Document:

ventura8kex101112910.htm

 

EXHIBIT 10.1

 

STOCK PURCHASE AGREEMENT

 

STOCK PURCHASE AGREEMENT, dated as of November 9, 2010 (this “Agreement”), by and among HASMIK YAGHOBYAN and OSHEEN HAGHANAZARIAN (“Seller”); HALTER CAPITAL CORPORATION, a Texas corporation (“Purchaser”); and VENTURA ASSETS LIMITED, a Colorado corporation (“Company”).

 

W I T N E S S E T H

 

WHEREAS, Sellers desire to sell to Purchaser 1,255,000 shares of the Company’s common stock, par value $0.01 (the “Common Stock”) (the “Shares”), representing 83.7% of the Company’s issued and outstanding shares of the Common Stock of the Company, on the terms and conditions set forth in this Stock Purchase Agreement (“Agreement”), and

 

WHEREAS, Purchaser desires to buy the Shares on the terms and conditions set forth herein, and

 

WHEREAS the Company joins in the execution of this Agreement for the purpose of evidencing its consent to the consummation of the foregoing transactions and for the purpose of making certain representations and warranties to and covenants and agreements with the Purchaser.

 

NOW THEREFORE, in consideration of the promises and respective mutual agreements herein contained, it is agreed by and between the parties hereto as follows.

 

ARTICLE 1

SALE AND PURCHASE OF THE SHARES

 

1.1 Sale of the Shares.  Subject to the terms and conditions herein set forth, on the basis of the representations, warranties and agreements herein contained, at the Closing Sellers agree to sell, assign, transfer and deliver the Shares to Purchaser, and Purchaser agrees to  purchase the Shares from the Sellers.

 

1.2 The Closing.  The purchase of the Shares shall take place at the office of the Purchaser in Frisco, Texas or such other place as Purchaser and Sellers may mutually agree on or before November 30, 2010, herein referred to as the “Closing Date”.

 

1.3 Instruments of Conveyance and Transfer.  At the Closing, Sellers shall deliver certificates representing the Shares to Purchaser duly endorsed by the Sellers to the Purchaser, in form and substance satisfactory to Purchaser (“Certificates”), as shall be effective to vest in Purchaser all right, title and interest in and to all of the Shares.

 

1.4 Consideration and Payment for the Shares.  In consideration for the Shares, Purchaser shall pay to the Sellers a total purchase price of $331,250 (the “Purchase Price”), as follows:

 

(a) The Purchaser has transferred $50,000 (“Initial Deposit”) to Securities Transfer Corporation (the “Escrow Agent”).

 

 

  

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(b) Simultaneously with the transfer of the Initial Deposit, the Sellers delivered to the Escrow Agent, the certificates for the Shares duly endorsed for transfer to be held in escrow in accordance with the terms of this Agreement.  The Escrow Agent shall hold the Shares pending the Closing.

 

(c) On or before the Closing Date, the Purchaser shall transfer $281,250 (“Additional Payment”) to the Escrow Agent to be held in escrow in accordance with the terms of this Agreement.

 

(d) Subject to the terms, conditions and warranties set forth in this Agreement, on the Closing Date (as such term is defined hereinafter), in consideration for the Shares, the Escrow Agent will transfer and deliver to the Purchaser and/or its nominees, the certificates for the Shares, will pay all outstanding indebtedness of the Company and will disburse the remaining amount of the Purchase Price to the Sellers (collectively, the “Closing”).

 

1.5 Conditions to Closing.  Purchaser’s obligation to close shall be conditional upon the completion to Purchaser’s satisfaction of the following matters:

 

(a) Completion to Purchaser’s satisfaction of its due diligence examination of the books, records and properties of the Company;

 

(b) The Company being in good standing and existence under Colorado law with all franchise taxes current;

 

(c) Delivery of the materials set forth in Article VI; and

 

(d) The Company shall have filed with the SEC an Information Statement pursuant to SEC Rule 14f-1 (the “Information Statement”) and mailed it to all shareholders of the Company at least ten days prior to the effective date of the resignation of all directors and reappointment of Kevin B. Halter, Jr. as the sole director.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE SELLER

 

The Sellers represent, warrant and undertake to the Purchaser that, except as set forth in the Disclosure Schedule:

 

2.1 Transfer of Title.  Sellers shall transfer all right, title and interest in and to the Shares to the Purchaser free and clear of all liens, security interests, pledges, encumbrances, charges, restrictions, demands and claims, of any kind or nature whatsoever, whether direct or indirect or contingent.

 

(a) Due Execution.  This Agreement has been duly executed and delivered by the Sellers.

 

(b) Valid Agreement.  This Agreement constitutes, and upon execution and delivery thereof by the Sellers, will constitute, a valid and binding agreement of the Sellers enforceable against the Sellers in accordance with its terms.

 

 

  

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(c) Authorization.  The execution, delivery and performance by the Sellers of this Agreement and the delivery by the Sellers of the Shares have been duly and validly authorized by the Company, and no further consent or authorization of the Sellers, the Company, its Board of Directors, or its stockholders is required.

 

(d) Sellers’ Title to Shares; No Liens or Preemptive Rights; Valid Issuance.  Sellers have and at the Closing will have good and valid title and control of the Shares; there will be no existing impediment or encumbrance to the sale and transfer of such Shares to the Purchaser; and on delivery to the Purchaser of the Shares, good and valid title to all the Shares will pass to Purchaser and all of the Shares will be free and clear of all taxes, liens, security interests, pledges, rights of first refusal or other preference rights, encumbrances, charges, restrictions (other than resale restrictions under federal and state securities laws), demands, claims or assessments of any kind or any nature whatsoever whether direct, indirect or contingent and shall not be subject to preemptive rights, tag-along rights, or similar rights of any of the stockholders of the Company.  The Shares have been legally and validly issued in compliance with all applicable U.S. federal and state securities laws, and are fully paid and non-assessable shares of the Company’s Common Stock; and the Shares have all been issued under duly authorized resolutions of the Board of Directors of the Company.  At the Closing, Sellers shall deliver to the Purchaser Certificates representing the Shares free and clear of all liens, security interests, pledges, encumbrances, charges, restrictions, demands or claims in any other party whatsoever with appropriate stock powers with medallion guarantees.

 

2.2 No Governmental Action Required.  The execution and delivery by the Sellers of this Agreement does not and will not, and the consummation of the transactions contemplated hereby will not, require any action by or in respect of, or filing with, any governmental body, agency or governmental official.

 

2.3 Compliance with Applicable Law and Corporate Documents.  The execution and delivery by the Sellers and the Company of this Agreement does not and will not, and the sale by the Sellers of the Shares and the consummation of the other transactions contemplated by this Agreement does not and will not contravene or constitute a default under or violation of (i) any provision of applicable law or regulation, (ii) the articles of incorporation or by-laws of the Company or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Sellers or any of their or the Company’s assets, or result in the creation or imposition of any lien on any asset of the Sellers.

 

2.4 Not a Voting Trust: No Proxies.  None of the Shares are or will be subject to any voting trust or agreement.  No person holds or has the right to receive any proxy or similar instrument with respect to the Shares.  Except as provided in this Agreement, the Sellers are not parties to any agreement which offers or grants to any person the right to purchase or acquire any of the Shares.  There is no applicable local, state or federal law, rule, regulation, or decree which would, as a result of the sale contemplated by this Agreement, impair, restrict or delay any voting rights with respect to the Shares.

 

2.5 Survival of Representations.  The representations and warranties herein by the Sellers will be true and correct in all material respects on and as of the Closing Date with the same force and effect as though said representations and warranties had been made on and as of the Closing Date and will survive the Closing Date as provided in Section 7.1(c).

 

 

  

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2.6 Adoption of Company’s Representations.  The Sellers adopt and remake as their own each and every representation, warranty and undertaking made by the Company in Article 3 below as if they had made such representations, warranties and undertakings to the Purchaser directly.

 

2.7 Brokers.  No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission payable by the Purchaser or the Company in connection with the transactions contemplated by this Agreement.

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COMPANY

 

The Company represents, warrants and undertakes to the Purchaser that, except as set forth on the Disclosure Schedule:

 

3.1 Due Organization.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Colorado (a) with full power and authority to own, lease, use, and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted.  The Company has no subsidiaries.  The Company is not qualified to conduct business in any jurisdiction other than the States of Colorado and California, and (b) all actions taken by the current directors and stockholders of the Company have been valid and in accordance with the laws of the State of Delaware and all actions taken by the Company have been duly authorized by the current directors and stockholders of the Company as appropriate.

 

3.2 (a)    Company Authority.  The Company has all requisite corporate power and authority to enter into and perform this Agreement and to consummate the transactions contemplated herein.

 

(b) Due Authorization.  The execution, delivery and performance by the Company of this Agreement has been duly and validly authorized and no further consent or authorization of the Company, its Board of Directors or its stockholders is required.  The Sellers are not disqualified from acting as a director with respect to the transactions contemplated hereby by reason of his interest in the transactions.

 

(c) Valid Execution.  This Agreement has been duly executed and delivered by the Company.

 

(d) Binding Agreement.  This Agreement constitutes, and upon execution and delivery thereof by the Company, will constitute, a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency or similar laws affecting creditor’s rights generally or the availability of equitable remedies.

 

 

  

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(e) No Violation of Corporate Documents or Agreements.  The execution and delivery of this Agreement by the Company and the performance by the parties hereto of its obligations hereunder will not cause, constitute, or conflict with or result in (i) any breach or violation, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, or to increased, additional, accelerated or guaranteed rights or entitlements of any person under any of the provisions of, or constitute a default under, any license, indenture, mortgage, charter, instrument, certificate of incorporation, bylaw, judgment, order, decision, writ, injunction, or decree or other agreement or instrument or proceeding to which the Company or its stockholders are a party, or by which they may be bound, nor will any consents or authorizations of any party other than those hereto by required, (ii) an event that would cause the Company to be liable to any party, or (iii) an event that would result in the creation or imposition or any lien, charge or encumbrance on any asset of the Company or on the securities of the Company to be acquired by the Purchaser.

 

3.3 Authorized Capital, No Preemptive Rights, No Liens; Anti-Dilution.  As of the date hereof, the authorized capital of the Company is 100,000,000 shares of Common Stock, par value $0.01 per share, and 25,000,000 shares of Preferred Stock, par value $0.001.  The issued and outstanding capital stock of the Company is 1,500,000 shares of Common Stock and no shares of Preferred Stock.  All of the shares of capital stock are duly authorized, validly issued, fully paid and non-assessable.  No shares of capital stock of the Company are subject to preemptive rights or similar rights of the stockholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company, or otherwise.  As of the date hereof (i) there are no outstanding options, warrants, convertible securities, scrip, rights to subscribe for, puts, calls, rights of first refusal, tag-along agreements, nor any other agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company, or arrangements by which the Company is or may become bound to issue additional shares of capital stock of the Company, and (ii) there are no agreements or arrangements under which the Company is obligated to register the sale of any of its securities under the Securities Act of 1933, and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in the Company’s articles of incorporation or bylaws or in any agreement providing rights to security holders) that will be triggered by the transactions contemplated by this Agreement. The Company has furnished to Purchaser true and correct copies of the Company’s Articles of Incorporation and Bylaws.

 

3.4 No Governmental Action Required.  The execution and delivery by the Company of this Agreement does not and will not, and the consummation of the transactions contemplated hereby will not, require any action by or in respect of, or filing with, any governmental body, agency or governmental official.

 

3.5 Compliance with Applicable Law and Corporate Documents.  The execution and delivery by the Company of this Agreement and the performance by the parties hereto of the transactions contemplated hereby does not and will not contravene or constitute a default under or violation of (i) any provision of applicable law or regulation, (ii) the Company’s Articles of Incorporation or Bylaws, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Company or any its assets, or result in the creation or imposition of any lien on any asset of the Company.  To the best of its knowledge, the Company is in compliance with and conforms to all statutes, laws, ordinances, rules, regulations, orders, restrictions and all other legal requirements of any domestic or foreign government or any instrumentality thereof having jurisdiction over the conduct of its businesses or the ownership of its properties.

