EXECUTION VERSION


 


LOAN AND SECURITY AGREEMENT



among



SEBRING SOFTWARE, INC.



as Borrower,



SEBRING DENTAL OF ARIZONA, L.L.C.,

AAR ACQUISITION, L.L.C. and

SEBRING MANAGEMENT FL, LLC




each as Guarantor


 


and




MIDMARKET CAPITAL PARTNERS, LLC



as Agent



Dated as of April 25, 2013


 




    	 



    	 



    

  


TABLE OF CONTENTS


 


	 	 	 	Page
	SECTION 1    DEFINITIONS	1
	 	 
	 	1.1	Certain Defined Terms	1
	 	 	 	 
	 	1.2	Accounting Terms	17
	 	 	 	 
	 	1.3	UCC Terms	18
	 	 	 	 
	 	1.4	Other Definitional Provisions	18
	 	 	 	 
	SECTION 2    TERM LOAN AND COLLATERAL	18
	 	 
	 	2.1	Term Loan	18
	 	 	 	 
	 	2.2	Use of Proceeds	19
	 	 	 	 
	 	2.3	Interest.	19
	 	 	(A)	Rate of Interest	19
	 	 	(B)	Computation and Payment of Interest	19
	 	 	(C)	Interest Laws	19
	 	 	 	 	 
	 	2.4	Fees.	20
	 	 	(A)	Transaction Fee	20
	 	 	(B)	[Reserved].	20
	 	 	(C)	Prepayment Fee	20
	 	 	(D)	Other Fees and Expenses	21
	 	 	 	 	 
	 	2.5	Payments and Prepayments.	21
	 	 	(A)	Manner and Time of Payment	21
	 	 	(B)	Payments on Business Days	21
	 	 	(C)	Scheduled Payments	21
	 	 	(D)	Unused Proceeds Prepayment	22
	 	 	(E)	Voluntary Prepayment	23
	 	 	(F)	Mandatory Prepayment	23
	 	 	 	 	 
	 	2.6	Grant of Security Interest	24
	 	2.7	Preservation of Collateral and Perfection of Security Interests Therein	24
	 	 	 	 
	 	2.8	Possession of Collateral and Related Matters	25
	 	 	 	 
	 	2.9	Limited License	25
	 	 	 	 
	 	2.10	Release of Security Interests	26
	 	 	 	 
	SECTION 3    CONDITIONS TO MAKING OF TERM LOAN	26
	 	 
	 	3.1	Conditions to Closing and Advance of First Tranche	26
	 	 	(A)	Closing Deliveries	26
	 	 	(B)	Security Interests	26
	 	 	(C)	Representations and Warranties	26
	 	 	(D)	Fees	26


 




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	 	 	(E)	No Default	26
	 	 	(F)	Performance of Agreements	26
	 	 	(G)	No Prohibition	27
	 	 	(H)	No Litigation	27
	 	 	(I)	Historic Financial Statements; Other Information	27
	 	 	(J)	Minimum Liquidity and Adjusted EBITDA	27
	 	 	(K)	Acquisition Documentation; Capitalization	27
	 	 	(L)	Information Memorandum	27
	 	 	(M)	Compliance with Laws	28
	 	 	(N)	Legal Opinion	28
	 	 	(O)	Consents	28
	 	 	(P)	No Material Adverse Change	28
	 	 	(Q)	Licenses and Permits	28
	 	 	(R)	Contract Review	28
	 	 	(S)	Other	28
	 	 	 	 	 
	 	3.2	Conditions to Advance of Second Tranche	28
	 	 	(A)	Request for Second Tranche	29
	 	 	(B)	Second Tranche Note and Other Documents	29
	 	 	(C)	No Adverse Material Change	29
	 	 	(D)	Acquisition Documentation; Capitalization	29
	 	 	(E)	Financial Statements; Other Information	29
	 	 	(F)	Legal Opinion	30
	 	 	(G)	Representations and Warranties	30
	 	 	(H)	Compliance with Laws	30
	 	 	(I)	Consents	30
	 	 	(J)	No Default	30
	 	 	(K)	Other	30
	 	 	 	 	 
	 	3.3	Conditions to Funding Permitted Acquisition	30
	 	 	(A)	No Adverse Material Change	30
	 	 	(B)	Acquisition Documentation; Capitalization	31
	 	 	(C)	Financial Statements; Other Information	31
	 	 	(D)	Representations and Warranties	31
	 	 	(E)	Compliance with Laws	31
	 	 	(F)	Consents	31
	 	 	(G)	No Default	31
	 	 	(H)	Other	31
	 	 	 	 	 
	SECTION 4      REPRESENTATIONS AND WARRANTIES OF LOAN PARTIES.	32
	 	 
	 	4.1	Organization, Powers, Capitalization.	32
	 	 	(A)	Organization and Powers	32
	 	 	(B)	Capitalization	32
	 	 	 	 	 
	 	4.2	Authorization; No Conflict	32
	 	 	 	 
	 	4.3	Financial Condition.	33
	 	 	 	 
	 	4.4	Indebtedness and Liabilities	33


 




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	 	4.5	Account Warranties	33
	 	 	 	 
	 	4.6	Names	34
	 	 	 	 
	 	4.7	Locations; FEIN	34
	 	 	 	 
	 	4.8	Title to Properties; Liens	34
	 	 	 	 
	 	4.9	Litigation; Adverse Facts	34
	 	 	 	 
	 	4.10	Payment of Taxes	34
	 	 	 	 
	 	4.11	Performance of Agreements	34
	 	 	 	 
	 	4.12	Employee Benefit Plans	35
	 	 	 	 
	 	4.13	Intellectual Property	35
	 	 	 	 
	 	4.14	Broker’s Fees	35
	 	 	 	 
	 	4.15	Environmental Compliance	35
	 	 	 	 
	 	4.16	Solvency	36
	 	 	 	 
	 	4.17	Disclosure	36
	 	 	 	 
	 	4.18	Insurance	36
	 	 	 	 
	 	4.19	Compliance with Laws	36
	 	 	 	 
	 	4.20	Bank Accounts	36
	 	 	 	 
	 	4.21	Subsidiaries	36
	 	 	 	 
	 	4.22	Employee Matters	37
	 	 	 	 
	 	4.23	Governmental Regulation	37
	 	 	 	 
	 	4.24	Receivables and Payables	37
	 	 	 	 
	 	4.25	Trade Relations	37
	 	 	 	 
	 	4.26	Absence of Defaults	37
	 	 	 	 
	 	4.27	Loans to Shareholders, Directors, Officers or Affiliates	37
	 	 	 	 
	 	4.28	Projections	37
	 	 	 	 
	 	4.29	Surety Obligations	38
	 	 	 	 
	 	4.30	Commercial Tort Claims and Letter of Credit Rights	38
	 	 	 	 
	 	4.31	Offering	38
	 	 	 	 
	SECTION 5     AFFIRMATIVE COVENANTS	38
	 	 
	 	5.1	Financial Statements and Other Reports	38
	 	 	(A)	Monthly Financials	38
	 	 	(B)	Quarterly Financials	38
	 	 	(C)	Year-End Financials	39
	 	 	(D)	Accountants’ Certification and Reports	39
	 	 	(E)	Management Report	39







 




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	 	 	(F)	Projections	40
	 	 	(G)	Lender Meetings	40
	 	 	(H)	Tax Returns	40
	 	 	(I)	Government Notices	40
	 	 	(J)	Events of Default, etc	40
	 	 	(K)	Trade Names	41
	 	 	(L)	Locations	41
	 	 	(M)	Bank Accounts	41
	 	 	(N)	Certified Public Accountants	41
	 	 	(O)	Litigation	41
	 	 	(P)	Other Information	41
	 	 	 	 	 
	 	5.2	Access to Accountants	41
	 	 	 	 
	 	5.3	Inspection	42
	 	 	 	 
	 	5.4	Collateral Records	42
	 	 	 	 
	 	5.5	Account Covenants; Verification	42
	 	 	 	 
	 	5.6	Endorsement	42
	 	 	 	 
	 	5.7	Corporate Existence	43
	 	 	 	 
	 	5.8	Payment of Taxes	43
	 	 	 	 
	 	5.9	Maintenance of Properties; Insurance	43
	 	 	 	 
	 	5.10	Compliance with Laws	43
	 	 	 	 
	 	5.11	Further Assurances	43
	 	 	 	 
	 	5.12	Collateral Locations	44
	 	 	 	 
	 	5.13	Bailees	44
	 	 	 	 
	 	5.14	Use of Proceeds and Margin Security	44
	 	 	 	 
	 	5.15	Observer and Other Rights	44
	 	 	 	 
	 	5.16	Revisions or Updates to Schedules	45
	 	 	 	 
	 	5.17	[Reserved].	45
	 	 	 	 
	 	5.18	Accuracy of Information	45
	 	 	 	 
	 	5.19	Landlord and Storage Agreements	45
	 	 	 	 
	 	5.20	Commercial Tort Claims and Letter of Credit Rights	45
	 	 	 	 
	 	5.21	Financial Covenants	45
	 	 	(A)	Minimum Liquidity	45
	 	 	(B)	Capital Expenditures	46
	 	 	(C)	Fixed Charge Coverage Ratio	46
	 	 	(D)	Total Debt Leverage Ratio	46
	 	 	(E)	Senior Debt Leverage Ratio	47
	 	 	(F)	Interest Coverage Ratio	48


 




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	SECTION 6     NEGATIVE COVENANTS	48
	 	 
	 	6.1	Indebtedness and Liabilities	48
	 	 	 	 
	 	6.2	Guaranties	49
	 	 	 	 
	 	6.3	Transfers, Liens and Related Matters.	49
	 	 	(A)	Transfers	49
	 	 	(B)	Liens	49
	 	 	(C)	No Pledge Restrictions	49
	 	 	 	 	 
	 	6.4	Restricted Payments	50
	 	 	 	 
	 	6.5	Restriction on Fundamental Changes	50
	 	 	 	 
	 	6.6	Transactions with Affiliates	50
	 	 	 	 
	 	6.7	Environmental Liabilities	50
	 	 	 	 
	 	6.8	Conduct of Business	50
	 	 	 	 
	 	6.9	Compliance with ERISA	51
	 	 	 	 
	 	6.10	Subsidiaries	51
	 	 	 	 
	 	6.11	Fiscal Year	51
	 	 	 	 
	 	6.12	Bank Accounts	51
	 	 	 	 
	 	6.13	Charter Documents	51
	 	 	 	 
	 	6.14	No Impairment of Restricted Payments	52
	 	 	 	 
	 	6.15	Advances, Loans or Investments	52
	 	 	 	 
	 	6.16	Management or Consulting Fees	52
	 	 	 	 
	 	6.17	[Reserved].	52
	 	 	 	 
	 	6.18	Certain Payments	52
	 	 	 	 
	 	6.19	Amendments to Subordinated Debt or Earn-Out Obligations	52
	 	 	 	 
	SECTION 7      DEFAULT, RIGHTS AND REMEDIES	52
	 	 
	 	7.1	Event of Default	52
	 	 	(A)	Payment	52
	 	 	(B)	Default in Other Agreements	52
	 	 	(C)	Breach of Certain Provisions	53
	 	 	(D)	Breach of Representation or Warranty	53
	 	 	(E)	Other Defaults Under Loan Documents	 
	 	 	(F)	Involuntary Bankruptcy; Appointment of Receiver, etc	53
	 	 	(G)	Voluntary Bankruptcy; Appointment of Receiver, etc	53
	 	 	(H)	Liens	53
	 	 	(I)	Judgment and Attachments	54
	 	 	(J)	Dissolution	54
	 	 	(K)	Solvency	54
	 	 	(L)	Injunction	54
	 	 	(M)	Invalidity of Loan Documents	54
	 	 	(N)	Failure of Security	54


 




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	 	 	(O)	Licenses and Permits	54
	 	 	(P)	Forfeiture	54
	 	 	(Q)	Change of Control	54
	 	 	(R)	Material Adverse Change	54
	 	 	 	 	 
	 	7.2	Acceleration	55
	 	 	 	 
	 	7.3	Remedies	55
	 	 	 	 
	 	7.4	Appointment of Attorney-in-Fact	56
	 	 	 	 
	 	7.5	Limitation on Duty of Agent with Respect to Collateral	56
	 	 	 	 
	 	7.6	Application of Proceeds	56
	 	 	 	 
	 	7.7	License of Intellectual Property	56
	 	 	 	 
	 	7.8	Waivers, Non-Exclusive Remedies	57
	 	 	 	 
	SECTION 8     REGARDING AGENT	57
	 	 
	 	8.1	Appointment	57
	 	 	 	 
	 	8.2	Nature of Duties	57
	 	 	 	 
	 	8.3	Lack of Reliance on Agent and Resignation	58
	 	 	 	 
	 	8.4	Certain Rights of Agent	58
	 	 	 	 
	 	8.5	Reliance	58
	 	 	 	 
	 	8.6	Notice of Default	59
	 	 	 	 
	 	8.7	Indemnification	59
	 	 	 	 
	 	8.8	Agent in its Individual Capacity	59
	 	 	 	 
	 	8.9	Delivery of Documents	59
	 	 	 	 
	 	8.10	Borrowers’ Undertaking to Agent	59
	 	 	 	 
	 	8.11	No Reliance on Agent’s Customer Identification Program	60
	 	 	 	 
	 	8.12	Other Agreements	60
	 	 	 	 
	SECTION 9     MISCELLANEOUS	60
	 	 
	 	9.1	Assignments and Participations	60
	 	 	 	 
	 	9.2	Set Off	60
	 	 	 	 
	 	9.3	Expenses and Attorneys’ Fees	61
	 	 	 	 
	 	9.4	Indemnity	62
	 	 	 	 
	 	9.5	Amendments and Waivers	62
	 	 	 	 
	 	9.6	Notices	62
	 	 	 	 
	 	9.7	Survival of Warranties and Certain Agreements.	64
	 	 	 	 
	 	9.8	Indulgence Not Waiver	65
	 	 	 	 
	 	9.9	Marshaling; Payments Set Aside	65


 




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	 	9.10	Entire Agreement	65
	 	 	 	 
	 	9.11	Independence of Covenants	65
	 	 	 	 
	 	9.12	Severability	65
	 	 	 	 
	 	9.13	Headings	66
	 	 	 	 
	 	9.14	APPLICABLE LAW	66
	 	 	 	 
	 	9.15	No Fiduciary Relationship; Limitation of Liabilities.	66
	 	 	(A)	No Fiduciary Relationship	66
	 	 	(B)	Limitation of Liabilities	66
	 	 	 	 	 
	 	9.16	CONSENT TO JURISDICTION	66
	 	 	 	 
	 	9.17	WAIVER OF JURY TRIAL	67
	 	 	 	 
	 	9.18	Construction	67
	 	 	 	 
	 	9.19	Counterparts; Effectiveness	67
	 	 	 	 
	 	9.20	No Duty	67
	 	 	 	 
	 	9.21	Communications by Loan Parties to Agent and Lenders	67
	 	 	 	 
	 	9.22	Confidentiality	68
	 	 	 	 
	 	9.23	Electronic Execution of Loan Documents	68


 




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Exhibits and Schedules


 


	 	Page
	 	 
	Schedule 1.1(A) – Liens	13
	Schedule 1.1(B) – Pro Forma	15
	Schedule 1.1(C) – Sources and Uses of Funds	16
	Schedule 3.1(A) – Closing Deliveries	26
	Schedule 3.1(H) – Litigation	27
	Schedule 4.1(B) – Capitalization	32
	Schedule 4.4   – Indebtedness and Liabilities	33
	Schedule 4.6   – Names	34
	Schedule 4.7   – Locations; FEIN	34
	Schedule 4.9   – Litigation; Adverse Facts	34
	Schedule 4.10 – Payment of Taxes	34
	Schedule 4.13 – Intellectual Property	35
	Schedule 4.14 – Broker’s Fees	35
	Schedule 4.15 – Environmental Compliance	35
	Schedule 4.19 – Compliance with Laws	36
	Schedule 4.20 – Bank Accounts	36
	Schedule 4.21 – Subsidiaries	36
	Schedule 4.22 – Employee Matters	37
	Schedule 4.24 – Receivables and Payables	37
	Schedule 4.25 – Trade Relations	37
	Schedule 4.26 – Absence of Defaults	37
	Schedule 4.27 – Loans to Insiders	37
	Schedule 4.28 – Projections	37
	Schedule 4.30 – Commercial Tort Claims; Letter of Credit Rights	38
	Schedule 6.2   – Guaranties	49


 




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LOAN AND SECURITY AGREEMENT


 


This LOAN AND SECURITY
AGREEMENT is dated as of April 25, 2013 and entered into by and among SEBRING SOFTWARE, INC., a Nevada corporation (“Borrower”),
SEBRING DENTAL OF ARIZONA, L.L.C., an Arizona limited liability company, AAR ACQUISITION, L.L.C., an Arizona limited liability
company, SEBRING MANAGEMENT FL, LLC, a Florida limited liability company, and each other Person that is, or may from time to time
hereafter become, a party to this Agreement as a guarantor, specifically including AZ Perio upon consummation of the AZ
Perio Acquisition and execution and delivery of the Joinder Agreement, as such terms are defined below (collectively, the “Guarantors,”
and each a “Guarantor”), MIDMARKET CAPITAL PARTNERS, LLC, a Delaware limited liability company (“MMCP”),
in its capacity as agent for the Lenders, as hereinafter defined (in such capacity, the “Agent”) and each of
the financial institutions which is now or which hereafter becomes a party hereto as a lender (each individually a “Lender”,
and collectively, the “Lenders”).


 


RECITALS


 


WHEREAS, Borrower requests
that Lenders extend the Term Loan to Borrower, the proceeds of which will be used by Borrower exclusively to (i) pay the transactional
fees and expenses relating to the events contemplated to occur under this Agreement on the Closing Date, (ii) refinance existing
indebtedness, (iii) fund a portion of the purchase price of the Acquisition (as hereinafter defined) in a manner consistent with
Schedule 1.1(C) hereto, (iv) subject to the terms and conditions set forth herein, fund the AZ Perio Acquisition and Permitted
Acquisitions, or a portion thereof, and (v) support Borrower’s working capital and long-term financing needs;


 


WHEREAS, Borrower desires
to secure its Obligations under the Loan Documents, inter alia by granting to Agent for the benefit of Lenders a
security interest in and lien upon all of Borrower’s property and assets; and


 


WHEREAS, each Guarantor
is wholly owned, directly or indirectly, by the Borrower, will directly or indirectly benefit from the making of the Term Loan
hereunder and each Guarantor has agreed to jointly and severally guaranty the Obligations pursuant to separate Guaranties.


 


NOW, THEREFORE, in
consideration of the premises and the agreements, provisions and covenants herein contained, Borrower, Guarantors, Lenders and
Agent agree as follows:


 


SECTION
1DEFINITIONS


 


1.1           Certain
Defined Terms. The following terms used in this Agreement shall have the following meanings:


 


“AAR”
means AAR Acquisition, L.L.C., an Arizona limited liability company.


 


“AAR Acquisition
Agreement” means that certain Asset Purchase Agreement, dated as of April 25, 2013, by and among AAR and the AAR Sellers,
as may be amended, modified, supplemented or restated.


 




    	 



    	 



    

 


“AAR Sellers”
means, collectively, (i) the following individuals: Byron J. Larsen, Jennifer Iacobelli, Mitchell W. Ellingson, Kathryn Ellingson
and (ii) MEBL Dental Management, P.C., an Arizona Professional Corporation, Byron J. Larsen, DDS, PLLC, an Arizona Professional
Limited Liability Company, Image Dentistry of Glendale, P.C., an Arizona Professional Corporation, Image Dentistry of Peoria, P.C.,
an Arizona Professional Corporation, and Dentelli Corp., an Arizona corporation.


 


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


 


“Acquisition”
means, collectively, (i) the merger of OSM with and into Sebring FL pursuant to the OSM Acquisition Agreement and (ii) the acquisition
by AAR of substantially all of the assets used in the AAR Sellers’ dental practice pursuant to the AAR Acquisition Agreement


 


“Acquisition
Agreements” means, collectively (i) the OSM Acquisition Agreement and (ii) the AAR Acquisition Agreement.


 


“Adjusted EBITDA”
means, for any period, with respect to Borrower and its Subsidiaries, determined on a Consolidated basis, EBITDA for such period,
plus the sum of the following, to the extent deducted from net income in calculating EBITDA for such period: (a) fees, costs
and expenses incurred in connection with the Acquisition and the AZ Perio Acquisition and the related financings (debt and equity)
in an aggregate amount not to exceed a sum of $2,250,000 and (b) fees, costs and expenses incurred in connection with acquisitions,
investments, dispositions, equity offerings and debt issuances, in each case to the extent such transaction is permitted under
this Agreement and the other Loan Documents, in an aggregate amount not to exceed a sum of $2,000,000.


 




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“Affiliate”
means any Person (other than Agent or any Lender): (a) directly or indirectly controlling, controlled by, or under common
control with any Loan Party; (b) directly or indirectly owning, controlling or holding ten percent (10%) or more of any equity
interest in any Loan Party; (c) ten percent (10%) or more of whose voting stock or other equity interest having ordinary voting
power for the election of directors or the power to direct or cause the direction of management, is directly or indirectly owned
or held by any Loan Party; or (d) which has a senior executive officer who is also a senior executive officer of any Loan
Party. For purposes of this definition, “control” (including with correlative meanings, the terms “controlling”,
“controlled by” and “under common control with”) means the possession directly or indirectly of the power
to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities
or other equity interest, or by contract or otherwise.


 


“Agent”
has the meaning assigned to that term in the preamble to this Agreement.


 


“Agreement”
means this Loan and Security Agreement, as amended, restated, supplemented or otherwise modified from time to time.


 


“Asset Disposition”
means the disposition, in any transaction or series of related transactions, whether by sale, lease, transfer, loss, damage, destruction,
condemnation or otherwise, of any, all, or substantially all, of the assets of Borrower or any of its Subsidiaries (whether such
assets are now owned or hereafter acquired) or which has the effect of selling or otherwise disposing of the whole or a major part
of the business or operations of Borrower or any of its Subsidiaries in each case, whether or not consideration therefore consists
of cash, securities or other assets owned by the acquiring Person; provided that none of the following shall constitute
an Asset Disposition: (a) sales of Inventory in the ordinary course of business, (b) dispositions of obsolete, worn-out or excess
Equipment in the ordinary course of business, the aggregate fair market value of which does not exceed $100,000 in any Fiscal Year,
(c) sales or dispositions of cash equivalents and (d) sales, assignments, transfers or dispositions, in the ordinary course of
business and solely for purposes of collection or realization, of delinquent Accounts.


 


“AZ Perio”
means AZ Perio, L.L.C., an Arizona limited liability company.


 


“AZ Perio Acquisition”
means the purchase by Sebring AZ of not less than 66 2/3% of the issued and outstanding membership interests of AZ Perio pursuant
to the AZ Perio Acquisition Agreement.


 


“AZ Perio Acquisition
Agreement” means that certain Membership Interest Purchase Agreement, dated on or about the Second Tranche Closing Date,
by and among the Borrower and the AZ Perio Sellers, as may be amended, modified, supplemented or restated.


 


“AZ Perio Seller
Note” means, collectively, those certain convertible promissory notes, each dated on or about the date of the AZ Perio
Acquisition Agreement, executed by Borrower and payable to one or more of the AZ Perio Sellers.


 


“AZ Perio Sellers”
means the following individuals, collectively: Steven Reitan, Ralph Wilson, Randy Fitzgerald and Bruce E. Houser.


 


“Borrower”
has the meaning assigned to that term in the preamble to this Agreement.


 




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“Business Day”
means any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York, or is a
day on which banking institutions located in such state are permitted to be closed.


 


“Capital Expenditures”
means, with respect to any period, the aggregate expenditures (whether paid in cash or accrued as liabilities and including expenditures
made under a Capital Lease) by Borrower or any of its Subsidiaries during such period that are required by GAAP to be included
in or reflected by the property, plant, equipment or similar fixed asset accounts (or intangible accounts subject to amortization)
on the Consolidated balance sheet of Borrower and its Subsidiaries.


 


“Capital Lease”
means, with respect to Borrower and its Subsidiaries: (a) any lease of property, real or personal, if the then present value
of the minimum rental commitment thereunder should, in accordance with GAAP, be capitalized on a Consolidated balance sheet of
Borrower and its Subsidiaries, and (b) any other such lease, the obligations under which are capitalized on the Consolidated
balance sheet of Borrower and its Subsidiaries.


 


“Capital Stock”
means with respect to Borrower and its Subsidiaries, any and all capital stock, membership, partnership
or other equity interests issued by Borrower or any of its Subsidiaries.


