Document:

Unassociated Document

    Exhibit 10.4.2

     

    PREPAYMENT AND AMENDMENT
AGREEMENT

     

    This
Agreement, made as of this 9th day of
February, 2010, by and between Diligent Board Member Services,
Inc. (“Diligent”) located at 39 West 37th Street,
8th
Floor, New York, NY 10018 and Services Share Holding LLC
(“LLC”) located at 39 West 37th Street,
8th
Floor, New York, NY 10018:

    

    WHEREAS,
LLC executed a promissory note for amounts loaned by Diligent to LLC, dated
October 1, 2007, which Note currently has an outstanding balance of US$7,167,791
(hereinafter the “Note”); and

    

    WHEREAS,
the Note is secured by the pledge by LLC of 21,667,597 shares of the common
stock of Diligent owned by LLC (the “Pledged Stock”); and

    

    WHEREAS,
the parties hereto desire to agree upon certain prepayments on the principal
balance of the Note and certain amendments to the terms of the Note as provided
below.

    

    NOW,
THEREFORE, the parties hereto hereby agree as follows:

    

    
      	
               
      

            	
              1.

            	
              Cash
      Prepayment.

            

    

    

    Contemporaneous
with the execution of this Agreement, the parties have entered into an Escrow
Agreement with UMB Bank (the “Escrow Agreement”).  LLC has deposited
$1,164,133 less brokerage commissions, if any, paid to McDouall Stuart, into the
escrow account (the “Escrow Account”) created pursuant to the Escrow
Agreement.  The amount deposited represents the proceeds of the sale
by LLC of 4,823,000 shares of the Pledged Stock.  The final amount
deposited may differ from the above based on the total number of shares sold by
LLC.  The amount deposited in the Escrow Account shall be distributed
to Diligent as follows:

    

    
      	
               
      

            	
              a.

            	
              $89,522.39
      shall be paid by Escrow Agent to Diligent on April 1, 2010 as payment of
      the interest payment due on April 1 under the
  Note.

            

    

    

    
      	
               
      

            	
              b.

            	
              $57,058.22
      shall be paid to Diligent by Escrow Agent on May 28, 2010 as payment of
      the accrued interest due on the Note through that
  date.

            

    

    

    
      	
               
      

            	
              c.

            	
              The
      remaining balance in the Escrow Account shall be paid to Diligent by
      Escrow Agent immediately following the consummation of the transaction in
      paragraph 2 and the amendment becoming effective pursuant to paragraph 3
      below.  This amount shall be applied to reduce the outstanding
      balance of principal due on the Note as of May 28, 2010 by the amount
      paid.

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              d.

            	
              Alternatively,
      the remaining balance in the Escrow Account shall be distributed to
      Diligent upon execution and delivery to Escrow Agent of written
      instructions to do so signed by representatives of Diligent and
      LLC.

            

    

    

    
      	
               
      

            	
              e.

            	
              In
      the event that the cash prepayment is not made to Diligent as contemplated
      in 1c or d above, the remaining balance in the Escrow Account shall be
      distributed to Diligent by the Escrow Agent on October 1,
      2010.

            

    

    

    The
provisions of this paragraph (1) shall survive any termination of this Agreement
and shall continue in effect until the actions described in this paragraph 1
have been fully completed.

    

    
      	
               
      

            	
              2.

            	
              Prepayment.

            

    

    

    At the
Closing as defined in paragraph 3 below, LLC shall transfer all of its right,
title and interest in 11,650,000 shares of the Pledged Stock to Diligent
(hereinafter referred to as the “Transferred Shares”).  In
consideration of such transfer, Diligent shall credit LLC with a payment of
US$3,075,676 against the outstanding balance of principal due on the
Note.  This reflects a per share value of US$0.264 being allocated as
the value of each of the Transferred Shares.  Attached as Exhibit A is
the Off-Market Transfer Form to record the aforementioned transfer on Link
Market Services’ register.  This form shall be executed and delivered
by LLC and Diligent at the Closing, and filed by Diligent after the Closing. LLC
agrees to execute any additional documents and do any other acts necessary to
complete the transaction and record the transfer of the Transferred Shares to
Diligent on Link Market Services’ register.  At the Closing, Diligent
shall deliver to LLC a statement of the balance due on the Note as set forth in
Exhibit B.

    

    
      	
               
      

            	
              3.

            	
              Amendment of
      Note.

            

    

    

    Effective
immediately following successful completion of the Closing, the Note shall be
amended, without further action, as follows:

    

    
      	
               
      

            	
              a.

            	
              Paragraph
      1 shall be amended by inserting “Effective May 29, 2010,” at the beginning
      of the paragraph and deleting “five percent (5%)” and inserting “six and
      one-half percent (6.5%)” in its
place.

            

    

    

    
      	
               
      

            	
              b.

            	
              Paragraph
      2 of the Note is deleted in its entirety and is replaced with the
      following new paragraph 2:

            

    

    

    
      	
               
      

            	
              “2.

            	
              Maturity
      Date.  This Note matures and shall be due and payable in full on
      October 1, 2012 (the “Maturity
Date”).”

            

    

    

    
      	
               
      

            	
              c.

            	
              The
      first sentence of paragraph 3 of the Note is deleted in its entirety and
      replaced with the following new sentence:  “Effective May 29,
      2010, accrued and unpaid interest shall be payable, in arrears, on the
      first day of January of each calendar year until the Maturity
      Date.”

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              d.

            	
              Paragraph
      12 (b) of the Note shall be deleted in its
  entirety.

            

    

    

    A signed
copy of this Agreement shall be attached to the Note.

    

    
      	
               
      

            	
              4.

            	
              Closing.

            

    

    

    The 2010
Annual Meeting of Diligent is scheduled for May 28, 2010 (the “Annual
Meeting”).  The holding of the Closing and the consummation of the
transaction in paragraph 2 above, and the effectiveness of the amendment in
paragraph 3 above, are conditioned upon the actions contemplated in these two
paragraphs being approved at the Annual Meeting by a vote of the shareholders of
Diligent eligible to vote on these matters.  The Closing to consummate
the prepayment transaction shall be held on the next business day in the U.S.
following the vote by the shareholders at the 2010 Annual Meeting of Diligent
approving the proposed prepayment and amendment (referred to herein as the
“Closing”).  The Closing shall be held in the headquarters offices of
Diligent in New York City.  If the shareholders do not approve the
actions proposed in paragraphs 2 and 3 above, then this Agreement shall
terminate and neither party shall have any further obligation to the other with
respect to the subject matter hereof.

    

    
      	
               
      

            	
              5.

            	
              Representations and
      Warranties.

            

    

    

    LLC
hereby represents and warrants as follows:

    

    
      	
               
      

            	
              a.

            	
              No
      Conflicts.  The
      execution, delivery and performance of this Agreement will not breach,
      violate, require any consent, or constitute a default under any contract,
      agreement, instrument, or other commitment or any order, decree, judgment,
      or other edict to which the LLC is a party or any of its property is
      subject.

            

    

    

    
      	
               
      

            	
              b.

            	
              Ownership
      of the Shares. The
      LLC
      is the lawful and sole owner of all of the Transferred
    Shares.

            

    

    

    
      	
               
      

            	
              c.

            	
              No
      Options, Warrants, Contract Rights Etc. Other
      than the Pledge, (i) the LLC is not a party to any agreement, written
      or oral, creating rights in respect of the Transferred Shares in any third
      person or relating to the voting or disposition of the Transferred Shares,
      (ii) the LLC has the full power and legal right to sell, assign,
      transfer and deliver the Transferred Shares, (iii) there are no
      existing warrants, options, stock purchase agreements, redemption
      agreements, restrictions of any nature, calls or rights to subscribe of
      any character relating to the Transferred
  Shares.

            

    

    

    
      	
               
      

            	
              d.

            	
              Authority.  The LLC is
      a limited liability company duly organized, validly existing and in good
      standing under the laws of the State of Delaware.  The
      transactions contemplated by this Agreement have been duly authorized and
      approved by all necessary and appropriate action by the
    LLC.

            

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              6.

            	
              Entire
      Agreement.

            

    

    

    This
Agreement contains the entire understanding and agreement between Diligent and
LLC with respect to the subject matter hereof, and supersedes all other prior
and contemporaneous proposals, representations, agreements, understandings and
commitments between the parties with respect to the subject matter
hereof.

    

    
      	
               
      

            	
              7.

            	
              Variation or
      Amendment.

            

    

    

    No
amendment or modification or variation of this Agreement will be effective
unless the parties execute a written agreement signed by an authorized
representative of each of them effecting such amendment, modification, or
variation.

    

    
      	
               
      

            	
              8.

            	
              Governing
      Law.

            

    

    

    The
interpretation of this Agreement, and all matters related to this Agreement,
will be governed and construed in accordance with the laws of the State of New
York, USA, without reference to the choice of law provisions of New York
law.

    

    
      	
               
      

            	
              9.

            	
              No Assignment or
      Delegation.

            

    

    

    Neither
Diligent nor LLC may assign this Agreement, in whole or in part, nor assign any
of its rights hereunder or delegate any of its duties hereunder, to any third
party without the prior written consent of the other party.

    

    
      	
               
      

            	
              10.

            	
              Board
      Approval.

            

    

    

    This
Agreement is subject to approval by the Diligent Board of
Directors.

    

    Remainder
of this page intentionally left blank.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

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

    

    
      
        	
                      
                  DILIGENT
      BOARD MEMBER SERVICES, INC.

                

              
	 
      	 
      
	
                BY:

              	 
      
	 
      	 
      
	
                /s/  Alessandro
    Sodi

              
	 
      	 
      
	
                Name:   

              	
                Alessandro Sodi

              
	 
      	 
      
	
                Title:   

              	
                President and Chief Executive
      Officer

              
	 
      	 
      
	SERVICES SHARE HOLDING LLC
	 
      	 
      
	
                BY:   

              	 
      
	 
      	 
      
	
                /s/   Sharon
      Daniels

              
	 
      	 
      
	
                Name:   

              	
                Sharon Daniels

              
	 
      	 
      
	
                Title:

              	
                Member

              

      

    

    
      
         

      

      
        5Exhibit
10.12

     

    CREDIT
FACILITY

     

    ESTABLISHED

     

    BY

     

    SPRING
STREET PARTNERS, L.P.

     

    AS
LENDER

     

    IN
FAVOR

     

    OF

     

    DILIGENT
BOARD MEMBER SERVICES, INC.

     

    AS
BORROWER

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    TABLE OF
CONTENTS

     

    
      
        
          
            	
                    ARTICLE
      ONE INTERPRETATION

                  	
                    1

                  
	
                    Section
      1.01

                  	
                    Definitions

                  	
                    1

                  
	
                    Section
      1.02

                  	
                    United
      States Currency

                  	
                    9

                  
	
                    Section
      1.03

                  	
                    Interest
      Calculation

                  	
                    9

                  
	
                    Section
      1.04

                  	
                    Headings
      and Table of Contents

                  	
                    9

                  
	
                    Section
      1.05

                  	
                    References

                  	
                    9

                  
	
                    Section
      1.06

                  	
                    Number
      and Gender

                  	
                    9

                  
	
                    Section
      1.07

                  	
                    Maximum
      Interest Rate

                  	
                    9

                  
	
                    Section
      1.08

                  	
                    Schedules

                  	
                    10

                  
	 
      	 
      
	
                    ARTICLE
      TWO CREDIT FACILITY

                  	
                    11

                  
	
                    Section
      2.01

                  	
                    Credit
      Facility.

