Document:

Applied Digital Solutions Form 8-K - Ex 10.2 - 3rd Amended Term Credit Agreement

THIRD AMENDED AND RESTATED

TERM CREDIT AGREEMENT

among

IBM CREDIT CORPORATION,

as Lender,

DIGITAL ANGEL SHARE TRUST,

as Tranche A Borrower,

and

APPLIED DIGITAL SOLUTIONS, INC.

as Tranche B Borrower

TABLE OF CONTENTS

Page

	
Section 1.

	 	
DEFINITIONS; ATTACHMENTS

	3
	 	1.1.
1.2.
1.3.	 	Special Definitions
Other Defined Terms
Attachments	3
19
19
	
Section 2.

	 	
RESTRUCTURING OF EXISTING CREDIT FACILITIES; AMOUNTS  AND TERMS OF CREDIT FACILITIES

	19
	 	2.1.
2.2.
2.3.
2.4.
2.5.
2.6.
2.7.

2.8.
2.9.
2.10.
2.11.
2.12.
2.13.	 	No Additional Credit Line

Restructuring of Existing Credit Facilities

Tranche A Facility

Tranche B Facility

Mandatory Prepayments

Optional Prepayments

Application of Payments

Maturity Date; Extension of Maturity Date

Currency

Taxes

Lockbox and Special Account

Reimbursement for Charges

Collections	19
19
20
20
21
22
22
22
22
23
23
23
24
	
Section 3.

	 	
SECURITY; COLLATERAL

	24
	 	3.1.
3.2.
3.3.
3.4.
3.5.
3.6.
3.7.
3.8.	 	Grant

Further Assurances

Power of Attorney

Communications with Obligors; Grantor Remains Liable

Proceeds to Be Turned Over to Lender

Remedies

Amendment and Restatement of Stock Pledge Agreement and Collateralized Guaranty

Ratification of Obligations under Contingent Blocked Account Agreement	24
25
25
27
27
28
30
30
	
Section 4.

	 	
CONDITIONS PRECEDENT

	30
	 	4.1.	 	Conditions Precedent to the Effectiveness of This Agreement	30
	
Section 5.

	 	
REPRESENTATIONS AND WARRANTIES

	33
	 	5.1.
5.2.
5.3.
5.4.
5.5.
5.6.
5.7.
5.8.
5.9.	 	Organization and Qualifications

Rights in Collateral; Priority of Liens

Financial Condition

No Change

No Conflicts

Enforceability

Locations of Offices, Records and Inventory

Fictitious Business Names

Organization	34
34
34
34
34
35
35
35
35

-i-

TABLE OF CONTENTS
(continued)

Page

	 	5.10.
5.11.
5.12.
5.13.
5.14.
5.15.
5.16.
5.17.
5.18.
5.19.
5.20.
5.21.
5.22.
5.23.

5.24.
5.25.
5.26.
5.27.
5.28.
5.29.
5.30.
5.31.	 	No Judgments or Litigation

No Defaults

Labor Matters

Compliance with Law

ERISA

Compliance with Environmental Laws

Federal Regulations

Intellectual Property

Licenses and Permits

Investment Company

Taxes and Tax Returns

Status of Accounts

Affiliate/Subsidiary Transactions

Accuracy and Completeness of Information

Recording Taxes

Indebtedness

Limitations on Lockboxes and Special Accounts

Solvency

Security Interest

Investment Property

Trust Agreement

Regulation U	35
36
36
36
36
37
38
38
38
39
39
39
39
40
40

40
40
40
40
40
41
41
	
Section 6.

	 	
AFFIRMATIVE COVENANTS

	41
	 	6.1.
6.2.
6.3.
6.4.
6.5.
6.6.
6.7.
6.8.
6.9.
6.10.

6.11.
6.12.
6.13.
6.14.
6.15.
6.16.
6.17.
6.18.
6.19.
6.20.
6.21.
6.22.
6.23.
6.24.	 	Financial and Other Information

Location of Collateral

Changes in Loan Parties

Legal Entity Existence

Payment of Obligations

ERISA

Environmental Matters

Collateral Books and Records/Collateral Audit

Insurance; Casualty Loss

Taxes

Compliance with Laws

Fiscal Year

Intellectual Property

Maintenance of Property

Maintenance of Security Interest

Collateral

Additional Collateral, etc.

Subsidiaries

Investment Property

Delivery of Instruments and Chattel Paper

Subsidiaries of Loan Parties

Financial Covenants; Additional Covenants

Guaranty

Trust Agreement	41
43
44
44
44
44
45
45
46
47
47
47
47

48
48
49
50
50
51
51
52
52
52
53

-ii-

TABLE OF CONTENTS
(continued)

Page

	
Section 7.

	 	
NEGATIVE COVENANTS

	53
	 	7.1.
7.2.
7.3.
7.4.
7.5.
7.6.
7.7.
7.8.
7.9.
7.10.

7.11.
7.12.
7.13.
7.14.
7.15.
7.16.
7.17.
7.18.
7.19.
7.20.
7.21.
7.22.
7.23.
7.24.	 	Financial Condition Covenants

Liens

Disposition of Assets

Legal Entity Changes

Guaranties

Restricted Payments

Employment Agreements

Capital Expenditures

Investments

Transactions with Affiliates

ERISA

Sales and Leasebacks

Additional Negative Pledges

Amendments to Restructuring Documents

Accounts

Indebtedness

Loans

Changes in Accounting Practices

Hedge Agreements

Optional Payment and Modifications of Certain Debt Instruments

Lines of Business

Change in Fiscal Year

Lockboxes and Special Accounts

Leases	53
54
54
55
55
55
55
56
56
57
57
57

57
57
57
58
58
58
58
58
58
59
59
59
	
Section 8.

	 	
DEFAULT

	59
	 	8.1.
8.2.
8.3.
8.4.
	 	Events of Default
Acceleration
Remedies
Waiver	59
62
62
63
	
Section 9.

	 	
MISCELLANEOUS

	63
	 	9.1.
9.2.
9.3.
9.4.
9.5.
9.6.
9.7.
9.8.

9.9.
9.10.
9.11.
9.12.
9.13.
9.14.	 	Term; Maturity Date

Indemnification

Additional Obligations

LIMITATION OF LIABILITY

RELEASE OF CLAIMS

Amendments; Waiver

Severability

One Loan

Additional Collateral

No Merger or Novations

Participations and Assignments

Section Titles

Binding Effect; Assignment

Cumulative Remedies	63
64
64
65
65
65
65
66
66
66
66
67
67
67

-iii-

TABLE OF CONTENTS
(continued)

Page

	 	9.15.
9.16.
9.17.
9.18.
9.19.
9.20.
9.21.
9.22.	 	Survival of Representations and Warranties

Payment of Expenses and Taxes

Confidentiality

Notices; E-Business Acknowledgment

Counterparts

SUBMISSION AND CONSENT TO JURISDICTION AND CHOICE OF LAW

JURY TRIAL WAIVER

Limitation of Liability	67
68
68
68
70
70
71
71

-iv-

TABLE OF CONTENTS
(continued)

	EXHIBIT

	 	 	 
	Exhibit 7.15	 	Loans to Affiliates	 
	

ATTACHMENTS

	 	 	 
	Attachment A

Attachment B

Attachment C

Attachment D

Attachment E

Attachment F

Attachment G

Attachment H

Attachment I

Attachment J

Attachment K

Attachment L

Attachment M

Attachment N

Attachment O

Attachment P

Attachment Q

Attachment R

Attachment S

Attachment T

Attachment U

Attachment V

Attachment W

Attachment X	 	Bank Accounts

Compliance Certificate

List of Guarantors and Guaranties

Certificate of Location of Collateral

Forms of Opinions of Counsel for Tranche A Borrower and Tranche B Borrower

Officer's Certificate

Letter-of-Credit Rights

Intellectual Property

Investment Property

Charter Amendment

Organization; Subsidiaries; Affiliates and Location of Offices, Records and Inventory

Permitted Liens

Fictitious Names

Indebtedness

Intentionally Omitted

Assignment and Acceptance Agreement

Assumption Certificate

Registration Rights Agreement

Commercial Tort Claims

Amended Warrant

Overdue Taxes and Tax Liens

Segment Reports

Judgments or Litigation

Defaults

-v-

THIRD
AMENDED AND RESTATED TERM CREDIT AGREEMENT

        This
THIRD AMENDED AND RESTATED TERM CREDIT AGREEMENT (as amended,
supplemented or otherwise modified from time to time, this
“Agreement”) is hereby made as of this 1st day of
March, 2002, by and among IBM Credit Corporation, a Delaware corporation
(“IBM Credit” or “Lender”) with a place
of business at North Castle Drive, Armonk, New York, United States of America
(“USA”), as lender, Digital Angel Share Trust, a
statutory business trust organized and governed by the laws of the State of
Delaware (“Tranche A Borrower”) and Applied Digital
Solutions, Inc. (formerly known as “Applied Cellular Technology,
Inc.”), a Missouri corporation (“Tranche B Borrower”)
with a place of business at 400 Royal Palm Way, Palm Beach, Florida 33480, USA
(Tranche A Borrower and Tranche B Borrower are each referred to herein
as a “Borrower” or, collectively,
“Borrowers”). 

WITNESSETH

        WHEREAS,
Tranche B Borrower and IBM Credit have entered into that certain Term and
Revolving Credit Agreement dated as of May 25, 1999 (the “Original
Agreement”); 

        WHEREAS,
Tranche B Borrower and IBM Credit have entered into an Amendment and
Restatement of the Original Agreement as of July 30, 1999; 

        WHEREAS,
Tranche B Borrower and Lender have entered into that certain Second Amended
and Restated Term and Revolving Credit Agreement, dated as of October 17, 2000
(as amended, supplemented or otherwise modified prior to the date hereof, the
“Existing Credit Agreement”); 

        WHEREAS,
(i) SysComm International Corporation, a Subsidiary of Tranche B Borrower, and
certain of its Subsidiaries (collectively, “SysCom”) have
entered into that certain Collateralized Guaranty, dated as of May 23, 2001 (as
amended, supplemented or otherwise modified prior to the date hereof, the
“SysComm Guaranty”) and (ii) certain other Subsidiaries of
Tranche B Borrower have entered into that certain Second Amended and
Restated Collateralized Guaranty, dated as of October 17, 2000, as amended,
supplemented or otherwise modified prior to the date hereof (collectively with
the SysComm Guaranty, the “Collateralized Guaranty”); 

        WHEREAS,
Tranche B Borrower and certain of its Subsidiaries have entered into that
certain Second Amended and Restated Stock Pledge Agreement, dated as of October
17, 2000 (as amended, supplemented or otherwise modified prior to the date
hereof, the “Stock Pledge Agreement”); 

        WHEREAS,
Tranche B Borrower and Lender have entered into the Acknowledgment, Waiver and
Amendment No. 1 to Second Amended and Restated Term and Revolving Credit
Agreement, dated as of March 30, 2001 (as amended, supplemented or otherwise
modified through the date hereof, “Amendment No. 1”); 

        WHEREAS,
under Amendment No. 1, Tranche B Borrower and Lender have agreed that
(A) Tranche B Borrower would not be obligated to pay the principal
amount due under Term Loan A of the Existing Credit Agreement on July 1, 2001
until October 1, 2001 (the “July Principal Amount”) and
(B) Tranche B Borrower would pay the July Principal Amount together
with the next principal amount payment due thereafter under Term Loan A of the
Existing Credit Agreement on October 1, 2001 (the “October
Cumulative Amount”); 

        WHEREAS,
Tranche B Borrower failed to pay to IBM Credit the October Cumulative Amount;

        WHEREAS,
Tranche B Borrower and Lender have entered into Amendment No. 2 to
Second Amended and Restated Term and Revolving Credit Agreement, dated as of
September 15, 2001 (as amended, supplemented or otherwise modified through
the date hereof, “Amendment No. 2”) to provide,
inter alia, that the October Cumulative Amount not be due and
payable until January 4, 2002, along with the principal payment currently
due on that date (the “January Cumulative Amount”); 

        WHEREAS,
based on the Financial Statements provided by Tranche B Borrower for the
months of September and October 2001, certain Events of Default have occurred
and are continuing as a result of Tranche B Borrower’s non-compliance
with certain financial covenants set forth in Section 7.16 of the
Existing Credit Agreement; 

        WHEREAS,
Tranche B Borrower and Lender have entered into Amendment No. 3 to Second
Amended and Restated Term and Revolving Credit Agreement, dated as of
December 31, 2001 (as amended, supplemented or otherwise modified through
the date hereof, “Amendment No. 3”) to provide for,
inter alia, the reset of certain financial covenants and the
postponement of the payment date of the January Cumulative Amount to
January 30, 2002; 

        WHEREAS,
Tranche B Borrower failed to pay to IBM Credit the January Cumulative Amount;

        WHEREAS,
Tranche B Borrower and Lender have entered into Amendment No. 4 to Second
Amended and Restated Term and Revolving Credit Agreement, dated as of January
31, 2002 (as amended, supplemented or otherwise modified through the date
hereof, “Amendment No. 4”) to provide for, inter
alia, the postponement of the payment date of the January Cumulative
Amount to March 1, 2002, along with the principal payment currently due on
that date (the “March Cumulative Amount”); 

        WHEREAS,
Tranche B Borrower does not expect to repay the March Cumulative Amount;

        WHEREAS,
Tranche B Borrower and Lender have entered into Amendment No. 5 to Second
Amended and Restated Term and Revolving Credit Agreement, dated as of February
27, 2002 (as amended, supplemented or otherwise modified through the date
hereof, “Amendment No. 5”) to provide for, inter
alia, the postponement of the payment date of the March Cumulative Amount
to April 2, 2002, along with the principal payment currently due on that date
(the “April Cumulative Amount”); 

        WHEREAS,
Tranche B Borrower does not expect to repay the April Cumulative Amount and all
other amounts due and payable on the Termination Date (as such term is defined
in the Existing Credit Agreement); 

        WHEREAS,
Borrowers have requested that the term and revolving credit facilities under the
Existing Credit Agreement (the “Existing Credit Facilities”) be
restructured as two (2) separate and distinct term loan facilities, in an
aggregate principal amount equal to approximately U.S.$82,111,481.96 as of
February 14, 2002 plus the Tranche B Per Diem Charge assessed
from and including February 15, 2002 to and including the Closing Date (as
defined below) (the “Restructured Credit Facilities”), plus any
accrued and unpaid interest thereon, and the Trust (as defined below) become
party to the Restructured Credit Facilities as Tranche A Borrower and
Tranche B Guarantor (as defined below); 

        WHEREAS,
Lender is willing to agree to the requested amendments, but only upon the terms
and conditions set forth herein; and 

        WHEREAS,
the parties hereto have elected to amend and restate the Existing Credit
Agreement, the Stock Pledge Agreement and the Collateralized Guaranty pursuant
to this Agreement rather than amend the Existing Credit Agreement, the Stock
Pledge Agreement and the Collateralized Guaranty or enter into a new credit
agreement or stock pledge agreement or collateralized guaranty for their
convenience and intend that all indebtedness, obligations and liens created
under the Existing Credit Agreement, the Stock Pledge Agreement and the
Collateralized Guaranty and the other Restructuring Documents be continued
hereunder and thereunder and remain in full force and effect and not be
discharged, paid, satisfied or cancelled. 

2

        NOW
THEREFORE, in consideration of the premises contained herein, any
financial accommodation heretofore, now or hereafter made by Lender and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows: 

Section 1.  DEFINITIONS; ATTACHMENTS

1.1.  Special Definitions.  The following terms shall have the following  respective  meaning in this Agreement
(such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“Accounts”:  with respect to Tranche A Borrower and Tranche B Borrower, as defined in the UCC.

“Affiliate”:
as to any Person, any other Person that, directly or indirectly, is in control
of, is controlled by, or is under common control with, such Person. For purposes
of this definition, “control” of a Person means the power, directly or
indirectly, either to (A) vote ten percent (10%) or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (B) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise. All of Borrowers’ officers, directors, joint venturers, and
partners shall also be deemed to be Affiliates of Borrowers for purposes of this
Agreement. 

“Agreement”:  as defined in the preamble hereto.

“Amended Contingent Blocked Account Agreement”:  as defined in Section 4.1(H).

“Amendment No. 1”:  as defined in the preamble hereto.

“Amendment No. 2”:  as defined in the preamble hereto.

“Amendment No. 3”:  as defined in the preamble hereto.

“Amendment No. 4”:  as defined in the preamble hereto.

“Amendment No. 5”:  as defined in the preamble hereto.

“Applicable Borrower”:  Tranche A Borrower or Tranche B Borrower, as applicable.

“April Cumulative Amount”:  as defined in the recitals hereto.

“Assignee”:  as defined in Section 9.11(B).

“Assignment and Acceptance Agreement”:  as defined in Section 9.11(B).

“Auditors”:  a nationally  recognized firm of independent  certified  public  accountants or independent  chartered
accountants, as applicable, selected by a Borrower in the country of its incorporation.

3

“Average Daily  Balance”:  for each Loan for a given period of time,  the sum of the unpaid  principal of such Loan
as of each day during such period of time, divided by the number of days in such period of time.

“Bank”:  as defined in Section 2.11.

“Borrower”:  as defined in the preamble hereto.

“Business”:  as defined in Section 5.15(B).

“Business Day”:  any day other than a Saturday,  Sunday or other day on which  commercial  banks in New York,  New
York are generally closed or on which IBM Credit is closed.

“Capital
Expenditures”: for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to Equipment (including replacements, capitalized repairs and
improvements during such period) that are required to be capitalized under GAAP
on a consolidated balance sheet of such Person and its Subsidiaries. 

“Capital Lease
Obligations”: as to any Person, the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP and, for the purposes of this
Agreement, the amount of such obligations at any time shall be the capitalized
amount thereof at such time determined in accordance with GAAP. 

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

“Chattel  Paper”:  all  “chattel  paper“ as such term is defined in the UCC and, in any event,  including,  without
limitation, all electronic chattel paper.

“Closing  Date”:  the date on which the conditions  precedent to the  effectiveness  of this Agreement set forth in
Section 4.1 hereof are satisfied or waived in writing by Lender.

“COBRA”:  the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

“Code”:  the Internal Revenue Code of 1986, as amended from time to time.

“Collateral”:  Collateral as defined in Section 3.1.

“Collateralized Guaranty”:  as defined in the fourth  recital hereto.

“Commercial Tort
Claim”: a claim arising in tort with respect to which (A) the
claimant is an organization or (B) the claimant is an individual and the
claim (i) arose in the course of the claimant’s business or profession
and (ii) does not include damages arising out of personal injury to or the
death of an individual. 

4

“Commonly
Controlled Entity”: an entity, whether or not incorporated, that is
under common control with a Borrower within the meaning of Section 4001 of
ERISA or is part of a group that includes a Borrower and that is treated as a
single employer under Section 414 of the Code. 

“Compliance Certificate”:  a certificate substantially in the form of Attachment B.

“Consolidated
Current Assets”: with respect to either Tranche B Borrower or MAS
at the date of determination, all assets which would, in accordance with GAAP,
be classified on a consolidated balance sheet of such Person and its respective
Subsidiaries as current assets; provided that Consolidated Current Assets
of Tranche B Borrower shall be determined without regard to MAS and its
Subsidiaries. 

“Consolidated
Current Liabilities”: with respect to either Tranche B Borrower or
MAS at the date of determination, all liabilities of such Person and its
Subsidiaries which, in accordance with GAAP, would be classified on a
consolidated balance sheet of such Person and its respective Subsidiaries as
current liabilities; provided that Consolidated Current Liabilities of
Tranche B Borrower shall be determined without regard to MAS and its
Subsidiaries; provided, further, that Consolidated Current
Liabilities shall exclude any liability or claim that will be satisfied by the
issuance of common stock of the Tranche B Borrower or MAS. 

“Consolidated
EBITDA”: with respect to either Tranche B Borrower or MAS for any
period, Consolidated Net Income of such Person for such period plus,
without duplication and to the extent reflected as a charge in the statement of
such Consolidated Net Income for such period, the sum of (A) income tax
expense, (B) interest expense, amortization or write-off of debt discount
and debt issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness (including the Loans), (C) depreciation and
amortization expense, (D) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (E) any extraordinary,
unusual or non-recurring non-cash expenses or losses (including, whether or not
otherwise includable as a separate item in the statement of such Consolidated
Net Income for such period, non-cash losses on sales of assets outside of the
ordinary course of business) and (F) non-cash compensation expenses
relating to stock options, impairment losses, any liability or claim that will
be satisfied by the issuance of common stock of the Tranche B Borrower or MAS
and losses on sales of stock. 

“Consolidated Net
Income”: with respect to either Tranche B Borrower or MAS for any
period, the consolidated net income (or loss) of such Person and its respective
Subsidiaries, determined on a consolidated basis in accordance with GAAP;
provided, that, there shall be excluded (A) the income (or
deficit) of any Person accrued prior to the date it becomes a Subsidiary of such
Borrower or is merged into or consolidated with such Borrower or any of its
Subsidiaries, (B) the income (or deficit) of any Person (other than a
Subsidiary of such Borrower) in which such Borrower or any of its respective
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by such Borrower or such Subsidiary in the form of
dividends or similar distributions, (C) the undistributed earnings of any
Subsidiary of such Borrower to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any
Restructuring Document) or Requirement of Law applicable to such Subsidiary and
(D) Consolidated Net Income of Tranche B Borrower shall be determined
without regard to MAS and its Subsidiaries. 

“Contingent  Blocked Account  Agreement”:  that certain Contingent Blocked Account Agreement,  dated as of March 9,
2001, among IBM Credit, KeyBank, N.A., the Tranche B Borrower and certain of its Subsidiaries parties thereto.

5

“Contractual  Obligation”:  as to any  Person,  any  provision  of any  security  issued  by such  Person or of any
agreement,  instrument or other  undertaking  to which such Person is a party or by which it or any of its property
is bound.

“Continuing
Directors”: the directors of MAS on the Closing Date, after giving
effect to the Merger and the other transactions contemplated hereby, and each
other director, if, in each case, such other director’s nomination for
election to the board of directors of MAS is recommended by at least sixty-six
and two thirds percent (66-2/3%) of the then Continuing Directors or such other
director is otherwise satisfactory to Lender. 

“Copyrights”:
(A) all copyrights arising under the laws of the United States, any other
country or any political subdivision thereof, whether registered or unregistered
and whether published or unpublished (including, without limitation, those
listed in Attachment H), all registrations and recordings thereof, and
all applications in connection therewith, including, without limitation, all
registrations, recordings and applications in the United States Copyright
Office, and (B) the right to obtain all renewals thereof. 

“Copyright
Licenses”: all written agreements naming each Grantor as licensors or
licensees (including, without limitation, those listed in Attachment H),
granting any right under any Copyright, including, without limitation, the grant
of rights in all derivative works based upon any Copyright, and all renewals and
extensions thereof. 

“Default”:  either  (A) an Event of Default  or (B) any event or  condition  which,  but for the  requirement  that
notice be given or time lapse or both, would be an Event of Default.

“Deposit
Account”: as defined in the UCC and, in any event, including, without
limitation, any demand, time, savings, passbook or like account maintained with
a depositary institution and all funds from time to time credited to any account
referred to in this definition. 

“Deposit Account
Control Agreement”: any agreement among any applicable Loan Party, any
applicable Bank and IBM Credit conveying to IBM Credit control over any Deposit
Account of such Loan Party, in form and substance satisfactory to IBM Credit. 

“Designated Senior Indebtedness”:  as defined in Section 7.20.

“Digital  Angel”:  Digital Angel  Corporation,  a Delaware  corporation,  to be renamed  Digital Angel  Acquisition
Corp. in connection with the Merger, and its successors.

“Disposition”:  with  respect  to any  property,  any sale,  lease,  sale and  leaseback,  assignment,  conveyance,
transfer or other disposition thereof.  The terms “Dispose“ and “Disposed of“ shall have correlative meanings.

“Dollars“ and “$”:  dollars in lawful currency of the United States.

“Domestic Subsidiary”:  a direct Subsidiary of the Tranche B Borrower,  which direct Subsidiary is incorporated in
the United States or in the District of Columbia.

“E-Documents”:  as defined in Section 9.18.

“Employment
Agreement”: as applicable, (A) that certain Employment Agreement, dated
as of March 1, 2000, by and between Tranche B Borrower and Richard J.
Sullivan and all amendments thereto, and (B) that certain Employment
Agreement, dated as of March 1, 2000, by and between Tranche B Borrower and
Garrett A. Sullivan and any and all subsequent agreements between them and
(C) that certain Employment Agreement, dated as of November 22, 2000,
by and between Tranche B Borrower and Jerome C. Artigliere. 

6

“Environmental
Laws”: any and all foreign, Federal, state, local or municipal laws,
rules, orders, regulations, statutes, ordinances, codes, decrees, judicial
decisions, requirements of any Governmental Authority in the United States or
other Requirements of Law (including common law) regulating, relating to or
imposing liability or standards of conduct concerning protection of human health
or the environment, as now or may at any time hereafter be in effect. 

“Environmental
Liability”: any claim, demand, obligation, cause of action, allegation,
order, violation, injury, judgment, penalty or fine, cost or expense, resulting
from the violation or alleged violation of any Environmental Laws or the
imposition of any Lien pursuant to any Environmental Laws. 

“Equipment”:
all “equipment” as such term is defined in the UCC and, in any event,
including without limitation, all furniture, furnishings, motor vehicles,
trucks, trailers, vessels, aircraft, rolling stock, machinery and fixtures and
all parts thereof and all accessions thereto. 

“Equity
Interests”: with respect to any Person, (A) all shares, interests,
participations, rights or other equivalents (however designated, whether voting
or non-voting) of or interests in corporate or capital stock, including without
limitation, shares of preferred or preference stock of such Person, (B) all
partnership interests (whether general or limited) of such Person, (C) all
membership interests or limited liability company interests in such Person,
(D) all other equity or ownership interests in such Person of any other
type and (E) all warrants, rights or options to purchase any of the
foregoing. 

“ERISA”:  the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ERISA
Group”: Each Tranche A Borrower and Tranche B Borrower, any Subsidiary
and all members of a controlled group of corporations, all trades or businesses
(whether or not incorporated) under common control and all affiliated service
group members that, together with Tranche A Borrower and Tranche B
Borrower or any of its respective Domestic Subsidiaries, are treated as a single
employer under Section 414 of the Code. 

“Event of Default”:  as defined in Section 8.1.

“Existing Credit Agreement”:  as defined in the preamble hereto.

“Existing Credit Facilities”:  as defined in the preamble hereto.

“Extraordinary
Receipt”: any cash received by or paid to or for the account of any
Person not in the ordinary course of business, including, without limitation,
cash received by way of tax refunds, pension plan reversions, proceeds of
insurance (other than proceeds of business interruption insurance to the extent
such proceeds constitute compensation for lost earnings), condemnation awards
(and payments in lieu thereof), indemnity payments and any purchase price
adjustment received in connection with any purchase agreement;
provided, however, that an Extraordinary Receipt
shall not include cash receipts received from proceeds of insurance,
condemnation awards (or payments in lieu thereof) or indemnity payments to the
extent that such proceeds, awards or payments in respect of loss or damage to
equipment, fixed assets or real property are applied (or in respect of which
expenditures were previously incurred) to replace or repair the equipment, fixed
assets or real property in respect of which such proceeds were received in
accordance with the terms of the Agreement, so long as such application is made
within six (6) months after the occurrence of such damage or loss. 

7

“Facility”:  each of the Tranche A Facility and the Tranche B Facility.

“Finance Charge”:  the Tranche A Loan Finance Charge, or the Tranche B Loan Finance Charge.

“Financial
Statements”: the consolidated and consolidating balance sheets
(including, without limitation, securities such as stocks and investment bonds),
statements of operations, statements of cash flows and statements of changes in
shareholder’s or other applicable equity of each Borrower and its
respective Subsidiaries for the period specified, prepared in accordance with
GAAP and consistent with prior practices. 

“GAAP”:
generally accepted accounting principles in the United States as in effect from
time to time, except that for purposes of Section 6.1, GAAP shall be
determined on the basis of such principles in effect on the date hereof and
consistent with those used in the preparation of the most recent audited
financial statements referred to in Section 5.3. In the event that
any “Accounting Change” (as defined below) shall occur and such
change results in a change in the method of calculation of financial covenants,
standards or terms in this Agreement, then each Borrower and IBM Credit agree to
enter into negotiations in order to amend such provisions of this Agreement so
as to equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating such Borrower’s financial condition shall be the
same after such Accounting Changes as if such Accounting Changes had not been
made. Until such time as such an amendment shall have been executed and
delivered by each Borrower and IBM Credit, all financial covenants, standards
and terms in this Agreement shall continue to be calculated or construed as if
such Accounting Changes had not occurred. “Accounting Changes”
refers to changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC. 

“General
Intangibles”: all “general intangibles” as such term is
defined in the UCC and, in any event, including, without limitation, with
respect to a Borrower, (A) all tax refunds, claims for tax refunds, and tax
credits, (B) all permits, licenses, approvals, authorizations, consents,
variances, and certifications of any Governmental Authority, (C) all
claims, tort claims and causes of action, (D) all property, casualty,
liability, and other insurance of any kind or character, and all insurance
claims and insurance refund claims, (E) all letters of credit, (F) all
payment intangibles (as defined in the UCC), (G) all lists, books, records,
recorded knowledge, ledgers, files (whether in printed form or stored
electronically), designs, blueprints, data, specifications, engineering reports,
manuals, computer records, computer programs and computer software (including
source codes), (H) all internet domain names and websites and related
licenses and agreements, (I) all rights, title and interest in Intellectual
Property, including any unregistered Intellectual Property, and (J) all
contracts, agreements, instruments and indentures in any form, and portions
thereof, to which any Grantor is a party or under which such Borrower or any
Grantor has any right, title or interest or to which such Borrower or any
Grantor or any property of such Borrower or any Grantor is subject, as the same
may from time to time be amended, supplemented or otherwise modified, including,
without limitation, (i) all rights of such Borrower or any Grantor to
receive moneys due and to become due to it thereunder or in connection
therewith, (ii) all rights of such Borrower or any Grantor to damages
arising thereunder and (iii) all rights of such Borrower or any Grantor to
perform and to exercise all remedies thereunder. 

“Governmental
Authority”: any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative functions of or pertaining to government,
any securities exchange and any self-regulatory organization (including the
National Association of Insurance Commissioners). 

8

“Grantor”:  each of the Borrowers and any of their respective  Subsidiaries  that have granted a security  interest
in Collateral to Lender.

“Guarantee
Obligation”: as to any Person (the “guaranteeing
person”), any obligation of (A) the guaranteeing person or
(B) another Person (including any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a reimbursement,
counter-indemnity or similar obligation, in either case guaranteeing or in
effect guaranteeing any Indebtedness, leases, dividends or other obligations
(the “primary obligations”) of any other third Person (the
“primary obligor”) in any manner, whether directly or
indirectly, including any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or
supply funds (a) for the purchase or payment of any such primary obligation
or (b) to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary obligor,
(iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however,
that the term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and
(b) the maximum amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such Guarantee Obligation,
unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person’s
maximum reasonably anticipated liability in respect thereof as determined by a
Borrower in good faith. 

“Guarantor”:  each of the Tranche A Guarantor and Tranche B Guarantor.

“Guaranty”:  each guaranty entered into by a Guarantor for the benefit of Lender.

“Hazardous Substances”:  all  substances,  wastes,  pollutants,  contaminants  or hazardous of toxic  chemicals or
materials,  to the  extent  subject  to  regulation  as  “hazardous substances”  or  “hazardous  waste”  under any
Environmental Laws.

“Hedge
Agreements”: all interest, commodity, bond or equity, swaps, options,
caps, collar or floor agreements or other derivatives or similar arrangements or
transactions dealing with interest rates or currency exchange rates or the
exchange of nominal interest obligations, either generally or under specific
contingencies. 

“HIPAA”
the Health Insurance Portability and Accountability Act of 1996, as amended. 

“Inactive Subsidiary”:  each of the Subsidiaries listed on Attachment K.

“IBM Credit”:  as defined in the preamble hereto.

“Indebtedness”:
of any Person at any date, without duplication, (A) all indebtedness of such
Person for borrowed money, (B) all obligations of such Person for the
deferred purchase price of property or services (other than current trade
payables incurred in the ordinary course of such Person’s business),
(C) all obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments, (D) all indebtedness created or arising under
any conditional sale or other title retention agreement 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), (E) all Capital Lease Obligations of such
Person, (F) all obligations of such Person, contingent or otherwise, as an
account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements, (G) the liquidation value of
all redeemable preferred capital stock of such Person, (H) all Guarantee
Obligations of such Person in respect of obligations of the kind referred to in
clauses (A) through (G) above, (I) all obligations of
the kind referred to in clauses (A) through (H) above secured
by (or for which the holder of such obligation has an existing right, contingent
or otherwise, to be secured by) any Lien on property (including accounts and
contract rights) owned by such Person, whether or not such Person has assumed or
become liable for the payment of such obligation, and (J) all obligations
of such Person in respect of Hedge Agreements. The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness expressly provide that such Person is not liable therefor. 

9

“Indemnified Liabilities”:  as defined in Section 9.16.

“Indemnified Person”:  as defined in Section 9.2.

“Indemnitee”:  as defined in Section 9.16.

“Insolvency”:  with respect to any  Multiemployer  Benefit Plan, the condition  that such Plan is insolvent  within
the meaning of Section 4245 of ERISA.

“Insolvent”:  pertaining to a condition of Insolvency.

“Intellectual Property”:  as defined in Section 5.17.

“Intercompany  Note”:  any promissory note evidencing  loans or other extensions of credit made by each Borrower to
any of its Subsidiaries or by any Subsidiary Grantor to any other Subsidiary or a Borrower.

“Intercreditor Agreement”:  as defined in Section 4.1.

“Interest
Expense”: for any period, the aggregate consolidated interest expense
of each Borrower and its respective Subsidiaries during such period in respect
of Indebtedness determined on a consolidated basis in accordance with GAAP,
including, without limitation, amortization of original issue discount on any
Indebtedness and of all fees payable in connection with the incurrence of such
Indebtedness (to the extent included in interest expense), the interest portion
of any deferred payment obligation and the interest component of any capital
lease obligations. 

“Inventory”":  all "inventory" as such term is defined in the UCC and, in any event,  including without  limitation,
all finished goods, and all raw materials and work in process.

“Investment”:
with respect to any Person (the “Investor”), (A) any investment
by the Investor in any other Person, whether by means of share purchase, capital
contribution, purchase or other acquisition of a partnership or joint venture
interest, loan, time deposit, demand deposit or otherwise, and (B) any
guaranty by the Investor of any Indebtedness or other obligation of any other
Person. 

“Investment  Property”:
the collective  reference to (A) all “investment  property” as such term is defined in the
UCC and  (B) whether or not  constituting  “investment  property” as so defined,  all Pledged Notes and all Pledged
Interests.

10

“Issuers”:  the collective reference to each issuer of any Investment Property.

“January Cumulative Amount”:  as defined in the recitals hereto.

“July Principal Amount”:  as defined in the recitals hereto.