 


“Change of Control”
means: (a) the failure of Lief Andersen to remain actively engaged in the management of Borrower and to hold the positions
held on the Closing Date, including as officer and director, for any reason other than death or disability; (b) the sale,
assignment or other transfer of any Capital Stock issued by Borrower if after the consummation of such sale, transfer, or disposition
(or proposed sale, transfer, or disposition) for any reason other than in connection with the Offering: (i) the owners of
the outstanding voting Capital Stock of Borrower as of the Closing Date will cease to own at least forty percent (40%) of the outstanding
voting Capital Stock of Borrower; or (ii) the owners of the outstanding voting Capital Stock of Borrower as of the Closing
Date shall cease to have at any time the power to vote at least forty percent (40%) of the outstanding voting Capital Stock of
Borrower or (c) except as otherwise permitted under this Agreement, the failure of Borrower to own, directly or indirectly, one
hundred percent (100%) (exclusive of any nominal amount of director’s qualifying shares) of the Capital Stock of each of
its Subsidiaries, except with respect to AZ Perio after consummation of the AZ Perio Acquisition, the failure of Borrower to own,
directly or indirectly, at least sixty-six and two-thirds percent (66 2/3%) (exclusive of any nominal amount of director’s
qualifying shares) of the Capital Stock of AZ Perio.


 


“Closing Date”
means April 25, 2013.


 


“Closing Date
Transaction Fee” shall have the meaning given such term in Section 2.4(A).


 


“Collateral”
means, collectively, any and all assets of any Loan Party on which a Lien in favor of Agent for the benefit of Lenders has been
created and/or granted to secure the Obligations, including without limitation the assets of Borrower defined as “Collateral”
in Section 2.6. 


 




    	-4-



    	 



    

 


“Commitment
Letter” means that certain commitment letter issued by Agent to Borrower, dated as of February 1, 2013.


 


“Commitment
Percentage” means, as to each Lender, the percentage set forth below such Lender’s name as its “Commitment
Percentage” on the signature pages hereto, as the same may be adjusted upon any assignment by a Lender pursuant to Section
9.1 hereof.


 


“Confidential
Information” has the meaning assigned to that term in Section 9.22.


 


“Consents”
shall mean all filings and all licenses, permits, consents, approvals, authorizations, qualifications and orders of governmental
bodies and other third parties, domestic or foreign, necessary to carry on any Loan Party’s business or necessary (including
to avoid a conflict or breach under any agreement, instrument, other document, license, permit or other authorization) for the
execution, delivery or performance of this Agreement, the other Loan Documents, or the Acquisition Agreements, including any Consents
required under all applicable federal, state or other applicable law.


 


“Consolidated”
means the consolidation of accounts in accordance with GAAP, including principles of consolidation.


 


“Debt Payments”
means (a) scheduled principal payments of the Term Loan and (b) scheduled payments of interest in cash on all Indebtedness for
borrowed money, including the Term Loan.


 


“Default”
means a condition, act or event that, after notice or lapse of time or both, would constitute an Event of Default.


 


“Default Rate”
has the meaning assigned to that term in Section 2.3(A).


 


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


 


“Domestic Subsidiary”
means each Subsidiary of Borrower that is not a Foreign Subsidiary.


 


“Earn-Out Obligations”
means any earn-out or similar deferred payment obligation owing by Borrower or a Guarantor to a seller in connection with a Permitted
Acquisition.


 


“EBITDA”
means, for any period, with respect to any entity, net income, plus the sum of the following, to the extent deducted in
calculating net income: (a) interest expense, income taxes, depreciation, and amortization expense and (b) other extraordinary,
unusual or non-recurring non-cash charges (including without limitation purchase accounting adjustments and goodwill write-offs
and write-downs) (other than any non-cash charge to the extent it represents an accrual of or reserve for cash expenditures in
any future period), minus the sum of the following to the extent included in calculating net income: (c) interest income,
(d) non-cash credits (other than any non-cash credit to the extent it will result in the receipt of cash payments in any future
period and (e) extraordinary, unusual or non-recurring gains.


 




    	-5-



    	 



    

  


“Employee Benefit
Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA which (a) is maintained for employees
of Borrower and its Subsidiaries or any ERISA Affiliate or (b) has at any time within the preceding six (6) years been maintained
for the employees of Borrower and its Subsidiaries and/or any current or former ERISA Affiliate.


 


“Environmental
Claims” means claims, liabilities, investigations, litigation, administrative proceedings, judgments or orders relating
to Hazardous Materials.


 


“Environmental
Laws” means any present or future federal, state and local laws, rules, ordinances and regulations governing the control,
removal, storage, transportation, spill, release or discharge of hazardous or toxic wastes, substances and petroleum products,
including as provided in the provisions of (a) the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended by the Superfund Amendment and Reauthorization Act of 1986, (b) the Solid Waste Disposal Act, (c) the
Clean Water Act, (d) the Clean Air Act, (e) the Hazardous Materials Transportation Act, (f) the Resource Conservation
and Recovery Act of 1976, (g) the Federal Water Pollution Control Act Amendments of 1972, and (h) any and all comparable
and/or similar laws of any foreign government (whether of any foreign national government or any agency or instrumentality of or
province, county, district, department, subdivision or local unit of any such foreign national government) and (i) the respective
rules, regulations and ordinances of the U.S. Environmental Protection Agency (or any equivalent environmental regulatory or protection
agency or instrumentality of any foreign government), and any departments of health services, regional water quality control boards,
state water resources control boards, and/or cities in which Borrower’s and its Subsidiaries’ assets are located.


 


“Equipment”
means all equipment (as defined in the UCC), whether now owned or hereafter acquired, including, without limitation, all furniture,
furnishings, fixtures, machinery, motor vehicles, trucks, trailers, vessels, aircraft and rolling stock and all parts thereof and
all additions, accessories, motors, engines, and accessions thereto and replacements therefor and all cash and non-cash proceeds
of any and all of the foregoing.


 


“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute and all rules
and regulations promulgated thereunder.


 


“ERISA Affiliate”
as applied to Borrower and its Subsidiaries, means any Person who is a member of a group which is under common control with Borrower
and its Subsidiaries, who together with Borrower and its Subsidiaries is treated as a single employer within the meaning of Section
414(b) and (c) of the IRC.


 


“Event of Default”
means any of the events set forth in Section 7.1. 


 




    	-6-



    	 



    

 


“Excess Cash
Flow” means, for any period, with respect to Borrower and its Subsidiaries, determined on a Consolidated basis, the excess
of (a) the sum of (i) consolidated net income for such period, (ii) all non-cash charges (including depreciation and amortization)
deducted in arriving at consolidated net income, (iii) decreases in consolidated working capital and (iv) all non-cash losses on
the disposition of property to the extent deducted in arriving at consolidated net income over (b) the sum of (i) all non-cash
credits included in consolidated net income, (ii) the aggregate amount actually paid in cash during such period in respect of Capital
Expenditures (subject to the limitations set forth in Section 5.21(B)), (iii) the aggregate amount of scheduled payments
of principal on Indebtedness for borrowed money made during such period and any prepayments of the Term Loan during such period
(but excluding any mandatory prepayments of the Term Loan based on Excess Cash Flow), (iv) increases in consolidated working capital
and (v) all non-cash gains on the disposition of property to the extent included in consolidated net income.


 


“Excess Interest”
has the meaning assigned to that term in Section 2.3(C).


 


“Exchange Act”
means the Securities Exchange Act of 1934, as amended.


 


“First Tranche”
has the meaning assigned to that term in Section 2.1.


 


“First Tranche
Term Note” means, collectively, the promissory notes payable by Borrower to Lenders, each in an amount equal to such
Lender’s Commitment Percentage of the First Tranche of the Term Loan, each dated as of the Closing Date, in a form acceptable
to Agent, issued pursuant to Section 2.1, which evidences Borrower’s indebtedness in respect of the First Tranche
of the Term Loan, and any amendment or restatement thereof.


 


“Fiscal Year”
means each twelve month period ending on or about December 31 of each year.


 


“Fixed Charge
Coverage Ratio” means, for any period, with respect to Borrower and its Subsidiaries on a Consolidated basis, the ratio
of (a) Adjusted EBITDA for such period, minus Capital Expenditures made in cash during such period, to the extent not financed,
to (b) all Debt Payments made in cash during such period, plus taxes paid (or required to be paid) in cash in respect of
such period.


 


“Foreign Subsidiary”
means any Subsidiary of Borrower that is organized in a jurisdiction outside of the United States of America.


 


“GAAP”
means generally accepted accounting principles in effect from time to time in the United States, applied on a consistent basis,
provided that for the purpose of Section 5.21 hereof and the definitions used therein, “GAAP” shall
mean generally accepted accounting principles in effect on the date hereof and consistent with those used in the preparation of
the Borrower’s audited financial statements for the Fiscal Year ended on December 31, 2011, provided, further,
that if there occurs after the date of this Agreement any change in GAAP that affects in any respect the calculation of any covenant
contained in Section 5.21 hereof, Agent, for itself and on behalf of the Lenders, and Borrower shall negotiate in good
faith amendments to the provisions of this Agreement that relate to the calculation of such covenant with the intent of having
the respective positions of Agent, each Lender and Borrower after such change in GAAP conform as nearly as possible to their respective
positions as of the date of this Agreement and, until any such amendments have been agreed upon, the covenants in Section 5.21
hereof shall be calculated as if no such change in GAAP had occurred. Notwithstanding the foregoing, all financial statements
delivered hereunder shall be prepared, and all financial covenants contained herein shall be calculated, without giving effect
to any election under Statement of Financial Accounting Standards 159 (or any similar accounting principle) permitting a Person
to value its financial liabilities at the fair value thereof, to the extent any such financial liability consists of or is in
respect of any type of Indebtedness described in any of clauses (a) through (j) of the definition thereof. 


 




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“General Intangibles”
means, as to Borrower and its Subsidiaries, all general intangibles as defined in the UCC, now owned or hereafter acquired, including,
without limitation, all of Borrower’s then owned or existing and future acquired or arising general intangibles, payment
intangibles, choses in action and causes of action and all other intangible personal property of Borrower of every kind and nature,
including, without limitation, Intellectual Property, corporate or other business records, inventions, designs, blueprints, plans,
specifications, trade secrets, goodwill, computer software, customer lists, licenses, franchises, tax refund claims, reversions
or any rights thereto and any other amounts payable to Borrower from any Employee Benefit Plan, rights and claims against carriers
and shippers, rights to indemnification, and business interruption, property, casualty or any similar type of insurance and any
proceeds thereof, and all cash and non-cash proceeds of any and all of the foregoing.


 


“Guaranties”
means, collectively, those certain unconditional guaranty agreements executed by each respective Guarantor in favor of Agent for
the benefit of Lenders pursuant to which such Guarantor shall give a continuing and unconditional agreement to guaranty and stand
surety for the Obligations, whether any such guaranty agreement shall be executed as of the date hereof or at any time in the future,
as each such guaranty agreement may be amended, restated, supplemented or otherwise modified from time to time.


 


“Guarantors”
means each Target that, after consummation of the Acquisition, will be a Domestic Subsidiary, each other Domestic Subsidiary, and
any other Person that may from time to time guaranty the Obligations.


 


“Guarantor Security
Documents” means, collectively, those various agreements, instruments and documents, including all security agreements,
charging agreements, mortgages, etc., which may from time to time be executed by the respective Guarantors pursuant to which each
such Guarantor shall grant Liens to Agent for the benefit of Lenders in substantially all of its assets, real and personal, tangible
and intangible, as security for the payment and performance of the Obligations, as each such agreement, instrument or document
may be amended, restated, supplemented or otherwise modified from time to time.


 


“Hazardous
Material” means all or any of the following: (a) substances that are defined or listed in, or otherwise classified
pursuant to, any Environmental 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, or toxicity; (b) oil, petroleum
or petroleum derived substances, natural gas, natural gas liquids or synthetic gas and 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) friable asbestos in any form or electrical equipment
which contains any oil or dielectric fluid containing polychlorinated biphenyls.


 




    	-8-



    	 



    

  


“Hedging Agreement”
means any interest rate, foreign currency, commodity or equity swap, collar, cap, floor or forward rate agreement, or other agreement
or arrangement designed to protect against fluctuations in interest rates or currency, commodity or equity values (including, without
limitation, any option with respect to any of the foregoing and any combination of the foregoing agreements or arrangements), and
any confirmation executed in connection with any such agreement or arrangement.


 


“Historic Financial
Statements” means (i) audited Consolidated financial statements of Borrower and its Consolidated Subsidiaries for the
Fiscal Years ended December 31, 2009, 2010 and 2011, (ii) internally prepared Consolidated financial statements of (and prepared
by) each Target and its Consolidated Subsidiaries for the Fiscal Years ended December 31, 2009, 2010 and 2011 and (iii) internally
prepared Consolidated financial statements of (and prepared by) Borrower and its Consolidated Subsidiaries, and of (and prepared
by) each Target and its Consolidated Subsidiaries, in each case as of December 31, 2012 and for the twelve (12) month period then
ended.


 


“Indebtedness”
as applied to Borrower and its Subsidiaries, means without duplication: (a) all obligations of Borrower and its Subsidiaries
for borrowed money, including without limitation the unpaid principal balance of the Term Loan, (b) all obligations of Borrower
and its Subsidiaries evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of Borrower and its
Subsidiaries upon which interest charges are customarily paid, (d) all obligations of Borrower and its Subsidiaries under
conditional sale or other title retention agreements relating to property acquired by Borrower and its Subsidiaries, (e) all
obligations of Borrower and its Subsidiaries in respect of the deferred purchase price of property or services, including without
limitation all such obligations incurred in connection with the Acquisition, the AZ Perio Acquisition and Permitted Acquisitions
(excluding (i) current accounts payable incurred in the ordinary course of business, (ii) installments of premiums payable with
respect to policies of insurance contracted for in the ordinary course of business, and (iii) Earn-Out Obligations until such
obligations become a liability on the Consolidated balance sheet of Borrower and its Subsidiaries in accordance with GAAP), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on property owned or acquired by Borrower and its Subsidiaries, whether or not the Indebtedness secured
thereby has been assumed, (g) all guaranties by Borrower and its Subsidiaries of Indebtedness of others, (h) all obligations
under Capital Leases of Borrower and its Subsidiaries attributable to the payment of principal, (i) the principal component
of all obligations, contingent or otherwise, of Borrower and its Subsidiaries as an account party in respect of letters of credit
and letters of guaranty, and (j) the principal component of all obligations, contingent or otherwise, of Borrower and its
Subsidiaries in respect of bankers’ acceptances. The Indebtedness of Borrower and its Subsidiaries shall include the Indebtedness
of any other entity (including any partnership in which Borrower or any of its Subsidiaries is a general partner) to the extent
Borrower and its Subsidiaries are liable therefor as a result of Borrower’s and its Subsidiaries’ ownership interest
in or other relationship with such entity, except to the extent the terms of such Indebtedness expressly provide that Borrower
and its Subsidiaries are not liable therefor. 


 




    	-9-



    	 



    

  


“Installment
Payment” has the meaning assigned to that term in Section 2.5(C).


 


“Intellectual
Property” means all present and future (a) designs, patents, patent rights and applications therefor, and license
rights with respect thereto; (b) trademarks, service marks, trade names and registrations and applications therefore and license
rights with respect thereto; (c) copyrights, renewals and all applications and registrations therefor, and license rights
with respect thereto; (d) software or computer programs, trade secrets, methods, processes, know-how, drawings, specifications,
and descriptions; (e) all memoranda, notes and records with respect to any research and development, whether now owned or
hereafter acquired; and (f) all goodwill associated with any of the foregoing described in subsections (a) – (e), and
all cash and non-cash proceeds of all of the foregoing.


 


“Interest Coverage
Ratio” means, for any period, with respect to Borrower and its Subsidiaries on a Consolidated basis, the ratio of (a)
Adjusted EBITDA for such period to (b) all payments of interest made in cash or in kind by Borrower during such period on all Indebtedness
for borrowed money, including the Term Loan.


 


“Inventory”
means, as to Borrower and its Subsidiaries, all inventory as defined in the UCC including, without limitation, all of Borrower’s
then owned or existing and future acquired or arising: (a) inventory, merchandise, goods and other personal property intended for
sale or lease or for display or demonstration; (b) inventory and any portion thereof that may be returned, rejected, reclaimed
or repossessed by Agent, any Lender or Borrower from Borrower’s customers; (c) work in process; (d) raw materials and other
materials and supplies, goods, incidentals, packaging materials and labels of every nature and description used or which might
be used in connection with the manufacture, packing, shipping, advertising, selling, leasing or furnishing of the foregoing or
otherwise used or consumed in the conduct of business; and (e) all cash and non-cash proceeds of any and all of the foregoing.


 


“Investment
Property” means a security, whether certificated or uncertificated, security entitlement, securities account, commodity
contract or commodity account.


 


“IRC”
means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute and all rules and regulations
promulgated thereunder.


 


“Joinder Agreement”
shall mean the Assumption and Joinder Agreement dated on or about the Second Tranche Closing Date, executed by AZ Perio in favor
of Agent and Lenders, pursuant to which, inter alia, AZ Perio shall assume and acknowledge its obligations and undertakings
hereunder and under the other Loan Documents and shall become a Guarantor hereunder and under the other Loan Documents, as the
same may be amended, restated, supplemented or otherwise modified from time to time.


 


“Lenders”
has the meaning assigned to that term in the preamble to this Agreement.


 


“Liabilities”
shall have the meaning given that term in accordance with GAAP and shall include all Indebtedness.


 




    	-10-



    	 



    

  


“Lien”
means any lien (whether statutory or otherwise), mortgage, deed of trust, pledge, hypothecation, assignment, security interest,
charge or encumbrance of any kind, whether voluntary or involuntary, (including any conditional sale or other title retention agreement,
any lease in the nature thereof, and any agreement to give any security interest).


 


“Liquidity”
means, on any date of determination, the aggregate amount of unrestricted cash and cash equivalents then on the Consolidated balance
sheet of Borrower and its Subsidiaries.


 


“Loan Documents”
means this Agreement, the Term Note, the Pledge Agreement, the Guaranties, the Guarantor Security Documents, the Joinder Agreement,
the Subordination Agreements, the Warrants, and all other instruments, documents, guaranties and agreements executed by or on behalf
of any Loan Party and delivered concurrently herewith or at any time hereafter to Agent or any Lender in connection with the Term
Loan or any other transaction contemplated by this Agreement, all as amended, restated, supplemented or modified from time to time.


 


“Loan Parties”
means, collectively, Borrower, Guarantors and any other Person (other than Agent or any Lender) which is or becomes a party to
this Agreement, including pursuant to the Joinder Agreement, and “Loan Party” means any one of them.


 


“Material Adverse
Effect” means a material adverse effect upon (a) the businesses, operations, properties, assets or condition (financial
or otherwise) of Borrower and its Subsidiaries (including the Targets), taken as a whole, (b) the ability of any Loan Party
to perform its obligations under any Loan Document to which it is a party, (c) the value of the Collateral, taken as a whole,
or (d) the ability of Agent or any Lender to enforce or collect any of the Obligations.


 


“Material Company
Event” means any development or event which is or is reasonably likely to be material to Borrower and its Subsidiaries,
taken as a whole, including, but not limited to: loss or gain of major contracts, significant government regulatory changes or
actions, product recalls, insurance claim events, legal notifications, key employee changes, and criminal activity.


 


“Maturity Date”
means April 25, 2018, provided, however, if Borrower fails to raise by the Term Decrease Date at least $30,000,000 in connection
with the Offering, the Maturity Date shall automatically mean, and become, October 25, 2015.


 


“Maximum Rate”
has the meaning assigned to that term in Section 2.3(C).


 


“MMCP”
has the meaning assigned to that term in the preamble to this Agreement. 


 




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“Obligations”
means all obligations (including the full and faithful discharge of each and every term, condition, agreement, representation and
warranty now or hereafter made by a Loan Party under the Loan Documents), liabilities and indebtedness of every nature of each
Loan Party from time to time owed to Agent and Lenders under the Loan Documents, including the obligation to pay when due all interest
on and principal of the Term Loan, and all fees, charges, costs and expenses payable under any of the Loan Documents, all debts,
claims and indebtedness (whether incurred before or after the Maturity Date), whether primary, secondary, direct, contingent, fixed
or otherwise, heretofore, or whether evidenced by a note or other writing, now and/or from time to time hereafter owing, due or
payable including, without limitation, all interest, fees, costs and expenses accrued or incurred after the filing of any petition
under any bankruptcy or insolvency law whether or not a claim for post-petition interest, fees or expenses is allowed in any bankruptcy
case or proceeding.


 


“Offering”
means a public offering of the Borrower’s equity securities having the ordinary power to vote, underwritten by an underwriter
reasonably acceptable to the Agent.


 


“Officer’s
Certificate” has the meaning assigned to that term in Section 5.1(E).


 


“OSM”
means Orthodontic Specialists Management, LLC, a Florida limited liability company


 


“OSM Acquisition
Agreement” means that certain Agreement and Plan of Merger, dated as of April 25, 2013, by and among OSM, Sebring FL,
the Borrower and the OSM Sellers, as may be amended, modified, supplemented or restated.


 


“OSM Sellers”
means the following individuals, collectively: Alan D. Shoopak, D.M.D. and Dennis J. L. Buchman, D.M.D.


 


“Permitted Acquisition”
means the acquisition by Borrower after the date hereof of all or substantially all of the assets of, or all of the equity interests
in, any Person, provided that (A) such Person conducts substantially the same business as is being conducted by the Loan
Parties or as Loan Parties are permitted to conduct pursuant to Section 6.8 and the acquisition of the assets or equity
interests of such Person shall have been approved by its board of directors (or comparable governing body); (B) not less than twenty
(20) days prior to such acquisition, Borrower shall deliver to Agent written notice of its intent to consummate such acquisition
together with a certificate signed by the chief financial officer of Borrower which shall include a calculation in reasonable detail
demonstrating that after giving effect to the acquisition on a Pro Forma Basis, as of the end of the period of four (4) consecutive
fiscal quarters ending with the most recent fiscal quarter for which the Borrower delivered to the Agent financial statements pursuant
to Section 5.1(B), Borrower would be in compliance with the financial covenants set forth in Section 5.21; (C) immediately
after giving effect to such acquisition, no Event of Default shall have occurred and be continuing; (D) if such acquisition is
an acquisition of assets, title to such assets shall be held by Borrower or a Domestic Subsidiary, and if such acquisition is an
acquisition of equity interests, the Person so acquired shall become or shall be merged or consolidated with a Domestic Subsidiary
and shall become a Guarantor and take such other actions as set forth in clauses (vi) and (vii) of Section 6.10; and (E)
Agent shall have perfected its Lien on the assets and equity interests of such Person.


 


“Permitted Encumbrances”
means the following types of Liens:


 


(A)         Liens
securing the Obligations; 


 




    	-12-



    	 



    

  


(B)         Liens
for taxes, assessments and governmental charges (other than Environmental Claims or ERISA) the payment of which is not yet due
and payable or that are being contested in compliance with Section 5.8;


 


(C)         Liens
imposed by law, such as carrier’s, warehousemen’s, mechanic’s, materialmen’s and other similar Liens arising
in the ordinary course of business and securing obligations (other than Indebtedness for borrowed money) that are not overdue by
more than thirty (30) days or are being contested in good faith and by appropriate proceedings promptly initiated and diligently
conducted, and a reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made therefor;


 


(D)         Liens
described on Schedule 1.1(A) and any modifications, replacements, renewals or extensions thereof; provided that such
Liens secure only those obligations that they secure on the Closing Date (and any refinancing thereof permitted pursuant to Section
6.1(e)) and do not subsequently apply to any other property or assets of the Borrower or any of its Subsidiaries other than
the proceeds and products thereof;


 


(E)         Liens
arising under Capital Leases or securing purchase money Indebtedness in respect of Equipment; provided, however,
that (A) no such Lien shall extend to or cover any other property of any Loan Party, and (B) the principal amount of the Indebtedness
secured by any such Lien shall not exceed the lesser of the fair market value or the cost of the property so held or acquired;


 


(F)         deposits
and pledges of cash securing (i) obligations incurred in respect of workers’ compensation, unemployment insurance or other
forms of governmental insurance or benefits, (ii) the performance of bids, tenders, leases, contracts (other than for the payment
of money) and statutory obligations (including obligations in respect of letters of credit or banker’s acceptances in respect
of any such bids, tenders, leases, contracts or statutory obligations) or (iii) obligations on surety or appeal bonds, but only
to the extent such deposits or pledges are incurred or otherwise arise in the ordinary course of business and secure obligations
not past due;


 


(G)         easements,
zoning restrictions and similar encumbrances on real property and minor irregularities in the title thereto that do not (i) secure
obligations for the payment of money or (ii) materially adversely impair the value of such property or its use by any Loan Party
in the normal conduct of such Person’s business;


 


(H)         Liens
securing judgments that do not constitute an Event of Default under Section 7.1(I);


 


(I)         leases
or subleases, licenses or sublicenses granted to others in the ordinary course of business not interfering in any material respect
with the business of Borrower and its Subsidiaries;


 


(J)         Liens
solely on any cash earnest money deposits made by Borrower or any of its Subsidiaries in connection with any letter of intent
or purchase agreement in respect of any acquisition permitted hereunder or any Permitted Investment; 


 




    	-13-



    	 



    

  


(K)         other
Liens securing obligations in an aggregate principal amount outstanding at any time not to exceed $50,000; and


 


(L)         other
Liens permitted to be incurred by any Loan Party pursuant to the terms of this Agreement or any other Loan Document.


