ex10-7_1392151.htm


    EXHIBIT
10.7


    SILICON
VALLEY BANK SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

     

    This SECOND AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT (this “Agreement”) dated as of December 16, 2009,
between SILICON VALLEY
BANK, a California chartered bank, with its principal place of business
at 3003 Tasman Drive, Santa Clara, California 95054 (FAX (408) 980-6410)
(“Bank”) and GLOBAL TELECOM
& TECHNOLOGY, INC., a Delaware corporation (“GTTI”) GLOBAL TELECOM & TECHNOLOGY
AMERICAS, INC., a Virginia

corporation (“GTTA”), WBS
CONNECT, LLC, a Colorado limited liability company (“WBS”) and GTT-EMEA, LTD., a private
limited company incorporated and registered in England and Wales (“EMEA” and
together with GTTI, GTTA and WBS, each a “Borrower” and collectively, the
“Borrowers”) each with offices at 8484 Westpark Drive, Suite 720, McLean,
VA  22102 (Fax (703) 442-5501), provides the terms on which Bank shall
lend to Borrowers and Borrowers shall repay Bank. This Agreement amends and
restates that certain Amended and Restated Loan and Security Agreement among
Bank, GTTI and GTTA, dated June 16, 2009, in its entirety.  The
parties agree as follows:

     

    ARTICLE
1

    ACCOUNTING AND OTHER
TERMS

     

    Accounting terms not defined in this
Agreement shall be construed following GAAP.  Calculations and
determinations must be made following GAAP, to the extent
applicable.  The term “financial statements” includes the notes and
schedules.  The terms “including” and “includes” always mean
“including (or includes) without limitation,” in this or any Loan
Document.  Capitalized terms in this Agreement shall have the meanings
set forth in Section 13.  All other terms contained in this Agreement,
unless otherwise indicated, shall have the meanings provided by the Code, to the
extent such terms are defined therein.

     

    ARTICLE
2

    LOAN AND TERMS OF
PAYMENT

     

    Section
2.1                      Promise
to Pay.  Borrowers hereby
unconditionally promise to pay Bank the unpaid principal amount of all Advances
hereunder with all interest, fees and finance charges due thereon as and when
due in accordance with this Agreement.

     

    2.1.1           Financing of Accounts or
Cash Collections.

     

    (a)           Advance Rate
Applicability.  During the term of this Agreement, for any
Subject Month so long as Borrower’s aggregate cash plus Excess Availability was
at least $1,500,000 during any Testing Month, the Streamline Advance Rate will
apply and Bank will finance Borrowers’ Streamline Eligible Accounts, as set
forth herein. At all other times, the Non-Streamline Advance Rate will apply and
Bank will finance Borrowers’ Non-Streamline Eligible Accounts as set forth
herein.

     

    (b)           Availability.

     

    (i)           Subject
to the terms of this Agreement, during any Subject Month in which the
Non-Streamline Advance Rate applies, Borrowers may request that Bank finance
specific Non-Streamline Eligible Accounts.  Bank may, in its good
faith business discretion, finance such Non-Streamline Eligible Accounts by
extending credit to Borrowers in an amount equal to the result of the
Non-Streamline Advance Rate multiplied by the face amount of the Non-Streamline
Eligible Account (a “Non-Streamline Advance”). Subject to the terms of this
Agreement, during any Subject Month in which the Streamline Advance Rate
applies, Borrowers may request that Bank finance Streamline

     


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    Eligible
Accounts.  Bank may, in its good faith business discretion, finance
such Streamline Eligible Accounts by extending credit to Borrowers in an amount
not to exceed the Streamline Advance Rate multiplied by the aggregate face
amount of the Streamline Eligible Accounts, as determined by Bank from
Borrower’s most recent Streamline Accounts Listing (a “Streamline
Advance”).  Bank may, in its sole discretion, (a) change the
percentage of the Non-Streamline Advance Rate for a particular Non-Streamline
Eligible Account on a case by case basis, (b) change the percentage of the
Streamline Advance Rate for a particular Streamline Eligible Account on a case
by case basis.  When Bank makes an Advance the Eligible Account
becomes a “Financed Receivable.” All Advances hereunder shall be made in
Dollars.

     

    (ii)           Subject
to the terms of this Agreement, EMEA may request that Bank finance EMEA Eligible
Accounts. Bank may, in its good faith business discretion, finance such EMEA
Eligible Accounts by extending credit to Borrowers in an amount equal to the
result of the EMEA Advance Rate multiplied by the face amount of the EMEA
Eligible Account (an “EMEA Advance”). Bank may, in its sole discretion, (a)
change the percentage of the EMEA Advance Rate for a particular EMEA Eligible
Account on a case by case basis or (b) change the percentage of the EMEA Advance
Rate for a particular EMEA Eligible Account on a case by case
basis.  When Bank makes an EMEA Advance the EMEA Eligible Account
becomes a “Financed Receivable.”  Notwithstanding anything to the
contrary herein, at no time may Financed Receivables on EMEA Eligible Accounts
exceed the Dollar Equivalent of $2,500,000.

     

    (iii)           Subject
to the terms of this Agreement, following an Increase Event and for a period of
45 days thereafter, but no later than April 14, 2010, the U.S. Borrowers may
request advances of up to $1,000,000 on a non-formula basis (the “Non-Formula
Advances”).

     

    (c)           Maximum
Advances.   The aggregate face amount of all Financed
Receivables plus Non-Formula Advances, outstanding at any time may not exceed
the Facility Amount. In addition, the outstanding principal balances of all
Streamline Advances may not at any time exceed the product of multiplying the
Streamline Advance Rate by the aggregate amount of Streamline Eligible Accounts.
In addition, the outstanding principal balances of all EMEA Advances may not at
any time exceed the product of multiplying the EMEA Advance Rate by the
aggregate amount of EMEA Eligible Accounts.

     

    (d)           Borrowing
Procedure.

     

    (i)           Non-Streamline
Advances. Borrowers will deliver an Advance Request/Invoice Transmittal
Form for each Non-Streamline Eligible Account it offers.  Bank may
rely on information set forth in or provided with the Advance Request/Invoice
Transmittal Form.

     

    (ii)           Streamline/EMEA/Non-Formula
Advances.  Subject to the prior satisfaction of all other
applicable conditions to the making of a Streamline Advance, EMEA Advance or
Non-Formula Advance set forth in this Agreement, to obtain a Streamline Advance,
EMEA Advance or Non-Formula Advance, Borrower shall notify Bank (which notice
shall be irrevocable) by electronic mail, facsimile, or telephone by 3:00 p.m.
Eastern time on the Funding Date of the Streamline Advance, EMEA Advance or
Non-Formula Advance, as the case may be.  Together with any such
electronic or facsimile notification, Borrower shall deliver to Bank by
electronic mail or facsimile a completed Advance Request/Invoice Transmittal
Form executed by a Responsible Officer or his or her designee.  Bank
may rely on any telephone notice given by a person whom Bank believes is a
Responsible Officer or designee.

     

    (e)           Credit Quality;
Confirmations.  Bank may, at its option, conduct a credit check
of the Account Debtor for each Account requested by Borrowers for financing as
an Advance (other than a Non-

     


    
      
         


      

      
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    Formula
Advance) hereunder, in order to approve any such Account Debtor’s credit before
agreeing to finance such Account.  Bank may also verify directly with
Account Debtors, from time to time and not necessarily all at one time, the
validity, amount and other matters relating to such Accounts (including
confirmations of Borrowers’ representations in Section 5.3) by means of mail,
telephone or otherwise, either in the name of Borrowers or Bank from time to
time in its sole discretion.

     

    (f)           Accounts
Notification/Collection.  Bank may notify any Person owing
Borrowers money of Bank’s security interest in the funds and verify and/or, if
an Event of Default has occurred and is continuing, collect the amount of the
Account.

     

    (g)           Early
Termination.  This Agreement may be terminated prior to the
Maturity Date as follows: (i) by Borrowers, effective three Business Days after
written notice of termination is given to Bank; or (ii) by Bank at any time
after the occurrence and during the continuance of an Event of Default, without
notice, effective immediately.  If this Agreement is terminated (A) by
Bank in accordance with clause (ii) in the foregoing sentence, or (B) by
Borrowers for any reason, Borrowers shall pay to Bank a termination fee in an
amount equal to one percent (1.0%) of the Non-Streamline Advance Rate multiplied
by the then-applicable Facility Amount (the “Early Termination
Fee”).  The Early Termination Fee shall be due and payable on the
effective date of such termination and thereafter shall bear interest at a rate
equal to the highest rate applicable to any of the
Obligations.  Notwithstanding the foregoing, Bank agrees to waive the
Early Termination Fee if the loan facility provided hereunder is refinanced and
redocumented under another division of Bank prior to the Maturity
Date.  In addition, (a) if a court of competent jurisdiction finds
that Bank has breached this Agreement, and Borrower has terminated this
Agreement due to such breach, Borrower shall not have to pay the Early
Termination Fee or (b) if Bank decreases the Advance Rate, and Borrower
terminates this Agreement solely due to such change in Advance Rate, Borrower
shall not have to pay the Early Termination Fee as a result of such
termination.

     

    (h)           Maturity.  This
Agreement shall terminate and all Obligations outstanding hereunder shall be
immediately due and payable on the Maturity Date.

     

    (i)           Suspension of
Advances.  Borrowers’ ability to request that Bank finance
Eligible Accounts or make Non-Formula Advances hereunder will terminate if, in
Bank’s sole discretion, there has been a Material Adverse Change.

     

    (j)           Borrower
Liability. Any Borrower may, acting
singly, request Advances hereunder.  Each Borrower hereby appoints the
other as agent for the other for all purposes hereunder, including with respect
to requesting Advances hereunder. Each Borrower hereunder shall be jointly and
severally obligated to repay all Advances made hereunder, regardless of which
Borrower actually receives said Advance, as if each Borrower hereunder directly
received all
Advances.  Notwithstanding any other provision of this Agreement or
other related document, each Borrower irrevocably waives all rights that it may
have at law or in equity (including, without limitation, any law subrogating
Borrower to the rights of Bank under this Agreement) to seek contribution,
indemnification or any other form of reimbursement from any other Borrower, or
any other Person now or hereafter primarily or secondarily liable for any of the
Obligations, for any payment made by Borrower with respect to the Obligations in
connection with this Agreement or otherwise and all rights that it might have to
benefit from, or to participate in, any security for the Obligations as a result
of any payment made by  Borrower with respect to the Obligations in
connection with this Agreement or otherwise.  Any agreement providing
for indemnification, reimbursement or any other arrangement prohibited under
this Article shall be null and void.  If any payment is made to a
Borrower in contravention of this Section, such Borrower shall hold such payment
in trust for Bank and such payment shall be promptly delivered to Bank for
application to the Obligations, whether matured or unmatured.

     


    
      
         


      

      
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    Section
2.2                      Collections,
Finance Charges, Remittances and Fees.   The Obligations
shall be subject to the following fees and Finance Charges.  Unpaid
fees and Finance Charges may, in Bank’s discretion, accrue interest and fees as
described in Section 9.2 hereof.

     

    2.2.1           Collections.
Collections for (a) Non-Streamline Advances will be credited to the Financed
Receivable Balance for such Financed Receivable and (b) for Streamline Advances,
EMEA Advances and Non-Formula Advances will be remitted to the applicable
Borrower, subject to Section 2.2.7, but if there is an Event of Default, Bank
may apply Collections to the Obligations in any order it
chooses.   If Bank receives a payment for both a Financed
Receivable and a non-Financed Receivable, the funds will first be applied to the
Financed Receivable for Non-Streamline Advances and, if there is no Event of
Default then existing, the excess (or if such payments are received during any
period when Streamline Advances are outstanding, the entire amount) will be
remitted to the applicable Borrower, subject to Section 2.2.7.