                  	
                    11

                  
	
                    Section
      2.02

                  	
                    Illegality

                  	
                    11

                  
	 
      	 
      
	
                    ARTICLE
      THREE PROCEDURES APPLICABLE TO BORROWINGS

                  	
                    11

                  
	
                    Section
      3.01

                  	
                    Written
      Instructions

                  	
                    11

                  
	
                    Section
      3.02

                  	
                    Drawdown
      Procedure

                  	
                    11

                  
	 
      	 
      
	
                    ARTICLE
      FOUR PAYMENTS

                  	
                    12

                  
	
                    Section
      4.01

                  	
                    Repayment

                  	
                    12

                  
	
                    Section
      4.02

                  	
                    Prepayment

                  	
                    12

                  
	
                    Section
      4.03

                  	
                    Payments
      Generally

                  	
                    13

                  
	
                    Section
      4.04

                  	
                    No
      Credit for Trust Funds

                  	
                    13

                  
	
                    Section
      4.05

                  	
                    Payments
      of Principal and Interest

                  	
                    13

                  
	
                    Section
      4.06

                  	
                    Use
      of Proceeds

                  	
                    13

                  
	
                    Section
      4.07

                  	
                    The
      Credit Facility and the Note

                  	
                    14

                  
	
                    Section
      4.08

                  	
                    Other
      Payment Terms

                  	
                    14

                  
	 
      	 
      
	
                    ARTICLE
      FIVE INTEREST, FEES AND EXPENSES

                  	
                    14

                  
	
                    Section
      5.01

                  	
                    Interest
      on Overdue Amounts

                  	
                    14

                  
	
                    Section
      5.02

                  	
                    Reimbursement
      of Expenses

                  	
                    14

                  
	
                    Section
      5.03

                  	
                    Reimbursement
      for Expenses

                  	
                    14

                  
	 
      	 
      
	
                    ARTICLE
      SIX CONDITIONS PRECEDENT

                  	
                    15

                  
	
                    Section
      6.01

                  	
                    Conditions
      - Credit Facility

                  	
                    15

                  
	
                    Section
      6.02

                  	
                    Waiver

                  	
                    17

                  
	 
      	 
      
	
                    ARTICLE
      SEVEN REPRESENTATIONS AND WARRANTIES

                  	
                    17

                  
	
                    Section
      7.01

                  	
                    Representation
      and Warranties

                  	
                    17

                  
	
                    Section
      7.02

                  	
                    Compliance
      with Securities Laws

                  	
                    21

                  
	
                    Section
      7.03

                  	
                    Disclosure

                  	
                    21

                  
	
                    Section
      7.04

                  	
                    Lender
      Representations and Warranties

                  	
                    21

                  
	
                    Section
      7.05

                  	
                    Survival
      of Representations and Warranties

                  	
                    22

                  

          

        

      

    

     

    
      
         

      

      
        (i)

        
          

        

      

      
         

      

    

     

    
      
        
          
            	
                    ARTICLE
      EIGHT COVENANTS

                  	
                    22

                  
	
                    Section
      8.01

                  	
                    Positive
      Covenants

                  	
                    22

                  
	
                    Section
      8.02

                  	
                    Restrictive
      Covenants

                  	
                    26

                  
	 
      	 
      
	
                    ARTICLE
      NINE SECURITY

                  	
                    29

                  
	
                    Section
      9.01

                  	
                    Security

                  	
                    29

                  
	
                    Section
      9.02

                  	
                    Further
      Assurances

                  	
                    29

                  
	 
      	 
      
	
                    ARTICLE
      TEN EVENTS OF DEFAULT

                  	
                    29

                  
	
                    Section
      10.01

                  	
                    Events
      of Default

                  	
                    29

                  
	
                    Section
      10.02

                  	
                    Lender
      May Waive

                  	
                    32

                  
	
                    Section
      10.03

                  	
                    Remedies
      are Cumulative

                  	
                    32

                  
	
                    Section
      10.04

                  	
                    Set-Off

                  	
                    33

                  
	 
      	 
      
	
                    ARTICLE
      ELEVEN ENVIRONMENTAL MATTERS

                  	
                    33

                  
	
                    Section
      11.01

                  	
                    Representations
      and Warranties

                  	
                    33

                  
	
                    Section
      11.02

                  	
                    Environmental
      Covenants

                  	
                    33

                  
	 
      	 
      
	
                    ARTICLE
      TWELVE GENERAL

                  	
                    34

                  
	
                    Section
      12.01

                  	
                    Notices

                  	
                    34

                  
	
                    Section
      12.02

                  	
                    Performance
      of Covenants by the Lender

                  	
                    34

                  
	
                    Section
      12.03

                  	
                    Indemnity

                  	
                    34

                  
	
                    Section
      12.04

                  	
                    No
      Set-Off or Counterclaim

                  	
                    35

                  
	
                    Section
      12.05

                  	
                    Severability

                  	
                    35

                  
	
                    Section
      12.06

                  	
                    Time
      of Essence

                  	
                    35

                  
	
                    Section
      12.07

                  	
                    Assignment

                  	
                    35

                  
	
                    Section
      12.08

                  	
                    Entire
      Agreement

                  	
                    35

                  
	
                    Section
      12.09

                  	
                    Amendments

                  	
                    35

                  
	
                    Section
      12.10

                  	
                    Governing
      Law

                  	
                    35

                  
	
                    Section
      12.11

                  	
                    Conflict

                  	
                    36

                  
	
                    Section
      12.12

                  	
                    Successors
      and Assigns

                  	
                    36

                  
	
                    Section
      12.13

                  	
                    Counterparts

                  	
                    36

                  
	
                    Section
      12.14

                  	
                    Waiver
      of Trial by Jury.

                  	
                    36

                  

          

        

      

    

     

    
      
         

      

      
        (ii)

        
          

        

      

      
         

      

    

     

    
      
        
          
            
              
                	
                        Schedule

                      	 
      	
                        Description

                      
	
                        Schedule “A”

                      	
                          -  

                      	
                        Form of Opinion

                      
	
                        Schedule “B”

                      	
                        -

                      	
                        Litigation

                      
	
                        Schedule “C”

                      	
                        -

                      	
                        Owned Properties

                      
	
                        Schedule “D”

                      	
                        -

                      	
                        Leased Properties

                      
	
                        Schedule “E”

                      	
                        -

                      	
                        Form of Promissory Note

                      
	
                        Schedule “F”

                      	
                        -

                      	
                        Form of Drawdown Request

                      
	
                        Schedule “G”

                      	
                        -

                      	
                        Permitted Encumbrances

                      
	
                        Schedule “H”

                      	
                        -

                      	
                        Location of Assets

                      
	
                        Schedule “I”

                      	
                        -

                      	
                        Intellectual Property

                      
	
                        Schedule “J”

                      	
                        -

                      	
                        Licenses

                      
	
                        Schedule “K”

                      	
                        -

                      	
                        Subsidiaries

                      
	
                        Schedule “L”

                      	
                        -

                      	
                        Predecessor/Trade Names

                      

              

            

          

        

      

    

     

    
      
         

      

      
        (iii)

        
          

        

      

      
         

      

    

    CREDIT
AGREEMENT

     

    THIS AGREEMENT dated as of the
12th day of March, 2010.

     

    BETWEEN
:

     

    DILIGENT
BOARD MEMBER SERVICES, INC.

     

    (the
“Borrower”)

     

    – and
–

     

    SPRING
STREET PARTNERS, L.P.

     

    (the
“Lender”)

     

    WITNESSES THAT in
consideration of the establishment of the Credit Facility by the Lender in favor
of the Borrower and for good and valuable consideration (the receipt and
sufficiency of which are hereby mutually acknowledged), the parties agree as
follows:

     

    ARTICLE
ONE

     

    INTERPRETATION

     

    Section
1.01        Definitions

     

    For the purposes of this Agreement and
where the context does not otherwise require, the following terms shall have the
following meanings:

     

    
      	
               
      

            	
              (1)

            	
              “Affiliate” of a Person
      means any other Person which, directly or indirectly, controls or is
      controlled by or is under common control with the first Person, and for
      purposes of this definition, “control” (including with
      correlative meanings the terms “controlled by” and
      “under common control
      with”) means the power to direct or cause the direction of the
      management and policies of any Person, through the ownership of shares or
      similar equity interests.

            

    

     

    
      	
               
      

            	
              (2)

            	
              “Agreement” means this
      agreement and the schedules hereto and any amendments, restatements,
      modifications or supplements to this agreement or the schedules at any
      time and from time to time.

            

    

     

    
      	
               
      

            	
              (3)

            	
              “Applicable Law” means,
      at any time, with respect to any Person, property, transaction or event,
      all applicable laws, statutes, regulations, treaties, judgments and
      decrees and (insofar as they have the force of law) all applicable
      official directives, rules, consents, approvals, by-laws, permits,
      authorizations, guidelines, orders and policies of any Governmental
      Authority or Persons having authority over any of the parties
      hereto.

            

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (4)

            	
              “Average Daily Balance”
      means, over any given period of time, the sum of the daily principal
      balances of the Outstanding Borrowings as of 5:00 p.m. New York time for
      each day during such time period, divided by the number of days in such
      time period.

            

    

     

    
      	
               
      

            	
              (5)

            	
              “Books and Records” mean
      all books, records, files, papers, disks, documents and other repositories
      of data recording in any form or medium, evidencing or relating to the
      collateral charged by the Security which are at any time owned by the
      Borrower or to which the Borrower (or any Person on the Borrower’s behalf)
      has access.

            

    

     

    
      	
               
      

            	
              (6)

            	
              “Borrower” means Diligent
      Board Member Services, Inc.

            

    

     

    
      	
               
      

            	
              (7)

            	
              “Borrowings” means
      advances of money under the Credit
Facility.

            

    

     

    
      	
               
      

            	
              (8)

            	
              “Business Day” means a
      day on which banks are open for business in New York City, New York, other
      than a Saturday, Sunday, statutory or legal
  holiday.

            

    

     

    
      	
               
      

            	
              (9)

            	
              “Capitalized Lease
      Obligations” means monetary obligations under any agreements for
      the lease or rental of real or personal property that in accordance with
      GAAP are required to be classified and accounted for as capital
      leases.

            

    

     

    
      	
               
      

            	
              (10)

            	
              “Closing Date” means
      March 12, 2010 or such earlier or later date as may be mutually agreed
      upon by the Lender and the
Borrower.

            

    

     

    
      	
               
      

            	
              (11)

            	
              “Commitment” means the
      commitment of the Lender to advance to the Borrower the principal amount
      of up to US$1,000,000 pursuant to the terms of this
    Agreement.

            

    

     

    
      	
               
      

            	
              (12)

            	
              “Commitment Fee” means a
      fee of 0.5% per annum of the unused portion of the
      Commitment.  For any given time period, the Commitment Fee shall
      be calculated by taking the product of (x) 0.5%, (y) [the number
      of days in such time period divided by 360], and (z) [$1,000,000
      minus the Average Daily Balance during such time period].  The
      Commitment Fee shall accrue daily in
arrears.

            

    

     

    
      	
               
      

            	
              (13)

            	
              “Consolidated” means when
      used to describe the calculation of any amount relating to the Borrower,
      consolidated, in accordance with
GAAP.

            

    

     

    
      	
               
      

            	
              (14)

            	
              “Contaminant” includes,
      but is not limited to, any pollutant, dangerous, toxic or hazardous
      substance or waste of any description whatsoever, hazardous materials or
      contaminants including any of the foregoing as defined in any
      Environmental Law.

            

    

     

    
      	
               
      

            	
              (15)

            	
              “Credit Facility” means
      the Credit Facility made available by the Lender to the Borrower pursuant
      to the terms of this Agreement.

            

    

     

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (16)

            	
              “Default” means any of
      the events described in Section 10.01 regardless of whether any
      requirement in connection with such event for the giving of notice, the
      lapse of time, or both, has been satisfied or
  met.

            

    

     

    
      	
               
      

            	
              (17)

            	
              “Default Rate” means the
      per annum rate of interest equal to the Interest Rate plus, to the extent
      permitted by law, 5.0% per annum, but in no event shall such rate exceed
      the maximum rate permitted by Applicable
Law.

            

    

     

    
      	
               
      

            	
              (18)

            	
              “Demand” means any
      communication of demand for payment of all or any portion of the
      Outstanding Obligations, made in writing by the
  Lender.

