EXHIBIT
      4.2

     

    AMENDED
      AND RESTATED NOTE PURCHASE AGREEMENT

    


    dated
      as
      of August 1, 2008

    


    among

    


    ENCOMPASS
      GROUP AFFILIATES, INC., a Delaware corporation,

    as
      Issuer,

    


    and

    


    ENCOMPASS
      GROUP AFFILIATES, INC., a Florida corporation (f/k/a ADVANCED COMMUNICATIONS
      TECHNOLOGIES, INC.),

    CYBER-TEST,
      INC., VANCE BALDWIN, INC., HUDSON STREET INVESTMENTS, INC.,

    SPECTRUCELL,
      INC. and TRITRONICS, INC.

    as
      Guarantors,

    


    THE
      NOTE
      PURCHASERS LISTED HEREIN

    


    and

    


    SANKATY
      ADVISORS, LLC

    as
      First
      Lien Collateral Agent for the Senior Notes and 

    Second
      Lien Collateral Agent for the Subordinated Notes

    


    __________________________________________________________________

    


    


    $12,690,355.00
      IN AGGREGATE ORIGINAL PRINCIPAL AMOUNT

    OF
      SENIOR
      SECURED NOTES DUE AUGUST 17, 2012; 

    $11,734,694.16
      IN AGGREGATE ORIGINAL PRINCIPAL AMOUNT 

    OF
      SERIES
      A SENIOR SUBORDINATED NOTES DUE AUGUST 17, 2013; AND

    $13,265,306.12
      IN AGGREGATE ORIGINAL PRINCIPAL AMOUNT

    OF
      SERIES
      B SENIOR SUBORDINATED NOTES DUE AUGUST 17, 2013

    PLUS
      ADDITIONAL ISSUANCES AS CONTEMPLATED HEREUNDER

    


    __________________________________________________________________

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    TABLE
      OF CONTENTS

     

    
      	 	 	
               

            	
              Page

            
	
              SECTION
                1. DEFINITIONS.

            	
              -
                2
                -

            
	 	
              1.1

            	
              Certain
                Defined Terms; Rules of Construction

            	
              -
                2
                -

            
	 	
              1.2

            	
              Accounting
                Terms

            	
              -
                3
                -

            
	
              SECTION
                2. PURCHASE AND SALE OF THE NOTES.

            	
              -
                3
                -

            
	 	
              2.1

            	
              Purchase
                and Sale of the Initial Notes

            	
              -
                3
                -

            
	 	
              2.2

            	
              The
                Initial Closing

            	
              -
                3
                -

            
	 	
              2.3

            	
              Payment
                of Purchase Price for the Initial Notes

            	
              -
                3
                -

            
	 	
              2.4

            	
              Purchase
                and Sale of the Series B Subordinated Notes

            	
              -
                3
                -

            
	 	
              2.5

            	
              Additional
                Issuance

            	
              - 3
                -

            
	 	
              2.6

            	
              Payment
                of Purchase Price Upon an Additional Issuance

            	
              -
                5
                -

            
	 	
              2.7

            	
              The
                Series B Closing Date

            	
              -
                5
                -

            
	 	
              2.8

            	
              Payment
                of Purchase Price for the Series B Subordinated Notes

            	
              -
                5
                -

            
	 	
              2.9

            	
              Use
                of Proceeds

            	
              -
                5
                -

            
	
              SECTION
                3. TERMS OF THE NOTES

            	
              -
                5
                -

            
	 	
              3.1

            	
              Interest
                on the Notes.

            	
              -
                5
                -

            
	 	
              3.2

            	
              Payment
                of Notes.

            	
              -
                6
                -

            
	 	
              3.3

            	
              Prepayment
                Procedures.

            	
              - 8
                -

            
	 	
              3.4

            	
              Taxes.

            	
              -
                8
                -

            
	 	
              3.5

            	
              Manner
                and Time of Payment.

            	
              -
                11 -

            
	
              SECTION
                4. REPRESENTATIONS AND WARRANTIES OF NOTE PURCHASERS.

            	
              -
                11 -

            
	 	
              4.1

            	
              Legal
                Capacity; Due Authorization

            	
              -
                11 -

            
	 	
              4.2

            	
              Restrictions
                on Transfer

            	
              -
                11 -

            
	 	
              4.3

            	
              Accredited
                Investor, etc

            	
              -
                11 -

            
	 	
              4.4

            	
              Brokerage
                Fees, etc

            	
              -
                11 -

            
	
              SECTION
                5. REPRESENTATIONS AND WARRANTIES OF THE NOTE PARTIES.

            	
              -
                12 -

            
	 	
              5.1

            	
              Organization,
                Good Standing and Qualification

            	
              -
                12 -

            
	 	
              5.2

            	
              Capitalization.

            	
              -
                12 -

            
	 	
              5.3

            	
              Corporate
                Power and Authorization

            	
              -
                13 -

            
	 	
              5.4

            	
              Valid
                Issuance of the Notes; Private Placement

            	
              -
                13 -

            


    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

    


    
      	 	
              5.5

            	
              Financial
                Statements and Other Information

            	
              -
                13 -

            
	 	
              5.6

            	
              Consents

            	
              -
                14 -

            
	 	
              5.7

            	
              Litigation

            	
              -
                14 -

            
	 	
              5.8

            	
              Compliance
                with Laws and Regulations

            	
              -
                14 -

            
	 	
              5.9

            	
              Licenses,
                Patents, Copyrights, Trademarks and Trade Names

            	
              -
                14 -

            
	 	
              5.10

            	
              Compliance
                with Other Instruments; No Conflicts

            	
              -
                14 -

            
	 	
              5.11

            	
              Indebtedness

            	
              -
                15 -

            
	 	
              5.12

            	
              Disclosure

            	
              -
                15 -

            
	 	
              5.13

            	
              Title
                to Property and Assets

            	
              -
                15 -

            
	 	
              5.14

            	
              Tax
                Liabilities

            	
              -
                15 -

            
	 	
              5.15

            	
              Labor
                Agreements and Actions

            	
              -
                16 -

            
	 	
              5.16

            	
              [Reserved].

            	
              -
                16 -

            
	 	
              5.17

            	
              Customers
                and Suppliers

            	
              -
                16 -

            
	 	
              5.18

            	
              Employee
                Benefit Plans

            	
              -
                16 -

            
	 	
              5.19

            	
              Environmental
                Matters

            	
              -
                17 -

            
	 	
              5.20

            	
              Margin
                Security

            	
              -
                17 -

            
	 	
              5.21

            	
              Brokerage
                Fees, etc

            	
              -
                17 -

            
	 	
              5.22

            	
              Solvency

            	
              -
                17 -

            
	 	
              5.23

            	
              Security
                Interest

            	
              -
                17 -

            
	 	
              5.24

            	
              Permits;
                Laws

            	
              -
                17 -

            
	 	
              5.25

            	
              Government
                Regulation; Margin Stock

            	
              -
                18 -

            
	 	
              5.26

            	
              Anti-Terrorism
                Laws.

            	
              -
                18 -

            
	
              SECTION
                6. CLOSING CONDITIONS FOR INITIAL CLOSING

            	
              -
                19 -

            
	 	
              6.1

            	
              Representations
                and Warranties; No Default

            	
              -
                19 -

            
	 	
              6.2

            	
              Documents
                Satisfactory; Transactions Consummated

            	
              -
                19 -

            
	 	
              6.3

            	
              Delivery
                of Documents

            	
              -
                19 -

            
	 	
              6.4

            	
              Due
                Diligence; No Change in Condition

            	
              -
                21 -

            
	 	
              6.5

            	
              Corporate/Capital
                Structure

            	
              -
                22 -

            
	 	
              6.6

            	
              Authorizations,
                Consents and Approvals

            	
              -
                22 -

            
	 	
              6.7

            	
              No
                Material Adverse Effect

            	
              -
                22 -

            
	 	
              6.8

            	
              Litigation

            	
              -
                22 -

            
	 	
              6.9

            	
              Other
                Fees and Expenses

            	
              -
                22 -

            


    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

    


    
      	 	
              6.10

            	
              No
                Violation of Regulations T, U or X

            	
              -
                22 -

            
	 	
              6.11

            	
              Perfection
                of Security

            	
              -
                22 -

            
	 	
              6.12

            	
              Ancillary
                Documents

            	
              -
                22 -

            
	 	
              6.13

            	
              Existing
                Indebtedness

            	
              -
                23 -

            
	 	
              6.14

            	
              Employment
                Agreements

            	
              -
                23 -

            
	
              SECTION
                6A. CLOSING CONDITIONS FOR SERIES B CLOSING.

            	
              -
                23 -

            
	 	
              6A.1

            	
              Representations
                and Warranties; No Default

            	
              -
                23 -

            
	 	
              6A.2

            	
              Documents
                Satisfactory; Transactions Consummated

            	
              -
                23 -

            
	 	
              6A.3

            	
              Delivery
                of Documents

            	
              -
                23 -

            
	 	
              6A.4

            	
              Due
                Diligence; No Change in Condition

            	
              -
                26 -

            
	 	
              6A.5

            	
              Corporate/Capital
                Structure

            	
              -
                26 -

            
	 	
              6A.6

            	
              Authorizations,
                Consents and Approvals

            	
              -
                26 -

            
	 	
              6A.7

            	
              No
                Material Adverse Effect

            	
              -
                26 -

            
	 	
              6A.8

            	
              Litigation

            	
              -
                26 -

            
	 	
              6A.9

            	
              Other
                Fees and Expenses

            	
              -
                26 -

            
	 	6A.10	
              No
                Violation of Regulations T, U or X

            	
              -
                26 -

            
	 	6A.11	
              Perfection
                of Security

            	
              -
                27 -

            
	 	6A.12	
              Ancillary
                Documents

            	
              -
                27 -

            
	 	6A.13	
              Existing
                Indebtedness

            	
              -
                27 -

            
	 	6A.14	
              Employment
                Agreements

            	
              -
                27 -

            
	 	6A.15	
              Series
                E Preferred Stock

            	
              -
                27 -

            
	
              SECTION
                7. COVENANTS

            	
              -
                27 -

            
	 	
              7.1

            	
              Payment
                of Obligations

            	
              -
                27 -

            
	 	
              7.2

            	
              Taxes
                and Other Charges

            	
              -
                27 -

            
	 	
              7.3

            	
              Maintenance
                of Properties

            	
              -
                28 -

            
	 	
              7.4

            	
              Statutory
                Compliance

            	
              -
                28 -

            
	 	
              7.5

            	
              Compliance
                with Material Agreements; Notices of Material Agreements

            	
              -
                28 -

            
	 	
              7.6

            	
              Insurance

            	
              -
                29 -

            
	 	
              7.7

            	
              ERISA

            	
              -
                29 -

            
	 	
              7.8

            	
              Use
                of Proceeds

            	
              -
                30 -

            
	 	
              7.9

            	
              Further
                Assurances

            	
              -
                30 -

            
	 	
              7.10

            	
              Environmental
                Laws

            	
              -
                30 -

            


    

     

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    


    
      	 	
              7.11

            	
              [Reserved].

            	
              -
                30 -

            
	 	
              7.12

            	
              Financial
                Covenants

            	
              -
                30 -

            
	 	
              7.13

            	
              Indebtedness

            	
              -
                30 -

            
	 	
              7.14

            	
              Liens

            	
              -
                31 -

            
	 	
              7.15

            	
              Investments

            	
              -
                32 -

            
	 	
              7.16

            	
              Restricted
                Payments

            	
              -
                33 -

            
	 	
              7.17

            	
              Mergers,
                Asset Dispositions and Acquisitions

            	
              -
                34 -

            
	 	
              7.18

            	
              Other
                Asset Sales

            	
              -
                35 -

            
	 	
              7.19

            	
              Business
                Activities

            	
              -
                36 -

            
	 	
              7.20

            	
              Guarantees

            	
              -
                36 -

            
	 	
              7.21

            	
              Antilayering

            	
              -
                36 -

            
	 	
              7.22

            	
              Restrictions
                on Subsidiary Dividends and Other Payments

            	
              -
                36 -

            
	 	
              7.23

            	
              No
                Non-Wholly Owned Subsidiaries

            	
              -
                36 -

            
	 	
              7.24

            	
              Financial
                Statements and Reports

            	
              -
                36 -

            
	 	
              7.25

            	
              Books,
                Records and Inspections; Consultation Rights

            	
              -
                39 -

            
	 	
              7.26

            	
              Transactions
                with Affiliates and Related Parties

            	
              -
                39 -

            
	 	
              7.27

            	
              Amendment
                of Certain Documents

            	
              -
                39 -

            
	 	
              7.28

            	
              Observer
                Rights

            	
              - 40
                -

            
	 	
              7.29

            	
              Competitors

            	
              -
                40 -

            
	 	
              7.30

            	
              Warrants

            	
              -
                40 -

            
	
              SECTION
                8. EVENTS OF DEFAULT.

            	
              -
                40 -

            
	 	
              8.1

            	
              Payment
                Default

            	
              -
                41 -

            
	 	
              8.2

            	
              Payment
                Default on Other Indebtedness

            	
              -
                41 -

            
	 	
              8.3

            	
              Reporting
                Default

            	
              -
                41 -

            
	 	
              8.4

            	
              Levy

            	
              -
                41 -

            
	 	
              8.5

            	
              Certain
                Covenants

            	
              -
                41 -

            
	 	
              8.6

            	
              Other
                Defaults

            	
              -
                41 -

            
	 	
              8.7

            	
              Breach
                of Representations or Warranties

            	
              -
                41 -

            
	 	
              8.8

            	
              Involuntary
                Bankruptcy, Appointment of Receiver, etc

            	
              -
                41 -

            
	 	
              8.9

            	
              Voluntary
                Bankruptcy, Appointment of Receiver, etc

            	
              -
                42 -

            
	 	
              8.10

            	
              Insolvency

            	
              -
                42 -

            
	 	
              8.11

            	
              Judgments
                and Attachments

            	
              -
                42 -

            


    

     

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

    


    
      	 	
              8.12

            	
              Failure
                of Liens

            	
              -
                42 -

            
	 	
              8.13

            	
              Material
                Adverse Effect

            	
              -
                42 -

            
	 	
              8.14

            	
              Governmental
                Action

            	
              -
                42 -

            
	 	
              8.15

            	
              ERISA

            	
              -
                43 -

            
	 	
              8.16

            	
              Business
                Interruption

            	
              -
                43 -

            
	
              SECTION
                9. RESTRICTIONS ON TRANSFER; LEGENDS.

            	
              -
                43 -

            
	 	
              9.1

            	
              Assignments.

            	
              -
                43 -

            
	 	
              9.2

            	
              Restrictive
                Legend.

            	
              -
                44 -

            
	 	
              9.3

            	
              Termination
                of Restrictions

            	
              -
                45 -

            
	
              SECTION
                10. GUARANTEE.

            	
              -
                45 -

            
	 	
              10.1

            	
              Guarantee
                of Note Obligations

            	
              -
                45 -

            
	 	
              10.2

            	
              Continuing
                Obligation

            	
              -
                45 -

            
	 	
              10.3

            	
              Waivers
                with Respect to Note Obligations

            	
              -
                46 -

            
	 	
              10.4

            	
              Note
                Purchasers’ Power to Waive, etc

            	
              -
                47 -

            
	 	
              10.5

            	
              Information
                Regarding the Issuer, etc

            	
              -
                48 -

            
	 	
              10.6

            	
              Certain
                Guarantor Representations

            	
              -
                48 -

            
	 	
              10.7

            	
              Subrogation

            	
              -
                49 -

            
	 	
              10.8

            	
              Subordination.

            	
              -
                49 -

            
	
              SECTION
                11. SUBORDINATION

            	
              -
                50 -

            
	 	
              11.1

            	
              Payment
                Defaults

            	
              -
                51 -

            
	 	
              11.2

            	
              Non-Payment
                Defaults

            	
              -
                51 -

            
	 	
              11.3

            	
              Forbearance
                Periods.

            	
              -
                51 -

            
	 	
              11.4

            	
              Distributions

            	
              -
                52 -

            
	 	
              11.5

            	
              Payments
                to be Held in Trust

            	
              -
                53 -

            
	 	
              11.6

            	
              Subrogation

            	
              -
                53 -

            
	 	
              11.7

            	
              Reinstatement
                of Obligations

            	
              -
                53 -

            
	 	
              11.8

            	
              Actions
                With Respect to the Senior Notes

            	
              -
                53 -

            
	 	
              11.9

            	
              Waiver
                of Notice of Acceptance

            	
              -
                54 -

            
	 	
              11.10

            	
              Injunctive
                and Other Relief

            	
              -
                54 -

            
	 	
              11.11

            	
              Application
                of Provisions.

            	
              -
                54 -

            
	 	
              11.12

            	
              No
                Modification

            	
              -
                55 -

            


    

     

    
      
        
        

      

      
        v

        
          

        

      

      
        
        

      

    

    


    
      	
              SECTION
                12. COLLATERAL AGENT.

            	
              -
                55 -

            
	 	
              12.1

            	
              Collateral
                Agents’ Authority to Act, etc

            	
              -
                55 -

            
	 	
              12.2

            	
              Collateral
                Agents’ Resignation

            	
              -
                55 -

            
	 	
              12.3

            	
              Concerning
                the Collateral Agent.

            	
              -
                56 -

            
	 	
              12.4

            	
              Indemnification

            	
              -
                57 -

            
	 	
              12.5

            	
              Assumption
                of Collateral Agent’s Rights

            	
              -
                57 -

            
	
              SECTION
                13. MISCELLANEOUS.

            	
              -
                57 -

            
	 	
              13.1

            	
              Expenses

            	
              -
                57 -

            
	 	
              13.2

            	
              Indemnity

            	
              -
                58 -

            
	 	
              13.3

            	
              [Reserved].

            	
              -
                59 -

            
	 	
              13.4

            	
              Amendments
                and Waivers

            	
              -
                59 -

            
	 	
              13.5

            	
              Independence
                of Covenants

            	
              -
                59 -

            
	 	
              13.6

            	
              Notices

            	
              -
                59 -

            
	 	
              13.7

            	
              Survival
                of Warranties and Certain Agreements.

            	
              -
                61 -

            
	 	
              13.8

            	
              Failure
                or Indulgence Not Waiver; Remedies Cumulative

            	
              -
                61 -

            
	 	
              13.9

            	
              Severability

            	
              -
                61 -

            
	 	
              13.10

            	
              Heading

            	
              -
                61 -

            
	 	
              13.11

            	
              Applicable
                Law

            	
              -
                61 -

            
	 	
              13.12

            	
              Successors
                and Assigns; Subsequent Holders

            	
              -
                61 -

            
	 	
              13.13

            	
              
                CONSENT
                  TO JURISDICTION AND SERVICE OF
                  PROCESS

              

            	
              -
                62 -

            
	 	
              13.14

            	
              
                WAIVER
                  OF JURY TRIAL

              

            	
              -
                62 -

            
	 	
              13.15

            	
              Counterparts;
                Effectiveness

            	
              -
                62 -

            
	 	
              13.16

            	
              Confidentiality

            	
              -
                63 -

            
	 	
              13.17

            	
              USA
                PATRIOT Parent

            	
              -
                63 -

            
	 	
              13.18

            	
              Entirety

            	
              -
                63 -

            
	 	
              13.19

            	
              Joinder

            	
              -
                63 -

            
	 	
              13.20

            	
              Securities
                Laws

            	
              -
                64 -

            


    

     

    
      
        
        

      

      
        vi

        
          

        

      

      
        
        

      

    

     

    
      	
              SCHEDULES
                AND EXHIBITS

            
	
              Schedule

            	 
	
              I

            	
              Note
                Purchasers and dollar amount of Notes

            
	
              I(A)

            	
              Note
                Purchasers and dollar amount of Series B Subordinated
                Notes

            
	
              II

            	
              Wire
                instructions of the Note Purchasers

            
	
              III

            	
              EBITDA
                Calculations

            
	
              5.2.1

            	
              Tax
                identification numbers, CEO address and principal place of business,
                jurisdictions of business, business names and authorized
                equity

            
	
              5.2.2

            	
              Options,
                warrants, conversion rights and preemptive rights

            
	
              5.6

            	
              Consents

            
	
              5.7

            	
              Litigation

            
	
              5.9

            	
              Intellectual
                Property

            
	
              5.13

            	
              Title
                to property and assets

            
	
              5.14

            	
              Tax
                Liabilities

            
	
              5.15

            	
              Labor
                agreements and actions

            
	
              5.17

            	
              Customers
                and Suppliers

            
	
              5.19

            	
              Environmental
                Matters

            
	
              5.21

            	
              Brokerage
                Fees

            
	
              5.23

            	
              Location
                of Collateral

            
	
              6.3.14

            	
              Material
                Contracts

            
	
              6.13

            	
              Existing
                Indebtedness

            
	
              7.12

            	
              Financial
                Covenants

            
	
              7.15

            	
              Investments

            
	
              7.17.4

            	
              Direct
                Competitors

            
	
              Exhibit

            	 
	
              A

            	
              Form
                of Senior Note

            
	
              B

            	
              Form
                of Subordinated Note

            
	
              C

            	
              First
                Lien Security Agreement

            
	
              D

            	
              Second
                Lien Security Agreement

            
	
              E

            	
              Notice
                of Borrowing

            


    

     

    
      
        
        

      

      
        vii

        
          

        

      

      
        
        

      

    

    


    AMENDED
      & RESTATED NOTE PURCHASE AGREEMENT

     

    This
      AMENDED & RESTATED NOTE PURCHASE AGREEMENT (this “Agreement”)
      is
      dated as of August 1, 2008 and is entered into by and among Encompass Group
      Affiliates, Inc., a Delaware corporation, as issuer (“Company”
or
      the
“Issuer”),
      any
      Subsidiary of Parent (as defined below) from time to time party hereto (each,
      a
“Subsidiary”
and
      collectively, the “Subsidiaries”),
      Advanced Communications Technology, Inc., a Florida corporation (the
“Parent”),
      SpectruCell, Inc., a Delaware corporation (“SpectruCell”),
      Hudson Street Investments, Inc., a Delaware corporation (“Hudson
      Street”),
      Cyber-Test, Inc., a Delaware corporation (“Cyber-Test”),
      Vance
      Baldwin, Inc., a Florida corporation (“Vance
      Baldwin”),
      and
      Tritronics, Inc. (“Tritronics”),
      a
      Maryland corporation, as guarantors (the Issuer, the Company, Parent,
      SpectruCell, Hudson Street, Cyber-Test, Vance Baldwin, Tritronics and any
      subsidiary of Parent that executes a counterpart or joinder of this Agreement
      together being referred to as the “Note
      Parties”,
      and
      each such Person, a “Note
      Party”),
      Sankaty Advisors, LLC, as First Lien Collateral Agent for the Senior Note
      Purchasers and Second Lien Collateral Agent for the Subordinated Note
      Purchasers, and each Senior Note Purchaser and Subordinated Note Purchaser
      listed on Schedule
      I
      and
Schedule
      I(A)
      attached
      hereto (together, the “Note
      Purchasers”).

    


    RECITALS

     

    WHEREAS,
      pursuant to a Purchase Agreement dated as of August 17, 2007 (the “Acquisition
      Agreement”),
      by
      and among Parent (the “Seller”),
      as
      seller, ACT-DE LLC, a Delaware limited liability company and the other buyer
      parties identified on Schedule 1 thereto, as buyer (together, the “Buyer”),
      Buyer
      acquired a portion of the equity of Parent, and pursuant to a Stock Purchase
      Agreement, dated as of August 17, 2007, the Issuer acquired all of the issued
      and outstanding capital stock of Vance Baldwin (the “Acquired
      Entity”)
      (collectively, the “Acquisition”);
      and

     

    WHEREAS,
      in order to finance the Acquisition of the Acquired Entity and thereafter to
      provide working capital to the Note Parties, the Note Parties, Collateral Agents
      and Note Purchasers executed and delivered the Note Purchase Agreement dated
      as
      of August 17, 2007 (the “Original
      Note Purchase Agreement”);
      and

     

    WHEREAS,
      pursuant to the Original Note Purchase Agreement, the Note Purchasers agreed
      to
      acquire from the Issuer Senior Secured Notes due 2012 (the “Senior
      Notes”)
      in the
      aggregate principal amount of $12,690,355.00, in the form attached as
Exhibit
      A
      hereto,
      and Senior Subordinated Notes due 2013 (the “Series
      A Subordinated Notes”
and,
      together with the Senior Notes, the “Initial
      Notes”)
      in the
      aggregate principal amount of $10,714,286.00, in the form attached as
Exhibit
      B
      hereto;

     

    WHEREAS,
      on September 24, 2007, the Note Purchasers agreed to purchase from the Issuer
      additional Series A Subordinated Notes in the aggregate principal amount of
      $1,020,408.16; and

     

    WHEREAS,
      as of the date hereof, the aggregate principal amounts outstanding of the Senior
      Notes and the Series A Subordinated Notes are $12,182,741.12 and $11,734,693.87,
      respectively; and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    WHEREAS,
      now Issuer proposes to acquire all the issued and outstanding shares of common
      stock of Tritronics pursuant to the Stock Purchase Agreement, dated as of August
      1, 2008 (the “Stock
      Purchase Agreement”),
      and
      Vance Baldwin proposes to enter into a contract to purchase certain products
      and
      materials for resale from Philips Consumer Lifestyle (“Philips”)
      and
      become an authorized OEM distributor for Phillips pursuant to the Spare Parts
      and Sales Authorization Agreement, dated as of August 1, 2008 (the “Sales
      Authorization Agreement”);
      and

     

    WHEREAS,
      the Issuer now desires to issue and sell to the Note Purchasers, and the Note
      Purchasers have agreed to purchase, subject to the terms and conditions set
      forth herein, additional Senior Subordinated Notes due 2013 up to the aggregate
      principal amount of up to $13,265,306.12 (the “Series
      B Subordinated Notes”
and,
      together with the Initial Notes, the “Notes”);
      and


     

    WHEREAS,
      the parties to the Original Note Purchase Agreement desire to amend and restate
      the Original Note Purchase Agreement in its entirety as set forth below (the
      Original Note Purchase Agreement, as amended hereby, and as may be further
      amended or modified from time to time, together with all other related
      supplements, agreements, documents and instruments, and all annexes, appendices,
      exhibits and schedules thereto, being referred to herein as the “Agreement”);
      and

     

    WHEREAS,
      each of the Parent, SpectruCell, Hudson Street, Cyber-Test, Vance Baldwin,
      and
      Tritronics will execute this Agreement as guarantors of the obligations of
      the
      Issuer under the Notes; and

     

    WHEREAS,
      the Note Parties will each execute (i) an Amended and Restated First Lien
      Security Agreement for the Senior Notes in the form of Exhibit
      C,
      pursuant to which each such Note Party will grant a first lien in all of its
      present and future assets (the “Collateral”)
      to
      Sankaty Advisors, LLC as collateral agent for the Senior Note Purchasers (the
      “First
      Lien Collateral Agent”),
      to
      secure each such Note Party’s respective obligations with respect to the Senior
      Notes and (ii) an Amended and Restated Second Lien Security Agreement for the
      Subordinated Notes in the form of Exhibit
      D,
      pursuant to which each such Note Party will grant a second lien in the
      Collateral to Sankaty Advisors, LLC as collateral agent for the Subordinated
      Note Purchasers (the “Second
      Lien Collateral Agent”
and,
      together with the First Lien Collateral Agent, the “Collateral
      Agents”),
      to
      secure each such Note Party’s respective obligations with respect to the
      Subordinated Notes;

     

    NOW,
      THEREFORE, in consideration of the foregoing, and for other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      the
      Note Parties and the Note Purchasers agree as follows:

     

    SECTION
      1. DEFINITIONS.

     

    1.1 Certain
      Defined Terms; Rules of Construction.
      Capitalized terms used in this Agreement have the meanings set forth in
Annex
      I
      hereto.
      Except as otherwise explicitly specified to the contrary or unless the context
      clearly requires otherwise, (a) the capitalized term “Section” refers to
      sections of this Agreement, (b) the capitalized term “Exhibit” refers to
      exhibits to this Agreement, (c) the capitalized term “Schedules” refers to
      schedules to this Agreement, (d) references to a particular Section include
      all
      subsections thereof, (e) the word “including” shall be construed as “including
      without limitation”, (f) references to a particular statute or regulation
      include all rules and regulations thereunder and any successor statute,
      regulation or rules, in each case as from time to time in effect, (g) references
      to a particular Person or entity include such Person’s or entity’s successors
      and assigns to the extent not prohibited by this Agreement and (h) references
      to
“$”, “cash”, “dollars” or similar references means U.S. dollars, paid in cash or
      other immediately available funds. References to “the date hereof” mean the date
      first set forth above.

     

    
      
        
        

      

      
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          2
          -

        
          

        

      

      
        
        

      

    


    1.2 Accounting
      Terms.
      Unless
      the context otherwise clearly requires, all accounting terms not specifically
      defined herein shall be construed, all accounting determinations hereunder
      shall
      be made and all financial computations required to be delivered pursuant hereto
      shall be prepared, in accordance with GAAP. If any change in GAAP following
      June
      30, 2006 results in a change in the calculation of the financial covenants
      or
      interpretation of related provisions of this Agreement, then the Issuer and
      the
      Required Purchasers agree to amend such provisions of this Agreement so as
      to
      equitably reflect such changes in GAAP with the desired result that the criteria
      for evaluating the Note Parties’ financial condition shall be the same after
      such change in GAAP as if such change had not been made, provided that,
      until
      such time as the financial covenants and the related provisions of this
      Agreement have been amended in accordance with the provisions of this
Section
      1.2,
      the
      calculations of financial covenants and the interpretation of any related
      provisions shall be calculated and interpreted in accordance with GAAP as in
      effect immediately prior to such change in GAAP.

     

    SECTION
      2. PURCHASE
      AND SALE OF THE NOTES.

     

    2.1 Purchase
      and Sale of the Initial Notes.
      Subject
      to the terms and conditions of this Agreement and on the basis of the
      representations and warranties set forth herein, the Issuer hereby agrees to
      sell to each Note Purchaser, and each such Note Purchaser agrees to purchase
      from the Issuer, on the Initial Closing Date, a Note in the original principal
      amount set forth opposite the name of such Note Purchaser on Schedule
      I
      for the
      purchase price set forth thereon. 

     

    2.2 The
      Initial Closing.
      The
      purchase and sale of the Initial Notes will occur at a closing to be held on
      August 17, 2007, at 10:00 a.m. (Boston time) (the “Initial
      Closing Date”),
      at
      the offices of Ropes & Gray LLP, One International Place, Boston, MA 02110,
      or at such other date, time and/or location as may be agreed upon by the parties
      hereto. 

     

    2.3 Payment
      of Purchase Price for the Initial Notes.
      On the
      Initial Closing Date, after payment to the Issuer by wire transfer of
      immediately available funds in the amounts set forth on Schedule
      I,
      the
      Issuer will deliver Notes registered in the names of the Note Purchasers in
      the
      amounts set forth on Schedule
      I.
      The
      Initial Notes will be delivered by the Issuer as they are allocated on
Schedule
      I.

     

    2.4 Purchase
      and Sale of the Series B Subordinated Notes.
      On the
      Series B Closing Date, and subject to the terms and conditions of this Agreement
      and on the basis of the representations and warranties set forth herein, the
      Issuer agrees to issue and sell to each Note Purchaser listed on Schedule
      I(A),
      and by
      its acceptance hereof, each such Note Purchaser agrees to purchase from the
      Issuer at the Series B Closing Date, in one issuance $13,265,306.12 in aggregate
      original principal amount of Series B Subordinated Notes (the “Series
      B Issuance”).
      Each
      Note Purchaser shall purchase from the Issuer on the Series B Closing Date,
      a
      Series B Subordinated Note in the original principal amount set forth opposite
      the name of such Note Purchaser on Schedule
      I(A)
      (under
      the caption “Series B Subordinated Notes”), for the purchase price set forth
      thereon. The Series B Subordinated Notes shall rank pari passu
      to the
      Series A Subordinated Notes in all respects, including right of payment and
      priority of security interests. 

     

    2.5 Additional
      Issuances.
      During
      the twenty-four (24) month period following the Initial Closing Date, the Issuer
      may sell to each Note Purchaser, and each such Note Purchaser agrees to purchase
      from the Issuer, in one additional issuances (the “Additional
      Issuance”),
      $510,204.08 of principal amount of Series A Subordinated Notes with aggregate
      net proceeds from such Additional Issuances of $500,000.00. Any purchase and
      sale of Series A Subordinated Notes pursuant to this Section
      2.5
      shall be
      subject to the following conditions, which conditions may only be waived or
      amended by the Required Purchasers:

     

    
      
        
        

      

      
        -
          3
          -

        
          

        

      

      
        
        

      

    


    2.5.1. the
      Leverage Ratio for the Trailing Twelve Month Period shall be no greater than
      5.0:1.0 as of the Supplemental Closing Date if the Supplemental Closing Date
      occurs on or before December 31, 2008; if the Supplemental Closing Date occurs
      after December 31, 2008, the Leverage Ratio for the Trailing Twelve Month Period
      shall be no greater than 4.5:1.0 as of such Supplemental Closing Date;


     

    2.5.2. not
      less
      than ten (10) Business Days prior to the contemplated issuance, the Issuer
      shall
      deliver a Notice of Borrowing to the Collateral Agent in the form attached
      hereto as Exhibit E, which shall include the proposed date of such Supplemental
      Closing Date;

     

    2.5.3. immediately
      before and after such Additional Issuance, no Default or Event of Default shall
      have occurred and be continuing; 

     

    2.5.4. the
      representations and warranties contained in Section 5 hereof and in the other
      Note Documents shall be true and correct as of the Supplemental Closing Date
      in
      all material respects after giving effect to the transactions contemplated
      herein on such Supplemental Closing Date (except that such materiality qualifier
      shall not be applicable to any representations and warranties that already
      are
      qualified or modified by materiality in the text thereof), provided that, (i)
      to
      the extent that such representations and warranties relate to a specific earlier
      date, such representations and warranties shall be true and correct as of such
      earlier date, and (ii) to the extent exceptions to such representations and
      warranties (excluding changes to schedules) have been disclosed in writing
      to
      the Note Purchasers and have been approved in writing by the Required
      Purchasers, such warranties shall be qualified by such exceptions; provided,
      further,
      that,
      notwithstanding anything to the contrary herein, the Note Parties may be
      permitted from time to time to provide supplements to the Schedules to this
      Agreement in order to reflect any changes to the information provided therein,
      provided that such changes and any transaction related thereto are expressly
      permitted by the terms of this Agreement and have not resulted from nor would
      result in a Material Adverse Effect; 

     

    2.5.5. no
      Material Adverse Effect shall have occurred since the Closing Date, it being
      understood and agreed that the Note Parties incurring non-ordinary course costs
      or damages exceeding the sum of $200,000 shall constitute a Material Adverse
      Effect for purposes of any Additional Issuance;

     

    2.5.6. the
      Issuer shall have paid all fees and expenses of the Note Purchasers pursuant
      to
Section
      6.9
      and
Section
      6A.9
      (including, without limitation, legal fees and expenses) as of the Supplemental
      Closing Date;

     

    2.5.7. an
      authorized officer of the Issuer shall deliver a certificate to the Note
      Purchasers certifying to the matters in Section
      2.5.1,
      Section
      2.5.3,
      Section
      2.5.4,
      Section
      2.5.5
      and
Section
      2.5.6
      hereof
      as of the Supplemental Closing Date.