 


“Permitted Investments”
means: (a) investments of Borrower outstanding on the date hereof; (b) marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency or any state thereof maturing within one (1) year from the date of acquisition
thereof; (c) commercial paper maturing no more than one (1) year from the date of creation thereof and having the highest rating
obtainable from either Standard & Poor’s or Moody’s Investor Services, Inc.; (d) certificates of deposit maturing
no more than one (1) year from the date of investment therein; (e) investments pursuant to or arising under Hedging Agreements
entered into in the ordinary course of business; (f) loans and advances to an officer or employee for salary, travel expenses,
commissions and similar items in the ordinary course of business; provided that the aggregate outstanding principal amount
of all loans and advances from the Borrower pursuant to this clause (f) shall not exceed $100,000 at any one time outstanding;
(g) loans, advances and capital contributions by Borrower to any Guarantor or by any Guarantor to Borrower or any other Guarantor,
so long as each such loan, advance and capital contribution is made in the ordinary course of business; (h) loans and advances
by Borrower or any Guarantor made in the ordinary course of business to a Person, less than a majority of the equity interests
of which are owned by Borrower or such Guarantor, provided the aggregate outstanding principal amount of all loans and advances
made pursuant to this clause (h) shall not exceed $100,000 at any one time outstanding and (i) loans, advances and capital contributions
by Borrower made in the ordinary course of business to any wholly-owned Foreign Subsidiary (determined without giving effect to
any nominal amount of director’s qualifying shares), provided that the aggregate outstanding principal amount of all
loans, advances and capital contributions made pursuant to this clause (i) shall not exceed $100,000 at any one time outstanding.


 


“Person”
means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, joint
stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and political subdivisions thereof.


 


“Pledge Agreement”
means each Pledge Agreement executed by each Person named therein as a Pledgor, dated as of the date hereof,
each as amended, restated, supplemented or otherwise modified from time to time.


 


“Pledged Collateral”
shall have the meaning given such term in the Pledge Agreement.


 


“Pledgor”
shall have the meaning given such term in each Pledge Agreement.


 


“Potential
Target” means any entity, the equity interests of which, or all or substantially all of the assets of which, Borrower
contemplates acquiring, directly or indirectly, pursuant to a Permitted Acquisition.


 




    	-14-



    	 



    

  


“Potential Target
Acquisition Agreement” means the agreement pursuant to which the Borrower, directly or indirectly, acquires all of the
outstanding equity interests, or all or substantially all of the assets, of a Potential Target.


 


“Prepayment
Fee” has the meaning assigned to that term in Section 2.4(C).


 


“Pro Forma”
means the unaudited Consolidated balance sheet of Borrower and its Subsidiaries as of the Closing Date after giving pro forma effect
to the transactions contemplated by this Agreement and the other Transaction Documents on such date. The Pro Forma Consolidated
balance sheet of Borrower and its Subsidiaries as of the Closing Date is annexed hereto as Schedule 1.1(B).


 


“Pro Forma Basis”
means, with respect to any transaction, that such transaction shall be deemed to have occurred as of the first day of the trailing
period of four (4) consecutive fiscal quarters ending with the most recent fiscal quarter preceding the date of such transaction
for which the Borrower delivered quarterly financial statements to Lender pursuant to Section 5.1(B).


 


“Prohibited
Acquisition” has the meaning assigned to that term in Section 2.5(D).


 


“Projections”
shall have the meaning given such term in Section 4.28.


 


“Quarterly Interest
Payment Date” has the meaning assigned to that term in Section 2.3(B).


 


“Refund Date”
has the meaning assigned to that term in Section 2.5(D).


 


“Required Lenders”
shall mean Lenders holding at least sixty-six and two-thirds percent (66 2/3%) of the Term Loan; provided, however, if there are
fewer than three (3) Lenders, Required Lenders shall mean all Lenders.


 


“Restricted
Payment” means: (a) any dividend or other distribution, direct or indirect, on account of any shares of any class
of the Capital Stock of Borrower or any of its Subsidiaries now or hereafter outstanding, except a dividend payable solely with
shares of the class of stock or membership interest (as applicable) on which such dividend is declared or distribution made; (b)
any payment or prepayment of principal of, premium, if any, or interest on, or any redemption, conversion, exchange, retirement,
defeasance, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Subordinated
Debt or any shares of any class of the Capital Stock of Borrower or any of its Subsidiaries now or hereafter outstanding (other
than through the issuance of additional Capital Stock of Borrower or such Subsidiary, as applicable) or the issuance of a notice
of an intention to do any of the foregoing; (c) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of the Capital Stock of Borrower or any of its Subsidiaries now
or hereafter outstanding (other than non cash repurchases of Capital Stock deemed to occur upon exercise of stock options if such
Capital Stock represents a portion of the exercise price of such options); and (d) any payment by Borrower or any of its
Subsidiaries of any management, consulting or similar fees to any Affiliate, whether pursuant to a management agreement or otherwise. 


 




    	-15-



    	 



    

  


“Sebring AZ”
means Sebring Dental of Arizona, L.L.C., an Arizona limited liability company.


 


“Sebring FL”
means Sebring Management FL, LLC, a Florida limited liability company.


 


“Second Tranche”
has the meaning assigned to that term in Section 2.1.


 


“Second Tranche
Closing Date” means the date on which the Second Tranche of the Term Loan is advanced by the Lenders to the Borrower
in accordance with Section 2.1.


 


“Second Tranche
Term Note” means, collectively, the promissory notes payable by Borrower to Lenders, each in an amount equal to such
Lender’s Commitment Percentage of the Second Tranche of the Term Loan, each dated as of the Second Tranche Closing Date,
in a form acceptable to Agent, issued pursuant to Section 2.1, which evidences Borrower’s indebtedness in respect
of the Second Tranche of the Term Loan, and any amendment or restatement thereof.


 


“Second Tranche
Transaction Fee” shall have the meaning given such term in Section 2.4(A).


 


“Senior Debt
Leverage Ratio” means, for any period, with respect to Borrower and its Subsidiaries on a Consolidated basis, the ratio
of (a) the unpaid principal balance of the Term Loan on the last day of such period to (b) Adjusted EBITDA for such period.


 


“Sources and
Uses of Funds” means the schedule of Sources and Uses of Funds annexed hereto as Schedule 1.1(C).


 


“Subordinated
Debt” means any Indebtedness of Borrower or any of its Subsidiaries (including any Earn-Out Obligations) with respect
to which the right of the holder of such Indebtedness to receive any payments thereon is junior and subordinated to the prior right
of Agent and the Lenders to receive payment in full of all Obligations, pursuant to a Subordination Agreement or intercreditor
agreement between Agent and such holder.


 


“Subordination
Agreements” means, collectively, (a) that certain Subordination Agreement, dated on or about the Second Tranche Closing
Date, between Agent and the AZ Perio Sellers, as amended, restated, supplemented or otherwise modified from time to time and (b)
any other agreement between Agent and a creditor of Borrower or any of its Subsidiaries, pursuant to which such creditor has subordinated
in favor of Agent and Lenders such creditor’s right to receive payment on the Indebtedness or other obligation owing by Borrower
to it, as amended, restated, supplemented or otherwise modified from time to time.


 


“Subsidiary”
means, if applicable, with respect to any Person, any corporation, association or other business entity of which more than fifty
percent (50%) of the total voting power of shares of stock, membership interests (or equivalent ownership or controlling interest)
entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by such Person (or any of its other Subsidiaries).


 




    	-16-



    	 



    

  


“Targets”
means, collectively, OSM, MEBL Dental Management, P.C., an Arizona Professional Corporation, Byron J. Larsen, DDS, PLLC, an Arizona
Professional Limited Liability Company, Image Dentistry of Glendale, P.C., an Arizona Professional Corporation, Image Dentistry
of Peoria, P.C., an Arizona Professional Corporation, and Dentelli Corp., an Arizona corporation.


 


“Taxes”
means all federal, state, municipal and other governmental taxes, levies, charges, claims and assessments, and all interest, penalties
and similar liabilities relating thereto, which are or may be due by Loan Parties with respect to their business, operations, Collateral
or otherwise.


 


“Term Decrease
Date” means April 25, 2015.


 


“Term Loan”
means the term loan made to Borrower pursuant to Section 2.1, and any amendment or restatement thereof.


 


“Term Note”
means, collectively, the First Tranche Term Note and the Second Tranche Term Note.


 


“Total Debt
Leverage Ratio” means, for any period, with respect to Borrower and its Subsidiaries on a Consolidated basis, the ratio
of (a) the aggregate unpaid principal balance of all Indebtedness for borrowed money on the last day of such period plus
the product of all rent expenses for such period multiplied by 8 to (b) Adjusted EBITDA for such period plus all rent expenses
for such period.


 


“Transaction
Documents” means the Loan Documents, the Acquisition Agreements, the AZ Perio Acquisition Agreement, each Potential Target
Acquisition Agreement and all other instruments, documents, guaranties and agreements executed in connection with any of the Transaction
Documents or any other transaction contemplated by the Transaction Documents, all as amended, restated, supplemented or modified
from time to time.


 


“Transaction
Fee” shall have the meaning given such term in Section 2.4(A).


 


“UCC”
means the Uniform Commercial Code as in effect on the date hereof in the State of New York, as amended from time to time, and any
successor statute.


 


“Unscheduled
Payment Date” shall have the meaning given such term in Section 2.4(C).


 


“Unused Term
Loan Proceeds” has the meaning assigned to that term in Section 2.5(D).


 


“Warrant”
or “Warrants” means each Warrant issued by Borrower to MMCP or a Lender, for its own account, dated as of the
date hereof, each as amended, restated, supplemented or otherwise modified from time to time. 


 




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1.2           Accounting
Terms. For purposes of this Agreement, all accounting terms not otherwise defined herein shall have the meanings assigned to
such terms in conformity with GAAP. Financial statements and other information furnished to Agent pursuant to Section 5.1
shall be prepared in accordance with GAAP, consistently applied.


 


1.3           UCC
Terms. Terms which are capitalized in Section 2.6 and not otherwise defined herein shall have the meanings assigned
to such terms in the UCC.


 


1.4           Other
Definitional Provisions. References to “Sections”, “subsections”, “Exhibits” and “Schedules”
shall be to Sections, subsections, Exhibits and Schedules, respectively, of this Agreement unless otherwise specifically provided.
Any of the terms defined in Section 1.1 may, unless the context otherwise requires, be used in the singular or the plural
depending on the reference. In this Agreement, words importing any gender include the other genders; the words “including,”
“includes” and “include” shall be deemed to be followed by the words “without limitation”;
except as otherwise indicated (e.g., by references to agreements “as in effect as of the date hereof” or words to that
effect), references to agreements and other contractual instruments shall be deemed to include subsequent amendments, assignments,
and other modifications thereto, but only to the extent such amendments, assignments and other modifications are not prohibited
by the terms of this Agreement or any other Loan Document; references to Persons include their respective permitted successors
and assigns or, in the case of governmental Persons, Persons succeeding to the relevant functions of such Persons; and all references
to statutes and related regulations shall include any amendments of same and any successor statutes and regulations.


 


SECTION
2   TERM LOAN AND COLLATERAL


 


2.1           Term
Loan. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Borrower
set forth herein and in the other Loan Documents, Lenders agree to lend to Borrower a Term Loan in the original principal amount
of Sixteen Million Dollars ($16,000,000). The Term Loan shall be funded in two separate tranches as follows: (i) the first tranche
of the Term Loan in the amount of Eleven Million Dollars ($11,000,000) (the “First Tranche”) shall be funded
on the Closing Date, subject to the satisfaction of all of the conditions precedent set forth in Section 3.1 hereof and
(ii) provided that all of the conditions precedent set forth in Section 3.2 shall have been satisfied, an additional tranche
of the Term Loan in the amount of Five Million Dollars ($5,000,000) (the “Second Tranche”) shall be funded
on or about the date set forth in Borrower’s written request delivered to Agent in accordance with Section 3.2(A), provided,
that (a) Lenders’ obligation to fund the Second Tranche shall expire, and shall automatically become null and void,
on May 25, 2013 (the “Second Tranche Expiration Date”) and (b) for the avoidance of doubt, Borrower shall not
have any right to request, and Lenders shall not have any obligation to make, any funding of the Second Tranche of any lesser
amount other than the amount set forth above. The Term Loan hereunder shall consist of both the First Tranche and, to the extent
funded in accordance with the foregoing sentence, the Second Tranche, without differentiation or distinction or any obligation
of Lenders to record or account for the separate principal balance of or the separate accrual of any interest or fees on either
the First Tranche and/or the Second Tranche, which together shall constitute one undivided Term Loan, and all interest and fees
provided for hereunder shall accrue on and all payments or satisfactions of any kind or nature shall be applied to such undivided
Term Loan as a whole, except to the extent otherwise provided in Section 2.5(C) hereof. The Term Loan shall be due and
payable in full on the Maturity Date without defense, set off or counterclaim of any sort. Amounts borrowed under this Section
2.1 and repaid may not be reborrowed. On or prior to the Closing Date, Borrower shall execute and deliver to each Lender a
First Tranche Term Note to evidence such Lender’s Commitment Percentage of the First Tranche of the Term Loan and, on or
prior to the Second Tranche Closing Date, Borrower shall execute and deliver to each Lender a Second Tranche Term Note to evidence
such Lender’s Commitment Percentage of the Second Tranche of the Term Loan. 


 




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2.2           Use
of Proceeds. The proceeds of the Term Loan shall be used exclusively to (i) pay the transactional fees and expenses relating
to the events contemplated to occur under this Agreement on the Closing Date, (ii) refinance existing indebtedness of Borrower,
(iii) fund a portion of the Acquisition purchase price in a manner consistent with Schedule 1.1(C), (iv) subject to the
terms and conditions set forth herein, fund the AZ Perio Acquisition and Permitted Acquisitions, or a portion thereof, and (v)
support Borrower’s working capital and long-term financing needs.


 


2.3           Interest.


 


(A)         Rate
of Interest. The unpaid principal balance of the Term Loan shall bear interest at the rate of eleven and one-half percent (111⁄2%)
per annum, to be calculated in accordance with Section 2.3(B). Commencing upon the occurrence and during the continuance
of an Event of Default, the unpaid principal balance of the Term Loan shall bear interest at the rate of thirteen and one-half
percent (131⁄2%) per annum (the “Default Rate”).


 


(B)         Computation
and Payment of Interest. Interest on the Term Loan and all other Obligations shall be computed on the daily principal balance
on the basis of a 360 day year for the actual number of days elapsed in the period during which it accrues. In computing interest
on the Term Loan, both the date of funding of the First Tranche and the Second Tranche, as the case may be, and the date of any
payment of the Term Loan shall be included. Interest on the Term Loan and all other Obligations shall be payable to Agent for the
benefit of Lenders quarterly in arrears on the last day of each quarter (each, a “Quarterly Interest Payment Date”)
by automatic wire transfer to Agent’s bank account, and on the date of any prepayment of the Term Loan, and at maturity,
whether by acceleration or otherwise.


 


(C)         Interest
Laws. Notwithstanding any provision to the contrary contained in this Agreement or any other Loan Document, Borrower shall
not be required to pay, and Agent shall not be permitted to collect, any amount of interest in excess of the maximum amount of
interest permitted by applicable law (“Excess Interest”). If any Excess Interest is provided for or determined
by a court of competent jurisdiction to have been provided for in this Agreement or in any other Loan Document, then in such event:
(1) the provisions of this Section shall govern and control; (2) neither Borrower nor any other Loan Party shall be
obligated to pay any Excess Interest; (3) any Excess Interest that Agent may have received hereunder shall be, at Agent’s
option, (a) applied as a credit against the outstanding principal balance of the Obligations or accrued and unpaid interest
(not to exceed the maximum amount permitted by law), (b) refunded to the payer thereof, or (c) any combination of the
foregoing; (4) the interest rate(s) provided for herein shall be automatically reduced to the maximum lawful rate allowed
from time to time under applicable law (the “Maximum Rate”), and this Agreement and the other Loan Documents
shall be deemed to have been and shall be, reformed and modified to reflect such reduction; and (5) neither Borrower nor
any Loan Party shall have any action against Agent or any Lender for any damages arising out of the payment or collection of any
Excess Interest. Notwithstanding the foregoing, if for any period of time interest on any Obligations is calculated at the Maximum
Rate rather than the applicable rate under this Agreement, and thereafter such applicable rate becomes less than the Maximum Rate,
the rate of interest payable on such Obligations shall remain at the Maximum Rate until Agent shall have received the amount of
interest which Agent would have received during such period on such Obligations had the rate of interest not been limited to the
Maximum Rate during such period. 


 




    	-19-



    	 



    

  


2.4           Fees.


 


(A)         Transaction
Fee. On the Closing Date, Borrower shall be obligated to pay to Agent for its own account, in cash, a non-refundable fee (the
“Closing Date Transaction Fee”) in the amount of Three Hundred and Thirty Thousand Dollars ($330,000), less
the sum of Twenty-Five Thousand Dollars ($25,000) previously paid to Agent, as provided in the Commitment Letter and, on the Second
Tranche Closing Date, Borrower shall be obligated to pay to Agent for its own account, in cash, a non-refundable fee (the “Second
Tranche Transaction Fee”, and together with the Closing Date Transaction Fee, the “Transaction Fee”)
in the amount of One Hundred and Fifty Thousand Dollars ($150,000). In addition, (i) on the Closing Date, Borrower shall be obligated
to pay or reimburse Agent in cash for all reasonable costs and expenses incurred by Agent in connection with any matters contemplated
by this Agreement which are due and payable as of the Closing Date, less the remaining portion, if any, of the sum of Ten Thousand
Dollars ($10,000) previously paid to Agent, as provided in the Commitment Letter and (ii) on the Second Tranche Closing Date, Borrower
shall be obligated to pay or reimburse Agent in cash for all reasonable costs and expenses incurred by Agent in connection with
any matters contemplated by this Agreement which are due and payable as of the Second Tranche Closing Date. All amounts payable
pursuant to this Section 2.4(A), including without limitation, the Transaction Fee, shall be paid by netting the amount thereof
against the proceeds of the Term Loan.


 


(B)         [Reserved].


 


(C)         Prepayment
Fee. Borrower shall pay to Agent, for the ratable benefit of the Lenders, in addition to any other amounts payable under this
Agreement, a prepayment fee (the “Prepayment Fee”) on each date (each an “Unscheduled Payment Date”)
on which any unscheduled prepayment of principal on the Term Loan is made (whether such unscheduled prepayment is of all or any
portion of the outstanding principal balance of the Term Loan and whether such unscheduled prepayment is optional or mandatory
or results from acceleration or enforcement of any rights granted hereunder), provided that no such Prepayment Fee shall
be charged in the event that such prepayment is mandatorily made based on Excess Cash Flow. The Prepayment Fee shall be determined
in accordance with the following schedule and is based on the principal amount of the Term Loan so prepaid on the applicable Unscheduled
Payment Date (the “Prepayment Amount”): 


 




    	-20-



    	 



    

  


	
        If the Unscheduled Payment Date occurs:
	
 

	
        Then the amount of the

Prepayment Fee shall equal:

	(i)          After April 25, 2014, but on or before April 25, 2015	 	5% of the Prepayment Amount
	(ii)         After April 25,
    2015, but on or before April 25, 2016	 	3% of the Prepayment Amount
	(iii)        After April 25, 2016
    but on or before April 25, 2017	 	1% of the Prepayment Amount
	(iv)       After April 25,
    2017	 	0% of the Prepayment Amount


  


(D)         Other
Fees and Expenses. Borrower shall pay to Agent, for its own account, all reasonable and customary charges for returned items
and all other out-of-pocket bank charges incurred by Agent, as well as reasonable and customary out-of-pocket wire transfer charges
incurred by Agent for each wire transfer made under this Agreement.


 


2.5           Payments
and Prepayments.


 


(A)         Manner
and Time of Payment. All payments made by Borrower with respect to the Obligations shall be made by wire transfer in United
States Dollars to Agent’s account, without deduction, defense, set off or counterclaim. All payments by Borrower on account
of the Term Loan shall be applied in the following manner: (i) first to the payment of any fees and charges due under the Loan
Documents, (ii) second to the payment of expenses, costs and indemnities due under the Loan Documents, (iii) third to the payment
of interest, to the extent payable in cash, due and owing under the Loan Documents, (iv) fourth to the payment of principal due
and owing under the Loan Documents, (v) fifth to the payment of principal not yet due under the Loan Documents in inverse chronological
order of the schedule of Installment Payments set forth in Section 2.5(C), and (vi) sixth to any other Indebtedness of Borrower
or any other Loan Party owing to Agent and Lenders.


 


(B)         Payments
on Business Days. Whenever 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 and such extension of time shall be included in the computation of
the amount of interest or fees due hereunder.


 


(C)         Scheduled
Payments. The principal amount of the Term Loan shall be repaid in consecutive quarterly installments (each, an “Installment
Payment”) on the last day of each quarter, commencing June 30, 2013, by automatic wire transfer to Agent’s bank
account. The amount of each Installment Payment shall be determined in accordance with the schedule hereunder set forth:


 


	Installment Date:	 	Amount of Installment Payment:	 
	June 30, 2013	 	$	300,000	 
	September 30, 2013	 	$	300,000	 
	December 31, 2013	 	$	300,000	 



 




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	Installment Date:	 	Amount of Installment Payment:	 
	March 31, 2014	 	$	300,000	 
	June 30, 2014	 	$	400,000	 
	September 30, 2014	 	$	400,000	 
	December 31, 2014	 	$	400,000	 
	March 31, 2015	 	$	400,000	 
	June 30, 2015	 	$	800,000	 
	September 30, 2015	 	$	800,000	 
	December 31, 2015	 	$	800,000	 
	March 31, 2016	 	$	800,000	 
	June 30, 2016	 	$	800,000	 
	September 30, 2016	 	$	800,000	 
	December 31, 2016	 	$	800,000	 
	March 31, 2017	 	$	800,000	 
	June 30, 2017	 	$	1,700,000	 
	September 30, 2017	 	$	1,700,000	 
	December 31, 2017	 	$	1,700,000	 
	April 25, 2018	 	 	100% of the then unpaid principal balance of the Term Loan	 



 


provided that if the Maturity Date
is determined to be April 25, 2015 in accordance with the definition thereof, then the schedule set forth above shall apply only
until April 25, 2015, on which date the entire outstanding amount of the Term Loan shall be due and payable in full, and provided,
further that if the Second Tranche of the Term Loan is not funded by the Second Tranche Expiration Date, the amount of each
Installment Payment set forth in the grid above shall be decreased in the proportion that the Second Tranche of the Term Loan bears
to the total principal amount of the full Term Loan as set forth in the first sentence of Section 2.1 hereof.


 


(D)         Unused
Proceeds Prepayment. If no Permitted Acquisitions shall have been consummated on or before the date (the “Refund Date”)
that is 120 days after the Closing Date, then on the Refund Date, Borrower shall remit to Agent, by wire transfer of immediate
funds, unconditionally and without offset of any kind, Two Million Dollars ($2,000,000) of the proceeds of the Term Loan (the “Unused
Term Loan Proceeds”). In the event that Permitted Acquisitions shall have been consummated prior to the Refund Date then,
subject to the terms of the last sentence of this paragraph, Borrower may retain and use the Unused Term Loan Proceeds to consummate
the Permitted Acquisitions, provided that the conditions set forth in Section 3.3 (in addition to the requirements
set forth in the definition of the term Permitted Acquisition) shall have been satisfied with respect to each Permitted Acquisition.
If such conditions shall not have been satisfied with respect to any Permitted Acquisition (a “Prohibited Acquisition”),
then upon Agent’s demand, Borrower shall remit to Agent that portion of the Unused Term Loan Proceeds related to such Prohibited
Acquisition, by wire transfer of immediate funds, unconditionally and without offset of any kind. Notwithstanding the foregoing,
if the aggregate cash portion of the purchase price of the applicable assets or equity interests acquired, directly or indirectly,
by Borrower in connection with all Permitted Acquisitions consummated on or before the refund date is less than $2,000,000, then
on the Refund Date, Borrower shall remit to Agent, by wire transfer of funds, unconditionally and without offset of any kind, the
difference between $2,000,000 and such aggregate cash portion.


