Document:

United States Securites and Exchange Commission Edgar Filing

Exhibit 10.1

MASTER CONSENT TO LOAN DOCUMENTS AND FIRST AMENDMENT TO LOAN AGREEMENT AND AMENDED AND RESTATED REVOLVING CREDIT PROMISSORY NOTE

MASTER CONSENT TO LOAN DOCUMENTS AND FIRST AMENDMENT TO LOAN AGREEMENT AND AMENDED AND RESTATED REVOLVING CREDIT PROMISSORY NOTE AND CONSENT (the “Consent and Amendment”), dated as of ___________, 2008, among Think Partnership Inc., a Nevada corporation (“Borrower”), each of Guarantors signators hereto (“Guarantors”) and Wachovia Bank, National Association (“Bank”).

W I T N E S S E T H:

WHEREAS, Bank has made available to Borrower a secured credit facility pursuant to the terms and conditions of (i) that certain Amended and Restated Loan Agreement, dated as of February 27, 2008, as amended, between Borrower and Bank (the “Loan Agreement”), (ii) that certain Amended and Restated Guaranty Agreement, dated as of February 27, 2008, between Borrower, Guarantors and Bank (the “Guaranty Agreement”), (iii) that certain Amended and Restated Security Agreement, dated as of February 27, 2008, as amended, between Borrower, Guarantors (the “Security Agreement”), (iv) that certain Amended and Restated Revolving Credit Promissory Note dated as of February 27, 2008, as amended, made by Borrower payable to the order of Bank (the “Revolving Credit Note”), (v) that certain Amended and Restated Term Promissory Note dated as of February 27, 2008, as amended, made by Borrower payable to the order of Bank (the “Term Note”) and (vi) any other Loan Documents (as defined in the Revolving Credit Note) in connection therewith;

WHEREAS, the parties hereto wish to amend the Loan Agreement and the Revolving Credit Note as further set forth below, to consent to the potential sale by Borrower of MarketSmart Advertising, Inc., Cherish, Inc. and ILead Media, LLC (each, a “Guarantor Sale”, collectively, the “Guarantors ) and to consent to the reduction of the principal amount and availability to Borrower under the Revolving Credit Note upon the sale of any such Guarantor pursuant to a Guarantor Sale; and

NOW, THEREFORE, in consideration of the premises and agreements contained herein, the parties hereto hereby agree as follows:

1.

Definitions.  All capitalized terms used herein and not otherwise defined shall have the respective meanings provided to such terms in the Revolving Credit Note, as amended hereby, or as set forth in the other Loan Documents.

2.

Amendments.

(a)

Amendment to the Revolving Credit Note.  The “Availability” paragraph of the Revolving Credit Note is hereby deleted in its entirety and the following new “Availability” paragraph is hereby substituted in lieu thereof:

“AVAILABILITY.  The aggregate principal of Advances under this Revolving Credit Note shall not exceed (the “Maximum Availability”) the lesser of: (x) $15,000,000 and (y) 1.75 times the 12 month trailing EBITDA of Borrower (provided, however, that for the time period from April 1, 2008 to December 31, 2008, such calculation shall be 2.00 times the 12 months trailing EBITDA of Borrower), as calculated monthly by Bank for 

the preceding 12 month period minus the aggregate outstanding amount under the Term Revolving Credit Note minus the aggregate undrawn and unexpired amount of the then outstanding Letters of Credit, minus the aggregate amount of unreimbursed drawings under all Letters of Credit outstanding at such time.  With respect to any Partial Term Subsidiary (as defined in the Loan Agreement), the EBITDA calculation shall include EBITDA generated by the Partial Term Subsidiary, including its predecessor entity (if any), during the entirety of the Calculation Period (as defined in the Loan Agreement); provided that (i) Bank shall have received: (a) audited financial statements for such Partial Term Subsidiary for each fiscal quarter during the applicable Calculation Period, (b) audited financial statements as of the end of a prior fiscal year that include such Partial Term Subsidiary’s operations for the applicable Calculation Period or (c) unaudited financial statements reflecting such Partial Term Subsidiary’s operations for the applicable Calculation Period that: (i) are certified as true and accurate by Borrower and (ii) have been reviewed and approved by Bank in its reasonable discretion.”

(b)

Amendment to the Loan Agreement.  The “Compliance Certificate” paragraph of the Loan Agreement is hereby deleted in its entirety and the following new “Compliance Certificate” paragraph is hereby substituted in lieu thereof:

“MONTHLY AND QUARTERLY COMPLIANCE CERTIFICATES.  Borrower agrees to deliver a Compliance Certificate (each a “Compliance Certificate”) to the Bank: (a) as soon as available but in any event within 45 days after the end of each fiscal quarter, a quarterly compliance certificate (i) demonstrating pro forma compliance (including calculations) by the Borrower and the Guarantors with each covenant contained in the Financial Covenants paragraph and (ii) showing the calculations for the determination of the Applicable Margin in accordance with the Applicable Margin paragraph in the Revolving Credit Note, (b) as soon as available but in any event within 20 days after the end of each month, a monthly compliance certificate demonstrating compliance with and the calculations for the determination of the Maximum Availability in accordance with the Availability paragraph in the Revolving Credit Note and (c) at such other times as Bank shall reasonably request, in each case, in form and substance reasonably satisfactory to Bank.”

3.

Consent to each Guarantor Sale; Net Cash Proceeds of each Guarantor Sale to Bank.  

(a)

Notwithstanding anything contained in the Loan Documents to the contrary, Bank hereby consents to each Guarantor Sale provided that each of the following conditions are satisfied for each Guarantor Sale: (i) Borrower shall provide copies of any sale agreements or similar documents to Bank in connection with any Guarantor Sale, such documents to be in form and substance reasonably satisfactory to Bank, (ii) each Guarantor Sale shall be consummated in all material respects in accordance with the terms and conditions of such sale agreements provided to Bank, (iii) no material provision of such sale agreements shall have been amended, modified or waived since the date of delivery of such sale agreements to Bank without the prior written consent of Bank, which consent shall not be unreasonably withheld, (iv) Borrower shall provide Bank with copies of such additional documents and information relating to such Guarantor Sale as Bank shall reasonably request and (v) promptly after receipt thereof, Borrower shall apply 100% of the Net Cash Proceeds of such Guarantor Sale to the payment and prepayment of the Revolving Credit Note until the Revolving Credit Note is paid in full; provided, however, that so long as no Default exists at such time, any excess Net Cash Proceeds after the Revolving Credit Note has been paid in full may be retained by Borrower (otherwise, such excess shall be held and applied by Bank in its sole and absolute discretion).  “Net Cash Proceeds” shall mean the gross cash proceeds received by Borrower or any Guarantor in connection with any Guarantor Sale less the sum of all income taxes and other taxes 

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asserted by an governmental authority as a result of such sale and any other fees and expenses in connection therewith.

(b)

Upon consummation of any Guarantor Sale pursuant to the terms and conditions hereunder, to the extent Bank has a lien on any of the assets of such Guarantor being sold or such Guarantor being sold is subject to the Guaranty Agreement, Security Agreement or any other Loan Document, Bank shall release such Guarantor from such Guaranty Agreement, Security Agreement and any other Loan Documents to which it is a party and shall release such liens of such Guarantor held by Bank.

4.

Consent to Reduction of Principal Amount under the Revolving Credit Note and Amendments to Maximum Availability.  Borrower, Guarantors and Bank hereby acknowledge and agree that, upon consummation of the first permitted Guarantor Sale (and each subsequent permitted Guarantor Sale thereafter), Bank may, in its sole and absolute discretion, (a) reduce the principal amount and availability under the Revolving Credit Note in an amount acceptable to Bank (upon such reduction by Bank, upon the request of Bank, Borrower agrees to execute and deliver to Bank an amended Revolving Credit Note reflecting such reduction) and (b) review and amend the terms, conditions and calculations in determining the Maximum Availability under the “Availability” paragraph of the Revolving Credit Note. 

5.