     

    
      
        
        

      

      
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          4
          -

        
          

        

      

      
        
        

      

    


    2.6 Payment
      of Purchase Price Upon an Additional Issuance.
      On the
      Supplemental Closing Date, in consideration of payment to the Issuer by wire
      transfer of immediately available funds in an amount equal to the purchase
      price
      of the Series A Subordinated Notes purchased on the Supplemental Closing Date,
      the Issuer will deliver Series A Subordinated Notes registered in the names
      of
      the Note Purchasers in the principal amount equal to such Note Purchasers pro
      rata share of the Senior Notes or the Series A Subordinated Subordinated Notes,
      as the case may be, issued on the Initial Closing Date.

     

    2.7 The
      Series B Closing Date.
      The
      purchase and sale of the Series B Subordinated Notes will occur at a closing
      (the “Series
      B Closing Date”)
      to be
      held, at the offices of Ropes & Gray LLP, 1211 Avenue of the Americas, New
      York, NY 10036, or at such other date, time and/or location as may be agreed
      upon by the parties hereto.

     

    2.8 Payment
      of Purchase Price for the Series B Subordinated Notes.
      On the
      Series B Closing Date, after payment to the Issuer by wire transfer of
      immediately available funds in the amounts equal to the purchase prices set
      forth on Schedule
      I(A),
      the
      Issuer will deliver the Series B Subordinated Notes registered in the names
      of
      the Note Purchasers in accordance with Schedule
      I(A).

     

    2.9 Use
      of
      Proceeds.
      The
      proceeds of the sale by the Issuer of the Notes hereunder shall be used solely
      to effect the Transactions, to pay fees and expenses in connection with the
      Transactions and the financing hereunder, for general corporate purposes and
      to
      provide working capital to the Note Parties. No portion of the proceeds of
      the
      sale of the Notes hereunder shall be used, directly or indirectly, for the
      purpose of buying or carrying any “margin stock” within the meaning of any
      regulation, interpretation or ruling of the Board of Governors of the Federal
      Reserve System, all as from time to time in effect, refunding of any
      indebtedness incurred for such purpose, or making any investment prohibited
      by
      foreign trade regulations. Without limiting the foregoing, the Issuer agrees
      that in no event shall any proceeds of the sale of the Notes hereunder be used
      in any manner which might cause the Notes or the application of such proceeds
      to
      violate any of Regulations T, U or X of the Board of Governors of the Federal
      Reserve System or any other regulation of the Board of Governors of the Federal
      Reserve System, or to violate the Exchange Act, in each case as in effect as
      of
      the Closing Date and as of such use of proceeds.

     

    SECTION
      3. TERMS
      OF THE NOTES

     

    3.1 Interest
      on the Notes.

     

    3.1.1. The
      Notes
      shall bear interest at a rate equal to the respective Applicable Rate for such
      Notes on the unpaid principal amount thereof (and on any interest or other
      amount owing hereunder that is not paid when due, to the extent permitted by
      applicable law) from and including the Closing Date until the principal amount
      shall have been paid in full. During the pendency of any Event of Default,
      the
      interest rate on the Notes shall be increased by 2% per annum
      over the
      then applicable interest rate. 

     

    3.1.2. All
      accrued interest on the Notes shall be payable, in arrears, in cash on the
      last
      Business Day of each of March, June, September and December, commencing
      September 28, 2007 with respect to the Initial Notes and commencing September
      30, 2008 with respect to the Series B Subordinated Notes (each an “Interest
      Payment Date”).

     

    
      
        
        

      

      
        -
          5
          -

        
          

        

      

      
        
        

      

    


    3.1.3. Interest
      on the Notes shall be computed on the basis of the actual number of days elapsed
      over a 360-day year. In computing such interest, the date or dates of the making
      of the Notes shall be included and the date of payment shall be
      excluded.

     

    3.1.4. AHYDO
      Catchup.
      Notwithstanding
      anything to the contrary in this Agreement, if the aggregate amount of accrued
      and unpaid interest (including, for this purpose only, PIK Interest) on the
      Subordinated Notes and all unpaid original issue discount on the Subordinated
      Notes on any Interest Payment Date following the fifth anniversary of the
      Closing (the first such date being August 17, 2012) would, but for this
      provision, exceed an amount equal to the product of:

     

    (a)
      the
      issue price (as defined in sections 1273(b) and 1274(a) of the Code) of the
      Subordinated Notes; and

     

    (b)
      the
      yield to maturity (interpreted in accordance with section 163(i) of the Code)
      of
      the Subordinated Notes (such product, the “Maximum
      Accrual”),

     

    then
      all
      accrued and unpaid interest (including, if necessary, PIK Interest) and original
      issue discount on the Subordinated Notes in excess of an amount equal to the
      Maximum Accrual shall be paid in cash by the Note Parties on each such Interest
      Payment Date.

     

    3.2 Payment
      of Notes.

     

    3.2.1. Scheduled
      Payments.
      The
      principal amount of the Senior Notes shall be repaid in consecutive quarterly
      installments in an amount equal to one percent (1.0%) per annum of the original
      principal amount of the Senior Notes payable, in arrears, in cash on each
      Interest Payment Date.

     

    3.2.2. Payment
      at Maturity.
      The
      entire principal amount of the Notes then outstanding, any accrued and unpaid
      interest on the Notes and all other Note Obligations (except for contingent
      obligations for which no demand has been made) shall be due and payable on,
      and
      shall be paid in full in cash on, the respective Maturity Date for such Series
      of Notes.
      The
      Issuer understands and acknowledges that it is obligated for the entire
      principal amount of the Notes outstanding, any accrued and unpaid interest
      on
      the Notes and all other Note Obligations. 

     

    3.2.3. Voluntary
      Prepayments.
      The
      Issuer shall not be permitted to make any voluntary prepayments of the
      Subordinated Notes until payment in full by the Issuer of all amounts due and
      owing under the Senior Notes. Subject
      to the foregoing, the Notes may be prepaid at the Issuer’s option, at any time,
      and from time to time, in whole or in part (in a minimum amount of $250,000
      and
      in increments of $250,000, or such lesser amount as is then outstanding), on
      ten
      Business Days’ prior notice to the respective Note Purchasers whose Notes are to
      be prepaid; provided,
      that
      any such voluntary prepayment of Notes shall include the Applicable Premium
      and
      the Refinancing Premium, if any, on the amount so prepaid. 

     

    3.2.4. Prepayments
      Upon a Change of Control.
      

     

    3.2.4.1. Upon
      any
      Change of Control, the Note Purchasers shall have the right to require the
      Issuer to prepay any or all of the Notes then outstanding together
      with accrued interest thereon and the then Applicable Premium on the amount
      so
      prepaid. Such prepayment of the Notes shall be made in accordance with
Section
      3.2.4.2.

     

    
      
        
        

      

      
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          6
          -

        
          

        

      

      
        
        

      

    


    3.2.4.2. Not
      later
      than (i) three (3) Business Days prior to any Change of Control resulting from
      the issuance or sale by Parent or any of its Subsidiaries of any equity interest
      or any other Change of Control of which Parent or any of its Subsidiaries has
      prior knowledge or (ii) three (3) Business Days following any other Change
      of
      Control, the Issuer shall deliver to the Note Purchasers a written notice of
      such Change of Control (a “Change
      of Control Notice”).
      The
      Note Purchasers shall have ten (10) Business Days from the date of delivery
      of
      the Change of Control Notice to exercise their right to require the Issuer
      to
      prepay all or a specified amount of the Notes held by such Note Purchasers
      pursuant to Section
      3.2.4.1
      at a
      purchase price equal to the principal amount of such Notes plus the Applicable
      Premium thereon by delivering a notice to the Issuer to that effect (the
“Change
      of Control Prepayment Notice”).
      Any
      prepayment of Notes pursuant to this Section
      3.2.4.2
      shall be
      effected on or prior to the later of (x) the occurrence of the Change of Control
      or (y) five Business Days following delivery of the Change of Control Prepayment
      Notice.

     

    3.2.5. Excess
      Cash Flow Sweep.
      In the
      event that there is Excess Cash Flow for any fiscal year, commencing with the
      period beginning on the Closing Date and ending June 30, 2008, then promptly
      following the delivery of the audited financial statements for such fiscal
      year
      pursuant to Section
      7.24.1,
      and in
      any event not more than one hundred twenty (120) days after the end of the
      fiscal year, the Company shall apply an amount equal to 50% of such Excess
      Cash
      Flow to the prepayment of the Senior Notes at a purchase price equal to the
      principal amount of such Senior Notes. 

     

    3.2.6. Other
      Mandatory Prepayments.
      The
      Issuer shall not be permitted to make any mandatory prepayments of the
      Subordinated Notes until payment in full by the Issuer of all amounts due and
      owing under the Senior Notes. Subject
      to the foregoing (excluding the sales or other dispositions of assets to the
      extent permitted by the provisions of Section
      7.18,
      but
      only to the extent that there is no existing Event of Default and (i) the Excess
      Disposition Proceeds do not exceed $200,000 or (ii) (x) the Excess Disposition
      Proceeds realized are less than $2,000,000 and are applied within 90 days from
      receipt of such Excess Disposition Proceeds to purchase other assets in
      accordance with Section
      7.18
      or (y)
      the Excess Disposition Proceeds realized are greater than or equal to $2,000,000
      and less than $2,500,000 and are applied within 60 days of receipt of the Excess
      Disposition Proceeds or if any Note Party enters into a contract to reinvest
      such Excess Disposition Proceeds within 60 days of the receipt thereof, within
      one hundred eighty (180) days after the date of such contract or other
      disposition to purchase other assets in accordance with Section
      7.18
      or (z)
      the Excess Disposition Proceeds realized are greater than or equal to $2,500,000
      and the Collateral Agents provide their written consent for such Excess
      Disposition Proceeds to be used to purchase other assets in accordance with
      Section
      7.18),
      within
      ten (10) days of receipt by any Note Party of any Excess Disposition Proceeds
      or
      any Excess Issuance Proceeds, the Issuer shall apply an amount equal to such
      Excess Disposition Proceeds or Excess Issuance Proceeds to the prepayment of
      the
      Notes. Nothing in this Section
      3.2.6
      shall be
      deemed to be a consent to the sale of any assets or equity or the issuance
      of
      any equity or debt securities.

     

    
      
        
        

      

      
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          7
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    3.3 Prepayment
      Procedures. 

     

    3.3.1. If
      fewer
      than all of a given Series of Notes are to be paid or prepaid, the Issuer shall
      pay or prepay the Notes or such Series of Notes on a pro rata
      basis
      and, in the event of an offer to prepay a portion of a Series of Notes in whole
      or in part, the Issuer shall pay or prepay the Notes of such Series of Notes
      pro rata
      to those
      parties tendering in response to such offer.

     

    3.3.2. Upon
      surrender of a Note that is paid or prepaid in part, the Issuer shall, at the
      request of the applicable Note Purchaser, promptly execute and deliver to the
      holder (at the expense of the Issuer) a new Note equal in principal amount
      to
      the unpaid portion of the Note surrendered.

     

    3.3.3. Each
      Note
      Purchaser agrees that before disposing of the Note held by it, or any part
      thereof (other than by granting participations therein), such Note Purchaser
      will make a notation thereon of all principal payments previously made thereon
      and of the date to which interest thereon has been paid and will notify the
      Issuer of the name and address of the transferee of that Note; provided,
      that
      the failure to make (or any error in the making of) a notation of the payments
      made under such Note or to notify the Issuer of the name and address of a
      transferee shall not limit or otherwise affect the obligation of the Issuer
      hereunder or under such Note.

     

    3.3.4. All
      payments or prepayments (whether voluntary or mandatory) shall include the
      payment of accrued and unpaid interest to, but not including, the date of such
      prepayment on the principal amount of the Notes so prepaid, and the Applicable
      Premium and any Refinancing Premium (other than those prepayments made pursuant
      to Section
      3.2.5),
      if
      any.

     

    3.4 Taxes.

     

    3.4.1. Any
      and
      all payments hereunder or with respect to any Note or any Guarantee shall be
      made free and clear of and without withholding or deduction for any and all
      present or future taxes, levies, imposts, deductions, charges or withholdings
      in
      any such case imposed by the United States or any other
      jursidiction
      or any political
      subdivision of the United States or any other jurisdiction, excluding taxes
      imposed or based on the recipient Note Purchaser’s overall net income,
franchise
      or capital taxes imposed on it in lieu of net income taxes,
      any
      estate, inheritance, gift or personal property tax,
      any
      branch profits taxes, and any taxes similar to the foregoing, but only to the
      extent any of such foregoing taxes are imposed as a result of a connection
      between the Note Purchaser and the relevant jurisdiction or political
      subdivision other than a connection resulting from entering into, executing,
      receiving payment under, or exercising rights or performing obligations under
      this Agreement (all
      such
      non-excluded taxes, levies, imposts, deductions, charges, withholdings and
      liabilities including any interest, additions to or penalties appliable thereto,
      in respect of payments hereunder or under the Notes being hereinafter referred
      to as “Taxes”). If the Issuer or any Guarantor shall be required by law to
      withhold or deduct any Taxes from or in respect of any sum payable hereunder
      or
      under any Note or any Guarantee to any Note Purchaser, (i) the sum payable
      shall
      be increased as may be necessary so that after making all required withholdings
      or deductions (including deductions applicable to additional sums payable under
      this Section
      3.4)
      such
      Note Purchaser receives an amount equal to the sum it would have received had
      no
      such withholdings or deductions been made, (ii) the Issuer or Guarantor shall
      make such withholdings or deductions and (iii) the Issuer or Guarantor shall
      remit the full amount withheld or deducted to the relevant taxation authority
      or
      other authority in accordance with applicable law. Within 30 days after the
      date
      of any payment of Taxes, the Issuer or Guarantor shall furnish to such Note
      Purchaser the original or certified copy of a receipt evidencing payment
      thereof.
      So long
      as no Event of Default has occurred and is continuing, the Note Purchasers
      will
      not assign any of the Notes to any Person that would trigger any payment
      obligations by the Issuer or Guarantors under this Section
      3.4.1.
      

     

    
      
        
        

      

      
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    3.4.2. In
      addition, the Issuer and Guarantors agree to pay any present or future stamp
      or
      documentary taxes or any other excise or property taxes, charges or similar
      levies which arise from any payment made hereunder or from the execution,
      delivery or registration of, performance under, or otherwise with respect to,
      this Agreement or the Notes or any other Note Document (hereinafter referred
      to
      as “Other
      Taxes”).

     

    3.4.3. Each
      Note
      Purchaser that is not a United States person within the meaning of Section
      7701(a)(30) of the Code, prior to its receipt of any payment under this
      Agreement and the Notes, and upon request
      from the Issuer prior to the obsolescence of any previously provided
      form,
      shall
      provide the Issuer with an accurate and complete original signed copies of
      Internal Revenue Service Form W-8ECI, W-8BEN, W-8EXP or W-8IMY, as appropriate,
      or any successor form prescribed by the Internal Revenue Service, certifying,
      in
      each case, that such Note Purchaser is entitled to a complete exemption from
      United States withholding tax on interest payments made pursuant to this
      Agreement and the Notes. In addition, each Note Purchaser that is a United
      States person within the meaning of Section 7701(a)(30) will deliver an accurate
      and complete original signed copy of Internal Revenue Service Form W-9. In
      addition, each Note Purchaser agrees that from time to time, when a change
      in
      circumstances of the Note Purchaser or
      any
      direct or indirect beneficial owner renders
      the previous certification obsolete or inaccurate in any material respect,
      it
      will deliver to the Issuer new accurate and complete original signed copies
      of
      Internal Revenue Service Form W-9, W-8BEN, W-8ECI, W-8EXP or W-8IMY, (or
      appropriate successor forms) as the case may be, certifying, in each case,
      that
      such Note Purchaser is entitled to a complete or partial exemption from United
      States withholding tax on interest payments made pursuant to this Agreement
      and
      the Note; provided, however, that if the applicable form provides only a partial
      exemption, the payment obligation in Section
      3.4.1
      and the
      indemnification obligation in Section
      3.4.6
      should
      apply only to the extent thereof. Any form W-8BEN on which exemption under
      an
      income tax treaty is
      not
      claimed
      shall be accompanied by a certificate to the effect that such Note Purchaser
      is
      not a (A) “bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a
“10 percent shareholder” of the Issuer within the meaning of section
      881(c)(3)(B) of the Code and (C) a “controlled foreign corporation” described in
      section 881(c)(3)(C) of the Code. Any
      form
      W-8IMY shall include certifications from all direct and indirect beneficial
      owners that they are entitled to a complete (or, in the case of change of
      circumstances of the Note Purchaser or any direct or indirect beneficial owner,
      partial) exemption from United States withholding tax on interest payments
      made
      pursuant to this Agreement and the Notes, but only to the extent such form
      W-8-IMY is required by law to include such certifications. 

     

    3.4.4. A
      Note
      Purchaser that is entitled to an exemption from any non-U.S. withholding tax
      under the law of the jurisdiction in which any Issuer or Guarantor (if such
      Guarantor is required to make a payment under this Agreement) is located, or
      any
      treaty to which such jurisdiction is a party, with respect to payments under
      this Agreement shall deliver to such Issuer or Guarantor, at the time or times
      prescribed by applicable law or reasonably requested by such Issuer or
      Guarantor, such properly completed and executed documentation prescribed by
      applicable law as will permit such payments to be made without withholding.
      

     

    
      
        
        

      

      
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    3.4.5. A
      Note
      Purchaser shall not be entitled to indemnification under this Section
      3.4
      with
      respect to Taxes to the extent such Taxes are imposed as a result of the Note
      Purchaser failing to provide to Issuer the forms required to be provided under
      Section
      3.4.3,
      or as a
      result of the Note Purchaser failing to provide to any Issuer or Guarantor
      the
      documentation required to be provided under Section
      3.4.4,
      unless
      it is unable to provide such forms as a result of a change in law, treaty or
      regulations or interpretation of such law or regulations by any governmental
      authority charged with the interpretation or administration thereof (whether
      or
      not having the force of law); provided,
      however,
      that
      should a Note Purchaser which is otherwise exempt from Taxes become subject
      to
      Taxes because of its failure to deliver a form required hereunder, the Issuer
      or
      Guarantors, as applicable, shall take such steps as such Note Purchaser shall
      reasonably request, but at no expense to the Issuer or Guarantors, to assist
      such Note Purchaser to recover such Taxes. 

     

    3.4.6. Subject
      to Section
      3.4.5
      above,
      the Issuer and Guarantors will indemnify each Note Purchaser for the full amount
      of Taxes or Other Taxes (to the extent not previously paid under Section
      3.4.2
      above)
      imposed on such Note Purchaser and any liability (including penalties, interest
      and expenses) arising therefrom or with respect thereto.
      Payment
      in respect of any such indemnification shall be made within 30 days from the
      date such Note Purchaser makes written demand therefor and a certificate from
      such Note Purchaser prepared in good faith and setting forth in reasonable
      detail the calculation thereof as to the amount and the type of such Taxes.
      Any
      payment due hereunder and not timely paid shall bear interest, payable in cash
      at the same time as the underlying payment, at the rate applicable to the
      Notes.

     

    3.4.7. In
      the
      event that the Issuer or any Guarantor make an additional payment under this
      Section
      3.4
      for the
      account of any Note Purchaser and such Note Purchaser, in its sole opinion
      and
      absolute discretion, determines that it has finally and irrevocably received
      or
      been granted a credit against, or relief or remission from, or repayment of,
      any
      tax paid or payable by it in respect of or calculated with reference to the
      deduction or withholding giving rise to such additional payment, such Note
      Purchaser shall, to the extent that it reasonably determines that it can do
      so
      without prejudice to the retention of the amount of such credit, relief,
      remission or repayment, pay to the Issuer such amount as such Note Purchaser
      shall, in its sole opinion, have determined is attributable to such deduction
      or
      withholding and will leave such Note Purchaser (after such payment) in no worse
      position than it would have been had the Issuer not been required to make such
      deduction or withholding. Nothing contained herein shall (i) interfere with
      the
      right of a Note Purchaser to arrange its tax affairs in whatever manner it
      thinks fit or (ii) oblige any Note Purchaser to claim any tax credit or to
      disclose any information relating to its tax affairs or any computations in
      respect thereof or (iii) require any Note Purchaser to take or refrain from
      taking any action that would prejudice its ability to benefit from any other
      credits, relief, remissions or repayments to which it may be
      entitled.

     

    3.4.8. Without
      prejudice to the survival of any other agreement hereunder, the agreements
      and
      obligations contained in this Section
      3.4
      shall
      survive the payment in full of principal and interest under the
      Notes.

     

    
      
        
        

      

      
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    3.5 Manner
      and Time of Payment.

     

    3.5.1. All
      payments with respect to any Series of Notes shall be made pro rata
      to the
      Note Purchasers without defense, set off or counterclaim in same day funds
      and
      shall be made by wire transfer to the Note Purchasers’ respective accounts
      designated in Schedule
      II
      hereto
      (or such other account or address or to the attention of such other Person
      as
      the applicable Note Purchaser shall have specified by prior written notice
      to
      the Issuer) so as to be actually received not later than 2:00 p.m. (Boston
      time)
      on the date such payment is due; provided
      that
      funds received by such Note Purchasers after 2:00 p.m. (Boston time) shall
      be
      deemed to have been paid on the next succeeding Business Day.

     

    3.5.2. Whenever
      any payment to be made hereunder or under the Notes shall be stated to be due
      on
      a day which is not a Business Day, the payment shall be made on the next
      succeeding Business Day and such additional period shall be included in the
      computation of the payment of interest hereunder or under the
      Notes.

     

    SECTION
      4. REPRESENTATIONS
      AND WARRANTIES OF NOTE PURCHASERS.

     

    In
      order
      to induce the Issuer to enter into this Agreement, each Note Purchaser
      individually (but not on behalf of any other Note Purchaser) represents and
      warrants for the benefit of the other Note Purchasers and the Issuer that,
      as of
      the Closing Date:

     

    4.1 Legal
      Capacity; Due Authorization.
      Such
      Note Purchaser has full legal capacity, power and authority to execute and
      deliver this Agreement and to perform its obligations hereunder and that this
      Agreement has been duly executed and delivered by such Note Purchaser and is
      the
      legal, valid and binding obligation of such Note Purchaser enforceable against
      it in accordance with the terms hereof.

     

    4.2 Restrictions
      on Transfer.
      Such
      Note Purchaser has been advised that the Notes have not been registered under
      the Securities Act or any state securities laws and, therefore, cannot be resold
      unless they are registered under the Securities Act and applicable state
      securities laws or unless an exemption from such registration requirements
      is
      available. Such Note Purchaser is aware that the Issuer is not under any
      obligation to effect any such registration with respect to the Notes or to
      file
      for or comply with any exemption from registration. Such Note Purchaser is
      purchasing the Notes to be acquired by such Note Purchaser hereunder for its
      own
      account and not with a view to, or for resale in connection with, the
      distribution thereof; provided,
      however,
      that
      subject to SECTION
      9
      of this
      Agreement, the disposition of such Note Purchaser’s property shall at all times
      be and remain in its control. 

     

    4.3 Accredited
      Investor, etc.
      Such
      Note Purchaser has such knowledge and experience in financial and business
      matters so as to be capable of evaluating the merits and risks of such
      investment, is able to incur a complete loss of such investment and to bear
      the
      economic risk of such investment for an indefinite period of time. Such Note
      Purchaser is an “accredited investor” as that term is defined in Regulation D
      under the Securities Act. 

     

    4.4 Brokerage
      Fees, etc.
      Each
      Note Purchaser represents and warrants to each other party to this Agreement
      that no broker’s, finders’ or placement fee or commission will be payable to any
      Person alleged to have been retained by such representing and warranting party
      with respect to any of the transactions contemplated by this Agreement. Each
      Note Purchaser hereby indemnifies each such other party against, and agrees
      that
      it will hold each such party harmless from, any claim, demand or liability,
      including reasonable attorneys’ fees, for any broker’s, finder’s or placement
      fee or commission alleged to have been incurred by such indemnifying
      party. 

     

    
      
        
        

      

      
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    SECTION
      5. REPRESENTATIONS
      AND WARRANTIES OF THE NOTE PARTIES.

     

    In
      order
      to induce each Note Purchaser to enter into this Agreement and to purchase
      the
      Notes to be purchased by such Note Purchaser hereunder, each Note Party jointly
      and severally represents, warrants and agrees for the benefit of each Note
      Purchaser that, as of the Closing Date, or, with respect to an Additional
      Issuance, a Supplemental Closing Date (unless otherwise stated, both before
      and
      after giving effect to the issuance of the Notes and the Transactions to occur
      on or prior to the Series B Closing Date (or Supplemental Closing Date) or
      in
      connection with the foregoing) (it being understood and agreed that in relation
      to any representation or warranty given by any of the Note Parties relating
      to
      SpectruCell, Hudson Street, Vance Baldwin or Cyber-Test in relation to any
      period prior to the closing of the Acquisition or to Tritronics in relation
      to
      any period prior to the closing of the Transactions shall be given only to
      the
      knowledge of such Note Party (except insofar as SpectruCell, Hudson Street,
      Vance Baldwin, Cyber-Test or Tritronics gives any such representation or
      warranty in relation to itself):

     

    5.1 Organization,
      Good Standing and Qualification.
      Parent
      and each of its Subsidiaries (a) is a duly organized and validly existing and
      (to the extent applicable in its jurisdiction of organization) in good standing
      under the laws of the jurisdiction of its organization and has the corporate
      power and authority to own its property and assets and to conduct its business
      as currently conducted and (b) has duly qualified to do business as currently
      conducted and (to the extent applicable in its jurisdiction of organization)
      is
      in good standing in each jurisdiction where it is required to be so qualified
      and where the failure to be so qualified could not reasonably be expected to
      have a Material Adverse Effect.

     

    5.2 Capitalization.

     

    5.2.1. Schedule
      5.2.1
      sets
      forth, as of the date hereof, (i) the name, jurisdiction of organization, the
      organizational identification number issued by such jurisdiction and the federal
      taxpayer identification number (or the equivalent, if any, issued under the
      laws
      of the jurisdiction of its organization) of each Note Party, (ii) the address
      of
      the chief executive office (if any) and principal place of business of each
      such
      Person, (iii) each name under which each such Person conducts its business,
      (iv)
      each jurisdiction in which each such Person owns or leases real property (if
      any) and (v) the authorized and issued equity interests (including options,
      warrants, convertible securities and rights to acquire the same) and ownership
      of Parent and each of its Subsidiaries. 

     

    5.2.2. Except
      as
      set forth in Schedule
      5.2.2,
      no
      options, warrants, conversion rights, preemptive rights or other statutory
      or
      contractual rights to purchase shares of Capital Stock or other equity
      securities of any of the Subsidiaries of Parent now exist, nor has any of
      Parent’s Subsidiaries authorized any such right, nor is any of Parent’s
      Subsidiaries obligated in any other manner to issue shares of its Capital Stock
      or other equity securities. 

     

    
      
        
        

      

      
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    5.3 Corporate
      Power and Authorization.
      Each
      Note Party has the corporate power and authority to execute, deliver and perform
      the Note Documents to which it is a party. All action on the part of each Note
      Party and its officers, directors or partners necessary for the authorization,
      execution and delivery of this Agreement and the other Note Documents to which
      it is a party, the performance of all obligations of each Note Party under
      such
      agreements and the authorization, issuance and delivery of the Notes being
      sold
      hereunder, has been taken or will be taken prior to the Closing, and this
      Agreement and the other Note Documents to which each Note Party is a party,
      constitute valid and legally binding obligations of such Note Party, enforceable
      in accordance with their terms, except to the extent that enforceability thereof
      may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
      or other similar laws generally affecting creditors rights and by equitable
      principles regardless of whether enforcement is sought in equity or at
      law. 

     

    5.4 Valid
      Issuance of the Notes; Private Placement.
      The
      Notes, when issued, sold and delivered in accordance with the terms hereof
      for
      the consideration expressed herein, will be duly and validly authorized and
      issued and free of restrictions on transfer, other than restrictions imposed
      under this Agreement or United States state or federal securities laws. Based
      in
      part upon the representations of the Note Purchasers in SECTION
      4,
      the
      Notes will be issued in compliance with all applicable United States state
      or
      federal securities laws.
      Assuming
      the truth and accuracy of the Note Purchasers’ representations set forth in
Section
      4.3
      of this
      Agreement, the initial offer, sale and issuance of the Notes to the Note
      Purchasers as contemplated by this Agreement is exempt from the registration
      requirements of the Securities Act. Neither the Issuer nor any authorized agent
      acting on their behalf of it will take any action hereafter that would cause
      the
      loss of such exemption.

     

    5.5 Financial
      Statements and Other Information.
      The
      Note Purchasers have been furnished copies of the following:

     

    5.5.1.1. The
      audited consolidated balance sheets of Parent as of June 30, 2007 and the
      related audited consolidated statements of operation, changes in stockholders’
deficiency and cash flows, including notes thereto, for the Fiscal Year then
      ended and the audited balance sheets of Vance Baldwin as of December 31, 2006
      and the related audited statements of income and cash flows, including notes
      thereto, for the Fiscal Year then ended (the “Audited
      Financial Statements”).

     

    5.5.1.2. The
      unaudited consolidated balance sheets of Parent as of June 30, 2008 and related
      statements of operations and cash flows for the Fiscal Year then ended, the
      unaudited balance sheets of Vance Baldwin as of June 30, 2008 and related
      statements of operations and cash flows for the interim period from August
      17,
      2007 to June 30, 2008, and the unaudited balance sheets of Tritronics as of
      June
      30, 2008 and the related statements of income for the twelve month period ended
      April 30, 2008 and the two-month period ended June 30, 2008 (the “Unaudited
      Financial Statements”
and
      together with the Audited Financial Statements, the “Financial
      Statements”).
      

     

    5.5.1.3. A
      pro
      forma consolidated balance sheet for Parent and its Subsidiaries (collectively,
      the “Pro
      Forma Balance Sheet”),
      the
      projections for Parent and its Subsidiaries, and the projections for Tritronics
      and the Philips Division for the four year period ended December 31, 2011,
      including calculations showing pro forma compliance with the financial covenants
      provided in this Agreement for such periods (the “Projections”).
      The
      Projections are based upon estimates and assumptions stated therein, all of
      which the Issuer believes to be reasonable and fair in light of reasonably
      foreseeable business conditions and current facts known to it and, as of the
      Closing Date, reflects the Issuer’s good faith and reasonable estimates of the
      future financial performance of the Note Parties and of the other information
      projected therein for the period set forth therein, it being recognized by
      the
      Note Purchasers that such projections as they relate to future events are not
      to
      be viewed as fact and that actual results during the period or periods covered
      by such projections may differ from the projected results set forth
      therein.

     

    
      
        
        

      

      
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    5.5.1.4. The
      Audited Financial Statements of Parent and its Subsidiaries, and Vance Baldwin,
      have been prepared in accordance with GAAP (except as may be indicated
      in the notes thereto) and fairly present, in all material respects, the
      financial position of Parent and its Subsidiaries as of the dates and for the
      periods specified therein. The Unaudited Financial Statements of Parent and
      its
      Subsidiaries, and Vance Baldwin, have been prepared in accordance with GAAP
      (except for the absence of complete notes thereto) and fairly present, in all
      material respects, the financial position as of the dates and for the period
      specified therein (subject to normal year-end adjustments). There are no
      material liabilities required in accordance with GAAP to be set forth in the
      Audited and Unaudited Financial Statements and the Pro Forma Balance Sheet
      that
      are not so set forth. 

     

    5.6 Consents.
      Except
      as set forth on Schedule
      5.6,
      no
      consent, approval, order or authorization of, or registration, qualification,
      designation, declaration or filing with, any federal, state, provincial or
      local
      governmental body is required that has not been obtained, and no consent of
      any
      third party is required that has not been obtained in order to avoid any
      material agreement to which any Note Party is party being in material default
      or
      such third party having a right of termination after giving effect to the
      issuance of the Notes and the consummation of the Acquisition and the other
      transactions contemplated by this Agreement.

     

    5.7 Litigation.
      Except
      as
      set forth on Schedule
      5.7,
      no
      judgments are outstanding against any Note Party, nor is there pending or,
      to
      the knowledge of the Issuer, threatened any litigation, contested claim, or
      governmental proceeding by, against or with respect to any Note Party as of
      the
      date of this Agreement.
      None of
      such outstanding judgments or pending or threatened litigation is reasonably
      likely to result in an adverse judgment in excess of $150,000 or, in the case
      of
      any shareholder derivative litigation, could not reasonably be expected to
      have
      a Material Adverse Effect.

     

    5.8 Compliance
      with Laws and Regulations.
      The
      Note Parties are in compliance with all Legal Requirements relating to the
      business operations and the assets of such Person, except for violations of
      Legal Requirements which, in the aggregate, could not reasonably be expected
      to
      have a Material Adverse Effect.

     

    5.9 Licenses,
      Patents, Copyrights, Trademarks and Trade Names.
      All of
      the Note Parties’ licenses, registered patents, registered copyrights,
      registered trademarks, trade names and designs (if any) and all of such Person’s
      applications for any of the foregoing are set forth on Schedule
      5.9,
      and
      such constitutes all of the registered Intellectual Property necessary to the
      conduct of the Note Party’s business as presently conducted and as proposed to
      be conducted. There is no action, proceeding, claim or complaint pending or,
      to
      the Note Parties’ knowledge, threatened in writing to be brought against any
      Note Party which might jeopardize any of such Person’s interest in any of the
      foregoing licenses, patents, copyrights, trademarks, trade names, designs or
      applications except those which are not, in the aggregate, material to the
      Note
      Parties’ financial condition, results of operations or business.

     

    5.10 Compliance
      with Other Instruments; No Conflicts.
      No
      Note
      Party is in default under any contract, lease or commitment to which such Person
      is a party or by which such Person is bound except defaults under contracts,
      leases or commitments which are not, individually or in the aggregate, material
      to such Person’s financial condition, results of operations or
      business.
      Neither
      the consummation of the Acquisition, nor the consummation of the financing
      arrangements contemplated hereunder, will constitute or create a default or
      create a right of termination under the Acquisition Agreement or any Material
      Agreement.

     

    
      
        
        

      

      
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    5.11 Indebtedness.
      Except
      for the Indebtedness to be issued under this Agreement or as otherwise permitted
      by Section
      7.13,
      no Note
      Party has any other indebtedness, contingent obligations or liabilities,
      outstanding bonds, letters of credit or acceptances to any other Person or
      loan
      commitments from any other Person, other than accounts payable incurred in
      the
      ordinary course of business.

     

    5.12 Disclosure.
      All
      factual information furnished by or on behalf of Parent and its Subsidiaries
      in
      writing to the Note Purchasers or the Collateral Agents (including this
      Agreement and any exhibits, schedules or certificates made or delivered in
      connection herewith (other than any proposed budgets and projections)), taken
      as
      a whole, are true and correct in all material respects as of the date on which
      they were dated or certified and do not omit to state a material fact necessary
      to make the statements herein or therein, when taken as a whole, not misleading
      in any material respect, in light of the circumstances under
      which they were made, which has not been corrected or amended prior to the
      execution of this Agreement.

     

    5.13 Title
      to Property and Assets.
      All
      real estate owned or leased (if any) by any Note Party is set forth on
Schedule
      5.13.
      As of
      the Closing Date, each Note Party owns or leases all of the real and personal
      property, including Intellectual Property, required to conduct its business
      as
      currently conducted and as proposed to be conducted. As of the Closing Date,
      each Note Party holds
      a
      valid ownership interest in, or has the right to use pursuant to valid leases
      or
      other agreements, all of the real and personal property required to conduct
      such
      Persons’ business as currently conducted. 

     

    5.14 Tax
      Liabilities.
      Parent
      and its Subsidiaries have filed all material federal, state, provincial and
      local tax reports and returns required by any law or regulation to be filed
      by
      such Person and has either duly paid all taxes, duties and charges indicated
      to
      be due on the basis of such returns and reports or has made adequate provision
      in accordance with GAAP for the payment thereof, and the assessment of any
      material amount of additional taxes in excess of those paid and reported is
      not
      reasonably expected. There are no material unresolved questions or claims
      concerning any tax liability of Parent, except as described on Schedule 5.14.

