Document:

FIRST
      AMENDMENT TO

    AGREEMENT
      OF PURCHASE AND SALE OF ASSETS

    

    This
      First Amendment to Agreement of Purchase and Sale of Assets is made as of
      _____________, 2007, by and among KASHOU BROTHERS, INC., a California
      corporation doing business as “BROTHERS RESTAURANT & DELI” (“Company”),
      STEVE KASHOU, EDWARD KASHOU, JAMES KASHOU, SAMI KASHOU (collectively the
“Shareholders”), ORGANIC TO GO, INC., a Delaware corporation (“Buyer”) and
      ORGANIC TO GO FOOD CORPORATION, a Delaware corporation (“Parent”). This
      Amendment is made under the following circumstances:

    

    A. Company,
      Buyer, Shareholders and Parent entered into an Agreement of Purchase and Sale
      of
      Assets dated as of ______________, 2007 (the “Agreement”).

     

    B. The
      parties desire to amend the Agreement as further set forth in this Amendment
      to
      include Company’s accounts receivable in the list of assets to be acquired by
      Buyer, to reflect the lessor’s refusal to permit assignment of the option to
      extend Company’s lease for the property located at 4250 Executive Square, Suite
      125, La Jolla, CA and to make certain related changes to the
      Agreement.

     

    C. Capitalized
      terms used in this Amendment that are not defined in this Amendment shall have
      the meanings set forth in the Agreement.

     

    NOW,
      THEREFORE, the parties agree as follows:

    

    1. Purchase
      of Accounts Receivable.

     

    (a)
      Schedule 1 to the Agreement is amended to add the following to the Acquired
      Assets: Company’s outstanding accounts receivable which are less than 120 days
      old on the Closing Date (the “Acquired Accounts Receivable”). At the Closing,
      Company shall deliver to Buyer a schedule of the Acquired Accounts
      receivable.

     

    (b)
      The
      second line of the Excluded Assets section of Schedule 1 to the Agreement is
      amended to read as follows: “All accounts receivable other than the Acquired
      Accounts Receivable”. 

     

    2. Purchase
      Price Adjustment.
      Section
      1.2 of the Agreement is amended to read as follows:

     

    The
      purchase price of the Acquired Assets shall be Three Million Dollars
      ($2,950,000) plus the Contingent Stock, as defined in Section 1.2(e) below,
      plus
      the exact face amount of the Acquired Accounts Receivable. As payment of such
      purchase price, Buyer shall deliver to Company: 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    1.2(a)
      Cash
      at Closing.
      At the
      Closing, cash, by bank cashier’s check, or by wire transfer, in the amount of
      Two Million Four Hundred Thousand Dollars ($2,400,000) made payable to the
      Handal & Associates Attorney Client Trust Account.

     

    1.2(b)
      Check at Closing.
      Cash,
      by Buyer’s check, in the exact face amount of the Acquired Accounts
      Receivable.   

     

    1.2(c)
      Additional Cash.
      Cash, by
      check or by wire transfer, in the total amount of Three Hundred Thousand Dollars
      ($300,000) made payable to the Handal & Associates Attorney Client Trust
      Account in two installments as provided below. Each installment shall bear
      interest at the rate of five and one-half percent (5.5%) per year from the
      Closing Date until paid, and interest shall be payable on each installment
      when
      such installment is due. If at any time or from time to time Buyer shall be
      entitled to be paid any amount pursuant to this agreement, Buyer shall be
      entitled, if it so elects, to set-off such amount against the amount payable
      under this paragraph 1.2(b). This right of set-off shall be in addition to
      and
      not in substitution of any other rights to which Buyer shall be entitled. Buyer
      shall use all reasonable efforts to collect the Acquired Accounts Receivable.
      If
      Buyer has not collected any portion of the Acquired Accounts Receivable within
      115 days after the Closing Date, in addition to any other rights or remedies,
      Buyer may elect to set-off any uncollected Acquired Accounts Receivable against
      the payment required under Section 1.2(b)(ii) below. Following any such set-off,
      Buyer shall transfer the uncollected Acquired Accounts Receivable to
      Company.

     

    (i) One
      Hundred Fifty Thousand Dollars ($150,000) ninety (90) days after the Closing;
      and

     

    (ii) One
      Hundred Fifty Thousand Dollars ($150,000) one hundred twenty (120) days after
      the Closing.

     

    1.2(d)
      Parent Common Stock.
      Three
      stock certificates in equal allotments to Steve Kashou, Edward Kashou and James
      Kashou (the “Stock
      Certificates”)
      representing a total number of shares of the Common Stock of Parent, par value
      $0.001 per share (the “Parent
      Shares”),
      equal
      to shares having an aggregate Market Value (as hereinafter defined) of Eighty
      Three Thousand Three Hundred Thirty Three and Thirty Three Cents ($83,333.33)
      each of which shall be delivered to the above named Shareholders for the benefit
      of Company within ten (10) business days after the Closing and each of which
      shall be rounded down to the nearest whole share. For purposes of this
      Agreement, the “Market
      Value”
      of the
      Parent Shares shall equal the average of the closing prices of the Parent Shares
      in the over the counter market (or on any national securities exchange if shares
      of Parent’s Common Stock are listed on a national securities exchange) during
      the ten (10) consecutive trading days ending three (3) trading days before
      the
      Closing. Sami Kashou waives any right he may have to receive any of the Parent
      Shares.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    1.2(e)
      Contingent Stock.
      If any
      of the following events occurs, then Buyer shall deliver three stock
      certificates in equal allotments to Steve Kashou, Edward Kashou and James Kashou
      representing a total number of Parent Shares equal to shares having an aggregate
      Market Value of Sixteen Thousand Six Hundred Sixty-Six and 67/100 Dollars
      ($16,666.67) (the “Contingent Stock”) each of which shall be delivered to the
      above-named Shareholders for the benefit of Company within ten (10) days after
      the first to occur of the following events (each of which shall be rounded
      down
      to the nearest whole share):

     

    (a)
      The
      execution and delivery by the landlord of a lease or lease extension for the
      property located at 4250 Executive Square, Suite 125, La Jolla, CA (the “La
      Jolla Lease”) for at least twelve (12) months; 

     

    (b)
      Buyer’s voluntary termination of the La Jolla Lease during the remaining term of
      the La Jolla Lease without cause, or Buyer’s election not to renew the La Jolla
      Lease on commercially reasonable terms;

     

    (c)
      The
      termination of the La Jolla Lease during the remaining term of the La Jolla
      Lease by the landlord following Buyer’s default and failure to cure such
      default;

     

    (d)
      Buyer’s failure at any time during the remaining term of the La Jolla Lease to
      operate the La Jolla location with substantially the same quality Buyer
      presently operates its other locations; and

     

    (e)
      Buyer’s failure to meet Landlord’s requirements for financial status and
      financial performance in connection with Buyer’s request for a new lease at the
      La Jolla location when the La Jolla Lease expires.

     

    3. Allocation
      of Purchase Price.
      Section
      1.4 of the Agreement is amended as follows: “3. Goodwill, Trade Name and
      Intangible Assets $2,740,000”; “Total Purchase Price $2,950,000”; provided that
      if the Contingent Stock is delivered, then the allocation to Goodwill, Trade
      Name and Intangible Assets and the Total Purchase Price shall each be increased
      by $50,000.

     

    4. Absence
      of Option to Extend.
      Section
      6.10 of the Agreement is amended to read as follows:

     

    Selling
      Parties shall have delivered or caused to be delivered an Assignment of Lease
      and Landlord’s Consent to Assignment (including without limitation landlords’
consent to the assignment of the options to extend at 10201 Wateridge Circle
      and
      110 West “A” Street and other rights held by Company) and an Estoppel
      Certificate, each in form and substance reasonably satisfactory to Buyer, with
      respect to each of the following locations:

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    6.10(a) 4250
      Executive Square, Suite 125, La Jolla, California;

     

    6.10(b) 10201
      Wateridge Circle, Suite 125, San Diego, California; and

     

    6.10(c) 110
      West
“A” Street, Suite 175, San Diego, California.

     

    5. Representation
      and Warranty.
      Section
      2.35 is added to the Agreement as follows: 

     

    Section
      2.35 Accounts Receivable.
      All
      accounts receivable of Company shown on the balance sheet of Company as of
      the
      dates stated included in the Financial Statements, and all accounts receivable
      of Company created after that date until the Closing, arose from valid sales
      in
      the ordinary course of business. These accounts have been collected in full
      since that date, or are collectible at their full amounts. 

     

    6. Effect
      of Amendment.
      As
      amended by this Amendment the Agreement shall continue to be in full force
      and
      effect.

     

    7. Counterparts.
      This
      Amendment may be executed in two or more counterparts and when so executed
      shall
      have the same force and effect as though all signatures appear on one
      document.

     

    [Signatures
      on the next page]

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties to this agreement have duly executed it as of
      the
      day and year first above written.

     

    
      	
              ORGANIC
                TO GO, INC.

              a
                Delaware corporation

               

            	 	
              KASHOU
                BROTHERS, INC.

              a
                California corporation

              doing
                business as

              “Brothers
                Restaurant & Deli”

            
	
               

              By:

            	 	 	
               

               

              By:

            	
               

               

            
	 	
              Jason
                Brown

              Chief
                Executive Officer

            	 	 	
              Edward
                Kashou

              Chief
                Executive Officer

            
	 	 	 	
               

               

              By:

            	
               

               

               

            
	 	 	 	 	
              ___________________

              Secretary

               

            
	
              ORGANIC
                TO GO FOOD CORPORATION

              a
                Delaware corporation

               

            	 	
               

               

            
	
              EDWARD
                KASHOU, Individually

            
	
               

              By:

            	 	 	
               

               

            
	 	
              Jason
                Brown

              Chief
                Executive Officer

            	 	
              STEVE
                KASHOU, Individually

               

            
	 	 	 	
               

               

            
	
              JAMES
                KASHOU, Individually

            
	 	 	 	
               

               

            
	 	 	 	
              SAMI
                KASHOU, Individually

            

    

     

    
      
        
        

      

      
        5Exhibit
      10.1

    CREDIT
      AGREEMENT

     

    Between

     

    GUARANTY
      BANK 

    

    (“Lender”)

     

    and

     

    DECORIZE,
      INC., GUILDMASTER, INC. and FAITH WALK DESIGNS, INC.

    

    (“Borrower”)

     

    $3,000,000
      Revolving Secured Credit Facility

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    CREDIT
      AGREEMENT

     

    THIS
      CREDIT AGREEMENT
      (“Agreement”), is made and entered into effective October 19, 2007, between
      GUARANTY BANK, a state chartered trust company with banking powers (“Lender”)
      and DECORIZE, INC., a Delaware corporation, GUILDMASTER, INC., a Missouri
      corporation, and FAITH WALK DESIGNS, INC., a Missouri corporation (each
      individually and collectively, the “Borrower”) as follows:

     

    SECTION
      ONE - DEFINITIONS

     

    As
      used
      in this Agreement, capitalized terms not otherwise defined have the following
      meanings:

     

    1.1 “Account”
means
      all accounts as defined in the Uniform Commercial Code as adopted and in force
      in the State of Missouri, as amended, contracts, contract rights, chattel paper,
      instruments and documents, in which Borrower now has or hereafter acquires
      an
      interest.

     

    1.2 “Advance”
is
      defined in Section 2.2.

     

    1.3 “Daily
      Balance”
is
      defined in Section 2.6.

     

    1.4 “Bankruptcy
      Code”
means
      the Federal Bankruptcy Code (11 U.S.C. Sec. 101, et
      seq.),
      as
      amended.

     

    1.5 “Borrowing
      Base”
means
      on a revolving basis an amount equal to the sum of: (i) Eighty percent (80%)
      of
      Eligible Accounts Receivable plus Fifty percent (50%) of Eligible
      Inventory.

     

    1.6 “Borrowing
      Base Certificate”
means
      a
      certificate in the form of Exhibit 1
      duly
      completed and executed by the Borrower.