Effectiveness; Fees and Expenses.  This Consent and Amendment shall become effective as of the date hereof, provided that Bank shall have received the following:

(a)

A copy of this Consent and Amendment executed by Borrower, Guarantors and by Bank (whether such parties shall have signed the same or different copies).

(b)

As consideration for Bank to approve and execute this Consent and Amendment, Borrower shall have paid to Bank an amendment fee in the amount of $25,000 due and payable on the date hereof.

(c)

Bank shall have been reimbursed by Borrower for all reasonable fees and out-of-pocket charges and other expenses incurred in connection with this Consent and Amendment and the transactions contemplated thereby, including, without limitation, the reasonable fees and expenses of counsel to Bank.

(d)

Bank shall have received any other documents or instruments reasonably requested by Bank in connection with the execution of this Consent and Amendment and the transactions contemplated thereby.

6.

Representations and Warranties.  After giving effect to the amendments set forth herein, Borrower and each Guarantor hereby certifies that (a) each of the representations and warranties set forth in the Loan Agreement, the Revolving Credit Note, the Term Note, the Guaranty Agreement, the Security Agreement and the other Loan Documents is true and correct in all material respects as of the date hereof as if fully set forth herein (except for any representation and warranty made as of an earlier date, which representation and warranty shall remain true and correct as of such earlier date) and (b) no Default or has occurred and is continuing as of the date hereof.

7.

Confirmation of all Loan Documents.  By their execution hereof, Borrower and each Guarantor hereby expressly (a) consents to the modifications, consents and amendments set forth in this Consent and Amendment, (b) reaffirms all of its respective covenants, representations, warranties and other obligations set forth in the Loan Agreement, the Revolving Credit Note, the Term Note, the Guaranty Agreement, the Security Agreement and each of the Loan Documents to which it is a party and (c) acknowledges, represents and agrees that its respective covenants, representations, warranties and 

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other obligations set forth in the Loan Agreement, the Revolving Credit Note, the Term Note, the Guaranty Agreement, the Security Agreement and each of the Loan Documents to which it is a party remain in full force and effect.

8.

Miscellaneous.  

(a)

This Consent and Amendment is limited and, except as set forth herein, shall not constitute a modification, acceptance or waiver of any provision of the Loan Agreement, the Revolving Credit Note, any Loan Document, or any other document or instrument entered into in connection therewith.

(b)

This Consent and Amendment may be executed in any number of counterparts by the different parties hereto on separate counterparts, each of which counterparts when executed and delivered shall be an original, but all of which together shall constitute one and the same instrument.  

(c)

This Consent and Amendment and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the laws of the North Carolina without giving effect to the conflicts of law provision thereof.

(d)

On and after the effectiveness of this Consent and Amendment, each reference in the Loan Agreement, the Revolving Credit Note and any other Loan Document shall mean and be a reference to the Loan Agreement, the Revolving Credit Note and any other Loan Document as amended by this Consent and Amendment.  This Consent and Amendment constitutes a “Loan Document”. 

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Consent and Amendment to be executed as of the day and year first above written.

			
	    [CORPORATE SEAL]     

	THINK PARTNERSHIP INC., a Nevada corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	 

	 
	Name:

	 

	 
	Title:

	 

			
	    [CORPORATE SEAL]     

	CHERISH, INC., a Florida corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	 

	 
	Name:

	 

	 
	Title:

	 

			
	    [CORPORATE SEAL]     

	CHECKUP MARKETING, INC., a North Carolina corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	 

	 
	Name:

	 

	 
	Title:

	 

			
	    [CORPORATE SEAL]     

	RIGHTSTUFF INC., a North Carolina corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	 

	 
	Name:

	 

	 
	Title:

	 

			
	    [CORPORATE SEAL]     

	MARKETSMART ADVERTISING, INC., a North Carolina corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	 

	 
	Name:

	 

	 
	Title:

	 

			
	    [CORPORATE SEAL]     

	OZONA ONLINE NETWORK, INC., a Florida corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	 

	 
	Name:

	 

	 
	Title:

	 

			
	    [CORPORATE SEAL]     

	KOWABUNGA MARKETING, INC., a Michigan corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	 

	 
	Name:

	 

	 
	Title:

	 

			
	    [CORPORATE SEAL]     

	PRIMARYADS, INC., a New Jersey corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	 

	 
	Name:

	 

	 
	Title:

	 

			
	    [CORPORATE SEAL]     

	REAL ESTATE SCHOOL ONLINE INC., a Florida corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	 

	 
	Name:

	 

	 
	Title:

	 

			
	    [CORPORATE SEAL]     

	VINTACOM FLORIDA, INC., a Florida corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	 

	 
	Name:

	 

	 
	Title:

	 

			
	    [CORPORATE SEAL]     

	MOREX MARKETING GROUP, LLC, a New York limited liability company

	 
	 
	  

	 
	 
	 

	 
	By:  

	 

	 
	Name:

	 

	 
	Title:

	 

			
	    [CORPORATE SEAL]     

	LITMUS MEDIA, INC., a Missouri corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	 

	 
	Name:

	 

	 
	Title:

	 

			
	    [CORPORATE SEAL]     

	ILEAD MEDIA LLC, a Delaware limited liability company

	 
	 
	  

	 
	 
	 

	 
	By:  

	 

	 
	Name:

	 

	 
	Title:

	 

			
	    [CORPORATE SEAL]     

	VALIDCLICK, INC., a Missouri corporation

	 
	 
	  

	 
	 
	 

	 
	By:  

	 

	 
	Name:

	 

	 
	Title:

	 

			
	    [CORPORATE SEAL]     

	SECOND BITE, LLC., a Kansas limited liability company

	 
	 
	  

	 
	 
	 

	 
	By:  

	 

	 
	Name:

	 

	 
	Title:

	 

			
	    

	WACHOVIA BANK, NATIONAL ASSOCIATION

	 
	 
	  

	 
	 
	 

	 
	By:  

	 

	 
	Name:

	 

	 
	Title:ivicommunications_8k-ex1001.htm

    
      

    

    EXHIBIT
10.1

    
Loan
and Security Agreement

     

    This Loan
and Security Agreement (as it may be amended, this "Agreement")
is entered into on June  , 2008 by and between IVI Communications,
Inc.,
a Nevada corporation (the "Borrower"),
whose principal office is located at 555 H Street, Suite H, Eureka, CA
95501 ("Borrower’s
Address"), and Titan Global Holdings,
Inc.,
a Utah corporation, whose principal office is located at 1700 Jay Ell
Drive, Suite 200, Richardson, Texas 75081 (the “Lender”).  The
Schedules to this Agreement are an integral part of this Agreement and are
incorporated herein by reference.  Terms used, but not defined
elsewhere, in this Agreement are defined in Schedule A.

     

    
      1.    LOANS.

    

     

    1.1   Amount.

     

    Subject
to the terms and conditions contained in this Agreement, Lender will provide
funds of up to One Hundred Thousand dollars ($100,000) from time to time upon
the written request of Borrower to Lender.  The lending of any such
funds pursuant to this Agreement shall be in the sole discretion of the Lender
and shall be dependent among other thing on receipt of the following, all of
which shall be to the satisfaction of the lender:  detailed use of
proceeds, budget, timelines for application of proceeds and milestone
requirements.  All amount loaned hereunder shall be referred to as
“Term Loans.”

     

    1.2           Repayment.

     

    Accrued
interest on all Term Loans shall be payable on the first day of each
month.  Outstanding principal and all accrued but unpaid
interest of the Term Loans shall be repaid on [December (180 days)], 2008 (the “Maturity
Date”).  The Term Loans shall be evidenced by the form of promissory
note attached hereto as Exhibit A.