     

    
      
        
        

      

      
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    5.15 Labor
      Agreements and Actions.
      Schedule 5.15
      sets
      forth the names and titles of each officer and director of each Note Party
      as of
      the Closing Date, the names and positions of certain additional individuals
      who
      are employees of such Persons (such officers and other key employees,
      collectively, the “Key
      Employees”).
      The
      Annual Compensation paid and to be paid to each such Key Employee has been
      and
      shall be consistent with the Financial Due Diligence Report of Ernst & Young
      LLP, dated as of March 30, 2008, provided to the Note Purchasers. Neither the
      Issuer nor Parent is aware that any Key Employee, or that any group of Key
      Employees, intends to terminate its employment with Parent or any of its
      Subsidiaries, as applicable, within one (1) year from the Closing Date. Except
      as set forth on Schedule 5.15
      or as a
      result of Legal Requirements, the employment of each Key Employee is terminable
      at the will of Parent or such Subsidiary, as applicable. Parent and its
      Subsidiaries are not a party to or bound by any currently effective employment
      contract or deferred compensation arrangement which is not reflected on
Schedule 5.15,
      and,
      except as set forth on Schedule 5.15,
      Parent
      and its Subsidiaries are not a party to or bound by any written bonus plan,
      profit sharing plan, retirement agreement or other employee compensation plan
      or
      agreement, nor has any employee of Parent or its Subsidiaries been granted
      in
      writing the right to continued employment by such Person or to any material
      compensation following termination of employment with such Person. Except as
      set
      forth on Schedule
      5.15,
      Parent
      and its Subsidiaries are not bound by or subject to (and none of its assets
      or
      properties is bound by or subject to) any written or oral, express or implied,
      contract, commitment or arrangement with any labor union and no labor union
      represents, has requested or, to the knowledge of Parent and
      its
      Subsidiaries,
      is
      currently seeking to represent any of the employees, representatives or agents
      of any such Person. Except
      as
      set forth on Schedule
      5.15,
      there
      are no controversies pending or to the knowledge of Parent and its Subsidiaries
      threatened between Parent and its Subsidiaries or any of their employees, other
      than employee grievances arising in the ordinary course of business or which
      are
      not, in the aggregate, material to Parent’s and its Subsidiaries’ financial
      condition, results of operations or business. To the knowledge of Parent and
      its
      Subsidiaries, no Key Employee or director is in violation of any term of any
      employment contract, proprietary information agreement or any other agreement
      relating to the right of any such individual to be employed
      by Parent and its Subsidiaries; and to the knowledge of Parent and its
      Subsidiaries, the continued employment by Parent and its Subsidiaries of the
      present Key Employees, and the performance of Parent’s or its Subsidiaries’
contracts with such Person’s independent contractors, will not result in any
      such violation. Each
      of
      Parent and its Subsidiaries have complied in all material respects with all
      applicable state and federal equal employment opportunity laws and with other
      laws related to employment. 

     

    5.16 [Reserved]. 

     

    5.17 Customers
      and Suppliers.
      Except
      as set forth on Schedule
      5.17,
      since
      December 31, 2005 none of the five largest customers or five largest suppliers
      of each Note Party has canceled, terminated or otherwise materially altered
      (including any material reduction in the rate or amount of sales to such
      customers or amounts sold by such suppliers), or notified any Note Party of
      any
      intention to do any of the foregoing or otherwise threatened in writing to
      cancel, terminate or materially alter, its relationship with such Note
      Party.
      To the
      knowledge of Parent and its Subsidiaries, the execution of this Agreement by
      the
      Note Parties does not violate or impair any material contracts by and between
      any Note Party and any of the customers and suppliers listed on Schedule
      5.17,
      including, without limitation, any contractual change of control
      provisions. 

     

    5.18 Employee
      Benefit Plans.
      No
      events, including without limitation, any “reportable event” or “prohibited
      transactions,” as those terms are defined in the Employee Retirement Income
      Security Act of 1974 as the same may be amended from time to time (“ERISA”),
      have
      occurred in connection with any type of plan, arrangement, association or fund
      covered by ERISA in which any personnel of the Note Parties or any of their
      Affiliates which is under common control with the Note Parties (within the
      meaning of applicable provisions of the Code) participate (“Benefit
      Plans”)
      which
      would have a Material Adverse Effect. The Benefit Plans are in material
      compliance with all applicable provisions of ERISA and the Code and meet the
      minimum funding standards of ERISA and the Code where applicable.

     

    
      
        
        

      

      
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    5.19 Environmental
      Matters.
      Except
      as
      disclosed on Schedule
      5.19
      or to
      the extent that it could not reasonably be expected to have a Material Adverse
      Effect, (a) no Note Party has received any notice to the effect, or has any
      knowledge, that any Real Property or its operations are not in compliance with
      any of the requirements of applicable federal, state, provincial and local
      environmental, health and safety statutes and regulations (“Environmental
      Laws”)
      or are
      the subject of any federal, state or provincial investigation evaluating whether
      any remedial action is needed to respond to a release of any toxic or hazardous
      waste or substance into the environment; (b) to the knowledge of the Note
      Parties, there have been no releases of Hazardous Substances at, on or under
      any
      Real Property; (c) there are no underground storage tanks, active or abandoned,
      including without limitation petroleum storage tanks, on or under any Real
      Property; (d) no Note Party has directly transported or directly arranged for
      the transportation of any hazardous material to any location which is listed
      or
      proposed for listing on the National Priorities List pursuant to CERCLA or
      on
      any similar state list or which is the subject of federal, state, provincial
      or
      local enforcement actions or other investigations which may lead to claims
      against such Person for any remedial work, damage to natural resources or
      personal injury, including without limitation, claims under CERCLA or any
      analogous legislation; and (e) no conditions exist at, on or under any Real
      Property which, with the giving of notice, would rise to any liability under
      any
      Environmental Laws.

     

    5.20 Margin
      Security.
      No
      Note
      Party is engaged principally, or as one of its important activities, in the
      business of extending credit for the purpose of purchasing or carrying margin
      securities and none of the loans advanced hereunder shall be used for the
      purpose of purchasing or carrying any margin securities or for the purpose
      of
      reducing or retiring any indebtedness which was originally incurred to purchase
      any margin securities or for any other purpose not permitted by Regulations
      T, U
      or X of the Board of Governors of the Federal Reserve System.

     

    5.21 Brokerage
      Fees, etc.
      Except
      as set forth on Schedule
      5.21,
      no
      broker’s, finders’ or placement fee or commission will be payable to any Person
      retained by or on behalf of HIG Capital or any Note Party or any representative
      of any such Person, with respect to any of the transactions contemplated by
      this
      Agreement. Each Note Party hereby jointly and severally indemnifies each Note
      Purchaser against and agrees that such Person will hold each such party harmless
      from any claim, demand or liability, including reasonable attorneys’ fees, for
      any broker’s, finder’s or placement fee or commission incurred by such
      indemnifying party or HIG Capital or a representative of such
      Person.

     

    5.22 Solvency.
      After
      giving effect to the Transactions on the Series B Closing Date, the saleable
      going-concern value of the Note Parties’ total assets at a fair valuation in the
      ordinary course, and at a present fair saleable value, is greater than the
      amount of the Note Parties total obligations to all Persons (taking
      into account, as applicable, rights of contribution, subrogation and indemnity
      with regard to obligations shared with others). Parent
      and its Subsidiaries will not be rendered insolvent (as defined in Section
      101(32) of the United States Bankruptcy Code) or left with unreasonably small
      assets with which to conduct its business by the execution or delivery of this
      Agreement or of any of the other Documents or by the transactions contemplated
      hereunder or thereunder.

     

    5.23 Security
      Interest.
      Each of
      the Collateral Documents creates and grants to the First Lien Collateral Agent
      and the Second Lien Collateral Agent, for its own benefit and for the benefit
      of
      the Note Purchasers, a legal, valid and binding Lien in the Collateral
      identified therein, and upon the recordation of the Mortgages and the filing
      of
      UCC financing statements in the jurisdictions listed on Schedule
      5.23
      hereto
      and the recording or filing required under any similar law of any foreign
      jurisdiction, such Lien shall be a perfected security interest (superior and
      prior to the rights of all other Persons other than to the extent specified
      in
Section
      12
      and
      subject only to the Permitted Encumbrances) on those assets in which a Lien
      can
      be perfected by such filing. 

     

    5.24 Permits;
      Laws.
      Each
      Note Party has all material permits, licenses and any similar authority
      necessary for the conduct of such Person’s business as presently conducted and
      as proposed to be conducted, and no Note Party is in default in any material
      respect under any of such franchises, permits, licenses or other similar
      authority. 

     

    
      
        
        

      

      
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    5.25 Government
      Regulation; Margin Stock.
      Neither
      the Issuer nor any Person controlling the Issuer or under common control with
      the Issuer, is subject to any applicable provision under the Federal Power
      Act,
      the Investment Company Act, the Interstate Commerce Act, or under any other
      statute or regulation which limits the incurring by the Issuer of debt as
      contemplated by this Agreement.

     

    5.26 Anti-Terrorism
      Laws. 

     

    (a) General.

     

    To
      the
      knowledge of the Note Parties, after reasonable inquiry, none of Parent nor
      any
      of its Subsidiaries nor any direct or indirect investor in any Note Party,
      is in
      violation of any Anti-Terrorism Law or engages in or conspires to engage in
      any
      transaction that evades or avoids, or has the purpose of evading or avoiding,
      or
      attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
      Law.

     

    (b) Executive
      Order No. 13224.

     

    To
      the
      knowledge of the Note Parties, after reasonable inquiry, neither Parent, nor
      any
      of its Subsidiaries nor any direct or indirect investor in any Note Party,
      or
      their respective agents acting or benefiting in any capacity in connection
      with
      the transactions hereunder, is any of the following (each a “Blocked
      Person”):
      

     

    (i) a
      Person
      that is listed in the annex to, or is otherwise subject to the provisions of,
      the Executive Order No. 13224; 

     

    (ii) a
      Person
      owned or controlled by, or acting for or on behalf of, any Person that is listed
      in the annex to, or is otherwise subject to the provisions of, the Executive
      Order No. 13224; 

     

    (iii) a
      Person
      or entity with which any Note Purchaser is prohibited from dealing or otherwise
      engaging in any transaction by any Anti-Terrorism Law; 

     

    (iv) a
      Person
      or entity that commits, threatens or conspires to commit or supports “terrorism”
as defined in the Executive Order No. 13224; 

     

    (v) a
      Person
      or entity that is named as a “specially designated national” on the most current
      list published by the U.S. Treasury Department Office of Foreign Asset Control
      at its official website or any replacement website or other replacement official
      publication of such list, or 

     

    (vi) a
      person
      or entity who is affiliated or associated with a person or entity listed
      above.

     

    To
      the
      best knowledge of the Note Parties, after reasonable inquiry, neither Parent
      nor
      any of its Subsidiaries or to the knowledge of the Note Parties, any of its
      or
      their agents acting in any capacity in connection with the transactions
      hereunder (i) conducts any business or engages in making or receiving any
      contribution of funds, goods or services to or for the benefit of any Blocked
      Person, or (ii) deals in, or otherwise engages in any transaction relating
      to,
      any property or interests in property blocked pursuant to the Executive Order
      No. 13224.

     

    
      
        
        

      

      
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    SECTION
      6. CLOSING
      CONDITIONS FOR INITIAL CLOSING. 

     

    The
      obligation of each Note Purchaser to purchase and pay for the Notes provided
      for
      hereunder is subject to the satisfaction or waiver by the Note Purchasers of
      the
      following conditions, each as of the Initial Closing Date:

     

    6.1 Representations
      and Warranties; No Default.
      All
      representations and warranties of the Note Parties contained in this Agreement
      shall be true and correct in all material respects, and there shall exist no
      Default or Event of Default under any of the Note Documents or any other
      material agreement to which any Note Party is a party as of the Initial Closing
      Date, after giving effect to the transactions contemplated hereby. 

     

    6.2 Documents
      Satisfactory; Transactions Consummated.
      The
      proceeds from the issuance of the Notes shall be used for the purposes set
      forth
      in Section
      2.9.
      The
      Acquisition shall be consummated, without giving effect to any waivers,
      modifications or amendments other than such as have been reflected in a written
      amendment or letter agreement that has been provided to the Note Purchasers
      in
      final and fully executed form prior to the Initial Closing Date.  

     

    6.3 Delivery
      of Documents.
      The
      Note Purchasers shall have received the following items, each of which shall
      be
      in form and substance reasonably satisfactory to the Note Purchasers and, unless
      otherwise noted, dated the Closing Date:

     

    6.3.1. Duly
      executed copies of this Agreement, the Security Agreements, the other Note
      Documents to which any Note Party is a party, the Acquisition Agreement, any
      financing statements or other filings to be filed to perfect the Liens granted
      by the Security Agreements and the Notes issued in the names of the respective
      Note Purchasers as set forth on Schedule
      I.

     

    6.3.2. Resolutions
      of the board of directors or other equivalent governing body of each Note Party,
      approving the transactions contemplated by this Agreement to which such Note
      Party is a party, and approving and authorizing the execution, delivery and
      performance of this Agreement and each of the other Note Documents to which
      it
      is a party and approving and authorizing, as applicable, the issuance and sale
      of the Notes, the execution, delivery and payment of the Notes and the grant
      of
      the security interests in the Collateral, in each case, certified as of the
      Closing Date by such party’s Secretary or an Assistant Secretary or other
      equivalent officer as being in full force and effect without modification or
      amendment.

     

    6.3.3. A
      certificate of the Secretary or an Assistant Secretary or other equivalent
      officer of each Note Party, dated the Closing Date, as to the incumbency and
      signature of the officers of each Note Party executing this Agreement, any
      certificate or other documents to be delivered by it pursuant hereto, together
      with evidence of the incumbency of such Secretary or Assistant Secretary or
      other equivalent officer;

     

    
      
        
        

      

      
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    6.3.4. A
      copy of
      a certificate of the Secretary of State or similar Governmental Body of the
      jurisdiction of organization of each Note Party, dated as of a recent date
      prior
      to the Closing Date, listing all Charter Documents of such Persons on file
      with
      such secretary of state or similar Governmental Body, including any amendments
      thereto, and certified copies of all such Charter Documents and certifying
      that
      (i) such copies are true and correct copies of the Charter Documents, (ii)
      the
      amendments listed in such certificate are the only amendments to such Charter
      Documents on file with such secretary of state, (iii) if applicable, each Note
      Party has paid all franchise taxes due as of the date of such certificate,
      and
      (iv) each Note Party is duly organized and (to the extent applicable in its
      jurisdiction of organization) in good standing under the laws of the
      jurisdiction of its organization. 

     

    6.3.5. A
      certificate of each Note Party signed on its behalf by an officer or manager
      duly authorized, dated the Closing Date (the statements made in which
      certificate shall be true on and as of such date) certifying as to (i) the
      absence of any amendment to the Charter Documents of such Person since the
      date
      of the Secretary of State’s or other similar Governmental Body certificate
      referred to in Section
      6.3.4
      above,
      (ii) its bylaws as in effect on the Closing Date (which shall be reasonably
      satisfactory to the Note Purchasers in all respects), (iii) the due organization
      and (to the extent applicable in its jurisdiction of organization) good standing
      of such Person under the laws of the jurisdiction of its organization and the
      absence of any proceeding for the dissolution or liquidation of such Person,
      (iv) the completeness and accuracy of the representations and warranties
      contained in this Agreement as of the Closing Date (except to the extent that
      such representation or warranty expressly relates to an earlier date), including
      the absence of any event occurring and continuing, or resulting from the
      transactions contemplated under this Agreement, that constitutes a Default
      or an
      Event of Default, and (v) compliance with all terms of this Agreement as of
      the
      Closing Date.

     

    6.3.6. A
      copy of
      a certificate of the Secretary of State or similar Governmental Body of each
      state or other jurisdiction in which each Note Party conducts substantial
      business (to the extent applicable in such jurisdiction), each dated a recent
      date prior to the Closing Date, stating that such Person is duly qualified
      and
      in good standing as a foreign corporation in such state or other jurisdiction
      and has filed all annual reports required to be filed to the date of such
      certificate.

     

    6.3.7. A
      favorable opinion of Eckert Seamans Cherin & Mellott, LLC, addressed to the
      Note Purchasers covering such matters as are typical to financings and such
      other matters as the Note Purchasers shall reasonably request, and in form
      and
      substance satisfactory to the Note Purchasers, including as to the perfection
      of
      the liens granted to the Collateral Agents on the Collateral. 

     

    6.3.8. An
      opinion from Latham,
      Shuker, Eden & Beaudine, LLP,
      special
      counsel for the Parent and Vance Baldwin, addressed to the Note Purchasers
      in
      form and substance reasonably satisfactory to the Note Purchasers. 

     

    6.3.9. A
      certificate of an executive officer of each Note Party, dated as of the Closing
      Date, certifying that the conditions specified in Section
      6
      have
      been fulfilled.

     

    
      
        
        

      

      
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    6.3.10. The
      Note
      Purchasers shall have received a copy of the Pro Forma Balance Sheet and the
      Projections, and such are in form and substance satisfactory to the Note
      Purchasers.

     

    6.3.11. The
      Note
      Parties shall have delivered to the Note Purchasers final executed copies of
      the
      Acquisition Agreement (including all amendments thereto), the Management
      Agreement and all agreements, documents and instruments delivered in connection
      with the Acquisition, as in effect on the Closing Date.

     

    6.3.12. The
      Note
      Purchasers shall have received all environmental studies and reports, if any,
      prepared by independent environmental engineering firms with respect to all
      Real
      Property owned or leased by any Note Party, and same shall be satisfactory
      to
      the Note Purchasers in form and substance. 

     

    6.3.13. The
      Note
      Purchasers shall have received written instructions from the Issuer directing
      the application of proceeds of the Notes made pursuant to this
      Agreement.

     

    6.3.14. The
      Note
      Purchasers shall have received or had access to true, correct and complete
      copies of all material contracts of the Note Parties including, without
      limitation, leases, union contracts, labor contracts, collective bargaining
      agreements, vendor supply contracts, and license agreements, including all
      Material Agreements to which the Note Parties are party as of the Closing Date
      (a list of which is set forth on Schedule
      6.3.14),
      and
      such contracts and agreements shall be satisfactory in all respects to the
      Note
      Purchasers.

     

    6.3.15. All
      corporate and other proceedings, and all documents, instruments and other legal
      matters in connection with the Transactions shall be reasonably satisfactory
      in
      form and substance to the Note Purchasers and their counsel. 

     

    6.3.16. A
      letter
      from Parent to its independent auditors authorizing the independent certified
      public accountants of Parent and each of its Subsidiaries to communicate with
      the Collateral Agents with respect to matters relating of such independent
      certified public accountants upon request by such Collateral
      Agents.

     

    6.3.17. Insurance
      certificates relating to the property, casualty, liability and business
      interruption insurance policies for each Note Party (if any), together with
      loss
      payable endorsements on standard form of loss payee endorsement naming the
      Collateral Agents as loss payees, and certificates of liability insurance
      policies for each Note Party (if any) together with endorsements naming the
      Collateral Agents as additional insured.

     

    6.3.18. Each
      applicable Note Party shall have duly authorized, executed and delivered such
      other certificates, instruments, agreements and other documents and papers
      reasonably requested by the Note Purchasers in connection with the transactions
      contemplated hereby in form and substance satisfactory to such Note
      Purchasers.

     

    6.4 Due
      Diligence; No Change in Condition.
      The
      Note Purchasers shall be satisfied in their sole and absolute discretion with
      the results of their legal, business, accounting and tax due diligence reviews
      of Parent and its Subsidiaries and there shall be no change from a legal,
      business, accounting or tax perspective from the time of such due diligence
      reviews until the Closing Date. 

     

    
      
        
        

      

      
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          21
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    6.5 Corporate/Capital
      Structure.
      The
      Note Purchasers shall be satisfied with the ownership, corporate and legal
      structure and capitalization of Parent and its Subsidiaries, including, without
      limitation, the terms and conditions of any Capital Stock, options, warrants
      or
      other securities issued by Parent and each of its Subsidiaries and any
      agreements related thereto, and the management of Parent and each of its
      Subsidiaries shall be acceptable to the Note Purchasers. 

     

    6.6 Authorizations,
      Consents and Approvals.
      Each
      Note Party shall have received any and all necessary authorizations, consents
      and approvals (if any) and shall have made any and all filings and shall have
      satisfied all applicable waiting periods necessary in connection with the
      consummation of the transactions contemplated by this Agreement and the other
      Note Documents. 

     

    6.7 No
      Material Adverse Effect.
      Nothing
      shall have occurred (and the Note Purchasers shall not be aware of any facts
      or
      conditions not previously known) which the Note Purchasers shall, in their
      sole
      discretion, determine has or could be reasonably expected to have, a Material
      Adverse Effect or that would result in the Note Parties incurring non-ordinary
      course costs or damages exceeding the sum of $150,000. 

     

    6.8 Litigation.
      There
      shall exist no action, suit, investigation, litigation or proceeding affecting
      Parent or any of its Subsidiaries or any of its properties pending or, to any
      Note Parties’ knowledge threatened, before any court, governmental agency or
      arbitrator that, in the determination of the Note Purchasers, (i) could
      reasonably be expected to have a Material Adverse Effect, or (ii) purports
      to
      affect the legality, validity or enforceability of this Agreement, the Notes,
      or
      any other Note Document or the consummation of the transactions contemplated
      hereby and thereby. No order, judgment or decree of any court, arbitrator or
      governmental body shall enjoin or restrain the Note Purchasers from acquiring
      the Notes or from making the loans evidenced by the Notes.

     

    6.9 Other
      Fees and Expenses.
      On the
      Closing Date, all reasonable expenses of the Collateral Agents and the Note
      Purchasers (including, without limitation, reasonable legal fees and expenses)
      incurred in connection with the negotiation and execution of this Agreement
      and
      the other Note Documents shall have been paid by the Issuer.

     

    6.10 No
      Violation of Regulations T, U or X.
      The
      issuance of the Notes shall not violate Regulations T, U or X of the Board
      of
      Governors of the Federal Reserve Board.

     

    6.11 Perfection
      of Security.
      Each
      Note Party shall have duly authorized, executed, acknowledged and delivered
      such
      security agreements, notices, financing statements, and other instruments as
      the
      Note Purchasers may have reasonably requested in order to perfect the Liens
      purported or required pursuant to this Agreement, the Security Agreements or
      any
      other Note Document to be created in the Collateral and shall have paid or
      arranged to pay all filing or recording fees or taxes required to be paid in
      connection with the filing, registration or recordation thereof, including
      any
      recording, mortgage, documentary, transfer or intangible taxes. 

     

    6.12 Ancillary
      Documents.
      Each
      applicable Note Party shall have duly authorized, executed and delivered such
      other certificates, instruments, agreements and other documents and papers
      reasonably requested by the Note Purchasers in connection with the transactions
      contemplated hereby in form and substance satisfactory to the Note
      Purchasers.

     

    
      
        
        

      

      
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    6.13 Existing
      Indebtedness.
      After
      giving effect to the transactions contemplated by this Agreement, none of the
      Note Parties shall have outstanding any Indebtedness, other than Indebtedness
      under the Notes and the Indebtedness disclosed on Schedule
      6.13
      hereto.

     

    6.14 Employment
      Agreements.
      The
      Note Purchasers shall be satisfied in their sole and absolute discretion with
      the Key Employee Employment Agreements. 

     

    SECTION
      6A. CLOSING CONDITIONS FOR SERIES B CLOSING.

     

    The
      obligation of each Note Purchaser to purchase and pay for the Notes provided
      for
      hereunder is subject to the satisfaction or waiver by the Note Purchasers of
      the
      following conditions, each as of the Series B Closing Date:

     

    6A.1. Representations
      and Warranties; No Default.
      All
      representations and warranties of the Note Parties contained in this Agreement
      shall be true and correct in all material respects, and there shall exist no
      Default or Event of Default under any of the Note Documents or any other
      material agreement to which any Note Party is a party as of the Series B Closing
      Date, after giving effect to the transactions contemplated hereby. 

     

    6A.2 Documents
      Satisfactory; Transactions Consummated.
      The
      proceeds from the issuance of the Notes shall be used for the purposes set
      forth
      in Section
      2.9.
      The
      Transactions shall be consummated, without giving effect to any waivers,
      modifications or amendments other than such as have been reflected in a written
      amendment or letter agreement that has been provided to the Note Purchasers
      in
      final and fully executed form prior to the Series B Closing Date. 

     

    6A.3 Delivery
      of Documents.
      The
      Note Purchasers shall have received the following items, each of which shall
      be
      in form and substance reasonably satisfactory to the Note Purchasers and, unless
      otherwise noted, dated the Series B Closing Date:

     

    6A.3.1. Duly
      executed copies of this Agreement, the Security Agreements, the other Note
      Documents to which any Note Party is a party, the Stock Purchase Agreement,
      the
      Sales Authorization Agreement, any financing statements or other filings to
      be
      filed to perfect the Liens granted by the Security Agreements and the Notes
      issued in the names of the respective Note Purchasers as set forth on
Schedule
      I
      and
Schedule
      I(A).

     

    6A.3.2. Resolutions
      of the board of directors or other equivalent governing body of each Note Party,
      approving the transactions contemplated by this Agreement to which such Note
      Party is a party, and approving and authorizing the execution, delivery and
      performance of this Agreement and each of the other Note Documents to which
      it
      is a party and approving and authorizing, as applicable, the issuance and sale
      of the Series B Subordinated Notes, the execution, delivery and payment of
      the
      Series B Subordinated Notes and the grant of the security interests in the
      Collateral, in each case, certified as of the Series B Closing Date by such
      party’s Secretary or an Assistant Secretary or other equivalent officer as being
      in full force and effect without modification or amendment.

     

    6A.3.3. A
      certificate of the Secretary or an Assistant Secretary or other equivalent
      officer, dated the Series B Closing Date, as to the incumbency and signature
      of
      the officers of each Note Party executing this Agreement, any certificate or
      other documents to be delivered by it pursuant hereto, together with evidence
      of
      the incumbency of such Secretary or Assistant Secretary or other equivalent
      officer;

     

    
      
        
        

      

      
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    6A.3.4. A
      copy of
      a certificate of the Secretary of State or similar Governmental Body of the
      jurisdiction of organization of each Note Party, dated as of a recent date
      prior
      to the Series B Closing Date, listing all Charter Documents of such Persons
      on
      file with such secretary of state or similar Governmental Body, including any
      amendments thereto, and certified copies of all such Charter Documents and
      certifying that (i) such copies are true and correct copies of the Charter
      Documents, (ii) the amendments listed in such certificate are the only
      amendments to such Charter Documents on file with such secretary of state,
      (iii)
      if applicable, each Note Party has paid all franchise taxes due as of the date
      of such certificate, and (iv) each Note Party is duly organized and (to the
      extent applicable in its jurisdiction of organization) in good standing under
      the laws of the jurisdiction of its organization. 

     

    6A.3.5. A
      certificate of each Note Party signed on its behalf by an officer or manager
      duly authorized, dated the Series B Closing Date (the statements made in which
      certificate shall be true on and as of such date) certifying as to (i) the
      absence of any amendment to the Charter Documents of such Person since the
      date
      of the Secretary of State’s or other similar Governmental Body certificate
      referred to in Section
      6A.3.4
      above,
      (ii) its bylaws as in effect on the Series B Closing Date (which shall be
      reasonably satisfactory to the Note Purchasers in all respects), (iii) the
      due
      organization and (to the extent applicable in its jurisdiction of organization)
      good standing of such Person under the laws of the jurisdiction of its
      organization and the absence of any proceeding for the dissolution or
      liquidation of such Person, (iv) the completeness and accuracy of the
      representations and warranties contained in this Agreement as of the Series
      B
      Closing Date (except to the extent that such representation or warranty
      expressly relates to an earlier date), including the absence of any event
      occurring and continuing, or resulting from the transactions contemplated under
      this Agreement, that constitutes a Default or an Event of Default, and (v)
      compliance with all terms of this Agreement as of the Series B Closing
      Date.

     

    6A.3.6. A
      copy of
      a certificate of the Secretary of State or similar Governmental Body of each
      state or other jurisdiction in which each Note Party conducts substantial
      business (to the extent applicable in such jurisdiction), each dated a recent
      date prior to the Series B Closing Date, stating that such Person is duly
      qualified and in good standing as a foreign corporation in such state or other
      jurisdiction and has filed all annual reports required to be filed to the date
      of such certificate.

     

    6A.3.7. A
      favorable opinion of Eckert Seamans Cherin & Mellott, LLC, addressed to the
      Note Purchasers covering such matters as are typical to financings and such
      other matters as the Note Purchasers shall reasonably request, and in form
      and
      substance satisfactory to the Note Purchasers, including as to the perfection
      of
      the liens granted to the Collateral Agents on the Collateral as of the Series
      B
      Closing Date. 

     

    6A.3.8. An
      opinion from Latham, Shuker, Eden & Beaudine, LLP, special counsel for the
      Parent and Vance Baldwin, addressed to the Note Purchasers in form and substance
      reasonably satisfactory to the Note Purchasers as of the Series B Closing
      Date.

     

    
      
        
        

      

      
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    6A.3.9. A
      certificate of an executive officer of each Note Party, dated as of the Series
      B
      Closing Date, certifying that the conditions specified in Section
      6A
      have
      been fulfilled.

     

    6A.3.10. The
      Note
      Purchasers shall have received a copy of the Pro Forma Balance Sheet and the
      Projections, and such are in form and substance satisfactory to the Note
      Purchasers.

     

    6A.3.11. [Intentionally
      Omitted.]

     

    6A.3.12. The
      Note
      Purchasers shall have received all environmental studies and reports, if any,
      prepared by independent environmental engineering firms with respect to all
      Real
      Property owned or leased by any Note Party, and same shall be satisfactory
      to
      the Note Purchasers in form and substance. 

     

    6A.3.13. The
      Note
      Purchasers shall have received written instructions from the Issuer directing
      the application of proceeds of the Series B Subordinated Notes made pursuant
      to
      this Agreement.

     

    6A.3.14. The
      Note
      Purchasers shall have received or had access to true, correct and complete
      copies of all material contracts of the Note Parties including, without
      limitation, leases, union contracts, labor contracts, collective bargaining
      agreements, vendor supply contracts, and license agreements, including all
      Material Agreements to which the Note Parties are party as of the Series B
      Closing Date (a list of which is set forth on Schedule
      6.3.14),
      and
      such contracts and agreements shall be satisfactory in all respects to the
      Note
      Purchasers.

     

    6A.3.15. All
      corporate and other proceedings, and all documents, instruments and other legal
      matters in connection with the Transactions shall be reasonably satisfactory
      in
      form and substance to the Note Purchasers and their counsel. 

     

    6A.3.16. A
      letter
      from Parent to its independent auditors authorizing the independent certified
      public accountants of Parent and each of its Subsidiaries to communicate with
      the Collateral Agents with respect to matters relating of such independent
      certified public accountants upon request by such Collateral
      Agents.

     

    6A.3.17. Insurance
      certificates relating to the property, casualty, liability and business
      interruption insurance policies for each Note Party (if any), together with
      loss
      payable endorsements on standard form of loss payee endorsement naming the
      Collateral Agents as loss payees, and certificates of liability insurance
      policies for each Note Party (if any) together with endorsements naming the
      Collateral Agents as additional insured.

     

    6A.3.18. Each
      applicable Note Party shall have duly authorized, executed and delivered such
      other certificates, instruments, agreements and other documents and papers
      reasonably requested by the Note Purchasers in connection with the transactions
      contemplated hereby in form and substance satisfactory to such Note
      Purchasers.

     

    
      
        
        

      

      
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    6A.3.19. All
      leases with respect to the Real Property leased by Tritronics and relating
      to
      the Philips Division of Vance Baldwin in form and substance satisfactory to
      the
      Note Purchasers.

     

    6A.3.20.
       An
      opinion from Offit Kurman, P.A., special counsel to Tritronics, addressed to
      the
      Note Purchasers in form and substance reasonably satisfactory to the Note
      Purchasers as of the Series B Closing Date.

     

    6A.4. Due
      Diligence; No Change in Condition.
      The
      Note Purchasers shall be satisfied in their sole and absolute discretion with
      the results of their legal, business, accounting and tax due diligence reviews
      of Parent and its Subsidiaries and there shall be no change from a legal,
      business, accounting or tax perspective from the time of such due diligence
      reviews until the Series B Closing Date. 

     

    6A.5. Corporate/Capital
      Structure.
      The
      Note Purchasers shall be satisfied with the ownership, corporate and legal
      structure and capitalization of Parent and its Subsidiaries, including, without
      limitation, the terms and conditions of any Capital Stock, options, warrants
      or
      other securities issued by Parent and each of its Subsidiaries and any
      agreements related thereto, and the management of Parent and each of its
      Subsidiaries shall be acceptable to the Note Purchasers. 

     

    6A.6. Authorizations,
      Consents and Approvals.
      Each
      Note Party shall have received any and all necessary authorizations, consents
      and approvals (if any) and shall have made any and all filings and shall have
      satisfied all applicable waiting periods necessary in connection with the
      consummation of the transactions contemplated by this Agreement and the other
      Note Documents. 

     

    6A.7. No
      Material Adverse Effect.
      Nothing
      shall have occurred (and the Note Purchasers shall not be aware of any facts
      or
      conditions not previously known) which the Note Purchasers shall, in their
      sole
      discretion, determine has or could be reasonably expected to have, a Material
      Adverse Effect or that would result in the Note Parties incurring non-ordinary
      course costs or damages exceeding the sum of $150,000. 

     

    6A.8. Litigation.
      There
      shall exist no action, suit, investigation, litigation or proceeding affecting
      Parent or any of its Subsidiaries or any of its properties pending or, to any
      Note Parties’ knowledge threatened, before any court, governmental agency or
      arbitrator that, in the determination of the Note Purchasers, (i) could
      reasonably be expected to have a Material Adverse Effect, or (ii) purports
      to
      affect the legality, validity or enforceability of this Agreement, the Notes,
      or
      any other Note Document or the consummation of the transactions contemplated
      hereby and thereby. No order, judgment or decree of any court, arbitrator or
      governmental body shall enjoin or restrain the Note Purchasers from acquiring
      the Notes or from making the loans evidenced by the Notes.

     

    6A.9. Other
      Fees and Expenses.
      On the
      Series B Closing Date, all reasonable expenses of the Collateral Agents and
      the
      Note Purchasers (including, without limitation, reasonable legal fees and
      expenses) incurred in connection with the negotiation and execution of this
      Agreement and the other Note Documents shall have been paid by the
      Issuer.

     

    6A.10. No
      Violation of Regulations T, U or X.
      The
      issuance of the Notes shall not violate Regulations T, U or X of the Board
      of
      Governors of the Federal Reserve Board.

     

    
      
        
        

      

      
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    6A.11. Perfection
      of Security.
      Each
      Note Party shall have duly authorized, executed, acknowledged and delivered
      such
      security agreements, notices, financing statements, and other instruments as
      the
      Note Purchasers may have reasonably requested in order to perfect the Liens
      purported or required pursuant to this Agreement, the Security Agreements or
      any
      other Note Document to be created in the Collateral and shall have paid or
      arranged to pay all filing or recording fees or taxes required to be paid in
      connection with the filing, registration or recordation thereof, including
      any
      recording, mortgage, documentary, transfer or intangible taxes. 

     

    6A.12. Ancillary
      Documents.
      Each
      applicable Note Party shall have duly authorized, executed and delivered such
      other certificates, instruments, agreements and other documents and papers
      reasonably requested by the Note Purchasers in connection with the transactions
      contemplated hereby in form and substance satisfactory to the Note
      Purchasers.