     

    1.7 “Business
      Day”
means
      any day on which the Lender is open for business in Springfield,
      Missouri.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    1.8 “Collateral”
means
      Decorize’s (i) Accounts, accounts receivable, Deposit Accounts, promissory notes
      and other obligations owed to Decorize that arise from the sale, rental or
      lease
      of inventory, goods or other property of Borrower or the rendering of services
      by Decorize, and all Chattel Paper, Instruments (including Promissory Notes),
      Documents, drafts, contract rights and acceptances, and other forms of
      obligations (including but not limited to all obligations that may be
      characterized as General Intangibles or otherwise under the UCC) respecting
      the
      rights of Decorize to the payment of money from others and all other rights
      to
      the payment of money; (ii)
      all
      Goods
      and Inventory, and all documents of title at any time evidencing or representing
      a part thereof, including all inventories of raw materials, work-in-process,
      finished goods, and merchandise, materials and supplies and all other personal
      property and assets of every kind and description held for sale, rental or
      lease
      or held to be furnished under contracts for services or consumed in Decorize’s
      business, or in any case held, used or useable in the supply, servicing,
      advertising, processing, packaging, delivery or shipping of such property;
      (iii)
      all
      Equipment, machinery, tools furniture, and fixtures of every sort and spare
      parts therefor, whether or not titled or certificated; (iv)
      all
      General Intangibles, including Payment Intangibles, all computer programs,
      data
      and databases, leases, licenses, claims and causes of action against others
      (whether in litigation, settlement or otherwise), and tax refunds, and all
      summaries, compilations, mailing and customer, client or supplier lists, and
      other supporting evidence records relating to the business, assets, liabilities
      or capital of Decorize, and all patents, patent applications, trademarks,
      trademark applications, trade secrets, trade names, service marks, trade styles,
      and copyrights, designs,
      prototypes, labels, molds, inventions, improvements, processes, manufacturing
      techniques, know-how, specifications, in
      each
      case whether or not registered, licensed or filed; (v)
      all
      rights under all licenses, permits, leases, contracts, governmental approvals,
      franchises, applications for any of the foregoing, renewals of any of the
      foregoing, and similar rights or privileges or immunities; (vi)
      (A) all
      dividends, cash, securities, instruments and other property from time to time
      paid, payable or otherwise distributed to Decorize in respect of or in exchange
      for any shares or other capital stock; (B) any and all distributions made to
      Decorize in respect of any such shares or capital stock, or trust, partnership
      or limited liability company interests, whether in cash or in kind, by way
      of
      dividends or stock splits, or pursuant to a merger or consolidation or
      otherwise, or any substitute security issued to Decorize upon conversion,
      reorganization or otherwise; and (C) any and all other property hereafter
      delivered to Decorize or Lender in substitution for or in addition to any of
      the
      foregoing; (vii)
      all of
      Decorize’s property in the possession, custody or control of Lender in any way,
      whether or not for safekeeping, custody, pledge, transmission, collection or
      otherwise; (viii)
      all
      funds paid to Lender or in transit to any deposit account or fund established
      by
      Decorize, and any securities in which such funds may be invested; and
(ix)
      all
      cash
      and non-cash proceeds and products of the foregoing, all proceeds from insurance
      on any of the foregoing, all goodwill associated with the foregoing, all
      additions and accessions to and replacements and substitutions for any of the
      foregoing, everything that becomes (or is held for the purpose of being) affixed
      to or installed in any of the foregoing, and all products, rents, income,
      dividends, royalties, and profits of or from any of the foregoing. All
      capitalized terms used and not otherwise defined in this definition of
      Collateral have the meanings given them in the Uniform Commercial Code as in
      effect from time to time in the State of Missouri (“UCC”).

     

    1.9 “Compliance
      Certificate”
means
      a
      certificate substantially in the form of Exhibit
      2.

     

    1.10 “Default”
is
      defined in Section 7.01 of this Agreement.

     

    1.11 “EBITDA”
means,
      on a consolidated basis, the amount of Borrower’s and its consolidated Foreign
      Subsidiaries’ earnings (excluding all gains and losses caused by foreign
      currency exchange adjustments) before interest, taxes, depreciation and
      amortization expense for the measurement period.

     

    1.12 “Eligible
      Accounts Receivable”
means
      at the time of any determination thereof all Accounts (net of all allowances
      and
      reserves for doubtful or uncollectible Accounts and sales adjustments, as
      determined by Lender in its reasonable credit judgment) that, based on the
      Borrower’s accounting practices on the date hereof, meet the following criteria
      at the time of creation and continue to meet the same at the time of such
      determination:

     

    (a) such
      Account has been invoiced and not more than ninety (90) days have elapsed since
      the date of the related invoice;

     

    (b) such
      Account is denominated in U.S. dollars;

     

    (c) such
      Account arose in the ordinary course of Borrower’s business;

     

    (d) the
      sale
      represented by such Account is not on a bill-and-hold, undelivered sale, sale
      or
      return, consignment, sale-on-approval or any other repurchase or return
      basis;

     

    (e) such
      Account is owned solely by Borrower and is subject to a perfected first priority
      security interest in favor of Lender pursuant to the Loan
      Documents;

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

     

    (f) no
      event
      of death (if the account debtor is an individual), bankruptcy, insolvency or
      inability to pay creditors generally of the account debtor thereunder has
      occurred (it being understood that if the Borrower receives notice of any such
      death, bankruptcy, insolvency or inability to pay creditors, the Borrower shall
      immediately give the same notice to the Lender);

     

    (g) with
      respect to such Account, the account debtor (I) is (A) a Person domiciled in
      the
      United States or (B) a Person outside of the continental United States that
      has
      supplied the Borrower with an irrevocable letter of credit or other credit
      insurance in form and substance satisfactory to Lender that (x) was issued
      or
      confirmed by a financial institution reasonably satisfactory to Lender and
      (v)
      has been duly transferred to, or the benefits of which are otherwise enforceable
      by, Borrower, (II) is not the United States or a State or any agency or
      instrumentality thereof unless the Borrower duly assigns its rights to payment
      of such Account to Lender pursuant to the Assignment of Claims Act of 1940,
      as
      amended (31 U.S.C. Sec. 3727 et seq.), or the comparable state law, as the
      case
      may be, in a manner reasonably satisfactory to Lender and (III) is not an
      affiliate of Borrower or any of the Foreign Subsidiaries;

     

    (h) such
      Account complies in all material respects with the requirements of all
      applicable laws and regulations, whether federal, state or local;
      and

     

    (i) Lender
      has not, after consultation with Borrower, notified Borrower that Lender is
      not
      reasonably satisfied with the credit standing of the account debtor in relations
      to the amount of credit extended.

     

    Notwithstanding
      the foregoing, no Account shall be an Eligible Accounts Receivable
      if:

     

    (aa) all
      Accounts of an account debtor when 20% of the outstanding balance is more than
      ninety (90) days since the date of the related invoice; or

     

    (bb) the
      portion of an account debtor’s balance that (when combined with account debtor’s
      remaining balance) exceeds 20% of all Accounts, provided, however, that the
      Borrower may have one (1) account debtor at any given time with a balance not
      to
      exceed 25% of all Accounts if the Borrower promptly notifies Lender of the
      (I)
      identity of such account debtor (together with the applicable account debtor
      balance), and (II) any change in the identity of such account
      debtor.

     

    1.13 “Eligible
      Inventory”
means
      such inventory of Borrower which, in Lender’s opinion, (i) is in good, new and
      saleable condition, (ii) is not obsolete or unmerchantable, (iii) meets the
      standards imposed by any governmental agency or authority in all material
      respects, (iv) conforms in all material respects to the warranties and
      representations set forth in this Agreement and the Loan Documents, (v) is
      at
      all times subject to Lender’s duly perfected, first priority security interest
      and no other Lien, and (vi) is located either (a) in the forty-eight (48)
      contiguous U.S., or (b) on the water in transit to the U.S., and (vii) Lender
      deems to be Eligible Inventory in Lender’s reasonable opinion.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

     

    1.14 “Environmental
      Laws”
means
      and includes all present and future federal, state or local laws including
      the
      Comprehensive Environmental Response Compensation and Liability Act of 1980,
      42
      U.S.C. Sec. 9601 et
      seq.,
      Federal Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sec. 6901,
      et
      seq.,
      the
      Hazardous Materials Transportation Act, 49 U.S.C. Sec. 1801, et
      seq.,
      the
      Federal Water Pollution Control Act, 33 U.S.C. Sec. 1251, et
      seq.,
      the
      Clean Air Act, 42 U.S.C. Sec. 7401, et
      seq.,
      the
      Toxic Substances Control Act, 15 U.S.C. Sec. 2601, et
      seq.,
      the
      Safe Drinking Water Act, 42 U.S.C. Sec. 300f-300j, the Emergency Planning and
      Community Right-To-Know Act, 42 U.S.C. Sec. 11001, et
      seq.,
      and
      any so-called “Superfund” or “Super Lien” law, environmental laws administered
      by the United States Environmental Protection Agency, any similar state and
      local laws and regulations, all amendments thereto, all regulations, orders,
      decisions, and decrees now or hereafter promulgated thereunder, in each case
      relating to environmental, health, safety or land use matters.

     

    1.15 “Event
      of Default”
is
      defined in Section 7.01 of this Agreement.

     

    1.16 “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended, and regulations
      promulgated thereunder.

     

    1.17 “Fixed
      Charges”
      means
      for any period of calculation, the sum of (i) all scheduled and unscheduled
      principal payments on long term Indebtedness of Borrower during such period;
      (ii) cash interest expense during such period, (iii) capital expenditures for
      maintenance and repair during such period, (iv) federal, state and local income
      taxes paid and (v) management fees during such period (whether accrued or paid
      in cash), all as determined in accordance with generally accepted accounting
      principles. 

     

    1.18 “Fixed
      Charge Coverage Ratio”
means
      the ratio of (a) EBITDA, to (b) Fixed Charges, all as determined in accordance
      with generally accepted accounting principles.

     

    1.19 “Foreign
      Subsidiary”
or
      “Foreign
      Subsidiaries”
means
      individually or collectively, Westway Enterprises, Ltd., a Hong Kong
      corporation, and P.T. Niaga Merapi, an Indonesian corporation.

     

    1.20 “Guarantors”
means
      the Foreign Subsidiaries.

     

    1.21 “Indebtedness”
      means
      all liability (i) in respect of money borrowed, or (ii) evidenced by a note,
      debenture (senior and subordinated) or other like written obligation to pay
      money, or (iii) in respect of rent or hire of property under leases or lease
      arrangements which under generally accepted accounting principals are required
      to be capitalized, or (iv) in respect of obligations under conditional sales
      or
      other title retention agreements.

     

    1.22 “Lien”
means
      any security interest, mortgage, deed of trust, pledge, hypothecation,
      assignment, charge or deposit arrangement, encumbrance, lien (statutory or
      other) or preferential arrangement of any kind or nature whatsoever in respect
      of any property (including those created by, arising under or evidenced by
      any
      conditional sale or other title retention agreement, the interest of a lessor
      under a capital lease, or any financing lease having substantially the same
      economic effect as any of the foregoing, but not including the interest of
      a
      lessor under an operating lease).

     

    1.23 “Loan
      Documents”
is
      defined in Section 3.1

     

    1.24 “Note”
shall
      refer to the Revolving Note (defined in Section 3.1(A) hereof).

     

    1.25 “Obligations”
means
      the obligation of Borrower:

     

    A. Payments
      of Principal, Interest and Advances.
      To pay
      the principal advanced or any interest on the Note and under this Agreement
      in
      accordance with their terms and to satisfy all of its other liabilities to
      Lender, whether under the Note or under this Agreement or otherwise, whether
      now
      existing or hereafter incurred, matured or unmatured, direct or contingent,
      joint or several, including any extensions, modifications, renewals, and
      substitutions; 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

     

    B. Payment
      of Costs.
      To
      reimburse Lender, on demand, for all of Lender’s expenses and costs, including
      reasonable fees and expenses of its counsel, in connection with the preparation,
      administration, amendment, modification, or enforcement of this Agreement and
      the documents required hereunder and in connection herewith, including, without
      limitation, any proceeding brought or threatened to enforce payment of any
      of
      the Obligations, notwithstanding the foregoing, Borrower and Lender agree that
      Borrower’s reimbursement obligations to Lender for third party expenses
      associated with the preparation of the Loan Documents shall not exceed $10,000;
      

     

    C. Performance.
      To
      fully perform and comply with all covenants, conditions, representations and
      warranties of Borrower set forth in this Agreement or in any Loan
      Document.

     

    1.26 “Pension
      Plan”
means
      a
      pension plan (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA
      with respect to which the Borrower or any affiliate may have any
      liability.

     

    1.27 “Permitted
      Liens”
      means:

     

    A. Taxes
      or Assessments.
      Liens
      for taxes, assessments, or similar charges, incurred in the ordinary course
      of
      business, that are not yet due and payable;

     

    B. Workmen’s
      Compensation.
      Pledges
      or deposits made in the ordinary course of business to secure payment of
      workmen’s compensation, or to participate in any fund in connection with
      workmen’s compensation, unemployment insurance, old-age pensions, or other
      social security programs;

     

    C. Pledges
      or Deposits.
      Good
      faith pledges or deposits made in the ordinary course of business to secure
      performance of bids, tenders, contracts (other than for the repayment of
      borrowed money), or leases, or to secure statutory obligations, or surety,
      appeal, indemnity, performance, or other similar bonds required in the ordinary
      course of business;

     

    D. Lender’s
      Liens.
      Liens
      in favor of Lender;

     

    E. Contested
      Matters.
      The
      following, if the validity or amount is being contested in good faith by
      appropriate and lawful proceedings and for which adequate reserves are
      maintained, so long as levy and execution thereon have been stayed and continue
      to be stayed and such contested matters do not, in the aggregate, materially
      detract from the value of the Collateral or property of Borrower, or materially
      impair the use of the Collateral or property of Borrower in the operation of
      Borrower’s business:

     

    (1) Claims
      or
      Liens for taxes, assessments, or charges due and payable; 

     

    (2) Claims,
      Liens, and encumbrances on, and defects of title to, real or personal property,
      including any attachment of personal or real property or other legal process
      prior to adjudication of a dispute on the merits;

     

    (3) Claims
      or
      Liens of mechanics, materialmen, warehousemen, carriers, or other like Liens;
      and

     

    (4) Adverse
      judgments on appeal.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

     

    F. Purchase
      Money Liens.
      Liens
      securing a purchase money obligation or Indebtedness arising under capital
      leases, provided that, in each case, any such Lien (i) attaches only to the
      specific item(s) of property or asset(s) acquired or financed with the proceeds
      of the corresponding Indebtedness, and (ii) does not exceed
      $100,000.