 

 

  

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3.6 Financial Statements.  (a) The Purchaser has received a copy of the audited financial statements of the Company for the fiscal year ended December 31, 2009 and the nine months ended September 30, 2010 (“Financial Statements”).  The Financial Statements fairly present the financial condition of the Company at the dates indicated and its results of their operations and cash flows for the periods then ended and, except as indicated therein, reflect all claims against, debts and liabilities of the Company, fixed or contingent, and of whatever nature. (b) Since September 30, 2010 (the “Balance Sheet Date”), there has been no material adverse change in the assets or liabilities, or in the business or condition, financial or otherwise, or in the results of operations or prospects, of the Company, whether as a result of any legislative or regulatory change, revocation of any license or rights to do business, fire, explosion, accident, casualty, labor trouble, flood, drought, riot, storm, condemnation, act of God, public force or otherwise and no material adverse change in the assets or liabilities, or in the business or condition, financial or otherwise, or in the results of operation or prospects, of the Company except in the ordinary course of business.  (c) Since the Balance Sheet Date, the Company has not suffered any damage, destruction or loss of physical property (whether or not covered by insurance) affecting its condition (financial or otherwise) or operations (present or prospective), nor has the Company issued, sold or otherwise disposed of, or agreed to issue, sell or otherwise dispose of, any capital stock or any other security of the Company and has not granted or agreed to grant any option, warrant or other right to subscribe for or to purchase any capital stock or any other security of the Company or has incurred or agreed to incur any indebtedness for borrowed money.  (d) The Financial Statements are contained in the Company’s filings and reports made with the Securities and Exchange Commission (“SEC”) since the Company’s formation (the “SEC Reports”). The SEC Reports are (i) accurate and complete, (ii) contain all information required to be filed under the rules and regulations of the SEC, (iii) are not subject to any outstanding SEC comment letters or inquiries, and (iv) do not contain any false statement of fact or fail to state ant fact necessary to make the facts stated therein not misleading.

 

3.7 No Litigation.  The Company is not a party to any suit, action, arbitration, or legal, administrative, or other proceeding, or pending or threatened governmental investigation.  The Company is not subject to or in default with respect to any order, writ, injunction, or decree of any federal, state, local, or foreign court, department, agency, or instrumentality.

 

3.8 No Taxes. The Company is not, and will not become with respect to any periods ending on or prior to the Closing Date, liable for any income, sales, withholding, franchise, excise, license, real or personal property taxes (a “Tax”) to any foreign, United States federal, state or local governmental agencies whatsoever. All United States federal, state, county, municipality local or foreign income Tax returns and all other material Tax returns (including information  returns) that are required, or have been required, to be filed by or on behalf of the Company have been or will be filed as of the Closing Date and all Taxes due pursuant to such returns or pursuant to any assessment received by the Company have been or will be paid as of the Closing Date.  The charges, accruals and reserves on the books of the Company in respect of taxes or other governmental charges have been established in accordance with the tax method of accounting. All returns that have been filed relating to Tax are true and accurate in all material respects.  No audit, action, suit, proceeding or other examination regarding taxes for which the Company may have any liability is currently pending against or with respect to the Company and neither Sellers nor the Company has received any notice (formally or informally) of any audit, suit, proceeding or other examination.  No material adjustment relating to any Tax returns, no closing or similar agreement have been entered into or issued or have been proposed (formally or informally) by any tax authority (insofar as such action relate to activities or income of or could result in liability of the Company for any Tax) and no basis exists for any such actions.  The Company has not changed any election, adopted or changed any accounting method or period, filed any amended return for any Tax, settled any claim or assessment of any Tax, or surrendered any right to claim any refund of any Tax, or consented to any extension or waiver of the statute of limitations for any Tax.  The Company has not had an “ownership change” as that term is defined in Section 382 of the Internal Revenue Code of 1986, as amended and in effect.

 

 

  

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3.9 Conduct of the Business.  From and after September 30, 2010 until the Closing Date:

 

(a) The Company has continued to be operated in the usual and ordinary manner in which its business has been conducted in the past and during such period. The Company has not made any expenditures or entered into any commitments which, when compared to past operations of its business, are unusual or extraordinary or outside the scope of the normal course of routine operations;

 

(b) The Company has kept in a normal state of repair and operating efficiency all tangible personal property used in the operation of its business;

 

(c) The Company has used its best efforts to maintain the good will associated with its business, and the existing business relationships with its agents, customers, lessors, key employees, suppliers and other persons having relations with it;

 

(d) The Company has not entered into any contract, agreement or action, or relinquished or released any rights or privileges under any contracts or agreements, the performance, violation, relinquishment or release of which could, on the date on which such contract or agreement was entered into, or such rights or privileges were relinquished or released, be reasonably foreseen to have a material adverse effect;

 

(e) The Company has not made, or agreed to make, any acquisition of stock or assets of, or made loans to, any person not in the ordinary course of business;

 

(f) The Company has not sold or disposed of any assets or created or permitted to exist any encumbrance on its assets except (x) in the ordinary course of business and which could not, on the date of such sale, disposition, creation or permission, be reasonably foreseen to have a material adverse effect or (y) as otherwise permitted by this Agreement;

 

(g) The Company has kept true, complete and correct books of records and accounts with respect to its business, in which entries will be made of all transactions on a basis consistent with past practices and in accordance with the tax method of accounting consistently applied by the Company;

 

 

  

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(h) The Company has paid current liabilities as and when they became due and has paid or incurred no fees and expenses not in the ordinary course of its business;

 

(i) There has been no declaration, setting aside or payment of any dividend or other distribution in respect of any Shares or any other securities of the Company (whether in cash or in kind);

 

(j) The Company has not redeemed, repurchased, or otherwise acquired any of its securities or entered into any agreement to do so;

 

(k) The Company has not made any loan to, or entered into any other transaction with, any of its directors, officers, and employees;

 

(l) The Company has not made or pledged to make any charitable or other capital contribution outside the ordinary course of business; and

 

(m) There has not been any other occurrence, event, incident, action, failure to act or transaction outside the ordinary course of business that would have a material adverse effect.

 

3.10 Liabilities.

 

(a) Except as set forth in the Financial Statements and the SEC Reports, the Company has no liabilities or obligations.

 

(b) Except as set forth in the Disclosure Schedule, since September 30, 2010, the Company has not:

 

(i) subjected to encumbrance, or agreed to do so to any of its assets, tangible or intangible other than purchase money liens in the ordinary course of business on equipment used in the conduct of business and incurred to finance the purchase price of the equipment involved and which do not cover any other asset of the Company;

 

(ii) except as otherwise contemplated hereby, engaged in any transactions affecting its business or properties not in the ordinary course of business consistent with past practice or suffered any extraordinary losses or waived any rights of substantial value except in the ordinary course of business; or

 

(iii) other than in the ordinary course of business consistent with past practice, granted or agreed to grant, or paid or agreed to pay any increase in the rate of wages, salaries, bonuses or other remuneration of any officer, director or consultant of the Company or any increase of 5% or more in the rate of wages, salaries, bonuses or other remuneration of any non-officer/director or employee or become a party to any employment contract or arrangement with any of its directors, officers, consultants or employees or become a party to any contract or arrangement with any director, officer, consultant or employee providing for bonuses, profit sharing payments, severance pay or retirement benefits, other than as set forth in any Exhibit or Schedule hereto.

 

 

  

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3.11 ERISA Compliance.   The Company maintains no “employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974 (“ERISA”), under which the Company or any ERISA Affiliate has any current or future obligation or liability or under which any employee of the Company or any ERISA Affiliate has any current or future right to benefits.

 

3.12 Insurance.  The Disclosure Schedule includes a true and correct list of all policies or binders of insurance of the Company in force, specifying the insurer, policy number (or covering note number with respect to binders) and amount thereof and describing each pending claim thereunder.  Such policies are in full force and effect.  The Company is not in default with respect to any provisions contained in any such policy or binder, nor has it failed to give any notice or present any claim under any such policy or binder in due and timely fashion.  There are no outstanding unpaid claims under any such policy or binder, or claims for worker’s compensation.  The Company has not received notice of cancellation or non-renewal of any such policy or binder.  The Company has never been, and is not now, the subject of any claim relating to damage or injury in excess of the Company’s then-current product liability policy limits or which has been disclaimed by the Company’s insurer.  Such insurance will lapse on the Closing Date.

 

3.13 Compliance with Law.  To the best of its knowledge, the Company has complied with, and is not in violation of any provision of laws or regulations of federal, state or local government authorities and agencies, including any environmental laws and regulations. There are no pending or threatened proceedings against the Company by any federal, state or local government, or any department, board, agency or other body thereof.

 

3.14 Consents.  The Disclosure Schedule lists all consents (“Consents”) of third parties required to be obtained as a result of the change of control of the Company hereby.

 

3.15 Agreements.  Except as set forth in the Disclosure Schedule,  the Company is not a party to any material agreement, loan, credit, lease, sublease, franchise, license, contract, commitment or instrument or subject to any corporate restriction.  The Disclosure Schedule identifies every loan or credit agreement, and every fully or partially executory agreement or purchase order pursuant to which the Company is obligated to deliver goods or perform services, pay for goods, services or other property, or repay any loan, including, without limitation, any agreement with present or former officers, directors, consultants, agents, brokers, vendors, customers and/or dealers of any nature.  True, correct and complete copies of all such agreements have been delivered to Purchaser.  Neither the Company nor any other party is in default under any such agreement, loan, credit, lease, sublease, franchise, license, contract, commitment, instrument or restriction.  No such instrument requires the consent of any other party thereto in order to consummate the sales of the Shares hereby.

 

 

 

  

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ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Unless specifically stated otherwise, Purchaser represents and warrants that the following are true and correct as of the date hereof and will be true and correct through the Closing Date as if made on that date:

 

4.1 Agreement’s Validity. This Agreement has been duly executed and delivered by Purchaser and constitutes a legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally or the availability of equitable remedies.

 

4.2 Investment Intent. Purchaser is acquiring the Shares for its own account for investment and not with a view to, or for sale or other disposition in connection with, any distribution of all or any part thereof.

 

4.3 Restricted Securities.  Purchaser understands that the Shares have not been registered pursuant to the Securities Act or any applicable state securities laws, that the Shares will be characterized as “restricted securities” under federal securities laws, and that under such laws and applicable regulations the Shares cannot be sold or otherwise disposed of without registration under the Securities Act or an exemption therefrom.

 

4.4 Legend. It is agreed and understood by Purchaser that the Certificates representing the Shares shall each conspicuously set forth on the face or back thereof a legend in substantially the following form:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

4.5 Disclosure of Information. Purchaser acknowledges that it has been furnished with information regarding the Company and its business, assets, results of operations, and financial condition to allow Purchaser to make an informed decision regarding an investment in the Shares.  Purchaser represents that it has had an opportunity to ask questions of and receive answers from the Company regarding the Company and its business, assets, results of operation, and financial condition.

 

 

  

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ARTICLE 5

COVENANTS OF THE PARTIES

 

5.1 General. In case at any time after the Closing any further action is necessary or desirable to carry out the purposes of this Agreement, each of the Parties will take such further action (including the execution and delivery of such further instruments and documents) as any other Party may request, all at the sole cost and expense of the requesting Party (unless the requesting Party is entitled to indemnification therefor under Article 7 below).  The Purchaser has had the opportunity to review and inspect all documents, books, records (including Tax records), properties, agreements, field operations, environmental records and compliance, and financial data of any sort relating to the Company, and to discuss the Company with its employees, customers and vendors.

 

5.2 Notices and Consents.  The Sellers will, and will cause the Company to, give any notices to third parties, and the Sellers will use their best efforts, and will cause the Company to use its best efforts, to obtain any third-party Consents that the Purchaser may request.  Each of the Parties will (and the Sellers will cause the Company to) give any notices to, make any filings with, and use its best efforts to obtain any required authorizations, Consents, and approvals of governmental bodies.

 

5.3 Transition.  Sellers will not take any action that is designed or intended to have the effect of discouraging any lessor, licensor, customer, supplier, or other business associate of the Company from maintaining the same business relationships with the Company after the Closing as it maintained with the Company prior to the Closing.  The Sellers will refer all customer inquiries relating to the business of the Company to the Purchaser from and after the Closing.

 

5.4 Debt.  At Closing, the Escrow Agent will pay from the Purchase Price all outstanding indebtedness or obligations of the Company of any kind.

 

5.5 SEC Filings.  Prior to Closing, the Company will file a Form 10K/A to attach the Company’s audited financial statements for the year ended December 31, 2008.  Purchaser will pay the fees to the Company’s audit firm for such re-certification.