     

    1.3           Interest.

     

    All Term
Loans shall bear interest at thirteen percent (10.0%) based on the actual
number of days elapsed in a year of 360 days (the “Interest Rate”); provided, that after the
occurrence of an Event of Default, all Term Loans and other monetary obligations
shall, at Lender's option, bear interest at a rate per annum equal to four
percent (4%) in excess of the rate otherwise applicable thereto (the "Default Rate") until paid in
full (notwithstanding the entry of any judgment against any Borrower or the
exercise of any other right or remedy by Lender), and all such interest shall be
payable on demand.  Notwithstanding anything to the contrary contained
in this Agreement, the aggregate of all amounts deemed to be interest hereunder
and charged or collected by Lender is not intended to exceed the highest rate
permissible under any applicable law, but if it should, such interest
shall automatically be reduced to the extent necessary to comply with
applicable law and Lender will refund to Borrower any such excess interest
received by Lender.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      2.    SECURITY
INTEREST; SUBORDINATION.

    

     

    2.1   Grant of
Security Interest.

     

    To secure
the full payment and performance of all of the Obligations, Borrower hereby
assigns to Lender and grants to Lender a continuing security interest in the
following property of Borrower, whether tangible or intangible, now or hereafter
owned, existing, acquired or arising and wherever now or hereafter located, and
whether or not eligible for lending purposes:  (i) all Accounts
(whether or not Eligible Accounts) and all Goods whose sale, lease or other
disposition by such Borrower has given rise to Accounts and have been returned
to, or repossessed or stopped in transit by, Borrower; (ii) all Chattel
Paper, Instruments, Documents and General Intangibles (including  all
patents, patent applications, trademarks, trademark applications, trade names,
trade secrets, goodwill, copyrights, copyright applications, registrations,
licenses, software, franchises, customer lists, tax refund claims, claims
against carriers and shippers, guarantee claims, contracts rights, payment
intangibles, security interests, security deposits and rights to
indemnification); (iii) all Inventory; (iv) all Goods (other than
Inventory), including Equipment, vehicles and Fixtures; (v) all Investment
Property; (vi) all Deposit Accounts, bank accounts, deposits and cash;
(vii) all Letter-of-Credit Rights; (viii) all Commercial Tort Claims;
(ix) all Supporting Obligations; (x) any other property of Borrower
now or hereafter in the possession, custody or control of Lender or any agent or
any parent, Affiliate or Subsidiary of Lender or any participant with Lender in
the Loans, for any purpose (whether for safekeeping, deposit, collection,
custody, pledge, transmission or otherwise) and (xi) all additions and
accessions to, substitutions for, and replacements, products and Proceeds of the
foregoing property, including proceeds of all insurance policies insuring the
foregoing property, and all of Borrower’s books and records relating to any of
the foregoing and to such Borrower’s business.

     

    2.2   Possessory
Collateral.

     

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

     

    2.3   Preservation
of Collateral and Perfection of Security Interest Therein.

     

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

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    2.4   Subordination

    

    It is
expressly agreed and understood that the Company has granted a prior security
interest in the Collateral.  The security interest granted herein is
subject to the terms and provisions of the Subordination Agreement entered into
as of the date hereof between the Lender and YA Global Investments,
L.P.

    

    
      3.    REPRESENTATIONS,
WARRANTIES AND COVENANTS.

    

     

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

     

    For
purposes of this Agreement, the term “Material Adverse Effect” when used in
connection with the Borrower means any change, event, violation, inaccuracy,
circumstance or effect that is materially adverse to the business, assets
(including intangible assets), capitalization, financial condition or results of
operations of the Borrower and its subsidiaries taken as a whole.  For
purposes of this Agreement, the term “Person” shall mean any individual,
corporation (including any non-profit corporation), general partnership, limited
partnership, limited liability partnership, joint venture, estate, trust,
company (including any limited liability company or joint stock company), firm
or other enterprise, association, organization, entity or Governmental Entity
(as hereinafter defined).

    

    3.1.   Organization and Good
Standing of the Borrower.  The
Borrower is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation as set forth above. The
Borrower is not required to be qualified to transact business in any other
jurisdiction where the failure to so qualify would have an adverse effect on the
business of the Borrower.

     

    3.2.   Authority.

    

    (a)  The Borrower has full
power and authority (corporate and otherwise) to carry on its business and has
all permits and licenses that are necessary to the conduct of its business or to
the ownership, lease or operation of its properties and assets.

     

    (b)  The execution of this
Agreement and all related agreements and the delivery hereof and thereof to the
Lender have been duly authorized by the Borrower’s Board of
Directors.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (c)  Subject to any consents
required under Section 3.7 below, the Borrower has the full legal right, power
and authority to execute, deliver and carry out the terms and provisions of this
Agreement; and this Agreement has been duly and validly executed and delivered
on behalf of the Borrower and constitutes a valid and binding obligation of the
Borrower enforceable in accordance with its terms.

     

    (d)  Except as set forth in
Schedule 3.2, neither the execution and delivery of this Agreement, the
consummation of the transactions herein contemplated, nor compliance with the
terms of this Agreement will violate, conflict with, result in a breach of, or
constitute a default under any statute, regulation, indenture, mortgage, loan
agreement, or other agreement or instrument to which the Borrower is a party or
by which it or any of them is bound, any charter, regulation, or bylaw provision
of Borrower, or any decree, order, or rule of any court or governmental
authority or arbitrator that is binding on Borrower in any way.

    

    3.3.   Subsidiaries and
Affiliates.  Any and all businesses, entities, enterprises and
organizations in which Borrower has any ownership, voting or profit and loss
sharing percentage interest (the “Subsidiaries”) are identified in Section 3.3
hereto, together with the Borrower’s interest therein.  Unless the
context requires otherwise or specifically designated to the contrary on Section
3.3 hereto, “Borrower” as used in this Agreement shall include all such
Subsidiaries.

     

    3.4.   Consents.  Except
as set forth in Schedule 3.4, no consents or approvals of any public body or
authority and no consents or waivers from other parties to leases, licenses,
franchises, permits, indentures, agreements or other instruments are
(i) required for the lawful consummation of the transactions contemplated
hereby.  The consummation of the transactions contemplated hereby will
not result in creating, accelerating or increasing any liability of
Borrower.

     

    3.5.    Machinery and
Equipment.  Except for items disposed of in the ordinary course
of business, all machinery, tools, furniture, fixtures, equipment, vehicles,
leasehold improvements and all other tangible personal property (hereinafter
“Fixed Assets”) of the Borrower currently being used in the conduct of its
business, together with any machinery or equipment that is leased or operated by
the Company, are in fully serviceable working condition and
repair.  Except as described on Schedule 3.5 hereto, all Fixed Assets
owned, used or held by the Borrower are situated at its business premises and
are currently used in its business.  Schedule 3.5 describes all Fixed
Assets owned by or an interest in which is claimed by any other person (whether
a customer, supplier or other person) for which the Borrower is responsible
(copies of all agreements relating thereto being attached to said Schedule 3.5),
and all such property is in the Borrower’s actual possession and is in such
condition that upon the return of such property in its present condition to its
owner, the Borrower will not be liable in any amount to such
owner.  There are no outstanding requirements or recommendations of
any insurance company that has issued a policy covering either (i) such
Fixed Assets or (ii) any liabilities of the Borrower relating to operation
of their business, or by any board of fire underwriters or other body exercising
similar functions, requiring or recommending any repairs or work to be done on
any Fixed Assets or any changes in the operations of the business, any equipment
or machinery used therein, or any procedures relating to such operations,
equipment or machinery.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    3.6.   Title to Properties; Certain
Real Property Matters.

     

    (a)  Except as set forth in
Schedule 3.6, the Borrower each have good and marketable title to all the real
properties used in their respective operations and each is the owner of all
other assets used in their respective operations including, without limitation,
those shown on the Basic Warranty Date Balance Sheet (except as to those since
sold or otherwise disposed of in the ordinary course of business), free and
clear of all liens, pledges, encumbrances, security interests, exceptions to
title or any other charges or restrictions or title retention agreements of any
kind or character whatsoever (whether of record or inchoate).  The
Borrower has delivered to the Lender customary and standard reports on the
Uniform Commercial Code filing status of the Borrower with respect to state,
county and local filings.