     

    1.28 “Person(s)”
means
      an individual, corporation, joint venture, partnership, trust, limited liability
      company, unincorporated organization or a government or any agency or political
      subdivision thereof.

     

    1.29 “Prime
      Rate”
means
      the base rate on corporate loans posted by at least 75% of the 30 largest U.S.
      banks, as published in the Wall Street Journal. The Prime Rate as of the date
      of
      this Agreement is Seven and Three-Quarter Percent (7.75%).

     

    1.30 “Request
      for Advance”
      means any request by Borrower for an Advance made in compliance with Section
      2.3.

     

    1.31 “Revolving
      Commitment Amount”
means
      Three Million Dollars ($3,000,000.00) which is the maximum amount of outstanding
      Senior Indebtedness at any time during the term of this Agreement which the
      Borrower may borrow and reborrow pursuant to the terms of the Revolving
      Loan.

     

    1.32 “Maturity
      Date”
means
      December 31, 2008.

     

    1.33 “Senior
      Indebtedness”
means
      the outstanding balance of the Obligations at the time of
      calculation.

     

    1.34 “Subordinated
      Indebtedness”
means
      all Indebtedness, excluding the Senior Indebtedness, incurred at any time by
      Borrower, repayment of which is subordinated to the Obligations in form and
      manner satisfactory to Lender, including but not limited to Indebtedness subject
      to a Subordination Agreement between Lender and Borrower. All existing
      Subordinated Indebtedness is specified in Exhibit 3
      and
      Borrower represents and warrants that no Subordinated Indebtedness exists which
      is not disclosed to Lender and specified on such Exhibit
      3.

     

    1.35 “U.S.”
means
      United States of America. 

     

    SECTION
      TWO - THE
      REVOLVING LOAN

     

    2.1 Revolving
      Loan Limit.
      Subject
      to the terms of this Agreement, Borrower shall have the right from time to
      time
      prior to the Maturity Date to borrow an aggregate principal balance not
      exceeding the lesser of (i) $3,000,000.00, or (ii) the Borrowing Base determined
      as of the date of the most recent Borrowing Base Certificate delivered to the
      Lender (“Revolving Loan”). 

     

    2.2 Disbursement
      of the Loan.
      Lender
      will credit the proceeds of the Revolving Loan from time to time to Borrower’s
      deposit account with Lender on the same Business Day requested, if Borrower’s
      request therefor is received by Lender prior to 3:00 p.m. Springfield, Missouri
      time or the next Business Day, if Borrower’s request therefor is received by
      Lender after 3:00 p.m. Springfield, Missouri time. Such credit of Loan proceeds
      shall sometimes herein be referred to as an “Advance.” 

     

    2.3 Requests
      for Advances under the Revolving Loan.
      Borrower shall make requests for Advances under the Revolving Loan in writing
      by
      delivering (via fax or e-mail) to Lender a Request for Advance in the form
      attached hereto as Exhibit
      4.
      Each
      Advance under the Revolving Loan shall be in integrals of $1,000.00. Lender
      may
      rely and act on any Request for Advance from any individual who Lender, absent
      gross negligence or willful misconduct, believes to be a representative of
      Borrower.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

     

    2.4 Use
      of
      Revolving Loan Proceeds.
      The
      Revolving Loan shall be used by the Borrower solely for (i) the refinancing
      of
      existing working capital indebtedness (including the factoring arrangement
      with
      Bibby Financial), (ii) the financing of ongoing working capital needs of the
      Borrower to the extent not inconsistent with the terms of this Agreement, and
      (iii) the payment of fees and expenses in connection with the closing of the
      transactions contemplated by this Agreement.

     

    2.5 Payment
      of Principal.
      Borrower shall repay the principal amount of the Revolving Loan immediately
      and
      without notice or demand: (i) to the extent at any time the aggregate principal
      amount of the Revolving Loan outstanding hereunder exceeds the Revolving
      Commitment Amount; (ii) to the extent at any time the aggregate principal amount
      of the Revolving Loan outstanding hereunder exceeds the Borrowing Base; (iii)
      upon Acceleration under Section 7.2; and (iv) in any and all events on the
      Maturity Date. 

     

    2.6 Payment
      of Interest.
      Interest shall accrue on the aggregate principal amount of the Revolving Loan
      outstanding from time to time under this Agreement. Borrower shall pay interest
      on the first (1st)
      day of
      each month, commencing on the first (1st)
      day of
      the first (1st)
      month
      following the date of this Agreement calculated by multiplying the Daily
      Interest Rate by the balance of the Revolving Loan at the end of each day (the
      “Daily Balance”) during the immediately preceding calendar month. The “Daily
      Interest Rate” shall be calculated by dividing the Adjusted Prime Rate in effect
      from time to time by three hundred sixty (360) days. 

     

    2.7 Adjusted
      Prime Rate.
      The
“Adjusted Prime Rate” shall be the Prime Rate plus the applicable Prime Margin
      determined from the Pricing
      Table contained herein.

     

    2.8 Prime
      Margin. Commencing
      on the date of this Agreement and continuing until Lender’s receipt of the
      Borrower’s first Compliance Certificate, the Prime Margin shall be 1.5%.
      Commencing on the first Business Day following the Lender’s receipt of a
      Compliance Certificate, the Prime Margin shall be determined as follows:

     

    
      	
              Pricing
                Table

            
	
              If
                the ratio of Borrower’s Senior Indebtedness to EBITDA (for the four fiscal
                quarter period of Borrower most recently ended) is:

            	
              The
                Prime Margin is:

            
	
              Greater
                than or equal to 0.0 and less than 3.0

            	
              0.00%

            
	
              Greater
                than or equal to 3.0 and less than 4.0

            	
              0.50%

            
	
              Greater
                than or equal to 4.0 and less than 5.0

            	
              1.50%

            
	
              Greater
                than or equal to 5.0 and less than 6.0

            	
              1.75%

            
	
              Greater
                than or equal to 6.0 or less than 0.0

              or
                undefined

            	
              2.50%

            

    

     

    The
      applicable Prime Margin shall be re-determined by Lender promptly after each
      delivery by Borrower to Lender of Borrower’s Financial Statements (and
      accompanying Compliance Certificate) as required herein, and will become
      applicable on the first Business Day following Lender’s receipt of the
      applicable Compliance Certificate. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    

     

    2.9 Time
      of Accrual.
      Interest
      shall accrue on all principal amounts outstanding from the date when first
      outstanding to the date when no longer outstanding. Amounts shall be deemed
      outstanding until payments are applied thereto as provided herein.

     

    2.10 Computation.
      Interest
      shall be computed for the actual days elapsed over a year deemed to consist
      of
      360 days.  

     

    2.11 Rate
      After Maturity or After an Event of Default.
      Borrower
      shall pay interest on any Loans after their Maturity, and, at the option of
      Lender, after declaration of an Event of Default, at a rate per annum of two
      percent (2.0%) plus the interest rate otherwise applicable thereto.

     

    2.12 Right
      of Setoff.
      If an
      Event of Default exists, Lender may charge against any deposit, savings,
      investment or other account of Borrower at Lender as due all or any part of
      any
      Obligation due whether in the nature of a regular monthly installment, by reason
      of acceleration due to default, or otherwise.

     

    SECTION
      THREE - CONDITIONS
      PRECEDENT

     

    3.1 First
      Advance.
      Borrower shall execute and/or deliver to Lender, as appropriate, prior to the
      closing and disbursement of the first Advance hereunder, the following, each
      of
      which together with this Agreement, immediately upon execution and delivery
      shall be considered a “Loan Document” hereunder:

     

    A. Note.
      A duly
      executed promissory note in the amount of the Revolving Loan and in form
      satisfactory to Lender (“Revolving Note”);

     

    B. Security
      Agreement.
      A duly
      executed security agreement in form reasonably satisfactory to Lender (“Security
      Agreement”) covering the Collateral and granting the Lender a first priority
      lien in any and all items of Collateral pledged as security for the
      Loan;

     

    C. Landlord’s
      Consent and Waiver.
      Executed copies of the Landlord Consent and Waiver from all landlords who lease
      any real property to the Borrower, if any;

     

    D. Authorizing
      Resolution.
      A
      certified copy of resolutions of Borrower’s (including its Subsidiaries’) boards
      of directors, members or partners, as applicable, authorizing the execution,
      delivery, and performance of each Loan Document to be delivered pursuant hereto,
      together with certified articles of formation, organization, by-laws, operating
      agreements and/or partnership agreements as are appropriate;

     

    E. Good
      Standing Certificate.
      A
      certificate, as of the most recent dates practicable, of the Secretary of State
      of the State of organization of the Borrower as to the good standing of each
      Borrower and of the Secretary of State of the State of Missouri as to the
      qualification of Decorize, Inc. to do business in the State of
      Missouri;

     

    F. UCC
      Financing Statements.
      Acknowledgment copies of filed financing statements from the Borrower, as
      debtor, to the Lender, as secured party, covering the Collateral, from such
      jurisdictions as the Lender deems necessary or desirable to perfect its security
      interest in the Collateral all of which financing statements Borrower authorizes
      the Lender to file;

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

     

    G. Subordinate
      Loan Documents.
      Copies
      of all documents evidencing the terms and conditions of any debt specified
      as
“Subordinated Indebtedness” on Exhibit 3;

     

    H. Subordination
      Agreements.
      Executed copies of all Subordination Agreements required by the
      Lender;

     

    I. Guaranty
      Agreement.
      Executed copy of the Guaranty Agreement signed by the Foreign
      Subsidiaries.

     

    J. Deposit
      Account
      Control Agreement.
      Executed copy of the Deposit
      Account
      Control Agreement signed by Bank of America, N.A., Borrower and
      Lender.

     

    K. Life
      Insurance.
      Copies
      of the life insurance policy described in Section 6.1(D);

     

    L. Insurance
      Policies.
      The
      Lender shall have received evidence satisfactory to it that the insurance
      described in Section 6.1(D) is in effect and that the Lender has been named
      as
      additional insured and loss payee under all insurance policies to be maintained
      with respect to the properties of the Borrower constituting the
      Collateral;

     

    M. Payment
      of Fees.
      Borrower shall have paid all fees and other closing or like costs and expenses
      of Lender which Borrower is obligated to pay hereunder, including but not
      limited a non-refundable loan fee in the amount of Fifteen Thousand and 00/100
      Dollars ($15,000.00), provided,
      however,
      that
      the costs payable by Borrower in connection with the origination of this Loan
      (i.e., attorney fees, loan documentation costs, recording fees, etc.) shall
      not
      exceed $10,000.00.

     

    N. Opinion
      of Counsel.
      A
      written opinion of the Borrowers’ counsel, as of the date of this Agreement and
      addressed to the Lender, in form reasonably satisfactory to the Lender, and
      containing assumptions and qualifications customary for this type of loan
      transaction, to the effect that:

     

    (1) Each
      Borrower is a corporation organized, existing, and in good standing under the
      laws of its state of incorporation and, with respect to Decorize, Inc., is
      qualified as a foreign corporation to transact business and is in good standing
      in the State of Missouri;

     

    (2) Each
      Borrower has the power to execute and deliver the Loan Documents to which it
      is
      a party, to borrow money thereunder, to grant the Collateral required
      thereunder, and to perform the obligations thereunder;

     

    (3) All
      corporate action by each Borrower, all consents and approvals of any
      governmental entity, necessary to the validity of each Loan Document to which
      it
      is a party, the Loan Documents, and such other documents do not conflict with
      any provision of the charter or bylaws of each Borrower, or of any applicable
      laws or any other material agreement binding on each Borrower or its property
      of
      which such counsel has knowledge; and

     

    (4) The
      Loan
      Documents, and all other agreements to be delivered hereunder have been executed
      by, and each is a valid and binding obligation of, each Borrower, enforceable
      in
      accordance with its terms.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

     

    O. Other
      Items.
      Such
      other agreements, documents and assurances as the Lender may reasonably request
      in connection with the transactions described in or contemplated by the Loan
      Documents or as deemed necessary or desirable by the Lender to perfect its
      security interest in any Collateral.

