Document:

SECURITIES PURCHASE AND LOAN AGREEMENT

    

    National
      Investment Managers Inc. 

    485
      Metro
      Place South, Suite 275

    Dublin,
      Ohio 43017

    

    November
      30, 2007

     

    Woodside
      Capital Partners IV, LLC

    25
      Mall
      Road

    Burlington,
      MA  01803

    

    Woodside
      Capital Partners IV QP, LLC 

    25
      Mall
      Road

    Burlington,
      MA  01803

    

    Lehman
      Brothers Commercial Bank

    745
      Seventh Avenue

    New
      York,
      NY 10019

    

    Woodside
      Agency Services, LLC, as Collateral Agent

    25
      Mall
      Road

    Burlington,
      MA  01803

    

    Ladies
      and Gentlemen:

    

    The
      undersigned, National Investment Managers Inc., a Florida corporation (the
      "Company"),
      hereby agrees with the Collateral Agent and the Holders as follows:

    

    1. DEFINITIONS.

    

    For
      all
      purposes of this Securities Purchase and Loan Agreement (the "Agreement")
      the
      following terms shall have the meanings set forth herein or elsewhere in the
      provisions hereof:

    

    Acquired EBITDA.
      Acquired EBITDA shall mean,
      for any
      period, with respect to any Person or business acquired pursuant to a Permitted
      Acquisition,
      an
      amount equal to the amount set forth on Schedule 1(a),
      as such
      schedule may be amended from time to time by the Company with the prior written
      consent of the Holders. 

    

    Acquired Party.
      Acquired Party shall mean any Person, 100% of the outstanding equity interest
      or
      substantially all of the assets of which are acquired by the Company or any
      of
      its Subsidiaries in connection with a Permitted Acquisition. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Adjusted EBITDA.
      Adjusted EBITDA shall mean, for any period, but without duplication, the sum
      of
      (a) EBITDA, plus (b) Acquired EBITDA (if applicable). The Company shall be
      permitted for the fiscal quarter ending December 31, 2007 to add back into
      the
      calculation of Adjusted EBITDA extraordinary expenses incurred in the Company’s
      fiscal quarter ending March 31, 2007 in an amount not to exceed $242,763 and
      in
      the Company’s fiscal quarter ending June 30, 2007, in an amount not to exceed
      $450,000. In addition, the Company shall be permitted for the fiscal quarter
      ending March 31, 2008 to add back into the calculation of Adjusted EBITDA
      extraordinary expenses incurred in the Company’s fiscal quarter ending June 30,
      2007 in an amount not to exceed $450,000. 

    

    Adjusted Net Worth.
      Adjusted Net Worth shall mean, in connection with any liquidation or sale of
      assets by the Company, the consolidated net worth of the equity of the Company,
      immediately prior to such liquidation or immediately after such sale, determined
      in accordance with GAAP, taking into account (i) the total consideration
      received by the Company for such transaction, (ii) the transaction costs
      incurred in connection with such transaction, and (iii) any liabilities of
      the
      Company whether or not to be discharged in connection with such
      transaction.

    

    Affiliate.
      Affiliate shall mean any Person directly or indirectly controlling, controlled
      by or under direct or indirect common control with the Company (or other
      specified Person) and shall include (a) any Person who is a director or
      beneficial holder of at least 15% of any class of the then outstanding capital
      stock (or other shares of beneficial interest) of the Company (or other
      specified Person) and Family Members of any such Person, (b) any Person of
      which
      the Company (or other specified Person) or an Affiliate (as defined in clause
      (a) above) of the Company (or other specified Person) shall, directly or
      indirectly, either beneficially own at least 15% of any class of the then
      outstanding capital stock (or other shares of beneficial interest) or constitute
      at least a 15% equity participant, and (c) in the case of a specified Person
      who
      is an individual, Family Members of such Person; provided,
      however,
      that no
      Investor shall be an Affiliate of the Company for the purposes of this
      Agreement.

    

    Approval
      Date.
      Approval Date shall mean the date on which the put arrangements set forth in
      Section 11 hereof shall have been approved by the requisite holders of the
      Preferred Stock, and evidence thereof shall have been delivered to the
      Holders.

    

    Call Closing Date.
      See
      Section 11.3.

    

    Call Notice.
      See
      Section 11.3.

    

    Capital
      Expenditures.
      Capital
      Expenditures shall mean amounts paid or Indebtedness incurred by the Company
      or
      any of its Subsidiaries in connection with the purchase or lease of fixed assets
      (both tangible and intangible) that would be required to be capitalized and
      shown on the balance sheet of such Person in accordance with
      GAAP.

    
      
        
        

      

      
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    Capital Transaction.
      Capital
      Transaction shall mean any of the following: (i) any sale or other disposition
      of all or substantially all of the assets of the Company or any of its
      Subsidiaries in any single transaction or series of related transactions; (ii)
      any transfer or other disposition in any single transaction or series of related
      transactions of a majority of the Company’s or any of its Subsidiary’s Common
      Stock; (iii) a Qualified Public Offering; (iv) the liquidation or dissolution
      of
      the Company or any of its Subsidiaries; (v) a merger or consolidation of the
      Company or any of its Subsidiaries in which the Company or such Subsidiary,
      as
      applicable, is not the surviving entity; (vi) a Change of Control or (vii)
      the
      repayment in full of the Senior Debt or the Notes.

    

    Change of Control.
      Change
      of Control shall mean any of the following: (i) any person or group of persons
      (within the meaning of the Securities Exchange Act of 1934) shall have acquired
      beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
      Securities and Exchange Commission under the Securities Exchange Act of 1934,)
      of 30% or more of the issued and outstanding shares of capital stock of the
      Company having the right to vote for the election of directors of the Company
      under ordinary circumstances; (ii) the occupation of a majority of the seats
      (other than vacant seats) on the board of directors of the Company by Persons
      who were neither (i) nominated by the board of directors of the Company nor
      (ii)
      appointed by directors so nominated; or (iii) the Company ceases to own and
      control all of the economic and voting rights associated with all of the
      outstanding capital Stock of any of its Subsidiaries.

    

    Charter.
      Charter
      shall include the articles or certificate of incorporation, statute,
      constitution, joint venture or partnership agreement, operating agreement or
      articles or other organizational document of any Person other than an
      individual, each as from time to time amended or modified.

    

    CIP Agreement.
      CIP
      Agreement shall mean that certain Contingent Interest Payment Agreement, dated
      as of the date hereof, among the Company, the Holders and the Collateral Agent.
      

    

    Closing.
      See
      Section 2.3.

    

    Closing
      Date.
      See
      Section 2.3. 

    

    Code.
      Code
      shall mean the Internal Revenue Code of 1986, any successor statute of similar
      import, and the rules and regulations thereunder, collectively and as from
      time
      to time amended and in effect.

    

    Collateral.
      Collateral shall mean all of the property, rights and interest of the Company
      and its Subsidiaries that are or are intended to be the subject of the Liens
      created by the Security Documents.

    

    Collateral
      Agent.
      Collateral Agent shall mean Woodside Agency Services, LLC,
      as
      agent for the Holders and any successor thereto.

    

    Commission.
      Commission shall mean the Securities and Exchange Commission.

    

    Common Equity Value.
      See
      Section 11.5(a).

    
      
        
        

      

      
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    Common Stock.
      Common
      Stock shall mean, collectively, (a) the Common Stock of the Company described
      in
      Section 4.5(a), (b) any capital stock or other securities into which or for
      which Common Stock shall have been converted or exchanged pursuant to any
      recapitalization, reorganization or merger of the Company, and (c) any shares
      of
      capital stock issued with respect to the foregoing pursuant to a stock dividend
      or stock split.

    

    Company.
      See
      preamble.

    

    Company Appraisal.
      See
      Section 11.5(b).

    

    Company
      Appraiser.
      See
      Section 11.5(b).

    

    Consolidated
      or
consolidated.
      Consolidated or consolidated shall mean, with reference to any term defined
      herein, that term as applied to the accounts of the Company and all of its
      Subsidiaries, consolidated in accordance with GAAP.

    

    Co-Sale Rights Agreements.
      Co-Sale
      Rights Agreements shall mean the Co-Sale Agreements, dated as of the date
      hereof, by and among the Company, the Holders, and certain holders of its
      capital stock party thereto.

    

    Default.
      Default
      shall mean an event or condition which with the passage of time or giving of
      notice, or both, would become an Event of Default.

    

    Distribution.
      Distribution shall mean (a) the declaration or payment of any dividend on or
      in
      respect of any shares of any class of capital stock or other equity interest
      of
      the Company or other specified Person (other than dividends payable in the
      form
      of capital stock), (b) the purchase, redemption or other retirement of any
      shares of any class of capital stock or other equity interests of the Company
      or
      other specified Person, directly or indirectly through a Subsidiary of such
      Person or otherwise; the return of capital by any Person to its shareholders
      or
      equity holders as such; or otherwise, or (c) any other distribution on or in
      respect of any shares of any class of capital stock or other equity interests
      of
      the Company or other specified Person.

    

    EBITDA.
      EBITDA
      shall mean, for any period, for the Company and its Subsidiaries on a
      consolidated basis, an amount equal to (a) Net Income for such period, plus
      (b)
      the sum of (i) consolidated interest charges for such period, (ii) the provision
      for federal, state, provincial, local and foreign income taxes payable by the
      Company and its Subsidiaries for such period, (iii) the amount of depreciation
      and amortization expense for such period, (iv) non-cash charges for stock based
      compensation for such period, and (v) non-cash extraordinary and unusual or
      non-recurring writedowns or writeoffs for such period, in each case, to the
      extent deducted in calculating such Net Income, minus (c) any extraordinary,
      unusual, non-recurring or non-operating gains for such period, in each case,
      calculated for the Company and its Subsidiaries in accordance with GAAP on
      a
      consolidated basis.

    
      
        
        

      

      
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    Employment
      Agreements.
      Employment Agreements shall mean the Employment Agreements, between the Company
      and (a) each of its Key Employees, (b) each Person listed on Schedule 1(b)
      hereto
      and (c) each seller in connection with a Permitted Acquisition, in each case,
      in
      a form acceptable to the Holders.

    

    Environmental Actions.
      Environmental Actions shall mean any complaint, summons, citation, notice,
      directive, order, claim, litigation, investigation, judicial or administrative
      proceeding, judgment, letter, or other communication from any governmental
      authority, or any third party involving violations of Environmental Laws or
      Releases of Hazardous Substances from (a) any assets, properties, or businesses
      of the Company, its Subsidiaries, or any of their predecessors in interest,
      (b)
      from adjoining properties or businesses, or (c) from or on to any facilities
      which received Hazardous Substances generated by the Company, its Subsidiaries,
      or any of their predecessors in interest.

    

    Environmental
      Laws.
      Environmental Laws shall mean all
      federal, state and local laws relating to public health, or to pollution or
      protection of the environment (including, without limitation, ambient air,
      surface water, groundwater, land surface or subsurface strata) including,
      without limitation, the Clean Air Act, as amended, CERCLA, the Resource
      Conservation and Recovery Act of 1976, as amended ("RCRA"), the Toxic Substances
      Control Act, the Federal Water Pollution Control Act, as amended, the Safe
      Drinking Water Act, as amended, the Hazardous Materials Transportation Act,
      as
      amended, the Oil Pollution Act of 1990, any state Laws implementing the
      foregoing federal Laws, and all other Laws relating to or regulating (i)
      emissions, discharges, releases, or cleanup of pollutants, contaminants,
      chemicals, polychlorinated biphenyls (PCB's), oil and gas exploration and
      production wastes, brine, solid wastes, or toxic or Hazardous Substances or
      wastes (collectively, the "Polluting Substances"), (ii) the generation,
      processing, distribution, use, treatment, handling, storage, disposal, or
      transportation of Polluting Substances, or (iii) environmental conservation
      or
      protection. References in this Agreement to Environmental Laws existing or
      in
      effect as of a particular date shall include written administrative
      interpretations and policies then existing or in effect.

     

    Environmental Liabilities and Costs.
      Environmental Liabilities and Costs shall mean all liabilities, monetary
      obligations, losses, damages, punitive damages, consequential damages, treble
      damages, costs and expenses (including all reasonable fees, disbursements and
      expenses of counsel,
      experts, or consultants, and costs of investigation and feasibility studies),
      fines, penalties, sanctions, and interest incurred as a result of any claim
      or
      demand, or Remedial Action required, by any governmental authority or any third
      party, and which relate to any Environmental Action.

     

    Environmental Lien.
      Environmental Lien shall mean any Lien in favor of any governmental authority
      for Environmental Liabilities and Costs.

    

    ERISA.
      ERISA
      shall mean the federal Employee Retirement Income Security Act of 1974, any
      successor statute of similar import, and the rules and regulations thereunder,
      collectively and as from time to time amended and in effect.

    

    Events
      of Default.
      See
      Section 10.1.

    
      
        
        

      

      
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    Exercising
      Holder.
      See
      Section 11.1. 

    

    Excepted Capital Raises.
      Excepted Capital Raises shall mean the sale of equity interests of the Company
      (a) to Laurus Master Fund, Ltd. (or its Affiliates) on the Closing Date and
      (b)
      to any Person so long as the net proceeds received by Company in connection
      with
      such sale are used to acquire the Common Stock that Duncan Capital Group LLC
      and
      DCI Master LDC are required to purchase pursuant to that certain Put Agreement
      dated as of November 30, 2005 with IBF Fund Liquidating LLC.

    

    Family Members.
      Family
      Members shall mean, as applied to any individual, any parent, spouse, child,
      spouse of a child, brother or sister of the individual, and each trust created
      for the benefit of one or more of such Persons and each custodian of a property
      of one or more such Persons.

    

    Fee Agreement.
      Fee
      Agreement shall mean that certain Fee Agreement, dated as of the date hereof,
      among the Company, the Holders and the Collateral Agent.

    

    Fee Letter.
      Fee
      Letter shall mean the letter agreement, dated September 25, 2007, by and among
      the Company, Woodside IV, Lehman Brothers Commercial Bank and Lehman Commercial
      Paper Inc. 

    

    Financing Agreements.
      Financing Agreements shall include this Agreement, the Securities, the
      Registration Rights Agreement, the Intercreditor Agreement, the Subordination
      Agreements, the Co-Sale Rights Agreements, the Fee Agreement, the Fee Letter,
      the CIP Agreement, the Guaranties, the Security Documents, and any and every
      other present or future instrument or agreement from time to time entered into
      between the Company or any of its Subsidiaries and the Collateral Agent or
      any
      Holder of the Securities and which relates to this Agreement or is stated to
      be
      a Financing Agreement, as from time to time amended or modified and all
      statements, reports or certificates delivered by or on behalf of the Company
      and
      any of its Subsidiaries to the Collateral Agent or any Holder of the Securities
      in connection herewith or therewith.

    

    Financial
      Statements.
      See
      Section 4.7(a)(i).

    

    Fixed Charge Coverage Ratio.
      Fixed
      Charge Coverage Ratio shall mean, as of any date of determination
      and as
      determined for the Company and its Subsidiaries on a consolidated
      basis,
      the
      ratio of (a) Adjusted EBITDA for the four fiscal quarter period ending as of
      such date, less
      cash
      taxes paid during such period, less
      Capital
      Expenditures made during such period to (b)
      the
      amount of the current portions of long term Indebtedness at such
      date,
      plus
      interest
      expense on Indebtedness for Borrowed Money during such period. 

    

    Formula Value.
      See
      Section 11.5(c).

    
      
        
        

      

      
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    Fully
      Diluted Basis.
      Fully
      Diluted Basis shall mean, at any time, the sum of (i) the number of shares
      of
      Common Stock then outstanding plus (ii) the number of shares of Common Stock
      then issuable upon exercise of then outstanding warrants, options or convertible
      securities, in each case, (x) to the extent then exercisable and (y) assuming
      that a share of Preferred Stock would convert into Common Stock only to the
      extent that the per share value of the Common Stock which would be received
      in
      respect of such share of Preferred Stock upon conversion thereof would exceed
      the “conversion price” of such Preferred Stock.

    

    GAAP.
      GAAP
      shall mean the Generally Accepted Accounting Principals adopted in the United
      States which are (a) consistent with the principles promulgated or adopted
      by
      the Financial Accounting Standards Board and its predecessors, in effect from
      time to time, (b) applied on a basis consistent with prior periods, and (c)
      such
      that a certified public accountant would, insofar as the use of accounting
      principles is pertinent, be in a position to deliver an unqualified opinion
      as
      to financial statements in which such principles have been properly
      applied.

    

    Guaranties.
      Guaranties shall mean the guarantees of the Obligations, granted or to be
      granted by each of the Guarantors.

    

    Guarantors.
      Guarantors shall mean each of the Subsidiaries of the Company as of the date
      hereof and any additional Subsidiaries of the Company who become Guarantors
      pursuant to Section 7.19. 

    

    Hazardous Substances.
      Hazardous Substances shall mean any hazardous waste as defined by 42 U.S.C.
      §6903(5), any hazardous substances as defined by 42 U.S.C. §9601(14), any
      pollutant or contaminant as defined by 42 U.S.C. §9601(33), and any toxic
      substance, oil, petroleum, friable asbestos, hazardous materials, or other
      substances regulated by any Environmental Laws.

     

    Holder.
      Holder
      shall mean, as to any Security, the holder thereof, unless such holder shall
      have presented such Security to the Company for transfer and the transferee
      shall have been entered in the Company's stock register (in the case of Warrant
      Shares), in the register referred to in Section 14.1(a) (in the case of a Note)
      or in the register referred to in Section 14.2(a) (in the case of a Warrant),
      as
      a subsequent holder, in which case "Holder"
      shall
      mean such subsequent holder.

    

    Indebtedness.
      Indebtedness shall include all obligations, contingent and otherwise, which
      in
      accordance with GAAP should be classified upon the obligor's balance sheet
      as
      liabilities, or to which reference should be made by footnotes thereto,
      including without limitation, in any event and whether or not so classified:
      (a)
      all debt and similar monetary obligations, whether direct or indirect; (b)
      all
      liabilities secured by any mortgage, pledge, security interest, lien, charge,
      or
      other encumbrance existing on property owned or acquired subject thereto,
      whether or not the liability secured thereby shall have been assumed; (c) all
      guaranties, endorsements and other contingent obligations whether direct or
      indirect in respect of Indebtedness of others, including any obligation to
      supply funds to or in any manner to invest in, directly or indirectly, the
      debtor, to purchase Indebtedness, or to assure the owner of Indebtedness against
      loss, through an agreement to purchase goods, supplies, or services for the
      purpose of enabling the debtor to make payment of the Indebtedness held by
      such
      owner or otherwise,
      (d) all
      obligations to repurchase, redeem, retire or defease (i) any capital stock,
      (ii)
      other equity interests, or (iii) rights to acquire equity interests,
provided,
      that
      the
      conversion of one class of stock solely to another class of stock shall not
      be
      deemed to create Indebtedness and (e) all Indebtedness for Borrowed
      Money.

    
      
        
        

      

      
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    Indebtedness for Borrowed Money.
      Indebtedness for Borrowed Money shall mean (a) all Indebtedness of the Company
      and its Subsidiaries for borrowed money, whether current or funded, or secured
      or unsecured, (b) all Indebtedness of the Company and its Subsidiaries for
      the
      deferred purchase price of property or services represented by a note or other
      security, (c) all Indebtedness of the Company and its Subsidiaries created
      or
      arising under any conditional sale or other title retention agreement with
      respect to property acquired by the Company or any of its Subsidiaries (even
      though the rights and remedies of the seller or lender under such agreement
      in
      the event of default are limited to repossession or sale of such property),
      (d)
      all Indebtedness of the Company and its Subsidiaries secured by a purchase
      money
      mortgage or other lien to secure all or part of the purchase price of property
      subject to such mortgage or lien, (e) all obligations under leases which shall
      have been or should be, in accordance with GAAP, recorded as capital leases
      in
      respect of which the Company or any of its Subsidiaries are liable as lessee,
      (f) any liability of the Company or any of its Subsidiaries in respect of
      banker's acceptances or letters of credit, including any reimbursement
      obligations with respect thereto, (g) all interest, fees and other expenses
      owed
      with respect to indebtedness described in the foregoing clause (a), (b), (c),
      (d), (e) or (f) above, and (h) all Indebtedness referred to in clause (a),
      (b),
      (c), (d), (e), (f) or (g) above which is directly or indirectly guaranteed
      by
      the Company or any of its Subsidiaries, or which the Company or any of its
      Subsidiaries has agreed (contingently or otherwise) to purchase or otherwise
      acquire, or in respect of which the Company or any of its Subsidiaries has
      otherwise assured a creditor against loss.

    

    Independent Director.
      Independent Director shall mean
      a
      Person other than an executive officer or employee of the Company or any other
      individual having a relationship which, in the opinion of the Company’s board of
      directors, would interfere with the exercise of independent judgment in carrying
      out the responsibilities of a director. The following persons shall not be
      considered independent:

    

    (a) a
      director who is, or at any time during the past three years was, employed by
      the
      Company;

    

    (b) a
      director who accepted or who has a Family Member who accepted any compensation
      from the Company in excess of $100,000 during any period of twelve consecutive
      months within the three years preceding the determination of independence,
      other
      than the following:

     

    (i) compensation
      for board or board committee service;

     

    (ii) compensation
      paid to a Family Member who is an employee (other than an executive officer)
      of
      the Company; or

     

    (iii) benefits
      under a tax-qualified retirement plan, or non-discretionary
      compensation;

    
      
        
        

      

      
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    (c) a
      director who is a Family Member of an individual who is, or at any time during
      the past three years was, employed by the Company as an executive
      officer;

     

    (d) a
      director who is, or has a Family Member who is, a partner in, or a controlling
      shareholder or an executive officer of, any organization to which the Company
      made, or from which the Company received, payments for property or services
      in
      the current or any of the past three fiscal years that exceed 5% of the
      recipient's consolidated gross revenues for that year, or $200,000, whichever
      is
      more, other than the following:

     

    (i) payments
      arising solely from investments in the Company's securities; or

     

    (ii) payments
      under non-discretionary charitable contribution matching programs;

     

    (e) a
      director of the issuer who is, or has a Family Member who is, employed as an
      executive officer of another entity where at any time during the past three
      years any of the executive officers of the issuer serve on the compensation
      committee of such other entity; or

     

    (f) a
      director who is, or has a Family Member who is, a current partner of the
      Company's outside auditor, or was a partner or employee of the Company's outside
      auditor who worked on the Company's audit at any time during any of the past
      three years.

    

    Intangible Assets.
      Intangible Assets shall mean goodwill, write-up in book value of assets, the
      excess of cost over book value of acquired businesses accounted for by the
      purchase method, customer lists, non-compete agreements, formulae, trademarks,
      trade names, patents, patent rights and deferred expenses (including, but not
      limited to, unamortized debt discount and expense, organizational expense and
      packaging and product development and design expense).

    

    Intercreditor Agreement.
      Intercreditor Agreement shall mean that certain Intercreditor and Subordination
      Agreement, dated as of the date hereof, among the Collateral Agent, the Holders
      and the Senior Creditor.

    

    Interest Coverage Ratio.
      Interest Coverage Ratio shall mean, as of any date of determination
      and as
      determined for the Company and its Subsidiaries on a consolidated
      basis,
      the
      ratio of (a) Adjusted EBITDA for the four fiscal quarter period ending as of
      such date less Acquired EBITDA for such period to (b) interest expense on
      Indebtedness for Borrowed Money made during such period. 

    
      
        
        

      

      
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    Investments.
      Investments shall mean (a) any share of capital stock, units, interests,
      evidence of Indebtedness or other security issued by any other Person, (b)
      any
      loan, advance, or extension of credit to, or contribution to the capital of,
      any
      other Person, (c) any purchase of the securities of any other Person, or
      commitment to make such purchase, and (d) any other investment in any other
      Person; provided,
      however,
      that
      the term "Investment" shall not include (i) trade and customer accounts
      receivable for services rendered in the ordinary course of business and payable
      in accordance with customary trade terms, and all letters of credit or other
      instruments securing or evidencing the same, (ii) advances to employees for
      travel expenses, drawing accounts and similar expenditures but only to the
      extent that all such advances outstanding at any particular time do not exceed
      $25,000, (iii) stock or other securities acquired in connection with the
      satisfaction or enforcement of Indebtedness or claims due or owing to the
      Company or any of its Subsidiaries or as security for any such Indebtedness
      or
      claim, (iv) any acquisition of assets or stock of a Person which is permitted
      pursuant to Section 7.14, and (v) the endorsement for collection of instruments
      in the ordinary course of business.

    

    Investor Appraisal.
      See
      Section 11.5(b).

    

    Investor Appraiser.
      See
      Section 11.5(b).

    

    Investors.
      Investors shall mean Woodside, Lehman and any permitted transferee of
      Securities.

    

    Issuance Notice.
      See
      Section 8.4(b).

    

    Key
      Employee.
      Key
      Employee shall mean each of Steven Ross and John Davis so long each such Person
      is an employee of the Company or any of its Subsidiaries, and any other employee
      of the Company receiving aggregate annual compensation from the Company of
      not
      less than $250,000.

    

    Lehman.
      Lehman
      shall mean Lehman Brothers Commercial Bank.

    

    Leverage Ratio.
      Leverage Ratio shall mean, as of any date of determination, the ratio of (a)
      Total Funded Debt at such date to (b) Adjusted EBITDA for the four fiscal
      quarter period ending as of such date.