            

    

     

    
      	
               
      

            	
              (19)

            	
              “Drawdown” means the
      Lender’s advance of funds to the Borrower in accordance with this
      Agreement and a drawdown request (each, a “Drawdown Request”) made
      by the Borrower in the form of that set forth as Schedule “F”
      hereto.

            

    

     

    
      	
               
      

            	
              (20)

            	
              “Environmental Activity”
      means any past, present or future activity, event or circumstance in
      respect of a Contaminant, including, without limitation, its storage, use,
      holding, collection, purchase, accumulation, assessment, generation,
      manufacture, construction, processing, treatment, stabilization,
      disposition, handling or transportation or its Release into the natural
      environment including the movement through or in the air, soil, subsoil,
      surface water or groundwater.

            

    

     

    
      	
               
      

            	
              (21)

            	
              “Environmental Laws”
      means any and all federal, provincial, state, municipal, local and foreign
      statutes, laws, regulations, ordinances, rules, judgments, orders,
      decrees, permits, licenses, agreements or other governmental restrictions
      having the force of law relating to the environment, occupational health
      and safety, health protection or any Environmental
    Activity.

            

    

     

    
      	
               
      

            	
              (22)

            	
              “Event of Default” means
      any of the events specified in Section 10.01, provided that any
      requirement in connection with such event for the giving of notice, the
      lapse of time or both, has been satisfied or
  met.

            

    

     

    
      	
               
      

            	
              (23)

            	
              “Financial Year” of an
      entity means the 12-month period ending on the fiscal year end of that
      entity in each year.

            

    

     

    
      	
               
      

            	
              (24)

            	
              “GAAP” means generally
      accepted accounting principles which are in effect in the United States
      from time to time and applied in a consistent manner from period to
      period.

            

    

     

    
      	
               
      

            	
              (25)

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

            

    

     

    
      	
               
      

            	
              (26)

            	
              “Guarantee” means, with
      respect to a Person, any absolute or contingent liability of that Person
      under any guarantee, agreement, endorsement (other than for collection or
      deposit in the ordinary course of business), discount with recourse or
      other obligation to pay, purchase, repurchase or otherwise be or become
      liable or obligated upon or in respect of any Indebtedness of any other
      Person and including any absolute or contingent obligations
      to:

            

    

     

    
      
         

      

      
        - 3
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (i)

            	
              advance
      or supply funds for the payment or purchase of any Indebtedness of any
      other Person,

            

    

     

    
      	
               
      

            	
              (ii)

            	
              purchase,
      sell or lease (as lessee or lessor) any property, assets, goods, services,
      materials or supplies primarily for the purpose of enabling any other
      Person to make payment of Indebtedness or to assure the holder thereof
      against loss, or

            

    

     

    
      	
               
      

            	
              (iii)

            	
              indemnify
      or hold harmless any other Person from or against any losses, liabilities
      or damages, in circumstances intended to enable such other Person to incur
      or pay any Indebtedness or to comply with any agreement relating thereto
      or otherwise to assure or protect creditors against loss in respect of
      such Indebtedness.

            

    

     

    Each
Guarantee shall be deemed to be in an amount equal to the amount of the
Indebtedness in respect of which the Guarantee is given, unless the Guarantee is
limited to a determinable amount in which case the amount of the Guarantee shall
be deemed to be the lesser of the amount of the Indebtedness in respect of which
the Guarantee is given and such determinable amount.

     

    
      	
               
      

            	
              (27)

            	
              “Indebtedness” of a
      Person means, without duplication,

            

    

     

    
      	
               
      

            	
              (i)

            	
              all
      debts, liabilities and obligations, direct, indirect, liquidated,
      unliquidated, contingent and other, including principal, interest, charges
      and fees, which in accordance with GAAP would be classified upon the
      Person’s balance sheet as liabilities including, without limitation, all
      Capitalized Lease Obligations and all Guarantees of such debts,
      liabilities and obligations; and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              all
      obligations secured by any Security Interest, including principal,
      interest, charges and fees, existing on property owned or acquired by the
      Person subject to such Security Interest whether or not the Person has
      assumed or otherwise become liable for the payment of such
      obligations.

            

    

     

    
      	
               
      

            	
              (28)

            	
              “Intellectual Property”
      means for the Borrower and, if applicable, each of its
      Subsidiaries:

            

    

     

    
      	
               
      

            	
              (i)

            	
              inventions,
      discoveries, methods, letters patent, applications for letters patent,
      renewals, reissues, extensions, divisions, continuations and
      continuations-in-part;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              trademarks
      and service marks (and the goodwill pertaining thereto), trade names or
      corporate names and any application, registration, or renewal pertaining
      thereto;

            

    

     

    
      
         

      

      
        - 4
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (iii)

            	
              copyright
      in works, including, but not limited to, computer software, documentation,
      source code, object code and all registrations and recordals thereof and
      any programmable media, paper or other media on which such works are
      fixed;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              industrial
      designs, integrated circuit topographies and any registration
      thereof;

            

    

     

    
      	
               
      

            	
              (v)

            	
              trade
      secrets, including know-how, ideas, plans, algorithms, hardware, firmware
      and architectures, whether in written, graphic or oral
    form;

            

    

     

    
      	
               
      

            	
              (vi)

            	
              applications
      or registrations set out in Schedule
“I”;

            

    

     

    
      	
               
      

            	
              (vii)

            	
              any
      future developments or improvements relating to intellectual and
      industrial property set out in (i) to (vi)
  above;

            

    

     

    
      	
               
      

            	
              (viii)

            	
              the
      right to take action for any infringement of rights in intellectual and
      industrial property prior to execution of this Agreement;
    and

            

    

     

    
      	
               
      

            	
              (ix)

            	
              any
      option or right to make, use, sell, copy, modify, distribute, have made,
      create derivative works from or sublicense any intellectual or industrial
      property, including, without limitation, all rights acquired under any
      License Agreement

            

    

     

    in New
Zealand, the United States and all other countries worldwide.

     

    
      	
               
      

            	
              (29)

            	
              “Interest Payment Date”
      means the first Business Day of each April, July, October and January
      during the Term.

            

    

     

    
      	
               
      

            	
              (30)

            	
              “Interest Rate” means an
      interest rate of 9.50% per
      annum.

            

    

     

    
      	
               
      

            	
              (31)

            	
              “Interim Interest” means
      the interest payable at the Interest Rate for the period, if any, between
      the Closing Date and the first Interest Payment
  Date.

            

    

     

    
      	
               
      

            	
              (32)

            	
              “Lender” means Spring
      Street Partners, L.P.

            

    

     

    
      	
               
      

            	
              (33)

            	
              “License Agreements”
      means all agreements pursuant to which the Borrower has obtained rights or
      an option to acquire rights or has granted to a Person rights or an option
      to acquire rights to use any Intellectual Property owned by a Person or
      the Borrower, respectively.

            

    

     

    
      	
               
      

            	
              (34)

            	
              “LLC Agreement” means
      that certain Prepayment and Amendment Agreement, dated February 9, 2010,
      by and between the Borrower and Services Share Holding
  LLC.

            

    

     

    
      	
               
      

            	
              (35)

            	
              “Maturity Date” means the
      date which is eighteen (18) months from the Closing
  Date.

            

    

     

    
      
         

      

      
        - 5
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (36)

            	
              “Note” means the
      promissory note of the Borrower substantially in the form set forth in
      Schedule “E”.

            

    

     

    
      	
               
      

            	
              (37)

            	
              “Outstanding Borrowings”
      means, at the time of determination, the outstanding principal amount of
      the Credit Facility.

            

    

     

    
      	
               
      

            	
              (38)

            	
              “Outstanding Obligations”
      means the aggregate of (i) Outstanding Borrowings, (ii) all unpaid
      interest and fees thereon as herein provided, (iii) all other
      indebtedness, liabilities and obligations (including without limitation
      under any indemnities) and all other fees (including Commitment Fees),
      charges and expenses required to be paid by the Borrower to the Lender
      hereunder or pursuant to the Security or any other written agreements now
      or hereafter entered into between the Borrower and the Lender pertaining
      to the Credit Facility.

            

    

     

    
      	
               
      

            	
              (39)

            	
              “Permitted Asset Sale”
      means (a) any license of Intellectual Property in the ordinary course of
      the Borrower’s business or (b) a sale, transfer, lease, contribution or
      other conveyance by the Borrower of any asset, real or personal, excluding
      Intellectual  Property, which satisfies any one of the following
      conditions:

            

    

     

    
      	
               
      

            	
              (i)

            	
              such
      sale, transfer, lease, contribution or conveyance is in the ordinary
      course of its business;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              such
      sale, transfer, lease, contribution or conveyance is between the Borrower
      and any Affiliate of the Borrower;
or

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      net proceeds from any sale, transfer, lease, contribution or conveyance
      are applied to acquire replacements of any assets which are the subject of
      such sale, transfer, lease, contribution or
  conveyance.

            

    

     

    
      	
               
      

            	
              (40)

            	
              “Permitted Encumbrances”
      means:

            

    

     

    
      	
               
      

            	
              (i)

            	
              inchoate
      or statutory priorities, liens or trust claims for taxes, assessments and
      other governmental charges or levies which are not delinquent or the
      validity of which are currently being contested in good faith by
      appropriate proceedings provided that there shall have been set aside a
      reserve to the extent required by GAAP in an amount which is reasonably
      adequate with respect thereto;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      right reserved to, or vested in, any municipality or Governmental
      Authority by the terms of any lease, license, franchise, grant, or permit,
      or by any statutory provision, to terminate any such lease, license,
      franchise, grant or permit, or to require annual or periodic payments as a
      condition of the continuance
thereof;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              inchoate
      or statutory liens of contractors, subcontractors, mechanics, suppliers,
      material men and others in respect of construction, maintenance, repair or
      operation of assets or properties, or other like possessory liens and
      public utility liens provided the same are being contested by the Borrower
      in good faith by appropriate and timely
  proceedings;

            

    

     

    
      
         

      

      
        - 6
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (iv)

            	
              security
      given to a public utility or other Governmental Authority or other public
      authority when required by such utility or Governmental Authority in
      connection with the operations of the Borrower in the ordinary course of
      business;

            

    

     

    
      	
               
      

            	
              (v)

            	
              title
      defects which are of a minor nature and in the aggregate will not
      materially impair the value or use of the property for the purposes for
      which it is held;

            

    

     

    
      	
               
      

            	
              (vi)

            	
              the
      Security;

            

    

     

    
      	
               
      

            	
              (vii)

            	
              Security
      Interests securing Purchase Money Obligations up to a maximum aggregate
      amount of US$300,000, provided the Security Interest charges only the
      asset which is the subject of the Purchase Money Obligations and no other
      asset;

            

    

     

    
      	
               
      

            	
              (viii)

            	
              Security
      Interests identified in Schedule “G” annexed
  hereto;

            

    

     

    
      	
               
      

            	
              (ix)

            	
              Security
      Interests, other than those described in this subsection 1.01(40), the
      existence of which have been disclosed in writing to the Lender and
      consented to by the Lender in writing;
and

            

    

     

    
      	
               
      

            	
              (x)

            	
              Security
      Interests securing Capitalized Lease
  Obligations.

            

    

     

    
      	
               
      

            	
              (41)

            	
              “Permitted Indebtedness”
      means the following Indebtedness of the
  Borrower:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Outstanding Obligations;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              current
      accounts payable arising in the ordinary course of business from the
      purchase of goods and services;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              any
      other Indebtedness specifically permitted
  hereunder;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              Capitalized
      Lease Obligations and Purchase Money Obligations, including, without
      limitation, Indebtedness to non-vendor third parties incurred to finance
      the acquisition of new assets;

            

    

     

    
      	
               
      

            	
              (v)

            	
              Subordinated
      Debt; and

            

    

     

    
      	
               
      

            	
              (vi)

            	
              Indebtedness
      in respect of which the Lender has given its prior written consent as to
      existence and ranking.