     

    3.2 First
      and Subsequent Advances.
      The
      obligation of Lender to make any Loan hereunder is subject to the following
      conditions precedent: 

     

    A. No
      Default.
      No
      Event of Default shall have occurred and be continuing, and no event shall
      have
      occurred and be continuing that, with the giving of notice or passage of time,
      or both, would be an Event of Default, under any Loan Document or this
      Agreement;

     

    B. No
      Material Adverse Change.
      No
      material adverse change shall have occurred in the financial condition of any
      Borrower since the date of this Agreement; 

     

    C. No
      Action.
      No
      action, proceeding, investigation, regulation or legislation shall have been
      instituted, threatened or proposed before any court, governmental agency or
      legislative body to enjoin, restrain or prohibit, or to obtain damages in
      respect of, or which is related to or arises out of this Agreement or the
      consummation of the transactions contemplated hereby or which, in the Lender's
      sole discretion, would make it inadvisable to consummate the transactions
      contemplated by this Agreement or any of the other Loan Documents;

     

    D. Representations
      and Warranties.
      The
      representations and warranties contained in Section 5 shall be true and correct
      in all material respects as of the date of each Advance as though made on and
      as
      of such date;

     

    E. Loan
      Documents in Effect.
      All of
      the Loan Documents are and shall have remained in full force and
      effect;

     

    F. Borrowing
      Base Certificate.
      Borrower shall have delivered to Lender a current monthly Borrowing Base
      Certificate;

     

    G. Legal
      Matters.
      All
      legal matters relating to this Agreement and each Loan shall be satisfactory
      to
      counsel to Lender.

     

    3.3 Incorporation
      of this Agreement.
      All
      Loan Documents currently outstanding and in existence and all Loan Documents
      entered into from and after the day of this Agreement by and between Borrower
      and Lender shall be subject to the terms and conditions of this Agreement which
      is hereby deemed to be incorporated therein by reference.

     

    SECTION
      FOUR - COLLATERAL
      SECURITY

     

    4.1 Composition
      of the Collateral.
      The
      Collateral, together with all of Borrower’s other property of any kind held by
      Lender, shall stand as one general, continuing, collateral security for all
      Obligations and may be retained by Lender until all Obligations have been
      satisfied in full.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

     

    4.2 Rights
      in Property held by Lender.
      As
      security for the prompt satisfaction of all Obligations, Borrower assigns,
      transfers, and sets over to Lender all of its right, title and interest in
      and
      to, and grants Lender a Lien on and a security interest in, all amounts that
      may
      be owing from time to time by Lender to Borrower in any capacity, including,
      but
      not limited to, any balance or share belonging to Borrower, or any deposit
      or
      other account with Lender, which Lien and security interest shall be independent
      of and in addition to the right of setoff that Lender has as against such
      amounts. This shall be a continuing assignment. 

     

    4.3 Rights
      in Property held by Borrower.
      As
      further security for the prompt satisfaction of all Obligations arising under
      this Agreement, Borrower assigns to Lender all of its right, title and interest
      in and to, and grants Lender a Lien on and a security interest in, the
      Collateral and Borrower agrees to immediately execute any necessary documents
      to
      assign to Lender and grant Lender a security interest in any new or replacement
      Collateral. 

     

    4.4 Priority
      of Liens.
      The
      Borrower covenants and agrees and represents and warrants that the Liens granted
      hereby or by any Loan Document shall be first and prior Liens except for any
      Permitted Liens that may have priority. 

     

    4.5 Financing
      Statements.
      Borrower authorizes Lender to file such financing statements (including
      amendments and continuation statements) in form satisfactory to Lender, as
      Lender may from time to time specify, agrees to pay to or reimburse Lender
      for
      all costs and taxes of filing or recording the statements in such public offices
      as Lender may designate (but, when coupled with all other costs payable by
      Borrower in connection with the origination of this Loan (i.e., attorney fees,
      loan documentation costs, recording fees, etc.), such costs, taxes and other
      payments shall not exceed $10,000), and agrees to take such other steps as
      Lender may direct, including the noting of Lender’s Lien on the Collateral and
      on any certificates of title therefor, to perfect Lender’s interest in the
      Collateral. In addition to the foregoing, and not in limitation thereof, a
      copy
      of this Agreement or any Security Agreement executed hereunder shall be
      sufficient as a financing statement and may be filed in any appropriate office
      in lieu thereof, and, to the extent lawful, Borrower hereby grants Lender an
      irrevocable power of attorney (without requiring Lender to act as such and
      which
      shall be deemed to be coupled with an interest) to execute any financing
      statements in the name of Borrower, and to perform all other acts that Lender
      deems appropriate to preserve and continue its security interest in, and to
      protect and preserve, the Collateral.

     

    4.6 Mortgagees’
      and Landlords’ Waivers.
      Borrower will cause each mortgagee of all real estate owned by Borrower and
      each
      landlord of premises leased by Borrower to execute and deliver to Lender
      instruments, in form and substance satisfactory to Lender, by which such
      mortgagee or landlord waives its rights, if any, to all goods composing a part
      of the Collateral.

     

    4.7 Operating
      and Lockbox Accounts.
      Borrower shall maintain its principal operating and cash management accounts
      (including without limitations, lockbox account) with Lender or such other
      financial institution as Lender shall approve in its reasonable discretion
      as to
      which the Lender is hereby granted a security interest and right of set off
      (the
“Approved Operating Accounts”). 

     

    Borrower
      shall ensure that all collections of its Accounts and all other payments
      received by Borrower from account debtors and other Persons are paid and
      delivered directly into the Approved Operating Accounts. To the extent that
      any
      Accounts are collected by Borrower or any other cash payments received by
      Borrower are not sent directly to an Approved Operating Account but are received
      by Borrower, such collections and proceeds shall be held in trust for the
      benefit of Lender and immediately remitted (and in any event within
      five (5) Business Days) to an Approved Operating Account. Borrower
      acknowledges and agrees that compliance with the terms of this Section 4.7
      is an essential term of this Agreement and upon Borrower’s failure to comply
      with the terms of this Section 4.7, Lender may, in its discretion, declare
      an
      Event of Default.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

     

    SECTION
      FIVE - REPRESENTATIONS
      AND WARRANTIES

     

    5.1 Original.
      To
      induce Lender to enter into this Agreement, Borrower represents and warrants
      to
      Lender (“Borrower Representations and Warranties”) as follows:

     

    A. Good
      Standing.
      Each
      Borrower is a corporation duly organized, validly existing, and in good standing
      under the laws of its state of incorporation; each Foreign Subsidiary is a
      corporation duly organized, validly existing, and in good standing under the
      laws of its country of incorporation; Borrower and the Foreign Subsidiaries
      have
      the lawful power to own their properties and to engage in the business they
      conduct, and each is qualified and in good standing as a foreign corporation
      in
      the jurisdictions wherein the nature of the business transacted by it or
      property owned by it makes such qualification necessary, except those states
      in
      which the failure to qualify or maintain good standing would not reasonably
      be
      expected to have a material adverse effect on Borrower’s ability to perform its
      obligations under this Agreement;

     

    B. No
      Default.
      Borrower is not in default with respect to any of its existing Indebtedness,
      and
      the making and performance of this Agreement and the Loan Documents will not
      immediately or with the passage of time, or the giving of notice, or both
      violate the charter or bylaw provisions of Borrower, or violate any laws
      applicable to Borrower or result in a default under any material contract or
      agreement to which Borrower is a party or by which Borrower or its property
      is
      bound, or result in the creation or imposition of any security interest in,
      or
      Lien or encumbrance on, any of the assets of Borrower, except in favor of
      Lender;

     

    C. Power
      and Authority.
      Borrower has the corporate power and authority to enter into and perform this
      Agreement, the Note, and the Loan Documents, and to incur such obligations,
      and
      has taken all corporate action necessary to authorize the execution, delivery,
      and performance of this Agreement, the Note, and the Loan
      Documents;

     

    D. Binding
      and Enforceable.
      This
      Agreement and the Loan Documents are, and each Loan Document when delivered
      will
      be, valid, binding and enforceable in accordance with their respective terms,
      subject to limitations imposed by bankruptcy, insolvency, moratorium or other
      similar laws affecting the rights of creditors generally or the application
      of
      general equitable principles;

     

    E. Approval
      of Governmental Bodies.
      No
      authorization or approval or other action by, and no notice to or filing with,
      any governmental authority or regulatory body is required for the due execution,
      delivery and performance by the Borrower of the Loan Documents or the exercise
      by the Lender of its rights thereunder, including, without limitation, the
      sale
      or other disposition of any of the Collateral;

     

    F. No
      Litigation.
      There
      is no pending or, to the knowledge of Borrower, threatened, order, notice,
      claim, litigation, proceeding or investigation against or affecting Borrower,
      whether or not covered by insurance, that would materially and adversely affect
      the business or prospects of Borrower if adversely determined;

     

    G. Marketable
      Title.
      Borrower has good and marketable title to all of their assets, which are not
      subject to any security interest, encumbrance, Lien or claim of any Person,
      except for Permitted Liens;

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

     

    H. Priority.
      Lender
      has a perfected first priority lien in the Collateral subject to no other liens
      or claims except for Permitted Liens.

     

    I. Financial
      Statement.
      All
      financial statements of the Borrower which have been furnished to the Lender
      fairly present the financial condition of the Borrower, as of the dates
      reflected on the financial statements, and fairly present the results of its
      operations for the period covered thereby, all in accordance with GAAP. As
      of
      the date of this Agreement, there has been no material change in such conditions
      or such operations since the most recent financial statements submitted to
      the
      Lender;

     

    J. No
      Debt.
      As of
      the date of this Agreement, Borrower has no material Indebtedness of any nature,
      including, but not limited to, liabilities for taxes and any interest or
      penalties relating thereto, any contingent liabilities or any material
      Indebtedness of any nature, not fully reflected and reserved against in the
      financial statements provided to Lender;

     

    K. Business.
      Borrower is not a party to or subject to any agreement or restriction that
      would
      reasonably be expected to have a material adverse effect on Borrower's business,
      properties or prospects. 

     

    L. Licenses,
      Permits, etc.
      Borrower
      has obtained any and all licenses, permits, franchises, governmental
      authorizations, patents, trademarks, copyrights or other rights necessary for
      the ownership of its properties and the conduct of its business. Borrower
      possesses adequate licenses, patents, patent applications, copyrights,
      trademarks, trademark applications, and trade names to continue to conduct
      its
      business as heretofore conducted by it, without any conflict with the rights
      of
      any other Person. All of the foregoing are in full force and effect and none
      of
      the foregoing are in known conflict with the rights of others. 

     

    M. Laws
      and Taxes.
      Borrower
      is in material compliance with all laws, regulations, rulings, orders,
      injunctions, decrees, conditions or other requirements applicable to or imposed
      upon Borrower by any law or by any governmental authority, court or agency.
      Borrower has filed all required tax returns and reports that are now required
      to
      be filed by it in connection with any federal, state and local tax, duty or
      charge levied, assessed or imposed upon Borrower or its assets, including
      unemployment, social security, and real estate taxes. Borrower has paid all
      taxes which are now due and payable. To Borrower’s knowledge, no taxing
      authority has asserted or assessed any additional tax liabilities against
      Borrower which are outstanding on this date.

     

    N. Hazardous
      Materials.
      To
      Borrower’s knowledge, the Borrower has duly complied in all material respects
      with all Environmental Laws and all of its facilities, leaseholds, assets and
      other property are in compliance with all Environmental Laws. There are no
      outstanding or, to Borrower’s knowledge, threatened citations, notices or orders
      of noncompliance issued to the Borrower or relating to its facilities,
      leaseholds, assets or other property. The Borrower has been issued all licenses,
      certificates, permits or other authorizations required under any Environmental
      Law or by any federal, state or local governmental or quasi-governmental
      entity.

     

    O. Subsidiaries
      and Partnerships.
      Borrower has no subsidiaries and is not a party to any partnership agreement
      or
      joint venture agreement except as set forth on Exhibit
      5.