     

    6A.13. Existing
      Indebtedness.
      After
      giving effect to the transactions contemplated by this Agreement, none of the
      Note Parties shall have outstanding any Indebtedness, other than Indebtedness
      under the Notes and the Indebtedness disclosed on Schedule
      6.13
      hereto.

     

    6A.14. Employment
      Agreements.
      The
      Note Purchasers shall be satisfied in their sole and absolute discretion with
      the Key Employee Employment Agreements. 

     

    6A.15. Series
      E Preferred Stock.
      ACT-DE
      LLC shall have paid $3,500,000 for the newly issued Series E Preferred Stock
      pursuant to the Purchase Agreement, dated as of the date hereof, among ACT-DE
      LLC, the buyer parties signatory thereto and Parent. 

     

    SECTION
      7. COVENANTS

     

    The
      Note
      Parties covenant and agree, for the benefit of the Note Purchasers, that until
      payment in full of the Note Obligations:

     

    7.1 Payment
      of Obligations.
      The
      Issuer will duly and punctually pay the principal, interest
      and any other amounts owing under this Agreement and the Notes when due under
      the terms of this Agreement, and each Note Party will observe and comply with
      all other requirements applicable to it pursuant to this Agreement and the
      other
      Documents.

     

    7.2 Taxes
      and Other Charges.
      Each
      Note Party shall, and shall cause each of its Subsidiaries to, duly pay and
      discharge, or cause to be paid and discharged, before the same becomes in
      arrears, all taxes, assessments and other governmental charges imposed upon
      such
      Person and its properties, sales or activities, or upon the income or profits
      therefrom except where failure to pay and discharge such amounts could not
      reasonably be expected to involve an amount greater than $100,000 in the
      aggregate at any one time outstanding, and duly pay and discharge all claims
      for
      labor, materials or supplies which if unpaid might by law become a Lien upon
      any
      of its property, prior to its becoming such a Lien; provided,
      however,
      that,
      to the extent permitted under applicable law, any such tax, assessment, charge
      or claim need not be paid if the validity or amount thereof shall at the time
      be
      contested in good faith by appropriate proceedings and if such Person shall,
      in
      accordance with GAAP, have set aside on its books adequate reserves with respect
      thereto; and provided,
      further,
      that
      each Note Party shall, and shall cause each of its Subsidiaries to, pay or
      bond,
      or cause to be paid or bonded, all such taxes, assessments, charges or other
      governmental claims immediately upon the commencement of proceedings to
      foreclose any Lien which may have attached as security therefor (except to
      the
      extent such proceedings have been dismissed or stayed).

     

    
      
        
        

      

      
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    7.3 Maintenance
      of Properties.
      Each
      Note Party shall, and shall cause each of its Subsidiaries to: 

     

    7.3.1. Keep
      its
      properties in such repair, working order and condition, and shall from time
      to
      time make such repairs, replacements, additions and improvements thereto, as
      are
      reasonably necessary for the efficient operation of its business and shall
      comply at all times in all material respects with all material franchises,
      licenses and leases to which it is party so as to prevent any loss or forfeiture
      thereof or thereunder, except where (i) compliance is at the time being
      contested in good faith by appropriate proceedings and (ii) failure to comply
      with the provisions being contested has not resulted, and which, in the
      aggregate, could not reasonably be expected to have a Material Adverse
      Effect;

     

    7.3.2. Take
      all
      reasonable actions to possess and maintain all Intellectual Property material
      to
      the conduct of their respective businesses and own all right, title and interest
      in and to, or have a valid license for, all such Intellectual Property. Neither
      Parent nor any Subsidiary shall take any action, or fail to take any action,
      that would result in the invalidity, abandonment, misuse, lapse, or
      unenforceability of such Intellectual Property or which would infringe upon
      or
      misappropriate any rights of other Persons.

     

    7.3.3. Do
      all
      things reasonably necessary in order to comply with all Environmental Laws
      at
      any Real Property or otherwise in connection with their operations noncompliance
      with which could reasonably be expected to cause a Material Adverse Effect,
      obtain all permits and other governmental authorizations for their operations
      under applicable Environmental Laws other than such permits and other
      authorizations the failure of which to obtain could not, individually or in
      the
      aggregate, reasonably be expected to cause a Material Adverse
      Effect.

     

    7.3.4. Do
      all
      things reasonably necessary to preserve, renew and keep in full force and effect
      and (to the extent applicable in its jurisdiction of organization) in good
      standing its legal existence and authority necessary to continue its business;
      provided,
      however,
      that
      this Section
      7.3.4
      shall
      not prevent the merger, amalgamation or consolidation of Subsidiaries permitted
      by Section
      7.17.

     

    7.4 Statutory
      Compliance.
      Each
      Note Party shall comply in all material respects with all valid Legal
      Requirements applicable to it, except where (a) non-compliance shall not have
      more than a de minimus
      effect
      on any Note Party or (b) (x) compliance therewith shall at the time be contested
      in good faith by appropriate proceedings and (y) failure so to comply with
      the
      provisions being contested has not resulted, and could not, in the aggregate,
      reasonably be expected to cause a Material Adverse Effect.

     

    7.5 Compliance
      with Material Agreements; Notices of Material Agreements.
      Each
      Note Party shall comply in all material respects with all Material Agreements
      (to the extent not in violation of the other provisions of this Agreement)
      to
      which it is a party. Without the prior written consent of the Required
      Purchasers, no Material Agreement shall be amended, modified, waived or
      terminated in any manner materially adverse to the interests of the Note
      Purchasers.
      The Note
      Parties shall provide to the Note Purchasers, promptly following the execution
      thereof, notice of the entry by any Note Party of any new Material Agreement
      following the Closing or of any material amendments or notices under any
      Material Agreement (excluding purchase orders and other ordinary course
      communications, but including any notices of default or intent to terminate
      any
      such Material Agreement), and shall provide to the Note Purchasers copies of
      any
      such new Material Agreement, material amendment or notice within 5 Business
      Days
      of any request therefore by a Note Purchaser or either Collateral
      Agent. 

     

    
      
        
        

      

      
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    7.6 Insurance.
      Each
      Note Party shall, and shall cause each of its Subsidiaries to, at all times
      from
      and after the Closing Date, maintain in full force and effect insurance with
      reputable and solvent insurance carriers in such amounts, covering such risks
      and liabilities and with such deductibles or self-insured retentions as are
      in
      accordance with normal industry practice in each such entity’s
      business. 

     

    7.7 ERISA 
      Each
      Note Party shall, and shall cause its Subsidiaries to:

     

    7.7.1. Comply
      in
      all material respects with the applicable provisions of ERISA or any other
      applicable federal, state, provincial, local or foreign law dealing with such
      matters. 

     

    7.7.2. Pay
      and
      discharge promptly any liability imposed upon it pursuant to the provisions
      of
      Title IV of ERISA; provided,
      however,
      that no
      ERISA Group Person or any other Subsidiary of Parent shall be required to pay
      any such liability if (i) the amount, applicability or validity thereof shall
      be
      diligently contested in good faith by appropriate proceedings, and (ii) such
      Person shall have set aside on its books reserves, in the opinion of the
      independent certified public accountants of such Person, adequate with respect
      thereto.

     

    7.7.3. Deliver
      to each Note Purchaser, promptly, and in any event within 30 days, after (i)
      the
      occurrence of any Reportable Event in respect of a Pension Benefit Plan, a
      copy
      of the materials that are filed with the PBGC, (ii) an ERISA Group Person or
      an
      administrator of any Pension Benefit Plan files with participants, beneficiaries
      or the PBGC a notice of intent to terminate any such Plan, a copy of any such
      notice, (iii) the receipt of notice by the Parent or any ERISA Group Person
      or
      an administrator of any Pension Benefit Plan from the PBGC of the PBGC’s
      intention to terminate any Pension Benefit Plan or to appoint a trustee to
      administer any such Plan, a copy of such notice, (iv) the request by any Note
      Purchaser of copies of each annual report that is filed on Treasury Form 5500
      with respect to any Pension Benefit Plan, together with certified financial
      statements (if any) for the Pension Benefit Plan and any actuarial statements
      on
      Schedule B to such Form 5500, (v) an ERISA Group Person knows or has reason
      to know of any event or condition which could reasonably be expected to
      constitute grounds under the provisions of Section 4042 of ERISA for the
      termination of (or the appointment of a trustee to administer) any Pension
      Benefit Plan, an explanation of such event or condition, (vi) the receipt by
      an
      ERISA Group Person of an assessment of withdrawal liability under
      Section 4201 of ERISA from a Multiemployer Plan, a copy of such assessment,
      (vii) an ERISA Group Person knows or has reason to know of any event or
      condition which might cause any one of them to incur a liability under
      Section 4062, 4063, 4064 or 4069 of ERISA or Section 412(n) or 4971 of
      the Code, an explanation of such event or condition, or (viii) an ERISA Group
      Person knows or has reason to know that an application is to be, or has been,
      made to the Secretary of the Treasury for a waiver of the minimum funding
      standard under the provisions of Section 412 of the Code, a copy of such
      application, and in each case described in clauses (i) through (iii) and (v)
      through (vii) together with a statement signed by an officer setting forth
      details as to such Reportable Event, notice, event or condition and the action
      which the ERISA Group Person proposes to take with respect thereto.

     

    
      
        
        

      

      
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    7.8 Use
      of
      Proceeds.
      The
      Issuer shall use the proceeds of the Notes only for the purposes set forth
      in
Section
      2.9. 

     

    7.9 Further
      Assurances.
      Each
      Note Party shall promptly inform the Note Purchasers of the creation or
      acquisition of any direct or indirect Subsidiary and cause each such direct
      or
      indirect Subsidiary to execute a joinder of this Agreement as a Guarantor and
      to
      execute the Security Agreements (in each case to the extent it is legally able
      to do so) and to take such other actions as are reasonably requested to perfect
      liens in favor of the Collateral Agents in any assets of such
      Subsidiary. 

     

    7.10 Environmental
      Laws.
      Each
      Note Party shall comply, and cause each of its Subsidiaries to comply, in all
      material respects with the provisions of all Environmental Laws, and shall
      keep
      its owned properties and the properties of its Subsidiaries free of any Lien
      imposed pursuant to any Environmental Law. No Note Party shall cause or suffer
      or permit, or suffer or permit any of its Subsidiaries to cause or suffer or
      permit, the property of such Person to be used for the generation, production,
      processing, handling, storage, transporting or disposal of any Hazardous
      Substance, except in material compliance with Environmental Laws.

     

    7.11 [Reserved].

     

    7.12 Financial
      Covenants.
      The
      Note Parties will comply with the covenants set forth on Schedule
      7.12. 

     

    7.13 Indebtedness.
      Parent
      will not, and will not permit any of its Subsidiaries to, create, assume, incur
      or in any manner be or become liable in respect of or permit to exist any
      Indebtedness except the following:

     

    7.13.1. The
      Notes
      and any Refinancing Debt with respect to the Senior Notes.

     

    7.13.2. To
      the
      extent that payment thereof shall not at the time be required by Section
      7.2.1,
      Indebtedness in respect to Taxes, assessments, governmental charges and claims
      for labor, materials and supplies.

     

    7.13.3. Indebtedness
      secured by Liens of carriers, warehouses, mechanics, landlords and other Persons
      permitted by Section
      7.14
      not to
      exceed $500,000 in the aggregate at any one time outstanding. 

     

    7.13.4. Indebtedness
      in respect of judgments or awards (a) which have been in force for less than
      the
      applicable appeal period or (b) in respect of which Parent or any of its
      Subsidiaries shall at the time in good faith be prosecuting an appeal or
      proceedings for review and, in the case of each of clauses (a) and (b), Parent
      or such Subsidiary shall have taken appropriate reserves therefor in accordance
      with GAAP and execution of such judgment or award shall not be
      levied.

     

    7.13.5. Indebtedness
      owed by Parent or any direct or indirect Wholly Owned Subsidiary of Parent
      to
      the Issuer or, any other Wholly Owned Subsidiary of the Issuer in respect of
      inter-company loans and advances among Parent and its Wholly Owned Subsidiaries
      that are not prohibited by Section 7.16;
      provided that such Indebtedness is subordinated to the Note Obligations and,
      if
      evidenced by a note, such note is pledged to the Collateral Agents.

     

    
      
        
        

      

      
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    7.13.6. Other
      Indebtedness and capitalized leases and purchase money loans of Parent and
      its
      Subsidiaries not to exceed $400,000 in the aggregate at any one time
      outstanding. 

     

    7.13.7. Guarantees
      permitted by Section
      7.20
      or
      constituting the endorsement of negotiable instruments for deposit or collection
      in the ordinary course of business.

     

    7.13.8. Indebtedness
      in connection with reimbursement obligations entered into with respect to
      standby letters of credit not to exceed $1,000,000 in the aggregate at any
      one
      time outstanding. 

     

    7.13.9. Refinancing
      Debt incurred with respect to Indebtedness permitted under this Section
      7.13.

     

    7.13.10. Indebtedness,
      and any Refinancing Debt in respect thereof, which is unsecured not to exceed
      $500,000 in the aggregate at any one time outstanding; provided, however, any
      individual Indebtedness permitted under this Section
      7.13.10
      that
      exceeds $100,000 shall be expressly subordinated to the Note Obligations on
      terms reasonably satisfactory to the Note Purchasers.

     

    7.13.11. Indebtedness
      in connection with loans or advances made to employees, officers or directors
      for travel or relocation in the ordinary course of business in an aggregate
      amount not to exceed $200,000. 

     

    7.13.12. Indebtedness
      existing on the date hereof and listed on Schedule
      6.13
      or any
      Refinancing Debt with respect to such Indebtedness.

     

    7.14 Liens.
      Neither
      Parent nor any of its Subsidiaries shall create, incur or enter into, or
      suffer to be created or incurred or to exist, any Lien (or become contractually
      committed to do so), except the following (“Permitted
      Encumbrances”):

     

    7.14.1. Liens
      to
      secure taxes, assessments and other governmental charges, to the extent that
      payment thereof shall not at the time be required by Section
      7.2.

     

    7.14.2. Deposits
      or pledges made (a) in connection with, or to secure payment of, workers’
compensation, unemployment insurance, old age pensions or other social security,
      and (b) in connection with casualty insurance maintained in accordance with
      Section
      7.6.

     

    7.14.3. Liens
      in
      the nature of (a) zoning restrictions, (b) easements, (c) restrictions of record
      on the use of real property, (d) landlords’ and lessors’ Liens on rented
      premises and (e) restrictions on transfers or assignment of leases, which in
      each case do not materially detract from the value of the encumbered property
      or
      impair the use thereof in the business of Parent or any Subsidiary.

     

    
      
        
        

      

      
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    7.14.4. Liens
      securing the performance of bids, tenders, leases, contracts (other than for
      the
      payment of borrowed money), statutory obligations, surety, customs and appeal
      bonds and any obligations of like nature, incurred in the ordinary course of
      business.

     

    7.14.5. Liens
      on
      assets of the Note Parties arising out of attachments, judgments or awards
      as to
      which an appeal or other appropriate proceedings for contest or review are
      timely commenced (and as to which foreclosure and other enforcement proceedings
      shall not have been commenced (unless fully bonded or otherwise effectively
      stayed)) and as to which appropriate reserves have been established in
      accordance with GAAP.

     

    7.14.6. Liens
      securing the Note Obligations (including Guarantees thereof) and any Refinancing
      Debt with respect to the Senior Notes.

     

    7.14.7. Liens
      securing Indebtedness permitted by Section
      7.13.1;
      provided that such Liens extend only to the applicable property acquired with
      the proceeds of the related Indebtedness or of the Indebtedness that was
      refinanced with the related Refinancing Debt.

     

    7.14.8. Liens
      of
      carriers, warehouses, mechanics and similar Liens not to exceed $500,000 in
      the
      aggregate at any one time outstanding, in each case (a) securing obligations
      arising in the ordinary course of business which are not delinquent or remain
      payable without penalty or (b) being contested in good faith by Parent or any
      of
      its Subsidiaries in appropriate proceedings (so long as Parent or such
      Subsidiary shall, in accordance with GAAP, have set aside on its books adequate
      reserves with respect thereto).

     

    7.14.9. Liens
      arising by virtue of any statutory or common law provision relating to banker’s
      Liens, rights of setoff or similar rights with respect to deposit
      accounts.

     

    7.14.10. Liens,
      if
      any, specifically permitted by the Required Purchasers from time to time in
      writing. 

     

    7.14.11. Liens
      in
      connection with capital leases and purchase money indebtedness permitted by
      Section
      7.13.6.
      

     

    7.14.12. Liens
      in
      connection with the retention of title arrangements entered into in the ordinary
      course of business. 

     

    7.14.13. Liens
      in
      connection with protective filings in respect of operating leases.

     

    7.14.14. Liens
      securing purchase money obligations to suppliers of inventory acquired in the
      ordinary course of business, provided that such Liens apply only to the
      inventory supplied and proceeds thereof in an amount not to exceed $500,000.
      

     

    7.15 Investments.
      Neither
      Parent nor any of its Subsidiaries shall have outstanding, acquire or hold
      any
      Investment (or become contractually committed to do so), except the
      following:

     

    7.15.1. Equity
      investments by Parent in and to the Issuer in the ordinary course of business
      consistent with the Issuer’s historical practices, and in other Wholly Owned
      Subsidiaries of Parent (including newly created or acquired Wholly Owned
      Subsidiaries) which are guarantors of the Notes.

     

    
      
        
        

      

      
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    7.15.2. Investments
      in the form of loans to employees, officers and independent directors to finance
      the purchase of Parent’s Capital Stock with no cash outlay by Parent or its
      Subsidiaries.

     

    7.15.3. Guarantees
      permitted by Section
      7.20.
      

     

    7.15.4. The
      purchase of Cash Equivalents.

     

    7.15.5. Investments
      existing on the date hereof and listed on Schedule
      7.15
      hereof.

     

    7.15.6. Investments
      in bank instruments maturing within one year after their acquisition issued
      by
      banks which are rated at least A-2/A by S&P.

     

    7.15.7. Repurchase
      agreements, having terms of less than 90 days, for government obligations of
      the
      type specified in Section
      7.15.4
      above
      with a commercial bank or trust company which is rated at least A-2/A by
      S&P.

     

    7.15.8. Investments
      in connection with loans or advances made to employees, officers or directors
      for travel or relocation in the ordinary course of business in an aggregate
      amount not to exceed $100,000.

     

    7.15.9. Investments
      in connection with permitted intercompany loans.

     

    7.15.10. Investments
      in connection with permitted acquisitions permitted by Section
      7.17.
      

     

    7.16 Restricted
      Payments.
      No Note
      Party will, or permit any of its Subsidiaries to, directly or indirectly,
      declare, order, pay, make or set apart any sum or property for any Restricted
      Payment (or become contractually committed to do so), except the
      following:

     

    7.16.1. Subsidiaries
      of any Note Party may pay dividends to such Note Party.

     

    7.16.2. Subsidiaries
      of Parent may pay dividends to Parent to pay overhead, taxes, corporate expenses
      and other out-of-pocket expenses incurred in the ordinary course of business,
      including dividends to pay management fees and expenses permitted under
Section
      7.16.4
      or
7.16.5.

     

    7.16.3. Parent
      may make capital contributions to the Issuer or purchase Capital Stock of the
      Issuer, and the Issuer may purchase the Capital Stock of any Wholly Owned
      Subsidiary of Parent or make capital contributions to such Wholly Owned
      Subsidiary of Parent; provided,
      in each
      case, that the recipient is an Issuer or a Guarantor of the Notes and pledged
      its assets to the Collateral Agents and that any Capital Stock issued in
      connection with the same is pledged to the Collateral Agents.

     

    
      
        
        

      

      
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    7.16.4. Provided
      that no Event of Default has occurred and is continuing, the Note Parties may
      make payments of fees in the ordinary course of business pursuant to the
      Management Agreement as presently in effect, in amounts not to exceed (i)
      $400,000 per annum if EBITDA is less than $6,500,000 for the four calendar
      quarters preceding the date of any payment, (ii) $450,000 per annum if EBITDA
      is
      greater than or equal to $6,500,000 for the four calendar quarters preceding
      the
      date of any payment, or (iii) $500,000 per annum if EBITDA is greater than
      or
      equal to $7,250,000 for the four calendar quarters preceding the date of any
      payment, as the case may be, in quarterly payments as contemplated under the
      Management Agreement provided that no Event of Default has occurred and is
      continuing; and provided further that to the extent such payments are prohibited
      hereunder, the Issuer shall be entitled to accrue such payments for the benefit
      of Sponsor. 

     

    7.16.5. The
      Note
      Parties may make payments of reasonable out-of-pocket expenses, such as
      reimbursement of travel expenditure (but not including fees and expenses of
      consultants or other third party advisors), incurred in the ordinary course
      of
      business, pursuant to the Management Agreement as presently in effect, but
      in no
      event shall such payments exceed $50,000 in the aggregate. 

     

    7.16.6. Parent
      may repurchase, and its Subsidiaries may dividend funds to Parent in respect
      of
      the repurchase of, stock issued to employees, officers and independent directors
      issued pursuant to employee stock option or employee stock incentive
      arrangements approved by the Required Purchasers in writing to the extent that
      (i) such repurchase is required under the terms of such arrangements, (ii)
      is in
      connection with the cessation of the applicable recipient’s employment by the
      Note Parties, (iii) the aggregate amounts expended under this provision do
      not
      exceed $100,000 in any Fiscal Year and $300,000 in the aggregate; and (iv)
      no
      Default or Event of Default has occurred and is continuing as of such
      repurchase. 

     

    7.16.7. Parent
      and its Subsidiaries may make advances to their officers and employees with
      respect to expenses incurred by those officers and employees which (1) expenses
      are (A) ordinary and necessary business expenses and (B) reimbursable by Parent
      and its Subsidiaries, as applicable, and (2) do not exceed $100,000 in the
      aggregate, outstanding at any one time. 

     

    7.16.8. The
      Issuer may pay the Guarantors reasonable guaranty fees in relation to their
      respective guaranties provided pursuant to Section
      10
      of this
      Agreement, as the case may be, in an aggregate amount not to exceed
      $100,000.

     

    7.16.9. So
      long
      as no Event of Default has occurred and is continuing, Parent may make payments
      of interest pursuant to the Seller Notes. 

     

    7.17 Mergers,
      Asset Dispositions and Acquisitions.
      No Note
      Party will, or will permit any of its Subsidiaries to, merge, amalgamate or
      consolidate with or acquire any other Person, or sell any material part or
      substantially all of its assets, or acquire a new company, business or line
      of
      business, except that the Note Parties may acquire or dispose of a new company,
      business or line of business only if the following conditions are
      met:

     

    
      
        
        

      

      
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    7.17.1. any
      such
      acquisition is with or to or by Parent or a Wholly Owned Subsidiary of Parent
      (and, in each case, such Subsidiary is a Guarantor) or is on the condition
      that
      any newly acquired or created Subsidiary becomes a Guarantor and such Subsidiary
      becomes a Wholly Owned Subsidiary of Parent; or
      the
      corporation that results from such merger, amalgamation, consolidation,
      transfer, sale or acquisition is a Note Party or the successor is organized
      under the laws of the United States and expressly assumes the obligation, terms
      and covenants of the Notes under this Agreement and the Notes;

     

    7.17.2. no
      Default has occurred and is continuing; 

     

    7.17.3. after
      giving effect thereto, no Default or Event of Default would exist, on a pro
      forma basis (calculated using actual EBITDA of the Persons, businesses or lines
      of business party to such transaction or being sold or acquired in such
      transaction, but without taking synergies from such transaction into account
      except to the extent agreed by the Collateral Agents using their absolute and
      sole discretion) for the latest Trailing Twelve Month Period prior to the
      transaction;

     

    7.17.4. unless
      the Collateral Agents shall so consent, such consent to be in the sole
      discretion of the Collateral Agents, the merged, amalgamated or newly acquired
      entity is not one of the existing direct competitors set forth on Schedule
      7.17.4;
      and

     

    7.17.5. the
      Collateral Agents have provided their written consent to such merger,
      amalgamation, consolidation, transfer, sale or acquisition, such written consent
      (i) not to be unreasonably withheld if such merger, amalgamation, consolidation,
      transfer, sale or acquisition has an enterprise value less than $5,000,000
      or
      (ii) to be in the sole discretion of the Collateral Agents if such merger,
      amalgamation, consolidation, transfer, sale or acquisition has an enterprise
      value greater than or equal to $5,000,000. 

     

    7.18 Other
      Asset Sales.
      No Note
      Party will, or will permit any of its Subsidiaries to sell assets other than
      (i)
      in the ordinary course of business or (ii) sales of obsolete or worn out
      Equipment in the ordinary course of business, or as otherwise permitted by
      this
Section
      7.18
      unless
      the following conditions are met: 

     

    7.18.1. the
      sale
      is for fair market value (as determined by the board of directors of the
      applicable Note Party); and

     

    7.18.2. at
      least
      80% of the sale proceeds will be in net available cash and the Excess
      Disposition Proceeds from such sale will be applied, first, so long as, both
      before and immediately after the completion of such sale, after giving pro
      forma
      effect thereto, no Default or Event of Default exists and (i) if the Excess
      Disposition Proceeds are less than $2,000,000, within 90 days from receipt
      of
      such Excess Disposition Proceeds, (ii) if the Excess Disposition Proceeds are
      greater than or equal to $2,000,000 and less than $2,500,000, within 60 days
      from receipt of such Excess Disposition Proceeds (or if any Note Party enters
      into a contract to reinvest such Excess Disposition Proceeds within 60 days
      of
      receipt thereof, within one hundred eighty (180) days after the date of such
      contract), or (iii) if the Excess Disposition Proceeds are greater than or
      equal
      to $2,500,000, the Collateral Agents provide their written consent, at the
      Issuer’s election, to reinvest in or purchase any property, plant or equipment
      (excluding, for the avoidance of doubt, inventory, cash and Cash Equivalents
      or
      securities) of the Note Parties and used in any business in which the Note
      Parties are engaged, and second, any remainder, to make an offer to purchase
      Notes as specified in Section
      3.3.
      

     

    
      
        
        

      

      
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    7.18.3. provided
      that the total fair market value of all such dispositions shall not exceed
      in
      aggregate at any time during the period the Notes are outstanding 20% of the
      Acquired Entities’ Consolidated Tangible Assets, measured cumulatively as of the
      date of each such disposition. 

     

    7.19 Business
      Activities.
      Parent
      will not engage in any type of business other than ownership of its Subsidiaries
      stock and its Subsidiaries will not engage in any type of business other than
      businesses reasonably related to or complementary to the business engaged in
      by
      the Note Parties on the date hereof.  

     

    7.20 Guarantees.
      Parent
      will not, and will not permit any Subsidiary to, become or be liable in respect
      of any guaranty except (a) guarantees of the Notes, (b) guarantees constituting
      the endorsement of negotiable instruments for deposit or collection in the
      ordinary course of business and (c) guarantees by Parent of obligations of
      its
      Wholly Owned Subsidiaries,
      or by Subsidiaries of Parent of obligations of other Subsidiaries.

     

    7.21 Antilayering.
      Parent
      will not, and will not permit any of its Subsidiaries to, incur or in any
      fashion become or remain liable with respect to any Indebtedness of Parent
      or
      any Subsidiary which, by its terms, is subordinated to any other Indebtedness
      of
Parent
      or such
      Subsidiary and which is not expressly subordinated to the Note Obligations
      on
      terms satisfactory to the Required Purchasers.

     

    7.22 Restrictions
      on Subsidiary Dividends and Other Payments.
      Parent
      will not permit any of its Subsidiaries to, directly or indirectly, create
      any
      restriction of any kind on the ability of any such Subsidiary to: (a) pay
      dividends or make any other distributions to the Issuer (other than restrictions
      on distributions for the
      purposes of making distributions to Parent); (b) pay any Indebtedness owed
      to
      the Issuer; (c) make loans or advances to the Issuer; or (d) transfer any of
      its
      properties or assets to the Issuer other than (i) pursuant to the Note Documents
      or (ii) pursuant to any Refinancing Debt in respect of the Senior
      Notes.

     

    7.23 No
      Non-Wholly Owned Subsidiaries.
      Parent
      shall not have any Subsidiaries other than the other Note Parties, each of
      which
      shall be Wholly-Owned Subsidiaries of Parent.

     

    7.24 Financial
      Statements and Reports.
      Each of
      Parent and its Subsidiaries shall maintain a system of accounting in which
      correct entries shall be made of all transactions in relation to their business
      and affairs in accordance with GAAP. The Fiscal Year of Parent and its
      Subsidiaries shall end on June 30 in each year.

     

    7.24.1. Annual
      Reports.
      Parent
      shall furnish to the Note Purchasers as soon as available, and in any event
      within 120
      days
      after the end of each Fiscal Year, the comparative consolidated balance sheets
      of Parent and its Subsidiaries as at the end of such Fiscal Year and the related
      consolidated statements of income, statements of changes in stockholders’ equity
      and statements of cash flows for such Fiscal Year, and notes thereto, and
      Management’s Discussion and Analysis of the results of operations and the
      financial condition, all as included in the Issuer’s annual report on Form
      10-KSB accompanied by: 

     

    7.24.1.1. A
      report
      of independent registered public accountants reasonably satisfactory to the
      Note
      Purchasers, containing no material qualification, to the effect that they have
      audited the foregoing Consolidated financial statements in accordance with
      generally accepted auditing standards and that such Consolidated financial
      statements present fairly, in all material respects, the financial position
      of
      Parent and its Subsidiaries covered thereby at the dates thereof and the results
      of their operations for the periods covered thereby in conformity with
      GAAP.

     

    
      
        
        

      

      
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    7.24.1.2. A
      certificate signed by an authorized financial officer of each of the Issuer
      to
      the effect that each such officer has caused this Agreement to be reviewed
      and
      has no knowledge of any Default, or if such officer has such knowledge,
      specifying such Default and the nature thereof, and what action such Issuer
      has
      taken, is taking or proposes to take with respect thereto.

     

    7.24.1.3. Computations
      by Parent and its Subsidiaries comparing the financial statements referred
      to in
Section
      7.24.1
      with (a)
      the most recent budget for such Fiscal Year furnished to the Note Purchasers
      pursuant to Section
      7.24.3
      and (b)
      the financial statements in the prior year.

     

    7.24.1.4. Computations
      by Parent and its Subsidiaries demonstrating, as of the end of such Fiscal
      Year,
      compliance with Sections
      7.12,
      7.13
      and
7.18
      (to the
      extent any asset sales provided for under Section
      7.18
      have
      been effected or the Excess Disposition Proceeds applied during such period),
      inclusive, and setting forth the amount of the available basket under
Section
      7.18
      and
      computations supporting any adjustments to or use of the same during such
      period.

     

    7.24.1.5. In
      reasonable detail, management’s discussion and analysis of the results of
      operations and the financial condition of Parent and its Subsidiaries as at
      the
      end of and for the year covered by such financial statements referred to in
      this
Section 7.24.1.

     

    7.24.2. Monthly
      Reports.

     

    7.24.2.1. The
      Issuer shall furnish to the Note Purchasers as soon as available and, in any
      event, within 45 days after the end of each fiscal month, other than the last
      fiscal month of each fiscal quarter, financial information consisting of (i)
      unaudited Consolidated balance sheets of Parent and its Subsidiaries as at
      the
      end of such fiscal month, setting forth in comparative form the figures for
      the
      corresponding period in the prior year and the figures contained in the
      projections for such Fiscal Year and the related statements of income and cash
      flows for that portion of the Fiscal Year ending as of the close of such fiscal
      month and (ii) on a month and year to date basis unaudited Consolidated
      statements of income, statements of cash flows of Parent and its Subsidiaries
      for such fiscal periods (all in reasonable detail), setting forth in comparative
      form the figures for the corresponding period in the prior year and the figures
      contained in the projections for such Fiscal Year, all prepared in accordance
      with GAAP (subject to normal year-end adjustments and the absence of footnotes).
      Such financial information shall be accompanied by the certification of the
      chief financial officer or senior vice president of finance of Parent that
      (i)
      such financial information was prepared in accordance with GAAP (subject to
      normal year-end adjustments and the absence of footnotes) and presents fairly
      the financial position and results of operations of Parent and its Subsidiaries,
      on a Consolidated basis, in each case as at the end of such fiscal month and
      for
      that period then ended presented for the Fiscal Year and (ii) any other
      information presented is true, correct and complete in all material respects
      and
      that such officer has caused this Agreement to be reviewed and there was no
      Default or Event of Default in existence as of such time or, if a Default or
      Event of Default has occurred and is continuing, describing the nature thereof
      and all efforts undertaken to cure such Default or Event of
      Default.

     

    
      
        
        

      

      
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    7.24.2.2. The
      Issuer shall furnish to the Note Purchasers as soon as available and in any
      event within 45 days after the end of each fiscal quarter (i) computations
      by
      the Issuer demonstrating, as of the end of such quarter, compliance with
Sections
      7.12,
      7.13
      and
7.18
      (to the
      extent any asset sales provided for under Section
      7.18
      have
      been effected or the Excess Disposition Proceeds applied during such period),
      inclusive, and setting forth the amount of the available basket under
Section
      7.18
      and
      computations supporting any adjustment to or use of the same during such period
      and (ii) in reasonable detail, management’s discussion and analysis of the
      results of operations and financial condition of Parent and its Subsidiaries
      as
      at the end of and for such fiscal quarter. 

     

    7.24.3. Other
      Reports.
      The
      Issuer shall promptly furnish to the Note Purchasers:

     

    7.24.3.1. As
      soon
      as prepared and in any event within 30 days after the beginning of each Fiscal
      Year, an annual budget and operating projections for such Fiscal Year of Parent
      and its Subsidiaries on a Consolidated basis (including quarterly balance
      sheets, statements of income and statements of cash flows).

     

    7.24.3.2. Any
      material updates of such budget and projections. 

     

    7.24.3.3. Any
      management letters furnished to Parent or any of its Subsidiaries by their
      respective auditors. 

     

    7.24.3.4. All
      budgets, projections, statements of operations and other documents or reports
      furnished generally to the stockholders of Parent. 

     

    7.24.4. Notice
      of Litigation, Defaults, etc.
      

     

    7.24.4.1. Parent
      and its Subsidiaries shall promptly furnish to the Note Purchasers notice of
      (x)
      any litigation or any administrative or arbitration proceeding (a) which creates
      a material risk of resulting, after giving effect to any applicable insurance,
      in the payment by Parent and its Subsidiaries of more than $200,000 or (b)
      which
      results, or creates a material risk of resulting, in a Material Adverse Effect
      and (y) any undischarged or unpaid judgments or decrees in excess of
      $200,000, singly or in the aggregate. 

     

    7.24.4.2. Parent
      and its Subsidiaries shall promptly, and in no event later than 5 Business
      Days
      following the occurrence of the same, furnish to the Note Purchasers notice
      of
      any Material Adverse Effect or any Default or Event of Default hereunder
      specifying the nature thereof and what action Parent or any of its Subsidiaries
      has taken, is taking or proposes to take with respect thereto.

     

    7.24.4.3. Parent
      and its Subsidiaries shall promptly, and in no event later than 5 Business
      Days
      following the occurrence of the same, furnish to the Note Purchasers notice
      of
      any accounts payable that are outstanding more than ninety (90) days past due
      in
      an aggregate amount exceeding $2,000,000 and what action Parent or any of its
      Subsidiaries has taken, is taking or proposes to take with respect thereto.
      

     

    
      
        
        

      

      
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    7.24.5. Other
      Information; Audit.
      From
      time to time at reasonable intervals upon request of any authorized officer
      of
      any Note Purchaser, each of Parent and its Subsidiaries shall furnish to such
      Note Purchaser such other information regarding the business, assets, financial
      condition, or income of Parent and its Subsidiaries as such officer may
      reasonably request, including copies of all tax returns, licenses, agreements,
      leases and instruments to which any of Parent or its Subsidiaries is
      party.