     

    2.2.2           Facility
Fee. A
fully earned, non-refundable facility fee of Sixty Thousand Dollars
($60,000.00).

     

    2.2.3           Finance
Charges. In computing Finance Charges on the Obligations under this
Agreement, all Collections received by Bank shall be deemed applied by Bank on
account of the Obligations (a) three (3) Business Days after receipt of the
Collections for all Non-Streamline Advances and (b) one and one-half (1.5)
Business Days after receipt of the Collections for all Streamline Advances and
EMEA Advances.  Borrowers will pay a finance charge (the “Finance
Charge”) on each Financed Receivable which is equal to the Applicable Rate divided by 360 multiplied by the
number of days each such Financed Receivable is outstanding multiplied by (w) for
Non-Streamline Advances, the outstanding Financed Receivable Balance for such
Financed Receivable, (x) for Streamline Advances, the Streamline Advance Rate
multiplied by
the outstanding Financed Receivable Balance for such Financed Receivable, (y)
for EMEA Advances, the EMEA Advance Rate multiplied by the
outstanding Financed Receivable Balance for such Financed Receivable and (z) for
Non-Formula Advances, the outstanding amount of such Non-Formula
Advances.  The Finance Charge is payable in accordance with Section
2.3 hereof. In the event that the aggregate amount of Finance Charges and
Collateral Handling Fees earned by Bank in any quarter is less than the Minimum
Finance Charge, Borrowers shall pay to Bank an additional Finance Charge equal
to (i) the Minimum Finance Charge minus (ii) the aggregate amount of all Finance
Charges and Collateral Handling Fees earned by Bank in such
quarter.   Such additional Finance Charge shall be payable on the
first day of next quarter

     

                             2.2.4           Collateral
Handling Fee. Borrower will pay to Bank a collateral handling fee (the
“Collateral Handling Fee”) equal to (a) for any Subject Month (as of the first
calendar day of such month), to the extent that Borrower qualifies for the
Streamline Advance Rate, the sum of (i) 0.15% per month of (A) the Streamline
Advance Rate multiplied by (B) the
applicable Financed Receivable Balance for each Financed Receivable outstanding,
plus (ii) 0.15% per month of (A) the EMEA Advance Rate multiplied by (B) the
applicable Financed Receivable Balance for each Financed Receivable outstanding,
plus (iii) 0.15% per month on the outstanding Non-Formula Advances, in each
case, based upon a 360 day year or (b) for any Subject Month (as of the first
calendar day of such month), to the extent that Borrower qualifies for the
Non-Streamline Advance, (i) 0.35% per month of the applicable Financed
Receivable Balance for each Financed Receivable outstanding based upon a 360 day
year, plus (ii) 0.15% per month of (A) the EMEA Advance Rate multiplied by (B)
the applicable Financed Receivable Balance for each Financed Receivable
outstanding, plus (iii) 0.15% per month on the outstanding Non-Formula Advances,
in each case, based upon a 360 day year. This fee is charged on a daily basis
which is equal to the Collateral Handling Fee divided by 30, multiplied by the
number of days each such Financed Receivable or Non-Formula Advance is
outstanding, multiplied by the outstanding Financed Receivable Balance or
outstanding Non-Formula Advance,  as applicable.  The
Collateral Handling Fee is payable in accordance with Section 2.3
hereof.  In computing Collateral Handling Fees under this Agreement,
all Collections received by Bank shall be deemed applied by Bank on account of
Obligations (x) three (3) Business Days after receipt of Collections for all
Non-Streamline Advances and (y) one and one-half (1.5)

     


    
      
         


      

      
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    Business
Days after receipt of Collections for all Streamline Advances and EMEA Advances.
If an Event of Default has occurred and is continuing, the Collateral Handling
Fee will increase an additional 0.50% effective immediately upon such Event of
Default.

     

    2.2.5           Accounting.  After
each Reconciliation Period, Bank will provide an accounting of the transactions
for that Reconciliation Period, including the amount of all Financed
Receivables, all Collections, Adjustments, Finance Charges, Collateral Handling
Fees and the Facility Fee.  If Borrowers do not object to the
accounting in writing within thirty (30) days it shall be considered
accurate.  All Finance Charges and other interest and fees are
calculated on the basis of a 360 day year and actual days elapsed.

     

    2.2.6           Deductions.  Bank may
deduct fees, Finance Charges, Advances which become due pursuant to Section 2.3,
and other amounts due pursuant to this Agreement from any Advances made or
Collections received by Bank.

     

    2.2.7           Lockbox;
Account Collection Services.   Borrowers shall direct each
Account Debtor (and each depository institution where proceeds of Accounts are
on deposit) (a) to remit Dollar payments with respect to the Accounts to a
lockbox account established with Bank or to wire transfer payments in Dollars to
a cash collateral account that Bank controls (collectively, the “Lockbox”); and
(b) to remit any other payments with respect to the Accounts to a blocked
account established with RBS or to wire any other transfer payments to a cash
collateral account that Bank controls (collectively, the “Blocked
Account”).  Upon receipt by Borrowers of Dollar proceeds, Borrowers
shall immediately transfer and deliver same to Bank, along with a detailed cash
receipts journal.  Provided no Event of Default exists or an event
that with notice or lapse of time will be an Event of Default, within three (3)
Business Days of receipt of such amounts by Bank, (a) when GTTA  and
WBS have Non-Streamline Advances outstanding, Bank will turn over to the
applicable Borrower the proceeds of the GTTA and WBS Accounts, other than
Collections with respect to Financed Receivables and the amount of Collections
in excess of the amounts for which Bank has made a Non-Streamline Advance to
GTTA or WBS, less any amounts due to Bank, such as the Finance Charge, the
Facility Fee, payments due to Bank, other fees and expenses, or otherwise or (b)
when GTTA and WBS have Streamline Advances outstanding, Bank will first apply
Collections on GTTA and WBS Accounts to the outstanding Streamline Advances,
then to any amounts due to Bank, such as the Finance Charge, the Facility Fee,
payments due to Bank, other fees and expenses, or otherwise and then will turn
over to the applicable Borrower the remaining proceeds of such Collections;
provided, however, when
Non-Streamline Advances are outstanding, Bank may hold any excess amount with
respect to Financed Receivables as a reserve until the end of the applicable
Reconciliation Period if Bank, in its discretion, determines that other Financed
Receivable(s) may no longer qualify as an Eligible Account at any time prior to
the end of the subject Reconciliation Period. This Section 2.2.7 does not
impose any affirmative duty on Bank to perform any act other than as
specifically set forth herein.  All Accounts and the proceeds thereof
are Collateral and if an Event of Default occurs and is continuing, Bank may
apply the proceeds of such Accounts to the Obligations. It will be considered an
immediate Event of Default if each of the Lockbox is not set-up and operational
on the Effective Date and if the Blocked Account is not set-up and operational
prior to an EMEA Advance.

     

    2.2.8           Good
Faith Deposit.  Borrower has paid to Bank a Good Faith Deposit
of Five Thousand Dollars ($5,000) (the “Good Faith Deposit”) to initiate Bank’s
due diligence review process.  Any portion of the Good Faith Deposit
not utilized to pay Bank Expenses will be applied to the initial Facility
Fee.

     

    Section
2.3                      Repayment of Obligations;
Adjustments.

     

    (a)           Repayment.

     

    (i)           Borrowers
will repay each Non-Streamline Advance, as well as all Finance Charges and
Collateral Handling Fees thereon, on the earliest of: (a) the date on which
payment is 

     


    
      
         


      

      
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    received
on the Financed Receivable with respect to which the Non-Streamline Advance was
made, (b) the date on which the Financed Receivable is no longer an
Non-Streamline Eligible Account, (c) the date on which any Adjustment is
asserted to the Financed Receivable (but only to the extent of the Adjustment if
the Financed Receivable remains otherwise an Eligible Account), (d) the date on
which there is a breach of any warranty or representation set forth in Section
5.3 or a breach of any covenant in this Agreement, or (e) the Maturity Date
(including any early termination). Each payment will also include all accrued
Finance Charges and Collateral Handling Fees with respect to such Non-Streamline
Advance and all other amounts then due and payable hereunder.

     

    (ii)           Borrowers
will repay the principal amount of each Streamline Advance on the Maturity Date
(including any early termination).  Notwithstanding anything to the
contrary in the foregoing, all Collections will be applied to the outstanding
principal amount of Streamline Advances in accordance with Section
2.2.7.

     

    (iii)           Borrower
will pay Finance Charges and Collateral Handling Fees on Streamline Advances,
EMEA Advances and Non-Formula Advances monthly, on the first day of the
month.  Payments of Finance Charges and/or Collateral Handling Fees
received after 3:00 p.m. Eastern time are considered received at the opening of
business on the next Business Day.  When a payment is due on a day
that is not a Business Day, the payment is due the next Business Day and
additional fees or interest, as applicable, shall continue to accrue. In
addition, all payments of Finance Charges and/or Collateral Handling Fees for
Streamline Advances, EMEA Advances and Non-Formula Advances shall be deemed
applied by Bank on account of Obligations one and one-half (1.5) Business Days
following receipt of such payment. The principal amount of all outstanding
Streamline Advances and EMEA Advances plus all accrued but unpaid Finance
Charges and Collateral Handling Fees thereon, and all other amounts due and
payable hereunder are due on the Maturity Date. In addition, notwithstanding
anything to the contrary herein, all outstanding Non-Formula Advances are due
and payable 45 days following an Increase Event; provided, however, that
Borrower may refinance such Advances with Streamline Advances or Non-Streamline
Advances hereunder, as then applicable.

     

    (iv)           Notwithstanding
anything to the contrary in the forgoing, during any Subject Month in which the
Non-Streamline Advance Rate applies, any outstanding Streamline Advances will be
immediately converted to Non-Streamline Advances and repaid in accordance with
subsection (i) above.  If Borrower does not have enough Non-Streamline
Eligible Accounts to finance the total Streamline Advances then-outstanding,
Borrower must immediately repay Bank the excess.  Conversely, during
any Subject Month in which the Streamline Advance Rate applies, any outstanding
Non-Streamline Advances will be immediately converted to Streamline Advances and
repaid in accordance with subsection (ii) above.  If Borrower does not
have enough Streamline Eligible Accounts to finance the total Non-Streamline
Advances then-outstanding, Borrower must immediately repay Bank the
excess.

     

    (b)           Repayment
on Event of Default.  If an Event of Default has occurred and
is continuing, Borrowers will, if Bank demands (or, upon the occurrence of an
Event of Default under Section 8.5, immediately without notice or demand from
Bank) repay all of the Advances.  The demand may, at Bank’s option,
include the Advance for each Financed Receivable then outstanding, and all
accrued Finance Charges, the Early Termination Fee, Collateral Handling Fees,
attorneys and professional fees, court costs and expenses, and any other
Obligations.

     

    (c)           Debit of
Accounts.   Bank may debit any of Borrowers’ deposit
accounts for payments or any amounts Borrowers owe Bank hereunder, as and when
due.  Bank shall promptly notify Borrowers when it debits Borrowers’
accounts.  These debits shall not constitute a set-off.

     


    
      
         


      

      
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    (d)           Adjustments.  If
at any time during the term of this Agreement any Account Debtor asserts an
Adjustment with respect to a Financed Receivable or if a Borrower issues a
credit memorandum with respect to a Financed Receivable, or if any of the
representations, warranties or covenants set forth in Section 5.3 are no longer
true in all material respects, such Borrower will promptly advise
Bank.

     

    Section
2.4                      Power of
Attorney.  Each Borrower irrevocably appoints Bank and its
successors and assigns as attorney-in-fact and authorizes Bank, to: (i)
following the occurrence and during the continuance of an Event of
Default,  sell, assign, transfer, pledge, compromise, or discharge all
or any part of the Financed Receivables; (ii) following the occurrence and
during the continuance of an Event of Default, demand, collect, sue, and give
releases to any Account Debtor for monies due and compromise, prosecute, or
defend any action, claim, case or proceeding about the Financed Receivables,
including filing a claim or voting a claim in any bankruptcy case in Bank’s or
Borrower’s name, as Bank chooses; (iii) following the occurrence and during the
continuance of an Event of Default, prepare, file and sign Borrower’s name on
any notice, claim, assignment, demand, draft, or notice of or satisfaction of
lien or mechanics’ lien or similar document; (iv) regardless of whether there
has been an Event of Default, notify all Account Debtors to pay Bank directly;
(v) regardless of whether there has been an Event of Default, receive, open, and
dispose of mail addressed to Borrower; (vi) regardless of whether there has been
an Event of Default,  endorse Borrower’s name on checks or other
instruments (to the extent necessary to pay amounts owed pursuant to this
Agreement); and (vii) regardless of whether there has been an Event of Default,
execute on Borrower’s behalf any instruments, documents, financing statements to
perfect Bank’s interests in the Financed Receivables and Collateral and do all
acts and things necessary or expedient, as determined solely and exclusively by
Bank, to protect or preserve, Bank’s rights and remedies under this Agreement,
as directed by Bank.

