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EXHIBIT 10.1

CONSULTING AGREEMENT

This Consulting
Agreement (this “Agreement”) is made as of February 10, 2010 by and between Vycor Medical, Inc., a Delaware
corporation (the “Company”) and Fountainhead Capital Management Limited, an entity registered in Jersey
 (“FCM”) (each a “Party” and collectively referred to hereafter as the
“Parties”).

W I T N E S S E T H:

WHEREAS, the Company is an early-stage business with limited resources to pursue its business plan and strategy.

WHEREAS, FCM has substantial experience in corporate strategic and financial advice and management and has
substantial expertise and contacts which are of value to the Company in managing its business and carrying out its business
plan;

WHEREAS, to facilitate pursuing the Company’s operation and pursuit of the goals stated in its business plan,
the Company desires to engage FCM to provide the services specified in this Agreement;

NOW, THEREFORE, in
consideration of the premises and the mutual covenants herein contained and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree in good faith as
follows:

2.         Services.  The services which FCM shall provide under this Agreement, shall include the
following:

(a)

FCM will familiarize itself to the extent it deems appropriate with the business, operations, financial
condition and prospects of the Company and assist in developing an overall strategic plan;

(b)

At the request of the Company’s management, FCM will provide strategic advisory services relative to the
achievement of the Company’s business plan;

(c)

FCM will assist the Company on the preparation of budgets and strategic plans and assist in the analysis and
negotiation of proposed contractual and other transactions;

(d)

FCM will assist in the
identification and qualifying of potential investors including institutional funds which might have an interest in evaluating participation in financing transactions with the Company;

(e)

FCM will assist the Company in the analysis, negotiation, structuring and if possible implementation of merger,
acquisition and corporate finance transactions;

(f)

At the request of the Company’s management,
FCM will provide advisory services related to corporate
governance and matters related to the maintenance of the Company’s status as a publicly-reporting company, and will assist the
Company in satisfying various corporate compliance matters; 

(g)

At the request of the Company’s management,
FCM will assist the Company in negotiations with Company
creditors; and

(h)

At the request of the Company’s management,
FCM will assist the company with the selection and management
of financial, legal, investor relations and other external advisors.
 For the avoidance of doubt, under this Consulting Agreement FCM will not
have the authority to bind the Company.

FCM is not a licensed
broker-dealer.  Under no circumstances will FCM engage in any activities which would require licensure as a broker-dealer or
otherwise.

3.         Term and
Termination. The term of this engagement shall be for a period of two (2) years commencing with the date of this Agreement and
may be extended upon the mutual written agreement of the Parties.  Vycor has the right to terminate this agreement one (1) year
commencing with the date of this Agreement if the Funding (as defined below) has not occurred by that date.

4.         Consideration.  In consideration for FCM providing the services set forth in Section 1 above, the Company will pay to
FCM.

(a)

Signing Warrants. Upon the signing of this agreement, the Company shall issue to FCM warrants to purchase 39,063,670 shares of the
Company’s Common Stock, at a price of $0.0125 per share.

(b)

Success
Warrants. Should new funding totaling $3 million in aggregate in Common Stock of Vycor or in securities convertible into Common
Stock of Vycor at a price of no less than $0.0125 per share of Common Stock be closed during the term of this agreement (the
“Funding”), then the Company shall issue to FCM additional warrants to purchase 39,063,670 shares of the Company’s
Common Stock, at a price of $0.0125 per share.

(c)

Monthly Retainer. Commencing February 10, 2010 the Company shall pay to FCM a
retainer of $8,500. This monthly retainer shall be accrued and paid out to FCM at the option of FCM as follows: (i) in Vycor stock
at any time at $0.0125 per share; or (ii) in cash following the closing of a fundraising of $1.5 million or on the sale of the
Company

(d)

Out of Pocket Expenses. Commencing February 10, 2010
 the Company shall reimburse FCM for all reasonable
out-of-pocket expenses directly

incurred in the provision
of the services set forth in Section 1 above, to include expenses incurred
during FCM’s visit to Vycor commencing January 24, 2010. This reimbursement shall be accrued and paid out to FCM at the option
of FCM as follows: (i) in Vycor stock at any time at $0.0125 per share; or (ii) in cash following the closing of a fundraising of
$1.5 million or on the sale of the Company
 

5.         Notices.  All notices, requests, demands, claims, and other
communications hereunder shall be in writing.  Any notice, request, demand, claim or other communication hereunder shall be
deemed duly delivered four business days after it is sent by registered or certified mail, return receipt requested, postage
prepaid, or one business day after it is sent for next business day delivery via a reputable overnight courier service, in each case
to the intended recipient as set forth below:

		
	If to the Company:

Vycor Medical, Inc.
80 Orville Dr.
Suite 100
Bohemia, NY 11716

	Copy to:

Law Offices of Robert Diener
122 Ocean Park
 Boulevard
Suite 307
Santa Monica, California 90405

Attention: Robert Diener

	If to the FCM:

Fountainhead Capital Management Limited
Portman House

Hue Street, St. Helier
Jersey JE4 5RP

Attention: Richard Breeze

	

Any Party
may give any notice, request, demand, claim or other communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail or electronic mail), but no such notice, request, demand, claim
or other communication shall be deemed to have been duly given unless and until it actually is received by the party for whom it is
intended.  Any party may change the address to which notices, requests, demands, claims, and other communications hereunder are
to be delivered by giving the other party notice in the manner herein set forth.

6.         Miscellaneous.

(a)

Entire Agreement.  This Agreement constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements or 

representations by or among the Parties, written or oral, with respect to the subject matter
hereof.

(b)

Succession and Assignment.  This Agreement shall be binding upon and inure to the benefit of the Parties
named herein and their respective successors and permitted assigns.  No Party may assign either this Agreement or any of its
rights, interests or obligations hereunder without the prior written approval of the other party.

(c)

Counterparts and Facsimile Signature.  This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the same instrument.  This Agreement may
be executed by facsimile signature.

(d)

Headings.  The section headings contained in this Agreement are inserted for convenience only and shall
not affect in any way the meaning or interpretation of this Agreement.

(e)

Governing Law.  This Agreement shall be governed by and construed in accordance with the internal laws of
the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or
any other jurisdiction) that would cause the application of laws of any jurisdictions other than those of the State of New York.
 The Parties hereby consent to the exclusive jurisdiction of the courts of the State of New York located in the Borough of
Manhattan and the United States District Court for the Southern District of New York for all disputes arising under this
Agreement.

(f)

Amendments and Waivers.  The Parties may mutually amend any provision of this Agreement at any time during
the term of this Agreement prior to the termination of this Agreement.  No amendment of any provision of this Agreement shall
be valid unless the same shall be in writing and signed by the Parties.  No waiver of any right or remedy hereunder shall be
valid unless the same shall be in writing and signed by the party giving such waiver.  No waiver by any party with respect to
any default, misrepresentation or breach of warranty or covenant hereunder shall be deemed to extend to any prior or subsequent
default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any
prior or subsequent such occurrence.

(g)

Severability.  Any term or provision of this Agreement that is invalid or unenforceable in any situation
in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other situation or in any other jurisdiction.  If the final judgment
of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the Parties agree that
the court 

making the determination of invalidity or unenforceability shall have the power to limit the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or unenforceable ter m or provision, and this
Agreement shall be enforceable as so modified.

(h)

Construction.  The language used in this Agreement shall be deemed to be the language chosen by the
Parties to express their mutual intent, and no rule of strict construction shall be applied against any party.  Any reference
to any federal, state, local or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise.

(i)

Remedies.  FCM shall be entitled to enforce its rights under this Agreement specifically to recover
damages by reason of any breach of any provision or term of this Agreement and to exercise all other rights existing in its favor.
 In the event of any dispute under this Agreement, the prevailing party shall be entitled to recover its costs incurred in
connection with the resolution thereof, including reasonable attorneys fees. 

IN WITNESS WHEREOF, the parties hereto
have duly executed this Agreement as an instrument under seal as of the date first written above.  

Vycor Medical, Inc.

By:____________________________

Name:  Heather N. Vinas

Title:

President

Fountainhead Capital Management Limited

By:____________________________

Name:  Gisele La Miere

Title:

Director

By:____________________________

Name:  Carole Dodge

Title:

Directora6181594ex101.htm

    Exhibit
10.1

     

     

    LOAN
AND SECURITY AGREEMENT

     

    by
and among

     

    HERCULES
TECHNOLOGY GROWTH CAPITAL, INC.

     

    as
Borrower,

     

    THE
LENDERS PARTY HERETO FROM TIME TO TIME

     

    as
Lenders,

     

    and

     

    UNION
BANK, N.A.

     

    as
Agent and a Lender

     

    

     

    February
10, 2010

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      TABLE
OF CONTENTS

       

    

    
      
        
          	 	 	 	

                  Page

                
	 	 	 	 
	
                  
1.

                	AMOUNT
      AND TERMS OF CREDIT	
                  1

                
	 	 	 
	
                   

                	

                  1.1

                	
                  Loans

                	
                  1

                
	
                   

                	

                  1.2

                	
                  Interest
      Rate Election Provisions

                	
                  2

                
	
                   

                	

                  1.3

                	
                  Payment
      of Interest

                	
                  3

                
	
                   

                	

                  1.4

                	
                  Maximum
      Rate of Interest

                	
                  4

                
	
                   

                	

                  1.5

                	
                  Fees

                	
                  4

                
	
                   

                	

                  1.6

                	
                  Repayment
      and Prepayment

                	
                  4

                
	
                   

                	

                  1.7

                	
                  Term

                	
                  4

                
	
                   

                	

                  1.8

                	
                  [Reserved]

                	
                  4

                
	
                   

                	

                  1.9

                	
                  Notes
      and Accounting

                	
                  5

                
	
                   

                	

                  1.10

                	
                  Manner
      of Payment

                	
                  5

                
	
                   

                	

                  1.11

                	
                  Withholding
      Taxes

                	
                  5

                
	
                   

                	

                  1.12

                	
                  Application
      of Payments

                	
                  7

                
	
                   

                	

                  1.13

                	
                  Use
      of Proceeds

                	
                  7

                
	
                   

                	

                  1.14

                	
                  All
      Obligations to Constitute One Obligation

                	
                  7

                
	
                   

                	

                  1.15

                	
                  Authorization
      to Make Loans

                	
                  7

                
	
                   

                	

                  1.16

                	
                  Authorization
      to Debit or Charge Accounts

                	
                  8

                
	
                   

                	

                  1.17

                	
                  Increase
      of Commitments and Maximum Amount; Termination and Reduction of
      Commitments

                	
                  8

                
	
                   

                	

                  1.18

                	
                  Bank
      Products

                	
                  9

                
	 	 	 	 
	
                  2.

                	CONDITIONS
      PRECEDENT	
                  10

                
	 	 	 
	
                   

                	

                  2.1

                	
                  Conditions
      Precedent to Closing

                	
                  10

                
	
                   

                	

                  2.2

                	
                  Further
      Conditions to the Loans

                	
                  11

                
	 	 	 	 
	
                  

                    3.

                  

                	REPRESENTATIONS,
      WARRANTIES AND AFFIRMATIVE COVENANTS	
                  12

                
	 	 	 	 
	
                   

                	

                  3.1

                	
                  Corporate
      Existence; Compliance with Law

                	
                  12

                
	
                   

                	

                  3.2

                	
                  Executive
      Offices; Corporate or Other Names; Conduct of Business

                	
                  12

                
	
                   

                	

                  3.3

                	
                  Corporate
      Power; Authorization; Enforceable Obligations

                	
                  13

                
	
                   

                	

                  3.4

                	
                  Financial
      Statements; Books and Records

                	
                  13

                
	
                   

                	

                  3.5

                	
                  Material
      Adverse Change

                	
                  13

                
	
                   

                	

                  3.6

                	
                  Ownership
      of Property; Liens

                	
                  13

                
	
                   

                	

                  3.7

                	
                  Employment
      Agreements

                	
                  14

                
	
                   

                	

                  3.8

                	
                  Ventures,
      Subsidiaries and Affiliates; Outstanding Stock and
      Indebtedness

                	
                  14

                
	
                   

                	

                  3.9

                	
                  Government
      Regulation

                	
                  14

                
	
                   

                	

                  3.10

                	
                  Margin
      Regulations

                	
                  14

                
	
                   

                	

                  3.11

                	
                  Taxes

                	
                  14

                
	
                   

                	

                  3.12

                	
                  ERISA

                	
                  15

                
	
                   

                	

                  3.13

                	
                  Litigation

                	
                  15

                
	
                   

                	

                  3.14

                	
                  Intellectual
      Property

                	
                  16

                
	
                   

                	

                  3.15

                	
                  Full
      Disclosure

                	
                  16

                
	
                   

                	

                  3.16

                	
                  Hazardous
      Materials

                	
                  16

                
	
                   

                	

                  3.17

                	
                  Insurance

                	
                  16

                
	
                   

                	

                  3.18

                	
                  Eligible
      Notes Receivable

                	
                  17

                
	
                   

                	

                  3.19

                	
                  Guaranteed
      Indebtedness

                	
                  18

                
	
                   

                	

                  3.20

                	
                  Payment
      of Obligations

                	
                  19

                
	
                   

                	

                  3.21

                	
                  Conduct
      of Business

                	
                  19

                

        

         

         

        
          
            i

          

          
            
            

            
              

            

          

          
            
            

          

        

        
           

          TABLE
OF CONTENTS

          (continued)

           

        

        
          
            	 	 	 	

                    Page

                  
	 	 	 	 
	
                     

                  	

                    3.22

                  	
                    Further
      Assurances; Other Matters

                  	
                    19

                  
	
                     

                  	

                    3.23

                  	
                    Collections
      and Proceeds of Collateral

                  	
                    20

                  
	
                     

                  	

                    3.24

                  	
                    Financial
      and Portfolio Covenants

                  	
                    21

                  
	
                     

                  	

                    3.25

                  	
                    [Reserved]

                  	
                    21

                  
	
                     

                  	3.26	
                    OFAC

                  	
                    21

                  
	
                     

                  	3.27	
                    Patriot
      Act

                  	
                    22

                  
	
                     

                  	

                    3.28

                  	
                    Solvency

                  	
                    22

                  
	
                     

                  	

                    3.29

                  	
                    Material
      Contracts

                  	
                    22

                  
	
                     

                  	

                    3.30

                  	
                    Investment
      Company; RIC Status

                  	
                    22

                  
	
                     

                  	

                    3.31

                  	
                    Not
      Plan Assets

                  	
                    22

                  
	
                     

                  	

                    3.32

                  	
                    Servicing
      of Pledged Notes Receivable and Pledged Loan Paper

                  	
                    22

                  
	
                     

                  	

                    3.33

                  	
                    Post-Closing
      Matters

                  	
                    24

                  
	 	 	 	 
	
                    4.

                  	NEGATIVE
      COVENANTS	
                    25

                  
	 	 	 
	
                     

                  	

                    4.1

                  	
                    Transfers

                  	
                    25

                  
	
                     

                  	

                    4.2

                  	
                    Changes
      to Name, Locations

                  	
                    25

                  
	
                     

                  	

                    4.3

                  	
                    Changes
      to Pledged Loan Paper

                  	
                    25

                  
	
                     

                  	

                    4.4

                  	
                    Restrictions
      on Fundamental Changes

                  	
                    25

                  
	
                     

                  	

                    4.5

                  	
                    Loans
      and Investments

                  	
                    25

                  
	
                     

                  	

                    4.6

                  	
                    Indebtedness

                  	
                    26

                  
	
                     

                  	

                    4.7

                  	
                    Liens
      and Encumbrances

                  	
                    26

                  
	
                     

                  	

                    4.8

                  	
                    Restricted
      Payments

                  	
                    26

                  
	
                     

                  	

                    4.9

                  	
                    Hedge
      Agreements

                  	
                    26

                  
	
                     

                  	

                    4.10

                  	
                    [Reserved]

                  	
                    26

                  
	
                     

                  	4.11	
                    Transactions
      with Affiliates

                  	
                    26

                  
	
                     

                  	

                    4.12

                  	
                    Collateral
      with Bailees

                  	
                    26

                  
	
                     

                  	

                    4.13

                  	
                    Material
      Contracts; Cancellation of Indebtedness

                  	
                    26

                  
	
                     

                  	

                    4.14

                  	
                    ERISA

                  	
                    27

                  
	
                     

                  	

                    4.15

                  	
                    Accounting
      Methods

                  	
                    27

                  
	
                     

                  	

                    4.16

                  	
                    Limitations
      on Subsidiaries

                  	
                    27

                  
	 	 	 	 
	
                    5.

                  	FINANCIAL
      REPORTS	
                    27

                  
	 	 	 
	
                     

                  	

                    5.1

                  	
                    Reports
      and Notices

                  	
                    27

                  
	
                     

                  	

                    5.2

                  	
                    Other
      Reports

                  	
                    28

                  
	
                     

                  	

                    5.3

                  	
                    IntraLinks/IntraAgency

                  	
                    29

                  
	 	 	 	 
	
                    6.

                  	CREATION
      OF SECURITY INTEREST	
                    29

                  
	 	 	 
	
                     

                  	

                    6.1

                  	
                    Grant
      of Security Interest; Assignment

                  	
                    29

                  
	
                     

                  	

                    6.2

                  	
                    Agent’s
      Rights

                  	
                    30

                  
	
                     

                  	

                    6.3

                  	
                    Power
      of Attorney

                  	
                    31

                  
	
                     

                  	

                    6.4

                  	
                    Grant
      of License to Use Intellectual Property

                  	
                    33

                  
	
                     

                  	

                    6.5

                  	
                    Chattel
      Paper

                  	
                    33

                  
	
                     

                  	

                    6.6

                  	
                    Reinstatement

                  	
                    33

                  
	 	 	 	 
	
                    7.

                  	EVENTS
      OF DEFAULT; RIGHTS AND REMEDIES	
                    34

                  
	 	 	 
	
                     

                  	

                    7.1

                  	
                    Events
      of Default

                  	
                    34

                  

          

           

          
            
              ii

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          
            TABLE
OF CONTENTS

            (continued)

             

          

          
            	 	 	 	

                    Page

                  
	 	 	 	 
	
                     

                  	

                    7.2

                  	
                    Remedies

                  	
                    36

                  
	
                     

                  	

                    7.3

                  	
                    Waivers
      by Borrower

                  	
                    37

                  
	
                     

                  	

                    7.4

                  	
                    Proceeds

                  	
                    37

                  
	 	 	 	 
	
                    8.

                  	ASSIGNMENT
      AND PARTICIPATIONS; APPOINTMENT OF AGENT	
                    37

                  
	 	 	 
	
                     

                  	

                    8.1

                  	
                    Assignment
      and Participations

                  	
                    37

                  
	
                     

                  	

                    8.2

                  	
                    Appointment
      of Agent

                  	
                    40

                  
	
                     

                  	

                    8.3

                  	
                    Delegation
      of Duties

                  	
                    41

                  
	
                     

                  	

                    8.4

                  	
                    Agent’s
      Reliance, Etc

                  	
                    41

                  
	
                     

                  	

                    8.5

                  	
                    Bank
      and Affiliates

                  	
                    41

                  
	
                     

                  	

                    8.6

                  	
                    Lender
      Credit Decision

                  	
                    41

                  
	
                     

                  	

                    8.7

                  	
                    Indemnification

                  	
                    42

                  
	
                     

                  	

                    8.8

                  	
                    Successor
      Agent

                  	
                    42

                  
	
                     

                  	

                    8.9

                  	
                    Set-off
      and Sharing of Payments

                  	
                    42

                  
	
                     

                  	

                    8.10

                  	
                    Settlement
      Procedures; Non-Funding Lenders; Information; Actions in
      Concert

                  	
                    43

                  
	
                     

                  	8.11	
                    Concerning
      the Collateral and the Related Loan Documents

                  	
                    45

                  
	
                     

                  	

                    8.12

                  	
                    Agency
      for Perfection

                  	
                    46

                  
	
                     

                  	

                    8.13

                  	
                    Legal
      Representation of Agent

                  	
                    46

                  
	 	 	 	 
	
                    9.

                  	SUCCESSORS
      AND ASSIGNS	
                    46

                  
	 	 	 
	
                    10.

                  	YIELD
      PROTECTION	
                    46

                  
	 	 	 
	
                     

                  	

                    10.1

                  	
                    LIBOR
      Basis Determination

                  	
                    46

                  
	
                     

                  	

                    10.2

                  	
                    Illegality

                  	
                    46

                  
	
                     

                  	

                    10.3

                  	
                    Increased
      Costs

                  	
                    47

                  
	
                     

                  	

                    10.4

                  	
                    Effect
      On Other Loans

                  	
                    48

                  
	
                     

                  	

                    10.5

                  	
                    Capital
      Adequacy

                  	
                    48

                  
	
                     

                  	

                    10.6

                  	
                    Federal
      Reserve System/Wire Transfers

                  	
                    48

                  
	
                     

                  	

                    10.7

                  	
                    Replacement
      of Lender in Respect of Increased Costs

                  	
                    48

                  
	 	 	 	 
	
                    11.

                  	MISCELLANEOUS	
                    49

                  
	 	 	 
	
                     

                  	

                    11.1

                  	
                    Complete
      Agreement; Modification of Agreement

                  	
                    49

                  
	
                     

                  	

                    11.2

                  	
                    Amendments
      and Waivers

                  	
                    49

                  
	
                     

                  	

                    11.3

                  	
                    Reimbursement
      and Expenses

                  	
                    51

                  
	
                     

                  	

                    11.4

                  	
                    Indemnity

                  	
                    52

                  
	
                     

                  	

                    11.5

                  	
                    No
      Waiver

                  	
                    52

                  
	
                     

                  	

                    11.6

                  	
                    Severability

                  	
                    53

                  
	
                     

                  	

                    11.7

                  	
                    Conflict
      of Terms

                  	
                    53

                  
	
                     

                  	

                    11.8

                  	
                    Notices

                  	
                    53

                  
	
                     

                  	

                    11.9

                  	
                    Section
      Titles

                  	
                    54

                  
	
                     

                  	

                    11.10

                  	
                    Counterparts

                  	
                    54

                  
	
                     

                  	

                    11.11

                  	
                    Time
      of the Essence

                  	
                    54

                  
	
                     

                  	

                    11.12

                  	
                    GOVERNING
      LAW; VENUE

                  	
                    54

                  
	
                     

                  	

                    11.13

                  	
                    DISPUTES

                  	
                    55

                  
	
                     

                  	

                    11.14

                  	
                    Confidentiality

                  	
                    55

                  

          

        

      

      

      
        
          iii

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

     

    INDEX
OF EXHIBITS AND SCHEDULES

     

    
      	
              Exhibit A

            	
              Form
      of Revolving Loan Note

            

    

    
      	
              Exhibit B

            	
              Form
      of Loan Supplement

            

    

    
      	
              Exhibit C

            	
              Form
      of Loan Request

            

    

    
      	
              Exhibit D

            	
              Form
      of Notice of
Continuation/Conversion

            

    

    
      	
              Exhibit E

            	
              Form
      of Borrowing Base Certificate

            

    

    
      	
              Exhibit F

            	
              Form
      of Compliance Certificate

            

    

    
      	
              Exhibit G

            	
              Form
      of Assignment and Assumption
Agreement

            

    

    
      	
              Exhibit H

            	
              Form
      of Accession Agreement

            

    

    

    
      	
              Schedule A

            	
              Definitions
      and Rules of Construction

            

    

    
      	
              Schedule B

            	
              Schedule of
      Documents

            

    

    
      	
              Schedule C

            	
              Schedule of
      Lenders and Revolving Loan
Commitments

            

    

    
      	
              Schedule D

            	
              Agent’s
      and Lenders’ Wire Transfer Information for
  Payments

            

    

    

    
      	
              Schedule 3.2

            	
              Executive
      Offices; Corporate or Other Names; Conduct of
  Business

            

    

    
      	
              Schedule 3.6

            	
              Bank
      Accounts

            

    

    
      	
              Schedule 3.7

            	
              Employment
      Agreements

            

    

    
      	
              Schedule 3.8

            	
              Ventures,
      Subsidiaries and Affiliates; Outstanding Stock and
      Indebtedness

            

    

    
      	
              Schedule 3.11

            	
              Taxes

            

    

    
      	
              Schedule 3.12

            	
              ERISA
      Plans

            

    

    
      	
              Schedule 3.13

            	
              Litigation

            

    

    
      	
              Schedule 3.14

            	
              Intellectual
      Property

            

    

    
      	
              Schedule 3.16

            	
              Hazardous
      Materials

            

    

    
      	
              Schedule 3.29

            	
              Material
      Contracts

            

    

    
      	
              Schedule 4.6

            	
              Permitted
      Indebtedness

            

    

    
      	
              Schedule 4.7

            	
              Permitted
      Liens

            

    

     

    
      
        iv

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    LOAN AND SECURITY
AGREEMENT

     

    THIS LOAN AND SECURITY
AGREEMENT (as amended, restated, supplemented or otherwise modified and
in effect from time to time, this “Agreement”), is
entered into as of February 10, 2010, by and among HERCULES TECHNOLOGY GROWTH
CAPITAL, INC., a Maryland corporation (“Borrower”), UNION
BANK, N.A. (in its individual capacity, “Bank”) for itself as
a Lender and as Agent for Lenders (in such capacity, the “Agent”), and the
other Lenders party hereto from time to time.

     

    Capitalized
terms used in this Agreement shall have the meanings ascribed to them in Schedule A
and, for purposes of this Agreement and the other Loan Documents, the rules of
construction set forth in Schedule A
shall govern.

     

    In
consideration of the mutual covenants and agreements set forth in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Borrower, Agent and Lenders agree as
follows:

     

    1. AMOUNT AND TERMS OF
CREDIT

     

    1.1 Loans.

     

    (a) Advances.  Subject
to the terms and conditions of this Agreement, each Lender shall extend its Pro
Rata Share of Loans to Borrower from time to time until the Borrowing
Termination Date.  The aggregate amount of Loans to Borrower
outstanding at any time shall not exceed the Borrowing Availability at such
time.  Prior to the Borrowing Termination Date, Borrower may repay at
any time any outstanding Loans and any amounts so repaid may be reborrowed, up
to Net Borrowing Availability.  Loans shall be evidenced by, and
repayable in accordance with, the terms of this Agreement, and, if applicable,
the Revolving Loan Notes.  The Pro Rata Share of the Loans of any
Lender shall not at any time exceed its separate Commitment.  The
obligations of each Lender hereunder shall be several and not
joint.

     

    (b) Loan Accounts; Revolving
Loan Notes.

     

    (1) Loan Accounts; Noteless
Transaction.  The Principal Debt owed to each Lender shall be
evidenced by one or more loan accounts or records maintained by such Lender or
by Agent in the ordinary course of business.  Regardless of whether a
Revolving Loan Note is issued with respect to such Principal Debt, Borrower
absolutely and unconditionally promises to pay to the order of each Lender, in
lawful money of the United States of America, the aggregate unpaid Principal
Amount owed to such Lender, together with interest thereon in accordance with
the terms hereof.  The loan accounts or records maintained by Agent
(including, without limitation, the Register) and each Lender shall be
conclusive evidence absent manifest error of the amount of the Loans made to
Borrower from each Lender under this Agreement and the interest and principal
payments thereon.  Any failure to so record or any error in doing so
shall not, however, limit or otherwise affect the obligation of Borrower under
the Loan Documents to pay any amount owing with respect to the
Obligations.  In the event of any conflict between the accounts and
records maintained by any Lender and the accounts and records of Agent in
respect of such matters, the accounts and records of such Lender shall control
absent manifest error.

     

    (2) Revolving Loan
Notes.  Upon the request of any Lender made through Agent, the
Principal Debt owed to such Lender may be evidenced by a Revolving Loan Note
dated as of the Closing Date (or such other date on which a Lender may become a
party hereto in accordance with this Agreement) and being completed with
appropriate insertions.

     

    
      
        
        

      

      
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    (3) Loan
Reserves.  Anything to the contrary in this Section 1.1
notwithstanding, Agent shall have the right to establish reserves in such
amounts, and with respect to such matters, as Agent in its Permitted Discretion
shall deem necessary or appropriate, against the Borrowing Base, including
reserves with respect to (i) sums that Borrower is required to pay (such as
taxes, assessments, insurance premiums, or, in the case of leased assets, rents
or other amounts payable under such leases) and has failed to pay under any
Section of this Agreement or any other Loan Document, (ii) amounts owing by
Borrower or any of its Subsidiaries to any Person to the extent secured by a
Lien on, or trust over, any of the Collateral, which Lien or trust, in the
Permitted Discretion of Agent likely would have a priority superior to the
Agent’s Liens (such as Liens or trusts in favor of landlords, warehousemen,
carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for
ad valorem, excise, sales, or other taxes where given priority under applicable
law) in and to such item of the Collateral, (iii) the valuation of any Eligible
Note Receivable, the Collateral securing any Eligible Note Receivable, or other
Collateral, and (iv) the aggregate amount of unfunded commitments of Borrower to
the Account Debtors under Loan Paper included in the Borrowing Base (except that
any such reserves referred to in this clause (iv) shall not limit the Borrower’s
ability to fund such commitments to such Account Debtors).  So long as
no Default or Event of Default has occurred and is continuing, Agent shall first
notify and attempt to discuss with Borrower any such reserve that Agent proposes
to establish unless Agent, in its Permitted Discretion, believes that exigent
circumstances justify the immediate establishment of such reserve.

     

    (c) Overadvances.  Borrower
shall immediately repay any Overadvance.  Overadvances constitute
Obligations that are secured by the Collateral and entitled to all of the
benefits of the Loan Documents.

     

    (d) Request and
Disbursement.  Borrower shall give to Agent irrevocable written
notice in the form of Exhibit C
(or telephonic notice confirmed in a writing in the form of Exhibit C)
of each Loan requested hereunder (a “Loan Request”) no
later than 10:00 a.m. (California time), (a) one (1) Business Day prior to the
proposed Drawdown Date of any Reference Rate Loan and (b) three (3) Business
Days prior to the proposed Drawdown Date of any LIBOR Loan.  Each Loan
Request shall, among other things, specify (1) the proposed Drawdown Date of the
Loan, which shall be a Business Day, (2) the principal amount of the Loan, (3)
whether it is to be a Reference Rate Loan or a LIBOR Loan, and (4) the LIBOR
Loan Period, if applicable.  Any notice in connection with a requested
Loan under this Agreement that is received by Agent after 10:00 a.m. (California
time) on any Business Day, or at any time on a day that is not a Business Day,
shall be deemed received by Agent on the next Business Day.  Each Loan
Request shall be irrevocable and binding on Borrower and shall obligate Borrower
to accept the Loan requested from the Lenders on the proposed Drawdown
Date.  Notwithstanding anything to the contrary contained herein, the
Lenders shall not be required to purchase United States Dollar deposits in the
London interbank market or other applicable LIBOR rate market to fund any LIBOR
Loan, but the provisions hereof shall be deemed to apply as if the Lenders had
purchased such deposits to fund the LIBOR Loan.

     

    1.2 Interest Rate Election
Provisions.

     

    (a) Any Loan
shall, at the option of Borrower, be made either as a Reference Rate Loan or as
a LIBOR Loan; provided, that if a
Default or Event of Default has occurred and is continuing, all Loans advanced
or continued thereafter shall be made as Reference Rate Loans.  If
Borrower fails to give notice to Agent specifying whether any LIBOR Loan is to
be repaid or reborrowed on a Payment Date, such LIBOR Loan shall be repaid and
then reborrowed as a Reference Rate Loan on the Payment
Date.  Borrower shall give to Agent irrevocable notice of a request
for a LIBOR Loan by telephone or facsimile transmission not later than three (3)
Business Days prior to the date of the proposed LIBOR Loan.  Agent
shall determine the applicable LIBOR Basis as of the second Business Day prior
to the date of the requested LIBOR Loan.  Each determination by Agent
of a LIBOR Basis shall, absent manifest error, be deemed final, binding and
conclusive upon Borrower.  The LIBOR Loan Period for each LIBOR Loan
shall be fixed at one, two or three months.  With respect to LIBOR
Loans, (i) each LIBOR Loan shall be in a principal amount of not less than
$1,000,000 and in an integral multiple of $500,000, and (ii) at no time shall
there be more than five (5) LIBOR Loans outstanding.

     

    
      
        
        

      

      
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    (b) At least
three (3) Business Days prior to each Payment Date for a LIBOR Loan, Borrower
shall give irrevocable written notice in the form of Exhibit D
(a “Notice of
Continuation/ Conversion”) to Agent specifying whether all or a portion
of such LIBOR Loan outstanding on such Payment Date (i) is to be repaid and then
reborrowed in whole or in part as a new LIBOR Loan, in which case such notice
shall also specify the LIBOR Loan Period that Borrower shall have selected for
such new LIBOR Loan; provided, that if a
Default or Event of Default has occurred and is continuing, then Borrower shall
not have the option to repay and then reborrow such LIBOR Loan as a new LIBOR
Loan, (ii) is to be repaid and then reborrowed in whole or in part as a
Reference Rate Loan, or (iii) is to be repaid and not reborrowed; provided, that any
such reborrowings described in clauses (i) and (ii) above shall be in a
principal amount of not less than $1,000,000 and in an integral multiple of
$500,000.  Upon such Payment Date such LIBOR Loan will, subject to the
provisions of this Agreement, be so repaid and, as applicable,
reborrowed.

     

    1.3 Payment of
Interest.

     

    (a) Loans.  Interest
on Loans shall be payable as follows:

     

    (1) Reference Rate
Loans.  Interest on each outstanding Loan made as or converted
into a Reference Rate Loan shall be computed for the actual number of days
elapsed on the basis of a year of 360 days and shall be payable to Agent, for
the ratable benefit of Lenders, in arrears (i) on the first Business Day of each
calendar month after the Closing Date, (ii) on the Commitment Maturity Date, and
(iii) if any interest accrues or remains payable after the Commitment Maturity
Date or during the continuance of an Event of Default, upon demand by
Agent.  Interest shall accrue and be payable on each such Reference
Rate Loan at a per annum interest rate equal to the Reference Rate plus the
Applicable Reference Rate Margin.

     

    (2) LIBOR
Loans.  Interest on each outstanding Loan made as or converted
into a LIBOR Loan shall be computed for the actual number of days elapsed on the
basis of a year of 360 days and shall be payable to Agent, for the ratable
benefit of Lenders, in arrears (i) on the last day of the applicable LIBOR Loan
Period in the case of any LIBOR Loan with a LIBOR Loan Period of one, two or
three months, (ii) on the Commitment Maturity Date, and (iii) if any interest
accrues or remains payable after the Commitment Maturity Date or during the
continuance of an Event of Default, upon demand by Agent.  Interest
shall accrue and be payable on each Loan made as a LIBOR Loan at a per annum
interest rate equal to the LIBOR Basis applicable to such LIBOR Loan plus the Applicable
LIBOR Margin.

     

    (b) Default
Rate.  Upon the occurrence and during the continuance of an
Event of Default, interest on all outstanding Obligations shall, upon the
election of Agent (or upon the written request of Requisite Lenders), confirmed
by written notice from Agent to Borrower, accrue and be payable at the Default
Rate.  Interest accruing at the Default Rate shall be payable to
Agent, for the ratable benefit of Lenders, on demand and in any event on the
Commitment Maturity Date.  Agent shall not be required to (i)
accelerate the maturity of the Loans, or (ii) exercise any other rights or
remedies under the Loan Documents, in order to charge the Default
Rate.  Upon the occurrence and during the continuance of an Event of
Default specified in Sections 7.1(e), (f) or (g), the interest rate shall
be increased automatically to the Default Rate without the necessity of any
action by Agent or any Lender.

     

    
      
        
        

      

      
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    1.4 Maximum Rate of
Interest.  In no event shall the aggregate of all interest on
the Obligations charged or collected pursuant to the terms of this Agreement or
pursuant to the Revolving Loan Notes exceed the highest rate permissible under
any law that a court of competent jurisdiction shall, in a final determination,
deem applicable.  In the event that such a court determines that Agent
or Lenders have charged or received interest under this Agreement or the
Revolving Loan Notes in excess of the highest applicable rate, the rate in
effect under this Agreement and the Revolving Loan Notes shall automatically be
reduced to the maximum rate permitted by Applicable Law, and Agent or Lenders
shall promptly apply such excess to reduce the principal balance of the
Obligations, or if the principal balances of the Obligations owing have been
paid in full, Agent or Lenders shall promptly apply such excess to reduce any
other Obligations, and if all Obligations have been paid in full, then Agent or
Lenders shall refund to Borrower any interest received by them in excess of the
maximum lawful rate; provided, that if at any time thereafter the rate of
interest payable hereunder is less than the highest applicable rate, Borrower
shall continue to pay interest hereunder at the highest applicable rate, until
such time as the total interest received by Agent or Lenders from the making of
Loans hereunder is equal to the total interest that Agent or Lenders would have
received had the interest rate payable hereunder been (but for the operation of
this Section 1.4)
the interest rate payable since the Closing Date as otherwise provided in this
Agreement.  It is the intent of this Agreement that Borrower not pay
or contract to pay, and that Lenders not receive or contract to receive,
directly or indirectly, interest in excess of that which may be paid by Borrower
under Applicable Law.

     

    1.5 Fees.  Borrower
shall pay to Agent:

     

    (a) Unused Line
Fee.  The Unused Line Fee, for the account of each Lender in
accordance with its daily average Pro Rata Share, for the previous Fiscal
Quarter payable in arrears on the first Business Day of each Fiscal Quarter,
beginning on the first Business Day of the Fiscal Quarter following the month in
which the Closing Date occurs, and on the Borrowing Termination
Date.  Such fee shall be fully-earned as of the last day of each
Fiscal Quarter and shall be nonrefundable.

     

    (b) Audit Fees and
Expenses.  The reasonable out-of-pocket expenses for each
financial analysis and field examination of Borrower and the Collateral
performed by Agent or its agents, plus any other out-of-pocket fees and expenses
incurred by Agent with respect to any field examination of Borrower or the
Collateral, when and as incurred.  Such fees shall be fully earned
when due and non-refundable when paid; provided that so long as no Event of
Default has occurred and is continuing, Borrower will not be charged for more
than three (3) financial or collateral audits in any calendar year.

     

    1.6 Repayment and
Prepayment.  Borrower shall pay the principal balance of the
Loans and all other Obligations in full on the Commitment Maturity
Date.  The principal amount of any Reference Rate Loan may be prepaid
prior to the Commitment Maturity Date at any time.  The principal
amount of any LIBOR Loan together with all accrued and unpaid interest thereon
may be prepaid prior to the applicable Payment Date, upon three (3) Business
Days’ prior notice to Agent; provided, that Borrower shall reimburse Agent or
any Lender entitled thereto at such time for any loss or out-of-pocket expense
incurred by Agent or such Lender or other charges in connection with such
prepayment, as set forth in Sections 1.10, 10 and 11.3.  Each notice
of prepayment shall be irrevocable.

     

    1.7 Term.  The
Revolving Credit Facility shall be in effect until the Commitment Maturity Date
unless terminated earlier pursuant to the terms of this
Agreement.  The Revolving Credit Facility and all other Obligations
related thereto shall be automatically due and payable in full on the Commitment
Maturity Date, unless earlier due and payable or terminated as provided in this
Agreement.

     

    1.8 [Reserved].

     

    
      
        
        

      

      
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    1.9 Notes and
Accounting.  Agent shall provide a quarterly accounting to
Borrower of the Loans and other transactions under this Agreement, including
Agent’s calculation of principal, interest, expenses and the Borrowing Base
during the preceding Fiscal Quarter.  Each and every such accounting
shall, absent manifest error, be deemed final, binding and conclusive upon
Borrower, unless Borrower, within 30 days after the date any such accounting is
rendered, provides Agent with written notice of any objection that Borrower may
have to any item in such accounting, describing the basis for such objection
with specificity.  In that event, only those items expressly objected
to in such notice shall be deemed to be disputed by Borrower and Agent’s
determination, based upon the facts available, of any such disputed item shall,
absent manifest error, be deemed final, binding and conclusive upon
Borrower.

     

    1.10 Manner of
Payment.

     

    (a) When Payments
Due.

     

    (1) Each
payment (including any prepayment) by Borrower on account of the principal of or
interest on the Loans and any other amount owed to Agent or any Lender on
account of the Obligations shall be made not later than 10:00 a.m. (California
time) on the date specified for payment under this Agreement to Agent for the
benefit of such Lender in lawful money of the United States and in immediately
available funds.  Any payment received by Agent on a day that is not a
Business Day or after 11:00 a.m. (California time) on a Business Day, shall be
deemed received on the next Business Day.

     

    (2) If any
payment on any Obligation is specified to be made upon a day that is not a
Business Day, it shall be deemed to be specified to be made on the next
succeeding day that is a Business Day, and such extension of time shall in such
case be included in computing interest and fees, if any, in connection with such
payment.

     

    (b) No
Deductions.  Borrower shall pay principal, interest, fees, and
all other amounts due on the Obligations without set-off or counterclaim or any
other defense whatsoever.

     

    (c) Inadequate
Payments.  If, on the date on which any amount (including any
payment of principal, interest or other costs and expenses) shall be due and
payable by Borrower to Agent or any Lender, the amount received by Agent from
Borrower shall not be adequate to pay the entire amount then due and payable,
then Agent, on behalf of Agent and Lenders, shall be authorized, but shall not
be obligated, to make a Reference Rate Loan to Borrower in the amount of the
deficiency.

     

    (d) Charges.  Agent
is authorized to, and at its sole election may, charge to the Loans on behalf of
Borrower and cause to be paid all fees, expenses, charges, costs (including
interest and principal other than principal of the Loans), owing by Borrower
under this Agreement or any of the other Loan Documents if and to the extent
Borrower fails to pay promptly any such amounts as and when due, even if the
amount of such charges would exceed Borrowing Availability at such time or would
cause the balance of the Loans to exceed the Borrowing Base after giving effect
to such charges.  At Agent’s option and to the extent permitted by
law, any charges so made shall constitute part of the Loans
hereunder.

     

    1.11 Withholding
Taxes.

     

    (a) All
payments made by Borrower hereunder or under any note or other Loan Document
will be made free and clear of, and without deduction or withholding for, any
present or future Taxes, and in the event any deduction or withholding of Taxes
is required, Borrower shall comply with the penultimate sentence of this Section 1.11(a).  “Taxes” shall mean,
any taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding any tax imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein measured by or based on the
net income or net profits of any Lender) and all interest, penalties or similar
liabilities with respect thereto.  If any Taxes are so levied or
imposed, Borrower agrees to pay the full amount of such Taxes and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement, any note, or other Loan Document, including any amount
paid pursuant to this Section 1.11(a) after
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein; provided, however, that
Borrower shall not be required to increase any such amounts if the increase in
such amount payable results from Agent’s or such Lender’s own willful misconduct
or gross negligence (as finally determined by a court of competent
jurisdiction).  Borrower will furnish to Agent as promptly as possible
after the date the payment of any Tax is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by
Borrower.

     

    
      
        
        

      

      
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    (b) If a
Lender claims an exemption or reduction from United States withholding tax, such
Lender agrees with and in favor of Agent and Borrower, to deliver to Agent and
Borrower:

     

    (1) if such
Lender claims an exemption from United States withholding tax pursuant to its
portfolio interest exception, (A) a statement of the Lender, signed under
penalty of perjury, that it is not a (I) a “bank” as described in
Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder of Borrower (within
the meaning of Section 871(h)(3)(B) of the IRC), or (III) a controlled
foreign corporation related to Borrower within the meaning of
Section 864(d)(4) of the IRC, and (B) a properly completed and executed IRS
Form W-8BEN, before receiving its first payment under this Agreement and at any
other time reasonably requested by Agent or Borrower;

     

    (2) if such
Lender claims an exemption from, or a reduction of, withholding tax under a
United States tax treaty, properly completed and executed IRS Form W-8BEN before
receiving its first payment under this Agreement and at any other time
reasonably requested by Agent or Borrower;

     

    (3) if such
Lender claims that interest paid under this Agreement is exempt from United
States withholding tax because it is effectively connected with a United States
trade or business of such Lender, two properly completed and executed copies of
IRS Form W-8ECI before receiving its first payment under this Agreement and at
any other time reasonably requested by Agent or Borrower; or

     

    (4) such other
form or forms, including IRS Form W-9, as may be required under the IRC or other
laws of the United States as a condition to exemption from, or reduction of,
United States withholding or backup withholding tax before receiving its first
payment under this Agreement and at any other time reasonably requested by Agent
or Borrower.

     

    Such
Lender agrees promptly to notify Agent and Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.

    

    (c) If a
Lender claims an exemption from withholding tax in a jurisdiction other than the
United States, such Lender agrees with and in favor of Agent and Borrower, to
deliver to Agent any such form or forms, as may be required under the laws of
such jurisdiction as a condition to exemption from, or reduction of, foreign
withholding or backup withholding tax before receiving its first payment under
this Agreement and at any other time reasonably requested by Agent or
Borrower.

