|   | LINE OF CREDIT LOAN to      Borrower aggregating ONE MILLION AND NO/100  ($1,000,000.00)      Dollars in principal amount, which loan shall be evidenced by and payable      according to Thermo's form of promissory note, a copy of which is attached      as Exhibit A (“Note”). |
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|   | LOCK      BOX.  Upon the request of Thermo, after the occurrence of      a Default and continuance thereof, all collections will be deposited into      an account controlled by Thermo. Upon the request of Thermo, after the      occurrence of a Default and continuance thereof, Borrower will      notify all account debtors to pay the proceeds of the accounts into a lock      box designated and controlled by Thermo and, upon the request of Thermo,      if Borrower has not timely notified its account debtors, Thermo shall also      have the right to notify the account debtors to make payments to the lock      box or directly to Thermo; provided, however, that Thermo is not obligated      to take any steps to collect any of the accounts.  Borrower      shall execute a lock box agreement satisfactory to  Thermo. |
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|   | (1) | Organization and      Authorization.  Borrower is an entity which is duly      organized, validly existing and, if a corporation, in good standing under      applicable laws. Borrower's execution, delivery and performance of this      Agreement and all other documents delivered to Thermo has been duly      authorized and does not violate Borrower's articles of incorporation (or      other governing documents), material contracts or any applicable law or      regulations.  All documents delivered to Thermo are legal and      binding obligations of Borrower who executed  same. |
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|   | (2) | Compliance with Tax and other      Laws.  Borrower shall comply (to the extent      necessary so      that any failure to do so will not materially and adversely affect the      business or property of Borrower) with all laws that are applicable to      Borrower's business activities, including, without limitation, all law      regarding (i) the collection, payment and deposit of employees' income,      unemployment, Social Security, sales and excise taxes; (ii) the filing of      returns and payment of taxes; (iii) pension liabilities including ERISA      requirements; (iv) environmental protection; and (v) occupational safety      and health. |
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|   | (3) | Borrower      shall keep its fixed property and equipment in good working order and      condition (reasonable wear and tear excepted), and maintain property and      liability insurance coverage relating thereto in form and coverage      reasonably acceptable to Thermo. |
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|   | (4) | Financial      Information. |
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|  | (a)  | Borrower      shall furnish to Thermo: |
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|   | i) | within      90 days after the close of Borrower's fiscal year, a copy of the      annual unaudited financial statements of Borrower, prepared in conformity      with generally accepted accounting principles applied on a basis      consistent with that of the preceding fiscal year, and approved by an      executive officer of Borrower, consisting of a balance sheet, a statement      of operations, and a statement of cash flow;and |
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|   | ii) | within      45 days after the close of each month unaudited financial statements as of      the end of such month consisting of a balance sheet as of the end of such      month, a statement of operations for such month and a statement of cash      flow for such month, all approved by an appropriate executive officer of      Borrower, together with year-to-date financial      statements.  Thermo will be notified promptly of any material      adjustments to the aforementioned financial  statements. |
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|   | (b) | Borrower      shall furnish to Thermo such additional information that Thermo may      require. |
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|   | (5) | Mergers,      etc.  Without the prior notice to Thermo and payment in      full of all amounts owed to Thermo, including but not limited to      principal, interest, prepayment fees, commitment fees or any other fee due      to Thermo, Borrower shall not, without written permission from Thermo      which shall not be unreasonably withheld, (a) consummate a merger or      consolidation where Borrower is not the surviving entity, (b) acquire all      or substantially all of the assets of another entity if such transaction      is not operating cash flow positive, or (c) sell, lease or transfer all,      or substantially all, of Borrower's assets.  Borrower will      notify Thermo within ten (10) business days of the execution of a letter      of intent relating to activities limited by this      Section.  Borrower shall not permit any material change to be      made in the character of Borrower's business as carried on at the original      date of this Agreement. |
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|   | (6) | Indebtedness and      Liens.  Other than obligations incurred in the ordinary      course of business, including but not limited to, the purchase or lease of      equipment (including non-vendor financing of such purchases or leases),      Borrower shall not create any additional obligations for borrowed money,      without the written consent of Thermo which will not be unreasonably      withheld.  Borrower shall not mortgage or encumber any of      Borrower's assets or suffer any liens to exist on any of Borrower's assets      without the prior written consent of Thermo, which shall not be      unreasonably withheld. Debt acquired in connection with a merger or asset      acquisition shall be permitted to the extent the other requirements of      Paragraph 5 are met. |
