Document:

Greystone
        Business Credit II, L.L.C.

      
        

      

       

      Loan
        and Security Agreement

    

     

    This
      Loan
      and Security Agreement (as it may be amended, this "Agreement")
      is
      entered into on December 14, 2007 between Greystone
      Business Credit II, L.L.C. ("Lender"),
      having an address at 152 West 57th Street, 60th Floor, New York, New York
      10019 and Titan
      Apparel, Inc. ("Borrower"),
      a
      Delaware corporation, whose principal office is located at 1700 Jay Ell Drive,
      Suite 200, Richardson, Texas 75081 ("Borrower's
      Address").
      The
      Schedules to this Agreement are an integral part of this Agreement and are
      incorporated herein by reference. Terms used, but not defined elsewhere, in
      this
      Agreement are defined in Schedule B.

     

    
      	
              1.

            	
              LOANS.

            

    

     

    1.1 Amount.
      Subject
      to the terms and conditions contained in this Agreement, Lender
      will:

     

    (a) Revolving
      Loans and Credit Accommodations. From
      time
      to time during the Term at Borrower's request, make revolving loans to Borrower
      ("Revolving
      Loans"),
      and
      make letters of credit, bankers acceptances and other credit accommodations
      ("Credit
      Accommodations")
      available to Borrower, in each case to the extent that there is sufficient
      Availability for Borrower at the time of such request to cover, dollar for
      dollar, the requested Revolving Loan or Credit Accommodation of Borrower;
provided,
      that
      after giving effect to such Revolving Loan or Credit Accommodation, (x) the
      outstanding balance of all monetary Obligations (excluding
      the
      principal balance of any Term Loans and including
      the
      Credit Accommodation Balance) will not exceed the Maximum Facility Amount set
      forth in Section 1(a) of Schedule A and (y) none of the other
      Loan Limits for Revolving Loans set forth in Section 1 of Schedule A
      will be exceeded. For this purpose,
      "Availability"
      means,
      with respect to Borrower:

     

    (i) the
      aggregate amount of Borrower's Eligible Accounts (less maximum existing or
      asserted taxes, discounts, credits and allowances) multiplied by the Accounts
      Advance Rate set forth in Section 1(b)(i) of Schedule A;

     

    plus

     

    (ii) the
      lower
      of cost or market value of Borrower's Eligible Inventory multiplied by the
      applicable Inventory Advance Rate set forth in Section 1(b)(ii) of
      Schedule A, but not to exceed the Inventory Sublimit set forth in
      Section 1(c) of Schedule A;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      
        	
                Greystone
                  Business Credit II, L.L.C.

              	 	
                Loan
                  and Security
                  Agreement

              

      

    

     

    minus

     

    (iii) all
      Reserves with respect to Borrower which Lender has established pursuant to
      Section 1.2 (including those to be established in connection with the
      requested Revolving Loan or Credit Accommodation);

     

    minus

     

    (iv) the
      outstanding balance of all monetary Obligations with respect to Borrower
      (excluding
      the
      principal balance of the Term Loan but including
      the
      Credit Accommodation Balance).

     

    (b) Term
      Loan.
      Make on
      the date of this Agreement an advance to Borrower in the principal amount set
      forth in Section 2(a) of Schedule A (the "Advance").
      The
      Advance is referred to as a "Term
      Loan Advance"
      and the
      "Term
      Loan"
      and
      will be wired to Borrower's Bank set forth in Section 16 of Schedule A. The
      Term
      Loan will be evidenced by a term note in the form attached hereto as Exhibit
      A.

     

    1.2 Reserves.
      Lender
      may from time to time establish and revise such reserves as Lender deems
      appropriate in its sole discretion ("Reserves")
      to
      reflect (i) events, conditions, contingencies or risks which affect or may
      affect (A) the Collateral or its value, or the security interests and other
      rights of Lender in the Collateral or (B) the assets, business or prospects
      of Borrower or any Obligor, (ii) Lender's good faith concern that any
      Collateral report or financial information furnished to Lender by or on behalf
      of Borrower or any Obligor is or may have been incomplete, inaccurate or
      misleading in any material respect, (iii) any fact or circumstance which
      Lender determines in good faith constitutes, or could constitute, a Default
      or
      Event of Default or (iv) any other events or circumstances which Lender
      determines in good faith make the establishment or revision of a Reserve
      prudent. Without limiting the foregoing, Lender shall (x) in the case of
      each Credit Accommodation issued for the purchase of Inventory (a) which
      meets the criteria for Eligible Inventory set forth in clauses (i), (ii), (iii),
      (v) and (vi) of the definition of Eligible Inventory, (b) which is or will
      be in transit to one of the locations set forth in Sections 9(d)
      of
      Schedule A, (c) which is fully insured in a manner satisfactory to
      Lender and (d) with respect to which Lender is in possession of all bills
      of lading and all other documentation which Lender has requested, all in form
      and substance satisfactory to Lender in its sole discretion, establish a Reserve
      equal to the cost of such Inventory (plus all duties, freight, taxes, insurance,
      costs and other charges and expenses relating to such Credit Accommodation
      or
      such Eligible Inventory) multiplied by a percentage equal to 90% minus the
      Inventory Advance Rate applicable to such Eligible Inventory and (y) in the
      case of any other Credit Accommodation issued for any other purpose, establish
      a
      Reserve equal to the full amount of such Credit Accommodation plus all costs
      and
      other charges and expenses relating to such Credit Accommodation. Lender may,
      in
      its discretion, establish and revise Reserves by deducting them in determining
      Availability or by reclassifying Eligible Accounts or Eligible Inventory as
      ineligible. In no event shall the establishment of a Reserve in respect of
      a
      particular actual or contingent liability obligate Lender to make advances
      to
      pay such liability or otherwise obligate Lender with respect
      thereto.

    
       

      
        
          
          

        

        
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                  Greystone
                    Business Credit II, L.L.C.

                	 	
                  Loan
                    and Security
                    Agreement

                

        

      

       

    

    1.3 Other
      Provisions Applicable to Credit Accommodations.
      Lender
      may, in its sole discretion and on terms and conditions acceptable to Lender,
      make Credit Accommodations available to Borrower either by issuing them, or
      by
      causing other financial institutions to issue them supported by Lender's
      guaranty or indemnification; provided,
      that
      after giving effect to each Credit Accommodation, the Credit Accommodation
      Balance will not exceed the Credit Accommodation Limit set forth in
      Section 1(d) of Schedule A. Any amounts paid by Lender in respect of a
      Credit Accommodation to Borrower will be treated for all purposes as a Revolving
      Loan to Borrower which shall be secured by the Collateral and bear interest,
      and
      be payable, in the same manner as a Revolving Loan. Borrower agrees to execute
      all documentation required by Lender or the issuer of any Credit Accommodation
      in connection with any such Credit Accommodation.

     

    1.4 Repayment.
      Accrued
      interest on all monetary Obligations shall be payable on the first day of each
      month. Principal of the Term Loan shall be repaid as set forth in
      Section 2(b) of Schedule A. Payments of principal in respect of the
      Term Loan may not be reborrowed. If at any time any of the Loan Limits are
      exceeded, Borrower will immediately pay to Lender such amounts (or provide
      cash
      collateral to Lender with respect to the Credit Accommodation Balance in the
      manner set forth in Section 7.3) as shall cause Borrower to be in full
      compliance with all of the Loan Limits. Notwithstanding the foregoing, Lender
      may, in its sole and absolute discretion, make or permit Revolving Loans, the
      Term Loan, any Credit Accommodations or any other monetary Obligations to be
      in
      excess of any of the Loan Limits; provided,
      that
      Borrower shall, upon Lender's demand, pay to Lender such amounts as shall cause
      Borrower to be in full compliance with all of the Loan Limits. Borrower shall
      pay to Lender as a mandatory prepayment, promptly after the receipt thereof
      by
      Borrower, all refunds of value added tax received by Borrower in respect of
      periods prior to the date hereof (the "VAT
      Refunds").
      Prior
      to the Maturity Date, such VAT Refunds indefeasibly received by Lender (net
      of
      any costs and expenses paid or advanced by Lender in connection with the
      collection thereof) shall be first applied by Lender to the then outstanding
      balance of the Term Loan until the Term Loan is paid in full, and thereafter
      paid to Lender as a fee. Borrower shall pay to Lender as a mandatory prepayment,
      promptly after the receipt thereof by Borrower, 50% of all proceeds of
      receivables included in the Collateral but deemed ineligible, as of the date
      hereof, for borrowing base purposes (“Ineligible
      Receivable Payments”). 
      Prior to
      the Maturity Date, such Ineligible Receivable Payments indefeasibly received
      by
      Lender shall be applied by Lender to the then outstanding balance of the Term
      Loan until the Term Loan is paid in full, and thereafter paid to Lender as
      a
      fee. All unpaid monetary Obligations shall be payable in full on the Maturity
      Date (as defined in Section 7.1) or, if earlier, the date of any early
      termination pursuant to Section 7.2.

    
       

      
        
          
          

        

        
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                  Greystone
                    Business Credit II, L.L.C.

                	 	
                  Loan
                    and Security
                    Agreement

                

        

      

       

    

    
      	
              2.

            	
              INTEREST
                AND FEES.

            

    

     

    2.1 Interest.
      Except
      where expressly set forth to the contrary in this Agreement or another Loan
      Document, all Revolving Loans and other monetary Obligations shall bear interest
      at the Interest Rate set forth in Section 3(a) of Schedule A and the
      Term Loan shall bear interest at the Interest Rate set forth in
      Section 3(b) of Schedule A; provided,
      that
      (i) after the occurrence of an Event of Default, all Loans and other
      monetary Obligations shall, at Lender's option, bear interest at a rate per
      annum equal to three percent (3%) in excess of the rate otherwise applicable
      thereto until paid in full (notwithstanding the entry of any judgment against
      Borrower or the exercise of any other right or remedy by Lender), and all such
      interest shall be payable on demand and (ii) after the occurrence of an
      Event of Default under either of clauses (vii) or (viii) of Section 8, the
      increase described in the foregoing clause (i) shall occur automatically and
      shall continue until all Loans and other monetary Obligations are paid in full.
      Changes in the Interest Rate shall be effective as of the date of any change
      in
      the Prime Rate. Notwithstanding anything to the contrary contained in this
      Agreement, the aggregate of all amounts deemed to be interest hereunder and
      charged or collected by Lender is not intended to exceed the highest rate
      permissible under any applicable law, but if it should, such interest shall
      automatically be reduced to the extent necessary to comply with applicable
      law
      and Lender will refund to Borrower any such excess interest received by
      Lender.

     

    2.2 Fees.
      Borrower
      shall pay Lender the following fees, which are in addition to all interest
      and
      other sums payable by Borrower to Lender under this Agreement, and are not
      refundable:

     

    (a) Credit
      Accommodation Fees.
      The fees
      relating to Credit Accommodations (or guaranties thereof by Lender) in the
      amount set forth in Section 6(a) of Schedule A (the "Credit
      Accommodation Fees"),
      payable, in arrears, on the first day of each month so long as any of the
      Obligations are outstanding and on the Maturity Date, plus all costs and fees
      charged by the issuer, payable as and when such costs and fees are
      charged.

     

    (b) Net
      Sales Participation.
      Borrower agrees to pay to Lender, monthly
      in arrears beginning 120 days from the date hereof and on the first day of
      each
      calendar month thereafter,
      an
      amount equal to five percent (5%) of Borrower's Net Sales (the "Net Sales
      Participation"). Such Net Sales Participation shall be applied by Lender to
      the
      outstanding balance of the Term Loan until the Term Loan is paid in full and
      thereafter shall be paid to Lender as a fee.

     

    (c) Sharing
      Fee. Borrower
      agrees to pay to Lender a fee in the amount of twenty-five percent (25%) of
      Borrower's Net Profits with respect to each of the first four full fiscal
      quarters of Borrower occurring after the date hereof. Such fee shall be deemed
      to be fully earned as of the last day of each such fiscal quarter, and payable
      on the date on which the financial statements of Borrower for such fiscal
      quarter are to be delivered pursuant to Section 5.15.

    
       

      
        
          
          

        

        
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                  Greystone
                    Business Credit II, L.L.C.

                	 	
                  Loan
                    and Security
                    Agreement

                

        

      

       

    

    2.3 Computation
      of Interest and Fees. All
      interest and fees shall be calculated daily on the closing balances in the
      Loan
      Account based on the actual number of days elapsed in a year of 360 days. For
      purposes of calculating interest and fees, if the outstanding daily principal
      balance of the Revolving Loans is a credit balance, such balance shall be deemed
      to be zero.

     

    2.4 Loan
      Account; Monthly Accountings. Lender
      shall maintain a loan account for Borrower reflecting all advances, charges,
      expenses and payments made pursuant to this Agreement (the "Loan
      Account"),
      and
      shall provide Borrower with a monthly accounting reflecting the activity in
      the
      Loan Account as soon as reasonably practicable. Each accounting shall be deemed
      correct, accurate and binding on Borrower and an account stated (except for
      reverses and reapplications of payments made and corrections of errors
      discovered by Lender), unless Borrower notifies Lender in writing to the
      contrary within sixty days after such account is rendered, describing the nature
      of any alleged errors or omissions. However, Lender's failure to maintain the
      Loan Account or to provide any such accounting shall not affect the legality
      or
      binding nature of any of the Obligations. Interest, fees and other monetary
      Obligations due and owing under this Agreement (including fees and other amounts
      paid by Lender to issuers of Credit Accommodations) may, in Lender's discretion,
      be charged to the Loan Account, and will thereafter be deemed to be Revolving
      Loans and will bear interest at the same rate as other Revolving
      Loans.

     

    
      	
              3.

            	
              SECURITY
                INTEREST.

            

    

     

    3.1 Grant
      of Security Interest. To
      secure
      the full payment and performance of all of the Obligations, Borrower hereby
      assigns to Lender and grants to Lender a continuing security interest in the
      following property of Borrower, whether tangible or intangible, now or hereafter
      owned, existing, acquired or arising and wherever now or hereafter located,
      and
      whether or not eligible for lending purposes: (i) all Accounts (whether or
      not Eligible Inventory) and all Goods whose sale, lease or other disposition
      by
      Borrower has given rise to Accounts and have been returned to, or repossessed
      or
      stopped in transit by, Borrower; (ii) all Chattel Paper, Instruments,
      Documents and General Intangibles (including all patents, patent applications,
      trademarks, trademark applications, trade names, trade secrets, goodwill,
      copyrights, copyright applications, registrations, licenses, software,
      franchises, customer lists, tax refund claims, claims against carriers and
      shippers, guarantee claims, contracts rights, payment intangibles, security
      interests, security deposits and rights to indemnification); (iii) all
      Inventory (whether or not Eligible Accounts); (iv) all Goods (other than
      Inventory), including Equipment, vehicles and Fixtures; (v) all Investment
      Property; (vi) all Deposit Accounts, bank accounts (including without
      limitation the Deposit Accounts and bank accounts described in Section 15 of
      Schedule A), deposits and cash; (vii) all Letter-of-Credit Rights;
      (viii) all Commercial Tort Claims listed in Section 14 of Schedule A;
      (ix) all Supporting Obligations; (x) any other property of Borrower
      now or hereafter in the possession, custody or control of Lender or any agent
      or
      any parent, Affiliate or Subsidiary of Lender or any participant with Lender
      in
      the Loans, for any purpose (whether for safekeeping, deposit, collection,
      custody, pledge, transmission or otherwise) and (xi) all additions and
      accessions to, substitutions for, and replacements, products and Proceeds of
      the
      foregoing property, including proceeds of all insurance policies insuring the
      foregoing property, and all of Borrower's books and records relating to any
      of
      the foregoing and to Borrower's business.

    
       

      
        
          
          

        

        
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                  Greystone
                    Business Credit II, L.L.C.

                	 	
                  Loan
                    and Security
                    Agreement

                

        

      

       

    

    3.2 Possessory
      Collateral.
      Immediately upon Borrower's receipt of any portion of the Collateral evidenced
      by an agreement, Instrument or Document, including any Tangible Chattel Paper
      and any Investment Property consisting of certificated securities, Borrower
      shall deliver the original thereof to Lender together with an appropriate
      endorsement or other specific evidence of assignment thereof to Lender (in
      form
      and substance acceptable to Lender). If an endorsement or assignment of any
      such
      items shall not be made for any reason, Lender is hereby irrevocably authorized,
      as Borrower's attorney and agent-in-fact, to endorse or assign the same on
      Borrower's behalf.

     

    3.3 Preservation
      of Collateral and Perfection of Security Interest Therein.
      Borrower
      shall, at Lender's request, at any time and from time to time, authenticate,
      execute and deliver to Lender such financing statements, documents and other
      agreements and instruments (and pay the cost of filing or recording the same
      in
      all public offices deemed necessary or desirable by Lender) and do such other
      acts and things or cause third parties to do such other acts and things as
      Lender may deem necessary or desirable in its sole and absolute discretion
      in
      order to establish and maintain a valid, attached and perfected security
      interest in the Collateral in favor of Lender (free and clear of all other
      liens, claims, encumbrances and rights of third parties whatsoever, whether
      voluntarily or involuntarily created, except Permitted Liens) to secure payment
      of the Obligations and to facilitate the collection of the Collateral. Borrower
      authorizes Lender to file, transmit, or communicate, as applicable, financing
      statements and amendments describing the Collateral as "all personal property
      of
      debtor" or "all assets of debtor" or words of similar effect, in order to
      perfect Lender's security interest in the Collateral without Borrower's
      signature. Borrower also hereby ratifies its authorization for Lender to have
      filed in any jurisdiction any financing statements filed prior to the date
      hereof.

     

    
      	
              4.

            	
              ADMINISTRATION.

            

    

     

    4.1 Lock
      Boxes and Blocked Accounts.
      Borrower
      will, at its expense, establish (and revise from time to time as Lender may
      require) procedures acceptable to Lender, in Lender's sole and absolute
      discretion, for the collection of checks, wire transfers and other proceeds
      of
      Accounts ("Account
      Proceeds"),
      which
      may include (i) directing all Account Debtors to send all such proceeds
      directly to a post office box designated by Lender either in the name of
      Borrower (but as to which Lender has exclusive access) or, at Lender's option,
      in the name of Lender (a "Lock
      Box")
      or
      (ii) depositing all Account Proceeds received by Borrower into one or more
      bank accounts maintained in Lender's name (each, a "Blocked
      Account"),
      under
      an
      arrangement acceptable to Lender with a depository bank acceptable to Lender,
      pursuant to which all funds deposited into each Blocked Account are to be
      transferred to Lender in such manner, and with such frequency, as Lender shall
      specify or (iii) a combination of the foregoing. Borrower agrees to
      execute, and to cause its depository banks to execute, such Lock Box and Blocked
      Account agreements and other documentation as Lender shall require from time
      to
      time in connection with the foregoing. 

    
       

      
        
          
          

        

        
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                  Greystone
                    Business Credit II, L.L.C.

                	 	
                  Loan
                    and Security
                    Agreement

                

        

      

       

    

    4.2 Remittance
      of Proceeds.
      Except
      as provided in Section 4.1, all Proceeds arising from the sale or other
      disposition of any Collateral, shall be delivered, in kind, by Borrower to
      Lender in the original form in which received by Borrower not later than the
      following Business Day after receipt by Borrower. Until so delivered to Lender,
      Borrower shall hold such Proceeds separate and apart from Borrower's other
      funds
      and property in an express trust for Lender. Nothing in this Section 4.2
      shall limit the restrictions on disposition of Collateral set forth elsewhere
      in
      this Agreement.