     

    ARTICLE
3

    CONDITIONS
OF LOANS

     

    Section
3.1                      Conditions
Precedent to Initial Advance.  Bank’s agreement to make the
initial Advance is subject to the condition precedent that Bank shall have
received, in form and substance satisfactory to Bank, such  documents,
and completion of such other matters, as Bank may reasonably deem necessary or
appropriate, including, without limitation, subject to the condition precedent
that Bank shall have received, in form and substance satisfactory to Bank, the
following:

     

    (a)           duly
executed original signatures to the Loan Documents to which each Borrower is a
party;

     

    (b)           duly
executed original signatures to the Guaranty;

     

    (c)           duly
executed original signatures to the completed Borrowing Certificates for
Borrowers, plus, if applicable, all exhibits thereto;

     

    (d)           duly
executed original signatures to the Guarantor Certificates for Guarantors, plus,
if applicable, all exhibits thereto;

     

    (e)           good
standing certificate/certificates of foreign qualification from Borrowers, other
than EMEA and Guarantors as set forth more specifically on the closing checklist
delivered to Borrowers in connection with this Agreement, dated no later than 30
days prior to the Effective Date.

     

    (f)           the
Perfection Certificates executed by Borrowers;

     

    (g)           a
legal opinion from counsel to the US Borrowers and Guarantors, in a form
satisfactory to Bank in all respects;

     


    
      
         


      

      
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    (h)           Reaffirmations
of existing subordination agreements with holders of Subordinated Debt in form
and substance satisfactory to Bank in all respects;

     

    (i)           A
Subordination Agreement, duly executed by Scott Charter and Mike Hollander, in
form and substance acceptable to Bank in all respects;

     

    (j)           evidence
satisfactory to Bank that the insurance policies required by Section 6.4 hereof
are in full force and effect, together with appropriate evidence showing loss
payable and/or additional insured clauses or endorsements in favor of Bank;
and

     

    (k)           such
other documents, and completion of such other matters, as Bank may reasonably
deem necessary or appropriate.

     

    Section
3.2                      Conditions
Precedent to Initial EMEA Advance.  In addition to the items
set forth in Section 3.1, Bank’s agreement to make the initial EMEA Advance is
subject to the condition precedent that Bank shall have received, in form and
substance satisfactory to Bank, such  documents, and completion of
such other matters, as Bank may reasonably deem necessary or appropriate,
including, without limitation, subject to the condition precedent that Bank
shall have received, in form and substance satisfactory to Bank, the
following:

     

    (a)           an
original Debenture, duly executed by EMEA and copy of the minutes of a meeting
of the board of directors of EMEA approving the terms of, and entry into, the
Debenture, certified as a true copy of the same by the company secretary of
EMEA;

     

    (b)           a
legal opinion from UK counsel to EMEA, in a form satisfactory to Bank in all
respects; and

     

    (c)           Release
of the Deed of Charge in favor of Bank of Scotland;

     

    (d)           evidence
of the establishment of the Blocked Account at RBS; and

     

    (e)           such
other documents, and completion of such other matters, as Bank may reasonably
deem necessary or appropriate.

     

    Section
3.3                      Conditions
Precedent to all Advances.  Bank’s agreement to make each
Advance, including the initial Advance, is subject to the
following:

     

    (a)           receipt
of the Advance Request/Invoice Transmittal Form, as the case may
be;

     

    (b)           Bank
shall have (at its option) conducted the confirmations and verifications as
described in Section 2.1.1(e); and

     

    (c)           the
representations and warranties in this Agreement shall be true, accurate, and
complete in all material respects on the date of the Advance Request/Invoice
Transmittal Form and on the Funding Date of each Advance; provided, however,
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; and provided, further that those representations and warranties
expressly referring to a specific date shall be true, accurate and complete in
all material respects as of such date, and no Event of Default shall have
occurred and be continuing or result from the Advance.  Each Advance
is Borrower’s representation and warranty on that date that the representations
and warranties in this Agreement remain true, accurate, and complete in all
material respects; provided, however, 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; and provided, further
that

     


    
      
         


      

      
        8

        
          

        

      

      
         


      

    


    those
representations and warranties expressly referring to a specific date shall be
true, accurate and complete in all material respects as of such
date.

     

    ARTICLE
4

    CREATION
OF SECURITY INTEREST

     

    Section
4.1                      Grant of
Security Interest.  Each Borrower, other than EMEA, hereby
grants Bank, to secure the payment and performance in full of all of the
Obligations and the performance of each of such Borrower’s duties under the Loan
Documents, a continuing security interest in, and pledges and assigns to Bank,
the Collateral, wherever located, whether now owned or hereafter acquired or
arising, and all proceeds and products thereof, in each case subject only to the
Permitted Liens.  Each Borrower, other than EMEA, warrants and
represents that the security interest granted herein shall be a first priority
security interest in the Collateral, subject only to the Permitted
Liens.  Each Borrower, other than EMEA, warrants and represents that
the security interest granted herein shall be a first priority security interest
in the Collateral. The payment and performance in full of all the Obligations
and the performance of EMEA’s duties under the Loan Documents is also secured
under the Debenture and any and all other security agreements, mortgages or
other collateral granted to Bank by EMEA as security for the Obligations, now or
in the future.

     

    Except as noted on the Perfection
Certificate with respect to such Borrower, no Borrower is a party to, nor is
bound by, any material license or other agreement with respect to which such
Borrower is the licensee that prohibits or otherwise restricts such Borrower
from granting a security interest in such Borrower’s interest in such license or
agreement or any other property.  Without prior consent from Bank, no
Borrower shall enter into, or become bound by, any such license or agreement
which is reasonably likely to have a material impact on such Borrower’s business
or financial condition.  Borrowers shall take such steps as Bank
requests to obtain the consent of, or waiver by, any person whose consent or
waiver is necessary for all such licenses or contract rights to be deemed
“Collateral” and for Bank to have a security interest in it that might otherwise
be restricted or prohibited by law or by the terms of any such license or
agreement, whether now existing or entered into in the future.

     

    If the Agreement is terminated, Bank’s
lien and security interest in the Collateral shall continue until Borrowers
fully satisfy their Obligations.  If any U.S. Borrower shall at any
time, acquire a commercial tort claim, such Borrower shall promptly notify Bank
in a writing signed by such Borrower of the brief details thereof and grant to
Bank in such writing a security interest therein and in the proceeds thereof,
all upon the terms of this Agreement, with such writing to be in form and
substance satisfactory to Bank.

     

    Upon the termination of this Agreement
and the payment in full of all monetary Obligations, Bank shall, promptly send
the Borrowers, (i) for each jurisdiction in which a UCC financing statement is
on file to perfect the security interests granted to Bank hereunder, a
termination statement to the effect that Bank no longer claims a security
interest in such financing statement, and (ii) such other documents necessary or
appropriate to terminate the security interests granted to Bank hereunder as may
be reasonably requested by the Borrowers, all at Borrower’s sole cost and
expense.

     

    Section
4.2                      Authorization
to File Financing Statements.   Each
Borrower hereby authorizes Bank to file financing statements and the Debenture,
without notice to such Borrower, with all appropriate jurisdictions in order to
perfect or protect Bank’s interest or rights hereunder.

     

    ARTICLE
5

    REPRESENTATIONS
AND WARRANTIES

     

    Each Borrower represents and warrants,
jointly and severally, as follows:

     


    
      
         


      

      
        9

        
          

        

      

      
         


      

    


    Section
5.1                      Due
Organization and Authorization.  Borrower and each of its
Subsidiaries is duly existing and in good standing in its jurisdiction of
formation and qualified and licensed to do business in, and in good standing in,
any jurisdiction in which the conduct of its business or its ownership of
property requires that it be qualified except where the failure to do so could
not reasonably be expected to cause a Material Adverse
Change.   Borrower represents and warrants to Bank that: (a)
Borrower’s exact legal name is that indicated on the Perfection Certificate and
on the signature page hereof; and (b) Borrower is an organization of the type,
and is organized in the jurisdiction, set forth in the Perfection Certificate;
and (c) the Perfection Certificate accurately sets forth Borrower’s
organizational identification number or accurately states that Borrower has
none; and (d) the Perfection Certificate accurately sets forth Borrower’s place
of business, or, if more than one, its chief executive office as well as
Borrower’s mailing address if different, and (e) all other information set forth
on the Perfection Certificate pertaining to Borrower is accurate and
complete.  If Borrower does not now have an organizational
identification number, but later obtains one, Borrower shall forthwith notify
Bank of such organizational identification number.

     

    The execution, delivery and performance
of the Loan Documents have been duly authorized, and do not conflict with
Borrower’s organizational documents, nor constitute an event of default under
any material agreement by which Borrower is bound.  Borrower is not in
default under any agreement to which or by which it is bound in which the
default could reasonably be expected to cause a Material Adverse
Change.

     

    Section
5.2                      Collateral.  Borrower
has good title to the Collateral, free of Liens except Permitted
Liens.  All inventory is in all material respects of good and
marketable quality, free from material defects.  Borrower has no
deposit account, other than the deposit accounts with Bank and deposit accounts
described in the Perfection Certificate delivered to Bank in connection
herewith.  The Collateral is not in the possession of any third party
bailee (such as a warehouse).  Except as hereafter disclosed to Bank
in writing by Borrower, none of the components of the Collateral shall be
maintained at locations other than as provided in the Perfection
Certificate.  In the event that Borrower, after the date hereof,
intends to store or otherwise deliver any portion of the Collateral to a bailee,
then Borrower will first receive the written consent of Bank and such bailee
must acknowledge in writing that the bailee is holding such Collateral for the
benefit of Bank. EMEA currently has no outstanding overdrafts on its bank
accounts with the Bank of Scotland or otherwise.

     

    Section
5.3                      Financed
Receivables.  Borrower represents and warrants for each
Financed Receivable:

     

    (a)           Such
Financed Receivable is an Eligible Account;

     

    (b)           Borrower
is the owner of and has the legal right to sell, transfer, assign and encumber
such Financed Receivable;

     

    (c)           The
correct amount is on the Advance Request/Invoice Transmittal Form and is not
disputed;

     

    (d)           Other
than for Deferred Revenue financed with a Streamline Advance or EMEA Advance,
payment is not contingent on any obligation or contract and Borrower has
fulfilled all its obligations as of the Advance Request/Invoice Transmittal Form
date;

     

    (e)           Such
Financed Receivable is based on an actual sale and delivery of goods and/or
services rendered, is due to Borrower, is not in default, has not been
previously sold, assigned, transferred, or pledged and is free of any liens,
security interests and encumbrances other than Permitted Liens;

     

    (f)           There
are no defenses, offsets, counterclaims or agreements for which the Account
Debtor may claim any deduction or discount;

     


    
      
         


      

      
        10

        
          

        

      

      
         


      

    


    (g)           Borrower
reasonably believes no Account Debtor is insolvent or subject to any Insolvency
Proceedings;

     

    (h)           Borrower
has not filed or had filed against it Insolvency Proceedings and does not
anticipate any filing;

     

    (i)           Bank
has the right to endorse and/ or require Borrower to endorse all payments
received on Financed Receivables and all proceeds of Collateral;
and

     

    (j)           No
representation, warranty or other statement of Borrower in any certificate or
written statement given to Bank contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statement contained in
the certificates or statement not misleading.

     

    Section
5.4                      Litigation.  There
are no actions or proceedings pending or, to the knowledge of Borrower’s
Responsible Officers, threatened by or against Borrower or any its Subsidiaries
in which an adverse decision could reasonably be expected to cause a Material
Adverse Change.

     

    Section
5.5                      No
Material Deviation  in Financial Statements.  All
consolidated financial statements for Borrower and any of its Subsidiaries
delivered to Bank fairly present in all material respects Borrower’s
consolidated financial condition and Borrower’s consolidated results of
operations.  There has not been any material deterioration in
Borrower’s consolidated financial condition since the date of the most recent
financial statements submitted to Bank.

     

    Section
5.6                      Solvency.  Borrower
is able to pay its debts (including trade debts) as they mature.

     

    Section
5.7                      Regulatory
Compliance.  Borrower is not an “investment company” or a
company “controlled” by an “investment company” under the Investment Company
Act.  Borrower is not engaged as one of its important activities in
extending credit for margin stock (under Regulations X, T and U of the Federal
Reserve Board of Governors).  Borrower has complied in all material
respects with the U.S. Federal Fair Labor Standards Act, or, in relation to
EMEA, all employment legislation in force in England or Wales (including,
without limitation the UK 1996 Employment Rights Act).  Borrower has
not violated any laws, ordinances or rules, the violation of which could
reasonably be expected to cause a Material Adverse Change.  None of
Borrower’s or any Subsidiary’s properties or assets has been used by Borrower or
any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in
disposing, producing, storing, treating, or transporting any hazardous substance
other than legally.  Borrower and each Subsidiary has timely filed all
required tax returns and paid, or made adequate provision to pay, all material
taxes, except those being contested in good faith with adequate reserves under
GAAP.  Borrower and each Subsidiary has obtained all consents,
approvals and authorizations of, made all declarations or filings with, and
given all notices to, all government authorities that are necessary to continue
its business as currently conducted except where the failure to obtain or make
such consents, declarations, notices or filings would  not reasonably
be expected to cause a Material Adverse Change.

