Document:

EXHIBIT 10.1
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                              LOAN AGREEMENT

                        dated as of October 5, 2007

                              by and between

                              LANDAUER, INC.,

                               as Borrower,

                                    and

                      U.S. BANK NATIONAL ASSOCIATION,

                                  as Bank

<PAGE>

                             TABLE OF CONTENTS

                                                                    Page

1.    DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . .     1
      1.1   Defined Terms. . . . . . . . . . . . . . . . . . . . .     1
      1.2   Accounting Terms . . . . . . . . . . . . . . . . . . .     8
      1.3   Other Terms Defined in UCC . . . . . . . . . . . . . .     8
      1.4   Other Definitional Provisions; Construction. . . . . .     8

2.    COMMITMENT OF THE BANK . . . . . . . . . . . . . . . . . . .     9
      2.1   Revolving Loans. . . . . . . . . . . . . . . . . . . .     9
      2.2   Additional LIBOR Loan Provisions . . . . . . . . . . .    10
      2.3   Interest and Fee Computation; Collection of Funds. . .    11
      2.4   Letters of Credit. . . . . . . . . . . . . . . . . . .    11
      2.5   Letter of Credit Collateral Account. . . . . . . . . .    11
      2.6   All Loans to Constitute One Obligation . . . . . . . .    12

3.    CONDITIONS OF BORROWING. . . . . . . . . . . . . . . . . . .    12
      3.1   Loan Documents . . . . . . . . . . . . . . . . . . . .    12
      3.2   Event of Default . . . . . . . . . . . . . . . . . . .    13
      3.3   Adverse Changes. . . . . . . . . . . . . . . . . . . .    13
      3.4   Litigation . . . . . . . . . . . . . . . . . . . . . .    13
      3.5   Representations and Warranties . . . . . . . . . . . .    13

4.    NOTES EVIDENCING LOANS . . . . . . . . . . . . . . . . . . .    13
      4.1   Revolving Note . . . . . . . . . . . . . . . . . . . .    13

5.    LOANS:  MANNER OF BORROWING AND GENERAL TERMS. . . . . . . .    14
      5.1   Borrowing Procedures . . . . . . . . . . . . . . . . .    14
      5.2   Letters of Credit. . . . . . . . . . . . . . . . . . .    14
      5.3   Payments to the Bank . . . . . . . . . . . . . . . . .    15
      5.4   Automatic Debit. . . . . . . . . . . . . . . . . . . .    15
      5.5   Conditions Precedent Events. . . . . . . . . . . . . .    15
      5.6   Offset . . . . . . . . . . . . . . . . . . . . . . . .    15
      5.7   Discretionary Disbursements. . . . . . . . . . . . . .    15
      5.8   Credit Termination Date; Continuance
            of Obligations, Etc. . . . . . . . . . . . . . . . . .    15

6.    RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . .    16

7.    REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . .    16
      7.1   Borrower's Organization and Name . . . . . . . . . . .    16
      7.2   Authorization; Validity. . . . . . . . . . . . . . . .    16
      7.3   Compliance with Laws . . . . . . . . . . . . . . . . .    16
      7.4   Environmental Laws and Hazardous Substances. . . . . .    16
      7.5   Absence of Breach. . . . . . . . . . . . . . . . . . .    17
      7.6   Asset Representations. . . . . . . . . . . . . . . . .    17
      7.7   Financial Statements . . . . . . . . . . . . . . . . .    17
      7.8   Litigation and Taxes . . . . . . . . . . . . . . . . .    17
      7.9   Event of Default . . . . . . . . . . . . . . . . . . .    18
      7.10  ERISA Obligations. . . . . . . . . . . . . . . . . . .    18
      7.11  Adverse Circumstances. . . . . . . . . . . . . . . . .    18
      7.12  Lending Relationship . . . . . . . . . . . . . . . . .    18
      7.13  Reserved . . . . . . . . . . . . . . . . . . . . . . .    18
      7.14  Compliance with Regulation U . . . . . . . . . . . . .    18
      7.15  Governmental Regulation. . . . . . . . . . . . . . . .    18
      7.16  Bank Accounts. . . . . . . . . . . . . . . . . . . . .    18
      7.17  Place of Business. . . . . . . . . . . . . . . . . . .    18
      7.18  Complete Information . . . . . . . . . . . . . . . . .    19
      7.19  Solvency, etc. . . . . . . . . . . . . . . . . . . . .    19

                                     i

<PAGE>

                             TABLE OF CONTENTS
                                (continued)

                                                                    Page

8.    NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . .    19
      8.1   Indebtedness . . . . . . . . . . . . . . . . . . . . .    19
      8.2   Encumbrances . . . . . . . . . . . . . . . . . . . . .    19
      8.3   Investments. . . . . . . . . . . . . . . . . . . . . .    20
      8.4   Transfer; Merger . . . . . . . . . . . . . . . . . . .    20
      8.5   Issuance of Stock. . . . . . . . . . . . . . . . . . .    21
      8.6   Restricted Payments/Distributions. . . . . . . . . . .    22
      8.7   Use of Proceeds. . . . . . . . . . . . . . . . . . . .    22
      8.8   Intentionally Omitted. . . . . . . . . . . . . . . . .    22
      8.9   Change of Legal Status . . . . . . . . . . . . . . . .    22

9.    AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . .    22
      9.1   Compliance with Bank Regulatory Requirements . . . . .    22
      9.2   Corporate Existence. . . . . . . . . . . . . . . . . .    22
      9.3   Maintain Property. . . . . . . . . . . . . . . . . . .    23
      9.4   Maintain Insurance . . . . . . . . . . . . . . . . . .    23
      9.5   Tax Liabilities. . . . . . . . . . . . . . . . . . . .    23
      9.6   ERISA Liabilities; Employee Plans. . . . . . . . . . .    23
      9.7   Reporting Requirements . . . . . . . . . . . . . . . .    23
      9.8   Supplemental Financial Statements. . . . . . . . . . .    25
      9.9   Notice of Proceedings. . . . . . . . . . . . . . . . .    25
      9.10  Banking Relationship . . . . . . . . . . . . . . . . .    25

10.   FINANCIAL COVENANTS. . . . . . . . . . . . . . . . . . . . .    25
      10.1  Tangible Net Worth . . . . . . . . . . . . . . . . . .    25
      10.2  Funded Debt to EBITDA. . . . . . . . . . . . . . . . .    25

11.   EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . .    25
      11.1  Nonpayment of Obligations. . . . . . . . . . . . . . .    25
      11.2  Misrepresentation. . . . . . . . . . . . . . . . . . .    25
      11.3  Nonperformance . . . . . . . . . . . . . . . . . . . .    26
      11.4  Default under Loan Documents . . . . . . . . . . . . .    26
      11.5  Default under Other Agreements . . . . . . . . . . . .    26
      11.6  Assignment for Creditors . . . . . . . . . . . . . . .    26
      11.7  Bankruptcy . . . . . . . . . . . . . . . . . . . . . .    26
      11.8  Judgments. . . . . . . . . . . . . . . . . . . . . . .    26
      11.9  Change in Control. . . . . . . . . . . . . . . . . . .    26
      11.10 Material Adverse Event . . . . . . . . . . . . . . . .    27

12.   REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . .    27
      12.1  UCC and Offset Rights. . . . . . . . . . . . . . . . .    27
      12.2  Additional Remedies. . . . . . . . . . . . . . . . . .    27
      12.3  Attorney-in-Fact . . . . . . . . . . . . . . . . . . .    27
      12.4  No Marshaling. . . . . . . . . . . . . . . . . . . . .    28
      12.5  Application of Proceeds. . . . . . . . . . . . . . . .    28
      12.6  No Waiver. . . . . . . . . . . . . . . . . . . . . . .    28

                                    ii

<PAGE>

                             TABLE OF CONTENTS
                                (continued)

                                                                    Page

13.   MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . .    28
      13.1  Obligations Absolute . . . . . . . . . . . . . . . . .    28
      13.2  Entire Agreement . . . . . . . . . . . . . . . . . . .    28
      13.3  Amendments; Waivers. . . . . . . . . . . . . . . . . .    29
      13.4  Waiver of Defenses . . . . . . . . . . . . . . . . . .    29
      13.5  Waiver of Jury Trial . . . . . . . . . . . . . . . . .    29
      13.6  Litigation . . . . . . . . . . . . . . . . . . . . . .    29
      13.7  Assignability. . . . . . . . . . . . . . . . . . . . .    29
      13.8  Confidentiality. . . . . . . . . . . . . . . . . . . .    29
      13.9  Binding Effect . . . . . . . . . . . . . . . . . . . .    30
      13.10 Governing Law. . . . . . . . . . . . . . . . . . . . .    30
      13.11 Enforceability . . . . . . . . . . . . . . . . . . . .    30
      13.12 Survival of Borrower Representations . . . . . . . . .    30
      13.13 Extensions of the Bank's Commitment and Note . . . . .    30
      13.14 Time of Essence. . . . . . . . . . . . . . . . . . . .    30
      13.15 Counterparts . . . . . . . . . . . . . . . . . . . . .    30
      13.16 Facsimile Signatures . . . . . . . . . . . . . . . . .    30
      13.17 Notices. . . . . . . . . . . . . . . . . . . . . . . .    30
      13.18 Costs, Fees and Expenses Related to Agreement
            and Other Agreements . . . . . . . . . . . . . . . . .    31
      13.19 Indemnification. . . . . . . . . . . . . . . . . . . .    32
      13.20 Patriot Act, Bank Secrecy Act and Office of
            Foreign Assets Control . . . . . . . . . . . . . . . .    32

Exhibits
--------

Exhibit A   -     Revolving Note
Exhibit B   -     Form of Compliance Certificate

                                    iii

<PAGE>

                              LOAN AGREEMENT
                              --------------

      This LOAN AGREEMENT dated as of October 5, 2007 (the "Agreement"), is
executed by and between LANDAUER, INC., a Delaware corporation
("Borrower"), with a chief executive office located at 2 Science Drive,
Glenwood, Illinois 60425, and U.S. BANK NATIONAL ASSOCIATION, a national
banking association (the "Bank"), located at 209 South LaSalle Street,
Chicago, Illinois 60604.

      WHEREAS, Borrower desires that the Bank extend certain working
capital facilities to Borrower and to provide funds for other general
business purposes of Borrower in accordance with this Agreement.

      NOW, THEREFORE, in consideration of the premises, the mutual
covenants and agreements set forth herein, Borrower agrees to borrow from
the Bank, and the Bank agrees to lend to Borrower, subject to and upon the
following terms and conditions:

1.    DEFINITIONS.

      1.1   DEFINED TERMS.  For the purposes of this Agreement, the
following capitalized words and phrases shall have the meanings set forth
below.

      "Acquisition" means any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of a Person, or of
all or substantially all of any business or division of a Person, (b) the
acquisition of in excess of 50% of the Capital Securities of any Person, or
otherwise causing any Person to become a Subsidiary, or (c) a merger or
consolidation or any other combination with another Person (other than a
Person that is already a Subsidiary).

      "Affiliate" means any Person (a) that directly or indirectly, through
one or more intermediaries, controls or is controlled by, or is under
common control with Borrower or one or more Affiliates, (b) that directly
or beneficially owns or holds 10% or more of any equity interest in
Borrower or one or more Affiliates or (c) 10% of more of whose voting stock
(or in the case of a Person which is not a corporation, 10% or more of any
equity interest) is owned directly or beneficially or held by Borrower or
one or more Affiliates.  For purposes of this definition and this
Agreement, the term "control" shall mean, directly or indirectly, the power
to direct or cause the direction of the management or policies of a Person,
whether through ownership interest or otherwise, including without
limitation the power to elect or appoint, directly or indirectly, a
majority of the members of its governing board or body.

      "Bankruptcy Code" shall mean the United States Bankruptcy Code, as
now existing or hereafter amended.

      "Capital Expenditures" shall mean expenditures (including Capital
Lease obligations which should be capitalized under GAAP) for the
acquisition of fixed assets which are required to be capitalized under
GAAP.

      "Capital Lease" shall mean, as to any Person, a lease of any interest
in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, by such Person as lessee that is, or should be, in
accordance with Financial Accounting Standards Board ("FASB") Statement
No. 13, as amended from time to time, or, if such statement is not then in
effect, such statement of GAAP as may be applicable, recorded as a "capital
lease" on the balance sheet of Borrower prepared in accordance with GAAP.

                                     1

<PAGE>

      "Capital Securities" means, with respect to any Person, all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital, whether now outstanding or
issued or acquired after the Closing Date, including common shares,
preferred shares, membership interests in a limited liability company,
limited or general partnership interests in a partnership, interests in a
trust, interests in other unincorporated organizations or any other
equivalent of such ownership interest.

      "Closing Date" shall mean October 5, 2007.

      "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.

      "Contingent Liability" and "Contingent Liabilities" shall mean,
without duplication, respectively, each obligation and liability of
Borrower and all such obligations and liabilities of Borrower incurred
pursuant to any agreement, undertaking or arrangement by which Borrower:
(a) guarantees, endorses or otherwise becomes or is contingently liable
upon (by direct or indirect agreement, contingent or otherwise, to provide
funds for payment, to supply funds to, or otherwise to invest in, a debtor,
or otherwise to assure a creditor against loss) the indebtedness, dividend,
obligation or other liability of any other Person in any manner (other than
by endorsement of instruments in the course of collection), including
without limitation, any indebtedness, dividend or other obligation which
may be issued or incurred at some future time; (b) guarantees the payment
of dividends or other distributions upon the shares or ownership interest
of any other Person; (c) undertakes or agrees (whether contingently or
otherwise) (i) to purchase, repurchase, or otherwise acquire any
indebtedness, obligation or liability of any other Person or any property
or assets constituting security therefor, (ii) to advance or provide funds
for the payment or discharge of any indebtedness, obligation or liability
of any other Person (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain solvency,
assets, level of income, working capital or other financial condition of
any other Person or (iii) to make payment to any other Person other than
for value received; (d) agrees to lease property or to purchase securities,
property or services from such other Person with the purpose or intent of
assuring the owner of such indebtedness or obligation of the ability of
such other Person to make payment of the indebtedness or obligation; (e) to
induce the issuance of, or in connection with the issuance of, any letter
of credit for the benefit of such other Person; or (f) undertakes or agrees
otherwise to assure a creditor against loss.  The amount of any Contingent
Liability shall (subject to any limitation set forth herein) be deemed to
be the outstanding principal amount (or maximum permitted principal amount,
if larger) of the indebtedness, obligation or other liability guaranteed or
supported thereby.

      "Default Rate" shall mean a per annum rate of interest equal to the
Prime Rate plus two percent (2%) per annum.

      "Depreciation" shall mean the total amounts added to depreciation,
amortization, obsolescence, valuation and other proper reserves, as
reflected on Borrower's consolidated financial statement and determined in
accordance with GAAP.

      "EBITDA" shall mean, for any period, (a) the sum for such period of:
(i) consolidated net income, PLUS (ii) Interest Expense, PLUS (iii) federal
and state income taxes as determined in accordance with GAAP, PLUS (iv) all
amounts treated as expenses for Depreciation, PLUS (v) all extraordinary or
non-recurring losses and other non-cash charges, MINUS (b) any items of
gain which are extraordinary items as defined by GAAP, including, without
limitation, that portion of net income arising out of the sale of assets
outside of the ordinary course of business.

                                     2

<PAGE>

      "Employee Plan" includes any pension, stock bonus, employee stock
ownership plan, retirement, disability, medical, dental or other health
plan, life insurance or other death benefit plan, profit sharing, deferred
compensation, stock option, bonus or other incentive plan, vacation benefit
plan, severance plan or other employee benefit plan or arrangement,
including, without limitation, those pension, profit-sharing and retirement
plans of Borrower described from time to time in the financial statements
of Borrower and any pension plan, welfare plan, Defined Benefit Pension
Plans (as defined in ERISA) or any multi-employer plan, maintained or
administered by Borrower or to which Borrower is a party or may have any
liability or by which Borrower is bound.

      "Environmental Laws" shall mean all federal, state, district, local
and foreign laws, rules, regulations, ordinances, and consent decrees
relating to health, safety, hazardous substances, pollution and
environmental matters, as now or at any time hereafter during the term
hereof in effect, applicable to Borrower's business or facilities owned or
operated by Borrower, including laws relating to emissions, discharges,
releases or threatened releases of pollutants, contamination, chemicals, or
hazardous, toxic or dangerous substances, materials or wastes in the
environment (including, without limitation, ambient air, surface water,
land surface or subsurface strata) or otherwise relating to the generation,
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials.

      "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.

      "Event of Default" shall mean any of the events or conditions set
forth in SECTION 11 hereof.

      "Exchange Act" shall mean the Securities and Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.

      "Funded Debt" means, at any time, for any Person, determined for such
Person and its Subsidiaries on a consolidated basis and in accordance with
GAAP, the sum of the following, without duplication:  (i) Indebtedness for
borrowed money, (ii) obligations under Capital Leases, and (iii) purchase
money Indebtedness.

      "GAAP" shall mean generally accepted accounting principles, using the
accrual basis of accounting and consistently applied with prior periods;
provided, however, that GAAP with respect to any interim financial
statements or reports shall be deemed subject to fiscal year-end
adjustments and footnotes made in accordance with GAAP.

      "General Intangibles" means all choses in action, causes of action
and all other intangible property of Borrower of every kind and nature now
owned or hereafter acquired by Borrower, including, without limitation,
corporate and other business records, inventions, designs, patents, patent
and trademark registrations and applications, trademarks, trade names,
trade secrets, Goodwill, copyrights, registrations, licenses, franchises,
deferred tax benefits, tax refund claims, prepaid expenses, computer
programs, covenants not to compete, customer lists and mailing lists,
contract rights, indemnification rights, causes of action and any letters
of credit, guarantee claims, security interests or other security held by
or granted to Borrower.

      "Goodwill" shall mean all goodwill reflected on the financial
statements of Borrower as determined in accordance with GAAP.

                                     3

<PAGE>

      "Hazardous Materials" shall mean any hazardous, toxic or dangerous
substance, materials and wastes, including, without limitation,
hydrocarbons (including naturally occurring or man-made petroleum and
hydrocarbons), flammable explosives, asbestos, urea formaldehyde
insulation, radioactive materials, biological substances, polychlorinated
biphenyls, pesticides, herbicides and any other kind and/or type of
pollutants or contaminants (including, without limitation, materials which
include hazardous constituents), sewage, sludge, industrial slag, solvents
and/or any other similar substances, materials or wastes that are or become
regulated under any Environmental Law (including, without limitation, any
that are or become classified as hazardous or toxic under any Environmental
Law).

      "Indebtedness" shall mean at any time (a) all Liabilities of
Borrower, (b) all Capital Lease obligations of Borrower, (c) all other
debt, secured or unsecured, created, issued, incurred or assumed by
Borrower for money borrowed or for the deferred purchase price of any fixed
or capital asset, (d) indebtedness secured by any Lien existing on property
owned by Borrower whether or not the Indebtedness secured thereby has been
assumed, and (e) all Contingent Liabilities of Borrower whether or not
reflected on its balance sheet.

      "Indemnified Party" and "Indemnified Parties" shall mean,
respectively, each of the Bank and any parent corporations, affiliated
corporations or subsidiaries of the Bank, and each of their respective
officers, directors, employees, attorneys and agents, and all of such
parties and entities.

      "Interest Expense" shall mean, for any period, the sum of:  (a) all
interest, charges and related expenses payable with respect to that fiscal
period to a lender in connection with borrowed money or the deferred
purchase price of assets that are treated as interest in accordance with
GAAP, PLUS (b) the portion of rent payable with respect to that fiscal
period under Capital Leases that should be treated as interest in
accordance with GAAP, PLUS (c) all charges paid or payable (without
duplication) during that period with respect to any Interest Rate
Agreements.

      "Interest Rate" means Borrower's option from time to time of (i) the
Prime Rate MINUS 0.50% or (ii) the LIBOR Rate PLUS 1.00%.

      "Interest Rate Agreements" shall mean any interest rate protection
agreement, interest rate swap or other interest rate hedge arrangement
(other than any interest rate cap or other similar agreement or arrangement
pursuant to which Borrower has no credit exposure to the Bank) to or under
which Borrower or any Subsidiary of Borrower is a party or beneficiary.

      "Letter of Credit" and "Letters of Credit" shall mean, respectively,
a letter of credit and all such letters of credit issued by the Bank, in
its sole discretion, upon the execution and delivery by Borrower and the
acceptance by the Bank of a reimbursement agreement and an application for
Letter of Credit, as set forth in SECTION 2.4 of this Agreement.

      "Letter of Credit Obligations" shall mean, at any time, an amount
equal to the aggregate of the original face amounts of all Letters of
Credit minus the sum of (i) the amount of any reductions in the original
face amount of any Letter of Credit which did not result from a draw
thereunder, (ii) the amount of any payments made by the Bank with respect
to any draws made under a Letter of Credit for which Borrower has
reimbursed the Bank, (iii) the amount of any payments made by the Bank with
respect to any draws made under a Letter of Credit which have been
converted to a Revolving Loan as set forth in SECTION 2.4 and (iv) the
portion of any issued but expired Letter of Credit which has not been drawn
by the beneficiary thereunder.  For purposes of determining the outstanding
Letter of Credit Obligations at any time, the Bank's acceptance of a draft
drawn on the Bank pursuant to a Letter of Credit shall constitute a draw on
the applicable Letter of Credit at the time of such acceptance.

                                     4

<PAGE>

      "Liabilities" shall mean at all times all liabilities of Borrower
that would be shown as such on the balance sheet of Borrower prepared in
accordance with GAAP.

      "LIBOR" shall mean a rate of interest equal to the per annum rate of
interest at which United States dollar deposits in an amount comparable to
the amount of the relevant LIBOR Loan and for a period equal to the
relevant Loan Period are offered generally to the Bank (rounded upward if
necessary, to the nearest 1/100 of 1.00%) in the London Interbank
Eurodollar market at 11:00 a.m. (London time) two New York Banking Days
prior to the commencement of each Loan Period LESS the maximum reserve
percentages for determining reserves to be maintained by member banks of
the Federal Reserve System for Eurocurrency liabilities, or as LIBOR is
otherwise determined by the Bank in its sole and absolute discretion, such
rate to remain fixed for such Loan Period.  The Bank's determination of
LIBOR shall be conclusive, absent manifest error.