    

    Lien.
      Lien
      shall mean (a) any encumbrance, mortgage, pledge, lien, charge or other security
      interest of any kind upon any property or assets of any character, or upon
      the
      income or profits therefrom; or (b) any acquisition of or agreement to have
      an
      option to acquire any property or assets upon conditional sale or other title
      retention agreement, device or arrangement (including a capitalized lease);
      or
      (c) any sale, assignment, pledge or other transfer for security of any accounts,
      general intangibles, or chattel paper, with or without recourse.

    

    Loan.
      Loan
      shall mean the term loan in the original principal amount of $6,000,000 made
      by
      Lehman to the Company pursuant to Section 2.1(c).

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    

    Major Holder.
      Major
      Holder shall mean the holder or holders at the relevant time (excluding the
      Company) of (a) in the case of the Notes, at least 10% or more in outstanding
      principal amount of the Notes, (b) in the case of the Warrants and Warrant
      Shares, at least 10% of the total number of (i) the Warrant Shares then issuable
      upon exercise of the outstanding Warrants plus
      (ii)
      then outstanding Warrant Shares and (c) if no class of Securities is referred
      to, the Major Holders of the Notes so long as any Notes are outstanding, and
      the
      Major Holders of the then outstanding Warrants and Warrant Shares.

    

    Majority Holders.
      Majority Holders shall mean the holder or holders at the relevant time
      (excluding the Company) of (a) in the case of the Notes, 50.1% or more in
      outstanding principal amount of the Notes, (b) in the case of the Warrants
      and
      Warrant Shares, 50.1% or more of the number of (i) the Warrant Shares then
      issuable upon exercise of the outstanding Warrants plus
      (ii)
      then outstanding Warrant Shares and (c)
      if no
      class of Securities is referred to, the Majority Holders of Notes so long as
      any
      Notes are outstanding and the Majority Holders of the then outstanding Warrants
      and Warrant Shares. 

    

    Material Adverse Effect.
      Material Adverse Effect shall mean (i) a material adverse change in, or a
      material adverse effect on, the operations, business, assets, properties,
      liabilities (actual or contingent), condition (financial or otherwise) or
      prospects of the Company and its Subsidiaries, taken as a whole; (ii) a material
      impairment of the rights and remedies of the Collateral Agent or any Holder,
      or
      of the ability of the Company or any Guarantor to perform its obligations under
      any Financing Agreement to which it is a party; or (iii) a material adverse
      effect upon the legality, validity, binding effect or enforceability against
      the
      Company or any Guarantor of any Financing Agreement to which it is a
      party.

    

    Maturity Date.
      Maturity Date shall mean January 31, 2011. 

    

    Maximum Rate.
      See
      Section 3.5(c).

    

    Negotiation Period.
      See
      Section 11.5(b).

     

    Net Income.
      Net
      Income shall mean, with respect to any Person, the book net income (or book
      net
      loss, as the case may be) of such Person for any period, after all taxes
      actually paid or accrued and all expenses and other charges determined in
      accordance with GAAP consistently applied.

    

    Net Worth.
      Net
      Worth shall mean, with respect to the Company and its Subsidiaries on a
      consolidated basis, Total Assets, less
      Total
      Liabilities, plus
      all
      accumulated amortization of Intangible Assets subsequent to the date of this
      Agreement.

    

    Non
      Compete Agreements.
      Non
      Compete Agreements shall mean the Non-Compete Agreements (or applicable
      provisions of Employment Agreements that contain non-compete covenants), between
      the Company and (a) each of its Key Employees, (b) each Person listed on
Schedule 1(b)
      hereto
      and (c) each seller in connection with a Permitted Acquisition, in each case,
      in
      a form acceptable to the Holders.

    

    Notes.
      Notes
      shall mean the Senior Secured Notes of the Company aggregating up to $12,000,000
      in principal amount issued pursuant to Section 2.1 hereof and any other Notes
      transferred to any other holders pursuant to Section 15 hereof.

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    

    Obligations.
      Obligations shall mean all indebtedness, obligations and liabilities of the
      Company or any of its Subsidiaries (including, without limitation, those in
      connection with the “put” rights of the Holders described in Section 11) to any
      of the Holders or the Collateral Agent, individually or collectively, existing
      on the date hereof or arising thereafter, arising by contract, operation of
      law
      or otherwise, arising or incurred under this Agreement or any of the other
      Financing Agreements, irrespective of whether for the payment of money, direct
      or indirect, absolute or contingent, due or to become due, voluntary or
      involuntary, joint or several, liquidated or unliquidated, secured or unsecured,
      whether now existing or hereafter arising, and including all interest, costs,
      fees (including attorneys fees), and expenses (including interest, costs,
      indemnities, fees, taxes and expenses that accrue with respect thereto,
      irrespective of whether a claim therefore is allowed pursuant to the provisions
      of the Bankruptcy Code or other insolvency proceeding (if applicable)) and
      any
      and all other amounts which the Company or any of its Subsidiaries is required
      to pay pursuant to any of the foregoing, by law, or otherwise.

    

    Permitted Acquisition.
      Permitted Acquisition shall mean any acquisition by the Company or any of its
      Subsidiaries
      of all
      or substantially all of the assets of any Person or all of the capital stock
      (or
      other equity interests) of any Person; provided that, with respect to any such
      acquisition, each of the following conditions is met:

    

    (i) the
      Acquired Party is in the same line or similar line of business as the Company
      and its Subsidiaries;

    

    (ii) the
      Holders have provided their prior written consent to such acquisition;
provided
      that the
      consent of the Holders shall not be required in the event that (a) the aggregate
      purchase price for the acquisition is less than $800,000, (b) the aggregate
      purchase price for all acquisitions with a purchase price of less than $800,000
      during any 24 month period is less than $2,000,000 and (c) the Company does
      not
      require funding under the Senior Loan Agreement to finance such
      acquisition;

    

    (iii) both
      immediately before and immediately after giving effect to such acquisition,
      no
      Default shall be continuing or shall result therefrom, and, after giving effect
      on a pro forma basis to the acquisition, the Company shall be in compliance
      with
      all terms and conditions of this Agreement and the other Financing
      Agreements;

    

    (iv) the
      Company and the Acquired Party shall comply with Section 7.19; and

    

    (v) prior
      to
      such acquisition, the Holders shall have received the acquisition agreement,
      all
      other acquisition-related documents and the Acquired Party’s financial
      statements, and such agreements and financial statements shall be satisfactory
      to the Holders; provided
      that the
      Company shall not be required to satisfy this condition if (a) the aggregate
      purchase price for the acquisition is less than $800,000, (b) the aggregate
      purchase price for all acquisitions with a purchase price of less than $800,000
      during any 24 month period is less than $2,000,000 and (c) the Company does
      not
      require funding under the Senior Loan Agreement to finance such
      acquisition.

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    

    Permitted Indebtedness.
      See
      Section 7.10.

    

    Permitted Liens.
      See
      Section 7.11.

    

    Person.
      Person
      shall mean an individual, partnership, corporation, limited liability company,
      association, trust, joint venture, unincorporated organization, and any
      government, governmental department or agency or political subdivision
      thereof.

    

    Post-Closing
      Letter.
      Post
      Closing Letter shall mean that certain Post-Closing letter agreement, dated
      the
      date hereof, between the Company and the Collateral Agent.

    

    Preferred Stock.
      Preferred Stock shall mean, collectively, (a) the Preferred Stock of the Company
      described in Section 4.5(a), (b) any capital stock or other securities into
      which or for which Preferred Stock shall have been converted or exchanged
      pursuant to any recapitalization, reorganization or merger of the Company,
      and
      (c) any shares of capital stock issued with respect to the foregoing pursuant
      to
      a stock dividend or stock split.

    

    Preemptive Right.
      See
      Section 8.4(a).

    

    Prepayment Price.
      Prepayment Price shall mean, at any time, with respect to any repayment or
      prepayment of the Notes at such time (whether voluntary or involuntary) or,
      following an Event of Default, any acceleration or demand for payment of the
      Notes at such time, the principal amount of Notes (including any payment in
      kind
      interest accrual) being redeemed or repaid multiplied by the applicable price
      percentage set forth below: 

    

    
      	
              Period

            	 	
              Prepayment Price Percentage

            
	
              November
                30, 2007 through November 30, 2009

            	 	
              105%

            
	
              December
                1, 2009 through January 30, 2011

            	 	
              102.5%

            
	
              Maturity
                Date 

            	 	
              100%

            

    

    

    ;
      provided,
      however,
      in the
      event that the repayment or prepayment occurs in connection with a sale of
      all
      or substantially all of the Company’s assets or Common Stock, then the
      Prepayment Price shall be the principal amount of Notes being redeemed or repaid
      multiplied by the applicable price percentage set forth below: 

    

    
      	
              Period

            	 	
              Prepayment Price Percentage

            
	
              November
                30, 2007 through November 30, 2008

            	 	
              103%

            
	
              December
                1, 2008 through November 30, 2009

            	 	
              102%

            
	
              December
                1, 2009 through January 30, 2011

            	 	
              101%

            
	
              Maturity
                Date 

            	 	
              100%

            

    

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    

    ;
      provided further
      that, if
      the Holders shall have received on or prior to May 30, 2009 an aggregate amount
      of (i) fees, (ii) interest and (iii) cash in connection with the Holders
      exercising their “put” rights hereunder in an amount equal to or greater than
      12,000,000, the Prepayment Price Percentage applicable to any repayment or
      prepayment made in connection with a sale of all or substantially all of the
      Company’s assets or Common Stock shall be 100%. 

    

    Projections.
      See
      Section 4.7(a)(ii).

    

    Public Sale.
      Public
      Sale shall mean any sale of Common Stock or other equity interest to the public
      pursuant to a public offering registered under the Securities Act or to the
      public through a broker or market-maker pursuant to the provisions of Rule
      144
      (or any successor rule) adopted under the Securities Act or any other public
      offering not required to be registered under the Securities Act.

    

    Public Valuation Criteria.
      Public
      Valuation Criteria shall mean, at any time of determination, that (i) the
      Company’s common stock equity is publicly-traded at an average daily trading
      volume level over the past 90 days which is greater than or equal to 1.50%
      of
      the outstanding common stock equity of the Company, (ii) the number of
      non-restricted shares of the Company’s common stock equity available to be
      publicly-traded as of the last date for which such information is publicly
      available is greater than or equal to 25% of the total shares outstanding of
      common stock equity of the Company, (iii) the product of all non-restricted
      shares of the Company’s common stock equity available to be publicly-traded as
      of the last date for which such information is publicly available multiplied by
      the
      thirty-day average per share closing stock price of the Company’s common stock
      equity is at least $25,000,000 and (iv) the closing stock price of the Company’s
      common stock equity is at least $1.00 per share.

    

    Purchase Price.
      See
      Section 2.2.

    

    Put Closing Date.
      See
      Section 11.2.

    

    Put Notice.
      See
      Section 11.1.

    

    Qualified Public Offering.
      Qualified Public Offering shall mean the closing of the Company’s underwritten
      public offering pursuant to an effective registration statement under the
      Securities Act covering the offer and sale of shares of Common Stock in which
      not less than $20,000,000 of gross proceeds are received by the Company for
      the
      account of the Company.

    

    Real Property.
      See
      Section 4.13.

    

    Registration Rights Agreement.
      Registration Rights Agreement shall mean the Registration Rights Agreement,
      dated as of the date hereof, by and among the Company and the
      Holders.

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    

    Related Agreements.
      Related
      Agreements shall mean, collectively, the Financing Agreements, the Senior
      Documents, the Employment Agreements, the Non-Compete Agreements and any
      document governing or evidencing the Subordinated Debt. 

    

    Release.
      Release
      shall have the meaning specified in the Comprehensive Environmental Response,
      Compensation and Liability Act of 1980, 42 U.S.C. §§9601 et seq.
      and the
      regulations promulgated thereunder, as in effect from time to time.

     

    Remedial Action.
      Remedial Action shall mean all actions taken to (a) clean up, remove, remediate,
      contain, treat, monitor, assess, evaluate, or in any way address Hazardous
      Substances in the indoor or outdoor environment, (b) prevent or minimize a
      Release or threatened Release of Hazardous
      Substances so they do not migrate or endanger or threaten to endanger public
      health or welfare or the indoor or outdoor environment, (c) restore or reclaim
      natural resources or the environment, (d) perform any pre-remedial studies,
      investigations, or post-remedial operation and maintenance activities, or (e)
      conduct any other actions with respect to Hazardous Substances authorized by
      Environmental Laws.

     

    Repurchase Price.
      See
      Section 11.5(a).

     

    Rescission Notice.
      See
      Section 11.4.

    

    Restricted Payment.
      Restricted Payment shall mean any payment (whether in cash, securities or other
      property) to or for the benefit of any Affiliate of the Company or any of its
      Subsidiaries in respect of any Indebtedness (other than Subordinated Debt)
      owed
      by or other obligation of the Company or such Subsidiary to such Affiliate.
      

    

    Securities.
      Securities shall mean the Notes, the Warrants and the Warrant
      Shares.

    

    Securities Act.
      Securities Act shall mean the Securities Act of 1933, as amended, or any
      successor federal statute, and the rules and regulations of the Commission
      thereunder, all as the same shall be in effect at the time.

    

    Security Documents.
      Security Documents shall mean all security agreements, Guaranties, pledge
      agreements, UCC financing statements, and any other instruments or documents
      required by the Collateral Agent to be executed or delivered hereunder to secure
      the Obligations.

    

    Sellers.
      Sellers
      shall mean the holders of the Seller Subordinated Closing Debt listed on
Schedule 1(c)
      hereto.

    

    Seller Subordinated Closing Debt.
      Seller
      Subordinated Closing Debt shall mean the Indebtedness of the Company set forth
      on Schedule 1(c)
      hereto.

    

    Seller Subordination Agreements.
      Seller
      Subordination Agreements shall mean those certain Subordination Agreements,
      dated as of the date hereof, among each Seller, the Collateral Agent, the
      Holders and the Company.

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    

    Senior Creditor.
      Senior
      Creditor shall mean RBS Citizens, National Association.

    

    Senior Debt.
      Senior
      Debt shall have the meaning assigned to it in the Intercreditor
      Agreement.

    

    Senior Documents.
      Senior
      Documents shall mean the Senior Loan Agreement, and all promissory notes,
      reimbursement agreements, guaranties, security agreements, trademark security
      agreements, pledge agreements, deeds of trust, mortgages, subordination
      agreements and other instruments, agreements and documents executed at any
      time
      pursuant thereto or in connection therewith, including all amendments
      thereto.

    

    Senior Loan Agreement.
      Senior
      Loan Agreement shall mean that certain Revolving Line of Credit and Term Loan
      Agreement, dated as of even date herewith, between the Senior Creditor and
      the
      Company (as amended and in effect from time to time, including any restatement
      of or replacement agreement therefore, whether with the same or different
      parties).

    

    Specified Shareholder.
      Specified Shareholder shall mean any Person that, together with its Affiliates,
      holds a number of shares of the Common Stock in excess of 2% of the aggregate
      number of shares of Common Stock then outstanding, calculated on a Fully Diluted
      Basis.

    

    Subsidiary.
      Subsidiary shall mean any Person of which the Company or other specified Person
      now or hereafter shall, at the time, own directly, or indirectly through a
      Subsidiary, at least a majority of the outstanding capital stock (or other
      shares of beneficial interest) entitled to vote generally.

    

    Subordinated Debt.
      Subordinated Debt shall mean (a) the Seller Subordinated Closing Debt and (b)
      unsecured Indebtedness owed to a seller as part of the purchase price in
      connection with a Permitted Acquisition so long as such Indebtedness is made
      subordinate and junior in right of payment to any and all Obligations pursuant
      to a Subordination Agreement satisfactory to the Holders.

    

    Subordination Agreement.
      Subordination Agreement shall mean (a) the Seller Subordination Agreements
      and
      (b) any other agreement satisfactory to the Holders subordinating any
      Subordinated Debt.

    

    Third Appraiser.
      See
      Section 11.5(b).

    

    Total Assets.
      Total
      Assets shall mean all assets of the Company and its Subsidiaries determined
      on a
      consolidated basis in accordance with GAAP.

    

    Total Funded Debt.
      Total
      Funded Debt shall mean the Notes, the Senior Debt, the Subordinated Debt and
      any
      other Indebtedness for Borrowed Money of the Company or its
      Subsidiaries.

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    

    Total Liabilities.
      Total
      Liabilities shall mean all liabilities of the Company and its Subsidiaries
      determined on a consolidated basis in accordance with GAAP and classified as
      such on the consolidated balance sheet of the Company and its
      Subsidiaries.

    

    Transfer Notice.
      See
      Section 15.2.

     

    Unrepurchased Securities.
      See
      Section 11.4.

    

    Warrants.
      Warrants shall mean the Warrants of the Company issued to the Holders pursuant
      to Section 2.1 hereof and any other Warrants transferred to any other permitted
      holders pursuant to Section 15 hereof; provided that
      no
      Warrants which have been sold pursuant to a Public Sale shall be considered
      to
      be outstanding Warrants or Securities hereunder.

    

    Warrant
      Shares.
      Warrant
      Shares shall mean, collectively, (a) shares of Common Stock issuable upon
      exercise of the Warrants in accordance with their terms, (b) any capital stock
      or other securities into which or for which such Common Stock shall have been
      converted or exchanged pursuant to any recapitalization, reorganization or
      merger of the Company, and (c) any shares of capital stock issued with respect
      to the foregoing pursuant to a stock dividend or a stock split; provided that
      no
      Warrant Shares which have been sold pursuant to a Public Sale shall be
      considered to be outstanding Warrant Shares or Securities
      hereunder.

    

    Woodside QP.
      Woodside QP shall mean Woodside
      Capital Partners IV QP, LLC. 

    

    Woodside IV.
      Woodside
      IV shall mean Woodside
      Capital Partners IV, LLC.

    

    2. SALE AND PURCHASE OF SECURITIES; TERM LOAN.

    

    2.1
      Sale and Purchase of Securities; Term Loan.
      (a) The
      Company agrees to issue and sell to Woodside QP and, subject to all of the
      terms
      and conditions hereof and in reliance on the representations and warranties
      set
      forth or referred to herein, Woodside QP agrees to purchase, at the Closing
      (as
      described below) (i) a Senior Secured Note of the Company, in the aggregate
      principal amount of $3,273,000, such Note to be in the form of Exhibit A hereto,
      (ii) a $0.50 Common Stock Purchase Warrant for the purchase of 1,566,346 shares
      of Common Stock, such Warrant to be in the form of Exhibits B-1
      hereto,
      (iii) a $1.00 Common Stock Purchase Warrant for the purchase of 1,044,230 shares
      of Common Stock, such Warrant to be in the form of Exhibits B-2
      hereto
      and (iv) a $1.50 Common Stock Purchase Warrant for the purchase of 522,115
      shares of Common Stock, such Warrant to be in the form of Exhibits B-3
      hereto;

    

    (b) The
      Company agrees to issue and sell to Woodside IV and, subject to all of the
      terms
      and conditions hereof and in reliance on the representations and warranties
      set
      forth or referred to herein, Woodside IV agrees to purchase, at the Closing
      (as
      described below) (i) a Senior Secured Note of the Company, in the aggregate
      principal amount of $2,727,000, such Note to be in the form of Exhibit A hereto,
      (ii) a $0.50 Common Stock Purchase Warrant for the purchase of 1,305,049 shares
      of Common Stock, such Warrant to be in the form of Exhibits B-1
      hereto,
      (iii) a $1.00 Common Stock Purchase Warrant for the purchase of 870,033 shares
      of Common Stock, such Warrant to be in the form of Exhibits B-2
      hereto
      and (iv) a $1.50 Common Stock Purchase Warrant for the purchase of 435,016
      shares of Common Stock, such Warrant to be in the form of Exhibits B-3
      hereto;

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    

    (c) Subject
      to all of the terms and conditions hereof, Lehman agrees to lend to the Company,
      at the Closing (as described below), an amount equal to $6,000,000, such term
      loan to be evidenced by a Senior Secured Note of the Company, in the aggregate
      principal amount of $6,000,000, such Note to be in the form of Exhibit A hereto;
      and

    

    (d) The
      Company agrees to issue to Lehman, subject to all of the terms and conditions
      hereof and in reliance on the representations and warranties set forth or
      referred to herein, at the Closing (as described below), (i) a $0.50 Common
      Stock Purchase Warrant for the purchase of 2,871,394 shares of Common Stock,
      such Warrant to be in the form of Exhibits B-1
      hereto,
      (ii) a $1.00 Common Stock Purchase Warrant for the purchase of 1,914,264 shares
      of Common Stock, such Warrant to be in the form of Exhibits B-2
      hereto
      and (iii) a $1.50 Common Stock Purchase Warrant for the purchase of 957,131
      shares of Common Stock, such Warrant to be in the form of Exhibits B-3
      hereto

     

    2.2.  Purchase Price.
      The
      aggregate purchase price for the Securities purchased pursuant to Section 2.1(a)
      and (b) is $6,000,000 (the “Purchase Price”).
      The
      parties hereto agree that (a) the aggregate purchase price for the Note to
      be
      issued to Woodside QP at the Closing is $3,271,909.00; (b) the aggregate
      purchase price for the Warrants to be issued to Woodside QP at the Closing
      is
      $1,091.00; (c) the aggregate purchase price for the Note to be issued to
      Woodside IV at the Closing is $2,726,091.00; and (d) the aggregate purchase
      price for the Warrants to be issued to Woodside IV at the Closing is $909.00,
      and, in each case, will be reported as such by all parties for federal, state
      and local tax purposes. 

    

    2.3.
      Closing.
      The
      closing of the purchase, sale and issuance of Securities and the Loan (the
      "Closing")
      will
      take place at the offices of Bingham McCutchen LLP, 150 Federal Street, Boston,
      Massachusetts 02110, at 10:00 a.m. on November 30, 2007, or at such other time,
      date and place as the parties hereto may mutually agree upon (the "Closing Date").
      At
      the Closing, the Company will deliver to the Holders the Securities described
      in
      Section 2.1 hereof against (a) payment by the Holders of the Purchase Price
      in
      immediately available funds and (b) the making of the Loan to the Company in
      immediately available funds. Each of the Securities described in Section 2.1
      hereof issued at the Closing will be issued to the Holders and registered in
      their name in the records of the Company.

    

    2.4.  Use of Proceeds.
      The
      proceeds from the sale of the Securities hereunder and the Loan will be used
      solely for the purposes set forth on Schedule 2.4
      hereto.
      The Company agrees that it will not use any part of the proceeds from the sale
      of the Securities or the Loan to purchase or carry any "margin security" or
      "margin stock," as such terms are defined in any regulation, rule or
      interpretation of the Board of Governors of the Federal Reserve
      System.

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    
      
        3.
          PRINCIPAL AND INTEREST PAYMENTS ON NOTES;
          SECURITY.

      

    

    

    3.1.  Mandatory Principal Repayment.
      The
      Company agrees to (x) repay the aggregate principal amount of the Notes in
      one
      installment in the amount of the Prepayment Price on the earlier to occur of
      (a)
      the Maturity Date, (b) a Capital Transaction and (c) the acceleration of the
      Notes following an Event of Default, and (y) prepay the Notes, at the Prepayment
      Price, in an amount equal to (i) 100% of the net cash insurance proceeds
      received by the Company or any of their Subsidiaries in respect the loss,
      destruction or condemnation of any Collateral, (ii) 100% of the net cash
      proceeds received by the Company or any of its Subsidiaries from any asset
      sale
      not permitted pursuant to Section 7.14 and (iii) 100% of the net cash proceeds
      received by the Company or any of its Subsidiaries from any offering or sale
      of
      equity interests (other than proceeds received by the Company from Excepted
      Capital Raises), provided that
      (1) any
      such amounts applied to permanently prepay a loan made under the Senior Loan
      Agreement, as in effect on the date hereof, where such prepayment is accompanied
      by a corresponding reduction of the Senior Creditor’s commitment to make loans
      under the Senior Loan Agreement, as in effect on the date hereof, shall not
      be
      required to be applied to prepay the Notes and (2) in the event that the
      Leverage Ratio as of the most recently ended fiscal quarter is less than
      3.00:1.00, no prepayment under clause (iii) shall be required so long as such
      proceeds are used to finance a Permitted Acquisition within three months of
      receipt of such proceeds by the Company or any of its Subsidiaries. Any payments
      required under this Section 3.1 shall be made to the Holders of the Notes
pro rata,
      in
      accordance with the outstanding principal amounts of such Holder’s Notes.

    

    3.2.  Optional Prepayments.
      Subject
      to the last sentence of this Section 3.2, the Company may at any time and from
      time to time prepay all or any portion (in integral multiples of $500,000)
      of
      the principal amount of the Notes, provided that
      (a) such
      prepayment shall be allocated to all of the Notes outstanding at the time in
      proportion to the respective outstanding principal amounts thereof, (b) all
      accrued and unpaid interest on the principal amount being prepaid is paid at
      the
      same time as such prepayment, (c) any such prepayment shall be made to the
      Holders of the Notes pro rata,
      in
      accordance with the outstanding principal amounts of such Holder’s Notes, (d)
      the Company shall give the Holders irrevocable written notice of such prepayment
      not less than 5 nor more than 30 days prior to the prepayment date, specifying
      (i) such prepayment date, (ii) the principal amount of the Notes to be
      prepaid on such date, and (iii) the accrued interest applicable to the
      prepayment and (iv) that such prepayment is to be made pursuant to this Section
      3.2, and (e) the principal amount of the Notes payable in the event of an
      optional prepayment pursuant to this Section 3.2 shall be an amount equal to
      the
      Prepayment Price. All Notes which have been prepaid may not be reborrowed.
      All
      optional prepayments under this Section 3.2 shall be applied first to all costs,
      expenses, indemnities and other amounts payable hereunder and under the
      applicable Notes, then to payment of default interest, if any, then to payment
      of premium, if any, then to payment of accrued interest and thereafter to
      payment of principal. Notwithstanding the foregoing, the Company shall not
      prepay all or any portion of the principal amount of the Notes at any time
      prior
      to May 30, 2009.