“Lender”:  as defined in the preamble hereto.

“Letter-of-Credit
Right”: as defined in the UCC, including but not limited to any right
to payment or performance, as identified in Attachment G under a letter
of credit, whether or not the beneficiary has demanded or is at the time
entitled to demand payment or performance. 

“Lien”:
any pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), charge or other security interest or any preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement and any capital lease having substantially the same economic effect as
any of the foregoing). 

“Loan”:  the collective reference to the Tranche A Loan and the Tranche B Loan.

“Loan  Expenses”:  all costs,  fees and  expenses  incurred  in  connection  with the  preparation,  execution  and
delivery  of the  Restructuring  Documents  and  the  transactions  contemplated  by the  Restructuring  Documents,
including without limitation:

        (A)  the reasonable  fees,  out-of-pocket  expenses and  disbursements of Jones,  Day, Reavis & Pogue,  special
counsel to IBM Credit;

        (B)  the reasonable fees,
out-of-pocket expenses and disbursements of Ernst & Young, special
consultant for Jones, Day, Reavis & Pogue on behalf of IBM Credit; 

        (C)  the reasonable fees, out-of-pocket expenses and disbursements of the Trustee;

        (D)  the reasonable fees,  out-of-pocket  expenses and  disbursements of Advisory Board Members of the Trust as
set forth in the Trust Agreement;

        (E)  any and all expenses  incurred in  connection  with any and/or all lien  searches in respect of any of the
Loan Parties; and

        (F)  any and all fees and
expenses incurred in filing any UCC-1 financing statements. 

“Loan Party”:  the collective  reference to each Borrower and any of their respective  Subsidiaries  other than MAS
that are parties to a Restructuring Document.

“Lockbox”:  as defined in Section 2.11.

“Losses”:  as defined in Section 9.2.

“March Cumulative Amount”:  as defined in the recitals hereto.

“MAS”: after giving effect to the Merger,  Medical Advisory Systems,  Inc., a Delaware  corporation,  to be renamed
Digital Angel Corporation in connection with the Merger, a subsidiary of Tranche A Borrower, and its successors.

11

“MAS
Stock”: the common stock, par value U.S.$.005 per share, of MAS, and
any stock into which such common stock shall have been changed, any stock
resulting from any reclassification of such common stock, any other shares of
stock issued or issuable with respect thereto (whether by way of a stock
dividend or stock split or in exchange for or upon conversion of such shares or
otherwise in connection with a combination of shares, recapitalization, merger,
consolidation or other corporate reorganization), and all other stock of any
class or classes (however designated) of MAS (or its successors) the holders of
which have the right, without limitation as to amount, either to all or to a
share of the balance of current dividends or liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference. 

“Material Adverse
Effect”: a material adverse effect (A) on the business, operations,
results of operations, assets condition (financial or otherwise) or prospects of
each Borrower and its respective Subsidiaries or any other Loan Party (taken
individually or as a whole), (B) on the aggregate value of the Collateral
or the aggregate amount which IBM Credit would be likely to receive (after
giving consideration to reasonably likely delays in payment and reasonable costs
of enforcement) in the liquidation of such Collateral to recover the Obligations
in full, (C) on the validity or enforceability of this Agreement or any
document related to this Agreement, or (D) on the rights and remedies of
IBM Credit under this Agreement or any document related to this Agreement. 

“Material
Environmental Amount”: an amount payable by each Borrower and/or its
respective Subsidiaries or any other Loan Party in excess of U.S.$200,000 for
remedial costs, compliance costs, compensatory damages, punitive damages, fines,
penalties or any combination thereof. 

“Materials of
Environmental Concern”: any gasoline or petroleum (including crude oil
or any fraction thereof) or petroleum products or any hazardous or toxic
substances, materials or wastes, defined or regulated as such in or under any
Environmental Law, including without limitation, asbestos, polychlorinated
biphenyls and urea-formaldehyde insulation. 

“Maturity Date”:  collective reference to Tranche A Loan Maturity Date and Tranche B Loan Maturity Date.

“Merger”: the merger of Acquisition  Subsidiary,  Inc., a Delaware corporation and wholly-owned  Subsidiary of MAS,
with and into Digital Angel in accordance with the provisions of the Merger Agreement.

“Merger  Agreement”:  that  certain  Agreement  and Plan of  Merger,  dated as of  November 1,  2001,  by and among
Tranche B Borrower,  Digital Angel, MAS, and Acquisition Subsidiary,  Inc., a Delaware corporation and wholly-owned
subsidiary of MAS, in the form furnished to IBM Credit on November 6, 2001.

“Moody's”:  Moody's Investor's Services, Inc.

“Multiemployer Benefit Plan”:  as defined in Section 5.14(H).

“Net Cash
Proceeds”: with respect to any sale, lease, transfer or other
disposition of any asset or property by any Person, or any Extraordinary Receipt
received by or paid to or for the account of any Person, the aggregate amount of
cash received from time to time (whether as initial consideration or through
payment or disposition of deferred consideration) by or on behalf of such Person
in connection with such transaction after deducting therefrom only (without
duplication) (A) reasonable and customary brokerage commissions,
underwriting fees and discounts, legal fees, finder’s fees and other
similar fees and commissions and (B) the amount of taxes payable in
connection with or as a result of such transaction is required to be paid upon
such disposition, in each case to the extent, but only to the extent, that the
amounts so deducted are, at the time of receipt of such cash, actually paid to a
Person that is not an Affiliate of such Person and are properly attributable to
such transaction or to the asset that is subject thereof. 

12

“Non-Excluded Taxes”:  as defined in Section 2.10(A).

“October Cumulative Amount”:  as defined in the recitals hereto.

“Obligations”:
(A) the unpaid principal of and interest on (including interest accruing after
the maturity of Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to each Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Loans payable from
such Borrower to Lender, (B) all other obligations, liabilities and
Indebtedness of any kind and nature whatsoever now or hereafter arising, owing,
due or payable from any Loan Party or any other Subsidiaries of the Borrowers to
Lender, whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, out of, or in
connection with, any Restructuring Document made, delivered or given in
connection herewith or therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including all
fees, charges and disbursements of counsel to Lender that are required to be
paid by such Loan Party pursuant hereto) or otherwise and (C) the unpaid
principal of and interest on (including interest accruing after the maturity of
loans and interest accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to each applicable borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the loans and other
extensions of credit payable from any Subsidiary of either Borrower to Lender
pursuant to any other loan documentation. 

“October Cumulative Amount”:  as defined in the preamble hereto.

“Original Agreement”:  as defined in the preamble hereto.

“Other
Taxes”: any and all present or future stamp or documentary taxes or any
excise or property taxes, charges or similar levies arising (A) in respect
of the Collateral, (B) from any payment made hereunder or (C) from the
execution, delivery or enforcement of, or otherwise with respect to, any
Restructuring Document. 

“Outstanding
Loans”: at any time of determination, the sum of (A) the unpaid
principal amount of all Loans that have been made by Lender, and (B) any
finance charge, fee, expense or other amount related to Loans charged to each
Borrower’s account with Lender. 

“Outstanding
Tranche A Loan”: at any time of determination, the sum of (A) the
unpaid principal amount of the Tranche A Loan that have been made by
Lender; and (B) any finance charge, fee, expense or other amount related to
the Tranche A Loan charged to Tranche A Borrower’s account with
Lender. 

“Outstanding
Tranche B Loan”: at any time of determination, the sum of (A) the
unpaid principal amount of all Tranche B Loan that have been made by
Lender; and (B) any finance charge, fee, expense or other amount related to
the Tranche B Loan charged to the accounts of the Tranche B Borrower
with Lender. 

“Patent
Licenses”: all agreements, whether written or oral, providing for the
grant by or to each Grantor of any right to make, use, sell, offer to sell, or
import any invention covered in whole or in part by a Patent, including, without
limitation, those listed on Attachment H, and all extensions and
renewals thereof. 

13

“Patents”:
(A) all letters patent including, without limitation, all utility patents,
design patents, industrial designs and utility model registrations of the United
States or any other country, or any political subdivision thereof and all
reissues and extensions thereof, including, without limitation, those listed on
Attachment H, (B) all applications for letters patent of the
United States or any other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, those listed on
Attachment H, and (C) all rights to obtain any reissues,
reexaminations, or extensions of the foregoing. 

“PBGC”:  as defined in Section 5.14(H).

“Participants”:  as defined in Section 9.11(A).

“Permitted
Disposition”: (i) any Disposition by any Borrower or other Loan Party
or Subsidiary thereof other than MAS, no matter how structured, of all or any
material part of the assets or property of such Borrower or any of its
Subsidiaries other than MAS and (ii) any Disposition of MAS Stock in
accordance with the terms of the Trust Agreement, provided that, in each
case (i) and (ii), (A) such disposition will not result in the breach of
any of the financial covenants contained in this Agreement and (B) one
hundred percent (100%) of the Net Cash Proceeds in respect of such Disposition
are used to prepay or repay the Loans in the manner set forth in Section
2.5. 

“Permitted Indebtedness”:  any of the following:

        (A)  Indebtedness to Lender;

        (B)  Indebtedness described in Attachment N;

        (C)  Purchase Money Indebtedness;

        (D)  guaranties in favor of Lender;

14

        (E)  Indebtedness incurred on account of loans permitted under Section 7.17; and

        (F)  
other Indebtedness consented to by IBM Credit in writing prior to incurring such
Indebtedness. 

“Permitted Liens”:  any of the following:

        (A)  Liens which are the subject of an Intercreditor Agreement in effect from time to
time between Lender and any other secured creditor; 

        (B)  Purchase Money Security Interests;

        (C)  Liens described in Attachment L;

        (D)  
Liens of warehousemen, mechanics, materialmen, workers, repairmen, common
carriers, landlords and other similar Liens arising by operation of law or
otherwise, not waived in connection herewith, for amounts that are not yet due
and payable or being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted if an adequate reserve or other appropriate
provisions shall have been made therefor as required to be in conformity with
GAAP and an adverse determination in such proceedings could not reasonably be
expected to have a Material Adverse Effect; 

        (E)  
attachment or judgment Liens described in Attachment L and all other
attachment or judgment Liens individually or in the aggregate not in excess of
U.S.$1,000,000 (exclusive of (i) any amounts that are duly bonded to the
satisfaction of IBM Credit or (ii) any amount fully covered by insurance as
to which the insurance company has acknowledged its obligation to pay such
judgment in full); 

        (F)  
easements, rights-of-way, restrictions and other similar encumbrances incurred
in the ordinary course of business which, in the aggregate, are not substantial
in amount and which do not materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of each Borrower; 

        (G)  
extensions and renewals of the foregoing Permitted Liens; provided, that
(i) the aggregate amount of such extended or renewed Liens do not exceed
the original principal amount of the Indebtedness which it secures,
(ii) such Liens do not extend to any property other than property already
subject to such Liens and (iii) such extended or renewed Liens are on terms
and conditions no more restrictive than the terms and conditions of the Liens
being extended or renewed; 

        (H)  
Liens arising from deposits or pledges to secure bids, tenders, contracts,
leases, surety and appeal bonds and other obligations of like nature arising in
the ordinary course of each Borrower’s business; 

        (I)  
Liens for taxes, assessments or governmental charges not delinquent or being
contested, in good faith, by appropriate proceedings promptly instituted and
diligently conducted if an adequate reserve or other appropriate provisions
shall have been made therefor as required in order to be in conformity with GAAP
and an adverse determination in such proceedings could not reasonably be
expected to have a Material Adverse Effect; 

        (J)  
Liens arising out of deposits in connection with workers’ compensation,
unemployment insurance or other social security or similar legislation; 

        (K)  Liens arising pursuant to any Restructuring Document; and

        (L)  
other Liens consented to by IBM Credit in writing prior to incurring such Lien. 

“Person”:
any individual, association, firm, corporation, limited liability company,
partnership, business or other trust, unincorporated organization, joint
venture, joint stock company, Governmental Authority or other entity whatsoever. 

“Plan”: at
a particular time, any employee benefit plan that is covered by ERISA or subject
to the minimum funding standards under Section 412 of the Code and in
respect of which Borrower or a Commonly Controlled Entity is or has at any time
been (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined
in Section 3(5) of ERISA. 

“Pledged
Interests”: all Equity Interests of or in any Person that may be issued
or granted to, or held or owned by, each Borrower or any other Loan Party,
including each Subsidiary Grantor, including, without limitation, the Equity
Interests described on Attachment I hereto, and all certificates
representing such Equity Interests. 

“Pledged  Notes”:  all promissory  notes listed on Attachment I, all  Intercompany  Notes at any time issued to any
Subsidiary and all other promissory notes issued to or held by any Loan Party.

15

“Policies”:  all policies of insurance  required to be maintained by each Borrower  under any of the  Restructuring
Documents.

“Pro Forma Balance Sheet”:  as defined in Section 5.3.

“Projections”:  as defined in Section 6.1(E).

“Properties”:  as defined in Section 5.15(A).

“Purchase Money
Indebtedness”: any Indebtedness (including capital leases) incurred to
finance the acquisition of assets to be used in each Borrower’s business
not to exceed the lesser of (A) the purchase price or acquisition cost of
such assets and (B) the fair market value of such assets at the time of
such acquisition. 

“Purchase Money Security Interest”:  any security interest securing  Purchase Money  Indebtedness,  which security
interest applies solely to the particular asset acquired with such Purchase Money Indebtedness.

“Recovery  Event”:  any  settlement  of or payment in respect of any  property or casualty  insurance  claim or any
condemnation proceeding relating to any asset of any Loan Party.

“Registration  Rights Agreement”:  the Registration Rights Agreement,  dated as of the Closing Date, by and between
MAS and Tranche B Borrower as attached hereto as Attachment R.

“Regulation
U”: Regulation U of the Board of Governors of the Federal Reserve
System of the United States (or any successor) as in effect from time to time. 

“Reorganization”:   with  respect  to  any  Multiemployer  Benefit  Plan,  the  condition  that  such  plan  is  in
reorganization within the meaning of Section 4241 of ERISA.

“Reportable  Event”:  any of the events set forth in  Section 4043(c) of ERISA, other than those events as to which
the thirty (30) day notice  period is waived under  subsection  .27,  .28,  .29,  .30, .31, .32, .34 or .35 of PBGC
Reg. § 4043.

“Requirement of
Law”: as to any Person, the Certificate of Incorporation and by-laws,
trust agreement or other organizational or governing documents of such Person,
and any law, treaty, rule or regulation or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject. 

“Restricted Payments”:  as defined in Section 7.6.

“Restructured Credit Facilities”:  as defined in the preamble hereto.

“Restructuring
Documents”: the collective reference to this Agreement, the Amended
Contingent Blocked Account Agreement, the Deposit Account Control Agreements,
the Trust Agreement, the Merger Agreement, the Registration Rights Agreement and
any security agreements, leases, instruments, documents, guarantees, schedules
of assignment, contracts and similar agreements, including schedules,
attachments, exhibits and ancillary documentation or other supporting documents,
executed by or on behalf of each Borrower or any other Loan Party and delivered
to Lender, pursuant to this Agreement or otherwise, and all amendments,
supplements and other modifications to the foregoing from time to time. 

“S&P”:  Standard & Poor's Corporation.

16

“SEC”:  the Securities and Exchange Commission, any successor thereto and any analogous Governmental Authority.

“Securities Act”:  the Securities Act of 1933, as amended.

“Single  Employer  Plan”:  as any  Plan  that is  covered  by Title IV of  ERISA,  but that is not a  Multiemployer
Benefit Plan.

“Solvent”:
when used with respect to any Person, means that, as of any date of
determination, (a) the amount of the “present fair saleable value” of
the assets of such Person will, as of such date, exceed the amount of all
“liabilities of such Person,” as of such date, as such quoted terms
are determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable value
of the assets of such Person will, as of such date, be greater than the amount
that will be required to pay the liability of such Person on its debts as such
debts become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they mature. For
purposes of this definition, (i) “debt” means liability on a
“claim,” and (ii) “claim” means any (x) 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 (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or not such
right to an equitable remedy is reduced to judgment, fixed, contingent, matured
or unmatured, disputed, undisputed, secured or unsecured. 

“Special Account”:  as defined in Section 2.11.

“Stated  Maturity  Date”:  the collective  reference to the Tranche A  Loan Stated  Maturity Date and the Tranche B
Loan Stated Maturity Date.

“Stock Pledge Agreement”:  as defined in the preamble hereto.

“Subsidiary”:
as to any Person, a corporation, partnership, limited liability company or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a
“Subsidiary” or to “Subsidiaries” in this Agreement shall
refer to a Subsidiary or Subsidiaries of a Borrower. For the avoidance of doubt,
MAS and its subsidiaries shall be considered Subsidiaries of Tranche A
Borrower. 

“Supporting  Obligation”:  any  Letter-of-Credit  Right or  secondary  obligation  that  supports  the  payment  or
performance of an Account,  Chattel Paper, a document,  a General Intangible,  an instrument,  Investment Property,
or any other Collateral.

“SysComm”:  as defined in the preamble hereto.

“Taxes”:  as defined in Section 2.10.

“Trademarks”:
(A) all trademarks, trade names, corporate names, company names, business names,
fictitious business names, service marks, logos, words, terms, names, symbols
and devices and all combinations thereof, and all other source or business
identifiers, and all goodwill of the business connected with the use thereof as
symbolized thereby, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, including, without
limitation, those listed on Attachment H, and (B) the right to
obtain all renewals and extensions thereof. 

17

“Trademark  Licenses”:  all agreements,  whether written or oral,  providing for the grant by or to each Grantor of
any right to use any Trademark,  including, without limitation,  those listed on Attachment H,  and all renewals of
extensions thereof.

“Tranche A Borrower”:  as defined in the preamble hereto.

“Tranche A Facility”:  as described in Section 2.3.

“Tranche A
Guarantor”: each of the Tranche B Borrower and its Subsidiaries
(other than MAS, after giving effect to the Merger), as a guarantor for
Tranche A Borrower’s Obligations under the Tranche A Facility, as
identified in Attachment C. 

“Tranche A Loan”:  as defined in Section 2.2(B).

“Tranche A Loan Commencement Date”:  the Closing Date.

“Tranche A Loan Finance Charge”:  as defined in Section 2.3(a)(i).

“Tranche A Loan
Maturity Date”: either (i) Tranche A Loan Stated Maturity Date,
(ii) date on which Tranche A Loan may become or be declared due and
payable pursuant to Section 8, or (iii) applicable date
determined under Section 2.8. 

“Tranche A Loan Stated Maturity Date”:  February 28, 2003.

“Tranche A Restructuring Fee”:  U.S.$200,000.

“Tranche B Borrower”:  as defined in the preamble hereto.

“Tranche B Facility”:  as described in Section 2.4.

“Tranche B  Guarantor”:  the Tranche A Borrower,  as a guarantor  for Tranche B  Borrower's  Obligations  under the
Tranche B Facility, as identified in Attachment C.

“Tranche B Loan”:  as defined in Section 2.2(C).

“Tranche B Loan Commencement Date”:  the Closing Date.

“Tranche B Loan Finance Charge”:  as defined in Section 2.4(a)(i).

“Tranche B Loan
Maturity Date”: either (i) the Tranche B Loan Stated Maturity Date,
(ii) the date on which Tranche B Loan may become or be declared due
and payable pursuant to Section 8, or (iii) the applicable date
determined under Section 2.8. 

“Tranche B Loan Stated Maturity Date”:  February 28, 2003.

“Tranche B Per Diem Charge”: U.S.$11,535.21.

18

“Tranche B Restructuring Fee”: U.S.$50,000.

“Trust”:  Digital Angel Share Trust.

“Trust  Agreement”:  the Trust Agreement of the Trust,  dated as of  February 28,  2002, by and between the Trustee
and Tranche B Borrower.

“Trustee”:  Wilmington Trust Company,  a Delaware banking  corporation,  not in its individual  capacity but solely
as trustees under the Trust Agreement.

“UCC”:  the Uniform Commercial Code as from time to time in effect in the State of New York.

“Voting Stock”:  securities,  the holders of which are  ordinarily,  in the absence of  contingencies,  entitled to
elect the corporate directors (or persons performing similar functions).

1.2.  Other Defined Terms.  Terms not otherwise defined in this Agreement which are defined in the UCC.

1.3.  Attachments.   All  attachments,   exhibits,  schedules  and  other  addenda  hereto,  including,  without
limitation, attachments, are specifically incorporated herein and made a part of this Agreement.

Section 2. RESTRUCTURING OF EXISTING CREDIT FACILITIES; AMOUNTS
AND TERMS OF
CREDIT FACILITIES

2.1.  No  Additional  Credit  Line.  Subject to the terms and  conditions  set forth in this  Agreement,  on and
after the  Closing  Date,  Lender  does not have the  obligation  to make  additional  Loans,  other than the Loans
already made under the Existing Credit Facilities.

2.2.  Restructuring of Existing Credit Facilities

        (A)  Under the Existing
Credit Facilities, Lender has made Loans to Tranche B Borrower in an
aggregate principal amount equal to U.S.$82,111,481.96 as of February 14,
2002. 

        (B)  On the Closing Date,
Tranche B Borrower will transfer to Tranche A Borrower, to own and to
sell, the MAS Stock held by Tranche B Borrower after giving effect to the
Merger. On the Closing Date, in consideration of receipt of the MAS Stock and
subject to the terms and conditions of this Agreement, Tranche B Borrower
will assign to Tranche A Borrower and Tranche A Borrower will assume
from Tranche B Borrower, the rights and obligations of Tranche B
Borrower under the Existing Credit Agreement in an aggregate principal amount
equal to U.S.$68,000,000, which will be immediately converted into a single term
loan (the “Tranche A Loan”), plus any accrued and unpaid
interest thereon. 

        (C)  On the Closing Date,
upon consummation of the transactions contemplated in Section 2.2(B)
hereof, the remaining term and revolving loans under the Existing Credit
Facilities, in an aggregate principal amount equal to U.S.$14,111,481.96
plus the Tranche B Per Diem Charge, will be immediately converted
into a single term loan (the “Tranche B Loan”), plus any
accrued and unpaid interest thereon. The Tranche B Borrower shall continue
to be liable for the Tranche B Loan. 

2.3.  Tranche A
Facility. (A) (i) The Tranche A Loan will accrue a finance charge on the
Average Daily Balance thereof, from and including the Tranche A Loan
Commencement Date to and including February 28, 2003, at a per annum rate equal
to the lesser of (a) the Tranche A Loan Finance Charge and
(b) the highest rate from time to time permitted by applicable law. If it
is determined that the amounts received from Tranche A Borrower or a
Tranche A Guarantor pursuant to this subclause (A) shall
otherwise be in excess of the highest rate permitted by applicable law, then the
amount representing such excess shall be considered reductions to principal of
Loans. 

19

	 	        (ii)  The “Tranche A Loan Finance Charge”
shall be seventeen percent (17%), payable in arrears;

	 	        (iii)  
If any amount owing under this Agreement (whether or not due), including,
without limitation, the Tranche A Loan, is not paid on February 28, 2003,
the unpaid amount thereof shall bear interest from and including March 1, 2003
to and including the date Lender receives payment thereof, at a per annum rate
equal to the lesser of (a) twenty-five percent (25%) and (b) the
highest rate from time to time permitted by applicable law. If it is determined
that amounts received from Tranche A Borrower or a Tranche A Guarantor
were in excess of such highest rate, then the amount representing such excess
shall be considered reductions to principal of Loans.

	 	        (iv)  
If any amount owing under this Agreement (whether or not due), including,
without limitation, the Tranche A Loan, is not paid on February 28, 2004,
the unpaid amount thereof will bear interest from and including March 1, 2004 to
and including the date Lender receives payment thereof, at a per annum rate
equal to the lesser of (a) thirty-five percent (35%) and (b) the
highest rate from time to time permitted by applicable law. If it is determined
that amounts received from Tranche A Borrower or a Tranche A Guarantor
were in excess of such highest rate, then the amount representing such excess
shall be considered reductions to principal of Loans.

	 	        (v)  
Tranche A Borrower hereby agrees to pay to IBM Credit on or before December
31, 2002 the Tranche A Restructuring Fee. Tranche A Borrower also
agrees to pay Lender additional charges for any returned items of payment
received by Lender. Tranche A Borrower hereby acknowledges that any such
charges are not interest but that such charges, if unpaid, will constitute part
of the Outstanding Loans.

        (B)  Tranche A Borrower
shall pay the principal of the Tranche A Loan on the Tranche A Loan
Maturity Date. 

        (C)  Tranche A Borrower shall comply with terms of the Trust Agreement.

2.4.  Tranche B Facility.

        (A)  (i) The Tranche B Loan
shall accrue a finance charge on the Average Daily Balance thereof, from and
including the Tranche B Loan Commencement Date to and including February
28, 2003, at a per annum rate equal to the lesser of (a) the Tranche B Loan
Finance Charge and (b) the highest rate from time to time permitted by
applicable law. If it is determined that the amounts received from
Tranche B Borrower or a Tranche B Guarantor pursuant to this
subclause (A) shall otherwise be in excess of the highest rate
permitted by applicable law, then the amount representing such excess shall be
considered reductions to principal of Loans. 

	 	        (ii)  The “Tranche B
Loan Finance Charge” shall be seventeen percent (17%), payable in arrears.

	 	        (iii)  
If any amount owing under this Agreement (whether or not due), including,
without limitation, the Tranche B Loan, is not paid on February 28, 2003,
the unpaid amount thereof will bear interest from and including March 1, 2003 to
and including the date Lender receives payment thereof, at a per annum rate
equal to the lesser of (a) twenty-five percent (25%) and (b) the
highest rate from time to time permitted by applicable law. If it is determined
that amounts received from the Tranche B Borrower or a Tranche B
Guarantor were in excess of such highest rate, then the amount representing such
excess shall be considered reductions to principal of Loans.

20

	 	        (iv)  
If any amount owing under this Agreement (whether or not due), including,
without limitation, the Tranche B Loan, is not paid on February 28, 2004,
the unpaid amount thereof will bear interest from and including March 1, 2004 to
and including the date Lender receives payment thereof, at a per annum rate
equal to the lesser of (a) thirty-five percent (35%) and (b) the
highest rate from time to time permitted by applicable law. If it is determined
that amounts received from Tranche B Borrower or a Tranche B Guarantor
were in excess of such highest rate, then the amount representing such excess
shall be considered reductions to principal of Loans.

	 	        (v)  
The Tranche B Borrower hereby agrees to pay to IBM Credit on or before December
31, 2002 the Tranche B Restructuring Fee and the Tranche B Per Diem Charge.
The Tranche B Borrower also agrees to pay Lender additional charges
for any returned items of payment received by Lender. The Tranche B
Borrower hereby acknowledges that any such charges are not interest but that
such charges, if unpaid, will constitute part of the Outstanding Loans.

        (B)  The Tranche B Borrower
shall pay the principal of the Tranche B Loan on the Tranche B Loan
Stated Maturity Date. 

2.5.  Mandatory Prepayments.

        (A)  Tranche A Borrower
shall, within three (3) Business Days of the date of receipt of the Net Cash
Proceeds by Tranche A Borrower or any of its Subsidiaries from the
Permitted Disposition of MAS Stock or any other assets or property or any
Recovery Events of Tranche A Borrower or any Subsidiary, apply one hundred
percent (100%) of such Net Cash Proceeds to the Obligations in the following
order: (i) first, to any outstanding Loan Expenses,
(ii) second, to any outstanding interest in respect of the
Outstanding Tranche A Loan, (iii) third, to any outstanding
interest in respect of the Outstanding Tranche B Loan,
(iv) fourth, to the aggregate principal amount of the Outstanding
Tranche A Loan, (v) fifth, to the aggregate principal amount of
the Outstanding Tranche B Loan, and (vi) sixth, to any
outstanding interest and principal in respect of any other outstanding loans or
extensions of credit made to any Subsidiary of either Borrower to Lender,
provided that Net Cash Proceeds from any Recovery Events shall not be
required to be so applied to the extent that such Net Cash Proceeds are used to
repair or replace assets employed in the business of Tranche A Borrower or
its Subsidiaries within one hundred and twenty (120) days of receipt
thereof, but if such Net Cash Proceeds are not so used, such Net Cash Proceeds
shall be applied as set forth above in this Section 2.5(A) on the earlier
of (x) the 121st day after receipt of such Net Cash Proceeds and (y)
the date on which Tranche A Borrower has determined that such Net Cash
Proceeds shall not so be used. 

        (B)  Tranche B Borrower
shall, within three (3) Business Days of the date of receipt of the Net Cash
Proceeds by Tranche B Borrower or any of its Subsidiaries from the
Permitted Disposition of any assets or property or any Recovery Events (other
than the sale by any Tranche B Borrower or any Subsidiary of inventory in
the ordinary course of business) of Tranche B Borrower or any Subsidiary,
apply one hundred percent (100%) of such Net Cash Proceeds to the Obligations in
the following order: (i) first, to any outstanding Loan Expenses,
(ii) second, to any outstanding interest in respect of the
Outstanding Tranche B Loan, (iii) third, to any outstanding
interest in respect of the Outstanding Tranche A Loan,
(iv) fourth, to the aggregate principal amount of the Outstanding
Tranche B Loan, (v) fifth, to the aggregate principal amount of
the Outstanding Tranche A Loan, and (vi) sixth, to any
outstanding interest and principal amount in respect of any other loans or other
extensions of credit made to a Subsidiary of a Borrower to Lender,
provided that Net Cash Proceeds from any Recovery Events shall not be
required to be so applied to the extent that such Net Cash Proceeds are used to
repair or replace assets employed in the business of Tranche B Borrower or
its Subsidiaries within one hundred and twenty (120) days of receipt thereof,
but if such Net Cash Proceeds are not so used, such Net Cash Proceeds shall be
applied as set forth above in this Section 2.5(B) on the earlier of (x)
the one hundred twenty one (121) days after receipt of such Net Cash Proceeds
and (y) the date on which Tranche B Borrower has determined that such Net
Cash Proceeds shall not so be used. 

21

2.6.  Optional Prepayments.

        (A)  A Borrower may at any
time prepay, without notice or penalty, in whole or in part, amounts owed under
this Agreement. Lender may apply payments made to it (whether by an Applicable
Borrower or by any other Person on behalf of an Applicable Borrower) to pay
finance charges and other amounts owing under this Agreement by such Borrower
first and then to the principal amount owed by such Borrower. 

        (B)  Any amount prepaid or
repaid to Lender with respect to Tranche A Loan and Tranche B Loan may
not be reborrowed by a Borrower. 

2.7.  Application
of Payments. Each Borrower hereby agrees that all checks and other
instruments delivered to Lender on account of such Borrower’s Obligations
shall constitute conditional payment until such items are actually collected by
Lender. If any Borrower fails to provide direction to Lender as to how any
optional prepayment made under Section 2.6 hereof should be applied,
Lender shall have the right to apply and reapply any and all such payments to
such Borrower’s Obligations in such manner as Lender may deem advisable in
its sole discretion. 

2.8.  Maturity
Date; Extension of Maturity Date. This Agreement shall remain in force until
the Maturity Date. Assuming no Default or Event of Default has occurred or is
continuing, (A) on or prior to the Stated Maturity Date, if (i) any
and all outstanding Loan Expenses, (ii) any and all outstanding interest
due as of such date, and (iii) forty percent (40%) of the principal amount
of the Loans are repaid, then the Maturity Date shall be automatically extended
to February 28, 2004; (B) if (i) any and all outstanding Loan
Expenses, (ii) any and all outstanding interest due as of such date, and
(iii) at least an additional forty percent (40%) of the original principal
amount of the Loans are repaid by February 28, 2004, then the Maturity Date
shall be automatically extended to February 28, 2005; (C) any Outstanding
Loan owing at February 28, 2005 must be repaid by August 31, 2005; and
(D) if the Borrowers fail to meet any minimum annual principal reduction
set forth in clauses (A) and (B) of this Section 2.8,
then all of the Outstanding Loans will become due and payable at the end of the
calendar year in which such failure to meet such reduction occurs. 

2.9.  Currency.  All payments by either Borrower pursuant to this Agreement shall be in U.S. Dollars.

2.10.  Taxes.
(A) All payments made by a Loan Party under any Restructuring Document shall be
made free and clear of, and without deduction or withholding for or on account
of, any and all present or future United States federal, state and local and
foreign taxes (including net income, gross income, franchise, value added, ad
valorem, gross receipts, leasing, excise, fuel, excess profits, sales, use,
employment, property (personal or real, tangible or intangible) and stamp
taxes), levies, imposts, duties, charges, assessments, or withholdings of any
nature whatsoever imposed by any Governmental Authority, general or special,
ordinary or extraordinary, now existing or hereafter created or adopted,
together with any and all interest, penalties, fines, additions to tax and
interest thereon now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority (collectively, “Taxes”),
excluding net income taxes and franchise taxes (imposed in lieu of net income
taxes) imposed on by the jurisdiction in which Lender is organized (or a
political subdivision thereof) or is currently carrying on business (other than
any such connection arising solely from Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, any
Restructuring Document). If any such non-excluded taxes, levies, imposts,
duties, charges, fees, assessments, deductions or withholdings
(“Non-Excluded Taxes”) or Other Taxes are required to be
withheld from any amounts payable to Lender pursuant to any provision of any
Restructuring Document, the amounts so payable to Lender shall be increased to
the extent necessary to yield to Lender (after payment of all Non-Excluded Taxes
and Other Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement. 

22

        (B)  In addition, each Loan
Party shall pay any Other Taxes to the relevant Governmental Authority in
accordance with applicable law. 

        (C)  Whenever any
Non-Excluded Taxes or Other Taxes are payable by a Loan Party, as promptly as
possible thereafter such Loan Party shall send to Lender a certified copy of an
original official receipt received by such Loan Party showing payment thereof.
If a Loan Party fails to pay any Non-Excluded Taxes or Other Taxes when due to
the appropriate taxing authority or fails to remit to Lender required receipts
or other required documentary evidence, such Loan Party shall indemnify Lender
for any incremental Taxes, interest or penalties that may become payable by
Lender as a result of any such failure. Such Loan Party shall make any and all
payments required pursuant to the immediately preceding sentence within fifteen
(15) days after written demand therefor from Lender. 

        (D)  The Loan Parties shall
indemnify Lender for the full amount of Non-Excluded Taxes and Other Taxes
(including any Non-Excluded Taxes and Other Taxes payable pursuant to this
Section 2.10) paid by Lender and any liability arising therefrom or
with respect thereto, whether or not such Non-Excluded Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within fifteen
(15) days after written demand therefor from Lender. 

        (E)  The agreements in this
Section shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder. 

2.11.  Lockbox
and Special Account. Tranche B Borrower shall and shall cause each Domestic
Subsidiary to establish and maintain Lockbox(es) (each, a
“Lockbox”) at the address(es) set forth in Attachment A
with the financial institution(s) listed in Attachment A (each, a
“Bank”) pursuant to an agreement between Tranche B
Borrower, each Domestic Subsidiary and each Bank in form and substance
satisfactory to IBM Credit. Tranche B Borrower shall also establish and
maintain a deposit account, which shall contain only proceeds, including Net
Cash Proceeds from Permitted Disposition or Recovery Event, of Tranche B
Borrower’s and its Domestic Subsidiaries’ Accounts (“Special
Account”) with each Bank. Tranche B Borrower and each Domestic
Subsidiary shall enter into and maintain a contingent blocked account agreement
with each Bank for the benefit of IBM Credit in form and substance satisfactory
to IBM Credit pursuant to which, among other things, such Bank shall agree that
disbursements from the Special Account shall be made only as IBM Credit shall
direct. 