     

    Such
Lender agrees promptly to notify Agent and Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.

     

    
      
        
        

      

      
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    (d) If any
Lender claims exemption from, or reduction of, withholding tax and such Lender
sells, assigns, grants a participation in, or otherwise transfers all or part of
the Obligations of Borrower to such Lender, such Lender agrees to notify Agent
and Borrower of  the percentage amount in which it is no longer the
beneficial owner of Obligations of Borrower to such Lender.  To the
extent of such percentage amount, Agent and Borrower will treat such Lender’s
documentation provided pursuant to Sections 1.11(b) or 1.11(c) as no longer
valid.  With respect to such percentage amount, such Lender may
provide new documentation, pursuant to Sections 1.11(b) or 1.11(c), if
applicable.

     

    (e) if any
Lender is entitled to a reduction in the applicable withholding tax, Agent may
withhold from any interest payment to such Lender an amount equivalent to the
applicable withholding tax after taking into account such
reduction.  If the forms or other documentation required by Sections 1.11(b) or 1.11(c) are not delivered to
Agent or Borrower, then Agent or Borrower, as applicable, may withhold from any
interest payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax.

     

    (f) If the IRS
or any other Governmental Authority of the United States or other jurisdiction
asserts a claim that Agent did not properly withhold tax from amounts paid to or
for the account of any Lender due to a failure on the part of the Lender
(because the appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Lender shall indemnify and hold Agent harmless for
all amounts paid, directly or indirectly, by Agent, as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to Agent under this Section 1.11, together
with all costs and expenses (including attorneys fees and
expenses).  The obligation of the Lenders under this subsection shall
survive the payment of all Obligations and the resignation or replacement of
Agent.

     

    1.12 Application of
Payments.  Borrower irrevocably waives the right to direct the
application of any and all payments received at any time by Agent from or on
behalf of Borrower and specifically waives the provisions of California Civil
Code sections 1479 and 2822 or similar provisions under any other Applicable Law
giving Borrower the right to designate application of
payments.  Borrower irrevocably agrees that Agent, on behalf of Agent
and Lenders, shall have the continuing exclusive right to determine the order
and method of the application of payments against the then due and payable
Obligations of Borrower in Agent’s sole discretion and to revise such
application prospectively or retroactively in Agent’s sole
discretion.

     

    1.13 Use of
Proceeds.  The proceeds of the Loans shall be used by Borrower
for general working capital needs and other corporate purposes.

     

    1.14 All Obligations to
Constitute One Obligation.  Obligations related to the
Revolving Credit Facility constitute one general obligation of Borrower and
shall be secured by the Liens granted to Agent, for the benefit of Agent and
Lenders, upon all of the Collateral, and by all other Liens previously, now or
at any time in the future granted by Borrower to Agent, for the benefit of Agent
and Lenders, to the extent provided in the Collateral Documents.

     

    1.15 Authorization to Make
Loans.  Agent, on behalf of Lenders, is authorized to make the
Loans based on telephonic or other oral or written instructions received from
any Person that Agent believes in good faith to be an authorized representative
of Borrower, or at the discretion of Agent from time to time and without prior
notice to Borrower, if such Loans are necessary to satisfy any of the
Obligations including any principal, interest, fees, costs and expenses and all
other payments as and when due and payable under any Loan
Documents.  Borrower consents to the recordation of any telephonic or
other communications between Agent and Borrower for the purpose of maintaining
Agent’s business records of such transactions.

     

    
      
        
        

      

      
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    1.16 Authorization to Debit or
Charge Accounts.  Borrower hereby authorizes Agent to debit or
charge any of Borrower’s bank accounts with Bank, from time to time and without
prior notice to Borrower, to the extent necessary to pay for any principal,
interest, fees, costs and expenses and all other payments as and when due and
payable under any Loan Documents.

     

    1.17 Increase of Commitments and
Maximum Amount; Termination and Reduction of Commitments.

     

    (a) Additional
Commitments.  Provided there exists no Default or Event of
Default, Borrower may from time to time request: (i) any one or more existing
Lenders to increase their respective Commitments, or (ii) request other
financial institutions first approved by Agent, in its sole and absolute
discretion, to agree to a Commitment (each such existing Lender who has agreed
to increase its Commitment or such other financial institution who has agreed to
provide a new Commitment, an “Acceding
Lender”).  Each such increase and new Commitment shall be
subject to the prior satisfaction of the following conditions, as determined by
Agent:

     

    (1) Borrower
shall have requested the increase and new Commitment in writing to the Agent not
less than thirty (30) days prior to the effective date of the proposed new or
increased Commitment;

     

    (2) the
applicable Acceding Lender shall have underwritten and approved by its credit
committees the proposed new or increased Commitment;

     

    (3) there
shall exist no Default or Event of Default both at the time of the request for
the increase of new Commitment and at the time at which the increase or new
Commitment becomes effective;

     

    (4) the Agent
and the Requisite Lenders shall have provided their prior written consent to
such increase or new Commitment, which consent shall be a matter of their sole
and absolute discretion;

     

    (5) Borrower
shall deliver to the Agent all documents (including, without limitation, new
Notes and Loan Document modifications as the Agent may reasonably request),
legal opinions, certificates and instruments as the Agent may require in its
sole and absolute discretion in connection with such increase or new
Commitment;

     

    (6) no event,
circumstance or condition shall exist which reasonably could be expected to have
a Material Adverse Effect;

     

    (7) as of the
date of such increase or new Commitment, the representations and warranties
contained in the Loan Documents shall be true and correct in all material
respects, with the same force and effect as if made on and as of such date
(except to the extent of changes in facts or circumstances that have been
disclosed to the Lenders and do not constitute a Default or Event of Default
under this Agreement or any other Loan Document, and except to the extent any
such representation or warranty is stated to relate solely to an earlier date,
in which case such representation or warranty was true and correct in all
material respects as of such earlier date); and

     

    
      
        
        

      

      
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    (8) each
Acceding Lender shall have delivered to Agent, an Accession Agreement in
substantially the form of Exhibit H
hereto (an “Accession
Agreement”) with Borrower and Agent and assuming thereunder an increased
Commitment or a new Commitment in an amount to be agreed upon by Borrower, such
Acceding Lender and Agent, to make Loans pursuant to the terms
hereof.

     

    A new
Acceding Lender shall become party to this Agreement by entering into an
Accession Agreement.  Upon the due execution and delivery of each
Accession Agreement and satisfaction of the foregoing conditions, the Maximum
Amount shall thereupon be increased by the amount of such Acceding Lender’s
Commitment; provided, that the
Agent shall have given its prior written consent to such accession, as
Agent.  No Lender is obligated to increase its Commitment under any
circumstances whatsoever, and no Lender’s Commitment may be increased except by
its execution and delivery of an Accession Agreement.  On the
effective date specified in any duly executed and delivered Accession Agreement:
(1) the Acceding Lender, to the extent not already a Lender, shall be a “Lender”
hereunder and a party hereto, entitled to the rights and benefits, and subject
to the duties, of a Lender under the Loan Documents, (2) Schedule C
hereto shall be deemed to be amended to reflect (a) the name, address,
Commitment, Pro Rata Share of such Acceding Lender, (b) the Maximum Amount as
increased by such Acceding Lender’s Commitment, and (c) the changes to the other
Lenders’ respective Pro Rata Shares and any changes to the other Lenders’
respective Commitments (in the event such Lender is also the Acceding Lender)
resulting from such assumption and such increased Maximum Amount, and (3) Schedule D
shall be deemed to be amended to reflect such Acceding Lender’s wire transfer
instructions specified in its Accession Agreement.  Each Lender’s Pro
Rata Share shall be recalculated to reflect the new proportionate share of the
revised total Commitments and increased Maximum Amount.  Upon request
of any Acceding Lender, Borrower shall issue a Revolving Loan Note to evidence
the Principal Amount of such Lender’s Commitment.  All new Loans
occurring after an increase of the total Commitments and the Maximum Amount
shall be funded in accordance with each Lender’s revised Pro Rata
Share.

    

    (b) Reduction of
Commitments.  Borrower may, upon written notice to the Agent,
terminate the Commitments in their entirety or permanently reduce, whereupon the
Commitments of the Lenders shall be reduced pro rata in accordance with their
respective Pro Rata Shares of the amount specified in such notice or, as the
case may be, terminated; provided that (i) any
such notice shall be received by Agent not later than 8:00 a.m., five (5)
Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in a minimum amount of $1,000,000 or an integral
multiple thereof, and (iii) Borrower shall not terminate or reduce the
Commitments if, after giving effect thereto and to any concurrent prepayments
hereunder, the aggregate outstanding Obligations in respect of the Loans would
exceed the lesser of (1) the Borrowing Base and (2) the aggregate Commitments of
all Lenders.  Promptly after receiving any notice of Borrower
delivered pursuant to this Section 1.17(b), Agent
will notify the Lenders of the substance thereof.  Upon the effective
date of any such reduction or termination, Borrower shall pay to Agent, for the
respective accounts of the Lenders, the full amount of any Unused Line Fee then
accrued on the amount of the reduction.  No reduction or termination
of Commitments may be reinstated.

     

    1.18 Bank
Products.  Borrower may request and the Agent may, in its sole
and absolute discretion, arrange for Borrower to obtain from Bank or its
Affiliates, Bank Products.  If Bank Products are provided by an
Affiliate of Bank, Borrower agrees to indemnify and hold Agent, Bank and the
Lenders harmless from any and all costs and obligations now or hereafter
incurred by Agent, Bank or any of the Lenders which arise from any indemnity
given to any such Affiliate related to such Bank Products.  The
agreement contained in this Section shall survive termination of this
Agreement.  Borrower acknowledges and agrees that the obtaining of
Bank Products from Bank or its Affiliates (a) is in the sole and absolute
discretion of Bank or such Affiliates, and (b) is subject to all rules and
regulations of Bank and such Affiliates.

     

    
      
        
        

      

      
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    2. CONDITIONS
PRECEDENT

     

    2.1 Conditions Precedent to
Closing.  Neither Agent nor any Lender shall be obligated to
make the initial Loans, or to take, fulfill, or perform any other action under
this Agreement, until the following conditions have been satisfied to Agent’s
complete satisfaction or waived in writing by Agent and the
Lenders:

     

    (a) Agent
shall have received each of the documents, agreements, instruments, reports,
certificates and statements set forth on the Schedule of Documents, each
duly executed by the appropriate parties and in form and substance satisfactory
to Agent;

     

    (b) payment by
Borrower of the Agent’s Fees and all other fees, costs, and expenses of closing
(including reasonable fees of counsel to Agent invoiced as of the Closing
Date);

     

    (c) no action,
proceeding, investigation, regulation or legislation shall have been instituted,
threatened or proposed before any court, Governmental Authority or legislative
body to enjoin, restrain or prohibit, or to obtain damages in respect of, or
that is related to or arises out of, this Agreement or any other Loan Document
or the consummation of the transactions contemplated hereby or thereby and that,
in Agent's sole judgment, would make it inadvisable to consummate the
transactions contemplated by this Agreement or any other Loan
Document;

     

    (d) Agent and
each Lender shall have completed their business and legal due diligence,
including a Collateral audit and field examination, with results satisfactory to
Agent;

     

    (e) all of the
representations and warranties of Borrower under this Agreement and the other
Loan Documents shall be true and correct in all material respects at such date,
except to the extent any such representations and warranties relate to an
earlier date in which case such representations and warranties shall remain true
and correct in all material respects as of such earlier date (provided that the
foregoing materiality qualifications shall not apply to any representations and
warranties that already are qualified or modified by materiality in the text
thereof), and Agent shall have received a certificate, dated as of the Closing
Date, to that effect signed by an Authorized Signatory;

     

    (f) Agent
shall determine that no Material Adverse Effect shall have occurred since the
most recent audited Financial Statements delivered to Agent prior to the Closing
Date;

     

    (g) Agent
shall have received opinions of counsel of (i) Winston & Strawn LLP, special
counsel to Borrower and (ii) Sutherland Asbill & Brennan LLP, special
Maryland counsel to Borrower, each in form and substance satisfactory to
Agent;

     

    (h) Agent
shall have received and approved Borrower’s Credit Policy, which shall be
consistent with those previously represented to Agent and shall be acceptable to
Agent in its sole discretion;

     

    (i) Agent
shall have received evidence satisfactory to Agent either that any Person having
a Lien (except for Permitted Liens) with respect to the assets of Borrower shall
have released such Lien or that such Lien shall be automatically terminated upon
the funding of the Loans to be made on the Closing Date; and

     

    (j) all other
documents and legal matters in connection with the transactions contemplated by
this Agreement shall have been delivered, executed, or recorded and shall be in
form and substance satisfactory to Agent.

     

    
      
        
        

      

      
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    If any
other term of any Loan Document should conflict, or appear to conflict, with
this Section 2.1,
the terms of this Section 2.1 shall
control, and Borrower shall not have any rights under this Agreement or any
other Loan Document until each of the conditions of this Section 2.1 has been
complied with to Agent’s satisfaction or specifically waived in a writing by
Agent.

     

    2.2 Further Conditions to the
Loans.  It shall be a further condition to the funding of any
Loan, including the initial Loans, that the following statements be true on the
date of each such funding, advance or incurrence, as the case may
be:

     

    (a) all of the
representations and warranties of Borrower under this Agreement and the other
Loan Documents shall be true and correct in all material respects at such date,
except to the extent any such representations and warranties relate to an
earlier date in which case such representations and warranties shall remain true
and correct in all material respects as of such earlier date (provided that the
foregoing materiality qualifications shall not apply to any representations and
warranties that already are qualified or modified by materiality in the text
thereof), both before and after giving effect to the funding of such
Loan;

     

    (b) Borrower
shall be in compliance with the Asset Coverage Ratio requirements as set forth
in Section 3.24(e)
immediately prior to the making of such Loan and immediately after giving effect
thereto and shall have provided a certificate of Borrower’s Chief Financial
Officer to that effect;

     

    (c) not less
than two (2) Business Days prior to the proposed Drawdown Date for such Loan,
(i) Borrower shall have delivered to Agent: (A) an updated Borrowing Base
Certificate, including an aged list of Eligible Notes Receivable, a detailed
calculation of the Borrowing Base, and such supporting detail and documentation
as Agent may request; (B) a summary of the filing information (to the extent
available) of all UCC financing statements indicating Borrower’s security
interest in any collateral obtained in connection with any Pledged Loan Paper;
(C) a completed checklist for each Note Receivable included or to be included in
the Borrowing Base; and (D) all other Required Asset Documents, (ii) Borrower
shall have taken the actions with respect to all agreements, instruments and
documents relating to assets included in the Borrowing Base as may be required
hereunder or under the Possessory Collateral Agreement and the other Loan
Documents, including delivery to the Agent or the Pledgeholder of (x) original
copies of all Pledged Loan Paper and (y) all originals of each Instrument issued
to Borrower in connection with each Pledged Note Receivable (endorsed in blank
pursuant to an allonge in form satisfactory to Agent which shall provide “Pay to
the Order of Union Bank, N.A., as Agent, without recourse.”) and (iii) Agent’s
counsel shall have received and reviewed all standard documentation evidencing,
governing, securing and guaranteeing Pledged Notes Receivable, and been
satisfied such documentation provides Borrower and Agent with appropriate rights
and remedies to enforce any necessary collection actions with respect to such
Pledged Notes Receivable;

     

    (d) Borrower
shall have deposited, or caused to be deposited, in the Collection Account all
Collections and Recoveries received with respect to each Pledged Note Receivable
and all Proceeds received with respect to all Account Debtor Collateral securing
any Pledged Note Receivable, in each case from and after the date such Pledged
Note Receivable was first included in the Borrowing Base;

     

    (e) Agent
shall determine that, after giving effect to the requested Loan, an Overadvance
shall not exist; and

     

    (f) no event
shall have occurred and be continuing, or would result from the funding, advance
or incurrence of any Loan, which constitutes or would constitute a Default or an
Event of Default.

     

    
      
        
        

      

      
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    The
request and acceptance by Borrower of the proceeds of the Loans shall be deemed
to constitute, as of the date of such Loan, (1) a representation and warranty by
Borrower that the conditions in this Section 2.2 have been
satisfied and (2) a confirmation by Borrower of the granting and continuance of
Agent’s Liens pursuant to the Collateral Documents.

     

    3. REPRESENTATIONS, WARRANTIES
AND AFFIRMATIVE COVENANTS

     

    Borrower
represents, warrants and agrees that from and after the Closing Date and until
the Termination Date:

     

    3.1 Corporate Existence;
Compliance with Law.  Borrower, and each of its Subsidiaries:
(a) is and will continue to be (1) a corporation, partnership, limited liability
company, or other legal entity as the case may be, duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization or formation, (2) duly qualified to do business and in good
standing in each other jurisdiction where its ownership or lease of property or
the conduct of its business requires such qualification and in which the failure
to be so qualified and in good standing could reasonably be expected to have a
Material Adverse Effect, (3) in compliance with its articles of incorporation,
certificate of formation or organization, partnership agreement, by-laws or
operating agreement, as applicable, and all other organizational documents, and
(4) in compliance with all Applicable Laws (including ERISA, Environmental Laws,
and the Investment Company Act) and all Material Contracts except where a
failure to be in compliance with such Applicable Laws or Material Contracts
could not reasonably be expected to have a Material Adverse Effect; and (b) has
and will continue to have and maintain (1) the requisite corporate, limited
liability company or partnership power and authority and the legal right to own,
pledge, mortgage or otherwise encumber and operate its properties, to lease the
property it operates under lease, and to conduct its business as now, previously
or proposed to be conducted, and (2) all licenses, permits, franchises, rights,
powers, consents or approvals from or by all Persons or Governmental Authorities
having jurisdiction over Borrower or such Subsidiary which are necessary or
appropriate for the conduct of its business except where a failure to have and
maintain such licenses, permits, franchises, rights, powers, consents and
approvals could not reasonably be expected to have a Material Adverse
Effect.  Borrower, and each of its Subsidiaries, has made and will
continue to make all filings with any Governmental Authority that are necessary
or appropriate for the conduct of its business and has given and will continue
to give all notices to the extent required for the ownership and operation of
its property and the conduct of its business except where the failure to make or
continue to make such filings or give such notices could not reasonably be
expected to have a Material Adverse Effect.

     

    3.2 Executive Offices; Corporate
or Other Names; Conduct of Business.  Borrower’s, and each of
its Subsidiaries’, name as it appears in official filings in the state of its
incorporation, formation, or other organization, the type of entity of such
Person (including corporation, partnership, limited partnership or limited
liability company), organizational identification number issued by such Person
state of incorporation, formation or organization or a statement that no such
number has been issued, the locations of such Person’s state of incorporation or
organization, chief executive office, principal place of business, corporate
offices, warehouses, other locations of Collateral and locations where all of
such Person’s records with respect to Collateral are kept are as set forth in
Schedule 3.2
provided, however, that
Borrower may amend Schedule 3.2 by providing
the Agent with the notice required by, and satisfying the other conditions set
forth in, Section 4.2(a).  As
of the Closing Date, except as set forth in Schedule 3.2, Borrower
has not been known as or conducted business in any other
name.  Borrower shall have only one state of
organization.  Borrower shall at all times maintain records pertaining
to the Collateral that contain information as may be reasonably requested by
Agent.  Borrower also shall keep a reporting system that shows all
additions, fees, payments, claims, and write-downs with respect to the Notes
Receivable.

     

    
      
        
        

      

      
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    3.3 Corporate Power;
Authorization; Enforceable Obligations.

     

    (a) The
execution, delivery and performance by Borrower of the Loan Documents, and the
creation of all Liens provided for in this Agreement and the other Loan
Documents: (i) are and will continue to be within Borrower’s power; (ii) have
been and will continue to be duly authorized by all necessary or proper action
of Borrower; (iii) are not and will not be in contravention of any provision of
Borrower’s articles or certificate of incorporation, charter, by-laws, operating
agreement or other organizational documents; (iv) do not and will not violate
any Applicable Law (including the Investment Company Act), or any order or
decree of any court or Governmental Authority; (v) do not and will not conflict
with or result in the breach or termination of, constitute a default under or
accelerate any performance required by, any Loan Paper or Note Receivable or any
other indenture, mortgage, deed of trust, lease, agreement or other instrument
to which Borrower or any of its Subsidiaries is a party or by which Borrower or
any of its Subsidiaries or any of their respective property is bound; (vi) do
not and will not result in the creation or imposition of any Lien (other than
Liens arising under this Agreement or the other Loan Documents in favor of
Agent) upon any of the Collateral; and (vii) do not and will not require the
consent or approval of any Governmental Authority or any other Person, except
those specifically referred to in the Schedule of Documents (all of which
will have been duly obtained, made or complied with on or before the Closing
Date).  Each Loan Document has been duly executed and delivered for
the benefit of or on behalf of Borrower, and each such Loan Document shall then
be and will continue to be a legal, valid and binding obligation of Borrower,
enforceable against it in accordance with its terms, subject, as to
enforceability, to Debtor Relief Laws and other laws affecting creditors’ rights
generally, and to general principles of equity.

     

    (b) With
respect to Agent’s Liens for the benefit of Agent and Lenders in the Collateral:
(i) Borrower has rights in and the power to transfer each such item of the
Collateral, free and clear of any and all other Liens, other than Permitted
Liens; and (ii) no effective security agreement, mortgage, deed of trust,
financing statement, equivalent security or Lien instrument or continuation
statement covering all or any part of the Collateral (other than Permitted
Liens) is or will be on file or of record in any public office, except those
filed by Borrower in favor of Agent, for the benefit of Agent and Lenders,
pursuant to the terms of this Agreement and the other Loan
Documents.

     

    3.4 Financial Statements; Books
and Records.  Borrower has delivered as of the Closing Date the
Financial Statements for the most recently ended Fiscal Year and Fiscal Quarter,
which Financial Statements are correct and complete and fairly and accurately
present the financial condition of Borrower as at the date of each Financial
Statements and the results of its operations and changes in financial position
for the fiscal periods then ended, all in accordance with
GAAP.  Borrower shall maintain, and cause each of its consolidated
Subsidiaries to maintain, books and records pertaining to its business
operations in such detail, form and scope as is consistent with good business
practice in accordance with GAAP (except in the case of unaudited financial
statements, for the absence of footnotes and being subject to normal year-end
adjustments).

     

    3.5 Material Adverse
Change.  Since the date of Borrower’s most recently audited
Financial Statements delivered to Agent, no event has occurred that could, alone
or in the aggregate, reasonably be expected to have a Material Adverse
Effect.

     

    3.6 Ownership of Property;
Liens.  Borrower holds and will continue to hold good and
marketable title to all of its properties and assets, and have rights in and the
power to transfer each item of Collateral upon which it purports to grant a Lien
under this Agreement or any other Loan Document, and none of the properties and
assets of Borrower are or will be subject to any Liens, except Permitted
Liens.  Borrower is and will at all times be the sole owner of each
Pledged Note Receivable and its related Loan Paper free and clear of any and all
other Liens, other than Permitted Liens, and the Agent will hold a
first-priority Lien in each item of Collateral.  Set forth on Schedule 3.6
is a listing, as of the Closing Date, of all of Borrower’s Deposit Accounts and
securities accounts, including, with respect to each bank or securities
intermediary (a) the name and address of such Person, and (b) the account
numbers of the Deposit Accounts or securities accounts maintained with such
Person.  Borrower shall provide Agent with prompt written notice each
time it establishes or acquires any deposit account, securities account,
investment account, commodities account or similar account that is not listed on
Schedule 3.6
at or with any bank or financial institution other than Agent.

     

    
      
        
        

      

      
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    3.7 Employment
Agreements.  Schedule 3.7
identifies each management agreement with an executive officer, or any other
material employment agreement to which Borrower is a party that is in effect as
of the Closing Date, and a copy of each such agreement has been made available
to Agent.  Promptly upon the execution of any such agreement or
incurrence of such obligation after the Closing Date and until the Termination
Date, Borrower shall provide to Agent prompt written notice of such event and a
copy of such agreement.

     

    3.8 Ventures, Subsidiaries and
Affiliates; Outstanding Stock and Indebtedness.  A complete
list of each Borrower’s Subsidiaries as of the Closing Date is set forth in
Schedule 3.8,
including the correct legal name of each Subsidiary, its jurisdiction of
organization of formation, the Persons holding Stock in such Subsidiary and
their percentage equity or voting interest in such Subsidiary.  Schedule 3.8
sets forth, as of the Closing Date, all outstanding Stock, and the holders
(including group or affiliated holders known to Borrower) of 10% or more of the
Stock of Borrower.  After the Closing Date, Borrower will give Agent
prompt notice of (a) each issuance of Stock or change in ownership of Borrower’s
Stock representing a sale or issuance of 10% or more of the ownership of
Borrower’s Stock, (b) the formation or acquisition of any Subsidiary and
(c) each Change of Control.

     

    3.9 Government
Regulation.  Borrower is not subject to or in default with
respect to any final judgment, writ, injunction, restraining order or order of
any nature, decree, rule or regulation of any court or Governmental Authority,
in each case which has or could reasonably be expected to have a Material
Adverse Effect.  The making of the Loans by any Lender to Borrower,
the application of the proceeds thereof and repayment thereof, will not violate
any provision of any Applicable Law or any rule, regulation, or order issued by
the Securities and Exchange Commission.

     

    3.10 Margin
Regulations.  Borrower is not engaged principally, or as one of
its important activities, in the business of purchasing or carrying margin stock
or extending credit for the purpose, whether immediate, incidental, or ultimate,
of buying or carrying “margin stock” within the meaning of Regulation U (as
enacted by the Board of Governors of the Federal Reserve System, as
amended).  Following the application of the proceeds of each Loan, not
more than 25% of the value of the assets (either of Borrower only or of Borrower
and its Subsidiaries) will be margin stock.  None of the proceeds of
the Loans will be used directly or indirectly for (a) purchasing or carrying any
margin stock, (b) reducing or retiring any indebtedness that was originally
incurred to purchase or carry any margin stock, or (c) any purpose that might
cause any of the Loans or this Agreement to be considered a “purpose credit”
within the meaning of Regulations T, U or X (as enacted by the Board of
Governors of the Federal Reserve System, as amended).

     

    3.11 Taxes.

     

    (a) All tax
returns, reports and statements required by any Governmental Authority to be
filed by or on behalf of Borrower have, as of the Closing Date, been filed and
will, until all Obligations have been paid or performed in full, be filed with
the appropriate Governmental Authority, and all Taxes and other impositions
shown thereon have been and will be paid when due, except (i) to the extent that
any such Taxes are being contested in accordance with clause (b) below, or (ii)
other than with respect to federal Taxes, where the failure to file or pay could
not reasonably be expected to have a Material Adverse Effect.  Proper
and accurate amounts have been and will be withheld by Borrower from its
employees, if any, for all periods in full and complete compliance with the tax,
social security and unemployment withholding provisions of all Applicable Law,
and such withholdings have and will be timely paid to the respective
Governmental Authorities, except to the extent that any such Taxes are being
contested in accordance with clause (b) below.  Except as set forth in
Schedule 3.11,
Borrower:  (1) has not executed or filed prior to the Closing Date any
requests for extension with respect to any Taxes currently due and payable, and
will not execute or file after the Closing Date, with any Governmental
Authority, any agreement or other document extending, or having the effect of
extending, the period for assessment or collection of any Taxes except to the
extent that Borrower shall promptly thereafter provide Agent with copies of any
such request for extension; (2) has not agreed or been requested to make any
adjustment in accounting method; (3) is not a party to any tax sharing
agreement; or (4) is not currently being audited by any Governmental Authority
(except with respect to Taxes being contested in accordance with clause (b)
below).  As of the Closing Date, there are no assessments or
threatened assessments outstanding against Borrower, and thereafter, there shall
be no assessments or threatened assessments outstanding against Borrower, except
to the extent with respect to Taxes that are being contested in accordance with
clause (b) below.

     

    
      
        
        

      

      
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    (b) Borrower
may contest, by proper legal actions or proceedings, the validity or amount of
any Taxes; provided, that at the
time of commencement of any such action or proceeding: (1) adequate reserves
with respect thereto are established on the books of Borrower in accordance with
GAAP; (2) such contest operates to suspend collection of the contested Taxes and
is maintained and prosecuted continuously with diligence; (3) none of the
Collateral would be subject to forfeiture or loss of Lien thereby; (4) Borrower
shall promptly pay or discharge any contested Taxes and shall deliver to Agent
evidence acceptable to Agent of such compliance, payment or discharge, if such
contest is terminated or discontinued adversely; and (5) Agent has not advised
Borrower in writing that Agent reasonably believes that nonpayment or
nondischarge thereof could reasonably be expected to have a Material Adverse
Effect.

     

    3.12 ERISA.

     

    (a) Schedule 3.12
lists all of Borrower’s and each of its ERISA Affiliates’
Plans.  Borrower is and will remain and will cause each of its ERISA
Affiliates to remain in material compliance with (i) ERISA and (ii) all
requirements of each Plan, and each Plan complies with and is operated, and will
continue to be operated, in compliance with ERISA and all other Applicable Law
in all material respects.  All required contributions have been and
will continue to be made in accordance with the provisions of Borrower’s and its
ERISA Affiliates’ Plans, Borrower has not engaged and will not engage, nor will
it permit any of its ERISA Affiliates to engage, in a “prohibited transaction”,
as defined in Section 4975 of the IRC or Section 406 of ERISA except
where such failure could not reasonably be expected to have a Material Adverse
Effect.

     

    (b) Borrower
shall notify Agent immediately in writing upon the occurrence of any Reportable
Event or a prohibited transaction with respect to any Plan of Borrower or any of
its ERISA Affiliates, or the institution or threatened institution by the PBGC
of proceedings under ERISA to terminate or to partially terminate any such Plan,
or the commencement or threatened commencement of any litigation against any
Plan, its fiduciaries or its assets, or against Borrower or any ERISA Affiliate
in connection with any Plan, except where such event, transaction, proceedings
or litigation could not reasonably be expected to have a Material Adverse
Effect.

     

    3.13 Litigation.  Except
as disclosed in Schedule 3.13
no Claim is pending or threatened against Borrower or any of its Subsidiaries
that (a) challenges any such Person’s right or ability, to enter into or perform
any of its Obligations under the Loan Documents, the validity or enforceability
of any Loan Document or any action taken thereunder, or (b) whether or not
determined adversely, could reasonably be expected to have a Material Adverse
Effect.  Borrower shall notify Agent in writing promptly upon learning
of the existence or commencement of any Claim commenced or, to the knowledge of
Borrower, threatened against it or any of its Subsidiaries that:  (1)
could reasonably be expected to have a Material Adverse Effect whether or not
determined adversely; or (2) regardless of amount (i) includes any demand for
injunctive relief, or (ii) alleges criminal misconduct by Borrower or its
Subsidiary.

     

    
      
        
        

      

      
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    3.14 Intellectual
Property.  As of the Closing Date, Borrower owns or has the
right to use and will own or have the right to use all Intellectual Property
necessary to continue to conduct its business as now or heretofore conducted by
it or proposed to be conducted by it, and each such item (that is registered or
for which an application for registration has been filed) of Intellectual
Property is listed, together with application or registration numbers, where
applicable, in Schedule 3.14.  Borrower
is not aware of any infringement or claim of infringement by others of any of
its Intellectual Property that could reasonably be expected to have a Material
Adverse Effect.  Borrower will give Agent prompt written notice of any
change in the status of any of its Intellectual Property that could reasonably
be expected to have a Material Adverse Effect.  Borrower conducts and
will continue to conduct its affairs and business without infringing upon any
Intellectual Property of any other Person in a manner that could reasonably be
expected to have a Material Adverse Effect.  Borrower shall notify
Agent in writing immediately if it (a) knows or discovers that its Intellectual
Property is or may become infringed upon, misappropriated, abandoned or diluted
by a third party in a manner that could reasonably be expected to have a
Material Adverse Effect, or (b) becomes aware of any other adverse determination
or development that could reasonably be expected to have a Material Adverse
Effect.

     

    3.15 Full
Disclosure.  No information contained in the Loan Documents,
the Financial Statements or any written statement furnished by or on behalf of
Borrower under this Agreement, or to induce Agent or any Lender to execute the
Loan Documents, contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading in light of the circumstances under which they were
made.

     

    3.16 Hazardous
Materials.  As of the Closing Date, to the knowledge of
Borrower, Schedule 3.16
discloses any Environmental Liabilities and Costs that, in each case, could
reasonably be expected to have a Material Adverse Effect.  As of the
Closing Date, Borrower has not caused any Release of Hazardous Materials on,
under or in any Subject Property that could reasonably be expected to have a
Material Adverse Effect.  Borrower shall: (a) comply in all material
respects with all applicable Environmental Laws and Environmental Permits; and
(b)  promptly notify Agent in writing of any Environmental Liabilities
and Costs that could reasonably be expected to have a Material Adverse
Effect.

     

    3.17 Insurance.  Borrower
shall maintain insurance with financially sound and reputable insurance
companies or associations against such risks and in such amounts as are
reasonably acceptable to Agent and as are customarily maintained by Persons
engaged in similar businesses, or as may be required by Applicable
Law.  Borrower shall deliver to Agent endorsements to all of the
following: (a) “All Risk” and business interruption insurance policies of
Borrower naming Agent, for the benefit of Agent and Lenders, as a loss payee, as
its interests may appear, and (b) general liability and other liability policies
of Borrower naming Agent, for the benefit of Agent and Lenders, as an additional
insured.  All policies of insurance on personal property will include
an endorsement, in form and substance acceptable to Agent, showing loss payable
to Agent as its interests may appear, for the benefit of Agent and Lenders (Form
438 BFU or other form acceptable to Agent) and such other endorsements as Agent
shall reasonably request.  Such endorsement, or an independent
instrument furnished to Agent, will provide that the insurer will give at least
30 days’ prior written notice to Agent before any such policy or policies of
insurance shall be altered or canceled (or, if such cancellation relates to a
liability insurance policy and is due to non-payment of premium, at least 20
days’ (or such greater time as Agent may agree in writing) notice) and that no
act or default of Borrower or any other Person shall affect the right of Agent,
on behalf of Agent and Lenders, to recover under such policy or policies of
insurance in case of loss or damage.  Borrower hereby directs all
present and future insurers under its “All Risk” policies of insurance to pay
all proceeds payable thereunder directly to Agent, for the benefit of Agent and
Lenders.  Agent reserves the right at any time, upon review of
Borrower’s risk profile, to require additional forms and limits of insurance to
adequately protect Agent’s interests in accordance with Agent’s normal practices
for similarly situated borrowers.

     

    
      
        
        

      

      
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    3.18 Eligible Notes
Receivable.  With respect to each Note Receivable identified as
an Eligible Note Receivable or otherwise included in the calculation of the
Borrowing Base on the most recent Borrowing Base Certificate:

     

    (a) such Note
Receivable arises under Eligible Loan Paper;

     

    (b) such Note
Receivable arose in the ordinary course of Borrower’s business from the lending
of money to the related Account Debtor and is evidenced by a promissory note
that has been duly authorized by the related Account Debtor and that, together
with the related Loan Paper, is in full force and effect;

     

    (c) such Note
Receivable and the related Loan Paper: (i) are bona fide existing, full recourse
payment obligations of the related Account Debtor created and entered into by
Borrower in the ordinary course of its business; (ii) constitute the legal,
valid and binding obligation of the Account Debtor on such Note Receivable to
pay the stated amount of the Note Receivable and interest thereon; and (iii) are
enforceable against such Account Debtor, without any known defenses, setoffs,
claims, counterclaims, rights or rescission, rights of cancellation (whether
actual or alleged), in accordance with their respective terms;

     

    (d) (i) there
are no facts, events or occurrences that in any way impair the validity,
collectability or enforceability of such Note Receivable or tend to reduce the
amount payable thereunder as reflected on the invoices, statements schedules
delivered to Agent with respect thereto, or that might result in any material
adverse change in the financial condition of the related Account Debtor or the
collectability thereof; (ii) the outstanding amount of such Note Receivable and
all information delivered to Agent or the Pledgeholder with respect to such Note
Receivable (including the amounts and dates of payments on such Note Receivable
shown on the Books and Records of Borrower) are true, correct and complete; and
(iii) the principal amount of such Note Receivable as represented to Agent is
actually and absolutely owing to Borrower and is not in any way
contingent;

     

    (e) such Note
Receivable was originated and documented in accordance with the terms of the
Credit Policy, and the Account Debtor on such Note Receivable has executed all
appropriate documentation required by Borrower, as required by, and in
accordance with, the Credit Policy;

     

    (f) such Note
Receivable, together with the related Loan Paper, was originated in accordance
with, and does not contravene in any material respect any Applicable Laws
(including, without limitation, laws, rules and regulations relating to usury,
credit disclosure, predatory lending, truth in lending, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection practices
and privacy);

     

    
      
        
        

      

      
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    (g) such Note
Receivable, together with the Loan Paper related thereto, is a “general
intangible,” an “instrument,” a “payment intangible,” or an “account,” within
the meaning of the UCC of all jurisdictions that govern the perfection of the
security interest granted therein;

     

    (h) all
material consents, licenses, approvals or authorizations of, or registrations or
declarations with, any Governmental Authority required to be obtained, effected
or given in connection with the extension of credit in connection with such Note
Receivable have been duly obtained, effected or given and are in full force and
effect;

     

    (i) such Note
Receivable bears some current cash interest, which is due and payable
monthly;

     

    (j) Borrower
is free to assign and pledge such Note Receivable, together with the related
Loan Paper and all rights relating thereto, without the giving of notice or the
obtaining of consent of any Person, including the applicable Account Debtor or
any agent with respect to such Note Receivable (except for such consents which
have been obtained prior to inclusion of such Note Receivable in the Borrowing
Base);

     

    (k) such Note
Receivable is not evidenced by a judgment or Chattel Paper;

     

    (l) such Note
Receivable is not secured by any real property;

     

    (m) if an
Instrument has been issued in connection therewith, there is only one original
of such Instrument representing all or any portion of such Note Receivable, and
the original of such Instrument has been delivered to the Agent or the
Pledgeholder, duly endorsed as Collateral;

     

    (n) such Note
Receivable and the Borrower’s interest in all related Account Debtor Collateral
are free of any Liens, except for Permitted Liens, and all filings and other
actions required to perfect the security interest of the Agent, on behalf of the
Lenders, in such Note Receivable and the related Loan Paper have been made or
taken;

     

    (o) the
Account Debtor on such Note Receivable has waived, in writing, all rights of
set-off and/or counterclaim against Borrower and its successors and
assigns;

     

    (p) the
Account Debtor on such Note Receivable is not a Person who would cause such Note
Receivable to not be an Eligible Note Receivable;

     

    (q) the Loan
Paper and other documents, instruments and agreements relating to such Note
Receivable do not, by their terms, permit the payment obligation of the Account
Debtor thereunder to be converted into or exchanged for Stock of such Account
Debtor;

     

    (r) no
payments with respect to such Note Receivable have been or shall be made thereon
except payments in accordance with the provisions of Section 3.23;

     

    (s) except as
permitted in Section 4.3, Borrower has
not agreed with the related Account Debtor to: (i) any amendment thereof or
waiver of or forbearance with respect to any of the covenants or requirements
set forth in the Loan Paper relating thereto; (ii) any deduction therefrom,
(iii) any extension of the time for payment thereof, (iv) any compromise or
settlement for less than the full amount thereof, or (v) any release, in whole
or in part, of any Person liable therefore; and

     

    
      
        
        

      

      
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    (t) such Note
Receivable is not excluded as ineligible by virtue of not satisfying one or more
criteria set forth in the definition of Eligible Note Receivable.

     

    3.19 Guaranteed
Indebtedness.  Borrower has no Guaranteed Indebtedness (other
than Borrower’s obligation to repurchase ineligible Notes Receivable from
Hercules Funding II under Section 3.05 of the Wells Fargo Sale and
Servicing Agreement, as in effect on the date hereof).

     

    3.20 Payment of
Obligations.  Borrower will: (a) pay and discharge or cause to
be paid and discharged all Obligations in a timely manner; and (b) except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect, (i) pay and discharge, or cause to be paid and discharged, its
Indebtedness in the ordinary course of business prior to an Event of Default,
subject to the terms of any Subordination Agreement in effect from time to time,
(ii) except to the extent they are the subject of a Permitted Protest, pay and
discharge, or cause to be paid and discharged promptly, all Charges, and (iii)
pay all lawful claims for labor, materials, supplies and services or otherwise,
before any thereof shall become in default.

     

    3.21 Conduct of
Business.  As of the Closing Date, Borrower and each of its
Subsidiaries are engaged only in the businesses described in Item 1 of the
Reference 10-K.  Borrower shall:  (a) conduct its business
substantially as conducted on the Closing Date and consistent with the Reference
10-K; (b) at all times maintain, preserve and protect all of the Collateral and
Borrower’s other property, in use or useful in the conduct of its business and
keep the same in good repair, working order and condition (taking into
consideration ordinary wear and tear) and from time to time make, or cause to be
made, all necessary or appropriate repairs, replacements and improvements
thereto consistent with industry practices, so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
and (c) at its sole cost and expense and in its own name, in accordance with
industry standards and Applicable Laws, promptly and diligently collect and
enforce payment of all Loan Paper and Notes Receivable in a commercially
reasonable manner, and defend and hold Agent and the Lenders harmless from any
and all loss, damage, penalty, fine or expense arising from such collection or
enforcement.  Borrower keeps complete, correct and accurate records of
all Notes Receivable owned or serviced by Borrower and all payments
thereon.

     

    3.22 Further Assurances; Other
Matters.

     

    (a) At any
time and from time to time, upon the written request of Agent and at the sole
expense of Borrower, Borrower shall promptly and duly execute and deliver any
and all such further instruments and documents and take such further action as
Agent may reasonably request to obtain the full benefits of this Agreement and
to protect, preserve and maintain Agent’s rights in the Collateral and under
this Agreement, including (i) using its best efforts to secure all consents and
approvals necessary or appropriate for the assignment to or for the benefit of
Agent of any License or other agreement held by Borrower and to enforce the
Liens granted hereunder; and (ii) filing any financing or continuation
statements under the UCC with respect to the Liens granted hereunder or under
any other Loan Document as to those jurisdictions that are not Uniform
Commercial Code jurisdictions.  Upon Agent’s request, within
forty-five (45) days following the end of each Fiscal Quarter of Borrower (or as
often as Agent may require upon the occurrence and continuation of a Default or
Event of Default), Borrower will supplement each Schedule to this Agreement
with respect to any matter hereafter arising that, if existing or occurring as
of the Closing Date, would have been required to be set forth or described in
such Schedule; provided, that such supplement shall not be deemed to be an
amendment thereof unless expressly consented to in writing by
Agent.

     

    (b) If not
waived by Agent in writing (which waiver may be revoked), Borrower shall obtain
authenticated Control Letters from each issuer of uncertificated securities,
securities intermediary, or commodities intermediary issuing or holding any
financial assets or commodities included in the Collateral to or for
Borrower.

     

    
      
        
        

      

      
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    (c) If
Borrower is or becomes the beneficiary of a letter of credit relating to any
Pledged Loan Paper or Pledged Note Receivable, Borrower shall promptly, and in
any event within two (2) Business Days after becoming a beneficiary, notify
Agent thereof and enter into a tri-party agreement with Agent and the issuer
and/or confirmation bank with respect to Letter of Credit Rights assigning such
Letter of Credit Rights to Agent and directing all payments thereunder to the
ACH Account, the Lockbox or the Custodial Account.

     

    (d) Borrower
shall take all steps necessary to grant Agent control of all electronic chattel
paper in accordance with the UCC and all “transferable records” as defined in
each of the Uniform Electronic Transactions Act and the Electronic Signatures in
Global and National Commerce Act.

     

    3.23 Collections and Proceeds of
Collateral.

     

    (a) Borrower
shall open and shall at all times maintain the ACH Account and the Collection
Account.  All cash, checks, drafts or other items of payment relating
to or constituting payments made in respect of any or all of the Collateral, all
Collections, and all other Proceeds of the Collateral, shall be deposited
directly into the ACH Account or the Collection Account.  Borrower
shall maintain in effect at all times instructions to all Account Debtors on
Pledged Notes Receivable to: (i) make payment of any obligations owing to
Borrower directly, by ACH transfer or wire transfer, to the ACH Account, and
(ii) to mail or deliver all checks or other forms of payment for amounts owing
to Borrower to a post office box designated by Agent (the “Lockbox”), over which
Agent shall have exclusive and unrestricted access.  Agent shall
collect the mail delivered to the Lockbox, open such mail, and endorse and
credit all items to the Collection Account, and Borrower shall cause all funds
flowing through the Lockbox or the ACH Account to automatically be transferred
into the Collection Account, over which Agent shall have exclusive and
unrestricted access.  Without limiting the generality of the
foregoing, Borrower shall cause the entire balance in the ACH Account to be
swept on at least a daily basis to the Collection Account.  Agent
shall have all right, title and interest in all of the items from time to time
flowing through the Lockbox and/or held in the Collection Account and their
proceeds.  Neither Borrower nor any Person claiming through Borrower
shall have any right or control over the use of, or any right to withdraw any
amount from, the Lockbox and/or the Collection Account, each of which shall be
under the sole control of the Agent.  Borrower shall hold in trust for
Agent all Collections that it receives despite the directions to make payments
to the Lockbox or the Collection Account, and immediately deliver such payments
to Agent in their original form as received from the customer, with proper
endorsements for deposit into the Collection Account.  If Borrower or
any of its Subsidiaries receives any payments on account of Pledged Notes
Receivable, Pledged Loan Paper, Collections or any other Collateral, then
Borrower shall hold or cause its Subsidiaries to hold such payments in trust for
Agent and shall deposit or cause its Subsidiaries to deposit all such payments,
to the extent of Borrower’s rights therein, into the Collection
Account.