    
      
        
        

      

      
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    3.3.  Presentation or Surrender of Notes.
      The
      Company may, as a condition to accepting any prepayment of a Note, require
      the
      Holder thereof to present such Note at the place specified in the Note for
      payment of the principal thereof, for notation thereon of the amount and date
      of
      such prepayment, or, if such Note is prepaid in full, to surrender the same
      to
      the Company.

    

    3.4.  No Reborrowing.
      No
      amount repaid or prepaid pursuant to Section 3.1 or 3.2 may be reborrowed under
      the Notes.

    

    3.5.  Interest Payments.
      (a)
      Subject to Sections 3.5(b) and 3.5(c) hereof, the unpaid principal amount of
      the
      Notes outstanding from time to time shall bear interest from the Closing Date
      until and including the Maturity Date, at a rate equal to fifteen percent (15%)
      per annum, of which (A)
      twelve percent (12%) per annum shall be due and payable, in cash, (x) on the
      first day of each calendar month
      (commencing on the first such date following the Closing Date)
      in
      arrears (y) on the date of any repayment or prepayment of such Notes (with
      respect to the portion of such Notes so repaid or prepaid), and (z) at the
      Maturity Date and (B) the remaining three percent (3%) shall be compounded
      monthly by adding the amount of such interest to the principal amount of the
      Notes and shall be due and payable, in cash, at the Maturity Date and on the
      date of any repayment or prepayment of such Notes (with respect to the portion
      of such Notes so repaid or prepaid).
      Interest on the Notes shall be calculated on the basis of the actual number
      of
      days elapsed and a 360 day year. Notwithstanding the foregoing, (a) in the
      event
      that the Company or any of its Subsidiaries receives net cash proceeds of at
      least $800,000 from any offering or sale of equity interests prior to December
      31, 2007, the interest rate set forth in clause (B) above shall be reduced
      to
      2.625% and (b) in the event that any interest payment is payable on a day that
      is not a business day, such payment shall be payable on the first business
      day
      following such day. 

    

    (b) Upon
      the
      occurrence and during the continuance of any Event of Default the Notes shall
      bear interest at a rate equal to 18% per
      annum,
      which
      shall be due and payable, in cash (x) monthly on the first day of each calendar
      month (commencing on the first such date following the occurrence of such Event
      of Default), in arrears and (y) upon the date of any repayment or prepayment
      of
      the Notes (with respect to the portion of such Notes so repaid or
      prepaid).

    

    (c) It
      is not
      intended by the Holders of the Notes, and nothing contained in this Agreement
      or
      any Note shall be deemed, to establish or require the payment of a rate of
      interest in excess of the maximum rate permitted by applicable federal, state
      or
      other law (the "Maximum Rate")
      and,
      to prevent such an occurrence, any agreement which may now or hereafter be
      in
      effect between the Company and the Holders of the Notes regarding the payment
      of
      fees or interest to such Holders is hereby limited by the provisions of this
      Section 3.5(c). If, in any month, the effective interest rate applicable to
      the
      principal outstanding under the Notes, absent the Maximum Rate limitation
      contained herein, would have exceeded the Maximum Rate, then the effective
      interest rate applicable to the Notes for that month shall be the Maximum Rate,
      and, if in any subsequent month, the effective interest rate would otherwise
      be
      less than the Maximum Rate, then the effective interest rate applicable to
      the
      Notes for such month shall be increased to the Maximum Rate until such time
      as
      the amount of interest paid hereunder equals the amount of interest which would
      have been paid in respect of the Notes if the same had not been limited by
      the
      Maximum Rate. In the event that, upon payment in full of the principal
      outstanding under the Notes, the total amount of interest paid or accrued in
      respect of the Notes under the terms of this Agreement is less than the total
      amount of interest which would have been paid or accrued in respect of the
      Notes
      had the interest not been limited hereby to the Maximum Rate, then the Company
      shall, to the extent permitted by such applicable federal, state or other law,
      pay to each of the holders of the Notes an amount equal to the excess, if any,
      of (i) the lesser of (A) the amount of interest which would have been charged
      in
      respect of the Notes if the Maximum Rate had, at all times, been in effect
      with
      respect to the Notes and (B) the amount of interest which would have accrued
      in
      respect of the Notes had the effective interest rate applicable with respect
      to
      the Notes at all times not been limited hereunder by the Maximum Rate over
      (ii)
      the amount of interest actually paid or accrued in respect of the Notes held
      by
      such holder under this Agreement. In the event that the Holders of the Notes
      receive, collect or apply as interest any sum in excess of the Maximum Rate,
      such excess amount shall be applied to the reduction of principal outstanding
      under the Notes until the payment in full thereof, and if no such principal
      is
      then outstanding, such excess, or part thereof remaining, shall be paid to
      the
      Company.

    
      
        
        

      

      
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    3.6. Security.
      (a) All
      Obligations shall be secured by a perfected first priority security interest
      (subject only to Permitted Liens entitled to priority under applicable law)
      in
      all assets of the Company, whether now owned or hereafter acquired, pursuant
      to
      the Security Documents to which the Company is a party.

    

    (b) All
      Obligations shall also be guaranteed pursuant to the terms of the Guaranties.
      The obligations of the guarantors under the Guaranties shall be in turn secured
      by a perfected first priority security interest (subject only to Permitted
      Liens
      entitled to priority under applicable law) in all of the assets of each
      guarantor, whether now owned or hereafter acquired, pursuant to the terms of
      the
      Security Documents to which such person is a party. 

    

    3.7.
      Subordination to Indebtedness Under Senior Loan
      Agreement.
      Notwithstanding any other provision of this Agreement or any other Financing
      Agreement, the payment of principal and interest on each of the Notes and each
      of the obligations owing to the Investors under the other Financing Agreements
      is and shall be junior and subordinated in right of payment, to the extent
      and
      in the manner set forth in the Intercreditor Agreement.

    

    4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

    

    In
      order
      to induce the Collateral Agent and the Holders to enter into this Agreement
      and
      to purchase the Securities and make the Loan, the Company hereby represents
      and
      warrants
      to each of the Collateral Agent and the Holders, both before and immediately
      after giving effect to the Closing:

    

    4.1.  Organization and Good Standing.
      The
      Company and each of its Subsidiaries is duly organized and existing in good
      standing in its jurisdiction of organization and is duly qualified as a foreign
      corporation and authorized to do business in all other jurisdictions in which
      the nature of its business or property makes such qualification necessary,
      except where the failure to so qualify would not be expected to have a Material
      Adverse Effect. The Company and each of its Subsidiaries has the requisite
      power
      to own its properties and to carry on its business as now conducted and as
      proposed to be conducted.

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    

    4.2.  Authorization.
      The
      execution, delivery and performance by the Company and each of its Subsidiaries
      of this Agreement and each Related Agreement to which such Person is a party,
      as
      applicable, and the issuance and sale by the Company of the Securities
      hereunder, (a) are within the Company’s or such Subsidiary’s power and
      authority, (b) have been duly authorized by all necessary corporate or other
      proceedings, and (c) do not conflict with or result in any breach of any
      provision of or the creation of any Lien upon any of the property of the Company
      or its Subsidiaries (other than Liens created by the Security Documents and
      the
      Senior Documents) or require any consent or approval pursuant to the Charter
      or
      bylaws of the Company or any of its Subsidiaries, except for such necessary
      corporate approvals as shall have been received prior to the Closing Date,
      or
      any material law, regulation, order, judgment, writ, injunction, license,
      permit, agreement or instrument applicable to the Company or any of its
      Subsidiaries.

    

    4.3.  Enforceability.
      The
      execution and delivery by the Company and each of its Subsidiaries of this
      Agreement and each of the Related Agreements to which such Person is a party,
      and the issuance and sale by the Company of the Securities hereunder, will
      result in legally binding obligations of the Company and its Subsidiaries,
      as
      applicable, enforceable against such Persons in accordance with the respective
      terms and provisions hereof and thereof, except to the extent that (a) such
      enforceability is limited by bankruptcy, insolvency, reorganization, moratorium
      or other laws relating to or affecting generally the enforcement of creditors'
      rights and (b) the availability of the remedy of specific performance or
      injunctive or other equitable relief is subject to the discretion of the court
      before which any proceeding therefor may be brought.

    

    4.4.  Governmental Approvals.
      Except
      as set forth on Schedule 4.4
      hereto,
      the execution, delivery and performance by the Company and each of its
      Subsidiaries of this Agreement and each Related Agreement to which such Person
      is a party, and the issuance and sale of the Securities hereunder, do not
      require the approval or consent of, or any filing with, any governmental
      authority or agency.

    

    4.5.  Capitalization.

    

    (a) The
      authorized capital stock of the Company consists of (i) 10,000,000 shares of
      Preferred Stock, $0.001 par value per share of which 4,000,000 shares have
      been
      designated as Series A Preferred Stock (the “Series A Preferred Stock”),
      4,000,000 shares have been designated as Series B Preferred Stock (the
“Series B Preferred Stock”),
      1,000,000 shares have been designated as Series C Preferred Stock (the
“Series C Preferred Stock”),
      500,000 shares have been designated as Series D Preferred Stock (the
“Series D Preferred Stock”)
      and
      60,000 shares have been designated as Series E Preferred Stock (the
“Series E Preferred Stock”)
      and
      (ii) 100,000,000 shares of Common Stock, $0.001 par value per share. On the
      Closing Date, after giving effect to the transactions contemplated hereby and
      by
      the Related Agreements, the Company will have no outstanding capital stock
      other
      than 2,420,000 shares of Series A Preferred Stock, 3,715,000 shares of Series
      B
      Preferred Stock, 770,834 shares of Series C Preferred Stock, 409,500 shares
      of
      Series D Preferred Stock, 29,350 shares of Series E Preferred Stock and
      35,539,620 shares of Common Stock, all of which shares will be owned as set
      forth on Schedule 4.5(a)
      hereto
      and will be duly authorized, validly issued, fully paid and non-assessable.
      On
      the Closing Date, after giving effect to the transactions contemplated hereby
      and by the Related Agreements, each of the Subsidiaries of the Company will
      have
      the authorized, issued and outstanding capital stock (or other equity interests)
      set forth on Schedule 4.5(a)
      hereto,
      all of which outstanding shares of capital stock (or other equity interests)
      will be duly authorized, validly issued, fully paid and non-assessable (as
      may
      be applicable to such interests) and will be owned, beneficially and of record
      by the Company.

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    

    (b) Options,
      Etc.
      Except
      for the Warrants or as set forth on Schedule 4.5(b)
      hereto,
      each of the Company and its Subsidiaries has no outstanding rights (either
      pre-emptive or other) or options to subscribe for or purchase, and no warrants
      or other agreements providing for or requiring the issuance by any of the
      Company or its Subsidiaries of, any of its capital stock or other equity
      interest, or any securities convertible into or exchangeable for its capital
      stock or other equity interest.

    

    (c) Common
      Stock Issuable
      Upon Conversion, Etc..
      Schedule 4.5(c)
      hereto
      sets forth the number of shares of Common Stock issuable upon conversion of
      all
      Preferred Stock or any other securities convertible into or exchangeable for
      its
      capital stock or other equity interests (including the exercise of all options
      and warrants to subscribe for or purchase the Company’s capital
      stock).

    

    (d) Reservation,
      Etc.
      Sufficient shares of authorized but unissued Common Stock have been reserved
      by
      appropriate corporate action in connection with the prospective exercise of
      the
      Warrants. The issuance of the Warrant Shares (i) will not require any further
      corporate action by the stockholders or directors of the Company, (ii) will
      not
      be subject to pre-emptive rights in any present or future stockholders of the
      Company, and (iii) will not conflict with any provision of any agreement to
      which the Company is a party or by which it is bound. All Warrant Shares, when
      issued upon exercise of the Warrants in accordance with their terms, will be
      duly authorized, validly issued, fully paid and non-assessable.

    

    4.6.  Subsidiaries.
      Except
      as set forth on Schedule 4.6
      hereto,
      neither the Company nor any of its Subsidiaries (a) has any Subsidiaries nor
      owns or holds of record and/or beneficially any shares of any class of the
      capital of any corporation, nor (b) owns any legal and/or beneficial interests
      in any partnerships, limited liability companies, business trusts or joint
      ventures, or in any other unincorporated trade or business enterprises.

    

    4.7.  Reports and Financial Statements.
      (a)  The Holders have heretofore been furnished with complete and
      correct copies of the following:

    

    (i) the
      balance sheets and related statements of income and cash flows attached hereto
      as Schedule 4.7(a)(i)
      (collectively, the "Financial Statements");
      and
      

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

     

    (ii)  the
      projections of the future performance of the Company and its Subsidiaries for
      the three-year period following the Closing Date, on a consolidated basis,
      including income, net profits, and cash flows, as attached hereto as
Schedule 4.7(a)(ii)
      (the
      "Projections").
      

    

    (b) Each
      of
      the Financial Statements was prepared in accordance with GAAP applied on a
      basis
      consistent with prior periods except as otherwise stated therein; each of the
      balance sheets of the Company included in such Financial Statements fairly
      presents the financial condition of the Company and its Subsidiaries as at
      the
      close of business on the date thereof; and each of the statements of income
      and
      cash flows of the Company and its Subsidiaries included in such Financial
      Statements fairly presents the results of operations of the Company and its
      Subsidiaries for the fiscal period then ended.

     

    (d) The
      Projections constitute a reasonable basis for the assessment of the future
      performance of the Company and its Subsidiaries, on a consolidated basis, during
      the periods indicated therein, and all material assumptions used in the
      preparation of the Projections are set forth in the notes thereto. 

    

    4.8.  Material Adverse Effect.
      There
      has been no Material Adverse Effect since June 30, 2007. 

    

    4.9.  Indebtedness and Liens.
      The
      Company and its Subsidiaries have no Indebtedness or Liens upon any of their
      properties other than Permitted Indebtedness and Permitted Liens.

    

    4.10.  Related Agreements.
      The
      Holders have heretofore or simultaneously herewith been furnished with complete
      and correct copies of all of the Related Agreements. This Agreement and the
      Related Agreements are the only material agreements relating to the transactions
      contemplated hereby to which the Company or any of its Subsidiaries is a party.
      Neither the Company nor any of its Subsidiaries is in default on any of its
      obligations under this Agreement or any Related Agreement to which such Person
      is a party and, to the best knowledge of the Company, no other party to any
      Related Agreement is in default thereunder.

    

    4.11.  Employee
      Benefit Plans.
      

     

    (a) Identification of Plans.  Except
      for the arrangements set forth in Schedule 4.11,
      neither
      the Company nor any of its Subsidiaries now maintains or contributes to any
      pension, profit-sharing, deferred compensation, bonus, stock option, share
      appreciation right, severance, group or individual health, dental, medical,
      life
      insurance, survivor benefit, or similar plan, policy or arrangement, whether
      formal or informal, for the benefit of any director, officer, consultant, or
      employee of it, whether active or terminated; nor has it ever maintained or
      contributed to any such plan, policy, or arrangement that was subject to ERISA.
      Each of the arrangements set forth in Schedule 4.11
      is
      herein referred to as an "Employee Benefit Plan."

    

    (b) Compliance with Terms and Law.  Each
      Employee Benefit Plan is and has been maintained and operated in compliance
      with
      the terms of such plan and with the requirements prescribed by any and all
      statutes, governmental, or court orders, or governmental rules or regulations
      in
      effect from time to time, including but not limited to ERISA and the Code, and
      applicable to such plan. Each Employee Benefit Plan that is intended to qualify
      under Section 401(a) of the Code is so qualified.

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    

    (c) Absence of Certain Events and Arrangements.
      

    

    (i) There
      is
      no pending, or, to the Company’s knowledge, threatened, legal action,
      proceeding, or investigation, other than routine claims for benefits, concerning
      any Employee Benefit Plan, or any fiduciary or service provider thereof, and
      to
      the Company’s knowledge, there is no basis for any such legal action or
      proceeding.

    

    (ii) No
      Employee Benefit Plan, nor any party in interest in respect thereof, has engaged
      in a prohibited transaction that could subject the Company or any of its
      Subsidiaries, directly or indirectly, to liability under Section 409 or 502(i)
      of ERISA or Section 4975 of the Code.

    

    (iii) No
      communication, report, or disclosure has been made that, at the time made,
      did
      not accurately reflect the terms and operations of any Employee Benefit
      Plan.

    

    (iv) No
      Employee Benefit Plan provides material welfare benefits subsequent to
      termination of employment to employees or their beneficiaries (except to the
      extent required by applicable state insurance laws and Title I, Part 6
      of ERISA).

    

    (v) Neither
      the Company nor any of its Subsidiaries has undertaken to maintain any Employee
      Benefit Plan for any period of time and each such plan is terminable at the
      sole
      discretion of the Company, subject only to such constraints as may imposed
      by
      applicable law.

    

    (vi) No
      Employee Benefit Plan is maintained pursuant to a collective bargaining
      agreement or is or has been subject to the minimum funding requirements of
      Section 302 of ERISA or Section 412 of the Code.

    

    (d) Funding of Certain Plans.  With
      respect to each Employee Benefit Plan for which a separate fund of assets is
      or
      is required to be maintained, full payment has been made of all amounts that,
      under the terms of each such plan, it is required to have paid as contributions
      to that plan as of the end of such plan’s most recently ended year.

     

    4.12.  Solvency.
      Prior
      to, upon and immediately after consummation of the transactions contemplated
      hereby and by the Related Agreements, the Company and each of its Subsidiaries
      is solvent, has tangible and intangible assets having a fair value in excess
      of
      the amount required to pay its probable liabilities on its existing debts as
      they become absolute and matured, and has access to adequate capital for the
      conduct of its business and the ability to pay its debts from time to time
      incurred in connection therewith as such debts mature.

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    

    4.13.  Title to Assets;
      Leases.
      The
      Company and each of its Subsidiaries own all of the assets reflected in the
      consolidated balance sheet of the Company and its Subsidiaries as of June 30,
      2007 and attached to Schedule 4.7(a)(i)
      hereto
      as at the Closing Date, subject to no Liens other than Permitted Liens and
      except for assets disposed of since such date in the ordinary course of business
      and consistent with past practices of the Company and its Subsidiaries. Neither
      the Company nor any of its Subsidiaries owns any real property. The Company
      and
      each of its Subsidiaries enjoys peaceful and undisturbed possession, and is
      in
      compliance, in all material respects, with the terms, (a) of all leases of
      real
      property on which facilities operated by it are situated (the "Real Property"),
      each
      of which is listed on Schedule 4.13
      hereto,
      and (b) of all leases of personal property, and all leases described in clauses
      (a) and (b) above are valid and in full force and effect.

    

    4.14.  Litigation.
      Except
      as set forth on Schedule 4.14
      hereto,
      there is no litigation, at law or in equity, or any proceeding before any court,
      board or other governmental or administrative agency or any arbitrator pending
      or, to the knowledge of the Company, threatened which, individually or in the
      aggregate, is reasonably likely to result in any final judgment or liability
      which, after giving effect to any applicable insurance, could result in a
      Material Adverse Effect or which seeks to enjoin the consummation of, or which
      questions the validity of, any of the transactions contemplated by this
      Agreement or any Related Agreement. No judgment, decree or order of any court,
      board or other governmental or administrative agency or arbitrator has been
      issued against or binds the Company or any of its Subsidiaries or any of their
      assets which has or may have a Material Adverse Effect.

    

    4.15.  Defaults.
      No
      Default or Event of Default exists on the date hereof. Neither the Company
      nor
      any of its Subsidiaries is in default under any provisions of its respective
      Charter or by-laws or under any material provisions of any contract, agreement,
      lease or other instrument to which it is a party or by which it or its property
      is bound or in material violation of any law, judgment, decree or governmental
      order, rule or regulation applicable to the Company or such
      Subsidiary.

    

    4.16.  Governmental Regulations.
      The
      Company is not a "holding company," or a "subsidiary company" of a "holding
      company" or an "affiliate" of a "holding company," as such terms are defined
      in
      the Public Utility Holding Company Act of 1935; nor is the Company a "registered
      investment company," or an "affiliated person" or a "principal underwriter"
      of a
      "registered investment company," as such terms are defined in the Investment
      Company Act of 1940, as amended.

    

    4.17.  Representations and Warranties under Related Agreements.
      All
      representations and warranties made by the Company or any of its Subsidiaries
      in
      any of the Related Agreements or in the certificates delivered in connection
      therewith are true and correct as of the date hereof with the same force and
      effect as though made on and as of the date hereof, and such representations
      and
      warranties are hereby confirmed to the Collateral Agent and the Holders. To
      the
      best knowledge of the Company, all representations and warranties made in the
      Related Agreements by or on behalf of any party thereto other than the Company
      or its Subsidiaries are true and correct in all material
      respects.

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

    

    4.18.  Taxes.
      The
      Company each of its Subsidiaries has filed all tax returns and reports which
      are
      required to be filed with any foreign, federal, state or local governmental
      authority or agency, and the Company and each such Subsidiary has paid, or
      made
      adequate provision for the payment of, all assessments received and all taxes
      which have or may become due under applicable foreign, federal, state or local
      governmental law or regulations with respect to the periods in respect of which
      such returns and reports were filed. The Company knows of no additional
      assessments since the date of such returns and reports, and there will be no
      additional assessments for which adequate reserves have not been established.
      The Company and each of its Subsidiaries have made adequate provision for all
      current taxes. There is no action, suit, taxing authority proceeding, or audit
      with respect to any tax now in progress, pending, or to the best of the
      Company’s knowledge, threatened, against or with respect to the Company or any
      of its Subsidiaries. No deficiency or proposed adjustment in respect of taxes
      that has not been settled or otherwise resolved has been asserted or assessed
      by
      any taxing authority against the Company or any of its Subsidiaries. Neither
      the
      Company nor any of its Subsidiaries has consented to extend the time in which
      any tax may be assessed or collected by any taxing authority. Neither the
      Company nor any of its Subsidiaries has requested or been granted an extension
      of the time for filing any tax return to a date on or after the Closing Date.
      Neither the Company nor any of its Subsidiaries has been a member of any
      affiliated group, or filed or been included in a combined, consolidated, or
      unitary tax return. Neither the Company nor any of its Subsidiaries is a party
      to or bound by any tax sharing or allocation agreement or has any current or
      potential contractual obligation to indemnify any other person with respect
      to
      taxes. Each
      of
      the Company and its Subsidiaries has withheld and paid all taxes required to
      have been withheld and paid by it in connection with amounts paid or owing
      to
      any employee, creditor, independent contractor, or other Person, based on the
      Company’s or such Subsidiary's characterization of such Person, which
      characterization is, to the Company’s knowledge, reasonable.

    

    4.19. Environmental Compliance.
      

     

    (a) The
      Company and each of its Subsidiaries has been issued and is in compliance with
      all permits, certificates, approvals, licenses and other authorizations relating
      to environmental matters and required under applicable Environmental Laws for
      the conduct of its business. None of the Company, its Subsidiaries, nor, to
      the
      Company’s knowledge, any operator of the Real Property is in alleged violation
      of any Environmental Laws which alleged violation would have a material adverse
      effect on the business, assets, or financial condition of the Company or any
      of
      its Subsidiaries.

     

    (b) No
      Release of Hazardous Substance or other condition exists at, on, or under any
      of
      the Real Property or any property formerly owned or leased by the Company or
      any
      of its Subsidiaries for which the Company or any of its Subsidiaries may be
      liable under any Environmental Laws.

     

    (c) Neither
      the Company nor any of its Subsidiaries has received notice from any third
      party
      that it may be liable for any costs or damages whatsoever arising out of the
      Release of Hazardous Substances.

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

    (d) To
      the
      knowledge of the Company, no underground storage tank or receptacle, asbestos
      containing material, or equipment containing polychlorinated biphenyls (PCBs)
      exists at any of the Real Property in violation of Environmental
      Laws.

     

    (e) Any
      Hazardous Substances generated by the Company, its Subsidiaries, or any operator
      of the Real Property have been transported offsite only by licensed carriers
      in
      accordance with applicable Environmental Law.

     

    4.20. Labor Relations.
      The
      Company and each of its Subsidiaries is in compliance with all applicable
      federal and state laws respecting employment and employment practices, terms
      and
      conditions of employment, wages and hours, and nondiscrimination in employment,
      and are not engaged in any unfair labor practice. There is no charge pending
      or,
      to the Company's knowledge, threatened, against or with respect to the Company
      or any of its Subsidiaries before any court or agency alleging unlawful
      discrimination in employment practices, and there is no charge of or proceeding
      with regard to any unfair labor practice against any of them pending before
      the
      National Labor Relations Board. There is no labor strike, dispute, slow-down,
      or
      work stoppage pending, or to the Company's knowledge, threatened against or
      involving the Company or any of its Subsidiaries. No employees of the Company
      or
      any of its Subsidiaries are party to a collective bargaining agreement, and
      no
      such collective bargaining agreement is currently being negotiated. No one
      has
      petitioned and no one is now petitioning for union representation of any
      employees of the Company or any of its Subsidiaries. Neither the Company nor
      any
      of its Subsidiaries has experienced any work stoppage or other material labor
      difficulty.