     

    4.3 Application
      of Payments. Lender
      may, in its sole and absolute discretion, apply, reverse and re-apply all cash
      and non-cash Proceeds of Collateral or other payments received with respect
      to
      the Obligations, in such order and manner as Lender shall determine, whether
      or
      not the Obligations are due, and whether before or after the occurrence of
      a
      Default or an Event of Default. For purposes of determining Availability, such
      amounts will be credited to the Loan Account and the Collateral balances to
      which they relate upon Lender's receipt of an advice from Lender's Bank (set
      forth in Section 11 of Schedule A) that such items have been credited
      to Lender's account at Lender's Bank (or upon Lender's deposit thereof at
      Lender's Bank in the case of payments received by Lender in kind), in each
      case
      subject to final payment and collection. However, for purposes of computing
      interest on the Obligations, such items shall be deemed applied by Lender three
      (3) Business Days after Lender's receipt of advice of deposit thereof at
      Lender's Bank.

     

    4.4 Notification;
      Verification. Lender
      or
      its designee may, from time to time, whether or not a Default or Event of
      Default has occurred: (i) verify directly with the Account Debtors the
      validity, amount and other matters relating to the Accounts and Chattel Paper,
      by means of mail, telephone or otherwise, either in the name of Borrower or
      Lender or such other name as Lender may choose; (ii) notify Account Debtors
      that Lender has a security interest in the Accounts and that payment thereof
      is
      to be made directly to Lender; and (iii) demand, collect or enforce payment
      of any Accounts and Chattel Paper (but without any duty to do so).

    
       

      
        
          
          

        

        
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                  Greystone
                    Business Credit II, L.L.C.

                	 	
                  Loan
                    and Security
                    Agreement

                

        

      

       

    

    4.5 Power
      of Attorney. Borrower
      hereby grants to Lender an irrevocable power of attorney, coupled with an
      interest, authorizing and permitting Lender (acting through any of its officers,
      employees, attorneys or agents), at any time (whether or not a Default or
      Event of Default has occurred and is continuing, except as expressly provided
      below), at Lender's option, but without obligation, with or without notice
      to
      Borrower, and at Borrower's expense, to do any or all of the following, in
      Borrower's name or otherwise: (i) execute on behalf of Borrower any
      documents that Lender may, in its sole and absolute discretion, deem advisable
      in order to perfect and maintain Lender's security interests in the Collateral,
      to exercise a right of Borrower or Lender, or to fully consummate all the
      transactions contemplated by this Agreement and the other Loan Documents
      (including such financing statements and continuation financing statements,
      and
      amendments thereto, as Lender shall deem necessary or appropriate) and to file
      as a financing statement any copy of this Agreement or any financing statement
      signed by Borrower; (ii) execute on behalf of Borrower any document
      exercising, transferring or assigning any option to purchase, sell or otherwise
      dispose of or lease (as lessor or lessee) any real or personal property which
      is
      part of the Collateral or in which Lender has an interest; (iii) execute on
      behalf of Borrower any invoices relating to any Accounts, any draft against
      any
      Account Debtor, any proof of claim in bankruptcy, any notice of Lien or claim,
      and any assignment or satisfaction of mechanic's, materialman's or other Lien;
      (iv) execute on behalf of Borrower any notice to any Account Debtor;
      (v) receive and otherwise take control in any manner of any cash or
      non-cash items of payment or Proceeds of Collateral; (vi) endorse
      Borrower's name on all checks and other forms of remittances received by Lender;
      (vii) pay, contest or settle any Lien, charge, encumbrance, security
      interest and adverse claim in or to any of the Collateral, or any judgment
      based
      thereon, or otherwise take any action to terminate or discharge the same;
      (viii) after the occurrence of a Default or Event of Default, grant
      extensions of time to pay, compromise claims relating to, and settle Accounts,
      Chattel Paper and General Intangibles for less than face value and execute
      all
      releases and other documents in connection therewith; (ix) pay any sums
      required on account of Borrower's taxes or to secure the release of any Liens
      therefor; (x) pay any amounts necessary to obtain, or maintain in effect,
      any of the insurance described in Section 5.14; (xi) settle and
      adjust, and give releases of, any insurance claim in an amount in excess of
      $50,000 (or upon the occurrence and during the continuance of an Event of
      Default, any insurance claim regardless of its amount) that relates to any
      of
      the Collateral and obtain payment therefor; (xii) instruct any third party
      having custody or control of any Collateral or books or records belonging to,
      or
      relating to, Borrower to give Lender the same rights of access and other rights
      with respect thereto as Lender has under this Agreement; (xiii) after the
      occurrence of a Default or Event of Default, change the address for delivery
      of
      Borrower's mail and receive and open all mail addressed to Borrower; and
      (xiv) endorse or assign to Lender on Borrower's behalf any portion of
      Collateral evidenced by an agreement, Instrument or Document if an endorsement
      or assignment of any such items is not made by Borrower pursuant to
      Section 3.2. Any and all sums paid, and any and all costs, expenses,
      liabilities, obligations and reasonable attorneys' fees incurred, by Lender
      with
      respect to the foregoing shall be added to and become part of the Obligations,
      shall be payable on demand, and shall bear interest at a rate equal to the
      highest interest rate applicable to any of the Obligations. Borrower agrees
      that
      Lender's rights under the foregoing power of attorney or any of Lender's other
      rights under this Agreement or the other Loan Documents shall not be construed
      to indicate that Lender is in control of the business, management or properties
      of Borrower.

    
       

      
        
          
          

        

        
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                  Greystone
                    Business Credit II, L.L.C.

                	 	
                  Loan
                    and Security
                    Agreement

                

        

      

       

    

    4.6 Disputes.
      Borrower
      shall promptly notify Lender of all disputes or claims relating to Accounts
      and
      Chattel Paper. Borrower will not, without Lender's prior written consent,
      compromise or settle any Account or Chattel Paper for less than the full amount
      thereof, grant any extension of time of payment of any Account or Chattel Paper,
      release (in whole or in part) any Account Debtor or other person liable for
      the
      payment of any Account or Chattel Paper or grant any credits, discounts,
      allowances, deductions, return authorizations or the like with respect to any
      Account or Chattel Paper; except that prior to the occurrence of an Event of
      Default, Borrower may take any of such actions in the ordinary course of its
      business, provided
      that
      Borrower promptly reports the same to Lender.

     

    4.7 Invoices.
      At
      Lender's request, Borrower will cause all invoices and statements which it
      sends
      to Account Debtors or other third parties to be marked, in a manner satisfactory
      to Lender, to reflect Lender's security interest therein.

     

    4.8 Inventory.

     

    (a) Returns.
      Provided
      that no Event of Default has occurred and is continuing, if any Account Debtor
      returns any Inventory to Borrower in the ordinary course of its business,
      Borrower will promptly issue a credit memorandum in an amount in excess of
      $10,000 to the Account Debtor in an appropriate amount and send a copy thereof
      to Lender. After the occurrence of an Event of Default, Borrower will not accept
      any return without Lender's prior written consent. If an Event of Default has
      occurred, Borrower will (i) hold the returned Inventory in trust for
      Lender; (ii) segregate all returned Inventory from all of Borrower's other
      property; (iii) conspicuously label the returned Inventory as Lender's
      property; and (iv) immediately notify Lender of the return of such
      Inventory, specifying the reason for such return, the location and the condition
      of the returned Inventory and, at Lender's request, deliver such returned
      Inventory to Lender at an address specified by Lender.

     

    (b) Other
      Covenants.
      Borrower
      will not, without Lender's prior written consent, (i) store any Inventory
      with any warehouseman or other third party other than subject to a
      warehouseman's or landlord's agreement in form and substance satisfactory to
      Lender and at a location set forth in Section 9(d) of Schedule A or
      (ii) sell any Inventory on a sale-or-return, guaranteed sale, consignment,
      or other contingent basis. All of the Inventory has been produced only in
      accordance with the Fair Labor Standards Act of 1938 and all rules, regulations
      and orders promulgated thereunder. 

    
       

      
        
          
          

        

        
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                  Greystone
                    Business Credit II, L.L.C.

                	 	
                  Loan
                    and Security
                    Agreement

                

        

      

       

    

    4.9 Access
      to Collateral, Books and Records.
      At
      reasonable times, and on one Business Day's notice prior to the occurrence
      of a
      Default or an Event of Default and at any time and with or without notice after
      the occurrence of a Default or an Event of Default, Lender or its agents shall
      have the right to inspect the Collateral, and the right to examine and copy
      Borrower's books and records. Lender shall take reasonable steps to keep
      confidential all information obtained in any such inspection or examination,
      but
      Lender shall have the right to disclose any such information to its auditors,
      regulatory agencies, attorneys and participants, and pursuant to any subpoena
      or
      other legal process. Borrower agrees to give Lender access to any or all of
      Borrower's premises to enable Lender to conduct such inspections and
      examinations. Such inspections and examinations shall be at Borrower's expense
      and the charge therefor shall be $1,000 per person per day (or such higher
      amount as shall represent Lender's then current standard charge), plus
      reasonable out-of-pocket expenses. Lender may, at Borrower's expense, use
      Borrower's personnel, computer and other equipment, programs, printed output
      and
      computer readable media, supplies and premises for the collection, sale or
      other
      disposition of Collateral to the extent Lender, in its sole discretion, deems
      appropriate. Borrower hereby irrevocably authorizes all accountants and third
      parties to disclose and deliver to Lender, at Borrower's expense, all financial
      information, books and records, work papers, management reports and other
      information in their possession regarding Borrower. Borrower will not enter
      into
      any agreement with any accounting firm, service bureau or third party to store
      Borrower's books or records at any location other than Borrower's Address
      without first obtaining Lender's written consent (which consent may be
      conditioned upon such accounting firm, service bureau or other third party
      agreeing to give Lender the same rights with respect to access to books and
      records and related rights as Lender has under this Agreement).

     

    
      	
              5.

            	
              REPRESENTATIONS,
                WARRANTIES AND COVENANTS.

            

    

     

    To
      induce
      Lender to enter into this Agreement, Borrower represents, warrants and covenants
      as follows, after giving effect to the Related Transactions (it being understood
      that (i) each such representation and warranty will be deemed remade as of
      the date on which each Loan is made and each Credit Accommodation is provided
      and shall not be affected by any knowledge of, or any investigation by, Lender,
      and (ii) the accuracy of each such representation, warranty and covenant
      will be a condition to each Loan):

     

    5.1 Existence
      and Authority.
      Borrower
      is, and at all times will be, duly organized, validly existing and in good
      standing under the laws of the State of Delaware and its state organizational
      indemnification number is DE4458560. Borrower is, and at all times will be,
      qualified and licensed to do business in all jurisdictions in which any failure
      to do so would have a material adverse effect on Borrower. The execution,
      delivery and performance by Borrower of this Agreement and all of the other
      Loan
      Documents have been duly and validly authorized, do not violate Borrower's
      articles or certificate of incorporation, by-laws or other organizational
      documents, or any law or any agreement or instrument or any court order which
      is
      binding upon Borrower or its property, do not constitute grounds for
      acceleration of any indebtedness or obligation under any agreement or instrument
      which is binding upon Borrower or its property, and do not require the consent
      of any Person. This Agreement and such other Loan Documents have been duly
      executed and delivered by, and are enforceable against, Borrower, and all other
      Obligors who have signed them, in accordance with their respective terms.
      Sections 9(g) and 9(h) of Schedule A set forth the ownership of
      Borrower and the names and ownership of Borrower's Subsidiaries as of the date
      of this Agreement.

    
       

      
        
          
          

        

        
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                  Greystone
                    Business Credit II, L.L.C.

                	 	
                  Loan
                    and Security
                    Agreement

                

        

      

       

    

    5.2 Name;
      Trade Names and Styles. The
      name
      of Borrower set forth in the heading to this Agreement is its correct and
      complete legal name as of the date hereof. Listed in Sections 9(a), 9(b)
      and 9(c) of Schedule A are all prior names of Borrower and all of
      Borrower's present and prior trade names. Borrower shall give Lender at least
      thirty days' prior written notice before changing its name or doing business
      under any other name. Borrower has complied with all laws relating to the
      conduct of business under a fictitious business name. Borrower represents and
      warrants that (i) each trade name does not refer to another corporation or
      other legal entity; and (ii) all Accounts invoiced under any such trade
      names are owned exclusively by Borrower and are subject to the security interest
      of Lender and the other terms of this Agreement.

     

    5.3 Title
      to Collateral; Permitted Liens. Borrower
      has good and marketable title to the Collateral. The Collateral now is and
      will
      at all times remain free and clear of any and all liens, charges, security
      interests, encumbrances and adverse claims, except for Permitted Liens. Lender
      now has, and will continue to have, a first-priority perfected and enforceable
      security interest in all of the Collateral, subject only to the Permitted Liens,
      and Borrower will at all times defend Lender and the Collateral against all
      claims of others. None of the Collateral which is Equipment is or will be
      affixed to any real property in such a manner, or with such intent, as to become
      a fixture. Except for leases or subleases as to which Borrower has delivered
      to
      Lender a landlord's waiver in form and substance satisfactory to Lender,
      Borrower is not, and will at no time be, a lessee or sublessee under any real
      property lease or sublease pursuant to which the lessor or sublessor may obtain
      any rights in any of the Collateral, and no such lease or sublease now, or
      at
      any time, prohibits, restrains, impairs or conditions, or will prohibit,
      restrain, impair or condition, Borrower's right to remove any Collateral from
      the premises. Except for warehouses as to which Borrower has delivered to Lender
      a warehouseman's waiver in form and substance satisfactory to Lender, Borrower
      is not, and will at no time be, a bailor of any Goods at any warehouse under
      an
      arrangement pursuant to which the warehouseman may obtain any rights in any
      of
      the Collateral. Prior to causing or permitting any Collateral to be located
      upon
      premises in which any third party has an interest (whether as owner, mortgagee,
      beneficiary under a deed of trust, lienholder or otherwise), Borrower shall,
      whenever requested by Lender, cause each such third party to execute and deliver
      to Lender, in form and substance acceptable to Lender, such waivers and
      subordinations as Lender shall specify, so as to ensure that Lender's rights
      in
      the Collateral are, and will continue to be, superior to the rights of any
      such
      third party. Borrower will keep in full force and effect, and will comply with
      all the terms of, any lease of real property where any of the Collateral now
      or
      in the future may be located.

    
       

      
        
          
          

        

        
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                  Greystone
                    Business Credit II, L.L.C.

                	 	
                  Loan
                    and Security
                    Agreement

                

        

      

       

    

    5.4 Accounts
      and Chattel Paper. As
      of
      each date reported by Borrower, all Accounts which Borrower has reported to
      Lender as being Eligible Accounts comply in all respects with the criteria
      for
      eligibility established by Lender and in effect at such time. All Accounts
      and
      Chattel Paper are genuine and in all respects what they purport to be, arise
      out
      of a completed, bona fide and unconditional and non-contingent sale and delivery
      of goods or rendition of services by Borrower in the ordinary course of its
      business and in accordance with the terms and conditions of all purchase orders,
      contracts or other documents relating thereto, each Account Debtor thereunder
      had the capacity to contract at the time any contract or other document giving
      rise to such Accounts and Chattel Paper were executed, and the transactions
      giving rise to such Accounts and Chattel Paper comply with all applicable laws
      and governmental rules and regulations.

     

    5.5 Electronic
      Chattel Paper.
      To the
      extent that Borrower obtains or maintains any Electronic Chattel Paper, Borrower
      shall create, store and assign the record or records comprising the Electronic
      Chattel Paper in such a manner that (i) a single authoritative copy of the
      record or records exists which is unique, identifiable and except as otherwise
      provided below, unalterable, (ii) the authoritative copy identifies Lender
      as the assignee of the record or records, (iii) the authoritative copy is
      communicated to and maintained by the Lender or its designated custodian,
      (iv) copies or revisions that add or change an identified assignee of the
      authoritative copy can only be made with the participation of Lender,
      (v) each copy of the authoritative copy and any copy of a copy is readily
      identifiable as a copy that is not the authoritative copy and (vi) any
      revision of the authoritative copy is readily identifiable as an authorized
      or
      unauthorized revision.

     

    5.6 Investment
      Property.
      Borrower
      will take any and all actions required or requested by Lender, from time to
      time, to (i) cause Lender to obtain exclusive control of any Investment
      Property in a manner acceptable to Lender and (ii) obtain from any issuers
      of Investment Property and such other Persons as Lender shall specify, for
      the
      benefit of Lender, written confirmation of Lender's exclusive control over
      such
      Investment Property and take such other actions as Lender may request to perfect
      Lender's security interest in such Investment Property. For purposes of this
      Section 5.6, Lender shall have exclusive control of Investment Property if
      (A) pursuant to Section 3.2, such Investment Property consists of
      certificated securities and Borrower delivers such certificated securities
      to
      Lender (with appropriate endorsements if such certificated securities are in
      registered form); (B) such Investment Property consists of uncertificated
      securities and either (x) Borrower delivers such uncertificated securities
      to Lender or (y) the issuer thereof agrees, pursuant to documentation in
      form and substance satisfactory to Lender, that it will comply with instructions
      originated by Lender without further consent by Borrower, and (C) such
      Investment Property consists of security entitlements and either (x) Lender
      becomes the entitlement holder thereof or (y) the appropriate securities
      intermediary agrees, pursuant to documentation
      in form and substance satisfactory to Lender, that it will comply with
      entitlement orders originated by Lender without further consent by
      Borrower.

     

    5.7 Commercial
      Tort Claims.
      Borrower
      has no Commercial Tort Claims pending other than those listed in Section 14
      of
      Schedule A, and Borrower
      shall promptly notify Lender in writing upon incurring or otherwise obtaining
      a
      Commercial Tort Claim after the date hereof against any third party. Such notice
      shall constitute Borrower's authorization to amend such Section 14 to add such
      Commercial Tort Claim.

    
       

      
        
          
          

        

        
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                  Greystone
                    Business Credit II, L.L.C.

                	 	
                  Loan
                    and Security
                    Agreement

                

        

      

       

    

    5.8 State
      of Organization; Location of Collateral.
      Borrower's Address is Borrower's chief executive office and the location of
      its
      books and records. In addition, except as provided in the immediately following
      sentence, Borrower has places of business and Collateral located only at the
      locations set forth on Sections 9(d) and 9(e) of Schedule A. Borrower
      will give Lender at least thirty days' prior written notice before changing
      Borrower's state of organization, opening any additional place of business,
      changing its chief executive office or the location of its books and records,
      or
      moving any of the Collateral to a location other than Borrower's Address or
      one
      of the locations set forth in Sections 9(d) and 9(e) of Schedule A,
      and will execute and deliver all financing statements and other agreements,
      instruments and documents which Lender shall require as a result
      thereof.

     

    5.9 Financial
      Condition, Statements and Reports. All
      financial statements delivered to Lender by or on behalf of Borrower have been,
      and will at all times continue to be, prepared in conformity with GAAP and
      completely and fairly reflect the financial condition of Borrower, at the times
      and for the periods therein stated. Between the last date covered by any such
      financial statement provided to Lender and the date hereof (or, with respect
      to
      the remaking of this representation in connection with the making of any Loan
      or
      providing of any Credit Accommodation, the date such Loan is made or such Credit
      Accommodation is provided) there has been no material adverse change in the
      financial condition or business of Borrower. Borrower is solvent and able to
      pay
      its debts as they come due, and has sufficient capital to carry on its business
      as now conducted and as proposed to be conducted. All schedules, reports and
      other information and documentation delivered by Borrower to Lender with respect
      to the Collateral are, or when delivered will be, true, correct and complete
      as
      of the date delivered or the date specified therein.