     

    7.25 Books,
      Records and Inspections; Consultation Rights.
      From
      time
      to time upon request of any authorized partner, designee or officer of the
      Collateral Agents and, so long as an Event of Default shall have occurred and
      is
      continuing, of any Note Purchaser, Parent and its Subsidiaries will permit
      any
      such authorized partner, designee or officer, and their representatives, to
      visit and inspect any of Parent’s or its Subsidiaries’ properties and the
      properties of each of its Subsidiaries, to examine their books of account and
      records, to make copies and extracts therefrom, to observe the taking of any
      physical inventories of their properties by them or their accountants, to
      discuss their affairs, finances and accounts with, and to be advised as to
      the
      same by, their officers and employees, and their independent public accountants
      (whose reasonable fees and expenses shall be paid by the Note Purchasers),
      all
      upon reasonable prior written notice to Parent or its Subsidiary and at such
      reasonable times
      (during normal business hours) and intervals as such authorized partner,
      designee or officer desires; provided
      that as
      long as no Event of Default shall have occurred and be continuing there shall
      be
      no more than two visits and inspections each year. 

     

    7.26 Transactions
      with Affiliates and Related Parties.
      Parent
      will not, and will not permit any of its Subsidiaries to, enter into any
      transaction with any Affiliate or Related Party or any Affiliate of Sponsor
      other than (i) the intercompany Investments, Indebtedness and distributions
      permitted under Sections
      7.12,
      7.15
      and
7.16;
      (ii)
      employment agreements in effect at Closing or adopted in the ordinary course
      of
      business and on arms length terms;
      (iii)
      reasonable director’s compensation plans in an amount not to exceed (a) $60,000
      in the aggregate per annum if EBITDA is less than or equal to $5,750,000 for
      the
      previous Fiscal Year, (b) $80,000 in the aggregate per annum if EBITDA is
      greater than $5,750,000 but less than or equal to $6,250,000 for the previous
      Fiscal Year or (c) $100,000 in the aggregate per annum if EBITDA is greater
      than
      $6,250,000 for the previous Fiscal Year, in each case provided that employees,
      affiliates or appointees of Sponsor shall not participate in such directors’
compensation plans, and (iv) the execution of the Management Agreement
and
      the
      payment of fees and expenses under the Management Agreement as in effect on
      the
      date hereof and to the extent permitted by Sections
      7.16.4
      and
7.16.5. 

     

    7.27 Amendment
      of Certain Documents. Parent
      will not, and will not permit any of its Subsidiaries to, consent to or request
      any amendment, modification or supplement to or waiver of any provision of
      the
      Management Agreement or any of their Charter Documents in a manner that would
      reasonably be expected to affect the interests of the Note Purchasers materially
      and adversely without in each case having obtained the prior written consent
      of
      the Required Purchasers. 

     

    
      
        
        

      

      
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    7.28 Observer
      Rights.
      The
      Required Purchasers shall have the right to have an observer attend (or
      participate by telephone in) all meetings of the boards of directors of Parent
      and each of its Subsidiaries and each committee thereof (such observer shall
      not
      be entitled hereby to become a member of any such board of directors). The
      Issuer shall pay the expenses of such observer to attend such meetings. Meetings
      of the boards of directors of the Note Parties shall be held at least annually;
      provided,
      however,
      that
      such observer shall (i) participate in a management update call for each of
      Parent and its Subsidiaries in any fiscal quarter during which no board meeting
      is held for such entity and (ii) be provided with such information and access
      to
      management as would otherwise be provided at a meeting of the boards of
      directors of the Note Parties at least quarterly. The Note Purchasers shall
      receive all reports, meeting materials, notices and other materials as and
      when
      provided to the board members or any committee thereof in connection with a
      vote
      or such meetings of the board of directors or committees thereof.
      Notwithstanding the foregoing, upon advance notice being given, such observer
      may be excluded from having access to any materials produced by counsel to
      the
      Note Parties in connection with pending or threatened litigation against, or
      by,
      any Note Party and may be excluded from the portions of any meetings at which
      such pending or threatened litigation is considered so long as the Note Party
      reasonably believes that such exclusion is reasonably necessary to preserve
      the
      attorney-client privilege of such Note Party. Notwithstanding the foregoing,
      upon advance notice, such observer may be excluded from having access to the
      portions of any board or committee meetings during which material discussions
      in
      connection with the Notes shall occur, including, without limitation, (i)
      proposed material modifications to the terms of the Notes are considered, (ii)
      any failure to comply with the terms of this Agreement or the other Note
      Documents, or (iii) any litigation involving the Note Purchasers are
      considered. 

     

    7.29 Competitors.
      Without
      the written consent of the Collateral Agents, which may be granted or withheld
      in their sole discretion, Parent will not, and will not permit any of its
      Subsidiaries or Affiliates to, acquire all or substantially all of the assets
      or
      equity of any entity that is one of the existing direct competitors set forth
      on
Schedule
      7.17.2.3.
      None
      of
      the Note Parties shall transfer or assign any of its business to any Affiliate
      that is not a Note Party without the written consent of the Note Purchasers,
      which may be granted or withheld in their sole discretion. 

     

    7.30 Warrants.
      If the
      Notes have not been Refinanced and the Leverage Ratio for the Trailing Twelve
      Month Period exceeds 3.50:1.00 as of the dates set forth on the table below,
      the
      Note Purchasers shall receive, for no additional or nominal consideration,
      warrants to purchase shares of the Issuer’s outstanding common stock (the
“Warrants”)
      in the
      percentages set forth on the table below on a fully diluted basis:

     

    
      	
              Issuance
                Date

            	 	
              Amount
                of Shares

            
	
               

              August
                1, 2009

            	 	
               

              3.5%

            
	
               

              February
                1, 2010

               

            	 	
               

              additional
                2.0% (or 5.5% total)

               

            
	
              August
                1, 2010

            	 	
              additional
                2.0% (or 7.5% total)

            


    

     

    The
      Warrants shall expire on the first anniversary of their issuance, shall have
      antidilution protections and benefit from other customary protections. For
      purposes of this Section
      7.30,
      “Leverage Ratio” shall have the meaning set forth on Schedule
      7.12;
      provided, however, that solely with respect to any issuance of Warrants on
      August 1, 2009, and so long as (i) the Philips program has been implemented
      and
      is operating as contemplated hereunder and (ii) no Material Adverse Effect
      shall
      have occurred since the Closing Date, “Leverage Ratio” shall mean the ratio of
      (x) the Indebtedness of Parent and its Subsidiaries as of August 1, 2009 to
      (y)
      the sum of Trailing Twelve Month Period EBITDA plus $600,000. 

     

    SECTION
      8. EVENTS
      OF DEFAULT.

     

    If
      one or
      more of the following events (herein referred to as “Events
      of Default”)
      shall
      occur and be continuing:

     

    
      
        
        

      

      
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    8.1 Payment
      Default.
      The
      Issuer shall fail to pay (i) any principal of, or premium, if any, on the Notes
      when the same becomes due and payable, whether upon maturity, prepayment,
      acceleration or otherwise, (ii) any interest on the Notes when the same shall
      become due and payable or (iii) any other amount due hereunder within five
      (5)
      days after demand therefor; or 

     

    8.2 Payment
      Default on Other Indebtedness.
      Any
      default or event of default shall have occurred under any other Indebtedness
      of
      Note Parties in excess of $200,000 in outstanding principal amount which is
      either (x) a payment default or (y) a nonpayment default that gives the holder
      of such Indebtedness a right to accelerate such Indebtedness; or 

     

    8.3 Reporting
      Default.
      Failure
      by any Note Party to (i) furnish financial information within fifteen (15)
      days
      of when due or when requested, or (ii) permit the inspection of its books or
      records, in each case, when required pursuant to the terms of this Agreement;
      or

     

    8.4 Levy.
      The
      Issuer permits (i) any attachment, garnishment, execution, or distraint of
      any
      Collateral having an aggregate fair market value of greater than $200,000 or
      (ii) any Collateral having an aggregate fair market value of greater than
      $200,000 to become subject, at any time, to any mandatory court order or to
      other legal process; or

     

    8.5 Certain
      Covenants.
      Any
      Note Party shall default in the performance or observance of any covenant
      contained in any of Sections
      7.12
      through
7.23
      or in
7.27
      or
7.29
      hereof;
provided
      that any
      default pursuant to Sections
      7.29
      may be
      remedied if the Note Parties provide irrevocable notice to the Collateral Agents
      of their intention to pay a 10% premium on the Notes (such 10% premium to be
      added to the then outstanding principal amount of the Notes) within five days
      of
      such default; or

     

    8.6 Other
      Defaults.
      Any
      Note Party shall default in the performance or observance of any covenant,
      agreement or condition (a) this Agreement (other than those described or
      referred to in any other paragraph of this Section) and such default shall
      continue unremedied for more than 30 days after the first to occur of (i) a
      Note
      Party obtaining actual knowledge of such default or (ii) receipt by a Note
      Party
      of written notice of such default from the Required Purchasers; or
      (b) of
      any other Note Document, subject to applicable cure periods therein;
provided
      that, in
      the event of any discrepancy between this Agreement and any other Note Document,
      such default shall not be deemed to have occurred until the longer cure period
      under clause (a) or clause (b)
      shall
      have lapsed. 

     

    8.7 Breach
      of Representations or Warranties.
      Any
      representation or warranty made by any Note Party in this Agreement or in any
      statement or certificate at any time given by it in writing pursuant hereto
      or
      in connection herewith or therewith shall (taken as a whole) be false or
      inaccurate in any material respect on the date as of when made; or

     

    8.8 Involuntary
      Bankruptcy, Appointment of Receiver, etc.
      (a) A
      court having jurisdiction in the premises shall enter a decree or order for
      relief in respect of Parent or any of its Subsidiaries in an involuntary case
      or
      proceeding under the Bankruptcy Code or any applicable bankruptcy, insolvency
      or
      other similar law now or hereafter in effect in the United States or any other
      jurisdiction, which decree or order is not stayed; or any other similar relief
      shall be granted and remain unstayed under any applicable law; or (b) an
      involuntary case is commenced against Parent or any of its Subsidiaries under
      any applicable bankruptcy, insolvency or other similar law now or hereafter
      in
      effect; or a decree or order of a court having jurisdiction in the premises
      for
      the appointment of a receiver, liquidator, sequestrator, trustee, custodian
      or
      other officer having similar powers over Parent or any of its Subsidiaries
      or
      over all or a substantial part of any of their respective properties, shall
      have
      been entered, or an interim receiver, trustee or other custodian of Parent
      or
      any of its Subsidiaries for all or a substantial part of their respective
      properties is involuntarily appointed, and the continuance of any such events
      in
      this clause (b) for 60 days unless dismissed, bonded, stayed, vacated or
      discharged; or

     

    
      
        
        

      

      
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    8.9 Voluntary
      Bankruptcy, Appointment of Receiver, etc.
      Parent
      or any of its Subsidiaries shall have an order for relief entered with respect
      to it or commence a voluntary case or proceeding under the Bankruptcy Code
      or
      any applicable bankruptcy, insolvency or other similar law now or hereafter
      in
      effect in the United States or any other jurisdiction, or shall consent to
      the
      entry of an order for relief in an involuntary case, or to the conversion of
      an
      involuntary case or proceeding to a voluntary case or proceeding, under any
      such
      law, or shall consent to the appointment of or taking possession by a receiver,
      trustee or other custodian for all or a substantial part of its property; the
      making by Parent or any of its Subsidiaries of any assignment for the benefit
      of
      creditors; or the board of directors of Parent or any of its Subsidiaries (or
      any committee thereof) adopts any resolution or otherwise authorizes any action
      to approve any of the foregoing; or 

     

    8.10 Insolvency.
      Parent
      or any of its Subsidiaries shall admit in writing its inability, or be generally
      unable, to pay its debts as they become due or cease operations of its present
      business; or

     

    8.11 Judgments
      and Attachments.
      One or
      more judgments or decrees shall be entered against Parent or any of its
      Subsidiaries involving a liability (to the extent not paid or covered by
      insurance) in excess of $250,000 individually or in the aggregate for all such
      outstanding judgments and decrees and all such judgments or decrees shall not
      have been paid, vacated, discharged or stayed or bonded pending appeal within
      30
      days from the entry thereof; or

     

    8.12 Failure
      of Liens.
      Any
      Lien created under the Note Documents or provided for thereby or under any
      related agreement for any reason ceases to be or is not a valid and perfected
      Lien in a material portion of the Collateral subject hereto; or 

     

    8.13 Material
      Adverse Effect.
      A
      default of the obligations of Parent or any of its Subsidiaries under any other
      agreement to which it is a party shall occur which results in a Material Adverse
      Effect; or 

     

    8.14 Governmental
      Action.
      (i) any
      Governmental Body shall (A) revoke, terminate, suspend or adversely modify
      any
      license, permit, patent, trademark, tradename or design of Parent or any of
      its
      Subsidiaries, the continuation of which is material to the continuation the
      business of Parent and its Subsidiaries taken as a whole or (B) commence
      proceedings to suspend, revoke, terminate or adversely modify any such license,
      permit, trademark, tradename or patent and such proceedings shall not be
      dismissed or discharged within sixty (60) days, or (C) schedule or conduct
      a
      hearing on the renewal of any license, permit, trademark, tradename or patent
      necessary for the continuation of such Person’s business and the staff of such
      Governmental Body issues a report recommending the termination, revocation,
      suspension or material, adverse modification of such license, permit, trademark,
      tradename or patent; (ii) any agreement which is necessary or material to the
      operation of the Issuer’s business shall be revoked or terminated and not
      replaced by a substitute acceptable to the Required Purchasers within thirty
      (30) days after the date of such revocation or termination, and, with respect
      to
      both clauses (i) and (ii), such revocation, proceedings or termination and
      non-replacement would reasonably be expected to have a Material Adverse
      Effect;
      or

     

    
      
        
        

      

      
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    8.15 ERISA.
      An
      event or condition specified in Sections
      5.18
      or
7.7
      hereof
      shall occur or exist with respect to any Plan and, as a result of such event
      or
      condition, together with all other such events or conditions, any Issuer or
      any
      member of the Controlled Group shall incur, or in the opinion of the Collateral
      Agents be reasonably likely to incur, a liability to a Plan or the PBGC (or
      both) which, in the reasonable judgment of the Collateral Agents, would have
      a
      Material Adverse Effect;
      or 

     

    8.16 Business
      Interruption.
      The
      operations of the Note Parties at any material Real Property location are
      interrupted at any time for a period of ten (10) consecutive days, unless either
      (x) such business interruption is not reasonably likely to have a Material
      Adverse Effect or (y) the Note Parties shall (i) be entitled to receive for
      such
      period of interruption, proceeds of business interruption insurance sufficient
      to assure that its per diem cash needs during such period is at least equal
      to
      its average per diem cash needs for the consecutive three month period
      immediately preceding the initial date of interruption (or, at the Note Parties’
election, any other consecutive three month period preceding the initial date
      of
      interruption and commencing subsequent to the Closing Date as then designated
      by
      the Note Parties) and (ii) receive such proceeds in the amount described in
      clause (i) preceding not later than thirty (30) days (with an additional thirty
      (30) days in the event the proof of loss takes longer to obtain than the initial
      thirty (30) days) following the initial date of any such interruption; provided,
      however, that notwithstanding the provisions of clauses (i) and (ii) of this
      section, an Event of Default shall be deemed to have occurred if the Note
      Parties shall have ceased material operations for a period of thirty (30)
      consecutive days; 

     

    THEN,
      (i)
      upon the occurrence of any Bankruptcy Default, the unpaid principal amount
      of
      all Notes, together with accrued interest thereon, and, as liquidated damages
      and not as a penalty, an amount equal to the Applicable Premium then in effect,
      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 the Issuer and the other Note Parties, and (ii) upon the
      occurrence of any other Event of Default, the Required Purchasers may, upon
      written notice to the Issuer, declare the Notes to be due and payable, whereupon
      the principal amount of all Notes, together with accrued interest thereon,
      and,
      as liquidated damages and not as a penalty, an amount equal to the Applicable
      Premium then in effect, shall automatically become immediately due and payable,
      such without any other notice of any kind, and without presentment, demand,
      protest or other requirements of any kind, all of which are hereby expressly
      waived by the Issuer and the other Note Parties; provided,
      however,
      that if
      the principal of, premium, if any, and interest on the Notes due otherwise
      than
      by such declaration plus any expenses due and payable hereunder have been paid
      in full, and any and all Defaults (other than the nonpayment of principal and
      interest on the Notes that shall have become due by such declaration) shall
      have
      been remedied or waived, the Required Purchasers may waive all Defaults and
      rescind and annul any such declaration and consequences. 

     

    SECTION
      9. RESTRICTIONS
      ON TRANSFER; LEGENDS.

     

    9.1 Assignments.

     

    9.1.1. Each
      Note
      Purchaser may assign all or a portion of its interests, rights and obligations
      under this Agreement (including, without limitation, all or a portion of the
      Notes held by it) to any Person, provided that so long as no Event of Default
      shall have occurred and be continuing such assignment (i) shall not be to a
      competitor of the Note Parties and (ii) shall be to an “accredited investor” as
      that term is defined in Regulation D under the Securities Act; provided,
      further, that (i) any assignment of less than all of the Notes held by a Note
      Purchaser shall be in a minimum amount equal to $1,000,000, and (ii) the parties
      to each such assignment shall execute and deliver to the Issuer and the
      Collateral Agents notice of such assignment. In the case of any assignment
      of
      all or part of the Notes permitted under this Section
      9.1.1,
      the
      assignee shall have, to the extent of the assignment, the same rights, benefits
      and obligations as it would if it were a Note Purchaser with respect to such
      Notes. Notwithstanding any provision herein imposing minimum assignment
      thresholds, each Note Purchaser (and including any subsequent Note Purchaser)
      may at any time make an assignment of its Notes and other interests, rights
      and
      obligations under this Agreement, to (i) any Affiliate of such Note Purchaser,
      (ii) any Person, or Affiliate of a Person, that manages such Note Purchaser
      (a
“Related
      Fund”)
      or
      (iii) any other Note Purchaser hereunder. 

     

    
      
        
        

      

      
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    9.1.2. 
      The
      Issuer shall keep at its principal office, or the principal office of its
      counsel, a register in which it shall provide for the registration of the Notes
      and the transfer of the same shall be provided. Upon surrender for registration
      of transfer of any Notes in accordance with Section
      9.1
      at the
      principal office of the Issuer, the Issuer shall, at its expense, promptly
      execute and deliver one or more new Notes, as applicable, of like tenor and
      of a
      like principal amount, registered in the name of such transferee or transferees
      and, in the case of a transfer in part, a new Note in the appropriate amount
      registered in the names of such transferor. While the Notes are “restricted
      securities” within the meaning of Rule 144(a)(3) under the Securities Act, the
      Issuer shall provide the Note Purchasers with the information specified in,
      and
      meeting the requirements of Rule 144A(d)(4) under the Securities Act in
      connection with any proposed transfer.

     

    9.2 Restrictive
      Legend.

     

    9.2.1. Each
      Note
      shall bear a legend in substantially the following form:

     

    “THIS
      NOTE WAS ISSUED IN A PRIVATE PLACEMENT, WITHOUT REGISTRATION UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD, ASSIGNED,
      PLEDGED OR OTHERWISE TRANSFERRED (I) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT UNDER THE ACT COVERING THE TRANSFER OR PURSUANT TO AN EXEMPTION FROM
      REGISTRATION AND (II) EXCEPT IN COMPLIANCE WITH SECTION 9.1 OF THAT CERTAIN
      NOTE
      PURCHASE AGREEMENT DATED AS OF AUGUST 17, 2007 AMONG THE ISSUER, THE NOTE
      PURCHASERS (AS DEFINED THEREIN) AND THE GUARANTOR PARTY THERETO.

     

    THIS
      NOTE
      BEARS ORIGINAL ISSUE DISCOUNT. UPON WRITTEN REQUEST TO THE ISSUER C/O HIG
      CAPITAL, 855 BOYLSTON STREET, 11TH FLOOR, BOSTON, MA 02116, ATTENTION: CHIEF
      FINANCIAL OFFICER INFORMATION REGARDING THE ISSUE PRICE, AMOUNT OF ORIGINAL
      DISCOUNT, ISSUE DATE AND YIELD TO MATURITY WILL BE MADE AVAILABLE.”

    


    9.2.2. Each
      Series A Subordinated Note shall bear a legend in substantially the following
      form:

     

    “THE
      COLLATERAL SECURING THE INDEBTEDNESS EVIDENCED BY THIS INSTRUMENT IS
      SUBORDINATED TO THE SENIOR DEBT COLLATERAL (AS DEFINED IN THE AGREEMENT REFERRED
      TO BELOW) PURSUANT TO, AND TO THE EXTENT SET FORTH IN, THE NOTE PURCHASE
      AGREEMENT DATED AS OF AUGUST 17, 2007.

     

    
      
        
        

      

      
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    9.2.3. Each
      Series B Subordinated Note shall bear a legend in substantially the following
      form:

     

    “THE
      COLLATERAL SECURING THE INDEBTEDNESS EVIDENCED BY THIS INSTRUMENT IS
      SUBORDINATED TO THE SENIOR DEBT COLLATERAL (AS DEFINED IN THE AGREEMENT REFERRED
      TO BELOW) PURSUANT TO, AND TO THE EXTENT SET FORTH IN, THE AMENDED AND RESTATED
      NOTE PURCHASE AGREEMENT DATED AS OF AUGUST 1, 2008.

     

    9.3 Termination
      of Restrictions.
      The
      restrictions imposed by Section
      9.2
      hereof
      upon the transferability of the Notes shall cease and terminate as to any
      particular Notes (i) when, in the opinion of Ropes & Gray LLP, or other
      counsel reasonably acceptable to the Issuer, such restrictions are no longer
      required in order to assure compliance with the Securities Act and any other
      applicable securities laws or (ii) when such Notes shall have been registered
      under the Securities Act or transferred pursuant to Rule 144 thereunder.
      Whenever such restrictions shall cease and terminate as to any Notes or such
      Notes shall be transferable under paragraph (k) of Rule 144, the holder thereof
      shall be entitled to receive from the Issuer, without expense, replacement
      Notes, not bearing the legend set forth in Section
      9.2
      hereof.

     

    SECTION
      10. GUARANTEE.

     

    10.1 Guarantee
      of Note Obligations.
      Each
      Guarantor unconditionally guarantees that the Note Obligations of the Issuer
      will be performed and paid in full in cash when due and payable, whether at
      the
      stated or accelerated maturity thereof or otherwise, this guarantee being a
      guarantee of payment and not of collectibility and being absolute and in no
      way
      conditional or contingent (the “Guaranteed
      Obligation”).
      In
      the event any part of the Note Obligations shall not have been so paid in full
      when due and payable, each Guarantor will, immediately upon notice by the
      Collateral Agents or, without notice, immediately upon the occurrence of a
      Bankruptcy Default with respect to any Note Party, pay or cause to be paid
      to
      the Collateral Agents for the account of each Note Purchaser in accordance
      with
      the Note Purchasers’ proportionate share of such Note Obligations which are then
      due and payable and unpaid. The obligations of each Guarantor hereunder shall
      not be affected by the invalidity, unenforceability or irrecoverability of
      any
      of the Note Obligations as against the Issuer, any other Note Party, any other
      Guarantor thereof or any other Person. For purposes hereof, the Note Obligations
      shall be due and payable when and as the same shall be due and payable under
      the
      terms of this Agreement or any other Note Document notwithstanding the fact
      that
      the collection or enforcement thereof may be stayed or enjoined under the
      Bankruptcy Code or other applicable law. 

     

    10.2 Continuing
      Obligation.
      Each
      Guarantor acknowledges that the Note Purchasers have entered into this Agreement
      (and, to the extent that the Note Purchasers or the Collateral Agents may enter
      into any future Note Document, will have entered into such agreement) in
      reliance on this SECTION
      10
      being a
      continuing irrevocable agreement, and such Guarantor agrees that its guarantee
      may not be revoked in whole or in part. The obligations of the Guarantors
      hereunder shall terminate when all of the Note Obligations have been paid in
      full in cash and discharged; provided,
      however,
      that:

     

    
      
        
        

      

      
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    10.2.1. if
      a
      claim is made upon the Note Purchasers at any time for repayment or recovery
      of
      any amounts or any property received by the Note Purchasers from any source
      on
      account of any of the Note Obligations and the Note Purchasers repay or return
      any amounts or property so received (including interest thereon to the extent
      required to be paid by the Note Purchasers), or 

     

    10.2.2. if
      the
      Note Purchasers become liable for any part of such claim by reason of (i) any
      judgment or order of any court or administrative authority having competent
      jurisdiction, or (ii) any settlement or compromise of any such claim,


     

    then
      the
      Guarantors shall remain liable under this Agreement for the amounts so repaid
      or
      property so returned or the amounts for which the Note Purchasers become liable
      (such amounts being deemed part of the Note Obligations) to the same extent
      as
      if such amounts or property had never been received by the Note Purchasers,
      notwithstanding any termination hereof or the cancellation of any instrument
      or
      agreement evidencing any of the Note Obligations. Not later than five days
      after
      receipt of notice from the Collateral Agents, the Guarantors shall pay to the
      Collateral Agents, for the benefit of the Note Purchasers, an amount equal
      to
      the amount of such repayment or return for which the Note Purchasers have so
      become liable. Payments hereunder by a Guarantor may be required by the
      Collateral Agents on any number of occasions.

     

    10.3 Waivers
      with Respect to Note Obligations.
      Except
      to the extent expressly required by this Agreement or any other Note Document,
      each Guarantor waives, to the fullest extent permitted by the provisions of
      applicable law, all of the following (including all defenses, counterclaims
      and
      other rights of any nature based upon any of the following):

     

    10.3.1. presentment,
      demand for payment and protest of nonpayment of any of the Note Obligations,
      and
      notice of protest, dishonor or nonperformance;

     

    10.3.2. notice
      of
      acceptance of this guarantee and notice that the Notes have been sold by the
      Issuer hereunder in reliance on such Guarantor’s guarantee of the Note
      Obligations;

     

    10.3.3. notice
      of
      any Default or of any inability to enforce performance of the obligations of
      the
      Issuer or any other Person with respect to any Note Document or notice of any
      acceleration of maturity of any Note Obligations;

     

    10.3.4. demand
      for performance or observance of, and any enforcement of any provision of this
      Agreement, the Note Obligations or any other Note Document or any pursuit or
      exhaustion of rights or remedies with respect to any Collateral or against
      the
      Issuer or any other Person in respect of the Note Obligations or any requirement
      of diligence or promptness on the part of the Collateral Agents or any Note
      Purchaser in connection with any of the foregoing;

     

    10.3.5. any
      act
      or omission on the part of the Collateral Agents or any Note Purchaser which
      may
      impair or prejudice the rights of such Guarantor, including rights to obtain
      subrogation, exoneration, contribution, indemnification or any other
      reimbursement from the Issuer or any other Person, or otherwise operate as
      a
      deemed release or discharge;

     

    
      
        
        

      

      
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    10.3.6. failure
      or delay to perfect or continue the perfection of any Security Interest in
      any
      Collateral or any other action which harms or impairs the value of, or any
      failure to preserve or protect the value of, any Collateral;

     

    10.3.7. any
      statute or rule of law which provides that the obligation of a surety must
      be
      neither larger in amount nor in other respects more burdensome than the
      obligation of the principal;

     

    10.3.8. any
      “single action” or “antideficiency” law which would otherwise prevent any Note
      Purchaser from bringing any action, including any claim for a deficiency,
      against such Guarantor before or after the Collateral Agents’ or the Note
      Purchasers’ commencement or completion of any foreclosure action, whether
      judicially, by exercise of power of sale or otherwise, or any other law which
      would otherwise require any election of remedies by the Collateral Agents or
      any
      Note Purchaser;

     

    10.3.9. all
      demands and notices of every kind with respect to the foregoing;
      and

     

    10.3.10. to
      the
      extent not referred to above, all defenses (other than payment) which the Issuer
      may now or hereafter have to the payment of the Note Obligations, together
      with
      all suretyship defenses, which could otherwise be asserted by such
      Guarantor.

     

    Each
      Guarantor represents that it has obtained the advice of counsel as to the extent
      to which suretyship and other defenses may be available to it with respect
      to
      its obligations hereunder in the absence of the waivers contained in this
Section
      10.3.

     

    No
      delay
      or omission on the part of the Collateral Agents or any of the Note Purchasers
      in exercising any right under any Note Document or under any other guarantee
      of
      the Note Obligations or with respect to the Collateral shall operate as a waiver
      or relinquishment of such right. No action which the Collateral Agents or the
      Note Purchasers or Parent or any of its Subsidiaries may take or refrain from
      taking with respect to the Note Obligations shall affect the provisions of
      this
      Agreement or the obligations of each Guarantor hereunder. None of the Note
      Purchasers’ or the Collateral Agents’ rights shall at any time in any way be
      prejudiced or impaired by any act or failure to act on the part of Parent or
      any
      of its Subsidiaries, or by any noncompliance by Parent or of its Subsidiaries
      with any Note Document, regardless of any knowledge thereof which the Collateral
      Agents or any Note Purchaser may have or otherwise be charged with.

     

    10.4 Note
      Purchasers’ Power to Waive, etc.
      Notwithstanding anything to the contrary herein, with respect to this
SECTION
      10,
      each
      Guarantor grants to the Collateral Agents and each of the Note Purchasers full
      power in their discretion, without notice to or consent of such Guarantor,
      such
      notice and consent being expressly waived to the fullest extent permitted by
      applicable law, and without in any way affecting the liability of such Guarantor
      under its guarantee hereunder:

     

    10.4.1. To
      waive
      compliance with, and any Default under, and to consent to any amendment to
      or
      modification or termination of any provision of, or to give any waiver in
      respect of, this Agreement, any other Note Document, the Collateral, the Note
      Obligations or any guarantee thereof (each as from time to time in
      effect);

     

    
      
        
        

      

      
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    10.4.2. To
      grant
      any extensions of the Note Obligations (for any duration), and any other
      indulgence with respect thereto, and to effect any total or partial release
      (by
      operation of law or otherwise), discharge, compromise or settlement with respect
      to the obligations of the Note Parties or any other Person in respect of the
      Note Obligations, whether or not rights against such Guarantor under this
      Agreement are reserved in connection therewith;

     

    10.4.3. To
      take
      security in any form for the Note Obligations, and to consent to the addition
      to
      or the substitution, exchange, release or other disposition of, or to deal
      in
      any other manner with, any part of any property contained in the Collateral
      whether or not the property, if any, received upon the exercise of such power
      shall be of a character or value the same as or different from the character
      or
      value of any property disposed of, and to obtain, modify or release any present
      or future guarantees of the Note Obligations and to proceed against any of
      the
      Collateral or such guarantees in any order;

     

    10.4.4. To
      collect or liquidate or realize upon any of the Note Obligations or the
      Collateral in any manner or to refrain from collecting or liquidating or
      realizing upon any of the Note Obligations or the Collateral; and

     

    10.4.5. To
      extend
      additional credit, if any, under this Agreement, any other Note Document or
      otherwise in such amount as the Note Purchasers may determine, including
      increasing the amount of credit and the interest rate and fees with respect
      thereto, even though the condition of the Note Parties (financial or otherwise,
      on an individual or Consolidated basis) may have deteriorated since the date
      hereof. 

     

    10.5 Information
      Regarding the Issuer, etc.
      Each
      Guarantor has made such investigation as it deems desirable of the risks
      undertaken by it in entering into this Agreement and is fully satisfied that
      it
      understands all such risks. Each Guarantor waives any obligation which may
      now
      or hereafter exist on the part of the Collateral Agents or any Note Purchaser
      to
      inform it of the risks being undertaken by entering into this Agreement or
      of
      any changes in such risks and, from and after the date hereof, each Guarantor
      undertakes to keep itself informed of such risks and any changes therein. Each
      Guarantor expressly waives any duty which may now or hereafter exist on the
      part
      of the Collateral Agents or any Note Purchaser to disclose to such Guarantor
      any
      matter related to the business of Parent and its Subsidiaries, operations,
      character, collateral, credit, condition (financial or otherwise), income or
      prospects of the Issuer and its Affiliates or their properties or management,
      whether now or hereafter known by the Collateral Agents or any Note Purchaser.
      Each Guarantor represents, warrants and agrees that it assumes sole
      responsibility for obtaining from the Issuer all information concerning this
      Agreement and all other Note Documents and all other information as to the
      Issuer and its Affiliates or their properties or management as such Guarantor
      deems necessary or desirable. 

     

    10.6 Certain
      Guarantor Representations.
      Each
      Guarantor represents that:

     

    10.6.1. it
      is in
      its best interest and in pursuit of the purposes for which it was organized
      as
      an integral part of the business conducted and proposed to be conducted by
      the
      Note Parties and their Subsidiaries, and reasonably necessary and convenient
      in
      connection with the conduct of the business conducted and proposed to be
      conducted by them, to induce the Note Purchasers to enter into this Agreement
      and to purchase the Notes from the Issuer by making the Guaranteed Obligation
      contemplated by this SECTION
      10;

     

    
      
        
        

      

      
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    10.6.2. the
      proceeds from the sale of the Notes will directly or indirectly inure to its
      benefit;

     

    10.6.3. by
      virtue
      of the foregoing it is receiving directly or indirectly at least reasonably
      equivalent value from the Note Purchasers for its Guaranteed
      Obligation;

     

    10.6.4. it
      will
      not be rendered insolvent or left with unreasonably small assets with which
      to
      conduct its business as a result of entering into this Agreement (considering,
      among other things, its rights of contribution against other Note
      Parties);

     

    10.6.5. after
      giving effect to the transactions contemplated by this Agreement and the other
      Note Documents and considering, among other things, its rights of contribution
      against other Note Parties, it will (directly or indirectly) have assets having
      a fair saleable value in the ordinary course in excess of its total obligations
      to all Persons (taking into account, as applicable, rights of contribution,
      subrogation and indemnity with regard to obligations shared by others);
      and

     

    10.6.6. it
      has
      been advised by the Collateral Agents that the Note Purchasers are unwilling
      to
      enter into this Agreement unless the Guarantee provided for by this SECTION
      10
      is given
      by it.

     

    10.7 Subrogation.
      Each
      Guarantor agrees that, until the Note Obligations are paid in full, it will
      not
      exercise any right of reimbursement, subrogation, contribution, offset or other
      claims against Parent or any of its Subsidiaries arising by contract or
      operation of law in connection with any payment made or required to be made
      by
      such Guarantor under this Agreement or any other Note Document; provided,
      that
      Parent hereby waives any such right of reimbursement, subrogation, contribution,
      offset or other claim. After the payment in full of the Note Obligations, each
      Guarantor (other than Parent) shall be entitled to exercise against Parent
      or
      any of its Subsidiaries all such rights of reimbursement, subrogation,
      contribution and offset, and all such other claims, to the fullest extent
      permitted by law. 

     

    10.8 Subordination. 

     

    10.8.1. Each
      Note
      Party covenants and agrees that the payment of any Indebtedness and all
      obligations and liabilities owing by any Note Party in favor of any other Note
      Party, whether now existing or hereafter incurred (collectively, the
“Intercompany
      Obligations”)
      is
      subordinated, to the extent and in the manner provided in this Section
      10.8,
      to the
      prior payment in full of all Note Obligations owed or hereafter owing to the
      Note Purchasers by the Note Parties and is so subordinated as a claim against
      such Person or any of its assets, whether such claim be in the ordinary course
      of business or in the event of voluntary or involuntary liquidation,
      dissolution, insolvency or bankruptcy, so that no payment with respect to any
      such Indebtedness, claim or liability will be made or received while any Event
      of Default exists and that such subordination is for the benefit of the Note
      Purchasers. 