     

    4.21. Potential Conflicts of Interest.
      Except
      as set forth on Schedule 4.2.1(a),
      none of
      the Persons listed on Schedule 4.21(b),
      the
      Company, any of the Company’s Subsidiaries or any of their respective officers,
      directors, or Key Employees, (i) owns, directly or indirectly, any interest
      in (excepting passive holdings for investment purposes of not more than one
      percent (1%) of the securities of any publicly held and traded company), or
      is
      an officer, director, employee, or consultant of, any Person that is a
      competitor, lessor, lessee, customer, client or supplier of the Company or
      any
      of its Subsidiaries; (ii) owns, directly or indirectly, any interest in any
      tangible or intangible property used in or necessary to the business of the
      Company or any of its Subsidiaries; or (iii) has any cause of action or other
      claim whatsoever against the Company or any of its Subsidiaries, or owes any
      amount to the Company or any of its Subsidiaries, except for claims in the
      ordinary course of business, such as for accrued vacation pay, accrued benefits
      under employee benefit plans, and similar matters and agreements.

     

    4.22. Material Contracts.
      Except
      for the contracts, agreements and arrangements listed in Schedule 4.22
      and
      contracts, agreements or other arrangements that have been fully performed
      and
      with respect to which neither the Company nor any of its Subsidiaries has any
      further obligations or liabilities, neither the Company nor any of its
      Subsidiaries is a party to or otherwise bound by (i)
      any
      agreement, instrument, or commitment that may affect its ability to consummate
      the transactions contemplated hereby or by the Related Agreements, or (ii)
      any
      other material agreement, instrument, or commitment; including without
      limitation, any:

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

    (a) agreement
      for the purchase, sale, lease or license by or from it of (i) real estate
      requiring total payments in excess of $100,000 in any instance or (ii) other
      services, products, or assets, requiring total payments in excess of $100,000
      in
      any instance, other than agreements for the purchase of inventory in the
      ordinary course of its business;

     

    (b) agreements
      requiring it to purchase all or substantially all of its requirements for a
      particular product or service from a particular supplier or suppliers, or
      requiring it to supply all of a particular customer's or customers' requirements
      for a certain service or product (including all management service
      agreements);

     

    (c) agreement
      or other commitment pursuant to which it has agreed to indemnify or hold
      harmless any other person, to share tax liability of any other person, or to
      refrain from competing with any other person;

     

    (d) (i)
      employment agreement, (ii) consulting agreement, or (iii) agreement providing
      for severance payments or other additional rights or benefits (whether or not
      optional) in the event of a sale or other change in control of it;

     

    (e) agreement
      with any current or former Affiliate, stockholder, officer, director, employee,
      or consultant of the Company or any of the Company's Subsidiaries, or with
      any
      person in which any such Affiliate has an interest;

     

    (f) joint
      venture, partnership or teaming agreement;

     

    (g) agreement
      with any domestic or foreign government or agency or executive office thereof
      or
      any subcontract between it and any third party relating to a contract between
      such third party and any domestic or foreign government or agency or executive
      office thereof;

     

    (h) agreement
      the performance of which is reasonably likely to result in a loss to it;
      or

     

    (i) promissory
      note, indenture, mortgage, loan agreement, guaranty, security agreement, pledge
      or similar agreement with any lender. 

     

    The
      Company has delivered to the Holders correct and complete copies of each
      agreement, instrument, and commitment listed in Schedule 4.22,
      each as
      amended to date. Each such agreement, instrument, and commitment is a valid,
      binding and enforceable obligation of the Company or its relevant Subsidiary
      and
      is in full force and effect. Except as set forth in Schedule 4.22,
      neither
      the Company nor any of its Subsidiaries is, nor to the Company's knowledge,
      is
      any other party thereto (nor is the Company or any of its Subsidiaries, to
      the
      Company's knowledge, considered by any other party thereto to be) in breach
      of
      or noncompliance with any term of any such agreement, instrument, or commitment
      (nor is there, to the Company's knowledge, any basis for any of the foregoing),
      except for breaches or noncompliances that singly or in the aggregate would
      not
      have a Material Adverse Effect. No claim, change order, request for equitable
      adjustment, or request for contract price or schedule adjustment, between the
      Company or any of its Subsidiaries and any supplier, client or customer,
      relating to any agreement, instrument, or commitment listed in Schedule 4.22
      is
      pending or, to the Company's knowledge, threatened, other than those claims,
      change orders or requests which could not result in a Material Adverse Effect.
      No agreement, instrument, or commitment listed in Schedule 4.22
      includes
      or incorporates any provision, the effect of which may be to enlarge or
      accelerate any of the obligations of the Company or any of its Subsidiaries
      or
      to give additional rights to any other party thereto, or will terminate, lapse,
      or in any other way be affected, by reason of the transactions contemplated
      by
      this Agreement.

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

    4.23. Intellectual Property.

     

    (a) The
      Company or one of its Subsidiaries is the sole and exclusive owner of or has
      the
      right to use, free and clear of any material obligations to pay royalties or
      any
      other similar obligations, and free and clear of all Liens, all (if any)
      franchises, patents, patent applications, patent licenses, patent rights, trade
      secrets, trademarks, trademark rights, trade names, trade name rights, brand
      names, copyrights, licenses, permits, authorizations and other rights as are
      necessary for the conduct of its business as currently conducted or currently
      proposed to be conducted. All of the foregoing are in full force and effect,
      and
      the Company and each of its Subsidiaries is in compliance with the foregoing
      without any known conflict with the valid rights of others which could affect
      or
      impair in a material manner the business, assets or financial condition of
      the
      Company or any of such Subsidiaries. Except as otherwise described in
Schedule 4.23
      there
      are no material licenses, sublicenses, covenants or agreements which have been
      entered into by the Company or any of its Subsidiaries with respect to any
      patents, trade secrets, trademarks, trade names, brand names or copyrights.
      None
      of the Company nor any of its Subsidiaries is in default in any material respect
      under or in relation to any such license, sublicense, covenant or
      agreement.

     

    (b) There
      is
      no claim by or demand of any Person pertaining to, and there is no pending
      or,
      to the best knowledge of the Company, threatened action, suit, proceeding or
      investigation relating to any rights of the Company or any of its Subsidiaries
      in respect of any patents, trade secrets, trademarks, trade names, brand names
      or copyrights used in the business or operations of the Company or any of its
      Subsidiaries.

     

    (c) No
      patent, trade secret, trademark, trade name, brand name or copyright owned
      or
      used by the Company or any of its Subsidiaries (i) is, to the Company's
      knowledge, being infringed by any Person, or (ii) to the Company's knowledge,
      infringes any patent, trade secret, trademark, copyright or other intellectual
      property right of any Person.

     

    (d) Except
      as
      otherwise described in Schedule 4.23,
      none of
      the Company nor any of its Subsidiaries is a party to or bound by any agreement
      or contract (whether written or, to its knowledge, oral) containing any covenant
      prohibiting the Company or any of its Subsidiaries from competing in any
      business of any kind in any territory or from competing with any Person, or
      prohibiting the Company or any of its Subsidiaries from doing any kind of
      business with any Person.

     

    (e) To
      the
      Company's knowledge: (i) None of the Company, any of its Subsidiaries nor any
      of
      their respective employees or consultants has infringed or made unlawful use
      of,
      or is infringing or making unlawful use of, any proprietary or confidential
      information of any Person, including without limitation any former employer
      of
      any past or present employee or consultant of the Company or any of its
      Subsidiaries; and (ii) the activities of the Company's and its Subsidiaries’
employees and consultants in connection with their employment or consulting
      do
      not violate any agreements or arrangements that any such employees or
      consultants have with any former employer or any other Person.

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

    

    4.24. Brokers.
      Except
      as set forth on Schedule 4.24,
      no
      finder, broker, agent or other intermediary has acted for or on behalf of the
      Company or any or its Subsidiaries in connection with the negotiation or
      consummation of the transactions contemplated hereby, and no fee will be payable
      by the Company or any of its Subsidiaries to any such Person in connection
      with
      such transactions.

     

    4.25. Real
      Property Holding Corporation.
      The
      Company it is not a "United States real property holding corporation" within
      the
      meaning of Section 897 of the Code, as amended, and Treasury Regulation Section
      1.897-2.

     

    4.26.  Lawful Issuance.  All
      of the outstanding shares of the Company's capital stock and all other
      securities of the Company were offered, issued, and sold, and, assuming the
      accuracy of the Holders’ representations and warranties set forth in Section 5
      hereof, the Securities (other than the Note evidencing the Loan) have been
      offered and at the Closing will be issued and, except for the Warrants issued
      to
      Lehman, sold, in compliance with (i) all applicable preemptive or similar
      rights of all Persons, and (ii) all applicable provisions of the Securities
      Act and the rules and regulations thereunder, and all applicable state
      securities laws and the rules and regulations thereunder. No Person has any
      valid right to rescind any purchase of the Notes, any shares of capital stock
      or
      other securities of the Company.

    

    4.27. Disclosure.
      No
      representation, warranty or statement made in this Agreement, any Related
      Agreement, or any agreement, certificate, statement or document furnished by
      or
      on behalf of the Company or any of its Subsidiaries in connection herewith
      or
      therewith contains any untrue statement of material fact or omits to state
      a
      material fact necessary in order to make the statements contained herein or
      therein, in light of the circumstances in which they were made, not
      misleading.

    

    4.28 Preferred Stock.
      No
      adjustment to the “conversion price” in respect of any Preferred Stock and no
      other antidilution rights in favor of the holders of any Preferred Stock will
      be
      triggered as a result of the transactions contemplated hereby

    

    4.29. Certain Shareholders.
      Schedule 4.29
      lists,
      as of the date hereof, each Person that, together with its Affiliates, holds
      a
      number of shares of the Common Stock in excess of 4% of the aggregate number
      of
      shares of Common Stock then outstanding, calculated on a Fully Diluted
      Basis.

    

    5. REPRESENTATIONS AND WARRANTIES OF HOLDERS.

    

    Each
      of
      the Holders represents and warrants to the Company, that, as of the Closing
      Date:

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

    

    5.1.
      Organization and Good Standing.
      Each
      Holder is duly organized and existing in good standing in its jurisdiction
      of
      organization and is authorized to do business in all other jurisdictions in
      which the nature of its business or property makes such qualification necessary,
      except where the failure to so qualify would not be expected to materially
      adversely affect such Holder’s business or financial condition. Each Holder has
      the requisite power to own its properties and to carry on its business as now
      conducted and as proposed to be conducted.

    

    5.2.  Authorization.
      The
      execution, delivery and performance by each Holder of this Agreement and each
      Related Agreement to which such Holder is a party, as applicable, (a) are within
      such Holder’s power and authority, (b) have been duly authorized by all
      necessary proceedings, and (c) do not conflict with or result in any material
      breach of any provision of or the creation of any Lien upon any of the property
      of such Holder or require any consent or approval pursuant to the organizational
      documents such Holder, except for such necessary partnership or other approvals
      as shall have been received prior to the Closing Date, or any material law,
      regulation, order, judgment, writ, injunction, license, permit, agreement or
      instrument applicable to such Holder.

    

    5.3.  Enforceability.
      The
      execution and delivery by each Holder of this Agreement and each of the Related
      Agreements to which it is a party, will result in legally binding obligations
      of
      such Holder, enforceable against such Holder in accordance with the respective
      terms and provisions hereof and thereof, except to the extent that (a) such
      enforceability is limited by bankruptcy, insolvency, reorganization, moratorium
      or other laws relating to or affecting generally the enforcement of creditors'
      rights and (b) the availability of the remedy of specific performance or
      injunctive or other equitable relief is subject to the discretion of the court
      before which any proceeding therefor may be brought.

    

    5.4. Governmental Consents.
      Except
      as set forth in Schedule 5.4,
      no
      consent, approval or authorization of, or registration, qualification or filing
      with, any governmental agency or authority is required for the execution and
      delivery by the Holders of this Agreement, or for the consummation by the
      Holders of the transactions contemplated hereby.

    

    5.5.
      Investment Representation.
      Each
      Holder is (i) an "accredited investor" as defined in the Securities Act, and
      (ii) acquiring the Securities for its own account for investment and not with
      a
      view to selling or otherwise distributing the Securities; provided,
      however,
      that
      the disposition of such Person's property shall at all times be and remain
      in
      its control, subject to the provisions of Section 15 hereof.

    

    5.6. Brokers.
      No
      Holder has retained or been represented by any broker, agent, finder or other
      intermediary in connection with the negotiation or consummation of the
      transactions contemplated by this Agreement.

    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

    5.7. Information.
      Each
      Holder has been furnished with certain materials relating to the business,
      finances and operations of the Company and materials relating to the
      transactions contemplated hereby which have been requested by such Holder.
      Each
      Holder and its advisors, if any, have been afforded the opportunity to ask
      questions of the Company. Neither such inquiries nor any other due diligence
      investigations conducted by any Holder or its advisors or representatives shall
      modify, amend or affect such Holder’s right to rely on the Company’s
      representations and warranties contained herein. Each Holder has sought such
      accounting, legal and tax advice as it has considered necessary to make an
      informed investment decision in respect of its acquisition of the Securities.
      

    

    6. CONDITIONS TO PURCHASE AND LOAN.

    

    Each
      of
      the obligations of the Holders to purchase the Securities or make the Loan
      pursuant to this Agreement is subject to compliance by the Company with its
      agreements herein contained, and to the satisfaction, on or prior to the Closing
      Date, of the following conditions (subject to the terms of the Post-Closing
      Letter):

    

    6.1.  Related Agreements.
      Each of
      the Related Agreements shall have been executed and delivered in a form
      satisfactory to the Holders, and each of the Related Agreements shall be in
      full
      force and effect and no term or condition thereof shall have been amended,
      modified or waived except with the prior written consent of the Holders. All
      covenants, agreements and conditions contained in the Related Agreements which
      are to be performed or complied with on or prior to the Closing Date shall
      have
      been performed or complied with (or waived with the prior written consent of
      the
      Holders).

    

    6.2.  Charter Documents;
      Good Standing Certificates.
      The
      Collateral Agent shall have received (i) a copy, certified by the applicable
      Secretary of State to be true and complete, of the Charter of the Company,
      (ii)
      a copy, certified by a duly authorized officer of the Company or its
      Subsidiaries to be true and complete as of the Closing Date, of the (A) Charter
      of each of the Subsidiaries and (B) the by-laws of each of the Company and
      its
      Subsidiaries, and (iii) certificates of the applicable Secretary of State as
      to
      the Company's and each of its Subsidiaries' corporate good standing or
      qualification to do business, as the case may be, in such state.

    

    6.3.
      Pay-off
      Letter.
      The
      Collateral Agent shall have a received a fully-executed copy of a pay-off letter
      from Laurus Master Fund, Ltd. to the Company, indicating that the existing
      financing arrangements with Laurus Master Fund, Ltd. has been paid in full
      and
      all Liens securing such financing arrangements have been released, and otherwise
      in form and substance satisfactory to the Holders.

    

    6.4.  Proof
      of Corporate Action, Consents and
Waivers.
      The
      Collateral Agent shall have received from the Company and each of its
      Subsidiaries copies, certified by a duly authorized officer of the Company
      or
      such Subsidiary to be true and complete as of the Closing Date, of the records
      of (i) all action taken to authorize the execution, delivery and performance
      of
      this Agreement and each of the Related Agreements to which the Company or such
      Subsidiary is or is to become a party, and (ii) all consents and waivers from
      stockholders of the Company and such Subsidiary and any other third parties
      required for the Company's or such Subsidiary’s execution, delivery or
      performance of any Financing Agreement.

    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    

    

    6.5.  Incumbency Certificate.
      The
      Collateral Agent shall have received from the Company and each Subsidiary an
      incumbency certificate, dated the Closing Date, signed by a duly authorized
      officer of the Company or such Subsidiary and giving the name and bearing a
      specimen signature of each individual who shall be authorized to sign, in the
      name and on behalf of the Company and such Subsidiary, this Agreement and each
      of the Related Agreements to which the Company or such Subsidiary is or is
      to
      become a party, and to give notices and to take other action on behalf of the
      Company or such Subsidiary under each of such documents.

    

    6.6.  Legal Opinions.
      On or
      prior to the Closing Date, the Collateral Agent shall have received from (i)
      Sichenzia Ross Friedman Ference LLP, counsel to the Company and its Subsidiaries
      and (ii) Company’s local Connecticut, Florida, New Jersey, Pennsylvania, Rhode
      Island and Washington counsel, favorable opinions in form acceptable to the
      Holders and their counsel and covering such matters with respect to the
      transactions contemplated by this Agreement and the Related Agreements as the
      Holders or their counsel may reasonably request.

    

    6.7.  Representations and Warranties;
      Officers'
      Certificates.
      The
      representations and warranties contained or incorporated by reference herein
      shall be true and correct on and as of the Closing Date, and the Company and
      each of the Company’s Subsidiaries shall have performed and complied with all
      conditions and agreements required to be performed or complied with by it prior
      to the Closing; and the Collateral Agent shall have received on the Closing
      Date
      a certificate to these effects signed by an authorized officer of the Company.
      

    

    6.8.  Legality;
      Governmental Authorization.
      The
      purchase of the Securities shall not be prohibited by any law or governmental
      order or regulation, and shall not subject the Collateral Agent or any Holder
      to
      any penalty, special tax, or other onerous condition. All necessary consents,
      approvals, licenses, permits, orders and authorizations of, or registrations,
      declarations and filings with, any governmental or administrative agency or
      of
      or with any other Person, with respect to any of the transactions contemplated
      by this Agreement or any of the Related Agreements shall have been duly obtained
      or made and shall be in full force and effect.

    

    6.9.  Payments.
      The
      Collateral Agent and the Holders shall have received payment for all
      out-of-pocket expenses incurred in connection with the transactions contemplated
      by this Agreement and the Related Agreements, including, but not limited to,
      due
      diligence costs and travel expenses. Bingham McCutchen LLP, the Collateral
      Agent’s, Woodside QP’s and Woodside IV’s special counsel, shall have received
      payment for all legal fees reasonably charged and all charges for costs,
      expenses and disbursements incurred by such counsel through the Closing
      Date.

    

    6.10. [Intentionally Omitted].
      

    

    6.11. No
      Material Effect.
      Since
      June 30, 2007, there shall not have been, or threatened to be after giving
      effect to the transactions contemplated hereby, (i) a Material Adverse Effect
      or
      (ii) a default under the existing financing arrangements with Laurus
      Master Fund, Ltd.

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

    6.12. Fees.
      Any
      fees
      required to be paid on or before the Closing Date shall have been
      paid.

    

    6.13. Funds
      Flow.
      The
      Collateral Agent and the Holders shall have received a flow of funds, in form
      and substance satisfactory to it and attached hereto as Schedule 6.13,
      with
      respect to the transactions contemplated hereby.

    

    6.14. UCC Search Results and Perfection.
      The
      Collateral Agent shall
      (a)
have
      received (i) the results of UCC searches with respect to the Collateral
      indicating no Liens other than Permitted Liens and otherwise in form and
      substance satisfactory to the Holders and (ii)
      landlord
      waivers, in form and substance reasonably satisfactory to the Collateral Agent,
      from each of the landlords with respect to each of their respective properties
      listed on Schedule 6.14 hereto
      and
(b)
      be
      satisfied, in its sole discretion, that its Lien on the Collateral, as described
      in the Security Documents, has been properly perfected.

    

    6.15. Certificates of Insurance.
      The
      Collateral Agent shall have received certificates of insurance from an
      independent insurance broker dated as of the Closing Date, together with
      endorsements thereto (including, without limitation a designation of the
      Collateral Agent as loss payee and additional insured), identifying insurance,
      types of insurance, insurance limits and policy terms and otherwise describing
      the insurance in accordance with the provisions of the Security
      Agreements,
      which
      shall be in amounts, types and terms and conditions satisfactory to the
      Holders.

    

    6.16.  Capital
      Contributions.
      The
      Collateral Agent shall have received evidence that Laurus Master Fund, Ltd.
      (or
      its Affiliates) shall have made a capital contribution to the Company of
      $3,000,000 by no later than the Closing Date, pursuant to terms and conditions
      acceptable to the Holders. 

    

    6.17.  Senior
      Debt Financing.
      The
      financing from the Senior Creditor pursuant to the Senior Loan Agreement shall
      be in full force and effect, shall be on terms and conditions reasonably
      satisfactory to the Holders, and shall provide to the Company and its
      Subsidiaries, in the aggregate, total credit of not more than $15,000,000.
      On
      the Closing Date, after giving effect to the transactions contemplated by this
      Agreement and the other Financing Agreements and the payment of all transaction
      costs, the Company and its Subsidiaries shall, together, have aggregate
      unrestricted cash and cash equivalents of at least $2,000,000.

    

    6.18. No
      Litigation.
      No
      restraining order or injunction shall prevent the transactions contemplated
      by
      this Agreement and the other Financing Agreements and no action, suit or
      proceeding shall be pending or threatened before any court or administrative
      body (i) in which it will be, or is, sought to restrain or prohibit or to obtain
      damages or other relief in connection with this Agreement or the other Financing
      Agreements or the consummation of the transactions contemplated hereby or
      thereby or (ii) which
      has
      or may have a Material Adverse Effect.

    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    

     

    6.19. General.
      All
      instruments and legal, governmental, administrative and corporate proceedings
      in
      connection with the transactions contemplated by this Agreement and the Related
      Agreements shall be satisfactory in form and substance to the Holders, and
      each
      Holder shall have received copies of all documents, including, without
      limitation, records of corporate or other proceedings, opinions of counsel,
      consents, waivers, licenses, approvals, permits and orders which the Holders
      may
      have requested in connection therewith.

    

    6.20. Releases.
      The
      Company shall have received releases from certain Persons as requested by the
      Holders, in form and substance satisfactory to the Holders. 

    

    For
      purposes of determining compliance with the conditions specified in this Section
      6, each Holder that has signed this Agreement shall be deemed to have consented
      to, approved or accepted or to be satisfied with, each document or other matter
      required thereunder to be consented to or approved by or acceptable or
      satisfactory to a Holder.

    

    
      
        7.
          COVENANTS APPLICABLE TO THE COMPANY WHILE NOTES
          ARE
          OUTSTANDING.

      

    

    

    The
      Company covenants that, until all of the Indebtedness of the Company with
      respect to the Notes has been paid in full, the Company will comply and will
      cause each of the Company's Subsidiaries to comply with this Section 7, unless
      otherwise consented to in writing by the Majority Holders of the
      Notes:

    

    7.1.  Punctual Payment.
      The
      Company will duly and punctually pay or cause to be paid all principal and
      interest payable with respect to the Notes, and all other amounts owing
      hereunder, in accordance with the terms thereof. 

    

    7.2.  Records and Accounts;
      Accountants and Accounting Methods.
      The
      Company and each of its Subsidiaries will (i) keep true and accurate records
      and
      books of account in which full, true and correct entries will be made in
      accordance with GAAP and (ii) maintain adequate accounts and reserves for all
      taxes (including income taxes), all depreciation, depletion, obsolescence and
      amortization of its properties and all other contingencies.
      Neither
      the Company, nor any of its Subsidiaries, shall modify or change its
      fiscal
      year or its method of accounting (other than as may be required to conform
      to
      GAAP) or enter into, modify, or terminate any agreement currently existing,
      or
      at any time hereafter entered into with any third party accounting firm or
      service bureau for the preparation or storage of the Company’s or its
      Subsidiaries’ accounting records without said accounting firm or service bureau
      agreeing to provide the Holders with the information required hereunder
      regarding the Company’s and its Subsidiaries’ financial
      condition.

    
      
        
        

      

      
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    7.3.  Corporate Existence;
      Maintenance of Properties.
      Subject
      to the proviso set forth in the last sentence of this Section 7.3, the Company
      and each of its Subsidiaries will preserve and keep in full force and effect
      its
      legal existence, rights and franchises. Neither the Company nor any of its
      Subsidiaries will engage in any business other than the business currently
      being
      conducted by such Person. The Company and each of its Subsidiaries will maintain
      all of its properties used or useful in the conduct of its business in good
      condition, repair and working order and cause to be made all necessary repairs,
      renewals, replacements, betterments and improvements thereof, all as in the
      judgment of the Company may be necessary so that the business carried on in
      connection therewith may be properly and advantageously conducted at all times;
      provided,
      however,
      that
      nothing in this Section 7.3 shall prevent the Company or any of its Subsidiaries
      from discontinuing the operation and maintenance of any of such properties
      if
      such discontinuance is, in the judgment of the Company, desirable in the conduct
      of such Person's business and does not materially adversely affect the business,
      assets or financial condition of the Company or any of its
      Subsidiaries.

    

    7.4.  Insurance.
      The
      Company and each of its Subsidiaries will maintain with financially sound and
      reputable insurance companies, funds or underwriters insurance of the kinds,
      covering the risks and in the relative proportionate amounts usually carried
      by
      reasonable and prudent companies conducting businesses similar to that of such
      Person. 