     

    (b)  The real property and
improvements thereon owned or leased by the Borrower (the “Real Properties”),
all of which are described on Schedule 3.6, and their respective operations, do
not violate or contravene any planning or zoning ordinance or other
administrative regulations or any restrictive covenant or any provision of local
law in effect or any other law, ordinance, executive order or judicial decree,
whether pertaining to pollution of the earth, water, atmosphere or otherwise,
that in any material respect interferes with or prevents the continued use of
the Real Properties for the purposes for which they are now being used or which
would materially affect the value thereof or the ability to transfer the same
under state or federal laws or regulations.

     

    (c)  Borrower has not received
any notice of alleged violation of any applicable planning or zoning
regulations, ordinance or other law, order, regulation or other requirement
relating to their respective operations or properties including, without
limitation of the foregoing, any pertaining to occupational safety and health or
pollution of the earth, water or atmosphere.

     

    (d)  Each Real Property
includes all right, title and interest in and to strips, gores, easements,
rights of way, privileges, appurtenances, land lying in the bed of any street,
road or avenue, opened or proposed, in front of or adjoining such Real Property
or any part thereof by reason of change or grade or closing of any street, road,
highway or avenue, and all rights belonging to and inuring to the benefit of
such Real Property.

     

    (e)  Except as set forth on
Schedule 3.6, the buildings, driveways, and all other structures and
improvements upon each Real Property are all within the boundary lines of such
Real Property or have the benefit of valid easements and there are no
encroachments thereon.  There are no outstanding requirements or
recommendations by any insurance company that has issued a policy covering any
Real Property, or by any board of fire underwriters or other body
exercising similar functions, requiring or recommending any repairs or work to
be done on any Real Property.

     

    (f)  All public utilities
required for the operation of the Real Properties either enter the Real
Properties through adjoining public streets or, if they pass through adjoining
private land, do so in accordance with valid public or private
easements.  All of the public utilities mentioned above are installed
and operating, and all installation and connection charges, are paid in
full.

     

    (g)  On the date hereof there
are no governmental assessments against any of the Real Properties proposed,
pending or constituting a lien on or against any of the Real Properties for
which the Company would be responsible, which assessments have not been paid in
full.

     

    
      
        
        

      

      
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    (h)  All real estate taxes
related to the Borrower’ lease of the Real Properties are paid by the owner(s)
of such Real Properties.

    

    3.7.   Leases.  All
leases of real and personal property of the Borrower are described in
Schedule 3.7, are in full force and effect and constitute legal, valid and
binding obligations of the respective parties thereto enforceable in accordance
with their terms, except as limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting generally the enforcement of
creditor’s rights, and have not been assigned or encumbered.  The
Borrower has performed in all material respects the obligations required to be
performed by it under all such leases to date and it is not in default in any
material respect under any of said leases, except as set forth in Schedule 3.7,
nor has it made any leasehold improvements required to be removed at the
termination of any lease, except signs.  No other party to any such
lease is in material default thereunder.

     

    3.8.   Reserved.

     

    3.9.   Banking.  The
Borrower has delivered to the Lender the name of each bank in which the Borrower
have an account, the account numbers and description and the names of all
persons authorized to draw thereon or have access thereto.

     

    3.10.        
Lists of Contracts,
Etc.  There is included in Schedule 3.10 a list of the
following items (whether written or oral) relating to the Borrower, which list
identifies and fairly summarizes each item:

    

    (i)   All collective
bargaining and other labor union agreements (if any); all employment agreements
with any officer, director, employee or consultant; and all employee pension,
health and welfare benefit plans, group insurance, bonus, profit sharing,
severance, vacation, hospitalization, and retirement plans, post-retirement
medical benefit plans, and any other plans, arrangements or custom requiring
payments or benefits to current or retiring employees.

     

    (ii)          
All joint venture contracts of the Borrower

     

    (iii)        
All contracts of the Borrower relating to (a) obligations for borrowed
money, (b) obligations evidenced by bonds, debentures, notes or other
similar instruments, (c) obligations to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (d) obligations under capital leases, (e) debt of
others secured by a lien on any asset of the Borrower, and (f) debts of
others guaranteed by the Borrower.

     

    (iv)   All agreements of
the Borrower relating to the supply of raw materials for and the distribution of
the products of the Borrower, including without limitation all sales agreements,
manufacturer’s representative agreements and distribution agreements of whatever
magnitude and nature, and any commitments therefor;

     

    
      
        
        

      

      
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    (v)   All contracts that
individually provide for aggregate future payments to or from the Borrower of
$25,000 or more, to the extent not included in (i) through (iv)
above;

     

    (vi)       
All other contracts of the Borrower material to the business, assets,
liabilities, financial condition, results of operations or prospects of the
business of the Borrower taken as a whole to the extent not included
above.

    

    Except as
set forth in Schedule 3.10, (i) all contracts, agreements and commitments
of the Borrower set forth in Schedule 3.10 are valid, binding and in full force
and effect, and (ii) neither the Borrower nor any other party to any such
contract, agreement, or commitment has materially breached any provision thereof
or is in default thereunder.  True and complete copies of the
contracts, leases, licenses and other documents referred to in this Schedule
3.10 have been delivered to the Lender, certified by the Secretary or Assistant
Secretary of Borrower as true, correct and complete copies.

    

    3.11.        Compliance With the
Law.

     

    (a)  Except as set forth on
Schedule 3.11 or except where any failure to comply or any violation would
not have a Material Adverse Effect on the Borrower:

     

    (i)    the Borrower
is in material compliance with each any federal, state, local, municipal,
foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, court order, consent,
decree, regulation, license, permit, statute, or treaty (“Legal Requirement”),
that is or was applicable to it or to the conduct or operation of its business
or the ownership or use of any of its assets;

     

    (ii)           no
event has occurred or circumstance exists that (with or without notice or lapse
of time) may constitute or result in a material violation by Borrower of, or a
material failure on the part of either Borrower to comply with, any Legal
Requirement; and

     

    (iii)           to
Borrower’s knowledge, it has not received any written notice or communication
from any court, administrative agency, commission, governmental or regulatory
authority, domestic or foreign (each a “Governmental Body”),
regarding:  (A) any actual or alleged violation of, or failure to
comply with, any Legal Requirement, or (B) any actual or alleged obligation
on the part of such Borrower to undertake, or to bear all or any portion of the
cost of, any remedial action of any nature.

     

    (b)  Schedule 3.10
contains a list that is complete and accurate in all material respects of all
Governmental Authorizations which are material to operation of the business of
the Borrower or that otherwise relates to the business of, or to any of the
assets owned or used by, the Borrower.  The Borrower holds all
Governmental Authorizations necessary to conduct the business as presently
conducted without any material violation of any Legal Requirement.  To
the knowledge of the Borrower, each Governmental Authorization listed on
Schedule 3.15 is valid and in full force and effect.  To the
knowledge of the Borrower, and except as set forth on Schedule 3.15, or
except where any failure to comply, violation or other event or circumstances
would not have a Material Adverse Effect on the Borrower:

     

    
      
        
        

      

      
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    (i)           the
Borrower is in compliance with all of the terms and requirements of each
Governmental Authorization identified or required to be identified on
Schedule 3.10;

     

    (ii)           no
event has occurred or circumstance exists that may (with or without notice or
lapse of time):  (A) constitute or result directly or indirectly in a
violation of or a failure to comply with any term or requirement of any
Governmental Authorization listed on Schedule 3.10, or (B) result directly
or indirectly in the revocation, withdrawal, suspension, cancellation,
modification, or termination of, any material Governmental Authorization listed
on Schedule 3.10;

     

    (iii)           the
Borrower has not received any written notice or communication from any
Governmental Body regarding:  (A) any actual, alleged or
potential violation of or failure to comply with any term or requirement of any
Governmental Authorization, or (B) any actual or threatened revocation,
withdrawal, suspension, cancellation, modification or termination of any
material Governmental Authorization; and

     

    (iv)           all
applications required to have been filed for the renewal of any material
Governmental Authorizations listed or required to be listed on
Schedule 3.10 have been duly filed on a timely basis with the appropriate
Governmental Bodies, and all other filings required to have been made with
respect to such Governmental Authorizations have been duly made on a timely
basis with the appropriate Governmental Bodies.