      "LIBOR Loan" or "LIBOR Loans" shall mean that portion, and
collectively those portions, of the aggregate outstanding principal balance
of the Revolving Loans that will bear interest at the LIBOR Rate, of which
at any time and from time to time, Borrower may identify no more than
five (5) advances of the Revolving Loans which will bear interest at the
LIBOR Rate, of which each particular LIBOR Loan must be in the amount of
Two Hundred Fifty Thousand Dollars ($250,000.00) or a higher integral
multiple of One Hundred Thousand Dollars ($100,000.00).

      "LIBOR Rate" shall mean a per-annum rate of interest equal to LIBOR
for the relevant Loan Period quoted by Bank from Reuters Screen LIBORO1
Page or any successor thereto (which shall be the LIBOR rate in effect
two (2) New York Banking Days prior to commencement of the advance),
adjusted for any reserve requirement and any subsequent costs arising from
a change in government regulation, which LIBOR Rate shall remain fixed
during such Loan Period.

      "Lien" shall mean any mortgage, pledge, hypothecation, judgment lien
or similar legal process, title retention lien, or other lien or security
interest, including, without limitation, the interest of a vendor under any
conditional sale or other title retention agreement and the interest of a
lessor under a lease of any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible, by such Person
as lessee that is, or should be, a Capital Lease on the balance sheet of
Borrower prepared in accordance with GAAP.

      "Loans" shall mean, collectively, all Revolving Loans (whether Prime
Loans or LIBOR Loans) made by the Bank to Borrower and all Letter of Credit
Obligations, under and pursuant to this Agreement.

      "Loan Documents" shall have the meaning set forth in SECTION 3.1.

      "Loan Period" shall mean the period commencing on the advance date of
the applicable LIBOR Rate Loan and ending on the numerically corresponding
day 1, 2 or 6 months thereafter matching the interest rate term selected by
Borrower; provided, however, (a) if any Loan Period would otherwise end on
a day which is not a New York Banking Day, then the Loan Period shall end
on the next succeeding New York Banking Day unless the next succeeding New
York Banking Day falls in another calendar month, in which case the Loan
Period shall end on the immediately preceding New York Banking Day; or
(b) if any Loan Period begins on the last New York Banking Day of a
calendar month (or on the day for which there is no numerically
corresponding day in the calendar month at the end of the Loan Period),
then the Loan Period shall end on the last New York Banking Day of the
calendar month at the end of such Loan Period.

      "Mandatory Prepayment" shall have the meaning set forth in
SECTION 2.1(c).

                                     5

<PAGE>

      "Material Adverse Effect" means (a) a material adverse change in, or
a material adverse effect upon, the results of operations, business,
assets, or the financial condition of Borrower; (b) a material impairment
of the ability of Borrower to perform its obligations under the Loan
Documents; or (c) a material adverse effect upon the legality, validity,
binding effect or enforceability of any Loan Document.

      "Maturity Date" shall mean October 31, 2009 in the case of all
Revolving Loans, unless extended by the Bank pursuant to any modification,
extension or renewal note executed by Borrower and accepted by the Bank in
its sole and absolute discretion in substitution for the applicable Note.

      "Maximum Letter of Credit Obligation" shall mean the lesser of
(a) the amount of the Revolving Loan Commitment less the aggregate amount
of all Loans (including, but not limited to, Letter of Credit Obligations)
outstanding at any time and (b) Fifteen Million Dollars ($15,000,000).

      "Net Worth" shall mean, as of any date of determination, total assets
LESS total Liabilities, as determined in accordance with GAAP.

      "New York Banking Day" shall mean any day (other than a Saturday or
Sunday) on which commercial banks are open for business in New York, New
York.

      "Note" shall mean the Revolving Note.

      "Obligations" shall mean the Loans, as evidenced by the Note, all
interest accrued thereon, any fees due the Bank hereunder, any expenses
incurred by the Bank hereunder and any and all other liabilities and
obligations of Borrower to the Bank and its Affiliates, howsoever created,
arising or evidenced, and howsoever owned, held or acquired, whether now or
hereafter existing, whether now due or to become due, direct or indirect,
absolute or contingent, and whether several, joint or joint and several,
including, but not limited to, any Interest Rate Agreements, or obligations
arising under the other Loan Documents.

      "Obligor" shall mean Borrower, any accommodation endorser, third
party pledgor, or any other party liable with respect to the Obligations.

      "Organizational Identification Number" means, with respect to
Borrower, the organizational identification number assigned to Borrower by
the applicable governmental unit or agency of the jurisdiction of
organization for Borrower.

      "Person" shall mean any natural person, individual, partnership,
limited liability company, corporation, trust, joint venture, joint stock
company, association, unincorporated organization, government or agency or
political subdivision thereof, or other entity.

      "Prime Loan" or "Prime Loans" shall mean that portion, and
collectively, those portions of the aggregate outstanding principal balance
of the Loans that will bear interest at the Prime Rate.

      "Prime Rate" shall mean the floating per annum rate of interest which
at any time, and from time to time, shall be most recently announced by the
Bank as its Prime Rate, which is not intended to be the Bank's lowest or
most favorable rate of interest at any one time.  The effective date of any
change in the Prime Rate shall for purposes hereof be the date the Prime
Rate is changed by the Bank.

      "Regulatory Change" shall mean the introduction of, or any change in
any applicable law, treaty, rule, regulation or guideline or in the
interpretation or administration thereof by any governmental authority or
any central bank or other fiscal, monetary or other authority having
jurisdiction over the Bank or its lending office.

                                     6

<PAGE>

      "Revolving Loan" and "Revolving Loans" shall mean, respectively, each
direct advance and the aggregate of all such direct advances, from time to
time in the form of either Prime Loans and/or LIBOR Loans, made by the Bank
to Borrower under and pursuant to this Agreement, as set forth in
SECTION 2.1 of this Agreement.

      "Revolving Loan Availability" shall mean at any time, the Revolving
Loan Commitment LESS all outstanding Revolving Loans and Letters of Credit.

      "Revolving Loan Commitment" shall mean Fifteen Million Dollars
($15,000,000).

      "Revolving Note" shall have the meaning set forth in SECTION 4.1
hereof.

      "Subordinated Debt" shall mean that portion of the Liabilities of
Borrower which are subordinated to the Obligations in a manner satisfactory
to the Bank in its sole discretion, including, but not limited to, right
and time of payment of principal and interest.

      "Subsidiary" and "Subsidiaries" shall mean, respectively, each and
all such corporations, partnerships, limited partnerships, limited
liability companies, limited liability partnerships or other entities of
which or in which Borrower owns directly or indirectly fifty percent
(50.00%) or more of (i) the combined voting power of all classes of stock
having general voting power under ordinary circumstances to elect a
majority of the board of directors of such entity if a corporation,
(ii) the management authority and capital interest or profits interest of
such entity, if a partnership, limited partnership, limited liability
company, limited liability partnership, joint venture or similar entity, or
(iii) the beneficial interest of such entity, if a trust, association or
other unincorporated organization.

      "Tangible Net Worth" means, at any time, Net Worth PLUS Subordinated
Debt LESS the amount of any General Intangibles and amounts due from
Affiliates.

      "Type of Organization" means, with respect to Borrower, the kind or
type of entity of Borrower, such as a corporation or limited liability
company.

      "UCC" shall mean the Uniform Commercial Code in effect in the State
of Illinois from time to time.

      "Wholly-Owned Subsidiary" shall mean any Subsidiary of which or in
which Borrower owns directly or indirectly 100% of (i) the combined voting
power of all classes of stock having general voting power under ordinary
circumstances to elect a majority of the board of directors of such Person,
if it is a corporation, (ii) the capital interest or profits interest of
such Persons, if it is a partnership, joint venture or similar entity or
(iii) the beneficial interest of such Persons, if it is a trust,
association or other unincorporated organization.

                                     7

<PAGE>

      1.2   ACCOUNTING TERMS.  Any accounting terms used in this Agreement
which are not specifically defined herein shall have the meanings
customarily given them in accordance with GAAP.  Calculations and
determinations of financial and accounting terms used and not otherwise
specifically defined hereunder and the preparation of financial statements
to be furnished to the Bank pursuant hereto shall be made and prepared,
both as to classification of items and as to amount, in accordance with
GAAP as used in the preparation of the financial statements of Borrower on
the date of this Agreement.  If any changes in accounting principles or
practices from those used in the preparation of the financial statements
are hereafter occasioned by the promulgation of rules, regulations,
pronouncements and opinions by or required by the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants
(or any successor thereto or agencies with similar functions), which
results in a material change in the method of accounting in the financial
statements required to be furnished to the Bank hereunder or in the
calculation of financial covenants, standards or terms contained in this
Agreement, the parties hereto agree to enter into good faith negotiations
to amend such provisions so as equitably to reflect such changes to the end
that the criteria for evaluating the financial condition and performance of
Borrower will be the same after such changes as they were before such
changes; and, if the parties fail to agree on the amendment of such
provisions, Borrower will furnish financial statements in accordance with
such changes but shall provide calculations for all financial covenants,
perform all financial covenants and otherwise observe all financial
standards and terms in accordance with applicable accounting principles and
practices in effect immediately prior to such changes.  Calculations with
respect to financial covenants required to be stated in accordance with
applicable accounting principles and practices in effect immediately prior
to such changes shall be reviewed and certified by Borrower's accountants.

      1.3   OTHER TERMS DEFINED IN UCC.  All other capitalized words and
phrases used herein and not otherwise specifically defined shall have the
respective meanings assigned to such terms in the UCC, as amended from time
to time, to the extent the same are used or defined therein.

      1.4   OTHER DEFINITIONAL PROVISIONS; CONSTRUCTION.  Whenever the
context so requires, the neuter gender includes the masculine and feminine,
the single number includes the plural, and vice versa, and in particular
the word "Borrower" shall be so construed.  The words "hereof", "herein"
and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and references to Article, Section,
Subsection, Annex, Schedule, Exhibit and like references are references to
this Agreement unless otherwise specified.  An Event of Default shall
"continue" or be "continuing" until such Event of Default has been waived
in accordance with SECTION 13.3 hereof.  References in this Agreement to
any party shall include such party's successors and permitted assigns.
References to any "Section" shall be a reference to such Section of this
Agreement unless otherwise stated.  To the extent any of the provisions of
the other Loan Documents are inconsistent with the terms of this Loan
Agreement, the provisions of this Loan Agreement shall govern.

                                     8

<PAGE>

2.    COMMITMENT OF THE BANK.

      2.1   REVOLVING LOANS.

            (a)   REVOLVING LOAN COMMITMENT.  Subject to the terms and
conditions of this Agreement and the other Loan Documents, and in reliance
upon the representations and warranties of Borrower set forth herein and in
the other Loan Documents, the Bank agrees to make such Revolving Loans at
such times as Borrower may from time to time request until, but not
including, the Maturity Date, and in such amounts as Borrower may from time
to time request; PROVIDED, however, that the aggregate principal balance of
all Revolving Loans and all Letter of Credit Obligations outstanding at any
time shall not exceed the Revolving Loan Commitment.  Revolving Loans made
by the Bank may be repaid and, subject to the terms and conditions hereof,
borrowed again up to, but not including the Maturity Date unless the
Revolving Loans are otherwise terminated or extended as provided in this
Agreement.  The Revolving Loans shall be used by Borrower for working
capital purposes.

            (b)   REVOLVING LOAN INTEREST AND PAYMENTS.  Except as
otherwise provided in this SECTION 2.1(b), the principal amount of the
Revolving Loans outstanding from time to time shall bear interest at the
Interest Rate.  Accrued and unpaid interest on the unpaid principal balance
of all Revolving Loans outstanding from time to time which are Prime Loans,
shall be due and payable monthly, in arrears, commencing on October 31,
2007 and continuing on the last day of each calendar month thereafter, and
on the Maturity Date; provided, however, for any Loan Period in excess of
three (3) months, such interest will be payable on the last day of each
three (3) month interval.  Accrued and unpaid interest on the unpaid
principal balance of all Revolving Loans outstanding from time to time
which are LIBOR Loans shall be payable on the last New York Banking Day of
each Loan Period, commencing on the first such date to occur after the date
hereof, on the date of any principal repayment of a LIBOR Loan and on the
Maturity Date.  Any amount of principal or interest on the Revolving Loans
which is not paid when due, whether at stated maturity, by acceleration or
otherwise, shall bear interest payable on demand at the Default Rate.

            (c)   REVOLVING LOAN PRINCIPAL REPAYMENTS.

            (i)   MANDATORY PREPAYMENTS.  All Revolving Loans hereunder
      shall be repaid by Borrower on the Maturity Date, unless payable
      sooner pursuant to the provisions of this Agreement.  In the event
      the aggregate outstanding principal balance of all Revolving Loans
      and Letter of Credit Obligations hereunder exceeds the Revolving Loan
      Commitment, Borrower shall, without notice or demand of any kind,
      immediately make such repayments of the Revolving Loans or take such
      other actions as shall be necessary to eliminate such excess.  Also,
      if Borrower chooses not to convert any Revolving Loan which is a
      LIBOR Loan to a Prime Loan as provided in SECTION 2.2(b) and
      SECTION 2.2(c), then such Revolving Loan shall be immediately due and
      payable on the last New York Banking Day of the then-existing Loan
      Period or on such earlier date as required by law, all without
      further demand, presentment, protest or notice of any kind, all of
      which are hereby waived by Borrower (each a "Mandatory Prepayment").

            (ii)  OPTIONAL PREPAYMENTS.  Borrower may from time to time
      prepay the Revolving Loans which are Prime Loans, in whole or in
      part, without any prepayment penalty whatsoever, provided, however,
      that any prepayment of the entire principal balance of the Prime
      Loans shall include accrued interest on such Prime Loans to the date
      of such prepayment and payment in full of all other Obligations
      (other than the LIBOR Loans), then due and payable.

                                     9

<PAGE>

      2.2   ADDITIONAL LIBOR LOAN PROVISIONS.

            (a)   LIBOR LOAN PREPAYMENTS.  Notwithstanding anything to the
contrary contained herein, the principal balance of any LIBOR Loan may not
be prepaid in whole or in part at any time.  If for any reason a LIBOR Loan
is prepaid prior to the last New York Banking Day of the Loan Period,
whether voluntarily or because prepayment is required due to this Note
maturing or due to acceleration of the Obligations upon default or
otherwise, Borrower agrees to pay all of Bank's costs, expenses and
Interest Differential (as defined below) incurred as a result of such
prepayment.  For purposes herein, the term "Interest Differential" shall
mean that sum as determined by the Bank equal to the greater of zero or the
financial loss incurred by Bank resulting from prepayment, calculated as
the difference between the amount of interest Bank would have earned (from
like investments in the money markets as of the first day of the LIBOR
Loan) had prepayment not occurred and the interest Bank will actually earn
(from like investments in the money markets as of the date of prepayment)
as a result of the redeployment of funds from the prepayment.  Because of
the short-term nature of this facility, Borrower agrees that the Interest
Differential shall not be discounted to its present value.  Any prepayment
of a LIBOR Loan shall be in an amount equal to the remaining entire
principal balance of such loan.

            (b)   LIBOR UNAVAILABILITY.  If the Bank determines (which
determination shall be conclusive, absent manifest error) prior to the
commencement of any Loan Period that (i) United States dollar deposits of
sufficient amount and maturity for funding any LIBOR Loan are not available
to the Bank in the London Interbank Eurodollar market in the ordinary
course of business or (ii) by reason of circumstances affecting the London
Interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the rate of interest to be applicable to the relevant LIBOR
Loan, the Bank shall promptly notify Borrower thereof and, so long as the
foregoing conditions continue, Revolving Loans may not be advanced as a
LIBOR Loan thereafter.  In addition, at Borrower's option, each existing
LIBOR Loan shall be immediately (i) converted to a Prime Loan on the last
New York Banking Day of the then existing Loan Period or (ii) due and
payable on the last New York Banking Day of the then existing Loan Period,
without further demand, presentment, protest or notice of any kind, all of
which are hereby waived by Borrower.

            (c)   REGULATORY CHANGE.  In addition, if, after the date
hereof, a Regulatory Change shall, in the reasonable determination of the
Bank, make it unlawful for the Bank to make or maintain the LIBOR Loans,
then the Bank shall promptly notify Borrower and Revolving Loans may not be
advanced as LIBOR Loans thereafter.  In addition, at Borrower's option,
each existing LIBOR Loan shall be immediately (i) converted to a Prime Loan
on the last New York Banking Day of the then existing Loan Period or on
such earlier date as required by law or (ii) due and payable on the last
New York Banking Day of the then existing Loan Period or on such earlier
date as required by law, all without further demand, presentment, protest
or notice of any kind, all of which are hereby waived by Borrower.

            (d)   LIBOR LOAN INDEMNITY.  If any Regulatory Change (whether
or not having the force of law) shall (a) impose, modify or deem applicable
any assessment, reserve, special deposit or similar requirement against
assets held by, or deposits in or for the account of or loans by, or any
other acquisition of funds or disbursements by, the Bank; (b) subject the
Bank or any LIBOR Loan to any tax, duty, charge, stamp tax or fee or change
the basis of taxation of payments to the Bank of principal or interest due
from Borrower to the Bank hereunder (other than a change in the taxation of
the overall net income of the Bank); or (c) impose on the Bank any other
condition regarding such LIBOR Loan or the Bank's funding thereof, and the
Bank shall determine (which determination shall be conclusive, absent
manifest error) that the result of the foregoing is to increase the cost to
the Bank of making or maintaining such LIBOR Loan or to reduce the amount
of principal or interest received by the Bank hereunder, then Borrower
shall pay to the Bank, on demand, such additional amounts as the Bank
shall, from time to time, determine are sufficient to compensate and
indemnify the Bank for such increased cost or reduced amount.

                                    10

<PAGE>

      2.3   INTEREST AND FEE COMPUTATION; COLLECTION OF FUNDS.  Except as
otherwise set forth herein, all interest and fees shall be calculated on
the basis of a year consisting of 360 days and shall be paid for the actual
number of days elapsed.  Principal payments submitted in funds not
immediately available shall continue to bear interest until collected.  If
any payment to be made by Borrower hereunder or under the Notes shall
become due on a day other than a New York Banking Day, such payment shall
be made on the next succeeding New York Banking Day and such extension of
time shall be included in computing any interest in respect of such
payment.

      2.4   LETTERS OF CREDIT.  Subject to the terms and conditions of this
Agreement and upon the execution and delivery by Borrower of a
reimbursement agreement in form and substance reasonably acceptable to the
Bank and, upon the execution and delivery by Borrower, and the acceptance
by the Bank, in its reasonable discretion, of an application for letter of
credit, the Bank agrees to issue for the account of Borrower out of the
Revolving Loan Availability, such Letters of Credit in the standard form of
the Bank and otherwise in form and substance acceptable to the Bank, from
time to time during the term of this Agreement; provided, that the Letter
of Credit Obligations may not at any time exceed the Maximum Letter of
Credit Obligation; and, provided, further, that no Letter of Credit shall
have an expiration date later than the Maturity Date for Revolving Loans;
provided, however, that the Bank may elect, in its sole discretion, to
issue Letters of Credit with expiration dates up to one year beyond the
Maturity Date for Revolving Loans so long as Borrower complies with the
provisions of SECTION 2.5 below.  The amount of any payments made by the
Bank with respect to draws made by a beneficiary under a Letter of Credit
for which Borrower has failed to reimburse the Bank, shall be deemed to
have been converted to a Revolving Loan (as a Prime Rate Loan) as of the
date such payment was made by the Bank to such beneficiary.  Upon the
occurrence of an Event of Default and at the option of the Bank, all Letter
of Credit Obligations shall be converted to Prime Loans, all without
demand, presentment, protest or notice of any kind, all of which are hereby
waived by Borrower.

      2.5   LETTER OF CREDIT COLLATERAL ACCOUNT.

            (a)   Upon the occurrence and during the continuance of an
Event of Default, Borrower hereby agrees that it will, until the final
expiration date of any Letter of Credit and thereafter as long as any
amount is payable to the Bank in respect of any Letter of Credit and
whether or not this Agreement is then in effect, maintain a special
collateral account (the "Letter of Credit Collateral Account") at the
Bank's office at the address specified on the signature page hereof, in the
name of Borrower but under the sole dominion and control of the Bank and in
which Borrower shall have no interest other than as set forth below.  If
this Agreement terminates for any reason and any Letter of Credit remains
outstanding beyond the Maturity Date, Borrower shall, immediately do one or
more of the following:  (i) establish (if none existed) and deposit in the
Letter of Credit Collateral Account for the benefit, of the Bank, an amount
of cash equal to one hundred two percent (102%) of the sum of the aggregate
maximum amount remaining available to be drawn under the remaining
outstanding Letters of Credit (assuming compliance with all conditions for
drawing thereunder) (herein the "Collateral Amount"), (ii) deliver to the
Bank, cash equivalents in a face amount, which when discounted at the
Bank's customary advance rate for collateral of that type, is at least
equal to the Collateral Amount, plus such pledge agreements, financing
statements, control agreements and other documents requested by the Bank in
order to perfect a first and prior perfected security interest in such cash
equivalents in favor of the Bank, or (iii) provide the Bank with a
letter(s) of credit in an aggregate amount of at least equal to the
Collateral Amount, such letter(s) of credit to be in form and substance,
and issued by banks, satisfactory to the Bank.  The Bank will invest any
funds on deposit from time to time in the Letter of Credit Collateral
Account in cash equivalents, as directed by Borrower from time to time.

                                    11

<PAGE>

            (b)   Upon any Event of Default hereunder, (i) the obligations
of the Bank to issue Letters of Credit shall terminate and (ii) Borrower
will be and become thereby unconditionally obligated, without the need for
demand or the necessity of any act or evidence, to deliver to the Bank, for
deposit into the Letter of Credit Collateral Account, an amount ("the
"Collateral Shortfall Amount") of cash or cash equivalents equal to the
excess, if any, of

            (i)   one hundred two percent (102%) of the sum of the
      aggregate maximum amount remaining available to be drawn under the
      Letters of Credit (assuming compliance with all conditions for
      drawing thereunder) issued by the Bank and outstanding as of such
      time, MINUS

            (ii)  the amount on deposit in the Letter of Credit Collateral
      Account at such time that is free and clear of all rights and claims
      of third parties and that has not been applied by the Bank against
      Borrower's Obligations.