     

    (b) Borrower
shall open and maintain a Deposit Account at Bank identified in writing to Bank
as Borrower’s “operating account” (the “Operating Account”),
and, so long as no Default or Event of Default has occurred which is continuing,
any amounts in the Collection Account shall be transferred daily by Agent to the
Operating Account.  During the continuance of an Event of Default,
Agent may apply all or any part of the amounts in the Collection Account to the
Obligations as provided in Section 7.4.

     

    (c) Borrower
shall keep the Collateral, all Collections and all other Proceeds of the
Collateral segregated and separate from its other assets and property, and
Borrower shall not at any time comingle Collections on or Proceeds of Pledged
Notes Receivable with Proceeds of Notes Receivable or Accounts that are not
Proceeds of Pledged Notes Receivable.  Borrower shall at all times
maintain in effect instructions to all Account Debtors on Notes Receivable that
are not Pledged Notes Receivable to make payments to accounts other than the ACH
Account and the Collection Account and to a physical address that is not
associated with the Lock Box.

     

    
      
        
        

      

      
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    (d) Borrower
shall deposit into a Deposit Account that is subject to a perfected
first-priority Agent’s Lien all amounts advanced by Borrower into escrow and all
amounts delivered to Borrower to be held in escrow, including, without
limitation, construction funds, insurance premiums and proceeds, taxes, and
other funds delivered to Borrower to be held on behalf of any Account Debtor
under any Pledged Note Receivable.

     

    3.24 Financial and Portfolio
Covenants.

     

    (a) Borrower
and its Subsidiaries, on a consolidated basis, shall maintain, as measured on
the last day of each Fiscal Quarter of Borrower, the following financial
covenants, each of which shall be calculated in accordance with GAAP
consistently applied:

     

    (1) Minimum Adjusted Quick
Ratio.  A quick ratio of cash, marketable securities, and Notes
Receivable (excluding those owing from affiliates) minus bad debt reserve, to
current liabilities that is not less than 0.10:1.00.

     

    (2) Minimum Tangible Net
Worth.  Tangible Net Worth of not less than Two Hundred Fifty
Million Dollars ($250,000,000).

     

    (3) Consolidated Debt to
Tangible Net Worth.  A ratio of total consolidated liabilities
(determined in accordance with GAAP) to Tangible Net Worth that is not more than
1.25 to 1.00.

     

    (b) Maximum Delinquent Notes
Receivable Percentage.  Borrower shall not, and will not permit
any of its Subsidiaries to, cause or allow the aggregate unpaid principal
balance of all loans that are owned by Borrower or its Subsidiaries, or that are
serviced by Borrower for any of its Subsidiaries or Affiliates, with respect to
which any payment thereunder remains outstanding and unpaid, in whole or in
part, for more than thirty (30) days past the date it became due and payable, to
be in excess of ten percent (10%) of the aggregate unpaid principal balance of
all such loans owned by Borrower or its Subsidiaries or that are serviced by
Borrower as of such day.

     

    (c) Liquidity
Ratio.  Borrower shall maintain at all times a Liquidity Ratio
of not less than 1.00 to 1.00.

     

    (d) Debt Service Coverage
Ratio.  Borrower shall maintain a Debt Service Coverage Ratio
of not less than 1.50 to 1.00 as of the last day of each Fiscal Quarter,
commencing with the Fiscal Quarter ending March 31, 2010.

     

    (e) Asset Coverage
Ratio.  Borrower shall maintain at all times an Asset Coverage
Ratio of not less than 2.00 to 1.00.

     

    3.25 [Reserved].

     

    3.26 OFAC.  Neither
Borrower nor any of its Subsidiaries (i) is a person whose property or interest
in property is blocked or subject to blocking pursuant to Section 1 of
Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism
(66 Fed. Reg. 49079 (2001), (ii) engages in any dealings or transactions
prohibited by Section 2 of such executive order, or is otherwise associated
with any such person in any manner violative of Section 2, or (iii) is a
person on the list of Specially Designated Nationals and Blocked Persons or
subject to the limitations or prohibitions under any other U.S. Department of
Treasury’s Office of Foreign Assets Control regulation or executive
order.

     

    
      
        
        

      

      
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    3.27 Patriot
Act.  Borrower is in compliance, in all material respects, with
(i) the Trading with the Enemy Act, as amended, and each of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) and any other enabling legislation or executive order
relating thereto, and (ii) the Uniting And Strengthening America By Providing
Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act
of 2001) and the USA PATRIOT Improvement and Reauthorization Act of 2005 (Pub.
L. 109-177) (the “Patriot
Act”).  No part of the proceeds of the Loans will be used,
directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United Stats Foreign Corrupt Practices Act of 1977, as
amended.

     

    3.28 Solvency.  Borrower,
and each of its Subsidiaries, is Solvent and neither Borrower nor any of its
Subsidiaries is the subject of a case or proceeding under any Debtor Relief
Law.

     

    3.29 Material
Contracts.  As of the Closing Date, Schedule 3.29
is a true, correct, and complete listing of all Material Contracts of Borrower
other than Loan Paper.  After the Closing Date, Borrower will promptly
provide Agent with a true, complete and correct copy of each Material Contract
executed by Borrower (other than Loan Paper, except to the extent required
hereunder).

     

    3.30 Investment Company; RIC
Status.  Borrower is a non-diversified closed-end management
investment company within the meaning of the Investment Company
Act.  Borrower has validly elected to be treated as a “business
development company” pursuant to Section 54 of the Investment Company Act
and has not revoked such election.  Borrower qualifies as a
RIC.  Borrower is in compliance with the requirements of the
Investment Company Act as they relate to business development
companies.  At all times, Borrower shall maintain its status and
qualification as a “business development company” under the Investment Company
Act, and as a RIC under the IRC.  Neither Borrower nor any Subsidiary
is, except with respect to Borrower as a business development company under the
Investment Company Act, subject to any other Applicable Law which purports to
regulate or restrict its ability to borrow money or to consummate the
transactions contemplated by this Agreement or to perform its obligations under
any Loan Document to which it is a party.

     

    3.31 Not Plan
Assets.  The assets of Borrower do not and will not constitute
“plan assets,” within the meaning of ERISA, the IRC and the respective
regulations promulgated thereunder.  Assuming no Lender will use “plan
assets” within the meaning of ERISA, the IRC and the respective regulations
promulgated thereunder to make Loans to Borrower, the execution, delivery and
performance of this Agreement, and the borrowing and repayment of amounts
hereunder, do not and will not constitute non-exempt “prohibited transactions”
under ERISA or the IRC.

     

    3.32 Servicing of Pledged Notes
Receivable and Pledged Loan Paper.

     

    (a) Generally.  Borrower
shall conduct the servicing, administration and collection of the Pledged Loan
Paper and Pledged Notes Receivable and shall take, or cause to be taken, all
such actions as may be necessary or advisable to service, administer and collect
the Pledged Loan Paper and Pledged Notes Receivable from time to
time.  Borrower will service, administer and make collections on the
Pledged Loan Paper and Pledged Notes Receivable with reasonable care, using that
degree of skill and attention that the Borrower exercises with respect to all
comparable loans that it services for itself or others and in accordance with
the Accepted Servicing Practices.  Without limiting the generality of
the foregoing, Borrower shall:

     

    
      
        
        

      

      
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    (1) prepare
and submit of claims to, and post-billing liaison with, Account
Debtors;

     

    (2) maintain
all necessary Books and Records with respect to the Pledged Loan Paper and
providing such reports to Agent and the Lenders in respect of the servicing of
the Pledged Loan Paper and Pledged Notes Receivable (including information
relating to its performance under this Agreement) as may be required hereunder
or as the Agent may reasonably request;

     

    (3) maintain
and implement administrative and operating procedures (including, without
limitation, an ability to recreate servicing records evidencing the Pledged Loan
Paper in the event of the destruction of the originals thereof) and keeping and
maintaining all documents, books, records and other information reasonably
necessary or advisable for the collection of the Pledged Loan Paper (including,
without limitation, records adequate to permit the identification of any new
Pledged Loan Paper and all Collections of and adjustments to any existing
Pledged Loan Paper);

     

    (4) promptly
deliver to Agent and the Pledgeholder, from time to time, such information and
servicing records (including information relating to its performance under this
Agreement) as Agent or the Pledgeholder may from time to time reasonably
request;

     

    (5) identify
all new Pledged Loan Paper and Pledged Notes Receivable clearly and
unambiguously in its servicing records to reflect that such Pledged Loan Paper
and Pledged Notes Receivable are owned solely by Borrower and pledged to the
Agent, for the benefit of the Lenders;

     

    (6) comply in
all material respects with the Credit Policy in regard to all Pledged Loan Paper
and Pledged Notes Receivable;

     

    (7) comply in
all material respects with all Applicable Laws with respect to it, its business
and properties and all Pledged Loan Paper, Pledged Notes Receivable and
Collections with respect thereto; and

     

    (8) notify
Agent of any material action, suit, proceeding, dispute, offset deduction,
defense or counterclaim that (1) is or is threatened to be asserted by an
Account Debtor with respect to any Pledged Loan Paper or Pledged Note
Receivable; or (2) could reasonably be expected to have a Material Adverse
Effect.

     

    (b) Collection
Efforts.

     

    (1) Collections.  Borrower
will make reasonable efforts to collect all payments called for under the terms
and provisions of the Pledged Notes Receivable as and when the same become due,
and will follow those collection procedures as are consistent with Accepted
Servicing Practices.  Borrower may not waive, modify or otherwise vary
any provision of Pledged Loan Paper or Pledged Notes Receivable, except as may
be in accordance with the Credit Policy.  Notwithstanding anything to
the contrary contained herein, Borrower will not take any action with respect to
any Pledged Loan Paper or Pledged Notes Receivable that is prohibited
hereunder.

     

    
      
        
        

      

      
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    (2) Payments to Cash Management
Account.  On or before the first date on which any Note
Receivable is included in the Borrowing Base, Borrower shall have instructed all
Account Debtors to make all payments in respect of all Pledged Notes Receivable
directly to the Collection Account.

     

    (3) Adjustments.  If
(i) Borrower makes a deposit into the Collection Account or the ACH Account in
respect of a Collection of a Pledged Note Receivable or a Recovery and such
Collection was received by Borrower in the form of a check that is not honored
for any reason or (ii) Borrower makes a mistake with respect to the amount
of any Collection or Recovery and deposits an amount that is less than or more
than the actual amount of such Collection or Recovery, Borrower shall
appropriately adjust the amount subsequently deposited into the Collection
Account or ACH Account to reflect such dishonored check or
mistake.  Any payment to Agent or any Lender in respect of which a
dishonored check is received shall be deemed not to have been paid.

     

    (c) Realization Upon Defaulted
Loan Paper.  Borrower will use its reasonable efforts to
repossess or otherwise comparably convert the ownership of any Account Debtor
Collateral with respect to Defaulted Loan Paper.  Borrower will follow
the practices and procedures set forth in the Credit Policy in order to realize
upon such Account Debtor Collateral.  Any sale of Account Debtor
Collateral shall be evidenced by a certificate of a Responsible Officer of
Borrower delivered to the Agent identifying the Defaulted Loan Paper and the
Account Debtor Collateral, setting forth the sale price of the Account Debtor
Collateral and certifying that such sale price is the fair market value of such
Account Debtor Collateral; provided, that if after giving effect to such sale
(a) the Net Borrowing Availability would not be greater than or equal to zero or
(b) a Default or an Event of Default would exist, then Borrower prior to selling
any Account Debtor Collateral with respect to Defaulted Loan Paper shall obtain
the prior written consent of Agent.  Borrower will remit to the
Collection Account the Recoveries received in connection with the sale or
disposition of Account Debtor Collateral with respect to Defaulted Loan
Paper.

     

    (d) Limitations.  After
an Event of Default has occurred and is continuing, at Agent’s sole direction,
Borrower shall take such action as Agent may deem necessary or advisable to
enforce collection of all Pledged Loan Paper and Pledged Notes Receivable;
provided, that Agent may, at any time after an Event of Default has occurred and
is continuing, notify any Account Debtor with respect to any Pledged Loan Paper
or and Pledged Note Receivable of the pledge and assignment of the same to the
Agent and direct that payments of all amounts due or to become due to the
Borrower thereunder be made directly to the Agent or any servicer, collection
agent or lock-box or other account designated by Agent and, upon such
notification and at the expense of Borrower, Agent may enforce collection of any
such Collateral and adjust, settle or compromise the amount or payment
thereof.  In no event shall Borrower be entitled to make the
Pledgeholder, Agent or any Lender a party to any litigation without such party’s
express prior written consent.

     

    (e) Release of Pledged Notes
Receivable.  When a Pledged Note Receivable that is in the
possession of Agent or the Pledgeholder is repaid in its entirety, Agent shall
return or shall authorize the Pledgeholder to return such Pledged Note
Receivable to Borrower to facilitate its payment and Agent shall release Agent’s
Liens in such Pledged Note Receivable promptly upon receipt of the final payment
relating to such Pledged Note Receivable.

     

    3.33 Post-Closing
Matters.  Borrower shall complete the matters and deliver the
documents, instruments and agreements listed in Sections 4, 5 and 6 of the Schedule of
Documents when and to the extent required thereunder.

     

    
      
        
        

      

      
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    4. NEGATIVE
COVENANTS

     

    Borrower
covenants and agrees that, from the Closing Date until the Termination Date,
none of Borrower or any of its Subsidiaries (except to the extent that any of
the below covenants are expressly limited to the Borrower) shall, directly or
indirectly, by operation of law or otherwise:

     

    4.1 Transfers.  (a)
Other than Permitted Dispositions, sell, license, lease, transfer, convey,
assign (by operation of law or otherwise), grant any option with respect to, or
otherwise dispose of any its or its Subsidiaries’ assets or properties, or (b)
cause the portfolio of Notes Receivable held by Borrower, as opposed to any
Subsidiary or Affiliate of Borrower, to be selected in a manner adverse to
Borrower, Agent or any Lender.

     

    4.2 Changes to Name,
Locations.  (a) Change its name, its federal employer
identification number (or obtain additional numbers), type of legal entity,
organizational identification number issued by the state of its organization,
the timing of its Fiscal Year, the location of its chief executive office or
principal place of business, the locations of any Collateral or records
concerning the Collateral, without, in each instance, giving thirty (30) days’
prior written notice thereof to Agent and taking all actions deemed necessary or
appropriate by Agent to protect and perfect the Lien of Agent, for the benefit
of Agent and Lenders, continuously upon the Collateral; (b) engage in any
business other than as set forth in the Reference 10-K and as presently
conducted or as reasonably related thereto; make any material changes in any of
its investment objectives, investment policies, or investment guidelines;
(c) agree or otherwise permit any change in the Credit Policy without first
having provided Agent with ten (10) Business Days advance notice of any proposed
change and having obtained the prior written consent of the Agent (which consent
shall not unreasonably be withheld); (d) amend its articles or certificate of
incorporation, by-laws, operating agreement or other organizational documents in
a manner that would materially adversely affect Agent or the Lenders; or (e) as
to Borrower only, reincorporate or reorganize itself under the laws of any
jurisdiction other than the jurisdiction in which it is incorporated or
organized as of the Closing Date without the prior written consent of
Agent.

     

    4.3 Changes to Pledged Loan
Paper.  Extend, amend or otherwise modify the terms (or in the
case of Multi-Lender Loan Paper, consent to any extension, amendment or other
modification of the terms) of any Eligible Loan Paper or Eligible Note
Receivable, except for extensions and adjustments made in accordance with the
Credit Policy, provided that, upon written notice from Agent, sent after the
occurrence and during the continuance of any Default or Event of Default,
Borrower shall not make, or consent to, any further extensions, amendments or
modifications without the prior written consent of Agent.

     

    4.4 Restrictions on Fundamental
Changes.

     

    (a) Merge
with, consolidate with, acquire all or substantially all of the assets or Stock
of, or otherwise combine with, any Person.

     

    (b) amend any
of its articles of incorporation or bylaws as in effect on the Closing
Date.

     

    (c) Liquidate,
wind up, or dissolve itself (or suffer any liquidation or
dissolution).

     

    (d) Suspend or
go out of a substantial portion of its or their business.

     

    4.5 Loans and
Investments.  Make any Investment in any Subsidiary, Affiliate
or any other Person, or permit any Subsidiary to do so, other than Permitted
Investments.

     

    
      
        
        

      

      
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    4.6 Indebtedness.  Create,
incur, assume or permit to exist any Indebtedness, except Permitted
Indebtedness.  For the avoidance of doubt, Borrower shall not create
or incur any Guaranteed Indebtedness except by endorsement of instruments or
items of payment for deposit to the general account of Borrower and except for
Borrower’s obligation to repurchase ineligible Notes Receivable from Hercules
Funding II under Section 3.05 of the Wells Fargo Sale and Servicing
Agreement, as in effect on the date hereof.

     

    4.7 Liens and
Encumbrances.  (a) Create, incur, assume, or suffer to exist,
directly or indirectly, any Lien on or with respect to any of its assets, of any
kind, whether now owned or hereafter acquired, or any income or profits
therefrom, except for Permitted Liens; (b) permit any Collateral not to be
subject to the first priority security interest of Agent, for the benefit of
Agent and the Lenders, granted herein; or (c) solely with respect to Borrower,
enter into any agreement, document, instrument or other arrangement (except with
or in favor of Agent) with any Person which directly or indirectly prohibits,
purports to prohibit, or has the effect of prohibiting Borrower from assigning,
mortgaging, pledging, granting a security interest in or upon, or encumbering
any of Borrower’s assets or properties; provided that the restrictions set forth
in this clause (c) shall not prohibit or restrict the obligations of the
Borrower, if any, or Hercules Funding II set forth in Section 7.6 of that
certain Loan and Security Agreement dated as of August 25, 2008 by and among
Hercules Funding II LLC, Wells Fargo Foothill, LLC as administrative agent and
the lenders party thereto or Section 3.05 of the Wells Fargo Sale and
Servicing Agreement (collectively, as the same may be amended or extended from
time to time, the “Wells Fargo
Facility”).

     

    4.8 Restricted
Payments.  Make or cause to be made any Restricted Payment by
Borrower provided, however, that so long as no Default or Event of Default shall
have occurred and be continuing or would occur as a result thereof and Agent and
Lenders shall have received the financial statements required hereunder for the
most recently completed fiscal month, then Borrower may make distributions to
the holders of its Stock to the extent permitted by Applicable Law.

     

    4.9 Hedge
Agreements.  Enter into any Hedge Agreement except in the
ordinary course of business with a nationally recognized financial institution
satisfactory to Agent pursuant to bona fide hedging transactions and not for
speculation.

     

    4.10 [Reserved].

     

    4.11 Transactions with
Affiliates.  Acquire or lease any property from, or sell,
transfer or lease any property to, or enter into any lending, borrowing or other
transaction with, any of its officers or directors or other Affiliates
(including upstreaming and downstreaming of cash and intercompany advances)
other than: (i) transfers to Borrower; (ii) transfers in the ordinary course of
business and at prices and on reasonable terms not less favorable to Borrower
than those which would have been obtained in an arm’s-length transaction with a
non-Affiliated third party.

     

    4.12 Collateral with
Bailees.  Maintain or store any of the Collateral at any time
now or hereafter with a bailee, warehouseman, or similar party, other than Agent
or the Pledgeholder.

     

    4.13 Material Contracts;
Cancellation of Indebtedness.  Enter into, or permit any
Subsidiary to enter into, any amendment or modification to (or take any action
or omit to take any action with respect to) any Material Contract, which could
reasonably be expected to have a Material Adverse Effect, or default in the
performance of any obligations under any Material Contract which could
reasonably be expected to have a Material Adverse Effect, or permit any Material
Contract to be canceled or terminated prior to its stated maturity where such
cancellation or termination could reasonably be expected to have a Material
Adverse Effect; or cancel any Indebtedness owing to it, except for reasonable
consideration and in the ordinary course of its business; provided that the
restrictions set forth in this Section 4.13 shall not be
applicable to Special Purpose Subsidiaries.

     

    
      
        
        

      

      
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    4.14 ERISA.  (a)
Voluntarily terminate any Plan so as to result in liability of Borrower to the
PBGC, (b) enter into any “Prohibited Transaction” (as defined in ERISA)
involving any Plan that could reasonably be expected to result in liability of
Borrower to PBGC, (c) cause an occurrence of any Reportable Event that could
reasonably be expected to result in liability of Borrower to PBGC, (d) allow or
suffer to exist any other event or condition known to that Borrower could result
in liability of Borrower to PBGC, or (e) permit any of its assets, other than
assets in any plan as defined in Section 3(3) of ERISA, to become or be
deemed to be “plan assets” within the meaning of ERISA, the IRC or the
respective regulations promulgated thereunder.

     

    4.15 Accounting
Methods.  Modify or change its fiscal year or its method of
accounting (other than as may be required to conform to GAAP) or enter into,
modify, or terminate any agreement currently existing, or at any time hereafter
entered into with any third party accounting firm or service bureau for the
preparation or storage of Borrower’s or its Subsidiaries’ accounting records
without said accounting firm or service bureau agreeing to provide Agent
information regarding the Collateral or Borrower’s and its Subsidiaries’
financial condition.

     

    4.16 Limitations on
Subsidiaries.  Create or otherwise cause or suffer to exist or
become effective, or (other than covenants applicable only to Special Purpose
Subsidiaries set forth in documentation governing Permitted Special Purpose
Indebtedness) permit any Subsidiary to create or otherwise cause or suffer to
exist or become effective, any consensual encumbrance or restriction of any kind
on the ability of any Subsidiary to:  (a) pay dividends or make any
other distribution on any of such Subsidiary’s capital stock or other equity
interests owned by Borrower or any other Subsidiary of Borrower; (b) pay any
Indebtedness owed to Borrower or any other Subsidiary; (c) make loans or
advances to Borrower or any other Subsidiary; or (d) transfer any of its
property or assets to Borrower or any other Subsidiary.

     

    5. FINANCIAL
REPORTS

     

    5.1 Reports and
Notices.  Borrower represents, warrants and agrees that, from
and after the Closing Date until the Termination Date, Borrower shall deliver to
Agent, or cause to be delivered to Agent (with a copy of the same delivered
electronically to any third party engaged by Agent to analyze or audit the
same):

     

    (a) as soon as
available and in any event no later than thirty (30) days following the end of
each Fiscal Month:

     

    (1) a
Borrowing Base Certificate including a list of Eligible Notes Receivable, a
detailed calculation of the Borrowing Base, and such supporting detail and
documentation as Agent may request;

     

    (2) a summary
and detailed aging of Notes Receivable of Borrower including separate aging
reports of all Notes Receivable and all Eligible Notes Receivable included in
the Borrowing Base, together with a reconciliation to the detailed calculation
of the Borrowing Base most recently provided to Agent;

     

    (3) the
Financial Statements of Borrower (on a non-consolidated basis) for such month,
which Financial Statements shall provide comparisons to actual results for the
corresponding period during the prior Fiscal Year, both on a monthly and
year-to-date basis;

     

    
      
        
        

      

      
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    (4) a
Compliance Certificate from the Chief Executive Officer or Chief Financial
Officer of Borrower certifying, among other things, that (i) such Financial
Statements are complete and correct and are prepared in accordance with GAAP
(subject to the exclusion of footnotes required by GAAP and changes resulting
from normal year-end audit adjustments), (ii) Borrower is in compliance with the
financial covenants tested on a quarterly or “at all times” basis under this
Agreement and showing in reasonable detail the calculations used in determining
compliance with such financial covenants, and (iii) no Default or Event of
Default has occurred and is continuing (or specifying those Defaults or Events
of Default that have occurred and are continuing of which he or she was
aware);

     

    (5) Collateral
reports specifying (i) the current unpaid principal balance of each Pledged Note
Receivable, (ii) current committed amount with respect to each Pledged Note
Receivable, (iii) current payment status of each Pledged Note Receivable, and
(iv) brief description of Account Debtor Collateral for each Pledged Note
Receivable, with additional detail showing additions to and deletions from the
Collateral; and

     

    (6) Borrower’s
monthly credit watch list prepared in the ordinary course of business and
consistent with past practice; and

     

    (b) within
forty five (45) days following the end of each Fiscal Quarter of Borrower (other
than the end of the Fiscal Quarter that coincides with the end of Borrower’s
Fiscal Year), the Financial Statements of Borrower for such Fiscal Quarter,
which Financial Statements shall be presented both on a quarterly and
year-to-date basis and shall comply with all applicable SEC reporting
requirements;

     

    (c) within
ninety (90) days following the end of each Fiscal Year, the Financial Statements
of Borrower for such Fiscal Year certified without qualification by an
independent certified accounting firm acceptable to Agent, which Financial
Statements shall provide comparisons to actual results for the prior Fiscal
Year, on an annual basis, and shall comply with all applicable SEC reporting
requirements, accompanied by (1) a Compliance Certificate, and (2) any
management letter that may be issued;

     

    (d) promptly
upon the filing or sending thereof, copies of all regular, periodic or special
reports of Borrower or any of its Subsidiaries filed with the SEC; copies of all
registration statements of Borrower or any of its Subsidiaries filed with the
SEC (other than on Form S-8); and copies of all proxy statements or other
communications made Stockholders generally;

     

    (e) promptly
upon receipt thereof, copies of all final reports, if any, submitted to Borrower
by its independent certified public accountants in connection with any annual or
interim audit of Borrower;

     

    (f) copies of
each of Borrower’s quarterly reports to its Stockholders, promptly upon
transmission of each such report to any Stockholder;

     

    (g) promptly
upon receipt or knowledge thereof, notice of all claims, offsets or disputes
asserted by Account Debtors with respect to any of the Pledged Notes Receivable;
and

     

    (h) such other
reconciliations of Notes Receivable and such other information respecting the
business, financial condition, prospects or projections of Borrower or any of
its Affiliates as Agent reasonably may request from time to time.

     

    
      
        
        

      

      
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    5.2 Other
Reports.  Borrower shall notify Agent promptly of any
occurrence causing a material loss or decline in value of any Collateral and the
estimated (or actual, if available) amount of such loss or
decline.  Borrower shall, upon the request of Agent, furnish to Agent
and Lenders such other reports and information in connection with the affairs,
business, financial condition, operations, prospects, projections or management
of Borrower or the Collateral as Agent may request, all in reasonable detail,
and Borrower shall advise Agent promptly, in reasonable detail,
of:  (a) any Lien, other than Permitted Liens, attaching to or
asserted against any of Borrower’s property or assets; (b) any material change
in the composition of the Collateral or Borrower’s other properties or assets;
and (c) the occurrence of any other event that could reasonably be expected to
have a Material Adverse Effect.

     

    5.3 IntraLinks/IntraAgency.  Reports
required to be delivered pursuant to Sections 5.1 and 5.2 may be delivered
electronically and if so, shall be deemed to have been delivered on the date on
which Borrower posts such reports, or provides a link thereto, when such report
is posted electronically on IntraLinks/IntraAgency or other relevant website
that each Lender and Agent have access to (whether a commercial, third-party
website or whether sponsored by the Agent), if any, on Borrower’s behalf; provided,
that:  (a) Borrower shall deliver paper copies of such reports to
Agent or any Lender who requests Borrower to deliver such paper copies until
written request to cease delivering paper copies is given by Agent or such
Lender; (b) Borrower shall notify (which may be by facsimile or electronic mail)
Agent and each Lender of the posting of any such reports and immediately
following such notification Borrower shall provide to Agent, by electronic mail,
electronic versions (i.e., soft copies) of such reports; and (c) in each
instance, Borrower shall, upon request by Agent, provide paper copies of the
Compliance Certificates required by Sections 5.1(b) and 5.1(c) to
Agent.  Except for such Compliance Certificates, Agent shall have no
obligation to request the delivery of or to maintain copies of the reports
referred to above, and in any event shall have no responsibility to monitor
compliance by Borrower with any such request for delivery, and each Lender shall
be solely responsible for requesting delivery to it or maintaining its copies of
such reports.

     

    6. CREATION OF SECURITY
INTEREST

     

    6.1 Grant of Security Interest;
Assignment.

     

    (a) Borrower
grants to Agent, for the benefit of Agent and Lenders, a Lien upon all of its
right, title and interest in the Collateral to secure the prompt and complete
payment and performance of the Obligations.

     

    (b) Borrower
shall defend the right, title and interest of Agent, for the benefit of Agent
and the Lenders, in and to the Collateral against the claims and demands of all
Persons whomsoever, and shall take such actions, including (i) all actions
necessary to grant Agent “control” of any Investment Property, Deposit Accounts,
Letter of Credit Rights or electronic Chattel Paper owned by Borrower included
in the Collateral, with any agreements establishing control to be in form and
substance satisfactory to Agent, (ii) the delivery to Agent of all original
Instruments, Chattel Paper, negotiable Documents and certificated Stock owned by
Borrower included in the Collateral (in each case, accompanied by stock powers,
allonges or other instruments of transfer executed in blank) promptly after
Borrower receives same, (iii) after the occurrence and during the continuance of
an Event of Default, notification of Agent’s interest in Collateral at Agent’s
request, (iv) preparation and delivery of all applications and other relevant
actions to note the Lien of Agent, for the benefit of Agent and Lenders, on any
certificate of title included in the Collateral, and (v) the institution of
litigation against third parties as shall be prudent in order to protect and
preserve Borrower’s, Agent’s and Lenders’ respective and several interests in
the Collateral.  Borrower shall mark its Books and Records pertaining
to the Collateral to evidence the Loan Documents and the Liens granted under the
Loan Documents.  If Borrower retains possession of any Chattel Paper
or Instruments included in the Collateral with Agent’s consent, then such
Chattel Paper and Instruments shall be marked with the following
legend:  “THIS WRITING AND THE OBLIGATIONS EVIDENCED OR SECURED HEREBY
ARE SUBJECT TO THE LIEN OF UNION BANK, N.A., AS AGENT”  Borrower shall
promptly, and in any event within two (2) Business Days after the same is
acquired by it, notify Agent of any Commercial Tort Claim acquired by it
relating or pertaining to any Collateral, and unless otherwise consented to by
Agent, Borrower shall enter into a supplement to this Agreement (and the Loan
Documents) granting to Agent (for the benefit of Agent and Lenders) a Lien in
such Commercial Tort Claim.

     

    
      
        
        

      

      
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    (c) Without
limiting the generality of the foregoing, Borrower hereby unconditionally
collaterally assigns to Agent, for the benefit of Agent and the Lenders, and
grants to Agent, for the benefit of Agent and the Lenders, a continuing security
interest in, all of Borrower’s right title and interest in and to any and all
Notes Receivable included in the calculation of any Borrowing Base or referenced
on any Borrowing Base Certificate and all related Loan Paper, whether now
existing or later created or acquired, together with: (i) any and all
obligations therein described, the debt secured thereby and all sums of money
due and to become due thereon, with the interest provided for therein, (ii) any
and all Liens, privileges, security interests, collateral, rights, remedies,
entitlements and equities that Borrower now or in the future possesses or to
which is entitled as additional security for the payment thereof and the other
obligations described in any related Loan Paper, (iii) any and all financing
statements filed against the applicable Account Debtors, as debtor, naming
Borrower or any Multi-Lender Agent as secured party; (iv) any and all other
documents executed and/or delivered in connection with such Notes Receivable or
Loan Paper, including, without limitation, all of Borrower’s right, title and
interest in and to any collateral, security, guaranties, certificates of
deposit, letters of credit, performance bonds, demands, causes of action, all
related certificates, bank accounts, operating accounts, insurance policies,
reserve accounts, escrow accounts and other accounts, opinions, financial
statements of Account Debtors and any guarantors and any other collateral
arising out of and/or executed and/or delivered in connection with or related to
such Notes Receivable or Loan Paper, and all other rights and benefits of
Borrower related to such other documents, and (v) any and all claims, demands
and causes of action that Borrower now or in the future possesses against any
Account Debtor in connection with foregoing or to which Borrower is otherwise
entitled as additional security for the payment of such Notes Receivable, Loan
Paper and the other obligations described therein.  Borrower
authorizes Agent, to file amendments to all UCC financing statement filed by, on
behalf of or for the benefit of Borrower (other than financing statements naming
only a Multi-Lender Agent (other than Borrower) as secured party) against any
and all Account Debtors to Pledged Loan Paper or Pledged Notes Receivable,
changing the secured party of record on such UCC financing statements to
Agent.

     

    6.2 Agent’s
Rights.

     

    (a) Agent or
Agent’s designee may, at any time in Agent’s own name or in the name of
Borrower, after the occurrence and during the continuance of an Event of Default
(1) communicate with Account Debtors of Borrower, including obligors in
respect of Loan Paper, Notes Receivable, Accounts, Payment Intangibles,
Documents, Instruments, Chattel Paper or other agreements included in the
Collateral to verify to Agent’s satisfaction of the existence, amount and terms
of any such Loan Paper, Notes Receivable, Accounts, Payment Intangibles,
Documents, Instruments, Chattel Paper or other Collateral, (2) cause a back-up
or replacement servicer to take possession of, administer, collect and enforce,
the Pledged Loan Paper, Pledged Notes Receivable and other Collateral, and (3)
without prior notice to Borrower, notify Account Debtors and other Persons
obligated on the Collateral that Agent has a security interest therein, and that
payments shall be made directly to Agent.  Upon the request of Agent,
Borrower shall so notify such Account Debtors and other Persons obligated on the
Collateral.  Once any such notice has been given to any Account Debtor
or other Person obligated on the Collateral, Borrower shall not give any
contrary instructions to such Account Debtor or other Person without Agent’s
prior written consent.

     

    
      
        
        

      

      
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    (b) Borrower
shall remain liable under all of its Loan Paper and each of its other
agreements, contracts, Licenses and shall observe and perform all the conditions
and obligations to be observed and performed by it thereunder, and neither of
Agent nor any Lender shall have any obligation or liability whatsoever to any
Person under or with respect thereto by reason of or arising out of the
execution, delivery or performance of this Agreement or any other Loan
Documents, and neither Agent nor any Lender shall be required or obligated in
any manner (i) to perform or fulfill any of the obligations of Borrower
thereunder, (ii) to make any payment or inquiry, or (iii) to take any action of
any kind to collect or enforce any performance or the payment of any amounts
that may have been assigned to it or to which it may be entitled at any time or
times under or pursuant to any Loan Paper, agreement, contract or
License.

     

    (c) Borrower
shall, with respect to each of its owned, leased, or controlled properties or
facilities, during normal business hours and upon reasonable advance notice
(unless a Default or Event of Default has occurred and is continuing, in which
event no notice shall be required and Agent shall have access at any and all
times): (i) provide access to such facilities or properties to Agent, any Lender
and any of their respective officers, employees and agents, as frequently as
Agent determines to be appropriate; (ii) permit Agent, any Lender and any of
their respective officers, employees and agents to inspect, examine, audit and
make extracts from all of its Books and Records, including without limitation
management letters prepared by independent accountants; (iii) permit Agent, any
Lender and any of its officers, employees and agents to inspect, review,
evaluate and make physical verifications and appraisals of the Collateral in any
manner and through any medium that Agent considers advisable; and (iv) permit
Agent, any Lender and any of their respective officers, employees and agents to
discuss with its officers and its independent accountants, its business, assets,
liabilities, financial condition, results of operations and business
prospects.  Borrower shall provide to Agent, at Borrower’s expense,
such clerical and other assistance as may be reasonably requested with respect
thereto.  Representatives of Lenders may accompany Agent’s
representatives on inspections and audits.  Borrower shall make
available to Agent and its counsel, as quickly as practicable under the
circumstances, originals or copies of all of Borrower’s Books and Records and
any other instruments and documents that Agent may request.  Borrower
shall deliver any document or instrument reasonably necessary for Agent, as it
may from time to time request, to obtain records from any service bureau or
other Person that maintains records for Borrower.  If requested by
Agent, Borrower shall execute an authorization letter addressed to its
accountants authorizing Agent or any Lender to discuss the financial affairs of
Borrower with its accountants.

     

    6.3 Power of
Attorney.  Borrower hereby irrevocably makes, constitutes, and
appoints Agent, on behalf of Agent and Lenders (and any of Agent’s officers,
employees or agents designated by Agent) as its irrevocable true and lawful
attorney-in-fact, with power to, in the name of Borrower or its own
name:  (a) sign the name of Borrower on any document to be executed,
recorded or filed in order to perfect or continue perfected Agent’s Lien, for
the benefit of Agent and Lenders, upon the Collateral if Borrower fails to do so
promptly after request therefor by Agent, including filing any financing
statement or amendments thereto or continuation statement without the signature
of Borrower; and (b) after the occurrence and during the continuance of an Event
of Default, with respect to the Collateral:

     

    (1) take
possession of and to sign and endorse Borrower’s name on any invoice or bill of
lading relating to any Account, Loan Paper, Note Receivable or other Collateral,
drafts against Account Debtors, schedules and assignments of Accounts, Loan
Paper or Notes Receivable, verifications of Accounts and Notes Receivable and
notices to Account Debtors and other documents in connection with any of the
Collateral;

     

    (2) send
requests for verification of Accounts and Notes Receivable;

     

    
      
        
        

      

      
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    (3) take
possession of and endorse Borrower’s name on, and collect, any checks, notes,
acceptances, money orders, drafts, or other instruments or forms of payment or
security that relate to the Collateral or that may come into Pledgeholder’s,
Agent’s or any Lender’s possession;

     

    (4) notify the
post office authorities to change the address for delivery of Borrower’s mail to
an address designated by Agent, to receive and open all mail addressed to
Borrower, and to retain all mail relating to the Collateral and forward all
other mail to Borrower;

     

    (5) make,
settle, and adjust all claims under Borrower’s policies of insurance, as its
interests may appear (and all of Borrower’s rights with respect to insurance
relating to Account Debtors and Account Debtor Collateral under Pledged Loan
Paper) and make all determinations and decisions with respect to such policies
of insurance, as its interests may appear;

     

    (6) pay or
discharge Charges and Liens levied or placed on or threatened against the
Collateral;

     

    (7) (A) direct
any party liable for any payment under any Pledged Note Receivable or Pledged
Loan Paper or other Collateral to make payment of any and all moneys due or to
become due thereunder directly to Agent or as Agent shall direct; (B) receive,
demand and enforce any and all of Borrower’s rights with respect to the Pledged
Note Receivable, Pledged Loan Paper, other Collateral and/or the Hedge
Agreements and to perform any and all acts in the name of Borrower or at the
option of Agent, in the name of Agent with the same force and effect as if
performed by Borrower in the absence of this Agreement; (C) enforce the Pledged
Note Receivable, Pledged Loan Paper and the other Collateral, and ask or demand
for, collect, receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising out of
any Pledged Note Receivable, Pledged Loan Paper or other Collateral; (D) collect
and receive debts and other obligations owing to Borrower relating to the
Collateral; (E) foreclose, enforce and satisfy Liens and other security in favor
of Borrower securing the Pledged Notes Receivable; (F) commence and prosecute
any suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any thereof and to enforce any other
right in respect of any Collateral; (G) defend any suit, action or proceeding
brought against the Borrower with respect to any Collateral; (H) settle,
compromise or adjust any suit, action or proceeding described in clause (G) above and, in
connection therewith, to give such discharges or releases as Agent may deem
appropriate; (I) settle and adjust disputes and claims respecting the Pledged
Note Receivable, Pledged Loan Paper and the other Collateral, directly with the
applicable Account Debtors, for amounts and upon terms that Agent determines to
be reasonable; (J) generally, sell, transfer, pledge and make any agreement with
respect to or otherwise deal with the Pledged Notes Receivable, Pledged Loan
Paper and the other Collateral as fully and completely as though Agent were the
absolute owner thereof for all purposes; and (K) cause to be executed and
delivered any documents and releases and to do, at Agent’s option and Borrower’s
expense, at any time, or from time to time, all acts and things which Agent
deems necessary to protect, preserve or realize upon the Collateral or the
Agent’s Liens thereon or to effect the intent of this Agreement and the other
Loan Documents, all as fully and effectively as Borrower might do.

     

    Borrower
hereby ratifies all that such attorneys shall lawfully do or cause to be done by
virtue hereof.  The appointment of Agent as attorney-in-fact for
Borrower, and each and every one of Agent’s rights and powers, being coupled
with an interest, is irrevocable until the Termination Date.  NEITHER
AGENT NOR ANY LENDER, NOR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL BE RESPONSIBLE TO BORROWER FOR ANY
ACT OR FAILURE TO ACT PURSUANT TO THE POWERS GRANTED UNDER THE POWER OF ATTORNEY
HEREIN OR OTHERWISE, EXCEPT FOR ITS OR THEIR OWN GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, NOR FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES,
OR LOST PROFITS.  Borrower also hereby (i) authorizes Agent to file
any financing statements, continuation statements or amendments thereto that
contain any information required by Part 5 of Article 9 of the UCC for the
sufficiency or filing office acceptance of any financing statement, continuation
statement or amendment, including whether Borrower is an organization, the type
of organization and any organization identification number issued to Borrower,
(ii) agrees to furnish any such information to the Agent promptly upon request,
and (iii) ratifies its authorization for Agent to have filed any initial
financial statements, or amendments thereto if filed prior to the Closing
Date.  Borrower also authorizes Agent, at any time and from time to
time, to execute, in connection with any sale, transfer, assignment or other
disposition of Collateral pursuant hereto or the other Loan Documents, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral.  Borrower acknowledges that it is not
authorized to file any financing statement or amendment or termination statement
with respect to any financing statement with respect to the Liens granted under
the Loan Documents without the prior written consent of Agent and agrees that it
will not do so without the prior written consent of Agent prior to the
Termination Date.

     

    
      
        
        

      

      
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    6.4 Grant of License to Use
Intellectual Property.  For the purpose of enabling Agent, on
behalf of Agent and Lenders, to exercise its rights and remedies under the Loan
Documents, Borrower hereby grants to Agent, for the benefit of Agent and
Lenders, an irrevocable, non-exclusive license (exercisable upon the occurrence
of an Event of Default without payment of royalty or other compensation to
Borrower) to use, transfer, license or sublicense any Intellectual Property now
owned, licensed to, or hereafter acquired by Borrower, and wherever the same may
be located, and including in such license access to all media in which any of
the licensed items may be recorded or stored and to all computer and automatic
machinery software and programs used for the compilation or printout thereof,
and Borrower represents, warrants and agrees that any such license or sublicense
is not and will not be in conflict with the contractual or commercial rights of
any other Person; provided, subject to
Section 6.6, that
such license will terminate, on the Termination Date.

     

    6.5 Chattel
Paper.  With respect to each contract or lease included in the
Collateral, under which Borrower, as lessor, leases property to third parties,
where such leases fall within the definition of Chattel Paper, (i) each such
contract and lease, and any supplements thereto, may be executed in original
counterparts, but one and only one of which shall be designated the “Lessor’s
Original,” (ii) only the Lessor’s Original counterpart of each such lease and
any supplement thereto shall be deemed to constitute “chattel paper” under the
UCC, and (iii) each such lease and any supplement thereto shall contain a
provision setting forth the terms contained in clauses (i) and (ii) of this
sentence.  Borrower shall conspicuously stamp the Lessor’s Original
counterpart of each such contract and lease and any supplement thereto entered
into as of or after the Closing Date (and any other counterpart thereof that
comes into Borrower’s possession) with a legend, in form and substance
satisfactory to the Agent, clearly indicating that such lease and the property
leased thereunder is subject to the security interest granted pursuant
hereto.