     

    5.10 Tax
      Returns and Payments; Pension Contributions. Borrower
      has timely filed, and shall at all times continue to timely file, all tax
      returns and reports required by applicable law or a request for an extension
      thereof, has timely paid, and shall continue to timely pay, all applicable
      taxes, assessments, deposits and contributions owing by Borrower and will timely
      pay all such items in the future as they become due and payable. Borrower may,
      however, defer payment of any contested taxes; provided,
      that
      Borrower (i) in good faith contests its obligation to pay such taxes by
      appropriate proceedings promptly and diligently instituted and conducted;
      (ii) notifies Lender in writing of the commencement of, and any material
      development in, the proceedings; (iii) posts bonds or takes any other steps
      required to keep the contested taxes from becoming a Lien upon any of the
      Collateral and (iv) maintains adequate reserves therefor in conformity with
      GAAP. Borrower is unaware of any claims or adjustments proposed for any of
      Borrower's prior tax years that could result in additional taxes becoming due
      and payable by Borrower and shall give prompt written notice to Lender if it
      becomes aware of any such claims or adjustments. Borrower has paid, and shall
      continue to pay, all amounts necessary to fund all present and future pension,
      profit sharing and deferred compensation plans in accordance with their terms,
      and Borrower has not withdrawn from participation in, permitted partial or
      complete termination of, or permitted the occurrence of any other event with
      respect to, any such plan which could result in any liability of Borrower,
      including any liability to the Pension Benefit Guaranty Corporation or any
      other
      governmental agency.

    
       

      
        
          
          

        

        
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                    Business Credit II, L.L.C.

                	 	
                  Loan
                    and Security
                    Agreement

                

        

      

       

    

    5.11 Compliance
      with Laws. Borrower
      has complied, and shall at all times continue to comply, in all material
      respects with all provisions of all applicable laws and regulations, including
      those relating to Borrower's ownership of real or personal property, the conduct
      and licensing of Borrower's business, the payment and withholding of taxes,
      ERISA and other employee matters, safety and environmental matters.

     

    5.12 Litigation.
      Section 9(f)
      of Schedule A discloses all claims, proceedings, litigation or
      investigations pending or (to the best of Borrower's knowledge) threatened
      against Borrower. There is no claim, suit, litigation, proceeding or
      investigation pending or (to the best of Borrower's knowledge) threatened by
      or
      against or affecting Borrower in any court or before any governmental agency
      (or
      any basis therefor known to Borrower) which may result, either separately or
      in
      the aggregate, in any material adverse change in the financial condition or
      business of Borrower, or in any material impairment in the ability of Borrower
      to carry on its business in substantially the same manner as it is now being
      conducted. Borrower will promptly inform Lender in writing of any claim,
      proceeding, litigation or investigation in the future threatened or instituted
      by or against Borrower.

     

    5.13 Use
      of Proceeds. All
      proceeds of all Loans will be used solely for lawful business purposes,
      including to finance the Related Transactions.

     

    5.14 Insurance.
      Borrower
      will at all times carry property, liability and other insurance, with insurers
      acceptable to Lender, in such form and amounts, and with such deductibles and
      other provisions, as Lender shall require, and Borrower will provide Lender
      with
      evidence satisfactory to Lender that such insurance is, at all times, in full
      force and effect. Each property insurance policy shall name Lender as loss
      payee
      and shall contain a lender's loss payable endorsement in form acceptable to
      Lender, each liability insurance policy shall name Lender as an additional
      insured, and each business interruption insurance policy shall be collaterally
      assigned to Lender, all in form and substance satisfactory to Lender. All
      policies of insurance shall provide that they may not be cancelled or changed
      without at least thirty days' prior written notice to Lender, shall contain
      breach of warranty coverage, and shall otherwise be in form and substance
      satisfactory to Lender. Upon receipt of the proceeds of any such insurance,
      Lender will apply such proceeds in reduction of the Obligations as Lender shall
      determine in its sole discretion. Borrower will promptly deliver to Lender
      copies of all reports made to insurance companies.

    
       

      
        
          
          

        

        
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                    Business Credit II, L.L.C.

                	 	
                  Loan
                    and Security
                    Agreement

                

        

      

      
         

        5.15 Financial
          and Collateral Reports. Borrower
          has kept and will keep adequate records and books of account with respect
          to its
          business activities and the Collateral in which proper entries are made
          in
          accordance with GAAP reflecting all its financial transactions, and will
          cause
          to be prepared and furnished to Lender the following (all to be prepared
          in
          accordance with GAAP, unless Borrower's certified public accountants concur
          in
          any change therein and such change is disclosed to Lender):

         

      

    

    (a) Collateral
      Reports.
      On or
      before the fifteenth (15) day of each month, an aging of Borrower's Accounts,
      Chattel Paper and notes receivable, and on a monthly basis, or more frequently
      as requested by Lender Inventory reports, all in such form, and together with
      such additional certificates, schedules and other information with respect
      to
      the Collateral or the business of Borrower or any Obligor, as Lender shall
      request; provided,
      that
      Borrower's failure to execute and deliver the same shall not affect or limit
      Lender's security interests and other rights in any of the Accounts, nor shall
      Lender's failure to advance or lend against a specific Account affect or limit
      Lender's security interest and other rights therein. Together with each such
      schedule, Borrower shall furnish Lender with copies (or, at Lender's request,
      originals) of all contracts, orders, invoices, and other similar documents,
      and
      all original shipping instructions, delivery receipts, bills of lading, and
      other evidence of delivery, for any goods the sale or disposition of which
      gave
      rise to such Accounts, and Borrower warrants the genuineness of all of the
      foregoing. In addition, Borrower shall deliver to Lender the originals of all
      Instruments, Chattel Paper, security agreements, guaranties and other documents
      and property evidencing or securing any Accounts, immediately upon receipt
      thereof and in the same form as received, with all necessary endorsements.
      Lender may destroy or otherwise dispose of all documents, schedules and other
      papers delivered to Lender pursuant to this Agreement (other than originals
      of
      Instruments, Chattel Paper, security agreements, guaranties and other documents
      and property evidencing or securing any Accounts) six months after Lender
      receives them, unless Borrower requests their return in writing in advance
      and
      arranges for their return to Borrower at Borrower's expense;

     

    (b) Annual
      Statements.
      Not
      later than one hundred and five (105) days after the close of each fiscal year
      of Borrower, unqualified (except for a qualification for a change in accounting
      principles with which the accountant concurs) audited financial statements
      of
      Borrower and its Subsidiaries as of the end of such year, on a consolidated
      and
      consolidating basis, certified by a firm of independent certified public
      accountants of recognized standing selected by Borrower but acceptable to
      Lender, together with a copy of any management letter issued in connection
      therewith and a letter from such accountants acknowledging that Lender is
      relying on such financial statements;

     

    (c) Interim
      Statements.
      Not
      later than thirty (30) days after the end of each month hereafter, including
      the
      last month of Borrower's fiscal year, (i) unaudited interim financial
      statements of Borrower and its Subsidiaries as of the end of such month and
      of
      the portion of Borrower's fiscal year then elapsed, on a consolidated and
      consolidating basis, certified by the principal financial officer of Borrower
      as
      prepared in accordance with GAAP and fairly presenting the consolidated
      financial position and results of operations of Borrower and its Subsidiaries
      for such month and period subject only to changes from audit and year-end
      adjustments and except that such statements need not contain notes and
      (ii) a compliance certificate in form and substance satisfactory to Lender
      setting forth the financial covenants set forth in Section 8 of Schedule A
      for
      such month, as certified by officer of Borrower;

    
       

      
        
          
          

        

        
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                    Business Credit II, L.L.C.

                	 	
                  Loan
                    and Security
                    Agreement

                

        

      

       

    

    (d) Projections,
      Etc.
      Such
      business projections, Availability projections, business plans, budgets and
      cash
      flow statements for Borrower and its Subsidiaries as Lender shall request from
      time to time;

     

    (e) Shareholder
      Reports, Etc.
      Promptly
      after the sending or filing thereof, as the case may be, copies of any proxy
      statements, financial statements or other material reports which Borrower has
      made available to its shareholders and copies of any regular, periodic and
      special reports or registration statements which Borrower files with the
      Securities and Exchange Commission or any governmental authority which may
      be
      substituted therefor, or any national securities exchange;

     

    (f) ERISA
      Reports.
      Upon
      request by Lender, copies of any annual report to be filed pursuant to the
      requirements of ERISA in connection with each plan subject thereto;
      and

     

    (g) Other
      Information.
      Such
      other data, appraisals and information (financial and otherwise) as Lender,
      from
      time to time, may reasonably request, bearing upon or related to the Collateral
      or Borrower's and each of its Subsidiary's financial condition or results of
      operations.

     

    5.16 Litigation
      Cooperation. Should
      any third-party suit or proceeding be instituted by or against Lender with
      respect to any Collateral or in any manner relating to Borrower, Borrower shall,
      without expense to Lender, make available Borrower and its officers, employees
      and agents, and Borrower's books and records, without charge, to the extent
      that
      Lender may deem them reasonably necessary in order to prosecute or defend any
      such suit or proceeding.

     

    5.17 Maintenance
      of Collateral, Etc. Borrower
      will maintain all of its Equipment in good working condition, ordinary wear
      and
      tear excepted, and Borrower will not use the Collateral for any unlawful
      purpose. Borrower will immediately advise Lender in writing of any material
      loss
      or damage to the Collateral and of any investigation, action, suit, proceeding
      or claim relating to the Collateral or which may result in an adverse impact
      upon Borrower's business, assets or financial condition.

     

    
      
        
          
          

        

        
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                  Greystone
                    Business Credit II, L.L.C.

                	 	
                  Loan
                    and Security
                    Agreement

                

        

      

      
         

        5.18 Notification
          of Changes. Borrower
          will promptly notify Lender in writing of any change in its officers or
          directors, the opening of any new bank account or other deposit account,
          or any
          material adverse change in the business or financial affairs of Borrower
          or the
          existence of any circumstance which would make any representation or warranty
          of
          Borrower untrue in any material respect or constitute a material breach
          of any
          covenant of Borrower.

         

      

    

    5.19 Further
      Assurances. Borrower
      agrees, at its expense, to take all actions, and execute or cause to be executed
      and delivered to Lender all promissory notes, security agreements, agreements
      with landlords, mortgagees and processors and other bailees, subordination
      and
      intercreditor agreements and other agreements, instruments and documents, as
      Lender may request from time to time to perfect and maintain Lender's security
      interests in the Collateral and to fully carry out the transactions contemplated
      by this Agreement.

     

    5.20 Negative
      Covenants. Borrower
      will not, without Lender's prior written consent, (i) merge or consolidate
      with another Person, form any new Subsidiary or acquire any interest in any
      Person; (ii) acquire any assets except in the ordinary course of business
      and as otherwise permitted by this Agreement and the other Loan Documents;
      (iii) enter into any transaction outside the ordinary course of business;
      (iv) sell or transfer any Collateral or other assets, except that Borrower
      may sell finished goods Inventory in the ordinary course of its business;
      (v) make any loans to, or investments in, any Affiliate or other Person in
      the form of money or other assets; (vi) incur any debt outside the ordinary
      course of business; (vii) guaranty or otherwise become liable with respect
      to the obligations of another party or entity; (viii) pay or declare any
      dividends or other distributions on Borrower's Capital Stock (except for
      dividends payable solely in Capital Stock of Borrower); (ix) redeem,
      retire, purchase or otherwise acquire, directly or indirectly, any of Borrower's
      Capital Stock or other equity interests; (x) make any change in Borrower's
      capital structure; (xi) dissolve or elect to dissolve; (xii) pay any
      principal or interest on any indebtedness owing to an Affiliate,
      (xiii) enter into any transaction with an Affiliate other than on
      arms-length terms disclosed to Lender in writing; (xiv) change the state of
      Borrower's organization or enter into any transaction which has the effect
      of
      changing Borrower's state of organization except as provided for in
      Section 5.8; or (xv) agree to do any of the foregoing.

     

    5.21 [Intentionally
      Omitted].

     

    5.22 Other
      Covenants. Borrower
      will comply with the additional covenants set forth in Section 12 of
      Schedule A.

    
       

      
        
          
          

        

        
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                  Greystone
                    Business Credit II, L.L.C.

                	 	
                  Loan
                    and Security
                    Agreement

                

        

      

       

    

    5.23 Related
      Transactions. Borrower
      have furnished Lender a true and correct copy of the Related Agreements pursuant
      hereto.
      Borrower
      and each other party to the Related Agreements, has duly taken all necessary
      organizational action to authorize the execution, delivery and performance
      of
      the Related Agreements and the consummation of transactions contemplated
      thereby.
      As of
      the date hereof, the Related Transactions have been consummated (or are being
      consummated substantially contemporaneously with the initial credit extension
      hereunder) in accordance with the terms of the Related Agreements in all
      material respects (except for any matters to which the Lender has consented).
      The Related Transactions will comply in all material respects with all
      applicable legal requirements, and all necessary governmental, regulatory,
      creditor, shareholder, partner and other material consents, approvals and
exemptions
      required to be obtained by any Person and
      any
      such consents, approvals and exemptions in connection with the Related
      Transactions will be, prior to consummation of the Related Transactions, duly
      obtained and will be in full force and effect. As of the date of the Related
      Agreements, all applicable waiting periods with respect to the Related
      Transactions will have expired without
      any action being taken by any competent governmental authority which restrains,
      prevents or imposes material adverse conditions upon the consummation of the
      Related Transactions.
      The
      execution and delivery of the Related Agreements did not, and the consummation
      of the Related Transactions will not, violate any statute or regulation of
      the
      United States (including any securities law) or of any state or other applicable
      jurisdiction, or any order, judgment or decree of any court or governmental
      body
      binding on any Person, or result in a breach of, or constitute a default under,
      any material agreement, indenture, instrument or other document, or any
      judgment, order or decree, to which any Person is bound. No
      material statement or representation made in the Related Agreements by any
      Person, contains any untrue statement of a material fact or omits to state
      any
      material fact required to be stated therein or necessary in order to make the
      statements made therein, in light of the circumstances under which they are
      made, not misleading as of the time that such statement or representation is
      made. 
      Borrower is not in any way obligated to any Person in respect of any
      finder's or broker's fee or similar commission in connection with the closing
      of
      the Loans or any part of the Related Transactions.

     

    
      	
              6.

            	
              RELEASE
                AND INDEMNITY.

            

    

     

    6.1 Release.
      Borrower
      hereby releases Lender and its Affiliates and their respective directors,
      officers, employees, attorneys and agents and any other Person affiliated with
      or representing Lender (the "Released
      Parties")
      from
      any and all liability arising from acts or omissions under or pursuant to this
      Agreement, whether based on errors of judgment or mistake of law or fact, except
      for those arising from willful misconduct. However, in no circumstance will
      any
      of the Released Parties be liable for lost profits or other special or
      consequential damages. Such release is made on the date hereof and remade upon
      each request for a Loan by Borrower. Without limiting the
      foregoing:

     

    (a) Lender
      shall not be liable for (i) any shortage or discrepancy in, damage to, or
      loss or destruction of, any goods, the sale or other disposition of which gave
      rise to an Account; (ii) any error, act, omission, or delay of any kind
      occurring in the settlement, failure to settle, collection or failure to collect
      any Account; (iii) settling any Account in good faith for less than the
      full amount thereof; or (iv) any of Borrower's obligations under any
      contract or agreement giving rise to an Account; and

    
       

      
        
          
          

        

        
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                  Greystone
                    Business Credit II, L.L.C.

                	 	
                  Loan
                    and Security
                    Agreement

                

        

      

       

    

    (b) In
      connection with Credit Accommodations or any underlying transaction, Lender
      shall not be responsible for the conformity of any goods to the documents
      presented, the validity or genuineness of any documents, or any delay, default
      or fraud by Borrower, shippers and/or any other Person. Borrower agrees that
      any
      action taken by Lender, if taken in good faith, or any action taken by an issuer
      of any Credit Accommodation, under or in connection with any Credit
      Accommodation, shall be binding on Borrower and shall not create any resulting
      liability to Lender. In furtherance thereof, Lender shall have the full right
      and authority to clear and resolve any questions of non-compliance of documents,
      to give any instructions as to acceptance or rejection of any documents or
      goods, to execute for Borrower's account any and all applications for steamship
      or airway guaranties, indemnities or delivery orders, to grant any extensions
      of
      the maturity of, time of payment for, or time of presentation of, any drafts,
      acceptances or documents, and to agree to any amendments, renewals, extensions,
      modifications, changes or cancellations of any of the terms or conditions of
      any
      of the Credit Accommodations or applications and other documentation pertaining
      thereto.

     

    6.2 Indemnity.
      Borrower
      hereby agrees to indemnify the Released Parties and hold them harmless from
      and
      against any and all claims, debts, liabilities, demands, obligations, actions,
      causes of action, penalties, costs and expenses (including attorneys' fees),
      of
      every nature, character and description, which the Released Parties may sustain
      or incur based upon or arising out of any of the transactions contemplated
      by
      this Agreement or the other Loan Documents or any of the Obligations, including
      any transactions or occurrences relating to the issuance of any Credit
      Accommodation, the Collateral relating thereto, any drafts thereunder and any
      errors or omissions relating thereto (including any loss or claim due to any
      action or inaction taken by the issuer of any Credit Accommodation) (and for
      this purpose any charges to Lender by any issuer of Credit Accommodations shall
      be conclusive as to their appropriateness and may be charged to the Loan
      Account), or any other matter, cause or thing whatsoever occurred, done, omitted
      or suffered to be done by Lender relating to Borrower or the Obligations (except
      any such amounts sustained or incurred as the result of the gross negligence
      or
      willful misconduct of the Released Parties). Notwithstanding any provision
      in
      this Agreement to the contrary, the indemnity agreement set forth in this
      Section shall survive any termination of this Agreement.

     

    
      	
              7.

            	
              TERM.

            

    

     

    7.1 Maturity
      Date.
      Lender's
      obligation to make Loans and provide Credit Accommodations under this Agreement
      shall initially continue in effect for a term (the "Initial
      Term")
      from
      the date of this Agreement until the Initial Maturity Date set forth in
      Section 7 of Schedule A; provided,
      that the
      Initial Maturity Date shall automatically be extended (the Initial Maturity
      Date, as it may be so extended, being referred to as the "Maturity
      Date")
      for
      successive additional terms of one year each (each a "Renewal
      Term"),
      unless one party gives written notice to the other, not less than sixty days
      prior to the Maturity Date, that such party elects not to extend the Maturity
      Date. This Agreement and the other Loan Documents and Lender's security
      interests in and Liens upon the Collateral, and all representations, warranties
      and covenants of Borrower contained herein and therein, shall remain in full
      force and effect after the Maturity Date until all of the monetary Obligations
      are indefeasibly paid in full.

    
       

      
        
          
          

        

        
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                  Greystone
                    Business Credit II, L.L.C.

                	 	
                  Loan
                    and Security
                    Agreement

                

        

      

       

    

    7.2 Early
      Termination. Lender's
      obligation to make Loans and to provide Credit Accommodations under this
      Agreement may be terminated prior to the Maturity Date as follows: (i) by
      Borrower, effective thirty Business Days after written notice of termination
      is
      given to Lender or (ii) by Lender at any time after the occurrence of an
      Event of Default, without notice, effective immediately; provided,
      that if
      any Affiliate of Borrower is also a party to a financing arrangement with
      Lender, no such early termination shall be effective unless such Affiliate
      simultaneously terminates its financing arrangement with Lender. In addition,
      if
      Borrower so terminates and repays the Obligations without having provided Lender
      with at least thirty days' prior written notice thereof, Borrower shall pay
      to
      Lender, on the effective date of termination, an additional amount equal to
      thirty days of interest at the applicable interest rate(s), based on the average
      outstanding amount of the Obligations for the six month period immediately
      preceding the date of termination.

     

    7.3 Payment
      of Obligations. On
      the
      Maturity Date or on any earlier effective date of termination, Borrower shall
      pay in full all Obligations, whether or not all or any part of such Obligations
      are otherwise then due and payable. Without limiting the generality of the
      foregoing, if, on the Maturity Date or on any earlier effective date of
      termination, there are any outstanding Credit Accommodations, then on such
      date
      Borrower shall provide to Lender cash collateral in an amount equal to 110%
      of
      the Credit Accommodation Balance to secure all of the Obligations (including
      estimated attorneys' fees and other expenses) relating to said Credit
      Accommodations or such greater percentage or amount as Lender reasonably deems
      appropriate, pursuant to a cash pledge agreement in form and substance
      satisfactory to Lender.