ARTICLE 6 - THE CLOSING

 

6.1 Time of Closing.  The Closing of the transactions hereby shall occur as expeditiously as possible after the satisfaction of all conditions to Closing, but in any event on or before November 30, 2010.

 

6.2 Deliveries.  The Closing shall occur as a single integrated transaction, as follows.

 

(a) Delivery by Seller.  Sellers shall deliver to Purchaser:

 

	
(i)  

	
The Shares;

 

 

  

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(ii)  

	
copies of resolutions by the Board of Directors of the Company approving the terms of this Agreement and the execution of the Agreement by the Company;

 

	
(iii)  

	
copies of all books, records and documents relating to the Company, including the corporate records and stock records of the Company;

 

	
(iv)  

	
any other such instruments, documents and certificates as are required to be delivered by Sellers or their representatives pursuant to the provisions of this Agreement;

 

	
(v)  

	
the Consents;

 

	
(vi)  

	
the Disclosure Schedule; and

 

	
(vii)  

	
evidence of the satisfaction of all conditions set forth in Section 1.5.

 

(b) Delivery by Purchaser.  Purchaser shall deliver to Sellers:

 

	
(i)  

	
From Escrow, the balance of the Purchase Price in U.S. currency by wire transfer to a bank account designated in writing by the Sellers or by delivery of a certified check;

 

	
(ii)  

	
copies of resolutions of the Board of Directors of Purchaser approving the terms of the Agreement and the execution of this Agreement by the Purchaser; and

 

	
(iii)  

	
Instruments of conveyance covering the excluded assets.

 

(c) Post-Closing Actions

 

	
(i)  

	
Effective ten days after mailing the Information Statement, the Board of Directors of the Company shall resolve to appoint Kevin Halter, Jr. as director of the Company.

 

	
(ii)  

	
Following the appointment of such person to the Board of Directors of the Company, the Sellers and all others shall resign from the Board of Directors and as officers.

 

	
(iii)  

	
Purchaser and Sellers shall file all reports on Schedule 13D and Form 4.

 

 

  

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ARTICLE 7

INDEMNIFICATION

 

7.1 Purchaser Claims.  (a) Sellers shall indemnify and hold harmless Purchaser, its successors and assigns, against, and in respect of:

 

(i) Any and all damages, losses, liabilities, costs, and expenses incurred or suffered by Purchaser that result from, relate to, or arise out of:

 

(A) Any failure by Sellers to carry out any covenant or agreement contained in this Agreement;

 

(B) Any material misrepresentation or breach of warranty by Sellers contained in this Agreement, the Disclosure Schedule, or any certificate, furnished to Purchaser by Sellers pursuant hereto; or

 

(C) Any claim by any Person for any brokerage or finder’s fee or commission in respect of the transactions contemplated hereby as a result of Sellers’ dealings, agreement, or arrangement with such Person.

 

(ii) Any and all actions, suits, claims, proceedings, investigations, demands, assessments, audits, fines, judgments, costs, and other expenses (including, without limitation, reasonable legal fees and expenses) incident to any of the foregoing including all such expenses reasonably incurred in mitigating any damages resulting to Purchaser from any matter set forth in subsection (i) above.

 

(b) The amount of any liability of Sellers under this Section 7.1 shall be computed net of any tax benefit to Purchaser from the matter giving rise to the claim for indemnification hereunder and net of any insurance proceeds received by Purchaser with respect to the matter out of which such liability arose.

 

(c) The representations and warranties of Sellers contained in this Agreement, the Disclosure Schedule, or any certificate delivered by or on behalf of Sellers pursuant to this Agreement or in connection with the transactions contemplated herein shall survive the consummation of the transactions contemplated herein and shall continue in full force and effect for a period until the expiration of any applicable statutes of limitation provided by law (“Survival Period”). Anything to the contrary notwithstanding, the Survival period shall be extended automatically to include any time period necessary to resolve a written claim for indemnification which was made in reasonable detail before expiration of the Survival Period but not resolved prior to its expiration, and any such extension shall apply only as to the claims so asserted and not so resolved within the Survival Period.  Liability for any such item shall continue until such claim shall have been finally settled, decided, or adjudicated.

 

(d) Purchaser shall provide written notice to Sellers of any claim for indemnification under this Article as soon as practicable; provided, however, that failure to provide such notice on a timely basis shall not bar Purchaser’s ability to assert any such claim except to the extent that Sellers are actually prejudiced thereby, provided that such notice is received by Sellers during the applicable Survival Period.  Purchaser shall make commercially reasonable efforts to mitigate any damages, expenses, etc. resulting from any matter giving rise to liability of Sellers under this Article.

 

 

  

13

  

 

7.2 Defense of Third-Party Claims.  With respect to any claim by Purchaser under Section 7.1, relating to a third-party claim or demand, Purchaser shall provide Sellers with prompt written notice thereof and Sellers may defend, in good faith and at its expense, by legal counsel chosen by it and reasonably acceptable to Purchaser any such claim or demand, and Purchaser, at its expense, shall have the right to participate in the defense of any such third party claim.  So long as Sellers are defending in good faith any such third party claim, Purchaser shall not settle or compromise such third party claim.  In any event Purchaser shall cooperate in the settlement or compromise of, or defense against, any such asserted claim.

 

7.3 Sellers’ Claims.  Purchaser shall indemnify and hold harmless Sellers against, and in respect of, any and all damages, claims, losses, liabilities, and expenses, including without limitation, legal, accounting and other expenses, which may arise out of:  (a) any material breach or violation by Purchaser of any covenant set forth herein or any failure to fulfill any obligation set forth herein, including, but not limited to, the obligation to satisfy the Assumed Liabilities; (b) any material breach of any of the representations or warranties made in this Agreement by Purchaser; or (c) any claim by any Person for any brokerage or finder’s fee or commission in respect of the transactions contemplated hereby as a result of Purchaser’s dealings, agreement, or arrangement with such Person.

 

ARTICLE 8

MISCELLANEOUS

 

8.1 Entire Agreement.  This Agreement sets forth the entire agreement and understanding of the parties hereto with respect to the transactions contemplated hereby, and supersedes all prior agreements, arrangements and understanding related to the subject matter hereof. No understanding, promise, inducement, statement of intention, representation, warranty, covenant or condition, written or oral, express or implied, whether by statute or otherwise, has been made by any party hereto which is not embodied in this Agreement or the written statement, certificates, or other documents delivered pursuant hereto or in connection with the transactions contemplated hereby, and no party hereto shall be bound by or liable for any alleged understanding, promise, inducement, statement, representation, warranty, covenant or condition not set forth.

 

8.2 Notices.  Any notice or communications hereunder must be in writing and given by depositing same in the United States mail addressed to the party to be notified, postage prepaid and registered or certified mail with return receipt requested or by delivering same in person. Such notices shall be deemed to have been received on the date on which it is hand delivered or on the third business day following the date on which it is to be mailed. For purpose of giving notice, the addresses of the parties shall be:

 

 

  

14

  

 

	
  

	
If to Sellers:

 

	
  

	
Osheen Haghnazarian and Hasmik Yaghobyan

	
  

	
2241 Flintridge Drive

	
  

	
Glendale, California 91206

	
  

	
Fax: __________________

 

	
  

	
If to Purchaser or Company to:

 

	
  

	
Halter Capital Corporation

	
  

	
2591 Dallas Parkway, Suite 102

	
  

	
Frisco, Texas 75034

	
  

	
Fax: (469) 633-0099

 

8.3 Governing Law.  This Agreement shall be governed in all respects, including validity, construction, interpretation and effect, by the laws of the State of Texas (without regard to principles of conflicts of law).

 

8.4 Consent to Jurisdiction.  Each party irrevocably submits to the exclusive jurisdiction of the appropriate state or federal court in the State of Texas for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby or thereby.  Each party agrees to commence any such action, suit or proceeding in Dallas, Texas.  The parties agree that any service of process to be made hereunder may be made by certified mail, return receipt requested, addressed to the party at the address appearing in Section 8.2.  Such service shall be deemed to be completed when mailed and sent and received by Telecopier.  Sellers and Purchaser each waives any objection based on forum non-conveniens. Nothing in this paragraph shall affect the right of Sellers or Purchaser to serve legal process in any other manner permitted by law.

 

8.5 Counterparts.  This Agreement may be executed by the parties hereto in separate counterparts each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

8.6 Waivers  and Amendments; Non-Contractual Remedies; Preservation of Remedies.  This Agreement may be amended, superseded, canceled, renewed, or extended, and the terms hereof may be waived, only by a written instrument signed by authorized representatives of the parties or, in the case of a waiver, by an authorized representative of the party waiving compliance.  No such written instrument shall be effective unless it expressly recites that it is intended to amend, supersede, cancel, renew or extend this Agreement or to waive compliance with one or more of the terms hereof, as the case may be.  No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any such right, power or privilege, or any single or partial exercise of any such right, power of privilege, preclude any further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies that any party may otherwise have at law or in equity.  The rights and remedies of any party based upon, arising out of or otherwise in respect of any inaccuracy in or breach of any representation, warranty, covenant or agreement contained in this Agreement shall in no way be limited by the fact that the act, omission, occurrence or other state of facts upon which any claim of any such inaccuracy or breach is based may also be the subject of any other representation, warranty, covenant or agreement contained in this Agreement (or in any other agreement between the parties) as to which there is no inaccuracy or breach.

 

 

  

15

  

 

8.7 Binding Effect; No Assignment, No Third-Party Rights.  This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.  This Agreement is not assignable without the prior written consent of each of the parties hereto or by operation of law.  This Agreement is for the sole benefit of the parties hereto and their permitted assigns, and nothing herein, expressed or implied, shall give or be construed to give to any person, including any union or any employee or former employee of Sellers, any legal or equitable rights, benefits or remedies of any nature whatsoever, including any rights of employment for any specified period, under or by reason of this Agreement.

 

8.8 Further Assurances.  Each party shall, at the request of the other party, at any time and from time to time following the Closing Date promptly execute and deliver, or cause to be executed and delivered, to such requesting party all such further instruments and take all such further action as may be reasonably necessary or appropriate to carry out the provisions and intents of this Agreement and of the instruments delivered pursuant to this Agreement.

 

8.9 Severability of Provisions.  If any provision or any portion of any provision of this Agreement or the application of any such provision or any portion thereof to any person or circumstance, shall be held invalid or unenforceable, the remaining portion of such provision and the remaining provisions of the Agreement, or the application of such provision or portion of such provision is held invalid or unenforceable to person or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and such provision or portion of any provision as shall have been held invalid or unenforceable shall be deemed limited or modified to the extent necessary to make it valid and enforceable, in no event shall this Agreement be rendered void or unenforceable.

 

8.10 Exhibits and Schedules.  All exhibits annexed hereto, and all schedules referred to herein, are hereby incorporated in and made a part of this Agreement as if set forth herein. Any matter disclosed on any schedule referred to herein shall be deemed also to have been disclosed on any other applicable schedule referred to herein.

 

8.11 Captions.  All section titles or captions contained in this Agreement or in any schedule or exhibit annexed hereto or referred to herein, and the table of contents to this Agreement, are for convenience only, shall not be deemed a part of this Agreement and shall not affect the meaning or interpretation of this Agreement. All references herein to sections shall be deemed references to such parts of this Agreement, unless the context shall otherwise require.

 

8.12 Expenses.  Except as otherwise expressly provided in this Agreement, whether or not the Closing Date occurs, each party hereto shall pay its own expenses incidental to the preparation of this Agreement, the carrying out of the provisions hereof and the consummation of the transactions contemplated.  For the avoidance of doubt, any fees and expenses incurred by the Sellers or the Company in connection with entering into this Agreement and the transactions contemplated hereby after September 1, 2010 shall be paid by the Sellers and not the Company.

 

 

  

16

  

 

8.13 Public Announcements.  The parties agree to consult with each other before issuing any press release or making any public statement or completing any public filing with respect to this Agreement or the transactions contemplated hereby and, except as may be required by applicable law or any listing agreement with any national securities exchange or quotation system, will not issue any such press release or make any such public statement prior to consultation.

 

8.14 Non-confidentiality.  Notwithstanding Section 8.13, the Company, Sellers and Purchaser, and each employee, representative or other agent of the same (collectively the “Covered Parties”), may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transaction and all materials of any kind (including opinions or other tax analyses) that are provided to a Covered Party relating to such tax treatment and tax structure.