2.12.  Reimbursement for Charges. Tranche B Borrower agrees to pay for all costs
and expenses of its and its Domestic Subsidiaries’ bank(s) in respect to
collection of checks and other items of payment, all fees relating to the use
and maintenance of the Lockbox(es) and the Special Account(s) and with respect
to remittances of proceeds of the Loans hereunder. 

23

2.13.  Collections. Tranche B Borrower shall instruct and shall cause each
Domestic Subsidiary to (A) instruct all Account debtors or buyers from
Permitted Disposition to remit payments directly to a Lockbox and (B) remit
all Net Cash Proceeds from any Permitted Disposition or Recovery Event directly
to a Lockbox. In addition, Tranche B Borrower shall have and shall cause
each Domestic Subsidiary to have such instruction printed in conspicuous type on
all invoices. Tranche B Borrower shall instruct and shall cause each
Domestic Subsidiary to instruct such Bank to deposit all remittances to such
Bank’s Lockbox into its Special Account. Tranche B Borrower further
agree that it shall not and shall cause each Domestic Subsidiary not to deposit
or permit any deposits of funds other than remittances paid in respect of the
Accounts or Permitted Dispositions into the Special Account(s) or permit any
commingling of funds with such remittances in any Lockbox or Special Account. 

Without limiting Tranche B
Borrower’s foregoing obligations, if, at any time, Tranche B Borrower
or any of its Domestic Subsidiaries receives a remittance directly from an
Account debtor or asset buyer, then such Borrower shall make and shall cause
each Domestic Subsidiary to make entries on its books and records in a manner
that shall reasonably identity such remittances and shall keep a separate
account on its record books of all remittances so received and deposit the same
into a Special Account. Until so deposited into the Special Account,
Tranche B Borrower shall keep and shall cause each Domestic Subsidiary to
keep all remittances received in respect of Accounts separate and apart from
such Borrower’s and each Domestic Subsidiary’s other property so that
they are capable of identification as the proceeds of Accounts in which IBM
Credit has a security interest. 

Section 3.  SECURITY; COLLATERAL

3.1.  Grant.

        (A) To secure full and punctual
payment and performance of the Obligations when due (whether at the stated
maturity, by acceleration or otherwise) of Tranche A Borrower and
Tranche B Borrower, each Tranche A Borrower, Tranche B Borrower
and each of their respective Subsidiaries and Guarantors (other than MAS), as
applicable, grant to IBM Credit a prior (subject only to Permitted Liens)
security interest in all of such Person’s right, title and interest in, all
personal property and fixtures, whether now owned or hereafter acquired or
existing and wherever located, including but not limited to such Person’s
rights, title and interest in, to and under: 

	 	        (i)  all goods,
including  Inventory  and  Equipment,  and all parts  thereof,  attachments,  accessories  and
accessions thereto, products thereof and documents therefor;

	 	        (ii)  
all Accounts, contract rights, Chattel Paper, negotiable instruments, promissory
notes, instruments, obligations of any kind owing to such Loan Party, as
applicable, whether or not arising out of or in connection with the sale or
lease of goods or the rendering of services;

	 	        (iii)  all General Intangibles (including without limitation, Payment Intangibles);

	 	        (iv)  all Commercial Tort Claims set forth on Attachment S;

	 	        (v)  all Intellectual Property;

	 	        (vi)  all  Investment  Property  (including,  without  limitation,  (x) the  MAS  Stock  and  (y)  the  "Pledged
Collateral" (as defined in the Stock Pledge Agreement));

	 	        (vii)  all Pledged Notes;

24

	 	        (viii)  all Letter-of-Credit Rights;

	 	        (ix)  all Supporting Obligations;

	 	        (x)  all Deposit  Accounts  (including,  without  limitation,  all "Bank Accounts" as defined in the Contingent
Blocked Account Agreement);

	 	        (xi)  
all other obligations of any kind owing to such Loan Party or such Guarantor, as
applicable, whether or not arising out of or in connection with the sale or
lease of goods or the rendering of services;

	 	        (xii)  all books, invoices,
documents and other records pertaining to the Collateral;

		        (xiii)  
all rights now or hereafter existing in and to all mortgages, security
agreements, leases or other contracts securing or otherwise relating to any of
the foregoing;

	 	        (xiv)  
all Net Cash Proceeds from any Permitted Disposition or Recovery Event; and

	 	        (xv)  
all substitutions and replacements for all of the foregoing, all assets of such
Loan Party and such Guarantor and all products or proceeds of any and/or all of
the foregoing, all collateral security and guarantees given by any Person with
respect to any and/or all of the foregoing and, to the extent not otherwise
included, all payments under insurance or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any of the
foregoing.

All of the above assets
shall be collectively defined herein as the “Collateral.” Each
Loan Party and each other Guarantor covenants and agrees with IBM Credit that:
(a) the security constituted to by this Agreement is in addition to any
other security from time to time held by IBM Credit and (b) the security
hereby created is a continuing security interest and will cover and secure the
payment of all Obligations both present and future of Tranche A Borrower
and Tranche B Borrower and each other Guarantors to IBM Credit. 

3.2.  Further
Assurances. Each Loan Party granting a security interest in the Collateral
hereunder shall, from time to time upon the request of Lender, execute and
deliver to Lender, or cause to be executed and delivered, at such time or times
as Lender may request such other and further documents, certificates, consents,
records and instruments that Lender may reasonably deem necessary to perfect and
maintain perfected Lender’s security interests in the Collateral, including
without limitation, to grant to Lender in writing a security interest in any
Commercial Tort Claims arising from time to time and in the proceeds thereof and
act as further required by Section 6.17 and in order to fully
consummate all of the transactions contemplated under this Agreement and the
other Restructuring Documents. Applicable Borrower shall make appropriate
entries on its books and records disclosing Lender’s security interests in
the Collateral. 

3.3.  Power of
Attorney. Each Loan Party granting a security interest in the Collateral
hereunder hereby irrevocably appoints Lender, with full power of substitution,
as its true and lawful attorney-in-fact with full power, in good faith and in
compliance with commercially reasonable standards, in the discretion of Lender,
to: 

        (A)  sign the name of such
Loan Party on any document or instrument that Lender shall deem necessary or
appropriate to perfect and maintain perfected the security interest in the
Collateral contemplated under this Agreement and the other Restructuring
Documents; 

25

        (B)  file UCC-1 financing
statements, continuation statements or any amendments thereto, relative to all
or any part of the Collateral without the signature of such Grantor where
permitted by law, to perfect the security interest in the Collateral
contemplated under the Restructuring Documents; 

        (C)  direct Banks to pay IBM
Credit directly any proceeds that are in or come into any Special Account as
directed by IBM Credit; 

        (D)  endorse the name of
such Loan Party upon any of the items of payment of proceeds and deposit the
same in the account of Lender for application to the Obligations; and 

        (E)  upon the occurrence and during the continuance of an Event of Default:

	 	        (i)  
demand payment, enforce payment and otherwise exercise all such Loan
Party’s rights and remedies with respect to the collection of any Accounts
or Chattel Paper;

	 	        (ii)  
settle, adjust, compromise, extend or renew any Accounts or Chattel Paper;

	 	        (iii)  
settle, adjust or compromise any legal proceedings brought to collect any Accounts or Chattel Paper;

	 	        (iv)  sell or assign any  Accounts  upon such  terms,  for such  amounts and at such time or times as Lender may
         deem advisable;

	 	        (v)  
discharge and release any Accounts or Chattel Paper;

	 	        (vi)  
prepare,  file and sign such Loan Party's  name on any proof of claim in  bankruptcy  or similar  document
         against any Account debtor;

	 	        (vii)  
prepare, file and sign such Loan Party’s name on any notice of lien, claim
of mechanic’s lien, assignment or satisfaction of lien or mechanic’s
lien, or similar document in connection with any Accounts;

	 	        (viii)  
endorse the name of such Loan Party upon any Chattel Paper, document,
instrument. invoice, freight bill, bill of lading or similar document or
agreement relating to any Account or goods pertaining thereto;

	 	        (ix)  
endorse the name of such Loan Party upon any of the items of payment of
proceeds, checks or bankers drafts and deposit the same in the account of Lender
for application to the Obligations;

	 	        (x)  
sign the name of such Loan Party to requests for  verification  of Accounts and notices thereof to Account
         debtors;

	 	        (xi)  
sign the name of such Loan Party on any document or instrument that Lender shall
deem necessary or appropriate to enforce any and all remedies it may have under
this Agreement, at law or otherwise;

	 	        (xii)  
make, settle and adjust claims under the Policies with respect to the Collateral
and endorse such Loan Party’s name on any check, draft, instrument or other
item of payment of the proceeds of the Policies with respect to the Collateral;
and

26

	 	        (xiii)  
take control in any manner of any term of payment or proceeds and for such
purpose to notify the postal authorities to change the address for delivery of
mail addressed to such Loan Party to such address as Lender may designate.
Lender agrees that in the event Lender exercises the power granted in this
clause (xiii), Lender shall promptly forward to such Loan Party all
mails other than any payments or proceeds.

With respect to the
foregoing and the grant of the security interest hereunder, each Loan Party
hereby authorizes Lender to file one or more financing or continuation
statements, and amendments thereto, relative to all or any part of the
Collateral without the signature of such Loan Party where permitted by law. A
carbon, photographic or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law. Each Loan Party shall furnish to
Lender from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as Lender may reasonably request, all in reasonable detail. 

The power of attorney
granted by this Section is for value and coupled with an interest and is
irrevocable so long as this Agreement is in effect or any Obligations remain
outstanding. Nothing done by Lender pursuant to such power of attorney will
reduce any of any and/or all Loan Party’s Obligations other than such Loan
Party’s payment Obligations to the extent Lender has received monies. 

3.4.  Communications  with  Obligors;  Grantor  Remains  Liable.  (A)  Lender  in its own name or in the name of
others may at any time  communicate  with obligors under the Accounts to verify with them to Lender's  satisfaction
the existence, amount and terms of any Accounts.

        (B)  Anything herein to the
contrary notwithstanding, each Grantor shall remain liable under each of the
Accounts to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise thereto. Lender shall not have any obligation or liability
under any Accounts (or any agreement giving rise thereto) by reason of or
arising out of this Agreement or the receipt by Lender of any payment relating
thereto; Lender shall not be obligated in any manner to perform any of the
obligations of any Grantor under or pursuant to any Accounts (or any agreement
giving rise thereto) to make any payment, to make any inquiry as to the nature
or the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times. 

3.5.  Proceeds to
Be Turned Over to Lender. (A) Whether or not any Event of Default shall
occur and/or be continuing, any and all cash dividends, distributions or other
Net Cash Proceeds received by any Borrower and/or any relevant Grantor in
respect of any Investment Property (including, without limitation, any MAS
Stock) and (B) if any Event of Default shall occur and/or be continuing,
all other proceeds received by any Borrower and/or any relevant Grantor
consisting of cash, checks and other near-cash items shall be held by such
Borrower or such other Grantor in trust for Lender, segregated from other funds
of such Borrower or such other Grantor, and shall, forthwith upon receipt by
such Borrower or such other Grantor, be turned over to Lender in the exact form
received by such Borrower or such other Grantor (duly indorsed by each Borrower
or such other Grantor to Lender, if required). All proceeds received by Lender
hereunder shall be held by Lender in a Collateral Account maintained under its
sole dominion and control. All proceeds while held by Lender in a Collateral
Account (or by a Borrower or such other Grantor in trust for IBM Credit) shall
continue to be held as collateral security for all the Obligations and shall not
constitute payment thereof until applied as provided in Section 2.7. 

27

3.6.  Remedies. (A) (i) Upon the occurrence and during the continuance of any
Event of Default which has not been waived in writing by Lender, Lender shall
have the rights set forth in the Trust Agreement and the right to sell, lease,
or otherwise dispose of all or any part of the Collateral, whether in its then
condition or after further preparation or processing, in the name of any
applicable Loan Party or Lender, or in the name of such other party as Lender
may designate, either at public or private sale or at any broker’s board,
in lots or in bulk, for cash or for credit, with or without warranties or
representations, and upon such other terms and conditions as Lender in its sole
discretion may deem advisable, and Lender shall have the right to purchase at
any such sale. 

	 	        (ii)  
If Lender, in its sole discretion, determines that any of the Collateral
requires rebuilding, repairing, maintenance or preparation, Lender shall have
the right, at its option, to do such of the aforesaid as it deems necessary for
the purpose of putting such Collateral in such saleable form as Lender shall
deem appropriate. Each Borrower and each Subsidiary Grantor hereby agrees that
any disposition by Lender of any Collateral pursuant to and in accordance with
the terms of a repurchase agreement between Lender and the manufacturer or any
supplier of such Collateral constitutes a commercially reasonable sale. Each
Borrower and each Subsidiary Grantor agrees, at the request of Lender, to
assemble the Collateral and to make it available to IBM Credit at places which
IBM Credit shall select, whether at the premises of a Borrower or such
applicable Subsidiary Grantor or elsewhere, and to make available to Lender the
premises and facilities of such Borrower or such applicable Subsidiary Grantor
for the purpose of Lender’s taking possession of, removing or putting such
Collateral in saleable form. If notice of intended disposition of any Collateral
is required by law, it is agreed that five (5) Business Days notice shall
constitute reasonable notification.

        (B)  Unless expressly
prohibited by the licensor thereof, if any, Lender is hereby granted, upon the
occurrence and during the continuance of any Event of Default which has not been
waived in writing by Lender, an irrevocable, non-exclusive license to use,
assign, license or sublicense all computer software programs, data bases,
processes and materials used by Borrowers or such applicable Subsidiary Grantor
in its businesses or in connection with any of the Collateral. 

        (C)  The net cash proceeds
resulting from Lender’s exercise of any of the foregoing rights (after
deducting all charges, costs and expenses, including reasonable attorneys’
fees) shall be applied by Lender to the payment of such Borrower’s
Obligations and the obligations of each applicable Loan Party to IBM Credit,
whether due or to become due, in such order as IBM Credit may in it sole
discretion elect. Each Borrower and each applicable Subsidiary Grantor shall
remain liable to IBM Credit for any deficiencies, and Lender in turn agrees to
remit to such Borrower and each applicable Subsidiary Grantor or its successors
or assigns, any surplus resulting therefrom. 

        (D)  If an Event of Default
shall occur and be continuing and Lender shall give notice of its intent to
exercise such rights to Applicable Borrower and each applicable Subsidiary
Grantor, (i) Lender shall have the right to receive any and all
distributions, payments or other Net Cash Proceeds paid in respect of any
Permitted Disposition or Recovery Event and make application thereof to the
Obligations in such order as Lender may determine, and (ii) any or all of
the Investment Property pledged hereunder shall be registered in the name of
Lender or its nominee, and Lender or its nominee may thereafter exercise
(a) all voting, corporate and other rights pertaining to such Investment
Property at any meeting of shareholders (or other owners of Equity Interests) of
the relevant Issuer or Issuers or otherwise and (b) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Investment Property as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Investment Property upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
(or organizational) structure of any Issuer, or upon the exercise by a Borrower
or each applicable Grantor or Lender of any right, privilege or option
pertaining to such Investment Property, and in connection therewith, the right
to deposit and deliver any and all of the Investment Property with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as Lender may determine), all without liability except
to account for property actually received by it, but Lender shall have no duty
to such Borrower or such applicable Subsidiary Grantor to exercise any such
right, privilege or option and shall not be responsible for any failure to do so
or delay in so doing. 

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        (E)  Each Applicable
Borrower and each of its applicable Subsidiary Grantors hereby authorizes and
instructs each Issuer of any Investment Property pledged by such Borrower or
such applicable Subsidiary Grantors hereunder to (i) comply with any
instruction received by it from Lender in writing that (a) states that an
Event of Default has occurred and is continuing and (b) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Borrower or such applicable Subsidiary Grantors, and each
Borrower and each applicable Subsidiary Grantor agrees that each Issuer shall be
fully protected in so complying and (ii) unless otherwise expressly
permitted hereby, pay any dividends, distributions or other payments with
respect to such Investment Property directly to Lender. 

        (F)  If IBM Credit shall
determine to exercise its right to sell any or all of the Pledged Interests
pursuant to this Agreement, and if in the opinion of IBM Credit it is necessary
or advisable to have the Pledged Interests, or that portion thereof to be sold,
registered under the provisions of the Securities Act, each Applicable Borrower
and its respective Subsidiaries, as applicable, will cause the Issuer thereof to
(i) execute and deliver, and cause the directors and officers of such
Issuer to execute and deliver, all such instruments and documents, and do or
cause to be done all such other acts as may be, in the opinion of IBM Credit,
necessary or advisable to register the Pledged Interests, or that portion
thereof to be sold, under the provisions of the Securities Act, (ii) use
its best efforts to cause the registration statement relating thereto to become
effective and to remain effective for a period of one (1) year from the date of
the first (1st) public offering of the Pledged Interests, or that portion
thereof to be sold, and (iii) make all amendments thereto and/or to the
related prospectus which, in the opinion of IBM Credit, are necessary or
advisable, all in conformity with the requirements of the Securities Act and the
rules and regulations of the SEC applicable thereto. Each Loan Party agrees to
cause such Issuer to comply with the provisions of the securities or “Blue
Sky” laws of any and all jurisdictions which IBM Credit shall designate and
to make available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions of
Section 11(a) of the Securities Act. 

        (G)  Each Applicable
Borrower and its respective Subsidiaries, as applicable, recognizes that IBM
Credit may be unable to effect a public sale of any or all the Pledged
Interests, by reason of certain prohibitions contained in the Securities Act and
applicable state securities laws or otherwise, and may be compelled to resort to
one or more private sales thereof to a restricted group of purchasers which will
be obliged to agree, among other things, to acquire such securities for their
own account for investment and not with a view to the distribution or resale
thereof. Each Tranche A Borrower and Tranche B Borrower and each
applicable Subsidiary Grantor acknowledges and agrees that any such private sale
may result in prices and other terms less favorable than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. IBM Credit shall be under no obligation to delay a sale of any of the
Pledged Interests for the period of time necessary to permit the Issuer thereof
to register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree to do so. 

        (H)  Each Borrower and
applicable Subsidiary Grantor agrees to use its best efforts to do or cause to
be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Interests pursuant to this
Section 3.6 valid and binding and in compliance with any and all
other applicable Requirements of Law. Each Borrower and each applicable
Subsidiary Grantor further agrees that a breach of any of the covenants
contained in this Section 3.6 will cause irreparable injury to
Lender and that Lender has no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this
Section 3.6 shall be specifically enforceable against each such
Borrower or such applicable Subsidiary Grantor, and each Borrower and each
applicable Subsidiary Grantor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants except for
a defense that no Event of Default has occurred under this Agreement. 

29

        (I)  The enumeration of the
foregoing rights is not intended to be exhaustive and the exercise of any right
shall not preclude the exercise of any other rights, including those under
Section 8.3 of this Agreement and under the Trust Agreement, all of
which shall be cumulative. 

        (J)  If any of the
Collateral shall be sold, transferred or otherwise disposed of by any Grantor in
a transaction permitted by this Agreement, then IBM Credit, at the request and
sole expense of such grantor, shall execute and deliver to such Grantor all
releases or other documents reasonably necessary or desirable for the release of
the Liens created hereby on such Collateral. 

        (K)  The provisions of this
Section 3 will survive the termination of this Agreement until the
indefeasible payment in full and satisfaction of the Obligations. 

3.7.  Amendment
and Restatement of Stock Pledge Agreement and Collateralized Guaranty. The
provisions of the Stock Pledge Agreement and the Collateralized Guaranty with
respect to the “Pledged Collateral” and the “Collateral”,
respectively, are hereby amended and restated by this Section 3 and all
other provisions of this Agreement applicable to Investment Property and all
other Collateral, respectively; provided that all obligations, liens and
security interests created and existing under each of the Stock Pledge Agreement
and the Collateralized Guaranty are continued hereunder, remain in full force
and effect and are not discharged, paid, satisfied or cancelled hereunder. Each
of the Loan Parties party to such agreements hereby ratifies and reaffirms all
of its payment and performance obligations, contingent or otherwise, under each
such agreement and hereby ratifies and reaffirms any guaranty and/or grant of
security interests and Liens and confirms and agrees that such security
interests and Liens hereafter secure all of the Obligations as amended hereby,
provided that the parties hereto hereby agree that nothing herein shall
be deemed to modify the maximum amount of liability of SysComm under the Stock
Pledge Agreement or the SysComm Guaranty. 

3.8.  Ratification of Obligations  under Contingent  Blocked Account  Agreement.  Each of the Loan Parties party
to the Contingent  Blocked Account Agreement,  hereby ratifies and reaffirms all of its obligations,  contingent or
otherwise, under the Contingent Blocked Account Agreement.

Section 4.  CONDITIONS PRECEDENT

4.1.  Conditions  Precedent to the  Effectiveness of This Agreement.  Conditions  precedent to restructuring the
Existing Credit Facilities will include,  without  limitation,  satisfaction of the following  conditions as of the
Closing Date (unless otherwise waived in writing by IBM Credit):

        (A)  Agreements;  Merger.  (i) This  Agreement  and all  other  Restructuring  Documents  shall  have been duly
executed and delivered by each  Borrower,  each  Guarantor,  and each of Messrs.  Richard J.  Sullivan,  Garrett A.
Sullivan  and Jerome C.  Artigliere,  as  applicable,  (ii) the  Merger  shall have been  consummated  on terms and
conditions  satisfactory to Lender and (iii) the  transactions  contemplated in Section 2.2(B) hereof and the Trust
Agreement shall have been consummated;

30

        (B)  Legal Opinions.
(i) Favorable opinions of counsel for Borrowers and each of their respective
Subsidiaries in substantially the form of Attachment E shall have been
delivered to Lender, and (ii) favorable opinions of counsel for
Tranche B Borrower delivered in connection with the Merger, in form
satisfactory to Lender; 

        (C)  Officers’
Certificates. Lender shall have received a certificate of the secretary or
an assistant secretary of each Loan Party substantially in the form and
substance of Attachment F hereto, certifying that, among other items,
(i) each Loan Party is duly organized under the laws of the State of its
organization or incorporation and has its principal place of business as stated
therein, (ii) each Loan Party is registered to conduct business in
specified states and localities, (iii) true and complete copies of the
articles of incorporation, or corresponding organizational documents, as
applicable, and by-laws of each Loan Party are delivered therewith, together
with all amendments and addenda thereto as in effect on the date thereof,
(iv) the resolutions as stated in such certificate is a true, accurate and
compared copy of the resolutions adopted by each Loan Party’s Board of
Directors or, if such Loan Party is a limited liability company, trust or other
legal entity, by such Loan Party’s authorized members, trustees or other
applicable Persons, authorizing the execution, delivery and performance of each
Restructuring Document executed and delivered in connection herewith and the
transactions contemplated hereby and thereby, and (v) the names and true
signatures of the officers of each Loan Party authorized to sign each
Restructuring Document; 

        (D)  Organization; Good
Standing. Except with respect to any Inactive Subsidiary, Lender shall have
received certificates dated as of a recent date from the Secretary of State or
other appropriate authority evidencing (i) the good standing of each
Borrower and each other Loan Party and MAS in the jurisdiction of its
organization and in each other jurisdiction where the ownership or lease of its
property or the conduct of its business requires it to qualify to do business,
(ii) a true and correct copy of the charter or other organizational
documents of each Borrower and each other Loan Party and MAS and each amendment
filed thereto, and (iii) payment of all franchise and other applicable
taxes by or on behalf of the date of such Certificates; 

        (E)  Pro Forma Balance
Sheet; Financial Statements. Lender shall have received (i) the Pro
Forma Balance Sheet, statements of income and cash flows, including EBITDA and
other operating data, for the Borrowers for the 2002 fiscal year,
(ii) forecasts of financial performance of the Borrowers and their
Subsidiaries, (iii) applicable Compliance Certificates and
(iv) unaudited consolidated financial statements of Loan Parties (other
than any Inactive Subsidiary) for each fiscal month and quarterly period ended
as requested by IBM Credit as to which such financial statements are available,
and such financial statements shall, in the reasonable judgment of IBM Credit,
reflect any material adverse change in the consolidated financial condition of
each Borrower; 

        (F)  Approvals;
Consents. Lender shall have received copies of all approvals and consents
(including landlords’ and other consents) from any Person, in each case in
form and substance satisfactory to IBM Credit, which are required to enable each
Borrower to authorize, or required in connection with, (i) the execution,
delivery and performance of each of the Restructuring Documents (including,
without limitation, in connection with the Merger), and (ii) the legality,
validity, binding effect and enforceability of each of the Restructuring
Documents; 

        (G)  Lockbox
Agreements. A lockbox agreement shall have been executed by Tranche B
Borrower, each other Grantor (other than Tranche A Borrower) and each Bank,
in form and substance satisfactory to IBM Credit; 

        (H)  Amendment to
Contingent Blocked Account Agreement. The Amendment to Contingent Blocked
Account Agreement, dated as of March 9, 2001 (the “Amended Contingent
Blocked Account Agreement”), in form and substance satisfactory to
IBM Credit, shall have been duly executed by the parties thereto and
delivered to IBM Credit; 

31

        (I)  Subordination
Agreements. Lender shall have received duly executed copies of intercreditor
and subordination agreements (“Intercreditor Agreements”), in
form and substance satisfactory to IBM Credit, executed by each other secured
creditor of Borrowers; 

        (J)  Deposit Account
Control Agreements. IBM Credit shall have received duly executed copies of
each Deposit Account Control Agreement with respect to each Deposit Account not
covered by the Amended Contingent Blocked Account Agreement. 

        (K)  Lien Searches.
IBM Credit shall have received the results of a recent lien search in each of
the jurisdictions where each Borrower and its respective Subsidiaries are
located and where assets of each Borrower and its respective Subsidiaries are
located, and such search shall reveal no liens on any of the assets of Borrowers
or their respective Subsidiaries except for liens permitted by
Section 7.2 or discharged on or prior to the Closing Date pursuant
to documentation satisfactory to IBM Credit; 

        (L)  Fees. All fees
required to be paid, and all expenses for which invoices have been presented
(including the reasonable fees and expenses of legal counsel) shall have been
paid, on or before the Closing Date; 

        (M)  UCC Financing
Statements. IBM Credit shall have received (i) stamped receipt copies
of UCC financing statements or amendments thereto, to the extent necessary,
originals of which have been duly filed, registered or recorded in each
jurisdiction reasonably requested by IBM Credit, duly authorized by each Grantor
and (ii) any document or other instrument creating or continuing in favor
of IBM Credit a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 7.2), in proper form for filing,
registration or recordation; all consents and authorizations to pre-file such
UCC financing statements shall have been granted to IBM Credit from each
Grantor; 

        (N)  Solvency Certificate.

	 	        (i)  
Lender shall have received a satisfactory solvency certificate of the chief
financial officer of each of MAS and Digital Angel certifying that each such
Person is, and after giving effect to the Merger, will be and will continue to
be Solvent;

	 	        (ii)  
The Lender shall have received a satisfactory solvency certificate of the chief
financial officer of each Subsidiary Guarantor of the Tranche B Borrower
other than any Inactive Subsidiary, certifying that each such Person is, and
after given effect to the incurrence of all indebtedness and obligations being
incurred in correction herewith will be and will continue to be Solvent.

        (O)  Control of Collateral.

	 	        (i)  
To the extent not otherwise “controlled” (within the meaning of the
UCC) by IBM Credit on or prior to the Closing Date, in the case of Investment
Property, electronic Chattel Paper, Collateral in possession of a third party
bailee, Deposit Accounts or any other relevant Collateral, each Borrower and
each applicable Grantor shall (a) have entered into a control agreement
with IBM Credit to enable IBM Credit to obtain “control” (within the
meaning of the UCC) with respect thereto and (b) if applicable, have
obtained consent and acknowledgement of bailee that IBM Credit has
“control” (within the meaning of the UCC) of the applicable
Collateral.

32

	 	        (ii)  
(a) To the extent not otherwise held by IBM Credit on or prior to the Closing
Date, the certificates representing the shares of Capital Stock pledged by any
Grantor pursuant to each applicable Restructuring Document, together with an
undated stock power for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof, shall have been delivered to IBM
Credit and (b) each promissory note (if any) pledged to IBM Credit pursuant
to each applicable Restructuring Document endorsed (without recourse) in blank
(or accompanied by an executed transfer form in blank) by the pledgor thereof.

        (P)  Other  Documents.  Lender  shall have  received  all  statements,  certificates,  documents,  instruments,
financing statements, agreements and information set forth in certain Attachments hereto;

        (Q)  Further
Assurances. Lender shall have received all such other statements,
certificates, documents, instruments, financing statements, opinions, agreements
and other information with respect to the matters contemplated by this Agreement
as IBM Credit shall have reasonably requested; 

        (R)  Insurance.
Lender shall have received insurance certificates with respect to the real and
personal properties of each Borrower and its Subsidiaries satisfactory to IBM
Credit; and 

        (S)  Employee
Consent. Each Employee (as such term is defined in each respective
Employment Agreement) shall have consented to the provisions of
Section 7.7 of this Agreement. 

        (T)  Representations and
Warranties. Each of the representations and warranties made by any Loan
Party in or pursuant to the Restructuring Documents shall be true and correct on
and as of the Closing Date. 

        (U)  No Default.  No Default or Event of Default shall have occurred and be continuing on the Closing Date.

        (V)  Issuer  Consent.  Each Issuer shall have  consented to the  applicable  provisions of  Section 3.6(E)  and
Section 6.19(C).

        (W)  MAS Continuing
Directors. The Continuing Directors of MAS shall be satisfactory to Lender
as of the Closing Date, after giving effect to the Merger and the transactions
contemplated thereby. 

        (X)  Charter  Amendment.  The  resolutions  attached hereto as Attachment J shall have been duly adopted by the
Board of Directors of MAS.

        (Y)  Warrant. The
“Purchase Price” set forth and defined in that certain Stock Purchase
Warrant, dated as of April 10, 2001, and in the form attached hereto as
Attachment T and issued by ADS to IBM Credit, shall be amended to be
$0.15 per share in consideration of the amendments provided in this Agreement. 

Section 5.
REPRESENTATIONS AND WARRANTIES

To induce Lender to enter
into this Agreement, each Borrower and each other Loan Party (other than any
Inactive Subsidiary, unless otherwise expressly noted herein) represents and
warrants to Lender as follows: 

33

5.1.  Organization and Qualifications. Each Loan Party and each of its
respective Subsidiaries (A) is duly organized, validly existing and in good
standing, in the exact names set forth in this Agreement or Attachment K
hereto, as applicable, under the laws of the jurisdiction of its
organization, (B) has the corporate or other power and authority, and the
legal right, to own its properties and assets, to lease the property it operates
as a lessee and to transact the businesses in which it presently is engaged, and
(C) is in compliance with all Requirements of Law. Except as disclosed to
IBM Credit by each Loan Party in writing from time to time after the Closing
Date, Attachment K hereto sets forth the name and jurisdiction of
organization of each Subsidiary and, as to each such Subsidiary, the percentage
of each class of Capital Stock owned by such Loan Party. Except as set forth on
Attachment K, there are no other Subsidiaries of Loan Parties. There are
no outstanding subscriptions, options, warrants, calls, rights or other
agreements or commitments (other than stock options granted to employees or
directors and directors’ qualifying shares) of any nature relating to any
Capital Stock of any Loan Party or any of its Subsidiaries, except as created by
each Restructuring Document. The Tranche A Borrower is and has at all time
been operated in compliance with the Trust Agreement. 

5.2.  Rights in
Collateral; Priority of Liens. Each Grantor (including any Inactive
Subsidiary) signatory hereto owns the property granted by it, as Collateral to
IBM Credit, free and clear of any and all Liens in favor of third parties except
for the Liens otherwise permitted pursuant to Section 7.2. The Liens
granted by each Grantor signatory hereto pursuant to each Restructuring Document
and the Guaranties in the Collateral constitute the valid and enforceable first,
prior and perfected Liens on the Collateral, except to the extent any Liens that
are prior to IBM Credit’s Liens are (A) the subject of an
Intercreditor Agreement or (B) Purchase Money Security Interests in
products of a brand that is not financed by IBM Credit. 

5.3.  Financial
Condition. The projections and pro forma financial statements of each
Borrower and its consolidated Subsidiaries referenced above have been prepared
on the basis of the assumptions accompanying them (which assumptions are
believed by management of such Borrower to be reasonable at the time made) and
reflect, as of the date hereof, Borrower’s good faith projections of such
Borrower’s reasonable analysis of the matters set forth therein based on
such assumptions. 

5.4.  No  Change.  Since  October  1,  2001,  there  has  been no  development  or  event  that has had or could
reasonably be expected to have a Material Adverse Effect.

5.5.  No
Conflicts. The execution, delivery and performance by each Loan Party of
each of the Restructuring Documents to which it is a party and the restructuring
of Existing Credit Facilities hereunder and thereunder (A) are within its
power and authority and legal right; (B) are duly authorized by all
necessary organizational actions; (C) are not in contravention in any
respect of any Requirement of Law or any indenture, contract, lease, agreement,
instrument or other commitment to which it is a party or by which it or any of
its properties are bound; (D) do not require the consent, registration or
approval of any Governmental Authority or any other Person (except such as have
been duly obtained, made or given, and are in full force and effect); and
(E) will not, except as contemplated herein, result in the imposition of
any Liens upon any of its properties. Each Restructuring Document has been duly
executed and delivered on behalf of each Loan Party that is a party to such
Restructuring Document. No Requirement of Law or Contractual Obligation
applicable to any Loan Party or any of its Subsidiaries (other than any Inactive
Subsidiary) could reasonably be expected to have a Material Adverse Effect. 

5.6.  Enforceability. All of the Restructuring Documents executed and delivered
by each Loan Party which is a party thereto in connection herewith are the
legal, valid and binding obligations of such Loan Party, and are enforceable in
accordance with their terms, except as such enforceability may be limited by the
effect of any applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or similar laws affecting creditors’ rights
generally or the general equitable principles relating thereto; provided,
however, that such laws shall not materially interfere with the practical
realization of the benefit of the Restructuring Documents or the Liens created
thereby, except for (A) possible delay, (B) situations that may arise
under Chapter 11 of the Bankruptcy Code and (C) equitable orders of
Bankruptcy court. 