     

    7.4 Effect
      of Termination.
      No
      termination shall affect or impair any right or remedy of Lender or relieve
      Borrower of any of the Obligations until all of the monetary Obligations have
      been indefeasibly paid in full. Upon indefeasible payment and performance in
      full of all of the monetary Obligations (and the provision of cash collateral
      with respect to any Credit Accommodation Balance as required by
      Section 7.3) and termination of this Agreement, Lender shall promptly
      deliver to Borrower termination statements, requests for reconveyances and
      such
      other documents as may be reasonably required to terminate Lender's security
      interests in the Collateral.

    
       

      
        
          
          

        

        
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                  Greystone
                    Business Credit II, L.L.C.

                	 	
                  Loan
                    and Security
                    Agreement

                

        

      

       

    

    
      	
              8.

            	
              EVENTS
                OF DEFAULT AND REMEDIES.

            

    

     

    8.1 Events
      of Default. The occurrence of any of the following events shall
      constitute an "Event
      of Default"
      under
      this Agreement, and Borrower shall give Lender immediate written notice thereof:
      (i) if any warranty, representation, statement, report or certificate made
      or delivered to Lender by Borrower or any of Borrower's officers, employees
      or
      agents is untrue or misleading; (ii) if Borrower fails to pay when due any
      principal or interest on any Loan or any other monetary Obligation;
      (iii) if Borrower breaches any covenant or obligation contained in this
      Agreement or any other Loan Document or fails to perform any other non-monetary
      Obligation; (iv) if any levy, assessment, attachment, seizure, lien,
      security interest or encumbrance (other than a Permitted Lien) is made or
      permitted to exist on all or any part of the Collateral; (v) if one or more
      judgments aggregating in excess of $150,000, or any injunction or attachment,
      is
      obtained against Borrower or any Obligor which remains unstayed for more than
      ten days or is enforced; (vi) the occurrence of any default under any
      financing agreement, security agreement or other agreement, instrument or
      document executed and delivered by (A) Borrower with, or in favor of, any
      Person other than Lender or (B) Borrower or any Affiliate of Borrower with,
      or in favor of, Lender or any Affiliate of Lender; (vii) the dissolution,
      death, termination of existence in good standing, insolvency or business failure
      or suspension or cessation of business as usual of Borrower or any Obligor
      (or
      of any general partner of Borrower or any Obligor if it is a partnership) or
      the
      appointment of a receiver, trustee or custodian for all or any part of the
      property of, or an assignment for the benefit of creditors by Borrower or any
      Obligor, or the commencement of any proceeding by Borrower or any Obligor under
      any reorganization, bankruptcy, insolvency, arrangement, readjustment of debt,
      dissolution or liquidation law or statute of any jurisdiction, now or in the
      future in effect, or if Borrower makes or sends a notice of a bulk transfer
      or
      calls a meeting of its creditors; (viii) the commencement of any proceeding
      against Borrower or any Obligor under any reorganization, bankruptcy,
      insolvency, arrangement, readjustment of debt, dissolution or liquidation law
      or
      statute of any jurisdiction, now or in the future in effect; (ix) the
      actual or attempted revocation or termination of, or limitation or denial of
      liability upon, any guaranty of the Obligations, or any security document
      securing the Obligations, by any Obligor; (x) if Borrower makes any payment
      on account of any indebtedness or obligation which has been subordinated to
      the
      Obligations other than as permitted in the applicable subordination agreement,
      or if any Person who has subordinated such indebtedness or obligations attempts
      to limit or terminate its subordination agreement; (xi) if there is any
      actual or threatened indictment of Borrower or any Obligor under any criminal
      statute or commencement or threatened commencement of criminal or civil
      proceedings against Borrower or any Obligor, pursuant to which the potential
      penalties or remedies sought or available include forfeiture of any property
      of
      Borrower or such Obligor having an aggregate value greater than or equal to
      $150,000; (xii) if there is a change in the record or beneficial ownership
      of an aggregate of more than 20% of the outstanding shares of stock of Borrower
      (or partnership or membership interests if it is a partnership or limited
      liability company), in one or more transactions, compared to the ownership
      of
      outstanding shares of stock (or partnership or membership interests) of Borrower
      as of the date hereof, without the prior written consent of Lender;
      (xiii) if there is any change in the chief executive officer, chief
      operating officer or chief financial officer of Borrower and a replacement
      acceptable to Lender is not appointed within ninety (90) days; (xiv) if an
      Event of Default occurs under any Loan and Security Agreement between Lender
      and
      an Affiliate of Borrower; or (xv) if Lender determines in good faith that
      the Collateral is insufficient to fully secure the Obligations or that the
      prospect of payment of performance of the Obligations is impaired. 

    
       

      
        
          
          

        

        
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              Greystone
                Business Credit II, L.L.C.

            	 	
              Loan
                and Security Agreement

            

    

     

    8.2 Remedies.
      Upon
      the
      occurrence of any Default, and at any time thereafter, Lender, at its option,
      may cease making Loans or otherwise extending credit to Borrower under this
      Agreement or any other Loan Document. Upon the occurrence of an Event of
      Default, Lender may exercise from time to time any rights and remedies available
      to it under the UCC and any other applicable law in addition to, and not in
      lieu
      of, any rights and remedies expressly granted in this Agreement or in any of
      the
      other Loan Documents and all of Lender's rights and remedies shall be cumulative
      and non-exclusive to the extent permitted by law. In particular, but not by
      way
      of limitation of the foregoing, upon the occurrence of any Event of Default,
      and
      at any time thereafter, Lender, at its option, and without notice or demand
      of
      any kind (all of which are hereby expressly waived by Borrower), may do any
      one
      or more of the following: (i) cease making Loans or otherwise extending
      credit to Borrower under this Agreement or any other Loan Document;
      (ii) accelerate and declare all or any part of the Obligations to be
      immediately due, payable and performable, notwithstanding any deferred or
      installment payments allowed by any instrument evidencing or relating to any
      of
      the Obligations; (iii) take possession of any or all of the Collateral (in
      addition to Collateral of which it already has possession) wherever it may
      be
      found, and for that purpose Borrower hereby authorizes Lender, without judicial
      process, to enter onto any of Borrower's premises without interference to search
      for, take possession of, keep, store, or remove any of the Collateral, and
      remain (or cause a custodian to remain) on the premises in exclusive control
      thereof, without charge for so long as Lender deems it reasonably necessary
      in
      order to complete the enforcement of its rights under this Agreement or any
      other agreement; provided,
      that if
      Lender seeks to take possession of any of the Collateral by court process,
      Borrower hereby irrevocably waives (A) any bond and any surety or security
      relating thereto required by law as an incident to such possession, (B) any
      demand for possession prior to the commencement of any suit or action to recover
      possession thereof and (C) any requirement that Lender retain possession
      of, and not dispose of, any such Collateral until after trial or final judgment;
      (iv) require Borrower to assemble any or all of the Collateral and make it
      available to Lender at one or more places designated by Lender which are
      reasonably convenient to Lender and Borrower, and to remove the Collateral
      to
      such locations as Lender may deem advisable; (v) complete the processing,
      manufacturing or repair of any Collateral prior to a disposition thereof and,
      for such purpose and for the purpose of removal, Lender shall have the right
      to
      use Borrower's premises, vehicles and other Equipment and all other property
      without charge; (vi) sell, lease or otherwise dispose of any of the
      Collateral, in its condition at the time Lender obtains possession of it or
      after further manufacturing, processing or repair, at one or more public or
      private sales, in lots or in bulk, for cash, exchange or other property, or
      on
      credit (a "Sale"),
      and
      to adjourn any such Sale from time to time without notice other than oral
      announcement at the time scheduled for Sale (and, in connection therewith,
      (A) Lender shall have the right to conduct such Sale on Borrower's premises
      without charge, for such times as Lender deems reasonable, on Lender's premises,
      or elsewhere, and the Collateral need not be located at the place of Sale;
      (B) Lender may directly or through any of its Affiliates purchase or lease
      any of the Collateral at any such public disposition, and if permissible under
      applicable law, at any private disposition and (C) any Sale of Collateral
      shall not relieve Borrower of any liability Borrower may have if any Collateral
      is defective as to title, physical condition or otherwise at the time of sale);
      (vii) demand payment of and collect any Accounts, Chattel Paper,
      Instruments and General Intangibles included in the Collateral and, in
      connection therewith, Borrower irrevocably authorizes Lender to endorse or
      sign
      Borrower's name on all collections, receipts, Instruments and other documents,
      to take possession of and open mail addressed to Borrower and remove therefrom
      payments made with respect to any item of Collateral or Proceeds thereof and,
      in
      Lender's sole and absolute discretion, to grant extensions of time to pay,
      compromise claims and settle Accounts, General Intangibles and the like for
      less
      than face value; and (viii) demand and receive possession of any of
      Borrower's federal and state income tax returns and the books and records
      utilized in the preparation thereof or relating thereto. Borrower
      recognizes that if Borrower fails to perform, observe or discharge any of its
      Obligations under this Agreement or any of the Loan Documents, no remedy at
      law
      will provide adequate relief to Lender, and agrees that Lender shall be entitled
      to temporary and permanent injunctive relief in any such case without the
      necessity of proving actual damages. Any notification of intended disposition
      of
      any of the Collateral required by law will be deemed to be a reasonable
      authenticated notification of disposition if given at least ten days prior
      to
      such disposition and such notice shall (i) describe Lender and Borrower,
      (ii) describe the Collateral that is the subject of the intended
      disposition, (iii) state the method of the intended disposition,
      (iv) state that Borrower is entitled to an accounting of the Obligations
      and state the charge, if any, for an accounting and (v) state the time and
      place of any public disposition or the time after which any private sale is
      to
      be made. Lender may disclaim any warranties that might arise in connection
      with
      the sale, lease or other disposition of the Collateral and has no obligation
      to
      provide any warranties at such time. Any Proceeds of any disposition by Lender
      of any of the Collateral may be applied by Lender to the payment of expenses
      in
      connection with the Collateral, including legal expenses and reasonable
      attorneys' fees, and any balance of such Proceeds may be applied by Lender
      toward the payment of such of the Obligations, and in such order of application,
      as Lender may from time to time elect. In addition to the foregoing remedies,
      upon the occurrence of any Event of Default resulting from a breach of any
      of
      the financial covenants set forth in Section 5.21, Lender may, at its
      option, upon not less than ten days' prior notice to Borrower, reduce any or
      all
      of the Loan Limits set forth in Section 1(b) of Schedule A to the
      extent Lender, in its sole discretion, deems appropriate. Exercise or partial
      exercise by Lender of one or more of its rights or remedies shall not be deemed
      an election or bar Lender from subsequent exercise or partial exercise of any
      other rights or remedies. The failure or delay of Lender to exercise any rights
      or remedies shall not operate as a waiver thereof, but all rights and remedies
      shall continue in full force and effect until all of the Obligations have been
      fully paid and performed. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              Greystone
                Business Credit II, L.L.C.

            	 	
              Loan
                and Security Agreement

            

    

    
       

    

    8.3 Application
      of Proceeds. Subject
      to any application required by law, all Proceeds realized as the result of
      any
      Sale shall be applied by Lender to the Obligations in such order as Lender
      shall
      determine in its sole discretion. Any surplus shall be paid to Borrower or
      other
      Persons legally entitled thereto; but Borrower shall remain liable to Lender
      for
      any deficiency. If Lender, in its sole and absolute discretion, directly or
      indirectly enters into a deferred payment or other credit transaction with
      any
      purchaser at any Sale, Lender shall have the option, exercisable at any time,
      in
      its sole and absolute discretion, of either reducing the Obligations by the
      principal amount of the purchase price or deferring the reduction of the
      Obligations until the actual receipt by Lender of the cash
      therefor.

     

    
      	
              9.

            	
              GENERAL
                PROVISIONS.

            

    

     

    9.1 Notices.
      All
      notices to be given under this Agreement shall be in writing and shall be given
      either personally, by reputable private delivery service, by regular first-class
      mail or certified mail return receipt requested, addressed to Lender or Borrower
      at the address shown in the heading to this Agreement, or by facsimile to the
      facsimile number shown in Section 9(i) of Schedule A, or at any other
      address (or to any other facsimile number) designated in writing by one party
      to
      the other party in the manner prescribed in this Section 9.1. All notices
      shall be deemed to have been given when received or when delivery is refused
      by
      the recipient.

     

    9.2 Severability.
      If
      any
      provision of this Agreement, or the application thereof to any party or
      circumstance, is held to be void or unenforceable by any court of competent
      jurisdiction, such defect shall not affect the remainder of this Agreement,
      which shall continue in full force and effect.

     

    9.3 Integration.
      This
      Agreement and the other Loan Documents represent the final, entire and complete
      agreement between Borrower and Lender and supersede all prior and
      contemporaneous negotiations, oral representations and agreements, all of which
      are merged and integrated into this Agreement. THERE ARE NO ORAL UNDERSTANDINGS,
      REPRESENTATIONS OR AGREEMENTS BETWEEN THE PARTIES THAT ARE NOT SET FORTH IN
      THIS
      AGREEMENT OR THE OTHER LOAN DOCUMENTS.

     

    9.4 Waivers.
      The
      failure of Lender at any time or times to require Borrower to strictly comply
      with any of the provisions of this Agreement or any other Loan Documents shall
      not waive or diminish any right of Lender later to demand and receive strict
      compliance therewith. Any waiver of any default shall not waive or affect any
      other default, whether prior or subsequent, and whether or not similar. None
      of
      the provisions of this Agreement or any other Loan Document shall be deemed
      to
      have been waived by any act or knowledge of Lender or its agents or employees,
      but only by a specific written waiver signed by an authorized officer of Lender
      and delivered to Borrower. Borrower waives demand, protest, notice of protest
      and notice of default or dishonor, notice of payment and nonpayment, release,
      compromise, settlement, extension or renewal of any commercial paper,
      Instrument, Account, General Intangible, Document, Chattel Paper, Investment
      Property or guaranty at any time held by Lender on which Borrower is or may
      in
      any way be liable, and notice of any action taken by Lender, unless expressly
      required by this Agreement, and notice of acceptance hereof.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

        	
                Greystone
                  Business Credit II, L.L.C.

              	 	
                Loan
                  and Security
                  Agreement

              

      

    

     

    9.5 Amendment.
      This
      Agreement may not be amended or modified except in a writing executed by
      Borrower and a duly authorized officer of Lender.

     

    9.6 Time
      of Essence. Time
      is
      of the essence in the performance by Borrower of each and every obligation
      under
      this Agreement and the other Loan Documents.

     

    9.7 Attorneys
      Fees and Costs. Borrower
      shall reimburse Lender for all reasonable attorneys' and paralegals' fees
      (including in-house attorneys and paralegals employed by Lender) and all filing,
      recording, search, title insurance, appraisal, audit, and other costs incurred
      by Lender, pursuant to, in connection with, or relating to this Agreement,
      including all reasonable attorneys' fees and costs Lender incurs to prepare
      and
      negotiate this Agreement and the other Loan Documents; to obtain legal advice
      in
      connection with this Agreement and the other Loan Documents or Borrower or
      any
      Obligor; to administer this Agreement and the other Loan Documents (including
      the cost of periodic financing statement, tax lien and other searches conducted
      by Lender); to enforce, or seek to enforce, any of its rights; prosecute actions
      against, or defend actions by, Account Debtors; to commence, intervene in,
      or
      defend any action or proceeding; to enforce and protect, or to seek to enforce
      and protect, any of its rights and interests in any bankruptcy case of Borrower,
      including by initiating and prosecuting any motion for relief from the automatic
      stay and by initiating, prosecuting or defending any other contested matter
      or
      adversary proceeding in bankruptcy; to file or prosecute any probate claim,
      bankruptcy claim, third-party claim, or other claim; to examine, audit, copy,
      and inspect any of the Collateral or any of Borrower's books and records; to
      protect, obtain possession of, lease, dispose of, or otherwise enforce Lender's
      security interests in, the Collateral; and to otherwise represent Lender in
      any
      litigation relating to Borrower or any Obligor. If either Lender or Borrower
      files any lawsuit against the other predicated on a breach of this Agreement,
      the prevailing party in such action shall be entitled to recover its reasonable
      costs and attorneys' fees, including reasonable attorneys' fees and costs
      incurred in the enforcement of, execution upon or defense of any order, decree,
      award or judgment. All attorneys' fees and costs to which Lender may be entitled
      pursuant to this Section shall immediately become part of the Obligations,
      shall
      be due on demand, and shall bear interest at a rate equal to the highest
      interest rate applicable to any of the Obligations.

     

    9.8 Benefit
      of Agreement; Assignability. The
      provisions of this Agreement shall be binding upon and inure to the benefit
      of
      the respective successors, assigns, heirs, beneficiaries and representatives
      of
      Borrower and Lender; provided,
      that
      Borrower may not assign or transfer any of its rights under this Agreement
      without the prior written consent of Lender, and any prohibited assignment
      shall
      be void. No consent by Lender to any assignment shall release Borrower from
      its
      liability for any of the Obligations. Lender shall have the right to assign
      all
      or any of its rights and obligations under the Loan Documents, and to sell
      participating interests therein, to one or more other Persons, and Borrower
      agrees to execute all agreements, instruments and documents requested by Lender
      in connection with each such assignment and participation.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              Greystone
                Business Credit II, L.L.C.

            	 	
              Loan
                and Security Agreement

            

    

     

    9.9 Headings;
      Construction. Section
      and subsection headings are used in this Agreement only for convenience and
      do
      not affect the meanings of the provisions that they precede.

     

    9.10 GOVERNING
      LAW; CONSENT TO FORUM, ETC.
      THIS
      AGREEMENT HAS BEEN NEGOTIATED, EXECUTED AND DELIVERED, AND SHALL BE DEEMED
      TO
      HAVE BEEN MADE, IN NEW YORK COUNTY, NEW YORK, AND SHALL BE GOVERNED BY AND
      CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. BORROWER HEREBY
      CONSENTS AND AGREES THAT THE STATE AND FEDERAL COURTS LOCATED IN NEW YORK
      COUNTY, NEW YORK OR ANY STATE IN WHICH ANY OF THE COLLATERAL IS LOCATED SHALL
      HAVE NON-EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
      BETWEEN BORROWER AND LENDER PERTAINING TO THIS AGREEMENT, ANY OTHER LOAN
      DOCUMENTS OR ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
      OTHER
      LOAN DOCUMENTS. BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
      JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND WAIVES
      ANY
      OBJECTION WHICH BORROWER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
      IMPROPER VENUE OR FORUM NON CONVENIENS.
      BORROWER ALSO AGREES THAT ANY CLAIM OR DISPUTE BROUGHT BY BORROWER AGAINST
      LENDER PURSUANT TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY MATTER ARISING
      OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT EXCLUSIVELY
      IN
      THE STATE AND FEDERAL COURTS LOCATED IN NEW YORK COUNTY, NEW YORK. BORROWER
      HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS
      ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
      COMPLAINT AND OTHER PROCESS MAY BE MADE IN THE MANNER AND SHALL BE DEEMED
      RECEIVED AS SET FORTH IN SECTION 9.1 FOR NOTICES, TO THE EXTENT PERMITTED
      BY LAW. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE
      RIGHT
      OF LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO
      PRECLUDE THE ENFORCEMENT BY LENDER OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH
      FORUM OR THE TAKING OF
      ANY
      ACTION UNDER THIS AGREEMENT TO ENFORCE THE SAME IN ANY OTHER APPROPRIATE FORUM
      OR JURISDICTION.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              Greystone
                Business Credit II, L.L.C.