     

    Section
5.8                      Subsidiaries.  Borrower
does not own any stock, partnership interest or other equity securities except
for Permitted Investments.

     

    Section
5.9                      Full
Disclosure.  No written representation, warranty or other
statement of Borrower in any certificate or written statement given to Bank
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained in the certificates or
statements not misleading.

     


    
      
         


      

      
        11

        
          

        

      

      
         


      

    


    ARTICLE
6

    AFFIRMATIVE
COVENANTS

     

    Until all monetary Obligations are paid
in full and this Agreement has terminated, Borrowers shall do all of the
following:

     

    Section
6.1                      Government
Compliance.  Each Borrower shall maintain its and all
Subsidiaries’ legal existence and good standing in its jurisdiction of formation
and maintain qualification in each jurisdiction in which the failure to so
qualify would reasonably be expected to have a Material Adverse
Change.  Each Borrower shall comply, and have each Subsidiary comply,
with all laws, ordinances and regulations to which it is subject, noncompliance
with which could have a material adverse effect on such Borrower’s business or
operations or would reasonably be expected to cause a Material Adverse
Change.

     

    Section
6.2                      Financial
Statements, Reports, Certificates.

     

    (a)           Each
Borrower shall deliver to Bank, unless otherwise noted:  (i) as soon
as available, but no later than thirty (30) days after the last day of each
month, a company prepared consolidating balance sheet and income statement
covering Borrowers’ operations during the period certified by a Responsible
Officer and in substantially the same form as provided to Bank in connection
with its underwriting; (ii) (A) within five (5) days of mailing, copies of all
statements, reports and notices mailed to GTTI’s security holders or to any
holders of Subordinated Debt and (B) within five (5) days of filing, if such
reports have not been made public, all reports on Form 10-K, 10-Q and 8-K filed
with the Securities and Exchange Commission; (iii) a prompt report of any legal
actions pending or threatened in writing against Borrower or any Subsidiary that
could reasonably be expected to result in damages or costs to Borrower or any
Subsidiary of One Hundred Thousand Dollars ($100,000.00) or more; and (iv)
budgets, sales projections, operating plans or other financial
information reasonably requested by Bank.

     

    (b)           Within
thirty (30) days after
the last day of each month, Borrower shall deliver to Bank with the monthly
financial statements a Compliance Certificate signed by a Responsible Officer in
the form of Exhibit
B.

     

    (c)           During
any Subject Month in which the Streamline Advance Rate applies, provide Bank
with, as soon as available, but no later than five (5) days following each
Reconciliation Period, a Streamline Accounts Listing.

     

    (d)           No
later than five (5) days following each Reconciliation Period, an EMEA Accounts
Listing.

     

    (e)           Upon
Bank’s request, provide a written report respecting any Financed Receivable, if
payment of any Financed Receivable does not occur by its due date and include
the reasons for the delay.

     

    (f)           Provide
Bank with, as soon as available, but no later than thirty (30) days following
each Reconciliation Period, an aged listing of accounts receivable and accounts
payable by invoice date, in substantially the same form as provided to Bank in
connection with its underwriting.

     

    (g)           Provide
Bank with, as soon as available, but no later than thirty (30) days following
each Reconciliation Period, a Deferred Revenue report, in substantially the same
form as provided to Bank in connection with its underwriting.        

    
       

      (h)            Borrower
will allow Bank to audit Borrower’s Collateral, including, but not limited to,
Borrower’s Accounts and accounts receivable, at Borrower’s expense, upon
reasonable notice to Borrower;

    


    
      
         


      

      
        12

        
          

        

      

      
         


      

    


    provided,
however, that Borrower shall be obligated to pay for not more than one (1) audit
per year, unless an Event of Default has occurred and is
continuing.  If an Event of Default has occurred and is continuing,
Bank may audit Borrower’s Collateral, including, but not limited to, Borrower’s
Accounts and accounts receivable at Borrower’s expense and at Bank’s sole and
exclusive discretion and without notification and authorization from
Borrower.  Notwithstanding anything to the contrary herein, Bank will
postpone Borrowers’ 2009 audit until March, 2010, unless an Event of Default has
occurred and is continuing.

     

    Section
6.3                      Taxes.  Each
Borrower shall make, and cause each of its Subsidiaries to make, timely payment
of all material federal, state, and local taxes or assessments (other than taxes
and assessments which such Borrower is contesting in good faith, with adequate
reserves maintained in accordance with GAAP) and will deliver to Bank, on
demand, appropriate certificates attesting to such payments.

     

    Section
6.4                      Insurance.  Each
Borrower shall keep its business and the Collateral insured for risks and in
amounts as Bank may reasonably request.  Insurance policies shall be
in a form, with companies, and in amounts that are reasonably satisfactory to
Bank.  All property policies shall have a lender’s loss payable
endorsement showing Bank as an additional  loss payee and all
liability policies shall show Bank as an additional insured and  all
policies shall provide that the insurer must give Bank at least twenty (20) days
notice before canceling its policy.  At Bank’s request, Borrowers
shall deliver certified copies of policies and evidence of all premium payments.
Proceeds payable under any policy shall, at Bank’s option, following the
occurrence and during the continuance of an Event of Default, be payable to Bank
on account of the Obligations.  If any Borrower fails to obtain
insurance as required under this Article or to pay any amount or furnish
any required proof of payment to third persons and Bank, Bank may make all or
part of such payment or obtain such insurance policies required in this
Article and take any action under the policies Bank deems
prudent.

     

    Section
6.5                      Accounts.

     

    (a)           In
order to permit Bank to monitor Borrowers’ financial performance and condition,
Each Borrower, and all of such Borrower’s U.S. and UK Subsidiaries, shall
maintain such Borrower’s, and such Subsidiaries, primary depository and
operating accounts and securities accounts with Bank, Bank’s Affiliates, or, in
the case of EMEA and any UK Subsidiary, RBS, which accounts shall represent at
least 95% of the Dollar Equivalent of such Borrower’s and all of such
Subsidiaries accounts at all financial institutions.

     

    (b)           Each
Borrower shall identify to Bank, in writing, any bank or securities account
opened by such Borrower with any institution other than Bank.  In
addition, for each such account that a Borrower at any time opens or maintains,
such Borrower shall, at Bank’s request and option, pursuant to an agreement in
form and substance acceptable to Bank, cause the depository bank or securities
intermediary to agree that such account is the collateral of Bank pursuant to
the terms hereunder.  The provisions of the previous sentence shall
not apply to deposit accounts exclusively used for payroll, payroll taxes and
other employee wage and benefit payments to or for the benefit of a Borrower’s
employees.

     

    Section
6.6                      Financial
Covenants.  GTTI shall maintain on a consolidated basis with
respect to GTTI and its Subsidiaries, measured at the end of each month,
aggregate Net Operating Cash Flow,  prior to an Increase Event, of at
least:

     

    
      	
              For the months ending:

            	
              Minimum Net Operating
      Cash Flow:

            
	
                December
      31, 2009

            	
              ($150,000)

            
	
                January
      31 – March 31, 2010

            	
              $1.00

            
	
              For the three months
      ending:

            	 
      
	
                April
      30, 2010

            	
              $200,000

            
	
                May
      31, 2010

            	
              $250,000

            
	
                June
      30, 2010

            	
              $300,000

            


       

      

        
          
             


          

          
            13

            
              

            

          

          
             


          

        

      

       

      	
                July
      31, 2010

            	
              $350,000

            
	
                August
      31, 2010

            	
              $400,000

            
	
                September
      30, 2010 and thereafter

            	
              $500,000

            


    

     

               and upon an Increase Event, of at
least:

     

    
      	
              For the months
      ending:

            	
              Minimum Net Operating
      Cash Flow:

            
	
                December
      31, 2009

            	
              ($150,000)

            
	
                January
      31 – March 31, 2010

            	
              $1.00

            
	
              For the three months
      ending:

            	 
      
	
                April
      30, 2010 – June 30, 2010

            	
              $1,250,000

            
	
                July
      31, 2010 and thereafter

            	
              $1,750,000

            


    

    


    Section
6.7                      Further
Assurances.  Each Borrower shall execute any further
instruments and take further action as Bank reasonably requests to perfect or
continue Bank’s security interest in the Collateral or to effect the purposes of
this Agreement and/or any of the other Loan Documents.

     

    ARTICLE 7

    NEGATIVE
COVENANTS

     

    Until all monetary Obligations are paid
in full and this Agreement has terminated, no Borrower shall do any of the
following without Bank’s prior written consent.

     

    Section
7.1                      Dispositions.  Convey,
sell, lease, transfer or otherwise dispose of (collectively a “Transfer”), or
permit any of its Subsidiaries to Transfer, all or any part of its business or
property, except for Transfers (i) of inventory in the ordinary course of
business; (ii) of non-exclusive licenses and similar arrangements for the use of
the property of Borrower or its Subsidiaries in the ordinary course of business;
or (iii) of worn-out or obsolete equipment.

     

    Section
7.2                      Changes
in Business, Ownership, Management or Business
Locations.  Engage in or permit any of its Subsidiaries to
engage in any business other than the businesses currently engaged in by
Borrower ), enter into any transaction or series of related transactions in
which the stockholders of Borrower who were not stockholders immediately prior
to the first such transaction own more than 40% of the voting stock of Borrower
immediately after giving effect to such transaction or related series of such
transactions (other than by the sale of Borrower’s equity securities in a public
offering), or have a change in both its Chief Executive Officer and Chief Financial
Officer.  Borrower shall not, without at least thirty (30) days prior
written notice to Bank: (i) relocate its chief executive office, or add any new
offices or business locations, including warehouses  (unless such new
offices or business locations contain less than Twenty Five Thousand Dollars
($25,000.00) in Borrower’s assets or property), or (ii) change its jurisdiction
of organization, or (iii) change its organizational structure or type, or (iv)
change its legal name, or (v) change any organizational number (if any) assigned
by its jurisdiction of organization.

     

    Section
7.3                      Mergers
or Acquisitions.  Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with any other Person, or acquire, or
permit any of its Subsidiaries to acquire, all or substantially all of the
capital stock or property of another Person, except where (a) no Event of
Default has occurred and is continuing or would exist after giving effect to the
transaction, (b) Borrower is the surviving legal entity and (c) the transaction
does not result in a decrease to Borrower’s Tangible Net Worth of more than
25%.  A Subsidiary may merge or consolidate into another Subsidiary or
into Borrower.

     

         Section
7.4                      Indebtedness.  Create,
incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do
so, other than Permitted Indebtedness.


    
      
         


      

      
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    Section
7.5                      Encumbrance.  Create,
incur, or allow any Lien on any of its property, or assign or convey any right
to receive income, including the sale of any Accounts, or permit any of its
Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not
to be subject to the first priority security interest granted
herein.  The Collateral may also be subject to Permitted
Liens.

     

    Section
7.6                      Distributions;
Investments.  (a) Directly or indirectly acquire or own any
Person, or make any Investment in any Person, other than Permitted Investments
or Investments permitted in Section 7.3, or permit any of its Subsidiaries to do
so; or (b) pay any dividends or make any distribution or payment or redeem,
retire or purchase any capital stock; provided that (i) Borrower may convert any
of its convertible securities into other securities pursuant to the terms of
such convertible securities or otherwise in exchange thereof, (ii) Borrower may
pay dividends solely in common stock; and (iii) Borrower may repurchase the
stock of former employees or consultants pursuant to stock repurchase agreements
so long as an Event of Default does not exist at the time of such repurchase and
would not exist after giving effect to such repurchase, provided such repurchase
does not exceed in the aggregate of One Hundred Thousand Dollars ($100,000) in
any fiscal year.

     

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

     

    Section
7.8                      Subordinated
Debt.  Make or permit any payment on any Subordinated Debt,
except under the terms of the Subordinated Debt, or amend any provision in any
document relating to the Subordinated Debt, without Bank’s prior written
consent.

     

    Section
7.9                      Compliance.  Become
an “investment company” or a company controlled by an “investment company”,
under the Investment Company Act of 1940 or undertake as one of its important
activities extending credit to purchase or carry margin stock, or use the
proceeds of any Advance for that purpose; fail to meet the minimum funding
requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as
defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards
Act or violate any other law or regulation, if the violation could reasonably be
expected to have a material adverse effect on Borrower’s business or operations
or would reasonably be expected to cause a Material Adverse Change, or permit
any of its Subsidiaries to do so.