34

5.7.  Locations
of Offices, Records and Inventory. (A) (i) The location (within the meaning
of Article 9 of the UCC) of each Grantor (including any Inactive Subsidiary),
(ii) the addresses of the principal place of business and chief executive
office of each Grantor (including any Inactive Subsidiary) where such Grantor is
duly qualified and is authorized to do business and is in good standing in each
jurisdiction where it owns, leases or operates property or presently is engaged
in business and in each case is required to be so qualified, and (iii) an
organizational identification number for each Grantor (including any Inactive
Subsidiary), which is located in a jurisdiction which issues such a number and
which requires the inclusion of such a number on UCC financing statements filed
therein in respect of such Grantors are as set forth on Attachment K
hereto or on any notice provided by each Grantor to IBM Credit pursuant to
Section 6.8(C) of this Agreement. The books and records of each
Grantor (including any Inactive Subsidiary) and all of its Chattel Paper (other
than the Chattel Paper delivered to IBM Credit pursuant to
Section 6.16(C)) and records of Accounts are maintained exclusively
at such location. 

        (B)  There is no
jurisdiction in which a Grantor (including any Inactive Subsidiary) has any
assets, Inventory or Equipment (except for vehicles and Inventory in transit for
processing) other than those jurisdictions identified on Attachment K
hereto or on any notice provided by such Grantor to IBM Credit pursuant to
Section 6.8(C) of this Agreement. Attachment K hereto, as
amended from time to time by any notice provided by each Grantor to IBM Credit
in accordance with Section 6.8(C) of this Agreement, also contains a
complete list of the legal names and addresses of each warehouse at which such
Grantor’s Inventory is stored. None of the receipts received by any Grantor
(including any Inactive Subsidiary) from any warehouseman states that the goods
covered thereby are to be delivered to bearer or to the order of a named person
or to a named person and such named person’s assigns. Each Grantor has
exclusive possession and control of the Inventory and Equipment owned by it. 

5.8.  Fictitious  Business Names.  Each Loan Party (including any Inactive  Subsidiary) has not used any company
or  fictitious  name during the five (5) years  preceding  the date of this  Agreement,  other than those listed on
Attachment M hereto.

5.9.  Organization.  All of the  outstanding  Capital  Stock of each Loan Party and each Issuer  (including  any
Inactive Subsidiary) and the MAS Stock have been validly issued and are fully paid and nonassessable.

5.10.  No
Judgments or Litigation. Except as set forth in Attachment W, no
judgments, orders, writs or decrees are outstanding against any Loan Party or
any of its Subsidiaries (other than any Inactive Subsidiary) nor is there now
pending or threatened. There is no litigation, contested claim, investigation,
arbitration, or governmental proceeding by or against any such Loan Party or any
of its Subsidiaries (other than any Inactive Subsidiary) or against any of such
Loan Party’s or any of its Subsidiaries (other than any Inactive
Subsidiary) respective properties or revenues (A) with respect to any
Restructuring Documents or any of the transactions contemplated hereby or
thereby, or (B) that could reasonably be expected to have a Material
Adverse Effect, or (C) to the best of such Loan Party’s knowledge,
after due inquiry, is there any reasonable basis for the institution of such
action or proceeding or the probable assertion of such action or proceeding. 

5.11.  No
Defaults. Except as set forth in Attachment X, no Loan Party and
none of its Subsidiaries (other than any Inactive Subsidiary) are in default
under any term of its respective constituent documents or any indenture,
contract, lease, agreement, instrument or other commitment to which it is a
party or by which it, or any of its properties are bound. No Loan Party and none
of its Subsidiaries (other than any Inactive Subsidiary) have knowledge of any
dispute regarding any such constituent documents, indenture, contract, lease,
agreement, instrument or other commitment. No Default or Event of Default has
occurred and is continuing. 

35

5.12.  Labor
Matters. Except as set forth on any notice provided by any Loan Party to IBM
Credit pursuant to Section 6.1(H) of this Agreement, no Loan Party
nor any of its Subsidiaries (other than any Inactive Subsidiary) are a party to
any labor dispute. Except as, in the aggregate, could not reasonably be expected
to have a Material Adverse Effect: (A) there are no strikes, walkouts or
other labor controversies against any Loan Party or any of its Subsidiaries
(other than any Inactive Subsidiary) pending or, to the knowledge of any Loan
Party, threatened; (B) hours worked by and payment made to employees of any
Loan Party or any of its Subsidiaries (other than any Inactive Subsidiary) have
not been in violation of the Fair Labor Standards Act, as amended or any other
applicable Requirement of Law dealing with such matters; and (C) all
payments due from any Loan Party or any of its Subsidiaries (other than any
Inactive Subsidiary) on account of employee health and welfare insurance have
been paid or accrued as a liability on the books of such Loan Party. 

5.13.  Compliance
with Law. To the best of each such Person’s knowledge, no Loan Party
and none of its Subsidiaries (other than any Inactive Subsidiary) have violated
or failed to comply with any Requirement of Law or any requirement of any
self-regulatory organization. 

5.14.  ERISA.
(A) To the best of each such Person’s knowledge, each Plan that is intended
to be qualified under Section 401(a) of the Code as currently in effect has
been determined by the Internal Revenue Service to be so qualified, and each
trust related to any such Plan has been determined to be exempt from federal
income tax under Section 501(a) of the Code as currently in effect. Each
member of the ERISA Group is in compliance in all material respects with the
presently applicable provisions of ERISA and the Code with respect to each Plan. 

        (B)  To the best of each
such Person’s knowledge, each member of the ERISA Group has fulfilled its
obligations under the minimum funding standards of ERISA and the Code with
respect to each Plan. No member of the ERISA Group has (i) sought a waiver
of the minimum funding standard under Section 412 of the Code in respect of
any Plan, (ii) failed to make any required contribution or payment to any
Plan, or multiemployer benefit plan, or made any amendment to any Plan, that has
resulted or could reasonably be expected to result in the imposition of a Lien
or the posting of a bond or other security under ERISA or the Code or
(iii) incurred liabilities in an aggregate amount in excess of U.S.$100,000
under Title IV of ERISA other than a liability to the PBGC for premiums under
Section 4007 of ERISA. There is no other Plan that if terminated would
result in liabilities in excess of U.S.$100,000 under Title IV of ERISA. 

        (C)  To the best of each
such Person’s knowledge, no member of the ERISA Group maintains or
contributes to any employee welfare benefit plan within the meaning of
Section 3(1) of ERISA that provides medical benefits to employees after
termination of employment, other than as required by Section 601 of ERISA,
where the unfunded accumulated post-retirement benefit obligation as of the end
of the last fiscal year of the Borrowers that occurred prior to the Closing Date
exceeded U.S.$100,000. 

        (D)  To the best of each
such Person’s knowledge, no member of the ERISA Group nor any fiduciary of
any Plan (i) has engaged in a nonexempt prohibited transaction described in
Sections 406 of ERISA or 4975 of the Code that could give rise to a
material liability or (ii) has taken or failed to take any action that
would cause a Borrower to have to notify IBM Credit pursuant to this Agreement. 

        (E)  To the best of each
such Person’s knowledge, no member of the ERISA Group has incurred any
material liability to or on account of any Plan pursuant to Section 4063,
4064, 4069, 4204 or 4212(c) of ERISA, and no such member expects to incur any
such material liability under the foregoing sections with respect to any Plan. 

36

        (F)  To the best of each
such Person’s knowledge, no member of the ERISA Group is non-compliant with
respect to COBRA, HIPAA and Medicare secondary where the liability with respect
to such non-compliance would exceed U.S.$100,000. 

        (G)  To the best of each
such Person’s knowledge, neither a Reportable Event nor an
“accumulated funding deficiency” (within the meaning of
Section 412 of the Code or Section 302 of ERISA) has occurred during
the five (5)-year period prior to the date on which this representation is made
or deemed made with respect to any Plan, and each Plan has complied in all
material respects with the applicable provisions of ERISA and the Code. To the
best of each such Person’s knowledge, no termination of a Single Employer
Plan has occurred, and no Lien in favor of the PBGC or a Plan has arisen, during
such five (5)-year period. To the best of each such Person’s knowledge, the
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. To the best of each such Person’s knowledge,
neither Borrower nor any Commonly Controlled Entity has had a complete or
partial withdrawal from any Multiemployer Benefit Plan that has resulted or
could reasonably be expected to result in a material liability under ERISA, and
neither Borrower nor any Commonly Controlled Entity would become subject to any
material liability under ERISA if Borrower or any such Commonly Controlled
Entity were to withdraw completely from all Multiemployer Benefit Plans as of
the valuation date most closely preceding the date on which this representation
is made or deemed made. To the best of each such Person’s knowledge, no
such Multiemployer Benefit Plan is in Reorganization or Insolvent. 

        (H)  As used in this
Agreement the terms “employee benefit plans,” “employee pension
benefit plan,” “defined benefit plan,” and “multiemployer
benefit plan” have the respective meanings assigned to them in
Section 3 of ERISA and any applicable rules and regulations thereunder,
each Borrower and any other Loan Party (including any Inactive Subsidiary) has
not incurred any “accumulated funding deficiency” within the meaning
of ERISA or incurred any liability to the Pension Benefit Guaranty Corporation
(the “PBGC”) in connection with a Plan (other than for premiums
due in the ordinary course). 

5.15.  Compliance  with  Environmental  Laws.  To the best of each such  Person's  knowledge,  except  as, in the
aggregate, could not reasonably be expected to result in the payment of a Material Environmental Amount:

        (A)  The facilities and
properties owned, leased or operated by any Loan Party or any of its
Subsidiaries (other than any Inactive Subsidiary) (the
“Properties”) do not contain, and have not previously
contained, any Materials of Environmental Concern in amounts or concentrations
or under circumstances that constitute or constituted a violation of, or could
give rise to liability under, any Environmental Law; 

        (B)  None of the Loan
Parties has received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the Properties or
the business operated by such Loan Party or any of its subsidiaries (other than
any Inactive Subsidiary) (the “Business”), nor does such Loan
Party have knowledge or reason to believe that any such notice will be received
or is being threatened; 

37

        (C)  Materials of
Environmental Concern have not been transported or disposed of from the
Properties in violation of, or in a manner or to a location that could give rise
to liability under, any Environmental Law, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed of at, on or
under any of the Properties in violation of, or in a manner that could give rise
to liability under, any applicable Environmental Law; 

        (D)  No judicial proceeding
or governmental or administrative action is pending or, to the knowledge of any
Loan Party, threatened, under any Environmental Law to which such Loan Party or
any of its Subsidiaries (other than any Inactive Subsidiary) are or will be
named as a party with respect to the Properties or the Business, nor are there
any consent decrees or other decrees, consent orders, administrative orders or
other orders, or other administrative or judicial requirements outstanding under
any Environmental Law with respect to the Properties or the Business; 

        (E)  There has been no
release or threat of release of Materials of Environmental Concern at or from
the Properties, or arising from or related to the operations of any Loan Party
or any Subsidiary in connection with the Properties or otherwise in connection
with the Business, in violation of or in amounts or in a manner that could give
rise to liability under Environmental Laws; 

        (F)  The Properties and all
operations at the Properties are in compliance, and have in the last five (5)
years been in compliance, with all applicable Environmental Laws, and there is
no contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the Business; and 

        (G)  Neither any Loan Party
nor any Subsidiary thereof has assumed any liability of any other Person under
Environmental Laws. 

5.16.  Federal
Regulations. No part of the proceeds of the Restructured Credit Facilities
will be used for “buying” or “carrying” any “margin
stock” within the respective meanings of each of the quoted terms under
Regulation U as now and from time to time hereafter in effect or for any purpose
that violates the provisions of the Regulations of the Board. If requested by
IBM Credit, each Borrower will furnish to IBM Credit a statement to the
foregoing effect in conformity with the requirements of FR Form G-3 or FR
Form U-1, as applicable, referred to in Regulation U. 

5.17.  Intellectual Property. Each Loan Party that is a Grantor (including any
Inactive Subsidiary) possesses such assets, licenses, Patents, patent
applications, Patent Licenses, Copyrights, Copyright Licenses, service marks,
Trademarks, Trademark Licenses, trade names, trade secrets and all rights,
priorities, privileges and other property relating thereto or arising therefrom
(“Intellectual Property”), as identified in
Attachment H, as are necessary or advisable to continue to conduct
its present and proposed business activities. No material claim has been
asserted and is pending by any Person challenging or questioning the use of any
Intellectual Property or the validity or effectiveness of any Intellectual
Property, nor does such Grantor know of any valid basis for any such claim. All
Intellectual Property is valid, subsisting, unexpired and enforceable, and the
use of Intellectual Property by each Loan Party that is a Grantor (including any
Inactive Subsidiary) and its respective Subsidiaries does not infringe on the
rights of any Person in any material respect. 

5.18.  Licenses
and Permits. Each Loan Party that is Grantor (including any Inactive
Subsidiary) has obtained and holds in full force and effect all franchises,
licenses, leases, permits, certificates, authorizations, qualifications,
easements, rights of way and other rights and approvals which are necessary for
the operation of its businesses as presently conducted. None of such Grantors is
in violation of the terms of any such franchise, license, lease, permit,
certificate, authorization, qualification, easement, right of way, right or
approval. 

38

5.19.  Investment
Company. No Loan Party is (A) an “investment company” or a company
“controlled” by an “investment company” within the meaning
of the Investment Company Act of 1940, as amended, (B) a holding company or
a subsidiary of a holding company, or an Affiliate of a holding company or of a
subsidiary of a holding company, within the meaning of the Public Utility
Holding Company Act of 1935, as amended, or (C) subject to any other law
which purports to regulate or restrict its ability to borrow money or to
consummate the transactions contemplated by the Restructuring Documents or to
perform its obligations hereunder or thereunder. 

5.20.  Taxes and
Tax Returns. Except to the extent set forth on Attachment U, each
Loan Party and each of its Subsidiaries (other than any Inactive Subsidiary) has
timely filed all federal, state, and local Tax returns and other reports which
it is required by law to file, and has either duly paid all Taxes, fees and
other governmental charges indicated to be due on the basis of such reports and
returns or pursuant to any assessment received by such Loan Party or such
Subsidiary, or made provision for the payment thereof in accordance with GAAP.
The charges and reserves on the books of each Loan Party and each of its
Subsidiaries (other than any Inactive Subsidiary) in respect of taxes or other
governmental charges are in accordance with GAAP. Except to the extent set forth
on Attachment U, no tax liens have been filed against any Loan Party or
any of its Subsidiaries (other than any Inactive Subsidiary) or any of its
property, and, to the knowledge of such Loan Party, no claim is being asserted,
with respect to any such tax, fee or other charge. 

5.21.  Status of
Accounts. Each Account is based on an actual and bona fide sale and delivery
of goods or rendition of services to customers, made by Borrower and each
applicable Grantor (including any Inactive Subsidiary), in the ordinary course
of its business; the goods and Inventory being sold and the Accounts created are
its exclusive property and are not and shall not be subject to any Lien,
consignment arrangement, encumbrance, security interest or financing statement
whatsoever (other than Permitted Liens). Each Borrower’s and each
applicable Grantor’s customers have accepted goods or services and owe and
are obligated to pay the full amounts stated in the invoices according to their
terms. There are no proceedings or actions known to such Borrower and each
applicable Grantor which are pending or threatened against any of the Accounts
which could reasonably be expected to result in a Material Adverse Effect on the
debtor’s ability to pay the full amounts due to such Borrower and each
applicable Grantor. The goods and Inventory being sold and the Accounts created
are not “consumer goods” or “consumer transaction” as such
term is used and defined by UCC. 

5.22.  Affiliate/Subsidiary Transactions. Each Loan Party is not a party to or
bound by any agreement or arrangement (whether oral or written) to which any
Affiliate or Subsidiary of such Loan Party is a party except (A) in the
ordinary course of and pursuant to the reasonable requirements of such Loan
Party’s business and (B) upon fair and reasonable terms no less
favorable to such Loan Party than it could obtain in a comparable
arm’s-length transaction with an unaffiliated Person. 

5.23.  Accuracy
and Completeness of Information. All factual information furnished by or on
behalf of each Loan Party or any Subsidiary thereof to IBM Credit or the
Auditors for purposes of or in connection with any Restructuring Document, or
any transaction contemplated hereby or thereby, is or will be true and accurate
in all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any material fact necessary to
make such information not misleading at such time. The Projections and
Pro Forma financial information contained in the materials
referenced above are based upon good faith estimates and assumptions believed by
management of such Loan Party or Subsidiary thereof to be reasonable at the time
made, it being recognized by IBM Credit that such financial information as it
relates to future events is not to be viewed as fact and that actual results
during the period or periods covered by such financial information may differ
from the projected results set forth therein by a material amount. There is no
fact known to such Loan Party or Subsidiary thereof that could reasonably be
expected to have a Material Adverse Effect that has not been expressly disclosed
herein, in the certificates and statements furnished to IBM Credit for use in
connection with the transactions contemplated by any Restructuring Documents. 

39

5.24.  Recording
Taxes. All recording taxes, recording fees, filing fees and other charges
payable in connection with the filing and recording of this Agreement have
either been paid in full by each Loan Party or Subsidiary thereof or
arrangements for the payment of such amounts by such Loan Party or Subsidiary
thereof have been made to the satisfaction of IBM Credit. 

5.25.  Indebtedness. Each Loan Party and each Subsidiary thereof (including any
Inactive Subsidiary) (A) has no Indebtedness, other than Permitted
Indebtedness; and (B) has not guaranteed the obligations of any other
Person (except as permitted by Section 7.5). The Obligations
constitute “senior indebtedness” of each Loan Party and each
applicable Subsidiary thereof, and the obligations of each Loan Party to the
Guaranty under the Restructuring Documents constitute “guarantor senior
indebtedness” of such Grantor. 

5.26.  Limitations on Lockboxes and Special Accounts. Tranche B Borrower and
each applicable Grantor has no Lockbox, Special Account or other Deposit
Accounts with any banks or other financial institutions except as provided in
Section 2.11 of this Agreement. 

5.27.  Solvency.  Each  Subsidiary  Guarantor  of Tranche B  Borrower and MAS is, and after giving  effect to the
incurrence of all  Indebtedness  and  Obligations  being incurred in connection  herewith and therewith will be and
will continue to be, Solvent.

5.28.  Security
Interest. (A) Each Loan Party that is a Grantor (including any Inactive
Subsidiary) represents that all filings and other actions necessary to perfect
and protect the security interest in the Collateral created under this Agreement
have been duly made or taken and are in full force and effect (subject only to
Permitted Liens), and this Agreement creates in favor of IBM Credit a valid
first priority security interest in the Collateral, and all filings and other
actions necessary or desirable to perfect and protect such security interest
have been duly taken. 

        (B)  The Restructuring
Documents that are security documents are effective to create in favor of IBM
Credit, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. In the case of the Pledged Stock
described in the such Restructuring Documents that are security documents, when
stock certificates representing such Pledged Stock are delivered to IBM Credit,
and in the case of the other Collateral described in such Restructuring
Documents that are security documents, when financing statements and other
filings specified therein in appropriate form are filed in the offices specified
therein, such security documents shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Subsidiaries parties
thereto (including any Inactive Subsidiary) in such Collateral and the proceeds
thereof, as security for the Obligations, in each case prior and superior in
right to any other Person (subject only to Permitted Liens). 

5.29.  Investment  Property.  (A) The Pledged  Interests,  as identified in  Attachment I,  constitute all of the
issued and outstanding Equity Interests of each Issuer owned by each Grantor (including any Inactive Subsidiary).

        (B)  All the Pledged
Interests have been duly and validly issued and are fully paid and
nonassessable. There is no amount or other obligation owing by each Loan Party
that is a Grantor (including any Inactive Subsidiary) to any Issuer of the
Pledged Interests in exchange for or in connection with the issuance of the
Pledged Interests or such Grantor’s status as a stockholder, member, or
partner of any Issuer. 

40

        (C)  Each of the Pledged
Notes constitutes the legal, valid and binding obligation of the obligor with
respect thereto, enforceable in accordance with its terms, subject to the
effects of bankruptcy, insolvency and reorganization, moratorium and other
similar laws relating to or affecting creditors’ rights generally and
general equitable principles (whether considered in a proceeding in equity or at
law). 

        (D)  Each Loan Party that is
a Grantor (including any Inactive Subsidiary) is the record and beneficial owner
of, and has good and marketable title to, the Investment Property pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of, any
other Person, except the security interest created by this Agreement. 

5.30.  Trust  Agreement.  Tranche A  Borrower is in compliance with the terms of the Trust Agreement and has been
in compliance therewith since the date thereof.

5.31.  Regulation
U. No part of the proceeds of any Loans, and no other extensions of credit
hereunder, will be used for “buying” or “carrying” any
“margin stock” within the respective meanings of each of the quoted
terms under Regulation U as now and from time to time hereafter in effect or for
any purpose that violates the provisions of the Regulations of the Board. If
requested by Lender, each Tranche A Borrower and Tranche B Borrower
and their respective Subsidiaries will furnish to Lender a statement to the
foregoing effect in conformity with the requirements of FR Form G-3 or FR
Form U-1, as applicable, referred to in Regulation U. 

Section 6.
AFFIRMATIVE COVENANTS

Until termination of this
Agreement and the indefeasible payment and satisfaction of all Obligations: 

6.1.  Financial and Other  Information.  Each Borrower shall cause the following  information to be delivered to
IBM Credit within the following time periods:

        (A)  commencing with the
2001 fiscal year, as soon as available and in any event within ninety (90) days
after the end of each fiscal year of each of each Borrower and MAS
(i) audited Financial Statements (provided, that, to the extent not
otherwise audited by the Auditors, the consolidating Financial Statements may be
unaudited) as of the close of the fiscal year and for the fiscal year, together
with a comparison to the Financial Statements for the prior year, in each case
accompanied by (a) either an opinion of the Auditors without a
qualification or exception, or qualification arising out of the scope of the
audit other than a “going concern” qualification, (b) such
Auditors’ “Management Letter” to such Loan Party, if any,
(c) a written statement signed by the Auditors stating that in the course
of the regular audit of the business of such Loan Party and its consolidated
Subsidiaries, which audit was conducted by the Auditors in accordance with GAAP,
the Auditors have not obtained any knowledge of the existence of any Default
under any provision of this Agreement, or, if such Auditors will have obtained
from such examination any such knowledge, they will disclose in such written
statement the existence of the Default and the nature thereof, it being
understood that such Auditors will have no liability, directly or indirectly, to
anyone for failure to obtain knowledge of any such Default; and (ii) a
Compliance Certificate along with a schedule, in substantially the form of
Attachment B hereto, of the calculations used in determining, as of
the end of such fiscal year, whether such Borrower is in compliance with the
financial covenants set forth in this Agreement provided that such
Compliance Certificate with respect to the 2001 fiscal year of such Persons will
be delivered on or prior to the Closing Date; 

        (B)  as soon as available
and in any event no later than forty-five (45) days after the end of each fiscal
quarter each of each Borrower and MAS (i) unaudited Financial Statements as
of the end of such period and for the fiscal year to date, together with a
comparison to the Financial Statements for the same periods in the prior year,
all in reasonable detail and duly certified (subject to normal year-end audit
adjustments and except for the absence of footnotes) by the chief executive
officer or chief financial officer of such Person as having been prepared in
accordance with GAAP; and (ii) a Compliance Certificate along with a
schedule, in substantially the form of Attachment B hereto, of the
calculations used in determining, as of the end of such fiscal quarter, whether
such Borrower is in compliance with the financial covenants set forth in this
Agreement; 

41

        (C)  as soon as available
and in any event no later than thirty-five (35) days after the end of each
fiscal month of each Borrower (i) segment reports as of the end of such
period and for the fiscal year to date, all in reasonable detail and duly
certified (subject to normal year-end audit adjustments and except for the
absence of footnotes) by the chief executive officer or chief financial officer
of such Borrower as having been prepared in accordance with GAAP and in
substantially the form of Attachment V hereto; and (ii) a Compliance
Certificate along with a schedule, in substantially the form of
Attachment B hereto, of the calculations used in determining, as of
the end of such fiscal month, whether such Borrower is in compliance with the
financial covenants set forth in this Agreement; 

        (D)  concurrently with the
delivery of any financial statements pursuant to this Section 6.1
and to the extent not previously disclosed to IBM Credit, a listing of any
county or state within the United States where each Loan Party keeps Inventory
or Equipment and of any Intellectual Property acquired by each Loan Party since
the date of the most recent list delivered pursuant to this
clause (D) (or, in the case of the first such list so delivered,
since the Closing Date); 

        (E)  promptly upon (i) the
occurrence of a Default or Event of Default, or (ii) the existence of any
condition or event which could result in a Borrower’s failure to satisfy
the conditions precedent to restructuring set forth in Section 5, a
certificate of the chief executive officer or chief financial officer of such
Borrower specifying the nature thereof and such Borrower’s proposed
response thereto, each in reasonable detail; 

        (F)  promptly upon (i) any
litigation, investigation or proceeding(s) being instituted or threatened to be
instituted by or against any Loan Party or any Subsidiary thereof in any
federal, state, local or foreign court or before any commission or other
regulatory body (federal, state, local or foreign), or (ii) any actual or
prospective change, development or event which, in any such case, has had or
could have a Material Adverse Effect, a certificate of the chief executive
officer or chief financial officer of Tranche B Borrower specifying the
nature thereof and such Loan Party’s or such Subsidiary’s proposed
response thereto, each in reasonable detail; 

        (G)  promptly upon (i) any
order, judgment or decree in excess of U.S.$50,000 entered against any Loan
Party or any of its respective Subsidiaries or any of its properties or assets,
(ii) any litigation or proceeding affecting any Loan Party or any of its
respective Subsidiaries (a) in which the amount involved is U.S.$50,000 or
more not covered by insurance, (b) in which injunctive or similar relief is
sought or (c) which relates to any Restructuring Document or (iii) a
Loan Party or any of its respective Subsidiaries has received any notification
of a material violation of any Requirement of Law from any Governmental
Authority or (iv) upon any default or event of default under any
Contractual Obligation of a Loan Party or any of its respective Subsidiaries, a
certificate of the chief executive officer or chief financial officer of
Tranche B Borrower specifying the nature thereof and or such Loan
Party’s or such Subsidiary’s proposed response thereto, each in
reasonable detail provided that in the cases of (iii) and (iv), with
respect to any Inactive Subsidiary, such certificate will be required only if
any liability that could result therefrom could exceed U.S.$50,000; 

        (H)  promptly after any Loan
Party learns of any material labor dispute to which such Loan Party or any of
its Subsidiaries may become a party, any strikes or walkouts relating to any of
its plants or other facilities, and the expiration of any labor contract to
which such Loan Party or any of its Subsidiaries is a party or by which it is
bound, a certificate of the chief executive officer or chief financial officer
of Tranche B Borrower specifying the nature thereof and such Loan
Party’s or such Subsidiary’s proposed response thereto, each in
reasonable detail; 

42

        (I)  promptly, any development or event that has had or could have a Material Adverse Effect;

        (J)  within five (5)
Business Days after request by IBM Credit, any written certificates, schedules
and reports together with all supporting documents as IBM Credit may reasonably
request relating to the Collateral or any Loan Party’s or MAS’
business affairs and financial condition; 

        (K)  within five (5) days
after the same are sent, copies of all Financial Statements and reports which a
Borrower or MAS sends to its stockholders or creditors, and within five (5) days
after the same are filed, copies of all Financial Statements and reports which
such Borrower may make to, or file with, the SEC; 

        (L)  promptly,  such additional  financial and other information as IBM Credit may from time to time reasonably
request;

        (M)  any notice,  statement or report furnished to any lender or its subsidiaries  pursuant to the terms of any
indenture, loan or credit similar agreement;

        (N)  promptly, if a Grantor
acquires or licenses Intellectual Property, information with respect thereto
other than as specified in Attachment H as of the date hereof; and 

        (O)  promptly, a copy of
each demand, notice or document received by any Loan Party that questions or
calls into doubt the validity or enforceability of more than five percent (5%)
of the aggregate amount of the then outstanding Accounts. 

Each certificate, schedule
and report provided by a Loan Party to IBM Credit will be signed by an
authorized officer of such Loan Party, which signature will be deemed a
representation and warranty that the information contained in such certificate,
schedule or report is true and accurate in all material respects on the date as
of which such certificate, schedule or report is made and does not omit to state
a material fact necessary in order to make the statements contained therein not
misleading at such time. Each Financial Statement delivered pursuant to this
Section 6.1 will be prepared in reasonable detail and in accordance
with GAAP applied consistently throughout the periods reflected therein and with
prior periods. Each Borrower will cause the audited Financial Statements and
accompanying documents set forth in Section 6.1(A)(i) to be
delivered directly by the Auditors to IBM Credit only via first class or express
mail. 

6.2.  Location of
Collateral. The Inventory, Equipment and other tangible Collateral will be
kept or sold at the addresses as set forth on Attachment K hereto or on
any notice provided by each Grantor to IBM Credit in accordance with
Section 6.8(C). Such locations will be certified quarterly to IBM
Credit substantially in the form of Attachment D hereto. 

6.3.  Changes in
Loan Parties. No Loan Party and none of its Subsidiaries will make any
change in its name, chief executive office and principal place of business,
organization, form of ownership or structure without the prior written consent
of IBM Credit, which consent not unreasonably withheld. Each Loan Party will
update Attachment K, including an updated organizational chart, to
IBM Credit on a quarterly basis; provided, however, that each Loan
Party’s compliance with this covenant will not relieve it of any of its
other obligations or any other provisions under any Restructuring Document
limiting actions of the type described in this Section. 

43

6.4.  Legal
Entity Existence. Each Loan Party will and will cause each of its
Subsidiaries to, (A) maintain its legal entity existence, maintain in full force
and effect all rights, privileges, licenses, bonds, franchises, leases and
qualifications to do business, and all Properties, contracts and other rights
necessary to the profitable conduct of its business, (B) cause each of its
Subsidiaries to maintain its legal entity existence, maintain in full force and
effect all rights, privileges, licenses, bonds, franchises, leases and
qualification to do business, and all properties, contracts and other rights
necessary to the profitable conduct of its business, (C) authorize for
itself and cause each of its Subsidiaries, as applicable, to authorize IBM
Credit to file revised UCC financing statements if such applicable Loan Party
changes its legal name, (D) continue in, and limit its operations to, the
same general lines of business as presently conducted by it unless otherwise
permitted in writing by IBM Credit and (E) comply with all Requirements of
Law; notwithstanding the foregoing: 

        (A)  any Subsidiary of a
Loan Party other than MAS may be merged or consolidated with or into any
wholly-owned Subsidiary Grantor other than any Inactive Subsidiaries
(provided that such wholly-owned Subsidiary Grantor will be the
continuing or surviving entity); 

        (B)  any Subsidiary of a
Loan Party other than MAS may Dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to a Borrower or any wholly-owned Subsidiary
Grantor other than any Inactive Subsidiaries; and 

        (C)  the Merger shall be permitted.

6.5.  Payment of
Obligations. Each Loan Party (other than any Inactive Subsidiaries) will and
will cause each of its Subsidiaries to, pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be,
(A) all taxes, assessments and governmental charges or levies imposed upon
the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Loan Party and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein, and (B) all its material obligations of whatever nature, except
where the amount or validity thereof is currently being contested in good faith
by appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of such Loan Party or its Subsidiaries,
as the case may be. 

6.6.  ERISA.
As soon as possible and in any event within thirty (30) days after any Loan
Party (other than any Inactive Subsidiaries) knows or has reason to know
thereof, such Loan Party will give notice to IBM Credit of: (A) the
occurrence of any Reportable Event with respect to any Plan, a failure to make
any required contribution to a Plan, the creation of any Lien in favor of the
PBGC or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Benefit Plan or (B) the institution of
proceedings or the taking of any other action by the PBGC or each Borrower or
any Loan Party or any Commonly Controlled Entity or any Multiemployer Benefit
Plan with respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Plan. 

Such notification will
include a certificate of the chief financial officer of Tranche B Borrower
setting forth details as to such Reportable Event and the action which such
Borrower proposes to take with respect thereto, together with a copy of any
notice of such Reportable Event which may be required to be filed with the PBGC,
or any notice delivered by the PBGC evidencing its intent to institute such
proceedings. Upon request of IBM Credit, Tranche B Borrower or each Loan
Party will furnish, or cause the plan administrator to furnish, to IBM Credit
the most recently filed annual report for each Plan. 

44

6.7.
Environmental Matters.

        (A)  Each Borrower and any
other Person (other than any Inactive Subsidiaries) under such Borrower’s
control (including, without limitation, agents and Affiliates under such
control) will (i) comply with all Environmental Laws in all material
respects, and ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws, and obtain and
comply in all material respects with and maintain, and ensure that all tenants
and subtenants obtain and comply in all material respects with and maintain, any
and all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, (ii) undertake to use commercially
reasonable effort to prevent any unlawful release of any Hazardous Substance by
a Borrower or any other Person into, upon, over or under any property now or
hereinafter owned, leased or otherwise controlled (directly or indirectly) by
such Borrower and (iii) conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws. 

        (B)  Each Borrower will
notify IBM Credit, promptly upon its obtaining knowledge of (i) any
non-routine proceeding or investigation by any Governmental Authority with
respect to the presence of any Hazardous Substances on or in any property now or
hereinafter owned, leased or otherwise controlled (directly or indirectly) by
such Borrower, (ii) all claims made or threatened by any Person or
Governmental Authority against such Borrower or any of such Borrower’s
assets relating to any loss or injury resulting from any Materials of
Environmental Concern, (iii) such Borrower’s discovery of evidence of
unlawful disposal of or environmental contamination by any Materials of
Environmental Concern on any property now or hereinafter owned, leased or
otherwise controlled (directly or indirectly) by such Borrower, and
(iv) any occurrence or condition which could constitute a violation of any
Environmental Law. 

6.8.  Collateral
Books and Records/Collateral Audit. (A) Each Grantor agrees to maintain
books and records pertaining to the Collateral in such detail, form and scope as
is consistent with GAAP and good business practice, and agrees that such books
and records will reflect IBM Credit’s interest in the Accounts. 

        (B)  Each Grantor agrees
that, to the extent applicable, IBM Credit, its agents or designee may enter
upon its premises at any time and from time to time, during normal business
hours and upon reasonable notice under the circumstances, and at any time at all
on and after the occurrence and during the continuance of an Event of Default
for the purposes of (i) inspecting the Collateral, (ii) inspecting
and/or copying (at the relevant Grantor’s expense) any and all records
pertaining thereto, (iii) discussing its affairs, financial and other
condition and business with any officers, employees and directors of such party
or with the Auditors and (iv) verifying eligible accounts and other
Collateral. Each Grantor also agrees to provide IBM Credit with such reasonable
information and documentation that IBM Credit deems necessary to conduct the
foregoing activities, including, without limitation, reasonably requested
samplings of purchase orders, invoices and evidences of delivery or other
performance. 

Upon the occurrence and
during the continuance of an Event of Default which has not been waived by IBM
Credit in writing, IBM Credit may conduct any of the foregoing activities in any
manner that IBM Credit deems reasonably necessary. 

45

        (C)  Each Grantor will give
IBM Credit thirty (30) days prior written notice of any change in the location
of any Collateral, the location of its books and records or in the location of
its chief executive office or place of business from the locations specified in
Attachment K, and will execute in advance of such change and cause to be
filed and/or delivered to IBM Credit any financing statements, landlord or other
lien waivers, or other documents reasonably required by IBM Credit, all in form
and substance reasonably satisfactory to IBM Credit. 