 




    	-22-



    	 



    

 


(E)         Voluntary
Prepayment. Borrower shall have the right to prepay, at any time and from time to time after April 25, 2014, without penalty
or premium (other than the Prepayment Fee) all or any portion of the outstanding Term Loan, provided that each such prepayment
shall be in an amount equal to or greater than One Hundred Thousand Dollars ($100,000), and shall be accompanied by payment of
accrued interest to date of payment on the amount prepaid, together with the amount of the applicable Prepayment Fee.


 


(F)         Mandatory
Prepayment. In the event Borrower (i) procures financing from any source, whether in the form of Indebtedness (excluding
all Indebtedness permitted to be incurred under the Loan Documents) or equity, other than Capital Stock issued in connection with
the Offering, (ii) makes an Asset Disposition, (iii) undergoes a Change of Control, or (iv) receives proceeds from any
liability or casualty insurance policies in respect of any loss, then an amount equal to the entire net cash proceeds thereof,
or the portion thereof equal to the outstanding balance of the Term Loan plus accrued and unpaid interest and the Prepayment Fee,
and all other amounts then due and owing hereunder, shall be paid by Borrower to Agent, promptly following the occurrence of the
applicable event, to repay or reduce the Term Loan; provided that so long as no Event of Default shall have occurred and
be continuing, (1) Borrower shall deliver to Agent, no later than ten (10) days after the date such Asset disposition or insurance
loss shall have occurred, an officer’s certificate setting forth (x) the amount of that portion of such net cash proceeds
from any Asset Disposition or from any such insurance loss that Borrower intends to reinvest in productive assets of the general
type used in the business of Borrower and its Subsidiaries and (y) the proposed use of such portion of the net cash proceeds and
such other information with respect to such reinvestment as Agent may reasonably request, and (2) Borrower shall apply such portion
to such reinvestment purposes, no later than ninety (90) days after delivery to Agent of such officer’s certificate. If
such net cash proceeds have not been applied to the Obligations or timely reinvested as provided above, then Borrower shall promptly
make an additional prepayment of the Term Loan in the full amount of such net cash proceeds. In the event that Borrower and its
Subsidiaries have Excess Cash Flow for any Fiscal Year, commencing with the Fiscal Year ending on or about December 31, 2013,
Borrower shall prepay the outstanding balance of the Term Loan, plus accrued and unpaid interest, and all other amounts then due
and owing hereunder in an aggregate amount equal to fifty percent (50%) of such Excess Cash Flow for such Fiscal Year. Each such
prepayment based on Excess Cash Flow shall be due and payable by Borrower within three (3) Business Days after Agent’s receipt
of the annual financial statements required to be delivered to Agent pursuant to Section 5.1(C) for the Fiscal Year then
ended, but in no event later than ninety-three (93) days after the end of such Fiscal Year. 


 




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2.6           Grant
of Security Interest. To secure the full and prompt payment and performance of the Obligations as and when due (whether at
the stated maturity, by acceleration or otherwise), including all renewals, extensions, restructurings and refinancings of any
or all of the Obligations, Borrower hereby grants to Agent for the benefit of Lenders a continuing perfected Lien of first priority
ranking (subject only to the Permitted Encumbrances) in and to all right, title and interest of Borrower in any and all assets
and all property of Borrower, all whether now owned or hereafter created, arising or acquired and wherever located, including all
of the following (the “Collateral”):


 


		(i)	all Accounts, Chattel Paper, Commercial Tort Claims,
Deposit Accounts, Documents of Title (including all warehouse receipts and bills of lading), Equipment, General Intangibles, Goods,
Instruments, Inventory, including all stock-in-trade, raw materials, work in process, items held for sale or lease or furnished
or to be furnished under contracts of sale or lease, goods that are returned, reclaimed or repossessed, and materials used or
consumed in Borrower’s business, Investment Property and Financial Assets (including all Commodity Accounts, Commodity Contracts,
Securities (including all Certificated Securities and Uncertificated Securities), Security Entitlements and Securities Accounts)
and Letter of Credit Rights,



 


		(ii)	all parts, substitutions or replacements to or of or
accessories to any tangible assets and property included in the foregoing, and all software and computer programs embedded in
the foregoing, and all accessions to the foregoing,



 


		(iii)	all Supporting Obligations for any of the foregoing and
all rights of Borrower in any property belonging to any third party in which a Lien of any kind or nature has been granted to
Borrower to secure the payment or performance of any third party under or with respect to any of the foregoing,



 


		(iv)	all records, books, ledger cards, files, correspondence,
customer lists, blueprints, technical specifications, manuals, computer software, computer printouts, tapes, disks and other electronic
storage media and related data processing software and similar items that at any time evidence or contain information relating
to any of the foregoing or are otherwise necessary or helpful in the collection thereof or realization thereupon and all other
business books and records of Borrower, and



 


		(v)	all cash and non-cash proceeds (including, without limitation,
insurance proceeds), products, rents and profits of all of the foregoing.



  




    	-24-



    	 



    

 


2.7           Preservation
of Collateral and Perfection of Security Interests Therein. Borrower shall, at Agent’s reasonable request, at any time
and from time to time, execute and deliver to Agent within ten (10) days of such request, such financing statements, documents
and other agreements and instruments (and pay the cost of filing or recording the same in all public offices deemed reasonably
necessary or desirable by Agent) and do such other acts and things as Agent may deem necessary or desirable in order to establish
and maintain a valid, attached and perfected security interest in the Collateral in favor of Agent for the benefit of Lenders (free
and clear of all other liens, claims and rights of third parties whatsoever, whether voluntarily or involuntarily created, except
Permitted Encumbrances) to secure payment of the Obligations, and in order to facilitate the collection of the Collateral. Borrower
irrevocably hereby makes, constitutes and appoints Agent (and all Persons designated by Agent for that purpose) as Borrower’s
true and lawful attorney and agent-in-fact to execute such financing statements, documents and other agreements and instruments
and do such other acts and things as may be necessary to preserve and perfect Agent’s security interest in the Collateral.
Borrower further agrees that a carbon, photographic, photostatic or other reproduction of this Agreement or of a financing statement
shall be sufficient as a financing statement. Borrower hereby authorizes Agent to prepare and file such financing statements or
amendments thereof (including financing statements and amendments thereof describing the Collateral as “all assets”
or “all personal property” or words to that effect) as Agent may from time to time deem necessary or appropriate in
order to perfect and maintain the security interests granted hereunder in accordance with the UCC or the Uniform Commercial Code
of any applicable jurisdiction, all without Borrower’s signature. Borrower acknowledges and agrees that the Collateral is
intended to encompass all assets and property of Borrower and if at any time Borrower acquires any interest in any assets or property
a security interest in which cannot be perfected by the filing of a financing statement in the appropriate jurisdiction or any
assets or property a security interest in which can be perfected by the filing of a financing statement in the appropriate jurisdiction
but that are not covered by the security interest grant set forth above, such as commercial tort claims, then Borrower will promptly
notify Agent of the same and, if requested by Agent, cause such assets or property to become part of the Collateral and take such
reasonable steps as Agent may require in accordance with the first sentence of this Section 2.7.


 


2.8           Possession
of Collateral and Related Matters. Until an Event of Default has occurred and is continuing, Borrower shall have the right,
except as otherwise provided in this Agreement, in the ordinary course of Borrower’s business, to (a) sell or lease
any of Borrower’s Inventory normally held by Borrower for any such purpose, (b) use and consume any raw materials, work
in process or other materials normally held by Borrower for such purpose, or (c) dispose of any obsolete or excess equipment
in the ordinary course of business, provided, however, that a sale in the ordinary course of business shall not include
any transfer or sale in satisfaction, partial or complete, of a debt owed by Borrower and, provided, further that,
any sale, lease or disposition shall require Agent’s consent if a Default or Event of Default exists.


 


2.9           Limited
License. Borrower hereby irrevocably grants to Agent for the benefit of Lenders a royalty-free, non-exclusive license to use
at any time during the continuance of an Event of Default Borrower’s trademarks, copyrights, patents and other proprietary
and intellectual property rights, in connection with the (a) advertisement for sale, and the sale or other disposition of,
any finished goods Inventory by Agent in accordance with the provisions of this Agreement, and (b) the manufacture, assembly,
completion and preparation for sale of any unfinished Inventory by Agent in accordance with the provisions of this Agreement. 


 




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2.10         Release
of Security Interests. Upon the payment and satisfaction in full of the Obligations (other than unasserted claims for indemnification
or expense reimbursement), and the delivery by Borrower to Agent of a satisfactory release agreement, at Borrower’s expense,
Agent shall release all liens and security interests granted by Borrower by execution and delivery of appropriate documentation,
including, but not limited to, UCC termination statements, (i) within seven (7) Business Days of such payment or (ii) concurrent
with such payment if Borrower gives three (3) Business Days advance notice of such payment.


 


SECTION
3   CONDITIONS TO MAKING OF TERM LOAN


 


3.1           Conditions
to Closing and Advance of First Tranche. The obligation of Lenders to advance the First Tranche on the Closing Date is subject
to satisfaction or waiver (in each case, as determined by Agent) of all of the conditions set forth below:


 


(A)         Closing
Deliveries. Agent shall have received, in form and substance satisfactory to Agent, all documents, instruments and information
identified on Schedule 3.1(A) and all other agreements, notes, certificates, orders, authorizations, financing statements,
mortgages and other documents which Agent may request.


 


(B)         Security
Interests. Agent shall have received satisfactory evidence that all security interests and Liens granted to Agent for the benefit
of Lenders pursuant to this Agreement or the other Loan Documents have been duly perfected and constitute valid Liens on the Collateral,
with priority over all other Liens subject only to Permitted Encumbrances. Without limiting the generality of the foregoing: (x)
Pledgor(s) shall have pledged and collaterally assigned to Agent for the benefit of Lenders the Pledged Collateral pursuant to
a Pledge Agreement (in form and substance satisfactory to Agent); and (y) each Guarantor shall have executed and delivered all
Guarantor Security Documents required by Agent and its counsel (each such document to be in form and substance satisfactory to
Agent) in order to create and grant Liens in favor of Agent for the benefit of Lenders on substantially all of such Guarantor’s
property and all appropriate public filings or registrations of or related to such Guarantor Security Documents and/or the Liens
created and granted thereunder have been made.


 


(C)         Representations
and Warranties. The representations and warranties contained herein and in the other Transaction Documents shall be true, correct
and complete on and as of the Closing Date, to the same extent as though made on and as of that date.


 


(D)         Fees.
Borrower shall have paid the fees and other amounts payable on the Closing Date referred to in Section 2.4(A).


 


(E)         No
Default. No event shall have occurred and be continuing or would result from the consummation of the requested borrowing that
would constitute an Event of Default or a Default.


 


(F)         Performance
of Agreements. Each Loan Party shall have performed all agreements and satisfied all conditions which any Transaction Document
provides shall be performed by it on or before the Closing Date, unless the performance of any such condition shall have been
waived in writing by Agent (subject to the provisions set forth in Section 3.1(K)). 


 




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(G)         No
Prohibition. No order, judgment or decree of any court, arbitrator or governmental authority shall purport to enjoin or restrain
Lenders from advancing the Term Loan.


 


(H)         No
Litigation. Except as set forth on Schedule 3.1(H), there shall not be pending or, to the knowledge of any Loan Party,
threatened, any action, charge, claim, demand, suit, proceeding, petition, governmental investigation or arbitration by, against
or affecting any Loan Party or any property of any Loan Party that has not been disclosed by Borrower in writing, and there shall
have occurred no development in any such action, charge, claim, demand, suit, proceeding, petition, governmental investigation
or arbitration that, in the opinion of Agent, could reasonably be expected to have a Material Adverse Effect.


 


(I)         Historic
Financial Statements; Other Information. Agent shall have received a copy of the Historic Financial Statements which shall
be satisfactory in all respects to Agent. The audited Consolidated financial statements of Borrower and its Consolidated Subsidiaries
for the Fiscal Year ended December 31, 2011 shall be consistent in all material respects with the draft audited financial statements
for such period provided to Agent prior to execution of the Commitment Letter. In addition, to the extent Borrower has received
any audits, appraisal and asset valuation reports, and/or quality of earnings reports with respect to the Targets, Agent shall
have received and reviewed to its satisfaction such audits and reports.


 


(J)         Minimum
Liquidity and Adjusted EBITDA. Agent shall have received a certificate (which shall include a calculation, in reasonable detail,
of Adjusted EBITDA for the period described in clause (ii) hereof), dated as of the Closing Date and signed by the chief financial
officer of the Borrower, certifying that, as of the Closing Date and after giving effect to the Acquisition and the transactions
contemplated by the Transaction Documents (i) Liquidity equals at least $1,000,000 and (ii) Adjusted EBITDA for the period of twelve
consecutive months ending no earlier than thirty (30) days prior to the Closing Date, calculated on a Pro Forma Basis after giving
effect to the Acquisition, is not less than $3,650,000.


 


(K)         Acquisition
Documentation; Capitalization. The Acquisition shall have been consummated (i) pursuant to the Acquisition Agreements, a substantially
final draft of each of which, and a substantially final draft of each material document, instrument and agreement to be executed
or delivered in connection therewith, shall have been reviewed to the reasonable satisfaction of Agent and (ii) on or before the
Closing Date, without amendment to, or waiver of, any terms or conditions of the Acquisition Agreements, other than any amendment
or waiver which is not materially adverse to the interests of Agent or the Lenders or as to which Agent has consented in writing
(such consent not to be unreasonably withheld or delayed) and Agent shall be reasonably satisfied with the ownership, management
and capital structure of Borrower after giving effect to the Acquisition. Borrower shall have collaterally assigned to Agent, as
security for all Obligations, all of its rights under the Acquisition Agreements.


 


(L)         Information
Memorandum. In connection with its review of the Loan Parties and the Acquisition, Agent shall have received an Information
Memorandum from the Borrower that includes information regarding history, operations, industry, management, and transaction risks
which shall be satisfactory in all respects to Agent. 


 




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(M)         Compliance
with Laws. Agent shall be reasonably satisfied that there is not any provision of applicable law which would reasonably be
expected to prevent the consummation of the Acquisition, and that each Loan Party is in compliance in all material respects with
all pertinent federal, state, local or territorial regulations, including those with respect to the Federal Occupational Safety
and Health Act, the Environmental Protection Act, ERISA and the Trading with the Enemy Act.


 


(N)         Legal
Opinion. Agent shall have received the executed legal opinion of (i) Shumaker, Loop & Kendrick LLP, (ii) Todorovich &
Tetreault, (iii) Hunter Taubman Weiss LLP and (iv) such other law firms as may be necessary, in form and substance reasonably satisfactory
to Agent which shall cover such matters incident to the transactions contemplated by this Agreement, the Term Note, the Acquisition
Agreements, the other Transaction Documents and related agreements as Agent may reasonably require and each Loan Party hereby authorizes
and directs each such counsel to deliver such opinions to Agent and Lenders.


 


(O)         Consents.
All Consents necessary to permit the effectuation of the transactions contemplated by this Agreement and the other Transaction
Documents shall have been obtained; and, Agent shall have received such Consents and waivers of such third parties as might assert
claims with respect to the Collateral, as Agent and its counsel shall reasonably deem necessary.


 


(P)         No
Material Adverse Change. (i) since December 31, 2011, there shall not have occurred any event, condition or state of facts
which could reasonably be expected to have a Material Adverse Effect and (ii) no representations made or information supplied (including
any matter relating to financial models and underlying assumptions relating to the Projections) to Agent shall have been proven
to be inaccurate or misleading in any material respect.


 


(Q)         Licenses
and Permits. Agent shall have received and reviewed to its satisfaction a copy of all licenses and permits material to the
operation of the Loan Parties’ businesses.


 


(R)         Contract
Review. Agent shall have reviewed all contracts material to the operation of the Loan Parties’ businesses including leases,
union contracts, labor contracts, vendor supply contracts, license agreements and distributorship agreements and such contracts
and agreements shall be satisfactory in all respects to Agent.


 


(S)         Other.
All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions
contemplated by this Agreement and the other Transaction Documents shall be reasonably satisfactory in form and substance to Agent
and its counsel.


 


3.2           Conditions
to Advance of Second Tranche. The obligation of Lenders to advance the Second Tranche is subject to satisfaction or waiver
(in each case, as determined by Agent) of all of the conditions set forth below: 


 




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(A)         Request
for Second Tranche. Agent shall have received from Borrower at least ten (10) days prior written notice requesting the advance
of the Second Tranche. Together with the written notice requesting such advance, Agent shall have received a certificate signed
by the chief financial officer of Borrower which shall include a calculation in reasonable detail demonstrating that after giving
effect to the AZ Perio Acquisition on a Pro Forma Basis, as of the end of the period of four (4) consecutive fiscal quarters ending
with the most recent fiscal quarter for which the Borrower delivered to the Agent financial statements pursuant to Section 5.1(B),
Borrower would be in compliance with the financial covenants set forth in Section 5.21.


 


(B)         Second
Tranche Note and Other Documents. Agent shall have received the Second Tranche Note, duly executed by the Borrower, as well
as all other agreements, notes, certificates, orders, authorizations, financing statements, mortgages and other documents which
Agent may reasonably request.


 


(C)         No
Adverse Material Change. (a) Since the date of AZ Perio’s and its Consolidated Subsidiaries’ most recent audited
financial statements delivered to Agent, there has not been any material adverse change in or affecting the business, property,
results of operations, or condition (financial or otherwise) of AZ Perio and any such Subsidiaries, taken as a whole and (b) no
information or other matter (including any matter relating to financial models and underlying assumptions relating to any projections
delivered to Agent) affecting AZ Perio or the AZ Perio Acquisition or the other transactions contemplated in connection therewith
is inconsistent in a material and adverse manner with any such information or other matter previously disclosed to Agent.


 


(D)         Acquisition
Documentation; Capitalization. The AZ Perio Acquisiton shall have been consummated (i) pursuant to the AZ Perio Acquisition
Agreement, a substantially final draft of which, and a substantially final draft of each material document, instrument and agreement
to be executed or delivered in connection therewith, shall have been reviewed to the reasonable satisfaction of Agent and (ii)
on or before the Second Tranche Closing Date, without amendment to, or waiver of, any terms or conditions of the AZ Perio Agreement,
other than any amendment or waiver which is not materially adverse to the interests of Agent or the Lenders or as to which Agent
has consented in writing (such consent not to be unreasonably withheld or delayed) and Agent shall be reasonably satisfied with
the ownership, management and capital structure of Borrower after giving effect to the AZ Perio Acquisition. AZ Perio shall have
become a Guarantor and taken such other actions as set forth in clauses (vi) and (vii) of Section 6.10. Agent shall have
perfected its Lien on the assets and equity interests of AZ Perio. Borrower shall have collaterally assigned to Agent, as security
for all Obligations, all of its rights under the AZ Perio Acquisition Agreement.


 


(E)         Financial
Statements; Other Information. Agent shall have received a copy of (a) the audited financial statements of AZ Perio and its
Consolidated Subsidiaries for each of its three preceding fiscal years and (b) the internally prepared consolidated financial
statements of (and prepared by) AZ Perio and its Consolidated Subsidiaries as of the last day of the fiscal month ending closest
to the date of consummation of the AZ Perio Acquisition for which such financial statements for such month shall be available,
and for the year-to-date period then ended.


 




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(F)         Legal
Opinion. Agent shall have received the executed legal opinion of Todorovich & Tetreault and such other law firms as may
be necessary, in form and substance reasonably satisfactory to Agent which shall cover such matters incident to the transactions
contemplated by the AZ Perio Acquisition Agreement and related agreements as Agent may reasonably require and each Loan Party hereby
authorizes and directs each such counsel to deliver such opinions to Agent and Lenders.


 


(G)         Representations
and Warranties. The representations and warranties contained herein and in the other Transaction Documents shall be true, correct
and complete in all material respects on and as of the date the AZ Perio Acquisition is consummated, to the same extent as though
made on and as of that date; provided that if any representation or warranty expressly relates to an earlier date, such
representation or warranty shall be true and correct in all material respect on and as of such earlier date.


 


(H)         Compliance
with Laws. Agent shall be reasonably satisfied that there is not any provision of applicable law which would reasonably be
expected to prevent the consummation of the AZ Perio Acquisition, and that each Loan Party and AZ Perio is in compliance in all
material respects with all pertinent federal, state, local or territorial regulations, including those with respect to the Federal
Occupational Safety and Health Act, any applicable Environmental Laws, ERISA and the Trading with the Enemy Act.


 


(I)         Consents.
Agent shall be reasonably satisfied that all approvals and consents necessary to permit the effectuation of the transactions contemplated
by the AZ Perio Acquisition Agreement have been obtained.


 


(J)         No
Default. No event shall have occurred and be continuing or would result from the consummation of the AZ Perio Acquisition that
would constitute an Event of Default or a Default.


 


(K)         Other.
All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions
contemplated by the Transaction Documents shall be reasonably satisfactory in form and substance to Agent and its counsel.


 


3.3           Conditions
to Funding Permitted Acquisition. Borrower may retain and use the Unused Term Loan Proceeds to consummate Permitted Acquisitions
in accordance with Section 2.5(D), subject to satisfaction or waiver (in each case, as determined by Agent) of all of the
conditions set forth below with respect to each Permitted Acquisition:


 


(A)         No
Adverse Material Change. (a) Since the date of the Potential Target and its Consolidated Subsidiaries’ most recent audited
financial statements delivered to Agent, there has not been any material adverse change in or affecting the business, property,
results of operations, or condition (financial or otherwise) of the Potential Target and any of such Potential Target’s
Subsidiaries, taken as a whole and (b) no information or other matter (including any matter relating to financial models and underlying
assumptions relating to any projections delivered to Agent) affecting the Potential Target or the Permitted Acquisition or the
other transactions contemplated in connection therewith is inconsistent in a material and adverse manner with any such information
or other matter previously disclosed to Agent. 


 




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(B)         Acquisition
Documentation; Capitalization. The Permitted Acquisition shall have been consummated (i) pursuant to the Potential Target Acquisition
Agreement, a substantially final draft of which, and a substantially final draft of each material document, instrument and agreement
to be executed or delivered in connection therewith, shall have been reviewed to the reasonable satisfaction of Agent and (ii)
on or before the Refund Date, without amendment to, or waiver of, any terms or conditions of the Potential Target Acquisition Agreement,
other than any amendment or waiver which is not materially adverse to the interests of Agent or the Lenders or as to which Agent
has consented in writing (such consent not to be unreasonably withheld or delayed) and Agent shall be reasonably satisfied with
the ownership, management and capital structure of Borrower after giving effect to the Permitted Acquisition. Borrower shall have
collaterally assigned to Agent, as security for all Obligations, all of its rights under the Potential Target Acquisition Agreement.


 


(C)         Financial
Statements; Other Information. Agent shall have received a copy of (a) the audited financial statements of the Potential Target
and its Consolidated Subsidiaries for each of its three preceding fiscal years and (b) the internally prepared consolidated financial
statements of (and prepared by) the Potential Target and its Consolidated Subsidiaries (i) for each of its three preceding fiscal
years and (ii) as of the last day of the fiscal month ending closest to the date of consummation of the Permitted Acquisition for
which such financial statements for such month shall be available, and for the year-to-date period then ended.


 


(D)         Representations
and Warranties. The representations and warranties contained herein and in the other Transaction Documents shall be true, correct
and complete in all material respects on and as of the date the Permitted Acquisition is consummated, to the same extent as though
made on and as of that date; provided that if any representation or warranty expressly relates to an earlier date, such
representation or warranty shall be true and correct in all material respect on and as of such earlier date.


 


(E)         Compliance
with Laws. Agent shall be reasonably satisfied that there is not any provision of applicable law which would reasonably be
expected to prevent the consummation of the Permitted Acquisition, and that each Loan Party and Potential Target is in compliance
in all material respects with all pertinent federal, state, local or territorial regulations, including those with respect to the
Federal Occupational Safety and Health Act, any applicable Environmental Laws, ERISA and the Trading with the Enemy Act.


 


(F)         Consents.
Agent shall be reasonably satisfied that all approvals and consents necessary to permit the effectuation of the transactions contemplated
by the Potential Target Acquisition Agreement have been obtained.


 


(G)         No
Default. No event shall have occurred and be continuing or would result from the consummation of the Permitted Acquisition
that would constitute an Event of Default or a Default.


 


(H)         Other.
All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions
contemplated by the Transaction Documents shall be reasonably satisfactory in form and substance to Agent and its counsel. 


 




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SECTION
4    REPRESENTATIONS AND WARRANTIES OF LOAN PARTIES.


 


To induce Agent and
Lenders to enter into this Agreement, and for Lenders to fund the Term Loan, each Loan Party represents and warrants to Agent and
Lenders that the statements set forth in this Section 4 are true, correct and complete in all respects, unless any such
statement, by its terms, is qualified by materiality, in which case such statement shall be true, correct and complete to the extent
so qualified.  Such representations and warranties, and all other representations and warranties made by any Loan Party
herein or in the other Loan Documents shall survive the execution and delivery of this Agreement and the closing contemplated hereby.