     

    For the
purposes hereof, Governmental Authorization means any approval, consent,
license, permit, certification, registration, waiver, or other authorization
issued, granted, given, required, or otherwise made available by or under the
authority of any:

     

     (a)  nation, state, county,
city, town, village, district, or other jurisdiction of any nature;

     

    (b)  federal, state, local,
county, municipal, foreign, or other government;

     

    (c)  governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official, or entity and any court or other tribunal);
or

     

    (d)  body exercising, or
entitled to exercise, any administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power of any nature.

     

    3.11.    Litigation; Pending Labor
Disputes.  Except as specifically identified in Schedule
3.11:

    

    (i)           There
are no legal, administrative, arbitration or other proceedings or governmental
investigations pending or, to the knowledge of the Borrower, threatened, against
the Borrower, relating to the Borrower or its properties (including leased
property), or the transactions contemplated by this Agreement, nor is there any
basis known to the Borrower for any such action.

     

    (ii)           There
are no judgments, decrees or orders of any court, or any governmental
department, commission, board, agency or instrumentality binding upon the
Borrower relating to the business of the Borrower the effect of which is to
prohibit any business practice or the acquisition of any property or the conduct
of any business by the Borrower or which limit or control or otherwise adversely
affect its method or manner of doing business.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (iii)           No
work stoppage has occurred and is continuing or, to the knowledge of the
Borrower, is threatened affecting the business of the Borrower, and no
representation question involving recognition of a collective bargaining agent
exists in respect of any employees of the Borrower.

     

    (iv)           There
are no pending labor negotiations or union organization efforts relating to
employees of the Borrower.

     

    (v)           There
are no charges of discrimination (relating to sex, age, race, national origin,
handicap or veteran status) or unfair labor practices pending or, to the
knowledge of the Borrower, threatened before any governmental or regulatory
agency or authority or any court relating to employees of the
Borrower.

     

    3.12.    Assets.   The
assets of the Borrower are located at the locations listed on Schedule 3.12
attached hereto. Except as described in Schedule 3.12, the assets of the
Borrower are sufficient in all material respects to carry on the operations of
the Borrower business as now conducted by the Borrower.

     

    3.13.    Absence of Certain
Commercial
Practices.  The Borrower has not made any payment (directly or
by secret commissions, discounts, compensation or other payments) or given any
gifts to another business concern, to an agent or employee of another business
concern or of any governmental entity (domestic or foreign) or to a political
party or candidate for political office (domestic or foreign), to obtain or
retain business for the Borrower or to receive favorable or preferential
treatment, except for gifts and entertainment given to representatives of
customers or potential customers of sufficiently limited value and in a form
(other than cash) that would not be construed as a bribe or payoff.

     

    3.14.    Licenses, Permits, Consents
and Approvals.  The Borrower has all licenses, permits or other
authorizations of governmental, regulatory or administrative agencies or
authorities (collectively, “Licenses”) required to conduct the business of the
Borrower.

     

    3.15.    Environmental
Matters.

     

    (a)  Except as set forth on
Schedule 3.15(a) and except to the extent that the inaccuracy of any of the
following, individually or in the aggregate, would not have a Material Adverse
Effect on the Borrower:

     

    (i)           the
Borrower holds and is in compliance with all Environmental Permits, and are and
have otherwise been in compliance with all applicable Environmental Laws and
there is no condition that is reasonably likely to prevent or materially
interfere with compliance by the Borrower with Environmental Laws;

     

    (ii)           no
modification, revocation, re-issuance, alteration, transfer or amendment of any
Environmental Permit, or review by, or approval of, any third party, including,
without limitation, any Governmental Body, of any Environmental Permit or of the
environmental condition any real property owned by the Borrower or any of their
subsidiaries is required in connection with the execution or delivery of this
Agreement or the consummation by the Borrower of the transactions contemplated
hereby or the operation of the business of the Borrower on the date of the
Closing;

     

    
      
        
        

      

      
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    (iii)           the
Borrower has not received any Environmental Claim, nor, to the knowledge of the
Borrower, has any Environmental Claim been threatened against either of the
Borrower; and

     

    (iv)           the
Borrower has not entered into or agreed to any outstanding judgment, decree,
order or consent arrangement with any Governmental Body under any Environmental
Laws, including without limitation those relating to compliance with any
Environmental Laws or to the investigation, cleanup, remediation or removal of
Hazardous Materials.

     

    (b)  Set forth on
Schedule 3.15(b) are all of the parcels of real property that are now, or
have heretofore been, owned or leased by the Borrower or their subsidiaries, or
otherwise used by the Borrower or their subsidiaries for the conduct of the
Borrower’s business (each, a “Borrower Facility”), or to
which any Hazardous Materials generated by the Borrower or its Subsidiaries have
been delivered during the last 10 years by a third party.

     

    (c)  Except as set forth on
Schedule 3.15(c), except for Hazardous Materials which are required
for the conduct of the business of the Borrower or any of their subsidiaries as
currently conducted and which are being stored and disposed of by the Borrower
or any of their Subsidiaries in accordance with applicable Environmental Laws,
no Hazardous Materials have been Released at or onto or, to the knowledge of the
Borrower or their Subsidiaries, are migrating onto or from any Borrower Facility
currently leased or owned by either Borrower or any subsidiary (a “Current
Borrower Facility”) (including, without limitation, the soil, groundwater,
surface water, or ambient air, or building materials thereof).  Except
as set forth on Schedule 3.21(c), no Hazardous Materials were Released at
or onto, and, to the knowledge of the Borrower, no Hazardous Materials migrated
onto or from, any Borrower Facility previously leased or owned by the Borrower
or any subsidiary (a “Former Borrower Facility”) during the ownership or leasing
by the Borrower or any subsidiary of such Former Borrower
Facility.  Except as set forth on Schedule 3.15(c), except for
Hazardous Materials used, generated, stored and Released in accordance with
applicable Environmental Laws, to the knowledge of the Borrower, no Hazardous
Material which was generated, discarded, transported, or Released by the
Borrower or their subsidiaries prior to the date hereof is present, in a
concentration or amount exceeding legally allowable limits applicable to the use
of the property in question or  in a manner which violates any
applicable Environmental Law or that is reasonably likely to require any
investigation, removal or response activity under any applicable Environmental
Law, on any other real property, including, without limitation any disposal site
to which Hazardous Materials generated or transported by the Borrower has been
delivered.

     

    (d)  The Borrower has
delivered to Lender (or made available for Lender’s inspection) all reports,
records, tests, evaluations, Governmental Body and third party correspondence,
and other documents relating to the storage, use, Release, manufacture,
remediation, investigation, or removal of Hazardous Materials by the Borrower or
any of their subsidiaries or the presence of any Hazardous Material on or about
any Borrower Facility.

     

    (e)  Except as set forth on
Schedule 3.15(e), no person has been exposed to any Hazardous Material
stored, used, Released, generated, or transported by or for the Borrower or any
of their subsidiaries in a manner which has caused, or is reasonably likely to
cause, an adverse health effect.

     

    
      
        
        

      

      
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    For
purposes of this Agreement, the terms below shall have the following
meanings:

     

    “Environmental Claim” means any
written complaint, notice, claim, demand, action, suit or judicial,
administrative or arbitral proceeding by any Person to the Company asserting
liability or potential liability (including without limitation, liability or
potential liability for investigatory costs, cleanup costs, governmental
response costs, natural resource damages, property damage, personal injury,
fines or penalties) arising out of, relating to, based on or resulting from:
(i) the presence, Release or threatened Release of any Hazardous Materials
at any location, (ii) circumstances forming the basis of any violation or
alleged violation of any Environmental Laws or Environmental Permits, or
(iii) otherwise relating to obligations or liabilities under any
Environmental Law.

     

    “Environmental Laws” means all
applicable federal, state, county, and local statutes, rules, regulations,
ordinances, orders and decrees, and all common law, in each case relating in any
manner to pollution, protection of human health and the environment, the
exposure of Persons, property or the environment to any Hazardous Materials, or
the Release or threatened Release of any Hazardous Materials, to the extent and
in the form that such exist at the date hereof.