            (c)   Upon the occurrence and during the continuance of an
Event of Default, the Bank may at any time or from time to time after funds
are deposited in the Letter of Credit Collateral Account, apply such funds
to the payment of Borrower's Obligations as shall from time to time have
become due and payable by Borrower to the Bank under this Agreement or the
other Loan Documents.  Neither Borrower nor any Person claiming on behalf
of or through Borrower shall have any right to withdraw any of the funds
held in the Letter of Credit Collateral Account.  After all of Borrower's
Obligations have been indefeasibly paid in full, any funds remaining in the
Letter of Credit Collateral Account shall be returned by the Bank to
Borrower, or paid to whoever may be legally entitled thereto at such time.
The Bank shall exercise reasonable care in the custody and preservation of
any funds held in the Letter of Collateral Account and shall be deemed to
have exercised such care if such funds are accorded treatment substantially
equivalent to that which the Bank accords its own property, it being
understood that the Bank shall not have any responsibility for taking any
necessary steps to preserve rights against any Persons with respect to any
such funds.

      2.6   ALL LOANS TO CONSTITUTE ONE OBLIGATION.  Except as specifically
set forth herein, the Loans shall constitute one general obligation of
Borrower.

3.    CONDITIONS OF BORROWING.  Notwithstanding any other provision of this
Agreement, the Bank shall not be required to disburse or make all or any
portion of the Loans if any of the following conditions shall have
occurred:

      3.1   LOAN DOCUMENTS.  Borrower shall have failed to execute and
deliver to the Bank any of the following Loan Documents (collectively, the
"Loan Documents"), all of which must be satisfactory in form and substance
to the Bank and the Bank's counsel:

            (a)   LOAN AGREEMENT. This Agreement duly executed by Borrower.

            (b)   REVOLVING NOTE. A Revolving Note duly executed by
Borrower, in the form attached hereto as EXHIBIT "A".

            (c)   RESOLUTIONS.  Resolutions of the board of directors
and/or shareholders, as applicable, of Borrower authorizing the execution
of this Agreement and the Loan Documents.

            (d)   ARTICLES OF INCORPORATION AND BYLAWS.  A copy of
Borrower's Articles or Certificate of Incorporation or Formation (as
applicable), and all amendments, certified by the applicable Secretary of
State of the state of incorporation of Borrower (or equivalent) and a copy
of Borrower's By-laws or Operating Agreement, as applicable, certified by
the Secretary of Borrower (or equivalent).

                                    12

<PAGE>

            (e)   GOOD STANDING CERTIFICATES.  Good Standing Certificates
(or equivalent) for Borrower from the State of incorporation and each state
in which Borrower is required to be qualified to transact business as a
foreign corporation, as well as a good standing or similar certificate from
each regulatory authority or state having jurisdiction over Borrower's
business activities.

            (f)   INCUMBENCY CERTIFICATES.  A certificate of the Secretary
or an Assistant Secretary of Borrower certifying the names of the officer
or officers of Borrower authorized to sign this Agreement and the other
Loan Documents, together with a sample of the true signature of each such
officer.

            (g)   ADDITIONAL DOCUMENTS.  Such other certificates, financial
statements, schedules, resolutions, opinions of counsel, notes and other
documents which are provided for hereunder or which the Bank shall require
in its reasonable discretion.

      3.2   EVENT OF DEFAULT.  No Event of Default, or any event which,
with notice or lapse of time, or both would constitute an Event of Default,
shall have occurred and be continuing.

      3.3   ADVERSE CHANGES.  No material adverse change in the financial
condition or affairs of Borrower, as determined in the Bank's sole
discretion, shall have occurred.

      3.4   LITIGATION.  No litigation or governmental proceeding shall
have been instituted against Borrower or any of its officers or
shareholders which in the discretion of the Bank, reasonably exercised,
could reasonably be expected to result in a Material Adverse Effect.

      3.5   REPRESENTATIONS AND WARRANTIES.  No representation or warranty
of Borrower contained herein or in any Loan Document shall be untrue or
incorrect as of the date of any Loan as though made on such date, except to
the extent such representation or warranty expressly relates to an earlier
date.

4.    NOTES EVIDENCING LOANS.

      4.1   REVOLVING NOTE.  The Revolving Loans and the Letter of Credit
Obligations shall be evidenced by a single Revolving Note (together with
all renewals, extensions, modifications or substitutions thereof, the
"Revolving Note") in the form of EXHIBIT "A" attached hereto, duly executed
by Borrower and payable to the order of the Bank.  At the time of the
initial disbursement of a Revolving Loan and at each time any additional
Revolving Loan shall be requested hereunder or a repayment made in whole or
in part thereon, a notation thereof shall be made on the books and records
of the Bank.  All amounts recorded shall be, absent demonstrable error,
conclusive and binding evidence of (i) the principal amount of the
Revolving Loans advanced hereunder and the amount of all Letter of Credit
Obligations, (ii) any unpaid interest owing on the Revolving Loans and
(iii) all amounts repaid on the Revolving Loans or the Letter of Credit
Obligations.  The failure to record any such amount or any error in
recording such amounts shall not, however, limit or otherwise affect the
obligations of Borrower under the Revolving Note to repay the principal
amount of the Revolving Loans, together with all interest accruing thereon.

                                    13

<PAGE>

5.    LOANS:  MANNER OF BORROWING AND GENERAL TERMS.

      5.1   BORROWING PROCEDURES.  (a) Each Loan shall be made available to
Borrower upon Borrower's request from any Person whose authority to so act
has not been revoked by Borrower in writing previously received by the
Bank.  Each Revolving Loan may be advanced either as a Prime Loan or a
LIBOR Loan; provided, however, that at any time and from time to time,
Borrower may identify no more than five (5) Revolving Loans which may be
LIBOR Loans.  A request for a Prime Loan must be received by no later than
11:00 a.m. Chicago, Illinois time, on the day it is to be funded.  A
request for a LIBOR Loan must be (i) received by no later than 11:00 a.m.
Chicago, Illinois time, two (2) New York Banking Days before the day it is
to be funded and (ii) in an amount equal to Two Hundred Fifty Thousand and
00/100 Dollars ($250,000.00) or a higher integral multiple of One Hundred
Thousand and 00/100 Dollars ($100,000.00).  In the event Borrower does not
timely select another interest rate option at least two (2) New York
Banking Days before the end of the Loan Period for a LIBOR Loan, Bank may
at any time after the end of the Loan Period convert the LIBOR Loan to a
Prime Loan, but until such conversion, the funds advanced under the LIBOR
Loan shall continue to accrue interest at the same rate as the Interest
Rate in effect for the such LIBOR Loan prior to the end of the Loan Period.

The proceeds of each Prime Loan or LIBOR Loan shall be made available at
the office of the Bank by credit to the account of Borrower or by other
means requested by Borrower and acceptable to the Bank.  No LIBOR Loan may
extend beyond the Maturity Date.  In any event, if the Loan Period for a
LIBOR Loan should happen to extend beyond the Maturity Date, such LIBOR
Loan must be prepaid on the Maturity Date.  Bank's internal records of
applicable interest rates shall be determinative in the absence of manifest
error.

            (b)   The Bank is authorized to rely on any written, verbal,
electronic, telephonic or telecopy loan requests which the Bank believes in
its good faith judgment to emanate from a properly authorized
representative of Borrower, whether or not that is in fact the case.
Borrower does hereby irrevocably confirm, ratify and approve all such
advances by the Bank and does hereby indemnify the Bank against losses and
expenses (including court costs, attorneys' and paralegals' fees) and shall
hold the Bank harmless with respect thereto.

      5.2   LETTERS OF CREDIT.  Each Letter of Credit shall be issued by
the Bank upon the execution of the Bank's standard reimbursement agreement
by Borrower and the Bank, and the execution and delivery by Borrower and
the acceptance by the Bank, in its reasonable discretion, of the Bank's
standard application for Letter of Credit and the payment by Borrower of
the Bank's fees charged in connection therewith.  In addition to all other
applicable fees, charges and/or interest payable by Borrower pursuant to
such reimbursement agreement or otherwise payable in accordance with the
Bank's standard letter of credit fee schedule, all standby Letters of
Credit issued under and pursuant to this Agreement shall bear an annual fee
equal to one percent (1.00%) of the face amount of such standby Letter of
Credit (as such face amount may be reduced by draws or otherwise amended
from time to time), payable by Borrower on or before the issuance of such
Letter of Credit by the Bank and annually thereafter on the same date
unless and until (i) such Letter of Credit has expired or has been returned
to the Bank, or (ii) the Bank has paid the beneficiary thereunder the full
face amount of such Letter of Credit.  All Letters of Credit other than
standby Letters of Credit shall bear such fees, costs and interest as
charged by the Bank and shall contain such other terms as set forth in the
reimbursement agreement and the Bank's standard letter of credit fee
schedule.

                                    14

<PAGE>

      5.3   PAYMENTS TO THE BANK.  That portion of Borrower's Obligations
consisting of: (a) principal payable on account of the Loans made by the
Bank to Borrower pursuant to this Agreement shall be payable by Borrower to
the Bank for account of the Bank, as provided in the Note or applicable
instrument or document in respect of the Loans; (b) costs, fees and
expenses payable pursuant to this Agreement shall be payable by Borrower to
the Bank, on demand; (c) interest payable pursuant to this Agreement shall
be payable by Borrower to the Bank as provided in SECTION 2.1(b); and
(d) the balance of Borrower's Obligations, if any, shall be payable by
Borrower to the Bank as and when provided in this Agreement or the other
Loan Documents.

      5.4   AUTOMATIC DEBIT.  In order to cause timely payment to be made
to the Bank of all Borrower's Obligations as and when due, Borrower hereby
authorizes and directs the Bank, at the Bank's option, to debit the amount
of such Borrower's Obligations to any ordinary deposit account of Borrower
(including, without limitation, by increasing the principal balance due
under the Revolving Loan).

      5.5   CONDITIONS PRECEDENT EVENTS.  Each Loan made by the Bank to
Borrower at the request of Borrower pursuant to this Agreement or the other
Loan Documents shall in any event be subject to the following conditions
precedent: (a) there shall not then exist an Event of Default or any event
or condition which with notice, lapse of time and/or the making of such
Loan would constitute an Event of Default; (b) the representations,
warranties and covenants of Borrower contained in this Agreement shall be
true and correct as of the date of such Loan with the same effect as though
made on such date; (c) all of the covenants and agreements of Borrower in
this Agreement, and all of the requirements of this Agreement with respect
to such Loan, shall have been complied with; and (d) there shall not have
occurred, since the date of this Agreement, any material adverse change in
the financial condition, results of operations, assets or businesses of
Borrower.  Each borrowing by Borrower hereunder shall be deemed a
representation and warranty by Borrower that the foregoing conditions have
been fulfilled as of the date of such borrowing.  The Bank shall have
received upon request a certificate signed by the President or Chief
Financial Officer of Borrower dated the date of such requested Loan
certifying satisfaction of the conditions specified in clauses (a)-(d) of
this SECTION 5.5.

      5.6   OFFSET.  Borrower agrees that, in addition to (and without
limitation of) any right of set-off, bankers' lien or counterclaim the Bank
may otherwise have, the Bank shall be entitled, at its option, to offset
balances held by it for account of Borrower at any of its offices, in
United States Dollars or in any other currency, against any principal of or
interest on any of the Bank's Loans, or any other amount payable to the
Bank hereunder, which is not paid when due (regardless of whether such
balances are then due to Borrower), in which case it shall promptly notify
Borrower thereof, provided that the Bank's failure to give such notice
shall not affect the validity thereof.

      5.7   DISCRETIONARY DISBURSEMENTS.  The Bank, in its sole and
absolute discretion, may immediately upon notice to Borrower, disburse any
or all proceeds of Loans made or available to Borrower pursuant to this
Agreement and/or the other Loan Documents to pay any fees, costs, expenses
or other amounts required to be paid by Borrower hereunder and not so paid.

All monies so disbursed shall be a part of Borrower's Obligations, payable
by Borrower on demand.

      5.8   CREDIT TERMINATION DATE; CONTINUANCE OF OBLIGATIONS, ETC.  This
Agreement, the Bank's obligation to loan monies to Borrower, and Borrower's
ability to borrow monies from the Bank shall be in effect until the
Maturity Date.  Notwithstanding the foregoing and until such date when
Borrower's Obligations shall be paid in full, Borrower's Obligations
hereunder and under the other Loan Documents shall continue, interest shall
continue to be paid in accordance with the foregoing, and the Bank shall
retain all of its rights and remedies under this Agreement.

                                    15

<PAGE>

6.    RESERVED.

7.    REPRESENTATIONS AND WARRANTIES.  To induce the Bank to make the
Loans, Borrower makes the following representations and warranties to the
Bank, each of which shall be true and correct as of the date of the
execution and delivery of this Agreement and which shall survive the
execution and delivery of this Agreement:

      7.1   BORROWER'S ORGANIZATION AND NAME.  Borrower is a corporation
duly organized, existing and in good standing under the laws of the state
of its incorporation.  Borrower has full and adequate corporate or limited
liability company power, as applicable, to carry on and conduct its
business as presently conducted.  Borrower's state-issued Organizational
Identification Number is set forth on SCHEDULE 7.1.  Borrower is duly
licensed or qualified in all foreign jurisdictions wherein the nature of
its activities require such qualification or licensing, unless the failure
to be so licensed or qualified could not reasonably be expected to result
in a Material Adverse Effect.  The exact legal name and chief executive
office of Borrower is as set forth in the first paragraph of this
Agreement.  Borrower does not currently conduct, nor has it during the last
five (5) years conducted, business under any other name or trade name.

      7.2   AUTHORIZATION; VALIDITY.  Borrower has full right, power and
authority to enter into this Agreement, to make the borrowings and execute
and deliver the Loan Documents as provided herein and to perform all of its
duties and obligations under this Agreement and the Loan Documents.  The
execution and delivery of this Agreement and the Loan Documents will not,
nor will the observance or performance of any of the matters and things
herein or therein set forth, violate or contravene any provision of law or
of the respective articles/certificate of incorporation or bylaws of
Borrower.  All necessary and appropriate corporate action has been taken on
the part of Borrower to authorize the execution and delivery of this
Agreement and the Loan Documents.  This Agreement and the Loan Documents
are valid and binding agreements and contracts of Borrower in accordance
with their respective terms, subject to (i) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect affecting the enforcement of creditors' rights generally and
(ii) equitable principles (whether or not any action to enforce such
document is brought at law or in equity).

      7.3   COMPLIANCE WITH LAWS.  The nature and transaction of Borrower's
business and operations and the use of its properties and assets,
including, but not limited to, any real estate owned or occupied by
Borrower, do not and during the term of the Loans shall not, violate or
conflict with any applicable law, statute, ordinance, rule, regulation or
order of any kind or nature, including, without limitation, the provisions
of the Fair Labor Standards Act or any zoning, land use, building, noise
abatement, occupational health and safety or other laws, any building
permit or any condition, grant, easement, covenant, condition or
restriction, whether recorded or not, except to the extent the failure to
be in compliance therewith could not reasonably be expected to result in a
Material Adverse Effect.

      7.4   ENVIRONMENTAL LAWS AND HAZARDOUS SUBSTANCES.  Borrower
represents, warrants and agrees with the Bank that (i) Borrower has not
generated, used, stored, treated, transported, manufactured, handled,
produced or disposed of any Hazardous Materials, on or off any of the
premises of Borrower (whether or not owned by it) in any manner which at
any time violates in any material respect any Environmental Law or any
license, permit, certificate, approval or similar authorization thereunder,
(ii) the operations of Borrower comply in all material respects with all
Environmental Laws and all licenses, permits certificates, approvals and
similar authorizations thereunder, (iii) there has been no investigation,
proceeding, complaint, order, directive, claim, citation or notice by any

                                    16

<PAGE>

governmental authority or any other Person, nor is any pending or, to the
best of Borrower's knowledge, threatened, and Borrower shall promptly
notify the Bank upon becoming aware of any such investigation, proceeding,
complaint, order, directive, claim, citation or notice that could
reasonably result in any material loss, damage or fine, and shall take
prompt and appropriate actions to respond thereto, with respect to any non-
compliance with, or violation of, the requirements of any Environmental Law
by Borrower or the release, spill or discharge, threatened or actual, of
any Hazardous Material by Borrower or the generation, use, storage,
treatment, transportation, manufacture, handling, production or disposal of
any Hazardous Material by Borrower or any other environmental, health or
safety matter, which affects Borrower or its business, operations or
assets, (iv) to the best of Borrower's knowledge, Borrower has no material
liability, contingent or otherwise, in connection with a release, spill or
discharge, threatened or actual, of any Hazardous Materials or the
generation, use, storage, treatment, transportation, manufacture, handling,
production or disposal of any Hazardous Material, and (v) without limiting
the generality of the foregoing, Borrower shall, following a reasonable
determination by the Bank that there is any material non-compliance, or any
material environmental condition which requires any action by or on behalf
of Borrower in order to avoid any material non-compliance, with any
Environmental Law, at Borrower's sole expense, cause an independent
environmental engineer acceptable to the Bank to conduct such assessment or
tests of the relevant site as are appropriate, and prepare and deliver a
report setting forth the result of such assessment or tests, a proposed
plan for remediation and an estimate of the costs thereof.

      7.5   ABSENCE OF BREACH.  The execution, delivery and performance of
this Agreement, the Loan Documents and any other documents or instruments
to be executed and delivered by Borrower in connection with the Loans shall
not: (i) violate any provisions of law or any applicable regulation, order,
writ, injunction or decree of any court or governmental authority or
(ii) conflict with, be inconsistent with, or result in any breach or
default of any of the terms, covenants, conditions, or provisions of any
material indenture, mortgage, deed of trust, instrument, document,
agreement or contract of any kind to which Borrower is a party or by which
Borrower or any of its property or assets may be bound.

      7.6   ASSET REPRESENTATIONS.  Borrower is the sole owner of all of
its real and personal property having a value in excess of $10,000, free
from any Lien of any kind.

      7.7   FINANCIAL STATEMENTS.  All financial statements submitted to
the Bank have been prepared in accordance with GAAP on a basis, except as
otherwise noted therein, consistent with the previous fiscal year and
present fairly in all material respects the consolidated financial
condition of Borrower and the consolidated results of the operations for
Borrower as of such date and for the periods indicated. Since the date of
the most recent financial statement submitted by Borrower to the Bank,
there has been no material adverse change in the financial condition or in
the assets or liabilities of Borrower, or any changes except those
occurring in the ordinary course of business.

      7.8   LITIGATION AND TAXES.  There is no litigation, demand, charge,
claim, petition or governmental investigation or proceeding pending, or to
the best knowledge of Borrower, threatened, against Borrower, which, if
adversely determined, could reasonably be expected to result in a Material
Adverse Effect.  Borrower has duly filed all applicable federal income tax
returns and state income tax returns involving any income tax liability in
excess of $25,000 and has paid all material income taxes when due.  There
is no controversy or objection pending, or to the best knowledge of
Borrower, threatened in respect of any federal or material state tax
returns of Borrower involving any income tax liability in excess of $25,000
except for any controversy being contested in good faith by appropriate
legal proceedings and for which (i) adequate reserves have been provided in
accordance with GAAP and (ii) no Lien has been filed or recorded on any
asset of Borrower or its Subsidiaries.

                                    17

<PAGE>

      7.9   EVENT OF DEFAULT.  No Event of Default has occurred and is
continuing, and no event has occurred and is continuing which, with the
lapse of time, the giving of notice, or both, would constitute such an
Event of Default under this Agreement or any of the Loan Documents and
Borrower is not in default (without regard to grace or cure periods) under
any material contract or agreement to which it is a party.

      7.10  ERISA OBLIGATIONS.  All Employee Plans of Borrower meet the
minimum funding standards of Section 302 of ERISA where applicable, and
each such Employee Plan that is intended to be qualified within the meaning
of Section 401(a) of the Code has been determined to be so qualified by the
Internal Revenue Service or will be timely submitted for such favorable
determination.  Borrower has not (i) incurred a withdrawal liability,
(ii) incurred a "Reportable Event" (as defined in Section 4043 of ERISA) or
(iii) engaged in a nonexempt "Prohibited Transaction" (as defined in
Section 406 of ERISA) which will result in a Material Adverse Effect under
(i), (ii) or (iii).  Borrower has promptly paid and discharged all
obligations and liabilities arising under ERISA of a character which if
unpaid or unperformed might result in the imposition of a Lien against any
of its properties or assets.

      7.11  ADVERSE CIRCUMSTANCES.  No condition, circumstance, event,
agreement, document, instrument, restriction, litigation or proceeding (or
threatened litigation or proceeding or basis therefor) exists which
(a) could adversely affect the validity or priority of the Liens granted to
the Bank under the Loan Documents, if any, (b) could materially adversely
affect the ability of Borrower to perform its obligations under the Loan
Documents, (c) would constitute a default under any of the Loan Documents
or (d) would constitute such a default with the giving of notice or lapse
of time or both.

      7.12  LENDING RELATIONSHIP.  Borrower acknowledges and agrees that
the relationship hereby created with the Bank is and has been conducted on
an open and arm's length basis in which no fiduciary relationship exists
and that Borrower has not relied and are not relying on any such fiduciary
relationship in executing this Agreement and in consummating the Loans.
The Bank represents that it will receive the Note payable to its order as
evidence of a bank loan.

      7.13  RESERVED.

      7.14  COMPLIANCE WITH REGULATION U.  No portion of the proceeds of
the Loans shall be used by Borrower, or any affiliates of Borrower, either
directly or indirectly, for the purpose of purchasing or carrying any
margin stock, within the meaning of Regulation U as adopted by the Board of
Governors of the Federal Reserve System.

      7.15  GOVERNMENTAL REGULATION.  Borrower and its Subsidiaries are
not, or after giving effect to any Loan, will not be, subject to regulation
under the Federal Power Act or the Investment Company Act of 1940 or to any
federal or state statute or regulation limiting its ability to incur
indebtedness for borrowed money.

      7.16  BANK ACCOUNTS.  The account numbers and locations of all
material Deposit accounts and other bank accounts of Borrower and its
Subsidiaries are set forth on SCHEDULE 7.16 attached hereto and made a part
hereof.

      7.17  PLACE OF BUSINESS.  The principal place of business of Borrower
and the locations of all of its material assets are set forth on
SCHEDULE 7.17 attached hereto and made a part hereof.

                                    18

<PAGE>

      7.18  COMPLETE INFORMATION.  This Agreement and all financial
statements, schedules, certificates, confirmations, agreements, contracts,
and other materials submitted to the Bank in connection with or in
furtherance of this Agreement by or on behalf of Borrower fairly state in
all material respects the matters with which they purport to deal, and
neither misstate any material fact nor, separately or in the aggregate,
fail to state any material fact necessary to make the statements made not
misleading.