     

    
      
        
        

      

      
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    P. No
      Omissions.
      No
      representation or warranty by Borrower contained herein or in any certificate
      or
      other document furnished by Borrower pursuant hereto contains any untrue
      statement of material fact or omits to state a material fact necessary to make
      such representation or warranty not misleading in light of the circumstances
      under which it was made;

     

    Q. Use
      of
      Proceeds.
      The
      proceeds of the Revolving Loan shall be used solely for the purposes set forth
      in Section 2.4; 

     

    R. No
      Additional Consents.
      Each
      consent, approval or authorization of, or filing, registration, or qualification
      with, any Person required to be obtained or effected by Borrower in connection
      with the execution and delivery of this Agreement, the Loan Documents, or the
      undertaking or performance of such obligations, has been obtained or
      effected;

     

    S. Leases,
      Contracts or Commitments.
      Except
      as described in Exhibit
      6
      (“Material Leases, Contracts or Commitments”), Borrower has no Material Lease,
      Contract, or Commitment of any kind; a Material Lease, Contract or Commitment
      shall be defined as any such obligations requiring payments by Borrower in
      excess of Fifty Thousand Dollars ($50,000.00) per year or having a total cost
      to
      Borrower in excess of One Hundred Thousand Dollars ($100,000.00); to Borrower’s
      knowledge, all parties to all such Material Leases, Contracts, or Commitments
      to
      which Borrower is a party have complied with provisions of such Material Leases,
      Contracts, or Commitments, to Borrower’s knowledge, no party is in default under
      any such Material Leases, Contracts, or Commitments, and no event has occurred
      that, but for the giving of notice or the passage of time, or both, would
      constitute a default; and

     

    T. Investment
      Company Act; Public Utility Holding Company Act.
      Borrower is not (a) an “investment company” as defined in, or subject to
      regulation under, the Investment Company Act of 1940 or (b) a “holding company”
as defined in, or subject to regulation under, the Public Utility Holding
      Company Act of 1935.

     

    U. Regulations
      U, G, T and X.
      No part
      of the proceeds of any Advance will be used to purchase or carry any margin
      stock or to extend credit to others for the purpose of purchasing or carrying
      any margin stock or for any purpose which violates, or which would be
      inconsistent with, the provisions of Federal Reserve Regulations G, T, U or
      X.

     

    V. Transactions
      with Foreign Subsidiaries; Loans to Insiders.
      Each
      Borrower shall not enter into or be a party to any transaction or arrangement,
      including the purchase, sale or exchange of property of any kind or the
      rendering of any service with any other Borrower or Foreign Subsidiary, or
      make
      any loans or advances to any other Borrower or Foreign Subsidiary, in each
      case
      on terms more favorable than could be obtained with independent third parties.
      Further, Borrower shall not directly or indirectly (a) fund a personal loan
      to
      or for the benefit of a director or executive officer of Borrower, other than
      travel expense advances and company credit card advances in the ordinary course
      of business, or (b) take any action in violation of or otherwise prohibited
      by
      or fail to take any action required by, the Sarbanes-Oxley Act of
      2002.

     

    W. Pension
      Plan.
      Any
      Pension Plan maintained by Borrower is in full compliance in all material
      respects with applicable governmental laws and regulations (including, without
      limitation, ERISA) and there are no current enforcement or investigative actions
      or proceedings associated with such Pension Plans.

     

    5.2 Survival.
      All of
      the representations and warranties set forth herein shall survive and be
      continuing representations and warranties until all Obligations to Lender are
      satisfied in full.

     

    
      
        
        

      

      
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    SECTION
      SIX - BORROWER’S
      COVENANTS

     

    Borrower
      covenants and agrees with Lender that, until any of its Obligations arising
      under this Agreement are fully satisfied, Borrower will comply with the
      following covenants (“Covenants”):

     

    6.1 Affirmative
      Covenants.

     

    A. Periodic
      Reports.
      Borrower will furnish Lender:

     

    (1) Monthly
      Borrowing Base Certificate, Inventory and Accounts Receivable
      Report.
      By the
      fifteenth (15th) day of each calendar month: a Borrowing Base Certificate
      prepared as of the last day of the immediately preceding calendar month; and
      a
      complete listing of all inventory of Borrower and an updated list of accounts
      receivable including aging monthly;

     

    (2) Monthly
      Financials.
      As soon
      as available and in any event within 30 days after the end of each month of
      each
      fiscal year of the Borrower, an internally prepared balance sheet of the
      Borrower as of the end of such month and internally prepared income statements
      as of the end of such month and for the fiscal year-to-date, each certified
      by
      the Borrower's chief financial officer;

     

    (3) Annual
      Financials.
      As soon
      as available and in any event within 90 days after the end of each fiscal year
      of the Borrower, final audited financial statements (as described above but
      including a statement of changes in financial position) as of the end of such
      fiscal year of the Borrower audited by independent certified accountants
      satisfactory to the Lender and a copy of any management, operation or other
      letter or correspondence from such accountant to the Borrower in connection
      therewith; and

     

    (4) Compliance
      Certificate.
      Within
      thirty (30) days after the end of each fiscal quarter of the Borrower, a
      certificate of the president or principal financial officer of Borrower stating
      that (i) he or she has individually reviewed the provisions of this Agreement
      and that a review of the activities of Borrower during such quarterly period,
      has been made by or under the supervision of the signer of such certificate
      with
      a view to determine whether Borrower has kept, observed, performed, and
      fulfilled all its Obligations under this Agreement, (ii) a computation of each
      of the financial ratios and restrictions as set forth in the Compliance
      Certificate attached hereto as Exhibit 2, and (iii) that, to the best of his
      or
      her knowledge, no Event of Default has occurred and is continuing or, if an
      Event of Default has occurred and is continuing, specifying all such Events
      of
      Default. 

     

    B. Maintenance
      of Collateral, Property.
      Borrower will maintain the Collateral, including but not limited to Lender’s
      priority security interest in the Collateral, as well as their personal
      properties in good condition and repair (normal wear and tear excepted); will
      pay and discharge or will cause to be paid and discharged when due, the cost
      of
      repairs and maintenance of the same; and will pay or cause to be paid all rental
      or mortgage payments due on such real estate. Borrower agrees that in the event
      it fails to pay or cause to be paid any such payment, Lender may notify Borrower
      in writing of Lender’s intention to pay same and unless Borrower makes such
      payment within five (5) days of such notice, Lender may do so and on demand
      be
      reimbursed therefor by Borrower.

     

    
      
        
        

      

      
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    C. Use
      of
      Proceeds.
      The
      proceeds of the Revolving Loan will be used solely for the purposes set forth
      in
      Section 2.4.

     

    D. Insurance.
      At its
      own cost, Borrower shall obtain and maintain insurance against (a) loss,
      destruction or damage to its properties and business of the kinds and in the
      amounts customarily insured against by corporations with established reputations
      engaged in the same or similar business as Borrower and, in any event,
      sufficient to fully protect Lender’s interest in the Collateral, and (b)
      insurance against public liability and third party property damage of the kinds
      and in the amounts customarily insured against by corporations with established
      reputations engaged in the same or similar business as Borrower. All such
      policies shall (i) be issued by financially sound and reputable insurers, (ii)
      name Lender as an additional insured and, where applicable, as loss payee under
      a lender loss payable endorsement satisfactory to Lender, and (iii) shall
      provide for thirty (30) days written notice to Lender before such policy is
      altered or canceled. All of the insurance policies required hereby shall be
      evidenced by one or more Certificates of Insurance delivered to Lender by
      Borrower on the Closing Date and at such other times as Lender may request
      from
      time to time.

     

    E. Life
      Insurance.
      Maintain life insurance in an aggregate amount of $4,000,000.00, insuring the
      life of Steven R. Crowder with the Borrower, SRC Corporation, Quest Capital
      Alliance, LLC and Capital Investors named as beneficiaries therein.

     

    F. Payment
      of Taxes.
      Borrower shall pay when due all taxes, assessments and other governmental
      charges imposed upon it or its assets, franchises, business, income or profits
      before any penalty or interest accrues thereon, and all claims (including,
      without limitation, claims for labor, services, materials and supplies) for
      sums
      which by law might be a lien or charge upon any of its assets, provided that
      (unless any material item or property would be lost, forfeited or materially
      damaged as a result thereof) no such charge or claim need be paid if it is
      being
      diligently contested in good faith, if Lender is notified in advance of such
      contest and if Borrower establishes an adequate reserve or other appropriate
      provision required by generally accepted accounting principles.

     

    G. Compliance
      with Laws.
      Borrower shall comply with all federal, state and local laws, regulations and
      orders applicable to Borrower or its assets including but not limited to all
      Environmental Laws and the Sarbanes-Oxley Act of 2002, in all respects material
      to Borrower’s business, assets or prospects and shall promptly notify Lender of
      any violation of any rule, regulation, statute, ordinance, order or law relating
      to the public health or the environment and of any complaint or notifications
      received by Borrower regarding to any environmental or safety and health rule,
      regulation, statute, ordinance or law. Borrower shall obtain and maintain any
      and all licenses, permits, franchises, governmental authorizations, patents,
      trademarks, copyrights or other rights necessary for the ownership of its
      properties and the advantageous conduct of its business and as may be required
      from time to time by applicable law, except where the failure to so maintain
      such licenses, permits, franchises, governmental authorizations, patents,
      trademarks, copyrights or other rights would not materially or adversely affect
      the actual or prospective business, financial condition or operations of the
      Borrower.

     

    
      
        
        

      

      
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    H. Other
      Amounts Deemed Loans.
      If
      Borrower fails to pay any tax, assessment, governmental charge or levy or to
      maintain insurance within the time permitted or required by this Agreement,
      or
      to discharge any Lien prohibited hereby, or to comply with any other Obligation,
      Lender may, but shall not be obligated to, pay, satisfy, discharge or bond
      the
      same for the account of Borrower, and to the extent permitted by law and at
      the
      option of Lender, all monies so paid by Lender on behalf of Borrower shall
      be
      deemed Obligations.

     

    I. Further
      Assurances.
      Borrower
      shall execute, acknowledge and deliver, or cause to be executed, acknowledged
      or
      delivered, any and all such further assurances and other agreements or
      instruments, and take or cause to be taken all such other action, as shall
      be
      reasonably necessary and requested by Lender from time to time to give full
      effect to the Loan Documents and the transactions contemplated
      thereby.

     

    J. Books
      and Records; Inspection; Lender Audits. Maintain
      complete and accurate books and financial records in accordance with GAAP;
      no
      more than once a year unless an Event of Default exists, during normal working
      hours that does not otherwise unnecessarily interfere with Borrower’s business,
      permit the Lender and persons designated by the Lender to visit and inspect
      its
      properties and to conduct any environmental tests or audits thereon, to inspect
      its books and financial records (including its journals, orders, receipts and
      correspondence which relates to its Accounts), and to discuss its affairs,
      finances and Accounts and operations with its directors, officers, employees
      and
      agents and its independent public accountants; and permit the Lender and persons
      designated by the Lender to perform audits of such books and financial records
      when and as requested by the Lender.

     

    K. Preservation
      of Business and Corporate Existence.
      Carry
      on and conduct its principal business substantially as it is now being
      conducted; maintain in good standing its existence and its right to transact
      business in those states in which it is now or may hereafter be doing business;
      and maintain all licenses, permits and registrations necessary to the conduct
      of
      its business (except where the failure to so maintain its right to transact
      business or to maintain such licenses, permits or registrations would not
      materially and adversely affect the actual or prospective business, financial
      condition or operations of the Borrower)

     

    L. Collection
      of Accounts Receivable.
      Borrower will collect its Accounts and sell its inventory only in the ordinary
      course of business.

     

    M. Accounts
      Records.
      Borrower will keep accurate and complete records of its Accounts, inventory,
      and
      equipment, consistent with sound business practices.

     

    N. Notice
      to Lender of Litigation.
      Borrower will give immediate notice to the Lender of any litigation or
      proceeding in which any of them is a party, if an adverse decision therein
      would
      require them to pay over more than One Hundred Thousand Dollars ($100,000.00)
      or
      deliver assets, the value of which exceeds such sum, provided such claim is
      not
      covered by insurance, is defended by an insurance company under a reservation
      of
      rights or exceeds the limits of coverage of any insurance policy, and the
      institution of any other suit or proceeding involving any of them that might
      materially and adversely affect their operations, financial condition, property,
      or business.

     

    O. Copies
      of Tax Returns.
      Within
      twenty (20) days after Lender’s request therefor, Borrower will furnish Lender
      with copies of federal income tax returns filed by Borrower.

     

    
      
        
        

      

      
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    P. Pay
      Other Obligations.
      Borrower will pay when due (or within applicable grace periods) all Indebtedness
      due any Person, except when the amount is being contested in good faith by
      appropriate proceedings and with adequate reserves therefor being set aside
      or
      if such amount is otherwise subject to Subordinated Indebtedness where payments
      are restricted or otherwise not allowed in certain circumstances. If Borrower
      defaults in the payment of any principal (or installment thereof) of, or
      interest on, any such Indebtedness, Lender shall have the right, in its
      discretion, to pay such interest or principal for the account of Borrower and
      be
      reimbursed by Borrower on demand.

     

    Q. Notify
      Lender of Default.
      Borrower will notify Lender immediately if any of them becomes aware of the
      occurrence of any Event of Default or of any fact, condition, or event that,
      with the giving of notice or passage of time, or both, could become an Event
      of
      Default, or of the failure of Borrower to observe any of their respective
      undertakings under this Agreement.