     

    6.6 Reinstatement.  The
provisions of this Section 6 shall remain in
full force and effect and continue to be effective even if:  (a) any
case, proceeding or petition is filed by or against Borrower under any Debtor
Relief Law; (b) Borrower becomes insolvent or makes an assignment for the
benefit of creditors; (c) a receiver or trustee is appointed for all or any
significant part of Borrower’s assets; or (d) at any time payment and
performance of the Obligations, or any part thereof, is, pursuant to Applicable
Law, rescinded or reduced in amount, or must otherwise be restored or returned
by any obligee of the Obligations, whether as a “voidable preference,”
“fraudulent transfer” or otherwise, all as though such payment or performance
had not been made.  To the extent that any payment, or any part
thereof, by or on behalf of Borrower is made to Agent or any Lender, or Agent or
any Lender exercises its right of set-off, and such payment or the proceeds of
such set-off or any part thereof is subsequently invalidated, rescinded,
reduced, restored, returned, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by Agent or
any Lender in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then, the Obligations and Agent’s Liens, for the benefit of Agent and
the Lenders, in the Collateral shall be revived, reinstated and deemed reduced
only by any amount paid and not so rescinded, reduced, restored or
returned.

     

    
      
        
        

      

      
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    7. EVENTS OF DEFAULT; RIGHTS
AND REMEDIES

     

    7.1 Events of
Default.  The occurrence of any one or more of the following
events (regardless of the reason therefor) shall constitute an “Event of
Default” under this Agreement:

     

    (a) Borrower
fails to (a) make any payment of principal or interest in respect of any
Obligations when due and payable or declared due and payable, or (b) make any
other payment or pay any other Obligations within three (3) days after such
Obligations are due and payable or are declared due and payable (which three (3)
day cure period shall not apply to payments due on the Commitment Maturity
Date); or

     

    (b) Borrower
Party shall fail or neglect to perform, keep or observe any of the covenants,
promises, agreements, requirements, conditions or other terms or provisions
contained in this Agreement or any of the other Loan Documents and such default
shall have continued for a period of ten (10) Business Days or more after the
occurrence thereof; provided, there shall be no grace period for failure to
perform, keep or observe any of the covenants, promises, agreements,
requirements, conditions or other terms or provisions contained in
Sections 3.17, 3.18, 3.21,
3.22, 3.23, 3.24, 3.30, 3.31, or 3.32, or Section 4;
or

     

    (c) (i) an
event of default shall occur under any other agreement, document or instrument
to which Borrower or any of its Subsidiaries is a party, or by which any such
Person or its property is bound, and such event of default  (1)
involves the failure to make any payment, whether of principal, interest or
otherwise, and whether due by scheduled maturity, required prepayment,
acceleration, demand or otherwise, in respect of any Indebtedness (other than
the Obligations) of such Person in an aggregate amount exceeding $500,000, (2)
causes (or permits any holder of such Indebtedness or a trustee to cause) such
Indebtedness, or a portion thereof in an aggregate amount exceeding $500,000 to
become due prior to its stated maturity or prior to its regularly scheduled
dates of payment, or (3) causes a termination date under a Hedge Agreement to
occur prior to the stated or contracted termination date and the liability of
such Person as a result thereof, individually or in the aggregate, is greater
than $500,000; or

     

    (d) any
representation or warranty in this Agreement or any other Loan Document, or in
any written statement pursuant hereto or thereto, or in any report, financial
statement or certificate made or delivered to Agent or any Lender by or on
behalf of Borrower shall be untrue or incorrect in any material respect as of
the date when made or deemed made; or

     

    (e) any of the
assets of Borrower or any of its Subsidiaries shall be attached, seized, levied
upon or subjected to a writ or distress warrant; or come within the possession
of any receiver, trustee, custodian or assignee for the benefit of creditors of
Borrower or such Subsidiary, and shall remain unstayed or undismissed for 10
consecutive days; or any Person other than Borrower or such Subsidiary shall
apply for the appointment of a receiver, trustee or custodian for the assets of
Borrower or such Subsidiary and the order appointing such receiver, trustee or
custodian shall remain unstayed or undismissed for 10 consecutive days; or
Borrower or any of its Subsidiaries shall have concealed, removed or permitted
to be concealed or removed, any part of its property with intent to hinder,
delay or defraud its creditors or any of them or made or suffered a transfer of
any of its property or the incurring of an obligation that may be fraudulent
under any Debtor Relief Law or fraudulent transfer or other similar law;
or

     

    
      
        
        

      

      
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    (f) a case or
proceeding shall have been commenced involuntarily against Borrower or any of
its Subsidiaries:  (i) under any Debtor Relief Law and such case or
proceeding continues undismissed or unstayed for 60 calendar days, or an order
for relief is entered in any such case or proceeding, (ii) in any court or other
tribunal (A) seeking the appointment of a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) of such Person or of any
substantial part of its properties, or (B) seeking a decree, order or other
relief (1) for the reorganization or winding up or liquidation of the affairs of
any such Person, and such case or proceeding shall remain undismissed or
unstayed for 45 consecutive days or such court shall enter a decree or order
granting the relief sought in such case or proceeding; or (2) invalidating or
denying (x) any Person’s right, power, or competence to enter into or perform
any of its obligations under any Loan Document, or (y) the validity or
enforceability of this Agreement or any other Loan Document or any action taken
hereunder or thereunder; or

     

    (g) Borrower
or any of its Subsidiaries shall (1) institute or consent to the institution of
any case or proceeding under any Debtor Relief Law, (2) make an assignment for
the benefit of creditors; (3) apply for or consent to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) of any such Person or of any material part of
its properties, (4) fail generally to pay (or admit in writing its inability to
pay) its debts as such debts become due, or (5) take any action in furtherance
of any such action; or

     

    (h) a judgment
or judgments (after the expiration of all times to appeal therefrom) for the
payment of money in excess of $500,000 in the aggregate shall be rendered
against Borrower, unless the same shall be (i) fully covered by insurance and
the issuer(s) of the applicable policies shall have acknowledged full coverage
in writing within 10 days of such judgment, or (ii) vacated, stayed, bonded,
paid or discharged within a period of 10 days from the date of such judgment;
or

     

    (i) any
guaranty or any subordination agreement in favor of Agent or any Lender or any
other Loan Document shall be terminated or otherwise cease to be in full force
or effect, or Borrower shall take any steps to terminate any such agreement;
or

     

    (j) Borrower
or any of its Subsidiaries is no longer Solvent or voluntarily or involuntarily
liquidates, winds-up, dissolves or is dissolved, terminates or is terminated;
or

     

    (k) Agent
determining that one or more conditions exist or events have occurred which have
had a Material Adverse Effect; or

     

    (l) Borrower
or any Subsidiary is enjoined, restrained, or in any way prevented by the order
of any court or other Governmental Authority, the effect of which order
restricts such Person from conducting all or any material part of its business;
or

     

    (m) the loss,
suspension, revocation or failure to renew any license or permit now held or
hereafter acquired by Borrower, which loss, suspension, revocation or failure to
renew could reasonably be expected to have a Material Adverse Effect;
or

     

    (n) any Lien
or any provision of any Loan Document shall for any reason cease to be valid,
binding and enforceable in accordance with its terms, or any Lien granted, or
intended by the Loan Documents to be granted, to Agent, for the benefit of Agent
and Lenders, shall cease to be a valid and perfected Lien having the first
priority (or a lesser priority if expressly permitted in the Loan Documents) in
any of the Collateral covered or purported to be covered thereby;
or

     

    
      
        
        

      

      
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    (o) any Change
of Control shall occur.

     

    7.2 Remedies.

     

    (a) If any
Event of Default has occurred and is continuing, then Agent may, and at the
written request of Requisite Lenders shall, exercise one or more of the
following remedies: (1) upon notice to Borrower from Agent, increase the rate of
interest applicable to the Loans to the Default Rate effective as of the date of
the initial Event of Default, or (2) terminate or suspend its and the Lenders’
obligations to make further Loans and terminate the Commitments.  In
addition, if any Event of Default shall have occurred and be continuing, then
Agent may, and at the written request of Requisite Lenders, shall, without
notice, take any one or more of the following actions:  (i) declare
all or any portion of the Obligations to be forthwith due and payable, whereupon
such Obligations shall become and be due and payable; (ii) require that all
obligations relating to Bank Products be fully cash collateralized; or (iii)
exercise any rights and remedies provided to Agent or Lenders under the Loan
Documents or at law or equity, including all remedies provided under the UCC;
provided, that
upon the occurrence of an Event of Default specified in Sections 7.1(e), (f) or (g), the Obligations shall
become immediately due and payable (and any obligation of Lenders to make
further Loans, if not previously terminated, shall immediately be terminated)
without declaration, notice or demand by Agent or Lenders.

     

    (b) In
addition to all other rights and remedies of Agent and Lenders under this
Agreement, Borrower expressly agrees that, upon the occurrence and during the
continuance of any Event of Default, Agent may, and at the written request of
Requisite Lenders shall, on behalf of Agent and Lenders, collect, receive,
assemble, process, appropriate and realize upon the Collateral, or any part
thereof, and may forthwith sell, lease, license, assign, give an option or
options to purchase or otherwise dispose of and deliver said Collateral (or
contract to do so), or any part thereof, in one or more parcels at public or
private sale or sales, at any exchange at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit
risk.  Agent, on behalf of Agent and Lenders, shall have the right
upon any such public sale or sales and, to the extent permitted by law, upon any
such private sale or sales, to purchase for the benefit of Agent and Lenders by
credit bid the whole or any part of said Collateral so sold, free of any right
or equity of redemption, which equity of redemption Borrower hereby
releases.  Such sales may be adjourned, or continued from time to time
with or without notice.  Agent, on behalf of Agent and Lenders, shall
have the right to conduct such sales on Borrower’s premises or elsewhere and
shall have the right to use Borrower’s premises without rent or other charge for
such sales or other action with respect to the Collateral for such time or times
as Agent deems necessary or advisable.

     

    (c) Borrower
further agrees, upon the occurrence and during the continuance of an Event of
Default and at Agent’s request, to assemble and cause its Subsidiaries to
assemble the Collateral and make it available to Agent at places that Agent
shall reasonably select, whether at Borrower’s premises or
elsewhere.  Until Agent is able to effect a sale, lease, or other
disposition of the Collateral, Agent shall have the right to complete, assemble,
use or operate the Collateral or any part thereof, to the extent that Agent
deems appropriate, for the purpose of preserving such Collateral or its value or
for any other purpose.  Agent shall have no obligation to Borrower to
maintain or preserve the rights of Borrower as against third parties with
respect to any Collateral while such Collateral is in the possession of
Agent.  Upon the occurrence and during the continuance of an Event of
Default, Agent may, if it so elects, and at the written request of Requisite
Lenders shall, seek the appointment of a receiver or keeper to take possession
of any Collateral and to enforce any of Agent’s remedies, on behalf of Agent and
Lenders, with respect to such appointment without prior notice or
hearing.  To the maximum extent permitted by Applicable Law, Borrower
waives all claims, damages, and demands against Agent, each Lender, their
respective Affiliates, agents, and the officers and employees of any of them
arising out of the repossession, retention or sale of any Collateral except such
as are determined in a final judgment by a court of competent jurisdiction to
have arisen solely out of the gross negligence or willful misconduct of such
Person.  Borrower agrees that 10 days’ prior notice by Agent to
Borrower of the time and place of any public sale or of the time after which a
private sale may take place is reasonable notification of such
matters.  Borrower shall remain liable for any deficiency if the
proceeds of any sale or disposition of the Collateral are insufficient to pay
all amounts to which Agent and Lenders are entitled.

     

    
      
        
        

      

      
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    (d) Agent’s
rights and remedies under this Agreement shall be cumulative and nonexclusive of
any other rights and remedies that Agent, on behalf of Agent and Lenders, may
have under any Loan Document or at law or in equity.  Recourse to the
Collateral shall not be required. All rights, remedies and powers provided in
this Agreement may be exercised only to the extent that the exercise thereof
does not violate any Applicable Law, and all provisions of this Agreement are
intended to be subject to any Applicable Law that may be controlling and to be
limited, to the extent necessary, so that they do not render this Agreement
invalid, unenforceable, in whole or in part.

     

    7.3 Waivers by
Borrower.  Except as otherwise provided for in this Agreement
and to the fullest extent permitted by Applicable Law, Borrower
waives:  (a) presentment, demand and protest, and notice of
presentment, dishonor, intent to accelerate, acceleration, protest, default,
nonpayment, maturity, release, compromise, settlement, extension or renewal of
any or all Loan Documents, the Revolving Loan Notes, any notes, commercial
paper, Accounts, Documents, Instruments, Chattel Paper and guaranties at any
time held by Agent on which Borrower may in any way be liable, and hereby
ratifies and confirms whatever Agent, on behalf of Agent and Lenders, may do in
this regard; (b) all rights to notice and a hearing prior to Agent’s taking
possession or control of, or to Agent’s replevy, attachment or levy upon, any
Collateral or any bond or security that might be required by any court prior to
allowing Agent to exercise any of its remedies; and (c) the benefit of all
valuation, appraisal and exemption laws.  Borrower acknowledges that
it has been advised by counsel of its choice with respect to this Agreement, the
other Loan Documents and the transactions evidenced hereby and
thereby.

     

    7.4 Proceeds.  The
Proceeds of any sale, disposition or other realization upon any Collateral shall
be applied by Agent upon receipt, in the following order of
priorities:  first, to reimburse
or pay in full the actual and reasonable expenses of Agent incurred in
connection with such sale, disposition or other realization, including all other
expenses, liabilities and advances incurred or made by Agent in connection
therewith; second, to
Pledgeholder and/or Bank to pay any fees owing under the Possessory Collateral
Agreement or the Custody Agreement; third, to cash secure
and collateralize obligations in respect of any outstanding Bank Products; fourth, to Agent, for
the benefit of Agent and Lenders, as specified in Section 1.12, and finally, after
payment and satisfaction in full in cash of all of the Obligations (other than
inchoate indemnification obligations), and after the payment by Agent of any
other amount required by any provision of law, including Section 9608(a)(1)
of the UCC (but only after Agent has received what Agent considers reasonable
proof of a subordinate party’s Lien), the surplus, if any, to Borrower or its
representatives or to whomsoever may be lawfully entitled to receive the same,
or as a court of competent jurisdiction may direct.

     

    8. ASSIGNMENT AND
PARTICIPATIONS; APPOINTMENT OF AGENT

     

    8.1 Assignment and
Participations.

     

    (a) Borrower
consents to any Lender’s assignment of, or sale of participations in, at any
time or times, the Loan Documents, Loans, and any Commitment or of any portion
thereof or interest therein, including any Lender’s rights, title, interests,
remedies, powers, or duties thereunder, whether evidenced by a writing or not,
to any Qualified Assignee.  Any assignment by a Lender
shall:  (i) require the consent of Agent (which shall not be
unreasonably withheld or delayed) and the execution of an Assignment and
Assumption Agreement in substantially the form of Exhibit G hereto (an
“Assignment and
Assumption Agreement”) or otherwise in form and substance satisfactory
to, and acknowledged by, Agent; (ii) be conditioned on such assignee Lender
representing to the assigning Lender and Agent that it is purchasing the
applicable Loans and Commitments to be assigned to it for its own account, for
investment purposes, and not with a view to the distribution thereof; (iii) if a
partial assignment, be in an amount at least equal to $5,000,000 and, after
giving effect to any such partial assignment, the assigning Lender shall have
retained Loans and Commitments in an amount at least equal to $5,000,000; and
(iv) include a payment to Agent of an assignment fee of $5,000.  From
and after the effective date specified in each Assignment and Assumption
pursuant to this Section 8.1, which
effective date shall be at least five (5) Business Days after the execution
thereof, (1) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance and this Section 8.1, have the
rights and obligations of a Lender hereunder, (2) the assigning Lender shall, to
the extent provided in such assignment and this Section 8.1 and upon
payment to Agent of the fee referred to above, be relieved of its obligations
hereunder with respect to its Commitments or assigned portion thereof from and
after the date of such assignment, and (3) Schedules
C and D
hereto shall be deemed amended to reflect the assignor’s and assignee’s
respective new Commitments, Pro Rata Shares, addresses and wire transfer and
payment instructions as provided in the Assignment and Acceptance and the notice
given thereunder.  Borrower hereby acknowledges and agrees that any
assignment will give rise to a direct obligation of Borrower to the assignee and
that the assignee shall be considered to be a “Lender.”  In all
instances, each Lender’s liability to make Loans hereunder shall be several and
not joint and shall be limited to such Lender’s Pro Rata Share of the applicable
Commitment.  In the event Agent or any Lender assigns or otherwise
transfers all or any part of a Revolving Loan Note, Agent or any such Lender
shall so notify Borrower and Borrower shall, upon the request of Agent or such
Lender, execute new Revolving Loan Notes in exchange for the Revolving Loan Note
being assigned.  By executing and delivering an Assignment and
Assumption, the parties to the assignment thereunder confirm to and agree with
each other and the other parties hereto as follows:

     

    
      
        
        

      

      
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    (1) other than
the representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, the
assigning Lender makes no representation or warranty, express or implied, and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or the attachment, perfection or priority of any
security interest or mortgage;

     

    (2) the
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower and its
Subsidiaries or any other Person primarily or secondarily liable in respect of
any of the Obligations, or the performance or observance by Borrower and its
Subsidiaries or any other Person primarily or secondarily liable in respect of
any of the Obligations under this Agreement or any of the other Loan Documents
or any other instrument or document furnished pursuant hereto or
thereto;

     

    (3) such
assignee confirms that it has received a copy of this Loan Agreement, together
with copies of the most recent financial statements referred to herein and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Assumption;

     

    (4) such
assignee will, independently and without reliance upon the assigning Lender,
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement;

     

    
      
        
        

      

      
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    (5) such
assignee appoints and authorizes Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to Agent by the terms hereof or thereof, together
with such powers as are reasonably incidental thereto;

     

    (6) such
assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed by
it as a Lender; and

     

    (7) such
assignee represents and warrants that it is legally authorized to enter into
such Assignment and Assumption.

     

    (b) Agent,
acting solely for this purpose as an agent of Borrower, shall maintain at
Agent’s office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of Lenders, and the
Commitments of, and principal amounts of Loans owing to, each Lender pursuant to
the terms hereof from time to time (the “Register”).  The
entries in the Register shall be conclusive as to the identity of the Lenders
and their respective Commitments, and Borrower, Agent and Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary.  The Register shall be available for inspection by
Borrower and any Lender at any reasonable time and from time to time upon
reasonable prior notice.  In addition, at any time that a request for
a consent for a material or substantive change to the Loan Documents is pending,
any Lender may request and receive from Agent a copy of the
Register.

     

    (c) Any grant,
sale, transfer, assignment or conveyance of a participation by a Lender of all
or any part of its Commitments shall be in an amount at least equal to
$5,000,000 and shall be made with the understanding that all amounts payable by
Borrower hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder,
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, or (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral
Documents, or the other Loan Documents).  Solely for purposes of Section 10 and Section 11.4, Borrower
acknowledges and agrees that a participation shall give rise to a direct
obligation of Borrower to the participant and the participant shall be
considered to be a “Lender.”  Except as set forth in the preceding
sentence, Borrower shall not have any obligation or duty to any
participant.  Neither Agent nor any Lender (other than the Lender
selling a participation) shall have any duty to any participant and may continue
to deal solely with the Lender selling a participation as if no such sale had
occurred.

     

    (d) Except as
expressly provided in this Section 8.1, no Lender
shall, as between Borrower and that Lender, or between Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer, or negotiation of, or granting of a participation in, all
or any part of the Loans, the Revolving Loan Notes, or other Obligations owed to
such Lender.

     

    (e) Borrower
shall assist any Lender permitted to sell assignments or participations under
this Section 8.1 as
reasonably required to enable the assigning or selling Lender to effect any such
assignment or participation, including the execution and delivery of any and all
agreements, notes, and other documents and instruments as shall be requested and
the preparation of informational materials for, and the participation of
management in meetings with, potential assignees or participants.

     

    
      
        
        

      

      
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    (f) A Lender
may furnish any information concerning Borrower in the possession of such Lender
from time to time to assignees and participants (including prospective assignees
and participants) subject to the requirements of Section 11.14.

     

    8.2 Appointment of
Agent.

     

    (a) Each
Lender hereby designates Bank to act on behalf of all Lenders as Agent under
this Agreement and the other Loan Documents.  The provisions of this
Section 8.2 are
solely for the benefit of Agent and Lenders and neither Borrower nor any other
Person shall have any rights as a third party beneficiary of any of the
provisions hereof.  In performing its functions and duties under this
Agreement and the other Loan Documents, Agent shall act solely as an agent of
Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for Borrower or any
other Person.  Each Lender acknowledges and agrees that the use of the
word “Agent” is for convenience only and that Bank is merely the representative
of Lenders and only has the contractual duties set forth
herein.  Agent shall have no duties or responsibilities except for
those expressly set forth in this Agreement and the other Loan
Documents.  The duties of Agent shall be ministerial and
administrative in nature and Agent shall not have, or be deemed to have, by
reason of this Agreement, any other Loan Document, or otherwise a fiduciary
relationship in respect of any Lender.  Neither Agent nor any of its
Affiliates nor any of their respective officers, directors, employees, agents,
or representatives shall be liable to any Lender for any action taken or omitted
to be taken by it hereunder or under any other Loan Document, or in connection
herewith or therewith, except for damages solely caused by its or their own
gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction.  Without limiting the generality of the
foregoing, or of any other provision of the Loan Documents that provides rights
or powers to Agent, each Lender hereby agrees that Agent shall have the right to
exercise the following powers as long as this Agreement remains in
effect:  (a) maintain, in accordance with its customary business
practices, ledgers and records reflecting the status of the Obligations, the
Collateral, the collections of funds from Borrower and its Subsidiaries, and
related matters, (b) execute or file any and all financing or similar statements
or notices, amendments, renewals, supplements, documents, instruments, proofs of
claim, notices and other written agreements with respect to the Loan Documents,
(c) make Loans, for itself or on behalf of Lenders as provided in the Loan
Documents, (d) exclusively receive, apply, and distribute the funds received
from Borrower and any of its Subsidiaries as provided in the Loan Documents, (e)
open and maintain such bank accounts and cash management accounts as Agent deems
necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes with respect to the Collateral and collection of funds from
Borrower and its Subsidiaries, (f) perform, exercise, and enforce any and all
other rights and remedies of each Lender with respect to Borrower, the
Obligations, the Collateral, the collection of funds from Borrower and its
Subsidiaries, or otherwise related to any of same as provided in the Loan
Documents, and (g) incur and pay any expenses as Agent may deem necessary or
appropriate for the performance and fulfillment of its functions and powers
pursuant to the Loan Documents.

     

    (b) If Agent
shall request instructions from the Requisite Lenders or all Lenders with
respect to any act or action (including a failure to act) in connection with
this Agreement or any other Loan Document, then Agent shall be entitled to
refrain from taking such act or such action unless and until Agent shall have
received instructions from the Requisite Lenders or all Lenders, as the case may
be, and Agent shall not incur liability to any Person by reason of so
refraining.  Agent shall be fully justified in failing or refusing to
take any action hereunder or under any other Loan Document if (i) such action
would, in the opinion of Agent, be contrary to law or the terms of this
Agreement or any other Loan Document, (ii) such action would, in the opinion of
Agent, expose Agent to Environmental Liabilities and Costs, or (iii) Agent shall
not first be indemnified to its satisfaction against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action.  No Lender shall have any right of action whatsoever
against Agent as a result of Agent acting or refraining from acting hereunder or
under any other Loan Document in accordance with the instructions of the
Requisite Lenders or all Lenders, as applicable.

     

    
      
        
        

      

      
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    8.3 Delegation of
Duties.  Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to the advice of counsel concerning all
matters pertaining to such duties.  Agent shall not be responsible for
the negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful
misconduct.

     

    8.4 Agent’s Reliance,
Etc.  Neither Agent nor any of its Affiliates nor any of their
respective directors, officers, agents, or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement or the other Loan Documents, except for damages solely caused by
its or their own gross negligence or willful misconduct as finally determined by
a court of competent jurisdiction.  Agent:  (a) may treat
the payee of any Revolving Loan Note as the holder thereof until Agent receives
written notice of the assignment or transfer thereof signed by such payee and in
form satisfactory to Agent; (b) may consult with legal counsel, independent
public accountants, and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants, or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties, or representations made in or in connection with this
Agreement or the other Loan Documents; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms,
covenants, or conditions of this Agreement or the other Loan Documents on the
part of Borrower or to inspect the Collateral (including Borrower’s Books and
Records); (e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency, or value of this
Agreement or the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; and (f) shall incur no liability under or
in respect of this Agreement or the other Loan Documents by acting upon any
notice, consent, certificate, or other instrument or writing (which may be by
facsimile transmission) believed by it to be genuine and signed or sent by the
proper party or parties.

     

    8.5 Bank and
Affiliates.  With respect to its Commitments hereunder, Bank
shall have the same rights and powers under this Agreement and the other Loan
Documents as any other Lender and may exercise the same as though it were not
Agent, and the terms “Lender” or “Lenders” shall, unless otherwise expressly
indicated, include Bank in its individual capacity.  Bank and its
Affiliates may lend money to, invest in, and generally engage in any kind of
business with, Borrower, any of its Affiliates, and any Person who may do
business with or own securities of Borrower or any such Affiliate, all as if
Bank were not Agent and without any duty to account therefor to
Lenders.  Bank and its Affiliates may accept fees and other
consideration from Borrower for services in connection with this Agreement or
otherwise without having to account for the same to Lenders.  Each
Lender acknowledges the potential conflict of interest between Bank as a Lender
holding disproportionate interests in the Loans and Bank as Agent.

     

    8.6 Lender Credit
Decision.  Each Lender acknowledges that it has, independently
and without reliance upon Agent or any other Lender and based on the Financial
Statements referred to in Section 3.4 and such
other documents and information as it has deemed appropriate, made its own
credit and financial analysis of Borrower and its own decision to enter into
this Agreement.  Each Lender also acknowledges that it will,
independently and without reliance upon Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement.  Each Lender acknowledges the potential conflict of
interest of each other Lender as a result of Lenders holding disproportionate
interests in the Loans and expressly consents to, and waives any claim based
upon, such conflict of interest.

     

    
      
        
        

      

      
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    8.7 Indemnification.  Lenders
agree to indemnify Agent (to the extent not reimbursed by Borrower and without
limiting the obligations of Borrower hereunder), ratably according to their
respective Pro Rata Shares, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any action taken or omitted to
be taken by Agent in connection therewith; provided, that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
resulting solely from Agent’s gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.  Without limiting the
foregoing, each Lender agrees to reimburse Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel fees) incurred by
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal
proceedings, or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the
extent that Agent is not reimbursed for such expenses by Borrower.

     

    8.8 Successor
Agent.  Agent may resign at any time by giving not less than 30
days’ prior written notice thereof to Lenders and Borrower.  Upon any
such resignation, Requisite Lenders shall have the right to appoint a successor
Agent.  If no successor Agent shall have been so appointed by the
Requisite Lenders and shall have accepted such appointment within 30 days after
the resigning Agent’s provision of notice of resignation, then the resigning
Agent may, on behalf of Lenders, appoint a successor Agent, which shall be a
Lender, if a Lender is willing to accept such appointment, or otherwise shall be
a commercial bank or financial institution or a Subsidiary of a commercial bank
or financial institution if such commercial bank or financial institution is
organized under the laws of the United States or of any state thereof and has a
combined capital and surplus of at least $300,000,000.  If no
successor Agent has been appointed pursuant to the foregoing within 30 days
following the date such notice of resignation was given by the resigning Agent,
then such resignation shall become effective as of the end of such period and
the Requisite Lenders shall thereafter perform all the duties of Agent hereunder
until such time, if any, as the Requisite Lenders shall appoint a successor
Agent as provided above.  Any successor Agent appointed by Requisite
Lenders hereunder shall be subject to the approval of Borrower, which approval
shall not be unreasonably withheld or delayed; provided, that such approval
shall not be required if a Default or an Event of Default shall have occurred
and be continuing.  Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall succeed to and become
vested with all the rights, powers, privileges, and duties of the resigning
Agent.  Upon the earlier of the acceptance of any appointment as Agent
hereunder by a successor Agent or the effective date of the resigning Agent’s
resignation, the resigning Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents, except that any
indemnity rights or other rights in favor of such resigning Agent shall
continue.  After any resigning Agent’s resignation hereunder, the
provisions of this Section 8 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement and the other Loan Documents.

     

    8.9 Set-off and Sharing of
Payments.  In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default, each Lender is
hereby authorized at any time or from time to time, without notice to Borrower
or to any other Person, any such notice being hereby expressly waived by
Borrower, to offset and to appropriate and apply any and all balances held by it
at any of its offices for the account of Borrower (regardless of whether such
balances are then due to Borrower) and any other properties or assets at any
time held or owing by that Lender to or for the credit or for the account of
Borrower against and on account of any of the Obligations that are not paid when
due.  Any Lender exercising a right to offset or otherwise receiving
any payment on account of the Obligations in excess of its Pro Rata Share
thereof shall purchase for cash (and the other Lenders shall sell) such
participations in each such other Lender’s Pro Rata Share of the Obligations as
would be necessary to cause such Lender to share the amount so offset or
otherwise received with each other Lender in accordance with their respective
Pro Rata Shares.  Borrower agrees, to the fullest extent permitted by
law, that (a) any Lender may exercise its right to offset with respect to
amounts in excess of its Pro Rata Share of the Obligations and may sell
participations in such amount so offset to other Lenders and (b) any Lender so
purchasing a participation in the Loans made or other Obligations held by other
Lenders or holders may exercise all rights of offset, bankers’ lien,
counterclaim or similar rights with respect to such participation as fully as if
such Lender were a direct holder of the Loans and the other Obligations in the
amount of such participation.  Notwithstanding the foregoing, if all
or any portion of the offset amount or payment otherwise received is thereafter
recovered from the Lender that has exercised the right of set-off, the purchase
of participations by that Lender shall be rescinded and the purchase price
restored without interest.

     

    
      
        
        

      

      
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    8.10 Settlement Procedures;
Non-Funding Lenders; Information; Actions in Concert.

     

    (a) Settlement
Procedures.

     

    (1) The
balance of the Loans may fluctuate from day to day due to Agent’s disbursement
of funds to, and receipt of funds from, Borrower.  In order to
minimize the frequency of transfers of funds between Agent and Lenders, Loans
may be made by Agent, and payments in respect thereof shall be settled,
according to the procedures set forth in this Section 8.10(a).  Notwithstanding
these procedures, each Lender’s obligation to fund its Pro Rata Share of any
Loan made to Borrower shall commence on the date such Loan is
made.  Such payments shall be made by each Lender without set-off,
counterclaim, or reduction of any kind.

     

    (2) Subject to
the terms and provisions of this Agreement, Agent shall (i) fund any Loan to the
extent that Agent has received any Lender’s Pro Rata Share of such Loan and (ii)
so long as Agent is using the weekly settlement procedure set forth in Section 8.10(a)(3), fund
the entire amount of any Loan requested by Borrower.  Notwithstanding
anything to the contrary contained in this Agreement, Agent may elect, at its
sole option, to fund the entire amount of any Loan requested by Borrower even if
Agent has not received each Lender’s Pro Rata Share of such Loan.  In
the event Agent makes such election, such Loan made by Agent shall be deemed and
shall constitute, as of the date of making thereof, a Loan made by each of the
applicable Lenders in an amount equal to such Lender’s Pro Rata Share thereof,
and each such Lender shall be obligated to deliver to Agent its Pro Rata Share
of such Loan on the Weekly Settlement Date in accordance with the procedure for
weekly settlement set forth in Section 8.10(a)(3) or as
otherwise provided in Section 8.10(a)(4).  Notwithstanding
anything to the contrary contained in this Agreement, for purposes of
calculating interest payable to any Lender, (A) Agent shall be deemed a “Lender”
with respect to any outstanding Loan funded by Agent and (B) the amount of the
Loan of any Lender that is outstanding on any day shall (x) exclude any Loan
with respect to which such Lender has not funded its Pro Rata Share and that has
been funded entirely by Agent and (y) include Loans of such Lender that have
been repaid by Borrower to Agent but not yet received by such Lender from
Agent.

     

    (3) Each
Lender shall settle with Agent, on the Weekly Settlement Date and upon Agent’s
request, the amount due to Agent from such Lender with regard to Loans made, and
payments received, since the date of the last settlement.  On each
Weekly Settlement Date, prior to 10:00 a.m. (California time), Agent shall
notify each Lender by telephone, facsimile, or other form of teletransmission of
such Lender’s Pro Rata Share of the outstanding Loans and of the amount
necessary to adjust such Lender’s outstanding Loans to such Lender’s Pro Rata
Share of such Loans as of such Weekly Settlement Date (on a net basis taking
into account any funds in the Collection Account that Agent determines are
available).  Any such payment shall be made by the party from which
such payment is due to the other party, in same day funds by wire transfer to
such party’s account set forth in Schedule D,
not later than 11:00 a.m. (California time) on such Weekly Settlement
Date.  If any Lender shall, for any reason, not settle with Agent
within one Business Day after the Weekly Settlement Date, such Lender agrees to
pay and Borrower agrees to repay, severally (but without duplication), to Agent
forthwith on demand the amount due Agent on such Weekly Settlement Date together
with interest thereon for each day from such Weekly Settlement Date until the
day such amount is paid to Agent at (i) in the case of such Lender, the Federal
Funds Rate for the first three (3) Business Days for which such amount remains
unpaid, and thereafter at the Reference Rate and (ii) in the case of Borrower,
at the applicable interest rate provided in Section 1.3 on Reference
Rate Loans (without limiting any claim that Borrower may have against such
Lender).  If such Lender shall pay to Agent such corresponding amount,
such amount so paid shall constitute such Lender’s Loan and, if both such Lender
and Borrower shall have paid and repaid, respectively, such corresponding
amount, Agent shall promptly pay over to Borrower such corresponding amount in
same day funds, but Borrower shall remain obligated for all interest
thereon.

     

    
      
        
        

      

      
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    (4) With
respect to all Loans and as an alternative to the weekly settlement provided for
in Section 8.10(a)(3) with
respect to Loans, Agent may elect, in its sole discretion, to use the following
same day settlement procedure.  Prior to 10:00 a.m. (California time)
on any date specified for a borrowing of a Loan, Agent may notify each
applicable Lender by telephone, facsimile, or other form of teletransmission of
the requested Loan.  Not later than 11:00 a.m. (California time) on
the date of such proposed Loan, each such applicable Lender shall make available
to Agent, in same day funds by wire transfer to such account of Agent set forth
in Schedule D,
such Lender’s Pro Rata Share of such Loan.  Notwithstanding the
foregoing, to the extent that there are available funds in the Collection
Account, Agent may, in its sole discretion, notify each such Lender that such
Lender’s obligation to make available to Agent same day funds as provided in the
preceding sentence shall be satisfied to the extent of its Pro Rata Share out of
such funds in the Collection Account or such portion of such funds as Agent
shall indicate are to be applied to fund such Loan.

     

    (5) On the
Weekly Settlement Date or more frequently at Agent’s discretion, Agent will
advise each Lender by telephone or facsimile of the amount of such Lender’s Pro
Rata Share of principal, interest, and fees paid for the benefit of Lenders with
respect to each applicable Loan.  Provided that such Lender has made
all payments required to be made by it and purchased all participations required
to be purchased by it under this Agreement and the other Loan Documents as of
such Weekly Settlement Date, Agent will pay to each Lender such Lender’s Pro
Rata Share of principal, interest, and fees paid by Borrower since the previous
Weekly Settlement Date for the benefit of that Lender on the Loans held by
it.  Such payments shall be made by wire transfer to such Lender’s
account (as specified by such Lender in Schedule D
or the applicable Assignment Agreement) not later than 1:00 p.m. (California
time) on the Business Day immediately succeeding each Weekly Settlement
Date.

     

    (b) Availability of Lender’s Pro
Rata Share.  Agent may assume that each Lender will make its
Pro Rata Share of each Loan available to Agent on each funding
date.  If such Pro Rata Share is not, in fact, paid to Agent by such
Lender when due, Agent will be entitled to recover such amount on demand from
such Lender without set-off, counterclaim, or deduction of any
kind.  If any Lender fails to pay the amount of its Pro Rata Share
forthwith upon Agent’s demand, then Agent shall promptly notify Borrower and
Borrower shall immediately repay such amount to Agent.  Nothing in
this Section 8.10(b) or
elsewhere in this Agreement or the other Loan Documents shall be deemed to
require Agent to advance funds on behalf of any Lender or to relieve any Lender
from its obligation to fulfill its Commitments hereunder or to prejudice any
rights that Borrower may have against any Lender as a result of any default by
such Lender hereunder.  To the extent that Agent advances funds to
Borrower on behalf of any Lender and is not reimbursed therefor on the same
Business Day as such advance is made, Agent shall be entitled to retain for its
account all interest accrued on such advance until reimbursed by the applicable
Lender.

     

    
      
        
        

      

      
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    (c) Return of
Payments.

     

    (1) If Agent
pays an amount to a Lender under this Agreement in the belief or expectation
that a related payment has been or will be received by Agent from Borrower and
such related payment is not received by Agent, then Agent will be entitled to
recover such amount from such Lender on demand without set-off, counterclaim, or
deduction of any kind.

     

    (2) If Agent
determines at any time that any amount received by Agent under this Agreement
must be returned to Borrower or paid to any other Person pursuant to any
insolvency law or otherwise, then, notwithstanding any other term or condition
of this Agreement or any other Loan Document, Agent will not be required to
distribute any portion thereof to any Lender.  In addition, each
Lender will repay to Agent on demand any portion of such amount that Agent has
distributed to such Lender, together with interest at such rate, if any, as
Agent is required to pay to Borrower or such other Person, without set-off,
counterclaim, or deduction of any kind.

     

    (d) Non-Funding
Lenders.  The failure of any Lender to make any Loan shall not
relieve any Other Lender of its obligations to make Loans or purchase such
participations on such date, but neither any Other Lender nor Agent shall be
responsible for the failure of any Non-Funding Lender to make a Loan to be made
by such Non-Funding Lender, and no Non-Funding Lender shall have any obligation
to Agent or any Other Lender for any such failure by such Non-Funding
Lender.  Notwithstanding anything herein to the contrary, a
Non-Funding Lender shall not have any voting or consent rights under or with
respect to any Loan Document or constitute a “Lender”(or be included in the
calculation of “Requisite Lenders” hereunder) for any voting or consent rights
under or with respect to any Loan Document until such time as such Non-Funding
Lender funds its Pro Rata Share of such Loan and pays to Agent any interest due
under Section 8.10(a)(3).

     

    (e) Dissemination of
Information.  Agent will use reasonable efforts to provide
Lenders with any notice of Default or Event of Default received by Agent from,
or delivered by Agent to Borrower, with notice of any Event of Default of which
Agent has actually become aware, and with notice of any action taken by Agent
following any Event of Default; provided, that Agent shall not be liable to any
Lender for any failure to do so, except to the extent that such failure is
attributable solely to Agent’s gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.

     

    (f) Actions in
Concert.  Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Revolving Loan Notes (including exercising any rights of
set-off) without first obtaining the prior written consent of Agent or Requisite
Lenders, it being the intent of Lenders that any such action to protect or
enforce rights under this Agreement and the Revolving Loan Notes shall be taken
in concert and at the direction or with the consent of Agent or the Requisite
Lenders.

     

    8.11 Concerning the Collateral
and the Related Loan Documents.  Each Lender authorizes and
directs Agent to enter into the other Loan Documents, for the ratable benefit
and obligation of the Agent and the Lenders.  Each Lender agrees that
any action taken by the Agent or the Requisite Lenders, as applicable, in
accordance with the terms of this Agreement or the other Loan Documents, and the
exercise by Agent or the or the Requisite Lenders, as applicable, of their
respective powers set forth therein or herein, together with such other powers
that are reasonably incidental thereto, shall be binding upon all of the
Lenders.  The Lenders acknowledge that the Loans, Bank Products and
all interest, fees and expenses hereunder constitute one Indebtedness, secured
pari passu by all of the
Collateral.

     

    
      
        
        

      

      
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    8.12 Agency for
Perfection.  Agent hereby appoints each other Lender as its
agent (and each Lender hereby accepts such appointment) for the purpose of
perfecting the Lien of Agent, for the benefit of Agent and Lenders, in assets
which, in accordance with Article 9 of the Code can be perfected only by
possession or control.  Should any Lender obtain possession or control
of any such Collateral, such Lender shall notify Agent thereof, and, promptly
upon Agent’s request therefor shall deliver possession or control of such
Collateral to Agent or in accordance with Agent’s instructions.

     

    8.13 Legal Representation of
Agent.  In connection with the negotiation, drafting, and
execution of this Agreement and the other Loan Documents, or in connection with
future legal representation relating to loan administration, amendments,
modifications, waivers, or enforcement of remedies, DLA has only represented and
shall only represent Bank in its capacity as Agent and as a
Lender.  Each other Lender hereby acknowledges that DLA does not
represent such Lender in connection with any such matters.

     

    9. SUCCESSORS AND
ASSIGNS

     

    Each Loan
Document shall be binding on and shall inure to the benefit of Borrower, Agent,
Lenders, and their respective successors and assigns, except as otherwise
provided herein or therein.  Borrower shall not assign, transfer,
hypothecate or otherwise convey its rights, benefits, obligations or duties
under any Loan Document without the prior written consent of Agent and the
Requisite Lenders.  Any such purported assignment, transfer,
hypothecation or other conveyance by Borrower without the prior express written
consent of Agent and the Requisite Lenders shall be void.  The terms
and provisions of this Agreement and the other Loan Documents are for the
purpose of defining the relative rights and obligations of Borrower, Agent, and
Lenders with respect to the transactions contemplated hereby and thereby, and
there shall be no third party beneficiaries of any of the terms and provisions
of any of the Loan Documents.  Agent reserves the right at any time to
create and sell a participation in any portion of the Loans and the Loan
Documents and to sell, transfer or assign any or all of its rights in the Loans
and under the Loan Documents and Borrower consents to any Lender’s sale of
participations in, at any time or times, the Loan Documents, Loans, or of any
portion thereof or interest therein, including such Lender’s rights, title,
interests, remedies, powers, or duties thereunder, whether evidenced by a
writing or not, to any bank or other financial institution.

     

    10. YIELD
PROTECTION

     

    10.1 LIBOR
Basis Determination.  If, with respect to any proposed LIBOR Loan for
any LIBOR Loan Period, any Lender determines that deposits in Dollars (in the
applicable amount) are not being offered to such Lender in the relevant market
for such LIBOR Loan Period, then such Lender shall give notice thereof to
Borrower (with a copy of such notice to Agent), whereupon the obligations of
such Lender to make LIBOR Loans shall be suspended until such Lender notifies
Borrower (with a copy of such notice to Agent) that the circumstances giving
rise to such situation no longer exist.

     

    10.2 Illegality.  If
any (a) Applicable Law or any change therein, (b) interpretation or change in
interpretation or administration thereof by any Governmental Authority, central
bank, or comparable agency charged with the interpretation or administration
thereof, or (c) compliance by any Lender with any request or directive (whether
or not having the force of law) of any such authority, central bank, or
comparable agency, shall make it unlawful or impossible for such Lender to make,
maintain, or fund any LIBOR Loans, then such Lender shall give notice thereof to
Agent and Borrower.  Upon receipt of such notice, Borrower shall repay
in full the then outstanding principal amount of each affected LIBOR Loan,
together with accrued interest thereon, either (i) on the last day of the then
current LIBOR Loan Period applicable to such LIBOR Loan if such Lender may
lawfully continue to maintain and fund such LIBOR Loan to such day or (ii)
immediately if Lender determines it may not lawfully continue to fund and
maintain such LIBOR Loan to such day.  Concurrently with repaying each
affected LIBOR Loan, Borrower shall borrow a Reference Rate Loan (or another
type of LIBOR Loan, if available) from Lenders, and Lenders shall make such Loan
in an amount such that the outstanding principal amount of the Loans immediately
following such repayment shall equal the outstanding principal amount of the
Loans immediately prior to such repayment.

     

    
      
        
        

      

      
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    10.3 Increased
Costs.

     

    (a) If any
Applicable Law or any change therein, or any interpretation or change in
interpretation or administration thereof by any Governmental Authority, central
bank, or comparable agency charged with the interpretation or administration
thereof or compliance by any Lender with any request or directive (whether or
not having any such authority) by any Governmental Authority, central bank, or
comparable agency:

     

    (1) shall
subject such Lender to any tax, duty, or other charge with respect to its
obligation to make LIBOR Loans, or its LIBOR Loans, or shall change the basis of
taxation of payments to such Lender of the principal of or interest on its LIBOR
Loans or in respect of any other amounts due under this Agreement in respect of
its LIBOR Loans or its obligation to make LIBOR Loans (except for changes in the
rate of tax on the overall net income of such Lender imposed by the jurisdiction
in which such Lender’s principal executive office is located); or

     

    (2) shall
impose, modify, or deem applicable any reserve (including any reserve imposed by
the Board of Governors of the Federal Reserve System, but excluding with respect
to any LIBOR Loan any such requirement included in any applicable LIBOR Reserve
Percentage), special deposit, capital adequacy, assessment, or other requirement
or condition against assets of, deposits with or for the account of, or
commitments or credit extended by such Lender, or shall impose on such Lender or
the London interbank borrowing market any other condition affecting its
obligation to make such LIBOR Loans or its LIBOR Loans;

     

    and the
result of any of the foregoing is to increase the cost to such Lender of making
or maintaining any such LIBOR Loans, or to reduce the amount of any sum received
or receivable by such Lender under this Agreement or under the Revolving Loan
Notes with respect thereto, and such increase is not given effect in the
determination of LIBOR Basis, then, on the earlier of demand by such Lender
(with a copy of such demand to Agent) or the Commitment Maturity Date, Borrower
shall pay to Agent, for the benefit of such Lender, such additional amount or
amounts as will compensate such Lender for such increased costs.  Each
Lender will promptly notify Agent, who will promptly notify Borrower, of any
event of which it has knowledge, occurring after the date hereof, that will
entitle such Lender to compensation pursuant to this Section 10.3 and such
Lender will designate a different lending office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
sole judgment of such Lender, be otherwise disadvantageous to it.