 

8.15           Release.  Provided the Closing shall occur, each Seller, for himself and his other family members, heirs, successors, and assigns (collectively the “Releasing Parties”) hereby releases, acquits, and forever discharges any and all claims and demands of whatever kind or character, whether vicarious, derivative, or direct, whether contingent or liquidated, or whether known or unknown, that he or they, individually, collectively, or otherwise, have or may have or assert or may assert against the Company; the Purchaser, any subsidiary, affiliated, or related company, or other related entity; or any officer, director, fiduciary, agent, employee, representative, insurer, attorney, accountant, financial advisor, consultant, partner, or shareholder of the Company or Purchaser; or any successors and assigns of the Company, the Purchaser or the other entities, companies, partnerships, persons or parties just named (collectively the “Released Parties”) based upon any theory of federal, state or local statutory or common law, the breach of any provision of any contract (express or implied), or with respect to any facts or circumstances that exist with respect to the relationship among the Company or the Releasing Parties, whether known or unknown, through the date of execution of this Agreement.

 

***Signature Page Follows***

 

 

  

17

  

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of the date first written herein above.

 

 

 

	 	
HALTER CAPITAL CORPORATION

	 	 
	 	 
	 	By: /s/ Kevin Halter, Jr.
	 	
Kevin Halter, Jr., President

	 	 
	 	 
	 	 
	 	
VENTURA ASSETS LIMITED

	 	 
	 	 
	 	By: /s/ Osheen Haghnazarian
	 	
Osheen Haghnazarian, President

	 	 
	 	 
	 	
SELLERS:

	 	 
	 	/s/ OSHEEN HAGHNAZARIAN
	 	
OSHEEN HAGHNAZARIAN

	 	 
	 	/s/  HASMIK YAGHOBYAN
	 	
HASMIK YAGHOBYAN

 

 

 

  

18ex101.htm

EXHIBIT 10.1

 

AMENDED AND RESTATED LOAN AGREEMENT

 

 

This Amended and Restated Loan Agreement (this “Agreement”) dated as of November 23, 2010, is between Bank of America, N.A. (the “Bank”) and Game Trading Technologies, Inc. and Gamers Factory, Incorporated (collectively, the “Borrower”).

 

	
1.  

	
DEFINITIONS

 

In addition to the terms which are defined elsewhere in this Agreement, the following terms have the meanings indicated for the purposes of this Agreement:

 

	
1.1  

	
“Borrowing Base” means the sum of:

 

	
(a)

	
80% of the balance due on Acceptable Receivables; and

 

	
(b)

	
the lesser of One Million Five Hundred Thousand Dollars ($1,500,000) or 20% of the value of Acceptable Inventory.

 

In determining the value of Acceptable Inventory to be included in the Borrowing Base, the Bank will use the lowest of (i) the Borrower’s cost, (ii) the Borrower’s estimated market value, or (iii) the Bank’s independent determination of the resale value of such inventory in such quantities and on such terms as the Bank deems appropriate.

 

After calculating the Borrowing Base as provided above, the Bank may deduct such reserves as the Bank may establish from time to time in its reasonable credit judgment, including, without limitation, reserves for rent at leased locations subject to statutory or contractual landlord’s liens, inventory shrinkage, dilution, customs charges, warehousemen’s or bailees’ charges, liabilities to growers of agricultural products which are entitled to lien rights under the federal Perishable Agricultural Commodities Act or any applicable state law, and the amount of estimated maximum exposure, as determined by the Bank from time to time, under any interest rate contracts which the Borrower enters into with the Bank (including interest rate swaps, caps, floors, options thereon, combinations thereof, or similar contracts).

 

	
1.2  

	
“Acceptable Receivable” means an account receivable which satisfies the following requirements:

 

	
(a)

	
The account has resulted from the sale of goods by the Borrower in the ordinary course of the Borrower’s business and without any further obligation on the part of the Borrower to service, repair, or maintain any such goods sold other than pursuant to any applicable warranty.

 

	
(b)

	
There are no conditions which must be satisfied before the Borrower is entitled to receive payment of the account.  Accounts arising from COD sales, consignments or guaranteed sales are not acceptable.

 

	
(c)

	
The debtor upon the account does not claim any defense to payment of the account, whether well founded or otherwise.

 

	
(d)

	
The account balance does not include the amount of any counterclaims or offsets which have been or may be asserted against the Borrower by the account debtor (including offsets for any “contra accounts” owed by the Borrower to the account debtor for goods purchased by the Borrower or for services performed for the Borrower).  To the extent any counterclaims, offsets, or contra accounts exist in favor of the debtor, such amounts shall be deducted from the account balance.

 

	
(e)

	
The account represents a genuine obligation of the debtor for goods sold to and accepted by the debtor.  To the extent any credit balances exist in favor of the debtor, such credit balances shall be deducted from the account balance.

 

  

1

  

 

	
(f)

	
The account balance does not include the amount of any finance or service charges payable by the account debtor.  To the extent any finance charges or service charges are included, such amounts shall be deducted from the account balance.

 

	
(g)

	
The Borrower has sent an invoice to the debtor in the amount of the account.

 

	
(h)

	
The Borrower is not prohibited by the laws of the state where the account debtor is located from bringing an action in the courts of that state to enforce the debtor’s obligation to pay the account.  The Borrower has taken all appropriate actions to ensure access to the courts of the state where the account debtor is located, including, where necessary, the filing of a Notice of Business Activities Report or other similar filing with the applicable state agency or the qualification by the Borrower as a foreign corporation authorized to transact business in such state.

 

	
(i)

	
The account is owned by the Borrower free of any title defects or any liens or interests of others except the security interest in favor of the Bank.

 

	(j) 	The debtor upon the account is not any of the following:

 

	
  

	
(i)

	
An employee, affiliate, parent or subsidiary of the Borrower, or an entity which has common officers or directors with the Borrower.

 

	
  

	
(ii)

	
The U.S. government or any agency or department of the U.S. government unless the Bank agrees in writing to accept the obligation, the Borrower complies with the procedures in the Federal Assignment of Claims Act of 1940 (41 U.S.C. §15) with respect to the obligation, and the underlying contract expressly provides that neither the U.S. government nor any agency or department thereof shall have the right of set-off against the Borrower.

 

	
  

	
(iiI)

	Any state, county, city, town or municipality.

 

	
  

	
(iv)

	
Any person or entity located in a foreign country.

 

	
(k)

	
The account is not in default.  An account will be considered in default if any of the following occur:

 

	
  

	
(i)

	
the account is not paid within 90 days from its invoice date or 60 days from its due date, whichever occurs first;

 

	
  

	
(ii)

	
the debtor obligated upon the account suspends business, makes a general assignment for the benefit of creditors, or fails to pay its debts generally as they come due; or

 

	
  

	
(iii)

	
any petition is filed by or against the debtor obligated upon the account under any bankruptcy law or any other law or laws for the relief of debtors.

 

	
(l)

	
The account is not the obligation of a debtor who is in default (as defined above) on 50% or more of the accounts upon which such debtor is obligated.

 

	
(m)

	
The account does not arise from the sale of goods which remain in the Borrower’s possession or under the Borrower’s control.

 

	
(n)

	
The account is not evidenced by a promissory note or chattel paper, nor is the account debtor obligated to the Borrower under any other obligation which is evidenced by a promissory note.

 

(o)           The account is otherwise acceptable to the Bank.

 

In addition to the foregoing limitations, the dollar amount of accounts included as Acceptable Receivables which are the obligations of a single debtor shall not exceed the concentration limit established for that debtor.  To the extent the total of such accounts exceeds a debtor’s concentration limit, the amount of any such excess shall be excluded.  The concentration limit for each debtor shall be equal to 50% of the total amount of the Borrower’s total accounts receivable at that time.

 

  

2

  

 

	
1.3  

	
“Acceptable Inventory” means inventory which satisfies the following requirements:

 

	
(a)

	
The inventory is owned by the Borrower free of any title defects or any liens or interests of others except the security interest in favor of the Bank.  This does not prohibit any statutory liens which may exist in favor of the growers of agricultural products which are purchased by the Borrower.

 

	
(b)

	
The inventory is located at locations which the Borrower has disclosed to the Bank and which are acceptable to the Bank.  If the inventory is covered by a negotiable document of title (such as a warehouse receipt) that document must be delivered to the Bank.  Inventory which is in transit is not acceptable.

 

	
(c)

	
The inventory is held for sale in the ordinary course of the Borrower’s business and is of good and merchantable quality.  Display items, work-in-process, parts, raw materials, samples, and packing and shipping materials are not acceptable.  Inventory which is obsolete, unsalable, damaged, defective, used, discontinued or slow-moving, or which has been returned by the buyer, is not acceptable.

 

	
(d)

	
The inventory is covered by insurance as required in the “Covenants” section of this Agreement.

 

	
(e)

	
The inventory has not been manufactured to the specifications of a particular account debtor.

 

	
(f)

	
The inventory is not subject to any licensing agreements which would prohibit or restrict in any way the ability of the Bank to sell the inventory to third parties.

 

	
(g)

	
The inventory has been produced in compliance with the requirements of the U.S. Fair Labor Standards Act (29 U.S.C. §§201 et seq.).

 

	
(h)

	
The inventory is not placed on consignment.

 

	
(I)

	The inventory is otherwise acceptable to the Bank.

 

	
1.4  

	
“Credit Limit” means the amount of Five Million Dollars ($5,000,000).

 

	
2.  

	
LINE OF CREDIT AMOUNT AND TERMS

 

	
2.1  

	
Line of Credit Amount.

 

	
(a)

	
During the availability period described below, the Bank will provide a line of credit to the Borrower.  The amount of the line of credit (the “Line of Credit Commitment”) is equal to the lesser of (i) the Credit Limit or (ii) the Borrowing Base.

 

	
(b)

	
This is a revolving line of credit.  During the availability period, the Borrower may repay principal amounts and reborrow them.

 

	
(c)

	
The Borrower agrees not to permit the principal balance outstanding to exceed the Line of Credit Commitment.  If the Borrower exceeds this limit, the Borrower will immediately pay the excess to the Bank upon the Bank’s demand.

 

  

3

  

 

	
2.2  

	
Availability Period.

 

The Line of Credit is available between the date of this Agreement and May 27, 2011, or such earlier date as the availability may terminate as provided in this Agreement (the “Line of Credit Expiration Date”).

 

	
2.3  

	
Conditions to Availability of Credit.

 

In addition to the items required to be delivered to the Bank under the paragraph entitled “Financial Information” in the “Covenants” section of this Agreement, the Borrower will promptly deliver the following to the Bank at such times as may be requested by the Bank:

 

	
(a)

	
A borrowing certificate, in form and detail satisfactory to the Bank, setting forth the Acceptable Receivables and the Acceptable Inventory on which the requested extension of credit is to be based.

 

	
(b)

	
Copies of the invoices or the record of invoices from the Borrower’s sales journal for such Acceptable Receivables and a listing of the names and addresses of the debtors obligated thereunder.

 

	
(c)

	
Copies of the delivery receipts, purchase orders, shipping instructions, bills of lading and other documentation pertaining to such Acceptable Receivables.

 

	
(d)

	
Copies of the cash receipts journal pertaining to the borrowing certificate.

 

	
2.4

	Repayment Terms.

 

	
(a)

	
The Borrower will pay interest on December 1, 2010, and then on the same day of each month thereafter until payment in full of any principal outstanding under this facility.

 

	
(b)

	
The Borrower will repay in full any principal, interest or other charges outstanding under this facility no later than the Line of Credit Expiration Date.

 

	
2.5  

	
Interest Rate.

 

	
(a)

	
The interest rate is a rate per year equal to the BBA LIBOR Daily Floating Rate plus two and one half percentage points (2.50%).

 

	
(b)

	
The BBA LIBOR Daily Floating Rate is a fluctuating rate of interest which can change on each banking day.  The rate will be adjusted on each banking day to equal the British Bankers Association LIBOR Rate (“BBA LIBOR”) for U.S. Dollar deposits for delivery on the date in question for a one month term beginning on that date.  The Bank will use the BBA LIBOR Rate as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as selected by the Bank from time to time) as determined at approximately 11:00 a.m. London time two (2) London Banking Days prior to the date in question, as adjusted from time to time in the Bank’s sole discretion for reserve requirements, deposit insurance assessment rates and other regulatory costs.  If such rate is not available at such time for any reason, then the rate will be determined by such alternate method as reasonably selected by the Bank.  A “London Banking Day” is a day on which banks in London are open for business and dealing in offshore dollars.