    

    7.5.  Taxes.
      The
      Company and each of its Subsidiaries will pay and discharge, or cause to be
      paid
      and discharged, before the same shall become overdue, all material taxes,
      assessments and other governmental charges imposed upon the Company and each
      of
      its Subsidiaries and their real properties, sales and activities, or any part
      thereof, or upon the income or profits therefrom, as well as all claims for
      labor, materials, or supplies, which if unpaid might by law become a Lien or
      charge upon any of their properties; provided,
      however,
      that
      any such tax, assessment, charge, levy or claim need not be paid if the validity
      or amount thereof shall currently be contested in good faith by appropriate
      proceedings and if the Company or any of its Subsidiaries shall have set aside
      on its books adequate reserves with respect thereto; and provided,
      further,
      that
      the Company and its Subsidiaries will pay or cause to be paid all such taxes,
      assessments, charges, levies or claims forthwith upon the commencement of
      foreclosure on any Lien which may have attached as security therefor, unless
      such proceeding is stayed.

     

    7.6.  Certain Financial Covenants.
      The
      Company and its Subsidiaries will comply with each of the covenants set forth
      on
Schedule 7.6
      hereto.

    

    7.7.  Inspection of Properties and Books.
      The
      Company and each of its Subsidiaries shall permit the Collateral Agent, the
      Holders or any of their designated representatives to visit and inspect, upon
      reasonable notice to the Company and during normal business hours, any of the
      properties of the Company and its Subsidiaries, to examine the books of account
      of the Company and its Subsidiaries (and to make copies thereof and extracts
      therefrom), and to discuss the affairs, finances and accounts of the Company
      and
      its Subsidiaries with, and to be advised as to the same by, officers and
      accountants of such Persons, all at such reasonable times and intervals as
      the
      Collateral Agent or any Holder may reasonably request. 

    

    7.8.  Compliance with Laws,
      Contracts,
      Licenses,
      and Permits.
      The
      Company and each of its Subsidiaries will comply with (a) all applicable laws
      and regulations wherever its business is conducted, (b) the provisions of its
      Charter and by-laws, (c) all material agreements and instruments by which it
      or
      any of its properties may be bound (including, without limitation, the Related
      Agreements), except, in the case of this clause (c), where the failure to so
      comply would not have a Material Adverse Effect, and (d) all applicable decrees,
      orders, and judgments. If any authorization, consent, approval, operating right,
      permit or license from any officer, agency or instrumentality of any government
      shall become necessary or required in order that the Company or any of its
      Subsidiaries may fulfill any of its obligations hereunder, the Company and
      its
      Subsidiaries will immediately take or cause to be taken all reasonable steps
      within its power to obtain such authorization, consent, approval, operating
      right, permit or license and furnish the Holders with evidence
      thereof.

    
      
        
        

      

      
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    7.9.  Further Assurances.
      The
      Company and each of its Subsidiaries will cooperate with the Collateral Agent
      and the Holders and execute such further instruments and documents as the
      Collateral Agent and the Holders shall reasonably request to carry out to the
      Collateral Agent’s and the Holders’ satisfaction the transactions contemplated
      by this Agreement and the Related Agreements.

    

    7.10.  Restrictions on Indebtedness.
      Neither
      the Company nor any of its Subsidiaries will create, incur, assume, guarantee
      or
      be or remain liable, contingently or otherwise, with respect to any Indebtedness
      other than the following ("Permitted Indebtedness"):

    

    (a) current
      liabilities incurred in the ordinary course of business not incurred through
      (i)
      the borrowing of money, or (ii) the obtaining of credit except for credit on
      an
      open account basis customarily extended, and in fact extended, in connection
      with normal purchases of goods and services;

    

    (b) Indebtedness
      in respect of taxes, assessments, governmental charges or levies and claims
      for
      labor, materials and supplies to the extent that payment therefor shall not
      at
      the time be required to be made in accordance with the provisions of Section
      7.5
      hereof;

    

    (c) Indebtedness
      in respect of judgments or awards which have been in force for less than the
      applicable period for taking an appeal so long as execution is not levied
      thereunder or in respect of which the Company or any of its Subsidiaries shall
      at the time in good faith be prosecuting an appeal or proceedings for review
      and
      in respect of which a stay of execution shall have been obtained pending such
      appeal or review;

    

    (d) Endorsements
      for collection, deposit or negotiation and warranties of products or services,
      in each case incurred in the ordinary course of business;

    

    (e) Indebtedness
      in respect of operating leases incurred in the ordinary course of
      business;

    

    (f) Indebtedness
      under or in respect of the agreements or instruments existing on the date of
      this Agreement listed and described on Schedule 7.10(f)
      hereto,
      but only to the extent of the amounts listed thereon; 

    

    (g) Indebtedness
      incurred in connection with any purchase money financing of any Capital
      Expenditures permitted hereunder, provided
      that the
      aggregate principal amount of such Indebtedness incurred by the Company and
      each
      of its Subsidiaries during any fiscal year shall not exceed $150,000 in the
      aggregate; 

    
      
        
        

      

      
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    (h) Indebtedness
      under the Financing Agreements; 

    

    (i) the
      Senior Debt; 

    

    (j) the
      Seller Subordinated Closing Debt;

    

    (k) unsecured
      Indebtedness owed to a seller as part of the purchase price in connection with
      a
      Permitted Acquisition so long as such Indebtedness is made subordinate and
      junior in right of payment to any and all Obligations pursuant to a
      Subordination Agreement satisfactory to the Holders;
      provided
      that
      such Indebtedness is on terms and conditions satisfactory to the Holders in
      their sole discretion;
      and

    

    (l) additional
      senior Indebtedness not to exceed $10,000,000; provided
      that
      such additional senior Indebtedness is on terms and conditions satisfactory
      to
      the Holders in their sole discretion. 

    

    7.11.  Restrictions on Liens.
      Neither
      the Company nor any of its Subsidiaries will create or incur or suffer to be
      created or incurred or to exist any Lien or other security interest of any
      kind
      upon any of its property or assets of any character whether now owned or
      hereafter acquired, or upon the income or profits therefrom; or transfer any
      of
      such property or assets or the income or profits therefrom for the purpose
      of
      subjecting the same to the payment of Indebtedness or performance of any other
      obligation in priority to payment of its general creditors; or acquire, or
      agree
      or have an option to acquire, any property or assets upon conditional sale
      or
      other title retention or purchase money security agreement, device or
      arrangement; or suffer to exist for a period of more than 30 days after the
      same
      shall have been incurred any Indebtedness or claim or demand against it which
      if
      unpaid might by law or upon bankruptcy or insolvency, or otherwise, be given
      any
      priority whatsoever over its general creditors (other than those claims which
      the Company or such Subsidiary is contesting in good faith by appropriate
      proceedings and as to which the Company or such Subsidiary shall have set aside
      on its books, adequate reserves with respect thereto); or sell, assign, pledge
      or otherwise transfer any accounts, contract rights, general intangibles,
      chattel paper or instruments with or without recourse; provided,
      however,
      that
      the Company and its Subsidiaries may create or incur or suffer to be created
      or
      incurred or to exist any of the following ("Permitted Liens"):

    

    (a) Liens
      to
      secure taxes, assessments and other government charges or claims for labor,
      material or supplies in respect of obligations not overdue (other than any
      such
      overdue taxes, levies, claims, assessments or charges, to the extent the payment
      therefor shall not at the time be required to be made in accordance with the
      provisions of Section 7.5 hereof);

    
      
        
        

      

      
        -39-

        
          

        

      

      
        
        

      

    

     

     

    (b) Deposits
      or pledges made in connection with, or to secure payment of, workmen's
      compensation, unemployment insurance, old age pensions or other social security
      obligations;

    

    (c) Liens
      in
      respect of judgments or awards, the Indebtedness with respect to which is
      permitted by Section 7.10(c);

    

    (d) Liens
      of
      carriers, warehousemen, mechanics and materialmen, and other like liens, in
      existence less than 60 days from the date of creation thereof or in respect
      of
      obligations not overdue or, if overdue, all such liens that the Company or
      such
      Subsidiary is contesting in good faith and by appropriate proceedings diligently
      conducted and with respect to which adequate reserves have been established
      and
      are being maintained in accordance with GAAP and which prevent enforcement
      of
      the lien;

    

    (e) Encumbrances
      consisting of easements, rights of way, zoning restrictions, restrictions on
      the
      use of real property and irregularities in the title thereto, landlord's or
      lessor's Liens under leases to which the Company or any of its Subsidiaries
      is a
      party, and other minor Liens or encumbrances none of which interferes materially
      with the use of the property affected in the ordinary conduct of the business
      of
      the Company and its Subsidiaries and which defects do not individually or in
      the
      aggregate have a material adverse effect on the business, assets or financial
      condition of the Company or any of its Subsidiaries; 

    

    (f) Liens
      presently outstanding as shown on Schedule 7.11
      hereto;

    

    (g) Purchase
      money security interests in or purchase money mortgages on real or personal
      property acquired after the date hereof to secure purchase money Indebtedness
      permitted by Section 7.10(g), incurred in connection with the acquisition of
      such property, which security interests or mortgages cover only the real or
      personal property so acquired;

    

    (h) Liens
      incurred pursuant to the Security Documents; and

    

    (i) Liens
      incurred in connection with the Senior Debt.

    

    7.12.  Distributions;
      Payments of Subordinated Debt.
      Neither
      the Company nor any of its Subsidiaries shall (i) make any Distribution except
      any Subsidiary may make Distributions to the Company or (ii) pay or acquire
      any
      Subordinated Debt; provided
      that the
      Company may make scheduled payments of principal and interest on the Seller
      Subordinated Closing Debt so long as no Default exists or would result
      therefrom.

    

    7.13.  Capital Expenditures.
      The
      Company and its Subsidiaries together will not make any Capital Expenditures
      in
      excess of $250,000 for any single expenditure or project nor will any of such
      Persons make any Capital Expenditures which aggregate more than $250,000 with
      respect to such Persons in any fiscal year.

    
      
        
        

      

      
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    7.14.  Merger,
      Consolidation,
      Purchase or Sale of Assets.
      Neither
      the Company nor any of its Subsidiaries will (a) become a party to any merger
      or
      consolidation, (b) sell, lease, sublease or otherwise transfer or dispose
      (including, without limitation, pursuant to any sale-leaseback transactions)
      of
      any portion of its assets, (c) acquire all or substantially all of the assets
      of
      any Person or any portion of the capital stock (or other equity interests)
      of
      any Person or (d) acquire any assets outside the ordinary course of business;
      provided
      that
      notwithstanding the forgoing, (i) any Subsidiary of the Company may merge or
      consolidate with the Company or any other Subsidiary of the Company so long
      as,
      in the case of any merger or consolidation with the Company, the Company is
      the
      surviving entity, (ii) the Company and its Subsidiaries may sell inventory
      and
      dispose of obsolete or worn-out machinery and equipment, in each case, in the
      ordinary course of business, consistent with past practices, (iii) the Company
      and any of its Subsidiaries may become a party to any merger or consolidation
      or
      sell or otherwise transfer or dispose of any portion of their assets so long
      as,
      in each case, contemporaneously with the closing of any such transaction, all
      of
      the Obligations (including, without limitation, the Prepayment Price with
      respect to the Notes, the CIP Amount pursuant to the CIP Agreement (or,
      to
      the extent that the Approval Date has occurred, all obligations in connection
      with the “put” rights of the Holders described in Section 11) and the Fee
      pursuant to the Fee Agreement)
      are
      indefeasibly paid in full, and (iv) the Company may acquire any Acquired Party
      pursuant to a Permitted Acquisition. 

    

    7.15.  Investments.
      The
      Company will not, nor will it permit any of its Subsidiaries to, have
      outstanding or acquire or commit itself to acquire or hold any Investment except
      for the Investments set forth on Schedule 7.15
      and
      except Investments in: (a) marketable direct obligations issued or guaranteed
      by
      the United States of America which mature within one year from the date of
      acquisition thereof or which are subject to a repurchase agreement, exercisable
      within 90 days from the date of acquisition of such agreement, with any
      commercial bank or trust company incorporated under the laws of the United
      States of America or any state thereof or the District of Columbia, (b)
      non-extendible commercial paper maturing within one year from the date of
      acquisition thereof and having, at the date of acquisition thereof, the highest
      rating obtainable from Moody's Investors Service, Inc. or Standard & Poor's
      Corporation, (c) bankers' acceptances eligible for rediscount under Federal
      Reserve Board requirements accepted by any commercial bank or trust company
      referred to in clause (a) hereof, (d) deposit accounts or certificates of
      deposit maturing within one year from the date of acquisition thereof issued
      by
      or maintained with, as applicable, any commercial bank or trust company referred
      to in clause (a) hereof and having capital and surplus of at least $100,000,000
      and rated at least “Prime-1”
      (or the then equivalent grade) by Moody’s or at least “A-1” (or the then
      equivalent grade) by Standard & Poor’s Ratings Services,
      and (e)
      certificates of deposit maturing within one year from the date of acquisition
      thereof issued by banks organized under the laws of any other jurisdiction,
      each
      having combined capital and surplus of not less than $100,000,000, and having
      at
      least an "A" rating or better.

     

    
      
        
        

      

      
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    7.16.  Transactions with Affiliates and Shareholders.
      Neither
      the Company nor any of its Subsidiaries will (a) engage in any transaction
      with
      any Affiliate except as expressly provided in clause (b) below, or (b) make
      any
      Restricted Payment other than (i) payments made pursuant to the terms of any
      Related Agreement as in effect on the Closing Date, (ii) in the case of each
      Person party to an Employment Agreement, payments of base salary as currently
      in
      effect and any increases thereto or bonuses (except for those bonuses provided
      for in the Employment Agreements) approved by the Majority Holders of the Notes
      in writing, (iii) payments of customary Board fees to any “outside” director of
      the Company, and (iv) so long as no Default or Event of Default has occurred
      and
      is continuing, payments made pursuant to the terms of any agreement or
      instrument, as in effect on the Closing Date, listed on Schedule 7.16.
      In
      addition, neither the Company nor any of its Subsidiaries will (w) increase
      the
      base salary of any Person party to any Employment Agreement over the amount
      currently in effect, (x) pay any bonuses to such Persons (other than as set
      forth in the Employment Agreements), (y) implement any management compensation,
      bonus or stock option plan, in each case, without the prior written approval
      of
      the Majority Holders of the Notes or (z) without the prior written consent
      of
      the Holders, enter into any arrangements with any Specified Shareholder with
      respect to any capital raising transaction, investment banking services,
      consulting or management services, the acquisition of, or merger with, any
      Person (including the acquisition of all or substantially all of the assets
      of
      any Person), or any similar arrangements.

    

    7.17. Employee Benefit Plans.
      The
      Company and each of its Subsidiaries will take all actions necessary to
      maintain, fund, and administer its employee benefit plans in accordance with
      federal, state and local law. Without limiting the foregoing, each of the
      Company and its Subsidiaries (a) will not permit the aggregate present value
      of
      the unfunded vested accrued benefits under all employee benefit plans of the
      Company or such Subsidiary or any ERISA Affiliate to exceed $150,000, and will
      not take any action which would result in the foregoing; (b) will furnish to
      the
      Holders a copy of any actuarial statement related to any pension plan
      maintained, funded or contributed to by the Company or such Subsidiary which
      is
      required to be submitted under Section 103(d) of ERISA, no later than the date
      on which such statement is submitted to the Department of Labor or the Internal
      Revenue Service; (c) will furnish to the Holders forthwith a copy of (i) any
      notice of a pension plan termination sent to the Pension Benefit Guaranty
      Corporation under Section 4041(a) of ERISA with respect to any pension plan
      maintained, funded or contributed to by the Company or such Subsidiary, or
      (ii)
      any notice, report or demand sent or received by a pension plan under Sections
      4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA; and (d) will furnish
      to
      the Holders a copy of any request for waiver from the funding standards or
      extension of the amortization periods required by Sections 303 and 304 of ERISA
      or Section 412 of the Code with respect to any pension plan maintained, funded
      or contributed to by the Company or such Subsidiary no later than the date
      on
      which the request is submitted to the Department of Labor or the Internal
      Revenue Service, as the case may be.

     

    7.18. Activities and Use of Proceeds.
      The
      Company will use the proceeds from the sale of the Securities and the Loan
      for
      the purposes set forth in Section 2.4 hereof. The Company will supply to the
      Holders such additional information and documents as any Holder may reasonably
      request with respect to the use of proceeds and will permit each Holder to
      have
      access to any and all records and information and personnel as such Holder
      deems
      necessary to verify such use of proceeds.

    
      
        
        

      

      
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    7.19. Guaranties and Other Related Documents.
      Each
      Person shall, upon becoming a Subsidiary of the Company, promptly execute and
      deliver to the Holders, a guaranty in form and substance reasonably satisfactory
      to the Holders guaranteeing all Obligations or other instruments and documents
      as the Holders shall require in order to grant the Collateral Agent a first
      (subject only to Permitted Liens entitled to priority under applicable law)
      priority, perfected security interest in all assets of such Subsidiary.

    

    7.20. Upstream Limitations.
      The
      Company will not permit any of its Subsidiaries to enter into any agreement,
      contract or arrangement (other than the Senior Loan Documents and this
      Agreement) restricting the ability of any Subsidiary to pay or make dividends
      or
      distributions in cash or kind, to make loans, advances or other payments of
      whatsoever nature or to make transfers or distributions of all or any part
      of
      its assets to the Company or any of its Subsidiaries.

    

    7.21. Environmental Compliance.
      The
      Company shall, and shall cause each of its Subsidiaries to (a) keep any property
      either owned or operated by the Company or its Subsidiaries free of any
      Environmental Liens or post bonds or other financial assurances sufficient
      to
      satisfy the obligations or liability evidenced by such Environmental Liens,
      (b)
      comply, in all material respects, with Environmental Laws and provide to the
      Holders documentation of such compliance which the Holders reasonably requests,
      (c) promptly notify the Holders of any Release of a Hazardous Substances in
      any
      reportable quantity from or on to property owned or operated by the Company
      or
      its Subsidiaries and take any Remedial Actions required to abate said Release
      or
      otherwise to come into compliance with applicable Environmental Law, and (d)
      promptly, but in any event within 5 days of its receipt thereof, provide the
      Holders with written notice of any of the following: (i) notice that an
      Environmental Lien has been filed against any of the real or personal property
      of the Company or its Subsidiaries, (ii) commencement of any Environmental
      Action or notice that an Environmental Action will be filed against the Company
      or its Subsidiaries, and (iii) notice of a violation, citation, or other
      administrative order which reasonably could be expected to result in a
material
      adverse change in the business, assets or financial condition of the Company
      or
      any of its Subsidiaries

    

    7.22. Deposit Accounts.
      The
      Company and its Subsidiaries shall not, at any time after March 31, 2008, permit
      the aggregate balance maintained in all deposit accounts (other than payroll
      accounts) which are not subject to a control agreement in favor of the
      Collateral Agent to exceed $150,000.

    

    7.23. Minimum Availability Under Senior Loan Agreement.
      The
Company
      shall maintain a minimum borrowing availability under the Revolving Loan (as
      such term is defined in the Senior Loan Document) at all times sufficient to
      fund three (3) months of debt service payments on Subordinated Debt on a pro
      forma basis.

    

    7.24. Use of Proceeds of Term
      Loan.
      The
      Company will use the proceeds from any Term Loan Advance (as such term is
      defined in the Senior Loan Agreement) made after the Closing Date solely for
      Permitted Acquisitions. 

    
      
        
        

      

      
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    7.25. Cash Management.
      On or
      prior to March 31, 2008, the Company shall have entered into cash management
      arrangements in accordance with Section 5(u) of the Senior Loan
      Agreement.

    

    7.26. Certain Agreements.
      Neither
the
      Company nor any of its Subsidiaries will enter into any arrangements with
      respect to any capital raising transaction, investment banking services,
      consulting or management services, the acquisition of, or merger with, any
      Person (including the acquisition of all or substantially all of the assets
      of
      any Person), or any similar arrangements, in each case, without the prior
      written consent of the Holders. 

    

    8. COVENANTS
      APPLICABLE WHILE THE WARRANTS OR ANY
WARRANT SHARES ARE
OUTSTANDING.
      The
      Company covenants that, so long as any Warrants or Warrant Shares are
      outstanding, the Company will comply, and will cause each of the Company’s
      Subsidiaries to comply with the following:

    

    8.1.  General.
      The
      Company will comply with and will cause each of its Subsidiaries to comply
      with
      the provisions of Sections 7.16-7.18 hereof.

    

    8.2.  Sale and Issuance of Capital Stock.
      Excluding the Excepted Capital Raises, neither the Company nor any of its
      Subsidiaries will (a) issue, sell, give away, transfer, pledge, mortgage, assign
      or otherwise dispose of, (b) grant any rights (either preemptive or other)
      or
      options to subscribe for or purchase, or (c) enter into any agreements, or
      issue
      any warrants, providing for the issuance of any of, its capital stock or any
      securities convertible into or exchangeable for any of its capital stock, except
      for (i) the Warrants and the Warrant Shares and (ii) options and/or additional
      equity interests in the Company described on Schedule 4.5(b)
      hereto
      or otherwise issued or issuable to employees, consultants, officers or directors
      of the Company pursuant to a stock option plan or restricted stock plan or
      agreement, for a number of shares equal to up to an aggregate of 2.5% of the
      fully-diluted Common Stock of the Company calculated as of the date
      hereof.

     

    8.3. Distributions.
      Neither
      the Company nor any of its Subsidiaries shall make any cash Distributions to
      the
      holder of any Preferred Stock in respect thereof. 

    

    8.4 Preemptive Rights.

    

    (a) If
      after
      the Closing Date the Company proposes to issue any equity securities, subject
      to
      paragraph (c) of this Section, each Holder shall have the right (the
“Preemptive Right”)
      to
      purchase a number of shares of the equity securities to be issued at the time
      set forth in paragraph (b) of this Section sufficient to enable such Holder
      to
      maintain its proportionate equity ownership interest in the equity securities
      to
      be so issued (on a Fully-Diluted Basis) at the level of such interest
      immediately prior to such issuance. The foregoing shall apply equally to any
      sale of equity securities by a Subsidiary if any purchaser in such sale is
      also
      an equity security-holder of the Company, or an Affiliate thereof, so as to
      enable each Holder to maintain its proportionate equity ownership interest
      in
      the Company and its Subsidiaries taken as a whole immediately prior to such
      issuance.

    
      
        
        

      

      
        -44-

        
          

        

      

      
        
        

      

    

    

    (b) The
      Company shall, at least thirty (30) days prior to any such issuance, give
      written notice of any such issuance to each Holder, setting forth in reasonable
      detail with proposed terms and conditions thereof (the “Issuance Notice”)
      which
      notice shall offer each Holder the opportunity to purchase such securities
      at
      the same price and on the same terms, as the securities are proposed to be
      issued by the Company. Any Holder may exercise its right of first refusal by
      delivery of a written notice to the Company together with immediately available
      funds in the requisite amount within fifteen (15) days after its receipt of
      the
      Issuance Notice.

    

    (c) The
      Preemptive Rights shall not apply to the following issuances: (i) equity
      securities issued in connection with the acquisition of another corporation
      or
      other business entity by the Company by merger, purchase of substantially all
      assets or other reorganization whereby the Company owns, upon consummation
      of
      such acquisition, greater than fifty percent (50%) of the voting power to elect
      the directors of such corporation or other business entity; (ii) equity
      securities issued in any merger or consolidation of the Company, provided that
      such
      merger or consolidation is approved by the Majority Holders; (iii) issuances
      for
      compensation-related (rather than financing) purposes to directors and employees
      of the Company and any Subsidiary thereof; (iv) the grant of stock to employees
      or the grant of employee stock options, restricted stock or stock purchase
      rights; (v) sales or issuances of equity securities upon exercise of employee
      stock option or employee stock purchase rights; (vi) equity securities
      distributed or set aside ratably to all holders of equity securities on a per
      share equivalent basis; (vii) issuance of equity securities upon exercise of
      any
      warrant existing on the date hereof; and (viii) equity securities issued upon
      conversion or exercise of any class of equity securities.

     

    
      
        9.
          COVENANTS APPLICABLE WHILE
          THE
          SECURITIES ARE OUTSTANDING.

      

    

    

    The
      Company hereby agrees that so long as any Securities are outstanding that it
      will comply with and it will cause each of its Subsidiaries to comply with
      the
      following provisions:

    

    9.1.  Annual Statements.
      As soon
      as available and in any event within 90 days after the close of the fiscal
      year
      of the Company commencing with the fiscal year ending on December 31, 2007,
      the
      Company will deliver to each Major Holder consolidated and consolidating balance
      sheets and statements of income and retained earnings and consolidated and
      consolidating statements of cash flows of the Company and its Subsidiaries
      audited by an independent public accounting firm selected by the Company and
      acceptable to the Majority Holders, showing the consolidated financial condition
      of the Company and its Subsidiaries as of the close of such fiscal year and
      the
      consolidated and consolidating results of the Company's and its Subsidiaries'
      operations during such fiscal year. Each of the financial statements delivered
      hereunder shall be certified without qualification (except any qualifications
      as
      the Majority Holders may in their discretion approve in writing) by such
      accounting firm to have been prepared in accordance with GAAP consistently
      applied, accompanied by an agreed upon procedures report from such accounting
      firm and by the written statement of such accounting firm that no Default or
      Event of Default exists, or if such firm shall have obtained knowledge of any
      such Default or Event of Default, setting forth the nature
      thereof.

    
      
        
        

      

      
        -45-

        
          

        

      

      
        
        

      

    

    

    9.2.  Quarterly Statements.
      The
      Company will deliver to each Major Holder, within 45 days after the end of
      each
      calendar quarter, a covenant compliance certificate in the form of Exhibit C
      hereto.