     

    “Environmental Permits” means
all permits, licenses, registrations, exemptions and other governmental
authorizations required under Environmental Laws for either Borrower to conduct
its operations as presently conducted.

     

    “Hazardous Materials” means all
hazardous or toxic substances, wastes, materials or chemicals, petroleum and
petroleum products, asbestos and asbestos-containing materials, pollutants,
contaminants and all other materials and substances, including but not limited
to radiologically-contaminated materials regulated pursuant to any Environmental
Laws or that could result in liability under any Environmental
Laws.

     

    “Release” means any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, or disposing into the environment (including but not limited
to any ventilated or indoor air) or into any building or other man-made
structure.

     

    “Released” means spilled,
leaked, pumped, poured, emitted, emptied, discharged, injected, allowed to
escape, allowed to leach, dumped, or disposed of into the
environment  (including but not limited to any ventilated or indoor
air) or into any building or other man-made structure.

     

    3.16.    Disclosure.  All
statements contained in any schedule, certificate, opinion, instrument, or other
document delivered by or on behalf of the Borrower pursuant hereto or in
connection with the transactions contemplated hereby shall be deemed
representations and warranties by the Borrower herein.  No statement,
representation or warranty by the Borrower in this Agreement or in any schedule,
certificate, opinion, instrument, or other document furnished or to be furnished
to the Lender pursuant hereto or in connection with the transactions
contemplated hereby contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact required to be stated
therein or necessary to make the statements contained therein not misleading or
necessary in order to provide a prospective purchaser of the business of the
Borrower with full and fair disclosure concerning the Borrower, its business,
and the Borrower’s affairs.

     

    
      
        
        

      

      
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    3.23.    Covenants:

     

    (a) Use
of Proceeds.

     

    All
proceeds of all Loans will be used solely for lawful business
purposes.

     

    (b)
Maintenance of Collateral, Etc.

     

    The
Borrower will maintain all of its equipment in good working condition, ordinary
wear and tear excepted.

     

    (c)
Further Assurances.

     

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

     

    (d)
Negative Covenants.

     

    Except as
set forth in herein, no Borrower will, without Lender's prior written consent,
(i) merge or consolidate with another Person, form any new subsidiary or
acquire any interest in any Person; (ii) acquire any assets except in the
ordinary course of business and as otherwise permitted by this Agreement;
(iii) enter into any transaction outside the ordinary course of business;
(iv) make any loans to, or investments in, any affiliate or other Person in
the form of money or other assets; (v) incur any debt outside the ordinary
course of business; (vi) guaranty or otherwise become liable with respect
to the obligations of another party or entity; (vii) pay or declare any
dividends or other distributions on any Borrower's stock, if such Borrower is a
corporation (except for dividends payable solely in capital stock of such
Borrower); (viii) redeem, retire, purchase or otherwise acquire, directly
or indirectly, any of any Borrower's capital stock or other equity interests;
(ix) make any change in any Borrower's capital structure; (x) dissolve
or elect to dissolve; (xi) enter into any transaction with an Affiliate
other than on arms-length terms disclosed to Lender in writing; (xii) agree
to do any of the foregoing.

     

    
      
        
        

      

      
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      4.    RELEASE
AND INDEMNITY.

    

     

    4.1.   Release.

     

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

     

    4.2.   Indemnity.

     

    The
Borrower hereby agrees to indemnify the Released Parties and hold them harmless
from and against any and all claims, debts, liabilities, demands, obligations,
actions, causes of action, penalties, costs and expenses (including attorneys'
fees), of every nature, character and description, which the Released Parties
may sustain or incur based upon or arising out of any of the transactions
contemplated by this Agreement, or any other matter, cause or thing whatsoever
occurred, done, omitted or suffered to be done by Lender relating to Borrower or
their obligations hereunder (except any such amounts sustained or incurred as
the result of the gross negligence or willful misconduct of the Released
Parties).  Notwithstanding any provision in this Agreement to the
contrary, the indemnity agreement set forth in this Section shall survive any
termination of this Agreement.

     

    
      5.    TERM.

    

     

    5.1.   Maturity
Date.

     

    Lender's
obligation to make Term Loans shall initially continue in effect for a term from
the date of this Agreement until the Maturity Date.  This
Agreement  and related agreement and documents and Lender's security
interests pursuant to the Mortgages, and all representations, warranties and
covenants of Borrower contained herein and therein, shall remain in full force
and effect after the Maturity Date until all of the monetary obligations are
indefeasibly paid in full.

     

    5.2.   Early
Termination.

     

    Lender's
obligation to make Loans under this Agreement may be terminated prior to the
Maturity Date as follows:  (i) by Borrower, upon notice of
termination and repayment of all outstanding obligations due to Lender
hereunder; or (ii) by Lender at any time after the occurrence of an Event
of Default, without notice, effective immediately.

     

    5.3.   Payment of
Obligations.

     

    On the
Maturity Date or on any earlier effective date of termination, Borrower shall
pay in full all obligations due to the Lender hereunder, whether or not all or
any part of such obligations are otherwise then due and payable.

     

    
      
        
        

      

      
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    5.4.   Effect of
Termination.

     

    No
termination shall affect or impair any right or remedy of Lender or relieve
Borrower of any of the obligations until all of the monetary obligations have
been indefeasibly paid in full.  Upon indefeasible payment and
performance in full of all of the monetary obligations and termination of this
Agreement, Lender shall promptly deliver to Borrower termination statements,
requests for reconveyances and such other documents as may be reasonably
required to terminate Lender's security interests in properties of the
Borrower.

     

    
      6.    EVENTS
OF DEFAULT AND REMEDIES.

    

     

    6.1.   Events of
Default.

     

    The
occurrence of any of the following events shall constitute an "Event of Default" under this
Agreement, and Borrower shall give Lender immediate written notice
thereof:  (i) if any warranty, representation, statement, report
or certificate made or delivered to Lender by Borrower or any of Borrower's
officers, employees or agents is untrue or misleading; (ii) if Borrower
fails to pay when due any principal or interest on any Term Loan or any other
monetary obligation; (iii) if Borrower breaches any covenant or obligation
contained in this Agreement or any related document or agreement or fails to
perform any other non-monetary obligation; (iv) if any levy, assessment,
attachment, seizure, lien, security interest or encumbrance (other than a
Permitted Lien) is made or permitted to exist on all or any part of the
Collateral; (v) if one or more judgments aggregating in excess of $150,000,
or any injunction or attachment, is obtained against Borrower which remains
unstayed for more than ten days or is enforced; (vi) the occurrence of any
default under any financing agreement, security agreement or other agreement,
instrument or document executed and delivered by any Borrower with, or in favor
of, any Person other than Lender; (vii) the dissolution, death, termination
of existence in good standing, insolvency or business failure or suspension or
cessation of business as usual of Borrower or the appointment of a receiver,
trustee or custodian for all or any part of the property of, or an assignment
for the benefit of creditors by any Borrower, or the commencement of any
proceeding by any Borrower under any reorganization, bankruptcy, insolvency,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, now or in the future in effect, or if any Borrower makes or
sends a notice of a bulk transfer or calls a meeting of its creditors;
(viii) the commencement of any proceeding against Borrower under any
reorganization, bankruptcy, insolvency, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, now or in the
future in effect; (ix) the actual or attempted revocation or termination
of, or limitation or denial of liability upon, any guaranty of the Obligations,
or any security document securing the Obligations, by any Obligor; or
(x) if there is any actual or threatened indictment of any Borrower or any
officer or director of any Borrower under any criminal statute or commencement
or threatened commencement of criminal or civil proceedings against
Borrower.