    

    (b) A
certificate of any Lender claiming compensation under this Section 10.3 and setting
forth the additional amount or amounts to be paid to it hereunder and
calculations therefor shall, absent manifest error, be deemed final, binding and
conclusive upon Borrower.  In determining such amount, such Lender may
use any reasonable averaging and attribution methods.  If a Lender
demands compensation under this Section 10.3, Borrower
may at any time, upon at least five (5) Business Days’ prior notice to Agent,
prepay in full the then outstanding affected LIBOR Loans, together with accrued
interest thereon to the date of prepayment, along with any reimbursement
required under Sections 1.10, 10 and 11.3(g).  Concurrently
with prepaying such LIBOR Loans, Borrower shall borrow a Reference Rate Loan, or
a LIBOR Loan not so affected, from Lenders, and Lenders shall make such Loan in
an amount such that the outstanding principal amount of the Loans immediately
following such prepayment shall equal the outstanding principal amount of the
Loans immediately prior to such prepayment.

     

    
      
        
        

      

      
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    10.4 Effect On Other
Loans.  If notice has been given pursuant to Sections 10.1, 10.2 or 10.3 suspending the obligation
of any Lender to make any LIBOR Loan, or requiring LIBOR Loans to be repaid or
prepaid, then, unless and until Agent notifies Borrower that the circumstances
giving rise to such repayment no longer applies, all LIBOR Loans that would have
been made by such Lender shall be made instead as Reference Rate
Loans.

     

    10.5 Capital
Adequacy.  If, after the date hereof, any Lender (or any
Affiliate of any Lender) shall have reasonably determined that the adoption of
any Applicable Law, governmental rule, regulation or order regarding the capital
adequacy of banks or bank holding companies, or any change therein, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or any Affiliate of any
Lender) with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the capital of such Lender (or any Affiliate of such Lender) as a consequence
of any of such Lender’s Revolving Credit Facility or obligations hereunder to a
level below that which it could have achieved but for such adoption, change or
compliance (taking into consideration the policies of such Lender (or Affiliate
of such Lender) with respect to capital adequacy immediately before such
adoption, change or compliance and assuming that the capital of such Lender (or
Affiliate of such Lender) was fully utilized prior to such adoption, change or
compliance), then, upon demand by such Lender (with a copy of such demand to
Agent), Borrower shall immediately pay to Agent, for the benefit of such Lender,
such additional amounts as shall be sufficient to compensate such Lender for any
such reduction actually suffered; provided, that there
shall be no duplication of amounts paid to such Lender pursuant to this sentence
and Section 10.3.  A
certificate of such Lender setting forth the amount to be paid to such Lender by
Borrower as a result of any event referred to in this Section 10.5 shall,
absent manifest error, be deemed final, binding and conclusive upon
Borrower.

     

    10.6 Federal Reserve System/Wire
Transfers.  The obligation of Lenders or Agent, on behalf of
Lenders, to make any Loan by wire transfer to Borrower or any other Person shall
be subject to all Applicable Laws, including the policy of the Board of
Governors of the Federal Reserve System on Reduction of Payments System Risk as
in effect from time to time.  Borrower acknowledges that such laws,
regulations and policy may delay the transmission of any funds to
Borrower.

     

    10.7 Replacement of Lender in
Respect of Increased Costs.

     

    (a) Within 15
days after receipt by Borrower of written notice and demand from any Affected
Lender for payment of (i) additional amounts or increased costs as provided in
Sections 10.3 or
10.5, or (ii) payment of
additional amounts pursuant to Section 1.11, Borrower
may, at its option, notify Agent and such Affected Lender of its intention to
replace such Affected Lender.  So long as no Default or Event of
Default shall have occurred and be continuing, Borrower may obtain, with the
consent of Agent and at Borrower’s expense, a Replacement Lender for the
Affected Lender, which Replacement Lender must be satisfactory to
Agent.  If Borrower obtains a Replacement Lender within 90 days
following notice of its intention to do so, such Affected Lender must sell and
assign its Loans and Commitments to such Replacement Lender for an amount equal
to the principal balance of all Loans held by such Affected Lender and all
accrued interest and fees with respect thereto through the date of such sale;
provided, that
Borrower shall have reimbursed such Affected Lender for the additional amounts
or increased costs that it is entitled to receive under this Agreement through
the date of such sale and assignment.

     

    
      
        
        

      

      
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    Notwithstanding
the foregoing, Borrower shall not have the right to obtain a Replacement Lender
if such Affected Lender rescinds its demand for increased costs or additional
amounts within 15 days following its receipt of Borrower’s notice of intention
to replace such Affected Lender.  Furthermore, if Borrower gives a
notice of intention to replace and does not so replace such Affected Lender
within 90 days thereafter, Borrower’s rights under this Section 10.7 shall
terminate and Borrower shall promptly pay all increased costs or additional
amounts demanded by such Affected Lender pursuant to Sections 10.3 and 10.5.

     

    (b) If any
Lender requests compensation under Sections 10.3 or 10.5, or the Borrower is
required to pay any additional amount to the Lenders or any Governmental
Authority for the account of the Lender pursuant to Section 1.11, then such
Lender shall use reasonable efforts (which shall not require such Lender to take
any action inconsistent with its internal policies or legal or regulatory
restrictions or suffer any disadvantage or burden deemed by it to be material)
to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Sections 1.11,
10.3 or 10.5, as the case may be, in
the future, and (ii) in each case, would not subject the Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to the
Lender.  Borrower hereby agrees to pay all reasonable costs and
expenses incurred by the Lender in connection with any such designation or
assignment.

     

    11. MISCELLANEOUS

     

    11.1 Complete Agreement;
Modification of Agreement.  This Agreement and the other Loan
Documents constitute the complete agreement between the parties with respect to
the subject matter hereof and thereof, supersede all prior agreements,
commitments, understandings or inducements (oral or written, expressed or
implied), and may not be modified, altered or amended except by written
agreement signed by Agent, Lenders, Borrower and each other Person executing
this Agreement or any other Loan Document, as applicable.

     

    11.2 Amendments and
Waivers.

     

    (a) Except for
actions expressly permitted to be taken by Agent, no amendment, modification,
termination, or waiver of any provision of this Agreement, any of the other Loan
Documents, or any of the Revolving Loan Notes, or any consent to any departure
by Borrower therefrom, shall in any event be effective unless the same shall be
in writing and signed by Borrower and Agent, with the written approval of the
Requisite Lenders or all Lenders, as applicable.  Except as set forth
in clauses (b), (c) or (e) below, all such
amendments, modifications, terminations, or waivers requiring the consent of any
Lender shall require the written consent of the Requisite Lenders.

     

    (b) No
amendment, modification, termination, or waiver of, or consent with respect to,
any provision of this Agreement that (i) increases the percentage advance rates
set forth in the definition “Borrowing Base”, (ii) makes less restrictive the
nondiscretionary criteria for exclusion from Eligible Notes Receivable, or (iii)
waives compliance with the conditions precedent set forth in Section 2.2 to the making
of any Loan, shall be effective unless the same shall be in writing and signed
by Agent, Borrower, and the Requisite Lenders.

     

    (c) No
amendment, modification, termination, or waiver shall, unless in writing and
signed by Agent and each Lender directly affected thereby, do any of the
following: (i) increase the principal amount of any Lender’s Commitment (which
action shall be deemed to directly affect all Lenders); (ii) reduce the
principal of, rate of interest on, or fees payable with respect to, any Loan of
any affected Lender; (iii) extend the Commitment Maturity Date or any scheduled
payment date or final maturity date of the principal amount of any Loan of any
affected Lender; (iv) waive, forgive, defer, extend, or postpone any payment of
interest or fees as to any affected Lender; (v) release any Guarantor or, except
as otherwise permitted herein or in the other Loan Documents, permit Borrower to
sell or otherwise dispose of any Collateral with a value exceeding $10,000,000
in the aggregate (which action shall be deemed to directly affect all Lenders);
(vi) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans that shall be required for Lenders or any of them
to take any action hereunder; and (vii) amend or waive this Section 11.2 or the
definitions of the term “Requisite Lenders” insofar as such definitions affect
the substance of this Section 11.2.  Furthermore,
(A) no amendment, modification, termination, or waiver affecting the rights or
duties of Agent under this Agreement or any other Loan Document shall be
effective unless in writing and signed by Agent in addition to Lenders required
hereinabove to take such action and (B) any provision of this Agreement setting
forth rights and duties of Lenders vis-à-vis each other or the rights and duties
of Lenders vis-à-vis Agent may be modified by Lenders and Agent without the
consent of Borrower.  Each amendment, modification, termination, or
waiver shall be effective only in the specific instance and for the specific
purpose for which it was given.  No amendment, modification,
termination, or waiver shall be required for Agent to take additional Collateral
pursuant to any Loan Document.  No amendment, modification,
termination, or waiver of any provision of any Revolving Loan Note shall be
effective without the written concurrence of the holder of that Revolving Loan
Note.  No notice to or demand on Borrower in any case shall entitle
Borrower to any other or further notice or demand in similar or other
circumstances.  Any amendment, modification, termination, waiver, or
consent effected in accordance with this Section 11.2 shall be
binding upon each holder of the Revolving Loan Notes at the time outstanding and
each future holder of the Revolving Loan Notes.

     

    
      
        
        

      

      
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    (d) If, in
connection with any proposed amendment, modification, waiver, or
termination:

     

    (1) requiring
the consent of all Lenders, the consent of Requisite Lenders is obtained, but
the consent of other Lenders whose consent is required is not
obtained;

     

    (2) requiring
the consent of Requisite Lenders, the consent of Lenders holding more than 50%
of the aggregate Commitments is obtained, but the consent of Requisite Lenders
is not obtained;

     

    then, so
long as Agent is a consenting Lender, at Borrower’s request Agent or a Person
acceptable to Agent shall have the right with Agent’s consent and in Agent’s
sole discretion (but shall have no obligation) to purchase from such
non-consenting Lenders, and such non-consenting Lenders agree that they shall,
upon Agent’s request, sell and assign to Agent or such Person, all of the
Commitments of such non-consenting Lenders for an amount equal to the principal
balance of all Loans held by such non-consenting Lenders and all accrued
interest and fees with respect thereto through the date of sale, such purchase
and sale to be consummated pursuant to an executed Assignment
Agreement.

     

    (e) Notwithstanding
anything to the contrary in this Section 11.2:

     

    (1) with
respect to any increase in the Commitment pursuant to Section 1.17, such
increase may be effected by an Accession Agreement executed only by Borrower,
Agent, and the applicable Acceding Lender;

     

    (2) Agent is
authorized by the Lenders to enter into amendments, supplements or modifications
to this Agreement or any other Loan Document to which it is a party, with
Borrower, for the purpose of:  (A) increasing the rates of interest
payable in respect of the Loans (provided that such
increases are shared ratably among the Lenders); (B) making changes that would
provide additional rights and benefits to the Lenders that do not adversely
affect the legal rights hereunder of any Lender, (C) reflecting additional
Collateral provided under the Loan Documents or effecting releases of
Collateral, or taking such further actions in respect of the Collateral
Documents as contemplated hereunder and thereunder, or (D) curing any
typographical error, incorrect cross-reference, defect in form, inconsistency,
omission or ambiguity herein or therein (without any further consent, approval
or authorization by the Lenders); and

     

    
      
        
        

      

      
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    (3) Agent is
authorized by the Lenders to give notices, consents, confirmations,
acknowledgments, approvals and other notices in respect of the Possessory
Collateral Agreement.

     

    11.3 Reimbursement and
Expenses.  Borrower will promptly pay:

     

    (a) all costs
and out-of-pocket expenses of Agent and Lenders in connection with the
preparation, negotiation, execution, and delivery of this Agreement, the
Revolving Loan Notes and the other Loan Documents, including all post-closing
matters, and the transactions contemplated hereunder and thereunder and the
making of the Loans, including, outside auditor costs, appraisal costs,
insurance premiums, recording and filing fees, and intangible, documentary stamp
and other taxes and the reasonable attorneys’ fees and disbursements of counsel
for Agent and Lenders and the reasonable, allocated costs for services of
internal counsel for Agent and the Lenders in connection therewith;

     

    (b) all costs
and out-of-pocket expenses of Agent and each Lender in connection with the
administration, making, or monitoring of the Loans and this Agreement and the
other Loan Documents in accordance with the provisions thereof, the provision of
the services of the type described in Section 5.3, the
restructuring and refinancing of the transactions herein and therein
contemplated, and the preparation, negotiation, execution, and delivery of any
waiver, amendment, or consent by Agent or any Lender relating to this Agreement
or the other Loan Documents, including, the reasonable attorneys’ fees and
disbursements of counsel for Agent, the Lenders and the reasonable allocated
costs for services of internal counsel for Agent and the Lenders and a fee to
compensate Agent and each Lender for any such waiver, amendment or
consent;

     

    (c) all of
Agent’s and Lenders’ costs and out-of-pocket expenses of obtaining performance
under this Agreement or the other Loan Documents and collection of the
Obligations, in any arbitration, mediation, legal action or proceeding
(including any case or proceeding under any Debtor Relief Laws), which, in each
case, shall include reasonable fees and expenses of counsel for Agent and
Lenders and the reasonable allocated fees and disbursements for the services of
internal counsel for Agent and Lenders;

     

    (d) all
reasonable fees, costs and out-of-pocket expenses of Agent and the Lenders in
connection with the forwarding to Borrower or any other Person on behalf of
Borrower by Agent or any Lender of the proceeds of any of the Loans (including
by wire transfer);

     

    (e) all costs
and out-of-pocket expenses of Agent and Lenders in connection with the
evaluation, observation, appraisal or assessment of any of the Collateral,
Borrower and its Subsidiaries or their respective affairs; and

     

    (f) whenever
Agent or any Lender sustains or incurs any losses or out-of-pocket expenses in
connection with (1) the failure by Borrower to borrow or reborrow any LIBOR
Loan, or reborrow any Loan as a LIBOR Loan, in each case, after having given
notice of its intention to borrow in accordance with Sections 1.1 and 1.2 (whether by the election
of Borrower not to proceed or the failure to satisfy of any of the conditions
set forth in Section 2), or (2)
prepayment of any LIBOR Loan in whole or in part, then Borrower shall pay to
Agent, for the benefit of Agent and Lenders, upon the earlier of Agent’s demand
or the Commitment Maturity Date an amount sufficient to compensate Agent and
Lenders for all such losses and out-of-pocket expenses.  Agent’s good
faith determination of the amount of such losses and out-of-pocket expenses,
shall, absent manifest error, be deemed final, binding and conclusive upon
Borrower.  Losses subject to reimbursement under this Agreement shall
include expenses incurred by Agent, Lenders, or any participant of Agent or any
Lender permitted under this Agreement in connection with the re-employment of
funds prepaid, repaid, not borrowed, or paid, as the case may be, and any lost
profit of Agent or any Lender or any participant of Agent or any Lender over the
remainder of the LIBOR Loan Period for such prepaid LIBOR Loan.

     

    
      
        
        

      

      
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    11.4 Indemnity.

     

    (a) Borrower
shall indemnify and hold each Indemnified Person, harmless, from and against any
Claim that may be instituted or asserted against or incurred by any such
Indemnified Person as the result of credit having been extended or not extended
under this Agreement and the other Loan Documents or otherwise in connection
with or arising out of the transactions contemplated hereunder or thereunder,
including any Claim for Environmental Liabilities and Costs and legal costs and
expenses of disputes between the parties to this Agreement, except to the extent
that any such Claim resulted solely from such Indemnified Person’s gross
negligence or willful misconduct.  NO INDEMNIFIED PERSON SHALL BE
RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR,
ASSIGNEE OR THIRD PARTY BENEFICIARY OR ANY OTHER PERSON ASSERTING CLAIMS
DERIVATIVELY THROUGH ANY SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES THAT MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN
EXTENDED OR NOT EXTENDED UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR AS A
RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR
THEREUNDER.

     

    (b) In any
suit, proceeding or action brought by Agent, on behalf of Agent and Lenders, or
any Lender relating to any item of Collateral or any amount owing hereunder, or
to enforce any provision of any item of Collateral, Borrower shall, save,
indemnify and keep Agent and each Lender harmless from and against all expense,
loss or damage suffered by reason of such action or any defense, setoff, or
counterclaim asserted for any reason by the other party or parties to such
litigation and however arising.  All obligations of Borrower with
respect to any item of Collateral shall be and remain enforceable against, and
only against, Borrower and shall not be enforceable against Agent or any
Lender.  This Section 11.4 shall
survive the Termination Date.

     

    11.5 No
Waiver.  Neither Agent’s nor any Lender’s failure, at any time
or times, to require strict performance by Borrower of any provision of any Loan
Document, nor Agent’s or any Lender’s failure to exercise, nor any delay in
exercising, any right, power or privilege under this Agreement, (a) shall waive,
affect or diminish any right of Agent or such Lender thereafter to demand strict
compliance and performance therewith, or (b) shall operate as a waiver
thereof.  Any suspension or waiver of a Default, Event of Default, or
other provision under the Loan Documents must be in writing signed by an
authorized employee of Agent and the required Lenders to be effective and shall
not suspend, waive or affect any other Default or Event of Default, whether the
same is prior or subsequent thereto and whether of the same or of a different
type, and shall not be construed as a bar to any right or remedy that Agent or
any Lender would otherwise have had on any future occasion.

     

    11.6 Severability.  Wherever
possible, each provision of the Loan Documents shall be interpreted in such
manner as to be effective and valid under Applicable Law, but if any provision
of any Loan Document shall be prohibited by or invalid under Applicable Law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of such Loan Document.  Except as otherwise
expressly provided herein or in any other Loan Document, all undertakings,
agreements, covenants, warranties and representations of or binding upon
Borrower and all rights of Agent and Lenders, all as contained in the Loan
Documents, shall not terminate or expire, but rather shall survive such
termination or cancellation and shall continue in full force and effect until
the Termination Date; provided, that the
reimbursement and expense provisions of Section 11.3, the
indemnity provisions of Section 11.4, the
governing law and venue provisions of Section 11.12 and the
jury trial waiver of Section 11.13 shall all
survive the Termination Date.

     

    
      
        
        

      

      
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    11.7 Conflict of
Terms.  Except as otherwise provided in any Loan Document by
specific reference to the applicable provisions of this Agreement, if any
provision contained in this Agreement is in conflict with, or inconsistent with,
any provision in any other Loan Document, the provision contained in this
Agreement shall govern and control.

     

    11.8 Notices.

     

    (a) All
notices and other communications under this Agreement and the other Loan
Documents shall be in writing and shall be deemed to have been given three days
after deposit in the United States mail, first class mail, postage prepaid, or
one day after being entrusted to a reputable commercial overnight delivery
service, or when sent out by facsimile transmission (with such facsimiles
promptly confirmed by delivery of a copy by personal delivery or United States
mail as otherwise provided in this Section 11.8), addressed
to the party to which such notice is directed at its address determined as
provided in this Section 11.8.  All
notices and other communications under this Agreement shall be given to the
parties hereto at the following addresses:

     

    
      	(1)	 	if to
    Borrower:
	 	 	 
	 	 	

              Hercules
      Technology Growth Capital, Inc.

            
	 	 	

              400
      Hamilton Ave, Suite 310

            
	 	 	Palo Alto,
      California  94301
	 	 	

              Attention:  Chief
      Financial Officer

            
	 	 	

              Facsimile
      No.:  (650) 473-9194

            
	 	 	 
	(2)	 	if to
      Agent: 
	 	 	 
	 	 	

              Union
      Bank, N.A., as Agent

            
	 	 	

              601
      East Potrero Grande Drive

            
	 	 	Monterey Park,
      California  91754
	 	 	Attn:  Commercial
      Loan Operations
	 	 	Facsimile
      No.:  (323) 720-2252
	 	 	 
	 	 	with a copy
    to:
	 	 	 
	 	 	Union Bank, N.A., as
      Agent
	 	 	Northern California
      Commercial Banking Group
	 	 	99 Almaden Boulevard,
      Suite 200
	 	 	San Jose,
      California  95113
	 	 	Attention:  J.
      William Bloore and James B. Goudy
	 	 	Facsimile:  (408)
      280-7163

    

    
 

    
      
        
        

      

      
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      	(3)	 	if to any Lender, at
      such Lender’s address set forth on Schedule C,
      as amended or replaced from time to time (each a “Lender’s
      Office”).

    

     

    (b) Any party
to this Agreement may change the address to which notices shall be directed
under this Section 11.8 by giving 10
days’ written notice of such change to the other parties.

     

    11.9 Section
Titles.  The section titles and table of contents contained in
this Agreement and any other Loan Document are and shall be without substantive
meaning or content of any kind whatsoever and are not a part of the agreement
between the parties hereto.

     

    11.10 Counterparts.  Each
Loan Document may be executed in any number of identical counterparts, each of
which shall constitute an original and all of which shall collectively and
separately constitute a single instrument or agreement.  Delivery of
an executed counterpart of a signature page to this Agreement or any other Loan
Document by facsimile transmission shall be effective as delivery of a manually
executed counterpart thereof.

     

    11.11 Time of the
Essence.  Time is of the essence for payment and performance of
the Obligations.

     

    11.12 GOVERNING LAW;
VENUE.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE
LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE OBLIGATIONS
ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
THEREOF REGARDING CONFLICTS OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA.  BORROWER HEREBY CONSENTS AND AGREES THAT THE STATE
OR FEDERAL COURTS LOCATED IN SAN FRANCISCO COUNTY, CALIFORNIA SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES AMONG
BORROWER, ANY LENDER, AND AGENT PERTAINING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS; PROVIDED, THAT AGENT,
EACH LENDER, AND BORROWER ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY
HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF SAN FRANCISCO COUNTY, CALIFORNIA;
AND FURTHER
PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE AGENT OR ANY LENDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN
ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL
OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF AGENT FOR THE BENEFIT OF ITSELF AND
LENDERS.  BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND BORROWER
HEREBY WAIVES ANY OBJECTION THAT IT MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS
AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
DEEMED APPROPRIATE BY SUCH COURT.  BORROWER HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINTS AND OTHER PROCESS ISSUED IN ANY SUCH ACTION
OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS
MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER AT THE ADDRESS
SET FORTH IN SECTION
11.8 AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER
OF BORROWER’S ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT IN THE UNITED
STATES MAIL, PROPER POSTAGE PREPAID.

     

    
      
        
        

      

      
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    11.13 DISPUTES.  TO
THE EXTENT PERMITTED BY LAW, IN CONNECTION WITH ANY CLAIM, CAUSE OF ACTION,
PROCEEDING OR OTHER DISPUTE CONCERNING THE LOAN DOCUMENTS (EACH A “CLAIM”), THE PARTIES
TO THIS AGREEMENT EXPRESSLY, INTENTIONALLY, AND DELIBERATELY WAIVE ANY RIGHT
EACH MAY OTHERWISE HAVE TO TRIAL BY JURY.  IN THE EVENT THAT THE
WAIVER OF JURY TRIAL SET FORTH IN THE PREVIOUS SENTENCE IS NOT ENFORCEABLE UNDER
THE LAW APPLICABLE TO THIS AGREEMENT, THE PARTIES TO THIS AGREEMENT AGREE THAT
ANY CLAIM, INCLUDING ANY QUESTION OF LAW OR FACT RELATING THERETO, SHALL, AT THE
WRITTEN REQUEST OF ANY PARTY, BE DETERMINED BY JUDICIAL REFERENCE PURSUANT TO
THE STATE LAW APPLICABLE TO THIS AGREEMENT.  THE PARTIES SHALL SELECT
A SINGLE NEUTRAL REFEREE, WHO SHALL BE A RETIRED STATE OR FEDERAL
JUDGE.  IN THE EVENT THAT THE PARTIES CANNOT AGREE UPON A REFEREE, THE
COURT SHALL APPOINT THE REFEREE.  THE REFEREE SHALL REPORT A STATEMENT
OF DECISION TO THE COURT.  NOTHING IN THIS PARAGRAPH SHALL LIMIT THE
RIGHT OF ANY PARTY AT ANY TIME TO EXERCISE SELF-HELP REMEDIES, FORECLOSE AGAINST
COLLATERAL OR OBTAIN PROVISIONAL REMEDIES.  THE PARTIES SHALL BEAR THE
FEES AND EXPENSES OF THE REFEREE EQUALLY, UNLESS THE REFEREE ORDERS
OTHERWISE.  THE REFEREE SHALL ALSO DETERMINE ALL ISSUES RELATING TO
THE APPLICABILITY, INTERPRETATION, AND ENFORCEABILITY OF THIS
PARAGRAPH.  THE PARTIES ACKNOWLEDGE THAT IF A REFEREE IS SELECTED TO
DETERMINE THE CLAIMS, THEN THE CLAIMS WILL NOT BE DECIDED BY A
JURY.

     

    11.14 Confidentiality.  Agent
and each Lender agrees, as to itself, to use commercially reasonable efforts
(equivalent to the efforts Agent or such Lender, as the case may be, applies to
maintaining the confidentiality of its own confidential information) to maintain
as confidential all confidential information provided to it by Borrower, and
designated as confidential, except that Agent and Lenders may disclose such
information (a) to persons employed by, or professionals engaged by, Agent or a
Lender; (b) to any bona fide assignee or participant or potential assignee or
participant that has agreed to comply with the covenant contained in this Section 11.14 (and any
such bona fide assignee or participant or potential assignee or participant may
disclose such information to persons employed or engaged by them as described in
clause (a) above); (c)
as required or requested by any governmental authority or reasonably believed by
Agent or any Lender to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, on the advice of Agent’s or such
Lender’s counsel, required by law; (e) in connection with the exercise of any
right or remedy under the Debt Documents or in connection with any litigation to
which Agent or such Lender is a party or bound that relates to this Agreement,
any other Debt Document or the transactions contemplated hereby or thereby; or
(f) that ceases to be confidential through no fault of Agent or such
Lender.

     

    [Remainder
of Page Left Blank]

     

     

     

     

    
      
        
        

      

      
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    IN WITNESS
WHEREOF, this Loan and Security Agreement has been duly executed as of the date
first written above.

     

    
      	 	
              BORROWER:

            	 	
              HERCULES
      TECHNOLOGY GROWTH CAPITAL, INC.

            	 
	 	 
      	 	 
      	 	 
	 	 
      	 	 
      	 	 
	 	 
      	 	
              By:

            	 	 
	 	 
      	 	 
      	 	 
	 	 
      	 	
              Name:

            	 	 
	 	 
      	 	 
      	 	 
	 	 
      	 	
              Title:

            	 	 
	 	 
      	 	 
      	 	 
	 	 
      	 	 
      	 	 
	 	
              AGENT:

            	 	
              UNION
      BANK, N.A., as Agent

            	 
	 	 
      	 	 
      	 	 
	 	 
      	 	 
      	 	 
	 	 
      	 	
              By:

            	 	 
	 	 
      	 	 
      	 	 
	 	 
      	 	
              Name:

            	 	 
	 	 
      	 	 
      	 	 
	 	 
      	 	
              Title:

            	 	 
	 	 
      	 	 
      	 	 
	 	 
      	 	 
      	 	 
	 	
              LENDER:

            	 	
              UNION
      BANK, N.A.

            	 
	 	 
      	 	 
      	 	 
	 	 
      	 	 
      	 	 
	 	 
      	 	
              By:

            	 	 
	 	 
      	 	 
      	 	 
	 	 
      	 	
              Name:

            	 	 
	 	 
      	 	 
      	 	 
	 	 
      	 	
              Title:

            	 	 

    

    

     

    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

    

     

    SCHEDULE A - DEFINITIONS AND
RULES OF CONSTRUCTION

     

    (a)           In
addition to the defined terms appearing in the Agreement, capitalized terms used
in this Agreement and the other Loan Documents shall have (unless otherwise
provided elsewhere in this Agreement or in the other Loan Documents) the
following respective meanings:

     

    “Acceding Lender” has
the meaning set forth in Section 1.17.

     

    “Accepted Servicing
Practices” means the servicing practices and collection procedures of
Borrower that are in accordance with the applicable Loan Paper and Applicable
Law and which are consistent with the higher standard of (i) customary servicing
practices of prudent institutions which service loans or other financial assets
similar to the Pledged Loan Paper for their own account or for the account of
others and (ii) the same care, skill, prudence and diligence with which Borrower
services and administers loans or other financial assets which are similar to
the Pledged Loan Paper, for its own account or for the account of
others.

     

    “Accession Agreement”
has the meaning set forth in Section 1.17.

     

    “Account Debtor” means
any Person who may become obligated, directly or indirectly, to any Person
under, with respect to, or on account of, an Account, Chattel Paper or General
Intangible (including a Payment Intangible) and obligor, debtor or other any
Person who is obligated, directly or indirectly, on or under, or is a party to,
any Loan Paper or Note Receivable.

     

    “Account Debtor
Collateral” means the assets and properties of each Account Debtor
subject to, or purportedly subject to, any Lien in favor of Borrower (or any
Multi-Lender Agent for the benefit of Borrower) arising under or in connection
with any Loan Paper or otherwise securing payment of any Note Receivable or
obligations under Loan Paper, including without limitation intellectual property
rights.

     

    “Accounts” means all
“accounts,” as such term is defined in the UCC, now owned or hereafter acquired
by any Person, including (a) all accounts receivable, other receivables, book
debts and other forms of obligations (other than forms of obligations evidenced
by Chattel Paper or Instruments) (including any such obligations that may be
characterized as an account or contract right under the UCC), (b) all of such
Person’s rights in, to and under all purchase orders or receipts for goods or
services, (c) all of such Person’s rights to any goods represented by any of the
foregoing (including unpaid sellers’ rights of rescission, replevin, reclamation
and stoppage in transit and rights to returned, reclaimed or repossessed goods),
(d) all rights to payment due or to become due to such Person for Goods or other
property sold, leased, licensed, assigned or otherwise disposed of, for a policy
of insurance issued or to be issued, for a secondary obligation incurred or to
be incurred, for energy provided or to be provided, for the use or hire of a
vessel under a charter or other contract, arising out of the use of a credit
card or charge card, or for services rendered or to be rendered by such Person
or in connection with any other transaction (whether or not yet earned by
performance on the part of such Person), (e) all health care insurance
receivables, and (f) all collateral security of any kind, given by any Person
with respect to any of the foregoing.  “Accounts” includes, without
limitation, all amounts owed with respect to Notes Receivable.

     

    “ACH Account” means
the account designated in writing by Borrower and Agent as the ACH Account for
purposes of this Agreement in the name of Borrower maintained at
Bank.

     

    “ACH Transactions”
means any cash management or related services provided by Agent to Borrower,
including the automatic clearing house transfer of funds by Agent for the
account of Borrower pursuant to any agreement or overdrafts.

     

    
      
        
        

      

      
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    “Affected Lender”
means any Lender demanding payment from Borrower pursuant to the terms of Section 10.3 or Section 10.5.

     

    “Affiliate” means,
with respect to any Person:  (a) each Person that, directly or
indirectly, owns or controls, whether beneficially, or as a trustee, guardian or
other fiduciary, 10% or more of the Stock having ordinary voting power in the
election of directors of such Person; (b) each Person that controls, is
controlled by or is under common control with such Person or any Affiliate of
such Person; (c) each of such Person’s officers, directors, joint venturers,
partners and Subsidiaries; or (d) with respect to Borrower, each Related
Person.  For the purpose of this definition, “control” of a Person
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of its management or policies, whether through the ownership
of voting securities, by contract or otherwise.

     

    “Agent” means Union
Bank, N.A., as agent for Lenders, or its successors appointed pursuant to Section 8.8.

     

    “Agreement” means the
Loan and Security Agreement to which this Schedule A
is attached or otherwise identified.

     

    “Applicable Law”
means, in respect of any Person, all provisions of constitutions, statutes,
rules, regulations and orders of governmental bodies or regulatory agencies
applicable to such Person, and all orders and decrees of all courts, tribunals
and arbitrators in proceedings or actions to which the Person in question is a
party or by which it or its properties are bound or affected.

     

    “Applicable LIBOR
Margin” means, as of any time of determination, the greater of: (a) two
and one quarter of one percent (2.25%), and (b) four percent (4.00%) minus the
applicable LIBOR Basis then in effect.

     

    “Applicable Reference Rate
Margin” mean, as of any time of determination, the greater of (a) zero
percent (0.00%), and (b) four percent (4.00%) minus the Reference Rate then in
effect.

     

    “Asset Coverage Ratio”
shall mean, on a consolidated basis for Borrower and its consolidated
Subsidiaries, the ratio which the value of total assets, less all liabilities
and indebtedness not represented by senior securities (all as determined
pursuant to the Investment Company Act and any orders of the Securities and
Exchange Commission issued to Borrower thereunder), bears to the aggregate
amount of senior securities representing indebtedness of Borrower and its
consolidated Subsidiaries.

     

    “Assignment and Assumption
Agreement” means an Assignment and Assumption Agreement, by and among a
Lender, an assignee of such Lender, and Agent, in substantially the form of
Exhibit G,
or such other form as may be agreed to by such Lender, assignee and
Agent.

     

    “Assignment of Note”
means an Assignment of Note in the form attached to the Pledgeholder
Agreement.

     

    “Authorized Signatory”
means such officer of Borrower as may be duly authorized and designated in
writing by Borrower in its resolutions to execute documents, agreements,
certificates and instruments on behalf of Borrower and to grant a Lien upon
Borrower’s personal property.

     

    “Bank” means Union
Bank, N.A., and its successors and assigns.

     

    “Bank Product Reserve”
means, as of any date of determination, the amount of reserves that Agent has
established (based upon its reasonable determination of the credit exposure of
Borrower and its Subsidiaries in respect of then extant Bank Products) in
respect of Bank Products then provided or outstanding.

     

    
      
        
        

      

      
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    “Bank Product” means
any financial accommodation extended to Borrower or its Subsidiaries by Bank or
an Affiliate of Bank including:  (a) credit cards, (b) credit card
processing services, (c) debit cards, (d) purchase cards, (e) ACH Transactions,
(f) cash management, including controlled disbursement, accounts or services, or
(g) transactions under Hedging Agreements.

     

    “Bankruptcy Code”
means Title 11 of the United States Code (11 U.S.C. Sections 101 et seq.).

     

    “Books and Records”
means, with respect to any Person, all books, records, board minutes, contracts,
licenses, insurance policies, business plans, files, accounting books and
records, financial statements (actual and pro forma), and filings with
Governmental Authorities.

     

    “Borrower” means
Hercules Technology Growth Capital, Inc., a Maryland corporation.

     

    “Borrowing
Availability” means, at any time, the lesser of (a) the Maximum Amount at
such time, or (b) the Borrowing Base.

     

    “Borrowing Termination
Date” means February 1, 2011.

     

    “Borrowing Base”
means, as of any time of determination, the sum of (a) fifty percent (50%) of
the Net Eligible Notes Receivable under Eligible Loan Paper that is Single
Lender Loan Paper, plus (b) twenty five
percent (25%) of the of the Net Eligible Notes Receivable under Eligible Loan
Paper that is Multi-Lender Loan Paper, minus (c) the sum of
(i) the Bank Product Reserve, and (ii) the aggregate amount of reserves, in any,
established under Section 1.1(b).

     

    “Borrowing Base
Certificate” means a certificate delivered by Borrower to Agent pursuant
to Section 5.1(a),
which shall be substantially in the form of Exhibit E.

     

    “Business Day” means
any day that is not a Saturday, Sunday, or other day on which banks in the State
of California or the state in which the principal office of Agent is located,
are authorized or required to close, and in reference to LIBOR Loans means a
Business Day that is also a day on which banks in the city of London are open
for interbank or foreign exchange transactions.

     

    “Capital Expenditures”
means, with respect to any Person, all payments or accruals (including
Capitalized Lease Obligations) for any fixed assets or improvements or for
replacements, substitutions or additions thereto, that have a useful life of
more than one year and that are required to be capitalized under
GAAP.

     

    “Capital Lease” means
any lease where the obligations to pay rent or other amounts thereunder
constitute Capitalized Lease Obligations.

     

    “Capitalized Lease
Obligation” means, with respect to any Person, that portion of any
obligation as lessee under a lease of (or other agreement conveying the right to
use) real and/or personal property that is required to be capitalized on, or
disclosed in a footnote to, the balance sheet of such Person in accordance with
GAAP, and, for purposes of this Agreement, the amount of such obligation shall
be the capitalized amount thereof, determined in accordance with
GAAP.

     

    
      
        
        

      

      
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    “Cash Equivalents”
means (v) any readily-marketable securities (i) issued by, or directly,
unconditionally and fully guaranteed or insured by the United States federal
government or (ii) issued by any agency of the United States federal government
the obligations of which are fully backed by the full faith and credit of the
United States federal government, (w) any readily-marketable direct obligations
issued by any other agency of the United States federal government, any state of
the United States or any political subdivision of any such state or any public
instrumentality thereof, in each case having a rating of at least “A-1” from
S&P or at least “P-1” from Moody’s, (x) any commercial paper rated at least
“A-1” by S&P or “P-1” by Moody’s and issued by any entity organized under
the laws of any state of the United States, (y) any U.S. dollar-denominated time
deposit, insured certificate of deposit, money market account, overnight bank
deposit or bankers’ acceptance issued or accepted by (i) Bank or (ii) any
commercial bank that is (A) organized under the laws of the United States, any
state thereof or the District of Columbia, and (B) “adequately capitalized” (as
defined in the regulations of its primary federal banking regulators) or (z)
shares of any United States money market fund that has substantially all of its
assets invested continuously in the types of investments referred to in clauses (v), (w), (x) or (y) above with maturities as
set forth in the proviso below; provided, however, that the
maturities of all obligations specified in any of clauses (v), (w), (x) and (y) above shall not exceed 365
days.  For the avoidance of doubt, “Cash Equivalents” does not include
(and Borrower is prohibited from purchasing or purchasing participations in) any
auction rate securities or other corporate or municipal bonds with a long-term
nominal maturity for which the interest rate is reset through a Dutch
auction.

     

    “Change of Control”
means the occurrence of any one or more of the following:

     

    (a)           Persons
who are “interested persons” as defined in the Investment Company Act
representing a majority of Borrower’s board of directors;

     

    (b)           any
person or “group” becoming the “beneficial owner” (as such terms are defined
under Sections 13d-3 and 13d-5 of and Regulation 13D under the Securities
Exchange Act of 1934, as amended, except that a Person will be deemed to be the
“beneficial owner” of all securities that such Person has the right or
obligation to acquire, whether such right is exercisable immediately or only
after the passage of time), either directly or indirectly, of twenty percent
(20%) or more of the issued and outstanding shares of Stock of Borrower having
the right to vote for the election of directors of Borrower under ordinary
circumstances;

     

    (c)           any
Person (or group of Persons acting in concert) otherwise acquiring the power to
direct the management or affairs of Borrower by obtaining proxies, entering into
voting agreements or trusts, acquiring securities or otherwise in each case from
and after the Closing Date;

     

    (d)           Borrower
ceases to directly own and control 100% of the outstanding capital Stock of each
of its Subsidiaries;  or

     

    (e)           during
any period of twelve consecutive calendar months, individuals who at the
beginning of such period constituted the board of directors of Borrower
(together with any new directors whose election by the board of directors of
Borrower or whose nomination for election by the Stockholders of Borrower was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason other
than death or disability to constitute a majority of the directors then in
office.

     

    “Charges” means all
Federal, state, county, city, municipal, local, foreign or other governmental
taxes (including taxes owed to PBGC at the time due and payable), levies,
assessments and all additional charges, interest, penalties, expenses, or claims
upon or relating to (a) the Collateral, (b) the Obligations, (c) the ownership
or use of any assets by Borrower, or (d) any other aspect of Borrower’s
business.

     

    
      
        
        

      

      
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    “Chattel Paper” means
all “chattel paper,” as such term is defined in the UCC and including both
tangible and electronic chattel paper, now owned or hereafter acquired by any
Person, wherever located.

     

    “Claim” means any and
all:  (a) suits, actions, or proceedings in any court or forum, at
law, in equity or otherwise; (b) costs, fines, deficiencies, or penalties; (c)
asserted claims or demands by any Person; (d) arbitration demands, proceedings
or awards; (e) damages, losses, liabilities and expenses (including reasonable
attorneys’ fees and disbursements and other costs of collection, defense or
appeal); (f) enforcement of rights and remedies; or (g) criminal, civil or
regulatory investigations.

     

    “Closing Date” means
February 10, 2010.

     

    “Co-Lender” has the
meaning set forth in the definition of Multi-Lender Loan Paper.

     

    “Collateral” means all
of Borrower’s right title and interest in and to the following, wherever located
and whether now existing or hereafter created or acquired: (a) all Notes
Receivable and all related Loan Paper identified on any Borrowing Base
Certificate, Loan Request, or Loan Supplement now existing or hereafter
acquired, including without limitation any and all Notes Receivable and related
Loan Paper now or hereafter financed through a Loan under this Agreement, (b)
all Collections, (c) the Lockbox, the ACH Account, the Collection Account, the
Custodial Account, the Operating Account and all other deposit, investment and
securities accounts in which Collections are deposited; (d) any and all property
described in Section 6.1(c), (e) all
Account Debtor Collateral, (f) all Accounts, deposits, Investment Property,
Instruments, Documents, letters of credit, Letter of Credit Rights, Supporting
Obligations, Commercial Tort Claims, Goods, Books and Records, General
Intangibles, Chattel Paper pertaining to any of the foregoing, and (g) all
products, profits, rents of, dividends and distributions on, accessions to, and
all other Proceeds of the foregoing including any and all of the following to
the extent constituting such Proceeds (whether now existing or hereafter
acquired, tangible or intangible, and whether owned by, consigned to, or held
by, or under the care, custody or control of Borrower): all money, cash, cash
equivalents, Accounts, Deposit Accounts, other bank, securities, investment,
commodity and deposit accounts, deposits, Investment Property, Inventory,
Equipment, Fixtures, Goods, Chattel Paper, Documents, Loan Paper, Notes
Receivable, Instruments, letters of credit, Letter of Credit Rights, Supporting
Obligations, Commercial Tort Claims, Books and Records, General Intangibles
(including all Intellectual Property, Claims, Payment Intangibles, contract
rights, rights under or in respect of Hedge Agreements, choses in action, and
Software) regardless of whether the Collateral, or any portion of it, is
property as to which the UCC provides the perfection of a security interest, and
all rights and remedies applicable to such property, but excluding in all
events, Hazardous Materials.

     

    “Collateral Documents”
means all Loan Documents granting Liens to Agent, for the benefit of Agent and
Lenders, to secure the Obligations or other rights with respect to the
Collateral.

     

    “Collection Account”
means the cash collateral account designated in writing by Borrower and Agent as
the Collection Account for purposes of this Agreement in the name of Borrower
maintained at Bank.

     

    “Collections”
means  (a) all cash collections or other cash proceeds received by the
Borrower from any source in payment of any amounts owed in respect of any
Pledged Note Receivable, including, without limitation, interest collections,
principal collections, fees and insurance proceeds, (b) all Recoveries and (c)
any other cash, funds or other property received or receivable with respect to
or in connection with any Pledged Note Receivable, Pledged Loan Paper or any
related Account Debtor Collateral.

     

    
      
        
        

      

      
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    “Commercial Tort
Claim” means all “commercial tort claims,” as such term is defined in the
UCC, now owned or hereafter acquired by any Person.

     

    “Commitment” means (a)
as to any Lender, the aggregate commitment of such Lender to make Loans as set
forth in Schedule C
or in the most recent Assignment Agreement executed by such Lender, as the same
may be reduced or increased from time to time pursuant to this Agreement or as
appropriate to reflect any assignments to or by such Lender effected in
accordance with Section 8.1 and (b) as to
all Lenders, the aggregate commitment of all Lenders to make Loans, which
aggregate commitment shall be Twenty Million Dollars ($20,000,000) on the
Closing Date, as such amount may be adjusted, if at all, from time to time in
accordance with this Agreement.