     

    10.8.2. Each
      Note
      Party hereby (i) authorizes the Note Purchasers to demand specific performance
      of the terms of this Section
      10.8
      at any
      time when any Note Party shall have failed to comply with any provisions of
      this
Section
      10.8
      which
      are applicable to it and (ii) irrevocably waives any defense based on the
      adequacy of a remedy at law, which might be asserted as a bar to such remedy
      of
      specific performance.

     

    
      
        
        

      

      
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    10.8.3. Upon
      any
      distribution of assets of any Note Party in any dissolution, winding up,
      liquidation or reorganization (whether in bankruptcy, insolvency or receivership
      proceedings or upon an assignment for the benefit of creditors or
      otherwise):

     

    10.8.3.1. The
      Note
      Purchasers shall first be entitled to receive payment in full in cash of the
      Note Obligations before any Note Party is entitled to receive any payment on
      account of the Intercompany Obligations.

     

    10.8.3.2. Any
      payment or distribution of assets of any Note Party of any kind or character,
      whether in cash, property or securities, to which any other Note Party would
      be
      entitled except for the provisions of this Section
      10.8,
      shall
      be paid by the liquidating trustee or agent or other Person making such payment
      or distribution directly to the Note Purchasers in the manner set forth herein,
      to the extent necessary to make payment in full of all Note Obligations
      remaining unpaid after giving effect to any concurrent payment or distribution
      or provisions therefor to the Note Purchasers.

     

    10.8.3.3. In
      the
      event that notwithstanding the foregoing provisions of this Section
      10.8
      any
      payment or distribution of assets of any Note Party of any kind or character,
      whether in cash, property or securities, shall be received by any other Note
      Party on account of any Intercompany Obligations before all Note Obligations
      are
      paid in full, such payment or distribution shall be received and held in trust
      for and shall be paid over to the applicable Collateral Agent for itself and
      the
      Note Purchasers for application to the payment of the Note Obligations until
      all
      of the Note Obligations shall have been paid in full, after giving effect to
      any
      concurrent payment or distribution or provision therefor to the Note
      Purchasers.

     

    10.8.4. No
      right
      of any Note Purchaser or any other present or future holders of the Note
      Obligations to enforce subordination as provided herein shall at any time in
      any
      way be prejudiced or impaired by any act or failure to act on the part of any
      Note Party or by any act or failure to act, in good faith, by any Note Party,
      or
      by any noncompliance by any Note Party with the terms of the Intercompany
      Obligations, regardless of any knowledge thereof which any Note Party may have
      or be otherwise charged with.

     

    SECTION
      11. SUBORDINATION

     

    Parent
      and each of its Subsidiaries for itself and its successors and assigns, and
      each
      of the Note Purchasers, by its acceptance hereof and its acceptance of the
      Notes
      hereunder, for itself and its successors and assigns as holders of the Notes
      agrees (i) that no payments shall be made in respect of any Subordinated Note
      Obligations other than as permitted under this Section
      11
      and (ii)
      that all Subordinated Note Obligations and all payments in respect hereof and
      thereof shall be subordinate and junior in right of payment to the prior payment
      in full of all Senior Note Obligations as set forth in, and subject to the
      provisions of, this Section
      11.
      Each
      holder of Senior Note Obligations shall have been deemed to have acquired such
      Senior Note Obligations in reliance upon the subordination as set forth in
      this
Section
      11.
      Payments to holders of Notes by parties other than Parent or any of its
      Subsidiaries in exchange for the transfer of Notes to such Persons pursuant
      to
Section
      9
      of this
      Agreement are not covered by the provisions of this Section
      11.
      

     

    
      
        
        

      

      
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    11.1 Payment
      Defaults.
      During
      the continuance of any default in the payment of principal, premium, if any,
      any
      commitment fee or interest on any Senior Notes, whether at maturity, upon
      redemption or pursuant to acceleration or otherwise (a “Payment
      Default”),
      no
      direct or indirect payment of any kind shall be made with respect to principal
      or interest on the Subordinated Notes or other amounts due hereunder or
      thereunder, for a period beginning on the date on which written notice of such
      payment default is given to the Issuer and the record
      holders of the Subordinated Notes by the holders of Senior Notes or the First
      Lien Collateral Agent, and ending on the date on which such Payment Default
      shall have been cured or waived in writing or shall have ceased to exist or
      such
      Senior Notes shall have been discharged or paid in full, after
      which, subject to Section
      11.4
      (if
      applicable), the Issuer shall resume making any and all required payments in
      respect of the Subordinated Notes, including any missed payments (but only
      to
      the extent that such payments are not otherwise prohibited under the terms
      hereof). Any payment received by a Subordinated Note Purchaser in
      violation of this Section
      11.1
      shall be
      held in trust for, and paid over to, the holders of Senior Notes pursuant to
      Section
      11.5.

     

    11.2 Non-Payment
      Defaults.
      During
      the continuance of any event of default on or in respect of Senior Notes (other
      than a Payment Default, when Section
      11.1
      shall
      apply) that entitles the holders of Senior Notes to accelerate the maturity
      of
      the obligations outstanding thereunder (a “Non-payment
      Default”),
      no
      direct or indirect payment of any kind shall be made with respect to principal
      or interest on the Subordinated Notes or other amounts due hereunder or
      thereunder, and no Subordinated Note Purchaser
      shall
      accept any such payment, for a period (a “Blockage
      Period”)
      beginning on the date on which written notice of such default (a “Blockage
      Notice”)
      is
      given to the Issuer and to the record Subordinated Note Purchasers by the Issuer
      or by the First Lien Collateral Agent and ending on the earliest to occur of
      the
      following: (a) the date on which such Non-payment Default is cured or waived
      or
      shall have ceased to exist, (b) a number of days shall have elapsed from the
      beginning of such Blockage Period as shall cause the total number of days
      elapsed under any Blockage Period in effect during any consecutive 365-day
      period to exceed 180 days in the aggregate; (c) the Senior Notes have been
      paid
      in full or (d) the Senior Notes shall have been accelerated. Upon termination
      of
      a Blockage Period, the Issuer shall immediately make all past-due payments
      (including default rate interest thereon, as applicable) and shall resume all
      other required payments under this Agreement or the Subordinated Notes (but
      only
      to the extent that such payments are not otherwise prohibited under the terms
      hereof). No single Non-payment Default may serve as the basis for more than
      one
Blockage
      Notice (other than a Non-payment Default that has been cured or waived or
      otherwise ceased to exist for a period of 90 consecutive days); no Non-payment
      Default in existence on the date of delivery of a Blockage Notice shall serve
      as
      the basis for any subsequent Blockage Notice, unless such Non-payment Default
      shall have been cured or waived or otherwise ceased to
      exist
      for a period of 90 consecutive days; no more than one Blockage Notice shall
      be
      issued within any period of 365 consecutive days; and no more than three
      Blockage Notices shall be issued while the Subordinated Notes remain
      outstanding. 

     

    11.3 Forbearance
      Periods. 

     

    11.3.1. The
      Subordinated Note Purchasers agree to provide to the holders of Senior Notes,
      or
      to the First Lien Collateral Agent, written notice (an “Enforcement
      Notice”)
      prior
      to taking any action to accelerate, exercise any remedies with respect to,
      or
      otherwise take any enforcement action with respect to the Subordinated Notes,
      this Agreement or any guarantee agreement with respect to the Subordinated
      Notes
      (an “Enforcement
      Action”).

     

    
      
        
        

      

      
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    11.3.2. Without
      the prior written consent of the holders of a majority of the outstanding
      principal amount of any Senior Notes, the Subordinated Note Purchasers shall
      not
      exercise (or join in) any rights or remedies or take (or join in) any
      Enforcement Action until the expiration of ten (10) days following the delivery
      of an Enforcement Notice, as contemplated by the foregoing Section
      11.3.2;
      provided
      that if,
      prior to the expiry of such ten (10) day period, the holders of a majority
      of
      Senior Notes provide, or the First Lien Collateral Agent provides, to the
      Subordinated Note Purchasers delivering the Enforcement Notice a written notice
      directing the institution of a bar on Enforcement Actions (a “Forbearance
      Notice”),
      then
      the Subordinated Note Purchasers shall refrain from taking (or joining in)
      any
      Enforcement Action for a period (a “Forbearance
      Period”)
      terminating on the first to occur of (i) (x) if a Blockage Period is in effect
      pursuant to Section
      11.2
      at the
      time of delivery of the Enforcement Notice, the expiry or termination of such
      Blockage Period and (y) if no Blockage Period is in effect pursuant to
Section
      11.2
      at the
      time of delivery of the Enforcement Notice, (a) if, at the time of delivery
      of
      the Enforcement Notice, there is in existence a Payment Default on Senior Notes,
      the earliest to occur of (1) 180 days from delivery of the Enforcement Notice
      and (2) the date on which the applicable Payment Default is cured or waived
      and
      (b) in all other cases, 180 days from delivery of the Enforcement Notice, (ii)
      the acceleration of the maturity of the Senior Notes or the taking of any action
      by the holder of any Senior Notes, or any agent on acting on behalf of one
      or
      more such holders, to commence foreclosure or other legal proceedings against
      the Issuer, any guarantor of the Subordinated Notes or any of their properties,
      (iii) the commencement of a Proceeding by or against the Issuer or any guarantor
      of the Subordinated Notes, (iv) the payment in full of all Senior Notes and
      (v)
      the date on which the total number of days during which a Forbearance Period
      has
      been in effect during a consecutive 365-day period exceeds 180 days in the
      aggregate.

     

    11.4 Distributions. Upon
      any
      distribution of all or substantially all assets of Parent or any of its
      Subsidiaries or upon any dissolution, winding up, total or partial liquidation
      or reorganization of Parent or any Subsidiaries (whether in bankruptcy,
      insolvency or receivership proceedings or upon an assignment for the benefit
      of
      creditors or otherwise) (other than those permitted by Section
      11.5):

     

    11.4.1. The
      holders of all Senior Notes shall first be entitled to receive payment in full
      of all obligations owing in respect thereof before the holders of the
      Subordinated Notes are entitled to receive any payment on account of the
      principal of or interest on the Subordinated Notes or any other amount owing
      hereunder or thereunder; and

     

    11.4.2. until
      the
      Senior Notes are paid in full, any distribution to which the holders of the
      Subordinated Notes would be entitled but for this Section
      11
      shall be
      made to holders of Senior Notes as their interests may appear; provided
      that,
      notwithstanding this Section
      11.4,
      the
      Subordinated Note Purchasers shall be entitled to receive (and shall not be
      required to remit to holders of Senior Notes) in any such proceeding either
      (x)
      debt securities which mature no earlier than the Subordinated Notes and are
      subordinated to Senior Notes on terms no less favorable to the holders of Senior
      Notes than the Subordinated Notes or (y) equity securities which rank junior
      to
      any debt or equity securities distributed to the holders of the Senior
      Notes.

     

    
      
        
        

      

      
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    11.4.3. Upon
      any
      payment or distribution of assets of Parent or its Subsidiaries referred to
      in
      this Section
      11,
      the
      Subordinated Note Purchasers shall be entitled to rely upon any order or decree
      entered by any court of competent jurisdiction in which such insolvency,
      bankruptcy, receivership, liquidation, reorganization, dissolution, winding-up
      or similar case or proceeding is pending, for the purpose of ascertaining the
      persons entitled to participate in such payment or distribution to the holders
      of Senior Notes and other Indebtedness of Parent and its Subsidiaries, the
      amount thereof or payment thereon, the amount or amounts paid or distributed
      thereon and all other facts pertinent thereto or to this Section
      11.

     

    11.5 Payments
      to be Held in Trust.
      Subject
      to Section
      11.4.2,
      if any
      payment or distribution of assets of the Parent or any of its Subsidiaries
      of
      any kind or character, whether in cash, property or securities, shall be
      received by the Subordinated Note Purchasers on account of principal, interest
      or other amounts due hereunder that, because of the provisions of this
Section
      11,
      should
      not have been made, then such payment or distribution shall be received and
      held
      in trust for, and shall be paid over to, the holders of Senior Notes remaining
      unpaid or unprovided for or their representative or representatives under the
      agreements pursuant to which the Senior Notes may have been issued for
      application to the payment of such Senior Notes until all Senior Notes shall
      have been paid in full, after giving effect to any concurrent payment or
      distribution to the holders of such Senior Notes.

     

    11.6 Subrogation.
      After
      the payment in full in cash or cash equivalents of all Senior Notes, the rights
      of the Subordinated Note Purchasers shall be subrogated to the rights of the
      holders of the Senior Notes to receive payments and distributions of cash,
      property and securities made to the holders of the Senior Notes to which the
      Subordinated Note Purchasers would be entitled except for the provisions of
      this
Section
      11
      until
      the principal of, premium, if any, and interest on the Subordinated Notes shall
      be paid in full
      in
      cash or cash equivalents. For purposes of such subrogation, no payments or
      distributions to the holders of Senior Notes of any cash, property or securities
      to which the Subordinated Note Purchasers would be entitled except for the
      provisions of this Section
      11,
      and no
      payments over pursuant to the provisions of this Section
      11
      to the
      holders of Senior
      Notes
      by
      Subordinated Note Purchasers shall, as among the Issuer, its creditors other
      than holders of Senior Notes, and the Subordinated Note Purchasers deemed to
      be
      a payment or distribution by the Issuer to or on account of the Subordinated
      Notes.

     

    11.7 Reinstatement
      of Obligations.
      If, at
      any time, all or part of any payment with respect to Senior Notes theretofore
      made by the Issuer or any other Person is rescinded for any reason whatsoever
      (including, without limitation, the insolvency, bankruptcy or reorganization
      of
      the Issuer or such other Person), the subordination provisions set
      forth herein
      shall continue to be effective or be reinstated, as the case may be, all as
      though such payment had not been made.

     

    11.8 Actions
      With Respect to the Senior Notes.
      Each
      Subordinated Note Purchaser agrees and consents that without notice to or assent
      by such holder, and without affecting the liabilities and obligations of the
      Issuer and the rights and benefits of the holders of the Senior Notes set forth
      in this Section
      11:

     

    11.8.1. The
      obligations and liabilities of the Issuer or any other party or parties liable
      for or upon the Senior Notes may, from time to time, be renewed, refinanced,
      extended, modified, amended, restated, increased (subject to the limits
      contained in the definition of Senior Notes), compromised, supplemented,
      terminated, waived or released;

     

    11.8.2. The
      holders of Senior Notes, and any representative or representatives acting on
      behalf thereof, may exercise or refrain from exercising any right, remedy or
      power granted by or in connection with any agreements relating to the Senior
      Notes including, without limitation, any rights with respect to any collateral;
      and

     

    
      
        
        

      

      
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    11.8.3. Any
      balance or balances of funds with any holder of Senior Notes at any time
      outstanding to the credit of the Issuer may, from time to time, in whole or
      in
      part, be surrendered or released, all as the holders of any Senior Notes (acting
      by any requisite vote) may deem advisable, and all without impairing, abridging,
      diminishing, releasing or affecting the subordination of the obligations
      hereunder to Senior Notes.

     

    11.9 Waiver
      of Notice of Acceptance.
      To the
      extent permitted by applicable law, the Subordinated Note Purchasers and the
      Issuer hereby waive notice of acceptance hereof by the holders of the Senior
      Notes. Each Subordinated Note Purchaser, by accepting any Subordinated Note
      acknowledges and agrees that
      the
      subordination provisions in this Section
      11
      are, and
      are intended to be, an inducement and a consideration to each holder of any
      Senior Notes, to acquire and continue to hold such Senior
      Notes
      and such
      holder of Senior Notes shall be deemed conclusively to have relied on such
      subordination provisions in acquiring and continuing to hold such Senior
      Notes.

     

    11.10 Injunctive
      and Other Relief.
      The
      Issuer and the Purchasers hereby expressly agree that the holders of Senior
      Notes may enforce any and all rights derived herein by suit, either in equity
      or
      at law, for specific performance of any agreement contained in this Section
      11
      or for
      judgment at law and any other relief whatsoever appropriate to such action
      or
      procedure.

     

    11.11 Application
      of Provisions.

     

    11.11.1. The
      provisions of this Section
      11
      are and
      are intended solely for the purpose of defining the relative rights of the
      Subordinated Note Purchasers on the one hand and the Senior Note Purchasers
      on
      the other hand. Nothing contained in this Section
      11
      or
      elsewhere in this Agreement or in the Subordinated Notes is intended to or
      shall
      (a) impair the Issuer, as to its creditors other than holders of Senior Notes
      and the holders of the Subordinated Notes, the obligations of the Issuer, which
      are absolute and unconditional, to pay to the Subordinated Note Purchasers
      the
      principal of, premium, if any, and interest on the Subordinated Notes as and
      when the same shall become due and payable in accordance with their terms
      (provided,
      however,
      that
      this provision is not intended to limit the restrictions on payments on the
      Subordinated Notes set forth in Section
      11.1);
      or (b)
      affect the relative rights against the Issuer of the Subordinated Note
      Purchasers and creditors of the Issuer, other than the holders of Senior Notes;
      or (c) prevent any Subordinated Note Purchaser from exercising all remedies
      otherwise permitted by applicable law upon a Default or any Event of Default
      under this Agreement, subject however in all respects to the rights, if any,
      under this Section
      11
      of the
      holders of Senior Notes (1) in any case, proceeding, dissolution, liquidation
      or
      other winding up, assignment for the benefit of creditors or other marshaling
      of
      assets and liabilities of the Issuer referred to in Section
      11.4,
      to
      receive, pursuant to and in accordance with such Section, cash, property and
      securities otherwise payable or deliverable to such holder, or (2) under the
      conditions specified in Section
      11.1,
      to
      prevent any payment prohibited by such Section. The failure to make a payment
      on
      the account of the principal and interest on the Subordinated Notes or any
      other
      payment due hereunder or thereunder by reason of any provision in this
Section
      11
      shall
      not be construed as preventing the occurrence of an Event of Default under
      Section
      8
      or as
      preventing the accrual of interest on the Subordinated Notes at a default
      rate.

     

    
      
        
        

      

      
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    11.11.2. Nothing
      contained in this Section
      11
      shall
      limit the right of the Subordinated Note Purchasers to take any action to
      accelerate the maturity of the Senior Subordinated Notes pursuant to
Section
      8
      or to
      pursue any rights or remedies hereunder or under applicable law, subject to
      the
      rights under this Section
      11
      of the
      holders, from time to time, of Senior Notes, including, without limitation,
      the
      Forbearance Period hereunder.

     

    11.12 No
      Modification.
      The
      provisions of this Section
      11
      and the
      defined terms used in this Section
      11
      are for
      the benefit of the holders from time to time of Senior Notes and, so
      long as
      any Senior Notes remains outstanding, such provisions and defined terms may
      not
      be modified, rescinded or canceled in whole or in part, nor shall any grace
      periods in Section
      8
      hereof
      be reduced, without the prior written consent of the holders of a majority
      of
      the Senior Notes then outstanding. 

     

    SECTION
      12. COLLATERAL
      AGENT.

     

    12.1 Collateral
      Agents’ Authority to Act, etc.
      Each of
      the Senior Note Purchasers appoints and authorizes Sankaty Advisors, LLC to
      act
      for the Senior Note Purchasers as the First Lien Collateral Agent in connection
      with the granting of a First Lien Security Interest in the Collateral as
      contemplated by this Agreement and the Collateral Documents on the terms set
      forth in the Collateral Documents. Each of the Subordinated Note Purchasers
      appoints and authorizes Sankaty Advisors, LLC to act for the Subordinated Note
      Purchasers as the Second Lien Collateral Agent in connection with the granting
      of a Second Lien Security Interest in the Collateral as contemplated by this
      Agreement and the Collateral Documents on the terms set forth in the Collateral
      Documents. All action in connection with the enforcement of, or the exercise
      of
      any remedies under the Collateral Documents shall be taken in the manner set
      forth therein.

     

    12.2 Collateral
      Agents’ Resignation.
      Either
      of the Collateral Agents may resign at any time by giving at least 60 days’
prior written notice of its intention to do so to each of the Note Purchasers
      and the Issuer and upon the appointment by the Required Purchasers of a
      successor Collateral Agent reasonably satisfactory to the Issuer. If no
      successor Collateral Agent shall have been so appointed and shall have accepted
      such appointment within 45 days after the retiring Collateral Agent’s giving of
      such notice of resignation, then the retiring Collateral Agent may appoint
      a
      successor Collateral Agent which shall be a bank or a trust company organized
      under the laws of the United States of America or any state thereof and having
      a
      combined capital, surplus and undivided profit of at least $500,000,000 (so
      long
      as no Default exists) with the consent of the Issuer, which shall not be
      unreasonably withheld; provided,
      however,
      that
      any successor Collateral Agent appointed under this sentence may be removed
      upon
      the written request of the Required Purchasers, which request shall also appoint
      a successor Collateral Agent (so long as no Default exists) reasonably
      satisfactory to the Issuer. Upon the appointment of a new Collateral Agent
      hereunder, the term “Collateral Agent” shall for all purposes of this Agreement
      and the Collateral Documents thereafter mean such successor. After any retiring
      Collateral Agent’s resignation hereunder as Collateral Agent, or the removal
      hereunder of any successor Collateral Agent, the provisions of this Agreement
      and the Collateral Documents shall continue to inure to the benefit of such
      retiring or removed Collateral Agent as to any actions taken or omitted to
      be
      taken by it while it was Collateral Agent under this Agreement and the
      Collateral Documents.

     

    
      
        
        

      

      
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    12.3 Concerning
      the Collateral Agent.

     

    12.3.1. Action
      in Good Faith, etc.
      The
      Collateral Agents and their officers, directors, employees and agents shall
      be
      under no liability to any of the Note Purchasers or to any future holder of
      any
      Notes for any action or failure to act taken or suffered in good faith, and
      any
      action or failure to act in accordance with an opinion of its counsel shall
      conclusively be deemed to be in good faith. The Collateral Agents shall in
      all
      cases be entitled to rely, and shall be fully protected in relying, on
      instructions given to the Collateral Agent by the Required Purchasers. The
      Collateral Agents may execute releases and other collateral termination
      documents with respect to assets disposed of by the Note Parties as permitted
      by
      this Agreement.

     

    12.3.2. No
      Implied Duties, etc.
      The
      Collateral Agents shall have and may exercise such powers as are specifically
      delegated to the Collateral Agents under this Agreement or any Collateral
      Document together with all other powers incidental thereto. The Collateral
      Agents shall have no implied duties to any Person or any obligation to take
      any
      action under this Collateral Agreement or any Collateral Document except for
      action specifically provided for in this Agreement or any Collateral Document
      to
      be taken by the Collateral Agents.

     

    12.3.3. Validity,
      etc.
      The
      Collateral Agents shall not be responsible to any Note Purchaser or any future
      holder of any Notes (a) for the legality, validity, enforceability or
      effectiveness of this Agreement or any Collateral Document, (b) for any
      recitals, reports, representations, warranties or statements contained in or
      made in connection with this Agreement or any Collateral Document, (c) for
      the
      existence or value of any assets included in any security for the Note
      Obligations, (d) for the effectiveness of any Lien purported to be included
      in
      the Collateral, (e) for the specification or failure to specify any particular
      assets to be included in the Collateral, or (f) unless either of the Collateral
      Agents shall have failed to comply with Section
      12.3.1,
      for the
      perfection of the Security Interests.

     

    12.3.4. Compliance.
      The
      Collateral Agents shall not be obligated to ascertain or inquire as to the
      performance or observance of any of the terms of this Agreement or any
      Collateral Document.

     

    12.3.5. Employment
      of Collateral Agents and Counsel.
      The
      Collateral Agents may execute any of its duties as Collateral Agent under this
      Agreement or any Collateral Document by or through employees, agents and
      attorneys in fact and shall not be responsible to any of the Note Purchasers,
      the Issuer or any other Note Party for the default or misconduct of any such
      agents or attorneys in fact selected by the Collateral Agents acting in good
      faith. The Collateral Agents shall be entitled to advice of counsel concerning
      all matters pertaining to the agency hereby created and its duties hereunder
      or
      under any Collateral Document.

     

    12.3.6. Reliance
      on Documents and Counsel.
      The
      Collateral Agents shall be entitled to rely, and shall be fully protected in
      relying, upon any affidavit, certificate, cablegram, consent, instrument,
      letter, notice, order, document, statement, facsimile, telegram, telex or
      teletype message or writing reasonably believed in good faith by the Collateral
      Agents to be genuine and correct and to have been signed, sent or made by the
      Person in question, including any telephonic or oral statement made by such
      Person, and, with respect to legal matters, upon an opinion or the advice of
      counsel selected by the Collateral Agents.

     

    
      
        
        

      

      
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    12.3.7. Collateral
      Agent’s Reimbursement.
      Each of
      the Note Purchasers severally agrees to reimburse the Collateral Agents,
pro rata
      in
      accordance with such Note Purchaser’s percentage interest (determined based on
      the ratio of the aggregate principal amount of the Notes held by such Note
      Purchaser to the aggregate amount of all outstanding Notes), for any reasonable
      expenses not reimbursed by the Issuer (without limiting the obligation of the
      Issuer to make such reimbursement): (a) for which the Collateral Agents are
      entitled to reimbursement by the Issuer under this Agreement or any Collateral
      Document, and (b) after the occurrence and during the continuance of a Default,
      for any other reasonable expenses incurred by the Collateral Agents on the
      Note
      Purchasers’ behalf in connection with the enforcement of the Note Purchasers’
rights under this Agreement or any Collateral Document; provided,
      however,
      that
      the Collateral Agents shall not be reimbursed for any such expenses arising
      as a
      result of its gross negligence or willful misconduct.

     

    12.4 Indemnification.
      The
      Note Purchasers shall severally indemnify the Collateral Agents and their
      officers, directors, employees, agents, attorneys, accountants, consultants
      and
      controlling Persons (to the extent not reimbursed by the Note Parties and
      without limiting the obligation of the Note Parties to do so), pro rata in
      accordance with their respective percentage interests (as determined in
      accordance with Section
      12.3.7),
      from
      and against any and all liabilities, obligations, damages, penalties, actions,
      judgments, suits, losses (including accrued and unpaid Collateral Agents’ fees),
      costs, expenses or disbursements of any kind whatsoever which may at any time
      be
      imposed on, incurred by or asserted against the Collateral Agents or such
      Persons relating to or arising out of this Agreement, any Collateral Document,
      the transactions contemplated hereby or thereby, or any action taken or omitted
      by the Collateral Agents in connection with any of the foregoing; provided,
      however,
      that
      the foregoing shall not extend to actions or omissions which are determined
      in a
      final, nonappealable judgment by a court of competent jurisdiction to have
      been
      taken by either of the Collateral Agents with gross negligence or willful
      misconduct.

     

    12.5 Assumption
      of Collateral Agent’s Rights.
      Notwithstanding anything herein or in any Collateral Document to the contrary,
      if at any time no Person constitutes the Collateral Agents hereunder or the
      Collateral Agents fail to act upon written directions from the Required
      Purchasers, the Required Purchasers shall be entitled to exercise any power,
      right or privilege granted to the Collateral Agents under this Agreement or
      any
      Collateral Document and in so acting the Note Purchasers shall have the same
      rights, privileges, indemnities and protections provided to the Collateral
      Agents under this Agreement or any Collateral Document.

     

    SECTION
      13. MISCELLANEOUS.

     

    13.1 Expenses.
      Whether
      or not the transactions contemplated hereby shall be consummated, the Issuer
      agrees to promptly pay (i) all the actual and reasonable costs and expenses
      incurred by the Note Purchasers in the preparation of this Agreement and the
      other Note Documents and (ii) all reasonable out-of-pocket costs and expenses
      of
      the Note Purchasers (including fees, expenses and disbursements of their outside
      counsel, Ropes & Gray LLP and local counsel) relating to the negotiation,
      preparation and execution of the Note Documents, review of other documents
      (including due diligence review) in connection with the transactions
      contemplated hereby, and any amendments and waivers hereto or thereto, and
      the
      Closing. In addition, the Issuer agrees to promptly pay in full after the
      occurrence of an Event of Default, all costs and expenses (including, without
      limitation, reasonable fees and disbursements of counsel) incurred by the Note
      Purchasers in enforcing any obligations of or in collecting any payments due
      hereunder or under the Notes by reason of such Event of Default or in connection
      with any refinancing or restructuring of the credit arrangements provided under
      this Agreement in the nature of a workout, or any insolvency or bankruptcy
      proceedings; provided
      that, in
      such event, the Note Purchasers shall be only entitled to payment of the fees,
      expenses and disbursements of a single outside counsel and other professionals,
      such to be designated by the Required Purchasers.

     

    
      
        
        

      

      
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    13.2 Indemnity.
      In
      addition to the payment of expenses pursuant to Section
      13.1,
      whether
      or not the transactions contemplated hereby shall be consummated, each Note
      Party (as “Indemnitor”)
      agrees
      to indemnify, pay and hold the Note Purchasers, and the officers, directors,
      employees, agents, and Affiliates of the Note Purchasers (collectively called
      the “Indemnitees”)
      harmless from and against any and all other liabilities, costs, expenses,
      obligations, losses, damages, penalties, actions, judgments, suits, claims
      and
      disbursements of any kind or nature whatsoever (including, without limitation,
      the reasonable fees and disbursements of one counsel for such Indemnitees)
      in
      connection with any investigative, administrative or judicial proceeding
      commenced or threatened (excluding claims among Indemnitees and, with the
      exception of claims arising out of otherwise indemnifiable matters (e.g.,
      actions to enforce the indemnification rights provided hereunder), and excluding
      claims between the Issuer and an Indemnitee), whether or not such Indemnitee
      shall be designated a party thereto, which may be imposed on, incurred by,
      or
      asserted against that Indemnitee, in any manner relating to or arising out
      of
      this Agreement, the Notes, the Note Documents or the other documents related
      to
      the transactions contemplated hereby (including, without limitation, the
      existence or exercise of any security rights with respect to the Collateral
      in
      accordance with the Collateral Documents), the Note Purchasers’ agreement to
      purchase the Notes or the use or intended use of the proceeds of any of the
      proceeds thereof to the Issuer (the “Indemnified
      Liabilities”);
      provided,
      that
      the Indemnitor shall not have any obligation to an Indemnitee hereunder with
      respect to an Indemnified Liability to the extent that such Indemnified
      Liability arises from the gross negligence or willful misconduct of that
      Indemnitee as mutually agreed between the Indemnitee and the Indemnitors or
      as
      determined by a final, non-appealable judgment of a court of competent
      jurisdiction. Each Indemnitee shall give the Indemnitor prompt written notice
      of
      any claim that might give rise to Indemnified Liabilities setting forth a
      description of those elements of such claim of which such Indemnitee has
      knowledge; provided,
      that
      any failure to give such notice shall not affect the obligations of the
      Indemnitor unless (and then solely to the extent) such Indemnitor is prejudiced
      thereby. The Indemnitor shall have the right at any time during which such
      claim
      is pending to select counsel to defend and control the defense thereof and
      settle any claims for which it is responsible for indemnification hereunder
      (provided that the Indemnitor will not settle any such claim without (i) the
      appropriate Indemnitee’s prior written consent, which consent shall not be
      unreasonably withheld or (ii) obtaining an unconditional release of the
      appropriate Indemnitee from all claims arising out of or in any way relating
      to
      the circumstances involving such claim) so long as in any such event the
      Indemnitor shall have stated in writing delivered to the Indemnitee that, as
      between the Indemnitor and the Indemnitee, the Indemnitor is responsible to
      the
      Indemnitee with respect to such claim to the extent and subject to the
      limitations set forth herein; provided,
      that
      the Indemnitor shall not be entitled to control the defense of any claim in
      the
      event that in the reasonable opinion of counsel for the Indemnitee, there are
      one or more material defenses available to the Indemnitee which are not
      available to the Indemnitor; provided
      further,
      that
      with respect to any claim as to which the Indemnitee is controlling the defense,
      the Indemnitor will not be liable to any Indemnitee for any settlement of any
      claim pursuant to this Section
      13.2
      that is
      effected without its prior written consent, which consent shall not be
      unreasonably withheld. To the extent that the undertaking to indemnify, pay
      and
      hold harmless set forth in this Section
      13.2
      may be
      unenforceable because it is violative of any law or public policy, the Issuer
      shall contribute the maximum portion which it is permitted to pay and satisfy
      under applicable law, to the payment and satisfaction of all Indemnified
      Liabilities incurred by the Indemnitees or any of them.
      For the
      avoidance of doubt, the provisions in this Section
      13.2
      shall
      apply only to claims relating to or arising out of the Note
      Documents.

     

    
      
        
        

      

      
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    13.3 [Reserved].  

     

    13.4 Amendments
      and Waivers.
      No
      amendment, modification, termination or waiver of any provision of this
      Agreement, shall in any event be effective without the written consent of the
      Required Purchasers and the Issuer; provided,
      however,
      that no amendment that will, by its terms, affect the rights of a particular
      Series of Notes (the “Affected
      Notes”)
      adversely relative to the other Series of Notes shall be effective without
      the
      written consent of those Note Purchasers holding a majority of such Affected
      Notes; provided,
      further,
      that no
      amendment, modification, waiver or consent shall, unless in writing and signed
      by each Note Purchaser affected thereby, do any of the following: (a) extend
      the
      maturity or time of, or right to receive, payment of principal of, or premium,
      if any, or interest on, any Notes (other than as a result of waiving a
      prepayment required under Section
      3.2
      or a
      Default or Event of Default giving rise to a right of acceleration, which shall
      each be by written consent of the Required Purchasers); or (b) reduce the rate
      of interest or the principal amount of any of the Notes or increase the relative
      amount of interest which the Issuer may pay through capitalizing the same;
      or
      (c) impair or affect the right of any Note Purchaser to institute suit for
      enforcement of any such payment to which such Note Purchaser is entitled
      pursuant to this Agreement; or (d) alter the percentage of Note Purchasers
      necessary to modify or take action under this Agreement; or (e) amend this
      Section
      13.4.
      Any
      waiver or consent shall be effective only in the specific instance and for
      the
      specific purpose for which it was given. No notice to or demand on any Issuer
      in
      any case shall entitle such Person to any further notice or demand in similar
      or
      other circumstances. Any amendment, modification, termination, waiver or consent
      effected in accordance with this Section
      13.4
      shall be
      binding upon each holder of the Notes at the time outstanding and each future
      holder thereof.

     

    13.5 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 limitation
      of,
      another covenant shall not avoid the occurrence of an Event of Default or
      Default if such action is taken or condition exists.

     

    13.6 Notices.
      All
      notices, demands or other communications to be given or delivered under or
      by
      reason of the provisions of this Agreement shall be in writing and delivered
      personally or sent via a nationally recognized overnight courier. Such notices,
      demands and other communications will be delivered or sent to the address
      indicated below:

     

    If
      to the
      Issuer or any other Note Party:

     

    c/o
      HIG
      Capital

    855
      Boylston Street

    11th
      Floor

    Boston,
      MA 02116

    Telephone:
      (617) 262-8455

    Facsimile:
      (617) 262-1505

    Attention:
      John Black/John Tatum

     

    
      
        
        

      

      
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    with
      a
      copy to:

     

    c/o
      HIG
      Capital

    1650
      Market Street

    36th
      Floor

    Philadelphia,
      PA 19103

    Telephone:
      (267) 207-2732

    Facsimile:
      (267) 207-2733

    Attention:
      William Nolan

    


    with
      a
      copy to:

     

    Bingham
      McCutchen LLP

    399
      Park
      Avenue

    New
      York,
      New York 10022

    Telephone:
      (212) 705-7000

    Facsimile:
      (212) 702-3644

    Attention:
      Neil Townsend, Esq.