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|   | (7) | Other      Liabilities.  (a) Borrower shall not lend to or      guarantee, endorse or otherwise become contingently liable in connection      with the obligations, stock or dividends of any person, firm or      corporation, except as currently exists and as reflected in the financial      statements of Borrower as previously submitted to Thermo; (b) Borrower      shall not default in the performance, observance or fulfillment of any of      the obligations, covenants or conditions contained in any indenture,      agreement or other instrument to which Borrower is a party (the effect of      which would materially adversely affect the business or properties of      Borrower); and (c) except as disclosed or referred to in the financial      statements furnished to Thermo, there is no litigation, legal or      administrative proceeding, investigation or other action of any nature      pending or, to the knowledge of Borrower, threatened against or affecting      Borrower which involves the possibility of any judgment or liability not      fully covered by insurance, and which would materially and adversely      affect the business or assets of Borrower or Borrower's ability to carry      on business as now conducted. |
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|   | (8) | Documentation.  The      Loan Documents include, this Loan Agreement, the Promissory Note and      Security Agreement and all other documents necessary to effect the      purposes of this Agreement as reasonably required by Thermo. Upon the      written request of Thermo, Borrower shall promptly and duly execute and      deliver all such further instruments and documents and take such further      action as Thermo may deem reasonably necessary to obtain the full benefits      of the Loan Documents. |
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|   | (9) | Financial Covenants and      Ratios.  Borrower shall comply with the following      covenants and ratios: |
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|   | A. | Minimum Cash Flow to Debt      Service Ratio.  Borrower will maintain a ratio of cash      flow to scheduled interest payments on funded debt (excluding non-cash      interest) of not less than 1.00 to 1.00 as of the end of each fiscal      quarter beginning with the quarter ending June 30, 2008.  For      the purposes of this section "cash flow" shall mean the sum of net income      after taxes, plus depreciation and amortization and other non-cash      expenses for the period as well as any interest expense included in the      denominator of this ratio.  "Funded debt" shall mean all      indebtedness for borrowed money. |
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|   | B. | Minimum Tangible Net      Worth.  Borrower will maintain a tangible net worth of      not less than $5,000,000 as of the last day of each fiscal      quarter.  For the purposes of this section, "tangible net worth"      shall mean the sum of common stock, preferred stock, capital surplus,      paid-in capital and retained earnings less treasury stock and the sum of      all intangible assets (including, without limitation, good will,      franchises, licenses, patents, trademarks, trade names, copyrights,      service marks and brand names but excluding capitalized      software). |
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|   | (10) | Collateral.  As      security for payment and performance of the Loan and any and all      other obligations of Borrower to Thermo, direct or contingent, due or      to become due, now existing or hereafter arising, Borrower shall execute      and deliver to Thermo, or cause others to execute and deliver to Thermo,      the following described  security  documents: |
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|   | A      security agreement and financing statement by Borrower granting Thermo a      first lien and security interest in all of Borrower’s accounts, customer      contracts, insurance policies on such accounts and all other rights and      proceeds therefrom.  Except as provided in Schedule 10, Borrower      agrees to maintain the collateral free from other and further voluntary      liens, and subject to no other lien or      encumbrance.  Borrower shall inform Thermo of the existence of      any involuntary lien, within two (2) business days of Borrower’s first knowledge of      any involuntary lien or encumbrance affecting the Collateral and take      action to remove any involuntary lien or encumbrance within fifteen (15)      days of Borrower’s first knowledge.  Borrower’s failure to      remove, pay, satisfy or otherwise clear any involuntary lien within sixty      (60) days of Borrower’s first knowledge thereof will result in a default.      In the event of such involuntary lien, Thermo reserves the right to      suspend additional fundings, if any, until such involuntary lien is      released. |
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| Thermo      Credit, LLC         |
|---------------------------------|
|                            |   |
| By:                             | /s/ Seth Block |
|                            |   |
| Name:                           | Seth Block |
|                            |   |
| Title:                          | Executive Vice President |
|                            |   |
| ONSTREAM      MEDIA CORPORATION |
|                            |   |
| By:                             | /s/ Randy Selman |
|                            |   |
| Name:                           | Randy Selman |
|                            |   |
| Title:                          | CEO |

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