     

    “Commitment Maturity
Date” means the earliest of (a) May 1, 2011, (b) the date on which the
Lenders’ obligation to make Loans is terminated and the Obligations are declared
to be due and payable or the Commitments are terminated pursuant to Section 7.2, and (c) the
date of prepayment in full by Borrower of the Obligations in accordance with the
provisions of Section 1.17.

     

    “Compliance
Certificate” means a statement in reasonable detail certified by the
chief financial officer of Borrower showing, among other things, the
calculations used in determining compliance with the Financial Covenants under
this Agreement, which shall be substantially in the form of Exhibit F.

     

    “Control Letter” means
a letter agreement between Agent and (i) the issuer of uncertificated securities
with respect to uncertificated securities in the name of Borrower, (ii) a
securities intermediary with respect to securities, whether certificated or
uncertificated, securities entitlements and other financial assets held in a
securities account in the name of Borrower, or (iii) a futures commission
merchant or clearing house, as applicable, with respect to commodity accounts
and commodity contracts held by Borrower, whereby, among other things, the
issuer, securities intermediary or futures commission merchant limits any Lien
that it may have in the applicable financial assets in a manner reasonably
satisfactory to Agent, acknowledges the Lien of Agent, for the benefit of Agent
and Lenders, on such financial assets, and agrees to follow the instructions or
entitlement orders of Agent without further consent by Borrower.

     

    “Credit Policy” shall
mean the investment policies and practices relating to Notes Receivable, Loan
Paper and Account Debtor Collateral, specifically including underwriting,
valuation, auditing and documentation guidelines, standard documentation, and
portfolio management policies and procedures, in the form delivered to Agent and
approved by Agent on or prior to the Closing Date, as amended, supplemented or
otherwise modified from time to time with the prior written consent of
Agent.

     

    “Custodial Account”
means the account designated in writing by Borrower and Agent as the Custodial
Account for purposes of this Agreement in the name of Borrower maintained at
Bank.

     

    “Custody Agreement”
means the Custody Agreement to be entered into within thirty (30) days after the
Closing Date by and between Bank, as custodian, and Borrower, as amended,
modified, supplemented or restated from time to time.

     

    “Daily Balance” means,
as of any Business Day, (a) the aggregate outstanding amount of the Loans as of
the beginning of such Business Day, plus (b) any new Loans advanced or incurred
on such Business Day, minus (c) any payments or collections which are deemed to
be made on such Business Day under the provisions of this
Agreement.

     

    
      
        
        

      

      
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    “Debt Service Coverage
Ratio” means, with respect to Borrower, on an unconsolidated basis, as at
the last day of any Fiscal Quarter, the ratio determined by dividing (a) an
amount equal to (i) the sum of (A) cash payments in respect of principal and
interest received on account of Eligible Notes Receivable received by Borrower,
for its own account and not as servicer of another Person, during the Fiscal
Quarter ending on such date plus (B) the net cash
proceeds received by Borrower from the sale and issuance of its Stock during
such Fiscal Quarter, minus (ii) all
operating expenses of Borrower accrued or paid during such Fiscal Quarter, minus (iii) all
Restricted Payments made during such Fiscal Quarter, by (b) an amount equal to
the sum of (i) one third (1/3) of the amount equal to the average Daily Balance
during such Fiscal Quarter plus (ii) Interest
Expense of Borrower during the Fiscal Quarter ending on such date.

     

    “Debtor Relief Laws”
means the Bankruptcy Code, and all other liquidation, conservatorship,
bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief laws of the
United States or other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally.

     

    “Default” means any
event that, with the passage of time or notice or both, would, unless cured or
waived, become an Event of Default.

     

    “Default Rate” means a
per annum default rate equal to three percent (3%) in excess of the maximum
interest rate(s) otherwise applicable to the Obligations from the date of the
Event of Default.

     

    “Defaulted Loan Paper”
means any Loan Paper:  (a) under which any Delinquent Note Receivable
exists, (b) under which there exists a default in performance of any obligation
(other than the payment of money) subject to applicable grace periods, (c) as to
which Borrower has accelerated the date of payment all or any portion of the
obligations thereunder or any related Note Receivable prior to their stated due
date or maturity, (d) secured by Account Debtor Collateral for which Borrower,
or any Multi-Lender Agent for Borrower, has exercised, or provided a notice of
intent to exercise, any of its rights or remedies as a secured party, (e) as to
which any of the related Account Debtor Collateral has been repossessed or
returned due to a material adverse change in the financial condition of the
related Account Debtor, (f) where the related Account Debtor is subject to an
event of the type described in Sections 7.1(e), (f) or (g) or has become unable to
pay its obligations thereunder when due, (g) under which any Note Receivable or
part thereof was or, consistent with the Credit Policy, would be written off as
uncollectible, (h) all or any portion of which, or any related Note Receivable,
has been converted into or exchanged for Stock, or (i) under which any Note
Receivable or part thereof has been or, consistent with the Credit Policy,
should be placed in “non accrual” status in Borrower’s Books and
Records.

     

    “Delinquent Note
Receivable” means any Note Receivable with respect to which any payment
owing thereunder remains outstanding and unpaid, in whole or in part, for more
than thirty (30) days past the date it first became due and payable according to
the original face and tenor of such Note Receivable or as extended in accordance
with Borrower’s Credit Policy at a time when no default or event of default
exists under such Note Receivable.

     

    “Deposit Accounts”
means all “deposit accounts” as such term is defined in the UCC, now or
hereafter held in the name of any Person.

     

    “DLA” means DLA Piper
LLP (US).

     

    
      
        
        

      

      
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    “Documents” means all
“documents,” as such term is defined in the UCC, now owned or hereafter acquired
by any Person, wherever located, including all bills of lading, dock warrants,
dock receipts, warehouse receipts, and other documents of title, whether
negotiable or non-negotiable.

     

    “Dollars” or “$” means
lawful currency of the United States.

     

    “Drawdown Date” means
the date, which shall be a Business Day, on which any Loan is made or is to be
made, and the date on which any Loan is converted or continued in accordance
with this Agreement.

     

    “Eligible Loan Paper”
means that Loan Paper which complies with each of the representations and
warranties in Section 3.18, and in
respect of which each of the following conditions is satisfied; provided that such
criteria may be modified from time to time by Agent, in Agent’s Permitted
Discretion; provided further, that so long
as no Default or Event of Default has occurred and is continuing, Agent shall
first notify and attempt to discuss with Borrower any such modification that
Agent proposes to make to such criteria unless Agent, in its Permitted
Discretion, believes that exigent circumstances justify the immediate
modification of such criteria:

     

    (a) (i) Such
Loan Paper has been duly executed and delivered by the Account Debtor to
Borrower (and the related Multi-Lender Agent and Co-Lenders, if Multi-Lender
Loan Paper) in order to finance working capital or growth capital of the Account
Debtor; (ii) such Loan Paper provides for the grant of a Lien on substantially
all assets of such Account Debtor and the proceeds thereof to secure any
obligations thereunder and under any related Note Receivable (provided that
intellectual property assets of the Account Debtor may be excluded from the
Account Debtor Collateral, consistent with the Credit Policy, so long as the
collateral includes any and all rights to payment and proceeds from the sale,
licensing or disposition of all or any part, or rights in, such intellectual
property, the Account Debtor has covenanted in such Loan Paper to keep all
intellectual property assets free and clear of Liens, including any Liens
through the presence of any provision allowing such Liens to attach to such
intellectual property upon the occurrence of any such event (unless in favor of
Borrower or the Multi-Lender Agent, as applicable), and if such intellectual
property is owned by a wholly-owned subsidiary of such Account Debtor, the
Account Debtor has pledged to Borrower (or the related Multi-Lender Agent for
the benefit of Borrower) 100% of the Account Debtor’s capital stock (or other
ownership interest) in such subsidiary, or 65% of such stock if a pledge of all
such stock would result in material adverse tax consequences for such Account
Debtor); (iii) such Loan Paper was entered into in the ordinary course of
Borrower’s business and in accordance with the Credit Policy, and none of its
terms, conditions or provisions have been amended, modified or waived in any
manner inconsistent with the Credit Policy; (iv) such Loan Paper is in full
force and effect and has not been materially modified, supplemented or amended
in a manner other than in accordance with the Credit Policy; (v) the Account
Debtor has no claim or defense against Borrower (or any Multi-Lender Agent or
other Co-Lender, if applicable) with respect to such Loan Paper or any
obligations with respect thereto; (vi) the only originals of the promissory
notes issued to Borrower in connection with such Loan Paper (or, if not the only
original, the sole original for purposes of perfecting a security interest by
possession which fact is clearly indicated on such promissory note) have been
endorsed and delivered to the Agent or the Pledgeholder; (vii) a complete, fully
executed set of original copies of such Loan Paper been delivered to Agent or
the Pledgeholder; (viii) such Loan Paper (other than Multi-Lender Loan Paper) is
owned exclusively by Borrower and Borrower’s rights in such Loan Paper
(including Multi-Lender Loan Paper) are subject to a first priority Lien in
favor of the Agent, for the benefit of Agent and the Lenders; (ix) pursuant to
the terms of such Loan Paper, none of the Account Debtor, the Multi-Lender Agent
(if applicable) or any other Co-Lender (if applicable) need consent to such
collateral assignment of, or grant of a Lien in, all or any portion of such Loan
Paper or Borrower’s rights therein, in favor of Agent or otherwise; (x) such
Loan Paper provides that the obligation of the Account Debtor to pay loan
installment and other payments to Borrower or any assignee thereof is absolute
and unconditional; (xi) the related Account Debtor has begun to make payments
pursuant to such Loan Paper and no offsets, counterclaims or disputes exist
between the Account Debtor and Borrower or, in the case of Multi-Lender Loan
Paper, the Account Debtor and the Multi-Lender Agent or any Co-Lender; and (xii)
pursuant to the terms and conditions of such Loan Paper, the Account Debtor has
agreed to indemnify Borrower and its successors and assigns, for any losses and
liabilities incurred or suffered by Borrower arising from (a) the matters
contemplated by such Loan Paper, (b) any dispute between the Account Debtor and
any third party, or (c) any contention that the Account Debtor has failed to
comply with any law, rule, regulation, order or directive applicable the Account
Debtor 's business; and (xiii) such Loan Paper does not contain any
confidentiality provision which has the effect of or purports to restrict
disclosure to Agent or the Lenders of data or other information related thereto
or to any related Note Receivable, Account Debtor Collateral or Account
Debtor;

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (b) (i) The
related Account Debtor Collateral, is owned exclusively by the Account Debtor
under such Loan Paper free of all Liens other than Permitted Adverse Claims and
Permitted Pari Passu Interests (in the case of Multi-Lender Loan Paper only);
(ii) the Lien in favor of Borrower (or, as applicable, the related Multi-Lender
Agent for the ratable benefit of Borrower and the other Co-Lenders) in the
Account Debtor Collateral is (or upon disbursement of the loan to the Account
Debtor will be) a duly perfected first priority Lien (subject only to Permitted
Adverse Claims and Permitted Pari Passu Interests) as security for the loans and
other extensions of credit evidenced by such Loan Paper and the Account Debtor’s
other obligations to Borrower under such Loan Paper (and, in the case of
Multi-Lender Loan Paper, the obligations to a Multi-Lender Agent and the other
Co-Lenders under such Loan Paper), which has not been pledged, encumbered or
assigned by Borrower (or any related Multi-Lender Agent) to any Person and there
shall have been filed by Borrower appropriate UCC financing statements naming
Borrower (or the related Multi-Lender Agent in the case of Multi-Lender Loan
Paper) as the “secured party” and the Account Debtor as the “debtor” in order to
perfect Borrower’s security interest (or the related Multi-Lender Agent’s
security interest, for the ratable benefit or Borrower and the other Co-Lenders)
in the Account Debtor Collateral; (iii) there shall have been filed by Borrower
with respect to such Loan Paper appropriate UCC financing statements in order to
perfect and preserve the Agent’s first priority Lien on and security interest in
Borrower’s rights to, and interests in, such Loan Paper; (iv) the Account Debtor
Collateral is insured by the Account Debtor as required under the applicable
Loan Paper and as required under the Credit Policy;

     

    (c) If such
Loan Paper is Multi-Lender Loan Paper, (i) the lending commitments of lenders,
other than Borrower, thereunder do not exceed fifty percent (50%) of the lending
commitment of Borrower thereunder, and (ii) the outstanding obligations owing to
lenders, other than Borrower, thereunder do not exceed fifty percent (50%) of
the outstanding obligations owing to Borrower thereunder;

     

    (d) Agent has
the right to assert all of the rights of Borrower under such Loan
Paper;

     

    (e) Such Loan
Paper requires the Account Debtor to provide ongoing financial information to
Borrower, including financial statements on not less than a quarterly basis,
annual audited financial statements prepared by an independent third-party
auditor, annual budgets and ongoing loan monitoring and covenant compliance
certificates consistent with the Credit Policy;

     

    (f) Such Loan
Paper is not Defaulted Loan Paper and has never been Defaulted Loan Paper (other
that temporary classification as Defaulted Loan Paper due solely to the
existence of a Delinquent Note Receivable thereunder as to which the delinquency
has been cured); and

     

    (g) Such Loan
Paper contains terms, conditions, representations, warranties, covenants and
events of default that are customary for commercial loan transactions (or in the
case of Multi-Lender Loan Paper, commercial co-lender or syndicated loan
transactions), including provisions providing (i) that Borrower receive a
separate promissory note representing its right to repayment by the Account
Debtor, and (ii) in the case of Multi-Lender Loan Paper, for pro rata (based on
the amount of funds advanced by each of Borrower and the related Co-Lenders to
the Account Debtor pursuant to such Multi-Lender Loan Paper) allocation to
Borrower and the related Co-Lenders of all payments from the Account Debtor and
of all proceeds with respect to the disposition of the Account Debtor
Collateral.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    “Eligible Notes
Receivable” means, subject to the next sentence, the outstanding
principal amount of those Notes Receivable which comply with each of the
representations and warranties in Section 3.18 hereof and
each of the other representations and warranties relating to Eligible Notes
Receivable contained herein and in the other Loan Documents, that are owned by
Borrower in which Agent holds (and continuously maintains) a perfected
first-priority security interest and that have been collaterally assigned to the
Agent (and in any event shall not include any unfunded commitment or other
obligation of Borrower under any Loan Paper).  Notwithstanding the
foregoing, Eligible Notes Receivable shall not include a Note
Receivable:

     

    (a) if the
proceeds of the loans, advances and other extensions of credit provided for
under, or evidenced by, such Note Receivable have not yet been disbursed by
Borrower (and the related Co-Lenders, if Multi-Lender Loan Paper) to the Account
Debtor or to an existing lender for the Account Debtor’s benefit in connection
with the pay-off of an existing credit facility on such Account Debtor’s written
instructions;

     

    (b) if such
Note Receivable does not evidence a commercial loan made to an unaffiliated
Account Debtor in which venture capital firms, private equity groups or other
institutional investors have an aggregate equity ownership of such Account
Debtor of at least fifty percent (50%) on a fully-diluted basis;

     

    (c) if any
payment under such Note Receivable is more than thirty (30) days past due
according to its terms or has been, or, consistent with the Credit Policy,
should be, placed in “non-accrual” status in Borrower’s books;

     

    (d) if such
Note Receivable (i) is not approved, documented, managed and otherwise in
conformance with Borrower’s Credit Policy, or (ii) is not evidenced by
Borrower’s standard loan documents, or other documentation acceptable to Agent
in its sole discretion;

     

    (e) if such
Note Receivable (i) has been modified or had its maturity extended in a manner
that is not in compliance with the Credit Policy, or (ii) has had its maturity
extended or otherwise been modified in accordance with the Credit Policy, and
the aggregate outstanding principal amount of all Eligible Notes Receivable
which have had their maturity extended or have otherwise been modified exceeds
ten percent (10%) of the aggregate outstanding principal amount of all Eligible
Notes Receivable at such time; provided, that only
the amount in excess of such limit shall be considered ineligible;

     

    (f) if such
Note Receivable causes the aggregate outstanding principal amount of all
Eligible Notes Receivable owing by any Account Debtor and its Affiliates, to
exceed the lesser of (i) twenty percent (20%) of the aggregate outstanding
principal amount of all Eligible Notes Receivable at such time, or (ii)
Ten  Million Dollars ($10,000,000); provided, that only the amount in
excess of such limit shall be considered ineligible and such limit may be waived
by Agent on a case by case basis in its sole discretion;

     

    (g) if such
Note Receivable causes the aggregate outstanding principal amount of all
Eligible Notes Receivable owed by Account Debtors whose business activities fall
within a single industry, as defined by the Standard Industrial
Classification/NAIC classification (six-digit NAIC codes) then in effect, to
exceed thirty-five percent (35%) of the aggregate outstanding principal amount
of all Eligible Notes Receivable at such time; provided, that in each case only
the amount in excess of such limit shall be considered ineligible;

     

    
      
        
        

      

      
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    (h) if such
Note Receivable causes the aggregate outstanding principal amount of all
Eligible Notes Receivable owed by Account Debtors that are rated Investment
Grade 3 in accordance with Borrower’s Credit Policy then in effect, to exceed
thirty-three percent (33%) of the aggregate outstanding principal amount of all
Eligible Notes Receivable at such time; provided, that in each case only the
amount in excess of such limit shall be considered ineligible;

     

    (i) if such
Note Receivable is owed by an Account Debtor that is rated Investment Grade 4 or
Investment Grade 5 in accordance with Borrower’s Credit Policy then in
effect;

     

    (j) if such
Note Receivable is owed by an Account Debtor that, based upon Borrower’s
most-recent quarterly credit analysis and taking into account such Account
Debtor’s anticipated positive or negative cash flow, does not have either (i)
sufficient unrestricted cash on hand or committed availability under revolving
lines of credit to allow such Account Debtor to service at least two (2) months
of debt service under such Note Receivable or (ii) a signed commitment letter
from a “qualified investor” to make an additional equity investment in such
Account Debtor in an amount sufficient to allow such Account Debtor to service
at least six (6) months of debt service under such Note Receivable (for purposes
on this clause (j), “qualified investor” shall mean a venture capital firm on
Borrower’s approved list, a private equity group, a strategic acquirer or other
institutional investor acceptable to Agent in its Permitted
Discretion;

     

    (k) if such
Note Receivable has an original term to maturity that is not more than sixty
(60) months after the date of issuance (including any period of interest only
payments) or if such Note Receivable is not either fully amortizing in
installments (which installments need not be in identical amounts) over such
term or due in a single installment at the end of such term;

     

    (l) if the
related Account Debtor is the United States or any department, agency or
instrumentality of the United States, or (ii) any state of the United
States;

     

    (m) if the
related Account Debtor is subject to any event of the types described in Sections 7.1(e), (f) or (g) or has gone out of
business, (ii) with respect to such Account Debtor on a particular date, at fair
valuations, the sum of such Account Debtor’s assets is less than all of such
Account Debtor’s debts or (iii) Borrower has received notice of an imminent
insolvency proceeding of such Account Debtor or a material impairment of the
financial condition of such Account Debtor;

     

    (n) if such
Note Receivable was originated by a lender other than Borrower;

     

    (o) if such
Note Receivable does not require current payments of the full amount of cash
interest accruing on the full unpaid principal amount thereof on at least a
quarterly basis; provided, that notwithstanding this clause (o), Notes
Receivable that provide for payment-in-kind or accrual of a portion of such
interest may be eligible so long as such payment-in-kind or accruing portion of
such interest does not exceed twenty-five percent (25%) of the total interest
then due;

     

    (p) if such
Note Receivable (i) is a Delinquent Note Receivable or relates to Defaulted Loan
Paper, or (ii) unless waived by Agent on a case by case basis in its sole
discretion, has been at any time a Delinquent Note Receivable or related to
Defaulted Loan Paper;

     

    
      
        
        

      

      
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    (q) if the
Account Debtor with respect to such Note Receivable is in the nuclear waste,
natural resource, utility, or fishing vessel industry;

     

    (r) if any of
the proceeds of such Note Receivable were or are to be used for personal, family
or household purposes;

     

    (s) if
Borrower’s interest in such Note Receivable represents only a participating
interest or to the extent such Note Receivable is payable to another Co-Lender
or a Multi-Lender Agent for its own account;

     

    (t) if the
Account Debtor with respect to such Note Receivable is an Affiliate of Borrower
or a shareholder or employee or agent of Borrower or a member, employee or agent
of any Affiliate of Borrower, or a member of the family of any of the
foregoing;

     

    (u) if such
Note Receivable is payable other than in Dollars;

     

    (v) if the
Account Debtor with respect to such Note Receivable (i) does not maintain its
chief executive office or principal residence in the United States, or (ii) is
not organized under the laws of the United States or any state thereof, or (iii)
is the government of any foreign country or sovereign state, or of any state,
province, municipality, or other political subdivision thereof, or of any
department, agency, public corporation, or other instrumentality
thereof;

     

    (w) if the
Account Debtor has made a refundable deposit (not held in a separate escrow
account), to the extent of such deposit;

     

    (x) if such
Note Receivable is subject to any offset, discount, counterclaim,
contra-account, right of rescission, right of cancellation or any other defense
(actual or asserted) of any kind or character;

     

    (y) the Agent
or the Pledgeholder is not then in possession of each of the Required Asset
Documents related to such Note Receivable;

     

    (z) Agent has
not received a copy of Borrower’s written investment memorandum with respect to
the loan evidenced by such Note Receivable;

     

    (aa) such Note
Receivable is not subject to a valid and perfected first-priority Lien of Agent;
or

     

    (bb) if Agent
in its Permitted Discretion deems such Note Receivable or any part thereof
uncollectible.

     

    Agent, on
behalf of itself and the Lenders, reserves the right, at any time and from time
to time after the Closing Date, to establish and modify the criteria set forth
in, or establish new criteria for, the definitions of “Eligible Loan Paper” and
“Eligible Notes Receivable”, in its Permitted Discretion.

    

    “Environmental Laws”
means any and all Federal, state, local and municipal laws, regulations,
statutes, ordinances or codes of any Governmental Authority regulating, relating
to or imposing liability or standards of conduct concerning environmental
protection matters, including, Hazardous Materials, as now or may at any time in
the future be in effect.

     

    
      
        
        

      

      
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    “Environmental Liabilities
and Costs” means all liabilities, losses, damages, costs and expenses in
connection with any Release or threatened Release of any Hazardous
Material.

     

    “Environmental
Permits” means all permits or licenses required by any Environmental Laws
to operate Borrower’s business as conducted from time to time.

     

    “Equipment” means all
“equipment,” as such term is defined in the UCC, now owned or hereafter acquired
by any Person, wherever located, including all machinery, machine tools, motors,
equipment, furniture, furnishings, fixtures, vehicles (including motor vehicles
and trailers), tools, parts, dies, jigs, goods (other than consumer goods, farm
products, or Inventory), and all attachments, accessories, accessions,
replacements, substitutions, additions, and improvements to any of the
foregoing.

     

    “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended, and any regulations
promulgated thereunder, as in effect from time to time.

     

    “ERISA Affiliate”
means any trade or business (whether or not incorporated) that is a member of a
“controlled group of corporations,” a group of trades or businesses under
“common control,” or an “affiliated service group,” that includes Borrower, in
each case, within the meaning of Sections 414(b), (c), (m) or (o) of the
IRC.

     

    “Event of Default”
means any of the events specified in Section 7.1.

     

    “Federal Funds Rate”
means for any day, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers on such day, as published by the Federal Reserve Bank
of New York on the Business Day next succeeding such day; provided that (a) if
such day is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate (rounded upwards, if necessary, to the nearest
1/100 of 1%) charged to Bank on such day on such transactions as determined by
Agent.

     

    “Fees” shall mean the
Unused Line Fee, and such other fees as Borrower may, at any time and from time
to time, agree to pay to the Agent and/or the Lenders.

     

    “Financial Covenants”
means the financial covenants set forth in Section 3.24.

     

    “Financial Statements”
means the consolidated and consolidating income statement, balance sheet and
statement of cash flows of Borrower internally prepared for each Fiscal Month,
Fiscal Quarter, and audited for each Fiscal Year, as applicable, in each case
prepared in accordance with GAAP including the notes and schedules
thereto.

     

    “Fiscal Month” means
any of the monthly accounting periods of Borrower.

     

    “Fiscal Quarter” means
any of the quarterly accounting periods of Borrower.

     

    “Fiscal Year” means
the 12-Fiscal Month period of Borrower ending December 31, of each
year.  Subsequent changes to the Fiscal Year of Borrower shall not
change the term “Fiscal Year” unless Agent shall consent in writing to such
change.

     

    
      
        
        

      

      
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    “Fixtures” means all
“fixtures” as such term is defined in the UCC, now owned or hereafter acquired
by any Person, wherever located.

     

    “GAAP” means generally
accepted accounting principles as in effect from time to time in the United
States, consistently applied.

     

    “General Intangibles”
means all “general intangibles,” as such term is defined in the UCC, now owned
or hereafter acquired by any Person, including all right, title and interest
which such Person may now or hereafter have in or under any contract relating to
an Account, all Payment Intangibles, Licenses, Intellectual Property, interests
in partnerships, joint ventures and other business associations, permits,
proprietary or confidential information, inventions (whether or not patented or
patentable), technical information, procedures, designs, knowledge, know-how,
software, data bases, data, skill, expertise, experience, processes, models,
drawings, materials, Books and Records, Goodwill (including Goodwill associated
with any Intellectual Property), all rights and claims in or under insurance
policies (including insurance for fire, damage, loss, and casualty, whether
covering personal property, real property, tangible rights or intangible rights,
all liability, life, key-person, and business interruption insurance, and all
unearned premiums), uncertificated securities, choses in action, deposit
accounts, rights to receive tax refunds and other payments, rights to receive
dividends, distributions, cash, Instruments, and other property in respect of or
in exchange for pledged Stock, Investment Property or other equity interests,
and rights of indemnification.

     

    “Goods” means all
“goods,” as such term is defined in the UCC, now owned or hereafter acquired by
any Person, wherever located, including embedded software to the extent included
in “goods” as defined in the UCC, manufactured homes, standing timber that is
cut and removed for sale and unborn young of animals.

     

    “Goodwill” means all
goodwill, trade secrets, proprietary or confidential information, technical
information, procedures, formulae, quality control standards, designs, operating
and training manuals, customer lists, and distribution agreements now owned or
hereafter acquired by any Person.

     

    “Governmental
Authority” means any nation or government, any state or other political
subdivision thereof, and any agency, department or other entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.

     

    “Guaranteed
Indebtedness” means, with respect to any Person, any obligation of such
Person guaranteeing any indebtedness, lease, dividend, or other obligation
(“primary obligations”) of any other Person (the “primary obligor”) in any
manner, including any obligation or arrangement of such Person (a) to purchase
or repurchase any such primary obligation, (b) to advance or supply funds (1)
for the purchase or payment of any such primary obligation or (2) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet condition of the primary
obligor, (c) to purchase property, securities or services primarily for the
purpose of assuring the holder of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, or (d) to
indemnify the holder of such primary obligation against loss in respect
thereof.  The amount of any “Guaranteed Indebtedness” at any time
shall be deemed to be an amount equal to the lesser at such time of (x) the
stated or determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is made, and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness; or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect
thereof.

     

    “Guarantor” means each
guarantor of the Obligations.

     

    
      
        
        

      

      
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    “Guaranty” means a
guaranty executed by a Guarantor in favor of Agent, in form satisfactory to
Agent.

     

    “Hazardous Material”
means any substance, material or waste, the generation, handling, storage,
treatment or disposal of which is regulated under any Environmental
Law.

     

    “Hedge Agreement”
means any transaction, agreement or document now existing or hereafter entered
into that provide for an interest rate, credit, commodity or equity swap, cap,
floor, collar, forward foreign exchange transaction, currency swap, cross
currency rate swap, currency option, or any combination of,  or option
with respect to, these or similar transactions, for the purpose of hedging
Borrower’s exposure to fluctuations in interest or exchange rates, loan, credit
exchange, security or currency valuations or commodity prices.

     

    “Hercules Funding II”
means Hercules Funding II LLC a Delaware limited liability company.

     

    “Indebtedness” of any
Person means, at the time of computation thereof, all of the following (without
duplication):  (a) all indebtedness and liabilities of such Person for
borrowed money, under repurchase agreements (whether on a recourse or
non-recourse basis) or for the deferred purchase price of property or services
(including reimbursement and all other obligations with respect to surety bonds
and bankers’ acceptances, in each case whether or not matured, but excluding
obligations to non-Affiliate trade creditors incurred in the ordinary course of
business and not more than 45 days past due and excluding deferred taxes); (b)
all obligations and liabilities, whether or not for borrowed money (i)
represented by notes payable or drafts accepted, in each case representing
extensions of credit, or (ii) evidenced by notes, bonds, debentures or similar
instruments; (c) all indebtedness created or arising under any conditional sale,
other title retention agreements or other similar instruments with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property); (d) all Capitalized Lease Obligations;
(e) all Guaranteed Indebtedness; (f) all reimbursement obligations of such
Person under any letters of credit or acceptances (whether or not the same have
been presented for payment), and all obligations of such Person as the issuer of
any letters of credit or acceptances (whether or not the same have been
presented for payment); (g) all liabilities under Hedge Agreements or in respect
of Bank Products, in each case whether or not matured; (h) all Indebtedness
referred to in clauses
(a), (b), (c), (d), (e), (f) or (g) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including Accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness; (i) with respect
to Borrower, the Obligations; and (j) all liabilities under Title IV of
ERISA.

     

    “Indemnified Person”
means Agent, each Lender, and Agent’s and each Lender’s Affiliates and each of
their respective employees, attorneys, consultants, representatives and agents
and their respective successors and assigns.

     

    “Institutional Lender”
means a bank, commercial or finance lender, leasing or equipment financiers and
other leasing or lending institutions regularly engaged in the business of
lending money or leasing personal property (excluding venture capital,
investment banking or similar institutions which sometimes engage in lending
activities but which are primarily engaged in investments in equity
securities).

     

    “Instruments” means
all “instruments,” as such term is defined in the UCC, now owned or hereafter
acquired by any Person, wherever located, and, in any event, including all
certificated securities, all certificates of deposit, and all promissory notes
and other evidences of indebtedness, other than Instruments that constitute, or
are a part of a group of writings that constitute, Chattel Paper.

     

    
      
        
        

      

      
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    “Intellectual
Property” means all of the following now owned or hereafter acquired by
any Person:  (a) patents, trademarks, trade dress, trade names,
service marks, copyrights, trade secrets and all other intellectual property or
Licenses thereof; and (b) all Proceeds of the foregoing.

     

    “Interest Expense”
means, with respect to any Person for any fiscal period, total consolidated
interest expense (whether cash or non-cash) of such Person paid or deemed paid
in respect of any Indebtedness during such period plus all Fees and other fees
payable in respect of Hedge Agreements during such period, determined in
accordance with GAAP, and shall in any event include, the amortization of debt
discounts and the portion of any Capitalized Lease Obligation attributable to
interest expense.

     

    “Inventory” means all
“inventory,” as such term is defined in the UCC, now owned or hereafter acquired
by any Person, wherever located, including all goods, merchandise and other
personal property held for sale or lease by any Person, or which is furnished by
such Person under any contract of service or is held by such Person as raw
materials, work or goods in process, finished goods, returned goods or materials
and supplies of every nature used or consumed or to be used or consumed by such
Person in the ordinary course of its business including all embedded software,
whether now owned or hereafter acquired by such Person.

     

    “Investment” means,
with respect to any Person, any investment by such Person in any other Person
(including Affiliates) in the form of loans, guarantees, advances, or capital
contributions (excluding (a) commission, travel, and similar advances to
officers and employees of such Person made in the ordinary course of business,
and (b) bona fide Accounts arising in the ordinary course of business consistent
with past practice), purchases or other acquisitions of Indebtedness, Stock or
all or substantially all of the assets of such Person (or of any division or
business line of such other Person), and any other items that are or would be
classified as investments on a balance sheet prepared in accordance with
GAAP.

     

    “Investment Company
Act” means the Investment Company Act of 1940, as amended, and the rules
and regulations promulgated thereunder.

     

    “Investment Grade
Rating” means a Credit Rating of BBB- or higher by S&P, Baa3 or
higher by Moody’s, or the equivalent or higher of either such rating by another
Rating Agency.

     

    “Investment Property”
means all “investment property,” as such term is defined in the UCC, now owned
or hereafter acquired by any Person, wherever located, including (a) all
securities, whether certificated or uncertificated, including Stock, bonds,
interests in limited liability companies, partnership interests, treasuries,
certificates of deposit, and mutual fund shares, (b) all securities entitlements
of such Person, including the rights of such Person to any securities account
and the financial assets held by a securities intermediary in such securities
account and any free credit balance or other money owing by any securities
intermediary with respect to that account; (c) all securities accounts held by
any Person, (d) all commodity contracts held by such Person, and (e) all
commodity accounts held by any Person.

     

    “IRC” means the
Internal Revenue Code of 1986 as amended, together with the rules and
regulations promulgated thereunder.

     

    “Lender’s Office” has
the meaning set forth in Section 11.8(a).

     

    
      
        
        

      

      
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    “Lenders” means,
collectively, (a) Union Bank, N.A., as Bank and a Lender, (b) the other Lenders
named on the signature page of this Agreement, (c) if any such Lender shall
assign all or any portion of the Obligations or the Commitments in accordance
with Section 8.1,
any such assignee, (d) any Person who becomes a Lender pursuant to Section 1.17 and an
Accession Agreement, and (e) each of their respective successors and
assigns.

     

    “Letter of Credit
Rights” means all “letter-of-credit rights” as such term is defined in
the UCC, now owned or hereafter acquired by any Person, including rights to
payment or performance under a letter of credit, whether or not such Person, as
beneficiary, has demanded or is entitled to demand payment or
performance.

     

    “LIBOR” means, for any
LIBOR Loan Period, the rate determined by Agent to be the per annum rate
(rounded upward to the nearest one-hundredth of one percent (1/100%)) at which
Dollar deposits in immediately available funds and in lawful money of the United
States would be offered to Agent, on behalf of Lenders, outside of the United
States at approximately 11:00 a.m. (LIBOR time) three (3) Business Days before
the first day of such LIBOR Loan Period, in an amount approximately equal to the
principal amount of, and for a length of time approximately equal to the LIBOR
Loan Period for, the LIBOR Loan sought by Borrower.

     

    “LIBOR Basis” means a
per annum interest rate equal to the quotient of (a) LIBOR divided by (b) one
minus the LIBOR Reserve Percentage, stated as a decimal.  The LIBOR
Basis shall be rounded upward to the nearest one-sixteenth (1/16) of one percent
(1/16%) and, once determined, shall remain unchanged during the applicable LIBOR
Loan Period, except for changes to reflect adjustments in the LIBOR Reserve
Percentage.

     

    “LIBOR Loan” means a
Loan that Borrower requests to be made as a LIBOR Loan or that is reborrowed as,
or converted to, a LIBOR Loan, in each case in accordance with the provisions of
Sections 1.1 and
1.2.

     

    “LIBOR Loan Period”
means, for each LIBOR Loan, each one, two or three month period, as selected by
Borrower pursuant to Section 1.2, during which
LIBOR applicable to such LIBOR Loan shall remain unchanged; provided, that (a)
any applicable LIBOR Loan Period that would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day, unless such
Business Day falls in another calendar month, in which case such LIBOR Loan
Period shall end on the immediately preceding Business Day, (b) any applicable
LIBOR Loan Period that begins on a day for which there is no numerically
corresponding day in the calendar month during which such LIBOR Loan Period is
to end shall (subject to clause
(a) above) end on the last day of such calendar month, and (c) no LIBOR
Loan Period shall extend beyond the Commitment Maturity Date.

     

    “LIBOR Reserve
Percentage” means the percentage in effect from time to time under
Regulation D of the Board of Governors of the Federal Reserve System as the
maximum reserve requirement applicable with respect to Eurocurrency Liabilities
(as that term is defined in Regulation D), whether or not Lenders have any
Eurocurrency Liabilities subject to such reserve requirement at such
time.  The LIBOR Basis for any LIBOR Loan shall be adjusted as of the
effective date of any change in the LIBOR Reserve Percentage.

     

    “License” means any
license under any written agreement now owned or hereafter acquired by any
Person granting the right to use any Intellectual Property or other license of
rights or interests now held or hereafter acquired by any Person.

     

    
      
        
        

      

      
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    “Lien” means, with
respect to any property, any security deed, mortgage, deed to secure debt, deed
of trust, lien, pledge, assignment, charge, security interest, title retention
agreement, negative pledge, levy, execution, seizure, attachment, garnishment,
or other encumbrance of any kind in respect of such property, whether or not
choate, vested, or perfected.

     

    “Liquidity Ratio”
means, with respect to Borrower on an unconsolidated basis, at any time, the
ratio determined by dividing (a) the sum of (i) the amount of the Borrower’s
unrestricted cash and Cash Equivalents (valued at the lower of cost or fair
market value) at such time plus (ii) an amount equal to 50% of the aggregate
principal amount owed to Borrower under Notes Receivable owned solely by
Borrower that are not subject to any Liens in favor of Agent or any other Person
(other than Permitted Liens referenced in clause (c) of the definition thereof)
at such time, by (b) the aggregate outstanding amount at such time of the
Loans.

     

    “Loan Supplement”
means a Loan Supplement in the form of Exhibit B.

     

    “Loans” means the
revolving loans extended to Borrower pursuant to Section 1.1(a).

     

    “Loan Documents” means
collectively, this Agreement, the Revolving Loan Notes, the Collateral
Documents, the Possessory Collateral Agreement, the Custody Agreement, the
Guaranties, if any, the Hedge Agreements, if any, and any and all other
agreements, documents, or instruments (including financing statements) entered
into in connection with the transactions contemplated by this Agreement,
together with all alterations, amendments, changes, extensions, modifications,
refinancings, refundings, renewals, replacements, restatements, or supplements,
of or to any of the foregoing.

     

    “Loan Paper” means
Single Lender Loan Paper and/or Multi-Lender Loan Paper, as the context may
require.

     

    “Loan Request” has the
meaning set forth in Section 1.1(d).

     

    “Loans” means all
loans and advances made by Agent or any Lender to or for the benefit of Borrower
under this Agreement or under any of the Loan Documents, including the
Loans.

     

    “Material Adverse
Effect” means a material change to or effect on (a) the business, assets,
operations, liabilities (actual or contingent), prospects or financial or other
condition of Borrower, individually, or of Borrower and its Subsidiaries, taken
as a whole, or (b) the ability of Borrower to pay or perform in accordance with
the terms of any of its agreements with Agent and Lenders, or (c) the validity
or enforceability of the Loan Documents, or (d) the rights and remedies of Agent
and Lenders under any of the Loan Documents.

     

    “Material Contract”
means any contract, agreement, lease, License, Instrument or other arrangement
(other than, (a) Loan Documents, or (b) contracts or other agreements
constituting Loan Paper), whether oral or written, to which Borrower is a party,
as to which the breach, non-performance, cancellation, or failure to renew by
any party thereto could, alone or in the aggregate, reasonably be expected to
have a Material Adverse Effect.

     

    “Maximum Amount” means
Twenty Million Dollars ($20,000,000) as reduced or increased from time to time
pursuant to the terms of this Agreement.

     

    “Multi-Lender Agent”
has the meaning set forth in the definition of Multi-Lender Loan
Paper.

     

    
      
        
        

      

      
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    “Multi-Lender Loan
Paper” means collectively: (a) a loan agreement among Borrower and
certain other unaffiliated institutional lenders, as lenders or co-lenders (each
such other Person, a “Co-Lender”), an agent
(if one is appointed) for Borrower and such Co-Lenders, which may be Borrower
(the “Multi-Lender
Agent”), and an unaffiliated Account Debtor, as the borrower, pursuant to
which Borrower and such Co-Lenders have financed the working capital or growth
capital of, such Account Debtor in the ordinary course of business of such
Account Debtor for the Account Debtor’s business or commercial purposes, (b) the
promissory notes payable to the order of Borrower by such Account Debtor issued
in connection therewith (including all related Notes Payable), (c) all
contracts, security agreements, guaranties, assignments, mortgages,
undertakings, purchase agreements, intercreditor and/or subordination
agreements, Transaction Warrants, and other related documents, instruments and
agreements executed or delivered in connection with any of the foregoing,
including any agreement relating to the terms of payment or the terms of
performance of any Account or Note Receivable, and (d) any and all
schedules, exhibits, riders, amendments, modifications and supplements to the
foregoing.

     

    “Net Borrowing
Availability” means, at any time, the lesser of (a) the Maximum Amount
and (b) the Borrowing Base, in each case less the aggregate outstanding amount
at such time of the Loans.

     

    “Net Eligible Notes
Receivable” means, as of any time of determination, the aggregate unpaid
and outstanding principal amount of all Eligible Notes Receivable (less any
portions that are excluded based on the definition thereof) on such date, in
each case without counting any payments that are owing to Persons other than
Borrower or that are contingent on future conditions or events or that are
speculative in nature.

     

    “Non-Funding Lender”
means a Lender failing to fund its Pro Rata Share of a Loan in accordance with
Section 8.10(a).

     

    “Note Receivable”
means a promissory note evidencing a commercial loan made by Borrower in
accordance with Borrower’s Credit Policy and secured by a Lien on property owned
by the maker of such promissory note.

     

    “Obligations” means
all loans, advances, debts, expense reimbursements, fees, liabilities and
obligations, for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or amounts are liquidated or determinable) owing by Borrower arising
under or in any way in connection with any Loan Document or otherwise with
respect to any Loan or Bank Products, of any kind or nature, present or future,
whether voluntary or involuntary, whether incurred directly or acquired by Agent
or any Lender by assignment, assumption or succession, whether due or not due,
absolute or contingent, liquidated or unliquidated, legal or equitable, whether
Borrower is liable individually or jointly or with others, whether or not
evidenced by any note, agreement or other instrument, whether arising under this
Agreement or any of the other Loan Documents (including any Hedge Agreement or
other agreement for Bank Products),or under any other agreement between Borrower
or any of its Subsidiaries and Agent or any Lender, whether recovery thereof is
or becomes barred by a statute of limitations or is or becomes otherwise
unenforceable, together with all expenses of, for and incidental to collection,
including reasonable attorneys’ fees, and all covenants and duties regarding
such amounts.  “Obligations” includes, without
limitation:  (a) all principal, interest, fees, Taxes, expenses,
attorneys’ fees and any other sum chargeable to Borrower under this Agreement or
any of the other Loan Documents, and all principal, interest and other amounts
due or owing in respect of the Loans, (b) all interest, fees and other amounts
that accrue after the commencement by or against Borrower or any Affiliate
thereof of any case or proceeding under any Debtor Relief Law, regardless of
whether such interest and fees are allowed claims in such proceeding, and (c)
all debts, liabilities and obligations now or hereafter arising from or in
connection with Bank Products.

     

    
      
        
        

      

      
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    “Other Lender” means
each Lender that is not a Non-Funding Lender.

     

    “Overadvance” means
the amount, if any, by which the aggregate outstanding Loans at any time exceed
Borrowing Availability at such time.

     

    “Patriot Act” has the
meaning given in Section 3.27.

     

    “Payment Date” means
the last day of each LIBOR Loan Period for a LIBOR Loan.

     

    “Payment Intangibles”
means all “payment intangibles” as such term is defined in the UCC, now owned or
hereafter acquired by any Person.

     

    “PBGC” means the
Pension Benefit Guaranty Corporation or any successor thereto.

     

    “Permitted Adverse
Claims” means permitted Liens (excluding, however, liens relating to
ERISA and Environmental Claims) on an Account Debtor’s right title and interest
in and to Account Debtor Collateral, which Liens are junior and subordinate to
those of Borrower or a Multi-Lender Agent for Borrower (as applicable) in such
Account Debtor Collateral to the extent such permitted Liens are consistent with
the Credit Policy.

     

    “Permitted Discretion”
means a determination made in the exercise of reasonable (from the perspective
of a secured asset-based lender) business judgment.

     

    “Permitted
Dispositions” means (a) sales or other dispositions of Equipment that is
substantially worn, damaged, or obsolete in the ordinary course of business, (b)
the use or transfer of money or Cash Equivalents in connection with Permitted
Investments in a manner that is not prohibited by the terms of this Agreement or
the other Loan Documents, (c) the licensing, on a non-exclusive basis, of
patents, trademarks, copyrights, and other intellectual property rights in the
ordinary course of business, (d) sales of a Note Receivable and related Loan
Paper (other than Pledged Notes Receivable and Pledged Loan Paper) to and from
Special Purpose Subsidiaries in the ordinary course of business, consistent with
past practice, and without recourse to Borrower (other than customary
obligations to repurchase ineligible Notes Receivable from Special Purpose
Subsidiaries on terms substantially similar to those set forth in
Section 3.05 of the Wells Fargo Sale and Servicing Agreement as in effect
on the date hereof), for fair consideration and reasonably equivalent value;
provided that Borrower is in compliance with each of the covenants set forth in
Section 3.24 on a
current and pro forma basis, both immediately before and after giving effect to
each such sale, and (e) commercially reasonable sales, licenses, transfers,
assignments and other dispositions of Account Debtor Collateral repossessed or
acquired by Borrower, in accordance with applicable law, in the ordinary course
of business in connection with a foreclosure or similar proceeding following a
default under the Note Receivable secured by such Account Debtor
Collateral.