            

    

     

    
      	
               
      

            	
              (42)

            	
              “Person” includes an
      individual, a partnership, a joint venture, a trust, an unincorporated
      organization, a company, a corporation, an association, a government or
      any department or agency thereof and any other incorporated or
      unincorporated entity.

            

    

     

    
      
         

      

      
        - 7
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (43)

            	
              “Property” means any
      personal or real property owned, leased, occupied or under the charge,
      management or control of the
Borrower.

            

    

     

    
      	
               
      

            	
              (44)

            	
              “Purchase Money
      Obligations” means the outstanding balance of the purchase price of
      real and/or personal property, title to which has been acquired or will be
      acquired upon payment of such purchase price, or Indebtedness to
      non-vendor third parties incurred to finance the acquisition of such new
      or replacement real and/or personal property or any refinancing of such
      Indebtedness or outstanding
balance.

            

    

     

    
      	
               
      

            	
              (45)

            	
              “Release” includes
      discharge, spray, inject, inoculate, abandon, deposit, spill, leak, seep,
      pour, emit, empty, throw, dump, place, escape, leach, disperse, migrate
      and exhaust, and when used as a noun (as applicable) has the same
      meaning.

            

    

     

    
      	
               
      

            	
              (46)

            	
              “Security” means the
      security and agreements described in Article Nine and any additional
      security issued from time to time by any Person in support of the
      liabilities and obligations of the Borrower
  hereunder.

            

    

     

    
      	
               
      

            	
              (47)

            	
              “Security Interest”
      includes a mortgage, charge, floating charge, pledge, hypothecation,
      assignment, lien, encumbrance, conditional sale agreement or other title
      retention agreement, subordination trust or other security interest or
      arrangement of any kind or character intended to create a security
      interest in substance regardless of whether the person creating the
      interest retains an equity of redemption, and any agreement to provide or
      enter into at any time or on the happening of any event such a security
      interest or arrangement.

            

    

     

    
      	
               
      

            	
              (48)

            	
              “Subordinated Debt” means
      (i) Indebtedness (and any related Security Interest) which has been
      validly and absolutely postponed and subordinated in right of security,
      payment and collection and in all other respects to the repayment in full
      of the Outstanding Obligations and any refinancing thereof which is
      subordinated and postponed to the same extent and (ii) all other debt
      subordinated to the Outstanding Obligations which the Lender is prepared
      to include within the definition of “Subordinated Debt” in
      its sole and unfettered discretion.

            

    

     

    
      	
               
      

            	
              (49)

            	
              “Subsidiary” means a body
      corporate which is a subsidiary of  the  Borrower or
      another body corporate.

            

    

     

    
      	
               
      

            	
              (50)

            	
              “Tax” and “Taxes” include all
      present and future taxes, levies, imposts, stamp taxes, duties, charges to
      tax, fees, deductions, withholdings and any restrictions or conditions
      resulting in a charge to tax and all penalties, interest and other
      payments on or in respect thereof.

            

    

     

    
      	
               
      

            	
              (51)

            	
              “Term” means a period of
      eighteen (18) months from and after the Closing
  Date.

            

    

     

    
      
         

      

      
        - 8
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (52)

            	
              “United States Dollars”,
      “US Dollars” and
      “US$” each means
      lawful money of  the United States of
  America.

            

    

     

    
      	
               
      

            	
              (53)

            	
              “Written” and “In Writing” shall
      include printing, typewriting or any electronic means of communication
      capable of being visibly reproduced at the point of reception
      including  telecopy.

            

    

     

    Section
1.02        United States
Currency

     

    Unless otherwise specified herein, all
amounts and values referred to in this Agreement shall be calculated in US
Dollars.

     

    Section
1.03        Interest
Calculation

     

    All annual rates of interest or other
periodic fees referred to herein are based on a calendar year of 360 days
(unless specifically stated otherwise).  Interest on the Outstanding
Borrowings shall accrue daily in arrears.

     

    Section
1.04        Headings and Table of
Contents

     

    The division of this Agreement into
Articles and Sections and the provision of a Table of Contents and the insertion
of headings are for convenience of reference only and shall not affect the
meaning or interpretation of this Agreement.

     

    Section
1.05        References

     

    All references to Sections, Articles
and Schedules are to Sections and Articles of and Schedules to this Agreement.
The words “hereto”, “herein”, “hereof”, “hereunder”, “this Agreement” and
similar expressions mean and refer to this Agreement.

     

    Section
1.06        Number and
Gender

     

    Where the context so requires, words
importing the singular include the plural and vice versa, and words importing
gender include the masculine, feminine and neuter genders.

     

    Section
1.07        Maximum Interest
Rate

     

    
      	
               
      

            	
              (1)

            	
              In
      the event that any provision of this Agreement would oblige the Borrower
      to make any payment of interest or any other payment which is construed by
      a court of competent jurisdiction to be interest in an amount or
      calculated at a rate which would be prohibited by law or would result in a
      receipt by the Lender of interest at a criminal rate, then notwithstanding
      such provision, such amount or rate shall be deemed to have been adjusted
      nunc pro tunc to
      the maximum amount or rate of interest, as the case may be, as would not
      be so prohibited by law or so result in a receipt by the Lender of
      interest at a criminal rate, such adjustment to be effected, to the extent
      necessary, as follows:

            

    

     

    
      
         

      

      
        - 9
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (i)

            	
              firstly,
      by reducing the amount or rate of interest required to be paid under
      Section 5.01 of this Agreement; and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              thereafter,
      by reducing any fees, commissions, premiums and other amounts which would
      constitute interest for the purposes of the Applicable
  Law;

            

    

     

    
      	
               
      

            	
              (2)

            	
              If,
      notwithstanding the provisions of clause (1) of this Section and after
      giving effect to all adjustments contemplated thereby, the Lender shall
      have received an amount in excess of the maximum permitted by such clause,
      then such excess shall be applied by the Lender to the reduction of the
      principal balance of the Outstanding Borrowings and not to the payment of
      interest or if such excessive interest exceeds such principal balance,
      such excess shall be refunded to the Borrower;
  and

            

    

     

    
      	
               
      

            	
              (3)

            	
              Any
      amount or rate of interest referred to in this Section shall be determined
      in accordance with GAAP at an effective annual rate of interest over the
      term of this Agreement on the assumption that any charges, fees or
      expenses that fall within the meaning of “interest” (as defined under
      Applicable Law) shall, if they relate to a specific period of time, be
      prorated over that period of time and otherwise be prorated over the Term
      of this Agreement and, in the event of dispute, a certificate of a
      nationally recognized independent auditor appointed by the Lender shall be
      conclusive for the purposes of such
  determination.

            

    

     

    Section
1.08        Schedules

     

    The Schedules forming part of this
Agreement are as follows:

     

    
      
        
          
            	
                    Schedule

                  	 
      	
                    Description

                  
	 
      	 
      	 
      
	
                    Schedule “A”

                  	
                      –  

                  	
                    Form of Opinion

                  
	
                    Schedule “B”

                  	
                    –

                  	
                    Litigation

                  
	
                    Schedule “C”

                  	
                    –

                  	
                    Owned Properties

                  
	
                    Schedule “D”

                  	
                    –

                  	
                    Leased Properties

                  
	
                    Schedule “E”

                  	
                    –

                  	
                    Form of Promissory Note

                  
	
                    Schedule “F”

                  	
                    –

                  	
                    Form of Drawdown Request

                  
	
                    Schedule “G”

                  	
                    –

                  	
                    Permitted Encumbrances

                  
	
                    Schedule “H”

                  	
                    –

                  	
                    Location of Assets

                  
	
                    Schedule “I”

                  	
                    –

                  	
                    Intellectual Property

                  
	
                    Schedule “J”

                  	
                    –

                  	
                    Licenses

                  
	
                    Schedule “K”

                  	
                    –

                  	
                    Subsidiaries

                  
	
                    Schedule “L”

                  	
                    –

                  	
                    Predecessor/Trade Names

                  

          

        

      

    

     

    
      
         

      

      
        - 10
-

        
          

        

      

      
         

      

    

    ARTICLE
TWO

     

    CREDIT
FACILITY

     

    Section
2.01        Credit
Facility.

     

    Subject to the provisions of this
Agreement, and in reliance upon the representations and warranties made under
this Agreement, the Lender agrees to make available to the Borrower a revolving
term Credit Facility in the principal amount of US$1,000,000 and allow Borrower
to borrow, repay and re-borrow from the Lender in an amount up to, but not
exceeding, the Commitment, with any such borrowed monies to be advanced to the
Borrower by the Lender in one or more Borrowings during the Term.

     

    Section
2.02        Illegality

     

    If the introduction of or any change in
any Applicable Law or in the interpretation or application thereof by any court
or by any Governmental Authority charged with the administration thereof, makes
it unlawful or prohibited for the Lender to make, to fund or to maintain its
Commitment or to perform any of its obligations under this Agreement, the Lender
may, by thirty (30) days written notice to the Borrower (unless the provision of
the Applicable Law requires earlier prepayment in which case the notice period
shall be such shorter period as required to comply with the Applicable Law),
terminate its obligations under this Agreement and in such event, the Borrower
shall prepay such Borrowing forthwith (or at the end of such period as the
Lender in its discretion agrees), without notice or penalty, together with all
accrued but unpaid interest and fees as may be applicable to the date of
payment.

     

    ARTICLE
THREE

     

    PROCEDURES
APPLICABLE TO BORROWINGS

     

    Section
3.01        Written
Instructions

     

    The Lender shall act upon the written
instructions of the Chief Executive Officer or Chief Financial Officer of the
Borrower or any Person whom the Chief Executive Officer or Chief Financial
Officer has identified in writing as being a Person authorized to give
instructions regarding matters contemplated by this Agreement, including,
without limiting the generality of the foregoing, the Credit
Facility.  The Lender shall not be responsible for any error or
omission relating to such instructions.  The Borrower may revoke the
authority of any authorized Person by notifying the Lender in writing, which
notice shall be effective immediately.

     

    Section
3.02       Drawdown
Procedure

     

    All requests for a Drawdown under the
Credit Facility shall be made by the Borrower.  The Borrower shall
submit to the Lender a Drawdown Request, no later than 12:00 noon, New York
time, no less than three (3) Business Days prior to the proposed Drawdown
date.  Each such Drawdown Request shall be given and signed by the
Borrower and shall specify (i) the aggregate principal amount of the Drawdown
requested from the Lender (which amount shall not be in excess of the unused
portion of the Commitment), (ii) the proposed Drawdown date of such funds, (iii)
the wire transfer instructions for payment and (iv) such other matters as are
set forth on the form of Drawdown Request attached hereto as Schedule
“F”.  Each Drawdown Request shall be in a minimum aggregate amount of
$100,000 or a higher integral multiple of $100,000.  The Lender shall
conclusively be entitled to rely upon such Drawdown Request from the Borrower
and shall have no liability to the Borrower for acting in accordance with any
such Drawdown Request.

    
      
         

      

      
        - 11
-

        
          

        

      

      
         

      

    

    ARTICLE
FOUR

     

    PAYMENTS

     

    Section
4.01        Repayment

     

    Fees, interest and principal amounts
due pursuant to Credit Facility shall be repaid as follows:

     

    
      	
               
      

            	
              (1)

            	
              if
      applicable, by way of a payment of Interim Interest on the Average Daily
      Balance at the Interest Rate in arrears, for the period commencing on the
      Closing Date, through and including the day preceding the first Interest
      Payment Date;

            

    

     

    
      	
               
      

            	
              (2)

            	
              by
      way of quarterly interest-only payments, made in arrears, each such
      payment to be made on the applicable Interest Payment Date and in the
      amount calculated by taking the product of (i) the Average Daily Balance
      since the prior Interest Payment Date and (ii) the Interest Rate, and
      dividing that number by 4; and

            

    

     

    
      	
               
      

            	
              (3)

            	
              by
      way of quarterly payments, made in arrears on each Interest Payment Date,
      of the Commitment Fee, in each case calculated over the period of time
      since the most recent payment of the Commitment
  Fee.