    

    9.3.  Monthly Statements.
      Within
      30 days after the end of each month commencing with the month ending October
      31,
      2007, the Company will deliver to each Major Holder internal, unaudited
      consolidated and consolidating balance sheets and statements of income, retained
      earnings and cash flows of the Company and its Subsidiaries as of the end of
      each such month and for the year to date, setting forth in each case in
      comparative form (a) the figures for the corresponding period or periods of
      the
      previous fiscal year and (b) the figures from the annual budget covering the
      current fiscal year, in each case, certified by both the President and the
      Treasurer or chief financial officer of the Company to be true and correct
      and
      to have been prepared in accordance with GAAP consistently applied (subject
      to
      normal year-end adjustments and the absence of footnotes).

    

    9.4.  Other Financial Information.
      The
      Company will deliver to each Major Holder:

    

    (a) at
      least
      30 days prior to the commencement of each fiscal year, an annual budget and
      projected monthly balance sheets and statements of income for such fiscal year,
      prepared on a consolidated and consolidating basis and on a comparative basis
      to
      the Projections and, as soon as practical after preparation thereof, complete
      and correct copies of all quarterly (if any) or annual budgetary analyses or
      forecasts of the Company in the form customarily prepared by management for
      its
      own internal use or the use of the board of directors of the
      Company;

    

    (b) copies
      of
      all documents and materials (including
      accountant’s management letters) furnished
      from time to time to any director on the Company's board of
      directors;

    

    (c) contemporaneously
      with the filing or mailing thereof, copies of all material of a financial nature
      filed with the Securities and Exchange Commission or sent to the stockholders
      of
      the Company;

    

    (d) promptly
      after the receipt thereof, copies of any reports as to adequacies in accounting
      controls submitted by independent accountants with respect to the Company and
      its Subsidiaries;

    

    (e) contemporaneously
      with the mailing thereof, copies of all material of a financial nature (which
      materials shall include, without limitation, all collateral reports, financial
      statements, enterprise valuations and business plans) or an environmental nature
      delivered to the Senior Creditor; and

    
      
        
        

      

      
        -46-

        
          

        

      

      
        
        

      

    

    

    (f) from
      time
      to time such other financial data and information as any Major Holder may
      reasonably request.

    

    9.5.  Officers' Certificates.
      Together with delivery of consolidated financial statements of the Company
      pursuant to Sections 9.1 and 9.3 above, the Company will deliver to each Major
      Holder a certificate of the President, chief financial officer or Treasurer
      of
      the Company, (a) stating that such statements have been prepared in accordance
      with GAAP consistently applied and present fairly the consolidated financial
      position of the Company and its Subsidiaries as of the dates specified and
      the
      results of their consolidated operations and cash flows with respect to the
      periods specified (subject in the case of interim financial statements only
      to
      normal year-end adjustments and a lack of footnotes), and (b) stating that
      such
      officers have caused the provisions of this Agreement and the Securities to
      be
      reviewed and have no knowledge of any Default or Event of Default, or if either
      such officer has such knowledge, specifying such Default or Event of Default
      and
      the nature thereof, and what action the Company has taken, is taking or proposes
      to take with respect thereto.

    

    9.6.  Notice of Litigation,
      Defaults,
      Etc.
      The
      Company will, promptly upon any officer of the Company obtaining knowledge
      thereof, give notice to each Major Holder of any (i) litigation or any
      administrative proceeding, pending, threatened or to which the Company or any
      of
      its Subsidiaries may otherwise hereafter become a party which may result in
      a
      Material Adverse Effect, (ii) Default or Event of Default hereunder, with such
      notice specifying the nature and period of existence thereof and what action
      the
      Company has taken or proposes to take with respect thereto, (iii) default or
      event of default under any Related Agreement or under any other agreement
      relating to any Indebtedness for Borrowed Money, with such notice specifying
      the
      nature and period of existence thereof, (iv)
      material violation of any Environmental Law that the Company or any of its
      Subsidiaries reports in writing or is reportable by such Person in writing
      (or
      for which any written report supplemental to any oral report is made) to any
      federal, state or local environmental agency, (v) inquiry, proceeding,
      investigation, or other action, including a written notice from any agency
      of
      potential environmental liability, of any federal, state or local environmental
      agency or board, that may result in any material
      adverse change in the business, assets, or financial condition of the Company
      or
      any of its Subsidiaries
      and (vi)
      inquiry, proceeding, investigation, or other action, of the Securities and
      Exchange Commission or any similar state agency in respect of the Company,
      any
      of its Subsidiaries or any director, officer or employee of the Company or
      any
      of its Subsidiaries.

    

    9.7.  Right to Attend Meetings.
      Each
      Holder shall be entitled to have one observer at each and every meeting of
      the
      Company’s board of directors, or if a meeting is held by telephone conference,
      to participate therein by telephone. The Holders shall be entitled to
      reimbursement for any fees and expenses incurred in connection with retaining
      a
      Person to serve as observer, and any such observer shall have all rights of
      an
      observer, including reimbursement for all reasonable expenses incurred in
      connection with attendance at such meetings. The Company will give each Holder
      at least five business days’ prior written notice of the time, place and subject
      matter of any proposed meeting (or action by written consent) of the board
      of
      directors or managers of the Company, or any committee thereof, such notice
      in
      all cases to include true and complete copies of all documents furnished to
      any
      director in connection with such meeting or consent. In the event such observer
      receives material non-public information, whether attending such meeting or
      by
      other means, no Holder shall trade on such information until such time as the
      information is made publicly available. 

    
      
        
        

      

      
        -47-

        
          

        

      

      
        
        

      

    

    9.8.  Other Information.
      The
      Company will deliver to each Person entitled to receive notice pursuant to
      Section 9.7(a) of board meetings and consents, copies of all papers which may
      be
      distributed from time to time to the directors or stockholders of the Company
      at
      such time as such papers are so distributed to them. In addition, from time
      to
      time upon the request of the Collateral Agent or the Holders or upon the request
      of any representative designated by the Majority Holders, the Company will
      furnish to any authorized officer or representative of such Person such
      information regarding the business, affairs, prospects and financial condition
      of the Company and its Subsidiaries as such officer or representative may
      reasonably request. Each such officer or representative shall have the right
      during normal business hours to examine the books and records of the Company
      and
      its Subsidiaries, to make copies, notes and abstracts therefrom, and to make
      an
      independent examination of the books and records of the Company and its
      Subsidiaries.

    

    9.9.  Amendment of Related Agreements,
      Etc.
      Neither
      the Company nor any of its Subsidiaries shall agree to any amendment or
      modification of its Charter or by-laws, or agree to any amendment or
      modification of or grant any waiver or fail to enforce any of its rights
      pursuant to any of the Related Agreements, unless approved in each case by
      the
      Majority Holders in writing. 

    

    9.10. Budget.
      The
      Majority Holders shall be entitled to review and approve, such approval not
      to
      be unreasonably withheld, the Company's annual budget delivered in accordance
      with the provisions set forth in Section 9.4 hereof, and no material
      modification of such budget shall thereafter be made without the written consent
      of the Majority Holders.

     

    9.11. Key
      Employees.
      The
      Company and/or its applicable Subsidiary shall enter into an Employment
      Agreement and a Non-Compete Agreement with each (a) employee that becomes a
      Key
      Employee after the date hereof and (b) each seller in connection with a
      Permitted Acquisition.

     

    9.12 Independent Directors.
      Within
      one hundred twenty (120) days of the date hereof, the Company’s shareholders
      shall elect an Independent Director that is satisfactory to the Holders to
      its
      board of directors in accordance with the terms of its Charter and, at all
      times
      thereafter, at least one Independent Director that is satisfactory to the
      Holders shall be a member of the Company’s board of directors. 

     

    10. DEFAULTS.
      

     

    10.1.  Events of Default.
      Holders
      of the Securities will be entitled to exercise the remedies provided by Section
      10.2 hereof in accordance with the terms thereof if any one or more of the
      following events ("Events of Default")
      shall
      occur:

    
      
        
        

      

      
        -48-

        
          

        

      

      
        
        

      

    

    

    (a) the
      Company shall fail to make any payment of principal or interest on any of the
      Notes on the date the same shall become due, whether on any scheduled payment
      date, at maturity or by acceleration or otherwise; 

    

    (b) the
      Company shall fail to redeem any Preferred Stock when due in accordance with
      the
      terms of the Charter;

    

    (c) the
      Company shall fail to pay when due the Repurchase Price for any Warrants or
      Warrant Shares pursuant to Section 11 hereof;

    

    (d) the
      Company or any of its Subsidiaries shall fail to perform or observe any
      covenant, agreement or provision applicable to it (other than those provisions
      set forth in Sections 10.1(a) - (c) above) set forth in Sections 7, 8 or 9
      hereof;

    

    (e) the
      Company or any of its Subsidiaries shall fail to perform or observe any
      covenant, agreement or provision applicable to it, under this Agreement or
      any
      other Financing Agreement to which it is a party, other than those provisions
      set forth in Sections 10.1(a) - (d) above, and such failure shall not be
      rectified, waived or cured to the satisfaction of the Majority Holders within
      thirty (30) days of written notice thereof to the Company;

    

    (f) there
      occurs any "Event of Default" under the Senior Loan Agreement or any of the
      other Senior Documents, including any amendments or modifications
      thereto;

    

    (g) any
      representation or warranty made by the Company to any Holder in connection
      with
      this Agreement or any Related Agreement or any amendment to this Agreement
      or
      any Related Agreement shall prove to have been false, in any material respect,
      on the date as of which it was made;

    

    (h) the
      Company or any of its Subsidiaries shall fail (i) to make any required payment
      on any Indebtedness for Borrowed Money, or (ii) to perform or observe any of
      the
      covenants or provisions required to be performed or observed by it pursuant
      to
      any of the Related Agreements, as amended from time to time consistent with
      Section 9.9 and, in the case of each of (i) and (ii), (x) such failure shall
      continue, without having been duly cured, waived or consented to, beyond the
      period of grace, if any, therein specified and so as to permit the acceleration
      thereof, if any acceleration is provided for therein, or (y) any security
      interest in or other Lien on any property securing any such Indebtedness shall
      be enforced through judicial proceedings or foreclosure or repossession of
      collateral; 

    (i) a
      final
      judgment which in the aggregate with other outstanding final judgments against
      the Company or any of its Subsidiaries exceeds $150,000 shall be rendered
      against the Company or any of its Subsidiaries if, within 30 days after entry
      thereof, such judgment shall not have been satisfied and discharged or stayed
      pending appeal or bonded, or within 30 days after expiration of such stay such
      judgment shall not have been discharged;

    
      
        
        

      

      
        -49-

        
          

        

      

      
        
        

      

    

    

    (j) the
      Company or any of its Subsidiaries shall:

    

    (i)  commence
      a voluntary case under Title 11 of the United States Code as from time to time
      in effect, or authorize, by appropriate proceedings of its board of directors
      or
      other governing body, the commencement of such a voluntary case;

    

    (ii)  have
      filed against it a petition commencing an involuntary case under said Title
      11
      and such petition shall not have been dismissed or stayed within 45
      days;

    

    (iii)  seek
      relief as a debtor under any applicable law, other than said Title 11, of any
      jurisdiction relating to the liquidation or reorganization of debtors or to
      the
      modification or alteration of the rights of creditors, or consent to or
      acquiesce in such relief;

    

    (iv)  have
      entered against it an order by a court of competent jurisdiction (x) finding
      it
      to be bankrupt or insolvent, (y) ordering or approving its liquidation,
      reorganization or any modification or alteration of the rights of its creditors,
      or (z) assuming custody of, or appointing a receiver or other custodian for,
      all
      or a substantial part of its property; or

    

    (v)  make
      an assignment for the benefit of, or enter into a composition with, its
      creditors, or appoint or consent to the appointment of a receiver or other
      custodian for all or a substantial part of its property;

    

    (k) the
      employment of Steven Ross shall be terminated for any reason, including by
      resignation, or such Person is otherwise legally restricted from participating
      in the business conducted by the Company or any of its Subsidiaries, and the
      Company shall not have hired a replacement for any such Person who has been
      approved by the Majority Holders within 120 days thereafter, 

    

    (l) the
      Company or any of its Subsidiaries shall fail to maintain in full force and
      effect any federal, state or local license, permit or operating right material
      to the operation of its business;

    

    (m) if
      any of
      the Financing Agreements shall be cancelled, terminated, revoked or rescinded
      or
      any of the Collateral Agent’s or any Holder’s Liens on the Collateral shall
      cease to be perfected, or shall cease to have the priority contemplated hereby
      and by the Security Documents, in each case otherwise than in accordance with
      the terms thereof or with the express prior written consent, agreement or
      approval of the Majority Holders of the Notes, or any action at law or in equity
      or other legal proceeding to cancel, revoke or rescind any of the Financing
      Agreements shall be commenced by or on behalf of the Company or any of its
      Subsidiaries party thereto or any of their respective stockholders, or any
      court
      or any other governmental or regulatory authority or agency of competent
      jurisdiction shall make a determination that, or issue a judgment, order, decree
      or ruling to the effect that, any one or more of the Financing Agreements is
      illegal, invalid or unenforceable in accordance with the terms
      thereof;

    
      
        
        

      

      
        -50-

        
          

        

      

      
        
        

      

    

    

    (n) the
      Company or any of its Subsidiaries shall be convicted, pursuant to a final
      determination of a court of competent jurisdiction of a state or federal crime,
      or the Company or any of its Subsidiaries is held liable,
      pursuant to a final determination of a court of competent jurisdiction (or
      admits liability), in any civil or criminal action brought by a governmental
      entity, a punishment for which in any such case is reasonably likely to include
      fines or penalties in excess of, or the forfeiture of any assets of the Company
      or such Subsidiary having a fair market value in excess of
      $150,000;

    

    (o) the
      Company or any of its Subsidiaries agrees to the settlement of any one or more
      pending or threatened actions, suits or proceedings affecting the Company or
      any
      of its Subsidiaries before any court or other governmental authority or any
      arbitrator or mediator, providing for the payment of money exceeding $150,000
      in
      the aggregate;

    

    (p) any
      material portion of the Company’s, or any of its Subsidiaries’ assets is
      attached, seized, subjected to a writ or distress warrant, levied upon, or
      comes
      into the possession of any third Person;

    

    (q) the
      Company or any of its Subsidiaries is enjoined, restrained, or in any way
      prevented by court order from continuing to conduct all or any material part
      of
      its business affairs;

    

    (r) a
      notice
      of lien, levy, or assessment is filed of record with respect to any of the
      Company’s or any of its Subsidiaries’ assets by the United States, or any
      department, agency, or instrumentality thereof, or by any state, county,
      municipal, or governmental agency, or if any taxes or debts owing at any time
      hereafter to any one or more of such entities becomes a Lien, whether choate
      or
      otherwise, upon any of the Company’s or any of its Subsidiaries’ assets and the
      same is not paid before such payment is delinquent; 

    

    (s) the
      obligation of any Guarantor under any Guaranty is limited or terminated by
      operation of law or by such guarantor thereunder;
      or

    

    (t) there
      occurs any default under the Subordinated Debt.

    

    10.2.  Remedies.
      Upon
      the occurrence and continuance of any of the Events of Default under Section
      10.1 hereof, in each and every such case: 

    
      
        
        

      

      
        -51-

        
          

        

      

      
        
        

      

    

    

    (a) the
      Collateral Agent may and, upon the request of the Majority Holders of the Notes,
      shall, proceed to protect and enforce its or their rights by suit in equity,
      action at law and/or other appropriate proceedings either for specific
      performance of any covenant, provision or condition contained or incorporated
      by
      reference in this Agreement or in the Notes, or in aid of the exercise of any
      power granted in this Agreement or in the Notes, and (unless there shall have
      occurred an Event of Default under Section 10.1(j) hereof, in which case the
      unpaid balance of the Notes shall automatically become due and payable) may
      by
      notice to the Company, declare all or any part of the unpaid principal amount
      of
      the Notes then outstanding to be forthwith due and payable, and thereupon such
      unpaid principal amount or part thereof, together with interest accrued thereon
      and all other sums, if any, payable under this Agreement or the Notes shall
      become so due and payable without presentation, presentment, protest or further
      demand or notice of any kind, all of which are hereby expressly waived, and
      such
      holder or holders may proceed to enforce payment of such amount or part thereof
      in such manner as it or they may elect; and

    

    (b) (i)
      the
      Majority Holders of the Warrants and the Warrant Shares may proceed to protect
      and enforce its or their rights by suit in equity, action at law and/or other
      appropriate proceeding for specific performance of any covenant, provision
      or
      condition contained or incorporated by reference in this Agreement or in any
      Related Agreement, or in aid of the exercise of any power granted in this
      Agreement or any Related Agreement, and, immediately in the case of Section
      10.1(j) hereof and at any time after the giving of a Put Notice to the Company
      pursuant to Section 11 hereof in all other cases, the theretofore unexercised
      "put" rights set forth in Section 11 hereof shall, to the extent not already
      exercisable, be deemed to have become immediately exercisable and the Majority
      Holders of Warrants and the Warrant Shares may in such Put Notice to the Company
      declare all or part of such theretofore unexercised "put" rights to be forthwith
      exercised and due and payable (unless there shall have occurred an Event of
      Default under Section 10.1(j) hereof, in which case such "put" rights shall
      be
      automatically exercised and due and payable, whereupon the Repurchase Price
      for
      the Warrants and the Warrant Shares subject thereto shall become so due and
      payable without presentation, presentment, protest or further demand or notice
      of any kind, all of which are hereby expressly waived), and any such holder
      or
      holders may proceed to enforce payment of such amount or part thereof in such
      manner as it or they may elect; and

    

    (ii)
      the
      Majority Holders of the Warrants and the Warrant Shares may demand payment
      of
      the CIP Amount pursuant to the CIP Agreement and/or payment of the Fee pursuant
      to the Fee Agreement; whereupon such CIP Amount and such Fee shall become so
      due
      and payable without presentation, presentment, protest or further demand or
      notice of any kind, all of which are hereby expressly waived, and any such
      holder or holders may proceed to enforce payment of such amount or part thereof
      in such manner as it or they may elect; provided that
      such
      amounts shall automatically become due and payable in the case of an event
      described in Section 10.1(j) hereof. 

    
      
        
        

      

      
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    10.3.  Waivers.
      The
      Company and each of its Subsidiaries hereby waives, to the extent not prohibited
      by applicable law, (a) all presentments, demands for performance and notices
      of
      nonperformance (except to the extent specifically required by the provisions
      hereof), (b) any requirement of diligence or promptness on the part of any
      holder of Securities in the enforcement of its rights under the provisions
      of
      this Agreement, the Company's Charter, or any Financing Agreement, and (c)
      any
      and all notices of every kind and description which may be required to be given
      by any statute or rule of law.

    

    10.4.  Course of Dealing.
      No
      course of dealing between the Company or any of its Subsidiaries on the one
      hand, and the Collateral Agent or any Holder of Securities, on the other hand,
      shall operate as a waiver of any of the rights of the Collateral Agent or any
      Holder under this Agreement, the Company's Charter, or any Financing Agreement.
      No delay or omission in exercising any right under this Agreement, the Company's
      Charter, or any Financing Agreement shall operate as a waiver of such right
      or
      any other right. A waiver on any one occasion shall not be construed as a bar
      to
      or waiver of any right or remedy on any other occasion.

     

    10.5 Distribution of Proceeds.
      After
      the exercise of remedies provided for in Section 10.2
      (or
      after the Notes have automatically become due and payable), any amount received
      on account of the Obligations shall be applied first, to the payment of that
      portion of the Obligations constituting fees, indemnities, expenses and other
      amounts (including fees, charges and disbursement of counsel to the Collateral
      Agent) payable to the Collateral Agent in its capacity as such and second,
      to
      all other Obligations in such order or preference as the Majority Holders may
      determine, provided
      that
      with respect to each type of Obligation owing to the Holders, such as interest,
      principal, fees and expenses, distributions shall be made among the Holders
      on a
      pro rata basis.

    

    11. REPURCHASE OF WARRANTS
      AND
      WARRANT SHARES.

    

    11.1.  Right
      to Put Warrants and Warrant
Shares.
      Following the Approval Date and at any time and from time to time after the
      earliest of (i) the Maturity Date, or (ii) the date of consummation of a Capital
      Transaction, or on such earlier date as may be determined under Section 10.2(b)
      or Section 11.7 hereof, any Holder (an "Exercising
      Holder")
      may,
      by notice to the Company (a "Put
      Notice"),
      elect
      to sell to the Company (and the Company hereby agrees to repurchase), at the
      Repurchase Price specified in Section 11.5 hereof or Section 11.7 hereof, as
      applicable, all or such number of the shares of Warrant Shares held by the
      Exercising Holder and/or all or such portion of the Warrants held by such
      Exercising Holder then outstanding as is specified in the Put Notice. For all
      purposes of this Section 11, each Warrant shall be treated as the number of
      Warrant Shares for which it is then exercisable. 

    
      
        
        

      

      
        -53-

        
          

        

      

      
        
        

      

    

    11.2.  Put Closing.
      The put
      closing, except as otherwise provided in Section 11.7, shall take place at
      the
      offices of the Company at 10:00 a.m. local time on a date (a) not more than
      90
      days after the date a Put Notice is received by the Company as the Company
      shall
      specify by notice to each Exercising Holder, or at such later time as Fair
      Market Value shall have been determined under Section 11.5(b) hereof, or (b)
      at
      such other time and place as each Exercising Holder and the Company may agree
      upon (a "Put Closing Date").
      At
      the put closing each Exercising Holder will deliver to the Company a certificate
      or certificates evidencing the Warrant Shares and/or Warrants then to be
      purchased by the Company (properly endorsed or accompanied by assignments,
      with
      signature(s) guaranteed or similar appropriate documentation of authority to
      transfer, and free and clear of all Liens) against payment of the Repurchase
      Price to such Exercising Holder in the manner specified in Section 11.4 hereof.
      Except to the extent prohibited by applicable law, prior to the Put Closing
      Date, the Company will provide the Holders (on a confidential basis) with all
      available information that may be material to the exercise of the Holders’
rights under this Section 11, including any plans or proposals for any mergers,
      sales of assets, acquisitions and substantial sales of stock or other equity
      interests by its stockholders.

    

    11.3.  Right to Call Warrants or Warrant
      Shares;
      Call Closing.
      At any
      time after a CIP Notice (as defined in the CIP Agreement) is delivered to the
      Company by the Majority Holders pursuant to the CIP Agreement, the Company
      may,
      by notice to each Holder of Warrants and Warrant Shares (the "Call Notice"),
      elect
      to purchase from each Holder of the Warrants and the Warrant Shares (and each
      Holder hereby agrees to sell to the Company) out of funds legally available
      therefor, at the Repurchase Price, all but not less than all of Warrant Shares
      and the Warrants as are then outstanding on a date specified in such notice
      not
      fewer than 30 nor more than 90 days after the date of the Call Notice or at
      such
      later time as Fair Market Value shall have been determined under Section 11.5(b)
      hereof. The closing under this Section 11.3 shall take place at the offices
      of
      the Company at 10:00 a.m. local time on the date so specified or at such later
      time as Fair Market Value shall have been determined under Section 11.5(b)
      hereof, or at such other time and place as the Company and the Holders may
      agree
      upon (the "Call Closing Date").
      At
      the call closing the Holders will deliver to the Company a certificate or
      certificates evidencing the Warrant Shares and/or the Warrants, to be purchased
      by the Company (properly
      endorsed or accompanied by assignments, with signature(s) guaranteed or similar
      appropriate documentation of authority to transfer, and free and clear of all
      Liens) against payment of the Repurchase Price to the Holders in the manner
      specified in Section 11.4 hereof and payment of the Fee under and as defined
      in
      the Fee Agreement. Except to the extent prohibited by applicable law, prior
      to
      the Call Closing Date, the Company will provide the Holders (on a confidential
      basis) with all available information that may be material to the exercise
      of
      each Holder’s rights under this Section 11, including any plans or proposals for
      any mergers, sales of assets, acquisitions and substantial sales of stock or
      other equity interests by its stockholders.

    
      
        
        

      

      
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    11.4.  Payment.
      The
      Company shall pay the Repurchase Price and, in the case of a “call”, the Fee
      under and as defined in the Fee Agreement, at any closing under Section 11.2
      or
      11.3 hereof out of funds legally available therefor in cash, or otherwise,
      immediately available funds. In the event that any portion of the Repurchase
      Price or, in the case of a “call”, any portion of the Repurchase Price or any
      portion the Fee under and as defined in the Fee Agreement, is not paid as a
      result of any insufficiency of legally available funds or otherwise, (a) in
      the
      case of a “put” each Exercising Holder shall retain all of its rights hereunder
      and under and in connection with the Warrant Shares and Warrants held by such
      Exercising Holder, as to that number of Warrant Shares and/or that portion
      of
      the Warrants exercisable for that number of Warrant Shares as such unpaid
      portion represents (the "Unrepurchased Securities"),
      until
      such time as the unpaid portion of the Repurchase Price and interest thereon,
      determined as set forth below, shall be paid to such Exercising Holder; and
      each
      Exercising Holder shall, at any time or from time to time prior to payment
      of
      the Repurchase Price for any Unrepurchased Securities, be entitled, by notice
      to
      the Company (the "Rescission
      Notice"),
      to
      rescind its put of all or part of such Unrepurchased Securities pursuant to
      Section 11.1 and (b) in the case of a “call”, such “call” shall be terminated
      and the relevant Call Notice automatically rescinded and each Holder shall
      retain all its rights hereunder, under the CIP Agreement and the Fee Agreement
      and under and in connection with all of the Warrant Shares and the Warrants
      to
      be purchased pursuant to such Call Notice until such time as the Holders receive
      a new Call Notice from the Company. Unless and until the Company receives a
      Rescission Notice, the unpaid portion of the Repurchase Price allocable to
      the
      Unrepurchased Securities shall remain an obligation of the Company and shall
      become due and payable, in cash or immediately available funds, as soon as
      there
      are funds legally available therefor. Interest shall accrue from the date 90
      days after the date on which the Company receives the applicable Put Notice
      on
      any unpaid portion of the Repurchase Price at the rate of 18% per annum,
      compounded on a monthly basis to the extent permitted by law and payable on
      demand.