      7.19  SOLVENCY, ETC.  On the date of this Agreement, and immediately
prior to and after giving effect to the issuance of each Letter of Credit
and each borrowing hereunder and the use of the proceeds thereof,
(a) Borrower's assets will exceed its Liabilities and (b) Borrower will be
solvent, will be able to pay its debts as they mature, will own property
with fair saleable value greater than the amount required to pay its debts
and will have capital sufficient to carry on its business as then
constituted.

8.    NEGATIVE COVENANTS.  At all times prior to the Maturity Date and
thereafter for so long as any amounts are due or owing to the Bank
hereunder, Borrower hereby covenants as follows:

      8.1   INDEBTEDNESS.  Borrower shall not, either directly or
indirectly, create, assume, incur or have outstanding any Indebtedness
(including purchase money indebtedness), or become liable, whether as
endorser, guarantor, surety or otherwise, for any debt or obligation of any
other Person, except:

            (a)   the Obligations;

            (b)   endorsement for collection or deposit of any commercial
paper secured in the ordinary course of business;

            (c)   obligations of Borrower for taxes, assessments, municipal
or other governmental charges;

            (d)   obligations of Borrower for accounts payable;

            (e)   obligations existing on the date hereof which are
disclosed on the financial statements referred to in SECTION 7.7;

            (f)   purchase money indebtedness not to exceed $500,000 at any
time outstanding;

            (g)   Capital Leases in an aggregate amount not to exceed
$1,000,000 at any time outstanding; and

            (h)   Subordinated Debt subject to a subordination agreement in
form and substance acceptable to the Bank.

      8.2   ENCUMBRANCES.  Borrower shall not, either directly or
indirectly, grant, create, assume, incur or suffer or permit to exist any
Lien or charge of any kind or character upon any asset of Borrower, whether
owned at the date hereof or hereafter acquired except:

            (a)   Liens for taxes, assessments or other governmental
charges not yet due or which are being contested in good faith by
appropriate legal proceedings in such a manner as not to make the property
forfeitable;

            (b)   Liens or charges incidental to the conduct of Borrower's
business or the ownership of its property and assets which were not
incurred in connection with the borrowing of money or the obtaining of an
advance or credit, and which do not in the aggregate materially detract
from the value of its property or assets or materially impair the use
thereof in the operation of its business;

                                    19

<PAGE>

            (c)   Liens arising out of judgments or awards against Borrower
with respect to which they shall concurrently therewith be prosecuting a
timely appeal or proceeding for review and with respect to which it shall
have secured a stay of execution pending such appeal or proceedings for
review;

            (d)   pledges or deposits to secure obligations under worker's
compensation laws or similar legislation;

            (e)   good faith deposits in connection with lending contracts
or leases to which Borrower is a party;

            (f)   deposits to secure public or statutory obligations of
Borrower;

            (g)   Liens existing on the date hereof set forth on
SCHEDULE 8.2; and

            (h)   Liens granted to the Bank hereunder.

      8.3   INVESTMENTS.  Borrower shall not, either directly or
indirectly, make or have outstanding any new investments (whether through
purchase of stocks, obligations or otherwise) in, or loans or advances to,
any other Person, or acquire all or any substantial part of the assets,
business, stock or other evidence of beneficial ownership of any other
Person except:

            (a)   investments in direct obligations of the United States;

            (b)   investments in certificates of deposit issued by the Bank
or any bank with assets greater than One Hundred Million Dollars
($100,000,000.00);

            (c)   investments in Prime Commercial Paper (for purposes
hereof, Prime Commercial Paper shall mean short-term unsecured promissory
notes sold by large corporations and rated A-1/P-1 by Standard & Poor's
Ratings Group, a division of McGraw Hill, Inc., and Moody's Investment
Service, Inc.); or

            (d)   investments in Wholly-Owned Subsidiaries, joint ventures
and other Investments in an aggregate amount not to exceed $2,000,000 at
any time following the Closing Date.

      8.4   TRANSFER; MERGER.  Borrower shall not, (a) be a party to any
merger or consolidation, or purchase or otherwise acquire all or
substantially all of the assets or any equity securities of any class of,
or any partnership or joint venture interest in, any other Person, or
(b) either directly or indirectly, merge, consolidate, sell, transfer,
license, lease, encumber or otherwise dispose of all or any part of its
property or business or all or any substantial part of its assets, or sell
or discount (with or without recourse) any of its Promissory Notes, Chattel
Paper, Payment Intangibles or Accounts, other than (i) transfers of the
capital stock of a Subsidiary of a Borrower from one Borrower to another,
(ii) sales of Inventory in the ordinary course of their respective
businesses, (iii) dispositions of cash equivalents, (iv) dispositions of
Equipment for cash and fair value that the board of directors (or
comparable body) of the applicable Borrower determines in good faith is no
longer used or useful in the business of the such Borrower and its
Subsidiaries if all of the following conditions are met:  (a) the aggregate
market value of assets sold or otherwise disposed of (net of amounts
reinvested in replacement assets) in any fiscal year of the applicable
Borrower does not exceed $1,000,000; (b) the net cash proceeds of such
asset disposition are applied as required by SECTION 2.1(c); (c) after
giving effect to the asset disposition and the repayment of the
Indebtedness with the proceeds thereof, Borrower is in compliance on a pro

                                    20

<PAGE>

forma basis with the covenants set forth in ARTICLE 10 recomputed for the
most recently ended month for which information is available and is in
compliance with all other terms and conditions of this Agreement; and
(d) no Default or Event of Default then exists or would result from such
asset disposition and (v) any Acquisition by Borrower where (each a
"Permitted Acquisition"):

            (A)   the business or division acquired are for use, or the
Person acquired is engaged, in the businesses engaged in by Borrower on the
Closing Date;

            (B)   immediately before and after giving effect to such
Acquisition, no Event of Default shall exist;

            (C)   the aggregate consideration to be paid by Borrower
(including any Debt assumed or issued in connection therewith, the amount
thereof to be calculated in accordance with GAAP) in connection with all
Acquisitions (or any series of related Acquisitions) is no more than
$25,000,000 in the aggregate following the Closing Date;

            (D)   immediately after giving effect to such Acquisition,
Borrower is in pro forma compliance with all the financial ratios and
restrictions set forth in SECTION 10;

            (E)   in the case of the Acquisition of any Person, the board
of directors or similar governing body of such Person has approved such
Acquisition and such Acquisition is not considered to be hostile;

            (F)   reasonably prior to such Acquisition, the Bank shall have
received complete executed or conformed copies of each material document,
instrument and agreement to be executed in connection with such Acquisition
together with all lien search reports and lien release letters and other
documents as the Bank may require to evidence the termination of Liens on
the assets or business to be acquired;

            (G)   not less than ten New York Banking Days prior to such
Acquisition, the Bank shall have received an acquisition summary with
respect to the Person and/or business or division to be acquired, such
summary to include a reasonably detailed description thereof (including
financial information) and operating results (including financial
statements for the most recent 12 month period for which they are available
and as otherwise available), the terms and conditions, including economic
terms, of the proposed Acquisition, and Borrower's calculation of pro forma
EBITDA relating thereto; and

            (H)   if the Acquisition is structured as a merger, the
surviving entity is either Borrower or, following the merger, a domestic
wholly-owned Subsidiary which is a Borrower hereto.

Notwithstanding the foregoing, for all acquisitions involving consideration
which is less than or equal to $10,000,000, Borrower shall only be required
to deliver to Bank an officer's certificate in form and substance
reasonably acceptable to Bank at least 10 days prior to such Acquisition
certifying to items (A) through (E) above.

      8.5   ISSUANCE OF STOCK.  Borrower shall not, either directly or
indirectly, issue or distribute any additional capital stock or other
securities of Borrower except equity securities issued to employees of
Borrower in connection with and pursuant to Borrower's 2005 Stock Incentive
Plan and any successor plan thereto.

                                    21

<PAGE>

      8.6   RESTRICTED PAYMENTS/DISTRIBUTIONS.  Borrower shall not, either
directly or indirectly, (i) make any payment, redemption, prepayment,
defeasance or repurchase of any Subordinated Debt except as specifically
permitted by the applicable subordination agreement governing the terms of
the subordination of such Subordinated Debt, which shall be in form and
substance acceptable to the Bank, or (ii) purchase or redeem any shares of
stock, or declare or pay any dividends or similar distributions, whether in
cash or otherwise, or set aside any funds for any such purpose or make any
distribution to its shareholders; PROVIDED that the foregoing shall not
restrict or prohibit wholly-owned Subsidiaries from paying dividends or
making distributions and shall not restrict or prohibit dividends or
distributions to Borrower at such times and in such amounts as are
necessary to permit:

            (a)   purchases of shares of (or options to purchase shares of)
equity interests in Borrower or options therefor from employees of Borrower
upon their death, termination or retirement, so long as before and after
giving effect to any such purchase, no Event of Default shall have occurred
and be continuing; and

            (b)   payment by Borrower of a dividend to its stockholders, so
long as (x) before and after giving effect to any such dividend, no Event
of Default shall have occurred and be continuing.

      8.7   USE OF PROCEEDS.  No Borrower nor any of Borrower's
Subsidiaries or Affiliates shall use any portion of the proceeds of the
Loans, either directly or indirectly, for the purpose of purchasing any
securities underwritten by an Affiliate of the Bank.

      8.8   INTENTIONALLY OMITTED.

      8.9   CHANGE OF LEGAL STATUS.  Borrower shall not change its name,
its Organizational Identification Number, its Type of Organization, its
jurisdiction of organization or other legal structure without at least 30
days' prior written notice.

9.    AFFIRMATIVE COVENANTS.  At all times prior to the Maturity Date and
thereafter for so long as any amounts are due or owing to the Bank
hereunder, Borrower hereby covenants as follows:

      9.1   COMPLIANCE WITH BANK REGULATORY REQUIREMENTS.  Upon demand by
the Bank, Borrower shall reimburse the Bank for the Bank's additional costs
and/or reductions in the amount of principal or interest received or
receivable by the Bank if at any time after the date of this Agreement any
law, treaty or regulation or any change in any law, treaty or regulation or
the interpretation thereof by any governmental authority charged with the
administration thereof or any central bank or other fiscal, monetary or
other authority having jurisdiction over the Bank or the Loans, whether or
not having the force of law, shall impose, modify or deem applicable any
reserve (except reserve requirements taken into account in calculating the
Interest Rate) and/or special deposit requirement against or in respect of
assets held by or deposits in or for the account of the Loans by the Bank
or impose on the Bank any other condition with respect to this Agreement or
the Loans, the result of which is to either increase the cost to the Bank
of making or maintaining the Loans or to reduce the amount of principal or
interest received or receivable by the Bank with respect to such Loans.
Said additional costs and/or reductions will be those which directly result
from the imposition of such requirement or condition on the making or
maintaining of such Loans.  All Loans shall be deemed to be match funded
for the purposes of the Bank's determination in the previous sentence.

      9.2   CORPORATE EXISTENCE.  Borrower shall at all times preserve and
maintain its corporate existence, rights, franchises and privileges, and
shall at all times continue as a going concern in the business which
Borrower is presently conducting.

                                    22

<PAGE>

      9.3   MAINTAIN PROPERTY.  Borrower shall at all times maintain,
preserve and keep its plant, properties and Equipment in good repair,
working order and condition, normal wear and tear excepted, and shall from
time to time make all needful and proper repairs, renewals, replacements,
and additions thereto so that at all times the efficiency thereof shall be
fully preserved and maintained.  Borrower shall permit the Bank to examine
and inspect such plant, properties and Equipment at all reasonable times;
provided, however, that Borrower shall only be required to pay for one such
examination annually prior to the occurrence of an Event of Default.

      9.4   MAINTAIN INSURANCE.  Borrower shall at all times insure and
keep insured with insurance companies acceptable to the Bank, all insurable
property owned by it which is of a character usually insured by companies
similarly situated and operating like properties, against loss or damage
from fire and such other hazards or risks as are customarily insured
against by companies similarly situated and operating like properties; and
shall similarly insure employers' public and professional liability risks.
Upon request by the Bank, Borrower shall deliver to the Bank a certificate
setting forth in summary form the nature and extent of the insurance
maintained by Borrower pursuant to this SECTION 9.4.

      9.5   TAX LIABILITIES.  Borrower shall at all times pay and discharge
all material property and other taxes, assessments and governmental charges
upon, and all claims (including claims for labor, materials and supplies)
against Borrower or any of their properties, Equipment or Inventory, before
the same shall become delinquent and before penalties accrue thereon,
unless and to the extent that the same are being contested in good faith by
appropriate legal proceedings and are insured against or bonded over to the
satisfaction of the Bank.

      9.6   ERISA LIABILITIES; EMPLOYEE PLANS.  Borrower shall (i) keep in
full force and effect any and all Employee Plans which are presently in
existence or may, from time to time, come into existence under ERISA, and
not withdraw from any such Employee Plans, unless such withdrawal can be
effected or such Employee Plans can be terminated without a material
liability to such Borrower; (ii) make contributions to all of such Employee
Plans in a timely manner and in a sufficient amount to comply in all
material respects with the funding obligations of ERISA (or equivalent law
or regulation), including the minimum funding standards of Section 302 of
ERISA; (iii) comply in all material respects with the requirements of ERISA
(or equivalent law or regulation) which relate to such Employee Plans;
(iv) promptly notify the Bank upon receipt by Borrower of any notice
concerning the imposition of any material withdrawal liability or of the
institution of any proceeding or other action by the Pension Benefit
Guaranty Corporation which may result in the termination of any such
Employee Plans or the appointment of a trustee to administer such Employee
Plans; (v) promptly advise the Bank of the occurrence of any "Reportable
Event" (as defined in Section 4043 of ERISA) or "Prohibited Transaction"
(as defined in Section 406 of ERISA), with respect to any such Employee
Plans if such Reportable Event or Prohibited Transaction could result in a
material liability to the Borrower; and (vi) amend any Employee Plan that
is intended to be qualified within the meaning of Section 401(a) of the
Code to the extent necessary to keep the Employee Plan qualified, and to
cause the Employee Plan to be administered and operated in a manner that
does not cause the Employee Plan to lose its qualified status.

      9.7   REPORTING REQUIREMENTS.  Borrower shall at all times maintain a
standard and modern system of accounting, on the accrual basis of
accounting and in all respects in accordance with GAAP, and shall furnish
to the Bank or its authorized representatives such information regarding
the business affairs, operations and financial condition of Borrower,
including, but not limited to:

            (a)   within forty-five (45) days after the end of each
calendar quarter, a certificate showing compliance by Borrower with the
financial covenants set forth in SECTION 10 below in the form of EXHIBIT B
attached hereto;

                                    23

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            (b)   as soon as possible and in any event within ten (10) days
after the occurrence of an Event of Default or any event which, with the
giving of notice, lapse of time, or both, would constitute an Event of
Default, the statement of an authorized officer of Borrower setting forth
details of such Event of Default or event and the action which such
Borrower has taken or proposes to take to cure the same;

            (c)   as soon as available, notification of the filing of the
periodic Form 10-Q quarterly report or comparable successor report filed by
Borrower with the Securities and Exchange Commission ("SEC") or any
successor agency; PROVIDED, that if such report is not filed with the SEC
within forty-five (45) days after the end of each of the first three
quarterly accounting periods in each fiscal year of Borrower beginning with
the quarter ending September 30, 2007, Borrower shall immediately deliver
to Bank an internally-prepared balance sheet of Borrower and its
Subsidiaries on a consolidated basis as at the end of such quarter and the
related statements of operations and statements of cash flows of Borrower
and its Subsidiaries on a consolidated basis for such quarter and for the
portion of the fiscal year ended at the end of such quarter, setting forth
in each case in comparative form the figures for the corresponding quarter
and the corresponding portion of the previous fiscal year, all in
reasonable detail and certified (subject to normal year-end adjustments) as
to fairness of presentation, in accordance with GAAP (other than footnotes
thereto), by an Authorized Officer or Controller (if such Controller is a
corporate officer) of Borrower;

            (d)   as soon as available, notification of the filing of Form
10-K Annual Report or comparable successor report filed by Borrower with
the SEC or any successor agency; provided, that if such report is not filed
with the SEC within ninety (90) days after the close of each fiscal year of
Borrower, Borrower shall immediately deliver to Bank a balance sheet and
the related consolidated statements of operations and stockholders' equity
and statements of cash flows of Borrower and its Subsidiaries on a
consolidated basis as of the end of such fiscal year, fairly and accurately
presenting the financial condition of Borrower and its Subsidiaries on a
consolidated basis as at such date and the results of operations of
Borrower and its Subsidiaries for such fiscal year and setting forth in
each case in comparative form the corresponding figures for the
corresponding period of the preceding fiscal year, all in reasonable
detail, prepared in accordance with GAAP consistently applied, and audited
by Price Waterhouse Coopers LLP or such other independent certified public
accountants acceptable to Bank (the "Accountants");

            (e)   together with each delivery of financial statements
required by subsection (c) and (d) above, Borrower shall deliver to the
Bank a certificate of Borrower executed by the President or Chief Financial
Officer of Borrower stating whether any Event of Default, or event which,
with the passage of time or giving of notice or both, would constitute,
mature into or become such an Event of Default, currently exists and is
continuing and what activities, if any, Borrower is taking or proposing to
take with respect thereto;.

            (f)   immediately after notice to Borrower of the commencement
thereof, notice, in writing, of any action, suite, arbitration or other
proceeding instituted, commenced or threatened against or affecting
Borrower with an amount in controversy in excess of $1,000,000;

            (g)   if requested by the Bank, Borrower's federal, state and
local tax returns as soon as said returns are completed in the form said
returns will be filed with the Internal Revenue Service and any state or
local department of revenue or taxing authority; and

            (h)   such other information respecting the condition or
operations, financial or otherwise, of Borrower or any Affiliate as the
Bank may from time to time reasonably request.

                                    24

<PAGE>

      No change with respect to any accounting principles of Borrower shall
be made by Borrower without giving prior notification to the Bank.
Borrower represents and warrants to the Bank that the financial statements
delivered to the Bank at or prior to the execution and delivery of this
Agreement and to be delivered at all times thereafter accurately reflect
and will accurately reflect the consolidated financial condition of
Borrower.  The Bank shall have the right at all times during regular
business hours upon reasonable prior notice to inspect the books and
records of Borrower and make extracts therefrom; provided, however, that
Borrower shall only be required to pay for one visit annually prior to the
occurrence of an Event of Default.  The Borrower agrees to advise the Bank
immediately of any material adverse change in the financial condition, the
operations or any other status of Borrower.

      9.8   SUPPLEMENTAL FINANCIAL STATEMENTS.  Borrower shall immediately
upon receipt thereof, provide to the Bank copies of interim and
supplemental reports if any, submitted to Borrower by independent
accountants in connection with any interim audit or review of the books of
Borrower.

      9.9   NOTICE OF PROCEEDINGS.  Borrower shall, immediately after
knowledge thereof shall have come to the attention of any officer of
Borrower, give written notice to the Bank of all threatened or pending
actions, suits, and proceedings before any court or governmental
department, commission, board or other administrative agency which may have
a material effect on the business, property or operations of Borrower.

      9.10  BANKING RELATIONSHIP.  Borrower hereby agrees that to the
extent Borrower fails to utilize the Bank as its primary bank of account
and depository for all receipts, disbursements, cash management and related
services, the Bank may terminate the Revolving Loan Commitment and declare
all Obligations due and payable in full upon one hundred twenty (120) days'
prior written notice to Borrower.

10.   FINANCIAL COVENANTS.

      10.1  TANGIBLE NET WORTH.  Borrower shall maintain Tangible Net
Worth, determined at the end of each calendar quarter, in an amount not
less than the "Minimum Tangible Net Worth."  For purposes herein, "Minimum
Tangible Net Worth" shall mean Twenty-Two Million Five Hundred Thousand
Dollars ($22,500,000) at all times.

      10.2  FUNDED DEBT TO EBITDA.  Borrower shall maintain a ratio of
Funded Debt to EBITDA (calculated on a rolling four quarter basis)
determined at the end of each calendar quarter of less than or equal to 1.0
to 1.00.

11.   EVENTS OF DEFAULT.

      Borrower, without notice or demand of any kind, shall be in default
under this Agreement upon the occurrence of any of the following events
(each an "Event of Default"):

      11.1  NONPAYMENT OF OBLIGATIONS.  Any (i) principal amount due and
owing on any Note, whether by its terms or as otherwise provided herein, is
not paid when due or (ii) interest payment or any of the other Obligations
(excluding principal payments) whether by its terms or as otherwise
provided herein, is not paid within five (5) days of when due.

      11.2  MISREPRESENTATION.  Any oral or written warranty,
representation, certificate or statement in this Agreement, the Loan
Documents or any other agreement with the Bank shall be false when made or
at any time.

                                    25

<PAGE>

      11.3  NONPERFORMANCE.  Any failure to perform or default in the
performance of any covenant, condition or agreement contained in this
Agreement and, if capable of being cured, such failure to perform or
default in performance continues for a period of ten (10) days after
Borrower receives notice or knowledge from any source of such failure, to
perform or default in performance, or in the Loan Documents or any other
agreement with the Bank and such failure to perform or default in
performance continues beyond any applicable grace or cure period.

      11.4  DEFAULT UNDER LOAN DOCUMENTS.  A default under any of the other
Loan Documents, all of which covenants, conditions and agreements contained
therein are hereby incorporated in this Agreement by express reference,
shall be and constitute an Event of Default under this Agreement and any
other of the Obligations.

      11.5  DEFAULT UNDER OTHER AGREEMENTS.  Any default shall occur in the
payment of principal, interest or any other sum for any other obligation in
excess of $50,000 in the aggregate beyond any period of grace provided with
respect thereto or in the performance of any other term, condition or
covenant contained in any material agreement (including, but not limited to
any capital or operating lease or any agreement in connection with the
deferred purchase price of property) under which any such obligation is
created, the effect of which default is to cause or permit the holder of
such obligation (or the other party to such other agreement) to cause such
obligation to become due prior to its stated maturity or terminate such
other agreement.