 

  

4

  

 

	
3.  

	
FEES AND EXPENSES

 

	
3.1  

	
Fees.

 

	
(a)

	
Loan Fee.  The Borrower agrees to pay a loan fee in the amount of Six Thousand Two Hundred Fifty Dollars ($6,250).  This fee is due on the date of this Agreement.

 

	
(b)

	
Unused Commitment Fee.  The Borrower agrees to pay a fee on any difference between the Line of Credit Commitment and the amount of credit it actually uses, determined by the daily amount of credit outstanding during the specified period.  The fee will be calculated at 0.50% per year.  is fee is due on December 31, 2010 and on the last day of each following quarter until the expiration of the availability period.

 

	
(c)

	
Waiver Fee.  If the Bank, at its discretion, agrees to waive or amend any terms of this Agreement, the Borrower will, at the Bank’s option, pay the Bank a fee for each waiver or amendment in an amount advised by the Bank at the time the Borrower requests the waiver or amendment.  Nothing in this paragraph shall imply that the Bank is obligated to agree to any waiver or amendment requested by the Borrower.  The Bank may impose additional requirements as a condition to any waiver or amendment.

 

	
(d)

	
Late Fee.  To the extent permitted by law, the Borrower agrees to pay a late fee in an amount not to exceed four percent (4%) of any payment that is more than fifteen (15) days late.  The imposition and payment of a late fee shall not constitute a waiver of the Bank’s rights with respect to the default.

 

	
3.2  

	
Expenses.

 

The Borrower agrees to immediately repay the Bank for expenses that include, but are not limited to, filing, recording and search fees, appraisal fees, title report fees, and documentation fees.

 

	
3.3  

	
Reimbursement Costs.

 

	
(a)

	
The Borrower agrees to reimburse the Bank for any expenses it incurs in the preparation of this Agreement and any agreement or instrument required by this Agreement.  Expenses include, but are not limited to, reasonable attorneys’ fees, including any allocated costs of the Bank’s in-house counsel to the extent permitted by applicable law.

 

	
(b)

	
The Borrower agrees to reimburse the Bank for the cost of periodic field examinations of the Borrower’s books, records and collateral, and appraisals of the collateral, at such intervals as the Bank may reasonably require.  The actions described in this paragraph may be performed by employees of the Bank or by independent appraisers.

 

	
4.  

	
COLLATERAL

 

	
4.1  

	
Personal Property.

 

The personal property listed below now owned or owned in the future by the parties listed below will secure the Borrower’s obligations to the Bank under this Agreement.  The collateral is further defined in security agreement(s) executed by the owners of the collateral. In addition, all personal property collateral owned by the Borrower securing this Agreement shall also secure all other present and future obligations of the Borrower to the Bank (excluding any consumer credit covered by the federal Truth in Lending law, unless the Borrower has otherwise agreed in writing or received written notice thereof).  All personal property collateral securing any other present or future obligations of the Borrower to the Bank shall also secure this Agreement.

 

	
5.  

	
DISBURSEMENTS, PAYMENTS AND COSTS

 

	
5.1  

	
Disbursements and Payments.

 

	
(a)

	
Each payment by the Borrower will be made in U.S. Dollars and immediately available funds by debit to a deposit account, as described in this Agreement or otherwise authorized by the Borrower.  For payments not made by direct debit, payments will be made by mail to the address shown on the Borrower’s statement or at one of the Bank’s banking centers in the United States, or by such other method as may be permitted by the Bank.

 

  

5

  

 

	
(b)

	
The Bank may honor instructions for advances or repayments given by the Borrower (if an individual), or by any one of the individuals authorized to sign loan agreements on behalf of the Borrower, or any other individual designated by any one of such authorized signers (each an “Authorized Individual”).

 

	
(c)

	
For any payment under this Agreement made by debit to a deposit account, the Borrower will maintain sufficient immediately available funds in the deposit account to cover each debit.  If there are insufficient immediately available funds in the deposit account on the date the Bank enters any such debit authorized by this Agreement, the Bank may reverse the debit.

 

	
(d)

	
Each disbursement by the Bank and each payment by the Borrower will be evidenced by records kept by the Bank.  In addition, the Bank may, at its discretion, require the Borrower to sign one or more promissory notes.

 

	
(e)

	
Prior to the date each payment of principal and interest and any fees from the Borrower becomes due (the “Due Date”), the Bank will mail to the Borrower a statement of the amounts that will be due on that Due Date (the “Billed Amount”).  The calculations in the bill will be made on the assumption that no new extensions of credit or payments will be made between the date of the billing statement and the Due Date, and that there will be no changes in the applicable interest rate.  If the Billed Amount differs from the actual amount due on the Due Date (the “Accrued Amount”), the discrepancy will be treated as follows:

 

	
  

	
(i)

	
If the Billed Amount is less than the Accrued Amount, the Billed Amount for the following Due Date will be increased by the amount of the discrepancy.  The Borrower will not be in default by reason of any such discrepancy.

 

	
  

	
(ii)

	
If the Billed Amount is more than the Accrued Amount, the Billed Amount for the following Due Date will be decreased by the amount of the discrepancy.

 

	
  

	
Regardless of any such discrepancy, interest will continue to accrue based on the actual amount of principal outstanding without compounding.  The Bank will not pay the Borrower interest on any overpayment.

 

	
5.2  

	
Requests for Credit; Equal Access by all Borrowers.

 

Any Borrower (or a person or persons authorized by any one of the Borrowers), acting alone, can borrow up to the full amount of credit provided under this Agreement.  Each Borrower will be liable for all extensions of credit made under this Agreement to any other Borrower.

 

	
5.3  

	
Telephone and Telefax Authorization.

 

	
(a)

	
The Bank may honor telephone or telefax instructions for advances or repayments given, or purported to be given, by any one of the Authorized Individuals.

 

	
(b)

	
Advances will be deposited in and repayments will be withdrawn from account number _______ owned by the Borrower, or such other of the Borrower’s accounts with the Bank as designated in writing by the Borrower.

 

	
(c)

	
The Borrower will indemnify and hold the Bank harmless from all liability, loss, and costs in connection with any act resulting from telephone or telefax instructions the Bank reasonably believes are made by any Authorized Individual.  This paragraph will survive this Agreement’s termination, and will benefit the Bank and its officers, employees, and agents.

 

	
5.4  

	
Direct Debit.

 

	
(a)

	
The Borrower agrees that on the Due Date the Bank will debit the Billed Amount from deposit account number _____ owned by the Borrower, or such other of the Borrower’s accounts with the Bank as designated in writing by the Borrower (the “Designated Account”).

 

	
(b)

	
The Borrower may terminate this direct debit arrangement at any time by sending written notice to the Bank at the address specified at the end of this Agreement.

 

	
5.5  

	
Banking Days.

 

Unless otherwise provided in this Agreement, a banking day is a day other than a Saturday, Sunday or other day on which commercial banks are authorized to close, or are in fact closed, in the state where the Bank’s lending office is located, and, if such day relates to amounts bearing interest at an offshore rate (if any), means any such day on which dealings in dollar deposits are conducted among banks in the offshore dollar interbank market.  All payments and disbursements which would be due on a day which is not a banking day will be due on the next banking day.  All payments received on a day which is not a banking day will be applied to the credit on the next banking day.

 

  

6

  

 

	
5.6  

	
Interest Calculation.

 

Except as otherwise stated in this Agreement, all interest and fees, if any, will be computed on the basis of a 360-day year and the actual number of days elapsed.  This results in more interest or a higher fee than if a 365-day year is used.  Installments of principal which are not paid when due under this Agreement shall continue to bear interest until paid.

 

	
5.7  

	
Default Rate.

 

Upon the occurrence of any default or after maturity or after judgment has been rendered on any obligation under this Agreement, all amounts outstanding under this Agreement, including any interest, fees, or costs which are not paid when due, will at the option of the Bank bear interest at a rate which is 6.0 percentage point(s) higher than the rate of interest otherwise provided under this Agreement.  This may result in compounding of interest.  This will not constitute a waiver of any default.

 

	
5.8  

	
Overdrafts.

 

At the Bank’s sole option in each instance, the Bank may do one of the following:

 

	
(a)

	
The Bank may make advances under this Agreement to prevent or cover an overdraft on any account of the Borrower with the Bank.  Each such advance will accrue interest from the date of the advance or the date on which the account is overdrawn, whichever occurs first, at the interest rate described in this Agreement.  The Bank may make such advances even if the advances may cause any credit limit under this Agreement to be exceeded.

 

	
(b)

	
The Bank may reduce the amount of credit otherwise available under this Agreement by the amount of any overdraft on any account of the Borrower with the Bank.

 

This paragraph shall not be deemed to authorize the Borrower to create overdrafts on any of the Borrower’s accounts with the Bank.

 

	
5.9  

	
Payments in Kind.

 

If the Bank requires delivery in kind of the proceeds of collection of the Borrower’s accounts receivable, such proceeds shall be credited to interest, principal, and other sums owed to the Bank under this Agreement in the order and proportion determined by the Bank in its sole discretion.  All such credits will be conditioned upon collection and any returned items may, at the Bank’s option, be charged to the Borrower.

 

	
6.  

	
CONDITIONS

 

Before the Bank is required to extend any credit to the Borrower under this Agreement, it must receive any documents and other items it may reasonably require, in form and content acceptable to the Bank, including any items specifically listed below.

 

	
6.1  

	
Authorizations.

 

If the Borrower or any guarantor is anything other than a natural person, evidence that the execution, delivery and performance by the Borrower and/or such guarantor of this Agreement and any instrument or agreement required under this Agreement have been duly authorized.

 

	
6.2  

	
Governing Documents.

 

If required by the Bank, a copy of the Borrower’s organizational documents.

 

	
6.3  

	
Security Agreements.

 

	
  

	
Signed original security agreements covering the personal property collateral which the Bank requires.

 

	
6.4  

	
Perfection and Evidence of Priority.

 

Evidence that the security interests and liens in favor of the Bank are valid, enforceable, properly perfected in a manner acceptable to the Bank and prior to all others’ rights and interests, except those the Bank consents to in writing.  All title documents for motor vehicles which are part of the collateral must show the Bank’s interest.

 

  

7

  

 

	
6.5  

	
Payment of Fees.

 

Payment of all fees and other amounts due and owing to the Bank, including without limitation payment of all accrued and unpaid expenses incurred by the Bank as required by the paragraph entitled “Reimbursement Costs.”

 

	
6.6  

	
Good Standing.

 

Certificates of good standing for the Borrower from its state of formation and from any other state in which the Borrower is required to qualify to conduct its business.

 

	
6.7  

	
Landlord Agreement.

 

For any personal property collateral located on real property which is subject to a mortgage or deed of trust or which is not owned by the Borrower (or the grantor of the security interest), an agreement from the owner of the real property and the holder of any such mortgage or deed of trust.

 

	
6.8  

	
Insurance.

 

Evidence of insurance coverage, as required in the “Covenants” section of this Agreement.

 

	
6.9  

	
Appraisals.

 

Appraisals prepared by appraisers acceptable to the Bank with respect to the liquidation value of the Borrower’s inventory.

 

	
7.  

	
REPRESENTATIONS AND WARRANTIES

 

When the Borrower signs this Agreement, and until the Bank is repaid in full, the Borrower makes the following representations and warranties.  Each request for an extension of credit constitutes a renewal of these representations and warranties as of the date of the request:

 

	
7.1  

	
Formation.

 

If the Borrower is anything other than a natural person, it is duly formed and existing under the laws of the state or other jurisdiction where organized.

 

	
7.2  

	
Authorization.

 

This Agreement, and any instrument or agreement required hereunder, are within the Borrower’s powers, have been duly authorized, and do not conflict with any of its organizational papers.

 

	
7.3  

	
Enforceable Agreement.

 

This Agreement is a legal, valid and binding agreement of the Borrower, enforceable against the Borrower in accordance with its terms, and any instrument or agreement required hereunder, when executed and delivered, will be similarly legal, valid, binding and enforceable.

 

	
7.4  

	
Good Standing.

 

In each state in which the Borrower does business, it is properly licensed, in good standing, and, where required, in compliance with fictitious name statutes.