    

    11.5.  Repurchase Price for Warrants and Warrant
      Shares.
      

     

    (a) Repurchase Price.
      The
      repurchase price (the "Repurchase Price")
      shall
      be an amount equal to, (i) in the case of each Warrant Share,
      the
      quotient obtained by dividing (A) the greatest of (1) the Fair Market Value
      of
      the Company's common stock equity (as determined pursuant to Section 11.5(b)
      hereof), (2) the Formula Value of the Company’s common stock equity (as
      determined pursuant to Section 11.5(c) hereof, respectively), calculated as
      of
      the date of the related Put Notice or Call Notice under Section 11.1 or 11.3
      hereof, as applicable, plus,
      the
      aggregate consideration to be paid to the Company upon the exercise of all
      then
      exercisable outstanding warrants, options or convertible securities pursuant
      to
      which the Company is then obligated to issue Common Stock, to the extent such
      securities would be deemed to convert pursuant to the definition of Fully
      Diluted Basis or (3) the closing stock price of the Company’s common stock
      equity multiplied by
      the
      number of shares of Common Stock then outstanding, calculated on a Fully Diluted
      Basis, plus,
      the
      aggregate consideration to be paid to the Company upon the exercise of all
      then
      exercisable outstanding warrants, options or convertible securities pursuant
      to
      which the Company is then obligated to issue Common Stock, to the extent such
      securities would be deemed to convert pursuant to the definition of Fully
      Diluted Basis (the greatest of subclauses (1), (2) and (3) hereinafter being
      referred to as the “Common Equity Value”);
      provided
      that, in
      the event that the Public Valuation Criteria is satisfied, then the Common
      Equity Value shall be the amount set forth in subclause (A)(3) above,
by
      (B) the
      number of shares of Common Stock then outstanding, calculated on a Fully Diluted
      Basis, and (ii) in the case of each Warrant, (A) the product of the repurchase
      price per Warrant Share then purchasable under such Warrants as determined
      under
      this Section 11.5 multiplied by
      the
      number of such shares then purchasable thereunder, minus
      (B) the
      aggregate exercise price for such shares.

    
      
        
        

      

      
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    (b) Fair Market Value.
      For a
      period of 10 days after the date of any Put Notice (the "Negotiation Period"),
      each
      Exercising Holder and the Company agrees to negotiate in good faith to reach
      agreement upon the fair market value of the Company's common stock equity (the
      "Fair Market Value").
      In
      the event that each Exercising Holder and the Company are unable to agree upon
      the Fair Market Value by the end of the Negotiation Period, the Fair Market
      Value of the Company's common stock equity shall be determined for purposes
      of
      this Section 11.5(b) initially by an appraiser of nationally recognized standing
      selected by the Company (the "Company Appraiser")
      and
      whose appraisal (the "Company Appraisal")
      shall
      be furnished to each Exercising Holder within 45 days after the end of the
      Negotiation Period. If no Exercising Holder objects to such determination within
      15 days after such Exercising Holder’s receipt of the Company Appraisal, the
      fair market value determined by the Company Appraiser shall be the Fair Market
      Value. If an Exercising Holder objects to the Fair Market Value determined
      by
      the Company Appraiser, the Exercising Holders may select an Appraiser (the
      "Investor
      Appraiser")
      who
      shall review the determination of the Company Appraiser and issue a report
      thereon (the "Investor Appraisal")
      to
      each Exercising Holder and the Company, within 30 days after delivery to the
      Exercising Holders of the Company Appraisal. Within 10 days after delivery
      to
      the Company of the Investor Appraisal, the Company Appraiser and the Investor
      Appraiser shall meet in order to resolve any questions or differences with
      respect to the Fair Market Value. If such Appraisers agree on a Fair Market
      Value of the Company's common stock equity, such Fair Market Value shall be
      the
      Fair Market Value. If no agreement is reached, such Appraisers shall select
      an
      appraiser of nationally recognized standing (the "Third Appraiser")
      within
      five days after such meeting. Fair Market Value shall then be determined by
      the
      Third Appraiser within 30 days after delivery to the Company of the Investor
      Appraisal, and the determination of the Third Appraiser shall be conclusive
      and
      binding upon the Company and each Exercising Holder. Fair Market Value shall
      in
      all cases be calculated by determining the Fair Market Value of the entire
      common stock equity interest of the Company taken as a whole, without discounts
      for minority interests or restrictions on transfer or illiquidity. All expenses
      relating to the appraisals shall be borne by the Company. The Fair Market Value
      of the Company’s common stock equity shall be determined taking into account the
      aggregate liquidation preference attributable to shares of the Company’s
      outstanding Preferred Stock which are not deemed to be converted for purposes
      of
      calculating outstanding shares on a Fully-Diluted Basis.

     

    (c) Formula Value.
      The
“Formula Value”
of
      the
      Company’s common stock equity at any particular date of determination shall be
      an amount calculated as follows: six (6) x EBITDA for the trailing twelve months
      as determined by reference to the unaudited income statement most recently
      available of the Company (or the audited financial statements in the case of
      months constituting the fiscal year or any part thereof for which audited
      financial statements are available), prepared in accordance with GAAP (subject,
      in the case of interim financial statements, to normal year end adjustments
      and
      the absence of footnotes), for the period ended as of the last day of the month
      ending immediately prior to the date the Formula Value is being determined,
      less
      all
      Indebtedness for Borrowed Money of the Company on any day of calculation,
less
      to the
      extent (and only to the extent) that any Preferred Stock is deemed not to
      convert to Common Stock pursuant to the definition of “Fully Diluted Basis”, the
      aggregate liquidation preference of all such Preferred Stock, plus
      cash,
      (less
      outstanding checks) on any day of calculation held by the
      Company.

    
      
        
        

      

      
        -56-

        
          

        

      

      
        
        

      

    

    11.6.  Additional Payments Upon Merger,
      Etc.
      If at
      any time within six (6) months after any Put Closing Date or Call Closing Date
      with respect to the repurchase or exchange of any Warrants and/or Warrant
      Shares, the Company or any of its Subsidiaries shall become party to any Capital
      Transaction or the Company or any of its Subsidiaries or their respective
      stockholders enter into any agreement or letter of intent contemplating any
      Capital Transaction, the Company shall, simultaneously with the consummation
      of
      such Capital Transaction or at such later time as any payment is received by
      the
      Company or any of its stockholders in respect of such Capital Transaction,
      make
      an additional payment to each Exercising Holder in an amount per Warrant Share
      (or share of common stock issuable upon exercise of any Warrant) repurchased
      from such Exercising Holder pursuant to Section 11.2 or 11.3 hereof equal to
      the
      excess, if any, of the value per share of the cash, securities and other
      property that such Exercising Holder would have received (or that the Company
      received in which such Exercising Holder would have had a beneficial interest
      as
      a stockholder of the Company) had such Exercising Holder’s Warrant Shares and/or
      Warrants not been previously repurchased pursuant to Section 11.2 or 11.3
      hereof, but instead had been repurchased pursuant to Section 11.6 hereof, over
      the payment received by such Exercising Holder with respect to each such share
      pursuant to Section 11.2 or 11.3 hereof. Each payment to an Exercising Holder
      to
      this Section 11.6 shall be made either in cash or in the form of consideration
      received by the Company or the holders of common equity of the Company, as
      the
      case may be. 

     

    11.7.  Repurchase Price Upon Certain Transactions.
      The
      Company will give each Major Holder of Warrants and Warrant Shares at least
      45
      days' prior written notice of any Capital Transaction. Not less than 25 days
      prior
      to the
      consummation of such Capital Transaction, other than a Capital Transaction
      described in clause (iii) of the definition thereof, each Holder may elect
      to
      exercise its put rights, under Section 11.1 hereof, provided
      that if
      any Holder exercises its put rights under this Section 11.6 then,
      notwithstanding any other provision of this Section 11, the closing of the
      resulting purchase of Warrant Shares and/or Warrants shall occur simultaneously
      with the closing of such Capital Transaction and the Repurchase Price, for
      purposes of this Section 11.7, shall be equal to (a) in the case of each
      Warrant, (i) the product of the Repurchase Price per Warrant Share then
      purchasable thereunder as determined pursuant to clause (b) below multiplied by
      the
      number of such shares then purchasable thereunder, less
      (ii) the
      aggregate exercise price for such shares and (b) in the case of each share
      of
      such Warrant Shares, (i) in the case of a merger, or any other stock
      transaction, the highest price per share received by any holder of Common Stock
      in connection with such transaction, and (ii) in the case of any liquidation
      or
      sale of assets, the quotient of (A) the Adjusted Net Worth of the Company
      immediately prior to such liquidation or immediately after such sale,
divided by
      (B) the
      sum of the number of shares of Common Stock then outstanding on a Fully Diluted
      Basis. 

     

    12. REGISTRATION RIGHTS.

     

    Each
      Holder will have certain registration rights with respect to the Warrants and
      the Warrant Shares as set forth in the Registration Rights
      Agreement.

    
      
        
        

      

      
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    13. SUBSEQUENT HOLDERS OF SECURITIES.

    

    Whether
      or not any express assignment has been made in this Agreement, the provisions
      of
      this Agreement and the Financing Agreements that are for the benefit of the
      Holders as holders of any Securities are also for the benefit of, and
      enforceable by, all subsequent holders of Securities; provided that in any
      event, the Collateral Agent shall always act as agent for the Holders with
      respect to enforcement of any Security Document in accordance with the terms
      and
      conditions hereof.

    

    14. REGISTRATION AND TRANSFER OF SECURITIES.

    

    14.1.  Registration,
      Transfer and Exchange of Notes.

    

    (a) The
      Company shall keep at its principal office a register in which shall be entered
      the names and addresses of the registered Holders of the Notes issued by it
      and
      particulars of the respective Notes held by them and of all transfers of such
      Notes. The ownership of any of the Notes shall be proven by such register and
      the Company may conclusively rely upon such register.

    

    (b) The
      Holder of any of the Notes may at any time and from time to time prior to
      maturity or redemption thereof surrender any Note held by it for exchange or
      (subject to compliance with the applicable provisions of Section 15 hereof)
      transfer at said office of the Company. Within a reasonable time thereafter
      and
      without expense (other than transfer taxes, if any) to such Holder, the Company
      shall issue, at its expense, in exchange therefor another Note or Notes, dated
      the date to which interest has been paid on the surrendered Note, for the same
      aggregate principal amount as the unpaid principal amount of the Note or Notes
      so surrendered, having the same maturity and rate of interest, containing the
      same provisions and subject to the same terms and conditions as the Note or
      Notes so surrendered. Each such new Note shall be in the denominations and
      registered in the name of such person or persons as the Holder of such
      surrendered Note or Notes may designate in writing, and such exchange shall
      be
      made in a manner such that no additional or lesser amount of principal or
      interest shall result. The Company will pay shipping and insurance charges,
      from
      and to each Holder's principal office, involved in the exchange or transfer
      of
      any Note.

    

    (c) Each
      Note
      issued hereunder, whether originally or in substitution for, or upon transfer
      or
      exchange of, any Note shall be registered on the date of execution thereof
      by
      the Company. The registered Holder of a Note shall be deemed to be the owner
      of
      such Note for all purposes of this Agreement. All notices given hereunder to
      such Holder shall be deemed validly given if given in the manner specified
      in
      Section 17 hereof.

    

    14.2.  Registration,
      Transfer and Exchange of Warrants.
      

    

    (a) The
      Company shall keep at its principal office a register in which shall be entered
      the names and addresses of the Holders of Warrants issued by it and particulars
      of the respective Warrants held by them and of all transfers of such Warrants.
      The ownership of any of the Warrants shall be proven by such register and the
      Company may conclusively rely upon such register.

    
      
        
        

      

      
        -58-

        
          

        

      

      
        
        

      

    

    

    (b) The
      Holder of any of the Warrants may at any time and from time to time prior to
      exercise, repurchase or redemption thereof surrender any Warrant held by it
      for
      exchange or (subject to compliance with Section 15 hereof) transfer at said
      office of the Company. On surrender for exchange of the Warrants, properly
      endorsed, to the Company, the Company at its expense will issue and deliver
      to
      or on the order of the Holder thereof a new Warrant or Warrants of like tenor,
      in the name of such Holder or, upon payment by such Holder of any applicable
      transfer taxes, as such Holder may direct, calling in the aggregate on the
      face
      or faces thereof for the number of Warrant Shares called for on the face or
      faces of the Warrants so surrendered. The Company will pay shipping and
      insurance charges, from and to each Holder's principal office, involved in
      the
      exchange or transfer of any Warrant.

    

    (c) Each
      Warrant issued hereunder, whether originally or in substitution for, or upon
      transfer or exchange of, any Warrant shall be registered on the date of
      execution thereof by the Company. The registered Holder of a Warrant shall
      be
      deemed to be the owner of such Warrant for all purposes of this Agreement.
      All
      notices given hereunder to such Holder shall be deemed validly given if given
      in
      the manner specified in Section 17 hereof.

    

    14.3.  Transfer and Exchange of Common Stock.

    

    (a)
      The
      Company shall keep at its principal office a register in which shall be entered
      the names and addresses of the Holders of any Common Stock (including Warrant
      Shares) and the particulars (including without limitation the class thereof,
      if
      applicable) of the respective Common Stock held by them and of all transfers
      of
      shares of Common Stock (including Warrant Shares). References to the "holder"
      or
      "holder of record" of any Common Stock shall mean the holder thereof unless
      the
      holder shall have presented the stock certificates evidencing same to the
      Company for transfer and the transferee shall have been entered in said register
      as a subsequent holder, in which case the terms shall mean such subsequent
      holder. The ownership of any of the Common Stock shall be proven by such
      register and the Company may conclusively rely upon such register.

    

    (b) Upon
      surrender at such office of any certificate representing shares of Common Stock
      (including Warrant Shares) for registration of exchange or (subject to
      compliance with the applicable provisions of this Agreement, including without
      limitation the conditions set forth in Section 15 hereof) transfer or
      conversion, the Company shall issue, at its expense, one or more new
      certificates, in such denomination or denominations as may be requested, for
      shares of such class of Common Stock, as applicable, as may be requested, and
      registered as such holder may request. Any certificate representing shares
      of
      Common Stock (including Warrant Shares) surrendered for registration of transfer
      shall be duly endorsed, or accompanied by a written instrument of transfer
      duly
      executed by the holder of such certificate or his attorney duly authorized
      in
      writing. The Company will pay shipping and insurance charges, from and to each
      holder's principal office, upon any transfer, exchange or conversion provided
      for in this Section 14.3.

    
      
        
        

      

      
        -59-

        
          

        

      

      
        
        

      

    

    

    (c) Each
      certificate evidencing Common Stock (including Warrant Shares), whether
      originally or in substitution for, or upon transfer, conversion or exchange
      of,
      any Common Stock (including Warrant Shares), as applicable, or upon the exercise
      of any Warrant shall be registered on the date of execution thereof by the
      Company. The registered holder of record shall be deemed to be the owner of
      the
      Common Stock, as applicable, for all purposes of this Agreement. All notices
      given hereunder to the holder of record shall be deemed validly given if given
      in the manner specified in Section 17 hereof.

    

    14.4.  Replacement of Securities.
      Upon
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of any Security and, in the case of any such loss,
      theft or destruction, upon delivery of an indemnity bond in such reasonable
      amount as the Company may determine (or, in the case of any Security held by
      any
      Investor or another institutional Holder, an unsecured indemnity agreement
      from
      such Investor or such other Holder reasonably satisfactory to the Company)
      or,
      in the case of any such mutilation, upon the surrender of such Security for
      cancellation to the Company at its principal office, the Company, at its own
      expense, will execute and deliver, in lieu thereof, a new Security of like
      tenor, dated in the case of a Note so that there will be no loss of interest.
      Any Security in lieu of which any such new Security has been so executed and
      delivered by the Company shall not be deemed to be outstanding for any purpose
      of this Agreement.

    

    15. RESTRICTIONS ON TRANSFER AND CONFIDENTIALITY.

    

    15.1.  General Restriction.
      The
      Securities shall be transferable only upon the satisfaction of the conditions
      set forth below in this Section 15. 

    

    15.2.  Notice of Transfer.
      Prior
      to any transfer of any Securities, the Holder thereof shall be required to
      give
      written notice to the Company describing in reasonable detail the manner and
      terms of the proposed transfer and the identity of the proposed transferee
      (the
      "Transfer Notice"),
      accompanied by (a) (i) a certificate of such Holder or the proposed transferee
      certifying that such transferee is an "accredited investor," as defined in
      the
      Securities Act, and (ii) if requested by the Company in connection with a
      transfer of any Securities (other than Notes evidencing the Loan), an opinion,
      addressed to the Company, of Bingham McCutchen LLP or other counsel reasonably
      acceptable to the Company, that such transfer may be effected without
      registration of such Securities under the Securities Act, and (b) the written
      agreement of the proposed transferee to be bound by all of the provisions hereof
      and of the Financing Agreements, applicable to holders of such Securities
      hereunder or thereunder.

    

    15.3.  Restrictive Legends.
      Except
      as otherwise permitted by this Section 15, each Security (other than the Notes
      evidencing the Loan) shall bear the legend specified for such Security on
Schedule 15.3
      hereto.

    

    15.4.  Termination of Restrictions.
      The
      restrictions imposed by this Section 15 upon the transferability of Securities
      (other than the Notes evidencing the Loan) shall terminate as to any particular
      Securities when such Securities shall have been effectively registered under
      the
      Securities Act or sold pursuant to a Public Sale. Whenever any of such
      restrictions shall terminate as to any Securities, the holder thereof shall
      be
      entitled to receive from the Company, at such Person's expense, new Securities
      without such legends.

    
      
        
        

      

      
        -60-

        
          

        

      

      
        
        

      

    

     

    15.5.  Confidentiality.
      Each
      Major Holder, and its agents and representatives, will hold in confidence all
      proprietary information of the Company and its Subsidiaries provided or made
      available to such Major Holder pursuant to Section 9 hereof until such time
      as
      such information has become publicly available other than as a consequence
      of
      any breach by a Major Holder of its confidentiality obligations hereunder;
      provided that
      the
      Major Holders may disclose such proprietary information to potential transferees
      of their Securities, and the agents, representatives, counsel and affiliates
      of
      such transferees so long as such transferees and their agents, representatives,
      counsel and affiliates, as applicable to be bound be the confidentiality
      provisions contained herein..

    

    16. EXPENSES;
      INDEMNITY.

    

    (a) The
      Company hereby agrees to pay on demand all reasonable out-of-pocket expenses
      incurred by the Collateral Agent and the Holders, in connection with the
      transactions contemplated by this Agreement and the Related Agreements and
      in
      connection with any amendments or waivers (whether or not the same become
      effective) hereof and thereof and all reasonable out-of-pocket expenses incurred
      by the Collateral Agent or any Holder of any Security issued hereunder in
      connection with the enforcement of any rights hereunder, under any other Related
      Agreement or with respect to any Security, including without limitation
(i)
      the
      cost and expenses of preparing and duplicating this Agreement, the Securities
      and each of the other Related Agreements, (ii) the cost of delivering to the
      Investors’ principal offices, insured to their satisfaction, the Securities sold
      to them hereunder and any Securities delivered to them in exchange therefor
      or
      upon any exercise, conversion or substitution thereof,
      (iii)
      the reasonable legal fees and all charges for costs, expenses and disbursements
      of Bingham McCutchen LLP, special counsel to the Collateral Agent, Woodside
      IV
      and Woodside QP, in connection with the transactions contemplated by this
      Agreement and the Related Agreements and any amendments, modifications,
      approvals, consents or waivers hereunder or thereunder, (iv)
      the
      reasonable fees, expenses and disbursements of the Investors’ accountants,
      consultants and other experts, in connection with their due diligence
      investigation of the Company and its Subsidiaries and collateral examinations
      of
      the Company and its Subsidiaries; (v) all documentary stamp and similar taxes
      at
      any time payable in respect of this Agreement, the issuance of any of the
      Securities and any other Related Agreement, (vi) all
      reasonable out-of-pocket expenses, costs and liabilities (including without
      limitation (x) reasonable attorneys’, consultant’s, environmental consultant’s,
      collateral examiner’s, collateral auditor’s, commercial finance examiner’s,
      accountant’s, appraiser’s, engineer’s, investment banker’s and similar
      professional fees and costs, whether or not such professionals are employees
      of
      the Collateral Agent or any Holder, (y) all costs associated with any rights
      of
      board attendance, observation or inspection and travel and lodging expenses
      related thereto and (z) fees
      and
      expenses in connection with Uniform Commercial Code and other lien searches
      and
      filing fees)
      incurred
      by the Collateral Agent or any Holder in connection with (A) the exercise,
      enforcement or preservation of rights under this Agreement or any of the Related
      Agreements against the Company or any of its Subsidiaries or any of their
      officers or employees party thereto, (B) the administration of this Agreement
      and the Related Agreements, whether before or after the occurrence of a Default
      or Event of Default and (C) any litigation, proceeding or dispute whether
      arising hereunder or otherwise, in any way related to the relationship of the
      Collateral Agent or any Holder with the Company and any of its
      Subsidiaries.

    
      
        
        

      

      
        -61-

        
          

        

      

      
        
        

      

    

    

    (b) The
      Company hereby further agrees to indemnify, exonerate and hold the Collateral
      Agent, the Holders and their stockholders, officers, directors, employees,
      general partners, limited partners and agents free and harmless from and against
      any and all actions, causes of action, suits, losses, liabilities, damages
      and
      expenses (including, without limitation, reasonable attorneys' fees and
      disbursements), incurred in any capacity by any of the indemnitees as a result
      of or relating to (A) any transaction financed or to be financed in whole or
      in
      part directly or indirectly with proceeds from the Loan or the sale of any
      of
      the Securities, or (B) the execution, delivery, performance or enforcement
      of
      this Agreement (including, without limitation, any failure by the Company or
      any
      of its Subsidiaries to comply with any of its covenants hereunder), the Related
      Agreements or any instrument contemplated hereby or thereby, except, in each
      such case, for any such liabilities arising from any indemnitee's breach of
      this
      Agreement, gross negligence or willful misconduct.

    

    (c) The
      Company hereby indemnifies the Collateral Agent and the Holders against and
      agrees that it will hold the Collateral Agent and the Holders harmless from
      any
      claim, demand or liability for any broker's, finder's or placement fees or
      lender's incentive fees alleged to have been incurred by any of them connection
      with the transactions contemplated by this Agreement or the Related
      Agreements.

    

    (d) Except
      to
      the extent otherwise expressly provided herein, the Company shall pay on demand
      interest at a rate per annum equal to the lesser of the maximum rate of interest
      permitted by law or 18% (compounded quarterly) on all overdue amounts payable
      under this Agreement until such amounts shall be paid in full.

    

    (e) The
      obligations of the Company under this Section 16 shall survive payment or
      transfer of the Securities and the termination of this Agreement.

    

    17. NOTICES.

    

    Any
      notice or other communication in connection with this Agreement, any other
      Financing Agreement or the Securities will be in writing and shall be deemed
      to
      be properly delivered if either personally delivered or sent by facsimile,
      overnight courier or mailed certified or registered mail, return receipt
      requested, postage prepaid, to the recipient at the address specified
      below:

    

    If
      to the
      Company, then to its address set forth on page 1 hereof, to the attention of
      the
      President or at such other address as such person shall have specified by notice
      actually received by the addressor, with a copy to Gregory Sichenzia, Esq.,
      Sichenzia Ross Friedman Ference LLP, 61 Broadway, 32nd
      Fl., New
      York, New York 10006 (FAX) 212-930-9725.

    
      
        
        

      

      
        -62-

        
          

        

      

      
        
        

      

    

    

    If
      to the
      Collateral Agent, then to it at its address set forth on page 1 hereof, or
      at
      such other address as the Collateral Agent shall have specified by notice
      actually received by the addressor, with a copy to Matthew Furlong, Bingham
      McCutchen LLP, 150 Federal Street, Boston, Massachusetts 02110, phone:
      617-951-8904, facsimilie: 617-951-8736.

    

    If
      to the
      Investors, then to each of them at the respective address set forth on page
      1
      hereof, or at such other address as any Investor shall have specified by notice
      actually received by the addressor, with a copy to Matthew Furlong, Bingham
      McCutchen LLP, 150 Federal Street, Boston, Massachusetts 02110, phone:
      617-951-8904, facsimilie: 617-951-8736.

    

    If
      to any
      other Holder of any Security, to it at its address set forth in the applicable
      register referred to in Section 14 hereof.

    

    Any
      such
      notice shall be effective (a) if delivered personally or by facsimile, when
      received, (b) if sent by overnight courier, when receipted for, and (c) if
      mailed as described above, five (5) days after being so mailed.