     

    ARTICLE
8

    EVENTS OF
DEFAULT

     

    Any one of the following is an Event of
Default:

     

    Section
8.1                      Payment
Default.  Any Borrower fails to pay any of the Obligations when
due;

     

    Section
8.2                      Covenant
Default.  Any Borrower fails or neglects to perform any
obligation in Article 6 or violates any covenant in Article 7 or fails
or neglects to perform, keep, or observe any other material term, provision,
condition, covenant or agreement contained in this Agreement, any of the other
Loan Documents and as to any default under such other term, provision,
condition, covenant or agreement that can be cured, has failed to cure the
default within ten (10) days after the occurrence thereof; provided, however,
grace and cure periods provided under this section shall not apply to financial
covenants or any other covenants that are required to be satisfied, completed or
tested by a date certain;

     

         Section
8.3                      Material
Adverse Change.  A Material Adverse Change occurs in relation
to any Borrower;

    
 

    
      
         


      

      
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    Section
8.4                      Attachment.  (i)
Any portion of any Borrower’s assets is attached, seized, levied on, or comes
into possession of a trustee or receiver and the attachment, seizure or levy is
not removed in ten (10) days; (ii) the service of process upon any Borrower
seeking to attach, by trustee or similar process, any funds of such Borrower on
deposit with Bank, or any entity under the control of Bank (including a
subsidiary); (iii) any Borrower is enjoined, restrained, or prevented by court
order from conducting any part of its business; (iv) a judgment or other claim
becomes a Lien on a portion of any Borrower’s assets; or (v) a notice of lien,
levy, or assessment is filed against any of any Borrower’s assets by any
government agency and not paid within ten (10) days after such Borrower receives
notice;

     

    Section
8.5                      Insolvency.  (i)
Any Borrower is unable to pay its debts (including trade debts) as they become
due or otherwise becomes insolvent; (ii) any Borrower begins an Insolvency
Proceeding; or (iii) an Insolvency Proceeding is begun against any Borrower and
not dismissed or stayed within thirty (30) days (but no Advances shall be made
before any Insolvency Proceeding is dismissed);

     

    Section
8.6                      Other
Agreements.  If there is a default in any agreement to which
any Borrower is a party with a third party or parties resulting in a right by
such third party or parties, whether or not exercised, to accelerate the
maturity of any Indebtedness in an amount in excess of the Dollar Equivalent of
One Hundred Thousand Dollars ($100,000) or that could result in a Material
Adverse Change;

     

    Section
8.7                      Judgments.  If
a judgment or judgments for the payment of money in an amount, individually or
in the aggregate, of at least the Dollar Equivalent of Two Hundred Thousand
Dollars ($200,000) shall be rendered against any Borrower and shall remain
unsatisfied and unstayed for a period of ten (10) days (provided that no
Advances will be made prior to the satisfaction or stay of such
judgment);

     

    Section
8.8                      Misrepresentations.  If
any Borrower or any Person acting for such Borrower makes any material
misrepresentation or material misstatement now or later in any warranty or
representation in this Agreement or in any writing delivered to Bank or to
induce Bank to enter into this Agreement or any other Loan
Document;

     

    Section
8.9                      Subordinated
Debt. A default or breach occurs under any agreement between any Borrower
and any creditor of such Borrower that signed a subordination agreement with
Bank, or any creditor that has signed a subordination agreement with Bank
breaches any terms of the subordination agreement, in each case, that is not
cured within the cure periods set forth for any such breach
therein.

     

    Section
8.10                      Guaranty.  (a) Any
guaranty of any Obligations terminates or ceases for any reason to be in full
force and effect; (b) any Guarantor does not perform any obligation or covenant
under any guaranty of the Obligations; (c) any circumstance described in
Sections 8.4, 8.5, 8.7, or 8.8 occurs with respect to any Guarantor, (d) the
liquidation, winding up, or termination of existence of any Guarantor; or (e)
(i) a material impairment in the perfection or priority of Bank’s Lien in the
collateral provided by Guarantor or in the value of such collateral or (ii) a
material adverse change in the general affairs, management, results of
operation, condition (financial or otherwise) or the prospect of repayment of
the Obligations occurs with respect to any Guarantor.

     

    ARTICLE
9

    BANK’S
RIGHTS AND REMEDIES

     

    Section
9.1                      Rights
and Remedies.  When an Event of Default occurs and continues
Bank may, without notice or demand, do any or all of the following:

     

    (i)           Declare
all Obligations immediately due and payable (but if an Event of Default
described in Section 8.5 occurs all Obligations are immediately due and payable
without any action by Bank);

     

    
      
         


      

      
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    (ii)           Stop
advancing money or extending credit for Borrowers’ benefit under this Agreement
or under any other agreement between any Borrower and Bank;

     

    (iii)           Settle
or adjust disputes and claims directly with Account Debtors for amounts, on
terms and in any order that Bank considers advisable and notify any Person owing
any Borrower money of Bank’s security interest in such funds and verify the
amount of such account.  Borrower shall collect all payments in trust
for Bank and, if requested by Bank, immediately deliver the payments to Bank in
the form received from the Account Debtor, with proper endorsements for
deposit;

     

    (iv)           Make
any payments and do any acts it considers necessary or reasonable to protect its
security interest in the Collateral.  Borrower shall assemble the
Collateral if Bank requests and make it available as Bank
designates.  Bank may enter premises where the Collateral is located,
take and maintain possession of any part of the Collateral, and pay, purchase,
contest, or compromise any Lien which appears to be prior or superior to its
security interest and pay all expenses incurred. Each Borrower grants Bank a
license to enter and occupy any of its premises, without charge, to exercise any
of Bank’s rights or remedies;

     

    (v)           Apply
to the Obligations any (i) balances and deposits of any Borrower it holds, or
(ii) any amount held by Bank owing to or for the credit or the account of any
Borrower;

     

    (vi)           Ship,
reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise
for sale, and sell the Collateral.  Bank is hereby granted a
non-exclusive, royalty-free license or other right to use, without charge,
Borrower’s labels, patents, copyrights, mask works, rights of use of any name,
trade secrets, trade names, trademarks, service marks, and advertising matter,
or any similar property as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in
connection with Bank’s exercise of its rights under this Section, Borrowers’
rights under all licenses and all franchise agreements inure to Bank’s
benefit;

     

    (vii)           Place
a “hold” on any account maintained with Bank and/or deliver a notice of
exclusive control, any entitlement order, or other directions or instructions
pursuant to any control agreement or similar agreements providing control of any
Collateral;

     

    (viii)           Exercise
all rights and remedies and dispose of the Collateral according to the Code;
and

     

    (ix)           Enforce
the Debenture in accordance with its terms.

     

    Section
9.2                      Bank
Expenses; Unpaid Fees.  Any amounts paid by Bank pursuant to
Section 9.1 shall constitute Bank Expenses and are immediately due and payable,
and shall bear interest at the Default Rate and be secured by the Collateral and
the Debenture.  No payments by Bank shall be deemed an agreement to
make similar payments in the future or Bank’s waiver of any Event of
Default.  In addition, any amounts advanced hereunder which are not
based on Financed Receivables (including, without limitation, unpaid fees and
Finance Charges as described in Section 2.2) shall accrue interest at the
Default Rate and be secured by the Collateral.

     

    Section
9.3                      Bank’s
Liability for Collateral.  So long as Bank complies with
reasonable banking practices regarding the safekeeping of collateral, Bank shall
not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any
loss or damage to the Collateral; (c) any diminution in the value of the
Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or
other Person.  Borrowers bear all risk of loss, damage or destruction
of the Collateral.  For purposes of this Section 9.3, the term
“Collateral” shall include, in the case of EMEA, the property and assets
detailed in clause 3 of the Debenture.

     


    
      
         


      

      
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    Section
9.4                      Remedies
Cumulative.  Bank’s rights and remedies under this Agreement,
the Loan Documents, and all other agreements are cumulative.  Bank has
all rights and remedies provided under the Code, by law, or in equity. Bank’s
exercise of one right or remedy is not an election, and Bank’s waiver of any
Event of Default is not a continuing waiver. Bank’s delay is not a waiver,
election, or acquiescence. No waiver hereunder shall be effective unless signed
by Bank and then is only effective for the specific instance and purpose for
which it was given.

     

    Section
9.5                      Demand
Waiver.  Each Borrower waives demand, notice of default or
dishonor, notice of payment and nonpayment, notice of any default, nonpayment at
maturity, release, compromise, settlement, extension, or renewal of accounts,
documents, instruments, chattel paper, and guarantees held by Bank on which
Borrower is liable.

     

    Section
9.6                      Default
Rate.  If an Event of Default has occurred and is continuing,
all Obligations shall accrue interest at the Applicable Rate plus five percent
(5.0%) per annum (the “Default Rate”).

     

    ARTICLE
10

    NOTICES.

     

    Notices or demands by either party
about this Agreement must be in writing and personally delivered or sent by an
overnight delivery service, by certified mail postage prepaid return receipt
requested, or by fax to the addresses listed at the beginning of this
Agreement.  A party may change notice address by written notice to the
other party.

     

    ARTICLE
11

    CHOICE OF LAW, VENUE AND
JURY TRIAL WAIVER

     

    Except as may be otherwise set forth
therein, Virginia law governs the Loan Documents without regard to principles of
conflicts of law.  Each Borrower and Bank each submit to the exclusive
jurisdiction of the State and Federal courts in the Commonwealth of Virginia and
Borrower accepts jurisdiction of the courts and venue in Fairfax County,
Virginia.  NOTWITHSTANDING THE FOREGOING, BANK SHALL HAVE THE RIGHT TO
BRING ANY ACTION OR PROCEEDING AGAINST ANY BORROWER OR ITS PROPERTY IN THE
COURTS OF ANY OTHER JURISDICTION WHICH BANK DEEMS NECESSARY OR APPROPRIATE IN
ORDER TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE BANK’S RIGHTS AGAINST
SUCH BORROWER OR ITS PROPERTY.

     

    TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, BORROWERS AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN
DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF
DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES
TO ENTER INTO THIS AGREEMENT.  EACH PARTY HAS REVIEWED THIS WAIVER
WITH ITS COUNSEL.

     

    ARTICLE
12

    GENERAL
PROVISIONS

     

    Section
12.1                      Successors
and Assigns.  This Agreement binds and is for the benefit of
the successors and permitted assigns of each party.  No Borrower may
assign this Agreement or any rights or Obligations under it without Bank’s prior
written consent which may be granted or withheld in Bank’s
discretion.  Bank has the right, without the consent of or notice to
Borrowers, to sell, transfer, negotiate, or grant participation in all or any
part of, or any interest in, Bank’s obligations, rights and benefits under this
Agreement, the Loan Documents or any related agreement.

     


    
      
         


      

      
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    Section
12.2                      Indemnification.  Each
Borrower hereby indemnifies, defends and holds Bank and its officers, employees,
directors and agents harmless against:  (a) all obligations, demands,
claims, and liabilities asserted by any other party in connection with the
transactions contemplated by the Loan Documents; and (b) all losses or Bank
Expenses incurred, or paid by Bank from, following, or consequential to
transactions between Bank and such Borrower (including reasonable attorneys’
fees and expenses), except for losses caused by Bank’s gross negligence or
willful misconduct.

     

    Section
12.3                      Time of
Essence.  Time is of the essence for the performance of all
Obligations in this Agreement.

     

    Section
12.4                      Severability
of Provision.  Each provision of this Agreement is severable
from every other provision in determining the enforceability of any
provision.

     

    Section
12.5                      Amendments
in Writing; Integration.  All amendments to this Agreement must
be in writing signed by both Bank and Borrower.  This Agreement and
the Loan Documents represent the entire agreement about this subject matter, and
supersede prior negotiations or agreements.  All prior agreements,
understandings, representations, warranties, and negotiations between the
parties about the subject matter of this Agreement and the Loan Documents merge
into this Agreement and the Loan Documents.

     

    Section
12.6                      Counterparts.  This
Agreement may be executed in any number of counterparts and by different parties
on separate counterparts, each of which, when executed and delivered, are an
original, and all taken together, constitute one Agreement.

     

    Section
12.7                      Survival.  All
covenants, representations and warranties made in this Agreement continue in
full force while any Obligations remain outstanding.  The obligation
of Borrower in Section 12.2 to indemnify Bank shall survive until the statute of
limitations with respect to such claim or cause of action shall have
run.