 

  

8

  

 

	
7.5  

	
No Conflicts.

 

This Agreement does not conflict with any law, agreement, or obligation by which the Borrower is bound.

 

	
7.6  

	
Financial Information.

 

All financial and other information that has been or will be supplied to the Bank is sufficiently complete to give the Bank accurate knowledge of the Borrower’s (and any guarantor’s) financial condition, including all material contingent liabilities.  Since the date of the most recent financial statement provided to the Bank, there has been no material adverse change in the business condition (financial or otherwise), operations, properties or prospects of the Borrower (or any guarantor).  If the Borrower is comprised of the trustees of a trust, the foregoing representations shall also pertain to the trustor(s) of the trust.

 

	
7.7  

	
Lawsuits.

 

There is no lawsuit, tax claim or other dispute pending or threatened against the Borrower which, if lost, would impair the Borrower’s financial condition or ability to repay the loan, except as have been disclosed in writing to the Bank.

 

	
7.8  

	
Collateral.

 

All collateral required in this Agreement is owned by the grantor of the security interest free of any title defects or any liens or interests of others, except those which have been approved by the Bank in writing.

 

	
7.9  

	
Permits, Franchises.

 

The Borrower possesses all permits, memberships, franchises, contracts and licenses required and all trademark rights, trade name rights, patent rights, copyrights, and fictitious name rights necessary to enable it to conduct the business in which it is now engaged.

 

	
7.10  

	
Other Obligations.

 

The Borrower is not in default on any obligation for borrowed money, any purchase money obligation or any other material lease, commitment, contract, instrument or obligation, except as have been disclosed in writing to the Bank.

 

	
7.11  

	
Tax Matters.

 

The Borrower has no knowledge of any pending assessments or adjustments of its income tax for any year and all taxes due have been paid, except as have been disclosed in writing to the Bank.

 

	
7.12  

	
No Event of Default.

 

There is no event which is, or with notice or lapse of time or both would be, a default under this Agreement.

 

	
7.13  

	
Insurance.

 

The Borrower has obtained, and maintained in effect, the insurance coverage required in the “Covenants” section of this Agreement.

 

	
7.14  

	
Merchantable Inventory; Compliance with FLSA.

 

All inventory which is included in the Borrowing Base is of good and merchantable quality and free from defects, and has been produced in compliance with the requirements of the U.S. Fair Labor Standards Act (29 U.S.C. §§201 et seq.).

 

	
8.  

	
COVENANTS

 

The Borrower agrees, so long as credit is available under this Agreement and until the Bank is repaid in full:

 

  

9

  

 

	
8.1  

	
Use of Proceeds.

 

(a)           To use the proceeds of the Line of Credit only for general working capital needs of either Borrower.

 

	
(b)

	
The proceeds of the credit extended under this Loan Agreement may not be used directly or indirectly to purchase or carry any “margin stock” as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System, or extend credit to or invest in other parties for the purpose of purchasing or carrying any such “margin stock,” or to reduce or retire any indebtedness incurred for such purpose.

 

	
8.2  

	
Financial Information.

 

To provide the following financial information and statements in form and content acceptable to the Bank, and such additional information as requested by the Bank from time to time.  The Bank reserves the right, upon written notice to the Borrower, to require the Borrower to deliver financial information and statements to the Bank more frequently than otherwise provided below, and to use such additional information and statements to measure any applicable financial covenants in this Agreement.

 

	
(a)

	
Within 120 days of the fiscal year end, the annual financial statements of the Borrowers, certified and dated by an authorized financial officer. These financial statements must be audited (with an opinion satisfactory to the Bank) by a Certified Public Accountant acceptable to the Bank. The statements shall be prepared on a consolidated and consolidating basis.

 

	
(b)

	
Within 45 days of the period’s end (including the last period in each fiscal year), quarterly financial statements of the Borrowers, certified and dated by an authorized financial officer.  These financial statements may be company-prepared. The statements shall be prepared on a consolidated and consolidating basis.

 

	
(c)

	
Promptly, upon sending or receipt, copies of any management letters and correspondence relating to management letters, sent or received by the Borrower to or from the Borrower’s auditor.  If no management letter is prepared, the Bank may, in its discretion, request a letter from such auditor stating that no deficiencies were noted that would otherwise be addressed in a management letter.

 

	
(d)

	
Financial projections covering a time period acceptable to the Bank and specifying the assumptions used in creating the projections.  The projections shall be provided to the Bank no less often than 120 days after the end of each fiscal year.

 

	
(e)

	
A borrowing certificate setting forth the amount of Acceptable Receivables and Acceptable Inventory as of the last day of each month within thirty (30) days after month end and, upon the Bank’s request, copies of the invoices or the record of invoices from the Borrower’s sales journal for such Acceptable Receivables, copies of the delivery receipts, purchase orders, shipping instructions, bills of lading and other documentation pertaining to such Acceptable Receivables, and copies of the cash receipts journal pertaining to the borrowing certificate.

 

	
(f)

	
Within 120 days of the end of each fiscal year and within 45 days of the end of each quarter, a compliance certificate of the Borrower, signed by an authorized financial officer and setting forth (i) the information and computations (in sufficient detail) to establish compliance with all financial covenants at the end of the period covered by the financial statements then being furnished and (ii) whether there existed as of the date of such financial statements and whether there exists as of the date of the certificate, any default under this Agreement applicable to the party submitting the information and, if any such default exists, specifying the nature thereof and the action the party is taking and proposes to take with respect thereto.

 

	
(g)

	
A detailed aging of the Borrower’s receivables by invoice or a summary aging by account debtor, as specified by the Bank, within thirty (30) days after the end of each month.

 

	
(h)

	
If the Bank requires the Borrower to deliver the proceeds of accounts receivable to the Bank upon collection by the Borrower, a schedule of the amounts so collected and delivered to the Bank.

 

	
(i)

	
Copies of all letters of credit issued in support of the Borrower’s accounts receivable.

 

	
(j)

	
Promptly upon the Bank’s request, such other books, records, statements, lists of property and accounts, budgets, forecasts or reports as to the Borrower and as to each guarantor of the Borrower’s obligations to the Bank as the Bank may request.

 

	
8.3  

	
Funded Debt to EBITDA Ratio.

 

To maintain on a consolidated basis a ratio of Funded Debt to EBITDA not exceeding 3.0:1.0.

 

 “Funded Debt” means all outstanding liabilities for borrowed money and other interest-bearing liabilities, including current and long term debt, and including the stated amount of any letter of credit issued for the account of the Borrower or any reimbursement obligation owing by the Borrower with respect to any letter of credit.

 

  

10

  

 

“EBITDA” means net income, less income or plus loss from discontinued operations and extraordinary items, plus income taxes, plus interest expense, plus depreciation, depletion, and amortization, and plus any non-cash stock compensation provided to employees and non-employees to the extent the same was deducted in the determination of net income.

 

This ratio will be calculated at the end of each reporting period for which the Bank requires financial statements, using the results of the twelve-month period ending with that reporting period.

 

	
8.4  

	
Basic Fixed Charge Coverage Ratio.

 

To maintain on a consolidated basis a Basic Fixed Charge Coverage Ratio of at least 1.5:1.0.

 

“Basic Fixed Charge Coverage Ratio” means the ratio of (a) the sum of EBITDA plus lease expense and rent expense, minus income tax, minus dividends, withdrawals, and other distributions, to (b) the sum of interest expense, lease expense, rent expense, the current portion of long term debt and the current portion of capitalized lease obligations.

 

“EBITDA” means net income, less income or plus loss from discontinued operations and extraordinary items, plus income taxes, plus interest expense, plus depreciation, depletion, and amortization, and plus any non-cash stock compensation provided to employees and non-employees to the extent the same was deducted in the determination of net income.

 

This ratio will be calculated at the end of each reporting period for which the Bank requires financial statements, using the results of the twelve-month period ending with that reporting period.  The current portion of long-term liabilities will be measured as of the last day of the calculation period.

 

	
8.5  

	
Bank as Principal Depository.

 

To maintain the Bank or one of its affiliates as its principal depository bank, including for the maintenance of business, cash management, operating and administrative deposit accounts.

 

	
8.6  

	
Other Debts.

 

Not to have outstanding or incur any direct or contingent liabilities or lease obligations (other than those to the Bank), or become liable for the liabilities of others, without the Bank’s written consent.  This does not prohibit:

 

	
(a)

	
Acquiring goods, supplies, or merchandise on normal trade credit.

 

	
(b)

	
Endorsing negotiable instruments received in the usual course of business.

 

	
(c)

	
Obtaining surety bonds in the usual course of business.

 

	
(d)

	
Liabilities, lines of credit and leases in existence on the date of this Agreement disclosed in writing to the Bank.

 

	
8.7  

	
Other Liens.

 

Not to create, assume, or allow any security interest or lien (including judicial liens) on property the Borrower now or later owns, except:

 

	
(a)

	
Liens and security interests in favor of the Bank.

 

	
(b)

	
Liens for taxes not yet due.

 

	
(c)

	
Liens outstanding on the date of this Agreement disclosed in writing to the Bank.

 

	
(d)

	
Additional purchase money security interests in assets acquired after the date of this Agreement.

 

  

11

  

 

	
8.8  

	
Maintenance of Assets.

 

	
(a)

	
Not to sell, assign, lease, transfer or otherwise dispose of any part of the Borrower’s business or the Borrower’s assets except in the ordinary course of the Borrower’s business.

 

	
(b)

	
Not to sell, assign, lease, transfer or otherwise dispose of any assets for less than fair market value, or enter into any agreement to do so.

 

	
(c)

	
Not to enter into any sale and leaseback agreement covering any of its fixed assets.

 

	
(d)

	
To maintain and preserve all rights, privileges, and franchises the Borrower now has.

 

	
(e)

	
To make any repairs, renewals, or replacements to keep the Borrower’s properties in good working condition.

 

	
8.9  

	
Investments.

 

Not to have any existing, or make any new, investments in any individual or entity, or make any capital contributions or other transfers of assets to any individual or entity, except for:

 

	
(a)

	
Existing investments disclosed to the Bank in writing.

 

	
(b)

	
Investments in the Borrower’s current subsidiaries.

 

	
(c)

	
Investments in any of the following:

 

	
  

	
(i)

	
certificates of deposit;

 

	
  

	
(ii)

	
U.S. treasury bills and other obligations of the federal government;

 

	
  

	
(iii)

	
readily marketable securities (including commercial paper, but excluding restricted stock and stock subject to the provisions of Rule 144 of the Securities and Exchange Commission).

 

	
8.10  

	
Loans.

 

Not to make any loans, advances or other extensions of credit to any individual or entity, except for:

 

	
(a)

	
Existing extensions of credit disclosed to the Bank in writing.

 

	
(b)

	
Extensions of credit to the Borrower’s current subsidiaries.

 

	
(c)

	
Extensions of credit in the nature of accounts receivable or notes receivable arising from the sale or lease of goods or services in the ordinary course of business to non-affiliated entities.

 

	
8.11  

	
Change of Management.

 

To retain Todd Hays and Rodney Hillman in their current management positions with the Borrower.

 

	
8.12  

	
Change of Ownership.

 

Not to cause, permit, or suffer any change in capital ownership such that Todd Hays, Rod Hillman, John Hays, Jr., and Tom Hays cease to own and control, directly and indirectly, at least fifty-one percent (51%) of the capital ownership of the Borrower net of any warrants.

 

	
8.13  

	
Additional Negative Covenants.

 

Not to, without the Bank’s written consent:

 

  

12

  

 

	
(a)

	
Enter into any consolidation, merger, or other combination, or become a partner in a partnership, a member of a joint venture, or a member of a limited liability company.

 

	
(b)

	
Acquire or purchase a business or its assets.

 

	
(c)

	
Engage in any business activities substantially different from the Borrower’s present business.

 

	
(d)

	
Liquidate or dissolve the Borrower’s business.

 

	
(e)

	
Voluntarily suspend its business for more than thirty (30) days in any ninety (90) day period.

 

	
8.14  

	
Notices to Bank.

 

To promptly notify the Bank in writing of:

 

	
(a)

	
Any lawsuit over Two Hundred Fifty Thousand Dollars ($250,000) against the Borrower or any Obligor.

 

	
(b)

	
Any substantial dispute between any governmental authority and the Borrower or any Obligor.

 

	
(c)

	
Any event of default under this Agreement, or any event which, with notice or lapse of time or both, would constitute an event of default.