        (D)  Each Grantor agrees to
advise IBM Credit promptly, in reasonably sufficient detail, of any substantial
change relating to the type, quantity or quality of the Collateral, or any event
which could reasonably be expected to have a Material Adverse Effect on the
value of the Collateral or on the security interests granted to IBM Credit
therein. 

6.9.  Insurance;
Casualty Loss. (A) Each Loan Party (other than any Inactive Subsidiaries)
agrees to maintain with financially sound and reputable insurance companies:
(i) insurance on its properties, (ii) public liability insurance
against claims for personal injury or death as a result of the use of any
products sold by it and (iii) insurance coverage against other business
risks, in each case, in at least such amounts and against at least such risks as
are usually and prudently insured against in the same general geographical area
by companies of established repute engaged in the same or a similar business.
Each Loan Party will and will cause each of its Subsidiaries to, furnish to IBM
Credit, upon its written request and thirty (30) days after end of each fiscal
year, the insurance certificates with respect to such insurance. In addition,
all Policies so maintained by any Loan Parties (other than any Inactive
Subsidiaries) are to name IBM Credit as an additional insured as its interest
may appear. 

        (B)  Without limiting the
generality of the foregoing, each Loan Party (other than any Inactive
Subsidiaries) will keep and maintain, at its sole expense, the Collateral
insured for an amount not less than the fair market value of such Collateral
against all loss or damage under an “all risk” Policy with companies
mutually acceptable to IBM Credit and each Loan Party with a lender’s loss
payable endorsement in form and substance reasonably satisfactory to IBM Credit
designating that any loss payable thereunder with respect to such Collateral
will be payable to IBM Credit. Each such policy will in addition (i) name
each Loan Party and IBM Credit as insured party thereunder (without any
representation or warranty by or obligation upon IBM Credit) as their respective
interests may appear, (ii) contain the agreement by the insurer that any
loss thereunder will be payable directly to IBM Credit notwithstanding any
action, inaction or breach of representation or warranty by each Loan Party and
(iii) provide that there will be no recourse against IBM Credit for payment
of premiums or other amounts with respect thereto. Upon receipt of proceeds by
IBM Credit the same will be applied on account of such Borrower’s
outstanding interest payment first, then to the outstanding principal amount of
the Tranche A or Tranche B Loan, as applicable. Any excess payment
will be applied towards outstanding interest payments and then towards the
principal amount of an outstanding Loan. Each Loan Party agrees to instruct each
insurer to give IBM Credit, by endorsement upon the Policy issued by it or by
independent instruments furnished to IBM Credit, at least ten (10) days written
notice before any Policy will be altered or cancelled and that no act or default
of such Borrower or any other person will affect the right of IBM Credit to
recover under the Policies. Each Loan Party will, if so requested by IBM Credit,
deliver to IBM Credit original or duplicate policies of such insurance and, as
often as IBM Credit may reasonably request, a report of a reputable insurance
broker with respect to such insurance. Each Loan Party hereby agrees to direct
all insurers under the Policies to pay all proceeds with respect to the
Collateral directly to IBM Credit. 

        (C)  Reimbursement under any
liability insurance maintained by each Loan Party pursuant to this
Section 6.9 may be paid directly to the Person who will have
incurred liability covered by such insurance. Subject to the applicable
provisions set forth in Sections 2.5(A) and 2.5(B), in case of any
loss involving damage to Inventory or Equipment when Section 6.9(D)
is not applicable, each Loan Party will make or cause to be made the necessary
repairs to or replacements of such Loan Party’s Inventory or Equipment, and
any proceeds of insurance maintained by such Loan Party pursuant to this
Section 6.9 will be paid to such Loan Party as reimbursement for the
costs of such repairs or replacements. 

46

        (D)  Upon (i) the
occurrence and during the continuance of any Event of Default or Default or
(ii) subject to Sections 2.5(A) and 2.5(B), the actual
or constructive total loss (in excess of U.S.$25,000 per occurrence) of any
Inventory or Equipment, all insurance payments in respect of such Inventory or
Equipment will be paid to and applied by IBM Credit as specified in this
Section 6.9. 

        (E)  If any Loan Party fails
to pay any cost, charges or premiums, or if any Grantor fails to insure the
Collateral, IBM Credit may pay such costs, charges or premiums. Any amounts paid
by IBM Credit hereunder will be considered an additional debt owed by Borrowers
to IBM Credit and are due and payable immediately upon receipt of an invoice by
IBM Credit. 

6.10.  Taxes.
Each applicable Loan Party (other than any Inactive Subsidiaries) will, and will
cause its Subsidiaries to, timely file complete and correct United States
federal and applicable foreign, state and local Tax returns required by law and
agrees to pay and to cause its Subsidiary to pay, when due, all Taxes, fees or
other charges lawfully levied or assessed against such applicable Loan Party,
such Subsidiaries or any of the Collateral before any penalty or interest
accrues thereon unless such taxes are being contested, in good faith, by
appropriate proceedings promptly instituted and diligently conducted and an
adequate reserve or other appropriate provisions have been made therefor as
required in order to be in conformity with GAAP, and an adverse determination in
such proceedings could not reasonably be expected to have a Material Adverse
Effect, no Tax Lien has been filed, and, to the knowledge of such applicable
Loan Party or any of its Subsidiaries, no claim is being asserted against IBM
Credit or the Collateral, with respect to any such tax, fee or other charge. 

6.11.  Compliance
with Laws. Each Loan Party (other than any Inactive Subsidiaries) agrees to
and to cause each of its respective Subsidiaries (other than any Inactive
Subsidiaries) to, comply with all Requirements of Law and Contractual
Obligations. 

6.12.  Fiscal
Year. Each of each Borrower and MAS agrees to maintain its fiscal year as a
year ending December 31 unless such Person provides Lender at least thirty (30)
days prior written notice of any change thereof. 

6.13.  Intellectual Property. (A) Each Grantor (either itself or through
licensees) will (i) use each Trademark on each and every trademark class of
goods applicable to its current line as reflected in its current catalogs,
brochures and price lists in order to maintain such Trademark in full force free
from any claim of abandonment for non-use, (ii) maintain as in the past the
quality of products and services offered under such Trademark, (iii) use
such Trademark with the appropriate notice of registration and all other notices
and legends required by applicable Requirements of Law, (iv) not adopt or
use any mark which is confusingly similar or a colorable imitation of such
Trademark unless IBM Credit will obtain a perfected security interest in such
mark pursuant to this Agreement, and (v) not (and not permit any licensee
or sublicensee thereof to) do any act or omit to do any act whereby such
Trademark may become invalidated or impaired in any way. 

        (B)  No Grantor (either
itself or through licensees) will do any act, or omit to do any act, whereby any
Patent may become forfeited, abandoned or dedicated to the public. 

        (C)  No Grantor (either
itself or through licensees) (i) will employ each Copyright and (ii) will
(and will not permit any licensee or sublicensee thereof to) do any act or omit
to do any act whereby any portion of the Copyrights may become invalidated or
otherwise impaired. No Grantor will (either itself or through licensees) do any
act whereby any portion of the Copyrights may fall into the public domain. 

47

        (D)  No Grantor (either
itself or through licensees) will use any Intellectual Property to infringe the
intellectual property rights of any other Person. 

        (E)  Each Grantor will
notify IBM Credit immediately if it knows, or has reason to know, that any
application or registration relating to any Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any other Governmental
Authority in any country) regarding such Grantor’s ownership of, or the
validity of, any Intellectual Property or such Grantor’s right to register
the same or to own and maintain the same. 

        (F)  Whenever any Grantor,
either by itself or through any agent, employee, licensee or designee, will file
an application for the registration of any Intellectual Property with the United
States Patent and Trademark Office, the United States Copyright Office or any
similar office or agency in any other country or any political subdivision
thereof, such Grantor will report such filing to IBM Credit within five (5)
Business Days after the last day of the fiscal quarter in which such filing
occurs. Upon request of IBM Credit, such Grantor will execute and deliver, and
have recorded, any and all agreements, instruments, documents, and papers as IBM
Credit may request to evidence IBM Credit’s security interest in any
Copyright, Patent or Trademark and the goodwill and General Intangibles of such
Grantor relating thereto or represented thereby. 

        (G)  Each Grantor will take
all reasonable and necessary steps, including, without limitation, in any
proceeding before the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any other country or
any political subdivision thereof, to maintain and pursue each application (and
to obtain the relevant registration) and to maintain each registration of the
material Intellectual Property, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of incontestability. 

        (H)  In the event that any
Intellectual Property is infringed, misappropriated or diluted by a third party,
each Grantor will (i) take such actions as such Grantor will reasonably
deem appropriate under the circumstances to protect such Intellectual Property
and (ii) promptly notify IBM Credit after it learns thereof and sue for
infringement, misappropriation or dilution, to seek injunctive relief where
appropriate and to recover any and all damages for such infringement,
misappropriation or dilution. 

6.14.  Maintenance of Property. Each Loan Party (other than any Inactive
Subsidiaries) will and will cause each of its Subsidiaries (other than any
Inactive Subsidiaries) to, (A) maintain all properties that are used or useful
or necessary in the conduct of its business or otherwise in good condition and
repair (ordinary wear and tear excepted), and (B) pay and discharge all
costs of repair and maintenance thereof and all rental and mortgage payments and
related charges pertaining thereto and not commit or permit any waste with
respect to any of its material properties, provided, that the foregoing
shall not prohibit or limit the disposition, by any Loan Party or any such
Subsidiary, of any assets which are obsolete, worn out or not in compliance with
applicable law. 

6.15.  Maintenance of Security Interest. Each Grantor will maintain the security
interest created by this Agreement as a perfected security interest having at
least the priority described in Section 5.2 and will defend such
security interest against the claims and demands of all Persons whomsoever. 

48

6.16.  Collateral.  Each Grantor will:

        (A)  from time to time upon
request of IBM Credit, provide IBM Credit with access to copies of all invoices
during normal business hours, delivery evidences and other such documents
relating to each Account; 

        (B)  keep all goods rejected
or returned by any Account debtor and all goods repossessed or stopped in
transit by such Grantor from any Account debtor segregated from other property
of such Grantor, holding the same in trust for IBM Credit until such Grantor
applies a credit against such Account debtor’s outstanding obligations to
such Grantor or sells such goods in the ordinary course of business, whichever
occurs earlier; 

        (C)  stamp or otherwise mark
chattel paper and instruments now owned or hereafter acquired by it in
conspicuous type to show that the same are subject to IBM Credit’s security
interest and immediately thereafter deliver or cause such chattel paper and
instruments to be delivered to IBM Credit or any agent designated by IBM Credit
with appropriate endorsements and assignments to vest title and possession in
IBM Credit; 

        (D)  use commercially reasonable efforts to collect all Accounts owed;

        (E)  promptly notify IBM
Credit of any loss, theft or destruction of or damage to any of the Collateral.
Each Grantor will diligently file and prosecute its claim for any award or
payment in connection with any such loss, theft, destruction of or damage to
Collateral. Each Grantor will, upon demand of IBM Credit, make, execute and
deliver any assignments and other instruments sufficient for the purpose of
assigning any such award or payment to IBM Credit, free of any encumbrances of
any kind whatsoever; 

        (F)  consistent with
reasonable commercial practice, observe and perform all matters and things
necessary or expedient to be observed or performed under or by virtue of any
lease, license, concession or franchise forming part of the Collateral in order
to preserve, protect and maintain all the rights of IBM Credit thereunder; 

        (G)  consistent with
reasonable commercial practice, maintain, use and operate the Collateral and
carry on and conduct its business in a proper and efficient manner so as to
preserve and protect the Collateral and the earnings, incomes, rents, issues and
profits thereof; and 

        (H)  at any time and from
time to time, upon the request of IBM Credit, and at the sole expense of such
Grantor, such Grantor will promptly and duly execute and deliver such further
instruments and documents and take such further action as IBM Credit may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted, including,
without limitation, the filing of any financing or continuation statements under
the UCC in effect in any jurisdiction with respect to the security interests
granted herein and the payment of any and all recording taxes and filing fees in
connection therewith. 

6.17.  Additional
Collateral, etc. (A) With respect to any property acquired after the Closing
Date by any Grantor or its Subsidiary (other than any property described in
clause (B), (C) or (D) below as to which IBM Credit
does not have a perfected Lien, Borrower or its Subsidiary) will promptly
(i) execute and deliver to IBM Credit such amendments to such Restructuring
Documents as IBM Credit reasonably deems necessary or advisable to grant to IBM
Credit a security interest in such property, including but not limited to any
amendment to any Guaranty executed and delivered by such Grantor or Subsidiary,
(ii) in the case of Investment Property, Deposit Accounts and any other
relevant Collateral, take any actions requested by IBM Credit to enable IBM
Credit to obtain “control” (within the meaning of Revised
Article 9 of the UCC) with respect thereto, (iii) comply with any
Requirement of Law as to any Collateral if such compliance is deemed necessary
or advisable by IBM Credit for the attachment, perfection or priority of, or the
ability of IBM Credit to enforce, IBM Credit’s security interest in such
Collateral, (iv) use commercially reasonable efforts to obtain consents and
approvals from any Governmental Authority or other Person, including without
limitation any consent of licensor, lessor or other Person obligated on
Collateral, (v) execute and deliver such documents, agreements, and
instruments as reasonably may be required by IBM Credit to further evidence and
perfect its security interests in all Intellectual Property, (vi) use
commercially reasonable efforts to obtain waivers from mortgagees and landlords
in form and substance satisfactory to IBM Credit, and (vii) take all
actions necessary or advisable to grant to IBM Credit a perfected first priority
security interest in such property, including the filing of UCC financing
statements in such jurisdictions as may be required by the Guaranty or by law or
as may be requested by IBM Credit. 

49

        (B)  If a Grantor will at
any time hold or acquire a material Commercial Tort Claim, then such Grantor
will immediately notify IBM Credit in a writing signed by such Grantor of the
details thereof and grant to IBM in such writing a security interest therein and
in the proceeds thereof, all upon the terms of this Agreement, with such writing
to be in form and substance satisfactory to IBM Credit. 

        (C)  With respect to any new
Subsidiary created or acquired after the Closing Date by a Loan Party, such Loan
Party will promptly (i) execute and deliver to IBM Credit such amendments
to this Agreement and any Guaranty as IBM Credit reasonably deems necessary or
advisable to grant to IBM Credit a perfected first priority security interest in
all of the Capital Stock of such new Subsidiary that is owned by such Grantor,
(ii) deliver to IBM Credit the certificates representing such Capital
Stock, together with undated stock powers, in blank, executed and delivered by a
duly authorized officer of such Loan Party, (iii) cause such new Subsidiary
(a) to become a party to the Restructuring Documents that are security
documents, (b) to take such actions reasonably necessary or advisable to
grant to IBM Credit a perfected, first priority security interest in the
Collateral described in the Restructuring Documents that are security documents
with respect to such new Subsidiary, including the filing of UCC financing
statements in such jurisdictions as may be required by the Restructuring
Documents that are security documents or by applicable law or as may be
requested by IBM Credit and (c) to deliver to IBM Credit an assumption
certificate of such Subsidiary, substantially in the form of Attachment
Q, with appropriate insertions and attachments, and (iv) if reasonably
requested by IBM Credit, deliver to IBM Credit legal opinions relating to the
matters described above, which opinions will be in form and substance, and from
counsel, reasonably satisfactory to IBM Credit. 

6.18.  Subsidiaries. Lender may require that any Subsidiaries become parties to
this Agreement or any other agreement executed in connection with this Agreement
as guarantors or sureties. Each of Tranche A Borrower and Tranche B
Borrower hereby agrees that, promptly after it acquires any Subsidiary after the
Closing Date, it shall execute a supplement hereto for the purpose of pledging
to IBM Credit (i) all shares of stock of such Subsidiary owned by such
Borrower or (ii) all shares of stock of such new Subsidiary owned by such
Borrower up to sixty-six percent (66%) of the total outstanding shares of stock
of such Subsidiary, if such Subsidiary is organized under the laws of a
jurisdiction other than the United States. For the purpose of this
Section 6.18, each Borrower agrees to notify Lender ten (10) days
before it acquires a new Subsidiary. 

6.19.  Investment
Property. (A) If any Grantor will become entitled to receive or will receive
any certificate (including, without limitation, any certificate representing a
dividend or a distribution in connection with any reclassification, increase or
reduction of capital or any certificate issued in connection with any
reorganization), option or rights in respect of the Equity Interests of any
Issuer, whether in addition to, in substitution of, as a conversion of, or in
exchange for, any of the Pledged Interests, or otherwise in respect thereof,
such Grantor will accept the same as the agent of IBM Credit, hold the same in
trust for IBM Credit and deliver the same forthwith to IBM Credit in the exact
form received, duly indorsed by such Grantor to IBM Credit, if required,
together with an undated stock power (or other instrument of transfer
satisfactory to IBM Credit) covering such certificate duly executed in blank by
such Grantor and with, if IBM Credit so requests, signature guaranteed, to be
held by IBM Credit, subject to the terms hereof, as additional collateral
security for the Obligations. Any sums paid upon or in respect of the Investment
Property upon the liquidation or dissolution of any Issuer will be paid over to
IBM Credit to be held by it hereunder as additional collateral security for the
Obligations, and in case any distribution of capital will be made on or in
respect of the Investment Property or any property will be distributed upon or
with respect to the Investment Property pursuant to the recapitalization or
reclassification of the capital of any Issuer or pursuant to the reorganization
thereof, the property so distributed will, unless otherwise subject to a
perfected security interest in favor of IBM Credit, be delivered to IBM Credit
to be held by it hereunder as additional collateral security for the
Obligations. If any sums of money or property so paid or distributed in respect
of the Investment Property will be received by any Grantor, such Grantor will,
until such money or property is paid or delivered to IBM Credit, hold such money
or property in trust for IBM Credit, segregated from other funds of such
Grantor, as additional collateral security for the Obligations. 

50

        (B)  Without the prior
written consent of IBM Credit, each Grantor will not (i) vote to enable, or
take any other action to permit, any Issuer to issue any Equity Interests of any
nature or to issue any securities convertible into or granting the right to
purchase or exchange for any stock or other Equity Interests of any nature of
any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of,
or grant any option with respect to, the Investment Property of such Grantor or
proceeds thereof (except pursuant to a transaction expressly permitted by this
Agreement), (iii) create, incur or permit to exist any Lien or option in
favor of, or any claim of any Person with respect to, any of the Investment
Property of such Grantor or proceeds thereof, or any interest therein, except
for the security interests created by this Agreement or (iv) enter into any
agreement or undertaking restricting the right or ability of such Grantor or IBM
Credit to sell, assign or transfer any of the Investment Property of such
Grantor or proceeds thereof. 

        (C)  If any Subsidiary
(including any Inactive Subsidiaries) is an Issuer, such Issuer agrees that
(i) it will be bound by the terms of this Agreement relating to the
Investment Property issued by it and will comply with such terms insofar as such
terms are applicable to it, (ii) it will notify IBM Credit promptly in
writing of the occurrence of any of the events described in
Section 6.19(a) with respect to the Investment Property issued by it
and (iii) the terms of Section 8.3 will apply to it, mutatis
mutandis, with respect to all actions that may be required of it pursuant to
Section 8.3 with respect to the Investment Property issued by it. 

        (D)  Each Grantor will at
all times cause each of the Pledged Interests pledged by it hereunder to be a
certificated security expressly subject to Article 8 of the UCC. Each
Grantor will deliver to IBM Credit each certificate representing or evidencing
the Pledged Interests, together with an undated stock power (or other instrument
of transfer acceptable to IBM Credit), covering such certificate duly executed
in blank by such Grantor, and with, if IBM Credit so requests, signature
guaranteed. IBM Credit will have the right at any time to exchange certificates
representing or evidencing Pledged Interests for certificates of smaller or
larger denominations. 

6.20.  Delivery
of Instruments and Chattel Paper. If any amount payable under or in
connection with any of the Collateral will be or become evidenced by any
Instrument or Chattel Paper, such Instrument or Chattel Paper will be
immediately delivered to Lender, duly indorsed in a manner satisfactory to
Lender, to be held as Collateral pursuant to this Agreement. 

51

6.21.  Subsidiaries  of Loan  Parties.  Each Loan Party will obtain the prior  written  consent of Lender  before
creating, acquiring or dissolving a Subsidiary, whether directly or indirectly.

6.22.  Financial
Covenants; Additional Covenants. Each Borrower acknowledges and agrees that
such Borrower shall maintain and cause its applicable Subsidiaries to maintain,
the financial covenants and each Borrower acknowledges and agrees that it shall
comply with other covenants set forth in the attachments, exhibits and other
addenda incorporated in this Agreement. 

6.23.  Guaranty. (A) Each Tranche A Guarantor and Tranche B Guarantor
hereby jointly and severally guarantees to Lender the prompt payment when due
and the full, prompt, and faithful performance of any and all Obligations upon
which Tranche A Borrower and Tranche B Borrower, respectively, is in
any manner obligated, heretofore, now, or hereafter owned, contracted or
acquired by Lender pursuant to this Agreement, whether the same are individual,
joint or several, primary, secondary, direct, contingent or otherwise. Each
Guarantor irrevocably subordinates to the full payment of amounts due Lender any
and all rights to which it may be entitled, by operation of law or otherwise,
(i) to be subrogated to the rights of Lender against a Borrower hereto with
respect to such payment or otherwise to be reimbursed, indemnified or exonerated
by a Borrower in respect thereof, or (ii) to receive any payment, in the
nature of contribution or for any other reason, from a Borrower hereto with
respect to such payment. 

        (B)  Notwithstanding any
provision herein to the contrary, the liability of each Guarantor hereunder
shall in no event exceed the maximum amount that is valid and enforceable in any
action or proceeding involving any applicable state corporate law or any
applicable state or federal bankruptcy or other law, insolvency, reorganization,
fraudulent conveyance or other law involving the rights of creditors generally. 

        (C)  The liability of each
Guarantor under this Section 6.23 is direct, absolute and
unconditional and shall not be affected by any extension, renewal or other
change in the terms of payment or performance thereof, or the release,
settlement or compromise of or with any party liable for the payment or
performance thereof, the release or non-perfection of any security thereunder,
or any change in any Borrower’s financial condition. Each Guarantor’s
Obligation pursuant to this Section 6.23 shall continue for so long
as any sums owing to Lender by any Borrower remains outstanding and unpaid,
unless terminated in the manner provided herein. Each Guarantor acknowledges
that its Obligations hereunder are in addition to and independent of any
agreement or transaction between Lender and any Borrower or any other Person
creating or reserving any lien, encumbrance or security interest in any property
of any Borrower or any other Person as security for any obligation of such
Borrower. 

        (D)  Each Guarantor has made
an independent investigation of the financial condition of each Borrower and
guarantees the Obligations based on that investigation and not upon any
representations made by Lender. Each Guarantor acknowledges that it has access
to current and future Borrower financial information which will enable such
Guarantor to continuously remain informed of such Borrower’s financial
condition. Each Guarantor also consents to and agrees that the guarantees
provided in this Section 6.23 and the Obligations shall not be
affected by Lender’s subsequent (i) increases or decreases in any
credit line that Lender may grant to any Borrower, (ii) substitutions,
exchanges or releases of all or any part of the Collateral or hereafter securing
any of the Obligations or (iii) sales or other dispositions of any or all
of the Collateral now or hereafter securing any of the Obligations without
demands, advertisement or notice of the time or place of the sales or other
dispositions, realizing on the Collateral to the extent Lender, in their sole
discretion deems proper. 

        (E)  With respect to the
guarantees provided hereunder, each Guarantor, in its capacity as a guarantor,
waives (to the extent permitted by applicable law) (i) demand, protest and
all notices of protest or dishonor, (ii) all notices of payment and
nonpayment, (iii) all notices required by law, any and all defenses,
including but not limited to any defense which it may have against any
manufacturer or, distributor, (iv) any and all fights of setoff such
Guarantor may have against Lender and (v) all notices of nonpayment at
maturity, release, compromise, settlement, extension or renewal of any or all
commercial paper, accounts, contract rights, documents, instruments, chattel
paper and guarantees at any time held by Lender on which any Borrower may, in
any way, be liable, and each Guarantor hereby ratifies and confirms whatever
Lender may do in that regard. 

52

        (F)  This guaranty
obligation and any and all Obligations, liabilities, terms and provisions herein
shall survive any and all bankruptcy or insolvency proceedings, actions and/or
claims brought by or against each Guarantor, whether such proceedings, actions
and/or claims are federal and/or state. 

        (G)  The guaranty and
guaranty-related provisions of the Collateralized Guaranty are hereby amended
and restated by this Section 6.23 and all other provisions of this Credit
Agreement applicable to this Guaranty; provided, that all obligations,
liens and security interests created and existing under the Collateralized
Guaranty are continued hereunder, remain in full force and effect and are not
discharged, paid, satisfied or cancelled hereunder; provided, that the
parties hereto hereby agree that nothing herein shall be deemed to modify the
maximum amount of liability of SysComm under the SysComm Guaranty.. 

6.24.  Trust Agreement.  Tranche A Borrower shall comply with the terms of the Trust Agreement at all times.

Section 7.
NEGATIVE COVENANTS

Until termination of this
Agreement and the indefeasible payment and satisfaction of all Obligations
hereunder: 

7.1. Financial
Condition Covenants.

        (A)  Maintenance of Current Ratio.

	 	        (i)  
Tranche B Borrower (on a consolidated basis) will not permit, directly or
indirectly, the ratio of Consolidated Current Assets to Consolidated Current
Liabilities at any time during any period set forth below to be less than the
ratio set forth opposite such period below:

	Month Ended

January 2002

February 2002

March 2002

April 2002

May 2002

June 2002

July 2002

August 2002

September 2002

October 2002

November 2002

December 2002

January 2003
	Current Ratio

..16:1

..17:1

..17:1

..12:1

..11:1

..14:1

..10:1

..10:1

..11:1

..10:1

..11:1

..11:1

..11:1

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	 	        (ii)  
The ratio of Consolidated Current Assets to Consolidated Current Liabilities of
MAS at any time during any period set forth below shall not be less than the
ratio set forth opposite such period below:

	Quarter Ended

June 30, 2002

September 30, 2002

December 31, 2002	Current Ratio

1.8:1

1.8:1

2.0:1

        (B)  Minimum Consolidated EBITDA Requirement.

	 	        (i)  
Tranche B Borrower will not permit, directly or indirectly, Consolidated
EBITDA for any period set forth below to be less than the minimum
requirement set forth opposite such period below (cumulatively):

	Quarter Ended

March 31, 2002

June 30, 2002

September 30, 2002

December 31, 2002	Minimum Requirement

(U.S.$1,528,000)

U.S.$121,000

U.S.$817,000

U.S.$1,286,000

	 	        (ii)  
Consolidated EBITDA of MAS at any time during any period set forth below shall
not be less than the minimum requirement set forth opposite such period below
(cumulatively):

	Quarter Ended

June 30, 2002

September 30, 2002

December 31, 2002	Minimum Requirement

U.S.$577,000

U.S.$1,547,000

U.S.$3,329,000

7.2.  Liens.
Each Loan Party (including any Inactive Subsidiaries) will not, and will not
permit its Subsidiaries (including any Inactive Subsidiaries) to, directly or
indirectly mortgage, assign, pledge, transfer, create, incur, assume, permit to
exist or otherwise permit any Lien to exist on any of its property or any
property of its Subsidiaries, assets, revenues or goods, whether real, personal
or mixed, whether now owned or hereafter acquired, except for Permitted Liens as
set forth in Attachment L. 

7.3.  Disposition of Assets.

        (A)  No Borrower will, and
will not permit its Subsidiaries (including any Inactive Subsidiaries) to,
directly or indirectly, sell, lease, assign, transfer or otherwise dispose of
any assets other than (i) sales of inventory in the ordinary course of
business and short term rental of inventory as demonstrations in amounts not
material to such Borrower, (ii) voluntary dispositions of individual assets
and obsolete or worn out property in the ordinary course of business, and
(iii) Permitted Dispositions provided, however, that no
Permitted Disposition shall represent an amount in excess of five (5%) of the
combined assets of the Borrowers and Subsidiaries without the prior written
consent of IBM Credit. 

        (B)  In the event of a
Permitted Disposition, Lender shall provide Applicable Borrower with such
documentation (including, without limitation, the execution and delivery of
termination statements) and shall take all such steps (including, without
limitation, the redelivery of stock certificates) as Applicable Borrower, from
time to time may reasonably request in connection with, and to facilitate such,
Permitted Disposition. 

54

7.4.  Legal
Entity Changes. Except as permitted under Section 6.4, no Loan
Party (including any Inactive Subsidiaries) will, and will not permit any
Subsidiary (including any Inactive Subsidiary) thereof to, without the prior
written consent of IBM Credit, directly or indirectly, merge, consolidate,
liquidate, dissolve, or enter into or engage in any operation or activity
materially different from that presently being conducted by such Loan Party or
Subsidiary thereof. 

7.5.  Guaranties.
Each Borrower and Guarantor will not, and will not permit its Subsidiaries
(including any Inactive Subsidiary) or any other Loan Party to, directly or
indirectly, assume, guaranty, endorse, or otherwise become liable upon the
obligations of any other Person, except (A) by the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business, (B) by the giving of indemnities in connection
with the sale of Inventory or other asset dispositions permitted hereunder, and
(C) for Guarantee Obligations in favor of IBM Credit. 

7.6.  Restricted
Payments. Each Loan Party (including any Inactive Subsidiaries) will not,
and will not permit its respective Subsidiaries (including any Inactive
Subsidiary) to, directly or indirectly: (A) declare or pay any dividend
(other than dividends payable solely in common stock, membership interest or
other equity interest, of such Loan Party as applicable,) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or other acquisition of,
any shares of any class of Capital Stock of such Loan Party or any applicable
Subsidiaries or any warrants, options or rights to purchase any such Capital
Stock of such Loan Party, whether now or hereafter outstanding, or make any
other distribution in respect thereof, either directly or indirectly, whether in
cash or property or in obligations of such Loan Party or any applicable
Subsidiary; or (B) make any optional payment or prepayment on or redemption
(including, without limitation, by making payments to a sinking or analogous
fund) or repurchase of any Indebtedness (other than the Obligations) (all such
payments and/or distributions, the “Restricted Payments”);
provided that, so long as no Default or Event of Default shall have
occurred and be continuing, Restricted Payments in respect of Investment
Property may be made, subject to the terms of Section 3.5 hereof. 

7.7.  Employment  Agreements.  Notwithstanding  the  provisions of each  Employment  Agreement,  each Loan Party
will not,  and will not permit  its  respective  Subsidiaries  to,  make any  payment  or  distribute  any asset or
property to each respective Employee as follows:

        (A)  With respect to Richard
J. Sullivan, (i) no annual salary payments under Section 6 of the
Employment Agreement shall be made in cash in excess of U.S.$120,000,
provided that such payments in excess of U.S.$120,000 may be made in
Tranche B Borrower common stock; (ii) so long as any Loans are
outstanding and other Obligations have not been satisfied and indefeasibly paid
in full, no payment shall be made under Section 12 of the Employment
Agreement; and (iii) so long as any Loans are outstanding and other
Obligations have not been satisfied and indefensibly paid in full, no payment
shall be made in respect of a “Triggering Event” (as defined in the
Employment Agreement) under Section 25 of the Employment Agreement; 

        (B)  With respect to Garrett
A. Sullivan, (i) no automobile shall be furnished under Section 5 of the
Employment Agreement; (ii) no monthly payments as flexible perquisite
allowances under Section 6 of the Employment Agreement shall be made;
(iii) no payment shall be made under Section 12 and/or Section 21
of the Employment Agreement; and (iv) no payment shall be made in respect
of a “Triggering Event” (as defined in the Employment Agreement) under
Section 24 of the Employment Agreement or any subsequent agreement between
Garrett A. Sullivan and the Tranche B Borrower; and 

        (C)  With respect to Jerome
C. Artigliere, so long as any Loans are outstanding and other Obligations have
not been satisfied and indefeasibly paid in full, no payment shall be made under
Section 12 of the Employment Agreement. 

provided, that,
(x) all payments otherwise prohibited in clauses (A) through (C) of
this Section 7.7 may be made in kind with Tranche B Borrower
common stock, and (y) in the event that 70% of all Loans and other
Obligations outstanding under this Agreement and the other Restructuring
Documents as of the Closing Date are indefeasibly paid in full on or before
February 28, 2003, with the approval of a majority of the Board of the Tranche A
Borrower, the Tranche A Borrower may set aside U.S.$10 million in a deposit
account pledged to and controlled by IBM Credit as security for the Obligations.
Upon indefeasible payment in full and satisfaction of all Obligations, IBM
Credit’s security interest in and control of such deposit account will
automatically be terminated and released. 

55

7.8.  Capital
Expenditures. Each Loan Party and its respective Subsidiaries will not make
or commit to make any Capital Expenditure, except Capital Expenditures of such
Loan Party and its respective Subsidiaries in the ordinary course of business
not exceeding U.S.$500,000; provided, that (A) up to U.S.$50,000 of
any such amount referred to above, if not so expended in the fiscal year for
which it is permitted, may be carried over for expenditure in the next
succeeding fiscal year and (B) Capital Expenditures made pursuant to this
Section 7.8 during any fiscal year will be deemed made,
first, in respect of amounts permitted for such fiscal year as provided
above and, second, in respect of amounts carried over from the prior
fiscal year pursuant to subclause (A) above. 

7.9.  Investments.  Each Loan Party will not, and will not permit its respective  Subsidiaries  to,  directly or
indirectly, make, maintain or acquire any Investment in any Person (including any Inactive Subsidiary) other than:

        (A)  interest bearing
deposit accounts (including certificates of deposit) which are insured by the
Federal Deposit Insurance Corporation (“FDIC”) or a similar
federal insurance program; 

        (B)  direct obligations of
the government of the United States of America or any agency or instrumentality
thereof or obligations guaranteed as to principal and interest by the United
States of America or any agency thereof; 

        (C)  stock or obligations
issued to each Loan Party (other than any Inactive Subsidiary) in settlement of
claims against others by reason of an event of bankruptcy or a composition or
the readjustment of debt or a reorganization of any debtor of such Loan Party; 

        (D)  commercial paper of any
company organized under the laws of any State of the United States or any bank
organized or licensed to conduct a banking business under the laws of the United
States or any State thereof having the short-term highest rating then given by
Moody’s or S&P; 

        (E)  as provided in Section 7.4;

        (F)  extensions of trade credit in the ordinary course of business; and

        (G)  Intercompany
Investments by any Borrower or any Subsidiary of any Borrower in any Person
that, prior to such Investment, is a wholly-owned Subsidiary Grantor (other than
any Inactive Subsidiary) of the Obligations. 

7.10.  Transactions with Affiliates. Each Loan Party (including any Inactive
Subsidiary) will not, and will not permit its respective Subsidiaries (including
any Inactive Subsidiary) to, directly or indirectly, enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of
property, the rendering of any service or the payment of any management,
advisory or similar fees, with any Affiliate (other than a Borrower or any
wholly owned Subsidiary Grantor) unless such transaction is (A) otherwise
permitted under this Agreement, (B) in the ordinary course of business of
such Loan Party or its Subsidiaries, as the case may be, and (C) upon fair
and reasonable terms no less favorable to such Loan Party or its Subsidiary, as
the case may be, than it would obtain in a comparable arm’s length
transaction with a Person that is not an Affiliate. Notwithstanding anything to
the contrary in this Agreement, any payment made by Tranche B Borrower in
respect of any reasonable trust administration expenses of Tranche A
Borrower shall be permitted. 