    


    If
      to
      Note Purchasers or to either Collateral Agent:

    


    c/o
      Sankaty Advisors, LLC

    111
      Huntington Avenue

    Boston,
      Massachusetts 02199

    Telephone:
      (617) 516-2000

    Facsimile:
      (617) 516-2710

    Attention:
      James Athanasoulas

    


    with
      a
      copy to:

    


    Ropes
      & Gray LLP

    One
      International Place

    Boston,
      Massachusetts 02110

    Telephone:
      (617) 951-7483

    Facsimile:
      (617) 951-7050

    Attention:
      Alyson Allen, Esq.

    


    and

    


    Ropes
      & Gray LLP

    1211
      Avenue of the Americas

    New
      York,
      New York 10036-8704

    Telephone:
      (212) 596-9000

    Facsimile:
      (212) 596-9090

    Attention:
      Marc E. Hirschfield, Esq.

    


    or
      such
      other address or to the attention of such other Person as the recipient party
      shall have specified by prior written notice to the sending party; provided
      that the
      failure to deliver copies of notice as indicated above shall not affect the
      validity of such notice. Any such communication shall be deemed to have been
      received when actually delivered or refused.

     

    
      
        
        

      

      
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    13.7 Survival
      of Warranties and Certain Agreements.

     

    13.7.1. Any
      liability of any Note Party for any breach of, or inaccuracy in, the
      representations and warranties made by it herein shall survive the execution
      and
      delivery of this Agreement, the sale and delivery of the Notes hereunder and
      shall continue until the repayment of the Notes and the Note Obligations in
      full; provided,
      that if
      all or any part of such payment is set aside, such Note Party shall remain
      liable for any breach of, or inaccuracy in, the representations and warranties
      made by it herein as if no such payment had been made.

     

    13.7.2. Any
      liability of any Note Party for any breach of or default in the performance
      of
      the agreements made by it herein shall survive the execution and delivery of
      this Agreement, the sale and delivery of the Notes hereunder and shall continue
      until the repayment of the Notes and the Note Obligations; provided,
      that if
      all or part of such payment is set aside, such Person shall remain liable for
      any breach of or default in the performance of such agreements.

     

    13.7.3. Notwithstanding
      anything in this Agreement or implied by law to the contrary, the agreements
      of
      the Note Parties set forth in Sections
      13.1
      and
13.2
      shall
      survive the payment of the Notes, and the termination of this
      Agreement.

     

    13.8 Failure
      or Indulgence Not Waiver; Remedies Cumulative.
      No
      failure or delay on the part of any Note Purchaser in the exercise of any power,
      right or privilege hereunder or under the Notes 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. All rights and remedies existing under this Agreement or
      the
      Notes are cumulative to and not exclusive of, any rights or remedies otherwise
      available.

     

    13.9 Severability.
      If and
      to the extent that any provision in this Agreement or the Notes shall be
      invalid, illegal or unenforceable in any jurisdiction, the validity, legality
      and enforceability of the remaining provisions of this Agreement, the Notes
      or
      of the other obligations of any Note Party under any of such provisions, or
      of
      such provision or obligation in any other jurisdiction, or of such provision
      to
      the extent not invalid, illegal or unenforceable shall not in any way be
      affected or impaired thereby.

     

    13.10 Heading.
      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.

     

    13.11 Applicable
      Law.
      This
      Agreement shall be governed by, and shall be construed and enforced in
      accordance with, the laws of the State of New York.

     

    13.12 Successors
      and Assigns; Subsequent Holders.
      This
      Agreement shall be binding upon the parties hereto and their respective
      successors and assigns and shall inure to the benefit of the parties hereto
      and
      the successors and assigns of the Note Purchasers. The terms and provisions
      of
      this Agreement and all certificates delivered pursuant hereto shall inure to
      the
      benefit of any assignee or transferee of the Notes, to the extent the assignment
      is permitted hereunder, and in the event of such transfer or assignment, the
      rights and privileges herein conferred upon the Note Purchasers shall
      automatically extend to and be vested in such transferee or assignee, all
      subject to the terms and conditions hereof. The respective rights or any
      interest therein or hereunder of a Note Party may not be assigned without the
      written consent of the Required Purchasers. Any assignee shall execute a joinder
      to this Agreement.

     

    
      
        
        

      

      
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    13.13 CONSENT
      TO JURISDICTION AND SERVICE OF PROCESS. ALL
      JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY NOTE PARTY WITH RESPECT TO THIS
      AGREEMENT OR ANY OTHER NOTE DOCUMENTS MAY BE BROUGHT IN ANY STATE OR FEDERAL
      COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK IN NEW YORK COUNTY,
      AND
      BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH NOTE PARTY ACCEPTS FOR ITSELF
      AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
      JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY
      ANY
      JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT SUBJECT, HOWEVER,
      TO
      RIGHTS OF APPEAL. EACH NOTE PARTY HEREBY AGREES THAT SERVICE UPON IT IN THE
      MANNER PROVIDED FOR THE GIVING OF NOTICES IN SECTION 13.6 SHALL CONSTITUTE
      SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN
      ANY
      OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF ANY NOTE PURCHASER
      TO
      BRING PROCEEDINGS AGAINST THE ISSUER IN THE COURTS OF ANY OTHER
      JURISDICTION.

     

    13.14 WAIVER
      OF JURY TRIAL. THE
      PARTIES HERETO HEREBY WAIVE, TO THE FULL EXTENT PERMITTED BY APPLICABLE LAW,
      TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION
      WITH, OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER NOTE DOCUMENT OR THE
      VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF.
      NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY, NO CLAIM
      MAY BE MADE BY ANY NOTE PARTY AGAINST ANY NOTE PURCHASER FOR ANY LOST PROFITS
      OR
      ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY BREACH OR
      WRONGFUL CONDUCT (OTHER THAN WILLFUL MISCONDUCT CONSTITUTING ACTUAL FRAUD)
      IN
      CONNECTION WITH, ARISING OUT OF OR IN ANY WAY RELATED TO THE TRANSACTIONS
      CONTEMPLATED HEREUNDER OR UNDER THE OTHER NOTE DOCUMENTS, OR ANY ACT, OMISSION
      OR EVENT OCCURRING IN CONNECTION THEREWITH. EACH NOTE PARTY HEREBY WAIVES,
      RELEASES AND AGREES NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SUCH DAMAGES. EACH
      NOTE PARTY AGREES THAT THIS SECTION 13.14 IS A SPECIFIC AND MATERIAL ASPECT
      OF
      THIS AGREEMENT AND ACKNOWLEDGES THAT THE NOTE PURCHASERS WOULD NOT EXTEND TO
      THE
      ISSUER ANY MONIES HEREUNDER IF THIS SECTION 13.14 WERE NOT PART OF THIS
      AGREEMENT. 

     

    13.15 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 such 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, and when written or telephonic
      notification of such execution and authorization of delivery thereof has been
      received by the Note Parties and the Note Purchasers.

     

    
      
        
        

      

      
        -
          62
          -

        
          

        

      

      
        
        

      

    

     

    13.16 Confidentiality.
      The
      Collateral Agents and each Note Purchaser agrees to keep confidential (and
      to
      cause their respective officers, directors, employees, agents and
      representatives to keep confidential) all information, materials and documents
      concerning the business of Parent and its Subsidiaries furnished to such Note
      Purchaser by Parent or any of its Subsidiaries or on its behalf pursuant to
      this
      Agreement (the “Information”).
      Notwithstanding the foregoing, the Collateral Agents and any Note Purchaser
      shall be permitted to disclose Information (i) to its officers, managers,
      directors, employees, agents and representatives provided that such Information
      shall remain confidential; (ii) to the extent required by applicable laws and
      regulations or by any subpoena or similar legal process, or to the extent
      requested by any governmental agency or authority; (iii) to the extent such
      Information (A) becomes publicly available other than as a result of a breach
      of
      this Agreement, (B) becomes available to such Note Purchaser on a
      non-confidential basis from a source other than Parent or any of its
      Subsidiaries or (C) was available to the Note Purchaser on a non-confidential
      basis prior to its disclosure to the Note Purchaser by Parent or any of its
      Subsidiaries; (iv) to the extent Parent or any of its Subsidiaries shall have
      consented to such disclosure in writing; (v) in connection with the assignment
      of any Notes other than to a competitor of the business of Parent and its
      Subsidiaries, provided that the recipient of Information agrees to maintain
      the
      confidentiality of the Information; or (vi) to its respective investors or
      lenders in connection with any regular or otherwise required reporting performed
      by such Note Purchaser to any such Persons. The Collateral Agents and any other
      Note Purchaser (and each employee, representative or agent or advisor of the
      Collateral Agents or any other Note Purchaser) may, to the extent necessary
      to
      prevent the transaction from being described as a “confidential transaction”
under Treasury Regulation section 1.6011-4(b)(3), disclose the tax treatment
      and
      tax structure of the transaction and any related tax strategies.

     

    13.17 USA
      PATRIOT ACT.
      Each
      Note Purchaser subject to the USA PATRIOT ACT (Title III of Pub. L. 107-56
      (signed into law October 26, 2001)) (the “Act”)
      hereby
      notifies the Note Parties that pursuant to the requirements of the Act, it
      may
      be required to obtain, verify and record information that identifies the Note
      Parties, which information includes the name and address of the Note Parties
      and
      other information that will allow such Note Purchaser to identify the Note
      Parties in accordance with the Act. The Note Parties hereby agree to provide
      any
      such information upon request, and to the disclosure of such information
      pursuant to the requirements of the Act and notwithstanding any other provision
      hereof.

     

    13.18 Entirety.
      This
      Agreement and the other Note Documents embody the entire agreement among the
      parties and supersede all prior agreements and understandings, if any, relating
      to the subject matter hereof and thereof. 

     

    13.19 Joinder.
      The
      Note Parties, Collateral Agents and Note Purchasers hereby acknowledge and
      agree
      that (a) the consummation of the Acquisition shall occur on the Closing
      Date simultaneously with the initial funding of the purchase of the Notes on
      the
      Closing Date, the proceeds of which will be used to fund the Acquisition, and
      (b) in connection therewith, the Acquired Entities party to this Agreement
      as of
      the Closing Date shall be deemed parties to the Note Documents, and their
      counterparts to the Note Documents deemed delivered and effective against such
      parties, only upon and immediately following (i) the consummation of the
      Acquisition and (ii) release of the resolutions regarding the Note Documents
      delivered to the Collateral Agents on the Closing Date of the Note Parties’
respective boards of directors as constituted immediately following the
      consummation of the Acquisition.

     

    
      
        
        

      

      
        -
          63
          -

        
          

        

      

      
        
        

      

    

     

    13.20 Securities
      Laws.
      Each
      Note Purchaser agrees that, if it shall receive any material non-public
      information with respect to the Note Parties, it shall not trade in the Capital
      Stock of the Parent unless and until such Note Purchaser agrees in writing
      to be
      subject to the same policies applicable to Sponsor with respect to trading
      in
      the Capital Stock of the Parent. Each Note Purchaser is aware, and will advise
      its agents and representatives who are provided with any material non-public
      information with respect to the Note Parties, of the restrictions imposed by
      the
      United States securities laws on the purchase or sale of securities by any
      person who has received material, non-public information from the issuer of
      such
      securities and on the communication of such information to any other person
      when
      it is reasonably foreseeable that such other person is likely to purchase or
      sell such securities in reliance upon such information. Any disclosure of any
      material non-public information with respect to the Note Parties is made in
      reliance upon the foregoing, the confidentiality obligations of the Note
      Purchasers set forth herein and upon Rule 100(b)(2)(ii) of Regulation FD as
      promulgated by the Securities and Exchange Commission. 

     

    
      
        
        

      

      
        -
          64
          -

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
      by
      the respective duly authorized officers of the undersigned and by the
      undersigned as of the date first written above.

     

    
      	
              THE
                ISSUER:

            	
              ENCOMPASS GROUP AFFILIATES, INC., a Delaware corporation

            
	 	 	 
	 	
              By:

            	
              /s/
                Wayne I. Danson

            	 
              
	 	 	
              Name: 
                Wayne I. Danson

            
	 	 	
              Title: 
                President

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              GUARANTORS:

            	
              ENCOMPASS
                GROUP AFFILIATES, INC., a Florida corporation

            
	 	 	 
	 	
              By:

            	
              /s/
                Wayne I. Danson

            	 
              
	 	 	
              Name:
                 Wayne I. Danson

            
	 	 	
              Title: 
                Chief Executive Officer

            
	 	 	 
	 	
              SPECTRUCELL,
                INC.

            
	 	 	 
	 	
              By:

            	
              /s/
                John E. Donahue

            	 
	 	 	
              Name:
                 John E. Donahue

            
	 	 	
              Title: 
                Chief Financial Officer

            
	 	 	 
	 	
              HUDSON
                STREET INVESTMENTS, INC.

            
	 	 	 
	 	
              By:

            	
              /s/
                John E. Donahue

            	 
	 	 	
              Name:
                 John E. Donahue

            
	 	 	
              Title: 
                Chief Financial Officer

            
	 	 	 
	 	
              CYBER-TEST,
                INC.

            
	 	 	 
	 	
              By:

            	
              /s/
                John E. Donahue

            	 
	 	 	
              Name:
                 John E. Donahue

            
	 	 	
              Title: 
                Chief Financial Officer

            
	 	 	 
	 	
              VANCE
                BALDWIN, INC.

            
	 	 	 
	 	
              By:

            	
              /s/
                John E. Donahue

            	 
	 	 	
              Name:
                 John E. Donahue

            
	 	 	
              Title: 
                Chief Financial Officer

            
	 	 	 
	 	
              TRITRONICS,
                INC.

            
	 	 	 
	 	
              By:

            	
              /s/
                John E. Donahue

            	 
	 	 	
              Name:
                 John E. Donahue

            
	 	 	
              Title:
                 Chief Financial Officer

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    
      	
              NOTE
                PURCHASERS:

            	
              PROSPECT
                HARBOR CREDIT PARTNERS, L.P.

            
	 	 
	 	
              By: 

            	
                   
                /s/ Timothy Barns

            
	 	 	
              Name:
                Timothy Barns

            
	 	 	
              Title:  
                Managing Director

            
	 	 
	 	
              SANKATY
                CREDIT OPPORTUNITIES II, L.P.

            
	 	 
	 	
              By:

            	
                   
                /s/ Timothy Barns

            
	 	 	
              Name:
                Timothy Barns

            
	 	 	
              Title:  
                Managing Director

            
	 	 
	 	
              SANKATY
                CREDIT OPPORTUNITIES III, L.P.

            
	 	 
	 	
              By:

            	
                   
                /s/ Timothy Barns

            
	 	 	
              Name:
                Timothy Barns

            
	 	 	
              Title:  
                Managing Director

            
	 	 
	 	
              RGIP,
                LLC

            
	 	 
	 	
              By:

            	
                   
                /s/ Ann L. Milner

            
	 	 	
              Name:
                Ann L. Milner

            
	 	 	
              Title:  
                Managing Member

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    
      	
              FIRST
                LIEN COLLATERAL AGENT:

            	
              SANKATY
                ADVISORS, LLC

            
	 	 
	 	
              By: 

            	
                   
                /s/ Timothy Barns

            
	 	 	
              Name:
                Timothy Barns

            
	 	 	
              Title:  
                Managing Director

            
	 	 
	
              SECOND
                LIEN COLLATERAL AGENT:

            	
              SANKATY
                ADVISORS, LLC

            
	 	 
	 	
              By:

            	
                   
                /s/ Timothy Barns

            
	 	 	
              Name:
                Timothy Barns

            
	 	 	
              Title:  
                Managing Director

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      I

     

    ALLOCATION
      AND PURCHASE PRICE FOR SENIOR NOTES

    


    
      	
              Note Purchaser

            	 	
              Principal Amount ($)

            	 	
              Purchase Price ($)

            	 
	
              PROSPECT HARBOR
                CREDIT PARTNERS, L.P.

            	 	
              $

            	
              12,563,452.00

            	 	
              $

            	
              12,375,000.00

            	 
	
              RGIP,
                LLC

            	 	
              $

            	
              126,904.00

            	 	
              $

            	
              125,000.00

            	 
	
              Total

            	 	
              $

            	
              12,690,355.00

            	 	
              $

            	
              12,500,000.00

            	 


    

    


    ALLOCATION
      AND PURCHASE PRICE FOR SERIES A SUBORDINATED NOTES

    


    
      	
              Note Purchaser

            	 	
              Principal Amount ($)

            	 	
              Purchase Price ($)

            	 
	
              PROSPECT
                HARBOR CREDIT PARTNERS, L.P.

            	 	
              $

            	
              1,109,692.00

            	 	
              $

            	
              1,087,498.00

            	 
	
              SANKATY
                CREDIT OPPORTUNITIES II, L.P.

            	 	
              $

            	
              2,191,719.00

            	 	
              $

            	
              2,147,885.00

            	 
	
              SANKATY
                CREDIT OPPORTUNITIES III, L.P. 

            	 	
              $

            	
              7,305,732.00

            	 	
              $

            	
              7,159,617.00

            	 
	
              RGIP,
                LLC

            	 	
              $

            	
              107,143.00

            	 	
              $

            	
              105,000.00

            	 
	
              Total

            	 	
              $

            	
              10,714,286.00

            	 	
              $

            	
              10,500,000.00

            	 


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SCHEDULE
      I(A)

     

    ALLOCATION
      AND PURCHASE PRICE FOR SERIES B SUBORDINATED NOTES

    


    
      	
              Note Purchaser

            	 	
              Principal Amount ($)

            	 	
              Purchase Price ($)

            	 
	
              PROSPECT
                HARBOR CREDIT PARTNERS, L.P.

            	 	
              $

            	
              1,373,904.18

            	 	
              $

            	
              1,346,426.00

            	 
	
              SANKATY
                CREDIT OPPORTUNITIES II, L.P.

            	 	
              $

            	
              2,713,557.34

            	 	
              $

            	
              2,659,286.00

            	 
	
              SANKATY
                CREDIT OPPORTUNITIES III, L.P. 

            	 	
              $

            	
              9,045,191.55

            	 	
              $

            	
              8,864,288.00

            	 
	
              RGIP,
                LLC

            	 	
              $

            	
              132,653.06

            	 	
              $

            	
              130,000.00

            	 
	
              Total

            	 	
              $

            	
              13,265,306.12

            	 	
              $

            	
              13,000,000.00

            	 


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    ADDRESSES
      OF THE NOTE PURCHASERS

    


    RGIP,
      LLC

    Ropes
      & Gray LLP

    One
      International Place

    Boston,
      MA 02110

    Attn:
      Erik Johnston

    Fax:
      (617) 951-7050

    


    With,
      in
      each case, copies to:

    Ropes
      & Gray LLP

    One
      International Place

    Boston,
      Massachusetts 02110

    Telephone:
      (617) 951-7483

    Facsimile:
      (617) 951-7050

    Attention:
      Alyson Allen, Esq.

    


    and

    


    Ropes
      & Gray LLP

    1211
      Avenue of the Americas

    New
      York,
      New York 10036-8704

    Telephone:
      (212) 596-9000

    Facsimile:
      (212) 596-9090

    Attention:
      Marc E. Hirschfield, Esq.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      II

    


    WIRE
      INSTRUCTIONS OF THE NOTE PURCHASERS

    


    PROSPECT
      HARBOR CREDIT PARTNERS

    HSBC
      Bank
      USA, N.A.

    ABA
      #:
      021001088

    Account
      #:090332555

    Account
      Name: PROSPECT HARBOR CREDIT PARTNERS-OPERATING

    Swift
      Code: MRMDUS33

    


    SANKATY
      CREDIT OPPORTUNITIES II

    HSBC
      Bank
      USA, N.A.

    ABA
      #:
      021001088

    Account
      #: 090332571

    Account
      Name: Sankaty Credit Opportunities II LP Operating

    Swift
      Code: MRMDUS33

    


    SANKATY
      CREDIT OPPORTUNITIES III

    HSBC
      Bank
      USA, N.A.

    ABA#
      021001088

    Account#
      090330170

    Reference:
      Sankaty Credit Opportunities III LP Operating

    SWIFT
      Code: MRMDUS33

    


    RGIP,
      LLC

    Bank
      Name: Bank of America

    Account
      Name: RGIP, LLC

    ABA:
      0260
      0959 3

    Account
      #: 00051280897

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    ANNEX
      I

    


    DEFINITIONS
      TO NOTE PURCHASE AGREEMENT

     

    “Acquired
      Entities”
has
      the
      meaning set forth in the recitals.

     

    “Acquisition”
has
      the
      meaning set forth in the recitals.

     

    “Acquisition
      Agreement”
has
      the
      meaning set forth in the recitals.

     

    “Additional
      Issuance”
has
      the
      meaning set forth in Section
      2.5.

     

    “Affected
      Notes”
has
      the
      meaning set forth in Section
      13.4.

     

    “Affiliate”
of
      any
      Person means (a) any Person which, directly or indirectly, is in control of,
      is
      controlled by, or is under common control with such Person, or (b) any Person
      who is a director or executive officer (i) of such Person, (ii) of any
      Subsidiary of such Person or (iii) of any Person described in clause (a) above.
      For purposes of this definition, control of a Person means the power, direct
      or
      indirect, (x) to vote 10% or more of the securities having ordinary voting
      power
      for the election of directors of such Person, or (y) to direct or cause the
      direction of the management and policies of such Person whether by contract
      or
      otherwise.

     

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

     

    “Annual
      Compensation”
means
      base salary, accrued compensation, bonuses, expense reimbursements, automobile
      allowances and other forms of remuneration paid to Key Employees in connection
      with their employment with the Note Parties. 

     

    “Anti-Terrorism
      Laws”
means
      any laws relating to terrorism or money laundering, including Executive Order
      No. 13224, the USA Patriot Act, the laws comprising or implementing the Bank
      Secrecy Act, and the laws administered by the United States Treasury
      Department’s Office of Foreign Asset Control (as any of the foregoing laws may
      from time to time be amended, renewed, extended, or replaced).

     

    “Applicable
      Premium”
means
      the premium to be due and payable in connection with any acceleration or
      prepayment of the Notes pursuant to the Agreement (excluding any scheduled
      amortization payments). With respect to the Senior Notes, each such prepayment
      premium shall be equal, with respect to any such acceleration or prepayment
      made
      or first required to be made during any period set forth in the table below,
      to
      the percentage set forth beside such period in such table of the aggregate
      principal amount of the Senior Notes then prepaid or required to be
      prepaid:

     

    
      	
              Period

            	 	
              Applicable Premium

            	 
	 	 	 	 
	
              August
                17, 2007 through

              August
                16, 2008

            	 	 	
              2

            	
              %

            
	 	 	 	 	 
	
              August
                17, 2008 through

              August
                16, 2009

            	 	 	
              1

            	
              %

            
	 	 	 	 	 
	
              Subsequent
                to August 17, 2009

            	 	 	
              0

            	
              %

            


    

     

    
      
        
        

      

      
        Annex
          I-1

        
          

        

      

      
        
        

      

    


    With
      respect to the Series A Subordinated Notes, each such prepayment premium shall
      be equal, with respect to any such acceleration or prepayment made or first
      required to be made during any period set forth in the table below, to the
      percentage set forth beside such period in such table of the aggregate principal
      amount of the Series A Subordinated Notes then prepaid or required to be
      prepaid:

     

    
      	
              Period

            	 	
              Applicable Premium

            	 
	 	 	 	 
	
              August
                17, 2007 through

              August
                16, 2008

            	 	 	
              3

            	
              %

            
	 	 	 	 	 
	
              August
                17, 2008 through

              August
                16, 2009

            	 	 	
              2

            	
              %

            
	 	 	 	 	 
	
              August
                17, 2009 through

              August
                16, 2010

            	 	 	
              1

            	
              %

            
	 	 	 	 	 
	
              Subsequent
                to August 17, 2010

            	 	 	
              0

            	
              %

            


    

    


     

    With
      respect to the Series B Subordinated Notes, each such prepayment premium shall
      be equal, with respect to any such acceleration or prepayment made or first
      required to be made during any period set forth in the table below, to the
      percentage set forth beside such period in such table of the aggregate principal
      amount of the Series B Subordinated Notes then prepaid or required to be
      prepaid:

     

    
      	
              Period

            	 	
              Applicable Premium

            	 
	 	 	 	 
	
              August
                1, 2008 through

              August
                1, 2009

            	 	 	
              3

            	
              %

            
	 	 	 	 	 
	
              August
                1, 2009 through

              August
                1, 20010

            	 	 	
              2

            	
              %

            
	 	 	 	 	 
	
              August
                1, 2010 through

              August
                1, 2011

            	 	 	
              1

            	
              %

            
	 	 	 	 	 
	
              Subsequent
                to August 1, 2011

            	 	 	
              0

            	
              %

            


    

    


     

    “Applicable
      Rate”
means
      the rate of interest to be paid on the unpaid principal amount of the Notes from
      and after the Closing Date. With respect to the Senior Notes, for the period
      from and after the Closing Date, the Applicable Rate shall be a rate equal
      to
      LIBOR + 3.75%. 

     

    With
      respect to the Subordinated Notes, for the period from and after the Closing
      Date, the Applicable Rate shall be 13% per annum payable in cash; provided,
      that
      the leverage spread as set forth below (the “Leverage
      Spread”)
      shall
      be added to the 13% interest payable in cash and the Issuer may elect such
      Leverage Spread to be paid in cash or capitalized, compounded and added to
      the
      unpaid principal amount of the Subordinated Notes on the applicable Interest
      Payment Date (whereupon from and after such date such additional amounts shall
      also accrue interest) (such interest, “PIK
      Interest”).
      The
      Leverage Spread shall be calculated on a leverage based grid as follows, where
      the Leverage Ratio as set forth in the computations delivered pursuant to
Section
      7.24.2.2
      for the
      most recent Trailing Twelve Month Period equals “x” and is calculated as of the
      end of the most recent fiscal month for which financial reports have been
      delivered pursuant to the Agreement.

     

    
      
        
        

      

      
        Annex
          I-2

        
          

        

      

      
        
        

      

    

     

    
      	
              Leverage Ratio

            	 	
              Applicable Rate

            	 
	
              x
                >
                3.5:1.00

            	 	 	
              4.0

            	
              %

            
	
              3.00:1.00
                <
                x
                < 3.50:1.00

            	 	 	
              2.0

            	
              %

            
	
              2.50:1.00
                <
                x
                < 3.00:1.00

            	 	 	
              1.0

            	
              %

            
	
              x
                < 2.50:1.00

            	 	 	
              0.0

            	
              %

            


    

     

    “Audited
      Financial Statements”
has
      the
      meaning set forth in Section
      5.5. 

     

    “Bankruptcy
      Code”
means
      Title 11 of the United States Code, as now or hereafter in effect, or any
      successor to such statute.

     

    “Bankruptcy
      Default”
means
      any Event of Default referred to in Section 8.8
      or
8.9.

     

    “Benefit
      Plan”
has
      the
      meaning set forth in Section
      5.18.

     

    “Blockage
      Notice”
has
      the
      meaning set forth in Section
      11.2.

     

    “Blockage
      Period”
has
      the
      meaning set forth in Section
      11.2.

     

    “Blocked
      Person”
has
      the
      meaning set forth in Section
      5.26.

     

    “Business
      Day”
means
      any day other than a Saturday, a Sunday or a day on which commercial banks
      in
      Boston, Massachusetts are required or authorized to be closed.

     

    “Capital
      Expenditures”
means,
      without duplication, all expenditures accounted as a capital expenditure under
      GAAP.

     

    “Capital
      Stock”
means
      all shares, interests, participations, rights to purchase, options, warrants,
      general or limited partnership interests, or limited liability company interests
      or other equivalents (regardless of how designated) of or in a corporation,
      partnership, limited liability company or equivalent entity, whether voting
      or
      nonvoting, including common stock, preferred stock or any other “equity
      security” (as such term is defined in Rule 3a11-1 of the Rules and Regulations
      promulgated by the Securities and Exchange Commission (17 C.F.R. § 240.3a11-1)
      under the Securities and Exchange Act of 1934, as the same shall be from time
      to
      time be amended, renewed, extended or replaced.

     

    “Capitalized
      Lease”
means
      any lease which is required to be capitalized on the balance sheet of the lessee
      in accordance with GAAP, including Statement Nos. 13 and 98 of the Financial
      Accounting Standards Board.

     

    
      
        
        

      

      
        Annex
          I-3

        
          

        

      

      
        
        

      

    


    “Cash
      Equivalents”
means:
      (a) marketable direct obligations issued or unconditionally guaranteed by the
      United States Government or issued by any agency thereof and backed by the
      full
      faith and credit of the United States, in each case maturing within one (1)
      year
      from the date of acquisition thereof; (b) commercial paper maturing no more
      than
      365 days from the date issued (i) by any Bank (or its holding company) or (ii)
      at the time of acquisition, having a rating of at least A-1 from Standard &
Poor’s Rating Services or at least P-1 from Moody’s Investors Service, Inc.; (c)
      certificates of deposit or bankers’ acceptances maturing within 365 days from
      the date of issuance thereof issued by, or repurchase agreements backed by
      United States governmental securities from (i) the Bank or (ii) any commercial
      bank organized under the laws of the United States of America or any state
      thereof or the District of Columbia having combined capital and surplus of
      not
      less than $500,000,000 and whose debt obligations, or those of a holding company
      of which it is a Subsidiary, are rated not less than A (or the equivalent
      rating) by a nationally recognized investment rating agency and not subject
      to
      setoff rights in favor of such bank; and (d) United States money market funds
      that invest solely in obligations issued or guaranteed by the United States
      of
      America or an agency thereof.

     

    “CERCLA”
means
      the Comprehensive Environmental Response, Compensation, and Liability Act.
      

     

    “Change
      of Control”
means
      any of the following (or any combination of the following) whether arising
      from
      any single transaction or event or any series of transactions or events (whether
      as the most recent transaction in a series of transactions) which, individually
      or in the aggregate, results in:

     

    (a) a
      change
      in the ownership of Parent, such that HIG Capital and its Affiliates fails
      to
      (i) maintain its ownership, both legally and beneficially, of at least 85%
      of
      the issued and outstanding voting and non-voting Capital Stock of Parent owned
      by HIG Capital and its Affiliates as of the Closing Date or (ii) have the power
      to control the board of directors and to direct or cause the direction of the
      management and policies of Parent; or

     

    (b) a
      change
      in the ownership of the Company, such that Parent fails to (i) own legally
      and
      beneficially, free and clear of any Liens (except the Liens in favor the
      Collateral Agents), 100%, on a fully diluted basis, of the issued and
      outstanding voting and non-voting securities of, and other equity interests
      in
      the Company or (ii) have the power control the board of directors and to direct
      or cause the direction of the management and policies of the Issuer;
      or

     

    (c) a
      sale of
      all or substantially all of the assets of the Note Parties.

     

    “Change
      of Control Notice”
has
      the
      meaning set forth in Section
      3.2.4.2.

     

    “Change
      of Control Prepayment Notice”
has
      the
      meaning set forth in Section
      3.2.4.2.

     

    “Charter
      Documents”
means,
      with respect to any Person, such Person’s articles and by-laws of a corporation,
      operating agreement, if a limited liability company or unlimited liability
      company, and limited partnership agreement and certificate of limited
      partnership, of a limited partnership, and other similar governing documents,
      with respect to any other entity.

     

    “Closing
      Date”
means
      the Initial Closing Date and/or the Series B Closing Date, as
      applicable.

     

    “Code”
means
      the United States Internal Revenue Code of 1986, together with all rules and
      regulations issued thereunder, as now and hereafter in effect, as codified
      at 26
      U.S.C. §1 et
      seq
      or any
      successor provision thereto.

     

    “Collateral”
has
      the
      meaning set forth in the recitals and means all collateral on which a lien
      is
      granted or purported to be granted pursuant to the Collateral
      Documents.

     

    
      
        
        

      

      
        Annex
          I-4

        
          

        

      

      
        
        

      

    


    “Collateral
      Agents”
means
      the First Lien Collateral Agent and the Second Lien Collateral Agent.


     

    “Collateral
      Documents”
means
      the First Lien Collateral Documents and the Second Lien Collateral
      Documents.

     

    “Consolidated”,
      when
      used with reference to any term, mean that term as applied to the accounts
      of
      Parent (or other specified Person) and all of its Subsidiaries (or other
      specified group of Persons), or such of its Subsidiaries as may be specified,
      consolidated (or combined), in accordance with GAAP and with appropriate
      deductions for minority interests in Subsidiaries.

     

    “Consolidated
      Tangible Assets”
means,
      as of the date of any determination thereof, (i) the Consolidated total assets
      of Parent and its Subsidiaries minus (ii) the Consolidated intangible assets
      of
      Parent and its Subsidiaries, as determined in accordance with GAAP.

     

    “Controlled
      Group”
means
      all members of a controlled group of corporations and all trades or businesses
      (whether or not incorporated) under common control which, together with any
      Note
      Party, are treated as a single employer under Section 414 of the
      Code.

     

    “Default”
means
      any event, act or condition which with notice or lapse of time, or both, would
      constitute an Event of Default.

     

    “Documents”
means
      the Note Documents, the Acquisition Agreement, the Charter Documents, the
      Collateral Documents and all documents, certificates and agreements delivered
      with respect thereto, in each case, together with any schedules, exhibits,
      appendices or other attachments thereto.

     

    “Enforcement
      Action”
has
      the
      meaning set forth in Section
      11.3.1.

     

    “Enforcement
      Notice”
has
      the
      meaning set forth in Section
      11.3.1.

     

    “Environmental
      Laws”
means
      any applicable federal, state, local and foreign statutes, laws, regulations,
      ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
      franchises, licenses, agreements or governmental restrictions relating to
      pollution and the protection of the environment or the release of any materials
      into the environment, including but not limited to those related to Hazardous
      Substances or wastes, air emissions and discharges to waste or public
      systems.

     

    “EPA”
means
      the Environmental Protection Agency. 

     

    “Equipment”
means
      and includes, as to each Note Party, all of such Note Party’s goods (other than
      Inventory) whether now owned or hereafter acquired and wherever located
      including, without limitation, all equipment, machinery, apparatus, motor
      vehicles, fittings, furniture, furnishings, fixtures, parts, accessories and
      all
      replacements and substitutions therefor or accessions thereto.

     

    “ERISA”
has
      the
      meaning set forth Section
      5.18.

     

    
      
        
        

      

      
        Annex
          I-5

        
          

        

      

      
        
        

      

    


    “ERISA
      Group Person”
means
      Parent, any of its Subsidiaries and any Person which is a member of the
      controlled group or under common control with Parent or any of its Subsidiaries
      within the meaning of section 414 of the Code or section 4001(a)(14) of
      ERISA.

     

    “Events
      of Default”
has
      the
      meaning set forth in SECTION 8.

     

    “Excess
      Cash Flow”
means
      for any fiscal year, the excess (if any), of (a) EBITDA for such fiscal year,
      minus (b) the sum during such fiscal year of (i) Interest Expense paid in cash,
      plus (ii) Income Tax Expense paid in cash, plus (iii) Capital Expenditures,
      plus
      (iv) the increase in “net working capital” during such fiscal year, plus (v)
      scheduled payments on Indebtedness, plus (vi) prepayments of the Notes. For
      purposes of this definition, “net working capital” means the excess of current
      assets minus current liabilities, each as determined in accordance with GAAP.
      

     

    “Excess
      Disposition Proceeds”
shall
      mean, during any period of determination, net cash proceeds (after the payment
      of brokerage commissions and other out-of-pocket expenses incurred in connection
      with such disposition and after provision for sales or transfer taxes and taxes
      on any gain realized as a result of such disposition) from (i) the sale of
      assets (except for the sale of Inventory in the ordinary course of business
      and
      except for the disposition of obsolete or worn out Equipment in the ordinary
      course of business) and (ii) the condemnation, damage or destruction (including
      insurance proceeds) of fixed assets; provided,
      any
      such net cash proceeds that are applied pursuant to Section
      7.18.2
      shall
      not be “Excess Disposition Proceeds”.