 


4.1           Organization,
Powers, Capitalization.


 


(A)         Organization
and Powers.  Loan Parties are entities duly organized, validly existing and in good standing under the laws of the
jurisdiction of their incorporation or formation and qualified to do business in all states where such qualification is required
except where failure to be so qualified could not be reasonably expected to have a Material Adverse Effect.  Loan Parties
have all requisite power and authority to own and operate their properties, to carry on their business as now conducted and proposed
to be conducted and to enter into each Transaction Document to which each is a party, in each case, in all material respects.


 


(B)         Capitalization.  The
Capital Stock of each Loan Party is as set forth on Schedule 4.1(B).  All Capital Stock of each Loan Party is
duly authorized and validly issued, fully paid, and non-assessable, and such shares of Capital Stock were issued in compliance
with all applicable federal, state and local laws concerning the issuance of securities.  All Capital Stock of each Loan
Party is free and clear of all Liens other than Liens in favor of the Agent to secure the Obligations.  No Capital Stock
of any Loan Party other than as described above is issued and outstanding.  There are no preemptive or other outstanding
rights, options, warrants, conversion rights or similar agreements or understandings for the purchase or acquisition from any Loan
Party of any equity interests or securities except in connection with the Acquisition and the Offering or as set forth on Schedule
4.1(B).


 


4.2           Authorization;
No Conflict.  Borrower has the power and authority to incur the Obligations, and Borrower and each Loan Party has
the power and authority to grant security interests in the Collateral in which it has rights or any interest.  The execution,
delivery and performance of the Transaction Documents have been duly authorized by all necessary company and shareholder or member
action of each Loan Party which is a party thereto.  The execution, delivery and performance of the Transaction Documents
and the consummation of the transactions contemplated by this Agreement and the other Transaction Documents, do not contravene
any applicable law or the organizational documents of any Loan Party or any material agreement or order by which they or any of
their property is bound.  This Agreement and the other Transaction Documents, including the Term Note, when executed
and delivered, are the legally valid and binding obligations of each Loan Party which is a party thereto, enforceable against such
Loan Party in accordance with their respective terms except as the enforceability thereof may be limited by applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of creditors rights generally and subject to any equitable
principles limiting the right to obtain specific performance of any such obligation.


 




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4.3           Financial
Condition.  


 


(A)         All
financial statements concerning the Loan Parties which have been or will hereafter be furnished by any Loan Party to Agent pursuant
to this Agreement or any other Loan Document (subject to the provisions regarding projections set forth in Section 4.28)
(i) have been, or will be, prepared in accordance with GAAP consistently applied throughout the periods involved; (ii) do, or will
present fairly, the financial condition of Loan Parties as at the dates thereof and the results of their operations for the periods
then ended; and (iii) do, or will accurately reflect the financial condition of Loan Parties in all material respects.  As
of the Closing Date, after giving effect to all of the transactions contemplated to occur on the Closing Date pursuant to the Transaction
Documents, all Subsidiaries of Borrower shall be Consolidated Subsidiaries as determined in accordance with GAAP.  


 


(B)         Since
December 31, 2011 there has been no event or development which has had, or is reasonably likely to have, a Material Adverse Effect.  


 


(C)         The
Pro Forma was prepared by Borrower based on the audited consolidated balance sheet of Borrower and its Subsidiaries, dated December
31, 2011.  


 


4.4           Indebtedness
and Liabilities.  Except as set forth on Schedule 4.4, as of the Closing Date, no Loan Party has any (a) Indebtedness
except as reflected on the Pro Forma and the most recent financial statements delivered to Agent; or (b) Liabilities other
than as reflected on the Pro Forma, the most recent financial statements or other written information delivered to Agent on or
before the Closing Date.


 


4.5           Account
Warranties.  Each Account arising from the sale of Inventory or from services rendered (a)  is a valid, bona
fide account, representing an undisputed indebtedness incurred by the named account debtor for goods actually sold and delivered
or for services completely rendered, substantially in accordance with any purchase order, contract or other document relating
thereto; (b) to Borrower’s knowledge, is not subject to any defenses, setoffs, offsets or counterclaims, genuine or
otherwise; (c)  does not represent a sale to an Affiliate (except in accordance with Section 6.6) or a consignment,
sale or return, or a bill and hold transaction; (d) is not subject to any agreement permitting any deduction or discount;
(e) is lawfully owned by Borrower or a Subsidiary of Borrower and is freely assignable by such Person to Agent; and (f) is
free of all Liens other than Permitted Encumbrances and is due and payable in accordance with its terms. There is no Account which,
when considered as a whole with all other Accounts on which the same account debtor is obligated, is subject to any pending or,
to the knowledge of Loan Parties, threatened proceedings or actions by or against such account debtor that could reasonably be
expected to have a material adverse effect on the value or collectability of all such Accounts, taken as a whole, to the extent
the aggregate face amount of all such Accounts equals or exceeds $100,000.


 




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4.6           Names.  Schedule
4.6 sets forth all names, trade names, fictitious names and business names under which each Loan Party currently conduct business
or have at any time during the past five (5) years conducted business.


 


4.7           Locations;
FEIN.  Schedule 4.7 sets forth the jurisdiction of organization of each Loan Party, location of each Loan
Party’s chief executive office, principal place of business, the location of each Loan Party’s books and records, the
location of all other offices of such Loan Party and all Collateral locations, and such locations are the sole locations of the
Loan Parties for their businesses and the Collateral.  Each Loan Party’s federal employer identification number
and entity identification number in its state of incorporation or formation (as applicable) is set forth on Schedule 4.7.


 


4.8           Title
to Properties; Liens.  Each Loan Party has good, sufficient and legal title to all of its respective properties and
assets, other than any property which, either on a stand alone basis or collectively with all other such property, has a de minimus
value.  Except for Permitted Encumbrances, all such properties and assets are free and clear of Liens.  None
of the Loan Parties has breached any leases of real property under which such Loan Party is lessee or lessor or has knowledge of
any breach thereof by any other party thereto, in each case, which breach could reasonably be expected to have a Material Adverse
Effect.  All Liens of Agent for the benefit of Lenders in the Collateral are duly perfected first priority Liens subject
only to the Permitted Encumbrances.


 


4.9           Litigation;
Adverse Facts.  Except as set forth on Schedule 4.9, there are no judgments outstanding against any Loan Party
or affecting any property of any Loan Party nor is there any action, charge, claim, demand, suit, proceeding, petition, governmental
investigation or arbitration now pending or, to the knowledge of Loan Parties, threatened against or affecting any Loan Party or
any property of any Loan Party which could reasonably be expected to have a Material Adverse Effect.  None of the Loan
Parties has received any opinion or memorandum or legal advice from legal counsel to the effect that it is exposed to any liability
which could reasonably be expected to have a Material Adverse Effect.


 


4.10         Payment
of Taxes.  Except as set forth on Schedule 4.10, all material tax returns and reports of each Loan Party
required to be filed by it have been timely filed, and all Taxes upon such Loan Party and upon its properties, assets, income and
franchises which are shown on such returns as due and payable, have been paid when due and payable.  As of the Closing
Date, none of the income tax returns of any Loan Party is under audit.  No tax liens have been filed or are being asserted
with respect to any such taxes.  The charges, accruals and reserves on the books of each Loan Party in respect of any
taxes or other governmental charges are in accordance with GAAP.


 


4.11         Performance
of Agreements.  No Loan Party is in default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any contractual obligation of such Loan Party, including those contained in any Transaction
Document to which such Loan Party is a party, and no condition exists that, with the giving of notice or the lapse of time or
both, would constitute such a default, which in any case could reasonably be expected to have a Material Adverse Effect. 


 




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4.12         Employee
Benefit Plans.  Each Loan Party is in compliance in all material respects with all applicable provisions of ERISA,
the IRC and all other applicable laws and the regulations and interpretations thereof with respect to all Employee Benefit Plans.  No
liability which could reasonably be expected to have a Material Adverse Effect has been incurred and remains unsatisfied for any
funding obligation, taxes or penalties with respect to any Employee Benefit Plan.  All Foreign Subsidiaries are in compliance
in all material respects with all applicable provisions of all laws, and all regulations and interpretations thereof, of all applicable
foreign government(s) (whether of any foreign national government or any agency or instrumentality of or province, county, district,
department, subdivision or local unit of any such foreign national government) regarding employee pension plans or employee benefit
and welfare plans with respect to each employee pension plan or employee benefit and/or welfare plans maintained by such Foreign
Subsidiary, and no liability which could reasonably be expected to have a Material Adverse Effect has been incurred and remains
unsatisfied for any funding obligation, taxes or penalties with respect to any such employee pension plan or employee benefit and/or
welfare plans maintained by such Foreign Subsidiary.


 


4.13         Intellectual
Property.  Each Loan Party owns, is licensed to use, or otherwise has the right to use, all material Intellectual
Property used in or necessary for the conduct of its businesses as currently conducted without conflict with any rights of others,
and all such material Intellectual Property that is filed or registered with a governmental authority and owned by any Loan Party
is identified on Schedule 4.13.  Except as disclosed on Schedule 4.13 none of Loan Parties pays or
owes any royalty or any other compensation to any Person with respect to any Loan Party’s use of any Intellectual Property
of a third party (excluding any generally commercially available off-the-shelf software licensed on non-negotiated terms with a
cost of no more than $50,000 per title).  


 


4.14         Broker’s
Fees.  Except as set forth on Schedule 4.14, no broker’s or finder’s fee or commissions or investment
banking fees will be payable by reason of any action of Loan Parties with respect to any of the transactions contemplated by the
Transaction Documents.


 


4.15         Environmental
Compliance.  Except as set forth on Schedule 4.15, each Loan Party has been, and is currently, in compliance
with all applicable Environmental Laws, including obtaining and maintaining in effect all material permits, licenses or other
authorizations required by applicable Environmental Laws, except to the extent the failure to so comply or to so maintain such
would not reasonably be expected to have a Material Adverse Effect.  Except as set forth on Schedule 4.15, there
are no claims, liabilities, investigations, litigation, administrative proceedings, judgments or orders relating to any Hazardous
Materials asserted or, to the knowledge of each Loan Party, threatened against such Loan Party or relating to any real property
currently or formerly owned, leased or operated by such Loan Party which could reasonably be expected to have a Material Adverse
Effect, and none of the Loan Parties has any knowledge of any release  or threatened release of hazardous substances
at any real property currently or formerly owned, leased or operated by any Loan Party for which any Loan Party is legally responsible
to remediate under applicable laws or which could reasonably be expected to have a Material Adverse Effect.


 




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4.16         Solvency.  After
giving effect to the transactions contemplated by the Transaction Documents, and, as of, from and after the date of this Agreement,
the Loan Parties taken as a whole (a) own and will own assets the fair saleable value of which are (i) greater than the
total amount of their liabilities (including contingent liabilities) and (ii) greater than the amount that will be required
to pay the probable liabilities of the Loan Parties taken as a whole as they mature; (b) have capital that is not unreasonably
small in relation to their businesses as presently conducted or any contemplated or undertaken transaction; and (c) do not
intend to incur and do not believe that they will incur debts beyond their ability to pay as they become due.


 


4.17         Disclosure.  Subject
to the provisions regarding projections set forth in Section 4.28, no representation or warranty of any Loan Party
contained in this Agreement, the other Transaction Documents, the financial statements, or any other document, certificate or written
statement furnished to Agent by or on behalf of such Loan Party for use in connection with the Transaction Documents contains any
untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in which the same were made.  There is no material
fact known to any Loan Party that has had or could reasonably be expected to have a Material Adverse Effect and that has not been
fully disclosed herein or in such other documents, certificates and statements furnished to Agent for use in connection with the
transactions contemplated by the Transaction Documents.


 


4.18         Insurance.  Each
Loan Party shall maintain all risk property coverage with a limit equal to the full replacement cost, without co-insurance and
with a deductible no greater than $10,000 and insurance policies for public liability, worker’s compensation, larceny, embezzlement
or other criminal misappropriation for their businesses and properties, of types and in amounts customarily maintained by comparable
businesses; and, as of the Closing Date, no notice of cancellation has been received or, to the knowledge of any Loan Party, threatened
with respect to such policies.  Each Loan Party is in compliance in all material respects with all conditions contained
in such policies.


 


4.19         Compliance
with Laws.  Except as set forth on Schedule 4.19, each Loan Party is in compliance with any law, ordinance,
rule, regulation, order, policy, or other requirement of any domestic or foreign government or any instrumentality or agency thereof,
having jurisdiction over the conduct of its business or the ownership of its properties, including, without limitation, any violation
relating to any use, release, storage, transport or disposal of any Hazardous Material, except to the extent the failure to be
in compliance therewith would not subject any Loan Party or any of its respective officers to criminal liability or have a Material
Adverse Effect.


 


4.20         Bank
Accounts.  Schedule 4.20 sets forth the account numbers and locations of all bank accounts of the Loan Parties.


 


4.21         Subsidiaries.  Except
as set forth on Schedule 4.21, no Loan Party has any Subsidiaries.


 




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4.22         Employee
Matters.  Except as set forth on Schedule 4.22, (a) no employees of any Loan Party are subject to any
collective bargaining agreement, management agreement or consulting agreement, (b) no petition for certification or union
election is pending with respect to the employees of any Loan Party and no union or collective bargaining unit has sought such
certification or recognition with respect to the employees of such Loan Party and (c) there are no strikes, slowdowns, work
stoppages or controversies pending or threatened between any Loan Party and its respective employees, other than employee grievances
arising in the ordinary course of business which could not reasonably be expected to have, either individually or in the aggregate,
a Material Adverse Effect.  Except as set forth on Schedule 4.22, no Loan Party is subject to any employment contract.


 


4.23         Governmental
Regulation.  No Loan Party is, and, after giving effect to the borrowing of the Term Loan, will not be, subject to
regulation under the Federal Power Act or the Investment Company Act of 1940 or to any foreign, federal or state statute or regulation
limiting its ability to incur indebtedness for borrowed money.


 


4.24         Receivables
and Payables.  The amount of the receivables and payables of each Loan Party, as of the Closing Date, is set forth
in detail on Schedule 4.24, all of which are respectively collectible and payable in the ordinary course of business in
accordance with the usual terms and conditions of such Loan Party’s businesses, except for uncollectible receivables arising
in the ordinary course of business.  No Loan Party has any knowledge of any fact or circumstance not already disclosed
to Agent in writing which would be reasonably likely to impair the validity or collectability of any Account.


 


4.25         Trade
Relations.  Except as set forth on Schedule 4.25, as of the Closing Date there exists no actual or threatened
termination or cancellation of material adverse modification or change in, the business relationship of any Loan Party with any
customer or supplier or group of customers or suppliers, either individually or in the aggregate, material to their respective
operations.


 


4.26         Absence
of Defaults.  Except as set forth on Schedule 4.26, as of the Closing Date, no Loan Party is in default under
its certificate of formation, or articles of incorporation, by-laws or operating agreement, or similar entity governance documents.  No
event has occurred which has not been remedied (to the extent expressly permitted hereunder) or waived in writing by Agent, which
constitutes a Default or an Event of Default, or which constitutes, or which with the passage of time or giving of notice or both
would constitute, a default or event of default by any Loan Party under any material agreement or judgment, decree or order to
which such Loan Party is a party or by which its properties may be bound or which would require it to make any payment under any
of the foregoing prior to the scheduled maturity date therefor.


 


4.27         Loans
to Shareholders, Directors, Officers or Affiliates.  Except as set forth on Schedule 4.27, no Loan Party has
made any loans or advances to or for the benefit of any shareholder, director, officer or Affiliate of such Loan Party.


 


4.28         Projections.  The
projections attached hereto as Schedule 4.28 (“Projections”) (a) fairly represent Borrower’s
and its Subsidiaries’ financial projections for the period covered thereby, and (b) were prepared in a manner consistent
with GAAP.  The Projections and pro forma financial information contained in the Projections are based upon good faith
estimates and assumptions believed by Borrower to be reasonable at the time made, it being recognized by Agent and Lenders that
projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by the
Projections may differ from the projected results, and such differences may be material.


 


 


 




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4.29         Surety
Obligations.  None of the Loan Parties is obligated as surety or indemnitor under any bond or other contract that
assumes payment or performance of any obligation of any Person, except as permitted hereunder.


 


4.30         Commercial
Tort Claims and Letter of Credit Rights.  Except as set forth in, Schedule 4.30, no Loan Party holds interest
in any commercial tort claims and is not the beneficiary of any letter of credit.


 


4.31         Offering.  Borrower
intends to use commercially reasonable efforts to commence within ninety (90) days after the Closing Date the process of either
(i) preparing an S-1 Registration Statement for filing with the Securities Exchange Commission for an underwritten public offering
or (ii) commencing negotiations to complete a PIPE or other equity financing transaction.


 


SECTION
5    AFFIRMATIVE COVENANTS


 


Each Loan Party covenants
and agrees that until payment and performance in full of all Obligations (other than unasserted claims for indemnification or expense
reimbursement), unless such Loan Party has received the prior written consent of Agent, such Loan Party shall perform all covenants
in this Section 5 applicable to such Loan Party.


 


5.1           Financial
Statements and Other Reports.  Borrower and its Subsidiaries shall maintain a system of accounting and keep such
books, records and accounts (which shall be true and complete in all material respects), as may be required or as may be necessary
to permit the performance of an annual audit and the preparation of financial statements in accordance with GAAP, consistently
applied.  Borrower will deliver to Agent the financial statements and other reports described below until payment and
performance in full of all Obligations (other than unasserted claims for indemnification or expense reimbursement).


 


(A)         Monthly
Financials.  As soon as available and in any event within thirty (30) days after the end of each month, including,
without limitation, each March, June, September and December, Borrower shall deliver the consolidated and consolidating balance
sheet of Borrower and its Subsidiaries as at the end of such month and the related consolidated and consolidating statements of
income, shareholder’s or member’s (as applicable) equity and cash flow for such month and for the period from the beginning
of the then current Fiscal Year to the end of such month.  


 


(B)         Quarterly
Financials.  In addition to the monthly financial statements referred to in Section 5.1(A), as soon as available
and in any event within forty-five (45) days after the end of each of the first three quarters of each Fiscal Year, Borrower shall
deliver the consolidated and consolidating balance sheet of Borrower and its Subsidiaries as at the end of such period and the
related consolidated and consolidating statements of income, shareholder’s or member’s (as applicable), equity and
cash flow for such quarter of such Fiscal Year and for the period from the beginning of the then current Fiscal Year to the end
of such quarter of such Fiscal Year.


 


 


 




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(C)         Year-End
Financials.  In addition to the monthly and quarterly financial statements referred to in Sections 5.1(A)
and 5.1(B), as soon as available and in any event within ninety (90) days after the end of each Fiscal Year, Borrower shall
deliver to Agent: (1) the audited consolidated and consolidating balance sheet of Borrower and its Subsidiaries as at the
end of such Fiscal Year and the related consolidated and consolidating statements of income, shareholder’s or member’s
(as applicable) equity and cash flow for such Fiscal Year; and (2) a report with respect to the financial statements from
Salberg & Company, P.A. or another firm of independent certified public accountants selected by Borrower and reasonably acceptable
to Agent, which report shall be unqualified as to going concern and scope of audit of Borrower and its Subsidiaries and shall state
that (a) such financial statements present fairly the financial position of Borrower and its Subsidiaries as at the dates
indicated and the results of its operations and cash flow for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years and (b) the examination by such accountants in connection with such financial statements has been
made in accordance with generally accepted auditing standards.


 


(D)         Accountants’
Certification and Reports.  Promptly after receipt thereof, Borrower will deliver (i) copies of all reports submitted
to Borrower by its independent public accountants in connection with each annual, interim or special audit or review of the financial
statements or financial controls of Borrower or any of its Subsidiaries made by such accountants, including the comment letter
submitted by such accountants to management or any member or committee of the Borrower or any of its Subsidiaries in connection
with their annual, interim or special audit or review, and (ii) if such accounting firm is not restricted from providing such
a certificate by its policies, a certificate of the independent public accountants who performed such annual, interim or special
audits or review, to the effect that, in making the examination necessary for the audits or review, they have obtained no knowledge
of any condition or event which constitutes a Default or Event of Default, or if such accountants shall have obtained knowledge
of any such condition or event, specifying in such certificate each such condition or event of which they have knowledge and the
nature and status thereof.


 


(E)         Management
Report.  Together with each delivery of financial statements pursuant to subdivisions (A), (B) and (C) of this Section
5.1, Borrower shall deliver a management report: (1) describing the operations and financial condition of Borrower and
its Subsidiaries for the relevant period then ended and the portion of the current Fiscal Year then elapsed (or for the Fiscal
Year then ended in the case of year-end financials); (2) setting forth in comparative form (x) the corresponding figures
for such relevant period and year-to-date periods as set forth in the Projections (or, if applicable, the yearly projections delivered
to Agent under Section 5.1(F) below) and (y) the corresponding figures for the comparable period and year-to-date period
in the previous Fiscal Year, in each case setting forth the variances between the figures for the relevant period then ended and
the portion of the current Fiscal Year and the corresponding figures from the Projections or projections and prior Fiscal Year;
and (3) with respect only to the financial statements to be delivered pursuant to subdivisions (B) and (C) of this Section
5.1, setting forth a schedule showing the calculation of the financial covenants specified in Section 5.21.  In
addition, together with each delivery of financial statements, Borrower shall deliver to Agent a certificate, which shall be satisfactory
in form and substance to Agent, of a chief financial officer, director of finance, chief executive officer or president of Borrower
to the effect that (i) such information is accurate and complete in all material aspects or, in the case of financial statements,
fairly presents the results of operations and financial condition of Borrower and its Subsidiaries, on a Consolidated basis, as
at the dates and for the periods indicated (subject to, in the case of financial statements delivered pursuant to Section 5.1(A)
and (B), the absence of footnotes and customary year-end adjustments), (ii) as of the date of such certification, there
does not exist any Default or Event of Default or, if an Event of Default or Default existed, describing the nature and period
of existence thereof and the action which Borrower and its Subsidiaries propose to take or have taken with respect thereto, and
(iii) the representations and warranties contained in this Agreement and in the other Loan Documents remain in full force
and effect and are true and accurate in all respects as of the date of delivery of the management report, except (x) to the
extent such representations and warranties relate solely and expressly to an earlier date, and (y) for revisions or updates
to any Schedule(s) approved by Agent pursuant to Section 5.16. 


 




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(F)         Projections.  At
least thirty (30) days before the beginning of each Fiscal Year, Borrower shall deliver to Agent the projected consolidated and
consolidating balance sheets and income and cash flow statements of Borrower and its Subsidiaries for each month of such Fiscal
Year, each in reasonable detail, reporting Borrower’s good faith projections and certified by Borrower’s chief financial
officer as being the most accurate projections available and identical to the projections used by Borrower and its Subsidiaries
for internal planning purposes, together with a statement of underlying assumptions and such supporting schedules and information
as Agent may reasonably require.


 


(G)         Lender
Meetings.  Within 120 days after the end of each Fiscal Year, at the request of Agent, Borrower shall hold a meeting
with Agent (at a mutually agreeable location, venue and time or, at the option of the Agent, by conference call, the costs of such
venue or call, but not any travel, lodging or meal expenses incurred by Agent, to be paid by Borrower) to review the financial
results of the previous Fiscal Year and the financial condition of Borrower and its Subsidiaries and the projections for the current
Fiscal Year.


 


(H)         Tax
Returns.  Within twenty (20) days after filing thereof, Borrower shall deliver to Agent a copy of the annual federal
(and, if requested by Agent, state or other) tax return (and any amended return) of Borrower and its Subsidiaries, certified by
the chief financial officer or chief executive officer of Borrower to be accurate and complete in all material respects.


 


(I)         Government
Notices.  Borrower shall deliver to Agent promptly after receipt copies of all notices, requests, subpoenas, inquiries
or other writings received from any governmental agency concerning the violation or alleged violation of any Environmental Laws,
the storage, use or disposal of any Hazardous Material, the violation or alleged violation of the Fair Labor Standards Act or Borrower’s
or its Subsidiaries’ payment or non-payment of any taxes including any tax audit, in each case, to the extent such violation,
alleged violation, payment or non-payment could reasonably be expected to have a Material Adverse Effect.


 


(J)         Events
of Default, etc.  Within five (5) Business Days following the day any officer of Borrower obtains knowledge of any
of the following events or conditions, Borrower shall deliver a certificate signed by Borrower’s chief executive officer
or president specifying the nature and period of existence of such condition or event and what action the applicable Loan Party
has taken, is taking, and propose to take, with respect thereto: (1) any condition or event that constitutes an Event of
Default or Default; (2) any notice of material default that any Person has given to any Loan Party or any other action taken
with respect to a claimed material default under any contractual or other obligation; (3) any matter which has had or could
reasonably be expected to have a Material Adverse Effect; (4) the resignation or termination of Lief Andersen, Alan Shoopak,
Dennis Buchman or Steven Reitan; or (5) any matter which could reasonably be considered to be a Material Company Event.