      11.6  ASSIGNMENT FOR CREDITORS.  Borrower makes an assignment for the
benefit of creditors, fails to pay, or admits in writing its inability to
pay its debts as they mature; or if a trustee of any substantial part of
the assets of Borrower is applied for or appointed, and in the case of such
trustee being appointed in a proceeding brought against Borrower, Borrower,
by any action or failure to act indicates its approval of, consent to, or
acquiescence in such appointment and such appointment is not vacated,
stayed on appeal or otherwise shall not have ceased to continue in effect
within sixty (60) days after the date of such appointment.

      11.7  BANKRUPTCY.  Any proceeding involving Borrower, is commenced by
or against Borrower under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law or statute
of the federal government or any state government, and in the case of any
such proceeding being instituted against Borrower, (i) Borrower, by any
action or failure to act indicates its approval of, consent to or
acquiescence therein, or (ii) an order shall be entered approving the
petition in such proceedings and such order is not vacated, stayed on
appeal or otherwise shall not have ceased to continue in effect within
sixty (60) days after the entry thereof.

      11.8  JUDGMENTS.  The entry of any judgment, decree, levy,
attachment, garnishment or other process, or the filing of any Lien against
Borrower in excess of $1,000,000 in the aggregate, which is not fully
covered by insurance, and which judgment or other process shall not have
been, within sixty (60) days from the entry thereof, (i) bonded over to the
satisfaction of the Bank and appealed, (ii) vacated or (iii) discharged.

      11.9  CHANGE IN CONTROL.  Any Change in Control shall occur.  For
purposes herein, "Change in Control" means any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act, except that a person or group shall be deemed to have "beneficial
ownership" of all securities that such person or group has the right to
acquire (such right, an "option right"), whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of
30% or more of the equity securities of Borrower entitled to vote for
members of the board of directors or equivalent governing body of Borrower
on a fully diluted basis (and, taking into account all such securities that
such person or group has the right to acquire pursuant to any option
right).

                                    26

<PAGE>

      11.10 MATERIAL ADVERSE EVENT.  The occurrence of any material adverse
event which causes a change in the financial condition of Borrower, or
which would have a material adverse effect on the business of Borrower.

12.   REMEDIES.

      Upon the occurrence of an Event of Default, the Bank shall have all
rights, powers and remedies set forth in the Loan Documents, in any written
agreement or instrument (other than this Agreement or the Loan Documents)
relating to any of the Obligations or any security therefor, or as
otherwise provided at law or in equity.  Without limiting the generality of
the foregoing, the Bank may, at its option upon the occurrence of an Event
of Default, declare its commitments to Borrower to be terminated and all
Obligations to be immediately due and payable, PROVIDED, HOWEVER, that upon
the occurrence of an Event of Default under either SECTION 11.6 or
SECTION 11.7, all commitments of the Bank to Borrower shall immediately
terminate and all Obligations shall be automatically due and payable, all
without demand, notice or further action of any kind required on the part
of the Bank.  Borrower hereby waives any and all presentment, demand,
notice of dishonor, protest, and all other notices and demands in
connection with the enforcement of the Bank's rights under the Loan
Documents, notwithstanding anything contained herein or in the Loan
Documents to the contrary.  In addition to the foregoing:

      12.1  UCC AND OFFSET RIGHTS.  The Bank may exercise, from time to
time, any and all rights and remedies available to it under the UCC or
under any other applicable law in addition to, and not in lieu of, any
rights and remedies expressly granted in this Agreement or in any other
agreements between Borrower and the Bank, and may, without demand or notice
of any kind, appropriate and apply toward the payment of such of the
Obligations, whether matured or unmatured, including costs of collection
and attorneys' and paralegals' fees, and in such order of application as
the Bank may, from time to time, elect, any indebtedness of the Bank to
Borrower, however created or arising, including, but not limited to,
balances, credits, deposits, accounts or moneys of Borrower in the
possession, control or custody of, or in transit to the Bank.  Borrower
hereby waives the benefit of any law that would otherwise restrict or limit
the Bank in the exercise of its right, which is hereby acknowledged, to
appropriate at any time hereafter any such indebtedness owing from the Bank
to Borrower.

      12.2  ADDITIONAL REMEDIES.  The Bank shall have the right and power
to upon the occurrence of an Event of Default:

            (a)   extend, renew or modify for one or more periods (whether
or not longer than the original period) any Note, any other of the
Obligations, any obligation of any nature of any other obligor with respect
to any Note or any of the Obligations; and

            (b)   grant releases, compromises or indulgences with respect
to the Notes, any of the Obligations, any extension or renewal of any of
the Obligations, any security therefor, or to any other obligor with
respect to any Note or any of the Obligations.

      12.3  ATTORNEY-IN-FACT.  Upon an Event of Default, Borrower hereby
irrevocably makes, constitutes and appoints the Bank (and any officer of
the Bank or any Person designated by the Bank for that purpose) as
Borrower's true and lawful proxy and attorney-in-fact (and agent-in-fact)
in Borrower's name, place and stead, with full power of substitution, to
take such actions as are permitted in this Agreement.  Borrower hereby
acknowledges that the constitution and appointment of such proxy and
attorney-in-fact are coupled with an interest and are irrevocable.
Borrower hereby ratifies and confirms all that said attorney-in-fact may do
or cause to be done by virtue of any provision of this Agreement.

                                    27

<PAGE>

      12.4  NO MARSHALING.  The Bank shall not be required to marshal any
present or future asset security for, or other assurances of payment of,
the Obligations or any of them or to resort to such asset security or other
assurances of payment in any particular order.  To the extent that it
lawfully may, Borrower hereby agrees that it will not invoke any law
relating to the marshaling of assets which might cause delay in or impede
the enforcement of the Bank's rights under this Agreement or under any
other instrument creating or evidencing any of the Obligations or under
which any of the Obligations is outstanding or by which any of the
Obligations is secured or payment thereof is otherwise assured, and, to the
extent that it lawfully may, Borrower hereby irrevocably waives the
benefits of all such laws.

      12.5  APPLICATION OF PROCEEDS.  The Bank will within one (1) New York
Banking Day after receipt of cash or solvent credits from collection of
items of payment, proceeds of assets or any other source, apply the whole
or any part thereof against the Obligations secured hereby.  The Bank shall
further have the exclusive right to determine how, when and what
application of such payments and such credits shall be made on the
Obligations, and such determination shall be conclusive upon Borrower.  Any
proceeds of any disposition by the Bank of all or any part of Borrower's
assets may be first applied by the Bank to the payment of expenses incurred
by the Bank in connection with the enforcement of the obligations of
Borrower hereunder, including attorneys' fees and legal expenses as
provided for in SECTION 13 hereof.

      12.6  NO WAIVER.  No Event of Default shall be waived by the Bank
except in writing.  No failure or delay on the part of the Bank in
exercising any right, power or remedy hereunder shall operate as a waiver
of the exercise of the same or any other right at any other time; nor shall
any single or partial exercise of any such right, power or remedy preclude
any other or further exercise thereof or the exercise of any other right,
power or remedy hereunder.  There shall be no obligation on the part of the
Bank to exercise any remedy available to the Bank in any order.  The
remedies provided for herein are cumulative and not exclusive of any
remedies provided at law or in equity.  Borrower agrees that in the event
that Borrower fails to perform, observe or discharge any of its Obligations
or liabilities under this Agreement or any other agreements with the Bank,
no remedy of law will provide adequate relief to the Bank, and further
agrees that the Bank shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.

13.   MISCELLANEOUS.

      13.1  OBLIGATIONS ABSOLUTE.  None of the following shall affect the
Obligations of Borrower to the Bank under this Agreement:

            (a)   acceptance or retention by the Bank of other property or
any interest in property as security for the Obligations;

            (b)   release by the Bank of Borrower or of any party liable
with respect to the Obligations;

            (c)   release, extension, renewal, modification or substitution
by the Bank of the Notes, or any note evidencing any of the Obligations, or
the compromise of the Obligations; or

            (d)   failure of the Bank to resort to any other security or to
pursue Borrower or any other obligor liable for any of the Obligations.

      13.2  ENTIRE AGREEMENT.  This Agreement constitutes the entire
agreement between the parties and is the final expression of the intentions
of Borrower and the Bank.  No promises, either expressed or implied, exist
between Borrower and the Bank, unless contained herein.  This Agreement
supersedes all negotiations, representations, warranties, commitments,
offers, contracts (of any kind or nature, whether oral or written) prior to
or contemporaneous with the execution hereof.

                                    28

<PAGE>

      13.3  AMENDMENTS; WAIVERS.  No amendment, modification, termination,
discharge or waiver of any provision of this Agreement or of the Loan
Documents, or consent to any departure by Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Bank and Borrower, and then such waiver or consent shall be effective only
for the specific purpose for which given.

      13.4  WAIVER OF DEFENSES.  BORROWER WAIVES EVERY PRESENT AND FUTURE
DEFENSE, CAUSE OF ACTION, COUNTERCLAIM OR SETOFF WHICH BORROWER MAY NOW
HAVE OR HEREAFTER MAY HAVE TO ANY ACTION BY THE BANK IN ENFORCING THIS
AGREEMENT.  BORROWER WAIVES ANY IMPLIED COVENANT OF GOOD FAITH AND RATIFIES
AND CONFIRMS WHATEVER THE BANK MAY DO PURSUANT TO THE TERMS OF THIS
AGREEMENT.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK GRANTING
ANY FINANCIAL ACCOMMODATION TO BORROWER.

      13.5  WAIVER OF JURY TRIAL.  THE BANK AND BORROWER, AFTER CONSULTING
OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, EACH KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE IRREVOCABLY, THE RIGHT TO TRIAL BY JURY
WITH RESPECT TO ANY LEGAL PROCEEDING BASED HEREON, OR ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER
OBLIGATIONS, OR ANY OTHER AGREEMENT EXECUTED OR CONTEMPLATED TO BE EXECUTED
IN CONJUNCTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT OR COURSE OF
DEALING IN WHICH THE BANK AND BORROWER ARE ADVERSE PARTIES.  THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE BANK GRANTING ANY FINANCIAL ACCOMMODATION
TO BORROWER.

      13.6  LITIGATION.  TO INDUCE THE BANK TO MAKE THE LOANS, BORROWER
IRREVOCABLY AGREES THAT ALL ACTIONS ARISING, DIRECTLY OR INDIRECTLY, AS A
RESULT OR CONSEQUENCE OF THIS AGREEMENT, THE NOTE, ANY OTHER AGREEMENT WITH
THE BANK, SHALL BE INSTITUTED AND LITIGATED ONLY IN COURTS HAVING THEIR
SITUS IN THE CITY OF CHICAGO, ILLINOIS.  BORROWER HEREBY CONSENTS TO THE
EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT HAVING ITS
SITUS IN SAID CITY, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS.

BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND CONSENTS
THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, DIRECTED TO BORROWER AS SET FORTH HEREIN IN THE MANNER
PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF COURT OR OTHERWISE.

      13.7  ASSIGNABILITY.  The Bank may at any time assign the Bank's
rights in this Agreement, the Note, the Obligations, or any part thereof,
and the Bank thereafter shall be relieved from all liability with respect
thereto; PROVIDED, HOWEVER, that so long as no Event of Default exists, the
Bank shall obtain the consent of the Borrower prior to any assignment, such
consent not to be unreasonably withheld or delayed.  In addition, the Bank
may at any time sell one or more participations in the Loans.  Borrower may
not sell or assign this Agreement, or any other agreement with the Bank or
any portion thereof, either voluntarily or by operation of law, without the
prior written consent of the Bank.  This Agreement shall be binding upon
the Bank and Borrower and its respective legal representatives and
successors.  All references herein to Borrower shall be deemed to include
any successors, whether immediate or remote.  In the case of a joint
venture or partnership, the term "Borrower" shall be deemed to include all
joint venturers or partners of Borrower, who shall be jointly and severally
liable hereunder.

      13.8  CONFIDENTIALITY.  Borrower and the Bank hereby agree and
acknowledge that any and all information relating to Borrower which is
(i) furnished by Borrower to the Bank (or to any affiliate of the Bank),
and (ii) non-public, confidential or proprietary in nature, shall be kept
confidential by the Bank or such affiliate in accordance with applicable
law, PROVIDED, HOWEVER, that such information and other credit information
relating to Borrower may be distributed by the Bank or such affiliate to
the Bank's or such affiliate's directors, officers, employees, attorneys,
affiliates, auditors and regulators, and upon the order of a court or other
governmental agency having jurisdiction over the Bank or such affiliate, to
any other party.  Borrower and the Bank further agree that this provision
shall survive the termination of this Agreement.

                                    29

<PAGE>

      13.9  BINDING EFFECT.  This Agreement shall become effective upon
execution by Borrower and the Bank.

      13.10 GOVERNING LAW.  This Agreement, the Loan Documents and the Note
shall be delivered and accepted in and shall be deemed to be contracts made
under and governed by the internal laws of the State of Illinois (but
giving effect to federal laws applicable to national banks), and for all
purposes shall be construed in accordance with the laws of such State,
without giving effect to the choice of law provisions of such State.

      13.11 ENFORCEABILITY.  Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by, unenforceable or invalid under any jurisdiction, such
provision shall as to such jurisdiction, be severable and be ineffective to
the extent of such prohibition or invalidity, without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.

      13.12 SURVIVAL OF BORROWER REPRESENTATIONS.  All covenants,
agreements, representations and warranties made by Borrower herein shall,
notwithstanding any investigation by the Bank, be deemed material and
relied upon by the Bank and shall survive the making and execution of this
Agreement and the Loan Documents and the issuance of the Notes, and shall
be deemed to be continuing representations and warranties until such time
as Borrower has fulfilled all of its Obligations to the Bank, and the Bank
has been paid in full.  The Bank, in extending financial accommodations to
Borrower, is expressly acting and relying on the aforesaid representations
and warranties.

      13.13 EXTENSIONS OF THE BANK'S COMMITMENT AND NOTE.  This Agreement
shall secure and govern the terms of any extensions or renewals of the
Bank's commitment hereunder and the Note pursuant to the execution of any
modification, extension or renewal note executed by Borrower and accepted
by the Bank in its sole and absolute discretion in substitution for the
Notes.

      13.14 TIME OF ESSENCE.  Time is of the essence in making payments of
all amounts due the Bank under this Agreement and in the performance and
observance by Borrower of each covenant, agreement, provision and term of
this Agreement.

      13.15 COUNTERPARTS.  This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute one and the same
instrument.

      13.16 FACSIMILE SIGNATURES.  The Bank is hereby authorized to rely
upon and accept as an original any Loan Documents or other communication
which is sent to the Bank by facsimile, telegraphic or other electronic
transmission (each, a "Communication") which the Bank in good faith
believes has been signed by Borrower and has been delivered to the Bank by
a properly authorized representative of Borrower, whether or not that is in
fact the case. Notwithstanding the foregoing, the Bank shall not be
obligated to accept any such Communication as an original and may in any
instance require that an original document be submitted to the Bank in lieu
of, or in addition to, any such Communication.

      13.17 NOTICES.  Except as otherwise provided herein, Borrower waives
all notices and demands in connection with the enforcement of the Bank's
rights hereunder.  All notices, requests, demands and other communications
provided for hereunder shall be in writing, sent by certified or registered
mail, postage prepaid, by facsimile, telegram or delivered in person, and
addressed as follows:

                                    30

<PAGE>

If to Borrower:               c/o Landauer, Inc.
                              2 Science Drive
                              Glenwood, IL  60425
                              Attention: Jonathon Singer
                              Telephone:  (708) 441-8311
                              Facsimile:  (708) 755-7011

                              With a copy to:

                              Sidley Austin LLP
                              One South Dearborn Street
                              Chicago, IL  60603
                              Attn:  Larry Barden
                              Telephone:  (312) 853-7000
                              Facsimile:  (312) 853-7036

If to the Bank:               U.S. Bank National Association
                              209 South LaSalle Street, Suite 410
                              Chicago, Illinois  60604
                              Attention:  Kyle Freimuth
                              Telephone:  312-325-8758
                              Facsimile:  312-325-8750

                              With a copy to:
                              Vedder, Price, Kaufman & Kammholz, P.C.
                              222 North LaSalle Street
                              Chicago, Illinois 60601
                              Attention:  Matthew T. O'Connor, Esq.
                              Telephone:  312-609-7500
                              Facsimile:  312-609-5005

or, as to each party, at such other address as shall be designated by such
party in a written notice to each other party complying as to delivery with
the terms of this subsection.  No notice to or demand on Borrower in any
case shall entitle Borrower to any other or further notice or demand in
similar or other circumstances.

      13.18 COSTS, FEES AND EXPENSES RELATED TO AGREEMENT AND OTHER
AGREEMENTS.  In accordance with this Agreement on or prior to the date
hereof and thereafter upon demand by the Bank, Borrower shall pay or
reimburse the Bank for all reasonable costs, fees and expenses incurred by
the Bank or for which the Bank becomes obligated, in connection with the
negotiation, preparation, consummation and enforcement of this Agreement
and the other Loan Documents, including, but not limited to, reasonable
attorneys' fees plus costs and expenses of such attorneys or the Bank;
search fees, reasonable costs and expenses; and all taxes payable in
connection with this Agreement or the other Loan Documents.  That portion
of Borrower's Obligations consisting of reasonable costs, expenses or
advances to be reimbursed by Borrower to the Bank pursuant to this
Agreement or the other Loan Documents which are not paid on or prior to the
date hereof shall be payable by Borrower to the Bank on demand.  If at any
time or times hereafter the Bank: (a) employs counsel for advice or other
representation (i) with respect to this Agreement or the other Loan
Documents, (ii) to represent the Bank in any litigation, contest, dispute,
suit or proceeding or to commence, defend, or intervene or to take any
other action in or with respect to any litigation, contest, dispute, suit,
or proceeding (whether instituted by the Bank, Borrower, or any other
Person) in any way or respect relating to this Agreement, the other Loan
Documents or Borrower's affairs, or (iii) to enforce any rights of the Bank
against Borrower or any other person that may be obligated to the Bank by
virtue of this Agreement or the other Loan Documents; (b) takes any action

                                    31

<PAGE>

to protect, collect, sell, liquidate, or otherwise dispose of any of the
assets of Borrower; and/or (c) attempts to or enforces any of the Bank's
rights or remedies under the Agreement or the other Loan Documents, the
reasonable costs and expenses incurred by the Bank in any manner or way
with respect to the foregoing, shall be part of Borrower's Obligations,
payable by Borrower to the Bank on demand.

      13.19 INDEMNIFICATION.  Borrower agrees to defend (with counsel
satisfactory to the Bank), protect, indemnify and hold harmless each
Indemnified Party from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs,
expenses and distributions of any kind or nature (including, without
limitation, the disbursements and the reasonable fees of counsel for each
Indemnified Party thereto, which shall also include, without limitation,
attorneys' fees and time charges of attorneys who may be employees of the
Bank, any parent entity or affiliated entity of the Bank), which may be
imposed on, incurred by, or asserted against, any Indemnified Party
(whether direct, indirect or consequential and whether based on any
federal, state or local laws or regulations, including, without limitation,
securities, Environmental Laws and commercial laws and regulations, under
common law or in equity, or based on contract or otherwise) in any manner
relating to or arising out of this Agreement or any of the Loan Documents,
or any act, event or transaction related or attendant thereto, the
preparation, execution and delivery of this Agreement and the Loan
Documents, including, but not limited to, the making or issuance and
management of the Loans, the use or intended use of the proceeds of the
Loans, the enforcement of the Bank's rights and remedies under this
Agreement, the Loan Documents, the Notes, any other instruments and
documents delivered hereunder, or under any other agreement between
Borrower and the Bank; PROVIDED, HOWEVER, that Borrower shall not have any
obligations hereunder to any Indemnified Party with respect to matters
caused by or resulting from the willful misconduct or gross negligence of
such Indemnified Party.  To the extent that the undertaking to indemnify
set forth in the preceding sentence may be unenforceable because it
violates any law or public policy, Borrower shall satisfy such undertaking
to the maximum extent permitted by applicable law.  Any liability,
obligation, loss, damage, penalty, cost or expense covered by this
indemnity shall be paid to each Indemnified Party on demand, and, failing
prompt payment, shall, together with interest thereon at the Default Rate
from the date incurred by each Indemnified Party until paid by Borrower, be
added to the Obligations of Borrower.  The provisions of this SECTION 13.19
shall survive the satisfaction and payment of the other Obligations and the
termination of this Agreement.

      13.20 PATRIOT ACT, BANK SECRECY ACT AND OFFICE OF FOREIGN ASSETS
CONTROL.  As required by federal law and the Bank's policies and practices,
the Bank may need to obtain, verify and record certain customer
identification information and documentation in connection with opening or
maintaining accounts, or establishing or continuing to provide services and
Borrower agrees to provide such information.  In addition, and without
limiting the foregoing sentence, Borrower shall (a) ensure, and cause each
Subsidiary, if applicable, to ensure, that no Person who owns a controlling
interest in or otherwise controls Borrower or any Subsidiary is or shall be
listed on the Specially Designated Nationals and Blocked Person List or
other similar lists maintained by the Office of Foreign Assets Control
("OFAC"), the Department of the Treasury or included in any Executive
Orders, (b) not use or permit the use of the proceeds of the Loans to
violate any of the foreign asset control regulations of OFAC or any
enabling statute or Executive Order relating thereto, and (c) comply, and
cause each Subsidiary, if applicable, to comply, with all applicable Bank
Secrecy Act ("BSA") laws and regulations, as amended.

                         [SIGNATURE PAGE FOLLOWS]

                                    32

<PAGE>

                    (Signature Page to Loan Agreement)

      IN WITNESS WHEREOF, Borrower and the Bank have executed this Loan
Agreement as of the date first above written.

                              LANDAUER, INC., a Delaware corporation

                              By:   /s/ Jonathon M. Singer
                                    ---------------------------------
                              Its:  SVP/CFO
                                    ---------------------------------

                              Agreed and accepted:

                              U.S. BANK NATIONAL ASSOCIATION,
                              a national banking association

                              By:   /s/ Kyle Freimuth
                                    ---------------------------------
                              Its:  SVP
                                    ---------------------------------

                                    33

<PAGE>

                                 EXHIBIT A

                                    to

                              Loan Agreement

                              REVOLVING NOTE
                              --------------

$15,000,000                                           Chicago, Illinois
                                                      October 5, 2007

      FOR VALUE RECEIVED, on or before October 31, 2009 (or, if such day is
not a New York Banking Day, on the next following New York Banking Day),
the undersigned, LANDAUER, INC., a Delaware corporation (referred to herein
as "Borrower") promises to pay to the order of U.S. BANK NATIONAL
ASSOCIATION, a national banking association (herein, together with its
successors and assigns, called the "Bank"), the maximum principal sum of
FIFTEEN MILLION AND 00/100 DOLLARS ($15,000,000) or, if less, the aggregate
unpaid principal amount of all Loans made by the Bank to the undersigned
pursuant to that certain Loan Agreement of even date herewith between
Borrower and the Bank (herein, as the same may be amended, modified or
supplemented from time to time, called the "Loan Agreement") as shown
either on the schedule attached hereto (and any continuation thereof) or in
the Bank's records.