     

    6.2.   Remedies.

     

    Upon the
occurrence of any Default, and at any time thereafter, Lender, at its option,
may cease making Loans or otherwise extending credit to Borrower under this
Agreement or any other Loan Document.  Upon the occurrence of an Event
of Default, Lender may exercise from time to time any rights and remedies
available to it under the UCC and any other applicable law in addition to, and
not in lieu of, any rights and remedies expressly granted in this Agreement or
in any of the other Loan Documents and all of Lender's rights and remedies shall
be cumulative and non-exclusive to the extent permitted by law.  In
particular, but not by way of limitation of the foregoing, upon the occurrence
of any Event of Default, 

     

    
      
        
        

      

      
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    and at
any time thereafter, Lender, at its option, and without notice or demand of any
kind (all of which are hereby expressly waived by Borrower), may do any one or
more of the following:  (i) cease making Loans or otherwise
extending credit to Borrower under this Agreement or any other Loan Document;
(ii) accelerate and declare all or any part of the Obligations to be
immediately due, payable and performable, notwithstanding any deferred or
installment payments allowed by any instrument evidencing or relating to any of
the Obligations; (iii) take possession of any or all of the Collateral (in
addition to Collateral of which it already has possession) wherever it may be
found, and for that purpose Borrower hereby authorizes Lender, without judicial
process, to enter onto any of such Borrower's premises without interference to
search for, take possession of, keep, store, or remove any of the Collateral,
and remain (or cause a custodian to remain) on the premises in exclusive control
thereof, without charge for so long as Lender deems it reasonably necessary in
order to complete the enforcement of its rights under this Agreement or any
other agreement; provided, that if Lender
seeks to take possession of any of the Collateral by court process, Borrower
hereby irrevocably waives (A) any bond and any surety or security relating
thereto required by law as an incident to such possession, (B) any demand
for possession prior to the commencement of any suit or action to recover
possession thereof and (C) any requirement that Lender retain possession
of, and not dispose of, any such Collateral until after trial or final judgment;
(iv) require Borrower to assemble any or all of the Collateral and make it
available to Lender at one or more places designated by Lender which are
reasonably convenient to Lender and Borrower, and to remove the Collateral to
such locations as Lender may deem advisable; (v) complete the processing,
manufacturing or repair of any Collateral prior to a disposition thereof and,
for such purpose and for the purpose of removal, Lender shall have the right to
use Borrower's premises, vehicles and other Equipment and all other property
without charge; (vi) sell, lease or otherwise dispose of any of the
Collateral, in its condition at the time Lender obtains possession of it or
after further manufacturing, processing or repair, at one or more public or
private sales, in lots or in bulk, for cash, exchange or other property, or on
credit (a "Sale"),
and to adjourn any such Sale from time to time without notice other than oral
announcement at the time scheduled for Sale (and, in connection therewith,
(A) Lender shall have the right to conduct such Sale on any Borrower's
premises without charge, for such times as Lender deems reasonable, on Lender's
premises, or elsewhere, and the Collateral need not be located at the place of
Sale; (B) Lender may directly or through any of its Affiliates purchase or
lease any of the Collateral at any such public disposition, and if permissible
under applicable law, at any private disposition and (C) any Sale of
Collateral shall not relieve Borrower of any liability Borrower may have if any
Collateral is defective as to title, physical condition or otherwise at the time
of sale); (vii) demand payment of and collect any Accounts, Chattel Paper,
Instruments and General Intangibles included in the Collateral and, in
connection therewith, each Borrower irrevocably authorizes Lender to endorse or
sign such Borrower's name on all collections, receipts, Instruments and other
documents, to take possession of and open mail addressed to such Borrower and
remove therefrom payments made with respect to any item of Collateral or
Proceeds thereof and, in Lender's sole discretion, to grant extensions of time
to pay, compromise claims and settle Accounts, General Intangibles and the like
for less than face value; and (viii) demand and receive possession of any
of any Borrower's federal and state income tax returns and the books and records
utilized in the preparation thereof or relating thereto.  Borrower
recognizes that if Borrower fails to perform, observe or discharge any of its
Obligations under this Agreement or any of the Loan Documents, no remedy at law
will provide adequate relief to Lender, and agree that Lender shall be entitled
to temporary and 

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    permanent
injunctive relief in any such case without the necessity of proving actual
damages.  Any notification of intended disposition of any of the
Collateral required by law will be deemed to be a reasonable authenticated
notification of disposition if given at least ten days prior to such disposition
and such notice shall (i) describe Lender and the applicable Borrower(s),
(ii) describe the Collateral that is the subject of the intended
disposition, (iii) state the method of the intended disposition,
(iv) state that the applicable Borrower is entitled to an accounting of the
Obligations and state the charge, if any, for an accounting and (v) state
the time and place of any public disposition or the time after which any private
sale is to be made.  Lender may disclaim any warranties that might
arise in connection with the sale, lease or other disposition of the Collateral
and has no obligation to provide any warranties at such time.  Any
Proceeds of any disposition by Lender of any of the Collateral may be applied by
Lender to the payment of expenses in connection with the Collateral, including
legal expenses and reasonable attorneys' fees, and any balance of such Proceeds
may be applied by Lender toward the payment of such of the Obligations, and in
such order of application, as Lender may from time to time
elect.  Exercise or partial exercise by Lender of one or more of its
rights or remedies shall not be deemed an election or bar Lender from subsequent
exercise or partial exercise of any other rights or remedies.  The
failure or delay of Lender to exercise any rights or remedies shall not operate
as a waiver thereof, but all rights and remedies shall continue in full force
and effect until all of the Obligations have been fully paid and
performed.

     

    
      7.    GENERAL
PROVISIONS.

    

     

    7.1.   Notices.

     

    All
notices to be given under this Agreement shall be in writing and shall be given
either personally, by reputable private delivery service, by regular first-class
mail or certified mail return receipt requested, addressed to Lender or Borrower
at the address shown below, or by facsimile to the facsimile number shown below
or at any other address (or to any other facsimile number) designated in writing
by one party to the other party in the manner prescribed in this
Section 7.1.  All notices shall be deemed to have been given when
received or when delivery is refused by the recipient.

     

    
      (a)    Lender:

    

    

    
      	
              Titan
      Global Holdings, Inc.

            
	
              1700
      Jay Ell Drive Suite 200

            
	
              Richardson,
      Texas 75081

            
	
              Attention:        Bryan
      M. Chance, President & CEO

            
	
              Telephone:      (972)
      470-9100

            
	
              Facsimile:         (972)
      767-3117

            

    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

       

    

    
      (b)    Borrower:

    

    

     IVI
Communications, Inc.

     555
H Street, Suite H

     Eureka,
CA 95501 

     Attn:  Kurt
Jensen

              
  Phone:

                
Facsimile:

     

    7.2.   Severability.

     

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

     

    7.3.   Integration.

     

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

     

    7.4.   Waivers.

     

    The
failure of Lender at any time or times to require Borrower to strictly comply
with any of the provisions of this Agreement or any other Loan Documents shall
not waive or diminish any right of Lender later to demand and receive strict
compliance therewith.  Any waiver of any default shall not waive
or affect any other default, whether prior or subsequent, and whether or not
similar.  None of the provisions of this Agreement or any other loan
document shall be deemed to have been waived by any act or knowledge of Lender
or its agents or employees, but only by a specific written waiver signed by an
authorized officer of Lender and delivered to Borrower.