            	 	
              Loan
                and Security Agreement

            

    

     

    9.11 WAIVER
      OF JURY TRIAL, ETC.
      BORROWER
      WAIVES (I) THE RIGHT TO TRIAL BY JURY (WHICH LENDER ALSO WAIVES) IN ANY
      ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED
      TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL OR ANY CONDUCT,
      ACTS OR OMISSIONS OF LENDER OR BORROWER OR ANY OF THEIR RESPECTIVE DIRECTORS,
      OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS OR ANY OTHER PERSONS AFFILIATED WITH
      LENDER OR BORROWER, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE;
      (II) THE RIGHT TO INTERPOSE ANY CLAIMS, DEDUCTIONS, SETOFFS OR
      COUNTERCLAIMS OF ANY KIND IN ANY ACTION OR PROCEEDING INSTITUTED BY LENDER
      WITH
      RESPECT TO THE LOAN DOCUMENTS OR ANY MATTER RELATING THERETO, EXCEPT FOR
      COMPULSORY COUNTERCLAIMS; (III) NOTICE PRIOR TO LENDER'S TAKING POSSESSION
      OR CONTROL OF THE COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED
      BY
      ANY COURT PRIOR TO ALLOWING LENDER TO EXERCISE ANY OF LENDER'S REMEDIES AND
      (IV) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS.
      BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT
      TO
      LENDER'S ENTERING INTO THIS AGREEMENT AND THAT LENDER IS RELYING UPON THE
      FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH BORROWER. BORROWER WARRANTS AND
      REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL
      COUNSEL
      AND
      HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING
      CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT
      MAY
      BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	
              Greystone
                Business Credit II, L.L.C.

            	 	
              Loan
                and Security Agreement

            

    

     

    IN
      WITNESS WHEREOF, Borrower and Lender have signed this Agreement as of the date
      first set forth above.

     

    
      	
              Borrower:

               

              TITAN
                APPAREL, INC.

               

              By___________________________________________________

              Its________________________________________________

               

            	 	
              Lender:

               

              GREYSTONE
                BUSINESS CREDIT II, L.L.C.

               

              By__________________________________________________________________

              Its
                Authorized Signatory

               

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule A

     

    Description
      of Certain Terms

     

    This
      Schedule is an integral part of the Loan and Security Agreement between
Titan
      Apparel, Inc.
      and
Greystone
      Business Credit II, L.L.C. (the
      "Agreement").

     

    

      
        	
                1.

                 

              	
                Loan
                  Limits for Revolving Loans:

                 

              	 
	 	
                (a)

                 

              	
                Maximum
                  Facility Amount:

                 

              	
                $14,000,000

                 

              
	 	
                (b)

                 

              	
                Advance
                  Rates:

                 

              	 
	 	 	
                (i)

                 

              	
                Accounts
                  Advance Rate:

                 

              	
                Subject
                  to the reductions set forth below, 85%; provided,
                  that, in addition to the foregoing, if the Dilution Percentage
                  exceeds 2%,
                  Lender may, at its option (A) reduce such advance rate by the number
                  of full or partial percentage points comprising such excess or
                  (B) establish a Reserve on account of such excess

                 

              
	 	 	
                (ii)

                 

              	
                Inventory
                  Advance Rate:

                 

              	
                The
                  lesser of (A) 65% of cost or (B) 85% of the net orderly
                  liquidation value of Inventory, based in each case, upon a recent
                  appraisal in form and substance satisfactory to Lender

                 

              
	 	
                (c)

                 

              	
                Inventory
                  Sublimit:

                 

              	
                Commencing
                  eight (8) months after the date hereof, the lesser of (i) $6,000,000
                  and (ii) advances with respect to Eligible Accounts
                  outstanding

                 

              
	 	
                (d)

                 

              	
                Credit
                  Accommodation Limit:

                 

              	
                $3,000,000

                 

              
	
                2.

                 

              	
                Loan
                  Limits for Term Loan:

                 

              	 
	 	
                (a)

                 

              	
                Principal
                  Amount:

                 

              	
                $2,000,000

                 

              
	 	
                (b)

                 

              	
                Repayment
                  Schedule:

                 

              	
                Payable
                  in full in cash on the Initial Maturity Date

                 

              

      

       

      
        
          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      

       

      
        	
                3.

                 

              	
                Interest
                  Rate:

                 

              	 
	 	
                (a)

                 

              	
                Revolving
                  Loans and other monetary Obligations:

                 

              	
                3%
                  per annum in excess of the Prime Rate for a period of six (6) months
                  from
                  the date hereof and 5% per annum in excess of the Prime Rate
                  thereafter

                 

              
	 	
                (b)

                 

              	
                Term
                  Loan:

                 

              	
                5%
                  per annum in excess of the Prime Rate for a period of six (6) months
                  from
                  the date hereof and 7% per annum in excess of the Prime Rate
                  thereafter

                 

              
	
                4.

                 

              	
                [Intentionally
                  Omitted]

                 

              	 
	
                5.

                 

              	
                Maximum
                  Days:

                 

              	 
	 	
                (a)

                 

              	
                Maximum
                  days after original

                invoice
                  date
                  for Eligible Accounts:

                 

              	
                90
                  days

                 

              
	 	
                (b)

                 

              	
                Maximum
                  days after original 

                invoice
                  due date
                  for Eligible Accounts:

                 

              	
                60
                  days

                 

              
	
                6.

                 

              	
                Fees:

                 

              	 
	 	
                (a)

                 

              	
                Credit
                  Accommodation Fees:

                 

              	
                3%
                  of the face amount of any letters of credit issued in connection
                  with any
                  Credit Accommodation, plus any other fees and expenses charged
                  to Lender
                  with respect to any such letter of credit

                 

              
	
                7.

                 

              	
                Initial
                  Maturity Date:

                 

              	
                December
                  29, 2009

                 

              
	
                8.

                 

              	
                Financial
                  Covenants:

                 

              	 
	 	
                (a)

                 

              	
                Limitation
                  on Purchase Money Security Interests:

                 

              	
                $200,000

                 

              
	 	
                (b)

                 

              	
                Limitation
                  on Equipment Leases:

                 

              	
                $200,000

                 

              
	
                9.

                 

              	
                Borrower
                  Information:

                 

              	 
	 	
                (a)

                 

              	
                Prior
                  Names of Borrower:

                 

              	
                None

                 

              
	 	
                (b)

                 

              	
                Prior
                  Trade Names of Borrower:

                 

              	
                None

                 

              

      

       

      
        
          
          

        

        
          A-2

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (c)

                 

              	
                Existing
                  Trade Names of Borrower:

                 

              	
                [to
                  be inserted]

                 

              
	 	
                (d)

                 

              	
                Inventory
                  Locations:

                 

              	
                [to
                  be inserted]

                 

              
	 	
                (e)

                 

              	
                Other
                  Locations:

                 

              	
                [to
                  be inserted]

                 

              
	 	
                (f)

                 

              	
                Litigation:

                 

              	
                [to
                  be inserted]

                 

              
	 	
                (g)

                 

              	
                Ownership
                  of Borrower:

                 

              	
                [to
                  be inserted]

                 

              
	 	
                (h)

                 

              	
                Subsidiaries
                  (and ownership thereof):

                 

              	
                [to
                  be inserted]

                 

              
	 	
                (i)

                 

              	
                Facsimile
                  Numbers:

                 

              	 
	 	 	
                Borrower:

                 

              	
                [to
                  be inserted]

                 

              
	 	 	
                Lender:

                 

              	
                212-896-9199

                 

              

      

      
        	
                10.

                 

              	
                Description
                  of Real Property:

                 

              	
                None

                 

              
	
                11.

                 

              	
                Lender's
                  Bank:

                 

              	
                Bank
                  of America

                P.O.
                  Box 4899

                Atlanta,
                  GA 30302-4899

                ABA
                  No.: 026-009-593

                For
                  credit to: Greystone Business Credit II, L.L.C.

                Account
                  No.: 0032-8251-0983

                Re:
                  Titan Apparel, Inc.

                 

              
	
                12.

                 

              	
                Other
                  Covenants:

                 

              	
                For
                  each location set forth in Section 9(d) of Schedule A, Borrower
                  shall use commercially reasonable efforts to obtain a landlord's
                  agreement
                  in form and substance satisfactory to Lender 

                 

              
	
                13.

                 

              	
                [Intentionally
                  Omitted]

                 

              	 
	
                14.

                 

              	
                Commercial
                  Tort Claims

                 

              	
                [to
                  be inserted]

                 

              
	
                15.

                 

              	
                Deposit
                  Accounts

                 

              	
                [to
                  be inserted]

                 

              
	
                16.

                 

              	
                Borrower's
                  Bank

                 

              	
                [to
                  be inserted]

                 

              

      

    

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, Borrower and Lender have signed this Schedule A as of the
      date
      set forth in the heading to the Agreement.

     

    
      	
              Borrower:

               

            	 	
              Lender:

               

            
	
              TITAN
                APPAREL, INC.

               

            	 	
              GREYSTONE
                BUSINESS CREDIT II, L.L.C.

               

            
	
              By
                /s/                                                                                                      
                

            	 	
              By
                /s/                                                                                                           
                

            
	
                 
                Its_____________________________________________

               

            	 	
              Its
                Authorized Signatory

               

            

    

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

     

    Schedule B

     

    Definitions

     

    This
      Schedule is an integral part of the Loan and Security Agreement between
Titan
      Apparel, Inc. and
      Greystone
      Business Credit II, L.L.C. (the
      "Agreement").

     

    As
      used
      in the Agreement, the following terms have the following meanings:

     

    "Account"
      has the
      meaning set forth in the UCC.

     

    "Account
      Debtor"
      has the
      meaning set forth in the UCC.

     

    "Account
      Proceeds"
      has the
      meaning set forth in Section 4.1.

     

    "Accounts
      Advance Rate"
      means
      the percentage set forth in Section 1(b)(i) of
      Schedule A.

     

    "Advance"
      has the
      meaning set forth in Section 1.1(b).

     

    "Advance
      Rates"
      means,
      collectively, the Accounts Advance Rate and the Inventory Advance
      Rate.

     

    "Affiliate"
      means,
      with respect to any Person, a relative, partner, shareholder, member, manager,
      director, officer, or employee of such Person, any parent or subsidiary of
      such
      Person, or any Person controlling, controlled by or under common control with
      such Person or any other Person affiliated, directly or indirectly, by virtue
      of
      family membership, ownership, management or otherwise.

     

    "Agreement"
      and
      "this
      Agreement"
      mean
      the Loan and Security Agreement of which this Schedule B is a part and the
      Schedules thereto.

     

    "Availability"
      has the
      meaning set forth in Section 1.1(a)

     

    "Bankruptcy
      Code"
      means
      the United States Bankruptcy Code (11 U.S.C. § 101 et seq.).

     

    "Blocked
      Account"
      has the
      meaning set forth in Section 4.1.

     

    "Borrower"
      has the
      meaning set forth in the heading to the Agreement.

     

    "Borrower's
      Address"
      has the
      meaning set forth in the heading to the Agreement.

     

    "Business
      Day"
      means a
      day other than a Saturday or Sunday or any other day on which Lender or banks
      in
      New York are authorized to close.

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

     

    "Capital
      Stock"
      means
      any and all shares, interests, participations or other equivalents (however
      designated) of capital stock of a corporation, any and all equivalent ownership
      interests in a Person (other than a corporation) and any and all warrants,
      rights or options to purchase any of the foregoing.

     

    "Chattel
      Paper"
      has the
      meaning set forth in the UCC.

     

    "Collateral"
      means
      all property and interests in property in or upon which a security interest
      or
      other Lien is granted pursuant to this Agreement or the other Loan Documents,
      including all of the property of Borrower described in
      Section 3.1.

     

    "Commercial
      Tort Claims"
      has the
      meaning set forth in the UCC.

     

    "Credit
      Accommodation"
      has the
      meaning set forth in Section 1.1(a).

     

    "Credit
      Accommodation Balance"
      means
      the sum of (i) the aggregate undrawn face amount of all outstanding Credit
      Accommodations and (ii) all interest, fees and costs due or, in Lender's
      estimation, likely to become due in connection therewith.

     

    "Credit
      Accommodation Fees"
      has the
      meaning set forth in Section 2.2(a).

     

    "Credit
      Accommodation Limit"
      means
      the amount set forth in Section 1(e) of Schedule A.

     

    "Default"
      means
      any event which with notice or passage of time, or both, would constitute an
      Event of Default.

     

    "Deposit
      Account"
      has the
      meaning set forth in the UCC.

     

    "Dilution
      Percentage"
      means
      the gross amount of all returns, allowances, discounts, credits, write-offs
      and
      similar items relating to Borrower's Accounts computed as a percentage of
      Borrower's gross sales, calculated on a ninety (90) day rolling
      average.

     

    "Document"
      has the
      meaning set forth in the UCC.

     

    "Electronic
      Chattel Paper"
      has the
      meaning set forth in the UCC.

     

    
      
        
        

      

      
        B-2

        
          

        

      

      
        
        

      

    

     

    "Eligible
      Account"
      means,
      at any time of determination, an Account which satisfies the general criteria
      set forth below and which is otherwise acceptable to Lender (provided,
      that
      Lender may, in its sole discretion, change the general criteria for
      acceptability of Eligible Accounts upon at least fifteen days' prior notice
      to
      Borrower). An Account shall be deemed to meet the current general criteria
      if
      (i) neither the Account Debtor nor any of its Affiliates is an Affiliate,
      creditor or supplier of Borrower; (ii) it does not remain unpaid more than
      the earlier to occur of (A) the number of days after the original
invoice
      date
      set
      forth in Section 5(a) of Schedule A or (B) the number of days
      after the original invoice
      due date
      set
      forth in Section 5(b) of Schedule A; (iii) the Account Debtor or
      its Affiliates are not past due on other Accounts owing to Borrower comprising
      more than 50% of all of the Accounts owing to Borrower by such Account Debtor
      or
      its Affiliates; (iv) all Accounts owing by the Account Debtor or its
      Affiliates do not represent more than 30% of all otherwise Eligible Accounts
      (provided,
      that
      Accounts which are deemed to be ineligible solely by reason of this
      clause (iv) shall be considered Eligible Accounts to the extent of the
      amount thereof which does not exceed the applicable percentage of
      all
      otherwise Eligible Account as set forth in this clause (iv)); (v) no
      covenant, representation or warranty contained in this Agreement with respect
      to
      such Account (including any of the representations set forth in
      Section 5.4) has been breached; (vi) the Account is not subject to any
      contra relationship, counterclaim, dispute or set-off (provided,
      that
      Accounts which are deemed to be ineligible solely by reason of this
      clause (vi) shall be considered Eligible Accounts to the extent of the
      amount thereof which is not affected by such contra relationships,
      counterclaims, disputes or set-offs); (vii) the Account Debtor's chief
      executive office or principal place of business is located in the United States
      or Provinces of Canada which have adopted the Personal Property Security Act
      or
      a similar act, unless (A) the sale is fully backed by a letter of credit,
      guaranty or acceptance acceptable to Lender in its sole discretion, and if
      backed by a letter of credit, such letter of credit has been issued or confirmed
      by a bank satisfactory to Lender, is sufficient to cover such Account, and
      if
      required by Lender, the original of such letter of credit has been delivered
      to
      Lender or Lender's agent and the issuer thereof notified of the assignment
      of
      the proceeds of such letter of credit to Lender or (B) such Account is
      subject to credit insurance payable to Lender issued by an insurer and on terms
      and in an amount acceptable to Lender; (viii) it is absolutely owing to
      Borrower and does not arise from a sale on a bill-and-hold, guarantied sale,
      sale-or-return, sale-on-approval, consignment, retainage or any other repurchase
      or return basis or consist of progress billings; (ix) Lender shall have
      verified the Account in a manner satisfactory to Lender; (x) the Account
      Debtor is not the United States of America or any state or political subdivision
      (or any department, agency or instrumentality thereof), unless Borrower has
      complied with the Assignment of Claims Act of 1940 (31 U.S.C. §203 et seq.)
      or
      other applicable similar state or local law in a manner satisfactory to Lender;
      (xi) it is at all times subject to Lender's duly perfected, first priority
      security interest and to no other Lien that is not a Permitted Lien, and the
      goods giving rise to such Account (A) were not, at the time of sale,
      subject to any Lien except Permitted Liens and (B) have been delivered to
      and accepted by the Account Debtor, or the services giving rise to such Account
      have been performed by Borrower and accepted by the Account Debtor;
      (xii) the Account is not evidenced by Chattel Paper or an Instrument of any
      kind and has not been reduced to judgment; (xiii) the Account Debtor's
      total indebtedness to Borrower does not exceed the amount of any credit limit
      established by Borrower or Lender and the Account Debtor is otherwise deemed
      to
      be creditworthy by Lender (provided,
      that
      Accounts which are deemed to be ineligible solely by reason of this
      clause (xiii) shall be considered Eligible Accounts to the extent the
      amount of such Accounts does not exceed the lower of such credit limits);
      (xiv) there are no facts or circumstances existing, or which could
      reasonably be anticipated to occur, which might result in any adverse change
      in
      the Account Debtor's financial condition or impair or delay the collectibility
      of all or any portion of such Account; (xv) Lender has been furnished with
      all documents and other information pertaining to such Account which Lender
      has
      requested, or which Borrower is obligated to deliver to Lender, pursuant to
      this
      Agreement; (xvi) Borrower has not made an agreement with the Account Debtor
      to extend the time of payment thereof beyond the time periods set forth in
      clause (ii) above; and (xvii) Borrower has not posted a surety or other
      bond in respect of the contract under which such Account arose.

     

    
      
        
        

      

      
        B-3

        
          

        

      

      
        
        

      

    

     

    "Eligible
      Inventory"
      means,
      at any time of determination, Inventory
      (other than packaging materials and supplies) which satisfies the general
      criteria set forth below and which is otherwise acceptable to Lender
      (provided,
      that
      Lender may, in its sole discretion, change the general criteria for
      acceptability of Eligible Inventory upon at least fifteen days' prior written
      notice to Borrower). Inventory shall be deemed to meet the current general
      criteria if (i) it consists of raw materials or finished goods, or
      work-in-process that is readily marketable in its current form; (ii) it is
      in good, new and saleable condition; (iii) it is not slow-moving, obsolete,
      unmerchantable, returned or repossessed; (iv) it is not in the possession
      of a processor, consignee or bailee, or located on premises leased or subleased
      to Borrower, or on premises subject to a mortgage in favor of a Person other
      than Lender, unless such processor, consignee, bailee or mortgagee or the lessor
      or sublessor of such premises, as the case may be, has executed and delivered
      all documentation which Lender shall require to evidence the subordination
      or
      other limitation or extinguishment of such Person's rights with respect to
      such
      Inventory and Lender's right to gain access thereto; (v) it meets all
      standards imposed by any governmental agency or authority; (vi) it conforms
      in all respects to any covenants, warranties and representations set forth
      in
      the Agreement; (vii) it is at all times subject to Lender's duly perfected,
      first priority security interest and no other Lien except a Permitted Lien;
      and
      (viii) it is situated at an Inventory Location listed in Section 9(d)
      of Schedule A or other location of which Lender has been notified as
      required by Section 5.8.

     

    "Equipment"
      has the
      meaning set forth in the UCC.

     

    "ERISA"
      means
      the Employee Retirement Income Security Act of 1974 and all rules, regulations
      and orders promulgated thereunder.

     

    "Event
      of Default"
      has the
      meaning set forth in Section 8.1.

     

    "Fixtures"
      has the
      meaning set forth in the UCC.

     

    "GAAP"
      means
      generally accepted accounting principles as in effect from time to time,
      consistently applied.

     

    "General
      Intangibles"
      has the
      meaning set forth in the UCC.

     

    "Goods"
      has the
      meaning set forth in the UCC.

     

    "Ineligible
      Receivable Payments"
      has the
      meaning set forth in Section 1.4.

     

    "Initial
      Maturity Date"
      means
      the date set forth in Section 7 of Schedule A.

     

    
      
        
        

      

      
        B-4

        
          

        

      

      
        
        

      

    

     

    "Initial
      Term"
      has the
      meaning set forth in Section 7.1.