56

7.11.  ERISA.
Tranche B Borrower will not (A) terminate any Plan so as to incur a
material liability to the PBGC (as defined in Section 5.14 of this
Agreement), (B) permit any prohibited transaction” involving any Plan
(other than a “multi-employer benefit plan”) which would subject such
Borrower to a material tax or penalty on “prohibited transactions”
under the Code or ERISA, (C) fail to pay to any Plan any contribution which
they are obligated to pay under the terms of such Plan, if such failure would
result in a material “accumulated funding deficiency,” whether or not
waived, (D) allow or suffer to exist any occurrence of a “reportable
event” or any other event or condition, which presents a material risk of
termination by the PBGC of any Plan (other than a “multi-employer benefit
plan”), or (E) fail to notify IBM Credit as required in
Section 6.6. As used in this Agreement, the terms “accumulated
funding deficiency” and “reportable event” shall have the
respective meanings assigned to them in ERISA, and the term “prohibited
transaction” shall have the meaning assigned to it in the Code and ERISA.
For purposes of this Section 7.11, the terms “material
liability,” “tax,” “penalty,” “accumulated funding
deficiency” and “risk of termination” shall mean a liability,
tax, penalty, accumulated funding deficiency or risk of termination which could
likely be expected to have a Material Adverse Effect. 

7.12.  Sales and
Leasebacks. No Loan Party (other than any Inactive Subsidiary) will, and
will not permit its respective Subsidiaries to, without the prior written
consent of IBM Credit, enter into any arrangement with any Person providing for
the leasing by such Loan Party or any Subsidiary of real or personal property
that has been or is to be sold or transferred by such Loan Party or such
Subsidiary to such Person or to any other Person to whom funds have been or are
to be advanced by such Person on the security of such property or rental
obligations of such Loan Party or such Subsidiary. 

7.13.  Additional
Negative Pledges. Each Loan Party (other than any Inactive Subsidiary) will
not, and will not permit its respective Subsidiaries to, directly or indirectly,
create or otherwise cause or permit to exist or become effective (A) any
Contractual Obligation which may restrict or inhibit IBM Credit’s rights or
ability to sell or otherwise dispose of the Collateral or any part thereof after
the occurrence and during the continuance of an Event of Default, or
(B) any agreement that prohibits or limits the ability of such Loan Party,
any of its respective Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its property or revenues, whether now owned or hereafter
acquired, other than (i) the Restructuring Documents and (ii) any
agreements governing any Purchase Money Indebtedness otherwise permitted hereby
(in which case, any prohibition or limitation will only be effective against the
assets financed thereby). 

7.14.  Amendments
to Restructuring Documents. Each Loan Party will not, and will not permit
its respective Subsidiaries to, directly or indirectly, amend, supplement or
otherwise modify the terms and conditions of the Restructuring Documents or any
documents related thereto. 

7.15.  Accounts.
Each Grantor will not, and will not permit its respective Subsidiaries to,
permit or agree to any extension, compromise or settlement or make any change or
modification of any kind or nature with respect to any Account, including any of
the terms relating thereto, which would affect IBM Credit’s ability to
collect payment on any Account in whole or in part, except for such extensions,
compromises or settlements made by each Grantor in the ordinary course of its
business, provided, however, that the aggregate amount of such
extensions, compromises or settlements does not exceed five percent (5%) of such
Grantor’s Accounts at any time. 

57

7.16.  Indebtedness.  Each Loan Party  (including  any  Inactive  Subsidiary)  will not,  and will not permit its
respective  Subsidiaries  (including  any Inactive  Subsidiary)  to, create,  incur,  assume or permit to exist any
Indebtedness, except for Permitted Indebtedness.

7.17.  Loans.
Each Loan Party will not, and will not permit its respective Subsidiaries to,
make any loans, advances, contributions or payments of money or goods to any
Subsidiary (including any Inactive Subsidiary), Affiliate or parent company or
to any officer, director or stockholder of such Loan Party or of any such
company (except for compensation for personal services actually rendered),
except: 

        (A)  transactions expressly authorized by this Agreement;

        (B)  as described in Exhibit 7.15; and

        (C)  loans, advances and
payments of money or goods to other Borrowers or Guarantors in accordance with
Section 7.9(G). 

7.18.  Changes in  Accounting  Practices.  Each Loan Party  (other than any  Inactive  Subsidiary)  will not, and
will not permit its  respective  Subsidiaries  to,  change,  modify or alter its  accounting  policies or reporting
practices.

7.19.  Hedge
Agreements. Each Loan Party (other than any Inactive Subsidiary) will not
enter into or cause its respective Subsidiaries to enter into any Hedge
Agreements; provided, such Loan Party may enter into a Hedge Agreement if
such Hedge Agreement is for interest rate protection purposes only, is
nonspeculative in nature or purpose and the obligation thereunder are unsecured. 

7.20.  Optional
Payment and Modifications of Certain Debt Instruments. Each Borrower will
not, and will not permit its respective Subsidiaries (including any Inactive
Subsidiary) to, (A) make or offer to make any optional or voluntary payment,
prepayment, repurchase or redemption of or otherwise optionally or voluntarily
defease or segregate funds with respect to any Indebtedness subordinated to the
Obligations; (B) amend, modify, waive or otherwise change, or consent or
agree to any amendment, modification, waiver or other change to, any of the
terms of the any Indebtedness subordinated to the Obligations (other than any
such amendment, modification, waiver or other change that (i) would extend
the maturity or reduce the amount of any payment of principal thereof or reduce
the rate or extend any date for payment of interest thereon and (ii) does
not involve the payment of a consent fee); (C) enter into or be party to,
or make any payment under, any other debt related documents characterized by
“off-balance sheet” indebtedness; (D) designate any Indebtedness
(other than obligations of such Borrower and its Subsidiaries pursuant to the
Restructuring Documents) as “Designated Senior Indebtedness”
(or any other defined term having a similar purpose) for the purposes of any
Indebtedness subordinated to the Obligations; or (E) amend, modify, waive
or otherwise charge, or consent or agree to, any of the terms of any preferred
stock (other than any such amendment, modification, waiver or other charge that
(i) would extend the scheduled redemption date or reduce the amount of any
scheduled redemption payment or reduce the rate or extend any date for payment
of dividends thereon and (ii) does not involve the payment of a consent
fee. 

7.21.  Lines of
Business. Each Loan Party (other than any Inactive Subsidiary) and its
respective Subsidiaries will not enter into any business, either directly or
through any Subsidiary, except for those businesses in which such Loan Party and
its Subsidiaries are engaged on the date of this Agreement or that are
reasonably related thereto. 

58

7.22.  Change in
Fiscal Year. Each of each Loan Party (other than any Inactive Subsidiary)
and MAS will not change its fiscal year or change such Person’s method of
determining fiscal quarters in accordance with a prior written consent of IBM
Credit. 

7.23.  Lockboxes  and Special  Accounts.  Other than  Tranche B  Borrower,  no Grantor  will have or maintain any
Lockbox,  Special  Account or other  deposit  accounts  with any banks except as provided in  Section 2.11  of this
Agreement.

7.24.  Leases. Each Loan Party (other than any Inactive Subsidiary) and its
respective Subsidiaries will not enter into any arrangement with any Person for
the leasing thereby of any real or personal property other than Capital Lease
Obligations (subject to restrictions on Capital Expenditures as provided in
Section 7.8), if the aggregate amount of the rental payments (and
other obligations) thereunder would exceed U.S.$25,000. 

Section 8.
DEFAULT

8.1.  Events of Default.  Any one or more of the  following  events  shall  constitute  an Event of Default by a
Loan Party under this Agreement and the other Restructuring Documents:

        (A)  The failure of any  Borrower to make timely  payment of the  Obligations  or any part thereof when due and
payable;

        (B)  Any Borrower fails to
comply with or observe any term, covenant or agreement (other than the payment
Obligations set forth in Section 8.1(A)) contained in this Agreement
or any other Restructuring Documents and such failure is not cured within
fifteen (15) Business Days of written notice (with reasonable particularity) to
such Borrower of such failure; 

        (C)  Any representation,
warranty, statement, report or certificate made or deemed made or delivered by
or on behalf of any Borrower, any Loan Party or any Subsidiaries thereof in
connection with any Restructuring Document or any of its respective officers,
employees or agents or by or on behalf of any Guarantor to Lender shall prove to
have been inaccurate in any material respect on or as of the date when made or
deemed made; 

        (D)  Any Borrower, any other
Loan Party or any Subsidiary thereof defaults in the observance or performance
of any agreement contained in Section 6 or 7 of this
Agreement; 

        (E)  Any Loan Party or MAS
fails to comply with or observe any term, covenant or agreement contained in any
Restructuring Document (other than as set forth in paragraphs (A)
through (C) of this Section), and such default shall continue to be
unremedied for a period of fifteen (15) days after notice to a Borrower from IBM
Credit; 

        (F)  The occurrence of any
event or circumstance which could reasonably be expected to have a Material
Adverse Effect. For the purpose of this Section 8.1(F), (i) the
removal of any officer of MAS or (ii) the institution of any proceeding,
investigation, litigation or claim challenging any of the transactions
contemplated by the Restructuring Documents, which in either case Lender in its
sole and absolute discretion shall determine could have a Material Adverse
Effect, shall be deemed to be an Event of Default; 

        (G)  The use of any funds
borrowed from IBM Credit under this Agreement for any purpose other than as
provided in this Agreement; 

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        (H)  Any Loan Party or MAS
shall (i) default in making any payment of any principal of any Indebtedness
(including any Guarantee Obligation) on the scheduled or original due date with
respect thereto; or (ii) default in making any payment of any interest on
any such Indebtedness beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created; or
(iii) default in the observance or performance of any other agreement or
condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or (in the case of any such Indebtedness
constituting a Guarantee Obligation) to become payable; 

        (I)  Any Loan Party or any
Subsidiary thereof (other than any Inactive Subsidiary) shall commence any case,
proceeding or other action (i) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts; or
(ii) seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of its assets,
or any Loan Party or any Subsidiary thereof shall make a general assignment for
the benefit of its creditors; or (iii) there shall be commenced against any
Loan Party or any Subsidiary thereof any case, proceeding or other action of a
nature referred to in clause (i) above that (a) results in the
entry of an order for relief or any such adjudication or appointment or
(b) remains undismissed, undischarged or unbonded for a period of thirty
(30) days; or (iii) there shall be commenced against any Loan Party or any
Subsidiary thereof any case, proceeding or other action seeking issuance of a
warrant of attachment, execution or similar process against all or any
substantial part of its assets that results in the entry of an order for any
such relief that shall not have been vacated, discharged, or stayed or bonded
pending appeal within thirty (30) days from the entry thereof; or (iv) any
Loan Party or any Subsidiary thereof shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or
(v) any Loan Party or any Subsidiary thereof shall generally not, or shall
be unable to, or shall admit in writing its inability to, pay its debts as they
become due; 

        (J)  The entry of any
judgment against any Loan Party or MAS in an amount in excess of U.S.$50,000 and
such judgment is not satisfied, dismissed, stayed or superseded by bond within
thirty (30) days after the day of entry thereof (and in the event of a stay or
bond, such judgment is not discharged within thirty (30) days after termination
of any such stay or bond) or such judgment is not covered by insurance as to
which the insurance company has acknowledged its obligation to pay such judgment
in full; 

        (K)  The dissolution or
liquidation of any Loan Party or any Subsidiary thereof (other than any Inactive
Subsidiary), or its directors or stockholders shall take any action to dissolve
or liquidate such Loan Party or any Subsidiary thereof; 

        (L)  Any Borrower suspends
business for five (5) consecutive Business Days for any reason other than an Act
of God, war or other catastrophic event beyond the control of such Borrower; 

        (M)  The occurrence of any
event or condition that permits the holder of any Indebtedness aggregating in
excess of U.S.$100,000 arising in one or more related or unrelated transactions
to accelerate the maturity thereof or the failure of any Borrower to pay when
due any such Indebtedness; 

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        (N)  Any Guaranty of any or
all of the Borrowers’ Obligations executed by any Guarantor, whose assets
are substantially relied upon by Lender to secure the Obligations, in favor of
Lender, shall at any time for any reason cease to be in full force and effect or
shall be declared to be null and void by a court of competent jurisdiction or
the validity or enforceability thereof shall be contested or denied by any such
Guarantor, or any such Guarantor shall deny that it has any further liability or
obligation thereunder or any such Guarantor shall fail to comply with or observe
any of the terms, provisions or conditions contained in any such Guaranty; 

        (O)  Any Borrower is in
default under the material terms of any of the Restructuring Documents after the
expiration of any applicable grace and/or cure periods; 

        (P)  (i) any Person
(including any Inactive Subsidiary) shall engage in any “prohibited
transaction” (as defined in Section 406 of ERISA or Section 4975
of the Code) involving any Plan, (ii) any “accumulated funding
deficiency” (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or
a Plan shall arise on the assets of Borrower or any Commonly Controlled Entity,
(iii) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the reasonable
opinion of IBM Credit, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) any Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of IBM Credit is
likely to, incur any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, a Multiemployer Benefit Plan or (vi) any
other event or condition shall occur or exist with respect to a Plan; and in
each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could, in
the sole judgment of IBM Credit, reasonably be expected to have a Material
Adverse Effect; 

        (Q)  The issuance of a
warrant of distress for any rent or taxes with respect to any premises occupied
by any Borrower or any Subsidiary in or upon which the Collateral, or any part
thereof, may at any time be situated and such warrant shall continue for a
period of ten (10) Business Days from the date such warrant is issued; 

        (R)  Any “person”
(as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) shall have acquired a beneficial interest in twenty percent (20%) or
more of the Voting Stock of any Borrower; 

        (S)  Any Subsidiary of any
Borrower shall (i) default in any payment of principal of or interest of
any Indebtedness owning to Lender beyond the period of grace, if any, provided
in the instrument or agreement under which such Indebtedness was created, or
(ii) default in the observance or performance of any other agreement or
condition relating to any such Indebtedness contained in any instrument or
agreement evidencing, securing or relating thereto; 

        (T)  Any Issuer of MAS Stock
shall have issued Capital Stock without the prior written consent of IBM Credit; 

        (U)  A majority of the board of directors of MAS shall cease to consist of Continuing Directors;

        (V)  The terms and
conditions of the certificate of incorporation, by-laws and/or other constituent
documents of any Issuer of MAS Stock shall have been amended, supplemented or
otherwise modified unless such amendment, supplement or modification is not
adverse to the interests of any Borrower or their respective Subsidiaries or
Lender; 

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        (W)  Any Borrower and/or any
of their respective Subsidiaries shall have transferred any of their respective
assets and/or property, by any means whatsoever, to any Inactive Subsidiary; or 

        (X)  Tranche B Borrower
shall have asserted, threatened or commenced any action, litigation or
proceeding against Tranche A Borrower or any of its properties or revenues. 

8.2.  Acceleration. Upon the occurrence and during the continuance of an Event
of Default which has not been waived in writing by Lender, Lender may, in their
sole discretion, without prejudice to any other rights they may have at law or
under this Agreement to enforce its claims against the Loan Parties, declare all
Obligations to be immediately due and payable (except that if the Event of
Default consists of the filing of a petition under the Bankruptcy Code, in which
case all Obligations shall automatically become immediately due and payable
without the necessity of any notice or other demand) without presentment,
demand, protest or any other action or obligation of Lender. 

8.3.  Remedies.

        (A)  Upon the occurrence and
during the continuance of any Event of Default which has not been waived in
writing by Lender and the acceleration of the Obligations in accordance with
Section 8.2, Lender may exercise all rights and remedies of a
secured party under the UCC, or any other provisions, laws or statutes as
applicable. Without limiting the generality of the foregoing, Lender may:
(i) remove from any premises where same may be located any and all
documents, instruments, files and records (including the copying of any computer
records), and any receptacles or cabinets containing same, relating to the
Accounts, or Lender may use (at the expense of such Loan Party) such of the
supplies or space of a Borrower or any other Loan Party, as applicable, at such
Loan Party’s place of business or otherwise, as may be necessary to
properly administer and control the Accounts or the handling of collections and
realizations thereon; (ii) bring suit, in the name of a Borrower, any other
Loan Party or Lender and generally shall have all other rights respecting said
Accounts, including without limitation the right to accelerate or extend the
time of payment, settle, compromise, release in whole or in part any amounts
owing on any Accounts and issue credits in the name of such Borrower, such other
Loan Party or Lender; (iii) sell, assign and deliver the Accounts and any
returned, reclaimed or repossessed merchandise, with or without advertisement,
at public or private sale, for cash, or credit or otherwise, at Lender’s
sole option and discretion, and Lender may bid or become a purchaser at any such
sale; and (iv) foreclose the security interests created pursuant to this
Agreement by any available judicial procedure, or to take possession of any or
all of the Collateral without judicial process and to enter any premises where
any Collateral may be located for the purpose of taking possession of or
removing the same. 

        (B)  Upon the occurrence of
any Event of Default, in addition to any remedies provided under
Section 3.6 of this Agreement, each Borrower and each other
applicable Loan Party agrees to provide to Lender (i) within three (3)
Business Days after request by Lender, any written certificates, schedules and
reports together with all supporting documents relating to the Collateral or
such Person’s business affairs and financial condition; and (ii) the
name, address and phone number of each of its Account debtors’ primary
contacts for each Account if requested by IBM Credit. Upon the occurrence and
during the continuance of any Event of Default which has not been waived in
writing by Lender, and the acceleration of the Obligations in accordance with
Section 8.2, Lender shall have the right to sell, lease, or
otherwise dispose of all or any part of the Collateral, whether in its then
condition or after further preparation or processing, in the name of such Loan
Party or Lender, or in the name of such other party as Lender may designate,
either at public or private sale or at any broker’s board, in lots or in
bulk, for cash or for credit, with or without warranties or representations, and
upon such other terms and conditions as Lender in its sole discretion may deem
advisable, and Lender shall have the right to purchase at any such sale. 

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If Lender in its sole
discretion determines that any of the Collateral requires rebuilding, repairing,
maintenance or preparation, Lender shall have the right, at its option, to do
such of the aforesaid as it deems necessary for the purpose of putting such
Collateral in such saleable form as Lender shall deem appropriate. Each Borrower
and each other applicable Loan Party hereby agrees that any disposition by
Lender of any Collateral pursuant to and in accordance with the terms of a
repurchase agreement between Lender and the manufacturer or any supplier of such
Collateral constitutes a commercially reasonable sale. Each Borrower and each
other applicable Loan Party agrees, at the request of Lender, to assemble the
Collateral and to make it available to Lender at places which Lender shall
select, whether at the premises of such Person or elsewhere, and to make
available to Lender the premises and facilities of such Person for the purpose
of Lender’s taking possession of, removing or putting such Collateral in
saleable form. If notice of intended disposition of any Collateral is required
by law, it is agreed that ten (10) Business Days notice shall constitute
reasonable notification. 

        (C)  Unless expressly
prohibited by the licensor thereof, if any, Lender is hereby granted by each
Applicable Borrower and each other applicable Loan Party, upon the occurrence
and during the continuance of any Event of Default which has not been waived in
writing by Lender, an irrevocable, nonexclusive license to use, assign, license
or sublicense all computer software programs, data bases, processes and
materials used by such Person in its businesses or in connection with any of the
Collateral. 

        (D)  The net cash proceeds
resulting from Lender’s exercise of any of the foregoing rights (after
deducing all charges, costs and expenses, including reasonable attorneys’
fees) shall be applied by Lender to the payment of the Obligations, whether due
or to become due, in such order as Lender may in it sole discretion elect. Each
Borrower shall remain liable to Lender for any deficiencies, and Lender in turn
agrees to remit to such Borrower, or its successors or assigns, any surplus
resulting therefrom. 

        (E)  The enumeration of the
foregoing rights is not intended to be exhaustive and the exercise of any right
shall not preclude the exercise of any other rights, all of which shall be
cumulative. 

8.4.  Waiver.
If IBM Credit seeks to take possession of any of the Collateral by any court
process, each of Borrower and each applicable Grantor hereby irrevocably waives
to the extent permitted by applicable law any bonds, surety and security
relating thereto required by any statute, court rule or otherwise as an incident
to such possession and any demand for marshalling or possession of the
Collateral prior to the commencement of any suit or action to recover possession
thereof. Each Borrower and each other Loan Party waives to the extent permitted
by applicable law all rights of setoff it may have against Lender. Each Borrower
and each other Loan Party further waives to the extent permitted by applicable
law presentment, demand and protest, and notices of non-payment,
non-performance, any right of contribution, dishonor, and any other demands, and
notices required by law. 

Section 9.
MISCELLANEOUS

9.1.  Term; Maturity Date.

        (A)  This Agreement shall
remain in force until the earlier of (i) the Maturity Date, (ii) the date
specified in a written notice by any Borrower that the Borrowers intend to
terminate this Agreement, which date shall be no less than thirty (30) days
following the receipt by IBM Credit of such written notice, and
(iii) termination by Lender after the occurrence and during the continuance
of an Event of Default. Upon the date that this Agreement is terminated, all of
Borrowers’ Obligations shall be immediately due and payable in their
entirety, even if they are not yet due in accordance with their terms. 

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        (B)  Until the indefeasible
payment in full of all of Borrowers’ Obligations and the Obligations of
each other Loan Party to Lender under the Restructuring Documents, no
termination of any Restructuring Document shall in any way affect or impair
(i) Borrowers’ Obligations to Lender and the Obligations of each other
Loan Party to Lender under the Restructuring Documents, including, without
limitation, any transaction or event occurring prior to and after such
termination, or (ii) Lender’s rights hereunder, including, without
limitation Lender’ security interest in the Collateral. 

        (C)  In the event of the
payment in full of all of the then Outstanding Loans, Lender shall provide
Applicable Borrower with all such documentation (including, without limitation,
the execution and delivery of termination statements) and shall take all such
steps (including, without limitation, the redelivery of stock certificates) as
such Applicable Borrower, from time to time may reasonably request in connection
with, and to facilitate the release of all security and Collateral interests
which Lender has in any Borrower, Subsidiary or other Person. 

9.2.  Indemnification. Each Loan Party hereby agrees to indemnify and hold
harmless Lender and each of its officers, directors, agents and assigns
(collectively, the “Indemnified Persons”) against all losses,
claims, damages, liabilities or other expenses (including reasonable
attorneys’ fees and court costs now or hereinafter arising from the
enforcement of this Agreement, the “Losses”) to which any of
them may become subject to the extent such Losses arise out of or are based upon
any event, circumstance or condition (A) occurring or existing on or before
the date of this Agreement relating to any financing arrangements Lender may
from time to time have with (i) such Loan Party, (ii) any Person that
shall be acquired by such Loan party or (iii) any Person that such Borrower
may acquire all or substantially all of the assets of, or (B) directly or
indirectly, relating to the execution, delivery or performance of each
Restructuring Document or the consummation of the transactions contemplated
hereby or thereby or to any of the Collateral or to any act or omission of such
Loan Party in connection therewith. Notwithstanding the foregoing, a Loan Party
shall not be obligated to indemnify Lender for any Losses incurred by Lender
which are a result of Lender’s gross negligence or willful misconduct. The
indemnity provided herein shall survive the termination of this Agreement. 

9.3.  Additional
Obligations. Lender, without waiving or releasing any Obligation or Default
of any Loan Party, may perform any Obligations of a Loan Party that such Loan
Party shall fail or refuse to perform and Lender may, at any time or times
hereafter, but shall be under no obligation to, pay, acquire or accept any
assignment of any security interest, lien, encumbrance or claim against the
Collateral asserted by any person. All sums paid by Lender in performing in
satisfaction or on account of the foregoing and any expenses, including
reasonable attorney’s fees, court costs, and other charges relating
thereto, shall be a part of the Obligations, payable on demand and secured by
the Collateral. 

9.4.  LIMITATION
OF LIABILITY. NO LENDER NOR ANY OTHER INDEMNIFIED PERSON SHALL HAVE ANY
LIABILITY WITH RESPECT TO ANY SPECIAL, EXEMPLARY, PUNITIVE, INDIRECT OR
CONSEQUENTIAL DAMAGES SUFFERED BY BORROWERS OR ANY OTHER LOAN PARTY IN
CONNECTION WITH THIS AGREEMENT, ANY OTHER AGREEMENT, OR ANY DELAY, OMISSION OR
ERROR IN THE ELECTRONIC TRANSMISSION OR RECEIPT OF ANY E-DOCUMENT, OR ANY CLAIMS
IN ANY MANNER RELATED THERETO. NOR SHALL LENDER OR ANY OTHER INDEMNIFIED PERSON
HAVE ANY LIABILITY TO BORROWERS OR ANY OTHER LOAN PARTY OR ANY OTHER PERSON FOR
ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY IT OR THEM HEREUNDER, EXCEPT FOR ITS
OR THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. IN THE EVENT ANY BORROWER
OR ANY OTHER LOAN PARTY REQUESTS APPLICABLE LENDER TO EFFECT A WITHDRAWAL OR
DEBIT OF FUNDS FROM AN ACCOUNT OF SUCH BORROWER OR ANY OTHER LOAN PARTY, THEN IN
NO EVENT SHALL APPLICABLE LENDER BE LIABLE FOR ANY AMOUNT IN EXCESS OF ANY
AMOUNT INCORRECTLY DEBITED, EXCEPT IN THE EVENT OF SUCH APPLICABLE LENDER’S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. NO PARTY HERETO SHALL BE LIABLE FOR ANY
FAILURE TO PERFORM ITS OBLIGATIONS IN CONNECTION WITH ANY E-DOCUMENT, WHERE SUCH
FAILURE RESULTS FROM ANY ACT OF GOD OR OTHER CAUSE BEYOND SUCH PARTY’S
REASONABLE CONTROL (INCLUDING, WITHOUT LIMITATION, ANY MECHANICAL, ELECTRONIC OR
COMMUNICATIONS FAILURE) WHICH PREVENTS SUCH PARTY FROM TRANSMITTING OR RECEIVING
E-DOCUMENTS. 

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9.5.  RELEASE OF
CLAIMS. TO INDUCE LENDER TO ENTER INTO THIS AGREEMENT, EACH BORROWER AND
EACH OTHER LOAN PARTY HERETO HEREBY RELEASES, ACQUITS AND FOREVER DISCHARGES
LENDER AND LENDER’S OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, CONSULTANTS,
ADVISORS, SUCCESSORS AND ASSIGNS AND AFFILIATES FROM ALL LIABILITIES, CLAIMS,
DEMANDS, ACTIONS OR CAUSES OF ACTIONS OF ANY KIND (IF THERE BE ANY), WHETHER
ABSOLUTE OR CONTINGENT, DUE OR TO BECOME DUE, DISPUTED OR UNDISPUTED, LIQUIDATED
OR UNLIQUIDATED, AT LAW OR IN EQUITY, THAT ANY ONE OR MORE OF THEM NOW HAVE OR
EVER HAVE HAD AGAINST LENDER OR ANY OF LENDER’S AFFILIATES, WHETHER ARISING
UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY OF THE RESTRUCTURING DOCUMENTS
OR OTHERWISE. 

9.6.  Amendments;
Waiver. Each Restructuring Document may not be amended, supplemented, waived
or otherwise modified except by an agreement in writing signed by Borrowers,
each other Loan Party thereto and Lender. No delay or omission of Lender to
exercise any right or remedy hereunder, whether before or after the occurrence
of any Event of Default, shall impair any such right or remedy or shall operate
as a waiver thereof or as a waiver of any such Event of Default. In the event
that Lender at any time or from time to time dispenses with any one or more of
the requirements specified in any of the Restructuring Documents, such
dispensation may be revoked by Lender at any time and shall not be deemed to
constitute a waiver of any such requirement subsequent thereto. Lender’
failure at any time or times to require strict compliance and performance by any
Borrower or any other Loan Party of any undertakings, agreements, covenants,
warranties and representations of this Agreement or any other Restructuring
Document shall not waive, affect or diminish any right of Lender thereafter to
demand strict compliance and performance thereof. Any waiver by Lender of any
Default by the Borrowers or any of the Loan Party under any of the Restructuring
Documents shall not waive or affect any other Default by the Borrowers or any
other Loan Party under each Restructuring Documents, whether such Default is
prior or subsequent to such other Default and whether of the same or a different
type. None of the undertakings, agreements, warranties, covenants, and
representations of the Borrowers or any other Loan Party contained in each
Restructuring Documents and no Default by the Borrowers or any other Loan Party
shall be deemed waived by Lender unless such waiver is in writing signed by an
authorized representative of Lender. 

9.7.  Severability. If any provision of the Restructuring Documents or the
application thereof to any Person or circumstance is held invalid or
unenforceable, the remainder of the Restructuring Documents and the application
of such provision to other Persons or circumstances will not be affected
thereby, the provisions of the Restructuring Documents being severable in any
such instance. 

9.8.  One
Loan. All Loans heretofore, now or at any time or times hereafter made by
Lender to an Applicable Borrower under this Agreement or any other Restructuring
Documents shall constitute one loan secured by Lender’s security interests
in the Collateral and by all other security interests, liens and encumbrances
heretofore, now or from time to time hereafter granted by the Applicable
Borrower or any Grantor to Lender or any assignor of Lender. 

65

9.9.  Additional
Collateral. All monies, reserves and proceeds received or collected by
Lender with respect to Accounts and other property of an Applicable Borrower or
any other applicable Loan Party in possession of Lender at any time or times
hereafter are hereby pledged by Applicable Borrower or such applicable Loan
Party to Lender as security for the payment of Applicable Borrower’s
Obligations and the Obligations of such other Loan Party to Lender under the
Restructuring Documents and shall be applied promptly by Lender on account of
the Applicable Borrower’s Obligations and the Obligations of such other
Loan Party to Lender under the Restructuring Documents; provided,
however, Lender may release to the Applicable Borrower or such applicable
Loan Party such portions of such monies, reserves and proceeds as Lender may
from time to time determine, in its sole discretion. 

9.10.  No Merger
or Novations. This Agreement and the other Restructuring Documents represent
the entire agreement of each Borrower, each other Loan Party hereto and Lender
with respect to the subject hereof and thereof and supersedes all prior
agreements, representations and understanding, if any, relating to the subject
matter hereof and thereof (it being understood that all of the indebtedness,
obligations and liens created under the Existing Credit Agreement, as amended
and restated hereby, remain in full force and effect and are not discharged,
paid, satisfied, or cancelled). There are no promises, undertakings,
representations or warranties by Lender relative to the subject matter hereof
not expressly set forth or referred to in each Restructuring Document. Neither
the obtaining of any judgment nor the exercise of any power of seizure or sale
shall operate to extinguish the Obligations of a Borrower and the Obligations of
each other Loan Party under the applicable Restructuring Documents to Lender
secured by this Agreement and shall not operate as a merger of any covenant in
this Agreement, and the acceptance of any payment or alternate security shall
not constitute or create a novation and the obtaining of a judgment or judgments
under a covenant herein contained shall not operate as a merger of that covenant
or affect Lender’s rights under this Agreement. 

9.11.  Participations and Assignments.

        (A)  Lender may, in
accordance with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a “Participant”)
participating interests in any Loans owing to Lender or any other interest of
Lender under each Restructuring Document. In the event of any such sale by
Lender of a participating interest to a Participant, Lender’s obligations
under each Restructuring Document to the other parties to the Restructuring
Documents shall remain unchanged, Lender shall remain solely responsible for the
performance thereof, Lender shall remain the holder of any such Loan for all
purposes under the Restructuring Documents, and each Borrower and each other
Loan Party shall continue to deal solely and directly with Lender in connection
with Lender’s rights and obligations under each Restructuring Document. In
no event shall any Participant under any such participation have any right to
approve any amendment or waiver of any provision of any Restructuring Document,
or any consent to any departure by any other Participants therefrom, except to
the extent that such amendment, waiver or consent would reduce the principal of,
or interest on, the Loans or any fees payable hereunder, or postpone the date of
the final maturity of the Loans, in each case to the extent subject to such
participation. Each Borrower agrees that if amounts outstanding under this
Agreement and each other Restructuring Documents and the Loans are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement or
any other Restructuring Document to the same extent as if the amount of its
participating interest were owing directly to it as a lender under such
Restructuring Document, provided, that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with Lender
the proceeds thereof as fully as if it were a lender hereunder. Each
Borrower and each other Loan Party also agrees that each Participant shall be
entitled to the benefits of Sections 2.2, 2.10 and 9.2 with respect
to its participation in the Loans outstanding from time to time as if it were a
Lender; provided, that no Participant shall be entitled to receive any
greater amount pursuant to any such Section than Lender or any other transferor
Participant would have been entitled to receive in respect of the amount of the
participation transferred by Lender or any other transferor Participant to such
Participant had no such transfer occurred. 

66

        (B)  Lender may, in
accordance with applicable law, prior to a Default or Event of Default with the
consent of Applicable Borrower (such consent not to be unreasonably withheld or
delayed), assign to one or more bank, financial institution or other entity (an
“Assignee”) all or any part of its rights and obligations under
the Restructuring Documents pursuant to an assignment and acceptance agreement
substantially in the form of Attachment P hereto (the
“Assignment and Acceptance Agreement”), executed by such
Assignee, Lender and, if applicable, Applicable Borrower. Upon such execution,
delivery, and acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance Agreement, (i) the
Assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance Agreement, have the rights and obligations of a lender
hereunder with a commitment and/or Loans as set forth therein, and
(ii) Lender thereunder shall, to the extent provided in such Assignment and
Acceptance Agreement, be released from its obligations under any Restructuring
Document (and, in the case of an Assignment and Acceptance Agreement covering
all of Lender’s rights and obligations under this Agreement, Lender shall
cease to be a party hereto). Notwithstanding any provision of this
Section 9.11(B), the consent of Borrowers shall not be required for
any assignment that occurs when a Default or Event of Default shall have
occurred and be continuing. 

9.12.  Section Titles.  The Section titles used in this Agreement and the other  Restructuring  Documents are for
convenience only and do not define or limit the contents of any Section.

9.13.  Binding
Effect; Assignment. This Agreement and each other Restructuring Document
shall be binding upon and inure to the benefit of Lender and the Borrowers and
their respective successors and assigns; provided, that none of the
Borrower or any other Loan Party shall have the right to assign this Agreement
or any of the Restructuring Documents without the prior written consent of
Lender. 

9.14.  Cumulative
Remedies. No failure to exercise and no delay in exercising, on the part of
Lender, any right, remedy, power or privilege each Restructuring Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law. 

9.15.  Survival
of Representations and Warranties. All representations and warranties made
in each Restructuring Documents and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement. 