     

    7.5.   Amendment.

     

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

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

       

    

    7.6.   Time of
Essence.

     

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

     

    7.7.   Benefit of Agreement;
Assignability.

     

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

     

    7.8.   Headings;
Construction.

     

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

     

    7.9.   Governing law; Consent to
Forum, etc.

     

    THIS
AGREEMENT HAS BEEN NEGOTIATED, EXECUTED AND DELIVERED, AND SHALL BE DEEMED TO
HAVE BEEN MADE, IN RICHAREDSON, TEXAS SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.  THE BORROWER HEREBY
CONSENTS AND AGREES THAT THE STATE AND FEDERAL COURTS LOCATED IN
[       ] COUNTY, TEXAS OR ANY STATE IN WHICH
ANY OF THE COLLATERAL IS LOCATED SHALL HAVE NON-EXCLUSIVE JURISDICTION TO HEAR
AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWER AND LENDER PER­TAINING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENTS OR ANY MATTER ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.  EACH BORROWER
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDIC­TION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND WAIVES ANY OBJECTION WHICH SUCH
BORROWER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR
FORUM NON CONVENIENS.  EACH
BORROWER ALSO AGREES THAT ANY CLAIM OR DISPUTE BROUGHT BY SUCH BORROWER AGAINST
LENDER PURSUANT TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY MATTER ARISING
OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT EXCLUSIVELY IN
THE STATE AND FEDERAL COURTS LOCATED IN
[       ] COUNTY, TEXAS.  EACH
BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE IN THE MANNER AND SHALL BE
DEEMED RECEIVED AS SET FORTH IN SECTION 7.1 FOR NOTICES, TO THE EXTENT
PERMITTED BY LAW.  NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO AFFECT THE RIGHT OF LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY LENDER OF ANY JUDGMENT OR
ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO
ENFORCE THE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

       

    

    7.10.   Waiver of Jury Trial,
etc.

     

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

     

    
      8.    LIABILITY

    

     

    8.1.   Notwithstanding any
provisions of this Agreement to the contrary, it is intended that the joint and
several nature of the obligations of Borrower and the liens and security
interests granted by Borrower to secure the obligations, not constitute a "Fraudulent Conveyance" (as
defined below).  Consequently, Lender and Borrower agree that if the
obligations of a Borrower, or any liens or security interests granted by
Borrower securing the obligations would, but for the application of this
sentence, constitute a Fraudulent Conveyance, the obligations of Borrower and
the liens and security interests securing such obligations shall be valid and
enforceable only to the maximum extent that would not cause such obligations or
such lien or security interest to constitute a Fraudulent Conveyance, and the
obligations of Borrower and this Agreement shall automatically be deemed to have
been amended accordingly.  For purposes hereof, "Fraudulent
Conveyance" means a fraudulent conveyance under Section 548 of Chapter 11 of
Title II of the Bankruptcy Code or a fraudulent conveyance or fraudulent
transfer under the applicable provisions of any fraudulent conveyance or
fraudulent transfer law or similar law of any state, nation or other
governmental unit, as in effect from time to time.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

       

    

    8.2    Lender is
hereby authorized, without notice or demand and without affecting the liability
of Borrower hereunder, to, at any time and from time to time, (i) renew,
extend, accelerate or otherwise change the time for payment of, or other terms
relating to  Borrower's obligations or otherwise modify, amend or
change the terms of any promissory note or other agreement, document or
instrument now or hereafter executed by a Borrower and delivered to Lender;
(ii) accept partial payments on Borrower's obligations; (iii) take and
hold security or collateral for the payment of Borrower's obligations hereunder
or for the payment of any guaranties of Borrower's obligations or other
obligations of a Borrower and exchange, enforce, waive and release any such
security or collateral; and (iv) apply such security or collateral and
direct the order or manner of sale thereof as Lender, in its sole discretion,
may determine.  Lender shall have the exclusive right to determine the
time and manner of application of any payments or credits, whether received from
Borrower or any other source, and such determination shall be binding on
Borrower.

     

    [Intentionally
blank]

     

     

     

    
 

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

       

    

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

     

    
      	
              Borrower:

              IVI
      COMMUNICATIONS, INC.

               

              By:
      _________________________

              Kurt Jensen,

                     
      CEO

            	
              Lender:

              TITAN
      GLOBAL HOLDINGS, INC.

               

              By
      _______________________

              Bryan M. Chance,

                     
      President and CEO

            
	 
      	 
      

    

    

     

     

    
      
        
        

      

      
        Exhibit A
- Page 1

        
          

        

      

      
        
        

      

    

     

    Schedule A

     

    Definitions

     

    This
Schedule is an integral part of the Loan and Security Agreement among IVI
COMMUNICATIONS, INC.
and TITAN GLOBAL
HOLDINGS, INC. (the
"Agreement").

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        Exhibit A
- Page 2

        
          

        

      

      
        
        

      

       

    

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

     

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

     

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

     

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

     

    "Obligations"
means all present and future Term Loans, advances, debts, liabilities,
obligations, guaranties, covenants, duties and indebtedness at any time owing by
Borrower or any Borrower to Lender, whether evidenced by this Agreement, any
other Loan Document or otherwise whether arising from an extension of credit,
guaranty, indemnification or otherwise (including all fees, costs and other
amounts which may be owing, whether absolute or contingent, whether due or to
become due, and whether arising before or after the commencement of a proceeding
under the Bankruptcy Code or any similar statute, including all interest,
charges, expenses, fees, attorney's fees and any other sums chargeable to
Borrower under this Agreement or under any other Loan Document.

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        Exhibit A
- Page 3

        
          

        

      

      
        
        

      

    

    Exhibit
A

     

    FORM
OF TERM NOTE

     

    
    

     

    
      	$100,000.00 	
              Richardson,
      TX

            
	 	
              June  ,
      2008

            

    

     

     

    FOR VALUE
RECEIVED, the undersigned ("Borrower"),
hereby unconditionally promise to pay, jointly and severally, to the order of
Titan Global Holdings, Inc. ("Lender"), a
Utah corporation having an address at 1700 Jay Ell Drive, Suite 200, Richardson,
Texas 75081, or at such other place as the holder of this Term Note 
("Term
Note") may from time to time designate in writing, in lawful money of the
United States of America and in immediately available funds, the principal sum
of up to One Hundred Thousand and 00/100 Dollars ($100,000.00), as such
principal amount is set forth on Schedule A Attached
hereto.  Reference is hereby made to the Loan and Security Agreement
among Borrower and Lender of even date herewith (the "Loan
Agreement") for a statement of the terms and conditions under which the
loan evidenced hereby was made and is to be repaid.  This Term Note
evidences a Term Loan described in the Loan
Agreement.  Capitalized terms used herein which are not otherwise
specifically defined herein shall have the meanings ascribed to such terms in
the Loan Agreement.

     

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

     

    Borrower
further promises to pay interest on the outstanding principal amount hereof from
the date hereof until payment in full hereof at the per annum rate as set forth
in the Loan Agreement.  Following the occurrence and during the
continuance of an Event of Default the entire outstanding principal balance of
this Term Note shall, at Lender's option, bear interest until paid in full at a
per annum rate equal to the interest rate applicable to the Term Loan from time
to time in effect plus four percent (4.0%).  Until maturity, interest
on the outstanding principal amount hereof shall be payable in arrears on the
first day of each month, commencing one month after the opening of the first
terminal and on the Maturity Date.  After maturity, whether by
acceleration or otherwise, accrued interest shall be payable on
demand.  Interest as aforesaid shall be charged for the actual number
of days elapsed over a year consisting of three hundred sixty (360) days on the
actual daily outstanding balance hereof.  Changes in the interest rate
provided for herein which are due to changes in the Prime Rate shall be
effective on the date of the change in the Prime Rate.

     

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

     

    
      
        
        

      

      
        Exhibit A
- Page 4

        
          

        

      

      
        
        

      

       

    

    Borrower
may, prepay the outstanding principal balance hereof in whole or in
part.

     

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

     

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

     

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

     

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

     

    
    

     

    
      	 	Borrower: 
	 	 
	 	IVI Communications,
      Inc. 
	 	 
	 	By
      _________________________________ 
	 	     
      Kurt Jensen, CEO 

    

     

     

    
      
        
        

      

      
        Exhibit A
- Page 5

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
A

     

    
    

     

    
      	Principal Loan	Date
	 	 
	$ 
      _____________ 	_____________________________ 
	 	 
	$ 
      _____________  	_____________________________  
	 	 
	$ 
      _____________  	_____________________________  
	 	 
	$ 
      _____________  	_____________________________  
	 	 
	$ 
      _____________  	_____________________________  
	 	 
	$ 
      _____________  	_____________________________  
	 	 
	$ 
      _____________  	_____________________________  
	 	 
	$ 
      _____________  	_____________________________  
	 	 
	$ 
      _____________  	_____________________________  
	 	 
	$ 
      _____________  	_____________________________  

    

     

     

     

    Exhibit A - Page
6

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