            

    

     

    All Outstanding Obligations shall be
repaid in full by the Borrower no later than the Maturity Date.

     

    Section
4.02        Prepayment

     

    Notwithstanding anything herein to the
contrary, 100% of the net proceeds of the disposition of any asset of the
Borrower, or any Subsidiary of the Borrower, other than proceeds generated by
Permitted Asset Sales, shall be paid to the Lender forthwith upon receipt as a
permanent reduction of the Credit Facility.

     

    At any time, upon five (5) business
days prior written notice to the Lender, the Borrower may prepay the Credit
Facility, in whole or in part.  Any partial prepayments shall go first
to paying any accrued but unpaid interest and fees, with any remainder being
used to reduce the amount of the Outstanding Borrowings.  At any time,
upon five (5) business days prior written notice to the Lender, the Borrower may
terminate this Agreement and the Credit Facility by paying to the Lender
(i) the entire amount of the Outstanding Obligations, (ii) an early
termination fee in the amount of the Commitment Fee, as measured over the period
of time from the date of prepayment until the Maturity Date and assuming that
the Average Daily Balance during such time period is $0, and (iii) any and
all other monies owed to the Lender in connection with the Credit
Facility.

    
      
         

      

      
        - 12
-

        
          

        

      

      
         

      

    

    Section
4.03        Payments
Generally

     

    Subject to Section 4.05, each payment
under this Agreement shall be made at or before 1:00 p.m. (New York time) on the
applicable Interest Payment Date, in arrears.

     

    The
Borrower shall make all payments required to be made hereunder electronically to
Spring Street Partners, L.P. at:

    

    [REDACTED]

     

    Section
4.04        No Credit for Trust
Funds

     

    For greater certainty, payments of any
nature whatsoever made by the Borrower to the Lender which the Lender is
required to pay to any Person by reason of any trust imposed by law or by any
Person upon amounts received by the recipient from the Borrower, shall not be
credited against, or deemed to be payment on account of, all or any portion of
the Outstanding Borrowings.  All reasonable costs and expenses
incurred by the Lender or its representatives and attorneys in connection with
the repayment of such monies to any Person shall be for the account of the
Borrower and payable on demand.  Interest shall accrue on these costs
and expenses, until paid, at the Default Rate.

     

    Section
4.05        Payments of Principal and
Interest

     

    The Borrower shall make payments of the
Outstanding Obligations as contemplated by Section 4.01 and Section 4.03, and in
accordance with the terms and provisions of the Note, until the Credit Facility
is paid in full.

     

    Section
4.06        Use of
Proceeds

     

    The
proceeds of the Credit Facility shall exclusively be used by the Borrower to
fund working capital, including, without limitation, the purchase of
equipment.  For greater certainty, the Borrower covenants and agrees
that no part of the Credit Facility shall be used to redeem or pay dividends
upon any issued and outstanding shares in the capital of the
Borrower.

    
      
         

      

      
        - 13
-

        
          

        

      

      
         

      

    

    Section
4.07        The Credit Facility and the
Note

     

    The obligation of the Borrower to repay
the unpaid principal amount and interest on the Credit Facility shall be
evidenced by the Note.  The Lender may, and is hereby authorized by
the Borrower to, endorse on the grid appended to the Note appropriate notations
regarding the Credit Facility and the dates and amounts of any Drawdowns made
hereunder; provided, however, that the failure to make, or an error in making,
any such notation shall not limit or otherwise affect the obligations of the
Borrower hereunder or under the Note.

     

    Section
4.08        Other Payment
Terms

     

    Notwithstanding any other provisions of
this Agreement, the Borrower shall make all payments due to the Lender in US
Dollars, which payments shall be made in immediately available funds, in the
manner set forth in Section 4.03.

     

    ARTICLE
FIVE

     

    INTEREST,
FEES AND EXPENSES

     

    Section
5.01        Interest on Overdue
Amounts

     

    Upon an Event of Default relating to
the payment of principal, interest or any other amount due under this Agreement,
the Borrower shall pay interest on such overdue amount both before and after
judgment at the Default Rate, computed from the date such amount becomes overdue
for so long as such amount remains overdue.  Such interest shall be
payable upon Demand by the Lender and shall be compounded on each Interest
Payment Date.

     

    Section
5.02        Reimbursement of
Expenses

     

    All reasonable statements, reports,
certificates, Security registrations, opinions and other documents or
information required to be furnished to the Lender by the Borrower under this
Agreement shall be supplied without cost to the Lender.  The Borrower
agrees to pay all of the Lender’s reasonable legal, financial and other
out-of-pocket transaction fees and expenses, including due diligence
investigations incurred in connection with the preparation, negotiation,
documentation and operation of this Agreement, and any and all other documents
prepared on or before the date hereof in connection herewith, whether or not any
amounts are advanced under this Agreement.  In addition to the
foregoing, the Borrower agrees to pay the reasonable legal fees, disbursements
and other expenses incurred by the Lender subsequent to the date hereof in
connection with the amendment, restatement, modification, enforcement or
preservation of any rights under this Agreement and all documents delivered in
connection herewith, including, without limitation, the Note.  The
Lender may, in its discretion, add any such amounts discussed in this Section
5.02 to the amount of the Outstanding Borrowings if any such amount is not
reimbursed by the Borrower within thirty (30) days of the date such expense was
incurred by Lender.

     

    Section
5.03        Reimbursement for
Expenses

     

    If, for any reason, the Borrower does
not proceed with this transaction, fails to execute final documentation with the
Lender or does not utilize the Credit Facility, then the Lender shall be
entitled to reimbursement for all reasonable out-of-pocket disbursements and
expenses incurred in connection herewith.

    
      
         

      

      
        - 14
-

        
          

        

      

      
         

      

    

    ARTICLE
SIX

     

    CONDITIONS
PRECEDENT

     

    Section
6.01        Conditions - Credit
Facility

     

    The obligation of the Lender to advance
the Credit Facility under this Agreement is subject to the terms and conditions
of this Agreement and is conditional upon satisfactory evidence being given to
the Lender and its counsel as to compliance with the following conditions, on or
before the Closing Date and at the time of each Drawdown (unless otherwise
indicated):

     

    
      	
               
      

            	
              (1)

            	
              Representations and
      Warranties True.  The representations and warranties
      contained in Section 7.01 of this Agreement are true and correct as of the
      Closing Date, and shall continue to be true and correct in every material
      respect during the Term as if made by the Borrower on the Closing
      Date.

            

    

     

    
      	
               
      

            	
              (2)

            	
              Resolutions and
      Certificates.  The Lender shall have received, duly
      executed and in form and substance satisfactory to
  it:

            

    

     

    
      	
               
      

            	
              (i)

            	
              a
      copy of the Certificate of Incorporation and by-laws of the Borrower and a
      copy of the resolutions of the board of directors of the Borrower
      authorizing the execution, delivery and performance of this Agreement, the
      Security and any other instruments contemplated hereunder, certified by an
      appropriate officer of the Borrower (with such resolutions and consents to
      evidence the consent of a disinterested majority of the Borrower’s Board
      of Directors and approval of not less than 60% of the shares of the
      Borrower’s Series A preferred stock) (delivered on Closing Date
      only);

            

    

     

    
      	
               
      

            	
              (ii)

            	
              a
      Certificate of Good Standing from the Secretary of State of the State of
      Delaware (delivered on Closing Date
only);

            

    

     

    
      	
               
      

            	
              (iii)

            	
              a
      certificate of incumbency for the Borrower showing the names, offices and
      specimen signatures of the officers who will execute this Agreement, the
      Security and any other instruments contemplated hereunder and thereunder
      (delivered on Closing Date only);
and

            

    

     

    
      	
               
      

            	
              (iv)

            	
              such
      additional supporting documents as the Lender or its counsel may
      reasonably request.

            

    

     

    
      	
               
      

            	
              (3)

            	
              Delivery of
      Security.  The Lender shall have received the Security
      (together with any necessary consents, estoppels, confirmations,
      priorities agreements or subordinations of third parties as may be
      required by the Lender) duly executed by the issuer thereof and in form
      and substance satisfactory to the Lender and its
  counsel.

            

    

     

    
      
         

      

      
        - 15
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (4)

            	
              Registration.  The
      Security has been registered, recorded or filed in all jurisdictions
      deemed necessary by the Lender and its
counsel.

            

    

     

    
      	
               
      

            	
              (5)

            	
              Indebtedness.  Except
      for the Permitted Indebtedness, the Borrower shall not have any other
      Indebtedness.

            

    

     

    
      	
               
      

            	
              (6)

            	
              Legal Opinions.
      The Lender shall have received from Robert Norton, general counsel to the
      Borrower, a favorable legal opinion in connection with this Agreement, and
      the Security, substantially in the form of the opinion annexed as Schedule
      “A” hereto (delivery on Closing Date
only).

            

    

     

    
      	
               
      

            	
              (7)

            	
              No
      Default.  No Default or Event of Default has occurred and
      is continuing.

            

    

     

    
      	
               
      

            	
              (8)

            	
              Organization and
      Capital Structure.  The Lender shall be satisfied with
      the organizational and capital structure of the Borrower.  The
      Lender agrees and confirms that it is satisfied with the Borrower’s
      organizational and capital structure as of the Closing Date for purposes
      of this subsection (8).

            

    

     

    
      	
               
      

            	
              (9)

            	
              Material Adverse
      Change.  Nothing shall have occurred nor any fact become
      known to the Lender of which the Lender was not aware at the date of this
      Agreement and which is reasonably likely to have a material adverse effect
      on the  general affairs, financial condition, business, property
      or assets of the Borrower or creates a material impairment in the prospect
      of repayment of any portion of the Credit Facility to be advanced by the
      Lender or results in a material impairment of the value or priority of the
      Lender’s Security Interest.

            

    

     

    
      	
               
      

            	
              (10)

            	
              Transaction
      Expenses.  The Lender shall have received payment in full
      of all reasonable fees and out of pocket expenses payable to the Lender
      which have become due on or before the Closing Date (including payment of
      all fees and expenses of counsel to the
Lender).

            

    

     

    
      	
               
      

            	
              (11)

            	
              Insurance.  The
      Lender shall have received certificates of insurance in accordance with
      Section 8.01(8).

            

    

     

    
      	
               
      

            	
              (12)

            	
              Material
      Contracts. Lender shall be satisfied that all material agreements,
      contracts, permits, licenses and leases of the Borrower are in full force
      and effect and that the Borrower and the other parties thereto are not in
      default thereunder.

            

    

     

    
      	
               
      

            	
              (13)

            	
              Security
      Interests.  All Security Interests or secured convertible
      debentures charging any asset of the Borrower, other than Security
      Interests in favor of the Lender and Permitted Encumbrances, shall have
      been (i) discharged, (ii) fully subordinated and postponed in right of
      security and payment in favor of the Lender’s Security and the Outstanding
      Obligations, or (iii) if applicable, converted into equity securities of
      the Borrower.

            

    

     

    
      
         

      

      
        - 16
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (14)

            	
              Financial
      Performance.  The Lender shall have received a
      certificate from the Borrower, and any supporting financial documentation
      that the Lender may reasonably request, indicating that the Borrower has
      achieved in the aggregate projected quarterly annualized license fees
      during its two (2) most recent fiscal quarters, and has maintained its
      expenses, all in accordance with the Borrower’s most recent annual
      budget.

            

    

     

    Section
6.02        Waiver

     

    The terms and conditions stated in this
Article Six are inserted for the sole benefit of the Lender and may be waived by
it in writing in whole or in part and with or without terms or
conditions.