      Borrower further promises to pay to the order of the Bank interest on
the aggregate unpaid principal amount hereof from time to time outstanding
from the date hereof until paid in full at such rates and at such times as
shall be determined in accordance with the provisions of the Loan
Agreement.  Accrued interest shall be payable on the dates specified in the
Loan Agreement.

      Payments of both principal and interest are to be made in the lawful
money of the United States of America in immediately available funds at the
Bank's principal office at 209 South LaSalle Street, Chicago, Illinois
60604, or at such other place as may be designated by the Bank to Borrower
in writing.

      This Note is the Revolving Note referred to in, evidences
indebtedness incurred under, and is subject to the terms and provisions of,
the Loan Agreement.  The Loan Agreement, to which reference is hereby made,
sets forth said terms and provisions, including those under which this Note
may or must be paid prior to its due date or may have its due date
accelerated.  Terms used but not otherwise defined herein are used herein
as defined in the Loan Agreement.

      In addition to, and not in limitation of, the foregoing and the
provisions of the Loan Agreement hereinabove referred to, Borrower further
agrees, subject only to any limitation imposed by applicable law, to pay
all expenses, including attorneys' fees and expenses, incurred by the
holder of this Note in seeking to collect any amounts payable hereunder
which are not paid when due, whether by acceleration or otherwise.

      All parties hereto, whether as makers, endorsers or otherwise,
severally waive presentment, demand, protest and notice of dishonor in
connection with this Note.

      This Note is binding upon the undersigned and its successors and
assigns, and shall inure to the benefit of the Bank and its successors and
assigns.  This Note is made under and governed by the laws of the State of
Illinois without regard to conflict of laws principles.

                                    A-1

<PAGE>

      IN WITNESS WHEREOF, Borrower has executed this Note as of the day and
year first above written.

                              LANDAUER, INC., a Delaware corporation

                              By:   /s/ Jonathon M. Singer
                                    ----------------------------------
                              Its:  SVP/CFO
                                    ----------------------------------

                                    A-2

<PAGE>

                                 EXHIBIT B

                                    to

                              Loan Agreement

                      FORM OF COMPLIANCE CERTIFICATE
                      ------------------------------

To:   U.S. Bank National Association

      Please refer to the Loan Agreement dated as of October 5, 2007 (as
amended or otherwise modified from time to time, the "Loan Agreement")
between each of LANDAUER, INC., a Delaware corporation (the "Borrower"),
and U.S. Bank National Association.  Terms used but not otherwise defined
herein are used herein as defined in the Loan Agreement.

      I.    REPORTS.  Enclosed herewith is a copy of the [annual
            audited/quarterly/monthly] report of Borrower as at
            _____________, ____ (the "Computation Date"), which report
            fairly presents in all material respects the financial
            condition and results of operations (subject to the absence of
            footnotes and to normal year-end adjustments) of Borrower as of
            the Computation Date and has been prepared in accordance with
            GAAP consistently applied.

      II.   FINANCIAL TESTS.  Borrower hereby certifies and warrants to you
            that the following is a true and correct computation as at the
            Computation Date of the following ratios and/or financial
            restrictions contained in the Loan Agreement:

A.    Section 10.1 - Minimum Tangible Net Worth

      1.    Total Assets                              $__________________
      2.    Total Liabilities                         $__________________
      3.    (1) less (2)                              $__________________
      4.    (3) plus Subordinated Debt                $__________________
      5.    LESS General Intangibles                  ($__________________)
      6.    LESS Amounts due from Affiliates          ($__________________)
      7.    Total                                     $__________________
      8.    Required                                  $22,500,0000

B.    Section 10.2 - Funded Debt/EBITDA Ratio

      1.    Required                                  1.0 to 1

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

                         (Signature Page Follows)

                                    B-1

<PAGE>

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

                              LANDAUER, INC., a Delaware corporation

                              By:
                                    -----------------------------------
                              Its:
                                    -----------------------------------

                                    B-2form8-kblairex41.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

SECURITIES PURCHASE AGREEMENT

     SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of October 17, 2007, by and among USA Technologies, Inc., a Pennsylvania corporation, with
headquarters located at 100 Deerfield Lane, Suite 140, Malvern, Pennsylvania 19355 (the "Company"), and
the investors listed on the Schedule of Buyers attached hereto (individually, a "Buyer" and collectively,
the "Buyers").

WHEREAS:

     A. The Company and each Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(2) of
the Securities Act of 1933, as amended (the "1933 Act"), and Rule 506 of Regulation D ("Regulation D") as promulgated by the United States Securities and Exchange Commission (the "SEC") under the 1933 Act.

     B. Each Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, that aggregate number of shares of the
Common Stock, no par value per share, of the Company (the “Common Stock” or “Securities”), set forth opposite such Buyer's name in column (3) on the Schedule of Buyers (which aggregate
number for all Buyers together shall be 2,142,871 shares of Common Stock and shall collectively be referred to herein as the "Common Shares").

     C. Contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company has agreed to provide certain registration rights with
respect to the Registrable Securities (as defined in the Registration Rights Agreement), under the 1933 Act and the rules and regulations promulgated thereunder, and applicable state securities laws.

NOW, THEREFORE, the Company and each Buyer hereby agree as follows:

1. PURCHASE AND SALE OF COMMON SHARES.

     a. Common Shares.
Subject to the satisfaction (or waiver) of the conditions set forth in Sections 5 and 6 below, the Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the Closing Date (as
defined below), the number of Common Shares as is set forth opposite such Buyer's name in column (3) on the Schedule of Buyers. 

     b. Closing.  The
closing (the "Closing") of the purchase of the Common Shares by the Buyers shall occur at the offices of
Lurio & Associates, P.C., 2005 Market Street, Suite 2340, Philadelphia, PA 19103.  The date and time of the Closing (the "Closing Date") shall be 10:00 a.m., New York City Time, on the date hereof (i.e., October 16, 2007).

     c. Purchase Price.
The aggregate purchase price for the Common Shares to be purchased by each Buyer (the "Purchase Price")
shall be the amount set forth opposite such Buyer's name in column (4) on the Schedule of Buyers which shall be equal to the amount of $7.00 per Common Share. The aggregate Purchase Price for all of the Common Shares shall be
$15,000,097.

     d. Form of Payment.
On the Closing Date, (i) the Company shall deliver to each Buyer one or more stock certificates, free and clear of all restrictive and other legends (except as expressly provided in Sections 2(g) and 2(h) hereof), evidencing the number of Common
Shares such Buyer is purchasing as is set forth opposite such Buyer’s name in column (3) of the Schedule of Buyers and (ii) each Buyer shall, following receipt of such stock certificates, pay its portion of the Purchase Price to the Company for
the Common Shares to be issued and sold to such Buyer at the Closing, by wire transfer of immediately available funds in accordance with the Company's written wire instructions.

2. BUYER'S REPRESENTATIONS AND WARRANTIES.

Each Buyer represents and warrants with respect to only itself that: 

     a. Organization; Authority. Such Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.

     b. No Public Sale or Distribution.  Such Buyer is acquiring the Common Shares for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the
1933 Act; provided, however, that by making the representations herein, such Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves
the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act. Such Buyer is acquiring the Securities hereunder in the ordinary course of its business.  Such Buyer
does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities.

     c. Accredited Investor Status. Such Buyer is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D.

     d. Reliance on Exemptions. Such Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying
in part upon the truth and accuracy of, and such Buyer's compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Buyer set forth herein in order to determine the availability of such exemptions and
the eligibility of such Buyer to acquire the Securities.

     e. Information.  Such
Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company and materials 

relating to the offer and sale of the Securities which have been requested by such Buyer. Such Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the
Company. Neither such inquiries nor any other due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or affect such Buyer's right to rely on the Company's representations and
warranties contained herein.  Such Buyer understands that its investment in the Securities involves a high degree of risk. Such Buyer has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Securities.

     f. No Governmental Review. Such Buyer understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the
investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

     g. Transfer or Resale. Such Buyer understands that except as provided in the Registration Rights Agreement: (i) the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered for sale,
sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Buyer shall have delivered to the Company an opinion of counsel, in a generally acceptable form, to the effect that such Securities to be sold, assigned or
transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) such Buyer provides the Company with reasonable assurance that such Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule
144A promulgated under the 1933 Act, as amended, (or a successor rule thereto) (collectively, "Rule 144"); (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the
seller (or the Person (as defined in Section 3(s)) through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption
thereunder. Notwithstanding the foregoing, the Securities may be pledged in connection with a bona fide margin account or other loan or financing arrangement secured by the Securities and such pledge of Securities shall not be deemed to be a
transfer, sale or assignment of the Securities hereunder, and no Buyer effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or any
other Transaction Document (as defined in Section 3(b)), including, without limitation, this Section 2(g).

     h. Legends. Such
Buyer understands that the certificates or other instruments representing the Common Shares, except as set forth below, shall bear any legend as required by the "blue sky" laws of any state and a restrictive legend in substantially the following
form (and a stop-transfer order may be placed against transfer of such stock certificates):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS 

AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144
UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of the Securities upon which it is stamped or issue to such holder by
electronic delivery at the applicable balance account at The Depository Trust Company ("DTC"), if, unless
otherwise required by state securities laws, (i) such Securities are registered for resale under the 1933 Act, (ii) in connection with a sale, assignment or other transfer, such holder provides the Company with an opinion of counsel, in a generally
acceptable form, to the effect that such sale, assignment or transfer of the Securities may be made without registration under the applicable requirements of the 1933 Act, or (iii) such holder provides the Company with reasonable assurance that the
Securities can be sold, assigned or transferred pursuant to Rule 144(k).

If the Company shall fail for any reason or for no reason to issue to the holder of the Securities within three (3) Business days after the occurrence of any of (i) through (iii) above (the
“Delivery Date”) a certificate without such legend to the holder or to issue such
Securities to such holder by electronic delivery at the applicable balance account at DTC, and if on or after such Delivery Date the Buyer purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Buyer of shares of Common Stock that the Buyer anticipated receiving from the Company without any restrictive legend (a “Buy-In”), then the Company shall, within three (3) trading days after the Buyer’s request and in the Buyer’s sole discretion, either (i) pay cash to the Buyer in an amount equal to the
Buyer’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate shall terminate and such shares shall be cancelled, or (ii) promptly honor its obligation to deliver to the Buyer
a certificate or certificates representing such number of shares of Common Stock that would have been issued if the Company timely complied with its obligations hereunder (“Unlegended Shares”) and pay cash to the Purchaser in an amount equal to the excess (if any) of the Buy-In Price over the aggregate market price of the
Unlegended Shares on the date the Company delivers the Unlegended Shares to the Purchaser. 

     i. Validity; Enforcement.  This Agreement and the Registration Rights Agreement have been duly and validly authorized, executed and delivered on behalf of such Buyer and shall constitute the legal, valid and binding obligations of such Buyer enforceable
against such Buyer in accordance with their respective terms, except as such enforceability may

be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the
enforcement of applicable creditors' rights and remedies.

     j. No Conflicts. The
execution, delivery and performance by such Buyer of this Agreement and the Registration Rights Agreement and the consummation by such Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational
documents of such Buyer or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which such Buyer is a party, , except in the case of clause (ii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the ability of such Buyer to perform its obligations hereunder.

     k. Residency. Such
Buyer is a resident of that jurisdiction specified below its address on the Schedule of Buyers.

     l. During the last thirty (30) days prior to the date hereof, neither such Buyer nor any Affiliate (as defined below) of such Buyer, foreign or domestic, has,
directly or indirectly, effected or agreed to effect any “short sale” (as defined in Rule 200 under Regulation SHO), whether or not against the box, established any “put equivalent position” (as defined in Rule 16a-1(h) under the
1934 Act) with respect to the Common Stock, borrowed or pre-borrowed any shares of Common Stock, or granted any other right (including, without limitation, any put or call option) with respect to the Common Stock or with respect to any security that
includes, relates to or derived any significant part of its value from the Common Stock or otherwise sought to hedge its position in the Company’ securities (each, a “Prohibited Transaction”).  As used in this Agreement, “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.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to each of the Buyers that:

     a. Organization and Qualification.  Each of the Company and its "Subsidiaries" (which for purposes of this Agreement
means any joint venture or any entity in which the Company, directly or indirectly, owns capital stock or holds an equity or similar interest) are entities duly organized and validly existing and in good standing under the laws of the jurisdiction
in which they are formed, and have the requisite power and authorization to own their properties and to carry on their business as now being conducted. Each of the Company and its Subsidiaries is duly qualified as a foreign entity to do business and
is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not
reasonably be expected to have a Material Adverse Effect. As used in this Agreement, "Material Adverse Effect" means any material adverse effect on the business, 

properties, assets, operations, results of operations, condition (financial or otherwise) or prospects of the Company, its Subsidiaries, individually or taken as a whole, or on the
transactions contemplated hereby or in the other Transaction Documents or by the agreements and instruments to be entered into in connection herewith or therewith, or on the authority or ability of the Company to perform its obligations under the
Transaction Documents (as defined below). The Company has no Subsidiaries except as set forth on Schedule 3(a).

     b. Authorization; Enforcement; Validity.  The Company has the requisite power and authority to enter into and perform its obligations under this Agreement, the Registration Rights Agreement, and each of the other agreements entered into by the parties hereto in
connection with the transactions contemplated by this Agreement (collectively, the "Transaction Documents") and to issue the Securities in accordance with the terms hereof and thereof.  The execution and delivery of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby
and thereby, including, without limitation, the issuance of the Common Shares, have been duly authorized by the Company's board of directors and (other than the filing with the SEC of one or more Registration Statements in accordance with the
requirements of the Registration Rights Agreement and any other filings as may be required by any state securities agencies), no further filing, consent, or authorization is required by the Company, its board of directors or its stockholders.  This
Agreement and the other Transaction Documents of even date herewith have been duly executed and delivered by the Company, and constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with
their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement
of applicable creditors' rights and remedies.

     c. Issuance of Securities.  The Common Shares are duly authorized and, upon issuance in accordance with the terms hereof, shall be validly issued and free from all taxes, liens and charges with respect to the issue thereof and the Common Shares shall be
fully paid and nonassessable with the holders being entitled to all rights accorded to a holder of Common Stock.  The offer and issuance by the Company of the Securities is exempt from registration under the 1933 Act.

     d. No Conflicts. The
execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Common Shares will not (i)
result in a violation of the Articles of Incorporation (as defined in Section 3(r)) of the Company or any certificate of incorporation, certificate of formation, any certificate of designations or other constituent document of any of its
Subsidiaries, any capital stock of the Company or Bylaws (as defined in Section 3(r)) or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights
of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations and the rules and regulations of the NASDAQGlobal Market (the "Principal Market")) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected.

     e. Consents. Neither
the Company nor any Subsidiary is required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency or any other Person in order for it to
execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each case in accordance with the terms hereof or thereof. The Company is not in violation of the requirements of the Principal Market and has
no knowledge of any facts that would reasonably lead to delisting or suspension of the Common Stock in the foreseeable future. 

     f. Acknowledgment Regarding Buyer's Purchase of Securities.  The Company acknowledges and agrees that each Buyer is acting solely in the capacity of arm's length purchaser with respect to the Transaction Documents and the transactions contemplated hereby
and thereby. The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions
contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Buyer's purchase
of the Securities. The Company further represents to each Buyer that the Company's decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives.

     g. No General Solicitation; Placement Agent's Fees. Neither the Company, nor any of its Subsidiaries or affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offer or sale of the Securities. The Company shall be responsible for the payment of any placement agent's fees, financial advisory fees, or brokers' commissions (other than for persons engaged by any
Buyer or its investment advisor) relating to or arising out of the transactions contemplated hereby.  The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, attorney's fees and
out-of-pocket expenses) arising in connection with any such claim.

     h. No Integrated Offering.  None of the Company, its Subsidiaries, any of their affiliates, and any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, (i) under
circumstances that would require registration of any of the Securities under the 1933 Act or (ii) cause this offering of the Securities to be integrated with prior offerings by the Company under circumstances that would require registration of any
of the Securities under the 1933 Act or (iii) under circumstances that would require the application of or cause this offering of Securities to be integrated with prior offerings that would require the application of any applicable stockholder
approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or designated.  None of the Company, its Subsidiaries, their
affiliates and any Person acting on their behalf will take any action or steps referred to in the preceding sentence to cause this offering of Securities to be integrated with any other offering under circumstances that would require registration of
any of the Securities under the 1933 Act or cause the offering of the Securities to be integrated with any other offering under circumstances that would require the application of any such stockholder approval provisions.

     i. Application of Takeover Protections; Rights Agreement.  The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar anti-takeover provision under the Articles of Incorporation or any certificates of designations or the laws of the jurisdiction of its formation or incorporation which is or could become
applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the Company's issuance of the Securities and any Buyer's ownership of the Securities. The Company has not adopted a stockholder
rights plan or similar arrangement relating to accumulations of beneficial ownership of Common Stock or a change in control of the Company.

     j. SEC Documents; Financial Statements. During the two (2) years prior to the date hereof, the Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the
1934 Act (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the
"SEC Documents"). The Company has delivered to the Buyers or their respective representatives true,
correct and complete copies of each of the SEC Documents not available on the EDGAR system that have been requested by each Buyer. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934
Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, 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. As of their respective dates, the financial statements of the Company
included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Such financial
statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the
case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of
its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). No other information provided by or on behalf of the Company to the Buyers which is not included in the
SEC Documents, including, without limitation, information referred to in Section 2(e) of this Agreement, contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the
light of the circumstance under which they are or were made not misleading. The Company covenants that the Form 10-Q for the quarter ended September 30, 2007 will be timely filed on or before November 14, 2007 and will not contain any untrue
statement of a material fact or omit 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

     k. Absence of Certain Changes.  Since June 30, 2007 there has been no material adverse change and no material adverse development in the business, assets, properties,

operations, condition (financial or otherwise), results of operations or prospects of the Company or its Subsidiaries.  Except as disclosed in Schedule 3(k), since June 30, 2007, neither the Company nor any of its Subsidiaries has (i) declared or paid any dividends, (ii) sold any assets,
individually or in the aggregate, in excess of $100,000 outside of the ordinary course of business or (iii) had capital expenditures, individually or in the aggregate, in excess of $100,000. Neither the Company nor any of its Subsidiaries
has taken any steps to seek protection pursuant to any bankruptcy law nor does the Company have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which
would reasonably lead a creditor to do so. The Company and its Subsidiaries, individually and on a consolidated basis, are not as of the date hereof, and after giving effect to the transactions contemplated hereby to occur at the Closing will not,
be Insolvent (as defined below).  For purposes of this Section 3(l), "Insolvent" means, with respect to
any Person (as defined in Section 3(s)) (i) the present fair saleable value of such Person's assets is less than the amount required to pay such Person's total Indebtedness (as defined in Section 3(s)), (ii) such Person is unable to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured, (iii) such Person intends to incur or believes that it will incur debts that would be beyond its ability to pay as such debts mature
or (iv) such Person has unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted.

     l. No Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred or exists with respect to the Company, its Subsidiaries or their respective business, properties, prospects, operations or financial
condition, that would be required to be disclosed by the Company under applicable securities laws on a registration statement on Form S-1 filed with the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been
publicly announced.

     m. Conduct of Business; Regulatory Permits. Neither the Company nor its Subsidiaries is in violation of any term of or in default under its Articles of Incorporation, any certificate of designation, preferences or rights of any other outstanding series of preferred
stock of the Company or Bylaws or their organizational charter or certificate of incorporation or bylaws, respectively. Neither the Company nor any of its Subsidiaries is in violation of (i) any judgment, decree or order or (ii) any statute,
ordinance, rule or regulation in each case applicable to the Company or its Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct its business in violation of any of the foregoing, except in all cases of clause (ii) above
for possible violations which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Without limiting the generality of the foregoing, the Company is not in violation of any of the rules, regulations
or requirements of the Principal Market and has no knowledge of any facts or circumstances that would reasonably lead to delisting or suspension of the Common Stock by the Principal Market in the foreseeable future. During the two (2) years prior to
the date hereof, (i) trading in the Common Stock has not been suspended by the SEC or the Principal Market and (ii) the Company has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or
delisting of the Common Stock from the Principal Market. The Company and its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except
where the failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a

Material Adverse Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate,
authorization or permit.

     n. Sarbanes-Oxley Act.  The Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the SEC
thereunder that are effective as of the date hereof.

     o. Transactions With Affiliates. Except as set forth on Schedule 3(o), none of the officers, directors or employees of the
Company or any of its Subsidiaries is presently a party to any transaction with the Company or any of its Subsidiaries (other than for ordinary course services as employees, officers or directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such officer, director or employee or, to the knowledge of the Company or any
of its Subsidiaries, any corporation, partnership, trust or other entity in which any such officer, director, or employee has a substantial interest or is an officer, director, trustee or partner.

     p. Equity Capitalization. As of the date hereof, the authorized capital stock of the Company consists of (i) 640,000,000 shares of Common Stock, of which as of the date hereof, 12,544,072 are issued and outstanding and 2,668,355 shares are reserved for
issuance pursuant to securities exercisable or exchangeable for, or convertible into, shares of Common Stock and (ii) (x) 900,000 shares of preferred stock (the "Existing
Preferred Stock"), 520,392 of which, as of the date hereof, are issued and outstanding. All of such outstanding shares have been, or upon issuance will be, validly issued and are
fully paid and nonassessable. Except as set forth on Schedule 3(p): (i) none of the Company's capital stock is
subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company; (ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any
of its Subsidiaries is or may become bound to issue additional capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities
or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company or any of its Subsidiaries; (iii) there are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents
or instruments evidencing Indebtedness (as defined in Section 3(q)) of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may become bound; (iv) there are no financing statements securing obligations in
any material amounts, either singly or in the aggregate, filed in connection with the Company or any of its Subsidiaries; (v) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the
sale of any of their securities under the 1933 Act (except pursuant to the Registration Rights Agreement); (vi) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of

its Subsidiaries; (vii) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities; (viii) the Company
does not have any stock appreciation rights or "phantom stock" plans or agreements or any similar plan or agreement; and (ix) the Company and its Subsidiaries have no liabilities or obligations required to be disclosed in the SEC Documents but not
so disclosed in the SEC Documents, other than those incurred in the ordinary course of the Company's or its Subsidiaries' respective businesses and which, individually or in the aggregate, do not or would not have a Material Adverse Effect. The
Company has furnished to the Buyers true, correct and complete copies of the Company's Articles of Incorporation, as amended and as in effect on the date hereof (the "Articles
of Incorporation"), and the Company's Bylaws, as amended and as in effect on the date hereof (the "Bylaws"), and the terms of all securities convertible into, or exercisable or exchangeable for, shares of Common Stock and the material rights of the holders
thereof in respect thereto.

q. Indebtedness and Other Contracts.