 




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(K)         Trade
Names.  Borrower shall give Agent prompt written notice (but in any event no later than twenty (20) days prior to
such event) of any change of name or of any new trade name or fictitious business name of any Loan Party.  Each Loan
Party’s use of any trade name or fictitious business name shall be in compliance with all laws regarding the use of such
names.


 


(L)         Locations.  Borrower
shall give Agent prompt written notice (but in any event no later than twenty (20) days prior to such event) of any change in any
Loan Party’s principal place of business or any change in the location of their respective books and records or the Collateral
or of any new location for their respective books and records or the Collateral.


 


(M)         Bank
Accounts.  Borrower shall give Agent prompt notice of any new bank accounts any Loan Party intends to establish prior
to its opening same, and if required by Agent, such Loan Party shall cause such bank accounts to be subject to a control agreement
in favor of Agent for the benefit of Lenders.


 


(N)         Certified
Public Accountants.  Within three (3) Business Days of the resignation or termination of Borrower’s current
certified public accountants, or any certified public accountants hereafter engaged by Borrower with Agent’s prior written
consent, Borrower shall notify Agent in writing of such occurrence and the reason(s) therefor.


 


(O)         Litigation.  Within
three (3) Business Days after any officer of any Loan Party obtains knowledge of (1) the institution of any action, suit,
proceeding, governmental investigation or arbitration against or affecting any Loan Party or any property of any Loan Party not
previously disclosed by Borrower to Agent in writing or (2) any material development in any action, suit, proceeding, governmental
investigation or arbitration at any time pending against or affecting any Loan Party or any property of any Loan Party which, in
the case of the preceding clauses (1) or (2), could reasonably be expected to have a Material Adverse Effect, such Loan Party shall
promptly give written notice thereof to Agent and provide such other information as may be reasonably available such Loan Party
to enable Agent and its counsel to evaluate such matter.


 


(P)         Other
Information.  With reasonable promptness, each Loan Party shall deliver such other information and data with respect
to such Loan Party or the Collateral as Agent may reasonably request from time to time.


 


5.2           Access
to Accountants.  Each Loan Party authorizes Agent to discuss the financial condition and financial statements of
such Loan Party with Borrower’s certified public accountants upon reasonable notice to Borrower of Agent’s intention
to do so, and irrevocably authorizes and directs such accountants to respond to all of Agent’s inquiries and furnish Agent
with all such documentation as Agent may reasonably request.  Each Loan Party, on behalf of itself, and each of its
respective Subsidiaries, releases such accountants from any liability for furnishing the information and documents required by
Agent.  On the Closing Date, each Loan Party shall deliver to Agent a written and irrevocable letter addressed to such
accountants directing them to comply with the provisions of this Section 5.2.


 




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5.3           Inspection.  Each
Loan Party shall, at Borrower’s cost and expense, permit Agent and any authorized representatives designated by Agent to
visit and inspect any of the properties of such Loan Party, including its financial and accounting records, and in conjunction
with such inspection, to make copies and take extracts therefrom, and to discuss its affairs, finances and business with its officers
and independent public accountants, and to conduct environmental site assessments and environmental compliance audits, at such
reasonable times during normal business hours and as often as may be reasonably requested, provided that so long as no Event
of Default has occurred and is continuing, Borrower shall not be obligated to pay the costs and expenses of more than one (1) such
inspection in any consecutive period of 365 days commencing on the Closing Date.


 


5.4           Collateral
Records.  Each Loan Party shall keep full and accurate books and records relating to the Collateral and, promptly
after being requested by Agent, shall mark such books and records to indicate the security interests of Agent for the benefit of
Lenders in the Collateral.


 


5.5           Account
Covenants; Verification.  Each Loan Party shall, at its own expense use its best efforts to assure prompt payment
of all amounts due or to become due under the Accounts.  No discounts, credits or allowances (other than normal prompt
payment discounts and customer promotional arrangements discounts) shall be issued, granted or allowed by any Loan Party to customers
and no returns shall be accepted, in each case in any Fiscal Year, if the aggregate amount (or value, in the case of any return)
of all such discounts, credits, allowances and returns exceeds the sum of $200,000 in such Fiscal Year, without Agent’s prior
written consent (not to be unreasonably withheld).   Borrower shall promptly notify Agent in the event that a customer
alleges any material dispute or claim with respect to an Account or Accounts in excess of $100,000 in the aggregate or of any other
circumstances known to Borrower that may impair, in any material respect, the validity or collectability of the Accounts so as
to cause a Material Adverse Effect.  After the occurrence and during the continuance of an Event of Default, Agent shall
have the right to verify the validity, amount or any other matter relating to an Account, by mail, telephone or in person.  After
the occurrence and during the continuance of an Event of Default, no Loan Party shall, without the prior consent of Agent, adjust,
settle or compromise the amount or payment of any Account, or release wholly or partly any customer or obligor thereof, or allow
any credit or discount thereon.  


 


5.6           Endorsement.  Each
Loan Party hereby constitutes and appoints Agent and all Persons designated by Agent for that purpose as such Loan Party’s
true and lawful attorney-in-fact, with power to endorse such Loan Party’s name to any check or other instrument and all
proceeds of Collateral that come into Agent’s possession or under Agent’s control, provided that such possession shall
not be exercised except upon the occurrence of and during the continuance of an Event of Default.  Both the appointment
of Agent as each Loan Party’s attorney and Agent’s rights and powers are coupled with an interest and are irrevocable
until payment in full and complete performance of all of the Obligations (other than unasserted claims for indemnification or
expense reimbursement).  


 




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5.7           Corporate
Existence.  Each Loan Party shall at all times preserve and keep in full force and effect its limited liability company
or corporate (as applicable) existence and all rights and franchises material to their respective businesses.  Each Loan
Party shall notify Agent within one (1) Business Day of any change in its ownership (excluding, with respect to Borrower, any change
in ownership that does not constitute a Change of Control) or corporate structure.


 


5.8           Payment
of Taxes.  Each Loan Party shall pay all Taxes imposed upon its or any of its properties or assets or with respect
to any of its franchises, businesses, income or property before any penalty accrues thereon provided that no such tax need be paid
if such Loan Party, or Borrower on its behalf, is contesting the same in good faith by appropriate proceedings promptly instituted
and diligently conducted and if appropriate reserves have been established as required by GAAP or as required by the IRC.


 


5.9           Maintenance
of Properties; Insurance.  Each Loan Party shall maintain or cause to be maintained in good repair, working order
and condition, normal wear and tear excepted, all properties used in its business.  Each Loan Party shall make or cause
to be made all appropriate repairs, renewals and replacements thereof, and shall protect and preserve all material registered or
registrable Intellectual Property (now or hereafter existing).  Borrower shall maintain or cause to be maintained, with
financially sound and reputable insurers (rated A or better by Best Rating Guide) business interruption, public liability, worker’s
compensation, and property damage, larceny, embezzlement, or other criminal misappropriation insurance with respect to the businesses
and properties of all Loan Parties against loss or damage of the kinds customarily carried or maintained by corporations of established
reputation engaged in similar businesses and in amounts reasonably acceptable to Agent.  Borrower shall cause Agent to
be named as “lender’s loss payee” on all certificates evidencing insurance relating to any Collateral and shall
cause (x) separate loss payable endorsements in favor of Agent with respect to such insurance to be issued, and (y) Agent to be
named as “additional insured”, as its interests may appear, under all liability policies, in each case pursuant to
appropriate endorsements in form and substance reasonably satisfactory to Agent.  Borrower shall apply any proceeds received
from any policies of insurance relating to any Collateral to the Obligations, except to the extent otherwise provided in section
2.5(F).  An updated certificate of insurance evidencing the effectiveness of each type of insurance required to be maintained
by Borrower pursuant to this Section 5.9 shall be delivered to Agent on each yearly anniversary of the Closing Date, and upon Agent’s
reasonable request, a copy of each applicable insurance policy shall be delivered to Agent.


 


5.10         Compliance
with Laws.  Except to the extent provided in Schedule 4.19, each Loan Party shall comply with the requirements
of all applicable laws, rules, regulations and orders of any governmental authority as now in effect and which may be imposed
in the future in all jurisdictions in which such Loan Party is now doing business or may hereafter be doing business, except to
the extent that noncompliance with such laws, rules, regulations and orders could not reasonably be expected to have a Material
Adverse Effect.


 




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5.11         Further
Assurances.  Each Loan Party shall, from time to time, execute such guaranties, financing or continuation statements,
security agreements, reports and other documents or deliver to Agent such instruments, certificates of title or other documents
as Agent at any time may reasonably request to evidence, perfect or otherwise implement the guaranties and security for repayment
of the Obligations provided for in the Loan Documents.  


 


5.12         Collateral
Locations.  Each Loan Party shall keep the Collateral owned by it (other than in-transit Collateral, including Inventory,
Equipment and supplies and materials or Collateral that is otherwise moved in the ordinary course of business, and Equipment stored
on-site at a customer location in the ordinary course of business) at the locations specified on Schedule 4.7; provided,
however, that Borrower may amend Schedule 4.7 so long as such amendment occurs by written notice to Agent not less
than thirty (30) days prior to the date on which such Collateral is moved.  With respect to any new location (which shall
be within the continental United States), the applicable Loan Party shall execute such documents and take such actions as Agent
reasonably deems necessary to perfect and protect the security interests of Agent for the benefit of Lenders in the Collateral
prior to the transfer or removal of any Collateral to such new location.


 


5.13         Bailees.  In
the event that the fair market value of any Collateral at any time in the possession or control of any warehouseman, bailee or
any Loan Party’s agents or processors exceeds $50,000 at any single location or $100,000 in the aggregate, such Loan Party,
shall, upon the request of Agent, notify such warehouseman, bailee, agent or processor of the security interests in favor of Agent
for the benefit of Lenders created hereby, shall instruct such Person to hold all such Collateral for Agent’s account subject
to Agent’s instructions and shall cause such Person to execute an access and waiver agreement reasonably acceptable to Agent.


 


5.14         Use
of Proceeds and Margin Security.  Borrower shall use the proceeds of the Term Loan for proper business purposes (as
described in Section 2.2) consistent with all applicable laws, statutes, rules and regulations.  No portion of
the proceeds of the Term Loan shall be used by any Loan Party for the purpose of purchasing or carrying of margin stock within
the meaning of Regulation U, or in any manner that might cause the borrowing or the application of such proceeds to violate Regulation
T or Regulation X or any other regulation of the Board of Governors of the Federal Reserve System, or to violate the Exchange Act.


 


5.15         Observer
and Other Rights.  Borrower shall hold regularly scheduled meetings of its directors or managers, as applicable,
at least quarterly, and Agent shall have the right from time to time (i) to designate a representative to attend and serve
as an observer at such meetings and who shall have the right to receive twenty-eight (28) days prior notice of any quarterly meeting
(specifying the matters to be discussed or acted upon) of the directors or managers, as applicable, of Borrower, and attend any
meetings of the directors or managers, as applicable, and (ii) to receive on a timely basis and simultaneously with receipt
thereof by directors, managers or committee members, as applicable, copies of all written information provided to the directors,
managers or committee members, as applicable, of such Loan Party.


 




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5.16         Revisions
or Updates to Schedules.  Should any of the information or disclosures provided on any of the Schedules originally
attached hereto become outdated or incorrect in any material respect, Borrower shall deliver to Agent within thirty (30) days after
the end of the month in which such change occurs, along with the Officer’s Certificate required under Section 5.1(E),
such revisions or updates to such Schedule(s) as may be necessary or appropriate to update or correct such Schedule(s); provided
that no such revisions or updates to any Schedule(s) shall be deemed to have amended, modified or superseded such Schedule(s) as
originally attached hereto, or to have cured any breach of warranty, representation or covenant resulting from the inaccuracy or
incompleteness of any such Schedule(s), unless and until Agent shall have accepted in writing such revisions or updates to such
Schedule(s).  


 


5.17         [Reserved].


 


5.18         Accuracy
of Information.  All written information, reports, statements and other papers and data furnished to Agent, whether
pursuant to this Section 5 or any other provision of this Agreement or of any other Transaction Document, shall be,
at the time the same is so furnished, complete and correct in all material respects (subject to the provisions regarding projections
set forth in Section 4.28) to the extent necessary to give Agent true and accurate knowledge of the subject matter
thereof.


 


5.19         Landlord
and Storage Agreements.  Borrower shall deliver to Agent copies of all existing agreements, and promptly after execution
thereof, provide the Agent with copies of all future material agreements, between any Loan Party and any landlord, warehouseman,
processor, shipper, bailee or other Person that owns any premises at which any Collateral may be kept or that otherwise may possess,
control or handle any Collateral.


 


5.20         Commercial
Tort Claims and Letter of Credit Rights.  If any Loan Party at any time holds or acquires any interest in any commercial
tort claim or becomes a beneficiary under any letter of credit, such Loan Party shall promptly notify Agent in writing thereof
and shall be deemed to have granted to Agent for the benefit of Lenders a security interest and lien in and to such commercial
tort claim or letter of credit, as the case may be, and the proceeds thereof.  Without prejudice to the generality of
the foregoing, such Loan Party shall execute such further documents or do such further acts as Agent may require to grant to Agent
for the benefit of Lenders valid and perfected priority security interests in such commercial tort claims or letter(s) of credit,
as the case may be, including, but not limited, to: (i) furnishing to Agent all the details of the nature of the commercial tort
claim, the name(s) of the defendant(s), the court, if any, in which the claim has been brought and the index number, if any, and
(ii) using commercially reasonable efforts to cause the issuers of the letter(s) of credit to consent to the assignment of the
proceeds of such letter(s) of credit to the Agent for the benefit of Lenders or to cause the issuer of such letter(s) of credit
to name the Agent for the benefit of Lenders as the transferee beneficiary of such letter of credit.


 


5.21         Financial
Covenants.  Borrower on a consolidated basis with its Subsidiaries shall maintain or keep in full force and effect
all of the financial covenants set forth below.  The calculation and determination of each such financial covenant, and
all accounting terms contained therein, shall be so calculated and construed in accordance with GAAP, applied on a consistent basis
with the audited financial statements of Borrower and its Subsidiaries for the fiscal year ended on December 31, 2011:


 


(A)         Minimum
Liquidity.  Liquidity shall not be less than the amount set forth below, to be maintained at all times during and
at the end of each period specified below:


 




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	Periods	 	Liquidity	 
	Closing Date through June 30, 2013	 	$	1,000,000	 
	July 1, 2013 through September 30, 2013	 	$	1,500,000	 
	October 1, 2013 through December 31, 2013	 	$	1,750,000	 
	January 1, 2014 through March 31, 2014	 	$	2,000,000	 
	April 1, 2014 through June 30, 2014	 	$	2,250,000	 
	July 1, 2014 through September 30, 2014	 	$	2,500,000	 
	October 1, 2014 through December 31, 2014	 	$	2,750,000	 
	January 1, 2015 and at all times thereafter	 	$	3,000,000	 



 


(B)         Capital
Expenditures.  Capital Expenditures (whether or not financed) shall not exceed the amounts specified below for the
periods specified below:


 


	Periods	 	Capital Expenditures	 
	Fiscal Year ending on December 31, 2013	 	$	2,000,000	 
	Fiscal Year ending on December 31, 2014	 	$	1,500,000	 
	Fiscal Year ending on December 31, 2015 and each succeeding Fiscal Year thereafter	 	$	1,250,000	 



  


(C)         Fixed
Charge Coverage Ratio.  The Fixed Charge Coverage Ratio shall be not less than the levels specified below as of the
end of each fiscal quarter indicated below, in each case for the trailing period of four (4) consecutive fiscal quarters then ended,
provided that, for purposes of calculating compliance with this covenant, with respect to Debt Payments for the fiscal quarter
ending on June 30, 2013, the two fiscal quarters ending on September 30, 2013 and the three fiscal quarters ending on December
31, 2013 such Debt Payments shall be annualized by multiplying such Debt Payments by a factor of 4, 2 and 1.33, respectively:


 


	Period Ending On	 	
        Fixed Charge Coverage

        Ratio

	June 30, 2013	 	1.10 to 1.00
	September 30, 2013	 	1.10 to 1.00
	December 31, 2013	 	1.10 to 1.00
	March 31, 2014	 	1.10 to 1.00
	June 30, 2014 and the last day of each succeeding fiscal quarter thereafter	 	1.20 to 1.00


 


(D)         Total
Debt Leverage Ratio.  The Total Debt Leverage Ratio shall not be greater than the levels specified below as of the
end of, and for, each period indicated below, with Adjusted EBITDA and rent expenses measured for the trailing period of four
(4) consecutive fiscal quarters then ended: 


 




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	Period Ending On	 	
        Total Debt

        Leverage Ratio

	June 30, 2013	 	5.25 to 1.00
	September 30, 2013	 	5.00 to 1.00
	December 31, 2013	 	4.75 to 1.00
	March 31, 2014	 	4.75 to 1.00
	June 30, 2014	 	4.50 to 1.00
	September 30, 2014	 	4.50 to 1.00
	December 31, 2014	 	4.50 to 1.00
	March 31, 2015	 	4.25 to 1.00
	June 30, 2015	 	4.00 to 1.00
	September 30, 2015	 	3.75 to 1.00
	December 31, 2015	 	3.75 to 1.00
	March 31, 2016	 	3.50 to 1.00
	June 30, 2016 and the last day of each succeeding fiscal quarter thereafter	 	3.00 to 1.00


 


(E)         
Senior Debt Leverage Ratio.  The Senior Debt Leverage Ratio shall not be greater than the levels specified below
as of the end of, and for, each period indicated below, with Adjusted EBITDA measured for the trailing period of four (4) consecutive
fiscal quarters then ended:


 


	Period Ending On	 	
        Senior Debt

        Leverage Ratio

	June 30, 2013	 	3.50 to 1.00
	September 30, 2013	 	3.25 to 1.00
	December 31, 2013	 	3.00 to 1.00
	March 31, 2014	 	3.00 to 1.00
	June 30, 2014	 	2.75 to 1.00
	September 30, 2014	 	2.50 to 1.00
	December 31, 2014	 	2.50 to 1.00
	March 31, 2015	 	2.25 to 1.00
	June 30, 2015	 	2.25 to 1.00
	September 30, 2015	 	2.00 to 1.00
	December 31, 2015	 	1.75 to 1.00
	March 31, 2016	 	1.50 to 1.00
	June 30, 2016	 	1.50 to 1.00
	September 30, 2016	 	1.25 to 1.00
	December 31, 2016 and the last day of each succeeding fiscal quarter thereafter	 	1.00 to 1.00


  




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(F)         Interest
Coverage Ratio.  The Interest Coverage Ratio shall be not less than the levels specified below as of the end of each
fiscal quarter indicated below, in each case for the trailing period of four (4) consecutive fiscal quarters then ended, provided
that, for purposes of calculating compliance with this covenant, with respect to interest payments made in cash or in kind (“Interest
Payments”) for the fiscal quarter ending on June 30, 2013, the two fiscal quarters ending on September 30, 2013 and the
three fiscal quarters ending on December 31, 2013 such Interest Payments shall be annualized by multiplying such Interest Payments
by a factor of 4, 2 and 1.33, respectively:


 


	Period Ending On	 	Interest Coverage Ratio
	June 30, 2013	 	1.80 to 1.00
	September 30, 2013	 	2.20 to 1.00
	December 31, 2013	 	2.20 to 1.00
	March 31, 2014	 	2.35 to 1.00
	June 30, 2014	 	2.50 to 1.00
	September 30, 2014	 	2.65 to 1.00
	December 31, 2014	 	2.80 to 1.00
	March 31, 2015	 	3.00 to 1.00
	June 30, 2015	 	3.00 to 1.00
	September 30, 2015	 	3.25 to 1.00
	December 31, 2015	 	3.50 to 1.00
	March 31, 2016	 	3.75 to 1.00
	June 30, 2016 and the last day of each succeeding fiscal quarter thereafter	 	4.00 to 1.00


  


SECTION
6    NEGATIVE COVENANTS


 


Each Loan Party covenants
and agrees that until payment and performance in full of all Obligations (other than unasserted claims for indemnification or expense
reimbursement), unless such Loan Party has received the prior written consent of Agent, such Loan Party shall perform all covenants
in this Section 6 applicable to such Person.  


 


6.1           Indebtedness
and Liabilities.  None of the Loan Parties shall directly or indirectly create, incur, assume, guaranty, or otherwise
become or remain directly or indirectly liable, on a fixed or contingent basis, with respect to any Indebtedness except: (a) the
Obligations; (b) Capital Leases and purchase money financing for Equipment entered into in the ordinary course of business
(subject to Section 5.21); (c) trade payables and normal accruals in the ordinary course of business not yet due and
payable or with respect to which such Loan Party is contesting in good faith the amount or validity thereof by appropriate proceedings
and then only to the extent that Borrower shall have established adequate reserves therefor, if appropriate under GAAP; (d) Indebtedness
owing under the AZ Perio Seller Note and, to the extent constituting Indebtedness, working capital adjustments owing by Borrower
to a seller in connection with the Acquisition, the AZ Perio Acquisition or a Permitted Acquisition; (e) Indebtedness described
in Section 4.4(a) hereof (including Indebtedness described on Schedule 4.4) and any extension, refinancing, renewal
or replacement thereof if the principal amount thereof does not exceed the principal amount of the Indebtedness so refinanced;
(f) up to an aggregate amount of $6,000,000 in unsecured debt owing to sellers of assets or equity interests of all entities acquired
by Borrower pursuant to the Acquisition Agreements or in connection with any Permitted Acquisition, provided that the repayment
of any such unsecured debt is subordinated on terms satisfactory to Agent, including a restriction against payment of cash interest,
required amortization and mandatory prepayments and provided further that the stated maturity date of any such debt is at least
three (3) years or longer or otherwise acceptable to the Agent; (g) Indebtedness in respect of letters of credit or banker’s
acceptances to secure the performance of bids, tenders, leases, contracts (other than for the payment of money) or statutory obligations;
(h) Indebtedness in favor of Borrower or any Guarantor pursuant to clause (g) of the definition of Permitted Investments; and
(i) other Indebtedness in an aggregate principal amount at any time outstanding not to exceed $100,000.


 




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6.2           Guaranties.  Except
as set forth on Schedule 6.2 and except for the Guaranties and endorsements of instruments or items of payment for collection
in the ordinary course of business, no Loan Party shall guaranty, endorse, or otherwise in any way become or be responsible for
any obligations of any other Person, whether directly or indirectly, by agreement to purchase the Indebtedness of any other Person
or through the purchase of goods, supplies or services, or maintenance of working capital or other balance sheet covenants or other
financial conditions, or by way of stock purchase, capital contribution, advance or loan for the purpose of paying or discharging
any indebtedness or obligation of such other Person or otherwise; provided that each Loan Party shall be permitted to guaranty,
endorse, or otherwise in any way become or be responsible for any obligations of any other Person to the extent such Loan Party
is permitted to incur such Indebtedness as a primary obligor pursuant to Section 6.1.


 


6.3           Transfers,
Liens and Related Matters.


 


(A)         Transfers.  No
Loan Party shall sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to any
of the Collateral or other assets, except that each Loan Party may (i) sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to any of the Collateral or other assets to the extent such asset or Collateral
is of a kind described in any of clauses (a) through (d) of the defined term Asset Disposition, but only to the extent and on the
applicable terms set forth therein and (ii) make other Asset Dispositions (subject to the mandatory prepayment provisions
contained in Section 2.5(F) above) if all of the following conditions are met: (1) the fair market value of assets
sold or otherwise disposed of in any single transaction or series of related transactions does not exceed Fifty Thousand Dollars
($50,000) and the aggregate fair market value of assets sold or otherwise disposed of in any Fiscal Year does not exceed One Hundred
Thousand Dollars ($100,000); (2) the consideration received is at least equal to the fair market value of such assets; (3) the
sole consideration received is cash; and (4) no Default or Event of Default shall then exist or shall result from such Asset
Disposition.


 


(B)         Liens.  Except
for Permitted Encumbrances, no Loan Party shall directly or indirectly create, incur or assume (or agree to create, incur or assume)
or permit to exist any Lien on or with respect to any of the Collateral or other assets or any proceeds, income or profits therefrom.


 


(C)         No
Pledge Restrictions.  No Loan Party shall enter into or assume any agreement (other than the Loan Documents) restricting
the creation or assumption of any Lien upon any of its properties or assets, whether now owned or hereafter acquired. 