     

    
             Section
12.8                      Confidentiality.  In
handling any confidential information, Bank shall exercise the same degree of
care that it exercises for its own proprietary information, but disclosure of
information may be made: (i) to Bank’s subsidiaries or affiliates in connection
with their business with Borrower; (ii) to prospective transferees or purchasers
of any interest in the Advances (provided, however, Bank shall use commercially
reasonable efforts in obtaining such prospective transferee’s or purchaser’s
agreement to the terms of this provision); (iii) as required by law, regulation,
subpoena, or other order, (iv) as required in connection with Bank’s examination
or audit; and (v) as Bank considers appropriate in exercising remedies under
this Agreement.  Confidential information does not include information
that either: (a) is in the public domain or in Bank’s possession when disclosed
to Bank, or becomes part of the public domain after disclosure to Bank, other
than as a result of a breach by Bank or its Affiliates of their confidentiality
obligations hereunder; or (b) is disclosed to Bank by a third party, if Bank
does not know that the third party is prohibited from disclosing the
information.

     

    Section
12.9                      Attorneys’
Fees, Costs and Expenses.   In any action or proceeding
between any Borrower and Bank arising out of the Loan Documents, the prevailing
party will be entitled to recover its reasonable attorneys’ fees and other
reasonable costs and expenses incurred, in addition to any other relief to which
it may be entitled.

     

    ARTICLE
13

    DEFINITIONS

     

    Section
13.1                      Definitions.  In
this Agreement:

     

    
      
         


      

      
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    “Accounts” are all existing
and later arising accounts, contract rights, and other obligations owed
Borrowers in connection with its sale or lease of goods (including licensing
software and other technology) or provision of services, all credit insurance,
guaranties, other security and all merchandise returned or reclaimed by
Borrowers and Borrowers’ Books relating to any of the foregoing.

     

    “Account Debtor” is as defined
in the Code and shall include, without limitation, any person liable on any
Financed Receivable, such as, a guarantor of the Financed Receivable and any
issuer of a letter of credit or banker’s acceptance.

     

    “Adjustments” are all
discounts, allowances, returns, disputes, counterclaims, offsets, defenses,
rights of recoupment, rights of return, warranty claims, or short payments,
asserted by or on behalf of any Account Debtor for any Financed
Receivable.

     

    “Advance Request/Invoice Transmittal
Form” is that certain form attached hereto as Exhibit C.

     

    “Advance” is a Streamline
Advance and/or Non-Streamline Advance and/or EMEA Advance and/or Non-Formula
Advance.

     

    “Advance Rate” is the
Streamline Advance Rate and/or the Non-Streamline Advance Rate and/or the EMEA
Advance Rate.

     

    “Affiliate” is a Person that
owns or controls directly or indirectly the Person, any Person that controls or
is controlled by or is under common control with the Person, and each of that
Person’s senior executive officers, directors, partners and, for any Person that
is a limited liability company, that Person’s managers and members.

     

    “Applicable Rate” is (a) for
Streamline Advances and EMEA Advances, the Prime Rate plus one and
three-quarters percent (1.75%), (b) for Non-Streamline Advances, the Prime Rate
plus two percent (2.0%) and (c) for Non-Formula Advances, the Prime Rate plus
two and one-quarter percent (2.25%).

     

    “Bank Expenses” are all audit
fees and expenses and reasonable costs or expenses (including reasonable
attorneys’ fees and expenses) for preparing, negotiating, administering,
defending and enforcing the Loan Documents (including appeals or Insolvency
Proceedings).

     

    “Blocked Account” is defined
in Section 2.2.7.

     

    “Borrower’s Books” are all
Borrower’s books and records including ledgers, records regarding Borrower’s
assets or liabilities, the Collateral, business operations or financial
condition and all computer programs or discs or any equipment containing the
information.

     

    “Business Day” is any day that
is not a Saturday, Sunday or a day on which Bank is closed.

     

    “Code” is the Uniform
Commercial Code as adopted in Virginia, as amended and as may be amended and in
effect from time to time.

     

    “Collateral” is any and all
properties, rights and assets of Borrowers granted by Borrowers to Bank or
arising under the Code, now, or in the future, in which Borrower obtains an
interest, or the power to transfer rights, as described on Exhibit A.

     

    “Collateral Handling Fee” is
defined in Section 2.2.4.


    
      
         


      

      
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    “Collections” are all funds
received by Bank from or on behalf of an Account Debtor for Financed
Receivables.

     

    “Compliance Certificate” is
attached as Exhibit
B.

     

    “Contingent Obligation” is,
for any Person, any direct or indirect liability, contingent or not, of that
Person for (i) any indebtedness, lease, dividend, letter of credit or other
obligation of another such as an obligation directly or indirectly guaranteed,
endorsed, co-made, discounted or sold with recourse by that Person, or for which
that Person is directly or indirectly liable; (ii) any obligations for undrawn
letters of credit for the account of that Person; and (iii) all obligations from
any interest rate, currency or commodity swap agreement, interest rate cap or
collar agreement, or other agreement or arrangement designated to protect a
Person against fluctuation in interest rates, currency exchange rates or
commodity prices;  but “Contingent Obligation” does not include
endorsements in the ordinary course of business.  The amount of a
Contingent Obligation is the stated or determined amount of the primary
obligation for which the Contingent Obligation is made or, if not determinable,
the maximum reasonably anticipated liability for it determined by the Person in
good faith; but the amount may not exceed the maximum of the obligations under
the guarantee or other support arrangement.

     

    “Debenture” means that certain
Debenture of even date herewith by and between Bank and EMEA.

     

    “Default Rate” is defined in
Section 9.6.

     

    “Deferred Revenue” is all
amounts received or  invoiced, as appropriate, in advance of
performance under contracts and not yet recognized as revenue.

     

    “Dollars,” “dollars” or use of
the sign “$” means only lawful money of the United States and not any other
currency, regardless of whether that currency uses the “$” sign to denote its
currency or may be readily converted into lawful money of the United
States.

     

    “Dollar Equivalent” is, at any
time, (a) with respect to any amount denominated in Dollars, such amount, and
(b) with respect to any amount denominated in a Foreign Currency, the equivalent
amount therefor in Dollars as determined by Bank at such time on the basis of
the then-prevailing rate of exchange in San Francisco, California, for sales of
the Foreign Currency for transfer to the country issuing such Foreign
Currency.

     

    “Early Termination Fee” is
defined in Section 2.1.1.

     

    “EBITDA” means earnings before
interest, taxes, depreciation and amortization, in accordance with
GAAP.

     

    “Effective Date” is the date
of this Agreement.

     

    “Eligible Accounts” are
Streamline Eligible Accounts and/or Non-Streamline Eligible Accounts and/or EMEA
Eligible Accounts.

     

    “EMEA Accounts Listing” is a
summary of EMEA Eligible Accounts in form and substance acceptable to Bank in
all respects.

     

    
      “EMEA Advance Rate” means is
eighty percent (80.0%), net of any offsets related to each specific Account
Debtor, other than Deferred Revenue, or such other percentage as Bank
establishes under Section 2.1.1(c).

       

    

    
      
         


      

      
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    “EMEA Eligible Accounts” are
billed Accounts in the ordinary course of EMEA’s business that meet all such
Borrower’s representations and warranties in Section 5.3, have been, at the
option of Bank, confirmed in accordance with Section 2.1.1(e), and are due and
owing from Account Debtors deemed creditworthy by Bank in its sole
discretion.  Without limiting the fact that the determina­tion of
which Accounts are eligible hereunder is a matter of Bank discretion in each
instance, EMEA Eligible Accounts shall not include the following Accounts (which
listing may be amended or changed in Bank’s discretion with notice to
Borrowers):

     

    (i)           Accounts
that the Account Debtor has not paid within ninety (90) days of invoice
date;

     

    (ii)           Accounts
for an Account Debtor, fifty percent (50%) or more of whose Accounts have not
been paid within ninety (90) days of invoice date;

     

    (iii)           Accounts
owing from an Account Debtor, including Affiliates, whose total obligations to
Borrower exceed thirty percent (30%) of all Accounts, for the amounts that
exceed that percentage, unless Bank approves in writing

     

    (iv)           Accounts
for which the Account Debtor does not have its principal place of business in
the United Kingdom;

     

    (v)           Accounts
owing from an Account Debtor which is a United States government entity or any
department, agency, or instrumentality thereof unless Borrower has assigned its
payment rights to Bank and the assignment has been acknowledged under the
Federal Assignment of Claims Act of 1940, as amended;

     

    (vi)           Accounts
for which Borrower owes the Account Debtor, but only up to the amount owed
(sometimes called “contra” accounts, accounts payable, customer deposits or
credit accounts);

     

    (vii)           Accounts
for demonstration or promotional equipment, or in which goods are consigned,
sales guaranteed, sale or return, sale on approval, bill and hold, or other
terms if Account Debtor’s payment may be conditional;

     

    (viii)           Accounts
for which the Account Debtor is Borrower’s Affiliate, officer, employee, or
agent;

     

    (ix)           Accounts
in which the Account Debtor disputes liability or makes any claim and Bank
believes there may be a basis for dispute (but only up to the disputed or
claimed amount), or if the Account Debtor is subject to an Insolvency
Proceeding, or becomes insolvent, or goes out of business; and

     

    (x)           Accounts
for which Bank reasonably determines collection to be doubtful or any Accounts
which are unacceptable to Bank for any reason.

     

    “ERISA” is the Employment
Retirement Income Security Act of 1974, and its regulations.

     

    “Events of Default” are set
forth in Article 8.

     

    “Excess Availability” means
Total Availability less outstanding
Obligations.

     

    “Facility Amount” is Six
Million Two Hundred Fifty Thousand Dollars ($6,250,000.00), increasing to Ten
Million Dollars ($10,000,000) upon an Increase Event.

     

    
      
         


      

      
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    “Facility Fee” is defined in
Section 2.2.2.

     

    “Financed Receivables” are all
those Eligible  Accounts, including their proceeds which Bank finances
and makes an Advance, as set forth in Section 2.1.1.  A Financed
Receivable stops being a Financed Receivable (but remains Collateral) when the
Advance made for the Financed Receivable has been fully paid.

     

    “Financed Receivable Balance”
is the total outstanding gross face amount, at any time, of any Financed
Receivable.

     

    “Foreign Currency” means
lawful money of a country other than the United States.

     

    “Funding Date” is any date on
which an Advance is made to or on account of Borrower which shall be a Business
Day.

     

    “GAAP” is generally accepted
accounting principles.

     

    “Guarantor” is any present or
future guarantor of the Obligations, including GTT Global Telecom, LLC, GTT
Global Telecom Government Services, LLC, Global Internetworking of Virginia,
Inc. and TEK Channel Consulting, LLC.

     

    “Guaranty” is that certain
Amended and Restated Unconditional Guaranty by Guarantors, in favor of Bank, of
even date herewith.

     

    “Indebtedness” is (a)
indebtedness for borrowed money or the deferred price of property or services,
such as reimbursement and other obligations for surety bonds and letters of
credit, (b) obligations evidenced by notes, bonds, debentures or similar
instruments, (c) capital lease obligations and (d) Contingent
Obligations.

     

    “Increase Event” means the
date on which (a) Borrower has executed assignment consent agreements with
Account Debtors of Capital Growth Systems, Inc., Global Capacity Group, Inc. and
Global Capacity Direct, LLC (f/k/a Vanco Direct USA, LLC) (collectively, “Global
Capacity”) collectively representing at least 75% in interest of the total
Account Debtors of Global Capacity (following Borrower’s acquisition of Global
Capacity’s Accounts) and (b) the closing by Borrower (and release from escrow,
if applicable) of no less than $4,500,000 in additional equity or Subordinated
Debt following the Effective Date; provided, however that no Increase Event
shall be deemed to have occurred if either of the two events described in
subsections (a) and (b) above occur later than February 28, 2010.

     

    “Insolvency Proceeding” is any
proceeding by or against any Person under the United States Bankruptcy Code, or
any other bankruptcy or insolvency law, including assignments for the benefit of
creditors, compositions, extensions generally with its creditors, or proceedings
seeking reorganization, arrangement, or other relief.

     

    “Investment” is any beneficial
ownership of (including stock, partnership interest or other securities) any
Person, or any loan, advance or capital contribution to any Person.

     

    “Lockbox” is defined in
Section 2.2.7.

     

    “Lien” is a mortgage, lien,
deed of trust, debenture, charge, pledge, security interest or other
encumbrance.

     

    “Loan Documents” are,
collectively, this Agreement, the Guaranty, the Debenture, the Stock Pledge
Agreement, any note, or notes or guaranties executed by Borrower or Guarantor,
and any other present or future

    
 

    
      
        
           


        

        
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    agreement
between Borrower and/or for the benefit of Bank in connection with this
Agreement, all as amended, extended or restated.

     

    “Material Adverse Change” is:
(i) A material impairment in the perfection or priority of Bank’s security
interest in the Collateral or in the value of such Collateral; (ii) a material
adverse change in the business, operations, or condition (financial or
otherwise) of Borrower; or (iii) a material impairment of the prospect of
repayment of any portion of the Obligations. For purposes hereof, the term
“Collateral” shall include, in the case of EMEA, the property and assets
detailed in clause 3 of the Debenture.