9.16.  Payment of
Expenses and Taxes. Each Borrower and each other Loan Party agrees
(A) to pay or to reimburse Lender for all its out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution
of, and any amendment, supplement or modification to, any Restructuring
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including the reasonable fees and disbursements of counsel to
Lender and filing and recording fees and expenses, with statements with respect
to the foregoing to be submitted to the Borrowers prior to the Closing Date (in
the case of amounts to be paid on the Closing Date) and from time to time
thereafter on a quarterly basis or such other periodic basis as Lender shall
deem appropriate, (B) to pay or to reimburse Lender for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under any Restructuring Documents and any such other documents, including
the fees and disbursements of counsel (including the allocated fees and expenses
of in-house counsel) to Lender, (C) to pay, indemnify, and hold Lender
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise,
Non-Excluded Taxes and other taxes, if any, that may be payable or determined to
be payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
each Restructuring Documents and any such other documents, and (D) to pay,
indemnify, and hold Lender and their respective officers, directors, employees,
affiliates, agents and controlling persons (each, an
“Indemnitee”) harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of each
Restructuring Documents and any such other documents, or the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of each Borrower, each other Loan Party or their respective
Subsidiaries and the reasonable fees and expenses of legal counsel in connection
with claims, actions or proceedings by any Indemnitee against such Borrower,
each other Loan Party or their Subsidiaries under any Restructuring Document
(all the foregoing in this clause (D), collectively, the
“Indemnified Liabilities”), provided, that neither
Borrower nor any other Loan Party shall have any obligation hereunder to any
Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee. Without limiting the foregoing, and to
the extent permitted by applicable law, each of Borrower and each other Loan
Party agree not to assert and to cause their respective Subsidiaries not to
assert, and hereby waive and agree to cause their respective Subsidiaries to
waive, all rights for contribution or any other rights of recovery with respect
to all claims, demands, penalties, fines, liabilities, settlements, damages,
costs and expenses of whatever kind or nature, under or related to Environmental
Laws, that any of them might have by statute or otherwise against any
Indemnitee. 

67

9.17.  Confidentiality. Lender agrees to keep confidential all non-public
information provided to it by each Borrower, each other Loan Party or their
respective Subsidiaries pursuant to this Agreement that is designated by such
Borrower, such other Loan Party or their respective Subsidiaries as
confidential; provided, that nothing herein shall prevent Lender from
disclosing any such information (A) to its Subsidiaries or Affiliates,
(B) subject to an agreement to comply with the provisions of this Section,
to any actual or prospective transferee, (C) to its employees, directors,
agents, attorneys, accountants and other professional advisors or those of any
of its Affiliates, (D) upon the request or demand of any Governmental
Authority, (E) in response to any order of any court or other Governmental
Authority or as may otherwise be required pursuant to any Requirement of Law,
(F) if requested or required to do so in connection with any litigation or
similar proceeding, (G) that has been publicly disclosed, (H) to any
nationally recognized rating agency that requires access to information about
Lender’s investment portfolio in connection with ratings issued with
respect to Lender, or (I) in connection with the exercise of any remedy
under any Restructuring Document, and nothing herein shall prevent any
Subsidiary or Affiliate of Lender from disclosing any non-public information to
Lender. 

9.18.  Notices; E-Business Acknowledgment.

        (A)  Except as otherwise
expressly provided in this Agreement, any notice required or desired to be
served, given or delivered hereunder shall be in writing, and shall be deemed to
have been validly served, given or delivered (A) upon receipt if deposited
in the United States, first class mail, with proper postage prepaid,
(B) upon receipt of confirmation or answerback if sent by telecopy,
(C) upon sending a facsimile transmission, (D) one Business Day after
deposit with a reputable overnight courier with all charges prepaid, or
(E) when delivered, if hand-delivered by messenger, all of which shall be
properly addressed to the party to be notified and sent to the address or number
indicated as follows: 

68

	 	(i)  If to IBM Credit at:

	(ii)  If to a Borrower at:

	 	 	IBM Credit Corporation

1500 Riveredge Parkway

Atlanta, Georgia 30328

Attention:  Region Manager, East

Facsimile:  (770) 644-4826	 	Applicable Digital Solutions, Inc.

400 Royal Palm Way, Suite 410

Palm Beach, Florida 33480

Attention:  Jerome C. Artigliere

Facsimile:  (561) 805-8004
	 	
With a copy to:

	 
	 	 	IBM Global Financing

Special Handling Group

North Castle Drive

Armonk, New York 10504

Attention:  Bruce Gordon

Facsimile:  (914) 765-6268	 	 

or to such other address or
number as each party designates to the other in the manner prescribed herein. A
copy of all material notices under the Agreement or any other Restructuring
Document, including any notice of, or which starts the beginning of any grace
and/or cure periods applicable to, any Event of Default and any notice which
consists of a reservation of rights or claiming or suggesting any departure from
the provisions of the Agreement and any other Restructuring Documents shall also
be delivered to Applied Digital Solutions, Inc. located at 400 Royal Palm Way,
Suite 410, Palm Beach, Florida 33480, Attention: General Counsel or such other
address, written notice of which is provided by Borrowers to Lender. Lender
reserves the right to serve notices of legal proceedings directly to Borrowers. 

	 	        (i)  
Each Loan Party hereto, on the one hand, and Lender, on the other hand, may
electronically transmit to or receive from the other party hereto Restructuring
Documents (Restructuring Documents in such electronic form,
“E-Documents”) via the Internet. Any transmission of data which
is not an E-Document shall have no force or effect between the parties hereto.
E-Documents shall not be deemed to have been properly received, and no
E-Document shall give rise to any obligation, until accessible to the receiving
party at such party’s receipt computer at the address specified herein.
Upon proper receipt of an E-Document, the receiving party shall promptly
transmit a functional acknowledgment in return. A functional acknowledgment
shall constitute conclusive evidence that an E-Document has been properly
received. If any transmitted E-Document is received in an unintelligible or
garbled form, the receiving party shall promptly notify the originating party in
a reasonable manner. In the absence of such a notice, the originating
party’s records of the contents of such E-Document shall control.

	 	        (ii)  
Each party hereto shall use those security procedures which are reasonably
sufficient to ensure that all transmissions of E-Documents are authorized and to
protect its business records and data from improper access. Any E-Document
received pursuant to this Section 9.18 shall have the same effect as
if the contents of the E-Document had been sent in paper rather than electronic
form. The conduct of the parties hereto pursuant to this
Section 9.18 shall, for all legal purposes, evidence a course of
dealing and a course of performance accepted by the parties hereto. The parties
hereto agree not to contest the validity or enforceability of E-Documents under
the provisions of any applicable law relating to whether certain agreements are
to be in writing or signed by the party hereto to be bound thereby. The parties
hereto agree, as to any E-Document sent from a Loan Party’s e-mail
address(es) listed in this Section 9.18, that IBM Credit can
reasonably rely on the fact that such E-Document is properly authorized by such
Borrower or such other applicable Loan Party. E-Documents, if introduced as
evidence on paper in any judicial, arbitration, mediation or administrative
proceedings, will be admissible as between the parties hereto to the same extent
and under the same conditions as other business records originated and
maintained in documentary form. Neither party shall contest the admissibility of
copies of E-Documents under either the business records exception to the hearsay
rule or the best evidence rule on the basis that the E-Documents were not
originated or maintained in documentary form.

69

BORROWER/OTHER LOAN PARTIES RECIPIENT INFORMATION for Internet transmissions:

(PLEASE PRINT)

Name of
Borrower’s/Other Loan Parties’ Designated Contact(s) Authorized to
Receive and Transmit E-Documents: 

	E-mail Address:	 

	Phone Number:	 

9.19.  Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto were upon the same instrument. Delivery of an executed
signature page of this Agreement by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof. Each party hereto shall
deliver to each other party hereto a manually executed counterpart of its
signature page within five (5) days after delivering its signature page by
facsimile transmission. A set of the copies of this Agreement signed by all the
parties hereto shall be lodged with each Borrower and Lender. 

9.20.  SUBMISSION  AND CONSENT TO  JURISDICTION  AND CHOICE OF LAW. TO INDUCE LENDER TO ACCEPT ANY  RESTRUCTURING
DOCUMENTS, EACH BORROWER AND EACH OTHER LOAN PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY:

        (A)  SUBMITS ITSELF AND ITS
PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO ANY RESTRUCTURING
DOCUMENT, OR FOR THE RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK AND ANY FEDERAL DISTRICT COURT IN NEW YORK. 

        (B)  CONSENTS THAT ANY SUCH
ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT
IT MAY NOW OR HEREINAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN
ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME. 

70

        (C)  AGREES THAT SERVICE OF
PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY
THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF
MAIL), POSTAGE PREPAID, TO LOAN PARTY AT ITS ADDRESS SET FORTH IN SECTION
9.18 OR AT SUCH OTHER ADDRESS OF WHICH IBM CREDIT SHALL HAVE BEEN NOTIFIED
PURSUANT THERETO; 

        (D)  AGREES THAT NOTHING
HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION. 

        (E)  AGREES THAT THE
VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY
THE LAWS (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF NEW YORK GENERAL
OBLIGATIONS LAW) OF THE STATE OF NEW YORK. 

9.21.  JURY TRIAL
WAIVER. EACH OF LENDER, BORROWERS AND EACH OTHER LOAN PARTY HERETO HEREBY
IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
(INCLUDING ANY COUNTERCLAIM) OF ANY TYPE IN WHICH ANY LENDER, BORROWER OR SUCH
OTHER LOAN PARTY ARE PARTIES AS TO ALL MATTERS ARISING DIRECTLY OR INDIRECTLY
OUT OF THIS AGREEMENT OR ANY DOCUMENT, INSTRUMENT OR AGREEMENT EXECUTED IN
CONNECTION HEREWITH. 

9.22.  Limitation
of Liability. It is expressly understood and agreed by the parties hereto
that (a) this Agreement is executed and delivered by Wilmington Trust
Company, not individually or personally but solely as trustee of the
Tranche A Borrower, in the exercise of the powers and authority conferred
and vested in it, (b) each of the representations, undertakings and
agreements herein made on the part of Tranche A Borrower is made and
intended not as personal representations, undertakings and agreements by
Wilmington Trust Company but is made and intended for the purpose for binding
only Tranche A Borrower, (c) nothing herein contained shall be
construed as creating any liability on Wilmington Trust Company, individually or
personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties hereto
and by any Person claiming by, through or under the parties hereto and
(d) under no circumstances shall Wilmington Trust Company be personally
liable for the payment of any indebtedness or expenses of Tranche A
Borrower or be liable for the breach or failure of any Obligation,
representation, warranty or covenant made or undertaken by Tranche A
Borrower under this Agreement or any other Restructuring Documents. 

71

        IN
WITNESS WHEREOF, each Borrower, each Guarantor and each other Loan Party
hereto has read this entire Agreement, and has caused their respective
authorized representatives to execute this Agreement and has caused its
corporate seal, if any, to be affixed hereto as of the date first written above. 

	IBM CREDIT CORPORATION,
as Lender

	 	APPLIED DIGITAL SOLUTIONS, INC.,

as Tranche B Borrower and Tranche A Guarantor

	By:	/s/ John M. White

	 	By:	/s/ Jerome C. Artigliere

	Name:	John M. White	 	Name:	Jerome C. Artigliere
	Title:	Global Director of Credit	 	Title:	Senior Vice President

	DIGITAL ANGEL SHARE TRUST,

as Tranche A Borrower and Tranche B Guarantor

	 	ADS MONTEREY, INC.

	By:	Wilmington Trust Company, not in its
individual capacity but solely as Trustee

	 	By:	/s/ Jerome C. Artigliere

	By:	/s/ Donald G. MacKelcan
	 	Name:
Title:	/s/ Jerome C. Artigliere
Treasurer
	Name:	Wilmington Trust Company	 	 	 
	Title:	Vice President

	 	 	 
	ADVANCED POWER SOLUTIONS, INC.

	 	THE AMERICOM GROUP, INC.

	By:	/s/ Jerome C. Artigliere

	 	By:	/s/ Jerome C. Artigliere

	Name:	Jerome C. Artigliere	 	Name:	Jerome C. Artigliere
	Title:	Vice President	 	Title:	Treasurer

	APPLIED DIGITAL FINANCIAL
SOLUTIONS CORP.

	 	BALVA FINANCIAL CORPORATION

	By:	/s/ Jerome C. Artigliere

	 	By:	/s/ Jerome C. Artigliere

	Name:	Jerome C. Artigliere	 	Name:	Jerome C. Artigliere
	Title:	President	 	Title:	Assistant Treasurer

	COMPUTER EQUITY CORPORATION

	 	DIGITAL ANGEL CORPORATION

	By:	/s/ Jerome C. Artigliere

	 	By:	/s/ Jerome C. Artigliere

	Name:	Jerome C. Artigliere	 	Name:	Jerome C. Artigliere
	Title:	Assistant Treasurer	 	Title:	Vice President

	DIGITAL ANGEL HOLDINGS, LLC

	 	FEDERAL CONVENTION CONTRACTORS, INC.

	By:	/s/ Jerome C. Artigliere

	 	By:	/s/ Jerome C. Artigliere

	Name:	Jerome C. Artigliere	 	Name:	Jerome C. Artigliere
	Title:	Assistant Treasurer	 	Title:	Assistant Treasurer

	FEDERAL SERVICES, INC.

	 	GOVERNMENT TELECOMMUNICATIONS, INC.

	By:	/s/ Jerome C. Artigliere

	 	By:	/s/ Jerome C. Artigliere

	Name:	Jerome C. Artigliere	 	Name:	Jerome C. Artigliere
	Title:	Assistant Treasurer	 	Title:	Assistant Treasurer

	INFORMATION TECHNOLOGY SERVICES, INC.

	 	INFOTECH USA, INC.

	By:	/s/ Anat Ebenstein

	 	By:	/s/ Anat Ebenstein

	Name:	Anat Ebenstein	 	Name:	Anat Ebenstein
	Title:	President	 	Title:	President

	PDS ACQUISITION CORP.

	 	PERIMETER ACQUISITION CORP.

	By:	/s/ Jerome C. Artigliere

	 	By:	/s/ Jerome C. Artigliere

	Name:	Jerome C. Artigliere	 	Name:	Jerome C. Artigliere
	Title:	Assistant Treasurer	 	Title:	Assistant Treasurer

	PRECISION POINT CORPORATION

	 	SYSCOMM INTERNATIONAL CORPORATION

	By:	/s/ Jerome C. Artigliere

	 	By:	/s/ Anat Ebenstein

	Name:	Jerome C. Artigliere	 	Name:	Anat Ebenstein
	Title:	Vice President	 	Title:	President

	TIMELY TECHNOLOGY CORP.

	 	U.S. ELECTRICAL PRODUCTS CORP.

	By:	/s/ Jerome C. Artigliere

	 	By:	/s/ Jerome C. Artigliere

	Name:	Jerome C. Artigliere	 	Name:	Jerome C. Artigliere
	Title:	Assistant Treasurer	 	Title:	Treasurer

	VERICHIP CORPORATION

	 	WEBNET SERVICES, INC.

	By:	/s/ Jerome C. Artigliere

	 	By:	/s/ Jerome C. Artigliere

	Name:	Jerome C. Artigliere	 	Name:	Jerome C. Artigliere
	Title:	Vice President	 	Title:	Assistant Treasurer

        Each
of the undersigned hereby joins in and becomes a party to this Agreement solely
for the purpose of Section 7.7. 

	/s/ Richard J. Sullivan
	 	/s/ Garrett A. Sullivan

	Richard J. Sullivan

	 	Garrett A. Sullivan

	/s/ Jerome C. Artigliere
	 	 
	Jerome C. Artigliere	 	 

EXHIBIT 7.15

Loans to Affiliates

See Attached.Applied Digital Solutions Form 8-K - Ex 10.3 - Trust Agreement

TRUST AGREEMENT

          This Trust Agreement (the
“Agreement ”) of the Digital Angel Share Trust, a Delaware statutory business trust (the
“Trust”) is made and entered into as of March 1, 2002, between Wilmington Trust Company, a Delaware
banking corporation (acting hereunder not in its individual capacity but solely as trustee hereunder, the
“Trustee”), and Applied Digital Solutions, Inc., a corporation organized under the laws of Missouri
(“ADS”). 

RECITALS

          A.  Pursuant to the
Credit Agreement, the Trust has agreed to assume from ADS and certain of its Affiliates the obligation to pay IBM
Credit Corporation, a Delaware corporation (“IBM Credit”), certain indebtedness.

          B.  In consideration
of such assumption, and in order to secure and facilitate the payment of the Obligations according to their
terms, ADS has agreed to deposit with the Trustee the MAS Stock, to be held in trust hereunder on the terms and
conditions set forth herein. 

AGREEMENT

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

ARTICLE I. 

DEFINITIONS

          “Act” means the Delaware Business Trust Act, 12
Del. C. §§3801 et seq.

          “ADS” is
defined in the introductory paragraph of this Agreement.

          “ADS Designated Advisory Board Member” is defined in Section 4.01(b).

          “Advisory Board” means the Advisory Board prescribed by Section 4.01.

          “Advisory Board Members” means the members of the Advisory Board.

          “Affiliate” of any
Person means a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled
by or is under common control with the first mentioned Person. A Person shall be deemed to control another Person
if such first Person possesses directly or indirectly the power to direct, or cause the direction of, the
management and policies of the second Person, whether through the ownership of voting securities, by contract or
otherwise. 

          “Bankruptcy
Decision” means, with respect to a specified entity, any of the following actions: (a) filing any voluntary
petition in bankruptcy on behalf of such entity, (b) consenting to the filing of any involuntary petition in
bankruptcy against such entity, (c) filing any petition seeking, or consenting to, reorganization or
relief under any applicable federal, state or foreign law relating to bankruptcy or insolvency, on behalf of such
entity, (d) consenting to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of such entity or a substantial part of the property of such entity, (e) making any assignment
for the benefit of creditors on behalf of such entity, (f) admitting in writing the inability of such entity to
pay its debts generally as they become due, or (g) taking any action by such entity in furtherance of any of the
foregoing actions. 

          “Certificate of
Trust” means the Certificate of Trust of the Trust filed under the Act with the Delaware Secretary of State
on March 1, 2002, as such Certificate of Trust may be amended or restated from time to time. 

          “Credit Agreement”
means that certain Third Amended and Restated Term Credit Agreement of even date herewith, among IBM Credit, the
Trust and ADS. 

          “Closing Date” is defined in the Credit
Agreement. 

          “Credit Documents”
means the Credit Agreement, the Guarantee (as defined in the Credit Agreement), and any security agreements,
leases, instruments, documents, guarantees, schedules of assignment, contracts and similar agreements, including
schedules, attachments, exhibits and ancillary documentation or other supporting documents, executed by or on
behalf of each Borrower (as defined in the Credit Agreement), or any other Loan Party (as defined in the Credit
Agreement), and delivered to Lender (as defined in the Credit Agreement), pursuant to the Credit Agreement or
otherwise, and all amend ments, supplements and other modifications to the foregoing from time to time. 

          “Delaware Secretary of
State” means the office of the Secretary of State of the State of Delaware.

          “Fair Market
Value” means, on any date specified, the average of the daily Market Price of a share of MAS Stock during
the 10 consecutive trading days before such date, except that, if on any such date the shares of MAS Stock are
not listed or admitted for trading on any national securities exchange or quoted in the over-the-counter market,
Fair Market Value shall be the Market Price on such date. 

          “Final Payment
Date” means the date on which all Obligations have been paid and satisfied in full. 

          “Final Payment
Notice” means the written notice from IBM Credit to the Trustee stating tha t the Final Payment Date has
occurred. 

          “IBM Credit” is defined in Recital A. 

          “Indemnified Trustee Person(s)” is defined in
Section 6.06. 

          “Independent Advisory
Board Member” means (i) a Person who is not at the time of initial appointment, or at any time while serving
as an Advisory Board Member, and has not been at any time during the preceding five years: (a) a stockholder,
director, officer, employee, partner, attorney or counsel of MAS, ADS, IBM Credit or
any of their respective Affiliates; (b) a customer, supplier or other person who derives any of its purchases or
revenues from its activities with MAS, ADS, IBM Credit or any of their respective Affiliates; (c) a Person or
other entity controlling or under common control with any such stockholder, partner, customer, supplier or other
person; or (d) a member of the immediate family of any such stockholder, director, officer, employee, partner,
customer, supplier or other person and (ii) a Person who at the time of initial appointment as an Advisory Board
Member: (a) is financially literate; (b) has accounting or financial management expertise; and (c) has no less
than ten years of business experience, at least some of which is with a public company or involving public
company matters. 

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          “Market Price”
means, on any date specified, an amount per share of MAS Stock equal to (i) the last reported sale price of such
MAS Stock, regular way, on such date or, in case no such sale takes place on such date, the average of the
closing bid and asked prices thereof regular way on such date, in either case as officially reported on the
principal national securities exchange on which such MAS Stock is then listed or admitted for trading, (ii) if
such MAS Stock is not then listed or admitted for trading on any national securities exchange but is designated
as a national market system security by the NASD, the last reported trading price of the MAS Stock on such date,
(iii) if there shall have been no trading on such date or if the MAS Stock is not so designated, the average of
the closing bid and asked prices of the MAS Stock on such date as shown by the NASD automated quotation system,
or (iv) if such MAS Stock is not then listed or admitted for trading on any national exchange or quoted in the
over-the-counter market, the fair value thereof (as of a date which is within 10 days of the date as of which the
determination is to be made) determined in good faith by the Board of Directors of the issuer of such MAS Stock.

          “MAS” means Medical Advisory Systems, Inc., a
Delaware corporation. 

          “MAS Stock” means
the common stock, par value $.005 per share, of MAS, and any stock into which such common stock shall have been
changed, any stock resulting from any reclassification of such common stock, any other shares of stock issued or
issuable with respect thereto (whether by way of a stock dividend or stock split or in exchange for or upon
conversion of such shares or otherwise in connection with a combination of shares, recapitalization, merger,
consolidation or other corporate reorganiza tion), and all other stock of any class or classes (however
designated) of MAS (or its successors) the holders of which have the right, without limitation as to amount,
either to all or to a share of the balance of current dividends or liquidating dividend s after the payment of
dividends and distributions on any shares entitled to preference. 

          “Merger Agreement”
means that Agreement and Plan of Merger by and among ADS, Digital Angel Corporation, a Delaware corporation, MAS,
and Acquisition Subsidiary, Inc., a Delaware corporation, dated as of November 1, 2001. 

          “Obligations”
means the Obligations (as defined in the Credit Agreement) of the Trust under the Credit Documents. 

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          “Person” means an
individual, a corporation, an association, a partnership, an estate, a trust, a limited liability company and any
other entity or organization, governmental or otherwise. 

          “Registration Rights
Agreement” means that certain Registration Rights Agreement between MAS and ADS, attached as an exhibit to
the Merger Agreement and attached hereto as Exhibit A. 

          “Required Amount of
Cash” means (a) the Trigger Amount or such other amount as is then due and payable by the Trust under the
Credit Documents, minus (b) the amount of cash then in the Trust Estate, plus (c) the costs of liquidating
sufficient shares of MAS Stock held in the Trust Estate to generate net proceeds equal to the amount produced by
subtracting clause (b) from clause (a).

          “Trigger Amount” means the amount stated in a Trigger
Notice as owed but not timely paid by the Trust under the Credit Documents.

          “Trigger Event” means any payment default by
the Trust under the Credit Documents. 

          “Trigger Notice”
means a written notice from IBM Credit to the Trustee stating that there has been and is continuing a Trigger
Event, specifying the Trigger Amount. 

          “Trust” means the
Delaware statutory business trust formed pursuant to this Agreement and known as “Digital Angel Share
Trust,” which was formed as of March 1, 2002, under the Act pursuant to the filing of the Certificate of
Trust. 

          “Trustee” means
Wilmington Trust Company, not in its individual capacity, but solely as a trustee hereunder, and any successor
trustee appointed in accordance with Section 3807 of the Act and Section 6.04. 

          “Trust Estate” is defined in Article III. 

ARTICLE II.

GENERAL

          Section 2.01.  Formation of the Trust.

          (a)  The Trust
created hereby shall be known as “Digital Angel Share Trust,” in which name the Trustee may conduct the
affairs of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be sued
on behalf of the Trust. ADS hereby appoints Wilmington Trust Company as trustee of the Trust effective as of the
date hereof, to have all the rights, powers and duties set forth herein and in the Act. Wilmington Trust
Company hereby agrees to hold the Trust Estate as Trustee
on behalf of the Trust upon the terms and conditions set forth herein. The Trustee is hereby
authorized to file the Certificate of Trust with the Delaware Secretary of State pursuant to Section 3810 of the
Act. 

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          (b)  It is the
intention of the parties hereto that the Trust constitute a business trust under the Act and that this Trust
Agreement constitute the governing instrument of the Trust. Effective as of the date hereof, the Trustee shall
have all rights, powers and duties set forth herein and in the Act with respect to accomplishing the purposes of
the Trust. 

          Section 2.02.  
Name, Principal Office, and Name and Address of Trustee as Agent for Service of Process.

          
(a)  The principal place of business and office of the Trust shall be c/o Wilmington Trust Company, Rodney Square North, 1100 North
Market Street, Wilmington, DE 19890-0001, Attention: Corporate Trust Administration. The Trustee is hereby
designated to accept service of process on behalf of the Trust at the address provided in the preceding sentence.
The Trustee may change the address set forth in this Section 2.02 upon written notice to each Advisory Board
Member. 

          (b)  The Trust shall
be located and administered in, and all bank accounts of the Trust maintained in, the State of Delaware. Payments
shall be received by the Trust only in the State of Delaware and payments will be made by the Trust only from the
State of Delaware. 

          Section 2.03.  
Purpose. The purpose of the Trust is to own, vote (subject to Section
4.04) and dispose of the Trust Estate as directed in writing by the Advisory Board and with the ultimate
objective of securing and facilitating the repayment and satisfaction of the Obligations in accordance with the
terms and conditions of the Credit Documents. In furtherance of such purpose, the Trust shall enter into and
exercise all of its rights and perform all of its obligations under the Credit Documents, this Agreement and any
other agreement, document or instrument necessary or incidental thereto, and shall make all filings required
under Federal securities laws or otherwise in connection with its ownership of the MAS Stock held in the Trust
Estate. The Trust will not conduct activities other than those contemplated by this Section 2.03, and, except as
required in furtherance of its purpose, the Trust shall not: (i) have any property, rights or interests, whether
real or personal, tangible or intangible, (ii) incur any legal liability or obligation, whether fixed or
contingent, matured or unmatured, or (iii) subject any of the Trust Estate to any mortgage, lien, security
interest or other claim or encumbrance. 

          Section 2.04.  
Certain Covenants Relating to the Separateness of the Trust. The Trust shall maintain its
separate existence and, specifically, shall conduct its affairs in accordance with, and ADS agrees that it will
not take any actions in its dealings with the Trust or with other Persons (including creditors of ADS) that are
inconsistent with, the following: 

          (a)  The Trust shall
maintain its books, records and bank accounts separate from those of any other Person. 

          (b)  The Trust shall
not commingle or pool any of its funds or other assets with those of any other Person, and it shall, through the
Trustee, hold all of its assets in its own name. 

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          (c)  The Trust,
through the Trustee, shall conduct its own business in its own name and shall not operate, or purport to operate,
collectively as a single or consolidated business entity with respect to any Person. 

          (d)  The Trust has
done, or caused to be done, and shall do, all things necessary to observe all Delaware statutory business trus t
formalities and other organizational formalities, and preserve its existence (subject to Article VII and the
other express provisions hereof), and it shall not, nor will it permit any Affiliate or constituent party to,
amend, modify or otherwise change this Agreement in a manner which would adversely affect the existence of the
Trust as a special purpose entity. 

          (e)  The Trust shall not have any employees. 

          (f)  Except pursuant
to the Credit Documents, the Trust does not, and shall not, (i) guarantee, become obligated for, or hold itself
or its credit out to be responsible for or available to satisfy, the debts or obligations of any other Person or
(ii) control the decisions or actions respecting the daily business or affairs of any other Person. 

          (g)  The Trust shall,
at all times, hold itself out to the public as an entity separate and distinct from any other Person and shall
correct any known misunderstanding regarding its separate identity. 

          (h)  The Trust shall
not identify itself as a division or agent of any other Person. 

          (i)  The Trust shall
maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify
its individual assets from those of any other Person. 

          (j)  The Trust shall
not use its separate existence to abuse creditors or to perpetrate a fraud, injury, or injustice on creditors in
violation of applicable law. 

          (k)  The Trust shall
not be consensually merged or legally consolidated with any other Person. 

          Section 2.05.  
Creditors of ADS. Except pursuant to the Credit Documents, to the fullest extent
permitted by applicable law, no creditor of ADS or any of its Affiliates shall have any right to obtain
possession of, or otherwise exercise legal or equitable remedies with respect to, the Trust Estate. 

ARTICLE III.

CONTRIBUTION

          Section 3.01.  
Assignment. On the Closing Date, ADS shall execute and deliver to the
Trustee on behalf of the Trust an assignment in the form attached hereto as Exhibit B (the “Assignment”), by which ADS shall (a) sell, assign, transfer, convey and set
over to the Trust all of its right, title and interest in 19,600,000 shares of MAS Stock, which is all of the MAS
Stock owned by ADS, and (b) assign to the Trust all of its
rights under the Registration Rights Agreement. The Trustee shall acknowledge receipt of the
Assignment, which shall constitute the initial trust estate (including all income on and proceeds of such initial
trust estate, the “Trust Estate”). The Trustee hereby declares that it will hold the Trust Estate in
trust on the terms and conditions set forth herein. 

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          Section 3.02.  
Legal Title to Trust Property. Legal title to the Trust Estate shall be vested at all times
in the Trust as a separate legal entity except where applicable law in any jurisdiction requires title to any
part of the Trust Estate to be vested in a trustee or trustees, in which case legal title shall be deemed to be
vested in the Trustee, a co-trustee and/or a separate trustee, as the case may be. 

          Section 3.03.  
Beneficial Owner. ADS shall be deemed to be the beneficial owner of the Trust
Estate. 

ARTICLE IV.

TRUST GOVERNANCE

          Section 4.01.  
Advisory Board. 

          (a)  General. The Trustee shall act upon and in accordance with this Agreement and the written
instructions of the Advisory Board, which shall consist of three individuals, selected as described in Section
4.01(b). Each Advisory Board Member shall serve until his or her death, resignation or removal. An Advisory Board
Member other than the ADS Designated Advisory Board Member may only be removed by the other two Advisory Board
Members for “cause.” The ADS Designated Advisory Board Member may be removed either by the other two
Advisory Board Members for “cause” or by ADS as provided in paragraph (c) below. For purposes of this
Section 4.01, “cause” to remove an Advisory Board Member other than the ADS Designated Advisory Board
Member shall only exist upon the occurrence of any of the following events or conditions: 

	 	          (i)  the Advisory
Board Member shall be convicted of (or shall plead nolo contendere to) a felony crime;

          (ii)  the Advisory
Board Member shall misappropriate or misuse any funds or property of the Trust or engage in any material act of
dishonesty; 

          (iii)  the Advisory Board
Member shall attempt to obtain personal enrichment at the expense of the Trust or from any transaction in which
the Advisory Board Member has an interest adverse to the interest of the Trust, unless the Advisory Board Member
shall have obtained the prior written consent of the other Advisory Board Members; 

          (iv)  the Advisory Board
Member shall cease to meet the definition of an Independent Advisory Board Member; or 

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	 	          (v)  the Advisory
Board Member shall disregard or fail (for reasons other than disability or death) to perform any of his material
functions or duties to the Trust. 

“Cause” to remove the ADS Designated Advisory
Board Member shall only exist upon the occurrence of the events or conditions in clauses (i) through (iii). A
removal pursuant to any of clauses (i) through (iv) shall be effective immediately upon written notice to the
Advisory Board Member by the other Advisory Board Members. Upon the happening of an event or occurrence described
in clause (v) above, before the other Advisory Board Members may remove the Advisory Board Member in question,
that Advisory Board Member shall have first received written notice from the other Advisory Board Members
stating, with specificity, the nature of such failure and affording him not less than ten business days to
correct the acts or omissions specified. The notice and cure provisions of this paragraph shall not apply,
however, to a failure which cannot be cured. 

          (b)  
Initial Selection. The initial Independent Advisory Board Members shall be selected from a list of candidates
to be provided by the American Arbitration Association (the “AAA”) pursuant to a memorandum from ADS
and IBM Credit dated February 27, 2002. Upon receipt of the list of candidates from the AAA, the Trust shall
provide a slate of ten candidates to each of IBM Credit and ADS. Such slate of ten candidates shall consist of
the first ten names on the list provided by the AAA. Within five business days after receipt of the initial slate
from the Trust, IBM Credit and ADS shall notify the Trustee and the other of which three candidates it chooses to
strike from the slate. The Trustee shall then promptly select two of the remaining candidates for appointment on
the basis of which candidate is willing to serve for the least amount of compensation. If the candidates are not
distinguishable on the basis of lowest required compensation, the Trustee shall select the initial Independent
Advisory Board Members arbitrarily. Prior to final selection of the initial Independent Advisory Board Members,
the Trustee shall obtain a certificate from each selected candidate that he or she qualifies as an Independent
Advisory Board Member. The third initial Advisory Board Members shall be designated by ADS (the “ADS
Designated Advisory Board Member”). ADS hereby designates Richard J. Sullivan as the initial ADS Designated
Advisory Board Member. 

          (c)  
Replacements. In the event there should be a vacancy on the Advisory Board, other than that of the ADS
Designated Advisory Board Member, the Trustee shall select each new Advisory Board Member by the following
procedure. The Trustee shall promptly propose a slate of five Advisory Board candidates, which candidates the
Trustee shall request the AAA to provide. The Trustee shall provide the slate of candidates to each of IBM Credit
and ADS, and IBM Credit and ADS shall, within five business days thereafter, notify the Trustee and the other
which candidate it chooses to strike from the slate. The Trustee shall then promptly select one of the rema ining
candidates for appointment on the basis of which candidate is willing to serve for the least amount of
compensation. If none of the candidates is distinguishable on the basis of lowest required compensation, the
Trustee shall select the new Advisory Board Member arbitrarily from among the two or more candidates requiring
the least compensation. Prior to final selection of the new Advisory Board Member, the Trustee must receive a
certificate from the candidate that he or she qualifies as an Independent Advisory Board Member. The foregoing
procedure shall be repeated until all vacant Advisory Board Member positions, other than that of the ADS
Designated Advisory Board Member, are filled. ADS shall replace the ADS Designated Advisory Board Member upon his or her removal,
death or resignation, and may replace the ADS Designated Advisory Board Member with another designee at any time
with or without cause upon written notice to the other Advisory Board Members and the Trustee. 

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          (d)  
Meetings. The Advisory Board shall meet no less frequently than quarterly, on such regular date and at
such place as may from time to time be determined by the Advisory Board. Additional meetings of the Advisory
Board may be held upon no less than two business days’ written notice by one or more Advisory Board
Member(s) to the other Advisory Board Member(s). At all meetings of the Advisory Board, two Advisory Board
Members then in office will constitute a quorum for the transaction of business. Except as otherwise provided in
Section 4.02, the act of a majority of the Advisory Board Members present at any meeting at which there is a
quorum will be the act of the Advisory Board. If a quorum is not present at any meeting of the Advisory Board,
the Advisory Board Members present thereat may adjourn the meeting from time to time to another place, time, or
date, without notice other than announcement at the meeting, until a quorum is present. 