     Except as set forth on Schedule 3(q) or in the Company’s Form 10-K for the fiscal year ended June 30, 2007, neither the Company nor any of its Subsidiaries has any outstanding Indebtedness (as defined below). Except as set forth on Schedule 3(q), neither the Company nor any of its Subsidiaries (i) is a party to any contract, agreement or instrument, the
violation of which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected to result in a Material Adverse Effect, (ii) is in violation of any term of or in default under any contract,
agreement or instrument relating to any Indebtedness, except where such violations and defaults would not result, individually or in the aggregate, in a Material Adverse Effect, or (iii) is a party to any contract, agreement or instrument relating
to any Indebtedness, the performance of which, in the judgment of the Company's officers, has or is expected to have a Material Adverse Effect. Schedule 3(q) and the Company’s Form 10-K for the fiscal year ended June 30, 2007, provides a detailed description of the material terms of any such outstanding Indebtedness. For purposes of this
Agreement: (x) "Indebtedness" of any Person means, without duplication (A) all indebtedness for borrowed
money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without limitation, "capital leases" in accordance with generally accepted accounting principles) (other than trade payables
entered into in the ordinary course of business), (C) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or
sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in connection with generally accepted accounting principles, consistently applied for the periods covered thereby, is classified as a capital lease,
(G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, security interest or
other encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such 

indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G) above; (y) "Contingent Obligation" means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person
with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability
that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto; and (z) "Person" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency thereof.

     r. Absence of Litigation. Except as set forth on Schedule 3(r), there is no action, suit, proceeding, inquiry or
investigation before or by the Principal Market, any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or
any of its Subsidiaries, the Common Stock or any of the Company's Subsidiaries or any of the Company's or its Subsidiaries' officers or directors, whether of a civil or criminal nature or otherwise.

     s. Insurance.  The
Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the
Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or applied for and neither the Company nor any such Subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

     t. Employee Relations. i. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any member of a union.  The Company and its Subsidiaries believe that their relations with their employees are good.
 No executive officer of the Company or any of its Subsidiaries (as defined in Rule 501(f) of the 1933 Act) has notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise terminate
such officer's employment with the Company or any such Subsidiary.  No executive officer of the Company or any of its Subsidiaries is, or is now expected to be, in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each such executive officer does not subject the Company or any of its
Subsidiaries to any liability with respect to any of the foregoing matters.

     ii. The Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment and
employment practices and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse
Effect.

     u. Title. The Company
and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free and
clear of all liens, encumbrances and defects except such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and any of its Subsidiaries. Any real
property and facilities held under lease by the Company or any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its Subsidiaries.

     v. Intellectual Property Rights.  The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses,
approvals, governmental authorizations, original works of authorship, trade secrets and other intellectual property rights and all applications related thereto ("Intellectual
Property Rights") necessary to conduct their respective businesses as now conducted or as described in the SEC Documents.  None of the Company's or its Subsidiaries' Intellectual
Property Rights have expired, terminated or been abandoned, or are expected to expire, terminate or be abandoned, within three years from the date of this Agreement.  The Company has not received written notice of, and does not have any knowledge
of, any infringement, misappropriation or other violation by the Company or any of its Subsidiaries of Intellectual Property Rights of others. There is no claim, action or proceeding being made or brought, or to the knowledge of the Company, being
threatened, against the Company or any of its Subsidiaries regarding its Intellectual Property Rights.  The Company is unaware of any facts or circumstances which might give rise to any of the foregoing infringements or claims, actions or
proceedings. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights.

     w. Environmental Laws.  The Company and its Subsidiaries (i) are in compliance with any and all Environmental Laws (as hereinafter defined), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply could be reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect.  The term "Environmental Laws" means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata),
including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, "Hazardous Materials") into the environment, or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations
issued, entered, promulgated or approved thereunder.

     x. Subsidiary Rights.
 The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive

dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such Subsidiary.

     y. Tax Status.  The
Company and each of its Subsidiaries (i) has made or filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the
payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.

     z. Transfer Taxes.
On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be paid in connection with the sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have been, fully
paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

     aa. Disclosure. The
Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers or their agents or counsel with any information that constitutes or could reasonably be expected to constitute material, nonpublic information.
The Company understands and confirms that each of the Buyers will rely on the foregoing representations in effecting transactions in securities of the Company. All disclosure provided to the Buyers regarding the Company and its Subsidiaries, their
business and the transactions contemplated hereby, including the Schedules to this Agreement, furnished by or on behalf of the Company 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 the light of the circumstances under which they were made, not misleading. 

     bb. Manipulation of Price. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of any of the Shares, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Purchased Securities, or (iii) paid or agreed to pay to any person any compensation for
soliciting another to purchase.

     cc. Internal Accounting Controls. The Company and its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s
general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

4. COVENANTS.

     a. Best Efforts. Each
party shall use its best efforts to timely satisfy each of the covenants and conditions to be satisfied by it as provided in Section 4 of this Agreement.

     b. Form D and Blue Sky. The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof to each Buyer promptly after such filing. The Company shall, on or before the Closing Date, take
such action as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the Securities for sale to the Buyers at the Closing pursuant to this Agreement under applicable securities or "Blue Sky" laws of
the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyers on or prior to the Closing Date. The Company shall make all filings and reports relating to the
offer and sale of the Securities required under applicable securities or "Blue Sky" laws of the states of the United States following the Closing Date.

     c. Reporting Status.
Until the date on which the Buyers shall have sold all the Common Shares, and none of the Common Shares is outstanding (the "Reporting Period"), the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status as an issuer required to file reports under
the 1934 Act even if the 1934 Act or the rules and regulations thereunder would no longer require or otherwise permit such termination.

     d. Use of Proceeds.
The Company shall use the proceeds from the sale of the Securities for working capital purposes, but not for (A) repayment of any outstanding Indebtedness of the Company or any of its Subsidiaries, or (B) redemption or repurchase of any of its or
its Subsidiaries' equity securities.

     e. Financial Information. The Company agrees to send the following to each Investor (as defined in the Registration Rights Agreement) during the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are available to the
public through the EDGAR system, within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports and Quarterly Reports on Form 10-K, 10-KSB, 10-Q or 10-QSB, any interim reports or any consolidated balance sheets,
income statements, stockholders' equity statements and/or cash flow statements for any period other than annual, any Current Reports on Form 8-K and any registration statements (other than on Form S-8) or amendments filed pursuant to the 1933 Act
and (ii) copies of any notices and other information made available or given to the stockholders of the Company generally, contemporaneously with the making available or giving thereof to the stockholders.  As used herein "Business Day" means any day other than a Saturday, Sunday or other day on which commercial banks in The City of New York
are authorized or required by law to remain closed.

     f. Listing.  The
Company shall promptly secure the listing of all of the Registrable Securities (as defined in the Registration Rights Agreement) upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then
listed (subject to official notice of issuance) and shall maintain such listing of all Registrable Securities from time to time issuable under the terms of the Transaction Documents.

The Company shall maintain the Common Stocks' authorization for quotation on the Principal Market. Neither the Company nor any of its Subsidiaries shall take any action which would be
reasonably expected to result in the delisting or suspension of the Common Stock on the Principal Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(f).

     g. Fees.  The Company
shall be responsible for the payment of any placement agent's fees or commissions, financial advisory fees, or broker's commissions (other than for Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby.
The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorney's fees and out-of-pocket expenses) arising in connection with any claim relating to any such
payment.

     h. Pledge of Securities.  The Company acknowledges and agrees that the Securities may be pledged by an Investor (as defined in the Registration Rights Agreement) in connection with a bona fide margin agreement or other loan or financing arrangement that
is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Investor effecting a pledge of Securities shall be required to provide the Company with any notice
thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document. The Company hereby agrees to execute and deliver such documentation as a pledgee of the Securities may reasonably request in
connection with a pledge of the Securities to such pledgee by an Investor.

     i. Disclosure of Transactions and Other Material Information. On or before 8:30 a.m., New York City time, on the first Business Day following the date of this Agreement, the Company shall issue a press release and file a Current Report on Form 8-K
describing the terms of the transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching the material Transaction Documents (including, without limitation, this Agreement (and all schedules to this
Agreement), and the form of the Registration Rights Agreement) as exhibits to such filing (including all attachments, the "8-K Filing"). From and after the filing of the 8-K Filing with the SEC, no Buyer shall be in possession of any material, nonpublic information received from the Company, any of its Subsidiaries or any of
its respective officers, directors, employees or agents, that is not disclosed in the 8-K Filing. The Company shall not, and shall cause each of its Subsidiaries and its and each of their respective officers, directors, employees and agents, not to,
provide any Buyer with any material, nonpublic information regarding the Company or any of its Subsidiaries from and after the filing of the 8-K Filing with the SEC without the express written consent of such Buyer or as may be required under the
terms of the Transaction Documents. If a Buyer has, or believes it has, received any such material, nonpublic information regarding the Company or any of its Subsidiaries, it may provide the Company with written notice thereof. The Company shall,
within five (5) Business Days of receipt of such notice, make public disclosure of such material, nonpublic information. In the event of a breach of the foregoing covenant by the Company, any of its Subsidiaries, or any of its or their respective
officers, directors, employees and agents, in addition to any other remedy provided herein or in the Transaction Documents, a Buyer shall have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise,
of such material, nonpublic information without the prior approval by the Company, its Subsidiaries, or any of its or their respective officers, directors, employees or agents. No Buyer shall have any

liability to the Company, its Subsidiaries, or any of its or their respective officers, directors, employees, stockholders or agents for any such disclosure. Subject to the foregoing, neither the Company, its Subsidiaries nor any Buyer shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of any Buyer, to make any press release or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law and regulations. Without the prior written consent of any applicable Buyer, neither the Company nor any of its Subsidiaries or affiliates shall disclose the name of such Buyer or its investment adviser in any filing, announcement, release or otherwise, unless such disclosure is required by law, regulation or the Principal Market.

     j. Prior to the earliest to occur of (i) the termination of this Agreement or (ii) the Effective Date (as defined in the Registration Rights Agreement) no Buyer shall, and shall cause its Affiliates not to, engage, directly or indirectly, in a Prohibited Transaction.

     k. From the date hereof through the second annual anniversary of the date hereof, the Company will not, directly or indirectly, effect any sale of its Common Stock or any security convertible into or exchangeable or exercisable for shares of Common Stock (“Subsequent Placement”) unless the Company shall have first complied with this Section 4(k).

i. The Company shall deliver to each Buyer (in accordance with the notice provisions set forth in Section 7.f hereof) an irrevocable written notice (the "Offer Notice") of any proposed or intended issuance or sale or exchange (the "Offer") of the securities being offered (the "Offered Securities") in a Subsequent Placement, which Offer Notice shall (w) identify and describe the Offered Securities, the material terms of the Subsequent Financing, and a list of the proposed definitive documentation to be entered into in connection therewith, (x) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged, (y) identify the persons or entities (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged, and (z) offer to issue and sell to or exchange with such Buyers such amount of the Offered Securities so that the Buyers shall retain their then pro rata portion of the issued and outstanding Common Stock following the issuance of the Offered Securities, allocated among such Buyers (a) based on such Buyer's pro rata portion of the aggregate amount of Common Shares purchased hereunder (the "Basic Amount"), and (b) with respect to each Buyer that elects to purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of other Buyers as such Buyer shall indicate it will purchase or acquire should the other Buyers subscribe for less than their Basic Amounts (the "Undersubscription Amount"), which process shall be repeated until the Buyers shall have an opportunity to subscribe for any remaining Undersubscription Amount.

ii. To accept an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the third (3rd) Business Day after such Buyer's receipt of the Offer Notice (the "Offer Period"), setting forth the portion of such Buyer's Basic Amount that such Buyer elects to purchase and, if such Buyer shall 

elect to purchase all of its Basic Amount, the Undersubscription Amount, if any, that such Buyer elects to purchase (in either case, the "Notice of Acceptance"). If the Basic Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts, then each Buyer who has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, that if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Basic Amounts and the Basic Amounts subscribed for (the "Available Undersubscription Amount"), each Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Basic Amount of such Buyer bears to the total Basic Amounts of all Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent its deems reasonably necessary.

iii. The Company shall have thirty (30) days from the expiration of the Offer Period above to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by the Buyers (the "Refused Securities"), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions that are not more favorable to the acquiring person or persons or less favorable to the Company than those set forth in the Offer Notice.

iv. In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 4(k)(iii) above), then each Buyer may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 4(k)(ii) above multiplied by a fraction, (i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Buyers pursuant to Section 4(k)(iii) above prior to such reduction) and (ii) the denominator of which shall be the original amount of the Offered Securities. In the event that any Buyer so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Buyers in accordance with Section 4(k)(i) above.

v. Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, the Buyers shall acquire from the Company, and the Company shall issue to the Buyers, the number or amount of Offered Securities specified in the Notices of Acceptance, as reduced pursuant to Section 4(k)(iv) above if the Buyers have so elected, upon the terms and conditions specified in the Offer. The purchase by the Buyers of any Offered Securities is subject in all cases to the execution and delivery by the Company and the Buyers of the transaction documents relating to such Offered Securities .

vi. The provisions of this Section 4(k) shall not apply in connection with the issuance of any securities by the Company: (i) in connection with any employee benefit plan which has been approved by the Board of Directors of the Company, pursuant to which the Company’s securities may be issued to any employee, officer, consultant, or director for services provided to the Company; (ii) in connection with any securities covered by the 2006-B Common Stock Purchase Agreement between Steve Illes and the Company dated September 25, 2006 ; (iii) pursuant to a bona fide underwritten public offering of shares of Common Stock with a nationally recognized underwriter which generates gross proceeds to the Company of at least $25,000,000 (other than an "at-the-market offering" as defined in Rule 415(a)(4) under the 1933 Act and "equity lines"); (iv) issued upon exercise of options, warrants, or any other convertible securities which are outstanding on the date immediately preceding the Closing Date, provided that such issuance of Common Stock upon exercise of such options, warrants, or any other convertible securities is made pursuant to the terms of such options, warrants, or any other convertible securities in effect on the date immediately preceding the Closing Date and such options, warrants, or any other convertible securities are not amended after the date immediately preceding the Closing Date; or (v) issued in connection with any share split, share dividend, recapitalization or similar transaction.

5. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

     The obligation of the Company hereunder to issue and sell the Common Shares to each Buyer at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company's sole benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof:

     a. Such Buyer shall have executed each of the Transaction Documents to which it is a party and delivered the same to the Company.

     b. Such Buyer and each other Buyer shall have delivered to the Company the Purchase Price for the Common Shares being purchased by such Buyer at the Closing by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company.

     c. The representations and warranties of such Buyer shall be true and correct in all respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specified date), and such Buyer shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Buyer at or prior to the Closing Date.

6. CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE.

     The obligation of each Buyer hereunder to purchase the Common Shares at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following 

conditions, provided that these conditions are for each Buyer's sole benefit and may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written
notice thereof:

     a. The Company shall have duly executed and delivered to such Buyer (A) each of the Transaction Documents and (B) the Common Shares (in such numbers as is set
forth across from such Buyer's name in column (3) of the Schedule of Buyers) being purchased by such Buyer at the Closing pursuant to this Agreement.

     b. The Company shall have delivered to such Buyer a certificate, executed by the Secretary of the Company and dated as of the Closing Date, as to (i) the
resolutions consistent with Section 3(b) as adopted by the Company's board of directors in a form reasonably acceptable to such Buyer, (ii) the Articles of Incorporation and (iii) the Bylaws, each as in effect at the Closing.

     c. The representations and warranties of the Company shall be true and correct in all respects as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specified date) and the Company shall have performed, satisfied and complied in all respects with the
covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Closing Date.  Such Buyer shall have received a certificate, executed by the Chief Executive
Officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by such Buyer.

     d. The Common Stock (I) shall be designated for quotation or listed on the Principal Market and (II) shall not have been suspended, as of the Closing Date, by
the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the SEC or the Principal Market have been threatened, as of the Closing Date, either (A) in writing by the SEC or the Principal Market or (B) by falling
below the minimum maintenance requirements of the Principal Market.

The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale of the Securities. No statute, rule, regulation, executive
order, decree, ruling, injunction, action, proceeding or interpretation shall have been enacted, entered, promulgated, endorsed or adopted by any court or governmental authority of competent jurisdiction or any self-regulatory organization or the
staff of any of the foregoing, having authority over the matters contemplated hereby that questions the validity of, or challenges or prohibits the consummation of, any of the transactions contemplated by this Agreement.

     e. The Company shall have delivered to such Buyer such other documents relating to the transactions contemplated by this Agreement as such Buyer or its counsel
may reasonably request.

     f. The Buyers shall have received a legal opinion on behalf of the Company, dated as of the Closing Date in the form attached as Exhibit B.

7. MISCELLANEOUS.

     a. Governing Law; Jurisdiction; Jury Trial.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, 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 brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. 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 to such party at the address
for such 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
manner permitted by law.

     b. Counterparts. This
Agreement may be executed in two or more identical counterparts, all of which 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; provided that
a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature.

     c. Headings.  The
headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

     d. Severability.  If
any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.

     e. Entire Agreement; Amendments.  This Agreement and the other Transaction Documents supersede all other prior oral or written agreements between the Buyers, the Company, their Affiliates and Persons acting on their behalf with respect to the matters discussed
herein, and this Agreement, the other Transaction Documents and the instruments referenced herein and therein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set
forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or undertaking with respect to such matters.  No provision of this Agreement may be amended other than by an instrument in writing signed by the
Company and the holders of at least a majority of the Common Shares issued and issuable hereunder, and any amendment to this Agreement made in conformity with the provisions of this sub-section shall be binding on all Buyers and holders of
Securities, as applicable. No provision hereof may be waived other than by an instrument in

writing signed by the party against whom enforcement is sought. No such amendment shall be effective to the extent that it applies to less than all of the holders of the Common Shares then
outstanding. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration also is offered to all of the parties to the
Transaction Documents, or holders of Common Shares, as the case may be. The Company has not, directly or indirectly, made any agreements with any Buyers relating to the terms or conditions of the transactions contemplated by the Transaction
Documents except as set forth in the Transaction Documents.  Without limiting the foregoing, the Company confirms that, except as set forth in this Agreement, no Buyer has made any commitment or promise or has any other obligation to provide any
financing to the Company or otherwise.

     f. Notices. Any
notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one Business Day after deposit with an overnight courier service, in each case properly addressed
to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

	
If to the Company:
	
	
 
	
	
          USA Technologies, Inc.
	
	
          100 Deerfield Lane, Suite 140,
	
	
          Malvern, Pennsylvania 19355
	
	
          Telephone:
		
(610) 989-0340
	
	
          Facsimile:
		
(610) 989-0344
	
	
          Attention:
		
George R. Jenson Jr.
	
	
 
	
	
With a copy (for informational purposes only) to:
	
	
 
	
	
          Lurio & Associates, P.C.
	
	
          2005 Market Street, Suite 2340
	
	
          Philadelphia, Pennsylvania 19103-7015
	
	
          Telephone:
		
(215) 665-9300
	
	
          Facsimile:
		
(215) 665-8582
	
	
          Attention:
		
Douglas M. Lurio, Esq.
	

If to a Buyer, to its address and facsimile number set forth on the Schedule of Buyers, with copies to such Buyer's representatives as set forth on the Schedule of Buyers, or to such other
address and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt
(A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender's facsimile machine containing the time, date, recipient facsimile number and an image of the first page of
such transmission or (C) provided by an overnight courier service shall

be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.

     g. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any purchasers of the Common Shares.  The Company shall not assign this Agreement or any rights
or obligations hereunder without the prior written consent of the holders of at least a majority of the aggregate number of Registrable Securities.  A Buyer may assign some or all of its rights hereunder in connection with transfer of any of its
Securities without the consent of the Company, in which event such assignee shall be deemed to be a Buyer hereunder with respect to such assigned rights.

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

     i. Survival.  The
representations and warranties of the Company and the Buyers contained in Sections 2 and 3 and the agreements and covenants set forth in Sections 4 and 7 shall survive the Closing and the delivery and exercise of Securities, as applicable. Each
Buyer shall be responsible only for its own representations, warranties, agreements and covenants hereunder.

     j. Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may
reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

     k. Indemnification.
In consideration of each Buyer's execution and delivery of the Transaction Documents and acquiring the Securities thereunder and in addition to all of the Company's other obligations under the Transaction Documents, the Company shall defend,
protect, indemnify and hold harmless each Buyer and each other holder of the Securities and all of their stockholders, partners, members, officers, directors, employees and direct or indirect investors and any of the foregoing Persons' agents or
other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the "Indemnitees"), as incurred, from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and
expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys' fees and disbursements (the "Indemnified Liabilities"), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the Company in the Transaction Documents, (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or (c) any cause of action,
suit or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising out of or resulting from (i) the execution, delivery, performance or enforcement
of the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (ii) any

transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, (iii) any disclosure made by such Buyer pursuant to
Section 4(h), or (iv) the status of such Buyer or holder of the Securities as an investor in the Company pursuant to the transactions contemplated by the Transaction Documents. To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. Except as otherwise set forth herein, the mechanics and
procedures with respect to the rights and obligations under this sub-section shall be the same as those set forth in Section 6 of the Registration Rights Agreement.

     l. No Strict Construction.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

     m. Remedies.  Each
Buyer and each holder of the Securities shall have all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the
rights which such holders have under any law.  Any Person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any
breach of any provision of this Agreement and to exercise all other rights granted by law.  Furthermore, the Company recognizes that in the event that it fails to perform, observe, or discharge any or all of its obligations under the Transaction
Documents, any remedy at law may prove to be inadequate relief to the Buyers.  The Company therefore agrees that the Buyers shall be entitled to seek temporary and permanent injunctive relief in any such case without the necessity of proving actual
damages and without posting a bond or other security.

     n. Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and
the Company does not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or
election in whole or in part without prejudice to its future actions and rights.

     o. Payment Set Aside.
To the extent that the Company makes a payment or payments to the Buyers hereunder or pursuant to any of the other Transaction Documents or the Buyers enforce or exercise their rights hereunder or thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the
Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

     p. Independent Nature of Buyers' Obligations and Rights. The obligations of each Buyer under any Transaction Document are several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance
of the obligations of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as a
partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Buyers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction
Documents and the Company acknowledges that the Buyers are not acting in concert or as a group, and the Company will not assert any such claim, with respect to such obligations or the transactions contemplated by the Transaction Documents.  Each
Buyer confirms that it has independently participated in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors.  Each Buyer shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose.