     

    R. Notify
      Lender of Change of Address.
      Borrower will notify Lender thirty (30) days in advance of any change in the
      location of any of their places of business or of the establishment of any
      new,
      or the discontinuance of any existing, place of business.

     

    S. Notify
      Lender of Change in Senior Management.
      Borrower will notify Lender contemporaneously of any change in the officers,
      directors or senior management of the Borrower.

     

    T. Environmental
      Compliance.
      Borrower shall comply with Environmental Laws relating to the Collateral or
      the
      conduct of Borrower’s business. Borrower shall immediately remove and dispose of
      in compliance with Environmental Laws any hazardous substances located on or
      about Borrower’s business premises in violation of Environmental Laws. Borrower
      shall indemnify and hold Lender harmless (with attorneys satisfactory to Lender)
      from any and all costs and expenses, including attorney’s fees, suffered or
      incurred by Lender arising out of or in connection with, whether directly or
      indirectly, any breach or violation of any Environmental Law.

     

    U. Loans.
      All
      shareholder loans are to be subordinated. Borrower is prohibited from making
      loans to its employees or entering into any guarantee for the benefit of any
      third party.

     

    V. Inspection
      of Collateral.
      Borrower shall give Lender reasonable access to the Collateral.

     

    W. Financial
      Covenants.
      

     

    (1) Minimum
      Fixed Charge Coverage Ratio.
      Commencing
      with the four quarters ending September 30, 2007, the ratio of Borrower’s EBITDA
      to Borrower’s Fixed Charges for each four-quarter period then ended during the
      term of this Agreement, shall not be less than 1.0.

     

    (2) Maximum
      Ratio of Senior Indebtedness to EBITDA (Leverage Ratio).
      Commencing with the four quarters ending September 30, 2007, the ratio of
      Borrower’s Senior Indebtedness to EBITDA for each four-quarter period then ended
      during the term of this Agreement, calculated as of the last day of each such
      period, shall not be greater than 6.0. 

     

    
      
        
        

      

      
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    (3) Distributions.
      Borrower shall not directly
      or indirectly declare or make, or incur any liability to make, any cash dividend
      or other payment to shareholders of Borrower that relate to such shareholder's
      ownership in Borrower; provided, that this Section 6.1(W)(3) shall not be deemed
      to limit or otherwise prohibit Borrower from paying any indebtedness or other
      amounts due and owing from Borrower to any shareholder that is otherwise
      permitted pursuant to this Agreement.

     

    (4) Limitation
      on Operating Leases and Capital Expenditures.
      Without
      the prior written consent of the Lender, no Borrower shall make any capital
      expenditures in excess of $100,000, or lease real or personal property requiring
      in the aggregate rental payments in excess of $100,000 in any consecutive four
      (4) quarter period.

     

    6.2 Negative
      Covenants.

     

    A. No
      Name Change or Merger.
      Borrower will not change its corporate name, enter into any merger,
      consolidation, reorganization or recapitalization, reclassify its capital stock
      or permit a change of control in the Borrower.

     

    B. No
      Sale of Assets out of Ordinary Cause.
      Borrower will not sell, transfer, lease or otherwise dispose of all, or (except
      in the ordinary course of business) any material part of, its
      assets.

     

    C. No
      Pledge of Assets.
      Borrower will not mortgage, pledge, grant, or permit to exist a security
      interest in or Lien on any of its assets of any kind, now owned or hereafter
      acquired, except for Permitted Liens.

     

    D. No
      Guarantees.
      Borrower will not become liable, directly or indirectly, as guarantor or
      otherwise, for any obligation of any other Person. 

     

    E. No
      Debt.
      Borrower will not incur, create, assume, or permit to exist any Indebtedness
      except:

     

    (1) The
      Senior Indebtedness;

     

    (2) Subordinated
      Indebtedness as set forth in Exhibit
      3;

     

    (3) trade
      indebtedness incurred in the ordinary course of business;

     

    (4) Indebtedness
      secured by Permitted Liens;

     

    (5) Lease
      obligations permitted by this Agreement.

     

    F. Payments
      on Subordinated Indebtedness.
      Borrower will not, directly or indirectly, make any principal or cash interest
      payment on Subordinated Indebtedness that, after giving effect to such principal
      or cash interest payment when added to the Fixed Charges, would result in a
      Fixed Charge Coverage Ratio of less than 1.0.

     

    G. No
      New
      Subsidiaries.
      Without
      the prior written approval of Lender, which approval will not be unreasonably
      withheld, Borrower will not form any subsidiary or make any investment in,
      or
      make any loan in the nature of an investment to, a Person if and to the extent
      that after giving effect thereto, such formation, investment or loan results
      in
      a breach of Borrower’s covenants in Section 6.1(W)(1) (Minimum Fixed Charge
      Coverage Ratio) or Section 6.1(W)(2) (Maximum Ratio of Senior Indebtedness
      to
      EBITDA (Leverage Ratio)).

     

    
      
        
        

      

      
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    H. No
      Acquisitions.
      Without
      the prior written approval of Lender, which approval will not be unreasonably
      withheld, Borrower will not purchase or otherwise acquire (in one transaction
      or
      a series of transactions) any stock or assets of any other Person.

     

    I. No
      Loans to Insiders.
      Each
      Borrower will not make any loan or advance to any officer, shareholder,
      director, or employees of another Borrower or a Foreign Subsidiary, except
      temporary advances in the ordinary course of business.

     

    J. No
      Lease Financing.
      Borrower will not make payments on account of Lease Financing of assets that,
      in
      the aggregate, in any fiscal year, commencing with the current fiscal year,
      exceed $100,000.00. As used in this paragraph, the term “Lease Financing” means
      a lease reflected on a consolidated balance sheet of Borrower and its Foreign
      Subsidiaries or a lease that should be so reflected under generally accepted
      accounting principles.

     

    K. Notice
      of Leases.
      Borrower agrees to promptly notify the Lender of any Lease in excess of
      $100,000, undertaken by Borrower during the term of this Agreement and further
      agrees to promptly provide Lender with an executed copy of such Lease. “Lease”
as used in this paragraph shall mean a lease that is not reflected on a
      consolidated balance sheet of Borrower and its Foreign Subsidiaries and should
      not be so reflected under generally accepted accounting principles.

     

    L. Compensation
      - Salary.
      Borrower is prohibited from paying total compensation to its officers and
      directors in excess of reasonable compensation or that is not otherwise
      commensurate with past practices or for companies similarly situated with
      Borrower.

     

    M. Investments.
      Unless
      specifically permitted by Lender, Borrower is prohibited from holding any
      investments which (i) are not guaranteed by the United States (Treasury
      obligations); or (ii) are not issued by financial institutions that are insured
      by the FDIC or have capital in excess of $25,000,000.

     

    N. Conflicting
      Agreements; Default.
      Borrower will not enter into any agreement any term or condition of which
      conflicts with any provision of this Agreement or the other Loan Documents,
      or
      default under any material agreement with any other Person.

     

    O. Prepayments.
      Other
      than Indebtedness to Lender or Borrower’s trade creditors, Borrower is
      prohibited from prepaying any other Indebtedness; provided, however, Borrower
      may make prepayments on shareholder loans to the Borrower as long as such
      prepayment(s) do not cause, directly or indirectly, the Fixed Charge Coverage
      ratio to exceed 1.0.

     

    P. Transactions
      with Affiliates and Foreign Subsidiaries.
      Each
      Borrower is prohibited from entering into transactions with any of its Foreign
      Subsidiaries or affiliates, except in the ordinary course of and pursuant to
      the
      reasonable requirements of Borrower’s business and upon fair and reasonable
      terms no less favorable to Borrower than Borrower would obtain in a comparable
      arm’s length transaction with a Person not an affiliate.

     

    SECTION
      SEVEN - DEFAULT

     

    7.1 Events
      of Default.
      The
      occurrence of any one or more of the following events shall constitute an Event
      of Default or Default under this Agreement:

     

    
      
        
        

      

      
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    A. Monetary
      Default.
      Borrower shall fail to pay within three (3) business days after being due any
      installment of principal or interest, or any fee or charge payable hereunder
      or
      under any Loan Document.

     

    B. Nonmonetary
      Default.
      Borrower shall fail to observe or perform any covenant, representation or
      warranty to be observed or performed by them hereunder or under any of the
      Loan
      Documents (other than those covenants, representations and warranties covered
      by
      other subparagraphs of this Paragraph), and this failure shall continue for
      thirty (30) days after written notice of the failure from the
      Lender.

     

    C. Default
      to Third Persons.
      Borrower shall fail to pay any Indebtedness in excess of $100,000 due to any
      third Persons or an event of default occurs with respect to any Indebtedness,
      and this failure shall continue beyond any applicable grace period.

     

    D. False
      Financial Statements.
      Any
      financial statement, representation, warranty, or certificate made or furnished
      by Borrower to Lender in connection with this Agreement, or as inducement to
      Lender to enter into this Agreement, or in any separate statement or document
      to
      be delivered hereunder to Lender, shall be materially false, incorrect, or
      incomplete when made.

     

    E. Material
      Adverse Change in Borrower’s Condition.
      There
      shall occur a cessation of a material part of the business of the Borrower
      for a
      period which materially and adversely affects the Borrower's capacity to
      continue its business on a profitable basis; or the Borrower shall suffer the
      loss or revocation of any license or permit now held or hereafter acquired
      by
      the Borrower which is necessary to the continued or lawful operation of its
      business; or the Borrower shall be enjoined, restrained or in any way prevented
      by court, governmental or administrative order from conducting all or any
      material part of its business affairs; or any material lease or agreement
      pursuant to which the Borrower leases, uses or occupies any Property shall
      be
      canceled or terminated prior to the expiration of its stated term; or any
      material part of the Collateral shall be taken through condemnation or the
      value
      of such Collateral shall be materially impaired through
      condemnation.

     

    F. Enforceability
      of Loan Documents.
      Any of
      the Loan Documents ceases for any reason to be in full force and effect or
      any
      Lien created under any Loan Documents ceases to constitute a valid first
      priority perfected Lien (subject only to Permitted Liens) on the Collateral
      in
      accordance with the terms thereof 

     

    G. Borrower
      Challenge to Loan Documents.
      The
      Borrower shall challenge or contest in any action, suit or proceeding the
      validity or enforceability of this Agreement or any of the other Loan Documents,
      the legality or enforceability of any of the Obligations or the perfection
      or
      priority of any lien granted to the Lender.

     

    H. Violation
      of Laws.
      Borrower shall violate and/or fail to comply in all material respects with
      all
      federal, state and local laws, regulations and orders applicable to Borrower,
      its assets or the Collateral, including but not limited to all Environmental
      Laws, ERISA, the Sarbanes-Oxley Act of 2002 or the any federal or state
      racketeering statute (including, without limitation, the Racketeer Influenced
      and Corrupt Organization Act of 1970). 

     

    I. Inability
      to Pay Debts.
      Borrower shall admit its inability to pay its debts as they mature, or shall
      make an assignment for the benefit of it or any of its creditors.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    

     

    J. Bankruptcy.
      Proceedings in Bankruptcy, or for reorganization of Borrower, or for the
      readjustment of any of their respective debts, under the Bankruptcy Code, as
      amended, or any part thereof, or under any other laws, whether state or federal,
      for the relief of debtors, now or hereafter existing, shall be commenced against
      Borrower and shall not be discharged within sixty (60) days of their
      commencement, or any such proceeding shall be commenced by
      Borrower.

     

    K. Appointment
      of Receiver.
      A
      receiver or trustee shall be appointed for Borrower or for any substantial
      part
      of their respective assets, or any proceedings shall be instituted for the
      dissolution or the full or partial liquidation of Borrower, and the receiver
      or
      trustee shall not be discharged within sixty (60) days of his or her
      appointment, or the proceedings shall not be discharged within sixty (60) days
      of their commencement, or Borrower shall discontinue business or materially
      change the nature of its business.

     

    L. Adverse
      Judgment.
      Borrower shall suffer final judgments, whether by a court of competent
      jurisdiction or by arbitration, for payment of money aggregating in excess
      of
      $100,000 and shall not discharge the same within a period of sixty (60) days,
      unless, pending further proceedings, execution has been effectively
      stayed.

     

    M. Repossession
      of Collateral.
      A
      judgment creditor of Borrower shall obtain possession of any of the Collateral
      by any means, including but without limitation, garnishment, levy, distraint,
      replevin, or self help.

     

    N. Default
      by Subordinate Lenders.
      Any
      obligee of Subordinated Indebtedness shall fail to comply with the subordination
      provisions of the instruments evidencing the Subordinated
      Indebtedness.

     

    O. Notice
      of Federal Tax Lien.
      The
      filing against Borrower of any notice of federal tax lien and Borrower’s failure
      to discharge or contest in good faith such lien within sixty (60) days after
      Borrower’s knowledge thereof.