          (e)  
Action by Written Consent. Any action required or permitted to be taken at any meeting of
the Advisory Board may be taken without a meeting if the requisite number of Advisory Board Members consents
thereto in writing, and the writing or writings are filed with the minutes or proceedings of the Advisory Board
and provided to the non-consenting Advisory Board Member (if any) within two business days after such written
consent. 

          (f)  
Participation in Meetings by Telephone Conference.
Advisory Board Members may participate in a meeting of the
Advisory Board by means of telephone conference or similar means by which all persons participating in the
meeting can hear each other, and such participation in a meeting will constitute presence in person at the
meeting. 

          (g)  Compensation.
All Advisory Board compensation and expense reimbursement shall be paid by ADS promptly upon
written request by the Trustee therefor or, in the absence of such payment, from the Trust Estate. 

          (h)  
Advisory Board Member Liability. To the full extent permitted by applicable law currently or
hereafter in effect, no Advisory Board Member will be personally liable, for breach of fiduciary duty or
otherwise, to the Trust, the Trustee, IBM Credit or ADS for or with respect to any acts or omissions in the
performance of his or her duties as an Advisory Board Member. No repeal or modification of this Section 4.01(h)
will adversely affect any right or protection of an Advisory Board Member existing prior to such repeal or
modification. 

          (h)  
Indemnification. Each person who is or was or had agreed to become an Advisory Board Member will be
indemnified by the Trust to the full extent permitted by applicable law as currently or hereafter in effect and
will be entitled to advancement of expenses in connection therewith. The right of indemnification and of
advancement of expenses provided in this Section 4.01(i): (i) will not be exclusive of any other rights to which
any Person seeking indemnification or advancement of expenses may otherwise be entitled, including without
limitation pursuant to any contract approved by a majority of all Advisory Board Members (whether or not the
Advisory Board Members approving such contract are or are to be parties to such contract or similar contracts),
and (ii) will be applicable to matters otherwise within its scope whether or not such matters arose or arise before or
after the date of this Agreement. Any amendment or repeal of, or addition of any provision inconsistent with,
this Section 4.01(i) will not adversely affect any right or protection existing hereunder, or arising out of the
facts occurring, prior to such amendment, repeal, or adoption and no such amendment, repeal, or adoption will
affect the legality, validity, or enforceability of any contract entered into or right granted prior to the
effective date of such amendment, repeal, or adoption. If so determined by the Advisory Board, the Trust may
obtain insurance to support its indemnification obligations hereunder, the cost of which shall be paid from the
Trust Estate. 

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          Section 4.02.  
Major Decisions. The following actions shall require the unanimous vote of the
Advisory Board Members: 

          (a)  (i)  
filing any
voluntary petition in bankruptcy on behalf of the Trust, (ii) consenting to the filing of any involuntary
petition in bankruptcy against the Trust, (iii) filing any petition seeking, or consenting to, reorganization or
relief under any applicable federal, state or foreign law relating to bankruptcy or insolvency, on behalf of the
Trust, (iv) consenting to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or a substantial part of the property of the Trust, (v) making any assignment for
the benefit of creditors on behalf of the Trust, (vi) admitting in writing the Trust’s inability to pay its
debts generally as they become due, or (vii) taking any action by the Trust in furtherance of any of the
foregoing actions; 

          (b)  determining to liquidate or dissolve the Trust;

          (c)  approving the
merger, consolidation, sale or transfer of all or a substantial amount of assets or other change in control
transaction involving the Trust, provided that in no event may any of the aforementioned activities occur with
any entity that may seek bankruptcy protection or if such merger, consolidation, sale or transfer would undermine
the solvency of the Trust; 

          (d)  except as
permitted or required pursuant to Article V, approving the payment or making of any distributions from the Trust;

          (e)  approving
amendments to the constituent documents of the Trust or the Credit Documents; or 

          (f)  voting the MAS
Stock in favor of a Bankruptcy Decision with respect to MAS or any of its direct or indirect subsidiaries if, at
the time such Bankruptcy Decision is implemented or is to be implemented, (i) a Bankruptcy Decision has been made
with respect to ADS or any of its direct or indirect subsidiaries, or (ii) any borrower under the Credit
Documents is in default under or with respect to any obligation for borrowed money, including the Credit
Documents, regardless of whether such default has been declared. 

          Section 4.03.  
Charter Amendment. On the Closing Date, the Trustee shall execute and deliver to
the Secretary of MAS, on behalf of the Trust as the majority shareholder of MAS, the Action by Written Consent
attached hereto as Exhibit C, together with instructions to the Secretary of MAS directing
him or her to execute and file with the Delaware Secretary of State the Amendment to the Certificate of Incorporation of
MAS attached to such Action by Written Consent. 

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          Section 4.04.  
Voting Rights with Respect to the MAS Stock. Except as otherwise specified in this
Section, prior to such time as the MAS Stock has been sold or otherwise released by the Trust, the Trustee shall
exercise the right to vote such MAS Stock as instructed in writing by the Advisory Board in accordance with the
terms hereof. After delivery of the Final Payment Notice, ADS shall have the right to direct the Trustee with
respect to the voting of all MAS Stock then in the Trust Estate. 

ARTICLE V. 

MAS STOCK LIQUIDATIONS; FINAL DISTRIBUTION

          Section 5.01.  
MAS Stock Liquidations. From time to time, when any sums are due and payable under the
Credit Documents, including upon receipt of a Trigger Notice, the Trustee shall promptly take action to liquidate
the amount of MAS Stock held in the Trust Estate required in order to generate the Required Amount of Cash. Such
action may include the sale of some or all of the MAS Stock held in the Trust Estate in private transactions or
on a national stock exchange or quotation system, utilizing the registration rights available pursuant to the
Registration Rights Agreement where necessary. In effecting such sale(s) of MAS Stock, the Trustee will request
that IBM Credit release a sufficient number of shares of MAS Stock to facilitate such sale and will endeavor not
to sell shares of MAS Stock in a manner which would disrupt an orderly market or is reasonably likely to have an
adverse impact on the market price of MAS Stock and will use commercially reasonable efforts to maximize the per
share value realized for such MAS Stock. From the proceeds of such MAS Stock liquidations and all other cash then
held in the Trust Estate, the Trustee shall (i) pay the fees and expenses incurred by it in accomplishing such
liquidations, and (ii) distribute to IBM Credit the amounts due and payable under the Credit Documents. Any
excess proceeds shall remain in the Trust Estate. 

          Section 5.02.  
Final Distribution. Upon receipt of the Final Payment Notice, the Trust shall be
dissolved pursuant to Article VII. 

          Section 5.03.  
Trust Expenses. In the event ADS fails to pay the compensation or
reimbursement due the Advisory Board Members pursuant to Section 4.01(g), any indemnification amount or expense
advance payable pursuant to Section 4.01(i), the Trustee’s fees and expenses as provided in Section 6.07, or
any indemnification amount payable pursuant to Section 6.06 within five business days after demand, the Trustee
is hereby authorized to liquidate such amount of MAS Stock held in the Trust Estate as is necessary to pay such
amounts. Alternatively, IBM Credit may advance payment in satisfaction of such amounts and add such amounts to
the Obligations. Payment in satisfaction of the Trustee's fees and expenses as provided in Section 6.07 shall be
made in full prior to any other payment or distribution permitted or required hereunder. 

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ARTICLE VI.

CONCERNING THE TRUSTEE

          Section 6.01.  General. 

          (a)  In the exercise
or administration of the Trust hereunder, the Trustee, at the expense of ADS (paid as specified in Section 6.07),
may (i) act directly or through agents or attorneys pursuant to agreements entered into with any of them, and the
Trustee shall not be liable for the default or misconduct of such agents or attorne ys if such agents or
attorneys shall have been selected by the Trustee with reasonable care; and (ii) consult with counsel,
accountants and other skilled Persons to be selected with reasonable care and employed by the Trustee, and it
shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the advice or
opinion of any such counsel, accountants or other skilled Persons if such advice or opinion pertains to such
matters as the Trustee may reasonably presume to be within the scope of such counsel’s, accountant’s or
other skilled Person’s area of expertise. 

          (b)  Except as
expressly provided herein, (i) in accepting the Trust hereby created, Wilmington Trust Company acts solely as
Trustee hereunder and not in its individual capacity, and (ii) all Persons having any claim against the Trustee
or the Trust by reason of the transactions contemplated by this Agreement shall look only to the Trust’s
property for payment or satisfaction thereof. 

          (c)  The Trustee will
administer the business and affairs of the Trust in accordance with the terms of the Act and this Agreement;
provided, however, that the Trustee
undertakes to perform only such duties as are specifically set forth in this Agreement and as the Trustee may be
duly directed from time to time in writing by the appropriate parties specified herein. The Trustee shall not
have any duty or obligation to manage, control, use, sell, dispose of or otherwise deal with the Trust or to
otherwise take or refrain from taking any action under this Agreement except as expressly required by the terms
hereof or as expressly provided in written instructions from the appropriate parties specified herein, and no
implied duties or obligations shall be read into this Agreement against the Trustee. Wilmington Trust Company
nevertheless agrees that it will, at its own cost and expense (and not at the expense of the Trust), promptly
take all action as may be necessary to discharge any liens on any part of the Trust Estate which are attributable
to actions by or claims against Wilmington Trust Company that are not related to the ownership of any part of the
Trust Estate or the administration of the Trust Estate or the transactions contemplated by this Agreement. 

          (d)  The Trustee
shall not be required to take any action under this Agreement if the Trustee shall reasonably determine or shall
have been advised by counsel that such action is contrary to the terms of this Agreement or is otherwise contrary
to applicable law. 

          (e)  Whenever the
Trustee is unable to decide between alternative courses of action permitted or required by the terms of this
Agreement, or is unsure as to the application, intent, interpretation or meaning of any provision hereof, the
Trustee may give notice (in such form as shall be appropriate under the circumstances) to the Advisory Board
Members requesting written instructions as to the course of action to be adopted, and, to the extent the Trustee acts in good faith in accordance with any such
appropriate instruction received, the Trustee shall not be liable on account of such action or inaction to any
Person. If the Trustee shall not have received appropriate instructions within ten days of such notice (or within
such shorter period of time as reasonably may be specified in such notice or may be necessary under the
circumstances), it may, but shall be under no duty to, take or refrain from taking such action which is
consistent, in its view, with this Agreement and the Trust’s purpose (as set forth in Section 2.03), and the
Trustee shall have no liability to any Person for any such action or inaction. 

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          (f)  In no event
whatsoever shall the Trustee be liable for any representation, warranty, covenant, agreement, indebtedness or
other obligation of the Trust; provided, however, the foregoing shall in no event whatsoever relieve the Trustee from any liability resulting
from the Trustee’s bad faith, willful misconduct or gross negligence. 

          (g)  The Trustee may
rely upon and shall incur no liability to anyone in acting upon any signature, instrument, notice, resolutio n,
request, consent, order, certificate, report, opinion, bond or other document or paper reasonably believed by it
to be genuine and reasonably believed by it to be signed by the proper party or parties. The Trustee may accept a
certified copy of a resolution of the board of directors or other governing body of any Person as conclusive
evidence that such resolution has been duly adopted by such body and that the same is in full force and effect.
As to any fact or matter the manner of ascertainment of which is not specifically prescribed herein, the Trustee
may for all purposes hereof rely on a certificate, signed by the president or any vice president or by the
treasurer or any assistant treasurer or the secretary or any assistant secretary or any trust officer (or
equivalent position) of the relevant party, as to such fact or matter, and such certificate shall constitute full
protection to the Trustee for any action taken or omitted to be taken by it in good faith reliance thereon.

          (h)  The Trustee
shall not be required to take any action that is inconsistent with the purposes of the Trust set forth in Section
2.03. 

          (i)  The Trustee
shall not have any responsibility or liability for or with respect to the genuineness, value, sufficiency or
validity of the Trust Estate. The Trustee shall in no event assume or incur any liability, duty or obligation to
any Person other than as expressly provided for herein, and in no event shall the Trustee have any implied duties
or obligations hereunder. 

          (j)  The Trustee
shall incur no liability if, by reason of any provision of any future law or regulation thereunder, the Trustee
shall be prevented or forbidden from doing or performing any act or thing which the terms of this Agreement
provide shall or may be done or performed. 

          (k)  No provision of
this Agreement shall require the Trustee to expend or risk its personal funds, or otherwise incur any financial
liability in the performance of its rights or powers hereunder, if the Trustee shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably
assured or provided to it. 

-13-

          (l)  The Trustee
shall not be liable for the default or misconduct of the Advisory Board and shall not be liable for any act or
omission taken at the direction of the Advisory Board. 

          (m)  Every provision of this
Agreement relating to the Trustee shall be subject to the provisions of this Section 6.01. 

          Section 6.02.  
Acceptance of the Trust. The Trustee declares that it accepts the trust created
hereunder and agrees to perform its duties under this Agreement and the Act but only upon the terms of this
Agreement. 

          Section 6.03.  
Authority and Duties of the Trustee. 

          (a)  The Trustee is
authorized and directed to execute and deliver this Agreement, and to execute and deliver on behalf of the Trust,
the Credit Documents and any other document or instrument attached as an Exhibit to, contemplated by, or
necessary or incidental hereto, in such form as the Advisory Board shall approve, as evidenced conclusively by
the Trustee’s execution thereof. The execution and delivery of, and performance of the terms of any other
document or instrument necessary or incidental hereto shall be deemed not to conflict with or constitute a breach
or default under this Agreement. The Trustee shall have only such authority and shall perform such duties as are
expressly set forth in this Agreement. 

          (b)  Upon the written
instruction of the appropriate party specified herein, the Trustee shall execute, acknowledge, deliver, file or
record any document or instrument necessary or appropriate to carry out the provisions of this Agreement in such
form as is provided to it. 

          (c)  The Trustee
shall have the power and authority to execute, deliver, acknowledge and file all necessary documents and to
maintain all necessary records of the Trust as required by the Act.

          (d)  In the
performance of its duties under this Agreement, the Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter
stated in any such document, but the Trustee, in its discretion, may make further inquiry or investigation.

          (e)  The Trustee
shall cause to be prepared and filed such securities law and tax filings and returns relating to the Trust, and
shall make such tax elections as may from time to time be required or appropriate under any applicable Federal,
state or local tax statute or rule or regulation thereunder, in accordance with the Advisory Board’s written
instructions; provided that the Trustee shall not make any tax elections with respect to the Trust that are
inconsistent with the income tax characterization of the Trust as stated in Section 9.06. 

          (f)  Subject to the
provisions of any applicable confidentiality agreement to which the Trust is or becomes a party, the Trustee
shall furnish to the Advisory Board, promptly upon receipt thereof, duplicates or copies of all reports, notices,
requests, demands, certificates, financial statements and any other instruments furnished to the Trustee
hereunder; provided that the Trustee shall not be required to furnish the Advisory
Board with a copy of any such materials if the Trustee determines that such Person has otherwise
received such copies, unless such Person so requests. 

-14-

          Section 6.04  
Resignation of the Trustee. 

          (a)  The Trustee may
resign by giving 30 days’ prior written notice to the Advisory Board. In the case of the resignation of the
Trustee, the Advisory Board shall appoint a Person to serve as successor Trustee, provided that such Person shall
in all respects satisfy the requirements of Section 3807 of the Act, or any successor provision, and shall be a
bank or trust company incorporated and doing business within the United States of America, whose business shall
consist at least in part of serving as trustee in arrangements comparable to those contemplated hereby and having
a combined capital and surplus of at least $50,000,000, if there be such an institution willing, able and legally
qualified to perform the duties of the Trustee hereunder upon reasonable or customary terms. The appointment of
the successor Trustee shall take effect concurrently with (i) the resignation of the former Trustee and (ii) the
ratification of this Agreement, and no resignation of a Trustee shall be effective absent the concurrent
appointment of a successor Trustee. 

          (b)  If a successor
Trustee shall not have been appointed within 30 days after such notice of resignation, the Trustee or the
Advisory Board may apply to any court of competent jurisdiction to appoint a successor Trustee to act until such
time as a successor shall have been appointed as above provided. 

          (c)  Any corporation
into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation
to which substantially all the corporate trust business of the Trustee may be transferred, shall, subject to such
corporation satisfying in all respects the requirements set forth in Section 6.04(a), be the Trustee he reunder
without further action. 

          (d)  Upon the
substitution of the Person serving as Trustee, the successor Trustee shall file an amendment to the Certificate
of Trust with the Secretary of State in accordance with the provisions of Section 3810 of the Act, indicating the
change in the Trustee. 

          Section 6.05.  
Liability. 

          (a)  The Trustee
shall not be personally liable under any circumstances, except (i) for its own bad faith, willful misconduct or
gross negligence, and (ii) for taxes, fees or other charges on, based on or measured by any fees, commissions or
compensation received by the Trustee in connection with any of the transactions contemplated by this Agreement.

          (b)  The provisions
of this Agreement, to the extent that they restrict the duties and liabilities of the Trustee otherwise existing
at law or in equity, replace such other duties or liabilities of the Trustee to the extent permissible under law
or in equity. 

          (c)  The Trustee
shall not be liable for the default or misconduct of the Advisory Board or ADS. 

-15-

          (d)  The Trustee
shall not be liable for voting (or refraining from voting) the MAS Stock held in the Trust Estate so long as such
shares are voted (or not voted) in accordance with and as required by Section 4.04. 

          Section 6.06.  
Indemnification. ADS shall indemnify, pay, protect, and hold harmless each of
the Trustee, its officers, directors, employees, shareholders and agents (collectively the “Indemnified
Trustee Persons” or individually an “Indemnified Trustee
Person”) from and against any and all liabilities, obligations, losses, damages, claims, actions, judgments,
suits, proceedings, taxes, costs, expenses and disbursements of any kind or nature whatsoever including, without
limitation, all reasonable legal fees, third party costs and expenses of defense, appeal and settlement of any
and all suits, actions, or proceedings instituted against such Indemnified Trustee Person and all reasonable
third party costs of investigation in connection therewith that may be imposed on, incurred by, or asserted
against an Indemnified Trustee Person relating to or arising out of any action or inaction on the part of the
Trust or an Indemnified Trustee Person in respect of the Trust. If any action, suit, or proceeding shall be
pending against one or more Indemnified Trustee Persons relating to or arising out of any action or inaction of
the Indemnified Trustee Person or Indemnified Trustee Persons, ADS shall have the right to assume the defense of
the Indemnified Trustee Person or Indemnified Trustee Persons in which case such defense shall be conducted by
counsel chosen by ADS and reasonably satisfactory to the Indemnified Trustee Person or Indemnified Trustee
Persons and IBM Credit; provided, however, that if an Indemnified Trustee Person is advised by its counsel that due to actual or
potential conflicting interests representation by the same counsel would be inappropriate under applicable
standards of professional conduct, such Indemnified Trustee Person may, at the expense of ADS, employ separate
counsel of its choice with respect to all matters as to which such conflicting interests arise in any such
action. The indemnities contained in this Section shall survive the resignation of the Trustee, termination of
the Trust or the termination of this Agreement. 

          Section 6.07  Fees and Expenses.
The Trustee’s fees (as detailed on Exhibit D) and all
reasonable out-of-pocket expenses, disbursements and advances incurred or made by the Trustee, in its capacity as
Trustee hereunder, including, without limitation, the costs and expenses of the winding up, liquidation and
termination of the Trust, shall be paid by ADS promptly upon written request therefor. 

ARTICLE VII.

DISSOLUTION AND LIQUIDATION OF THE
TRUST

          Section 7.01.  
Dissolution of the Trust. The Trust shall be dissolved, wound up and terminated upon
delivery by IBM Credit of the Final Payment Notice, as provided in Section 5.02. 

          Section 7.02.  
Liquidation of the Trust. In connection with the dissolution of the Trust, the assets of
the Trust shall be liquidated at the written direction of ADS and applied as follows: (i) first, to pay the costs
and expenses of the winding up, liquidation and termination of the Trust, including all amounts owed to the
Trustee, (ii) second, to establish reserves to the extent required by the Act and any applicable law, in each
case, in the order of priority provided by law, and (iii) third, to ADS. 

-16-

          Section 7.03.  
Termination of the Trust. 

          (a)  The Trust (and
this Agreement) shall be deemed terminated when all of the Trust’s assets shall have been disposed of and
distributed as provided herein. 

          (b)  Upon the winding
up of the Trust and its termination, the Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Delaware Secretary of State in accordance with the provisions of Section
3810 of the Act. 

ARTICLE VIII.

NOTICES

          Section 8.01.  
Notices. All notices, demands, consents or requests required or permitted under this
Agreement must be in writing, and shall be delivered by facsimile, courier or first class mail, postage
prepaid, addressed as follows. Each notice hereunder must be delivered to the Trustee,
ADS, each Advisory Board Member and IBM Credit.

	 	(i)	If to the Trustee, as set forth in Section 2.01.

	 	(ii)	If to ADS:

Applied Digital Solutions, Inc.
400 Royal Palm Way, Suite 410

Palm Beach, Florida  33480
Attention:  Jerome C. Artigliere
Facsimile:  (561) 805-8004

	 	(iii)	If to the Advisory Board Members:

c/o the Trustee

	 	(iv)	If to IBM Credit:

IBM Credit Corporation
1500 Riveredge Parkway

Atlanta, Georgia  30328
Attention:  Region Manager, East
Facsimile:  (770) 644-4826

with a copy to:

IBM Global Financing
Special Handling Group
North Castle Drive
Armonk, New York  10504
Attention:  Bruce Gordon

Facsimile:  (914) 765-6268

-17-

ARTICLE IX. 

MISCELLANEOUS PROVISIONS

          Section 9.01.  Entire Agreement.

          This Agreement (including, without limitation,
the exhibits hereto) supercedes all prior agreements,
written or oral, among the parties hereto relating to the transactions contemplated hereby, and each of the
parties hereto represents and warrants to the others that this Agreement constitutes the entire agreement among
the parties hereto relating to the transactions contemplated hereby. 

          Section 9.02.  
Governing Law. 

          (a)  THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES). 

          (b)  The parties hereto hereby declare that it is their
intention that this Agreement shall be regarded as made under the laws of the
State of Delaware and that the laws of said State shall be applied in interpreting its provisions in all cases
where legal interpretation shall be required. Each of the parties hereto agrees (a) that this Agreement involves
at least $100,000.00, and (b) that this Agreement has been entered into by the parties hereto in express reliance
upon 6 Del. C. § 2708. Each of the parties hereto hereby irrevocably and unconditionally agrees (a) to be
subject to the jurisdiction of the courts of the State of Delaware and of the federal courts sitting in the State
of Delaware, and (b)(1) to the extent such party is not otherwise subject to service of process in the State of
Delaware, to appoint and maintain an agent in the State of Delaware as such party's agent for acceptance of legal
process, and (2) that, to the fullest extent permitted by applicable law, service of process may also be made on
such party by prepaid certified mail with a proof of mailing receipt validated by the United States Postal
Service constituting evidence of valid service, and that service made pursuant to (b)(1) or (2) above shall, to
the fullest extent permitted by applicable law, have the same legal force and effect as if served upon such party
personally within the State of Delaware. 

          Section 9.03.  
Effect; Third Party Beneficiaries.  Except as otherwise specified herein, this Agreement shall be binding upon and inure to
the benefit of the parties and their respective legal representatives, successors and assigns. IBM Credit (and
its assignees) is an intended third party beneficiary hereof and shall be entitled to enforce this Agreement
against the parties hereto as if it were a party hereto. 

          Section 9.04.  
Severability of Provisions. If any term, provision, covenant or condition of this
Agreement, or the application thereof to either party or any circumstance, is held to be unenforceable, invalid
or illegal (in whole or in part) for any reason (in any relevant jurisdiction), the remaining terms, provisions,
covenants and conditions of this Agreement, modified by the deletion of the unenforceable, invalid or illegal
portion (in any relevant jurisdiction), will continue in full force and effect, and
such unenforceability, invalidity or illegality will not otherwise affect the enforceability, validity or
legality of the remaining terms, provisions, covenants and conditions of this Agreement so long as this Agreement
as so modified continues to express, without material change, the original intentions of the parties as to the
subject matter hereof and the deletion of such portion of this Agreement will not substantially impair the
respective expectations or reciprocal obligations of the parties or the practical realization of the benefits
that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to
replace the prohibited or unenforceable provision with a valid provision, the economic effect of which comes as
close as possible to that of the prohibited or unenforceable provision. 

-18-

          Section 9.05.  Amendments, Waivers, Etc.
This Agreement may not be amended, discharged or terminated nor may any provision
hereof be waived unless such amendment, discharge, termination or waiver is in writing and signed by the Trustee
and ADS, with the prior unanimous written consent of the Advisory Board. 

          Section 9.06.  Tax Characterization.

          (a)  Each of the
parties hereto recognizes and intends that, for United States federal, state and local income tax purposes the
Trust will not be treated as an association taxable as a corporation. 

          (b)  To the extent
that any of the parties hereto is required to report any item of income, gain, loss, deduction or credit relating
to the Trust for United States federal, state or local income tax purposes, such party shall report such item in
a manner consistent with the characterization intended by this Section 9.06 and shall not take any contrary
position on any tax return or report relating to the United States federal, state or local income taxes or take
any other action that is inconsistent with such characterization. 

          Section 9.07.  
Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all such counterparts shall together constitute but one and
the same instrument. 

-19-

          IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the date above first written. 

	 	WILMINGTON TRUST COMPANY
as Trustee

	 	By:	/s/ James P. Lawler

	 	 	Name:     James P. Lawler
	 	 	Title:   Vice President

	 	APPLIED DIGITAL SOLUTIONS, INC.
as Beneficial Owner

	 	By:	/s/ Jerome C. Artigliere

	 	 	Name:     Jerome C. Artigliere
	 	 	Title:   Senior Vice President

-20-

Exhibit A

[Form of Registration Rights Agreement]

Exhibit B

FORM OF ASSIGNMENT 

          This Assignment is made and
entered into as of _______ __, 2002 (the “Effective Date”), between Applied Digital Solutions,
Inc., a corporation organized under the laws of Missouri (the “Assignor”), and Digital Angel Share
Trust, a Delaware statutory business trust (the “Assignee”). Reference is made to the Trust Agreement,
dated as of March 1, 2002 (as amended or modified, the “Trust Agreement”), between Wilmington Trust
Company, a Delaware banking corporation, and the Assignor. Capitalized terms used herein and not otherwise
defined herein have the meanings set forth for such terms in the Trust Agreement. 

          1.  The Assignor hereby sells, assigns, transfers, conveys and sets over to the Assignee, as of the Effective Date, all of the
Assignor’s right, title and interest in stock certificates numbered _______ representing 19,600,000
shares of MAS Stock, which is all of the MAS Stock owned by Assignor. 

          2.  The Assignor
hereby assigns to the Assignee all of the Assignor’s rights under the Registration Rights Agreement. 

          3.  THIS ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
DELAWARE. 

          IN WITNESS WHEREOF, the
Assignor has caused this Assignment to be executed by its duly authorized officer as of the Effective Date.

	 	APPLIED DIGITAL SOLUTIONS, INC.

	 	 
	 	 	 

	 	By:	 

	 	Its:	 

	Receipt Acknowledged:

DIGITAL ANGEL SHARE TRUST

By: Wilmington Trust Company, not in
its individual capacity but solely as Trustee

	 
	By:	 
	 
	Name:	 
	 
	Title:	 
	 

Exhibit C

MEDICAL ADVISORY SYSTEMS, INC.

ACTION BY WRITTEN CONSENT OF STOCKHOLDER

          The undersigned, being the
holder of a majority of the issued and outstanding common stock (the “Stockholder”) of Medical Advisory
Systems, Inc., a Delaware corporation (the “Corporation”), and having not less than the minimum number
of votes necessary to take the actions described below at a meeting at which all shares entitled to vote thereon
were present and voted, does hereby consent to the taking of the following actions in lieu of a meeting and does
hereby adopt the following resolutions by written action pursuant to Section 228(a) of the General Corporation
Law of the State of Delaware (the “DGCL”): 

          RESOLVED, that the
Certificate of Incorporation of the Corporation be amended in accordance with the attached Certificate of
Amendment of Certificate of Incorporation of Medical Advisory Systems, Inc. (the “Certificate of Amendment”);
and 

          FURTHER RESOLVED, that the Certificate of Amendment be,
and it hereby is, approved and adopted; and 

          FURTHER RESOLVED,
that the proper officers of the Corporation be,
and each of them hereby is, authorized and directed to take all actions necessary or prudent to cause the
Certificate of Amendment to be filed with the Office of the Secretary of State of the State of Delaware on the
date hereof, and to take such other actions as are required under the DGCL and any other applicable law or
regulation in respect of the subject matter of the resolutions contained herein. 

Dated as of March 1, 2002 

	 	DIGITAL ANGEL SHARE TRUST

By: Wilmington Trust Company, not in its
individual capacity but solely as Trustee

	 	By:	 

	 	Name:	 
	 	Title:	 

CERTIFICATE OF AMENDMENT 

OF 

CERTIFICATE OF INCORPORATION 

OF 

MEDICAL ADVISORY SYSTEMS, INC. 

          Medical Advisory Systems,
Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of
Delaware, DOES HEREBY CERTIFY: 

          FIRST:  That the Board of
Directors of Medical Advisory Systems, Inc. (the "Corporation") duly adopted resolutions setting forth a proposed
amendment to the Certificate of Incorporation of the Corporation, declaring said amendment to be advisable and
directing that the proposed amendment be submitted to the stockholders of the Corporation for approval. The
resolution setting forth the proposed amendment is as follows: 

          RESOLVED, that the Board of
Directors of the Corporation hereby declares that it would be advisable to amend the Certificate of Incorporation
of the Corporation by adding a new Article Ninth, as follows, and hereby directs that the proposed amendment be
submitted to the stockholders of the Corporation for approval: 

          "NINTH: The Corporation
shall not take any of the following actions without the approval of the holders of 66.6% of the issued and
outstanding common stock of the Corporation: 

	 	          (ii)  a Bankruptcy
Decision with respect to the Corporation or any of its direct or indirect subsidiaries if, at the time such
Bankruptcy Decision is implemented or is to be implemented, (i) a Bankruptcy Decision has been made with respect
to Applied Digital Solutions, Inc., a corporation organized under the laws of Missouri ("ADS"), or any of its
direct or indirect subsidiaries, or (ii) ADS is in default under or with respect to any obligation for borrowed
money, including the Credit Documents, regardless of whether such default has been declared; and 

	 	          (iii)  approving any issuance
of Corporation Stock (or securities of any of its direct or indirect subsidiaries) or securities convertible into
or exercisable for Corporation Stock (or securities of any of its direct or indirect subsidiaries), including
options or warrants for Corporation Stock (or securities of any of its direct or indirect subsidiaries), for (A)
non-cash consideration or (B) cash consideration of less than Fair Market Value. 

          For the purposes of items
(i) and (ii) above, the following defined terms shall have the following meanings: 

          "Bankruptcy Decision" means,
with respect to a specified entity, any of the following actions: (a) filing any voluntary petition in bankruptcy
on behalf of such entity, (b) consenting to the filing of any involuntary petition in bankruptcy against such
entity, (c) filing any petition seeking, or consenting to, reorganization or relief under any applicable federal,
state or foreign law relating to bankruptcy or insolvency, on behalf of such entity, (d) consenting to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of such entity
or a substantial part of the property of such entity, (e) making any assignment for the benefit of creditors on
behalf of such entity, (f) admitting in writing the inability of such entity to pay its debts generally as they
become due, or (g) taking any action by such entity in furtherance of any of the foregoing actions. 

          "Corporation Stock" means
the common stock, par value $.005 per share, of the Corporation, and any stock into which such common stock shall
have been changed, any stock resulting from any reclassification of such common stock, any other shares of stock
issued or issuable with respect thereto (whether by way of a stock dividend or stock split or in exchange for or
upon conversion of such shares or otherwise in connection with a combination of shares, recapitalization, merger,
consolidation or other corporate reorganization), and all other stock of any class or classes (however
designated) of the Corporation (or its successors) the holders of which have the right, without limitation as to
amount, either to all or to a share of the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference. 

          "Credit Agreement" means
that certain Third Amended and Restated Term Credit Agreement, dated as of March 1, 2002, among IBM Credit
Corporation, Digital Angel Share Trust and ADS. 

          "Credit Documents" means the
Credit Agreement, the Guarantee (as defined in the Credit Agreement), and any security agreements, leases,
instruments, documents, guarantees, schedules of assignment, contracts and similar agreements, including
schedules, attachments, exhibits and ancillary documentation or other supporting documents, executed by or on
behalf of each Borrower (as defined in the Credit Agreement), or any other Loan Party (as defined in the Credit
Agreement), and delivered to Lender (as defined in the Credit Agreement), pursuant to the Credit Agreement or
otherwise, and all amendments, supplements and other modifications to the foregoing from time to time. 

          "Fair Market Value" means,
on any date specified, the average of the daily Market Price of a share of Corporation Stock during the 10
consecutive trading days before such date, except that, if on any such date the shares of Corporation Stock are
not listed or admitted for trading on any national securities exchange or quoted in the over-the-counter market,
Fair Market Value shall be the Market Price on such date. 

          "Market Price" means, on any
date specified, an amount per share of Corporation Stock equal to (i) the last reported sale price of such common
stock, regular way, on such date or, in case no such sale takes place on such date, the average of the closing
bid and asked prices thereof regular way on such date, in either case as
officially reported on the principal national securities exchange on which such Corporation Stock is then listed
or admitted for trading, (ii) if such Corporation Stock is not the n listed or admitted for trading on any
national securities exchange but is designated as a national market system security by the NASD, the last
reported trading price of the Corporation Stock on such date, (iii) if there shall have been no trading on such
date or if the Corporation Stock is not so designated, the average of the closing bid and asked prices of the
Corporation Stock on such date as shown by the NASD automated quotation system, or (iv) if such Corporation Stock
is not then listed or admitted for trading on any national exchange or quoted in the over-the-counter market, the
fair value thereof (as of a date which is within 10 days of the date as of which the determination is to be made)
determined in good faith by the Corporation's Board of Directors.” 

          SECOND: That thereafter,
pursuant to resolution of its Board of Directors, the proposed amendment was submitted to the stockholders of the
Corporation and that the necessary number of shares required by statute consented to the adoption of the
amendment by written consent pursuant to the provisions of Delaware General Corporation Law Section 228. 

          THIRD: That prompt written
notice of the adoption of the amendment to the Corporation's Certification of Incorporation was sent to all
stockholders of record who had not consented in writing as provided in Delaware General Corporation Law Section
228(e). 

          FOURTH: That said amendment
was duly adopted in accordance with the provisions of Section 242 of the Delaware General Corporation Law. 

          IN WITNESS WHEREOF, said
Medical Advisory Systems, Inc. has caused this certificate to be signed by ________________, its
President and _____________________, its Secretary, this ___th day of ______________, 2002.

	 	By: /s/ [NAME]
	 	 

	 	President
	ATTEST: /s/ [NAME]	 
	 
	 
	Secretary	 

Exhibit D

[Trustee’s Fees]

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