     

    "Instrument"
      has the
      meaning set forth in the UCC.

     

    "Inventory"
      has the
      meaning set forth in the UCC.

     

    "Inventory
      Advance Rate"
      means
      the percentage(s) set forth in Section 1(b)(ii) of
      Schedule A.

     

    "Inventory
      Sublimit"
      means
      the amount(s) set forth in Section 1(d) of Schedule A.

     

    "Investment
      Property"
      has the
      meaning set forth in the UCC.

     

    "Lender"
      has the
      meaning set forth in the heading to the Agreement.

     

    "Letter-of-Credit
      Right"
      has the
      meaning set forth in the UCC.

     

    "Lien"
      means
      any interest in property securing an obligation owed to, or a claim by, a Person
      other than the owner of the property, whether such interest is based on common
      law, statute or contract, including rights of sellers under conditional sales
      contracts or title retention agreements and reservations, exceptions,
      encroachments, easements, rights-of-way, covenants, conditions, restrictions,
      leases and other title exceptions and encumbrances affecting property. For
      the
      purpose of this Agreement, Borrower shall be deemed to be the owner of any
      property which it has acquired or holds subject to a conditional sale agreement
      or other arrangement pursuant to which title to the property has been retained
      by or vested in some other Person for security purposes.

     

    "Loan
      Account"
      has the
      meaning set forth in Section 2.4.

     

    "Loan
      Documents"
      means,
      collectively, the Agreement and all notes, guaranties, security agreements,
      certificates, landlord's agreements, Lock Box and Blocked Account agreements
      and
      all other agreements, documents and instruments now or hereafter executed or
      delivered by Borrower or any Obligor in connection with, or to evidence the
      transactions contemplated by, this Agreement.

     

    "Loan
      Limits"
      means,
      collectively, the Availability limits, all other limits on the amount of Loans
      or Credit Accommodations set forth in this Agreement.

     

    "Loans"
      means
      collectively the Revolving Loans and the Term Loan.

     

    "Lock
      Box"
      has the
      meaning set forth in Section 4.1.

     

    "Maturity
      Date"
      has the
      meaning set forth in Section 7.1.

     

    "Maximum
      Facility Amount"
      means
      the amount set forth in Section 2(a) of Schedule A.

     

    
      
        
        

      

      
        B-5

        
          

        

      

      
        
        

      

    

     

    "Net
      Profits"
      means,
      for any given period of determination, Borrower's net profits for such period
      determined in accordance with GAAP.

     

    "Net
      Sales" means
      net
      sales as determined in accordance with GAAP.

     

    "Net
      Sales Participation" has
      the
      meaning set forth in Section 2.2(b).

     

    "Obligations"
      means
      all present and future Loans, advances, debts, liabilities, obligations,
      guaranties, covenants, duties and indebtedness at any time owing by Borrower
      to
      Lender, whether evidenced by this Agreement, any other Loan Document or
      otherwise whether arising from an extension of credit, opening a Credit
      Accommodation, guaranty, indemnification or otherwise (including all fees,
      costs
      and other amounts which may be owing to issuers of Credit Accommodations and
      all
      taxes, duties, freight, insurance, costs and other expenses, costs or amounts
      payable in connection with Credit Accommodations or the underlying goods),
      whether direct or indirect (including those acquired by assignment and any
      participation by Lender in Borrower's indebtedness owing to others), whether
      absolute or contingent, whether due or to become due, and whether arising before
      or after the commencement of a proceeding under the Bankruptcy Code or any
      similar statute whether or not allowed in any proceeding under the Bankruptcy
      Code, including all interest, charges, expenses, fees, attorney's fees, expert
      witness fees, audit fees, letter of credit fees, Credit Accommodation Fees
      and
      any other sums chargeable to Borrower under this Agreement or under any other
      Loan Document.

     

    "Obligor"
      means
      any guarantor, endorser, acceptor, surety or other person liable on, or with
      respect to, the Obligations or who is the owner of any property which is
      security for the Obligations, other than Borrower.

     

    "Permitted
      Liens"
      means:
      (i) purchase money security interests in specific items of Equipment in an
      aggregate amount not to exceed the limit set forth in Section 8(a) of
      Schedule A; (ii) leases of specific items of Equipment in an aggregate
      amount not to exceed the limit set forth in Section 8(b) of
      Schedule A; (iii) Liens for taxes not yet due and payable;
      (iv) additional Liens which are fully subordinate to the security interests
      of Lender and are consented to in writing by Lender; (v) security interests
      being terminated concurrently with the execution of this Agreement;
      (vi) Liens of materialmen, mechanics or carriers, but excluding Liens in
      favor of warehousemen, arising in the ordinary course of business and securing
      obligations which are not delinquent; (vii) Liens incurred in connection
      with the extension, renewal or refinancing of the indebtedness secured by Liens
      of the type described in clause (i) or (ii) above; provided,
      that
      any extension, renewal or replacement Lien is limited to the property encumbered
      by the existing Lien and the principal amount of the indebtedness being
      extended, renewed or refinanced does not increase; (viii) Liens in favor of
      customs and revenue authorities which secure payment of customs duties in
      connection with the importation of goods; and (ix) security deposits posted
      in connection with real property leases or subleases. Lender will have the
      right
      to require, as a condition to its consent under clause (iv) above, that the
      holder of the additional Lien sign an intercreditor agreement in form and
      substance satisfactory to Lender, in its sole discretion, acknowledging that
      the
      Lien is subordinate to the security interests of Lender, and agreeing not to
      take any action to enforce its subordinate Lien so long as any Obligations
      remain outstanding, and that Borrower agree that any uncured default in any
      obligation secured by the subordinate Lien shall also constitute an Event of
      Default under this Agreement.

     

    
      
        
        

      

      
        B-6

        
          

        

      

      
        
        

      

    

     

    "Person"
      means
      any individual, sole proprietorship, partnership, joint venture, limited
      liability company, trust, unincorporated organization, association, corporation,
      government or any agency or political division thereof, or any other
      entity.

     

    "Prime
      Rate"
      means,
      at any given time, the prime rate as quoted in The
      Wall Street Journal
      as the
      base rate on corporate loans posted as of such time by at least 75% of the
      nation's 30 largest banks (which rate is not necessarily the lowest rate offered
      by such banks).

     

    "Proceeds"
      has the
      meaning set forth in the UCC.

     

    "Projected
      EBITDA"
      means
      EBITDA as reflected on the projections delivered on or prior to the date hereof
      and attached as Annex I hereto. 

     

    "Real
      Property"
      means
      the real property described in Section 10 of Schedule A.

     

    "Related
      Agreements"
      means
      that certain Secured Party Bill of Transfer dated as of the date hereof between
      GBC Funding, LLC, a Delaware limited liability company (as successor to Lender),
      and Borrower, and the documents, instruments and agreements executed in
      connection therewith.

     

    "Related
      Transactions"
      means
      the transactions contemplated by the Related Agreements.

     

    "Released
      Parties"
      has the
      meaning set forth in Section 6.1.

     

    "Renewal
      Term"
      has the
      meaning set forth in Section 7.1.

     

    "Reserves"
      has the
      meaning set forth in Section 1.2.

     

    "Revolving
      Loans"
      has the
      meaning set forth in Section 1.1(a).

     

    "Sale"
      has the
      meaning set forth in Section 8.2.

     

    "Subsidiary"
      means
      any corporation or other entity of which a Person owns, directly or indirectly,
      through one or more intermediaries, more than 50% of the Capital Stock or other
      equity interest at the time of determination.

     

    "Tangible
      Chattel Paper"
      has the
      meaning set forth in the UCC.

     

    
      
        
        

      

      
        B-7

        
          

        

      

      
        
        

      

    

     

    "Term"
      means
      the period commencing on the date of this Agreement and ending on the Maturity
      Date.

     

    "Term
      Loan"
      has the
      meaning set forth in Section 1.1(b).

     

    "UCC"
      means,
      at any given time, the Uniform Commercial Code as adopted and in effect at
      such
      time in the State of New York.

     

    "Unfinanced
      Capital Expenditures"
      shall
      mean, for any period, as to any Person, total Capital Expenditures less
      (a) long-term indebtedness and (b) proceeds of sales of rental
      containers.

     

    "Utilization"
      means,
      with respect to any period, the average owned containers on rent divided by
      the
      average total owned containers. 

     

    "VAT
      Refunds"
      has the
      meaning set forth in Section 1.4.

     

    All
      accounting terms used in this Agreement, unless otherwise indicated, shall
      have
      the meanings given to such terms in accordance with GAAP. All other terms
      contained in this Agreement, unless otherwise indicated, shall have the meanings
      provided by the UCC, to the extent
      such terms are defined therein. The term "including,"
      whenever used in this Agreement, shall mean "including but not limited to."
      The
      singular form of any term shall include the plural form, and vice versa, when
      the context so requires. References to Sections, subsections and Schedules
      are
      to Sections and subsections of, and Schedules to, this Agreement. All references
      to agreements and statutes shall include all amendments thereto and successor
      statutes in the case of statutes. 

     

    
      
        
        

      

      
        B-8

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, Borrower and Lender have signed this Schedule B as of the
      date set forth in the heading to the Agreement.

     

    
      	
              Borrower:

            	 	
              Lender:

            
	 	 	 
	
              TITAN
                APPAREL, INC.

            	 	
              GREYSTONE
                BUSINESS CREDIT II, L.L.C.

            
	 	 	 
	 	 	 
	
              By

            	 
	 	
              By

            	 
	 	
              Its

            	 
	 	 	
              Its
                Authorized Signatory

            

    

    

    
      
        
        

      

      
        B-9

        
          

        

      

      
        
        

      

    

    Annex
      I

    

    See
      attached.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A

     

    FORM
      OF TERM NOTE

     

    
      	
              $_________________

            	
              New
                York, New York

            
	
               

            	
              ______________ ___, 2007

            

    

    

     

    FOR
      VALUE
      RECEIVED, the undersigned, Titan
      Apparel, Inc.,
      a
      __________ corporation ("Borrower"),
      hereby unconditionally promises to pay to the order of Greystone
      Business Credit II, L.L.C. ("Lender"),
      a
      Delaware limited liability company having an address at 152 West 57th Street,
      60th Floor, New York, New York 10019, or at such other place as the holder
      of
      this Term Note ("Term
      Note")
      may
      from time to time designate in writing, in lawful money of the United States
      of
      America and in immediately available funds, the principal sum of
      _______________________________ ___/100 Dollars ($________________).
      Reference is hereby made to the Loan and Security Agreement between Borrower
      and
      Lender of even date herewith (the "Loan
      Agreement")
      for a
      statement of the terms and conditions under which the loan evidenced hereby
      was
      made and is to be repaid. This Term Note evidences a Term Loan Advance described
      in the Loan Agreement. Capitalized terms used herein which are not otherwise
      specifically defined herein shall have the meanings ascribed to such terms
      in
      the Loan Agreement.

     

    The
      outstanding principal balance of this Term Note shall be payable in full on
      the
      Maturity Date. Prior thereto, the Term Note shall be repayable as set forth
      in
      the Loan Agreement.

     

    Borrower
      further promises to pay interest on the outstanding principal amount hereof
      from
      the date hereof until payment in full hereof at the per annum rate as set forth
      in the Loan Agreement. Following the occurrence and during the continuance
      of an
      Event of Default the entire outstanding principal balance of this Term Note
      shall, at Lender's option, bear interest until paid in full at a per annum
      rate
      equal to the interest rate applicable to the Term Loan from time to time in
      effect plus three percent (3.00%). Until maturity, interest on the outstanding
      principal amount hereof shall be payable in arrears on the first day of each
      month, commencing January 1, 2008 and on the Maturity Date. After maturity,
      whether by acceleration or otherwise, accrued interest shall be payable on
      demand. Interest as aforesaid shall be charged for the actual number of days
      elapsed over a year consisting of three hundred sixty (360) days on the actual
      daily outstanding balance hereof. Changes in the interest rate provided for
      herein which are due to changes in the Prime Rate shall be effective on the
      date
      of the change in the Prime Rate.

     

    Notwithstanding
      anything to the contrary contained herein, the aggregate of all interest
      hereunder and charged or collected by Lender is not intended to exceed the
      highest rate permissible under any applicable law, but if it should, such
      interest shall automatically be reduced to the extent necessary to comply with
      applicable law and Lender will refund to Borrower any such excess interest
      received by Lender.

     

    Subject
      to Section 7.2 of the Loan Agreement, Borrower may, prepay the outstanding
      principal balance hereof in whole or in part. Any partial prepayment of the
      Term
      Loan shall be applied to the unpaid installments of the Term Loan in the inverse
      order of their maturities.

     

    Upon
      and
      after the occurrence of an Event of Default, this Term Note may, at the option
      of Lender, and without demand, notice or legal process of any kind, be declared,
      and immediately shall become, due and payable.

     

    Payments
      received by Lender from Borrower on this Term Note shall be applied to the
      Obligations as provided in the Loan Agreement.

     

    Presentment,
      demand, protest and notice of presentment, demand, nonpayment and protest are
      hereby waived by Borrower.

     

    THIS
      TERM
      NOTE SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO
      DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. If any
      provision of this Term Note or the application thereof shall be held to be
      void
      or unenforceable by any court of competent jurisdiction, such defect shall
      not
      affect the remainder of this Term Note, which shall continue in full force
      and
      effect. Whenever in this Term Note reference is made to Lender or Borrower,
      such
      reference shall be deemed to include, as applicable, a reference to their
      respective successors and assigns. The provisions of this Term Note shall be
      binding upon Borrower and its successors and assigns, and shall inure to the
      benefit of Lender and its successors and assigns.

     

    
      	
              TITAN
                APPAREL, INC.

            
	 
	 
	
              By

            	 

	 	
              ItsSECURITIES
        PURCHASE AGREEMENT

       

      This
        Securities Purchase Agreement (this “Agreement”)
        is
        dated as of November 21, 2007, by and among Pressure BioSciences Inc., a
        Massachusetts corporation (the “Company”),
        and
        each purchaser identified on the signature pages hereto (each, including
        its
        successors and assigns, a “Purchaser”
and
        collectively the “Purchasers”).

       

      WHEREAS,
        subject to the terms and conditions set forth in this Agreement and pursuant
        to
        Section 4(2) of the Securities Act of 1933, as amended (the “Securities
        Act”),
        and
        Rule 506 promulgated thereunder, the Company desires to issue and sell to
        each
        Purchaser, and each Purchaser, severally and not jointly, desires to purchase
        from the Company, securities of the Company, as more fully described in this
        Agreement.

       

      NOW,
        THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
        and for other good and valuable consideration the receipt and adequacy of
        which
        are hereby acknowledged, the Company and each Purchaser agree as
        follows:

       

      ARTICLE
        I.

      DEFINITIONS

       

      1.1 Definitions.
        In
        addition to the terms defined elsewhere in this Agreement, for all purposes
        of
        this Agreement, the following terms have the meanings set forth in this Section
        1.1:

       

      “Affiliate”
means
        any Person that, directly or indirectly through one or more intermediaries,
        controls or is controlled by or is under common control with a Person as
        such
        terms are used in and construed under Rule 144 under the Securities Act.
        

       

      “Business
        Day”
means
        any day except Saturday, Sunday, any day which shall be a federal legal holiday
        in the United States, or any day on which banking institutions in the State
        of
        New York are authorized or required by law or other governmental action to
        close.

       

      “Closing”
means
        the closing of the purchase and sale of the Shares pursuant to Section
2.1.

       

      “Closing
        Date”
means
        the date of this Agreement.

       

      “Commission”
means
        the Securities and Exchange Commission.

       

      “Common
        Stock”
means
        the common stock of the Company, par value $0.01 per share, and any other
        class
        of securities into which such securities may hereafter be reclassified or
        changed into. 

       

      “Common
        Stock Equivalents”
means
        any securities of the Company or the Subsidiaries which would entitle the
        holder
        thereof to acquire at any time Common Stock, including, without limitation,
        any
        debt, preferred stock, rights, options, warrants, stock appreciation rights,
        restricted stock units, or other instrument that is at any time convertible
        into
        or exercisable or exchangeable for, or otherwise entitles the holder thereof
        to
        receive, Common Stock.

       

      “Company
        Counsel”
means
        Pepper Hamilton LLP, with offices located at 101 Federal Street, Suite 1010,
        Boston, Massachusetts, 02110. 

       

      “Damages”
shall
        have the meaning assigned to such term in Section 4.5.

       

      “Disclosure
        Schedules”
means
        the Disclosure Schedules of the Company delivered concurrently herewith.
        

       

      
        
           

        

        
          -1-

          
            

          

        

        
           

        

      

       

      “Effective
        Date”
has
        the
        meaning set forth in the Registration Rights Agreement.

       

      “Exchange
        Act”
means
        the Securities Exchange Act of 1934, as amended, and the rules and regulations
        promulgated thereunder.

       

      “Legend
        Removal Date”
shall
        have the meaning ascribed to such term in Section 4.1(c). 

       

      “Liens”
means
        a
        lien, charge, security interest, encumbrance, right of first refusal, preemptive
        right or other restriction.

       

      “Material
        Adverse Effect”
shall
        have the meaning assigned to such term in Section 3.1(a).

       

      “Per
        Share Price”
equals
        $5.00.

       

      “Person”
means
        an individual or corporation, partnership, trust, incorporated or unincorporated
        association, joint venture, limited liability company, joint stock company,
        government (or an agency or subdivision thereof), or other entity of any
        kind.

       

      “Proceeding”
means
        an action, claim, suit, investigation or proceeding (including, without
        limitation, an investigation or partial proceeding, such as a deposition),
        whether commenced or threatened.

       

      “Purchaser
        Party”
shall
        have the meaning ascribed to such term in Section 4.5.

       

      “Registration
        Rights Agreement”
means
        the Registration Rights Agreement, dated the date hereof, among the Company
        and
        the Purchasers, in the form of Exhibit
        A
        attached
        hereto.

       

      “Registration
        Statement”
means
        a
        registration statement meeting the requirements set forth in the Registration
        Rights Agreement and covering the resale by the Purchasers of all or part
        of the
        Shares.

       

      “Required
        Approvals”
shall
        have the meaning ascribed to such term in Section 3.1(d).

       

      “Rule
        144”
means
        Rule 144 promulgated by the Commission pursuant to the Securities Act, as
        such
        rule may be amended from time to time, or any similar rule or regulation
        hereafter adopted by the Commission having substantially the same effect
        as such
        rule. 

       

      “SEC
        Reports”
shall
        have the meaning ascribed to such term in Section 3.1(g).

       

      “Securities
        Act”
means
        the Securities Act of 1933, as amended, and the rules and regulations
        promulgated thereunder.

       

      “Shares”
means
        the shares of Common Stock issued or issuable to each Purchaser pursuant
        to this
        Agreement.

       

      “Subscription
        Amount”
means,
        as to each Purchaser, the aggregate amount to be paid for Shares purchased
        hereunder as specified below such Purchaser’s name on the signature page of this
        Agreement and next to the heading “Subscription Amount,” in United States
        dollars and in immediately available funds.

       

      “Subsidiary”
means
        any subsidiary of the Company as set forth on Schedule 3.1(a).

       

      “Trading
        Day”
means
        a
        day on which the Common Stock is traded on a Trading Market.

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

       

      “Trading
        Market”
means
        the Nasdaq Capital Market as such other markets or exchanges on which the
        Common
        Stock is listed or quoted for trading on the date in question.

       

      “Transaction
        Documents”
means
        this Agreement, the Registration Rights Agreement and any other documents
        or
        agreements executed in connection with the transactions contemplated
        hereunder.

       

      “Transfer
        Agent”
means
        Computershare Trust Company, with a mailing address of 350 Indiana street,
        Suite
        800, Golden, CO 80401 and a telephone number of (303) 262-0600.

       

      ARTICLE
        II.