     

    7.2 Acceleration.
      Immediately, and without notice, on the occurrence of an Event of Default,
      all
      Obligations, whether hereunder or under any Loan Document, shall, at the option
      of Lender, immediately become due and payable without further action of any
      kind
      and Lender shall be under no obligation to make any further or additional Loan
      or advance hereunder.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    

     

    7.3 Remedies.
      After
      any acceleration, Lender shall have, in addition to the rights and remedies
      given to it by this Agreement and the Loan Documents, all those rights and
      remedies allowed by all applicable laws, including, but not limited to, the
      Uniform Commercial Code as enacted in any jurisdiction in which any Collateral
      may be located. Without limiting the generality of the foregoing, Lender,
      immediately and without demand of performance and without other notice (except
      as specifically required by this Agreement or the Loan Documents) or demand
      whatsoever to Borrower, all of which are hereby expressly waived, and, without
      advertisement, may sell at public or private sale, or otherwise realize on,
      at a
      time and place convenient to Lender, the whole, or from time to time, any part
      of the Collateral, or any interest that Borrower may have therein. After
      deducting from the proceeds of sale or other disposition of the Collateral
      all
      expenses, including all reasonable expenses for legal services, Lender shall
      apply such proceeds towards the satisfaction of the Obligations. Any remainder
      of the proceeds after satisfaction in full of the Obligations shall be
      distributed as required by applicable laws. Notice of any sale or other
      disposition shall be given to Borrower at least ten (10) days before the time
      of
      any intended public sale or of the time after which any intended private sale
      or
      other disposition of the Collateral is to be made, which Borrower hereby agrees
      shall be reasonable notice of such sale or other disposition. Borrower agrees
      to
      assemble, or cause to be assembled, at its own expense the Collateral at such
      place or places as Lender shall designate. At any such sale or other
      disposition, Lender, to the extent permissible under applicable laws, may
      purchase the whole or any part of the Collateral, free from any right of
      redemption on the part of Borrower, which right is hereby waived and released.
      Without limiting the generality of any of the rights and remedies conferred
      on
      Lender under this paragraph, Lender, to the full extent permitted by applicable
      laws after acceleration of the Obligations, may:

     

    A. Repossession.
      Enter
      on the premises of Borrower, exclude therefrom Borrower or any affiliate, and
      take immediate possession of the Collateral, either personally or by means
      of a
      receiver appointed by a court of competent jurisdiction;

     

    B. Use
      Collateral.
      At
      Lender’s option, use, operate, manage, and control the Collateral in any
      manner;

     

    C. Collect
      Income.
      Collect
      and receive all rents, income, revenue, earnings, issues, and profits of
      Borrower arising out of or in connection with the Collateral; and

     

    D. Maintain
      Collateral.
      Maintain, repair, renovate, alter, or remove the Collateral as Lender may
      determine in its discretion.

     

    SECTION
      EIGHT - MISCELLANEOUS

     

    8.1 Construction
      of Agreement.
      As used
      herein, the singular shall include the plural and the masculine shall include
      the feminine and neuter and vice versa, as the context so requires. The
      provisions of this Agreement shall be in addition to those of any guaranty,
      pledge, security agreement, note, or other evidence of liability held by Lender,
      all of which shall be construed as complementary to each other. Nothing herein
      contained shall prevent Lender from enforcing any or all other notes, guaranty,
      pledge, or security agreements in accordance with their respective
      terms.

     

    8.2 Joint
      and Several Liability.
      If
      there is more than one Borrower hereunder, Obligations hereunder shall be joint
      and several.

     

    8.3 Successors
      and Assigns.
      This
      Agreement shall be binding on Borrower, its successors and assigns, and shall
      inure to the benefit of and be enforceable by the Lender, its successors and
      assigns (including, without limitation, any entity to which the Lender assigns
      or sells all or any portion of its interest in the Loan).

     

    8.4 Further
      Assurances.
      From
      time to time, Borrower shall execute and deliver to Lender such additional
      documents and will provide such additional information as Lender may reasonably
      require to carry out the terms of this Agreement and be informed of Borrower’s
      status and affairs.

     

    8.5 Enforcement
      and Waiver by Lender.
      Lender
      shall have the right at all times to enforce the provisions of this Agreement
      and the Loan Documents in strict accordance with their terms, notwithstanding
      any conduct or custom on the part of Lender in refraining from so doing at
      any
      time or times. The failure of Lender at any time or times to enforce its rights
      under such provisions, strictly in accordance with the same, shall not be
      construed as having created a custom in any way or manner contrary to specific
      provisions of this Agreement or as having in any way or manner modified or
      waived the same. All rights and remedies of Lender are cumulative and
      concurrent, and the exercise of one right or remedy shall not be deemed a waiver
      or release of any other right or remedy.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    8.6 Expenses
      of Lender.
      Borrower, on demand, will reimburse Lender for all expenses, including the
      reasonable fees and expenses of legal counsel for Lender, incurred by Lender
      in
      connection with the preparation, administration, amendment, modification, or
      enforcement of this Agreement and the Loan Documents, and the collection or
      attempted collection of the Note. Notwithstanding the foregoing, Borrower and
      Lender agree that the costs payable by Borrower in connection with the
      origination of the Loan (i.e., attorney fees, loan documentation costs,
      recording fees, etc.) shall not exceed $10,000.

     

    8.7 Notices.
      Any
      notices or consents required or permitted by this Agreement shall be in writing
      and shall be deemed delivered if delivered in person, or, if sent by certified
      mail, postage prepaid, return receipt requested, or if sent by overnight
      delivery, or if sent by facsimile, as follows, unless such address is changed
      by
      written notice similarly delivered:

    

      
        	
                A.   
                  If to Borrower: 

              	
                Decorize,
                  Inc.

              
	 	
                1938
                  E. Phelps

              
	 	
                Springfield,
                  Missouri 65802

              
	 	
                Attn.:
                  BJ Montle

              
	 	
                Facsimile:
                  (417) 879-3330

              
	 	 
	
                With
                  copy to:

              	
                Hallett
                  & Perrin, P.C.

              
	 	
                2001
                  Bryan Street, Suite 3900

              
	 	
                Dallas,
                  Texas  75201

              
	 	
                Attn:
                  M. Christopher Miller

              
	 	
                Facsimile: 
                  (214) 922-4144

              
	 	 
	
                B.    
                  If to Lender: 

              	
                Guaranty
                  Bank

              
	 	
                1341
                  W. Battlefield

              
	 	
                Springfield,
                  Missouri 65807

              
	 	
                Attn.:Doug
                  Thornsberry, Senior Vice President

              
	 	
                Facsimile:
                  (417) 520-6074

              
	 	 
	
                With
                  copy to:

              	
                Blackwell
                  Sanders, LLP

              
	 	
                901
                  St. Louis Street, Ste. 1900

              
	 	
                Springfield,
                  Missouri 65806

              
	 	
                Attn.:
                  Richard E. Walters

              
	 	
                Facsimile:
                  (417) 268-4040

              

      

    

    

    8.8 Waiver
      and Release by Borrower.
      To the
      maximum extent permitted by applicable laws, Borrower waives: (i) protest of
      all
      commercial paper at any time held by the Lender on which the Borrower is in
      any
      way liable; and (ii) notice of acceleration and of intention to accelerate,
      and
      notice and opportunity to be heard, after acceleration in the manner provided
      in
      this Agreement, before exercise by Lender of the remedies of self-help, set
      off,
      or of other summary procedures permitted by any applicable laws or by any
      agreement with Borrower, and, except when required hereby or by any applicable
      laws, notice of any other action taken by Lender; and

     

    8.9 Governing
      Law.
      It is
      agreed that this Agreement shall be governed by, construed, and enforced in
      accordance with the internal laws of the State of Missouri.

     

    8.10 Binding
      Effect.
      This
      Agreement shall inure to the benefit of, and shall be binding on, the respective
      successors and permitted assigns of the parties.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    8.11 Assignment.
      Borrower has no right to assign any of its rights or obligations under this
      Agreement without the prior, express, and written consent of Lender, which
      consent Lender may withhold in its sole discretion. 

     

    8.12 Entire
      Agreement.
      This
      Agreement shall constitute the entire Agreement between the parties and any
      prior understanding or representation of any kind preceding the date of this
      Agreement shall not be binding on either party except to the extent incorporated
      in this Agreement.

     

    8.13 Modification
      of Agreement.
      Any
      modification of this Agreement or additional obligation assumed by either party
      in connection with this Agreement shall be binding only if evidenced in writing
      signed by each party or an authorized representative of each party.

     

    ORAL
      AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
      ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
      ARE NOT ENFORCEABLE REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT
      IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU (BORROWER) AND
      US
      (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH
      COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE
      AND
      EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE
      IN
      WRITING TO MODIFY IT.

    

    8.14 Paragraph
      Headings.
      The
      titles to the paragraphs of this Agreement are solely for the convenience of
      the
      parties and shall not be used to explain, modify, simplify, or aid in the
      interpretation of the provisions of this Agreement.

     

    8.15 Severability.
      If any
      provision of this Agreement shall be held invalid under any applicable laws,
      such invalidity shall not affect any other provision of this Agreement that
      can
      be given effect without the invalid provision, and, to this end, the provisions
      of this Agreement are severable.

     

    8.16 Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed to be an original, but all of which together shall constitute but one
      and
      the same instrument.

     

    8.17 Terms
      Generally.
      All
      capitalized terms used and not otherwise defined herein shall have the meanings
      given them in the UCC.

     

    8.18 WAIVER
      OF JURY TRIAL.
      BORROWER HEREBY WAIVES ANY RIGHTS THAT IT MAY HAVE TO A JURY TRIAL IN ANY
      CONTROVERSY ARISING UNDER THIS AGREEMENT OR UNDER ANY OF THE LOAN DOCUMENTS.
      BORROWER SHALL, IF DIRECTED BY LENDER, FILE EVIDENCE OF THIS WAIVER WITH A
      COURT
      OF COMPETENT JURISDICTION IN COMPLIANCE WITH MISSOURI SUPREME COURT RULE
      69.01(b), AND IF BORROWER FAILS TO FILE SUCH EVIDENCE WITHIN FIVE (5) DAYS
      AFTER
      THE LENDER’S REQUEST, BORROWER HEREBY GRANTS TO THE LENDER AN IRREVOCABLE POWER
      OF ATTORNEY (WHICH SHALL BE DEEMED TO BE COUPLED WITH AN INTEREST) TO FILE
      EVIDENCE OF THIS WAIVER WITH A COURT OF COMPETENT JURISDICTION IN ORDER TO
      EFFECT THIS WAIVER AS PROVIDED IN MISSOURI SUPREME COURT RULE
      69.01(b).

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    

     

    8.19 CHOICE
      OF FORUM.
      SUBJECT ONLY TO THE EXCEPTION IN THE NEXT SENTENCE, BORROWER AND LENDER HEREBY
      AGREE TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL COURT OF THE WESTERN DISTRICT
      OF MISSOURI AND THE STATE COURTS OF MISSOURI LOCATED IN GREENE COUNTY AND WAIVE
      ANY OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH RESPECT TO ANY ACTION
      INSTITUTED THEREIN, AND AGREE THAT ANY DISPUTE CONCERNING THE RELATIONSHIP
      BETWEEN LENDER AND BORROWER OR THE CONDUCT OF ANY OF THEM IN CONNECTION WITH
      THIS NOTE OR OTHERWISE SHALL BE HEARD ONLY IN THE COURTS DESCRIBED ABOVE.
      NOTWITHSTANDING THE FOREGOING,
      BORROWER AND LENDER ACKNOWLEDGE THAT ANY APPEALS FROM THE COURTS DESCRIBED
      IN
      THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED
      OUTSIDE THOSE JURISDICTIONS.

     

    [SIGNATURE
      PAGES FOLLOW]

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      undersigned has caused this Agreement to be executed by an authorized
      representative effective on the date recited above.

     

    
      	 	 	 
	 	LENDER:
	 	 
	 	
              GUARANTY BANK, a state chartered trust company
                

              with banking powers 

            
	 
 	 
 	 
 
	 	By:  	/s/ Douglas W. Thornsberry
	 	Name:     	
              
                

              

              Douglas W. Thornsberry

            
	 	Title: 	Senior Vice President

    

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      undersigned have caused this Agreement to be executed by an authorized
      representative effective on the date recited above.