     

    “Excess
      Issuance Proceeds”
shall
      mean the Note Parties’ net cash proceeds from the issuance of Indebtedness,
      corporate stock or other equity interests, including capital contributions
      in
      respect of corporate stock or other equity interests previously issued (after
      payment of any fees, commissions, investment banking fees and other reasonable
      out-of-pocket expenses in connection therewith), excluding (i) the proceeds
      of
      any contribution to Parent by HIG Capital or its Affiliates at Closing; (ii)
      the
      proceeds of the issuance of any Indebtedness permitted under Section 7.12
      of the
      Agreement; and (iii) proceeds from the exercise of stock options by present
      or
      former employees, directors and officers of a Note Party. 

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended (and any successor
      statute).

     

    “Financial
      Statements”
has
      the
      meaning set forth in Section
      5.5. 

     

    “First
      Lien Collateral Agent”
means
      Sankaty Advisors, LLC, in its capacity as Collateral Agent for the Senior Note
      Purchasers under the First Lien Collateral Documents or any successor
      thereto.

     

    “First
      Lien Collateral Documents”
means,
      collectively, the First Lien Security Agreement, and any other document pursuant
      to which any Note Party grants security for the Senior Note
      Obligations.

     

    “First
      Lien Security Agreement”
means
      the Amended and Restated First Lien Security Agreement, substantially in the
      form of Exhibit
      C
      to the
      Agreement, between the Issuer, the Note Parties and the First Lien Collateral
      Agent, for the benefit of the Senior Note Purchasers, as amended, modified
      or
      supplemented from time to time.

     

    
      
        
        

      

      
        Annex
          I-6

        
          

        

      

      
        
        

      

    


    “Forbearance
      Notice”
has
      the
      meaning set forth in Section
      11.3.2.

     

    “Forbearance
      Period”
has
      the
      meaning set forth in Section
      11.3.2.

     

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

     

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

     

    “Guarantee”
means
      as to any Person, any obligation of such Person guaranteeing, providing comfort
      or otherwise supporting any Indebtedness, lease, dividend, or other obligation
      (“primary obligation”) of any other Person (the “primary obligor”) in any
      manner, including any obligation or arrangement of such Person to (a) purchase
      or repurchase any such primary obligation, (b) advance or supply funds (i)
      for
      the purchase or payment of any such primary obligation or (ii) to maintain
      working capital or equity capital of the primary obligor or otherwise to
      maintain the net worth or solvency or any balance sheet condition of the primary
      obligor, (c) purchase property, securities or services primarily for the purpose
      of assuring the owner of any such primary obligation of the ability of the
      primary obligor to make payment of such primary obligation, (d) protect the
      beneficiary of such arrangement from loss (other than product warranties given
      in the ordinary course of business) or (e) indemnify the owner of such primary
      obligation against loss in respect thereof. The amount of any Guarantee at
      any
      time shall be deemed to be an amount equal to the lesser at such time of (x)
      the
      stated or determinable amount of the primary obligation in respect of which
      such
      Guarantee is incurred and (y) the maximum amount for which such Person may
      be
      liable pursuant to the terms of the instrument embodying such Guarantee, or,
      if
      not stated or determinable, the maximum reasonably anticipated liability
      (assuming full performance) in respect thereof.

     

    “Guaranteed
      Obligations”
shall
      have the meaning assigned to such term in Section
      10.1.

     

    “Guarantors”
means
      Parent, SpectruCell, Hudson Street, Cyber-Test and Vance Baldwin and each Person
      that subsequently becomes party to this Agreement and is required to act as
      a
      Guarantor under this Agreement.

     

    “Hazardous
      Substance”
means
      any material, substance or waste characterized as hazardous or toxic under
      Environmental Laws, including any “hazardous substance” as defined in 42 U.S.C.
§ 9601(14), oil, gasoline and any other petroleum-based
      substance.

     

    “HIG
      Capital”
means
      H.I.G. Capital L.L.C., a Delaware limited liability company and its successors
      and assigns.

     

    “Indebtedness”
with
      respect to any Person, means, without duplication, the liabilities of such
      Person with respect to:

     

    (a) all
      liabilities appearing on its balance sheet in accordance with GAAP, excluding
      any customer deposits, contingency reserves, reserves for deferred income taxes,
      trade payables and accruals incurred in the ordinary course of business and
      accrued expenses on its balance sheet in accordance with GAAP;

     

    
      
        
        

      

      
        Annex
          I-7

        
          

        

      

      
        
        

      

    


    (b) borrowed
      money (including commercial paper and revolving credit line borrowings), or
      which is evidenced by bonds, debentures or notes or extensions of credit,
      whether or not representing obligations for borrowed money (other than trade,
      payroll and taxes payable):

     

    (c) the
      deferred purchase price of property acquired by such Person (excluding accounts
      payable arising in the ordinary course of business (unless such accounts payable
      are greater than $3,000,000 in the aggregate and outstanding more than ninety
      (90) days past due) but including all liabilities created or arising under
      any
      conditional sale or other title retention agreement with respect to any such
      property);

     

    (d) indebtedness
      of any other Person secured by any Lien existing on property owned by such
      Person (whether or not such liabilities have been assumed);

     

    (e) Capitalized
      Leases of such Person;

     

    (f) letters
      of credit, bankers’ acceptances or instruments serving a similar function issued
      or accepted by banks and other financial institutions for the account of such
      Person; 

     

    (g) any
      Capital Stock of any Person that has required payments (other than payments
      in-kind or in common equity), whether with respect to redemption, dividend
      or
      otherwise, that are payable prior to the 5 year anniversary of the issuance
      of
      the Notes; 

     

    (h) loans
      or
      advances made to employees, officers or directors; and 

     

    (i) any
      Guarantee of such Person or any obligation or liability of another Person of
      the
      types listed in clause (a) through clause (j) of this definition of
      Indebtedness; and

     

    “Indemnified
      Liabilities”
has
      the
      meaning set forth in Section
      13.2.

     

    “Indemnitees”
has
      the
      meaning set forth in Section
      13.2.

     

    “Indemnitor”
has
      the
      meaning set forth in Section
      13.2.

     

    “Information”
has
      the
      meaning set forth in Section
      13.16.

     

    “Initial
      Closing Date”
has
      the
      meaning set forth in Section
      2.2.
      

     

    “Initial
      Notes”
has
      the
      meaning set forth in the recitals. 

     

    “Intellectual
      Property”
means
      any and all licenses, patents, copyrights, trademarks, designs and the goodwill
      associated with such trademarks.

     

    “Intercompany
      Obligations”
has
      the
      meaning set forth in Section
      10.8.

     

    “Interest
      Payment Date”
has
      the
      meaning set forth in Section
      3.1.2.

     

    “Interest
      Period”
means,
      the period from and including the Closing Date to but excluding the first
      Interest Payment Date, and each succeeding period from and including each
      Interest Payment Date to but excluding the following Interest Payment
      Date.

     

    
      
        
        

      

      
        Annex
          I-8

        
          

        

      

      
        
        

      

    


    “Internal
      Revenue Service”
means
      the Internal Revenue Service of the United States government.

     

    “Inventory”
means
      and include, as to any Person, all of such Person’s now owned or hereafter
      acquired goods, merchandise and other personal property, wherever located,
      to be
      furnished under any consignment arrangement, contract of service or held for
      sale or lease, all raw materials, work in process, finished goods and materials
      and supplies of any kind, nature or description which are or might be used
      or
      consumed in such Person’s business or used in selling or furnishing such goods,
      merchandise and other personal property, and all documents of title or other
      documents representing them.

     

    “Investment”
means
      any loan, advance, equity contribution or acquisition or holding of an evidence
      of indebtedness or equity interest in or of another Person.

     

    “Issuer”
has
      the
      meaning set forth in the preamble.

     

    “Key
      Employee”
has
      the
      meaning set forth in Section
      5.15.

     

    “Key
      Employee Employment Agreements”
means
      (i) those certain Employment Agreements made and entered into as of August
      17,
      2007 by and between the Note Parties and certain members of the management
      of
      the Note Parties and (ii) any Employment Agreements with respect to the
      management of Tritronics. 

     

    “Legal
      Requirement”
means
      any present or future requirement imposed upon any of the Note Parties and
      their
      Subsidiaries by any law, statute, rule, regulation, directive, order, decree
      or
      guideline (or any interpretation thereof by courts or of administrative bodies)
      of the United States of America, or any state, or other political subdivision
      thereof, or by any board, governmental or administrative agency, central bank
      or
      monetary authority of the United States of America or any other jurisdiction
      in
      which such Note Party or Subsidiary is organized, owns property or conducts
      its
      business, or any political subdivision of any of the foregoing. 

     

    “LIBOR”
means
      for any Interest Period the greater of (x) 2.50% per annum or (y): 

     

    (a)    
      the rate per annum equal to the rate determined by the Note Purchasers to be
      the
      offered rate that appears on the page of the Telerate screen (or any successor
      thereto) that displays an average British Bankers Association Interest
      Settlement Rate for deposits in Dollars (for delivery on the first day of such
      Interest Period) with a term equivalent to such Interest Period, determined
      as
      of approximately 11:00 a.m. (London time) two Business Days prior to the first
      day of such Interest Period, or

     

    (b)    
      if the rate referenced in the preceding clause (a) does not appear on such
      page
      or service or such page or service shall not be available, the rate per annum
      equal to the rate determined by the Note Purchasers to be the offered rate
      on
      such other page or other service that displays an average British Bankers
      Association Interest Settlement Rate for deposits in Dollars (for delivery
      on
      the first day of such Interest Period) with a term equivalent to such Interest
      Period, determined as of approximately 11:00 a.m. (London time) two Business
      Days prior to the first day of such Interest Period.

     

    
      
        
        

      

      
        Annex
          I-9

        
          

        

      

      
        
        

      

    


    “Lien”
means
      any mortgage, deed of trust, pledge, hypothecation, assignment, security
      interest, lien (whether statutory or otherwise), charge, claim or encumbrance,
      or preference, priority or other security agreement or preferential arrangement
      held or asserted in respect of any asset of any kind or nature whatsoever
      including, without limitation, any conditional sale or other title retention
      agreement, any lease having substantially the same economic effect as any of
      the
      foregoing, and the filing of, or agreement to give, any financing statement
      under the Uniform Commercial Code, personal property security legislation or
      comparable law of any jurisdiction. 

     

    “Management
      Agreement”
means
      that certain Management Agreement made and entered into as of August 17, 2007
      by
      and between Parent and Sponsor.

     

    “Material
      Adverse Effect”
means,
      since any specified date or from the circumstances existing immediately prior
      to
      the happening of any specified event, a material adverse change in (a) the
      business, assets, operations or financial condition of the Note Parties, (b)
      the
      ability of the Note Parties to perform their obligations under this Agreement
      or
      the other Note Documents, (c) the rights and remedies of the Collateral Agents
      or the Note Purchasers under the Agreement and the other Note Documents, or
      (d)
      the Collateral Agents’ Liens on the Collateral or the priority of any such Lien;
provided,
      that
      where no date is specified, the measurement date shall be from and include
      December 31, 2006.

     

    “Material
      Agreements”
means,
      collectively, (i) all agreements pursuant to which the Note Parties lease any
      real property or any material personal property or material Intellectual
      Property; (ii) the Acquisition Agreement; and (iii) all agreements (excluding
      this Agreement) to which a Note Party is party where a termination of such
      agreement, or a material default by the other party to such agreement, would
      be
      reasonably likely to result in a Material Adverse Effect. 

     

    “Maturity
      Date”
means
      either the Senior Note Maturity Date or the Subordinated Note Maturity Date,
      as
      the case may be.

     

    “Multiemployer
      Plan”
means
      any Plan that is a “multiemployer plan” as defined in sections 3(37) and
      4001(a)(3) of ERISA.

     

    “National
      Priorities List”
means
      the list, compiled by EPA pursuant to CERCLA, of uncontrolled hazardous
      substance releases in the United States of America that are priorities for
      long-term remedial evaluation and response because they represent an especial
      hazard to human health and/or the environment. 

     

    “Non-Payment
      Default”
has
      the
      meaning set forth in Section
      12.2
      of the
      Agreement.

     

    “Note”
and
      “Notes”
has
      the
      meaning set forth in the recitals to the Agreement and shall mean and include
      any Notes issued pursuant to Section
      2.7
      and
Section
      9.1
      of the
      Agreement, and shall further mean and include any amendments, modifications
      or
      refinancings thereof, including any such that increase the principal amount
      thereof.

     

    “Note
      Documents”
means
      the Agreement, the Security Agreements, the Mortgages and each of the documents,
      instruments and other agreements evidencing, guaranteeing, governing or
      providing security for the payment of, or otherwise relating to the incurrence
      by the Issuer of, the Note Obligations, as in effect on the Closing Date and
      as
      the same may be entered into, amended, restated, modified or supplemented from
      time to time in accordance with the terms thereof.

     

    
      
        
        

      

      
        Annex
          I-10

        
          

        

      

      
        
        

      

    


    “Note
      Obligations”
means
      any and all obligations of the Issuer under the Agreement with respect to the
      Notes and under the Notes, including, without limitation, the obligation to
      pay
      principal, premium, if any, interest, expenses, reasonable attorneys’ fees and
      disbursements, indemnities and other amounts payable thereunder or in connection
      therewith or related thereto. 

     

    “Note
      Parties”
has
      the
      meaning set forth in the preamble.

     

    “Note
      Purchasers”
has
      the
      meaning set forth in the preamble to the Agreement, and means and include the
      Note Purchasers and any assignees of the Notes pursuant to Section 9.1
      of the
      Agreement. “Note Purchaser” means any of the Note Purchasers,
      individually.

     

    “Notice
      of Borrowing”
means
      a
      certificate in the form attached as Exhibit E hereto.

     

    “Original
      Note Purchase Agreement”
has
      the
      meaning set forth in the recital.

     

    “Other
      Taxes”
has
      the
      meaning set forth in Section
      3.4.2.

     

    “Parent”
has
      the
      meaning set forth in the preamble.

     

    “PBGC”
means
      the Pension Benefit Guaranty Corporation or any successor entity.

     

    “Pension
      Benefit Plan”
means
      any Plan which is an employee pension benefit plan within the meaning of Section
      3(2) of ERISA other than a Multiemployer Plan.

     

    “Permitted
      Encumbrances”
shall
      have the meaning provided in Section
      7.14.
      

     

    “Person”
means
      any entity, whether of natural or legal constitution, including any individual,
      corporation, partnership, joint venture, limited liability company, unlimited
      liability company, trust, estate, unincorporated organization, government or
      any
      agency or political subdivision thereof. 

     

    “Philips
      Division”
means
      the operations of Vance Baldwin in respect of the Sales Authorization
      Agreement.

     

    “Plan”
means
      any employee benefit plan within the meaning of Section 3(3) of ERISA,
      maintained for employees of any Note Party or any member of the Controlled
      Group
      or any such Plan to which any Note Party or any member of the Controlled Group
      is required to contribute on behalf of any of its employees other than any
      non-U.S. employee benefit plan.

     

    “Pro
      Forma Balance Sheet”
has
      the
      meaning set forth in Section
      5.5.
      

     

    “Projections”
has
      the
      meaning set forth in Section
      5.5.

     

    “Real
      Property”
means
      the right, title and interest in and to all owned and leased premises of Parent
      and each of its Subsidiaries.

     

    “Refinance”
means,
      in respect of any Indebtedness, to refinance, extend, renew, defease, amend,
      modify, supplement, restructure, replace, refund or repay, or to issue other
      Indebtedness in exchange or replacement for, such Indebtedness in whole or
      in
      part. “Refinanced” and “Refinancing” shall have correlative
      meanings.

     

    
      
        
        

      

      
        Annex
          I-11

        
          

        

      

      
        
        

      

    


    “Refinancing
      Debt”
means,
      as to any Indebtedness, the Refinancing of such Indebtedness, provided that
      the
      following conditions are satisfied:

     

    (a) the
      weighted average life to maturity of such Refinancing Debt shall be greater
      than
      or equal to the weighted average life to maturity of the Indebtedness being
      refinanced;

     

    (b) the
      principal amount of such Refinancing Debt shall be less than or equal to the
      sum
      of the principal amount then outstanding of, plus accrued and unpaid interest
      on
      and financing fees related to, the Indebtedness being refinanced;

     

    (c) the
      respective obligor or obligors shall be the same on the Refinancing Debt as
      on
      the Indebtedness being refinanced;

     

    (d) the
      ranking of such Refinancing Debt shall be the same as or lower than the ranking
      of the Indebtedness being Refinanced; and

     

    (e) the
      security, if any, for the Refinancing Debt shall be the same as that for the
      Indebtedness being refinanced (except to the extent that less security is
      granted to holders of the Refinancing Debt).

     

    “Refinancing
      Premium”
means
      a
      premium, upon a Refinancing of the Series B Subordinated Notes, equal to 2%
      of
      aggregate principal amount of the Series B Subordinated Notes
      Refinanced.

     

    “Related
      Party”
means
      any of the current stockholders, directors, officers or beneficial owners of
      Parent or any of its Subsidiaries or Affiliates, and their spouses, siblings
      and
      descendants and trusts for the benefit of any of the current stockholders,
      directors, officers or beneficial owners, their spouses, siblings and
      descendants.

     

    “Reportable
      Event”
has
      the
      meaning set forth in ERISA § 4043.

     

    “Required
      Purchasers”
      means
      one
      or more Note Purchasers having or holding Senior Note Obligations and/or
      Subordinated Note Obligations and representing more than 50% of the sum of
      (i)
      the aggregate Senior Note Obligations and (ii) the aggregate Subordinated Note
      Obligations, in each case to the extent then outstanding.

     

    “Restricted
      Payment”
means,
      with respect to any Note Party (a) the declaration or payment of any dividend
      or
      the incurrence of any liability to make any other payment or distribution of
      cash or other property or assets in respect of Stock, except a dividend payable
      solely in shares of that class of Stock to holders of that class; (b) any
      payment on account of the purchase, redemption, defeasance, sinking fund or
      other retirement of such Note Party’s Stock or any other payment or distribution
      made in respect thereof, either directly or indirectly; (c) any payment
      (including by way of purchase, redemption, prepayment or otherwise) in respect
      of Indebtedness that is contractually subordinated in right of payment to the
      Notes; (d) any payment made to redeem, purchase, repurchase or retire, or to
      obtain the surrender of, any outstanding warrants, options or other rights
      to
      acquire stock of such Note Party now or hereafter outstanding; (e) any payment
      of a claim for the rescission of the purchase or sale of, or for material
      damages arising from the purchase or sale of, any shares of such Note Party’s
      Stock or of a claim for reimbursement, indemnification or contribution arising
      out of or related to any such claim for damages or rescission; (f) any payment,
      loan, contribution, or other transfer of funds or other property to any
      Affiliate or stockholder of such Note Party other than payment of compensation
      in the ordinary course of business to stockholders who are employees or
      directors of such Person; and (g) any payment made to Parent or the Seller
      so
      long as any amount remains outstanding under the Notes.

     

    
      
        
        

      

      
        Annex
          I-12

        
          

        

      

      
        
        

      

    


    “Sales
      Authorization Agreement”
has
      the
      meaning set forth in the recitals.

     

    “Second
      Lien Collateral Agent”
means
      Sankaty Advisors, LLC, in its capacity as Collateral Agent for the Subordinated
      Note Purchasers under the Second Lien Collateral Documents or any successor
      thereto.

     

    “Second
      Lien Collateral Documents”
means,
      collectively, the Second Lien Security Agreement and any other document pursuant
      to which any Note Party grants security for the Subordinated Note
      Obligations.

     

    “Second
      Lien Security Agreement”
means
      the Amended and Restated Second Lien Security Agreement, substantially in the
      form of Exhibit
      D
      to the
      Agreement, between the Issuer, the Note Parties and the Second Lien Collateral
      Agent, for the benefit of the Subordinated Note Purchasers, as amended, modified
      or supplemented from time to time.

     

    “Securities
      Act”
means
      the United States Securities Act of 1933, as amended and any successor
      statute.

     

    “Security
      Agreements”
means
      the First Lien Security Agreement and the Second Lien Security
      Agreement,.

     

    “Security
      Interests”
means
      the security interests in the Collateral granted under the Collateral Documents
      to secure the Note Obligations.

     

    “Seller”
shall
      have the meaning provided in the recitals. 

     

    “Seller
      Notes”
means
      that certain (i) Convertible Subordinated Promissory Note dated as of August
      17,
      2007 by and between Parent and Fred V. Baldwin and (ii) Promissory Note dated
      as
      of the date hereof by and between Parent and Tritronics.

     

    “Senior
      Note Maturity Date”
means
      August 17, 2012.

     

    “Senior
      Note Obligations”
means
      any and all obligations of the Issuer under the Agreement with respect to the
      Senior Notes and under the Senior Notes, including, without limitation, the
      obligation to pay principal, premium, if any, interest, expenses, attorneys’
fees and disbursements, indemnities and other amounts payable thereunder or
      in
      connection therewith, in each case to the extent provided for under this
      Agreement or the other Note Documents.

     

    “Senior
      Note Purchasers”
shall
      mean the purchasers of the Senior Notes.

     

    “Senior
      Notes”
shall
      have the meaning provided in the recitals.

     

    “Series”
means
      either the Senior Notes or Subordinated Notes, each a “Series” of
      Notes.

     

    “Series
      A Subordinated Notes”
shall
      have the meaning set
      forth
      in the
      recital. 

     

    
      
        
        

      

      
        Annex
          I-13

        
          

        

      

      
        
        

      

    


    “Series
      B Closing Date”
shall
      have the meaning set
      forth
      in
Section
      2.5.
      

     

    “Series
      B Issuance”
shall
      have the meaning set
      forth
      in
Section
      2.4.
      

     

    “Series
      B Subordinated Notes”
shall
      have the meaning set
      forth
      in the
      recital. 

     

    “Sponsor”
means
      H.I.G. Capital, LLC, a Delaware limited liability company.

     

    “Stock”
means
      all shares, options, warrants, general or limited partnership interests,
      membership interests or other equivalents (regardless of how designated) of
      or
      in a corporation, partnership, limited liability company or equivalent entity
      whether voting or nonvoting, including common stock, preferred stock or any
      other “equity security” (as such term is defined in Rule 3a11 of the General
      Rules and Regulations promulgated by the Securities and Exchange Commission
      under the Exchange Act) or equivalent securities issued by the Foreign
      Subsidiaries.

     

    “Stock
      Purchase Agreement”
has
      the
      meaning set forth in the recitals.

     

    “Subordinated
      Note Maturity Date”
means
      August 17, 2013.

     

    “Subordinated
      Note Obligations”
means
      any and all obligations of the Issuer under the Agreement with respect to the
      Subordinated Notes and under the Subordinated Notes, including, without
      limitation, the obligation to pay principal, premium, if any, interest,
      expenses, attorneys’ fees and disbursements, indemnities and other amounts
      payable thereunder or in connection therewith, in each case to the extent
      provided for under this Agreement or the other Note Documents. 

     

    “Subordinated
      Note Purchasers”
shall
      mean the holders of the Subordinated Notes.

     

    “Subordinated
      Notes”
means
      the Series A Subordinated Notes and the Series B Subordinated Notes.


     

    “Subsidiary”
means,
      with respect to any Person, (a) any corporation of which an aggregate of more
      than 50% of the outstanding Stock having ordinary voting power to elect a
      majority of the board of directors of such corporation (irrespective of whether,
      at the time, Stock of any other class or classes of such corporation shall
      have
      or might have voting power by reason of the happening of any contingency) is
      at
      the time, directly or indirectly, owned legally or beneficially by such Person
      or one or more Subsidiaries of such Person, or with respect to which any such
      Person has the right to vote or designate the vote of more than 50% or more
      of
      such Stock whether by proxy, agreement, operation of law or otherwise, and
      (b)
      any partnership or limited liability company in which such Person and/or one
      or
      more Subsidiaries of such Person shall have an interest (whether in the form
      of
      voting or participation in profits or capital contribution) of more than 50%
      or
      of which any such Person is a general partner or managing member or may exercise
      the powers of a general partner whether directly or indirectly, and (c) any
      other Person (other than a corporation, limited liability company or
      partnership) in which such Person, a Subsidiary of such Person or such Person
      and one or more Subsidiaries of such Person, directly or indirectly, at the
      date
      of determination thereof, has (a) at least a majority ownership interest or
      (b)
      the power to elect or direct the election of a majority of the directors or
      other governing body of such Person. 

     

    “Supplemental
      Closing Date”
shall
      mean the date on which the Series A Subordinated Notes are issued and sold
      pursuant to the Additional Issuance.

     

    
      
        
        

      

      
        Annex
          I-14

        
          

        

      

      
        
        

      

    


    “Taxes”
has
      the
      meaning set forth in Section
      3.4.1.

     

    “Transactions”
means
      the transactions contemplated by the Acquisition Agreement, the Stock Purchase
      Agreement, the Sales Authorization Agreement and this Agreement.

     

    “Unaudited
      Financial Statements”
has
      the
      meaning set forth in Section
      5.5.

     

    “USA
      Patriot Act”
means
      the Uniting and Strengthening America by Providing Appropriate Tools Required
      to
      Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same
      has
      been, or shall hereafter be, renewed, extended, amended or replaced.


     

    “Warrants”
has
      the
      meaning set forth in Section
      7.30.

     

    “Wholly
      Owned Subsidiary”
means,
      with respect to a specified Person, an entity all of the outstanding Capital
      Stock of which (other than nominal interests issued to comply with local
      regulatory requirements), and all of the options, warrants or other rights
      to
      acquire the same, are owned, directly or indirectly, by the specified
      Person.

     


    
      
        
        

      

      
        Annex
          I-15

        
          

        

      

      
        
        

      

    


    SCHEDULE
      7.12

     

    FINANCIAL
      COVENANTS 

    


    Section
      1. Capital
      Expenditures.
      The
      Note Parties will not make capital expenditures (including expenditures for
      fixed assets, leases, maintenance, or repairs capitalized or required, in
      accordance with GAAP consistently applied, to be capitalized on the Acquired
      Entities’ books by purchase, lease-purchase agreement, option or otherwise) in a
      total amount that exceeds (i) $300,000 in the aggregate for the Fiscal Year
      ending on December 31, 2007 and (ii) (x) $400,000 per annum if EBITDA is greater
      than $5,500,000 for the previous Fiscal Year or (y) $300,000 per annum if EBITDA
      is less than or equal to $5,500,000 for the previous Fiscal Year, for each
      Fiscal Year ending on or after December
      31,
      2008; provided, however, the forgoing limitations shall not include any capital
      expenditures made during the Fiscal Year ending on June 30, 2009, not to exceed
      $575,000 in the aggregate, made in connection with the implementation of the
      Philips program.

    


    Section
      2. Minimum
      EBITDA.

    


    2.1 Minimum
      EBITDA.
      Parent
      and its Subsidiaries shall at all times maintain EBITDA for Parent and its
      Subsidiaries as indicated
      below for
      each
      Trailing Twelve Month Period, measured on a quarterly basis,
      as of
      the end of each Fiscal Quarter ending on and after September 30,
      2008. 

    


    
      	
              Fiscal
                Quarters Ended

            	 	
              EBITDA

            	 
	 	 	 	 
	
              September
                30, 2008

            	 	
              $

            	
              7,250,000

            	 
	 	 	 	 	 
	
              December
                31, 2008

            	 	
              $

            	
              8,500,000

            	 
	 	 	 	 	 
	
              March
                31, 2009

            	 	
              $

            	
              9,250,000

            	 
	 	 	 	 	 
	
              June
                30, 2009

            	 	
              $

            	
              9,250,000

            	 
	 	 	 	 	 
	
              September
                30, 2009

            	 	
              $

            	
              10,000,000

            	 
	 	 	 	 	 
	
              December
                31, 2009

            	 	
              $

            	
              10,000,000

            	 
	 	 	 	 	 
	
              Thereafter

            	 	
              $

            	
              10,000,000

            	 


    

     

    
      
        
        

      

      
        Sch
          7.12-i

        
          

        

      

      
        
        

      

    


    2.2 For
      purposes of this Schedule
      7.12
      and the
      Agreement:

    


    (i) “EBITDA”
means,
      for the applicable period, the total (without duplication), in Dollars (all
      as
      determined in accordance with GAAP consistently applied) of the Note Parties’
earnings before interest, income and franchise taxes (“Taxes”),
      depreciation, amortization expense,
      transaction fees paid in connection with the transactions contemplated hereby
      (provided
      that such transaction fees are approved by the Collateral Agents in their sole
      discretion),
      management fees paid pursuant to Section
      7.16.4,
      incremental
      first-year Sarbanes Oxley implementation expenses in an amount not to exceed
      $150,000 (which shall be limited to year-over-year accounting expenses incurred
      by the Note Parties that are directly related to additional requirements of
      Sarbanes Oxley during the first year of this Agreement and provided that the
      Note Parties provide a line item accounting of such expenses and the Collateral
      Agents approve such expenses, such approval not to be unreasonably
      withheld)
      and
      one-time severance costs in an amount not to exceed $600,000 per annum (provided
      that such amounts, fees and payments were deducted from the Note Parties’
earnings)
      for the
      applicable period. EBITDA, for purposes of this Schedule
      7.12
      and the
      Agreement, will (a) be calculated utilizing a first in-first out method of
      cost
      accounting for Inventory (“FIFO”)
      and
      (b) not include any (1) gain or loss arising from the sale of capital assets,
      (2) gain arising from any write-up or loss arising from any write-down of
      assets, (3) gain arising from the acquisition or loss arising from the sale
      of
      debt securities or Capital Stock of any Note Party or from cancellation or
      forgiveness of Indebtedness, (4) gain or income arising from accretion of any
      negative goodwill or loss arising from any write-off of goodwill, or (5) gain
      or
      loss recognized by any Note Party as earnings or losses which relate to any
      extraordinary accounting adjustments or non-recurring items of income or losses
      or include any amounts attributable to extraordinary gains or losses or
      extraordinary items of income or losses or any other non-operating,
      non-recurring gains or losses from time to time occurring.
      Notwithstanding the foregoing, the EBITDA of Tritronics shall be calculated
      in a
      manner consistent with Schedule
      III
      attached
      hereto. 

    


    (ii) “Fiscal
      Quarter”
means
      the applicable fiscal quarter of a Fiscal Year.

    


    (iii) “Fiscal
      Year”
means
      any Note Parties’ Fiscal Year for financial accounting purposes, beginning on
      July 1st and ending on June 30th.

    


    (iv) “Trailing
      Twelve Month Period”
means
      the twelve (12) calendar month period immediately preceding the date of
      calculation.

    


    Section
      3. Maximum
      Total Leverage Ratio. 

    


    3.1 Parent
      and its Subsidiaries shall maintain a Leverage Ratio, measured for each Trailing
      Twelve Month Period, of not greater than the following amount indicated below
      as
      of the end of each fiscal quarter ending on and after September 30,
      2007:

    


    
      	
              Fiscal Quarters Ended

            	 	
              Ratio

            	 
	 	 	 	 
	
              September
                30, 2008

            	 	 	
              5.00:1.00

            	 
	 	 	 	 	 
	
              December
                31, 2008

            	 	 	
              5.00:1.00

            	 
	 	 	 	 	 
	
              March
                31, 2009

            	 	 	
              4.25:1.00

            	 
	 	 	 	 	 
	
              June
                30, 2009

            	 	 	
              4.00:1.00

            	 
	 	 	 	 	 
	
              September
                30, 2009

            	 	 	
              3.75:1.00

            	 
	 	 	 	 	 
	
              December
                31, 2009

            	 	 	
              3.50:1.00

            	 
	 	 	 	 	 
	
              March
                31, 2010

            	 	 	
              3.25:1.00

            	 
	 	 	 	 	 
	
              June
                30, 2010

            	 	 	
              3.25:1.00

            	 
	 	 	 	 	 
	
              Thereafter

            	 	 	
              3.00:1.00

            	 


    

     

    
      
        
        

      

      
        Sch
          7.12-ii

        
          

        

      

      
        
        

      

    

    


    3.2 For
      purposes of this Schedule
      7.12
      and the
      Agreement, “Leverage
      Ratio”
means
      the ratio of (x) the Indebtedness of Parent and its Subsidiaries as of the
      measurement date to (y) Trailing Twelve Month Period EBITDA. 

    


    Section
      4. Minimum
      Fixed Charge Coverage Ratio.
      

    


    4.1 Parent
      and its Subsidiaries shall maintain a Fixed Charge Coverage Ratio, measured
      for
      each Trailing Twelve Month Period, of not less than the following amount
      indicated below as of the end of each fiscal quarter ending on and after
      September 30, 2007:

    


    
      	
              Fiscal
                Quarters Ended

            	 	
              Ratio

            	 
	 	 	 	 
	
              September
                30, 2007

            	 	 	
              1.25:1.00

            	 
	 	 	 	 	 
	
              December
                31, 2007

            	 	 	
              1.25:1.00

            	 
	 	 	 	 	 
	
              March
                31, 2008

            	 	 	
              1.25:1.00

            	 
	 	 	 	 	 
	
              June
                30, 2008

            	 	 	
              1.25:1.00

            	 
	 	 	 	 	 
	
              September
                30, 2008

            	 	 	
              1.50:1.00

            	 
	 	 	 	 	 
	
              December
                31, 2008

            	 	 	
              1.50:1.00

            	 
	 	 	 	 	 
	
              March
                31, 2009

            	 	 	
              1.50:1.00

            	 
	 	 	 	 	 
	
              June
                30, 2009

            	 	 	
              1.50:1.00

            	 
	 	 	 	 	 
	
              Thereafter

            	 	 	
              1.75:1.00

            	 


    

     

    4.2 For
      purposes of this Schedule
      7.12
      and the
      Agreement: 

     

    (i)
       “Fixed
      Charge Coverage Ratio”
means
      Trailing Twelve Month EBITDA minus Capital Expenditures and Income Tax Expense
      divided by Interest Expense paid in cash plus scheduled payments due on
      indebtedness or liability for borrowed money (including outstanding letters
      of
      credit) and obligations as lessee under capital leases.

     

    (ii)
       “Income
      Tax Expense”
means
      expenditures for federal and state income taxes determined in accordance with
      GAAP.

     

    (iii) “Interest
      Expense”
means
      expenditures for interest determined in accordance with GAAP.

     

    
      
        
        

      

      
        Sch
          7.12-iii

        
          

        

      

      
        
        

      

    


    Section 
      5. Calculation
      of Financial Covenants.
      

    


    (i) The
      Collateral Agents may calculate the Note Parties’ EBITDA and the other specified
      amounts under this Schedule
      7.12
      (and
      under the other financial covenants contained in the Agreement) on the basis
      of
      information then available to the Collateral Agents, which calculation(s) will
      be binding on the Note Parties;
      however,
      the
      Collateral Agents will give notice to the Note Parties of the Collateral Agents’
computations made pursuant to this Section
      5
      and an
      opportunity to provide the Collateral Agent with any additional or contrary
      information. The Note Parties must provide any additional (or contrary)
      information within 15 Business Days after the Collateral Agent gives notice
      to
      the Note Parties of the Collateral Agents’ computations.

    


    (ii) The
      Financial Covenants will be based on the consolidated financial performance
      of
      Parent and all its Subsidiaries in accordance with the Agreement.

    


    Section
      6. Definitions.
      Capitalized terms used, but not defined, in this Schedule
      7.12
      have the
      meanings given to them in the Agreement.


    
      
        
        

      

      
        Sch
          7.12-iv