 

	
(d)

	
Any material adverse change in the Borrower’s or any Obligor’s business condition (financial or otherwise), operations, properties or prospects, or ability to repay the credit.

 

	
(e)

	
Any change in the Borrower’s or any Obligor’s name, legal structure, principal residence (for an individual), state of registration (for a registered entity), place of business, or chief executive office if the Borrower or any Obligor has more than one place of business.

 

	
(f)

	
Any actual contingent liabilities of the Borrower or any Obligor, and any such contingent liabilities which are reasonably foreseeable, where such liabilities are in excess of Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate.

 

For purposes of this Agreement, “Obligor” shall mean any guarantor, any party pledging collateral to the Bank, or, if the Borrower is comprised of the trustees of a trust, any trustor.

 

	
8.15  

	
Insurance.

 

	
(a)

	
General Business Insurance.  To maintain insurance satisfactory to the Bank as to amount, nature and carrier covering property damage (including loss of use and occupancy) to any of the Borrower’s properties, business interruption insurance, public liability insurance including coverage for contractual liability, product liability and workers’ compensation, and any other insurance which is usual for the Borrower’s business.  Each policy shall provide for at least thirty (30) days prior notice to the Bank of any cancellation thereof.

 

	
(b)

	
Insurance Covering Collateral.  To maintain all risk property damage insurance policies (including without limitation windstorm coverage, and hurricane coverage as applicable) covering the tangible property comprising the collateral.  Each insurance policy must be in an amount acceptable to the Bank.  The insurance must be issued by an insurance company acceptable to the Bank and must include a lender’s loss payable endorsement in favor of the Bank in a form acceptable to the Bank.

 

	
(c)

	
Evidence of Insurance.  Upon the request of the Bank, to deliver to the Bank a copy of each insurance policy, or, if permitted by the Bank, a certificate of insurance listing all insurance in force.

 

  

13

  

 

	
8.16  

	
Compliance with Laws.

 

To comply with the laws (including any fictitious or trade name statute), regulations, and orders of any government body with authority over the Borrower’s business.  The Bank shall have no obligation to make any advance to the Borrower except in compliance with all applicable laws and regulations and the Borrower shall fully cooperate with the Bank in complying with all such applicable laws and regulations.

 

	
8.17  

	
ERISA Plans. 

 

Promptly during each year, to pay and cause any subsidiaries to pay contributions adequate to meet at least the minimum funding standards under ERISA with respect to each and every Plan; file each annual report required to be filed pursuant to ERISA in connection with each Plan for each year; and notify the Bank within ten (10) days of the occurrence of any Reportable Event that might constitute grounds for termination of any capital Plan by the Pension Benefit Guaranty Corporation or for the appointment by the appropriate United States District Court of a trustee to administer any Plan.  “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.  Capitalized terms in this paragraph shall have the meanings defined within ERISA.

 

	
8.18  

	
Books and Records.

 

To maintain adequate books and records.

 

	
8.19  

	
Audits.

 

To allow the Bank and its agents to inspect the Borrower’s properties and examine, audit, and make copies of books and records at any reasonable time.   Borrower acknowledges that, at the time this Agreement is executed, the Bank intends to conduct an audit at least annually.  If any of the Borrower’s properties, books or records are in the possession of a third party, the Borrower authorizes that third party to permit the Bank or its agents to have access to perform inspections or audits and to respond to the Bank’s requests for information concerning such properties, books and records.

 

	
8.20  

	
Perfection of Liens.

 

To help the Bank perfect and protect its security interests and liens, and reimburse it for related costs it incurs to protect its security interests and liens.

 

	
8.21  

	
Cooperation.

 

To take any action reasonably requested by the Bank to carry out the intent of this Agreement.

 

	
9.  

	
DEFAULT AND REMEDIES

 

If any of the following events of default occurs, the Bank may do one or more of the following: declare the Borrower in default, stop making any additional credit available to the Borrower, and require the Borrower to repay its entire debt immediately and without prior notice.  If an event which, with notice or the passage of time, will constitute an event of default has occurred and is continuing, the Bank has no obligation to make advances or extend additional credit under this Agreement.  In addition, if any event of default occurs, the Bank shall have all rights, powers and remedies available under any instruments and agreements required by or executed in connection with this Agreement, as well as all rights and remedies available at law or in equity.  If an event of default occurs under the paragraph entitled “Bankruptcy,” below, with respect to the Borrower, then the entire debt outstanding under this Agreement will automatically be due immediately.

 

	
9.1  

	
Failure to Pay.

 

The Borrower fails to make a payment under this Agreement when due.

 

	
9.2  

	
Other Bank Agreements.

 

Any default occurs under any other agreement the Borrower (or any Obligor) or any of the Borrower’s related entities or affiliates has with the Bank or any affiliate of the Bank.

 

	
9.3  

	
Cross-default.

 

Any default occurs under any agreement in connection with any credit the Borrower (or any Obligor) or any of the Borrower’s related entities or affiliates has obtained from anyone else or which the Borrower (or any Obligor) or any of the Borrower’s related entities or affiliates has guaranteed.

 

	
9.4  

	
Termination of Gamestop and SOCOM Agreements.

 

A termination of either or both of (i) that certain letter agreement between SOCOM LLC and Game Trading Technologies, Inc. dated September 27, 2010, and (ii) that certain agreement between Gamestop, Inc. and Game Trading Technologies, Inc. dated October 8, 2010; provided, however, that the Borrower shall have up to thirty (30) days to renegotiate or renew such terminated agreement(s) with terms satisfactory to the Bank.

 

  

14

  

 

	
9.5  

	
False Information.

 

The Borrower or any Obligor has given the Bank materially false or misleading information or representations.

 

	
9.6  

	
Bankruptcy.

 

The Borrower, any Obligor, or any general partner of the Borrower or of any Obligor files a bankruptcy petition, a bankruptcy petition is filed against any of the foregoing parties, or the Borrower, any Obligor, or any general partner of the Borrower or of any Obligor makes a general assignment for the benefit of creditors.

 

	
9.7  

	
Receivers.

 

A receiver or similar official is appointed for a substantial portion of the Borrower’s or any Obligor’s business, or the business is terminated, or, if any Obligor is anything other than a natural person, such Obligor is liquidated or dissolved.

 

	
9.8  

	
Lien Priority.

 

The Bank fails to have an enforceable first lien (except for any prior liens to which the Bank has consented in writing) on or security interest in any property given as security for this Agreement (or any guaranty).

 

	
9.9  

	
Lawsuits.

 

Any lawsuit or lawsuits are filed on behalf of one or more trade creditors against the Borrower or any Obligor in an aggregate amount of Two Hundred Fifty Thousand Dollars ($250,000) or more in excess of any insurance coverage.

 

	
9.10  

	
Judgments.

 

Any judgments or arbitration awards are entered against the Borrower or any Obligor, or the Borrower or any Obligor enters into any settlement agreements with respect to any litigation or arbitration, in an aggregate amount of Two Hundred Fifty Thousand Dollars ($250,000) or more in excess of any insurance coverage.

 

	
9.11  

	
Material Adverse Change.

 

A material adverse change occurs, or is reasonably likely to occur, in the Borrower’s (or any Obligor’s) business condition (financial or otherwise), operations, properties or prospects, or ability to repay the credit; or the Bank determines that it is insecure for any other reason.

 

	
9.12  

	
Government Action.

 

Any government authority takes action that the Bank believes materially adversely affects the Borrower’s or any Obligor’s financial condition or ability to repay.

 

  

15

  

 

	
9.13  

	
Default under Related Documents.

 

Any default occurs under any guaranty, subordination agreement, security agreement, deed of trust, mortgage, or other document required by or delivered in connection with this Agreement or any such document is no longer in effect, or any guarantor purports to revoke or disavow the guaranty.

 

	
9.14  

	
Other Breach Under Agreement.

 

A default occurs under any other term or condition of this Agreement not specifically referred to in this Article.  This includes any failure or anticipated failure by the Borrower (or any other party named in the Covenants section) to comply with any financial covenants set forth in this Agreement, whether such failure is evidenced by financial statements delivered to the Bank or is otherwise known to the Borrower or the Bank.

 

	
10.  

	
ENFORCING THIS AGREEMENT; MISCELLANEOUS

 

	
10.1  

	
GAAP.

 

Except as otherwise stated in this Agreement, all financial information provided to the Bank and all financial covenants will be made under generally accepted accounting principles, consistently applied.

 

	
10.2  

	
Governing Law.

 

This Agreement is governed by federal law.  To the extent that state law applies and is not preempted by federal law, then the laws of the State of Maryland apply.  To the extent that the Bank has greater rights or remedies under federal law, whether as a national bank or otherwise, this paragraph shall not be deemed to deprive the Bank of such rights and remedies as may be available under federal law.

 

	
10.3  

	
Successors and Assigns.

 

This Agreement is binding on the Borrower’s and the Bank’s successors and assignees.  The Borrower agrees that it may not assign this Agreement without the Bank’s prior consent.  The Bank may sell participations in or assign this loan, and may exchange information about the Borrower (including, without limitation, any information regarding any hazardous substances) with actual or potential participants or assignees.  If a participation is sold or the loan is assigned, the purchaser will have the right of set-off against the Borrower.

 

	
10.4  

	
Severability; Waivers.

 

If any part of this Agreement is not enforceable, the rest of the Agreement may be enforced.  The Bank retains all rights, even if it makes a loan after default.  If the Bank waives a default, it may enforce a later default.  Any consent or waiver under this Agreement must be in writing.

 

	
10.5  

	
Attorneys’ Fees.

 

The Borrower shall reimburse the Bank for any reasonable costs and attorneys’ fees incurred by the Bank in connection with the enforcement or preservation of any rights or remedies under this Agreement and any other documents executed in connection with this Agreement, and in connection with any amendment, waiver, “workout” or restructuring under this Agreement.  In the event of a lawsuit or arbitration proceeding, the prevailing party is entitled to recover costs and reasonable attorneys’ fees incurred in connection with the lawsuit or arbitration proceeding, as determined by the court or arbitrator.  In the event that any case is commenced by or against the Borrower under the Bankruptcy Code (Title 11, United States Code) or any similar or successor statute, the Bank is entitled to recover costs and reasonable attorneys’ fees incurred by the Bank related to the preservation, protection, or enforcement of any rights of the Bank in such a case.  To the extent permitted by law, as used in this paragraph, “attorneys’ fees” includes the allocated costs of the Bank’s in-house counsel.

 

	
10.6  

	
Joint and Several Liability.

 

	
(a)

	
Each Borrower agrees that it is jointly and severally liable to the Bank for the payment of all obligations arising under this Agreement, and that such liability is independent of the obligations of the other Borrower(s).  Each obligation, promise, covenant, representation and warranty in this Agreement shall be deemed to have been made by, and be binding upon, each Borrower, unless this Agreement expressly provides otherwise.  The Bank may bring an action against any Borrower, whether an action is brought against the other Borrower(s).

 

	
(b)

	
Each Borrower agrees that any release which may be given by the Bank to the other Borrower(s) or any guarantor will not release such Borrower from its obligations under this Agreement.

 

	
(c)

	
Each Borrower waives any right to assert against the Bank any defense, setoff, counterclaim, or claims which such Borrower may have against the other Borrower(s) or any other party liable to the Bank for the obligations of the Borrowers under this Agreement.

 

	
(d)

	
Each Borrower waives any defense by reason of any other Borrower’s or any other person’s defense, disability, or release from liability.  The Bank can exercise its rights against each Borrower even if any other Borrower or any other person no longer is liable because of a statute of limitations or for other reasons.

 

	
(e)

	
Each Borrower agrees that it is solely responsible for keeping itself informed as to the financial condition of the other Borrower(s) and of all circumstances which bear upon the risk of nonpayment.  Each Borrower waives any right it may have to require the Bank to disclose to such Borrower any information which the Bank may now or hereafter acquire concerning the financial condition of the other Borrower(s).

 

	
(f)

	
Each Borrower waives all rights to notices of default or nonperformance by any other Borrower under this Agreement.  Each Borrower further waives all rights to notices of the existence or the creation of new indebtedness by any other Borrower and all rights to any other notices to any party liable on any of the credit extended under this Agreement.