     

    ARTICLE
SEVEN

     

    REPRESENTATIONS
AND WARRANTIES

     

    Section
7.01        Representation and
Warranties

     

    The Borrower represents and warrants to
the Lender that on the Closing Date and, where applicable, as of the date of
each Drawdown:

     

    
      	
               
      

            	
              (1)

            	
              Due
      Incorporation.  The Borrower is a corporation duly
      incorporated, organized and in good standing under the laws of the State
      of Delaware.  The Borrower has all necessary corporate power and
      authority to own its properties and assets and to carry on business as now
      conducted and is duly licensed or registered or otherwise qualified to
      carry on business in all jurisdictions wherein the nature of its assets or
      the business transacted makes such licensing, registration or
      qualification necessary, including, without limitation, the States of
      Delaware, New York and the nation of New Zealand, except where failure to
      do so would not have a material adverse effect on such assets or the
      ability of the Borrower to perform its obligations
    hereunder.

            

    

     

    
      	
               
      

            	
              (2)

            	
              Power.  The
      Borrower has full corporate power and capacity to enter into, deliver and
      perform its obligations under this Agreement, the Note, the Security and
      all other instruments contemplated
hereunder.

            

    

     

    
      	
               
      

            	
              (3)

            	
              Due Authorization and
      No Conflict.  The execution, delivery and performance by
      the Borrower of this Agreement, the Note, the Security, and all other
      instruments contemplated hereunder and the consummation of the
      transactions contemplated hereby and
thereby:

            

    

     

    
      	
               
      

            	
              (i)

            	
              have
      been duly authorized by all necessary corporate
  action;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              do
      not and will not conflict with, result in any breach or violation of, or
      constitute a default under the Certificate of Incorporation or by-laws of,
      or any Applicable Laws, determination or award presently in effect and
      applicable to the Borrower, or of any commitment, agreement or any other
      instrument to which the Borrower is now a party or is otherwise
      bound;

            

    

     

    
      
         

      

      
        - 17
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (iii)

            	
              do
      not (except for the Security) result in or require the creation of any
      Security Interest upon or with respect to any of the properties or assets
      of the Borrower; and

            

    

     

    
      	
               
      

            	
              (iv)

            	
              do
      not require the consent or approval (other than those consents or
      approvals already obtained and copies of which have been delivered to the
      Lender) of, or registration or filing with, any other party (including
      shareholders or directors of the Borrower) or any Governmental Authority
      having jurisdiction except for filings in connection with the perfection
      of the Security Interests created by the
  Security.

            

    

     

    
      	
               
      

            	
              (4)

            	
              Valid and Enforceable
      Obligations.  This Agreement, the Note, the Security and
      all other instruments contemplated hereunder to which the Borrower is a
      party, are, or when executed and delivered to the Lender will be, legal,
      valid and binding obligations of the Borrower enforceable by the Lender in
      accordance with their respective
terms.

            

    

     

    
      	
               
      

            	
              (5)

            	
              Title.  Subject
      only to Permitted Encumbrances, the Borrower has good and marketable title
      to its real and personal property, free and clear of all Security
      Interests.

            

    

     

    
      	
               
      

            	
              (6)

            	
              Validity and Priority
      of Security.  Subject only to Permitted Encumbrances, the
      Security creates a valid first priority, charge, lien and security
      interest on the accounts receivable of the
  Borrower.

            

    

     

    
      	
               
      

            	
              (7)

            	
              No
      Actions.  Save as set forth in Schedule “B”, there are no
      actions, suits, proceedings, inquiries or investigations existing or, to
      the knowledge of the Borrower, pending, threatened or affecting the
      Borrower in any court or before or by any federal, state or municipal or
      other governmental department, commission, board, tribunal, bureau or
      agency, domestic or foreign, which are reasonably likely to affect
      adversely the financial condition, property, assets, operations or
      business of the Borrower, the ability of the Borrower to repay the
      Outstanding Obligations or any part thereof or which are reasonably likely
      to affect adversely the ability of the Borrower to perform any of its
      obligations under this Agreement, the Note, the Security or any other
      instrument contemplated hereunder, or the validity or enforceability of
      this Agreement or the Security.

            

    

     

    
      	
               
      

            	
              (8)

            	
              No Material Adverse
      Change or Event of Default.  No event has occurred and is
      continuing, and no circumstance exists which has not been waived, and
      which constitutes a Default or Event of Default hereunder or, to the best
      of the Borrower’s knowledge, a default or event of default in respect of
      any material commitment, agreement or any other instrument to which the
      Borrower is now a party or is otherwise bound, entitling any other party
      thereto to accelerate the maturity of amounts of principal owing
      thereunder, or terminate any such material commitment, agreement or
      instrument, or which would have a material adverse effect upon the general
      affairs, financial condition, property, assets, operations or business of
      the Borrower.

            

    

     

    
      
         

      

      
        - 18
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (9)

            	
              Compliance with
      Law.  The Borrower is not in violation of any terms of
      its Certificate of Incorporation or by-laws or, to the best of the
      Borrower’s knowledge, of any law, regulation, rule, order, judgment, writ,
      injunction, decree, determination or award presently in effect and
      applicable to it, the violation of which would have a material adverse
      effect on the general affairs, financial condition, property, assets,
      operations or business of the
Borrower.

            

    

     

    
      	
               
      

            	
              (10)

            	
              Location of
      Assets.  Schedule “C” contains the legal description of
      all real property owned by the Borrower. Set out in Schedule “D” is a list
      of all real property locations leased by the Borrower. Set out in Schedule
      “H” is a list of all real property locations in which any material asset
      owned by the Borrower is located and which locations are neither owned nor
      leased by the Borrower.

            

    

     

    
      	
               
      

            	
              (11)

            	
              Subsidiaries.  Other
      than as set out in Schedule “K” to this Agreement, the Borrower does not
      own any shares or voting securities of any Person and has no
      Subsidiaries.  The Subsidiaries, collectively, do not have
      assets in excess of $150,000.

            

    

     

    
      	
               
      

            	
              (12)

            	
              Taxes.  The
      Borrower has filed all foreign, federal, state and local tax returns which
      are required to be filed and has paid all Taxes due pursuant to such
      returns or pursuant to any assessment received by the Borrower except such
      Taxes, if any, as are being contested in good faith and as to which
      adequate reserves have been provided.  The charges, accruals and
      reserves on the books of the Borrower in respect of any Taxes or other
      governmental charges are adequate.

            

    

     

    
      	
               
      

            	
              (13)

            	
              Intellectual
      Property.

            

    

     

    
      	
               
      

            	
              (i)

            	
              The
      Borrower solely owns or licenses pursuant to a License Agreement all
      Intellectual Property, necessary for the conduct in all material respects
      of its business as now conducted without any conflict known to the
      Borrower with the rights of others, and in each case free from any
      Security Interest except for Permitted Encumbrances and the Security. No
      Intellectual Property of the Borrower has been dedicated to the
      public.  Set out in Schedule “I” are all registered or applied
      for patents, patent applications, trademarks, trade names, copyrights,
      licenses and rights with respect to the Intellectual Property owned by the
      Borrower.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              Any
      Intellectual Property that is not owned by the Borrower is used with the
      consent of or license from the rightful owner through the License
      Agreements set forth in Schedule “J” hereto; such License Agreements are
      valid and subsisting and in good standing and there are no defaults
      thereunder by the Borrower or, if applicable, its Subsidiaries. The
      Borrower has all rights necessary to use the Intellectual
      Property  described in the License Agreements set out in
      Schedule “J” hereto, free from any Security Interest, except for Permitted
      Encumbrances and the Security.

            

    

     

    
      
         

      

      
        - 19
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (14)

            	
              Supplier and Trade
      Relations. There is not any actual or, to the best of the
      Borrower’s knowledge and belief, threatened termination or cancellation
      of, or any material adverse change in, the business relationship between
      the Borrower and any supplier or vendor material to the operations of the
      Borrower.

            

    

     

    
      	
               
      

            	
              (15)

            	
              Labor
      Matters.  To the best of the Borrower’s knowledge, there
      are no strikes or other labor disputes against the Borrower that are
      pending or threatened.  All payments due from the Borrower on
      account of workers compensation, social security, employment insurance,
      employee health plans and insurance of every kind and employee income tax
      source deductions and vacation pay have been paid.  The Borrower
      does not have any obligation under any collective bargaining agreement
      nor, to the best of the Borrower’s knowledge, is there any organizing
      activity involving the Borrower  by any labor union or group of
      employees.  All employee and employer contributions under any
      pension plan operated by the Borrower have been made and the fund or funds
      established under such plans are funded in accordance with applicable
      regulatory requirements and there exists no going concern unfunded
      liabilities or solvency deficiencies
thereunder.

            

    

     

    
      	
               
      

            	
              (16)

            	
              Accuracy of
      Information. All factual information previously or
      contemporaneously furnished to the Lender by or on behalf of the Borrower
      in writing for purposes of or in connection with this Agreement or any
      transaction contemplated hereby, including, without limitation, any
      financial statement, budget, balance sheet or business plan, is true and
      accurate in every material respect and such information is not incomplete
      by the omission of any material fact necessary to make such information
      not misleading.

            

    

     

    
      	
               
      

            	
              (17)

            	
              Solvency.  The
      Borrower is solvent and is generally able to pay its debts as they become
      due and will be able to do so after giving effect to the transactions
      contemplated in this Agreement.

            

    

     

    
      	
               
      

            	
              (18)

            	
              Chief Executive
      Office. The chief executive office, principal place of business and
      place where the Borrower keeps its non-financial Books and Records is
      located at 39 West 37th Street, 8th floor, New York City, New York
      10018.

            

    

     

    
      	
               
      

            	
              (19)

            	
              Financial Year
      End. The financial year end of the Borrower is the last day of
      December.

            

    

     

    
      	
               
      

            	
              (20)

            	
              Guarantees. The
      Borrower has not guaranteed the obligations of any Person in respect of
      Indebtedness for borrowed money other than in connection with Permitted
      Indebtedness.

            

    

     

    
      	
               
      

            	
              (21)

            	
              Authorized and Issued
      Capital. The authorized capital of the Borrower consists of
      250,000,000 shares of common stock, par value $0.001 per share, of which
      90,440,000 shares are (as of the Closing Date) issued and outstanding, and
      50,000,000 shares of preferred stock, all designated as Series A
      Preferred Stock, par value $0.001 per share, of which 32,667,123 shares
      are (as of the Closing Date) issued and
  outstanding.

            

    

     

    
      
         

      

      
        - 20
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (22)

            	
              No Required
      Disposition. Except as set forth in Schedule “J”, there is no
      existing agreement, option, right or privilege capable of becoming an
      agreement or option pursuant to which the Borrower would be required to
      sell or otherwise dispose of any of its personal property, including,
      without limitation, Intellectual
Property.

            

    

     

    
      	
               
      

            	
              (23)

            	
              Predecessor Names and
      Trade Names.  Since the date of its incorporation, the
      Borrower has not used nor does it now use any name other than its current
      corporate name and any other names set out in Schedule “L” annexed
      hereto.

            

    

     

    
      	
               
      

            	
              (24)

            	
              No Consumer
      Goods.  The Borrower does not own any consumer goods
      which are material in value or which are material to the business,
      operations, property, condition or prospects (financial or otherwise) of
      the Borrower.

            

    

     

    
      	
               
      

            	
              (25)

            	
              Partnership.  The
      Borrower is not in partnership with any Person nor is the Borrower and any
      of its Subsidiaries a participant in any joint
  venture.

            

    

     

    
      	
               
      

            	
              (26)

            	
              No
      Claims.  The Borrower does not have any existing claims
      against the Lender.

            

    

     

    Section
7.02        Compliance with Securities
Laws

     

    The Borrower is in compliance in all
material respects with the provisions and requirements of all applicable
securities laws, stock exchanges, regulations, rules and requirements of any
jurisdiction having authority in relation to the Borrower, including, without
limitation, the completion on a proper and timely basis of all necessary filings
and reports under any and all such securities laws, regulations, rules and
requirements (including those of applicable stock exchanges).

     

    Section
7.03        Disclosure

     

    No representation or warranty made by
the Borrower in this Agreement or any of the Security delivered by the Borrower
contains any untrue statement of a fact or omits to state a material fact
necessary in order to make the statements contained therein, taken as a whole,
not misleading in light of the circumstances in which they were
made.