 




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6.4           Restricted
Payments.  No Loan Party shall directly or indirectly declare, order, pay, make or set apart any sum for any Restricted
Payment, except that Borrower may make payments when due in respect of the Earn-Out Obligations, provided that not less
than ten (10) Business Days prior to any such payment, Borrower shall deliver to Agent written notice of its intent to make such
payment together with a certificate signed by the chief financial officer of Borrower which shall include a calculation in reasonable
detail demonstrating that after giving effect to such payment on a Pro Forma Basis, Borrower would be in compliance with the financial
covenants set forth in Section 5.21(C),(D) and (E) as of the end of and for the period of four (4) consecutive fiscal quarters
ending with the most recent fiscal quarter for which the Borrower delivered financial statements to Agent pursuant to Section
5.1(B), provided further that no Default or Event of Default shall have occurred and be continuing at such time.


 


6.5           Restriction
on Fundamental Changes.  No Loan Party shall: (a)  except with thirty (30) days prior written notice to Agent,
change its jurisdiction of incorporation or formation (as applicable), type of organization (as defined in the UCC), tax, charter
or other organizational number or its legal name; (b) acquire by purchase or otherwise all or substantially all of the assets
of, or stock or other evidence of beneficial ownership, of any Person or any business division of any Person, except in connection
with the Acquisition, the AZ Perio Acquisition or a Permitted Acquisition; (c) merge into or consolidate with any other Person,
except (i) any Subsidiary of Borrower may merge into or consolidate with Borrower or any other wholly-owned Subsidiary of Borrower
and (ii) in connection with any acquisition permitted pursuant to the foregoing clause (b) so long as Borrower is the surviving
person of any merger or consolidation involving Borrower; or (d) liquidate, wind up its affairs or undergo any dissolution.


 


6.6           Transactions
with Affiliates.  Except as disclosed in Borrower’s filings with the Securities and Exchange Commission prior
to the Closing Date, no Loan Party shall directly or indirectly, enter into or permit to exist any transaction (including the purchase,
sale or exchange of property or the rendering of any service) with any Affiliate or with any officer, director or employee of any
Loan Party, except for (subject to Section 6.16) transactions in the ordinary course of and pursuant to the reasonable requirements
of such Loan Party’s business and upon fair and reasonable terms which are fully disclosed to Agent and which are no less
favorable to such Loan Party than they would obtain in a comparable arm’s length transaction with an unaffiliated Person.


 


6.7           Environmental
Liabilities.  No Loan Party shall: (a) violate in any material respect any applicable Environmental Law; (b) dispose
of any Hazardous Materials (except in accordance with applicable law) into, onto or from, any real property owned, leased or operated
by such Loan Party; or (c) permit any Lien imposed pursuant to any Environmental Law to be imposed or to remain on any real
property owned, leased or operated by such Loan Party.


 


6.8           Conduct
of Business.  No Loan Party shall engage in any business other than businesses of the type engaged in by such Loan
Party on the Closing Date and any businesses reasonably related, incidental or complementary thereto.


 




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6.9           Compliance
with ERISA.  No Loan Party shall establish any new Employee Benefit Plan or amend any existing Employee Benefit Plan
after the Closing Date if the liability or increased liability resulting from such establishment or amendment could reasonably
be expected to have a Material Adverse Effect.  Loan Parties shall establish, maintain and operate each Employee Benefit
Plan in compliance in all material respects with the provisions of ERISA, the IRC and all other applicable laws and the regulations
and interpretations thereof.  No Foreign Subsidiary shall establish any employee pension plan or employee benefit and/or
welfare plans or amend any existing employee pension plan or employee benefit and/or welfare plans if the liability or increased
liability resulting from such establishment or amendment could reasonably be expected to have a Material Adverse Effect, and each
Foreign Subsidiary shall establish maintain and operate each employee pension plan or employee benefit and/or welfare plans in
compliance in all material respects with all applicable provisions of all laws, and all regulations and interpretations thereof,
of all applicable foreign government(s) (whether of any foreign national government or any agency or instrumentality of or province,
county, district, department, subdivision or local unit of any such foreign national government) regarding such employee pension
plans or employee benefit and welfare plans with respect to each employee pension plan or employee benefit and/or welfare plans
maintained by such Foreign Subsidiary.


 


6.10         Subsidiaries.  
No Loan Party shall establish, create or acquire any Subsidiaries after the Closing Date, except in connection with the AZ Perio
Acquisition or a Permitted Acquisition, unless (i) in the case of any acquisition of a Subsidiary, Agent grants its prior
written consent thereto (such consent not to be unreasonably withheld, conditioned, or delayed); (ii) such Loan Party shall
have given Agent not less than twenty (20) days prior written notice of the proposed establishment, creation or acquisition; (iii) such
Subsidiary conducts substantially the same business as is being conducted by Loan Parties or as Loan Parties are permitted to conduct
pursuant to Section 6.8; (iv) such transaction otherwise complies with the provisions of this Agreement; (v) no
Event of Default shall have occurred and be continuing at the time such transaction occurs, or would occur after giving effect
to such transaction; (vi) if such Subsidiary is a Domestic Subsidiary, it shall have executed and delivered a joinder agreement
as well as a guaranty, such that it has bound itself as a party to this Agreement and has guaranteed the Obligations of Borrower,
each on such terms and conditions as Agent may reasonably require; and (vii) if such Subsidiary is a Domestic Subsidiary,
it shall have granted to Agent for the benefit of Lenders, and Agent for the benefit of Lenders shall have, a perfected, first
priority lien on, and security interest in, all of such Subsidiary’s personal property and real property (if so requested
by Agent), subject only to Permitted Encumbrances.


 


6.11         Fiscal
Year.  Borrower shall not change its fiscal year or adopt a fiscal year other than the Fiscal Year for tax or accounting
purposes.


 


6.12         Bank
Accounts.  No Loan Party shall establish any new bank accounts, or amend or terminate any blocked account or lockbox
agreement without Agent’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed).


 


6.13         Charter
Documents.  No Loan Party shall amend or otherwise modify its articles of incorporation or bylaws (or equivalent
charter documents) or any existing shareholder’s agreement or similar agreement (all of such agreements having been previously
delivered to Agent) in a manner which would be reasonably likely to adversely impact Agent’s or any Lender’s rights
under the Loan Documents, or enter into any new or amended shareholder’s agreement or similar agreement. 


 




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6.14         No
Impairment of Restricted Payments.  No Loan Party shall directly or indirectly enter into or become bound by any
agreement, instrument, indenture or other obligation (other than this Agreement and the other Transaction Documents) which would
be reasonably likely to directly or indirectly restrict, prohibit or require the consent of any Person with respect to the making
of any Restricted Payment to Borrower by any of its Subsidiaries.


 


6.15         Advances,
Loans or Investments.  Except for Permitted Investments and as otherwise expressly permitted hereunder (including
without limitation pursuant to Section 6.5), no Loan Party shall make any advance or loan to, or any investment in, or purchase
or acquire all or substantially all of the stock, equity, assets or Accounts of any Person or any business division of any Person.


 


6.16         Management
or Consulting Fees.  Except as expressly permitted hereunder, no Loan Party shall pay any management, consulting
or other similar fees to any Affiliate.


 


6.17         [Reserved].  


 


6.18         Certain
Payments.  No Loan Party shall make any payment on all or part of the Subordinated Debt or any other Indebtedness
subordinated to the Obligations other than in strict compliance with the applicable written Subordination Agreement.


 


6.19         Amendments
to Subordinated Debt or Earn-Out Obligations.  No Loan Party shall amend, supplement or otherwise modify the terms
of payment of any Earn-Out Obligation or any Subordinated Debt in any manner adverse to the interests of Agent or any Lender without
the prior written consent of Agent.


 


SECTION
7    DEFAULT, RIGHTS AND REMEDIES


 


7.1           Event
of Default.  “Event of Default” means the occurrence or existence of any one or more of the following:


 


(A)         Payment.  Failure
of Borrower to make payment of any of the Obligations when due, and such failure shall not be remedied within five (5) days of
the applicable due date; or


 


(B)         Default
in Other Agreements.  (1) Failure of Borrower or any other Loan Party to pay when due (or within any applicable
grace period) any principal or interest on any Indebtedness (other than the Obligations), the unpaid principal amount of which
equals or exceeds One Hundred Thousand Dollars ($100,000) or (2) default by Borrower or any other Loan Party under any agreement
or agreements evidencing any Indebtedness (other than the Obligations), the unpaid principal amount of which equals or exceeds
One Hundred Thousand Dollars ($100,000), if the effect of such default is to enable the holder of such Indebtedness to accelerate
the payment of such Person’s obligations which are the subject thereof prior to the maturity date thereof or prior to the
regularly-scheduled date of payment thereof, and such default continues beyond any applicable grace or cure period (whether or
not the holder of such Indebtedness actually accelerates such payment); or 


 




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(C)         Breach
of Certain Provisions.  Failure of any Loan Party to perform or comply with any term or condition applicable to it
contained in Sections 5.1, 5.3 through 5.5, 5.7 through 5.18 and 5.21, or contained in Section
6; or


 


(D)         Breach
of Representation or Warranty.  Any representation, warranty, certification or other statement made by any Loan Party
in any Loan Document or in any statement or certificate at any time given by such Person in writing pursuant to or in connection
with any Transaction Document is false or misleading in any material respect on the date made or reaffirmed; or


 


(E)         Other
Defaults Under Loan Documents.  Borrower or any Loan Party defaults in the performance of or compliance with any
term, provision, covenant or agreement contained in this Agreement or the other Transaction Documents other than occurrences described
in other provisions of this Section 7.1; or


 


(F)         Involuntary
Bankruptcy; Appointment of Receiver, etc.  (1) A court enters a decree or order for relief with respect to Borrower
or any other Loan Party or any of their respective properties in an involuntary case under the Bankruptcy Code or any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect; or (2) subject to Section 7.1(G), the continuance
of any of the following events for sixty (60) days unless dismissed or discharged: (a) an involuntary case is commenced against
Borrower or any other Loan Party under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect; or
(b) a decree or order of a court for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other
officer having similar powers over Borrower or any other Loan Party, or over all or a substantial part of their respective property,
is entered; or (c) an interim receiver, trustee or other custodian is appointed without the consent of Borrower or any other
Loan Party for all or a substantial part of the property of any such Person; or


 


(G)         Voluntary
Bankruptcy; Appointment of Receiver, etc.  (1) An order for relief is entered with respect to Borrower or any other
Loan Party or any of their respective properties or Borrower or any other Loan Party commences a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary
case or to the conversion of an involuntary case to a voluntary case under any such law or consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial part of its property; or (2) Borrower or any
other Loan Party makes any assignment for the benefit of creditors; or (3) the directors or managers, as applicable, of Borrower
or any other Loan Party adopts any resolution or otherwise authorizes action to approve any of the actions referred to in this
Section 7.1(G); or


 


(H)         Liens.  Any
Lien, levy or assessment is filed or recorded with respect to or otherwise imposed upon all or any part of the Collateral or the
assets of Borrower or any other Loan Party by the United States or any department or instrumentality thereof or by any state,
county, municipality or other governmental agency (other than Permitted Encumbrances) and such lien, levy or assessment is not
stayed, vacated, paid or discharged within fifteen (15) days; or


 




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(I)         Judgment
and Attachments.  Any money judgment, writ or warrant of attachment, or similar process involving an amount, either
singly or in the aggregate with all other money judgments, writs or warrants, at any time in excess of One Hundred Thousand Dollars
($100,000) (not adequately covered by insurance as to which the insurance company has not denied coverage or not denied to undertake
the defense thereof) is entered or filed against Borrower or any other Loan Party or any of their respective assets and remains
unsatisfied, undischarged, unvacated, unbonded or unstayed for a period of fifteen (15) days; or


 


(J)         Dissolution.  Any
order, judgment or decree is entered against Borrower or any other Loan Party decreeing the dissolution or split up of such Person
and such order remains undischarged or unstayed for a period in excess of fifteen (15) days; or


 


(K)         Solvency.  Borrower
or any other Loan Party ceases to be solvent (as defined in Section 4.16 with respect to Borrower) or admits in writing
its inability to pay such Person’s debts as they become due; or


 


(L)         Injunction.  Borrower
or any Loan Party is enjoined, restrained or in any way prevented by the order of any court or any administrative or regulatory
agency from conducting all or any material part of its business and such order continues for more than five (5) days; or


 


(M)         Invalidity
of Loan Documents.  Any of the Loan Documents for any reason ceases to be in full force and effect (except pursuant
to the express terms thereof) or is declared to be null and void, or Borrower or any other Loan Party denies that it has any further
liability under any Loan Documents to which it is party, or gives notice to such effect; or


 


(N)         Failure
of Security.  Agent does not have or ceases to have a valid and perfected first priority security interest in the
Collateral (subject only to Permitted Encumbrances); or


 


(O)         Licenses
and Permits.  The loss, suspension or revocation of, or failure to renew, any license or permit now held or hereafter
acquired by Borrower or any other Loan Party, if such loss, suspension, revocation or failure to renew could reasonably be expected
to have a Material Adverse Effect; or


 


(P)         Forfeiture.  There
is filed against Borrower or any Loan Party any civil or criminal action, suit or proceeding under any federal or state racketeering
statute (including, without limitation, the Racketeer Influenced and Corrupt Organization Act of 1970), which action, suit or proceeding
(1) is not dismissed within one hundred twenty (120) days; and (2) could reasonably be expected to result in the confiscation or
forfeiture of any material portion of the Collateral or other assets of such Person; or


 


(Q)         Change
of Control.  A Change of Control shall have occurred; or


 


(R)         Material
Adverse Change.  Any event, development or condition which has had or could reasonably be expected to have a Material
Adverse Effect. 


 




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7.2           Acceleration.  Upon
the occurrence of any Event of Default described in the foregoing Sections 7.1(F) or 7.1(G), all Obligations shall automatically
become immediately due and payable, without presentment, demand, protest or other requirements of any kind, all of which are hereby
expressly waived by Borrower and the other Loan Parties.  Upon the occurrence of any other Event of Default, Agent may,
and at the direction of the Required Lenders, shall, declare all Obligations to be immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby expressly waived by Borrower and the other Loan Parties.


 


7.3           Remedies.  If
any Event of Default shall have occurred and be continuing, in addition to and not in limitation of any rights or remedies available
to Agent or any Lender at law or in equity, Agent may exercise in respect of the Collateral, in addition to all other rights and
remedies provided for herein or in any other Loan Document or otherwise available to it, all the rights and remedies of a secured
party on default under the UCC (whether or not the UCC applies to the affected Collateral) and may also (a) notify any or
all obligors on the Accounts to make all payments directly to Agent; (b) require each Loan Party, and each Loan Party agrees
that it will, at Borrower’s expense and upon request of Agent forthwith, assemble all or part of the Collateral as directed
by Agent and make it available to Agent at a place to be designated by Agent which is reasonably convenient to both parties; (c) without
notice or demand or legal process, enter upon any premises of any Loan Party to take possession of the Collateral; and (d) without
notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at
any of Agent’s offices or elsewhere, at such time or times, for cash, on credit or for future delivery, and at such price
or prices and upon such other terms as Agent may deem commercially reasonable.  Each Loan Party agrees that, to the
extent notice of sale shall be required by law, at least ten (10) days notice to Borrower of the time and place of any public
sale or the time after which any private sale is to be made shall constitute reasonable notification.  At any sale of
the Collateral, if permitted by law, Agent or any Lender may bid (which bid may be, in whole or in part, in the form of cancellation
of indebtedness) for the purchase of the Collateral or any portion thereof for the account of Agent or such Lender.  Agent
shall not be obligated to make any sale of Collateral regardless of notice of sale having been given.  Borrower and
each Loan Party shall remain liable for any deficiency.  Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed thereof, and such sale may, without further notice, be made at the time and place
to which it was so adjourned. To the extent permitted by law, each Loan Party hereby specifically waives all rights of redemption,
stay or appraisal which it has or may have under any law now existing or hereafter enacted.  Agent and Lenders shall
not be required to proceed against any Collateral but may proceed against Borrower or any other Loan Party directly.


 




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7.4           Appointment
of Attorney-in-Fact.  Each Loan Party hereby constitutes and appoints Agent as its attorney-in-fact with full authority
in the place and stead of such Loan Party and in the name of such Loan Party, Agent or otherwise, from time to time in Agent’s
discretion while an Event of Default is continuing to take any action and to execute any instrument that Agent may deem necessary
or advisable to accomplish the purposes of this Agreement, including: (a) to ask, demand, collect, sue for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral; (b) to
adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any customer or obligor thereunder
or allow any credit or discount thereon; (c) to receive, endorse, and collect any drafts or other instruments, documents and chattel
paper, in connection with clause (a) above; (d) to file any claims or take any action or institute any proceedings that Agent
may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of Agent and Lenders
with respect to any of the Collateral; and (e) to sign and endorse any invoices, freight or express bills, bills of lading, storage
or warehouse receipts, assignments, verifications and notices in connection with Accounts and other documents relating to the Collateral.  The
appointment of Agent as each Loan Party’s attorney and Agent’s rights and powers are coupled with an interest and are
irrevocable until payment in full and complete performance of all of the Obligations (other than unasserted claims for indemnification
or expense reimbursement).


 


7.5           Limitation
on Duty of Agent with Respect to Collateral.  Beyond the safe custody thereof, Agent shall have no duty with respect
to any Collateral in its possession or control (or in the possession or control of any agent or bailee) or with respect to any
income thereon or the preservation of rights against prior parties or any other rights pertaining thereto.  Agent shall
be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral
is accorded treatment substantially equal to that which Agent accords its own property.  Agent shall not be liable or
responsible for any loss or damage to any of the Collateral, or for any diminution in the value thereof, by reason of the act or
omission of any warehouseman, carrier, forwarding agency, consignee or other agent or bailee selected by Agent in good faith.


 


7.6           Application
of Proceeds.  Upon the occurrence and during the continuance of an Event of Default, (a) Borrower and each Loan
Party irrevocably waives the right to direct the application of any and all payments at any time or times thereafter received by
Agent from or on behalf of Borrower or any Loan Party, and Borrower and each Loan Party hereby irrevocably agrees that Agent shall
have the continuing exclusive right to apply and to reapply any and all payments received at any time or times after the occurrence
and during the continuance of an Event of Default against the Obligations in such manner as Agent may deem advisable notwithstanding
any previous entry by Agent upon any books and records and (b) the proceeds of any sale of, or other realization upon, all or any
part of the Collateral shall be applied: first, to all fees, costs and expenses incurred by Agent with respect to this Agreement,
the other Loan Documents or the Collateral; second, to all fees due and owing to Agent; third, to accrued and unpaid interest on
the Obligations; fourth, to the principal amounts of the Obligations outstanding; and fifth, to any other indebtedness or obligations
of Borrower and any other Loan Party owing to Agent and Lenders.


 


7.7           License
of Intellectual Property.  Borrower and each Loan Party hereby grants to Agent the non-exclusive right and license
to use during the continuance of an Event of Default all Intellectual Property owned or used by Borrower or any other Loan Party
together with any goodwill associated therewith, all to the extent necessary to enable Agent to realize on the Collateral and any
successor or assign to enjoy the benefits of the Collateral.  This right and license shall inure to the benefit of all
successors, assigns and transferees of Agent and its successors, assigns and transferees, whether by voluntary conveyance, operation
of law, assignment, transfer, foreclosure, deed in lieu of foreclosure or otherwise.  Such right and license is granted
free of charge, without requirement that any monetary payment whatsoever be made to Borrower or any other Loan Party by Agent.


 




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7.8           Waivers,
Non-Exclusive Remedies.  By making the advance of the Term Loan hereunder, Agent and Lenders do not thereby waive
a breach of any warranty, representation or covenant made by Borrower or any other Loan Party hereunder or under any of the other
Transaction Documents or a breach under any agreement, document, or instrument delivered to Agent or any Lender or otherwise referred
to herein, and all of Agent’s and Lenders’ claims and rights resulting from any such breach by Borrower or any other
Loan Party is specifically reserved by Agent and Lenders.  The rights in this Agreement and the other Loan Documents
are cumulative and are not exclusive of any other remedies provided by law.


 


SECTION
8    REGARDING AGENT


 


8.1           Appointment.  Each
Lender hereby designates MMCP to act as Agent for such Lender under this Agreement and the other Loan Documents.  Each
Lender hereby irrevocably authorizes Agent to take such action on its behalf under the provisions of this Agreement and the other
Loan Documents and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to
or required of Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto and Agent shall
hold all Collateral, payments of principal and interest, fees (except as otherwise provided herein), charges and collections (without
giving effect to any collection days) received pursuant to this Agreement, for the ratable benefit of Lenders.  Agent
may perform any of its duties hereunder by or through its agents or employees.  As to any matters not expressly provided
for by this Agreement (including collection of the Term Note) Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be binding; provided, however, that Agent shall not
be required to take any action which exposes Agent to liability or which is contrary to this Agreement or the other Loan Documents
or Applicable Law unless Agent is furnished with an indemnification reasonably satisfactory to Agent with respect thereto.


 


8.2           Nature
of Duties.  Agent shall have no duties or responsibilities except those expressly set forth in this Agreement and
the other Loan Documents.  Neither Agent nor any of its officers, directors, employees or agents shall be (i) liable
for any action taken or omitted by them as such hereunder or in connection herewith, unless caused by their gross (not mere) negligence
or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment), or (ii) responsible
in any manner for any recitals, statements, representations or warranties made by any Loan Party or any officer thereof contained
in this Agreement, or in any of the other Loan Documents or in any certificate, report, statement or other document referred to
or provided for in, or received by Agent under or in connection with, this Agreement or any of the other Loan Documents or for
the value, validity, effectiveness, genuineness, due execution, enforceability or sufficiency of this Agreement, or any of the
other Loan Documents or for any failure of any Loan Party to perform its obligations hereunder.  Agent shall not be
under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any of the other Loan Documents, or to inspect the properties, books or records of any
Loan Party.  The duties of Agent as respects the Term Loan to Borrower shall be mechanical and administrative in nature;
Agent shall not have by reason of this Agreement a fiduciary relationship in respect of any Lender; and nothing in this Agreement,
expressed or implied, is intended to or shall be so construed as to impose upon Agent any obligations in respect of this Agreement
except as expressly set forth herein.


 




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8.3           Lack
of Reliance on Agent and Resignation.  Independently and without reliance upon Agent or any other Lender, each Lender
has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of each Loan Party
in connection with the making of the Term Loan hereunder and the taking or not taking of any action in connection herewith, and
(ii) its own appraisal of the creditworthiness of each Loan Party.  Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or other information with respect thereto, whether coming
into its possession before making of the Term Loan or at any time or times thereafter except as shall be provided by any Loan Party
pursuant to the terms hereof.  Agent shall not be responsible to any Lender for any recitals, statements, information,
representations or warranties herein or in any agreement, document, certificate or a statement delivered in connection with or
for the execution, effectiveness, genuineness, validity, enforceability, collectability or sufficiency of this Agreement or any
other Loan Document, or of the financial condition of any Loan Party, or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this Agreement, the Term Note, the other Loan Documents
or the financial condition of any Loan Party, or the existence of any Event of Default or any Default.  


 


Agent may resign on
sixty (60) days’ written notice to Lenders and upon such resignation, the Required Lenders will promptly designate a successor
Agent reasonably satisfactory to Borrower.  


 


Any such successor
Agent shall succeed to the rights, powers and duties of Agent, and the term “Agent” shall mean such successor agent
effective upon its appointment, and the former Agent’s rights, powers and duties as Agent shall be terminated, without any
other or further act or deed on the part of such former Agent.  After any Agent’s resignation as Agent, the provisions
of this Section 8 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under
this Agreement.  


 


8.4           Certain
Rights of Agent.  If Agent shall request instructions from Lenders with respect to any act or action (including failure
to act) in connection with this Agreement or any other Loan Document, Agent shall be entitled to refrain from such act or taking
such action unless and until Agent shall have received instructions from the Required Lenders; and Agent shall not incur liability
to any Person by reason of so refraining.  Without limiting the foregoing, Lenders shall not have any right of action
whatsoever against Agent as a result of its acting or refraining from acting hereunder in accordance with the instructions of the
Required Lenders.


 


8.5           Reliance.  Agent
shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate,
telex, teletype or telecopier message, cablegram, order or other document or telephone message believed by it to be genuine and
correct and to have been signed, sent or made by the proper person or entity, and, with respect to all legal matters pertaining
to this Agreement and the other Loan Documents and its duties hereunder, upon advice of counsel selected by it.  Agent
may employ agents and attorneys-in-fact and shall not be liable for the default or misconduct of any such agents or attorneys-in-fact
selected by Agent with reasonable care.


 




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8.6           Notice
of Default.  Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder or under the other Loan Documents, unless Agent has received notice from a Lender or Borrower referring to this Agreement
or the other Loan Documents, describing such Default or Event of Default and stating that such notice is a “notice of default”.  In
the event that Agent receives such a notice, Agent shall give notice thereof to Lenders.  Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders; provided, that, unless
and until Agent shall have received such directions, Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of Lenders.