     

    
      	 	 	 
	 	BORROWER:
	 	 
	 	DECORIZE, INC., a Delaware
              corporation
	 
 	 
 	 
 
	 	By:  	/s/ Steve Crowder
	 	
               

              Name:     

            	
              
Steve
              Crowder
	 	Title: 	President and
              CEO

    

    
       

      
        	 	 	 
	 	GUILDMASTER, INC., a Missouri
                corporation
	 
 	 
 	 
 
	 	By:  	/s/ Steve Crowder
	 	
                 

                Name:     

              	
                
Steve
                Crowder
	 	Title: 	President and
                CEO

      

       

      
        
          	 	 	 
	 	
                   

                   

                
	 	FAITH WALK DESIGNS, INC., a Missouri
                  corporation
	 
 	 
 	 
 
	 	By:  	/s/ Gaylen Ball 
	 	
                   

                  Name:      

                	
                  
Gaylen
                  Ball
	 	Title: 	Secretary

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

      

    

    EXHIBIT
      1

    Borrowing
      Base Certificate

     

    To: Guaranty
      Bank 

     

    Please
      refer to the Credit Agreement dated as of October 19, 2007 (as amended,
      restated, supplemented or otherwise modified from time to time, the
“Credit
      Agreement”)
      between DECORIZE, INC., a Delaware corporation, GUILDMASTER, INC., a Missouri
      corporation, and FAITH WALK DESIGNS, INC., a Missouri corporation (each
      individually and collectively, the “Borrower”),
      and
      GUARANTY BANK, a state chartered trust company with banking powers (the
“Lender”).
      This
      certificate (this “Certificate”),
      together with supporting calculations attached hereto as Exhibit 1-A, is
      delivered to you pursuant to the terms of the Credit Agreement. Capitalized
      terms used but not otherwise defined herein shall have the same meanings herein
      as in the Credit Agreement.

     

    Borrower
      hereby certifies and warrants to the Lender that: (i) at the close of business
      on ______________, ____ (the “Calculation
      Date”),
      the
      Borrowing Base was $_____________, computed as set forth on the schedule
      attached hereto as Exhibit 1-A; and (ii) the Company has kept, observed,
      performed, and fulfilled all its Obligations under the Credit Agreement, (iii)
      and all of Borrower’s Representations and Warranties are true and correct in all
      material respects, and (iv) and that no Event of Default has
      occurred.

     

    The
      Company has caused this Certificate to be executed and delivered by its officer
      thereunto duly authorized on ___________,
      ______.

     

    
      
        
          	 	 	 
	 	BORROWER:
	 	 
	 	DECORIZE, INC., a Delaware
                  corporation
	 
 	 
 	 
 
	 	By:  	 
	 	Name:	 
	 	Title:
                  	 

        

         

        
          
            
              
                
                  	 	 	 
	 	GUILDMASTER, INC., a Missouri
                          corporation
	 
 	 
 	 
 
	 	By:  	 
	 	Name: 	 
	 	Title:
                          	 

                

                
                   

                

              

            

          

        

      

      
        
          	 	 	 
	 	FAITH WALK DESIGNS, INC., a Missouri
                  corporation
	 
 	 
 	 
 
	 	By:  	 
	 	Name:	 
	 	Title:
                  	 

        

        
           

        

      

    

    

    
      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

    

    

    

    EXHIBIT
      1-A

     

    Borrowing
      Base Calculation

     

    
      
        	1)	
              	
                Total
                  Accounts Receivable

              

      

      

      
        	2)	
              	
                Less:
                  Ineligible Accounts

              

      

       

      
        	 	a. 	All account balances more than 90
                days from
                original invoice date (Section 1.12(a)):

      

       

      
        	 	b.	All accounts of account debtors with
≥ 20% of
                outstanding balance more than 90 days from original invoice date
                (Section
                1.12(aa)):

      

      
         

        
          	 	c. 	
                  The
                    portion of each account debtor’s outstanding balance that (when combined
                    with account debtor’s remaining balance) exceeds 20% of Line 1 above
                    (Section 1.12(bb)):

                

        

        
           

          
            	 	d.	Account debtor and account balance
                    not subject
                    to the immediately preceding exclusion in (c)
                    above:

          

          
             

            
              	 	e. 	
                      Ineligible
                        for all other reasons (Section 1.12 (a through
                        i)):

                    

            

            
               

              
                	 	f.  	Total Ineligible Accounts
                        (a + b + c - d +
                        e)

              

                     

            

          

        

      

      
        	3)	
              	
                Eligible
                  Accounts Receivable (Line 1 minus Line
                  2(f))

              

      

       

      
        
          	4)	
                	Accounts Receivable Borrowing Base
                  (Line 3
                  multiplied by 0.8)

        

         

        
          
            	5) 	
                  	Total
                    Inventory

          

           

          
            
              	6)	
                    	Less: Inventory reserves (shrinkage,
                      damage,
                      obsolescence, etc.)

            

             

            
              
                	7) 	
                      	Net Inventory (Line 5 minus
                        Line
                        6)

              

               

              
                	8) 	
                      	Less: Ineligible Inventory
                        (Section
                        1.13)

              

              
                 

                
                  	9)	
                        	Eligible Inventory (Line
                          7 minus Line
                          8)

                

                
                   

                  
                    	10)	
                          	Inventory Borrowing Base
                            (Line 9 multiplied by
                            0.5)

                  

                  
                     

                    
                      	11)	
                            	Total Borrowing Base
                              (Line 4 plus Line
                              10)

                    

                    
                       

                      
                        	12)	
                              	Revolving Line of
                                Credit
                                Balance

                      

                      
                         

                        
                          	13)	
                                	Line 11 minus Line
                                  12:

                        

                        
                           

                          
                            	 	a.	If a positive
                                    number: Borrowing Base
                                    Availability

                          

                          
                            
                               

                              
                                	 	or,	 

                              

                               

                            

                            
                              	 	b. 	If a negative
                                      number: Required
                                      Repayment

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    EXHIBIT
      2

     

    Compliance
      Certificate

     

    To: Guaranty
      Bank, as Lender

     

    Ladies
      and Gentlemen: 

    

    This
      Compliance Certificate is being delivered pursuant to Section 6.1(A)(4) of
      the
      Credit Agreement dated as of October 19, 2007 (the “Credit
      Agreement”),
      among
      GUARANTY BANK, a state chartered trust company with banking powers (“Lender”)
      and DECORIZE, INC., a Delaware corporation, GUILDMASTER, INC., a Missouri
      corporation, and FAITH WALK DESIGNS, INC., a Missouri corporation (each
      individually and collectively, the “Borrower”). Terms not otherwise defined
      herein shall have the meanings assigned to such terms in the Credit
      Agreement.

    

    Borrower
      hereby certifies and warrants to the Lender that the following is a true and
      correct computation as of the date of this Compliance Certificate of the
      following ratios and/or financial restrictions contained in the Credit
      Agreement:

     

    
      
        	
                A.

              	
                Section
                  6.1(W)(1) - Minimum Fixed Charge Coverage
                  Ratio

              
	 	 	 	 
	
                1.

              	
                EBITDA

              	
                $________

              	 
	 	 	 	 
	
                2.

              	
                Fixed
                  Charges

              	
                $________

              	 
	 	 	 	 
	 	
                a.

              	
                Cash
                  Interest Expense

              	
                $________

              
	 	 	 	 
	 	
                b.

              	
                Scheduled
                  and unscheduled principal

              	 
	 	 	
                payments
                  on long term Indebtedness

              	
                $________

              
	 	 	 	 	 
	 	
                c.

              	
                Capital
                  expenditures for maintenance and repair

              	
                $________

              
	 	 	 	 	 
	 	
                d.

              	
                Federal,
                  state and local income taxes paid

              	
                $________

              
	 	 	 	 	 
	 	
                e.

              	
                Management
                  fees (whether accrued or paid in cash) 

              	
                $________

              
	 	 	 	 	 
	
                3.

              	
                Ratio
                  of (1) to (2)

              	
                ____
                  to 1

              	 
	 	 	 
	
                B.

              	
                Section
                  6.1(W)(2) - Maximum Senior Indebtedness to EBITDA
                  Ratio

              	 
	 	 	 	 
	
                1.

              	
                Senior
                  Indebtedness

              	
                $________

              	 
	 	 	 	 
	
                2.

              	
                EBITDA

              	
                $________

              	 
	 	 	 	 
	
                3.

              	
                Ratio
                  of (1) to (2)

              	
                ____
                  to 1

              	 

      

    

    

    

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

    C.          
      Section
      6.1(W)(4) - Capital Expenditures

     

    1.            
      Capital
      Expenditures for the

    last
      four
      (4) Fiscal Quarters    
 $__________

     

    Borrower
      further certifies to you that no Event of Default has occurred and is
      continuing.

     

    Borrower
      has caused this Compliance Certificate to be executed and delivered by its
      duly
      authorized officer on _________, ____.

     

    
      
        
          
            	 	 	 
	 	BORROWER:
	 	 
	 	DECORIZE, INC., a Delaware
                    corporation
	 
 	 
 	 
 
	 	By:  	 
	 	Name:	 
	 	Title:
                    	 

          

           

          
            
              
                
                  
                    	 	 	 
	 	GUILDMASTER, INC., a Missouri
                            corporation
	 
 	 
 	 
 
	 	By:  	 
	 	Name: 	 
	 	Title:
                            	 

                  

                  
                     

                  

                

              

            

          

        

        
          
            	 	 	 
	 	FAITH WALK DESIGNS, INC., a Missouri
                    corporation
	 
 	 
 	 
 
	 	By:  	 
	 	Name:	 
	 	Title:
                    	 

          

          
             

          

        

      

    

    
      
        
          
            
            

          

          
            33

            
              

            

          

          
            
            

          

        

    

    EXHIBIT
      3

     

    Subordinated
      Indebtedness

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    EXHIBIT
      4

     

    Request
      for Advance

    (Revolving
      Loan)

     

    
      	To: 	Guaranty Bank 

      	
              From:

            	
              Decorize,
                Inc., GuildMaster, Inc. and Faith Walk Designs,
                Inc.

            

    

    
      	 	
              (each
                individually and collectively, the
“Borrower”)

            

    

    

    This
      Request for Advance is delivered pursuant to the Credit Agreement (the “Credit
      Agreement”) dated October 19, 2007, by and among GUARANTY BANK, a state
      chartered trust company with banking powers (“Lender”) and DECORIZE, INC., a
      Delaware corporation, GUILDMASTER, INC., a Missouri corporation, and FAITH
      WALK
      DESIGNS, INC., a Missouri corporation (each individually and collectively,
      the
“Borrower”). All terms used herein shall have the meaning set forth in the
      Credit Agreement.

    

    Borrower
      hereby gives irrevocable notice of a request for a borrowing as
      follows:

    

    
      	
              Request
                for borrowing under Revolving Line of Credit Balance:

            	
              $_________________

            
	
              Plus:
                Previous Revolving Line of Credit Balance:

            	
              $_________________

            
	
              Equals:
                New Revolving Line of Credit Balance:

            	
              $_________________

            

    

    

    The
      Borrower hereby represents, warrants, ratifies and confirms that, on the date
      hereof and as of the date of the Advance as set forth above, (i) Borrower has
      kept, observed, performed, and fulfilled all its Obligations under the Credit
      Agreement, (ii) and all of Borrower’s Representations and Warranties are true
      and correct in all material respects, (iii) and that no Event of Default has
      occurred, (iv) that all information contained in this Request for Advance is
      true and correct and (v) that the new revolving line of credit balance amount
      set forth above does not exceed the lessor of: (a) $3,000,000.00, or (b) the
      Borrowing Base.

    

    EXECUTED
      this ______ day of _______________, 20___.

      

      
        
          
            	 	 	 
	 	BORROWER:
	 	 
	 	DECORIZE, INC., a Delaware
                    corporation
	 
 	 
 	 
 
	 	By:  	 
	 	Name:	 
	 	Title:
                    	 

          

           

          
            
              
                
                  
                    	 	 	 
	 	GUILDMASTER, INC., a Missouri
                            corporation
	 
 	 
 	 
 
	 	By:  	 
	 	Name: 	 
	 	Title:
                            	 

                  

                  
                     

                  

                

              

            

          

        

        
          
            	 	 	 
	 	FAITH WALK DESIGNS, INC., a Missouri
                    corporation
	 
 	 
 	 
 
	 	By:  	 
	 	Name:	 
	 	Title:
                    	 

          

          
             

          

        

      

    

    
      
        
          
            
            

          

          
            35

            
              

            

          

          
            
            

          

        

    

    EXHIBIT
      5

     

    Subsidiaries
      and Partnerships

     

    
      	 	
              1.

            	
              GuildMaster,
                Inc., a Missouri corporation, 100% owned domestic
                subsidiary.

            

    

    

    
      	 	
              2.

            	
              Faith
                Walk Designs, Inc., a Missouri corporation, 100% owned domestic
                subsidiary

            

    

    

    
      	 	
              3.

            	
              Westway
                Enterprises, Ltd., 100% owned foreign subsidiary, located in Guangdong,
                China.

            

    

    

    
      	 	
              4.

            	
              P.T.
                Niaga Merapi, a 100% owned foreign subsidiary, located in Yogyakarta,
                Indonesia.

            

    

    

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    EXHIBIT
      6

     

    Material
      Leases, Contracts or Commitments

     

    None.

    
      
        
        

      

      
        37

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