[Signature Page Follows]

     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed as of the date first written above.

	                                                                                                                                                     	COMPANY: 
		  
		USA TECHNOLOGIES, INC. 
		By: 
		             Name: George R. Jensen, Jr. 
		             Title: Chief Executive Officer 

     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed as of the date first written above.

	                                                                                                                                                        	BUYERS: 
		By: 
		             Name: 
		             Title: 

	  	                                                             SCHEDULE OF BUYERS 	  
	  
	  
	  
	  
	(1) 	                             (2) 	(3) 	(4) 	(5) 
	  
	Number of 
	  	  	Common 	  	Legal Representative's 
	Buyer 	   Address and Facsimile Number	Shares 	Purchase Price 	Address and Facsimile Number 
	  
	 ________ 	________________________  	  __________	$__________ 	_________________
	  	________________________	  	  	Attention: _____________, Esq. 
	  	Facsimile: _________________	  	  	Facsimile: 
	  	Telephone: ________________	  	  	Telephone: 
	  	Attention: ________________	  	  	  
	  	E-mail: ___________________	  	  	  

	EXHIBITS 
	Exhibit A 	  Form of Registration Rights Agreement 
	Exhibit B 	  Form of Legal Opinion 

Exhibit B

Form of Legal Opinion

October __, 2007

To each of the Buyers listed in Exhibit “A” hereto 

Re: USA Technologies, Inc.

Dear Sir or Madam:

We have acted as counsel to USA Technologies, Inc., a Pennsylvania corporation (the “Company”), in connection with the Securities Purchase Agreement (the “Agreement”)
dated of even date herewith between the Company and each of the buyers set forth in Exhibit “A” hereto (severally, a “Purchaser”, and jointly, the “Purchasers”). This opinion is being delivered to each of you pursuant
to Section 6(f) of the Agreement. Capitalized terms used herein without definition have the respective meanings assigned to them in the Agreement. 

In connection with and as the basis for these opinions, in our capacity as counsel to the Company, we have examined originals or copies, certified or otherwise identified to us, of the
following: A.The Agreement;

B.Registration Rights Agreement;

C.Certificate of the Company executed by the Chief Executive Officer of the Company dated of even date herewith referred to in Section 6(c) of the Agreement;

D.Secretary’s Certificate executed by the Secretary of the Company dated of even date herewith referred to in Section 6(b) of the Agreement;

E.Good Standing Certificate issued by the Secretary of State of the State of Delaware with respect to Stitch Networks Corporation dated October 11, 2007.

     The documents listed in A and B above are referred to collectively as the “Transaction Documents.” The documents listed in A through E above are
referred to collectively as the “Documents.”

     We have also examined such other documents, matters, statutes, ordinances, published rules and regulations, published judicial and governmental decisions
interpreting or applying the same, and other official interpretations as we deem applicable in connection with this opinion.

     We also obtained telephonic confirmation, on October 11, 2007, from the Corporation Bureau of the Pennsylvania Department of State that each of the Company and
USAT Capital Corp, LLC, is active and in good standing in the Commonwealth of Pennsylvania.

We have also examined, relied upon, and assumed the accuracy, where appropriate, of all of the representations and warranties of each of the Company and of the Purchasers contained in the
Documents as to the matters of fact therein represented. As to certain questions of fact material to the opinions contained herein, we have, when appropriate, relied upon certificates or statements of public officials and officers and agents of the
Company, and we have assumed that any certificates or statements of public officials dated earlier than the date hereof are accurate on the date hereof as if made on and as of such date. We have not undertaken any independent investigation to
determine the accuracy of the representations or warranties of the Company or the Purchasers. We have also assumed that each Purchaser has obtained any and all consents, approvals, licenses, registrations, or authorizations required under or by any
federal or state governmental body, regulatory agency, self-regulatory organization or stock exchange or market, or any court, that are required in order for each Purchaser to execute, deliver and perform all of the transactions contemplated by the
Transaction Documents.

In our examination of the Documents, we have assumed the genuineness of all signatures of parties other than the Company, the authenticity of all documents submitted to us as originals and
the conformity to authentic originals of all documents submitted to us as copies.

In reaching the opinions set forth below, we have assumed the due authorization, execution and delivery of all Documents by all parties to the Documents other than the Company. In addition,
we have also assumed that the Transaction Documents accurately reflect the complete understanding of the parties with respect to the transactions contemplated thereby and the

rights and obligations of the parties thereunder. We have also assumed that the terms and conditions of the transactions as reflected in the Transaction Documents have not been amended,
modified or supplemented, directly or indirectly, by any other agreement or understanding of the parties or by waiver of any of the material provisions of the Transaction Documents. 

Based upon and subject to the foregoing and subject to the limitations, assumptions and qualifications set forth in this letter, it is our opinion that, as of the date hereof:

     1. Based solely on the good standing certificate relating to Stitch Networks Corporation referred to above and our telephone conversation with the Department of
State of the Commonwealth of Pennsylvania relating to each of the Company and USAT Capital Corp., LLC referred to above, and without any independent investigation whatsoever, the Company and each of its Subsidiaries is a corporation or limited
liability company, as the case may be, duly organized, validly existing and in good standing under the laws of the state of its incorporation or formation. The Company has the requisite corporate power to own, lease and operate its properties and to
conduct its business as presently conducted. 

     2. The Company has the requisite corporate power and authority to execute, deliver and perform all of its obligations under the Transaction Documents, including
the issuance of the Common Shares in accordance with the terms thereof. The execution and delivery of the Transaction Documents by the Company and the consummation of the transactions contemplated therein have been duly authorized by the Company's
Board of Directors, and no further consent or authorization of the Company, its Board of Directors or its shareholders is required therefor. The Transaction Documents have been duly executed and delivered by the Company.

     3. The Transaction Documents constitute valid and binding agreements or obligations of the Company, enforceable against the Company in accordance with their
respective terms.

     4. The execution, delivery and performance by the Company of the Transaction Documents, the consummation by the Company of the transactions contemplated by the
Transaction Documents and the compliance by the Company with the terms thereof (a) do not and will not violate, conflict with or constitute a material default (or an event which, with the giving of notice or lapse of time or both, constitutes or
would constitute a material default) under, or give rise to any right of termination, cancellation or acceleration under, (i) the Articles of

Incorporation or Bylaws of the Company; (ii) any agreement, note, lease, mortgage, deed or other instrument to which the Company is a party or by which the Company is bound or affected that
has been publicly filed (the "Publicly Filed Documents"); or (iii) any statute, law, rule or regulation applicable to the Company or any order, writ, injunction or decree; and (b) do not and will not result in or require the creation of any lien,
security interest or other charge or encumbrance (other than pursuant to the Transactions Documents) upon or with respect to any of its properties.

     5. When so issued, the Common Shares will be duly authorized and validly issued, fully paid and nonassessable, and free of any and all liens and charges and
preemptive or similar rights contained in the Company's Articles of Incorporation or Bylaws or any agreement, note, lease, publicly filed mortgage deed or other instrument to which the Company is a party or by which the Company is bound that are
Publicly Filed Documents.

     6. As of the date hereof, the authorized capital stock of the Company consists of (i) 640,000,000 shares of Common Stock, no par value per share, and (ii)
900,000 shares of preferred stock designated as Series A Convertible Preferred Stock. As of the date hereof, and based solely upon the representations made to us by the Company and its transfer agent, 12,544,072 shares of Common Stock are issued and
outstanding, 162,625 shares are reserved for issuance pursuant to the exercise of stock options, and 1,678,186 shares are reserved for issuance pursuant to stock warrants exercisable for shares of Common Stock, and 5,203 shares of Series A
Convertible Preferred Stock are issued and outstanding. Except for the preemptive rights granted by the Company to S.A.C. Capital Associates, LLC in the March 14, 2007 Securities Purchase Agreement, none of such Common Stock is subject to preemptive
rights or other rights of the shareholders of the Company pursuant to the Articles of Incorporation or the Bylaws or under the Pennsylvania Business Corporation Law (“PBCL”), or pursuant to any agreement, note, lease, publicly filed
mortgage deed or other instrument to which the Company is a party or by which the Company is bound that are Publicly Filed Documents.

     7. The offer and sale of the Common Shares in accordance with the Agreement constitute transactions exempt from the registration requirements of the 1933
Act.

     8. No authorization, approval, consent, filing, or other order of any federal or state governmental body, regulatory agency, self-regulatory organization or
stock exchange or

market, or the shareholders of the Company, or any court, or to our knowledge, any third party is required to be obtained by the Company to enter into and perform its obligations under the
Transaction Documents or for the issuance and sale of the Common Shares in accordance with the Transaction Documents, except (i) the filing of a Form D under Regulation D of the 1933 Act, (ii) the filing of a Form 8-K pursuant to the Securities
Exchange Act of 1934, as amended, (iii) any action necessary in order to qualify or obtain an exemption from qualification of the Common Shares under applicable securities or “Blue Sky” laws of the states of the United States, (iv) the
filing with the SEC of one or more Registration Statements in accordance with the requirements of the Registration Rights Agreement, and (v) the listing of the Common Shares with The NASDAQ Global Market and other filings required to be made
therewith in connection with the issuance of the Common Shares.

     9. To our knowledge, and except as set forth in Schedule 3(r) to the Agreement, no action, suit, proceeding, inquiry or investigation before or by any court,
public board or body or any governmental agency or self-regulatory organization is pending or threatened against the Company or any of its Subsidiaries or any of the properties or assets of the Company or any of its Subsidiaries.

Our opinion as to enforceability set forth in paragraph 3 above is also subject to the effect of (i) bankruptcy, insolvency, reorganization, arrangement, moratorium, liquidation, fraudulent
conveyance or other similar rights or laws relating to or affecting the rights or remedies of creditors; and (ii) limitations imposed by general principles of equity, regardless of whether the relevant matter is considered in a proceeding at law or
in equity, including with respect to certain covenants and provisions of the Transaction Documents, where the Purchaser’s enforcement of such covenants or provisions under the circumstances or, in the specified manner, would violate an implied
covenant of good faith and fair dealing or would be commercially unreasonable. Enforceability of the Transaction Documents may also be limited to the extent that remedies are sought for a breach that a court concludes is immaterial or does not
affect the Purchaser. We do not express any opinion whatsoever as the whether any particular right or remedy provided for in the Transaction Documents is or will be available upon a default by the Company. 

In addition, certain rights, remedies, waivers and limitations of liability contained in the Transaction Documents may be rendered ineffective, or limited, by applicable laws, rules or

judicial decisions governing such provisions. Without intending any limitation on the generality of the preceding sentence, and notwithstanding any of the opinions rendered above, we express
no opinion as to the enforceability of provisions that: (i) purport to establish evidentiary standards; (ii) purport to impose penalties or forfeitures upon delinquency or otherwise; (iii) relate to waiver of remedies (or the delay or omission of
enforcement thereof), disclaimers, liability limitations with respect to third parties, releases of legal or equitable rights, discharge or defenses or liquidated damages, or the right to a jury trial; (iv) purport to constitute consent to venue in
a particular jurisdiction; (v) modify or waive any requirement of commercial reasonableness or prior notice or right of redemption arising under applicable law; (vi) purport to provide for damages or for payments that are in a fixed amount or
expressed as an applicable percentage, or purport to provide for damages or payments which bear no reasonable relation to the damages suffered by the aggrieved party as a result of the default; (vii) purport to preclude the modification of the
Transaction Documents through conduct, custom or course of performance, action or dealing; (viii) purport to limit the Purchaser’s liability or provide for the indemnification of the Purchaser for its acts or omissions; (ix) purport to state
that the provisions of the Transaction Documents are severable; (x) purport to specify certain governing laws, the jurisdictions in which legal proceedings may be instituted or methods of resolving disputes; or (xi) relate to waivers of notice or
other rights, indemnity, contribution, severability, injunctive relief, the remedy of specific performance, remedies relating to a breach which is not material or does not adversely affect the Company, non-judicial remedies, and provisions which
release or limit liability or relate to cumulative remedies. 

     We express no opinion with respect to the qualification of the Common Shares or the exemption from qualification of the Common Shares under any applicable state
securities or “Blue Sky” laws of any state of the United States. 

     Whenever a statement herein is qualified by the phrases "known to us" or "to our knowledge", or similar phrases, it is intended to indicate that, during the
course of our representation of the Company no information that would give us current actual knowledge of the inaccuracy of such statement has come to the attention of those attorneys presently in this firm who have rendered legal services in
connection with the representation of the Company. We have not, however, undertaken any independent investigation or review to determine the accuracy of any such statement, and any limited inquiry

undertaken by us during the preparation of this opinion letter should not be regarded as such an investigation or review.  No inference as to our knowledge of any matters bearing on the
accuracy of any such statement should be drawn from the fact of our representation of the Company.

     This opinion is rendered only with regard to the matters set out in the numbered paragraphs above. No other opinions are intended nor should they be inferred.

     We are members of Bar of the Commonwealth of Pennsylvania and we are not expressing any opinion relating to any jurisdiction other than the laws of the United
States of America and the laws of the Commonwealth of Pennsylvania. 

     We express no opinion and assume no responsibility as to the effect of, or consequences resulting from, any act or change in any law, rule, or regulation of any
federal or state governmental body, regulatory agency, self-regulatory organization or stock exchange or market, or any court, occurring after the date of this letter. We assume no obligation to supplement this opinion if any applicable laws, rules
or regulations change after the date of this opinion, or if we become aware of any facts that might change the opinions expressed above after the date of this opinion.

     The foregoing opinions are given to you solely for your use in connection with the transactions contemplated by the Transaction Documents and may not be relied
upon by, or delivered to, any other person or entity or for any other purpose without our prior written consent.

	
 
		
Very truly yours,
	
	
 
		
LURIO & ASSOCIATES, P.C.
	
	
 
	
	
cc: Mr. George R. Jensen, Jr.
		
 
	

EXHIBIT “A”

List of Buyers under the Securities Purchase Agreement dated October __, 2007 

SCHEDULES

Schedule 3(a) - List of Subsidiaries

Schedule 3(k) - Absence of Certain Changes

Schedule 3(o) - Transactions with Affiliates

Schedule 3(p) - Equity Capitalization

Schedule 3(q) - Indebtedness and Other Contracts

Schedule 3(r) - Absence of Litigation

Schedule 3(a) to Securities Purchase Agreement

Organization and Qualification

Stitch Networks Corporation

USAT Capital Corp, LLC

Schedule 3(k) to Securities Purchase Agreement

Absence of Certain Changes

Since June 30, 2007, the Company has had capital expenditures in the aggregate amount of $125,000.

Schedule 3(o) to Securities Purchase Agreement

Transactions With Affiliates

Lurio & Associates, P.C., a firm owned by Douglas M. Lurio, a Director of the Company, provides legal services to the Company. Steven Katz & Associates, Inc., a firm owned by Steven
Katz, a Director of the Company, provides consulting services to the Company.

Schedule 3(p) to Securities Purchase Agreement

Equity Capitalization

     (i) Under Section 4(o)(iii) of the March 14, 2007 Securities Purchase Agreement between the Company and S.A.C. Capital Associates, LLC, the purchaser was
granted preemptive rights to maintain its pro-rata percentage of the issued and outstanding shares of the Company for a 5 year period.

     (ii) As of the date hereof, there are issued and outstanding options to purchase up to 162,625 shares of Common Stock and warrants to purchase up to 1,678,186
shares of Common Stock. The issued and outstanding shares of Series A Convertible Preferred Stock are convertible into 5,203 shares of Common Stock and the accrued and unpaid dividends thereon are convertible into 9,383 shares of Common Stock.
Pursuant to the 2006-B Common Stock Purchase Agreement between Steve Illes and the Company dated September 25, 2006, the Company has the right to sell to Mr. Illes shares of Common Stock with a purchase price of up to $15,000,000. Pursuant to
the Long-Term Equity Incentive Program adopted by the Company on February 12, 2007 (the “Plan”), if certain target goals are achieved by the Company during the fiscal years ending June 30, 2008, and June 30, 2009, each of George R. Jensen,
Jr., Stephen P. Herbert, and David M. DeMedio, will earn shares of Common Stock. If a change of control would occur during any of such fiscal years and provided such executive is then employed by the Company, then (i) Mr. Jensen would be awarded
178,570 shares for each uncompleted fiscal year as of the date of such change of control, (ii) Mr. Herbert would be awarded 53,713 shares for each uncompleted fiscal year as of the date of such change of control, and (iii) Mr. DeMedio would be
awarded 21,663 shares for each uncompleted fiscal year as of the date of such change of control. Pursuant to his employment agreement, upon the occurrence of a change of control, Mr. Jensen will be issued 140,000 shares of Common Stock. Each
executive officer’s employment agreement provides that upon termination of employment with the Company, the executive would be entitled to be eligible to be awarded shares of Common Stock pursuant to the Plan. 

     (iii) The Company has entered into a financing arrangement with Ford Motor Company in the amount of $28,333, a financing arrangement with Cisco Systems
Capital Corp. in the amount of $63,924 (for server equipment), a financing arrangement with Cananwill in the amount of $108,000 (insurance premiums), loan agreements with NetBank Business Finance for $709,740 (receivables financing), a
financing arrangement with IBM Credit LLC in the amount of $304,044 (computer equipment), a financing arrangement with Oracle for $48,800 (for software licenses), a financing arrangement with Oracle Finance for $289,677 (for software
licenses), and a financing arrangement with DeLage Landen Financial Services, Inc. in the amount of $146,496 (telephone system). Fifty percent of the obligations of the Company due to IBM Credit LLC are secured by a letter of credit.

     (iv) A financing statement has been filed by IBM Credit LLC securing the Company’s obligation in the amount of $304,044 covering certain computer
equipment. A financing statement has been filed by NetBank Business Finance securing the Company’s obligation in the

amount of $709,740 covering certain receivables and Business Express equipment. A financing statement has been filed by DeLage Landen Financial Services, Inc. securing the Company’s
obligation in the amount of $146,496 covering certain telephone equipment.

     (v) The Company has agreed to the following registration rights: (a) In December 2006, the Company sold 1,400,000 shares and warrants to purchase up to 700,017
shares in a private placement offering. The Company has agreed to register these shares for resale under the 1933 Act through December 14, 2007; (b) In connection with the foregoing offering, the Company issued to the placement agent warrants to
purchase up to 11,454 shares. The Company has agreed to register these shares for resale under the 1933 Act through December 14, 2007; (c) In connection with the 2005-G notes, the Company issued warrants to purchase up to 54,494 shares. The Company
has agreed to register these shares for resale under the 1933 Act through December 31, 2008; (d) In connection with the issuance of the 2006-A notes, the Company issued warrants to purchase up to 77,000 shares. The Company has agreed to register
these shares for resale through December 31, 2008; (e) Under his employment agreement, Mr. Jensen has received 75,000 shares as a bonus and 22,080 shares in lieu of cash salary. The Company has granted to Mr. Jensen piggyback registration rights for
a period of 5 years following the vesting of any such shares; (f) Under his employment agreement, Mr. Herbert received 50,000 shares as a bonus. The Company has granted to Mr. Herbert piggyback registration rights for a period of 5 years following
the vesting of any such shares; (g) During April, May and June 2006, the Company issued options to its executive officers and outside directors to purchase up to 160,000 shares. The Company has granted to the holders of these options piggyback
registration rights for a period of 5 years following the vesting of any such options; (h) The Company is entitled to sell to Steve Illes under the 2006-B Common Stock Purchase Agreement dated September 25, 2006 up to $15,000,000 of shares. The
Company has agreed that it shall register for resale any shares purchased by Mr. Illes through December 21, 2008; (i) Kazi Management VI, Inc. holds warrants to purchase up to 71,428 shares. The Company has agreed to register these shares for resale
through October 26, 2007; (j) In October 2007, the Company granted five year piggyback registration rights to any shares issued to its executive officers under the Long-Term Equity Incentive Program; and (k) In March 2007, the Company sold 1,666,667
shares and warrants to purchase up to 833,333 shares in a private placement offering. The Company has agreed to register these shares and the shares underlying the warrants for resale under the 1933 Act until the earlier of (i) the date as of which
the purchaser may sell all of such shares without restriction pursuant to Rule 144(k) promulgated under the Securities Act of 1933, or (ii) the date on which the purchaser shall have sold all of such shares. In accordance with the Registration
Rights Agreement entered into between the Company and such purchaser, no shares other than foregoing shares shall be included in the registration statement without the prior written consent of the purchaser.

     (vi) The shares of Series A Convertible Preferred Stock of the Company may be redeemed at any time by the Company for $11 per share together with the
payment of any and all accrued and unpaid dividends thereon.

Schedule 3(q) to Securities Purchase Agreement

Indebtedness and Other Contracts

(i) AT&T Wireless Corporate Digital Advantage Agreement between the Company and AT&T Wireless dated August 12, 2004. 

Schedule 3(r) to Securities Purchase Agreement

Absence of Litigation

On August 8, 2006, the Company filed a complaint for declaratory judgment against Haven Brock Kolls, a former employee and officer, in the Court of Common Pleas of Montgomery County, docket
no. 06-19712. The Company seeks a declaration that the one-year periods referred to in Sections 5.B and 6 of the Employment Agreement (the provisions restricting Kolls from disclosing business secrets of the Company and from soliciting any customer
or account of the Company, and the non-compete provision) expire on June 30, 2008, and that because Kolls did not provide timely notice of termination, his employment agreement does not expire until June 30, 2007.  Kolls has filed an answer in this
action. To date, no discovery has been conducted.

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