 


8.7           Indemnification.  To
the extent Agent is not reimbursed and indemnified by the Loan Parties, each Lender will reimburse and indemnify Agent in proportion
to its respective portion of the Term Loan, from and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against Agent in performing its duties hereunder, or in any way relating to or arising out of this Agreement or
any other Loan Document; provided that, Lenders shall not be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting from Agent’s gross (not mere) negligence
or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment).


 


8.8           Agent
in its Individual Capacity.  With respect to the obligation of Agent to lend under this Agreement, the Term Loan
made by it shall have the same rights and powers hereunder as any other Lender and as if it were not performing the duties as Agent
specified herein; and the term “Lender” or any similar term shall, unless the context clearly otherwise indicates,
include Agent in its individual capacity as a Lender.  Agent may engage in business with any Loan Party as if it were
not performing the duties specified herein, and may accept fees and other consideration from any Loan Party for services in connection
with this Agreement or otherwise without having to account for the same to Lenders.


 


8.9           Delivery
of Documents.  To the extent Agent receives financial statements required under Sections 5.1(A) through (F)
from any Loan Party pursuant to the terms of this Agreement which such Loan Party is not obligated to deliver to each Lender, Agent
will promptly furnish such documents and information to Lenders.


 


8.10         Borrowers’
Undertaking to Agent.  Without prejudice to their respective obligations to Lenders under the other provisions of
this Agreement, each Loan Party hereby undertakes with Agent to pay to Agent from time to time on demand all amounts from time
to time due and payable by it for the account of Agent or Lenders or any of them pursuant to this Agreement to the extent not
already paid.  Any payment made pursuant to any such demand shall pro tanto satisfy the relevant Loan Party’s
obligations to make payments for the account of Lenders or the relevant one or more of them pursuant to this Agreement.


 




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8.11         No
Reliance on Agent’s Customer Identification Program.  Each Lender acknowledges and agrees that neither such
Lender, nor any of its Affiliates, participants or assignees, may rely on the Agent to carry out such Lender’s, Affiliate’s,
participant’s or assignee’s customer identification program, or other obligations required or imposed under or pursuant
to the USA PATRIOT Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended
or replaced, the “CIP Regulations”), or any other Anti-Terrorism Law, including any programs involving any of
the following items relating to or in connection with any Borrower, its Affiliates or its agents, this Agreement, the other Loan
Documents or the transactions hereunder or contemplated hereby: (1) any identity verification procedures, (2) any record-keeping,
(3) comparisons with government lists, (4) customer notices or (5) other procedures required under the CIP Regulations or such
other laws.


 


8.12         Other
Agreements.  Each Lender agrees that it shall not, without the express consent of Agent, and that it shall, to the
extent it is lawfully entitled to do so, upon the request of Agent, set off against the Obligations, any amounts owing by such
Lender to any Loan Party or any deposit accounts of any Loan Party now or hereafter maintained with such Lender.  Anything
in this Agreement to the contrary notwithstanding, each Lender further agrees that it shall not, unless specifically requested
to do so by Agent, take any action to protect or enforce its rights arising out of this Agreement or the other Loan Documents,
it being the intent of Lenders that any such action to protect or enforce rights under this Agreement and the other Loan Documents
shall be taken in concert and at the direction or with the consent of Agent or Required Lenders.


 


SECTION
9    MISCELLANEOUS


 


9.1           Assignments
and Participations.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns except that no Loan Party may assign its rights or obligations hereunder without the prior written
consent of Agent.  Any Lender may assign its rights and delegate its obligations under this Agreement with the prior
written consent of the Agent, which consent shall not be unreasonably withheld or delayed, and further may sell participations
in all or any part of the Term Loan or any other interest herein to another Person.  In the case of an assignment authorized
under this Section 9.1, the assignee shall have, to the extent of such assignment, the same rights, benefits and obligations
as it would if it were a Lender hereunder and the assigning Lender shall be relieved of its obligations hereunder with respect
to the assigned portion thereof.  Loan Parties hereby acknowledge and agree that any assignment will give rise to a
direct obligation of Borrower to the assignee and that the assignee shall be deemed to be a “Lender”.  Agent
and each Lender may furnish any information concerning Borrower and the other Loan Parties in its possession from time to time
to assignees and participants (including prospective assignees and participants), provided that any such assignee or participant
or prospective assignee or participant agrees to maintain the confidentiality of such information in accordance with Section
9.22.


 




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9.2           Set
Off.  In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any
such rights, upon the occurrence, and during the continuance, of any Event of Default, Agent, any Lender, any assignee of any Lender’s
interest, and each participant is hereby authorized by Loan Parties at any time or from time to time, without notice to Loan Parties
or to any other Person (except as required pursuant to Section 8.12), any such notice being hereby expressly waived, to
set off and to appropriate and to apply any and all balances held by it at any of its offices for the account of any Loan Party
(regardless of whether such balances are then due to such Loan Party) and any other property at any time held or owing by such
Agent, Lender, assignee or participant to or for the credit or for the account of any Loan Party against and on account of any
of the Obligations then outstanding.


 


Loan Parties hereby
agree, to the fullest extent permitted by law, that Agent, any Lender, assignee or participant may exercise its right of setoff
with respect to amounts in excess of its pro rata share of the Obligations (or, in the case of a participant, in excess of its
pro rata participation interest in the Obligations) and that Agent, such Lender, assignee or participant, as the case may be, shall
be deemed to have purchased for cash in the amount of such excess, participations in Agent’s, each other Lender’s or
holder’s share of the Obligations.


 


9.3           Expenses
and Attorneys’ Fees.  Whether or not the transactions contemplated hereby shall be consummated, Borrower agrees
to promptly pay all reasonable and documented out-of-pocket fees, costs and expenses incurred by Agent in connection with any
matters contemplated by or arising out of this Agreement or the other Transaction Documents including the following, and Loan
Parties agree that all such fees, costs and expenses shall be part of the Obligations, payable on demand and secured by the Collateral:
(a) fees, costs and expenses (including reasonable attorneys’ fees, other than allocated costs of internal counsel,
and reasonable fees of environmental consultants, accountants and other professionals retained by Agent) incurred in connection
with the review, due diligence investigation, negotiation, preparation, documentation, execution, closing and administration of
the Transaction Documents, the Term Loan, and any amendments, waivers, consents, forbearance and other modifications relating
thereto or any subordination or intercreditor agreements; (b) fees, out of pocket costs and expenses incurred in creating,
perfecting and maintaining perfection of Liens in favor of Agent for the benefit of Lenders including title insurance premiums,
real estate survey costs and mortgage or recording taxes and fees; (c) fees, out of pocket costs and expenses incurred in
connection with forwarding to Borrower the proceeds of Loans including Agent’s standard wire transfer fee; (d) fees,
out of pocket costs, expenses and bank charges, including bank charges for returned checks, incurred by Agent in establishing,
maintaining and handling lock box accounts, blocked accounts or other accounts for collection of the Collateral; (e) fees,
costs, expenses (including reasonable attorneys’ fees) and costs of settlement incurred in collecting upon or enforcing
rights against the Collateral or incurred in any action to enforce this Agreement or the other Transaction Documents or to collect
any payments due from Borrower or any other Loan Party under this Agreement or any other Transaction Document or incurred in connection
with any refinancing or restructuring of the credit arrangements provided under this Agreement, whether in the nature of a “workout”
or in connection with any insolvency or bankruptcy proceedings or otherwise; (f) Agent’s reasonable out of pocket expenses
and internal costs and disbursements, whenever incurred, in monitoring and administering the Term Loan; and (g) the cost
of procuring background checks or updating background checks previously obtained by Agent relating to officers of Loan Parties
(Loan Parties shall use their best efforts to obtain the consent of all officers to such checks or updated checks).


 




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9.4           Indemnity.  In
addition to the payment of expenses pursuant to Section 9.3, whether or not the transactions contemplated hereby shall be
consummated, Loan Parties agree to indemnify, pay and hold Agent, each Lender, any participants or assignees and their respective
officers, directors, employees, agents, consultants, auditors, persons engaged by any of them to evaluate or monitor the Collateral,
affiliates and attorneys of any of them (collectively called the “Indemnitees”) harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or nature whatsoever (including the reasonable fees and disbursements of counsel for such Indemnitees in connection
with any investigative, administrative or judicial proceeding commenced or threatened, whether or not such Indemnitee shall be
designated a party thereto) that may be imposed on, incurred by, or asserted against that Indemnitee, in any manner relating to
or arising out of this Agreement or the other Transaction Documents, the consummation of the transactions contemplated by this
Agreement or the other Transaction Documents, the statements contained in the Commitment Letter, Lenders’ agreement to make
the Term Loan hereunder, the use or intended use of the proceeds of any of the Term Loan or the exercise of any right or remedy
hereunder or under the other Transaction Documents (the “Indemnified Liabilities”); provided that Loan Parties
shall have no obligation to an Indemnitee hereunder with respect to Indemnified Liabilities directly arising from the gross negligence
or willful misconduct of that Indemnitee as determined by a court of competent jurisdiction in a final nonappealable decision.


 


9.5           Amendments
and Waivers.  No amendment, modification, termination or waiver of any provision of this Agreement or of the other
Loan Documents, or consent to any departure by Borrower or any Loan Party hereof or therefrom or any of the terms, conditions,
or provisions hereof or thereof, shall be effective unless the same shall be in writing and signed by Agent and the affected Person.  Each
amendment, modification, termination or waiver shall be effective only in the specific instance and for the specific purpose for
which it was given.


 


9.6           Notices.  Unless
otherwise specifically provided herein, all notices shall be in writing addressed to the respective party as set forth below and
may be personally served, telecopied or sent by overnight courier service or United States mail and shall be deemed to have been
given: (a) if delivered in person, when delivered; (b) if delivered by telecopy, on the date of transmission if transmitted on
a Business Day before 4:00 p.m. Eastern standard time or, if not, on the next succeeding Business Day; (c) if delivered by overnight
courier, two (2) days after delivery to such courier properly addressed; or (d) if by U.S. Mail, four (4) Business Days after depositing
in the United States mail, with postage prepaid and properly addressed.


 


	If to Borrower:	Sebring Software, Inc.
	 	1400 Cattlemen Road, Suite D
	 	Sarasota, Florida 34232
	 	Attention:  Leif Andersen
	 	Facsimile: (941) 377-0719
	 	Telephone: (941) 377-0715


 




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	With copies to:	Vincent & Rees
	 	175 S Main St, 15th Floor
	 	Salt Lake City, Utah 84111-1916
	 	Attention:  David Rees
	 	Facsimile:  (801) 355-5005
	 	Telephone: (801) 303-5736
	 	 
	 	and
	 	 
	 	Shumaker, Loop & Kendrick, L.L.P.
	 	240 South Pineapple Avenue, 10th Floor
	 	Sarasota, Florida 34236
	 	Attention:  Ben Hanan
	 	Facsimile:  (941) 366-6660
	 	Telephone: (941) 366-3999
	 	 
	If to Agent:	MidMarket Capital Partners, LLC
	 	301 E. Fourth Street, 27th Floor
	 	Cincinnati, OH  45202
	 	Attention:  Joseph Haverkamp 
	 	Facsimile:  (513) 579-2910
	 	Telephone: (513) 579-2597
	 	 
	With copies to:	Blank Rome LLP 
	 	The Chrysler Building
	 	405 Lexington Avenue
	 	New York, New York  10174
	 	Attention:  Robert B. Stein, Esq.
	 	Facsimile:  (212) 885-5001
	 	Telephone: (212) 885-5206
	 	 
	If to Guarantors and	Sebring Dental of Arizona, L.L.C.
	Subsidiaries:	1400 Cattlemen Road, Suite D
	 	Sarasota, Florida 34232
	 	Attention:  Leif Andersen
	 	Facsimile: (941) 377-0719
	 	Telephone: (941) 377-0715
	 	 
	 	AAR Acquisition, L.L.C.
	 	1400 Cattlemen Road, Suite D
	 	Sarasota, Florida 34232
	 	Facsimile: (941) 377-0719
	 	Telephone: (941) 377-0715


 




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	 	Sebring Management FL, L.L.C.
	 	1400 Cattlemen Road, Suite D
	 	Sarasota, Florida 34232
	 	Facsimile: (941) 377-0719
	 	Telephone: (941) 377-0715
	 	 
	With copies to:	Vincent & Rees
	 	175 S Main St, 15th Floor
	 	Salt Lake City, Utah 84111-1916
	 	Attention:  David Rees
	 	Facsimile:  (801) 355-5005
	 	Telephone: (801) 303-5736
	 	 
	 	and
	 	 
	 	Camelback Law Offices
	 	5045 N. 12th Street, Suite 110
	 	Phoenix, Arizona 85014
	 	Attention: Valerie Todorovich
	 	Facsimile: (602) 293-3278
	 	Telephone: (602) 293-3407
	 	 
	 	and
	 	 
	 	Shumaker, Loop & Kendrick LLP
	 	240 South Pineapple Avenue, 10th Floor
	 	Sarasota, Florida 34236
	 	Attention:  Ben Hanan
	 	Facsimile:  (941) 366-3999
	 	Telephone: (941) 366-6660


 


or to such other address as the party addressed
shall have previously designated by written notice to the serving party, given in accordance with this Section 9.6.


 


9.7           Survival
of Warranties and Certain Agreements.


 


(A)         All
representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto
or in connection herewith or therewith shall survive the execution and delivery hereof and thereof.  Such representations
and warranties have been or will be relied upon by Agent and Lenders regardless of any investigation made by Agent or any Lender
or on any of their behalves and notwithstanding that Agent or any Lender may have had notice or knowledge of any breach of a representation
or warranty, and shall continue in full force and effect as long as any Obligation (other than unasserted claims for indemnification
or expense reimbursement) shall remain outstanding. 


 




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(B)         This
Agreement and the Loan Documents shall remain in full force and effect until such time as the Obligations have been paid and satisfied
in full, at which time this Agreement shall be terminated; provided, however, that the agreements set forth in Sections
9.3 and 9.4 (and any guaranty by the Guarantors of the Obligations of Borrower with respect to such Sections 9.3
and 9.4) shall survive termination of this Agreement.  Notwithstanding the foregoing, this Agreement and the Loan
Documents shall continue to be effective or be automatically reinstated, as the case may be, if at any time payment, in whole or
in part, of any of the Obligations is rescinded or must otherwise be restored or returned by Agent or any Lender as a preference,
fraudulent conveyance or otherwise, all as though such payment had not been made.


 


9.8           Indulgence
Not Waiver.  No failure or delay on the part of Agent or any Lender in the exercise of any power, right or privilege
hereunder or under any other Transaction Document shall impair such power, right or privilege or be construed to be a waiver of
any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege.


 


9.9           Marshaling;
Payments Set Aside.  Neither Agent nor any Lender shall be under any obligation to marshal any assets in favor of
any Loan Party or any other party or against or in payment of any or all of the Obligations.  To the extent that any
Loan Party makes a payment or payments to Agent or any Lender or Agent enforces its security interests or Agent or any Lender exercises
its rights of set off, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other
party under any bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such recovery, the Obligations
or part thereof originally intended to be satisfied, and all Liens, rights and remedies thereof, shall be revived and continued
in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.


 


9.10         Entire
Agreement.  This Agreement, the Term Note, and the other Loan Documents referred to herein embody the final, entire
agreement among the parties hereto and supersede any and all prior commitments, agreements, representations, and understandings,
whether written or oral, relating to the subject matter hereof (including, without limitation, the Commitment Letter) and may not
be contradicted or varied by evidence of prior, contemporaneous, or subsequent oral agreements or discussions of the parties hereto.  There
are no oral agreements among the parties hereto.


 


9.11         Independence
of Covenants.  All covenants hereunder shall be given independent effect so that if a particular action or condition
is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or be otherwise within the limitations
of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists.


 


9.12         Severability.  The
invalidity, illegality or unenforceability in any jurisdiction of any provision in or obligation under this Agreement or the other
Transaction Documents shall not affect or impair the validity, legality or enforceability of the remaining provisions or obligations
under this Agreement, or the other Transaction Documents or of such provision or obligation in any other jurisdiction. 


 




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9.13         Headings.  Section
and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part
of this Agreement for any other purpose or be given any substantive effect.


 


9.14         APPLICABLE
LAW.  THIS AGREEMENT AND ALL MATTERS RELATING HERETO AND ARISING HEREFROM (WHETHER ARISING UNDER CONTRACT LAW, TORT
LAW OR OTHERWISE) SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.


 


9.15         No
Fiduciary Relationship; Limitation of Liabilities.


 


(A)         No
Fiduciary Relationship.  No provision in this Agreement or in any of the other Transaction Documents and no course
of dealing between the parties shall be deemed to create any fiduciary duty by Agent or any Lender to Borrower or any other Loan
Party.


 


(B)         Limitation
of Liabilities.  None of the parties hereto nor any of their respective Affiliates, officers, directors, shareholders,
employees, attorneys, or agents thereof shall have any liability with respect to, and each other party hereto hereby waives, releases,
and agrees not to sue any of them upon, any claim for any special, indirect, incidental, or consequential damages suffered or incurred
by any other party hereto in connection with, arising out of, or in any way related to, this Agreement or any of the other Transaction
Documents, or any of the transactions contemplated by this Agreement or any of the other Transaction Documents.  Each
party hereto hereby waives, releases, and agrees not to sue any other party hereto or any of its Affiliates, officers, directors,
employees, attorneys, or agents for punitive damages in respect of any claim in connection with, arising out of, or in any way
related to, this Agreement or any of the other Loan Documents, or any of the transactions contemplated by this Agreement or any
of the transactions contemplated hereby.


 


9.16         CONSENT
TO JURISDICTION.  EACH LOAN PARTY HEREBY CONSENTS TO THE JURISDICTION OF
ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK, AND IRREVOCABLY AGREES THAT, SUBJECT TO AGENT’S
ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TERM NOTE, OR THE OTHER LOAN DOCUMENTS
SHALL BE LITIGATED IN SUCH COURTS.  EACH LOAN PARTY ACCEPTS FOR itSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY
AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, THE TERM NOTE, THE OTHER LOAN
DOCUMENTS OR THE OBLIGATIONS.  IF ANY LOAN PARTY PRESENTLY IS, OR IN THE FUTURE BECOMES, A NONRESIDENT OF THE STATE
OF NEW YORK, sUCH LOAN PARTY HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS
MAY BE MADE UPON SUCH LOAN PARTY BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO SUCH LOAN PARTY, AT SUCH
LOAN PARTY’S ADDRESS AS SET FORTH IN SECTION 9.6 OR AS MOST RECENTLY NOTIFIED BY BORROWER IN WRITING PURSUANT TO
SECTION 9.6 AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED AS AFORESAID. 


 




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9.17         WAIVER
OF JURY TRIAL.  EACH LOAN PARTY, aGENT AND eaCH LENDER HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE TERM NOTE OR
THE OTHER LOAN DOCUMENTS.  EACH LOAN PARTY, aGENT AND eaCH LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT
TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT, THE TERM NOTE
AND THE OTHER LOAN DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.  EACH
LOAN PARTY, aGENT AND eaCH LENDER FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND
THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.


 


9.18         Construction.  Each
Loan Party, Agent and each Lender acknowledge that it has had the benefit of legal counsel of its own choice and has been afforded
an opportunity to review this Agreement and the other Loan Documents with its legal counsel and that this Agreement and the other
Loan Documents shall be construed as if jointly drafted by each Loan Party, Agent and each Lender.


 


9.19         Counterparts;
Effectiveness.  This Agreement and any amendments, waivers, consents, or supplements may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which counterparts together shall constitute but one and the same instrument.  This Agreement
shall become effective upon the execution of a counterpart hereof by each of the parties hereto.  Delivery of an executed
counterpart of a signature page to this Agreement, any amendments, waivers, consents or supplements, or to any other Loan Document
by Facsimile shall be as effective as delivery of a manually executed counterpart thereof.


 


9.20         No
Duty.  All attorneys, accountants, appraisers, and other professional Persons and consultants retained by Agent shall
have the right to act exclusively in the interest of Agent and Lenders and shall have no duty of disclosure, duty of loyalty, duty
of care, or other duty or obligation of any type or nature whatsoever to any Loan Party or any Loan Party’s shareholders
or the shareholders (or members, as applicable) of any Loan Party’s Subsidiaries or any other Person.


 


9.21         Communications
by Loan Parties to Agent and Lenders.  Nothing contained in any letter, email, written notification, financial statement
or other communication, written or oral, from any Loan Party to Agent or any Lender, shall be deemed to be binding on Agent or
such Lender, unless Agent or such Lender acknowledges same in writing and expressly agrees to be bound thereby. 


 




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9.22         Confidentiality.  For
the purposes of this Section 9.22, the defined term “Confidential Information” means all financial
projections and all other nonpublic information delivered to Agent and Lenders by or on behalf of Borrower or any of the other
Loan Parties in connection with the transactions contemplated by this Agreement and the other Loan Documents, provided,
that such term does not include information that (a) was publicly known or otherwise known to Agent or such Lender prior to
the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by Agent or such Lender or
any Person acting on such Person’s behalf, (c) otherwise becomes known to Agent or such Lender other than through disclosure
by Borrower or any of the other Loan Parties, or (d) constitutes financial statements delivered hereunder that are otherwise
publicly available.  Agent and Lenders will maintain the confidentiality of such Confidential Information in accordance
with commercially reasonable procedures adopted by Agent and Lenders in good faith to protect confidential information of third
parties delivered to it; provided, that Agent and each Lender may deliver or disclose Confidential Information to:


 


(i)          its
directors, officers, employees, agents, attorneys and affiliates (to the extent such disclosure reasonably relates to the administration
of this Agreement and the other Transaction Documents);


 


(ii)         its
financial advisors and other professional advisors who are advised to hold confidential the Confidential Information substantially
in accordance with the terms of this Section 9.22;


 


(iii)        any
other Lender or Agent, as applicable; or


 


(iv)        any
other Person (including auditors and other regulatory officials) to which such delivery or disclosure may be necessary or appropriate
(A) to comply with any applicable law, rule, regulation or order, (B) in response to any subpoena, examination, or other
legal process, (C) in connection with any litigation to which Agent or such Lender is a party or (D) if an Event of Default
shall have occurred and remain outstanding, to the extent Agent or such Lender may reasonably determine such delivery and disclosure
to be necessary or appropriate in the enforcement or for the protection of the rights and remedies hereunder.


 


9.23         Electronic
Execution of Loan Documents.  The words “execution,” “signed,” “signature,” and
words of like import in any Loan Document shall be deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of
a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the
Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or
any other similar state laws based on the Uniform Electronic Transactions Act.


 


[This space intentionally left blank –
signature page follows]


 




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Witness the due execution hereof by the
respective duly authorized officers of the undersigned as of the date first written above.


 


	AGENT:	MIDMARKET CAPITAL PARTNERS, LLC
	 	 
	 	By:	 
	 	Name:Joseph Haverkamp
	 	Title:Managing Director
	 	 
	 	 
	LENDERS:	GREAT AMERICAN LIFE INSURANCE

COMPANY
	 	 
	 	By:	 
	 	Name:Mark Muething
	 	Title:Executive Vice President
	 	Commitment Percentage:  55%
	 	 
	 	GREAT AMERICAN INSURANCE

COMPANY
	 	 
	 	By:	 
	 	Name:Stephen C. Beraha
	 	Title:Assistant Vice President
	 	Commitment Percentage:  30%
	 	 
	 	UNITED TEACHER ASSOCIATES

INSURANCE COMPANY
	 	 
	 	By:	 
	 	Name:Mark Muething
	 	Title:Executive Vice President
	 	Commitment Percentage:  10%
	 	 
	 	CONTINENTAL GENERAL INSURANCE

COMPANY
	 	 
	 	By:	 
	 	Name:Mark Muething
	 	Title:Executive Vice President
	 	Commitment Percentage:  5%


 


Signature Page to Loan and Security Agreement


 




    	S-1



    	 



    

 


	BORROWER:	SEBRING SOFTWARE, INC.
	 	 
	 	By:	 
	 	Name:  Leif W. Andersen
	 	Title:    Chief Executive Officer
	 	 
	GUARANTORS:	SEBRING DENTAL OF ARIZONA, L.L.C.
	 	By:  Sebring Software, Inc., a Nevada

corporation, its Sole Member
	 	 
	 	By:	 
	 	Name:Leif W. Andersen
	 	Title:Chief Executive Officer
	 	 
	 	AAR ACQUISITION, L.L.C.
	 	By:  Sebring Dental of Arizona, L.L.C., an

Arizona limited liability company, its Sole

Member
	 	By:  Sebring Software, Inc., a Nevada

corporation, its Sole Member
	 	 
	 	By:	 
	 	Name:Leif W. Andersen
	 	Title:Chief Executive Officer
	 	 
	 	SEBRING MANAGEMENT FL, LLC
	 	By:  Sebring Software, Inc., a Nevada

corporation, its Sole Manager
	 	 
	 	By:	 
	 	Name:Leif W. Andersen
	 	Title:Chief Executive Officer


 


Signature Page to Loan and Security Agreement


 




    	S-2