      PURCHASE
        AND SALE

       

      2.1 Closing.
        On the Closing Date, upon the terms and subject to the conditions set forth
        herein, substantially concurrent with the execution and delivery of this
        Agreement by the parties hereto, the Company agrees to sell, and each Purchaser,
        severally and not jointly, agrees to purchase, at the Per Share Price,
up
        to an
        aggregate of [$_________] of Shares.
        On the
        Closing Date, each Purchaser shall deliver to the Company, via wire transfer,
        immediately available funds equal to its Subscription Amount and the Company
        shall deliver to each Purchaser its respective Shares (determined by dividing
        such Purchaser’s Subscription Amount by the Per Share Price), and the Company
        and each Purchaser shall deliver the other items set forth in Section 2.2
        deliverable at the Closing. 

       

      2.2 Deliveries.

       

      (a) On
        or
        prior to the Closing Date, the Company shall deliver or cause to be delivered
        to
        each Purchaser the following:

       

      
        	 	
                (i)

              	
                this
                  Agreement duly executed by the
                  Company;

              

      

       

      
        	 	
                (ii)

              	
                a
                  legal opinion of Company Counsel
                  in
                  customary form regarding the issuance of the Shares;
                  

              

      

       

      
        	 	
                (iii)

              	
                a
                  copy of the irrevocable instructions to the Transfer Agent instructing
                  the
                  Transfer Agent to deliver, on an expedited basis, a certificate
                  evidencing
                  the number of Shares purchased by such Purchaser pursuant to the
                  terms of
                  this Agreement, registered in the name of such Purchaser;
                  and

              

      

       

      
        	 	
                (iv)

              	
                the
                  Registration Rights Agreement duly executed by the
                  Company.

              

      

       

      (b) On
        or
        prior to the Closing Date, each Purchaser shall deliver or cause to be delivered
        to the Company the following:

       

      
        	 	
                (i)

              	
                this
                  Agreement duly executed by such
                  Purchaser;

              

      

       

      
        	 	
                (ii)

              	
                such
                  Purchaser’s Subscription Amount by wire transfer to the account as
                  specified in writing by the Company;
                  and

              

      

       

      
        	 	
                (iii)

              	
                the
                  Registration Rights Agreement duly executed by such
                  Purchaser.

              

      

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

       

      ARTICLE
        III.

      REPRESENTATIONS
        AND WARRANTIES

       

      3.1 Representations
        and Warranties of the Company. Except
        as
        set forth in the Disclosure Schedules, which Disclosure Schedules shall be
        deemed a part hereof and shall qualify any representation or otherwise made
        herein to the extent of the disclosure contained in the corresponding section
        of
        the Disclosure Schedules, the Company hereby makes the following representations
        and warranties to each Purchaser:

       

      (a) Subsidiaries.
        All of
        the direct and indirect subsidiaries of the Company are set forth on Schedule
        3.1(a). The Company owns, directly or indirectly, all of the capital stock
        or
        other equity interests of each Subsidiary free and clear of any Liens, and
        all
        of the issued and outstanding shares of capital stock of each Subsidiary
        are
        validly issued and are fully paid, non-assessable and free of preemptive
        and
        similar rights to subscribe for or purchase securities. If the Company has
        no
        subsidiaries, then all other references to the Subsidiaries or any of them
        in
        the Transaction Documents shall be disregarded.

       

      (b) Organization
        and Qualification.
        Each of
        the Company and each of the Subsidiaries is an entity duly incorporated or
        otherwise organized, validly existing and in good standing under the laws
        of the
        jurisdiction of its incorporation or organization (as applicable), with the
        requisite power and authority to own and use its properties and assets and
        to
        carry on its business as currently conducted. Neither the Company nor any
        Subsidiary is in violation or default of any of the provisions of its respective
        certificate or articles of incorporation, bylaws or other organizational
        or
        charter documents. Each of the Company and each of the Subsidiaries is duly
        qualified to conduct business and is in good standing as a foreign corporation
        or other entity in each jurisdiction in which the nature of the business
        conducted or property owned by it makes such qualification necessary, except
        where the failure to be so qualified or in good standing, as the case may
        be,
would
        not,
        individually or in the aggregate, have
        or
reasonably
        be expected to result in (i) a material adverse effect on the legality, validity
        or enforceability of any Transaction Document, (ii) a material adverse effect
        on
        the results of operations, assets, business,
        prospects
        or
        condition (financial or otherwise) of the Company and the Subsidiaries, taken
        as
        a whole, or (iii) a material adverse effect on the Company’s ability to perform
        in any material respect on a timely basis its obligations under any Transaction
        Document (any of (i), (ii) or (iii), a “Material
        Adverse Effect”). 

       

      (c) Authorization;
        Enforcement.
        The
        Company has the requisite corporate power and authority to enter into and
        to
        consummate the transactions contemplated by each of the Transaction Documents
        and otherwise to carry out its obligations hereunder and thereunder. The
        execution and delivery of each of the Transaction Documents by the Company
        and
        the consummation by it of the transactions contemplated hereby and thereby
        have
        been duly authorized by all necessary corporate action on the part of the
        Company and no further action is required by the Company, its board of directors
        or its stockholders in connection therewith other than in connection with
        the
        Required Approvals. Each Transaction Document has been (or upon delivery
        will
        have been) duly executed by the Company and, when delivered in accordance
        with
        the terms hereof and thereof, will constitute the valid and binding obligation
        of the Company enforceable against the Company in accordance with its terms
        except (i) as limited by general equitable principles and applicable bankruptcy,
        insolvency, reorganization, moratorium and other laws of general application
        affecting enforcement of creditors’ rights generally, (ii) as limited by laws
        relating to the availability of specific performance, injunctive relief or
        other
        equitable remedies and (iii) insofar as indemnification and contribution
        provisions may be limited by applicable law.

       

      (d) No
        Conflicts.
        The
        execution, delivery, and performance of the Transaction Documents by the
        Company, the issuance and sale of the Shares, and the consummation by the
        Company of the other transactions contemplated hereby and thereby do not
        and
        will not (i) conflict with or violate any provision of the Company’s or any
        Subsidiary’s certificate or articles of incorporation, bylaws or other
        organizational or charter documents, or (ii) conflict with, or constitute
        a
        default (or an event that with notice or lapse of time or both would become
        a
        default) under, result in the creation of any Lien upon any of the properties
        or
        assets of the Company or any Subsidiary, or give to others any rights of
        termination, amendment, acceleration or cancellation (with or without notice,
        lapse of time or both) of, any agreement,
        credit facility, debt or other instrument (evidencing a Company or Subsidiary
        debt or otherwise) or other understanding to which the Company or any Subsidiary
        is a party or by which any property or asset of the Company or any Subsidiary
        is
        bound or affected, or (iii) subject to the Required Approvals, conflict with
        or
        result in a violation of any law, rule, regulation, order, judgment, injunction,
        decree or other restriction of any court or governmental authority to which
        the
        Company or a Subsidiary is subject (including federal and state securities
        laws
        and regulations), or by which any property or asset of the Company or a
        Subsidiary is bound or affected; except in the case of each of clauses (ii)
        and
        (iii), such as would
        not,
        individually or in the aggregate,
        have
        or
        reasonably be expected to result in a Material Adverse Effect.

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

       

      (e) Filings,
        Consents and Approvals.
        The
        Company is not required to obtain any consent, waiver, authorization, or
        order
        of, give any notice to, or make any filing or registration with, any court
        or
        other federal, state, local or other governmental authority or other Person in
        connection with the execution, delivery, and performance by the Company of
        the
        Transaction Documents, other than (i) filings required pursuant to Section
        4.3
        of this Agreement, (ii) the filing with, and the declaration of effectiveness
        by, the Commission of the Registration Statement, (iii) application(s) and
        notification(s) to each applicable Trading Market for the listing of the
        Shares
        for trading thereon in the time and manner required thereby, and (iv) the
        filing
        of Form D with the Commission and such filings as are required to be made
        under
        applicable state securities laws (collectively, the “Required
        Approvals”).

       

      (f) Issuance
        of Shares.
        The
        Shares are duly authorized and, when issued and paid for in accordance with
        the
        applicable Transaction Documents, will be duly and validly issued, fully
        paid
        and nonassessable, free and clear of all Liens imposed by the Company other
        than
        restrictions on transfer provided for in the Transaction Documents.

       

      (g) Capitalization.
        The
        number of shares and type of all authorized, issued and outstanding capital
        stock of the Company as of November 20, 2007, as set forth on Schedule 3.1(g).
        No Person has any right of first refusal, preemptive right, right of
        participation, or any similar right to participate in the transactions
        contemplated by the Transaction Documents. Except as set forth on Schedule
        3.1(g), or as a result of the purchase and sale of the Shares pursuant to
        the
        terms of this Agreement, there are no outstanding options, warrants, scrip
        rights to subscribe to, calls or commitments of any character whatsoever
        relating to, or securities, rights, or obligations convertible into or
        exercisable or exchangeable for, or giving any Person any right to subscribe
        for
        or acquire, any shares of Common Stock, or contracts, commitments,
        understandings or arrangements by which the Company or any Subsidiary is
        or may
        become bound to issue additional shares of Common Stock or Common Stock
        Equivalents. The issuance and sale of the Shares will not obligate the Company
        to issue shares of Common Stock or other securities to any Person (other
        than
        the Purchasers) and will not result in a right of any holder of Company
        securities to adjust the exercise, conversion, exchange or reset price under
        any
        of such securities. 

       

      (h) SEC
        Reports; Financial Statements.
        The
        Company has filed all reports, schedules, forms, statements and other documents
        required to be filed by the Company under the Securities Act and the Exchange
        Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years
        preceding the date hereof (or such shorter period as the Company was required
        by
        law or regulation to file such material) (the foregoing materials, including
        the
        exhibits thereto and documents incorporated by reference therein, being
        collectively referred to herein as the “SEC
        Reports”)
        on a
        timely basis or has received a valid extension of such time of filing and
        has
        filed any such SEC Reports prior to the expiration of any such extension.
        As of
        their respective dates, the SEC Reports complied in all material respects
        with
        the requirements of the Securities Act and the Exchange Act, as applicable,
        and
        none of the SEC Reports, when filed, contained any untrue statement of a
        material fact or omitted to state a material fact required to be stated therein
        or necessary in order to make the statements therein, in the light of the
        circumstances under which they were made, not misleading. The
        financial statements of the Company included in the SEC Reports comply in
        all
        material respects with applicable accounting requirements and the rules and
        regulations of the Commission with respect thereto as in effect at the time
        of
        filing. Such
        financial statements have been prepared in accordance with United States
        generally accepted accounting principles applied on a consistent basis during
        the periods involved (“GAAP”),
        except as may be otherwise specified in such financial statements or the
        notes
        thereto and except that unaudited financial statements may not contain all
        footnotes required by GAAP, and fairly present in all material respects the
        financial position of the Company and its consolidated subsidiaries as of
        and
        for the dates thereof and the results of operations and cash flows for the
        periods then ended, subject, in the case of unaudited statements, to normal,
        immaterial, year-end audit adjustments and absence of footnotes
        thereto.

       

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

       

      (i) Material
        Changes; Undisclosed Events, Liabilities or Developments.
        Except
        as
        set forth on Schedule 3.1(i), since
        the date
        of the latest Current Report on Form 8-K filed by the Company prior to the
        date
        hereof, (i) there has been no event, occurrence or development that has had
        or
        that could reasonably be expected to result in a Material Adverse Effect,
        (ii)
        the Company has not incurred any liabilities (contingent or otherwise) other
        than (A) trade payables and accrued expenses incurred in the ordinary course
        of
        business consistent with past practice and (B) liabilities not required to
        be
        reflected in the Company’s financial statements pursuant to GAAP or disclosed in
        filings made with the Commission, (iii) the Company has not altered its method
        of accounting, and (iv) the Company has not declared or made any dividend
        or
        distribution of cash or other property to its stockholders or purchased,
        redeemed or made any agreements to purchase or redeem any shares of its capital
        stock. 

       

      (j) Certain
        Fees.
        Except
        as set forth on Schedule 3.1(j), no brokerage or finder’s fees or commissions
        are or will be payable by the Company to any broker, financial advisor or
        consultant, finder, placement agent, investment banker, bank or other Person
        with respect to the transactions contemplated by the Transaction Documents.
        

       

      (k) Disclosure.
        Except
        with regard to the identity of the Purchasers set forth on Schedule 3.1(k)
        and
        except with respect to the material terms and conditions of the transactions
        contemplated by the Transaction Documents which may constitutes material,
        non-public information until such time as the Company files a Current Report
        on
        Form 8-K or issues a press release disclosing the terms of the transaction
        contemplated by the Transaction Documents, the Company confirms that neither
        it
        nor any other Person acting on its behalf has provided any of the Purchasers
        or
        their agents or counsel with any information that it believes constitutes
        or
        might constitute material, non-public information. The Company understands
        and
        confirms that the Purchasers will rely on the foregoing representation in
        effecting transactions in securities of the Company. All disclosure furnished
        by
        or on behalf of the Company to the Purchasers regarding the Company, its
        business, and the transactions contemplated hereby, including the Disclosure
        Schedules to this Agreement, is true and correct and does not contain any
        untrue
        statement of a material fact or omit to state any material fact necessary
        in
        order to make the statements made therein, in light of the circumstances
        under
        which they were made, not misleading. 

       

      3.2 Representations
        and Warranties of the Purchasers.
        Each
        Purchaser, for itself, himself or herself and for no other Purchaser, hereby
        represents and warrants as follows:

       

      (a) Organization;
        Authority.
        If a
        corporation, partnership, limited liability company, trust or other entity,
        (i)
        such Purchaser is an entity duly organized, validly existing, and in good
        standing under the laws of the jurisdiction of its organization with full
        right,
        corporate or partnership power and authority to enter into and to consummate
        the
        transactions contemplated by the Transaction Documents and otherwise to carry
        out its obligations hereunder and thereunder; and (ii) the execution, delivery,
        and performance by such Purchaser of the transactions contemplated by this
        Agreement have been duly authorized by all necessary corporate or similar
        action
        on the part of such Purchaser.
        If an
        individual, such Purchaser has full legal capacity to execute and deliver
        this
        Agreement and the other Transaction Documents to which he or she is a party
        and
        to consummate the transactions contemplated by the Transaction Documents
        and
        otherwise to carry out his or her obligations hereunder and thereunder. Each
        Transaction Document to which such Purchaser is a party has been duly executed
        by the Purchaser, and when delivered by such Purchaser in accordance with
        the
        terms hereof, will constitute the valid and legally binding obligation of
        such
        Purchaser, enforceable against such Purchsaer in accordance with its terms,
        except (i) as limited by general equitable principles and applicable bankruptcy,
        insolvency, reorganization, moratorium and other laws of general application
        affecting enforcement of creditors’ rights generally, (ii) as limited by laws
        relating to the availability of specific performance, injunctive relief or
        other
        equitable remedies and (iii) insofar as indemnification and contribution
        provisions may be limited by applicable law. 

       

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

       

      (b) Own
        Account.
        Such
        Purchaser understands that the Shares are “restricted securities” and have not
        been registered under the Securities Act or any applicable state or other
        securities law and is acquiring the Shares as principal for its own account
        and
        not with a view to or for distributing or reselling such Shares or any part
        thereof in violation of the Securities Act or any applicable state or other
        securities law, has no present intention of distributing any of such Shares
        in
        violation of the Securities Act or any applicable state or other securities
        law,
        and has no direct or indirect arrangement or understandings with any other
        persons to distribute or regarding the distribution of such Shares (this
        representation and warranty not limiting such Purchaser’s right to sell the
        Shares pursuant to the Registration Statement or otherwise in compliance
        with
        applicable federal and state securities laws) in violation of the Securities
        Act
        or any applicable state or other securities law. Such Purchaser is acquiring
        the
        Shares hereunder in the ordinary course of its business.

       

      (c) Purchaser
        Status.
        At the
        time such Purchaser was offered the Shares, such Purchaser was, and at the
        date
        hereof it is an “accredited investor” as defined in Rule 501(a)(1), (a)(2),
        (a)(3), (a)(5), (a)(6), (a)(7) or (a)(8) under the Securities Act. No Purchaser
        is required to be registered as a broker-dealer under Section 15 of the Exchange
        Act. 

       

      (d) Experience
        of Such Purchaser.
        Such
        Purchaser, either alone or together with such Purchaser’s representatives, has
        such knowledge, sophistication, and experience in business and financial
        matters
        so as to be capable of evaluating the merits and risks of the prospective
        investment in the Shares, and has so evaluated the merits and risks of such
        investment. Such Purchaser is able to bear the economic risk of an investment
        in
        the Shares and, at the present time, is able to afford a complete loss of
        such
        investment. 

       

      (e) General
        Solicitation.
        Such
        Purchaser is not purchasing the Shares as a result of any advertisement,
        article, notice, or other communication regarding the Shares published in
        any
        newspaper, magazine or similar media or broadcast over television or radio
        or
        presented at any seminar or any other general solicitation or general
        advertisement.

       

      (f) Provision
        of Information.
        Such
        Purchaser has been afforded (i) the opportunity to ask such questions as
        it has
        deemed necessary of, and to receive answers from, representatives of the
        Company
        concerning the terms and conditions of the Shares and the finances, operations
        and business of the Company; and (ii) the opportunity to request such additional
        information which the Company possesses or can acquire without unreasonable
        effort or expense.
        All of
        such Purchaser’s questions have been answered to its satisfaction and such
        Purchaser has received all of such requested additional
        information.

       

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

       

      (g) Certain
        Fees.
        No
        brokerage or finder’s fees or commissions are or will be payable by such
        Purchaser to any broker, financial advisor or consultant, finder, placement
        agent, investment banker, bank, or other Person with respect to the transactions
        contemplated by the Transaction Documents.

       

      (h) Residency.
        The
        residence or principal place of business of such Purchaser is set forth below
        on
        such Purchaser’s signature page to this Agreement, and all communications
        between such Purchaser and the Company regarding the transactions contemplated
        by this Agreement took place within or from the state of such residence or
        principal place of business.

       

      (i) Acknowledgement.
        Each
        Purchaser acknowledges that the Company has relied upon the representations
        and
        warranties of the Purchasers set forth in Section 3.2 in its determination
        that
        no registration under the Securities Act is required for the offer and sale
        of
        the Shares by the Company to the Purchasers as contemplated by this
        Agreement.

       

      ARTICLE
        IV.

      OTHER
        AGREEMENTS OF THE PARTIES

       

      4.1 Transfer
        Restrictions. 

       

      (a) The
        Shares may only be disposed of in compliance with state and federal securities
        laws. In connection with any transfer of Shares other than pursuant to an
        effective registration statement or pursuant to Rule 144, the Company may
        require the transferor thereof to provide to the Company an opinion of counsel
        selected by the transferor and reasonably acceptable to the Company, the
        form
        and substance of which opinion shall be reasonably satisfactory to the Company,
        to the effect that such transfer does not require registration of such
        transferred Shares under the Securities Act. 

       

      (b) Certificates
        evidencing the Shares will contain the following legend or such other legend
        as
        may be reasonably appropriate under the Securities Act for so long as the
        Company determines that such legend is reasonably appropriate under the
        Securities Act:

       

      THIS
        SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
        THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
        REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
        ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
        EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
        AN
        AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
        REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
        SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
        TO
        SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
        COMPANY. 