     

    “Permitted
Indebtedness” means: (a) the Obligations; (b) Permitted Special Purpose
Indebtedness of Special Purpose Subsidiaries and refinancings, renewals or
extensions thereof, (c) Permitted Purchase Money Indebtedness; (d)
Indebtedness set forth in Schedule 4.6, (e)
endorsement of instruments or other payment items for deposit, and (f)
refinancings, renewals, or extensions of Indebtedness permitted under clauses (c) and (d) so long as: (i) the terms
and conditions of such refinancings, renewals, or extensions do not, in Agent’s
judgment, materially impair the prospects of repayment of the Obligations by
Borrower or materially impair Borrower’s creditworthiness, (ii) such
refinancings, renewals, or extensions do not result in an increase in the
principal amount of, or interest rate with respect to, the Indebtedness so
refinanced, renewed, or extended, (iii) such refinancings, renewals, or
extensions do not result in a shortening of the average weighted maturity of the
Indebtedness so refinanced, renewed, or extended, nor are they on terms or
conditions that, taken as a whole, are materially more burdensome or restrictive
to Borrower, (iv) if the Indebtedness that is refinanced, renewed, or extended
was subordinated in right of payment to the Obligations, then the terms and
conditions of the refinancing, renewal, or extension Indebtedness must include
subordination terms and conditions that are at least as favorable to the Lenders
as those that were applicable to the refinanced, renewed, or extended
Indebtedness, and (v) the Indebtedness that is refinanced, renewed, or extended
is non-recourse to any Person that is liable on account of the Obligations other
than those Persons which were obligated with respect to the Indebtedness that
was refinanced, renewed, or extended.

     

    
      
        
        

      

      
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    “Permitted
Investments” means (a) Investments in cash and Cash Equivalents; (b) (i)
Investments constituting Permitted Dispositions of Notes Receivable to and from
Special Purpose Subsidiaries, (ii) Investments by Borrower in its Subsidiaries
in existence on the Closing Date, (iii) cash Investments by Borrower in Hercules
Technology III, L.P., Borrower’s Special Purpose Subsidiary that is licensed as
a small business investment company under the Small Business Investment Act of
1958, as amended, in an aggregate amount not to exceed the lesser of (A) the
amount required under the capital requirements regulations of the Small Business
Association, and (B) Thirty Seven Million Five Hundred Thousand Dollars
($37,500,000), and (iv) other cash Investments in Special Purpose Subsidiaries
in an aggregate amount during the term of this Agreement not to exceed Ten
Thousand Dollars ($10,000); (c) Investments in negotiable instruments for
collection; (d) advances made in connection with purchases of goods or services
in the ordinary course of business; (e) commercial loans evidenced by a Note
Receivable and related Loan Paper made in the ordinary course of business in
accordance with the Credit Policy; and (f) Investments received in settlement of
amounts due to Borrower or any of its Subsidiaries effected in the ordinary
course of business or owing to Borrower or any of its Subsidiaries as a result
of Insolvency Proceedings involving an Account Debtor or upon the foreclosure or
enforcement of any Lien in favor of Borrower or its Subsidiaries.

     

    “Permitted Liens”
means (a) Liens held by Agent, for the benefit of the Lenders; (b) Liens limited
to assets of Special Purpose Subsidiaries securing Permitted Special Purpose
Indebtedness; (c) Liens for unpaid taxes or assessments that either (i) are not
yet delinquent, or (ii) do not constitute an Event of Default hereunder and are
the subject of Permitted Protests; (d) Liens set forth on Schedule 4.7; (e) the
interests of lessors under operating leases; (f) Liens that secure Purchase
Money Indebtedness, including the interests of lessors under Capital Leases to
the extent that such Liens or interests secure Permitted Purchase Money
Indebtedness and so long as such Lien attaches only to the asset purchased or
acquired and the proceeds thereof; (g) Liens arising by operation of law in
favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or
suppliers, that are junior to the security interest and Liens of Agent, incurred
in the ordinary course of business and not in connection with the borrowing of
money, and which Liens either (i) are for sums not yet delinquent, or (ii) are
the subject of Permitted Protests; (h) Liens on amounts deposited in connection
with obtaining worker’s compensation or other unemployment insurance; (i) Liens
on amounts deposited in connection with the making or entering into of bids,
tenders, or leases in the ordinary course of business and not in connection with
the borrowing of money; (j) Liens on amounts deposited as security for surety or
appeal bonds in connection with obtaining such bonds in the ordinary course of
business; (k) Liens resulting from any judgment or award that is not an Event of
Default hereunder; (l) rights of setoff imposed by law upon deposit of cash and
cash equivalents in favor of banks or other depository institutions incurred in
the ordinary course of business in deposit accounts maintained with such bank or
depository institution to the extent permitted under this Agreement; and (m)
Liens that are replacements of Liens referenced in clauses (a), (b), (d), (e),
or (f) of this definition to the extent that the original Indebtedness is
refinanced, renewed, or extended and constitutes Permitted Indebtedness and so
long as the replacement Liens only encumber those assets that secured the
refinanced, renewed, or extended Permitted Indebtedness.

     

    
      
        
        

      

      
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    “Permitted Pari Passu
Interest” means a security interest in an Account Debtor’s right title
and interest in and to Account Debtor Collateral securing Account Debtor
obligations and liabilities under Multi-Lender Loan Paper granted by the related
Account Debtor in favor of:  (a) the related Multi-Lender Agent for
the ratable benefit of Borrower and the related Co-Lenders, or (b) if no
Multi-Lender Agent exists, an unaffiliated institutional lender engaged in the
business of making or maintaining loans to venture capital-backed companies, in
each case, so long as such security interest(s) (i) are subject to an
intercreditor agreement (A) adjusting the relative priorities of Borrower’s and
each other lender’s respective security interests in the Account Debtor
Collateral such that their respective Liens shall be of equal priority, (B) that
includes provisions regarding distribution of payments and proceeds of
collection of Account Debtor Collateral no less favorable to Borrower than
ratable distributions based on outstanding obligations and commitments (provided
that such intercreditor agreements may provide that up to fifty percent (50%) of
the initial proceeds of collection of Account Debtor Collateral may be paid to
non-affiliated co-lenders until such time as the aggregate outstanding amount of
obligations owing to such co-lenders are fifty percent (50%) of the outstanding
obligations owing to Borrower, after which all futher distributions shall be no
less favorable to Borrower than ratable), and (C) in any event providing for a
consent to the Agent’s Lien in Borrower’s rights thereunder, and (ii) such
security interest, and the transaction in which such security interest arose, is
in compliance with Section 57 of the Investment Company Act.

     

    “Permitted Protest”
means the right of Borrower or any of its Subsidiaries to protest any Lien
(other than any Lien that secures the Obligations), Taxes (other than taxes that
are the subject of a United States federal tax lien), or rental payment,
provided that (a) a reserve with respect to such obligation is established on
the Books and Records in such amount as is required under GAAP, (b) any such
protest is instituted promptly and prosecuted diligently by Borrower or any of
its Subsidiaries, as applicable, in good faith, and (c) Agent is satisfied that,
while any such protest is pending, there will be no impairment of the
enforceability, validity, or priority of any of the Agent’s Liens.

     

    “Permitted Purchase Money
Indebtedness” means, as of any date of determination, Purchase Money
Indebtedness incurred after the Closing Date in an aggregate principal amount
outstanding at any one time not in excess of $100,000.

     

    “Permitted Special Purpose
Indebtedness” means Indebtedness of a Special Purpose Subsidiary,
provided that in no event shall Borrower guaranty or be liable, or have
recourse, directly or indirectly, contingently or otherwise, for any such
Indebtedness or have any of Borrower’s assets subject to any Lien to secure such
Indebtedness; provided that the Indebtedness of Hercules Funding II under the
Wells Fargo Facility shall be deemed Permitted Special Purpose Indebtedness
notwithstanding Borrower’s obligation to repurchase ineligible Notes Receivable
from Hercules Funding II under Section 3.05 of the Wells Fargo Sale and
Servicing Agreement, as in effect on the date hereof.

     

    “Person” means any
individual, sole proprietorship, partnership, limited liability partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, public benefit corporation, entity or
government (whether Federal, state, county, city, municipal or otherwise,
including any instrumentality, division, agency, body or department
thereof).

     

    “Plan” means, with
respect to Borrower, at any time, an employee benefit plan, as defined in
Section 3(2) of ERISA, that Borrower maintains, contributes to or has an
obligation to contribute to on behalf of participants who are or were employed
by Borrower.  With respect to an ERISA Affiliate of Borrower, Plan
also means an employee benefit plan, as defined in Section 3(2) of ERISA
that is subject to Title IV of ERISA.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    “Pledged Account
Agreement” means a tri-party pledged account agreement by and among
Agent, Borrower who owns the relevant deposit or other bank account and a
financial institution acceptable to Agent at which Borrower maintains such
account.

     

    “Pledged Loan Paper”
means all Loan Paper relating to any Pledged Note Receivable, including, without
limitation, any and all Loan Paper included in the Collateral or in which in
which Agent or any Lender otherwise holds a Lien.

     

    “Pledged Note
Receivable” means each Note Receivable in which Agent or any Lender holds
a Lien and all Accounts relating thereto, including, without limitation, any and
all Notes Receivable included in the calculation of the Borrowing Base or
referenced on a Borrowing Base Certificate.

     

    “Pledgeholder” means
Bank, in its capacity as custodian under the Custody Agreement, together with
its successors or assigns in such capacity.

     

    “Possessory Collateral
Agreement” means the Possessory Collateral Agreement, dated as of the
Closing Date, by and among Borrower, Agent and Bank, in its capacity as
Pledgeholder, as amended, modified, supplemented or restated from time to
time.

     

    “Principal Debt”
means, at any time of determination thereof, the aggregate unpaid principal
balance of all Loans.

     

    “Proceeds” means
“proceeds,” as such term is defined in the UCC, including:  (a) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable to
any Person from time to time with respect to any of the Collateral; (b) any and
all payments (in any form whatsoever) made or due and payable to any Person from
time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral by any Governmental
Authority (or any Person acting under color of Governmental Authority); (c) any
claim of any Person against third parties for past, present or future
infringement or dilution of any Intellectual Property, or for injury to the
goodwill associated with any Intellectual Property; (d) any recoveries by any
Person against third parties with respect to any litigation or dispute
concerning any of the Collateral including claims arising out of the loss or
nonconformity of, interference with the use of, defects in, or infringement of
rights in, or damage to, Collateral; (e) all amounts collected on, or
distributed on account of, other Collateral, including dividends, interest,
distributions and Instruments with respect to Investment Property and pledged
Stock; and (f) any and all other amounts, rights to payment or other property
acquired upon the sale, lease, license, exchange or other disposition of
Collateral and all rights arising out of Collateral.

     

    “Property” means any
real property or personal property owned, leased or operated by Borrower or any
of its Subsidiaries.

     

    “Pro Rata Share”
means, with respect to any Lender, with respect to the Loans, the percentage
equal to (i) the Commitment of such Lender divided by (ii) the
aggregate Commitments of all Lenders, in each case as such percentages may be
adjusted by assignments permitted pursuant to Section 8.1.

     

    “Purchase Money
Indebtedness” means Indebtedness (other than the Obligations, but
including Capitalized Lease Obligations), incurred at the time of, or within 20
days after, the acquisition of any fixed assets for the purpose of financing all
or any part of the acquisition cost thereof.

     

    “Qualified Assignee”
means (a) a commercial bank organized under the laws of the United States, or
any state thereof, and having total assets in excess of $250,000,000, (b) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development or a political
subdivision of any such country and which has total assets in excess of
$250,000,000, provided that such bank is acting through a branch or agency
located in the United States, (c) a finance company, insurance company, or other
financial institution or fund that is engaged in making, purchasing, or
otherwise investing in commercial loans in the ordinary course of its business
and having (together with its Affiliates) total assets in excess of
$250,000,000, (d) Agent, any Lender, and any Affiliate (other than individuals)
of a Lender, (e) so long as no Event of Default has occurred and is continuing,
any other Person approved by Agent and Borrower, (which approval of Borrower
shall not be unreasonably withheld, delayed, or conditioned), and (f) during the
continuation of an Event of Default, any other Person approved by
Agent.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    “Rating Agency” means
S&P, Moody’s, or any other nationally recognized securities rating agency
selected by Borrower and acceptable to Agent.

     

    “Recoveries” means,
with respect to any Defaulted Loan Paper, proceeds of the sale of any Account
Debtor Collateral, proceeds of any related insurance policy, and any other
recoveries with respect to such Pledged Loan Paper, Pledged Note Receivable and
Account Debtor Collateral, and amounts representing late fees and penalties, net
of liquidation expenses and amounts, if any, received that are required to be
refunded under Applicable Law to the Account Debtor.

     

    “Reference 10-K” means
the Form 10-K filed by Borrower with the Securities and Exchange Commission for
the fiscal year ending December 31, 2008.

     

    “Reference Rate”
means, for any day, the variable per annum rate of interest equal to the higher
of:  (a) the Federal Funds Rate for such day plus one percent (1.0%),
and (b) the rate most recently announced by Bank at its corporate headquarters
as the “Union Bank, N.A. Reference Rate,” with the understanding that the “Union
Bank, N.A. Reference Rate” is one of Bank’s index rates and merely serves as a
basis upon which effective rates of interest are calculated for loans making
reference thereto and may not be the lowest or best rate at which Bank
calculates interest or extends credit.  The Reference Rate shall be
adjusted at the same time as any change in the “Union Bank, N.A. Reference
Rate.”  The Reference Rate, as adjusted, shall constitute the
Reference Rate on the date when such adjustment is made and shall continue as
the applicable Reference Rate until further adjustment.

     

    “Reference Rate Loan”
means a Loan which Borrower requests to be made as a Reference Rate Loan or a
Loan which is reborrowed as, or converted to, a Reference Rate Loan, in
accordance with the provisions of Sections 1.1 and 1.2.

     

    “Register” has the meaning set
forth in Section 8.1(b).

     

    “Related Person” means
(a) any individual employee, officer, director, shareholder, partner or member
of Borrower or any Affiliate of Borrower, (b) any individual spouse, descendant
or other individual related by blood or marriage to any officer, director,
Stockholder, partner or member of Borrower or any Subsidiary of Borrower, or (c)
any trust in which any such individual Related Person is a grantor, settlor or
beneficiary.

     

    “Release” means any
release, spill, emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Materials in
the indoor or outdoor environment.

     

    “Replacement Lender”
means any Lender replacing an Affected Lender pursuant to the terms of Section 10.7.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    “Reportable Event”
means the reportable events identified in Section 403 of ERISA for which
notice to the PBGC has not been waived.

     

    “Required Asset
Documents” means each of the following with respect to any Note
Receivable that Borrower seeks to qualify as an Eligible Note
Receivable:

     

    (a)           the
original Instrument evidencing such Note Receivable, duly executed by the
applicable Account Debtor as maker and payable to the order of
Borrower;

     

    (b)           a
file-stamped copy of the related UCC financing statement(s) naming the
applicable Account Debtor as the debtor and Borrower, or the applicable
Multi-Lender Agent, as secured party;

     

    (c)           the
originals of all Transaction Warrants (if any) issued in connection with such
Note Receivable, together with originals of all assignments or stock powers
necessary to transfer all of such warrants to Borrower;

     

    (d)           the
originals of all other agreements, documents, or instruments evidencing or
securing such Note Receivable and the related Loan Paper;

     

    (e)           (i)
an original Assignment of Note with respect to such Note Receivable, executed by
Borrower to the order of Agent or in blank, (ii) an original Loan Supplement
with respect to such Note and the related Loan Paper, duly executed by Borrower
in favor of Agent, (iii) an original Assignment of Warrant or stock power with
respect to each warrant referred to in clause (c) above, executed by Borrower in
blank, and (iv) an original assignment with respect to all of Borrower’s rights
under the documents and instruments referred to in clause (d) above, executed by
Borrower in blank; and

     

    (f)           a
completed UCC amendment for each UCC financing statement referred to in clause
(b) above, assigning the secured party’s interest thereunder to
Agent.

     

    “Requisite Lenders”
means (a) Lenders having more than 66 2/3% of the Commitments of all Lenders or
(b) if the Commitments have been terminated, more than 66 2/3% of the aggregate
outstanding amount of the Loans; provided that if there are fewer than 3 Lenders
in the syndicate, the percentage must be 100%.

     

    “Restricted Payment”
means (a) the declaration or payment of any dividend, distribution or the
incurrence of any liability to make any other payment or distribution of cash or
other property or assets on or in respect of Borrower’s, any Guarantor’s or any
of their respective Subsidiaries’ Stock, (b) any payment or distribution on
account of the purchase, redemption, defeasance or other retirement of
Borrower’s, any Guarantor’s or any of their respective Subsidiaries’ Stock (or
warrants, options or rights to acquire Stock) or Indebtedness other than the
Obligations, or (c) any payment, loan, contribution, or other transfer of funds
or other property to any Stockholder of such Person.

     

    “Revolving Credit
Facility” means the advances and other extensions of credit in connection
with the Loans.

     

    “Revolving Loan Note”
means a Revolving Loan Note, substantially in the form of Exhibit A,
to be executed by Borrower in favor of each requesting Lender evidencing the
obligations to pay the Loans to such Lender.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    “RIC” means a Person
qualifying for treatment as a “regulated investment company” under the
IRC.

     

    “Schedule of
Documents” means the schedule, including all appendices, exhibits or
schedules thereto, listing certain documents and information to be delivered in
connection with this Agreement and the other Loan Documents and the transactions
contemplated hereunder and thereunder, in the form attached as Schedule B.

     

    “Single Lender Loan
Paper” means collectively (a) a loan and security agreement between
Borrower, as the sole lender, and an unaffiliated Account Debtor, as the
borrower, under which Borrower has financed the working capital or growth
capital of, such Account Debtor, in the ordinary course of business of such
Account Debtor for the Account Debtor’s business or commercial purposes, (b) the
promissory notes payable to the order of Borrower by such Account Debtor issued
in connection therewith (including all related Notes Payable), (c) all
contracts, security agreements, guaranties, assignments, mortgages,
undertakings, purchase agreements, intercreditor and/or subordination
agreements, Transaction Warrants, and other related documents, instruments and
agreements executed or delivered in connection with any of the foregoing,
including any agreement relating to the terms of payment or the terms of
performance of any Account or Note Receivable, and (d) any and all schedules,
exhibits, riders, amendments, modifications and supplements to the
foregoing.

     

    “Software” means all
“software” as such term is defined in the UCC, now owned or hereafter acquired
by any Person, other than software embedded in any category of goods, including
all computer programs and all supporting information provided in connection with
a transaction related to any program.

     

    “Solvent” means, with
respect to any Person as of a particular date, that on such date (a) such Person
is generally able to pay its debts and other liabilities, contingent obligations
and other commitments as they mature in the normal course of business, (b) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay as such debts and liabilities
mature in their ordinary course, (c) such Person is not engaged in a business or
transaction, and is not about to engage in a business or a transaction, for
which such Person’s assets would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which
such Person is engaged or is to engage, (d) the fair value of the assets of such
Person is greater than the total amount of liabilities, including contingent
liabilities, of such Person, and (e) the aggregate fair saleable value (i.e.,
the amount that may be realized within a reasonable time, considered to be six
months to one year, either through collection or sale at the regular market
value, conceiving the latter as the amount that could be obtained for the assets
in question within such period by a capable and diligent businessman from an
interested buyer who is willing to purchase under ordinary selling conditions)
of the assets of such Person will exceed its debts and other liabilities
(including contingent, subordinated, unmatured and unliquidated debts and
liabilities).  For purposes of this definition, “debt” means any
liability on a claim, and “claim” means (i) a right to payment, whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured, or (ii) a right to an equitable remedy for breach of performance
if such breach gives rise to a payment, whether or not such right is an
equitable remedy, is reduced judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or
unsecured.

     

    “Special Purpose
Subsidiary” means a wholly-owned Subsidiary of Borrower formed for the
purpose of acquiring and holding Notes Receivable originated by Borrower,
incurring Indebtedness from non-affiliated third party financial institutions or
institutional lenders secured by such Notes Receivable consistent with past
practice, which Subsidiary is used solely in connection with such transactions
and for such purposes.  For the avoidance of doubt, Hercules
Technology II, L.P., Hercules Technology III, L.P. and Hercules Funding II, LLC
are “Special Purpose Subsidiaries” for purposes of this Agreement.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    “Stock” means all
certificated and uncertificated shares, options, warrants, general or limited
partnership interests, participation or other equivalents (regardless of how
designated) of or in a corporation, partnership, limited liability company or
equivalent entity whether voting or nonvoting, including common stock, preferred
stock, membership units or interests, limited or general partnership interests,
or any other “equity security” (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934).

     

    “Stockholder” means,
with respect to any Person, each holder of Stock of such Person.

     

    “Subject Property”
means each real property location owned, leased or occupied by Borrower or any
of its Subsidiaries.

     

    “Subsidiary” means, as
applied to any Person, (a) a corporation or limited liability company whose
stock regularly entitled to vote (other than directors’ qualifying shares)
having ordinary voting power to elect a majority of its board of directors (or
other governing body) is 50% or more owned, directly or indirectly, by such
Person, or (b) a partnership or joint venture whose partnership or venture
interests are 50% or more owned, directly or indirectly, by such Person;
provided, however, the “Subsidiaries” of Borrower shall not include Account
Debtors of Borrower in which Borrower has acquired Stock as the result of
conversion of Indebtedness in connection with a workout of a defaulted loan or
receipt of collections and recoveries paid to Borrower in Stock.  The
term “Subsidiary”, when used in this Agreement without reference to any
particular Person, means a Subsidiary of Borrower.

     

    “Supporting
Obligations” means all “supporting obligations” as such term is defined
in the UCC, now owned or hereafter acquired by any Person, including letters of
credit and guaranties issued in support of Accounts, Chattel Paper, Documents,
General Intangibles, Instruments, or Investment Property.

     

    “Tangible Net Worth”
means, with respect to any Person on any date of determination, the excess of
assets over liabilities determined in accordance with GAAP, and decreased by the
following: patents, licenses, Goodwill, capitalized software, organization
expenses, covenants not to compete, investment in and monies due from Affiliates
(including officers, directors and shareholders), all prepaid expenses and all
other intangible assets of such Person.

     

    “Taxes” has the
meaning given in Section 1.11(a).

     

    “Termination Date”
means the date on which (a) the Loans and all other Obligations under this
Agreement and the other Loan Documents are indefeasibly paid in full, in cash,
(b)  Borrower shall not have any further right to borrow any moneys or
obtain other credit extensions or financial accommodations under this Agreement
or the other Loan Documents, and (c) if requested by Agent, Borrower and each
Guarantor has delivered to Agent and Lenders liability releases in form and
substance reasonably acceptable to Agent.

     

    “Transaction Warrants”
shall mean all of (a) the common and/or preferred Stock warrants issued by
Account Debtors party to Pledged Loan Paper, as issuers in consideration for
Borrower extending credit to such Account Debtor, originally giving Borrower,
the right to subscribe to a specified number of shares issued by the Account
Debtor and each and every instrument and agreement issued by such issuers in
exchange or as a replacement for the Transaction Warrants as originally issued,
and (b) the certificated securities issued to Borrower by the Account Debtors as
issuers in consideration for Borrower extending credit to such Account Debtor
and each and every instrument, share and/or security issued by such issuers in
exchange or as a replacement for such certificated securities as originally
issued.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    “UCC” means the
Uniform Commercial Code as the same may, from time to time, be enacted and in
effect in the State of California; provided, that in the event by reason of
mandatory provisions of law, any or all of the attachment, perfection or
priority of or remedies with respect to, Agent’s Lien, for the benefit of Agent
and Lenders, on any Collateral is governed by the Uniform Commercial Code as
enacted and in effect in a jurisdiction other than the State of California, the
term “UCC”
shall mean the Uniform Commercial Code as enacted and in effect in such other
jurisdiction solely for purposes of the provisions hereof relating to such
attachment, perfection, priority or remedies and for purposes of definitions
related to such provisions; provided, further,
that to the extent that the UCC is used to define any term herein or in any of
the Loan Documents and such term is defined differently in different Articles or
Divisions of the UCC, the definition of such term contained in Article or
Division 9 shall govern.

     

    “Uniform Commercial Code
jurisdiction” means any jurisdiction that has adopted all or
substantially all of Article 9 as contained in the 2000 Official Text of the
UCC, as recommended by the National Conference of Commissioners on Uniform State
Laws and the American Law Institute, together with any subsequent amendments or
modifications to the Official Text.

     

    “Unused Line Fee”
means for each day after the Closing Date through the Borrowing Termination
Date, an amount equal to (a) the difference between (1) the Maximum Amount and
(2) the closing balance of the Loans for such day, multiplied by (b) the Unused
Line Fee Percentage, the product of which is then divided by (c)
360.

     

    “Unused Line Fee
Percentage” means one quarter of one percent (0.25%).

     

    “Weekly Settlement
Date” means the Friday of each week (or such other day of the week as may
be designated from time to time by Agent).

     

    “Wells Fargo Facility”
has the meaning set forth in Section 4.7.

     

    “Wells Fargo Sale and
Servicing Agreement” means that certain Sale and Servicing Agreement,
dated as of August 25, 2008 by and among Hercules Funding II, Borrower, as
originator and services, Wells Fargo Foothill, LLC as agent, and Lyon Financial
Servicer, Inc. as backup servicer.

     

    (a)           Accounting
Terms.  All accounting terms used, but not specifically
defined, in this Agreement shall be construed and defined in accordance with
GAAP.

     

    (b)           UCC.  Any
terms that are defined in the UCC and used, but not specifically defined, in
this Agreement shall be construed and defined in accordance with the
UCC.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    (c)           Construction.  For
purposes of this Agreement and the other Loan Documents, the following rules of
construction shall apply, unless specifically indicated to the
contrary:  (a) wherever from the context it appears appropriate, each
term stated in either the singular or plural shall include the singular and the
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, the feminine and the neuter; (b) the term “or” is not
exclusive; (c) the term “including” (or any form thereof) shall not be limiting
or exclusive; (d) all references to statutes and related regulations shall
include any amendments thereof and any successor statutes and regulations; (e)
the words “herein,” “hereof” and “hereunder” or other words of similar import
refer to this Agreement as a whole, including the exhibits and schedules hereto,
as the same may from time to time be amended, modified or supplemented, and not
to any particular section, subsection or clause contained in this Agreement; (f)
all references in this Agreement or in the Schedules to this Agreement to
sections, schedules, disclosure schedules, exhibits, and attachments shall refer
to the corresponding sections, schedules, disclosure schedules, exhibits, and
attachments of or to this Agreement; and (g) all references to any instruments
or agreements, including references to any of the Loan Documents, shall include
any and all modifications or amendments thereto and any and all extensions or
renewals thereof.

     

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    
 

    SCHEDULE
B

     

    SCHEDULE
OF DOCUMENTS

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    SCHEDULE
C

     

    LENDERS AND REVOLVING LOAN
COMMITMENTS

    (As of
Closing Date)

    

    

    
      	
              
                Lender

                Name
      and Address

              

            	 	
              
                Lender

                Commitment

              

            	 	 	
              
                Pro
      Rata

                Share

              

            	 
	
              Union
      Bank, N.A.

              Attention:   J.
      William Bloore and

              James
      B. Goudy

              99
      Almaden Boulevard, Suite 200

              San
      Jose, California  95113

               

              Facsimile:  (408)
      280-7163

            	 	$	20,000,000.00	 	 	 	100	%
	 
      	 	 	 	 	 	 	 	 
	
              Total
      Commitment:

            	 	$	20,000,000.00	 	 	 	100	%

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    SCHEDULE
D

     

    AGENT’S
AND LENDERS’ WIRE TRANSFER

    INFORMATION
FOR PAYMENTS

     

    

    
      	
              Party

            	
              Wire
      Transfer Instructions (or address)

              for
      Payments

            
	
              Union
      Bank, N.A.

            	Bank
      Name:	
              Union
      Bank, NA                                                             

            
	 	Address: 	1980
      Saturn Street 
	 	 	Monterey
      Park, CA  91754-7417 
	 	Account
      No.: 	______________ 
	 	ABA
      No.: 	122000496 
	 	Reference: 	Hercules
      Technology Growth Capital, Inc.

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
A

     

    [FORM OF]
REVOLVING LOAN NOTE

     

    
      	[$___________]	 _________ ___,
20__

    

                                                                                                             

    

    FOR VALUE
RECEIVED, the undersigned HERCULES TECHNOLOGY GROWTH CAPITAL, INC., a Maryland
corporation (“Borrower”), hereby
absolutely and unconditionally promises to pay to the order of ________________
(the “Lender”)
at the Lender’s Office (as defined in the Loan Agreement referred to
below):

     

    (a)           the
principal amount of _____________ Dollars ($_________) or, if less, the
aggregate unpaid principal amount of Loans advanced by the Lender to Borrower
pursuant to the Loan and Security Agreement, dated as of February 10, 2010 (as
amended, modified, supplemented, restated or renewed from time to time, the
“Loan
Agreement”) by and among Borrower, the several financial institutions
from time to time party thereto (the “Lenders”), and UNION
BANK, N.A., as a Lender and as agent for the Lenders (in such capacity, the
“Agent”), in
the amounts and at the times specified in the Loan Agreement with a final
payment on the Commitment Maturity Date of all Loans made by the Lender which
are outstanding on such date; and

     

    (b)           interest
on the principal balance hereof from time to time outstanding from the date
hereof through and including the date on which such principal amount is paid in
full, at the times and at the rates provided in the Loan Agreement

     

    This
Revolving Loan Note evidences borrowings under and is subject to the terms of
the Loan Agreement and is secured pursuant to the Loan Agreement and the
documents referred to therein.  This Revolving Loan Note has been
issued by Borrower in accordance with the terms of the Loan
Agreement.  The Lender and any holder hereof are entitled to the
benefits of the Loan Agreement and the Loan Documents and may enforce the
agreements of Borrower contained therein, and any holder may exercise the
respective remedies provided for thereby or otherwise available in respect
thereof, all in accordance with the respective terms thereof.  All
capitalized terms which are used in this Revolving Loan Note and not otherwise
defined herein and which are defined in the Loan Agreement shall have the same
meanings herein as in the Loan Agreement.

     

    Borrower
irrevocably authorizes the Lender to make or cause to be made, at or about the
time of the Drawdown Date of any Loan or at or about the time of receipt of any
payment of principal of this Revolving Loan Note, an appropriate notation on the
grid attached to this Revolving Loan Note, or the continuation of such grid, or
any other similar record, including computer records, reflecting the making of
such Loan or (as the case may be) the receipt of such payment.  The
outstanding amount of the Loans set forth on such grid, or the continuation of
such grid, or any other similar record, including computer records, maintained
by the Lender with respect to any Loans shall be conclusive evidence of the
principal amount thereof owing and unpaid to the Lender, but the failure to
record, or any error in so recording, any such amount on any such grid,
continuation or other record shall not limit or otherwise affect the obligation
of Borrower hereunder or under the Loan Agreement to make payments of principal
of and interest on this Revolving Loan Note when due.

     

    Borrower
has the right in certain circumstances and the obligation under certain other
circumstances to prepay the whole or part of the principal of this Revolving
Loan Note on the terms and conditions specified in the Loan
Agreement.

     

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

    If any one
or more Events of Default shall occur, the entire unpaid principal amount of
this Revolving Loan Note and all of the unpaid interest accrued thereon may
become or be declared due and payable in the manner and with the effect provided
in the Loan Agreement.

     

    Borrower
and every endorser and guarantor of this Revolving Loan Note or the obligation
represented hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Revolving Loan Note, assent to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.

     

    THIS
REVOLVING LOAN NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF
THE STATE OF CALIFORNIA WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING
CONFLICTS OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.  BORROWER CONSENTS AND AGREES THAT THE STATE OR FEDERAL
COURTS LOCATED IN SAN FRANCISCO COUNTY, CALIFORNIA SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES AMONG ANY THE PARTIES
PERTAINING TO THIS REVOLVING LOAN NOTE OR TO ANY MATTER ARISING OUT OF OR
RELATED TO THIS REVOLVING LOAN NOTE; PROVIDED, THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF SAN
FRANCISCO COUNTY, CALIFORNIA.  BORROWER EXPRESSLY SUBMITS AND CONSENTS
IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH
COURT, AND HEREBY WAIVES ANY OBJECTION THAT IT MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT.  BORROWER HEREBY WAIVES PERSONAL SERVICE OF
THE SUMMONS, COMPLAINTS AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH IN
THE LOAN AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
EARLIER OF BORROWER’S ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT IN THE
UNITED STATES MAIL, PROPER POSTAGE PREPAID.  BORROWER CONSENTS TO THE
DISPUTE RESOLUTION PROVISIONS OF SECTION 11.3 OF THE LOAN
AGREEMENT.

     

    IN WITNESS WHEREOF, the
undersigned has caused this Revolving Loan Note to be signed as an instrument
under seal by its duly authorized officer as of the day and year first above
written.

     

    
      	 
      	
              HERCULES
      TECHNOLOGY GROWTH CAPITAL, INC.

            
	 
      	 
      	 
	 
      	
              By:

            	 
	 
      	 
      	 
	 
      	
              Print
      Name: 

            	 
	 
      	 
      	 
	 
      	
              Title: 

            	 

    

    

     

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

    
 

    
      
        	
                Date

              	
                Amount
      of Revolving Credit Loan

              	
                Amount
      of Principal Paid or Prepaid

              	
                Balance
      of Principal Unpaid

              	
                Notation
      Made By:

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

      

    

     

     

     

    
      
         

      

      
        A-3

        
          

        

      

      
         

      

    

    EXHIBIT
B

     

    [FORM OF]
LOAN SUPPLEMENT

     

    
      	
              To:

            	
              Union
      Bank, N.A., as Agent

            
	 
      	
              Commercial
      Loan Operations

            
	 
      	
              601
      East Potrero Grande Drive

            
	 
      	
              Monterey
      Park, CA  91754

            
	 
      	
              Facsimile:
      (323) 720-2252

            

    

    
with a
copy to:

     

    
      
        	 
      	
                Union
      Bank, N.A., as Agent

              
	 
      	
                Attention:  J.
      William Bloore and

              
	 
      	
                 
      James B. Goudy

              
	 
      	
                Northern
      California Commercial Banking Group

              
	 
      	
                99
      Almaden Boulevard, Suite 200

              
	 
      	
                San
      Jose, CA  95113

              
	 
      	 
      
	 	 
	 	 
	Re:	Loan
      Supplement dated for reference purposes as of : _____________ __,
      20__

      

Ladies and
Gentlemen:

    

    This Loan
Supplement (this “Loan
Supplement”) is executed and delivered pursuant to the Loan and Security
Agreement, dated as of February 10, 2010 (as amended, modified, supplemented,
restated or renewed from time to time, the “Loan Agreement”) by
and among HERCULES TECHNOLOGY GROWTH CAPITAL, INC., a Maryland corporation (the
“Borrower”),
the several financial institutions from time to time party thereto (the “Lenders”), and UNION
BANK, N.A., as a Lender and as agent for the Lenders (in such capacity, the
“Agent”).  All
capitalized terms used herein shall have the meanings specified in the Loan
Agreement unless otherwise defined herein.  In addition to the
provisions of the Loan and Security Agreement, the parties agree as
follows.

     

    Borrower
hereby certifies that the representations and warranties in Section 3 of the Loan
Agreement are and continue to be true, correct and complete as to the Notes
Receivable, Loan Paper, and all other Collateral in which Borrower has granted a
security interest and collaterally assigned to Agent, for itself and the other
Lenders, prior to the date of this Loan Supplement and as to the Notes
Receivable, Loan Paper and other documents, instruments, agreements, interests
and other property referenced in this Loan Supplement.  Without
limiting the security interests granted and collateral assignments made under
the Loan Agreement, Borrower hereby grants to Agent, for itself and the other
Lenders, a continuing security interest in, and collaterally assigns to Agent,
for itself and the other Lenders, all of Borrower’s right title and interest in
and to the Notes Receivable, related Loan Paper, and other property listed on
Attachment A to
this Loan Supplement together with:  (i) any and all obligations
therein described, the debt secured thereby and all sums of money due and to
become due thereon, with the interest provided for therein, (ii) any and all
Liens, privileges, security interests, collateral, rights, remedies,
entitlements and equities that Borrower now or in the future possesses or to
which is entitled as additional security for the payment thereof and the other
obligations described in any related Loan Paper, (iii) any and all financing
statements filed against the applicable Account Debtors, as debtor, naming
Borrower or any Multi-Lender Agent as secured party; (iv) any and all other
documents executed and/or delivered in connection with such Notes Receivable or
Loan Paper, including, without limitation, all of Borrower’s right, title and
interest in and to any collateral, security, guaranties, certificates of
deposit, letters of credit, performance bonds, demands, causes of action, all
related certificates, bank accounts, operating accounts, insurance policies,
reserve accounts, escrow accounts and other accounts, opinions, financial
statements of Account Debtors and any guarantors and any other collateral
arising out of and/or executed and/or delivered in connection with or related to
such Notes Receivable or Loan Paper, and all other rights and benefits of
Borrower related to such other documents, (v) any and all claims, demands and
causes of action that Borrower now or in the future possesses against any
Account Debtor in connection with foregoing or to which Borrower is otherwise
entitled as additional security for the payment of such Notes Receivable, Loan
Paper and the other obligations described therein, and (vi) any and all cash and
non-cash proceeds thereof.  Borrower confirms and agrees that the
foregoing shall be included as part of the Collateral referred to in the Loan
Agreement, shall be subject to Section 6 of the Loan
Agreement, and shall secure all Obligations.  Borrower ratifies and
confirms each power of attorney granted to Agent under the Loan Agreement and in
the other Loan Documents.

     

    
      
         

      

      
        B-1

        
          

        

      

      
         

      

    

    This
security interest herein is granted in conjunction with the security interest
granted to Agent under the Loan Agreement.  The rights and remedies of
Agent with respect to the security interest granted hereby are in addition to,
and in no way limit or restrict, those set forth in the Loan Agreement and the
other Loan Documents, and those which are now or hereafter available to Agent or
any Lender as a matter of law or equity.  Each right, power and remedy
of Agent and each Lender provided for herein or in the Loan Agreement or any of
the other Loan Documents, or now or hereafter existing at law or in equity shall
be cumulative and concurrent and shall be in addition to every right, power or
remedy provided for herein and the exercise by Agent or any Lender of any one or
more of the rights, powers or remedies provided for herein, the Loan Agreement
or any of the other Loan Documents, or now or hereafter existing at law or in
equity, shall not preclude the simultaneous or later exercise by any person,
including Agent, of any or all other rights, powers or remedies.

     

    Except as
expressly set forth herein, this Loan Supplement shall not alter, modify, amend,
or in any way affect any of the terms, conditions, obligations, covenants, or
agreements contained in the Loan Agreement or any other Loan
Document.  The Loan Agreement, all promissory notes, guaranties,
security agreements, and all other instruments, documents and agreements entered
into in connection with the Loan Agreement and each other Loan Document shall be
and remain in full force and effect in accordance with their respective terms
and hereby are ratified and confirmed by Borrower in all
respects.  Borrower further ratifies and reaffirms the continuing
effectiveness of the Loan Agreement and the other Loan
Documents.  Nothing in this Loan Supplement shall constitute a
satisfaction of any Obligations.

     

    This Loan
Supplement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto, and their respective permitted successors and
assigns.  This Loan Supplement and the Loan Agreement shall be read
together as one document.  No course of dealing on the part of Agent,
any Lender or their respective officers, nor any failure or delay in the
exercise of any right by Agent or any Lender, shall operate as a waiver thereof,
and any single or partial exercise of any such right shall not preclude any
later exercise of any such right.  No other person or entity shall be
entitled to claim any right or benefit hereunder, including, without limitation,
the status of a third party beneficiary hereunder.  This Loan
Supplement shall be governed by and construed in accordance with the laws of the
State of California without reference to conflicts of law rules.  If
any provision of this Loan Supplement or any of the other Loan Documents shall
be determined by a court of competent jurisdiction to be invalid, illegal or
unenforceable, that portion shall be deemed severed therefrom, and the remaining
parts shall remain in full force as though the invalid, illegal or unenforceable
portion had never been a part thereof.  This Loan Supplement may be
executed in any number of counterparts, including by electronic or facsimile
transmission, each of which when so delivered shall be deemed an original, but
all such counterparts taken together shall constitute but one and the same
instrument.

     

    
      
         

      

      
        B-2

        
          

        

      

      
         

      

    

     

    
       

      
        	 
      	
                HERCULES
      TECHNOLOGY GROWTH CAPITAL, INC.

              
	 
      	 
      	 
	 
      	
                By:

              	 
	 
      	 
      	 
	 
      	
                Print
      Name: 

              	 
	 
      	 
      	 
	 
      	
                Title: 

              	 

      

      

 

    

     

    
      
         

      

      
        B-3

        
          

        

      

      
         

      

    

    Attachment
A

    to

    Loan
Supplement

    

    

    
      
         

      

      
        B-4

        
          

        

      

      
         

      

    

    EXHIBIT
C

     

    [FORM OF] LOAN
REQUEST

    

    Date:___________________

    
       

      
        	
                To:

              	
                Union
      Bank, N.A., as Agent

              
	 
      	
                Commercial
      Loan Operations

              
	 
      	
                601
      East Potrero Grande Drive

              
	 
      	
                Monterey
      Park, CA  91754

              
	 
      	
                Facsimile:
      (323) 720-2252

              

      

      
with a
copy to:

       

      
        
          	 
      	
                  Union
      Bank, N.A., as Agent

                
	 
      	
                  Attention:  J.
      William Bloore and

                
	 
      	
                   
      James B. Goudy

                
	 
      	
                  Northern
      California Commercial Banking Group

                
	 
      	
                  99
      Almaden Boulevard, Suite 200

                
	 
      	
                  San
      Jose, CA  95113

                

           

          Ladies and
Gentlemen:

        

      

    

    

    HERCULES
TECHNOLOGY GROWTH CAPITAL, INC., a Maryland corporation (the “Borrower”) submits
this Loan Request pursuant to Section 1.1(d) of the
Loan and Security Agreement, dated as of February 10, 2010 (as amended,
modified, supplemented, restated or renewed from time to time, the “Loan Agreement”) by
and among Borrower, the several financial institutions from time to time party
thereto (the “Lenders”), and UNION
BANK, N.A., as a Lender and as agent for the Lenders (in such capacity, the
“Agent”).  All
capitalized terms used in this Loan Request shall have the meanings specified in
the Loan Agreement unless otherwise defined herein.

     

    The
undersigned hereby certifies that (a) [he][she] is the acting and incumbent
[President] [Chief Executive Officer] [Vice President] [Chief Financial Officer]
of Borrower, and (b) in such capacity, [he][she] is authorized to execute this
loan request on behalf of Borrower in connection with the Loan
Agreement.

     

    We hereby
represent, warrant and certify to you that (a) the proceeds specified herein
shall be used in accordance with the provisions of the Loan Agreement, (b) the
representations and warranties of Borrower contained in the Loan Agreement or
otherwise made by Borrower in connection with the transactions contemplated
thereby were true and correct in all material respects when made and are true
and correct in all material respects on and as of the date hereof with the same
effect as if made herein (except to the extent of changes resulting from
transactions contemplated or permitted by the Loan Agreement and the other Loan
Documents and to the extent that such representations and warranties relate
expressly to an earlier date), (c) Borrower has performed and complied in all
material respects with all of the terms and conditions contained in the Loan
Agreement required to be performed or complied with by Borrower prior to or at
the time of the borrowing requested hereunder, (d) at and as of the date of
hereof, Borrower is not in default of any of its obligations under the Loan
Agreement, and no Default or Event of Default exists and (e) the execution and
delivery of this Loan Request has been authorized by all necessary corporate
action/proceedings on behalf of Borrower.

     

    
      
         

      

      
        C-1

        
          

        

      

      
         

      

    

    Borrower
request that the Lenders make a [Reference Rate] [LIBOR] Loan on [proposed
Drawdown Date]1 for the LIBOR
Loan Period commencing on [proposed Drawdown Date] and ending on [_____]2 in the
principal amount of [$_____]3.

     

    
       

      
        	 
      	
                HERCULES
      TECHNOLOGY GROWTH CAPITAL, INC.