     

    “Maturity Date” is the date
that is 364 days following the Effective Date.

     

    “Minimum Finance Charge” is
Twelve Thousand Dollars ($12,000.00).

     

    “Net Operating Cash Flow”
means (a) EBITDA plus (b), at Bank’s discretion, one time extraordinary
expenses, plus (c) non-cash compensation expenses, less (d) capital
expenditures, less (e) cash taxes, less (f) cash interest expense, less (d) all
principal payments made during the applicable measurement period.

     

    “Non-Streamline Advance” is
defined in Section 2.1.1.

     

    “Non-Streamline Advance Rate”
is eighty percent (80.0%), net of any offsets related to each specific Account
Debtor, or such other percentage as Bank establishes under Section
2.1.1(b).

     

    “Non-Streamline Eligible
Accounts” are billed Accounts in the ordinary course of GTTA’s or WBS’
business that meet all such Borrower’s representations and warranties in Section
5.3, have been, at the option of Bank, confirmed in accordance with Section
2.1.1(e), and are due and owing from Account Debtors deemed creditworthy by Bank
in its sole discretion.  Without limiting the fact that the
determina­tion of which Accounts are eligible hereunder is a matter of Bank
discretion in each instance, Non-Streamline Eligible Accounts shall not include
the following Accounts (which listing may be amended or changed in Bank’s
discretion with notice to Borrowers):

     

    (i)           Accounts
that the Account Debtor has not paid within ninety (90) days of invoice
date;

     

    (ii)           Accounts
for an Account Debtor, fifty percent (50%) or more of whose Accounts have not
been paid within ninety (90) days of invoice date;

     

    (iii)           Accounts
for which the Account Debtor does not have its principal place of business in
the United States, unless agreed to by Bank in writing, in its sole discretion,
on a case-by-case basis;

     

    (iv)           Accounts
owing from an Account Debtor which is a United States government entity or any
department, agency, or instrumentality thereof unless Borrower has assigned its
payment rights to Bank and the assignment has been acknowledged under the
Federal Assignment of Claims Act of 1940, as amended;

     

    (v)           Accounts
for which Borrower owes the Account Debtor, but only up to the amount owed
(sometimes called “contra” accounts, accounts payable, customer deposits or
credit accounts);

     

    (vi)           Accounts
for demonstration or promotional equipment, or in which goods are consigned,
sales guaranteed, sale or return, sale on approval, bill and hold, or other
terms if Account Debtor’s payment may be conditional;

     


    
      
         


      

      
        24

        
          

        

      

      
         


      

    

    (vii)           Accounts
for which the Account Debtor is Borrower’s Affiliate, officer, employee, or
agent;

     

    (viii)           Accounts
in which the Account Debtor disputes liability or makes any claim and Bank
believes there may be a basis for dispute (but only up to the disputed or
claimed amount), or if the Account Debtor is subject to an Insolvency
Proceeding, or becomes insolvent, or goes out of business;

     

    (ix)           Accounts
owing from an Account Debtor with respect to which Borrower has received
Deferred Revenue (but only to the extent of such Deferred Revenue), other than
Deferred Revenue in connection with advanced monthly billings; and

     

    (x)           Accounts
for which Bank reasonably determines collection to be doubtful or any Accounts
which are unacceptable to Bank for any reason.

     

    “Obligations” are, as of the
date of determination, all advances, liabilities, obligations, covenants and
duties owing, arising, due or payable by Borrower to Bank now or later under
this Agreement or any other document, instrument or agreement, account
(including those acquired by assignment) primary or secondary, such as all
Advances, Finance Charges, Facility Fee, Early Termination Fee, Collateral
Handling, interest, fees, expenses, professional fees and attorneys’ fees, or
other amounts now or hereafter owing by Borrower to Bank.

     

    “Perfection Certificates” are
those certain Perfection Certificates delivered by Borrowers to Bank in
connection with this Agreement.

     

    “Permitted Indebtedness” is,
for each Borrower:

     

    (i)           Borrower’s
indebtedness to Bank under this Agreement or the Loan Documents;

     

    (ii)           Subordinated
Debt;

     

    (iii)           Indebtedness
to trade creditors incurred in the ordinary course of business;

     

    (iv)           Indebtedness
permitted pursuant to subsection (f) of the definition of “Permitted
Investments”; and

     

    (v)           Indebtedness
secured by Permitted Liens.

     

    “Permitted Investments” are:
(a)  marketable direct obligations issued or unconditionally
guaranteed by the United States or its agency or any state maturing within 1
year from its acquisition, (b) commercial paper maturing no more than 1 year
after its creation and having the highest rating from either Standard &
Poor’s Corporation or Moody’s Investors Service, Inc., (c) Bank’s certificates
of deposit issued maturing no more than 1 year after issue, (d) any other
investments administered through Bank, (e) Investments (including ownership of
Subsidiaries) existing on the Effective Date and listed on the Perfection
Certificate, and (f) investments by Borrowers  in any other Borrower
from the Effective Date through the Maturity Date.

     

    “Permitted Liens”
are:

     

    (i)           Liens
arising under this Agreement or other Loan Documents;

     

    (ii)           Liens
for taxes, fees, assessments or other government charges or levies, either not
delinquent or being contested in good faith and for which a Borrower maintains
adequate reserves on its Books, if they have no priority over any of Bank’s
security interests;

     


    
      
         


      

      
        25

        
          

        

      

      
         


      

    

    (iii)           Purchase
money Liens securing no more than $1,500,000.00 in the aggregate amount
outstanding  (i) on equipment acquired or held by Borrowers incurred
for financing the acquisition of the equipment, or (ii) existing on
equipment when acquired, if the Lien is
confined to the property and improvements and the proceeds of the
equipment;

     

    (iv)           Leases
or subleases and non-exclusive licenses or sublicenses granted in the ordinary
course of a Borrower’s business, if the leases,
subleases, licenses and sublicenses permit granting Bank a security
interest;

     

    
             (v)           Liens
in favor of other financial institutions arising solely in connection with
Borrower’s or any Subsidiary’s deposit accounts that are pledged as collateral
for letters of credit;

     

    (vi)           Liens
arising under Permitted Indebtedness; and

     

    (vii)           Liens
incurred in the extension, renewal or refinancing of the indebtedness secured by
Liens described in the foregoing clauses (i) through (vi), but any extension,
renewal or replacement Lien must be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness may not
increase.

     

    “Person” is any individual,
sole proprietorship, partnership, limited liability company, joint venture,
company, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, firm, joint stock company, estate,
entity or government agency.

     

    “Prime Rate” is Bank’s most
recently announced “prime rate,” even if it is not Bank’s lowest
rate.

     

    “RBS” means the Royal Bank of
Scotland.

     

    “Reconciliation Day” is the
last calendar day of each month.

     

    “Reconciliation Period” is
each calendar month.

     

    “Responsible Officer” is each
of the Chief Executive Officer, President, Chief Financial Officer and
Controller of a Borrower.

     

    “Stock Pledge Agreement” is
that certain Stock Pledge Agreement, dated March 17, 2008, by GTTI in favor of
Bank.

     

    “Streamline Accounts Listing”
is a summary of Streamline Eligible Accounts in form and substance acceptable to
Bank in all respects.

     

    “Streamline Advance” is
defined in Section 2.1.1.

     

    “Streamline Advance Rate” is
eighty percent (80.0%), net of any offsets related to each specific Account
Debtor, other than Deferred Revenue, or such other percentage as Bank
establishes under Section 2.1.1(b).

     

    “Streamline Eligible Accounts”
are billed Accounts in the ordinary course of GTTA’s or WBS’ business that meet
all such Borrower’s representations and warranties in Section 5.3, have been, at
the option of Bank, confirmed in accordance with Section 2.1.1(e), and are due
and owing from Account Debtors deemed creditworthy by Bank in its sole
discretion.  Without limiting the fact that the determina­tion of
which Accounts are eligible hereunder is a matter of Bank discretion in each
instance, Streamline Eligible Accounts shall not


    
      
         


      

      
        26

        
          

        

      

      
         


      

    

     

    include
the following Accounts (which listing may be amended or changed in Bank’s
discretion with notice to Borrowers):

     

    (i)           Accounts
that the Account Debtor has not paid within ninety (90) days of invoice
date;

     

    (ii)           Accounts
for an Account Debtor, fifty percent (50%) or more of whose Accounts have not
been paid within ninety (90) days of invoice date;

     

    (iii)           Accounts
owing from an Account Debtor, including Affiliates, whose total obligations to
Borrower exceed thirty percent (30%) of all Accounts, for the amounts that
exceed that percentage, unless Bank approves in writing

     

    (iv)           Accounts
for which the Account Debtor does not have its principal place of business in
the United States;

     

    (v)           Accounts
owing from an Account Debtor which is a United States government entity or any
department, agency, or instrumentality thereof unless Borrower has assigned its
payment rights to Bank and the assignment has been acknowledged under the
Federal Assignment of Claims Act of 1940, as amended;

     

    (vi)           Accounts
for which Borrower owes the Account Debtor, but only up to the amount owed
(sometimes called “contra” accounts, accounts payable, customer deposits or
credit accounts);

     

    (vii)           Accounts
for demonstration or promotional equipment, or in which goods are consigned,
sales guaranteed, sale or return, sale on approval, bill and hold, or other
terms if Account Debtor’s payment may be conditional;

     

    (viii)           Accounts
for which the Account Debtor is Borrower’s Affiliate, officer, employee, or
agent;

     

    (ix)           Accounts
in which the Account Debtor disputes liability or makes any claim and Bank
believes there may be a basis for dispute (but only up to the disputed or
claimed amount), or if the Account Debtor is subject to an Insolvency
Proceeding, or becomes insolvent, or goes out of business; and

     

    (x)           Accounts
for which Bank reasonably determines collection to be doubtful or any Accounts
which are unacceptable to Bank for any reason.

     

    “Subject Month” is the month
which is two (2) calendar months after any Testing Month.

     

    “Subordinated Debt” is debt
incurred by a Borrower subordinated to such Borrower’s debt to Bank (pursuant to
a subordination agreement entered into between Bank, Borrower and the
subordinated creditor), on terms acceptable to Bank.

     

    
      “Subsidiary” is any Person,
corporation, partnership, limited liability company, joint venture, or any other
business entity of which more than 50% of the voting stock or other equity
interests is owned or controlled, directly or indirectly, by the Person or one
or more Affiliates of the Person.

       

      “Tangible Net Worth” is, on
any date, the consolidated total assets of Borrower and its Subsidiaries minus
(a) any amounts attributable to (i) goodwill, (ii) intangible items including
unamortized debt discount and expense, patents, trade and service marks and
names, copyrights and research and development expenses except 

       

    


    
      
         


      

      
        27

        
          

        

      

      
         


      

    

     

    prepaid
expenses, (iii) notes, accounts receivable and other obligations owing to
Borrower from its officers or other Affiliates, and (iv) reserves not already
deducted from assets, minus (b) Total Liabilities, plus (c) Subordinated
Debt.

     

    “Testing Month” is any month
with respect to which Bank has tested Borowers’ aggregate cash and Excess
Availability in order to determine whether Borrowers may request Streamline
Advances.

     

    “Total Availability” means the
total amount available for Advances to Borrower hereunder, taking into account
all Account eligbility requirements and and applicable Advnace
Rates.

     

    “Total Liabilities” is on any
day, obligations that should, under GAAP, be classified as liabilities on
Borrower’s consolidated balance sheet, including all Indebtedness, and current
portion of Subordinated Debt permitted by Bank to be paid by Borrower, but
excluding all other Subordinated Debt.

     

    


    


    [Signature Page Follows]

     

    


     


    
      
         


      

      
        28

        
          

        

      

      
         


      

    


        IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed as of the
Effective Date.

     

    
      	
              BORROWERS:

               

            
	
              GLOBAL
      TELECOM & TECHNOLOGY, INC.

               

            
	
              By:

            	 /s/
      Eric A. Swank 
	
              Print
      Name:

            	
              Eric
      A. Swank

            
	
              Title:

            	
              Chief
      Financial Officer

            


    

    


    
      	
              GLOBAL
      TELECOM & TECHNOLOGY AMERICAS, INC.

               

            
	
              By:

            	 /s/
      Eric A. Swank 
	
              Print
      Name:

            	
              Eric
      A. Swank

            
	
              Title:

            	
              Chief
      Financial Officer

            


    

    


    
      	
              WBS
      CONNECT, LLC

               

            
	
              By:

            	 /s/
      Eric A. Swank 
	
              Print
      Name:

            	 Eric
      A. Swank 
	
              Title:

            	 Chief
      Financial Officer and Managing
Partner 


    

    


    
      	
              GTT-EMEA,
      LTD.