     

    Section
7.04        Lender Representations and
Warranties

     

    The Lender represents and warrants to
the Borrower that:

     

    
      	
               
      

            	
              (1)

            	
              the
      Lender is a limited partnership whose primary place of business is located
      in New York City, New York, and all necessary approvals to authorize the
      execution of this Agreement on behalf of the Lender have been
      obtained;

            

    

     

    
      	
               
      

            	
              (2)

            	
              the
      Lender has the right and authority to enter into this Agreement and make
      the advances of credit contemplated
hereby;

            

    

     

    
      
         

      

      
        - 21
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (3)

            	
              the
      Lender is acquiring the Note as principal for its own account and not for
      the benefit of any other person;

            

    

     

    
      	
               
      

            	
              (4)

            	
              the
      Lender is (i) an “accredited investor” within the meaning of the
      Securities Act of 1933; (ii) is acquiring the Note as an investment and
      not for resale, and (iii) is able to evaluate its investment in the
      Borrower on the basis of general business information respecting the
      Borrower presented by the Borrower;

            

    

     

    
      	
               
      

            	
              (5)

            	
              the
      Lender has had the opportunity to ask and have answered any and all
      questions which the Lender wished to have answered with respect to the
      business and affairs of the
Borrower;

            

    

     

    Section
7.05        Survival of Representations
and Warranties

     

    The representations and warranties
contained in this Article Seven shall survive the execution and delivery of this
Agreement and the making of Borrowings hereunder, regardless of any
investigation or examination made by the Lender or its counsel.  The
Lender shall be deemed to have relied upon each of the Borrower’s
representations and warranties in advancing the Credit Facility.

     

    ARTICLE
EIGHT

     

    COVENANTS

     

    Section
8.01        Positive
Covenants

     

    From the date hereof and until the
Outstanding Obligations are repaid in full, the Borrower will observe and
perform each of the following covenants, unless compliance therewith shall have
been waived in writing by the Lender:

     

    
      	
               
      

            	
              (1)

            	
              Existence.  The
      Borrower will do or cause to be done all such things as are necessary to
      maintain its corporate existence in good standing, to ensure that it has,
      at all times, the right and is duly qualified to conduct its business and
      to obtain and maintain all rights, privileges and licenses necessary for
      the conduct of its business.

            

    

     

    
      	
               
      

            	
              (2)

            	
              Conduct of
      Business.  The Borrower will maintain, operate and use
      its properties and assets, and will carry on and conduct its business so
      as to preserve and protect such properties and assets and business and the
      profits thereof.

            

    

     

    
      	
               
      

            	
              (3)

            	
              Payment of Principal,
      Interest and Expenses. The Borrower will duly and punctually pay or
      cause to be paid to the Lender the Outstanding Obligations at the times
      and places and in the manner provided for
  herein.

            

    

     

    
      
         

      

      
        - 22
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (4)

            	
              Payment of Taxes and
      Claims.  The Borrower will pay and discharge promptly
      when due all Taxes, assessments and other governmental charges or levies
      imposed upon it or upon its properties or assets or upon any part thereof,
      as well as all claims of any kind (including claims for labor, materials
      and supplies) which, if unpaid, would by law become a lien, charge, trust
      or other claim upon any such properties or assets; but the Borrower shall
      not be required to pay any such Tax, assessment, charge or levy or claim
      if the amount, applicability or validity thereof shall be contested in
      good faith by appropriate proceedings and if the Borrower shall have set
      aside on its books a reserve to the extent required by GAAP in an amount
      which is reasonably adequate with respect
  thereto.

            

    

     

    
      	
               
      

            	
              (5)

            	
              Use of
      Proceeds.  The Borrower shall use the proceeds of all
      Borrowings exclusively for the purposes set forth in subsection
      4.06.

            

    

     

    
      	
               
      

            	
              (6)

            	
              Reserves.  The
      Borrower will maintain appropriate reserves for Taxes and other contingent
      expenses or liabilities in accordance with
GAAP.

            

    

     

    
      	
               
      

            	
              (7)

            	
              Other
      Information.  The Borrower shall furnish to the Lender
      promptly on written request therefor such other information in its
      possession respecting its financial condition and its business and affairs
      as the Lender may from time to time reasonably
  require.

            

    

     

    
      	
               
      

            	
              (8)

            	
              Insurance.

            

    

     

    
      	
               
      

            	
              (i)

            	
              Borrower
      shall obtain and maintain for the Term, at its own expense, and present
      Lender with certificates evidencing the following
    coverages:

            

    

     

    
      	
               
      

            	
              (A)

            	
              “All
      Risk” property damage insurance against loss or damage.  The
      coverage limit shall be at least equal to the balance sheet value of the
      tangible personal property of the Borrower.  The deductible
      shall not exceed US$25,000.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Commercial
      General Liability Insurance (including contractual liability, products and
      completed operations coverage) reasonably satisfactory to
      Lender.  The limit of liability shall be at least equal to
      US$1,000,000 per occurrence (inclusive of any excess umbrella liability
      coverage).  The policy shall be without deductible, except for
      the products liability coverage which may have a deductible up to
      US$10,000.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              Such
      other insurance against risks of loss and with terms as shall be
      reasonably required by Lender.  All policies of insurance shall
      be placed with financially sound, commercial insurers reasonably
      satisfactory to the Lender.

            

    

     

    
      	
               
      

            	
              (9)

            	
              Books and
      Records.  The Borrower will, at all times, maintain
      proper records and books of account in accordance with GAAP (except that
      the unaudited financial statements may not be in accordance with GAAP
      because of the absence of footnotes normally contained therein and are
      subject to normal year-end adjustments which in the aggregate will not be
      material) and therein make true and correct entries of all dealings and
      transactions relating to its business and, if requested in writing by the
      Lender, will make the same available for inspection by the Lender or any
      agent of the Lender at all reasonable times during normal business hours
      following reasonable notice.

            

    

     

    
      
         

      

      
        - 23
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (10)

            	
              Reporting
      Requirements.  Borrower shall furnish to the
      Lender:

            

    

     

    
      	
               
      

            	
              (i)

            	
              Financial
      Statements.  Promptly as they are available and in any
      event: (i) within sixty (60) days of the end of each fiscal quarter of the
      Borrower,  consolidated quarterly financial statements of the
      Borrower and any Subsidiaries; and (ii) within thirty (30) days of each
      month end, the unaudited, consolidated internal financial statements of
      the Borrower and any Subsidiaries.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              Notice of
      Defaults.  As soon as possible, and in any event within
      three (3) Business Days after the discovery of a Default or Event of
      Default, provide the Lender with an officer’s certificate setting forth
      the facts relating to or giving rise to such Default or Event of Default
      and the remedial action which the Borrower has taken or proposes to take
      with respect thereto.

            

    

     

    
      	
               
      

            	
              (iii)

            	
              Miscellaneous.  Such
      other information as the Lender may reasonably request from time to
      time.

            

    

     

    
      	
               
      

            	
              (11)

            	
              Access.  The
      Borrower will permit the Lender through its officers or employees or
      through any agents or consultants retained by it, upon request following
      reasonable notice, to have reasonable access during normal business hours
      and from time to time (but not more often than twice per year, unless the
      Lender has a good faith belief or concern regarding the Borrower’s ability
      to meet its financial projections or repay the Outstanding Obligations, in
      which case the foregoing limitation shall not apply), to any of the
      Borrower’s premises and, as reasonably requested by the Lender, to any
      records, information or data in its possession so as to enable the Lender
      to ascertain the state of the Borrower’s operations, and will permit the
      Lender, to make copies of and abstracts from such records, information or
      data and will, upon request of the Lender and at Lender’s expense (if such
      expenses are not immaterial), deliver to the Lender copies of such
      records, information or data.

            

    

     

    
      	
               
      

            	
              (12)

            	
              Notice of Material
      Adverse Change.  The Borrower will give to the Lender
      prompt written notice, and in any event within three (3) Business Days of
      the occurrence thereof, of any material adverse change in the general
      affairs, business, condition (financial or otherwise) of the Borrower or
      any of its Subsidiaries, or of any material loss, destruction or damage to
      its properties and assets, or if there is a material impairment of the
      prospect of repayment of any portion of the Outstanding Obligations owing
      to the Lender or a material impairment of the value or priority of the
      Lender’s Security Interest in the
Property.

            

    

     

    
      
         

      

      
        - 24
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (13)

            	
              Notice of
      Litigation.  The Borrower will give to the Lender prompt
      written notice, and in any event within five (5) Business Days of the
      occurrence thereof, of any material action, suit, litigation, or other
      proceeding which is commenced or threatened against it and which has a
      claimed amount in excess of
US$100,000.

            

    

     

    
      	
               
      

            	
              (14)

            	
              Registration of
      Security.  The Borrower will provide the Lender with such
      assistance and do such things as the Lender may from time to time request
      so that the Security and any other instruments of conveyance or assignment
      effected pursuant to this Agreement or otherwise will be and remain
      registered, recorded or filed from time to time in such manner and in such
      places as may in the opinion of the Lender be necessary or advisable in
      perfecting the Security Interests constituted
  thereby.

            

    

     

    
      	
               
      

            	
              (15)

            	
              Material
      Contracts.  The Borrower shall perform all material
      obligations of the Borrower pursuant to all documents, contracts and
      agreements material to the operations of the Borrower, subject to any good
      faith disputes by the Borrower with respect
  thereto.

            

    

     

    
      	
               
      

            	
              (16)

            	
              Compliance with
      Laws.  The Borrower shall comply in all respects with all
      Applicable Laws, non-compliance with which could have a material adverse
      effect on Borrower’s business or
operations.

            

    

     

    
      	
               
      

            	
              (17)

            	
              New
      Locations.  The Borrower shall advise the Lender in
      writing not less than thirty (30) days’ prior to the Borrower: (i)
      changing the location of its registered office, principal place of
      business or the location of its records or acquiring any such new
      locations; (ii) establishing new places of business; (iii) keeping,
      maintaining or storing inventory at any location other than the locations
      listed in Schedules “C”, “D” or “H” ; or (iv) changing its corporate name
      or domicile.  Upon any event described in subparagraph (iii)
      above, Schedules “C”, “D” or “H”, as applicable, shall be deemed to be
      amended to reflect such occurrence without the requirement of any further
      action.

            

    

     

    
      	
               
      

            	
              (18)

            	
              Maintenance of
      Equipment and Similar Assets.  The Borrower, in
      accordance with commercially reasonable standards, shall keep and maintain
      all items of equipment and other similar types of personal property in
      good operating condition and repair and shall make all necessary
      replacements thereof and renewals thereto so that the value and operating
      efficiency thereof shall, at all times, be maintained and preserved,
      ordinary wear and tear excepted.

            

    

     

    
      	
               
      

            	
              (19)

            	
              Maintenance of
      Intellectual Property.  The Borrower shall pay all fees
      and take all commercially reasonable steps necessary in a prompt and
      diligent manner to keep and maintain the Intellectual Property in force,
      updated, valid and enforceable and to maintain the confidential,
      proprietary nature of all trade secrets, know how and other unregistered
      Intellectual Property.