 

  

16

  

 

	
(g)

	
The Borrowers represent and warrant to the Bank that each will derive benefit, directly and indirectly, from the collective administration and availability of credit under this Agreement.  The Borrowers agree that the Bank will not be required to inquire as to the disposition by any Borrower of funds disbursed in accordance with the terms of this Agreement.

 

	
(h)

	
Until all obligations of the Borrowers to the Bank under this Agreement have been paid in full and any commitments of the Bank or facilities provided by the Bank under this Agreement have been terminated, each Borrower (a) waives any right of subrogation, reimbursement, indemnification and contribution (contractual, statutory or otherwise), including without limitation, any claim or right of subrogation under the Bankruptcy Code (Title 11, United States Code) or any successor statute, which such Borrower may now or hereafter have against any other Borrower with respect to the indebtedness incurred under this Agreement; (b) waives any right to enforce any remedy which the Bank now has or may hereafter have against any other Borrower, and waives any benefit of, and any right to participate in, any security now or hereafter held by the Bank.

 

	
(i)

	
Each Borrower waives any right to require the Bank to proceed against any other Borrower or any other person; proceed against or exhaust any security; or pursue any other remedy.  Further, each Borrower consents to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of the Borrowers under this Agreement or which, but for this provision, might operate as a discharge of the Borrowers.

 

	
10.7  

	
Set-Off.

 

	
(a)

	
In addition to any rights and remedies of the Bank provided by law, upon the occurrence and during the continuance of any event of default under this Agreement, the Bank is authorized, at any time, to set off and apply any and all Deposits of the Borrower or any Obligor held by the Bank against any and all Obligations owing to the Bank.  The set-off may be made irrespective of whether or not the Bank shall have made demand under this Agreement or any guaranty, and although such Obligations may be contingent or unmatured or denominated in a currency different from that of the applicable Deposits.

 

	
(b)

	
The set-off may be made without prior notice to the Borrower or any other party, any such notice being waived by the Borrower (on its own behalf and on behalf of each Obligor) to the fullest extent permitted by law.  The Bank agrees promptly to notify the Borrower after any such set-off and application; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application.

 

	
(c)

	
For the purposes of this paragraph, “Deposits” means any deposits (general or special, time or demand, provisional or final, individual or joint) and any instruments owned by the Borrower or any Obligor which come into the possession or custody or under the control of the Bank.  “Obligations” means all obligations, now or hereafter existing, of the Borrower to the Bank under this Agreement and under any other agreement or instrument executed in connection with this Agreement, and the obligations to the Bank of any Obligor.

 

	
10.8  

	
One Agreement.

 

This Agreement and any related security or other agreements required by this Agreement, collectively:

 

	
(a)

	
represent the sum of the understandings and agreements between the Bank and the Borrower concerning this credit;

 

	
(b)

	
replace any prior oral or written agreements between the Bank and the Borrower concerning this credit; and

 

	
(c)

	
are intended by the Bank and the Borrower as the final, complete and exclusive statement of the terms agreed to by them.

 

In the event of any conflict between this Agreement and any other agreements required by this Agreement, this Agreement will prevail.  Any reference in any related document to a “promissory note” or a “note” executed by the Borrower and dated as of the date of this Agreement shall be deemed to refer to this Agreement, as now in effect or as hereafter amended, renewed, or restated.

 

	
10.9  

	
Disposition of Schedules and Reports.

 

The Bank will not be obligated to return any schedules, invoices, statements, budgets, forecasts, reports or other papers delivered by the Borrower.  The Bank will destroy or otherwise dispose of such materials at such time as the Bank, in its discretion, deems appropriate.

 

	
10.10  

	
Returned Merchandise.

 

Until the Bank exercises its rights to collect the accounts receivable as provided under any security agreement required under this Agreement, the Borrower may continue its present policies for returned merchandise and adjustments.  Credit adjustments with respect to returned merchandise shall be made immediately upon receipt of the merchandise by the Borrower or upon such other disposition of the merchandise by the debtor in accordance with the Borrower’s instructions.  If a credit adjustment is made with respect to any Acceptable Receivable, the amount of such adjustment shall no longer be included in the amount of such Acceptable Receivable in computing the Borrowing Base.

 

  

17

  

 

	
10.11  

	
Verification of Receivables.

 

The Bank may at any time, either orally or in writing, request confirmation from any debtor of the current amount and status of the accounts receivable upon which such debtor is obligated.

 

	
10.12  

	
Waiver of Confidentiality.

 

The Borrower authorizes the Bank to discuss the Borrower’s financial affairs and business operations with any accountants, auditors, business consultants, or other professional advisors employed by the Borrower, and authorizes such parties to disclose to the Bank such financial and business information or reports (including management letters) concerning the Borrower as the Bank may request.

 

	
10.13  

	
Indemnification.

 

The Borrower will indemnify and hold the Bank harmless from any loss, liability, damages, judgments, and costs of any kind relating to or arising directly or indirectly out of (a) this Agreement or any document required hereunder, (b) any credit extended or committed by the Bank to the Borrower hereunder, (c) any claim, whether well-founded or otherwise, that there has been a failure to comply with any law regulating the Borrower’s sales or leases to or performance of services for debtors obligated upon the Borrower’s accounts receivable and disclosures in connection therewith, and (d) any litigation or proceeding related to or arising out of this Agreement, any such document, any such credit, or any such claim.  This indemnity includes but is not limited to attorneys’ fees (including the allocated cost of in-house counsel).  This indemnity extends to the Bank, its parent, subsidiaries and all of their directors, officers, employees, agents, successors, attorneys, and assigns.  This indemnity will survive repayment of the Borrower’s obligations to the Bank.  All sums due to the Bank hereunder shall be obligations of the Borrower, due and payable immediately without demand.

 

	
10.14  

	
Notices.

 

Unless otherwise provided in this Agreement or in another agreement between the Bank and the Borrower, all notices required under this Agreement shall be personally delivered or sent by first class mail, postage prepaid, or by overnight courier, to the addresses on the signature page of this Agreement, or sent by facsimile to the fax numbers listed on the signature page, or to such other addresses as the Bank and the Borrower may specify from time to time in writing.  Notices and other communications shall be effective (i) if mailed, upon the earlier of receipt or five (5) days after deposit in the U.S. mail, first class, postage prepaid, (ii) if telecopied, when transmitted, or (iii) if hand-delivered, by courier or otherwise (including telegram, lettergram or mailgram), when delivered.

 

	
10.15  

	
Headings.

 

Article and paragraph headings are for reference only and shall not affect the interpretation or meaning of any provisions of this Agreement.

 

	
10.16  

	
Counterparts.

 

This Agreement may be executed in as many counterparts as necessary or convenient, and by the different parties on separate counterparts each of which, when so executed, shall be deemed an original but all such counterparts shall constitute but one and the same agreement.

 

	
10.17  

	
Borrower Information; Reporting to Credit Bureaus.

 

The Borrower authorizes the Bank at any time to verify or check any information given by the Borrower to the Bank, check the Borrower’s credit references, verify employment, and obtain credit reports.  The Borrower agrees that the Bank shall have the right at all times to disclose and report to credit reporting agencies and credit rating agencies such information pertaining to the Borrower and/or all guarantors as is consistent with the Bank’s policies and practices from time to time in effect.

 

	
10.18  

	
Prior Agreement Superseded.

 

This Agreement supersedes the Loan Agreement entered into as of May 4, 2010, between the Bank and the Borrower, and any credit outstanding thereunder shall be deemed to be outstanding under this Agreement.

 

	
10.19  

	
CONFESSION OF JUDGMENT.

 

THE BORROWER AUTHORIZES ANY ATTORNEY ADMITTED TO PRACTICE BEFORE ANY COURT OF RECORD IN THE UNITED STATES OR ANY CLERK OF ANY COURT OF RECORD TO APPEAR ON BEHALF OF THE BORROWER IN ANY COURT IN ONE OR MORE PROCEEDINGS, OR BEFORE ANY CLERK THEREOF OR OTHER COURT OFFICIAL, AND TO CONFESS JUDGMENT AGAINST THE BORROWER IN FAVOR OF THE HOLDER OF THIS AGREEMENT IN THE FULL AMOUNT DUE UNDER THIS AGREEMENT (INCLUDING PRINCIPAL, ACCRUED INTEREST AND ANY AND ALL CHARGES, FEES AND COSTS) PLUS ATTORNEYS’ FEES EQUAL TO FIFTEEN PERCENT (15%) OF THE TOTAL AMOUNT DUE, PLUS COURT COSTS, ALL WITHOUT PRIOR NOTICE OR OPPORTUNITY OF THE BORROWER FOR PRIOR HEARING.  THE BORROWER AGREES AND CONSENTS THAT VENUE AND JURISDICTION SHALL BE PROPER IN THE CIRCUIT COURT OF ANY COUNTY OF THE STATE OF MARYLAND OR OF BALTIMORE CITY, MARYLAND, OR IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND.  THE BORROWER WAIVES THE BENEFIT OF ANY AND EVERY STATUTE, ORDINANCE, OR RULE OF COURT WHICH MAY BE LAWFULLY WAIVED CONFERRING UPON THE BORROWER ANY RIGHT OR PRIVILEGE OF EXEMPTION, HOMESTEAD RIGHTS, STAY OF EXECUTION, OR SUPPLEMENTARY PROCEEDINGS, OR OTHER RELIEF FROM THE ENFORCEMENT OR IMMEDIATE ENFORCEMENT OF A JUDGMENT OR RELATED PROCEEDINGS ON A JUDGMENT.  THE AUTHORITY AND POWER TO APPEAR FOR AND ENTER JUDGMENT AGAINST THE BORROWER SHALL NOT BE EXHAUSTED BY ONE OR MORE EXERCISES THEREOF, OR BY ANY IMPERFECT EXERCISE THEREOF, AND SHALL NOT BE EXTINGUISHED BY ANY JUDGMENT ENTERED PURSUANT THERETO; SUCH AUTHORITY AND POWER MAY BE EXERCISED ON ONE OR MORE OCCASIONS FROM TIME TO TIME, IN THE SAME OR DIFFERENT JURISDICTIONS, AS OFTEN AS THE HOLDER SHALL DEEM NECESSARY, CONVENIENT, OR PROPER.

 

	
10.20  

	
Waiver of Jury Trial.

 

THE PARTIES TO THIS AGREEMENT WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THEY MAY BE PARTIES, ARISING OUT OF, IN CONNECTION WITH OR IN ANY WAY PERTAINING TO, THIS AGREEMENT.  IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTION OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT.  THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE.

 

[Signatures follow on next page.]

 

  

18

  

 

The Borrower executed this Agreement as of the date stated at the top of the first page, intending to create an instrument executed under seal.

 

 

	 	
BANK OF AMERICA, N.A.

	 
	 	 	 	 
	 	
By: 

	/s/ Kevin P. Mahon	 
	 	 	Kevin P. Mahon,	 
	 	 	Senior Vice President	 
	 	 	 	 
	 	 	
Address for Notices:

	 
	 	 	 	 
	 	 	
100 South Charles Street, 3rd Floor

	 
	 	 	Baltimore, Maryland 21201	 
	 	 	 	 
	Witness:      	 	GAMERS FACTORY, INCORPORATED	 
	 	 	 	 
	 	 	By: 	/s/ Richard J. Leimbach (Seal)	 
	 	 	Richard J. Leimbach	 
	 	 	Chief Financial Officer	 
	 	 	 	 
	 	 	Address for Notices:	 
	 	 	 	 
	 	 	10957 McCormick Road	 
	 	 	Hunt Valley, Maryland 21031	 
	 	 	
Attn: Richard J. Leimbach

	 
	 	 	 	 
	Witness:        	 	GAME TRADING TECHNOLOGIES, INC.	 
	 	 	 	 
	 	 	 	/s/ Richard J. Leimbach (Seal)	 
	 	 	Richard J. Leimbach	 
	 	 	Chief Financial Officer	 
	 	 	 	 
	 	 	Address for Notices:	 
	 	 	 	 
	 	 	
10957 McCormick Road

	 
	 	 	
Hunt Valley, Maryland 21031

	 
	 	 	
Attn: Richard J. Leimbach

	 
	 	 	 	 

 

USA PATRIOT ACT NOTICE

Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account or obtains a loan.  The Bank will ask for the Borrower’s legal name, address, tax ID number or social security number and other identifying information.  The Bank may also ask for additional information or documentation or take other actions reasonably necessary to verify the identity of the Borrower, guarantors or other related persons.

19

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