               

            
	
              By:

            	 /s/
      Richard D. Calder
	
              Print
      Name:

            	 Richard
      D. Calder 
	
              Title:

            	 Director
      


    

    


    
      	
              BANK:

               

            
	
              SILICON
      VALLEY BANK

               

            
	
              By:

            	 /s/
      Christine Egitto 
	
              Print
      Name:

            	 
      Christine Egitto
	
              Title:

            	 
      Vice President


    

    



    
      
         


      

      
        29

        
          

        

      

      
         


      

    


    EXHIBIT
A

     

    The
Collateral consists of all of each Borrower’s right, title and interest in and
to the following personal property:

     

    All goods, Accounts (including
health-care receivables), Equipment, Inventory, contract rights or rights to
payment of money, leases, license agreements, franchise agreements, General
Intangibles (except as provided below), commercial tort claims, documents,
instruments (including any promissory notes), chattel paper (whether tangible or
electronic), cash, deposit accounts, fixtures, letters of credit rights (whether
or not the letter of credit is evidenced by a writing), securities, and all
other investment property, supporting obligations, and financial assets, whether
now owned or hereafter acquired, wherever located; and

     

    all Borrower’s Books relating to the
foregoing, and any and all claims, rights and interests in any of the above and
all substitutions for, additions, attachments, accessories, accessions and
improvements to and replacements, products, proceeds and insurance proceeds of
any or all of the foregoing.

     

    Notwithstanding the foregoing, the
Collateral does not include any of the following, whether now owned or hereafter
acquired (a) more than 67% of the presently existing and hereafter arising
issued and outstanding shares of capital stock owned by Borrower of any foreign
Subsidiary which shares entitle the holder thereof to vote for directors or any
other matter, or (b) any copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work, whether published or unpublished, any patents, patent applications and
like protections, including improvements, divisions, continuations, renewals,
reissues, extensions, and continuations-in-part of the same, trademarks, service
marks and, to the extent permitted under applicable law, any applications
therefor, whether registered or not, and the goodwill of the business of
Borrower connected with and symbolized thereby, know-how, operating manuals,
trade secret rights, rights to unpatented inventions, and any claims for damage
by way of any past, present, or future infringement of any of the foregoing;
provided, however, the Collateral shall include all Accounts, license and
royalty fees and other revenues, proceeds, or income arising out of or relating
to any of the foregoing.

     

    Pursuant to the terms of a certain
negative pledge arrangement with Bank, Borrower has agreed not to encumber any
of its copyright rights, copyright applications, copyright registrations and
like protections in each work of authorship and derivative work, whether
published or unpublished, any patents, patent applications and like protections,
including improvements, divisions, continuations, renewals, reissues,
extensions, and continuations-in-part of the same, trademarks, service marks
and, to the extent permitted under applicable law, any applications therefor,
whether registered or not, and the goodwill of the business of Borrower
connected with and symbolized thereby, know-how, operating manuals, trade secret
rights, rights to unpatented inventions, and any claims for damage by way of any
past, present, or future infringement of any of the foregoing, without Bank’s
prior written consent.

     


    
      
        
        

         


      

      
        Exh
A-1

        
          

        

      

      
         


      

    


    EXHIBIT
B

     

    
      

    

     

    SPECIALTY
FINANCE DIVISION

    Compliance
Certificate

     

    We, as authorized officers of Global
Telecom and Technology, Inc., Global Telecom & Technology Americas, Inc.,
WBS Connect, LLC and GTT-EMEA, Ltd. (“Borrowers”) certify under the Amended and
Restated Loan and Security Agreement (the “Agreement”) between Borrowers and
Silicon Valley Bank (“Bank”) as follows (all capitalized terms used herein shall
have the meaning set forth in the Agreement):

     

    When
Invoice Advances are outstanding, each Borrower represents and warrants for each
of its Financed Receivables:

     

    
      	
              Ø

            	
              Each
      Financed Receivable is an Eligible
Account.

            


    

     

    
      	
              Ø

            	
              Borrower
      is the owner with legal right to sell, transfer, assign and encumber such
      Financed Receivable;

            


    

     

    
      	
              Ø

            	
              The
      correct amount is on the Advance Request/Invoice Transmittal Form and is
      not disputed;

            


    

     

    
      	
              Ø

            	
              Other
      than for Deferred Revenue financed with a Streamline Advance or EMEA
      Advance, payment is not contingent on any obligation or contract and
      Borrower has fulfilled all its obligations as of the Advance
      Request/Invoice Transmittal Form
date;

            


    

     

    
      	
              Ø

            	
              Each
      Financed Receivable is based on an actual sale and delivery of goods
      and/or services rendered, is due to Borrower,  is not in
      default, has not been previously sold, assigned, transferred, or pledged
      and is free of any liens, security interests and encumbrances other than
      Permitted Liens;

            


    

     

    
      	
              Ø

            	
              There
      are no defenses, offsets, counterclaims or agreements for which the
      Account Debtor may claim any deduction or
  discount;

            


    

     

    
      	
              Ø

            	
              It
      reasonably believes no Account Debtor is insolvent or subject to any
      Insolvency Proceedings;

            


    

     

    
      	
              Ø

            	
              It
      has not filed or had filed against it Insolvency Proceedings and does not
      anticipate any filing;

            


    

     

    
      	
              Ø

            	
              Bank
      has the right to endorse and/ or require Borrower to endorse all payments
      received on Financed Receivables and all proceeds of
      Collateral.

            


    

     

    
      	
              Ø

            	
              No
      representation, warranty or other statement of Borrower in any certificate
      or written statement given to Bank contains any untrue statement of a
      material fact or omits to state a material fact necessary to make the
      statement contained in the certificates or statement not
      misleading.

            


    

     

    Additionally,
each Borrower represents and warrants, jointly and severally, as
follows:

     

    
      	
              Ø

            	
              Borrower
      and each Subsidiary is duly existing and in good standing in its state of
      formation and qualified and licensed to do business in, and in good
      standing in, any state in which the conduct of its business or its
      ownership of property requires that it be qualified except where the
      failure to do so could not reasonably be expected to cause a Material
      Adverse Change.  The execution, delivery and performance of the
      Loan Documents have been duly authorized, and do not conflict with
      Borrower’s organizational documents, nor constitute an event of default
      under any material agreement by which Borrower is
      bound.  Borrower is not in default under any agreement to which
      or by which it is bound in which the default could reasonably be expected
      to cause a Material Adverse Change.

            


    

     


    
      
        
           

        

         


      

      
        Exh
B-1

        
          

        

      

      
         


      

    


    
      	
              Ø

            	
              Borrower
      has good title to the Collateral, free of Liens except Permitted
      Liens.  All inventory is in all material respects of good and
      marketable quality, free from material
defects.

            


    

     

    
      	
              Ø

            	
              Borrower
      is not an “investment company” or a company “controlled” by an “investment
      company” under the Investment Company Act.  Borrower is not
      engaged as one of its important activities in extending credit for margin
      stock (under Regulations X, T and U of the Federal Reserve Board of
      Governors).  Borrower has complied in all material respects with
      the Federal Fair Labor Standards Act, [the UK 1996 Employment Rights Act
      and UK National Minimum Wage Act of 1998], as
      applicable.  Borrower has not violated any laws, ordinances or
      rules, the violation of which could reasonably be expected to cause a
      Material Adverse Change.  None of Borrower’s or any Subsidiary’s
      properties or assets has been used by Borrower or any Subsidiary or, to
      the best of Borrower’s knowledge, by previous Persons, in disposing,
      producing, storing, treating, or transporting any hazardous substance
      other than legally.  Borrower and each Subsidiary has timely
      filed all required tax returns and paid, or made adequate provision to
      pay, all material taxes, except those being contested in good faith with
      adequate reserves under GAAP.  Borrower and each Subsidiary has
      obtained all consents, approvals and authorizations of, made all
      declarations or filings with, and given all notices to, all government
      authorities that are necessary to continue its business as currently
      conducted except where the failure to obtain or make such consents,
      declarations, notices or filings would not reasonably be expected to cause
      a Material Adverse Change.

            


    

     

    
      	
              Please
      indicate compliance status by circling Yes/No under “Complies”
      column.

            
	
              Reporting Covenant

               

               

            	
              Requires

               

            	
              Complies

               

            
	
              Monthly
      financial statements with

              Compliance
      Certificate

            	
              Monthly
      within 30 days

            	
              Yes    No

            
	
              10-Q,
      10-K and 8-K

            	
              Within
      5 days after filing with SEC unless otherwise made public, (for 10-K, no
      later than 90 days following FYE)

            	
              Yes    No

            
	
              Borrowing
      Base Certificate A/R & A/P Agings & Deferred Revenue
      Schedule

            	
              Monthly
      within 30 days

            	
              Yes    No

            
	
              Monthly
      Streamline/EMEA Accounts Report

            	
              Monthly
      within 5 days

            	
              Yes    No

            
	
              Annual
      Audit

            	
              Annually
      (other than 2009)

            	
              Yes    No

            


    

    


    
      	
              Financial Covenant

               

            	
              Required

            	
              Actual

            	
              Complies

            
	
              Maintain
      on a Monthly Basis prior to an Increase Event:

            	 
      	 
      	 
      
	
              Minimum Net Operatng Cash
      Flow

              For
      the months ending:

                December
      31, 2009

                January
      31 – March 31, 2010

              For
      the three months ending:

                April
      30, 2010

                May
      31, 2010

                June
      30, 2010

                July
      31, 2010

                August
      31, 2010

                September
      30, 2010 and thereafter

            	
               

              ($150,000)

              $1.00

               

              $200,000

              $250,000

              $300,000

              $350,000

              $400,000

              $500,000

            	
               

              $_________

              $_________

               

              $_________

              $_________

              $_________

              $_________

              $_________

              $_________

            	
              Yes   No

            
	
              Maintain
      on a Monthly Basis upon an Increase Event:

            	 
      	 
      	 
      
	
              Minimum Net Operatng Cash
      Flow

              For
      the months ending:

                December
      31, 2009

                January
      31 – March 31, 2010

              For
      the three months ending:

                April
      30, 2010 – June 30, 2010

                July
      31, 2010 and thereafter

            	
               

               

              ($150,000)

              $1.00

               

              $1,250,000

              $1,750,000

            	
               

               

              $_________

              $_________

               

              $_________

              $_________

            	
              Yes   No

            


    

     

     

    
      
        
        

      

      
        Exh
B-2

        
          

        

      

      
        
        

      

    

    
 

    
      	
              Financial
      Reporting

               

               

            	
              Actual

               

            
	
              Borrower’s
      cash + Excess Availability

            	
              $                         

            


    

    


    All
representations and warranties in the Agreement are true and correct in all
material respects on this date, and the Borrower represents that there is no
existing Event of Default.

     

    
      	
              Dated
      as of:

            	 
      


    

    


    Sincerely,

     

    
      
        	
                GLOBAL
      TELECOM & TECHNOLOGY, INC.

                 

              	 
      	
                BANK
      USE ONLY

                 

              
	
                By:

              	 
      	 
      	 Received
      by:	
                 

              	 
      
	
                Print
      Name:

              	 
      	 
      	 
      	
                AUTHORIZED
      SIGNER

              
	
                Title:

              	 
      	 
      	
                Date:

              	 
      
	 
      	 
      	 
      	Verified:	
                 

              	 
      
	 
      	 
      	 
      	 
      	
                AUTHORIZED
      SIGNER

              
	 
      	 
      	 
      	
                Date:

              	 
      
	 
      	 
      	 
      	
                Compliance
      Status:

              	
                Yes    No

              


      



    
      	
              GLOBAL
      TELECOM & TECHNOLOGY AMERICAS, INC.

               

            
	
               

              By:

            	 
      
	
               

              Print
      Name:

            	 
      
	
               

              Title:

            	 
      


    

    


    
      	
              WBS CONNECT,
      LLC

               

            
	
               

              By:

            	 
      
	
               

              Print
      Name:

            	 
      
	
               

              Title:

            	 
      


    

    


    
      	
              GTT-EMEA,
      LTD.

               

            
	
               

              By:

            	 
      
	
               

              Print
      Name:

            	 
      
	
               

              Title:

            	 
      


    

    


    


     

    

      
        
           


        

        
          Exh
B-3

          
            

          

        

        
           


        

      

    

     

    EXHIBIT
C

     

    ADVANCE
REQUEST/INVOICE TRANSMITTAL FORM

    


    


    (Attached)

     

    


    



    
      
        
        

         


      

      
        Exh
C-1