       

      (c) Certificates
        evidencing the Shares shall not contain any legend (including the legend
        set
        forth in Section 4.1(b)), (i) following any sale of such Shares pursuant
        to Rule
        144, or (ii) if such Shares are eligible for sale under Rule 144(k), or (iii)
        if
        such legend is not required under applicable requirements of the Securities
        Act
        (including judicial interpretations and pronouncements issued by the staff
        of
        the Commission). The Company shall cause its counsel to issue a legal opinion
        to
        the Transfer Agent promptly after the Effective Date if required by the Transfer
        Agent to effect the removal of the legend hereunder. Following the Effective
        Date or at such time as such legend is no longer required under this Section
        (c),
        the
        Company will, no later than three (3) Trading Days following the delivery
        by a
        Purchaser to the Company or the Transfer Agent of a certificate representing
        Shares, issued with a restrictive legend (such third Trading Day, the
“Legend
        Removal Date”),
        deliver or cause to be delivered to such Purchaser a certificate representing
        such shares that is free from all restrictive and other legends. Notwithstanding
        the foregoing, the Company shall not be required to remove any legends until
        all
        Shares represented by a single certificate are no longer subject to
        restrictions. If only a portion of the Shares represented by any single
        certificate are subject to restrictions, the holder of the certificate may
        request, or the Company may require, that such certificate be cancelled and
        two
        new certificates be issued. One certificate shall represent, and be in the
        amount of, Shares not subject to restrictions and shall bear no legend and
        the
        second certificate shall represent, and be in the amount of, Shares subject
        to
        restrictions and shall bear an appropriate legend. The Company may not make
        any
        notation on its records or give instructions to the Transfer Agent that enlarge
        the restrictions on transfer set forth in this Section 4.1. Certificates
        for
        Shares subject to legend removal hereunder shall be transmitted by the Transfer
        Agent to the Purchasers by crediting the account of the Purchaser’s prime broker
        with the Depository Trust Company System.

       

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

       

      (d) Each
        Purchaser, severally and not jointly with the other Purchasers, agrees that
        the
        removal of the restrictive legend from certificates representing Shares as
        set
        forth in this Section 4.1 is predicated upon the Company’s reliance that the
        Purchaser will sell any Shares pursuant to either the registration requirements
        of the Securities Act, including any applicable prospectus delivery
        requirements, or an exemption therefrom, and that if Shares are sold pursuant
        to
        a Registration Statement, they will be sold in compliance with the plan of
        distribution set forth therein.

       

      4.2 Furnishing
        of Information. As long as any Purchaser owns Shares and the Company remains
        subject to the requirements of the Exchange Act, the Company covenants to
        timely
        file (or obtain extensions in respect thereof and file within the applicable
        grace period) all reports required to be filed by the Company after the date
        hereof pursuant to the Exchange Act. As long as any Purchaser owns Shares,
        if
        the Company is not required to file reports pursuant to the Exchange Act,
        it
        will prepare and furnish to the Purchasers and make publicly available in
        accordance with Rule 144(c) such information as is required for the Purchasers
        to sell the Shares under Rule 144. The Company further covenants that it
        will
        take such further action as any holder of Shares may reasonably request,
        to the
        extent required from time to time to enable such Person to sell such Shares
        without registration under the Securities Act within the requirements of
        the
        exemption provided by Rule 144.

       

      4.3 Securities
        Laws Disclosure; Publicity. The Company shall, by 8:30 a.m. (New York City
        time) on the Trading Day immediately following the date hereof, file a Current
        Report on Form 8-K, disclosing the material terms of the transactions
        contemplated hereby and filing the Transaction Documents as exhibits thereto.
        The Company intends to and may issue press releases with respect to the
        transactions contemplated hereby without the prior consent of each Purchaser.
        Notwithstanding the foregoing, the Company shall not publicly disclose the
        name
        of any Purchaser, or include the name of any Purchaser in any filing with
        the
        Commission or any regulatory agency or Trading Market, without the prior
        written
        consent of such Purchaser, except (i) as required by federal securities law
        in
        connection with (A) any registration statement contemplated by the Registration
        Rights Agreement, (B) the Current Report on Form 8-K required by this Section
        4.3, (C) any filing required by the Commission and (D) the filing of final
        Transaction Documents (including signature pages thereto) with the Commission
        and (ii) to the extent such disclosure is required by law or Trading Market
        regulations, in which case the Company shall provide the Purchasers with
        prior
        notice of such disclosure permitted under this clause (ii).
        No
        Purchaser shall issue any press release or otherwise make any public statement
        with respect to the transactions contemplated hereby without the prior consent
        of the Company, which consent shall not unreasonably be withheld or delayed,
        except if such disclosure is required by law, in which case the Purchaser
        shall
        promptly provide the Company with prior notice of such public statement or
        communication. 

       

      
        
           

        

        
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      4.4 Use
        of
        Proceeds. The Company shall use the net proceeds from the sale of the Shares
        hereunder for general corporate working capital purposes, including repayment
        of
        any portion of the Company’s debt, funding working capital, capital
        expenditures, sales and marketing expenditures, and investments in new product
        development.

       

      4.5 Indemnification
        of Purchasers. Subject to the provisions of this Section 4.5, the Company
        will indemnify and hold each Purchaser and its directors, officers,
        shareholders, members, partners, employees, and agents (and any other Persons
        with a functionally equivalent role of a Person holding such titles
        notwithstanding a lack of such title or any other title), (each, a “Purchaser
        Party”) harmless from any and all losses, liabilities, obligations, claims,
        contingencies, damages, costs and expenses, including all judgments, amounts
        paid in settlements, court costs and reasonable attorneys’ fees and costs of
        investigation (collectively, “Damages”) that any such Purchaser Party may suffer
        or incur as a result of or relating to (a) any breach of any of the
        representations, warranties, covenants or agreements made by the Company
        in this
        Agreement or in the other Transaction Documents or (b) any action instituted
        against a Purchaser Party, or any of them or their respective Affiliates,
        by any
        stockholder of the Company who is not an Affiliate of such Purchaser Party,
        with
        respect to any of the transactions contemplated by the Transaction Documents
        (unless such action is based upon a breach of a Purchaser’s representations,
        warranties or covenants under the Transaction Documents or any agreements
        or
        understandings such Purchaser may have with any such stockholder or any
        violations by the Purchaser Party of state or federal securities laws or
        any
        conduct by such Purchaser Party which constitutes fraud, gross negligence,
        willful misconduct or malfeasance). If any action shall be brought against
        any
        Purchaser Party in respect of which indemnity may be sought pursuant to this
        Agreement, such Purchaser Party shall promptly notify the Company in writing,
        and the Company shall have the right to assume the defense thereof with counsel
        of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser
        Party shall have the right to employ separate counsel in any such action
        and
        participate in the defense thereof, but the fees and expenses of such counsel
        shall be at the expense of such Purchaser Party except to the extent that
        (i)
        the employment thereof has been specifically authorized by the Company in
        writing, (ii) the Company has failed after a reasonable period of time to
        assume
        such defense and to employ counsel or (iii) in such action there is, in the
        reasonable opinion of such separate counsel, a material conflict on any material
        issue between the position of the Company and the position of such Purchaser
        Party, in which case, the Company shall be responsible for the reasonable
        fees
        and expenses of no more than one such separate counsel. The Company will
        not be
        liable to any Purchaser Party under this Agreement (i) for any settlement
        by a
        Purchaser Party effected without the Company’s prior written consent, which
        shall not be unreasonably withheld or delayed; or (ii) to the extent, but
        only
        to the extent that a loss, claim, damage or liability is attributable to
        (A)
        any
        Purchaser Party’s breach of any of the representations, warranties, covenants or
        agreements made by such Purchaser Party in this Agreement or in the other
        Transaction Documents,
        (B)
        any
        violations by the Purchaser of state or federal securities laws or
        (C)
        any
        conduct by such Purchaser which constitutes fraud, gross negligence, willful
        misconduct or malfeasance.
        Notwithstanding anything in this Agreement to the contrary, in no event shall
        the Company be liable to or be obligated to indemnify, any Purchaser or its
        directors, officers, shareholders, members, partners, employees, and agents
        (and
        any other Persons with a functionally equivalent role of a Person holding
        such
        titles notwithstanding a lack of such title or any other title) for Damages
        in
        an amount in excess of such Purchaser’s Subscription Amount.

       

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

       

      4.6 Form
        D; Blue Sky Filings. The Company shall timely file a Form D with respect to
        the Shares as required under Regulation D under the Securities Act and to
        provide a copy thereof, promptly upon request of any Purchaser. The Company
        shall take such action as the Company shall reasonably determine is necessary
        in
        order to obtain an exemption for, or to qualify the Shares for, sale to the
        Purchasers at the Closing under applicable securities or “Blue Sky” laws of the
        states of the United States, and shall provide evidence of such actions promptly
        upon request of any Purchaser. Each Purchaser shall take all commercially
        reasonable actions that are reasonably requested by the Company related to,
        or
        to effectuate, the filing of a Form D or any filing required pursuant to
        the
“Blue Sky” laws of the states of the United States which, for purposes of
        clarity, shall not include the payment of any fees by such
        Purchaser.

       

      4.7 Registration
        of Shares. As
        promptly as possible following the Closing Date, the Company shall use its
        commercially reasonable efforts to prepare and file with the Commission a
        Registration Statement on Form S-3 covering the resale of the Shares, and
        upon
        such filing, the Company shall use its commercially reasonable efforts to
        cause
        the Registration Statement to be declared effective under the Securities
        Act as
        promptly as possible after the filing thereof, all in accordance with the
        terms
        and conditions of that certain Registration Rights Agreement, dated as of
        the
        date hereof, by and among the Company and the Purchasers. 

       

      ARTICLE
        V.

      MISCELLANEOUS

       

      5.1 Fees
        and Expenses. Except
        as
        expressly set forth in the Transaction Documents to the contrary, each party
        shall pay the fees and expenses of its advisers, counsel, accountants and
        other
        experts, if any, and all other expenses incurred by such party incident to
        the
        negotiation, preparation, execution, delivery and performance of this Agreement.
        The Company shall pay all Transfer Agent fees, stamp taxes and other taxes
        and
        duties levied in connection with the delivery of any Shares to the
        Purchasers.

       

      5.2 Entire
        Agreement. The Transaction Documents and all of the confidentiality
        agreements by and between the Company and the Purchasers listed on Schedule
        3.1(k), together with the exhibits and schedules thereto, contain the entire
        understanding of the parties with respect to the subject matter hereof and
        thereof and supersede all prior agreements and understandings, oral or written,
        with respect to such matters, which the parties acknowledge have been merged
        into such documents, exhibits and schedules.

       

      5.3 Notices.
        Any and all notices or other communications or deliveries required or permitted
        to be provided hereunder shall be in writing and shall be deemed given and
        effective on the earliest of (a) the date of transmission, if such notice
        or
        communication is delivered via facsimile at the facsimile number set forth
        on
        the signature pages attached hereto prior to 5:30 p.m. (New York City time)
        on a
        Trading Day, (b) the next Trading Day after the date of transmission, if
        such
        notice or communication is delivered via facsimile at the facsimile number
        set
        forth on the signature pages attached hereto on a day that is not a Trading
        Day
        or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the
        second
        Trading Day following the date of mailing, if sent by internationally recognized
        overnight courier service, or (d) upon actual receipt by the party to whom
        such
        notice is required to be given. The address for such notices and communications
        shall be as set forth on the signature pages attached hereto.

       

      5.4 Amendments;
        Waivers. No provision of this Agreement may be waived or amended except in a
        written instrument signed, in the case of an amendment, by the Company and
        all
        of the Purchasers or, in the case of a waiver, by the party against whom
        enforcement of any such waived provision is sought. No waiver of any default
        with respect to any provision, condition or requirement of this Agreement
        shall
        be deemed to be a continuing waiver in the future or a waiver of any subsequent
        default or a waiver of any other provision, condition or requirement hereof,
        nor
        shall any delay or omission of any party to exercise any right hereunder
        in any
        manner impair the exercise of any such right.

       

      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

       

      5.5 Headings.
        The headings herein are for convenience only, do not constitute a part of
        this
        Agreement and shall not be deemed to limit or affect any of the provisions
        hereof.

       

      5.6 Successors
        and Assigns. This Agreement shall be binding upon and inure to the benefit
        of the parties and their successors and permitted assigns. The Company may
        not
        assign this Agreement or any rights or obligations hereunder without the
        prior
        written consent of the Purchasers. Any Purchaser may assign any or all of
        its
        rights under this Agreement to any Person to whom such Purchaser assigns
        or
        transfers any Shares, provided such transferee agrees in writing to be bound,
        with respect to the transferred Shares, by the provisions of the Transaction
        Documents that apply to the “Purchasers.”

       

      5.7 No
        Third-Party Beneficiaries. This Agreement is intended for the benefit of the
        parties hereto and their respective successors and permitted assigns and
        is not
        for the benefit of, nor may any provision hereof be enforced by, any other
        Person.

       

      5.8 Governing
        Law. All questions concerning the construction, validity, enforcement and
        interpretation of the Transaction Documents shall be governed by and construed
        and enforced in accordance with the internal laws of the Commonwealth of
        Massachusetts, without regard to the principles of conflicts of law thereof.
        Each party agrees that all legal proceedings concerning the interpretations,
        enforcement, and defense of the transactions contemplated by this Agreement
        and
        any other Transaction Documents (whether brought against a party hereto or
        its
        respective affiliates, directors, officers, shareholders, employees, or agents)
        shall be commenced exclusively in the state and federal courts sitting in
        the
        Commonwealth of Massachusetts. Each party hereby irrevocably submits to the
        exclusive jurisdiction of the state and federal courts sitting in the City
        of
        Boston for the adjudication of any dispute hereunder or in connection herewith
        or with any transaction contemplated hereby or discussed herein (including
        with
        respect to the enforcement of any of the Transaction Documents), and hereby
        irrevocably waives, and agrees not to assert in any suit, action or proceeding,
        any claim that it is not personally subject to the jurisdiction of any such
        court, that such suit, action or proceeding is improper or is an inconvenient
        venue for such proceeding. Each party hereby irrevocably waives personal
        service
        of process and consents to process being served in any such suit, action
        or
        proceeding by mailing a copy thereof via registered or certified mail or
        overnight delivery (with evidence of delivery) to such party at the address
        in
        effect for notices to it under this Agreement and agrees that such service
        shall
        constitute good and sufficient service of process and notice thereof. Nothing
        contained herein shall be deemed to limit in any way any right to serve process
        in any other manner permitted by law. The parties hereby waive all rights
        to a
        trial by jury. If either party shall commence an action or proceeding to
        enforce
        any provisions of the Transaction Documents, then the prevailing party in
        such
        action or proceeding shall be reimbursed by the other party for its reasonable
        attorneys’ fees and other costs and expenses incurred with the investigation,
        preparation and prosecution of such action or proceeding.

       

      5.9 Survival.
        The representations and warranties contained herein shall survive the Closing
        and the delivery of the Shares
        until
        the 6 month anniversary of the Closing Date.

       

      5.10 Execution.
        This Agreement may be executed in two or more counterparts, all of which
        when
        taken together shall be considered one and the same agreement and shall become
        effective when counterparts have been signed by each party and delivered
        to the
        other party, it being understood that both parties need not sign the same
        counterpart. In the event that any signature is delivered by facsimile
        transmission or by e-mail delivery of a “.pdf” format data file, such signature
        shall create a valid and binding obligation of the party executing (or on
        whose
        behalf such signature is executed) with the same force and effect as if such
        facsimile or “.pdf” signature page were an original thereof.

       

      
        
           

        

        
          -12-

          
            

          

        

        
           

        

      

       

      5.11 Severability.
        If any term, provision, covenant or restriction of this Agreement is held
        by a
        court of competent jurisdiction to be invalid, illegal, void or unenforceable,
        the remainder of the terms, provisions, covenants and restrictions set forth
        herein shall remain in full force and effect and shall in no way be affected,
        impaired or invalidated, and the parties hereto shall use their commercially
        reasonable efforts to find and employ an alternative means to achieve the
        same
        or substantially the same result as that contemplated by such term, provision,
        covenant or restriction. It is hereby stipulated and declared to be the
        intention of the parties that they would have executed the remaining terms,
        provisions, covenants and restrictions without including any of such that
        may be
        hereafter declared invalid, illegal, void or unenforceable.

       

      5.12 Remedies.
        In addition to being entitled to exercise all rights provided herein or granted
        by law, including recovery of damages, each of the Purchasers and the Company
        will be entitled to specific performance under the Transaction Documents.
        The
        parties agree that monetary damages may not be adequate compensation for
        any
        loss incurred by reason of any breach of obligations contained in the
        Transaction Documents and hereby agrees to waive and not to assert in any
        action
        for specific performance of any such obligation the defense that a remedy
        at law
        would be adequate.

       

      5.13 Independent
        Nature of Purchasers’ Obligations and Rights. The obligations of each
        Purchaser under any Transaction Document are several and not joint with the
        obligations of any other Purchaser, and no Purchaser shall be responsible
        in any
        way for the performance or non-performance of the obligations of any other
        Purchaser under any Transaction Document. Nothing contained herein or in
        any
        other Transaction Document, and no action taken by any Purchaser pursuant
        thereto, shall be deemed to constitute the Purchasers as a partnership, an
        association, a joint venture or any other kind of entity, or create a
        presumption that the Purchasers are in any way acting in concert or as a
        group
        with respect to such obligations or the transactions contemplated by the
        Transaction Documents. Each Purchaser shall be entitled to independently
        protect
        and enforce its rights, including without limitation, the rights arising
        out of
        this Agreement or out of the other Transaction Documents, and it shall not
        be
        necessary for any other Purchaser to be joined as an additional party in
        any
        proceeding for such purpose. Each Purchaser has been represented by its own
        separate legal counsel in their review and negotiation of the Transaction
        Documents. 

       

      5.14 Construction.
        The parties agree that each of them and/or their respective counsel has reviewed
        and had an opportunity to revise the Transaction Documents and, therefore,
        the
        normal rule of construction to the effect that any ambiguities are to be
        resolved against the drafting party shall not be employed in the interpretation
        of the Transaction Documents or any amendments hereto.

       

      [SIGNATURE
        PAGES FOLLOW]

       

      
        
           

        

        
          -13-

          
            

          

        

        
           

        

      

      IN
        WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
        Agreement to be duly executed by their respective authorized signatories
        as of
        the date first indicated above.

       

      
        	
                PRESSURE
                  BIOSCIENCES INC.

                 

              	 	
                Address
                  for Notice:

              
	
                By:
                   /s/
                  Richard T. Schumacher

                
                  

                

                Name:
                  Richard T. Schumacher 

                Title:
                  President and Chief Executive Officer 

              	 	
                321
                  Manley Street

                West
                  Bridgewater, MA 02379

                Facsimile:
                  (508) 580-1110

                Attention:
                  Richard T. Schumacher

              
	 	 	 
	
                With
                  a copy to (which shall not constitute notice):

                 

                Pepper
                  Hamilton LLP

                101
                  Federal Street

                Suite
                  1010

                Boston,
                  MA 02110

                Facsimile:
                  617-956-4351

                Attention:
                  Steven R London

              	 	 

      

       

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK

      SIGNATURE
        PAGE FOR PURCHASER FOLLOWS]

       

      
        
           

        

        
          -14-

          
            

          

        

        
           

        

      

      [PURCHASER
        SIGNATURE PAGES TO PRESSURE BIOSCIENCES, INC. SECURITIES PURCHASE
        AGREEMENT]

      

      IN
        WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement
        to be duly executed by their respective authorized signatories as of the
        date
        first indicated above.

       

      Name
        of
        Purchaser:
        ___________________________________________________________________________

       

      Signature
        of Authorized Signatory of Purchaser:
        ________________________________________________________

       

      Name
        of
        Authorized Signatory:
        __________________________________________________________________________

       

      Title
        of
        Authorized Signatory:
        ___________________________________________________________________________

       

      Email
        Address of Purchaser:
        ______________________________________________________________________

       

      Fax
        Number of Purchaser:
        ______________________________________________________________________

       

      Address
        for Notice of Purchaser:

      

      

      Address
        for Delivery of Shares for Purchaser (if not same as address for
        notice):

       

      

      Subscription
        Amount: $__________________

      

      Shares:
        _______________________

      

      EIN
        Number: [PROVIDE
        THIS UNDER SEPARATE COVER]

      

      [SIGNATURE
        PAGES CONTINUE]

       

      
        
           

        

        
          -15-

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