              
	 
      	 
      	 
	 
      	
                By:

              	 
	 
      	 
      	 
	 
      	
                Print
      Name: 

              	 
	 
      	 
      	 
	 
      	
                Title: 

              	 

      

      

    

    

     

      
        

      

    

    
      1       Loan Request must be made at least 1
Business Day prior to the proposed Drawdown Date of any Reference Rate Loan and
3 Business Days prior to the proposed Drawdown Date of any LIBOR
Loan.

    

    
       

      2       For Reference Rate Loans, the last day
of the calendar quarter following the proposed Drawdown Date; for LIBOR Rate
Loans, 1, 2, or 3 months after the proposed Drawdown
Date.

    

    
       

      3       Each Loan Request relating to a LIBOR
Loan shall be in a minimum aggregate amount of
$______________.

       

      
        
           

        

        
          C-2

          
            

          

        

        
           

        

      

    

    EXHIBIT
D

     

    [FORM OF]
NOTICE OF CONTINUATION/CONVERSION

    
      
         

        
          	
                  To:

                	
                  Union
      Bank, N.A., as Agent

                
	 
      	
                  Commercial
      Loan Operations

                
	 
      	
                  601
      East Potrero Grande Drive

                
	 
      	
                  Monterey
      Park, CA  91754

                
	 
      	
                  Facsimile:
      (323) 720-2252

                

        

        
with a
copy to:

         

        
          
            	 
      	
                    Union
      Bank, N.A., as Agent

                  
	 
      	
                    Attention:  J.
      William Bloore and

                  
	 
      	
                     
      James B. Goudy

                  
	 
      	
                    Northern
      California Commercial Banking Group

                  
	 
      	
                    99
      Almaden Boulevard, Suite 200

                  
	 
      	
                    San
      Jose, CA  95113

                  

             

          

        

      

    

    Ladies and
Gentlemen:

    

    HERCULES
TECHNOLOGY GROWTH CAPITAL, INC., a Maryland corporation (the “Borrower”) submits
this Notice of Continuation/Conversion pursuant to Section 1.2 of the Loan
and Security Agreement, dated as of February 10, 2010 (as amended, modified,
supplemented, restated or renewed from time to time, the “Loan Agreement”) by
and among Borrower, the several financial institutions from time to time party
thereto (the “Lenders”), and UNION
BANK, N.A., as a Lender and as agent for the Lenders (in such capacity, the
“Agent”).  All
capitalized terms used in this Loan Request shall have the meanings specified in
the Loan Agreement unless otherwise defined herein.

     

    The
undersigned hereby certifies that (a) [he][she] is the acting and incumbent
[President] [Chief Executive Officer] [Vice President] [Chief Financial Officer]
of Borrower, and (b) in such capacity, [he][she] is authorized to execute this
notice on behalf of Borrower in connection with the Loan Agreement.

     

    We hereby
represent, warrant and certify to you that (a) the proceeds specified herein
shall be used in accordance with the provisions of the Loan Agreement, (b) the
representations and warranties of Borrower contained in the Loan Agreement or
otherwise made by Borrower in connection with the transactions contemplated
thereby were true and correct in all material respects when made and are true
and correct in all material respects on and as of the date hereof with the same
effect as if made herein (except to the extent of changes resulting from
transactions contemplated or permitted by the Loan Agreement and the other Loan
Documents and to the extent that such representations and warranties relate
expressly to an earlier date), (c)  Borrower has performed and
complied in all material respects with all of the terms and conditions contained
in the Loan Agreement required to be performed or complied with by Borrower
prior to or at the time of the borrowing requested hereunder, (d) at and as of
the date of hereof, Borrower is not in default of any of its obligations under
the Loan Agreement, and no Default or Event of Default exists and (e) the
execution and delivery of this Notice of Continuation/Conversion has been
authorized by all necessary corporate action and proceedings on behalf of
Borrower.

     

    Borrower
requests on __________, 20___ a LIBOR Loan as follows:

     

    
      
         

      

      
        D-1

        
          

        

      

      
         

      

    

    (a)           ____           (i)           A
rate conversion of an existing Reference Rate Loan to a LIBOR Loan;
or

     

    ____           (ii)         A
continuation of an existing LIBOR Loan as a LIBOR Loan.

     

    [Check (i) or (ii) above]

    

    (b)           The
date on which the LIBOR Loan is to be made is ___________________,
20___

     

    (c)           The
amount of the LIBOR Loan is to be ___________________ ($____________), for an
LIBOR Loan Period of ____________ month(s).

     

    
      
        	 
      	
                Very
      Truly yours,

              

      

       

      
        
          	 
      	
                  HERCULES
      TECHNOLOGY GROWTH CAPITAL, INC.

                
	 
      	 
      	 
	 
      	
                  By:

                	 
	 
      	 
      	 
	 
      	
                  Print
      Name: 

                	 
	 
      	 
      	 
	 
      	
                  Title: 

                	 

        

        

      

    

    

    For
Internal Bank Use Only

     

    
      
        	
                LIBOR
      Pricing Date

              	
                LIBOR
      Rate

              	
                LIBOR
      Rate Variance

              	
                Maturity
      Date

              
	 
      	 
      	
                ______%

              	 
      

      

    

    
 

    
      
         

      

      
        D-2

        
          

        

      

      
         

      

    

    

    EXHIBIT
E

     

    [FORM OF]
BORROWING BASE CERTIFICATE

    
      
         

        
          	
                  To:

                	
                  Union
      Bank, N.A., as Agent

                
	 
      	
                  Commercial
      Loan Operations

                
	 
      	
                  601
      East Potrero Grande Drive

                
	 
      	
                  Monterey
      Park, CA  91754

                
	 
      	
                  Facsimile:
      (323) 720-2252

                

        

        
with a
copy to:

         

        
          
            	 
      	
                    Union
      Bank, N.A., as Agent

                  
	 
      	
                    Attention:  J.
      William Bloore and

                  
	 
      	
                     
      James B. Goudy

                  
	 
      	
                    Northern
      California Commercial Banking Group

                  
	 
      	
                    99
      Almaden Boulevard, Suite 200

                  
	 
      	
                    San
      Jose, CA  95113

                  

             

          

        

      

    

    Ladies and
Gentlemen:

    

    This
certificate (this “Borrowing Base
Certificate”) is submitted pursuant to the Loan and Security Agreement,
dated as of February 10, 2010 (as amended, modified, supplemented, restated or
renewed from time to time, the “Loan Agreement”) by
and among HERCULES TECHNOLOGY GROWTH CAPITAL, INC., a Maryland corporation (the
“Borrower”),
the several financial institutions from time to time party thereto (the “Lenders”), and UNION
BANK, N.A., as a Lender and as agent for the Lenders (in such capacity, the
“Agent”).  All
capitalized terms used herein shall have the meanings specified in the Loan
Agreement unless otherwise defined herein.

     

    The
undersigned hereby certifies that (a) [he][she] is the acting and incumbent
Chief Financial Officer of Borrower, and (b) in such capacity, [he][she] is
authorized to execute this certificate on behalf of Borrower in connection with
the Loan Agreement.  The undersigned submits this Borrowing Base
Certificate for the purpose of inducing Agent and the Lenders to make a Loan to
Borrower.

     

    The
undersigned hereby represents, warrants and certifies that:

     

    (i)                      The
calculation of the Borrowing Base, on the attached Schedule 1, is
true, complete and correct, and that the information reflected in this Borrowing
Base Certificate complies with the representations and warranties and
definitions set forth in the Loan Agreement.

     

    (ii)                     Without
limiting the foregoing, the Notes Receivable and Loan Paper identified as
“Eligible Notes Receivable” and “Eligible Loan Paper” on Schedule 1
strictly comply with the definitions of the same in the Loan Agreement and with
the representations and warranties in Section 3.18.

     

    (iii)                    Attached
hereto is a detailed summary and aging of all Accounts, including separate aging
reports of all Eligible Notes Receivable included in the Borrowing, all Eligible
Notes Receivable not included in the Borrowing Base and all other Notes
Receivable.

     

    
      
         

      

      
        E-1

        
          

        

      

      
         

      

    

    (iv)                    All
of the representations and warranties of Borrower under the Loan Agreement and
the other Loan Documents are true and correct in all material respects as of the
date hereof, except to the extent any such representations and warranties relate
to an earlier date in which case such representations and warranties are true
and correct in all material respects as of such earlier date (provided that the
foregoing materiality qualifications shall not apply to any representations and
warranties that already are qualified or modified by materiality in the text
thereof), both before and after giving effect to the funding of the Loan
requested hereby.

     

    [Signature
Page Follows]

    

    
      
         

      

      
        E-2

        
          

        

      

      
         

      

    

    THIS
BORROWING BASE CERTIFICATE IS EXECUTED AND DELIVERED THIS ______ DAY OF
__________, 20__.

     

    
      	 
      	
              Very
      Truly yours,

            

      
         

        
          	 
      	
                  HERCULES
      TECHNOLOGY GROWTH CAPITAL, INC.

                
	 
      	 
      	 
	 
      	
                  By:

                	 
	 
      	 
      	 
	 
      	
                  Print
      Name: 

                	 
	 
      	 
      	 
	 
      	
                  Title: 

                	 

        

        

      

    

    

    
      
         

      

      
        E-3

        
          

        

      

      
         

      

    

    SCHEDULE
1

    TO

    BORROWING
BASE CERTIFICATE

    

    
      
        	
                Calculation Date:

              	
                _________
      __, 20__

              

      

    
 

    
      
         

      

      
        E-4

        
          

        

      

      
         

      

    

    

    EXHIBIT
F

     

    [FORM OF]
COMPLIANCE CERTIFICATE

    
      
        
           

          
            	
                    To:

                  	
                    Union
      Bank, N.A., as Agent

                  
	 
      	
                    Commercial
      Loan Operations

                  
	 
      	
                    601
      East Potrero Grande Drive

                  
	 
      	
                    Monterey
      Park, CA  91754

                  
	 
      	
                    Facsimile:
      (323) 720-2252

                  

          

          
with a
copy to:

           

          
            
              
                	 
      	
                        Union
      Bank, N.A., as Agent

                      
	 
      	
                        Attention:  J.
      William Bloore and

                      
	 
      	
                         
      James B. Goudy

                      
	 
      	
                        Northern
      California Commercial Banking Group

                      
	 
      	
                        99
      Almaden Boulevard, Suite 200

                      
	 
      	
                        San
      Jose, CA  95113

                      
	 	 
	Re:	Compliance
      Certificate as of and for period ending: _____________ __,
  20__

              

               

            

          

        

      

    

    Ladies and
Gentlemen:

    

    This
certificate (this “Compliance
Certificate”) is submitted pursuant to the Loan and Security Agreement,
dated as of February 10, 2010 (as amended, modified, supplemented, restated or
renewed from time to time, the “Loan Agreement”) by
and among HERCULES TECHNOLOGY GROWTH CAPITAL, INC., a Maryland corporation (the
“Borrower”),
the several financial institutions from time to time party thereto (the “Lenders”), and UNION
BANK, N.A., as a Lender and as agent for the Lenders (in such capacity, the
“Agent”).  All
capitalized terms used herein shall have the meanings specified in the Loan
Agreement unless otherwise defined herein.

     

    The
undersigned hereby certifies that: (a) [he][she] is the acting and incumbent
[Chief Executive Officer] [Chief Financial Officer] of Borrower, and (b) in such
capacity, [he][she] is authorized to execute this Compliance Certificate on
behalf of Borrower in connection with the Loan Agreement.

     

    The
undersigned has reviewed the terms and conditions of the Loan Agreement and the
definitions and provisions contained in the Loan Agreement, and, has made, or
have caused to be made under the supervision of the undersigned, such
examination or investigation as is necessary to enable the undersigned to
express an informed opinion, and to provide a certification, as to the matters
referred to herein.

     

    The
undersigned hereby further represents, warrants and certifies that:

     

    (a)           Borrower
is in complete and strict compliance, as of, and for the period ending,
__________ __, 20__ (the “Compliance Date”),
with all agreements, conditions and covenants contained in the Loan Agreement
and the other Loan Documents, except as noted below.

     

    (b)           The
representations and warranties of Borrower contained in the Loan Agreement and
the other Loan Documents are true and correct in all material respects as of the
Compliance Date as if made on such date except to the extent such
representations and warranties relate to an earlier date in which case such
representations and warranties remain true and correct in all material respects
as of such earlier date (provided that the foregoing materiality qualifications
shall not apply to any representations and warranties that already are qualified
or modified by materiality in the text thereof).

     

    
      
         

      

      
        F-1

        
          

        

      

      
         

      

    

    (c)           There
exists no Default or Event of Default under the Loan Agreement or any of the
other Loan Documents.

     

    (d)           Borrower
is in compliance with each of the covenants in Section 3.24 of the Loan
Agreement, as of, and for the period ending on, the Compliance Date, and
attached hereto as Schedule 1 is a true and correct copy of the calculation
of such financial covenants, prepared by the undersigned.

     

    (e)           Attached
to such Schedule 1 are
true, correct and complete copies of the documents and work sheets supporting
the above certifications.

     

    (f)           Since
_________ __, 20__, there has been no Material Adverse Effect as to Borrower,
individually, or Borrower and its consolidated Subsidiaries.

     

    (g)           Borrower
is in compliance with each of the reporting and notice covenants in Section 5 of the Loan
Agreement, as of, and for the period ending on the Compliance Date, and attached
hereto as Schedule 2 are
the monthly, quarterly and annual (as applicable) Financial Statements required
under Section 5 of
the Loan Agreement and the other reports, letters, opinions, notices and other
required under the Loan Agreement;

     

    (h)           Included
on Schedule 2
attached hereto is a true, correct and complete copy of Borrower’s most recent
quarterly watch-list report prepared in the ordinary course of business and
consistent with past practice.

     

    (i)           The
Financial Statements furnished on Schedule 2
attached hereto are complete and correct and have been prepared in accordance
with GAAP (except for the lack of footnotes required by GAAP and changes
resulting for normal year end adjustments, in the case of financial statements
other than those as of a Fiscal Year end), consistently applied from one period
to the next, and fairly present the financial condition of Borrower and its
consolidated Subsidiaries.

     

    (j)           Borrower
and each of its Subsidiaries is Solvent.

     

    (k)           There
is no litigation, action, suit, investigation, or other arbitral,
administrative, or judicial proceeding pending or, to the best of the knowledge
of the undersigned, threatened which could reasonably be expected to (x) result
in a Material Adverse Effect or (y) restrain or enjoin, impose materially
burdensome conditions on, or otherwise materially and adversely affect the
ability of Borrower to fulfill its obligations under the Loan Documents; or (z)
materially and adversely affect the rights and remedies of Agent or any Lender
under the Loan Documents.

     

    (l)           No
Liens have arisen, been granted or otherwise exist with respect to the
Collateral or the assets or properties of Borrower, other than Permitted
Liens.

     

    
      
         

      

      
        F-2

        
          

        

      

      
         

      

    

    

    THIS
COMPLIANCE CERTIFICATE IS EXECUTED AND DELIVERED THIS ______ DAY OF __________,
20__.

     

    
      	 
      	
              Very
      Truly yours,

            

      
         

        
          	 
      	
                  HERCULES
      TECHNOLOGY GROWTH CAPITAL, INC.

                
	 
      	 
      	 
	 
      	
                  By:

                	 
	 
      	 
      	 
	 
      	
                  Print
      Name: 

                	 
	 
      	 
      	 
	 
      	
                  Title: 

                	 

        

        

      

    

    

    
      
         

      

      
        F-3

        
          

        

      

      
         

      

    

    SCHEDULE
1

    TO

    COMPLIANCE
CERTIFICATE

    

    

    
      
         

      

      
        F-4

        
          

        

      

      
         

      

    

    EXHIBIT
G

     

    [FORM OF]
ASSIGNMENT AND ASSUMPTION AGREEMENT

    

    This
ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Assignment and
Assumption”) dated as of ____________________, 20__ is made between
______________________________ (the “Assignor”) and
__________________________ (the “Assignee”).

     

    RECITALS

    

    WHEREAS,
the Assignor is party to that certain Loan and Security Agreement, dated as of
February 10, 2010 (as amended, modified, supplemented, restated or renewed from
time to time, the “Loan Agreement”) by
and among HERCULES TECHNOLOGY GROWTH CAPITAL, INC., a Maryland corporation (the
“Borrower”),
the several financial institutions from time to time party thereto (including
the Assignor, the “Lenders”), and UNION
BANK, N.A., as a Lender and as agent for the Lenders (in such capacity, the
“Agent”).  Any
terms defined in the Loan Agreement and not defined in this Assignment and
Assumption are used herein as defined in the Loan Agreement;

     

    WHEREAS,
as provided under the Loan Agreement, the Assignor has committed to making Loans
(the “Committed
Loans”) to Borrower in an aggregate amount not to exceed $__________ (the
“Commitment”);

     

    WHEREAS,
the Assignor has made Committed Loans in the aggregate principal amount of
$__________ to Borrower; and

     

    WHEREAS,
the Assignor wishes to sell and assign to the Assignee, without recourse, [part
of the] [all] rights and obligations of the Assignor under the Loan Agreement in
respect of its Commitment, together with a corresponding portion of each of its
outstanding Committed Loans, in an amount equal to $__________ (the “Assigned Amount”) on
the terms and subject to the conditions set forth herein and the Assignee wishes
to accept assignment of such rights and to assume such obligations from the
Assignor on such terms and subject to such conditions;

     

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

     

    1.           Assignment and
Assumption.

     

    (a)           Subject
to the terms and conditions of this Assignment and Assumption, (i) the Assignor
hereby sells, transfers and assigns to the Assignee, and (ii) the Assignee
hereby purchases, assumes and undertakes from the Assignor, in all cases,
without recourse and without representation or warranty (except as provided in
this Assignment and Assumption) __% (the “Assignee’s Percentage
Share”) of (A) the Commitment and the Committed Loans of the Assignor and
(B) all related rights, benefits, obligations, liabilities and indemnities of
the Assignor under and in connection with the Loan Agreement, the other Loan
Documents.

     

    (b)           With
effect on and after the Effective Date (as defined in Section 5 hereof), the
Assignee shall be a party to the Loan Agreement and succeed to all of the rights
and be obligated to perform all of the obligations of a Lender under the Loan
Agreement, including the requirements concerning confidentiality and the payment
of indemnification, with a Commitment in an amount equal to the Assigned Amount
(plus the amount of any Commitment held by Assignee independent from the
Assigned Amount).  The Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Agreement are required to be performed by it as a Lender.  It is
the intent of the parties hereto that the Commitment of the Assignor shall, as
of the Effective Date, be reduced by an amount equal to the Assigned Amount and
the Assignor shall relinquish its rights and be released from its obligations
under the Loan Agreement to the extent such obligations have been assumed by the
Assignee; provided, that the Assignor shall not relinquish its rights under
Sections 1.5, 10, 11.3 and 11.4 of the Loan Agreement to
the extent such rights relate to the time prior to the Effective
Date.

     

    
      
         

      

      
        G-1

        
          

        

      

      
         

      

    

    (c)           After
giving effect to the assignment and assumption set forth herein, on the
Effective Date the Assignee’s Commitment will be $__________.

     

    (d)           After
giving effect to the assignment and assumption set forth herein, on the
Effective Date the Assignor’s Commitment will be $__________.

     

    2.           Payments.

     

    (a)           As
consideration for the sale, assignment and transfer contemplated in Section 1 hereof, the
Assignee shall pay to the Assignor on the Effective Date in immediately
available funds an amount equal to $__________, representing the Assignee’s Pro
Rata Share of the Principal Amount of all Committed Loans.

     

    (b)           The
Assignee further agrees to pay to the Agent a processing fee in the amount
specified in Section 8.1(a) of the
Loan Agreement.

     

    3.           Reallocation of
Payments.

     

    Any
interest, fees and other payments accrued to the Effective Date with respect to
the Commitment and Committed Loans shall be for the account of the
Assignor.  Any interest, fees and other payments accrued on and after
the Effective Date with respect to the Assigned Amount shall be for the account
of the Assignee.  Each of the Assignor and the Assignee agrees that it
will hold in trust for the other party any interest, fees and other amounts
which it may receive to which the other party is entitled pursuant to the
preceding sentence and pay to the other party any such amounts which it may
receive promptly upon receipt.

     

    4.           Independent Credit
Decision.

     

    The
Assignee (a) acknowledges that it has received a copy of the Loan Agreement and
the Schedules and Exhibits thereto, together with copies of the most recent
financial statements of Borrower, and such other documents and information as it
has deemed appropriate to make its own credit and legal analysis and decision to
enter into this Assignment and Assumption; and (b) agrees that it will,
independently and without reliance upon the Assignor, the Agent or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit and legal decisions in taking or
not taking action under the Loan Agreement.

     

    5.           Effective Date;
Notices.

     

    (a)           As
between the Assignor and the Assignee, the effective date for this Assignment
and Assumption shall be ________ __, 20__ (the “Effective Date”);
provided, that
the following conditions precedent have been satisfied on or before the
Effective Date:

     

    
      
         

      

      
        G-2

        
          

        

      

      
         

      

    

    (i)           this
Assignment and Assumption shall be executed and delivered by the Assignor and
the Assignee;

     

    [(ii)           the
consent of the Agent required for an effective assignment of the Assigned Amount
by the Assignor to the Assignee shall have been duly obtained and shall be in
full force and effect as of the Effective Date;]

     

    (iii)           the
Assignee shall pay to the Assignor all amounts due to the Assignor under this
Assignment and Assumption;

     

    [(iv)           the
Assignee shall have complied with Section 13 of the Loan
Agreement (if applicable);]

     

    (v)           the
processing fee referred to in Section 2(b) hereof and
in Section 13.1(a)
of the Loan Agreement shall have been paid to the Agent; and

     

    (b)           Promptly
following the execution of this Assignment and Assumption, the Assignor shall
deliver to Borrowers’ Agent and the Agent for acknowledgment by the Agent, a
Notice of Assignment in the form attached hereto as Schedule 1.

     

    6.           [The
Agent.  [INCLUDE ONLY IF ASSIGNOR IS AGENT]]

     

    (a)           The
Assignee hereby appoints and authorizes the Assignor to take such action as
agent on its behalf and to exercise such powers under the Loan Agreement as are
delegated to the Agent by the Lenders pursuant to the terms of the Loan
Agreement.

     

    (b)           The
Assignee shall assume no duties or obligations held by the Assignor in its
capacity as the Agent under the Loan Agreement.]

     

    7.           Representations and
Warranties.

     

    (a)           The
Assignor represents and warrants that (i) it is the legal and beneficial owner
of the interest being assigned by it hereunder and that such interest is free
and clear of any Lien or other adverse claim; (ii) it is duly organized and
existing and it has the full power and authority to take, and has taken, all
action necessary to execute and deliver this Assignment and Assumption and any
other documents required or permitted to be executed or delivered by it in
connection with this Assignment and Assumption and to fulfill its obligations
hereunder; (iii) no notices to, or consents, authorizations or approvals of, any
Person are required (other than any already given or obtained) for its due
execution, delivery and performance of this Assignment and Assumption, and apart
from any agreements or undertakings or filings required by the Loan Agreement,
no further action by, or notice to, or filing with, any Person is required of it
for such execution, delivery or performance; and (iv) this Assignment and
Assumption has been duly executed and delivered by it and constitutes the legal,
valid and binding obligation of the Assignor, enforceable against the Assignor
in accordance with the terms hereof, subject, as to enforcement, to Debtor
Relief Laws and other laws of general application relating to or affecting
creditors’ rights and to general equitable principles.

     

    (b)           The
Assignor makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Loan Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Agreement or any
other instrument or document furnished pursuant thereto.  The Assignor
makes no representation or warranty in connection with, and assumes no
responsibility with respect to, the solvency, financial condition or statements
of Borrower, or the performance or observance by Borrower, of any of its
obligations under the Loan Agreement or any other Loan Document.

     

    
      
         

      

      
        G-3

        
          

        

      

      
         

      

    

    (c)           The
Assignee represents and warrants that (i) it is duly organized and existing and
it has full power and authority to take, and has taken, all action necessary to
execute and deliver this Assignment and Assumption and any other documents
required or permitted to be executed or delivered by it in connection with this
Assignment and Assumption, and to fulfill its obligations hereunder; (ii) no
notices to, or consents, authorizations or approvals of, any Person are required
(other than any already given or obtained) for its due execution, delivery and
performance of this Assignment and Assumption; and apart from any agreements or
undertakings or filings required by the Loan Agreement, no further action by, or
notice to, or filing with, any Person is required of it for such execution,
delivery or performance; and (iii) this Assignment and Assumption has been duly
executed and delivered by it and constitutes the legal, valid and binding
obligation of the Assignee, enforceable against the Assignee in accordance with
the terms hereof, subject, as to enforcement, to Debtor Relief Laws and other
laws of general application relating to or affecting creditors’ rights and to
general equitable principles.

     

    8.           Further
Assurances.

     

    The
Assignor and the Assignee each hereby agree to execute and deliver such other
instruments, and take such other action, as either party may reasonably request
in connection with the transactions contemplated by this Assignment and
Assumption, including the delivery of any notices or other documents or
instruments to Borrower or Agent, which may be required in connection with the
assignment and assumption contemplated hereby.

     

    9.           Miscellaneous.

     

    (a)           Any
amendment or waiver of any provision of this Assignment and Assumption shall be
in writing and signed by the parties hereto.  No failure or delay by
either party hereto in exercising any right, power or privilege hereunder shall
operate as a waiver thereof and any waiver of any breach of the provisions of
this Assignment and Assumption shall be without prejudice to any rights with
respect to any other or further breach thereof.

     

    (b)           All
payments made hereunder shall be made without any set-off or
counterclaim.

     

    (c)           The
Assignor and the Assignee shall each pay its own costs and expenses incurred in
connection with the negotiation, preparation, execution and performance of this
Assignment and Assumption.

     

    (d)           This
Assignment and Assumption may be executed in any number of counterparts and all
of such counterparts taken together shall be deemed to constitute one and the
same instrument.

     

    
      
         

      

      
        G-4

        
          

        

      

      
         

      

    

    (e)           THIS
ASSIGNMENT AND ASSUMPTION AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE,
WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS, AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.  EACH PARTY HEREBY
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN SAN FRANCISCO
COUNTY, CALIFORNIA SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES AMONG ANY THE PARTIES PERTAINING TO THIS ASSIGNMENT AND
ASSUMPTION OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS ACCESSION
AGREEMENT; PROVIDED, THAT THE PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE
COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF SAN FRANCISCO COUNTY,
CALIFORNIA.  EACH PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND HEREBY
WAIVES ANY OBJECTION THAT IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT.  EACH PARTY HEREBY WAIVES PERSONAL SERVICE
OF THE SUMMONS, COMPLAINTS AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT
AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO EACH PARTY AT THE ADDRESS SET
FORTH HEREIN AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER
OF BORROWER’S ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT IN THE UNITED
STATES MAIL, PROPER POSTAGE PREPAID.

     

    (f)           TO
THE EXTENT PERMITTED BY LAW, IN CONNECTION WITH ANY CLAIM, CAUSE OF ACTION,
PROCEEDING OR OTHER DISPUTE CONCERNING THIS ASSIGNMENT AND ASSUMPTION (EACH A
“CLAIM”), THE
PARTIES EXPRESSLY, INTENTIONALLY, AND DELIBERATELY WAIVE ANY RIGHT EACH MAY
OTHERWISE HAVE TO TRIAL BY JURY.  IN THE EVENT THAT THE WAIVER OF JURY
TRIAL SET FORTH IN THE PREVIOUS SENTENCE IS NOT ENFORCEABLE UNDER THE LAW
APPLICABLE TO THIS ASSIGNMENT AND ASSUMPTION, THE PARTIES TO THIS ASSIGNMENT AND
ASSUMPTION AGREE THAT ANY CLAIM, INCLUDING ANY QUESTION OF LAW OR FACT RELATING
THERETO, SHALL, AT THE WRITTEN REQUEST OF ANY PARTY, BE DETERMINED BY JUDICIAL
REFERENCE PURSUANT TO THE STATE LAW APPLICABLE TO THIS ASSIGNMENT AND
ASSUMPTION.  THE PARTIES SHALL SELECT A SINGLE NEUTRAL REFEREE, WHO
SHALL BE A RETIRED STATE OR FEDERAL JUDGE.  IN THE EVENT THAT THE
PARTIES CANNOT AGREE UPON A REFEREE, THE COURT SHALL APPOINT THE
REFEREE.  THE REFEREE SHALL REPORT A STATEMENT OF DECISION TO THE
COURT.  NOTHING IN THIS PARAGRAPH SHALL LIMIT THE RIGHT OF ANY PARTY
AT ANY TIME TO EXERCISE SELF-HELP REMEDIES, FORECLOSE AGAINST COLLATERAL OR
OBTAIN PROVISIONAL REMEDIES.  THE PARTIES SHALL BEAR THE FEES AND
EXPENSES OF THE REFEREE EQUALLY, UNLESS THE REFEREE ORDERS
OTHERWISE.  THE REFEREE SHALL ALSO DETERMINE ALL ISSUES RELATING TO
THE APPLICABILITY, INTERPRETATION, AND ENFORCEABILITY OF THIS
PARAGRAPH.  THE PARTIES ACKNOWLEDGE THAT IF A REFEREE IS SELECTED TO
DETERMINE THE CLAIMS, THEN THE CLAIMS WILL NOT BE DECIDED BY A
JURY.

     

    
      
         

      

      
        G-5

        
          

        

      

      
         

      

    

    IN WITNESS
WHEREOF, the Assignor and the Assignee have caused this Assignment and
Assumption to be executed and delivered by their duly authorized officers as of
the date first above written.

     

    

    
      	 
      	[ASSIGNOR]
	 
      	 	 
      
	 
      	 	 
      
	 
      	By:	
               

            
	 
      	Title:	
               

            
	 
      	      
              Address: 

            	
               

            
	 
      	 	 
      
	 
      	 	 
      
	 
      	      
              [ASSIGNEE]

            
	 
      	 	 
      
	 
      	 	 
      
	 
      	By:	
               

            
	 
      	      
              Title: 

            	
               

            
	 
      	      
              Address: 

            	
               

            
	 
      	 	 
      
	 
      	 	 
      

    

     

    
 

    
      
         

      

      
        G-6

        
          

        

      

      
         

      

    

    SCHEDULE
1

     

    to

     

    ASSIGNMENT AND
ASSUMPTION

     

    [FORM OF
]NOTICE OF ASSIGNMENT AND ASSUMPTION

    

    

    _______________,
20__

    
      
         

        
          	
                  To:

                	
                  Union
      Bank, N.A., as Agent

                
	 
      	
                  Commercial
      Loan Operations

                
	 
      	
                  601
      East Potrero Grande Drive

                
	 
      	
                  Monterey
      Park, CA  91754

                
	 
      	
                  Facsimile:
      (323) 720-2252

                

        

        
with a
copy to:

         

        
          
            
              	 
      	
                      Union
      Bank, N.A., as Agent

                    
	 
      	
                      Attention:  J.
      William Bloore and

                    
	 
      	
                       
      James B. Goudy

                    
	 
      	
                      Northern
      California Commercial Banking Group

                    
	 
      	
                      99
      Almaden Boulevard, Suite 200

                    
	 
      	
                      San
      Jose, CA  95113

                    
	 	 
	Re:  	HERCULES
      TECHNOLOGY GROWTH CAPITAL, INC.

            

            
Ladies and
Gentlemen:

          

        

      

    

    

    We refer
to that certain Loan and Security Agreement dated as of February 10, 2010 (as
amended, modified, supplemented, restated or renewed from time to time, the
“Loan
Agreement”) by and among HERCULES TECHNOLOGY GROWTH CAPITAL, INC., a
Maryland corporation (“Borrower”), the
several financial institutions from time to time party thereto or who become
Lenders under and as defined in the Loan Agreement from time to time (the “Lenders”), and UNION
BANK, N.A., as a Lender and as agent for the Lenders (in such capacity, the
“Agent”).  Terms
defined in the Loan Agreement are used herein as therein defined.

     

    1.           We
hereby give you notice of, and request your consent to, the sale and assignment,
without recourse, by __________________ (the “Assignor”) to
_______________ (the “Assignee”) of _____%
of the right, title and interest of the Assignor in and to the Loan Agreement
(including the right, title and interest of the Assignor in and to the
Commitments of the Assignor, all outstanding Loans made by the Assignor pursuant
to the Assignment and Assumption Agreement attached hereto (the “Assignment and
Assumption”).  We understand and agree that the Assignor’s
Commitment, as of ____________, 20_ , is $ ___________, and the aggregate amount
of its outstanding Loans is $_____________.

     

    2.           The
Assignee agrees that, upon receiving the consent of the Agent and, if
applicable, Borrower, the Assignee will be bound by the terms of the Loan
Agreement as fully and to the same extent as if the Assignee were the Lender
originally holding such interest in the Loan Agreement.

     

    
      
         

      

      
        G-7

        
          

        

      

      
         

      

    

    3.           The
following administrative details apply to the Assignee:

     

    
      
        	
                (A)

              	
                Notice
      Address:

              	 
	 	 	 
	 
      	
                Assignee
      name:

              	 
	 
      	
                Address:

              	 
	 
      	 
      	 
	 
      	 
      	 
	 
      	
                Attention:

              	 
	 
      	
                Telephone:  (___)

              	 
	 
      	
                Telecopier:  (___)

              	 
	 
      	
                Telex
      (Answerback):

              	 

      

    

     

    
      
        	
                (B)

              	
                Wire
      Transfer and Payment Instructions:

              
	 	 
	 
      	
                Account
      No.:

              	 
      
	 
      	
                At:

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                Reference:

              	 
      
	 
      	
                Attention:

              	 
      
	 
      	 
      	 
      

      

    

    
4.           You
are entitled to rely upon the representations, warranties and covenants of each
of the Assignor and Assignee contained in the Assignment and
Assumption.

     

    IN WITNESS
WHEREOF, the Assignor and the Assignee have caused this Notice of Assignment and
Assumption to be executed by their respective duly authorized officials,
officers or agents as of the date first above mentioned.

     

    
      	 
      	
              Very
      truly yours,

            
	 
      	 
      	 
	 
      	
              [NAME
      OF ASSIGNOR]

            
	 
      	 
      	 
	 
      	 
      	 
	 
      	
              By: 

            	 
	 
      	
              Title: 

            	 
	 
      	 
      	 
	 
      	 
      	 
	 
      	 
      	 
	 
      	
              [NAME
      OF ASSIGNOR]

            
	 
      	 
      	 
	 
      	 
      	 
	 
      	
              By: 

            	 
	 
      	
              Title: 

            	 

    

     

    
 

    
      
         

      

      
        G-8

        
          

        

      

      
         

      

    

    

    
      	
              ACKNOWLEDGED
      AND ASSIGNMENT

              CONSENTED
      TO:

            	 
      

       

      
        	
                UNION
      BANK, N.A.,

                as
      Agent

              	 
      
	 	 
	 	 
	By:	 
	 	 
	Title:	 

      

    

    

    

    
      
         

      

      
        G-9

        
          

        

      

      
         

      

    

    EXHIBIT
H

     

    [FORM OF]
ACCESSION AGREEMENT

    

    Dated as
of [________, 200_]

    

    

    Reference
is hereby made to the Loan and Security Agreement, dated as of February 10, 2010
(as amended, modified, supplemented or restated and in effect from time to time,
the “Loan
Agreement”), by and among HERCULES TECHNOLOGY GROWTH CAPITAL, INC., a
Maryland corporation (“Borrower”), the
several financial institutions from time to time party thereto or who become
Lenders under and as defined in the Loan Agreement from time to time (the “Lenders”), and UNION
BANK, N.A., as a Lender and as agent for the Lenders (in such capacity, the
“Agent”).  Capitalized
terms used herein and not otherwise defined shall have the meanings assigned to
such terms in the Loan Agreement.

     

    Pursuant
to Section 1.17 of
the Loan Agreement, Borrower, Agent and [__________] (the “Acceding Lender”)
hereby agree as follows:

     

    1.           Accession.  Subject
to the terms and conditions of this Accession Agreement, the Acceding Lender
hereby agrees to assume, without recourse to Agent or any Lender, on the
Effective Date (as defined below), a Commitment to make Loans in the amount of
[$____________] (the “Assumption Amount”),
in accordance with the terms and conditions set forth in the Loan Agreement [,
which amount is in addition to the Acceding Lender’s existing Commitment of
[$____________]].  On the Effective Date, Borrower shall pay to the
Acceding Lender an upfront fee in the amount of [$___________] which fee shall
be nonrefundable when paid.  Upon such assumption, the Maximum Amount
shall be automatically increased by the Assumption Amount.  The
Acceding Lender hereby agrees to be bound by, and hereby requests the agreement
of Borrower and Agent that the Acceding Lender shall be entitled to the benefits
of, all of the terms, conditions and provisions of the Loan Agreement as if the
Acceding Lender had been one of the lending institutions originally executing
the Loan Agreement as a Lender; provided, that
nothing herein shall be construed as making the Acceding Lender liable to
Borrower or the Lenders in respect of any acts or omissions of any party to the
Loan Agreement or in respect of any other event occurring prior to the Effective
Date (as defined below) of this Accession Agreement [unless the Acceding Lender
was a Lender prior to the Effective Date].

     

    2.           Representations, Warranties
and Agreements of Acceding Lender.

     

    The
Acceding Lender (a) represents and warrants that (i) it is duly and legally
authorized to enter into this Accession Agreement, (ii) the execution, delivery
and performance of this Accession Agreement do not conflict with any provision
of law or of the charter or by-laws of the Acceding Lender, or of any agreement
binding on the Acceding Lender, (iii) all acts, conditions and things required
to be done and performed and to have occurred prior to the execution, delivery
and performance of this Accession Agreement, and to render the same the legal,
valid and binding obligation of the Acceding Lender, enforceable against it in
accordance with its terms, have been done and performed and have occurred in due
and strict compliance with all applicable laws; (b) confirms that it has
received a copy of the Loan Agreement, together with copies of the most recent
financial statements delivered pursuant thereto and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Accession Agreement; (c) agrees that it will,
independently and without reliance upon the Lenders or Agent and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Agreement; (d) represents and warrants that it is eligible to become a party to
this Accession Agreement under the terms and conditions of the Loan Agreement;
(e) appoints and authorizes Agent to take such action as Agent on its behalf and
to exercise such powers under the Loan Agreement and the other Loan Documents as
are delegated to the Agent by the terms thereof, together with such powers as
are reasonably incidental thereto; and (f) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Agreement are required to be performed by it as a Lender.

     

    
      
         

      

      
        H-1

        
          

        

      

      
         

      

    

    3.           Effect of
Accession.  The effective date for this Accession Agreement
shall be [________ __, 20__] (the “Effective
Date”).  Following the execution of this Accession Agreement by
Borrower, and the Acceding Lender, it will be delivered to the Agent for
acceptance.  Upon acceptance by the Agent, Schedule C
and Schedule D
to the Loan Agreement shall thereupon be replaced as of the Effective Date by
Schedule C
and Schedule D
annexed hereto.  Agent shall thereafter notify the other Lenders of
the revised Schedule C
and Schedule D
and the arrangements proposed to ensure that the outstanding amount of Loans
made by each Lender will correspond to its respective Pro Rata Shares after
giving affect to the accession contemplated hereby.

     

    4.           Payments.  Upon
such acceptance, from and after the Effective Date, Borrower shall make all
payments in respect of the Acceding Lender’s Commitment (including payments of
principal, interest, fees and other.

     

    5.           Governing
Law.  THIS ACCESSION AGREEMENT AND THE OBLIGATIONS ARISING
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED
IN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF
LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.  EACH
PARTY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN SAN
FRANCISCO COUNTY, CALIFORNIA SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES AMONG ANY THE PARTIES PERTAINING TO THIS
ACCESSION AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS ACCESSION
AGREEMENT; PROVIDED, THAT THE
PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF SAN FRANCISCO COUNTY, CALIFORNIA.  EACH PARTY
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
SUIT COMMENCED IN ANY SUCH COURT, AND HEREBY WAIVES ANY OBJECTION THAT IT MAY
HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT.  EACH PARTY HEREBY WAIVES PERSONAL SERVICE
OF THE SUMMONS, COMPLAINTS AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT
AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO EACH PARTY AT THE ADDRESS SET
FORTH HEREIN AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER
OF BORROWER’S ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT IN THE UNITED
STATES MAIL, PROPER POSTAGE PREPAID.

     

    
      
         

      

      
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    6.           DISPUTES.  TO
THE EXTENT PERMITTED BY LAW, IN CONNECTION WITH ANY CLAIM, CAUSE OF ACTION,
PROCEEDING OR OTHER DISPUTE CONCERNING THIS ACCESSION AGREEMENT (EACH A
“CLAIM”), THE PARTIES EXPRESSLY, INTENTIONALLY, AND DELIBERATELY WAIVE ANY RIGHT
EACH MAY OTHERWISE HAVE TO TRIAL BY JURY.  IN THE EVENT THAT THE
WAIVER OF JURY TRIAL SET FORTH IN THE PREVIOUS SENTENCE IS NOT ENFORCEABLE UNDER
THE LAW APPLICABLE TO THIS ACCESSION AGREEMENT, THE PARTIES TO THIS ACCESSION
AGREEMENT AGREE THAT ANY CLAIM, INCLUDING ANY QUESTION OF LAW OR FACT RELATING
THERETO, SHALL, AT THE WRITTEN REQUEST OF ANY PARTY, BE DETERMINED BY JUDICIAL
REFERENCE PURSUANT TO THE STATE LAW APPLICABLE TO THIS ACCESSION
AGREEMENT.  THE PARTIES SHALL SELECT A SINGLE NEUTRAL REFEREE, WHO
SHALL BE A RETIRED STATE OR FEDERAL JUDGE.  IN THE EVENT THAT THE
PARTIES CANNOT AGREE UPON A REFEREE, THE COURT SHALL APPOINT THE
REFEREE.  THE REFEREE SHALL REPORT A STATEMENT OF DECISION TO THE
COURT.  NOTHING IN THIS PARAGRAPH SHALL LIMIT THE RIGHT OF ANY PARTY
AT ANY TIME TO EXERCISE SELF-HELP REMEDIES, FORECLOSE AGAINST COLLATERAL OR
OBTAIN PROVISIONAL REMEDIES.  THE PARTIES SHALL BEAR THE FEES AND
EXPENSES OF THE REFEREE EQUALLY, UNLESS THE REFEREE ORDERS
OTHERWISE.  THE REFEREE SHALL ALSO DETERMINE ALL ISSUES RELATING TO
THE APPLICABILITY, INTERPRETATION, AND ENFORCEABILITY OF THIS
PARAGRAPH.  THE PARTIES ACKNOWLEDGE THAT IF A REFEREE IS SELECTED TO
DETERMINE THE CLAIMS, THEN THE CLAIMS WILL NOT BE DECIDED BY A
JURY.

     

    7.           Counterparts.  This
Accession Agreement may be executed in any number of counterparts which shall
together constitute but one and the same agreement.

     

    
      
         

      

      
        H-3

        
          

        

      

      
         

      

    

    IN WITNESS
WHEREOF, intending to be legally bound, each of the undersigned has caused this
Accession Agreement to be executed on its behalf by its officer thereunto duly
authorized, to take effect as of the date first above written.

     

    
      	 
      	
              BORROWER:

            	 
	 
      	 
      	 
	 
      	
              HERCULES
      TECHNOLOGY GROWTH CAPITAL, INC.

            
	 
      	 
      	 
	 
      	 
      	 
	 
      	
              By:

            	 
	 
      	 
      	 
	 
      	
              Print
      Name:

            	 
	 
      	 
      	 
	 
      	
              Title:

            	 
	 
      	 
      	 
	 
      	 
      	 
	 
      	
              ACCEDING
      LENDER:

            
	 
      	 
      	 
	 
      	
              [____________________]

            
	 
      	 
      	 
	 
      	 
      	 
	 
      	
              By:                                                                

            	 
	 
      	 
      	 
	 
      	
              Print
      Name:

            	 
	 
      	 
      	 
	 
      	
              Title:

            	 
	 
      	 
      	 
	 
      	 
      	 
	 
      	
              AGENT:

            	 
	 
      	 
      	 
	 
      	
              UNION
      BANK, N.A.,

            	 
	 
      	
              AS
      AGENT

            	 
	 
      	 
      	 
	 
      	 
      	 
	 
      	
              By:

            	 
	 
      	 
      	 
	 
      	
              Print
      Name:

            	 
	 
      	 
      	 
	 
      	
              Title:

            	 
	 
      	 
      	 
	 
      	 
      	 

    

    

    
      
         

      

      
        H-4

        
          

        

      

      
         

      

    

    SCHEDULE
C

     

    TO ACCESSION
AGREEMENT

     

     

     

     

    
      
         

      

      
        H-5

        
          

        

      

      
         

      

    

    

    SCHEDULE
D

     

    TO ACCESSION
AGREEMENT

     

    

     

     

    
 

    
      H-6

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