    

    18. SURVIVAL AND TERMINATION OF COVENANTS.

    

    All
      covenants, agreements, representations and warranties made herein or in any
      other document referred to herein or delivered to the Collateral Agent or the
      Holders pursuant hereto shall be deemed to have been relied on by the Collateral
      Agent and the Holders, notwithstanding any investigation made by the Collateral
      Agent or any Holder or on the Collateral Agent’s or any Holder’s behalf, and
      shall survive the execution and delivery to the Collateral Agent and the Holders
      hereof and of the Securities.

    

    19. AMENDMENTS AND WAIVERS.

    

    Any
      term
      of this Agreement may be amended and the observance of any term of this
      Agreement may be waived (either generally or in a particular instance and either
      retroactively or prospectively) only with the written consent of the Company
      and
      the Majority Holders, with respect to any provision of this Agreement which
      by
      its terms operates for the benefit
      of
      such respective Holders;
      provided
      that any
      provision hereunder governing the rights, obligations or liabilities of the
      Collateral Agent in capacity as such may not be amended or waiver without the
      written consent of the Collateral Agent. For the avoidance of doubt, in the
      event that any provision hereof expressly requires the consent of the Holders,
      the consent of each Holder shall be required hereunder. 

    
      
        
        

      

      
        -63-

        
          

        

      

      
        
        

      

    

    20. COLLATERAL AGENT.

    

    20.1.
      Appointment.
      Each of
      the Holders hereby irrevocably designates and appoints Woodside Agency Services,
      LLC, as its Collateral Agent under this Agreement, the Security Documents and
      the other Financing Agreements and to hold all Liens upon the Collateral on
      its
      behalf (and the Collateral Agent hereby accepts such appointment), and each
      Holder hereby irrevocably authorizes the Collateral Agent to take such action
      on
      its behalf under the provisions of this Agreement, the Security Documents and
      the other Financing Agreements, and to exercise such powers as are set forth
      herein or therein, together with such other powers as are reasonably incidental
      thereto. Furthermore, each Holder hereby (i) irrevocably authorizes and directs
      the Collateral Agent to (A) execute the Intercreditor Agreement and (B) take
      any
      and all actions contemplated or required thereunder and (ii) agrees to comply
      with the provisions of such Intercreditor Agreement. The provisions of this
      Section 20 are solely for the benefit of the Collateral Agent and the Holders,
      and none of the Company or any of its Subsidiaries shall have any rights as
      third party beneficiaries of any of the provisions hereof. In performing its
      functions and duties under this Agreement, the Security Documents and the other
      Financing Agreements, the Collateral Agent shall act solely as agent of the
      Holders and does not assume and shall not be deemed to have assumed any
      obligation toward or relationship of agency or trust with or for the Company
      or
      any of its Subsidiaries. The Collateral Agent may perform any of its duties
      under this Agreement, the Security Documents or the other Financing Agreements,
      by or through its agents or employees.

    

    20.2.
      Nature of Duties.
      The
      Collateral Agent shall have no duties or responsibilities except those expressly
      set forth in this Agreement, the Security Documents or the other Financing
      Agreements. The Collateral Agent agrees, that contemporaneously with its
      exercise of remedies pursuant to this Agreement, the Security Documents and
      the
      other Financing Agreements, it shall use reasonable efforts to consult thereon
      with the Holders to the extent practicable. The Collateral Agent shall not
      have
      by reason of this Agreement a fiduciary relationship in respect of any Holder.
      Nothing in this Agreement, the Security Documents or any other Financing
      Agreements, express or implied, is intended to or shall be construed to impose
      upon the Collateral Agent any obligations in respect of this Agreement, the
      Security Documents or any other Financing Agreements except as expressly set
      forth herein or therein. The Collateral Agent may employ agents, co-agents
      and
      attorneys-in-fact and shall not be responsible to the Holders for the negligence
      or misconduct of any such agents or attorneys-in-fact selected by it with
      reasonable care.

    

    20.3.
      Rights,
      Exculpation,
      Etc.
      Neither
      the Collateral Agent nor any of its officers, directors, employees or agents
      shall be liable to any Holder for any action taken or omitted by it or any
      of
      them under this Agreement, the Security Documents or other Financing Agreements,
      or in connection herewith or therewith. The Collateral Agent shall not be liable
      for any apportionment or distribution of payments made by it in good faith
      pursuant to this Agreement, (provided, that the Collateral Agent shall be liable
      to the Holders to correct any such ministerial error on any settlement following
      its obtaining knowledge of such error), and if any such apportionment or
      distribution is subsequently determined to have been made in error, the sole
      recourse of any Holder to whom payment was due but not made shall be to recover
      from the other Holders any payment in excess of the amount to which it is
      determined to have been entitled. The Collateral Agent shall not be responsible
      to any Holder for any recitals, statements, representations or warranties
      contained in this Agreement, the Security Documents, any other Financing
      Agreements or any Financial Statements, or made by the Company or any of its
      Subsidiaries in connection with appraisals performed prior to or following
      the
      Closing Date with respect to the equipment, real estate or other assets, or
      for
      the execution, effectiveness, genuineness, validity, enforceability,
      collectibility, or sufficiency of this Agreement, the Security Documents or
      any
      of the other Financing Agreements or any of the transactions contemplated
      thereby, or for the financial condition of the Company. The Collateral Agent
      shall not be required to make any inquiry concerning either the performance
      or
      observance of any of the terms, provisions or conditions of this Agreement,
      the
      Security Documents or any of the other Financing Agreements or the financial
      condition of the Company, or the existence or possible existence of any Default
      or Event of Default. The Collateral Agent may at any time request instructions
      from the Majority Holders with respect to any actions or approvals which by
      the
      terms of this Agreement, the Security Documents or of any of the other Financing
      Agreements the Collateral Agent is permitted or required to take or to grant,
      and the Collateral Agent shall be absolutely entitled to refrain from taking
      any
      action or to withhold any approval and shall not be under any liability
      whatsoever to any Person for refraining from any action or withholding any
      approval under any of the Security Documents or other Financing Agreements
      until
      it shall have received such instructions from the Majority Holders. Without
      limiting the foregoing, no Holder shall have any right of action whatsoever
      against the Collateral Agent as a result of the Collateral Agent acting or
      refraining from acting under this Agreement, the Security Documents or any
      other
      Financing Agreements in accordance with the instructions of the Majority
      Holders.

    
      
        
        

      

      
        -64-

        
          

        

      

      
        
        

      

    

    

    20.4.
      Reliance.
      The
      Collateral Agent shall be entitled to rely upon any written notices, statements,
      certificates, orders or other documents or any telephone message believed by
      it
      in good faith to be genuine and correct and to have been signed, sent or made
      by
      the proper Person, and with respect to all matters pertaining to this Agreement,
      the Security Documents or any other Financing Agreements, and its duties
      hereunder or thereunder, and upon advice and statements of legal counsel,
      independent accountants, consultants and other experts selected by it. The
      Collateral Agent shall be fully justified in failing or refusing to take any
      action under this Agreement, the Security Documents and the other Financing
      Agreements unless it shall first receive such advice or concurrence of the
      Majority Holders or Holders, as applicable, as it deems appropriate or it shall
      first be indemnified to its satisfaction by the Holders against any and all
      liability and expense which may be incurred by it by reason of taking or
      continuing to take any such action except for its own gross negligence or
      willful misconduct.

    

    20.5.
      Indemnification of the Collateral Agent and the Holders by the Holders.
      To the
      extent that the Collateral Agent is not reimbursed and indemnified by the
      Company, the Holders will reimburse and indemnify the Collateral Agent for
      and
      against any and all liabilities, obligations, losses, damages, penalties,
      actions, judgments, suits, costs, expenses, advances or disbursements of any
      kind or nature whatsoever which may be imposed on, incurred by or asserted
      against the Collateral Agent in any way relating to or arising out of this
      Agreement, the Security Documents, or any of the other Financing Agreements
      or
      any action taken or omitted by the Collateral Agent under this Agreement, the
      Security Documents or any of the other Financing Agreements, in proportion
      to
      each Holder’s share of the outstanding amount of the Notes or other Securities,
      as applicable; provided, however, that no Holder shall be liable for any portion
      of such liabilities, obligations, losses, damages, penalties, actions,
      judgments, suits, costs, expenses, advances or disbursements resulting from
      the
      Collateral Agent’s recklessness, gross negligence or willful misconduct, or
      representing ordinary costs and overhead expenses of the Collateral Agent which
      do not constitute out-of-pocket expenses or allocated in-house counsel
      fees.

    
      
        
        

      

      
        -65-

        
          

        

      

      
        
        

      

    

    

    20.6.
      Notices of Default.
      The
      Collateral Agent shall not be deemed to have knowledge or notice of the
      occurrence of any Default or Event of Default hereunder or under any Security
      Documents or other Financing Agreements unless it has received notice of such
      Default or Event of Default in accordance with the terms hereof or thereof
      or
      notice from the Company referring to this Agreement, the Security Documents
      or
      any other Financing Agreements, describing such Default or Event of Default
      and
      stating that such notice is a “notice of default”.

    

    20.7.
      Collateral Agent in Individual Capacity.
      Woodside QP and Woodside IV and their affiliates may generally engage in any
      kind of business with the Company as though the Collateral Agent were not the
      Collateral Agent hereunder. With respect to any Security issued to Woodside
      QP
      or Woodside IV, such Persons shall have the same rights and power under this
      Agreement, the Security Documents and the other Financing Agreements as though
      Woodside Agency Services, LLC was not the Collateral Agent hereunder, and
      without notice to or the consent of the other Holders.

    

    20.8.
      Successor Collateral Agent.

    

    (a) The
      Collateral Agent may resign from the performance of all of its functions and
      duties under this Agreement and the other Financing Agreements at any time
      by
      giving at least ten (10) Business Days’ prior written notice to the Company and
      each Holder. Such resignation shall take effect upon the acceptance by a
      successor Collateral Agent of appointment pursuant to clause (b) or (c)
      below.

    

    (b) Upon
      any
      such notice of resignation, the Holders shall appoint a successor Collateral
      Agent.

    

    (c) If
      a
      successor Collateral Agent shall not have been so appointed within such ten
      (10)
      Business Day period because the Holders have not agreed on such successor,
      the
      retiring Collateral Agent shall then appoint a successor Collateral Agent who
      shall serve as Collateral Agent until such time, if any, as the Holders shall
      appoint a successor Collateral Agent as provided above.

    

    20.9.
      Collateral Matters.

    

    (a) The
      Holders hereby irrevocably authorize the Collateral Agent, at its option and
      in
      its discretion, to release any Collateral Agent’s Lien upon any Collateral (i)
      upon the payment in full of the Notes and all other obligations which the
      Collateral Agent has been notified in writing are then due and payable; (ii)
      constituting property in which the Parent, the Company or any of their
      Subsidiaries owned no interest at the time the Lien was granted or at any time
      thereafter; (iii) constituting property leased to the Parent, the Company or
      any
      of their Subsidiaries under a lease which has expired or been terminated in
      a
      transaction permitted under this Agreement or which will expire imminently
      and
      which has not been, and is not intended by the Company to be, renewed or
      extended; (iv) if approved, authorized or ratified in writing by the Majority
      Holders; or (v) as otherwise as required pursuant to the Intercreditor
      Agreement. Upon request by the Collateral Agent or the Company at any time,
      the
      Holders will confirm in writing the Collateral Agent’s authority to release any
      Collateral Agent’s Liens upon particular types or items of Collateral pursuant
      to this Section 20.9.

    
      
        
        

      

      
        -66-

        
          

        

      

      
        
        

      

    

    

    (b) The
      Collateral Agent shall have no obligation whatsoever to any of the Holders
      to
      assure that the Collateral exists or is owned by the Company or is cared for,
      protected or insured or has been encumbered, or that the Collateral Agent’s
      Liens have been properly or sufficiently or lawfully created, perfected,
      protected or enforced or are entitled to any particular priority, or to exercise
      at all or in any particular manner or under any duty of care, disclosure or
      fidelity, or to continue exercising, any of the rights, authorities and powers
      granted or available to the Collateral Agent pursuant to this Section 20.9
      or
      pursuant to any of the Security Documents or other Financing Agreements, it
      being understood and agreed that in respect of the Collateral, or any act,
      omission or event related thereto, the Collateral Agent may act in any manner
      it
      may deem appropriate, in its sole discretion and that the Collateral Agent
      shall
      have no duty or liability whatsoever to any Holder as to any of the
      foregoing.

    

    20.10.
      Agency for Perfection.
      Subject
      to the Intercreditor Agreement, each Holder hereby appoints the Collateral
      Agent
      as agent for the purpose of perfecting the Holders’ security interest in assets
      which, in accordance with Articles 8 or 9 of the UCC can be perfected only
      by
      possession. Should any Holder (other than the Collateral Agent) obtain
      possession of any such Collateral, such Holder shall notify the Collateral
      Agent
      thereof, and, promptly upon the Collateral Agent’s request therefor shall
      deliver such Collateral to the Collateral Agent or in accordance with the
      Collateral Agent’s instructions.

    

    20.11.
      Concerning the Collateral and Related Loan Documents.
      Each
      Holder authorizes and directs the Collateral Agent to enter into this Agreement,
      the Security Documents and the other Financing Agreements relating to the
      Collateral, for the benefit of the Collateral Agent and the Holders. Each Holder
      agrees that any action taken by the Collateral Agent in accordance with the
      terms of this Agreement, the Security Documents or the other Financing
      Agreements relating to the Collateral, and the exercise by the Collateral Agent
      of its powers set forth therein or herein, together with such other powers
      that
      are reasonably incidental thereto, shall be deemed authorized by and binding
      upon all of the Holders.

    

    21. CONSENT TO JURISDICTION.

    

    THE
      COMPANY HEREBY AGREES TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS
      IN
      AND OF THE COMMONWEALTH OF MASSACHUSETTS OVER ANY SUIT, ACTION OR PROCEEDING
      EXISTING UNDER OR RELATING TO THIS AGREEMENT, THE SECURITIES OR ANY OF THE
      OTHER
      FINANCING AGREEMENTS, AND CONSENTS THAT SERVICE OF PROCESS WITH RESPECT TO
      ALL
      COURTS IN AND OF THE COMMONWEALTH
      OF MASSACHUSETTS MAY BE MADE BY REGISTERED MAIL TO IT AT ITS ADDRESS SET FORTH
      ON PAGE 1 HEREOF.

    
      
        
        

      

      
        -67-

        
          

        

      

      
        
        

      

    

    

    22. RIGHT TO PUBLICIZE

    

    The
      Company hereby acknowledges that each of the Investors will have the right
      to
      publicize its investment in the Company as contemplated hereby by means of
      a
      tombstone advertisement or other customary advertisement in newspapers and
      other
      periodicals.

    

    23. WAIVER OF JURY TRIAL.

    

    THE
      COMPANY HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE TO A JURY TRIAL IN ANY
      SUIT, ACTION OR PROCEEDING EXISTING UNDER OR RELATING TO THIS AGREEMENT, THE
      SECURITIES OR ANY OF THE OTHER FINANCING AGREEMENTS.

    

    24. MISCELLANEOUS.
      

    

    (a) This
      Agreement and the other Related Agreements set forth the entire understanding
      of
      the parties hereto with respect to the transactions contemplated hereby and
      supersede any prior written or oral understandings with respect thereto. The
      invalidity or unenforceability of any term or provision hereof shall not affect
      the validity or enforceability of any other term or provision hereof. The
      headings in this Agreement are for convenience of reference only and shall
      not
      alter or otherwise affect the meaning hereof. THIS
      AGREEMENT IS INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND MAY BE EXECUTED
      IN ANY NUMBER OF COUNTERPARTS WHICH TOGETHER SHALL CONSTITUTE ONE INSTRUMENT
      AND
      SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC SUBSTANTIVE
      LAWS OF THE COMMONWEALTH OF MASSACHUSETTS WITHOUT GIVING EFFECT TO ANY CHOICE
      OR
      CONFLICT OF LAW PROVISION OR RULE THAT WOULD CAUSE THE APPLICATION OF THE
      DOMESTIC SUBSTANTIVE LAWS OF ANY OTHER STATE, AND SHALL BIND AND INURE TO THE
      BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND
      ASSIGNS.

    

    (b) The
      Company acknowledges that the Holders or any of their Affiliates may be
      providing financing or other services to parties whose interests may conflict
      with the interests of the Company. Each Holder agrees that it will not furnish
      confidential information obtained from the Company to any of its other customers
      and that it will treat confidential information relating to the Company and
      is
      Affiliates with the same degree of care as they treat its own confidential
      information. Each Holder further advises the Company that it will not make
      available to the Company confidential information that it has obtained or may
      obtain from any other customer. In connection with the services and transactions
      contemplated hereby, the Company agrees that each Holder is permitted to access,
      use and share with any of its Affiliates, agents, advisors (legal or otherwise)
      or representatives any information concerning the Company or any of its
      Affiliates that is or may come into the possession of such Holder or any of
      such
      Affiliates.

    

    (c) The
      Company agrees that neither it nor its Affiliates will in the future issue
      any
      press releases or other public disclosure using the name of any Holder or their
      respective affiliates or referring to this Agreement, the other Financing
      Agreements or the transactions contemplated hereby without the prior written
      consent of each Holder.

    

    [Signature
      page follows.]

    
      
        
        

      

      
        -68-

        
          

        

      

      
        
        

      

    

    If
      the
      foregoing corresponds with your understanding of our agreement, kindly sign
      this
      letter and the accompanying copies thereof in the appropriate space below and
      return one counterpart of the same to the Company, at its address first listed
      above.

    

    
      	 	
              Very
                truly yours,

            
	 	 
	 	
              NATIONAL
                INVESTMENT MANAGERS INC.

            
	 	 
	 	 
	 	
              By:

            	 

              

            
	 	 	
              Name:

            
	 	 	
              Title:

            

    

     

    Accepted
      and agreed to:

     

    WOODSIDE
      CAPITAL PARTNERS IV, LLC,
      as a
      Holder

    

    
      	 	
              By:   
                Woodside Opportunity Partners, LLC, its Manager

            
	 	
              By:   Woodside
                Capital Management, LLC, its Manager

            
	 	 
	 	 
	 	
              By:

            	 

              

            
	 	 	
               Name:

            
	 	 	
               Title:

            

    

     

    WOODSIDE
      CAPITAL PARTNERS IV QP, LLC,
      as a
      Holder 

    

    
      	 	
              By:   
                Woodside Opportunity Partners, LLC, its Manager

            
	 	
              By:   Woodside
                Capital Management, LLC, its Manager

            
	 	 
	 	
              By:

            	 

              

            
	 	 	
              Name:

            
	 	 	
              Title:

            

    

     

    LEHMAN
      BROTHERS COMMERCIAL BANK,
      as a
      Holder

    

    
      	
              By:

            	 

              

            
	 	
              Name:

            
	 	
              Title:

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WOODSIDE
      AGENCY SERVICES, LLC,
      as
      Collateral Agent

    

    
      	 	
              By:

            	
              Woodside
                Capital Management, LLC, its Manager

            
	 	 	 
	 	
              By:

            	
               

              
                

              

            
	 	 	
              Name:

            
	 	 	
              Title:

            

    

     

    
      
        
        

      

      
        -2-EXHIBIT
      A

     

    Senior
      Secured Note due January 31, 2011

     

    This
      Note
      has not been registered under the Securities Act of 1933, as amended, and may
      not be sold or otherwise transferred in the absence of such registration or
      an
      exemption therefrom under such Act. Furthermore, this Note may be sold or
      otherwise transferred only in compliance with the conditions specified in the
      Securities Purchase Agreement (as hereinafter defined), a complete and correct
      copy of which is available for inspection at the principal office of the Company
      (as hereinafter defined) and will be furnished without charge to the holder
      of
      this Note upon written request.

     

    
      	
              $___________

            	
              Dated:
                ___________ __, ____

            

    

     

    National
      Investment Managers Inc., a Florida corporation (hereinafter called the
      "Company"),
      for
      value received, hereby promises to pay to [_________________] (the "Holder")
      or its
      registered assigns, the entire principal amount of [_____________________]
      ($[_________]) or such lesser amount as then remains outstanding under the
      Note,
      prior to or on January 31, 2011 (the "Maturity Date"),
      and
      to pay interest on the unpaid principal amount hereof from the original date
      hereof until and including the payment in full of the unpaid principal amount
      hereof at a rate equal to 15% per annum payable in the manner and at the time
      provided in Section 3.5(a) of the Securities Purchase Agreement (as defined
      below). During the continuance of an Event of Default, the principal amount
      of
      this Note shall, until such Event of Default has been cured or remedied or
      such
      Event of Default has been waived by the Majority Holders of the Notes, bear
      interest at a rate equal to eighteen percent (18%) per annum, payable in the
      manner and at the time provided in Section 3.5(b) of the Securities Purchase
      Agreement (as defined below). All payments of principal and interest hereof
      shall be made in lawful money of the United States of America to the account
      of
      the Holder hereof upon presentation hereof at the principal office of the Holder
      at [_____________________], or at such other place as the Holder hereof shall
      have designated to the Company in writing.

    

    This
      Note
      is one of the Notes of the Company aggregating $12,000,000 in original
      authorized principal amount issued pursuant to the Securities Purchase and
      Loan
      Agreement, dated as of November 30, 2007 (as amended from time to time, the
      "Securities Purchase Agreement"),
      among
      the Company, Woodside
      Capital Partners IV, LLC, Woodside Capital Partners IV QP, LLC, Lehman Brothers
      Commercial Bank, and Woodside Agency Services, LLC.
      This
      Note is, as further described in Section 3.6 of the Securities Purchase
      Agreement, secured by the Collateral. The
      Holder is entitled to enforce the provisions of the Securities Purchase
      Agreement and to enjoy the benefits thereof, and of the other Financing
      Agreements, and may exercise the respective remedies provided for thereby or
      otherwise available in respect thereof, all in accordance with the respective
      terms thereof. Capitalized terms used and not defined herein shall have the
      meanings ascribed thereto in the Securities Purchase Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    The
      Company may, at any time after May 30 2009, prepay this Note at its election,
      in
      whole or in part, and the maturity hereof may be accelerated by the Majority
      Holders of the Notes outstanding following an Event of Default, all as provided
      in the Securities Purchase Agreement, to which reference is made for the terms
      and conditions of such provisions as to prepayment and acceleration;
provided,
      that no
      prepayment of this Note may be made except upon compliance with the terms of
      Sections 3.1 and 3.2 of the Securities Purchase Agreement and payment of
      applicable prepayment charges provided for therein.

    

    Any
      permitted transfer of this Note is registrable on the note register of the
      Company upon presentation at the principal office of the Company accompanied
      by
      a written instrument of transfer in form satisfactory to the Company duly
      executed by, or on behalf of, the holder hereof. This Note may also be exchanged
      at such office for one or more Notes in any authorized denominations, as
      requested by the Holder, of a like aggregate unpaid principal amount. The date,
      time and interest rate applicable to the borrowing evidenced by this Note and
      all payments and prepayments of the principal hereof and interest hereon and
      the
      respective dates thereof shall be recorded by the Holder hereof in its internal
      records and, prior to any transfer of the Note, endorsed by the Holder on the
      schedule attached hereto or on any continuation thereof; provided, however,
      that
      the failure to make such a notation or any error in making such a notation
      shall
      not in any manner affect the obligation of the Company to make payments of
      principal and interest in accordance with the terms hereof.

    

    Prior
      to
      due presentment for registration of transfer, the Company and any agent of
      the
      Company may treat the person in whose name this Note is registered as the owner
      hereof for the purpose of receiving payment of principal and interest as herein
      provided and for all other purposes.

    

    No
      delay
      or omission on the part of the Holder or any holder hereof in exercising any
      right hereunder shall operate as a waiver of such right or of any other rights
      of the Holder or such holder, nor shall any delay, omission or waiver on any
      one
      occasion be deemed a bar or waiver of the same or any other right on any future
      occasion.

    

    The
      Company and every endorser and guarantor of this Note or the obligation
      represented hereby waives presentment, demand, notice, protest and all other
      demands and notices in connection with the delivery, acceptance, performance,
      default or enforcement of this Note, and assents to any extension or
      postponement of the time of payment or any other indulgence, to any
      substitution, exchange or release of collateral and to the addition or release
      of any other party or person primarily or secondarily liable.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    The
      Company agrees to pay, on demand, all out-of-pocket costs of collection of
      the
      principal or any interest on this Note, including, without limitation, court
      costs and attorneys’ fees.

     

    This
      Note
      shall be deemed to take effect as a sealed instrument under the laws of the
      Commonwealth of Massachusetts and for all purposes shall be construed in
      accordance with such laws.

    

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED. NO REGISTRATION OF TRANSFER OF SUCH
      SECURITIES WILL BE MADE ON THE BOOKS OF THE COMPANY UNLESS SUCH TRANSFER IS
      MADE
      IN CONNECTION WITH AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR
      PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT OR
      SUCH
      ACT DOES NOT APPLY.

     

    PAYMENT
      OF PRINCIPAL AND INTEREST ON THE NOTES AND OTHER AMOUNTS RELATING TO THE
      SECURITIES PURCHASE AGREEMENT HAS BEEN SUBORDINATED TO PRIOR PAYMENT OF THE
      SENIOR DEBT IN THE MANNER, AND TO THE EXTENT, SET FORTH IN THE INTERCREDITOR
      AGREEMENT.

    

    [Remainder
      of page intentionally left blank]

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    
      	
              NATIONAL
                INVESTMENT MANAGERS INC.

            
	 	 
	
              By:

            	 
	 	
                        
                Name:

            
	 	
                        
                Title:

            

    

    

    
      
        
        

      

      
        -4-

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