            

    

     

    
      
         

      

      
        - 25
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (20)

            	
              Additional
      Security.  In the event that the Borrower acquires or
      incorporates a Subsidiary with assets, rights or property with a book
      value (as determined by the financial statements of such Subsidiary) in
      excess of US$100,000 or an existing Subsidiary (or any Subsidiary of a
      Subsidiary), acquires assets, rights or property with a book value (as
      determined by the financial statements of such Subsidiary) in excess of
      US$100,000 outside of the ordinary course of business, the Borrower shall
      forthwith deliver to the Lender, in form and substance satisfactory to the
      Lender and its counsel,

            

    

     

    
      	
               
      

            	
              (i)

            	
              an
      instrument or instruments of the Subsidiary in favor of the Lender and
      pursuant to which the Subsidiary shall guarantee the Outstanding
      Obligations of the Borrower, postpone the indebtedness, liabilities and
      obligations of the Borrower to such Subsidiary to the Outstanding
      Obligations of the Borrower, grant a general security interest in favor of
      the Lender as security for its obligations to the Lender pursuant to such
      guarantee and represents and warrants substantially as to the matters
      referred to in Section 7.01 as they would relate to such
      Subsidiary;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              certified
      copies of the certificate of incorporation and by-laws of each of such
      Subsidiary and of the resolutions of the board of directors of each of
      such Subsidiary approving the aforesaid instruments and approving the
      giving of any financial assistance and of all documents evidencing other
      necessary corporate action of each such Subsidiary and any shareholder
      agreement to which the Borrower may be a party with respect to its
      shareholding in such Subsidiary and government approvals, if any, with
      respect to the aforesaid
instruments;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              a
      certificate of a senior officer of the Subsidiary certifying the
      jurisdiction of incorporation of the Subsidiary, a description of each
      type of material property or assets, whether tangible or intangible, of
      the Subsidiary and its location, the legal description of all property,
      owned or leased, and the location of each place of business, the chief
      executive office and the registered office or head office of the
      Subsidiary;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              a
      certificate of status or good standing with respect to the Subsidiary and
      issued by the jurisdiction of incorporation of the
    Subsidiary;

            

    

     

    
      	
               
      

            	
              (v)

            	
              a
      favorable legal opinion of such Subsidiary’s counsel as to such matters as
      the Lender may reasonably request;
and

            

    

     

    
      	
               
      

            	
              (vi)

            	
              such
      other certificates and documentation as the Lender may reasonably
      request.

            

    

     

    Section
8.02        Restrictive
Covenants

     

    From the date hereof and until the
Outstanding Obligations are paid in full, the Borrower shall adhere to the
following covenants unless waived in writing by the Lender:

    
      
         

      

      
        - 26
-

        
          

        

      

      
         

      

    
  

    
      	
               
      

            	
              (1)

            	
              Not to Merge,
      etc.  The Borrower and each of its Subsidiaries shall not
      enter into any transaction or series of related transactions (whether by
      way of merger, conversion, winding-up, consolidation, reorganization,
      reconstruction, combination, continuance, transfer, sale, lease or
      otherwise) whereby all or substantially all of its undertaking,
      properties, rights or assets would become the property of any other Person
      or, in the case of merger or conversion, of the continuing corporation
      resulting therefrom without the prior written consent of the
      Lender.

            

    

     

    
      	
               
      

            	
              (2)

            	
              Indebtedness.  The
      Borrower shall not create, assume, issue or permit to exist, directly or
      indirectly, any Indebtedness except for Permitted Indebtedness without the
      prior written consent of the
Lender.

            

    

     

    
      	
               
      

            	
              (3)

            	
              Negative
      Pledge.  Except for Permitted Encumbrances or Purchase
      Money Obligations, the Borrower shall not create, assume, incur or suffer
      to exist any Security Interest in or upon any of the property charged by
      the Security, including, without limitation, Intellectual Property,
      without the prior written consent of the
Lender.

            

    

     

    
      	
               
      

            	
              (4)

            	
              No
      Guarantees.  The Borrower shall not be or become liable,
      directly or indirectly, contingently or otherwise, for any obligation of
      any other Person by Guarantee other than as permitted hereunder, without
      the prior written consent of the
Lender.

            

    

     

    
      	
               
      

            	
              (5)

            	
              Restrictions on
      Subsidiaries, Investments and Loans.  The Borrower shall
      not, without the prior written consent of the Lender, directly or
      indirectly, (i) acquire or form any Subsidiary after the date hereof,
      unless it has complied with the provisions of Section 8.01(20) in
      connection therewith; or (ii) make any loan or loans to or an equity
      investment or investments (a “Permitted Investment”)
      in excess of US$50,000 in, or purchase or otherwise acquire or hold any
      shares or securities of any single Person.  For greater
      certainty, nothing contained in this Agreement shall restrict the ability
      of the Borrower to enter into any type or amount of treasury bill
      investment and other term deposits with financial institutions in the
      ordinary course of business. Except where such business association is in
      the ordinary course of its business and does not materially or adversely
      affect the assets of the Borrower or the Security, the Borrower shall not
      become a partner in any partnership or a participant in any joint venture
      without the prior written consent of the
Lender.

            

    

     

    
      	
               
      

            	
              (6)

            	
              Transactions with
      Affiliates.  The Borrower shall not enter into or
      consummate a transaction of any kind with any of its Affiliates or any of
      their respective Affiliates other than (i) compensation and
      employment arrangements with directors or officers in the ordinary course
      of business, provided that no payment of any bonus shall be permitted if a
      Default or Event of Default has occurred and remains in effect or would be
      caused by or result from such payment; (ii) transactions with the
      Lender or any Affiliate of the Lender; (iii) payments permitted under
      and pursuant to written agreements entered into by and between the
      Borrower and one or more Affiliates that both (A) reflect and constitute
      an arm’s length transaction between unrelated parties of equal bargaining
      power, (B) are subject to such terms and conditions as determined by
      the Lender in its sole discretion, and (C) are, collectively, not
      more than $50,000; (iv) carrying out the transactions contemplated by
      the LLC Agreement; and (v) transactions with a Subsidiary in the
      ordinary course of business (in relation to what is ordinary as of the
      Closing Date).

            

    

     

    
      
         

      

      
        - 27
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (7)

            	
              Relocation of
      Assets.  The Borrower shall not locate or permit to be
      situated any of its present or after-acquired property or assets in any
      jurisdiction other than as set out in Schedule “C”,  Schedule
      “D” or Schedule “H” or assets in transit in the ordinary course of
      business without having first notified the Lender in
    writing.

            

    

     

    
      	
               
      

            	
              (8)

            	
              Disposition of
      Assets.  The Borrower and each of its Subsidiaries shall
      not sell, assign, transfer, convey, lease (as lessor), license, contribute
      or otherwise dispose of, or grant options, warrants or other rights with
      respect to the property charged by the Security, other than Permitted
      Asset Sales and non-exclusive licenses of Intellectual Property in the
      ordinary course of business, without the prior written consent of the
      Lender.

            

    

     

    
      	
               
      

            	
              (9)

            	
              Material
      Contracts.  The Borrower shall not cancel or terminate
      any material contract or amend nor otherwise modify any material contract,
      or waive any default or breach under any material contract, or take any
      other action in connection with any contract that would have a material
      adverse effect on the business or affairs of the
  Borrower.

            

    

     

    
      	
               
      

            	
              (10)

            	
              Charter Documents;
      Name; Jurisdiction of Organization.  The Borrower shall
      not (i) amend, modify, restate or change its certificate of
      incorporation or formation or bylaws or similar charter documents in a
      manner that would be adverse to the Lender, (ii) without at least
      thirty (30) days prior written notice to the Lender, change its name or
      jurisdiction of incorporation, or (iii) wind up, liquidate, dissolve
      (voluntarily or involuntarily) or commence or suffer any proceedings
      seeking or that would result in any of the
  foregoing.

            

    

     

    
      	
               
      

            	
              (11)

            	
              Intellectual Property
      Escrow.  Except as set forth in Schedule “J”, the
      Borrower hereby covenants with the Lender that it has not, and shall not,
      place any of its Intellectual Property, including, without limitation, any
      source code (the “Escrowed Intellectual Property”) in escrow, without
      first ensuring that the beneficiary of such escrow would only be able to
      use the Escrowed Intellectual Property to update, maintain and internally
      use such beneficiary’s internal software and not be able to modify such
      Escrowed Intellectual Property (except as may be reasonably required for
      internal purposes only) or license, sell, assign, transfer, distribute or
      otherwise dispose of such Escrowed Intellectual
  Property.

            

    

     

    
      	
               
      

            	
              (12)

            	
              Dividends and
      Extraordinary Bonuses. The Borrower shall not, without the prior
      written consent of the Lender, (i) pay any cash dividends or make any cash
      distributions on its equity securities, (ii) purchase, redeem, retire or
      otherwise acquire any of its shares (other than repurchases pursuant to
      the terms of employee stock option plans, up to an aggregate annual amount
      not to exceed US$100,000 per year, or pursuant to the LLC Agreement),
      (iii) return any capital to any holder of its equity securities or (iv)
      pay any extraordinary bonuses to employees or management, provided
      however, that the Borrower may pay dividends payable solely in common
      stock.

            

    

     

    
      
         

      

      
        - 28
-

        
          

        

      

      
         

      

    

     

    ARTICLE
NINE

     

    SECURITY

     

    Section
9.01         Security

     

    The Borrower shall execute and deliver
to, or shall cause to be executed and delivered to, the Lender in form and
substance satisfactory to the Lender and its counsel, this Agreement, the Note,
and all documents to secure all debts, liabilities and obligations of the
Borrower to the Lender including, without limitation, the Outstanding
Obligations, as follows:

     

    
      	
               
      

            	
              (1)

            	
              a
      security agreement issued by the Borrower creating a Security Interest in
      all present and after-acquired accounts receivable of the Borrower (as
      such accounts receivable are more fully described in the security
      agreement); and

            

    

     

    
      	
               
      

            	
              (2)

            	
              all
      such other security agreements with respect to the aforementioned
      collateral which the Lender may reasonably
  require.

            

    

     

    Section
9.02         Further
Assurances

     

    The Borrower from time to time shall
execute and deliver, or cause to be executed and delivered, to the Lender such
further documents and assurances, in form and substance satisfactory to the
Lender and its counsel, as may be reasonably requested by the Lender for the
purpose of giving effect to this Agreement, the Note, or the Security or for the
purpose of establishing compliance with the representations, warranties and
conditions of this Agreement, the Note, or the Security.

     

    ARTICLE
TEN

     

    EVENTS
OF DEFAULT

     

    Section
10.01       Events of
Default

     

    Notwithstanding anything to the
contrary herein,

     

    
      	
               
      

            	
              (i)

            	
              the
      Outstanding Obligations shall, at the option of the Lender, become
      immediately due and payable to the Lender and the Lender may without
      notice to the Borrower apply any amounts outstanding to the credit of the
      Borrower to repayment of the Outstanding
  Obligations;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      interest rate on all Outstanding Obligations may, at Lender’s option,
      become the Default Rate; and

            

    

     

    
      
         

      

      
        - 29
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      Security shall, at the option of the Lender, become immediately
      enforceable,

            

    

     

    upon the
occurrence of any of the following events (each an “Event of
Default”):

     

    
      	
               
      

            	
              (1)

            	
              Failure to Pay
      Principal or Interest – if the Borrower fails to make punctual
      payment when due of any principal amount or interest payable hereunder and
      if such payment is not made within five (5) Business Days of the day on
      which such payment is due;

            

    

     

    
      	
               
      

            	
              (2)

            	
              Failure to Pay Other
      Amounts – if the Borrower fails to make punctual payment when due
      of any amount payable hereunder other than principal or interest and if
      such payment is not made within five (5) Business Days of the day on which
      the Borrower receives notice that such payment is
  due;

            

    

     

    
      	
               
      

            	
              (3)

            	
              False Representations,
      Etc. – if any representation or warranty made or given herein, in
      any certificate delivered pursuant hereto or in any financial statements,
      budgets, balance sheets or business plans delivered pursuant hereto is
      false or misleading in any material
respect;

            

    

     

    
      	
               
      

            	
              (4)

            	
              Default in Certain
      Covenants – if there is any default or failure in the observance or
      performance of any covenant contained in Section 8.02 provided that such
      default or failure is continuing five (5) Business Days after written
      notice thereof is given to the Borrower by the
  Lender.

            

    

     

    
      	
               
      

            	
              (5)

            	
              Default in Other
      Covenants – if, other than in respect of covenants contained in
      Section 8.02, or any covenant to pay, there is any default or failure in
      the observance or performance of any other act required to be done or any
      other covenant or condition required to be observed or performed under
      this Agreement or the Security, and the default or failure continues for
      five (5) Business Days after written notice by the Lender to the Borrower
      specifying such default or failure;

            

    

     

    
      	
               
      

            	
              (6)

            	
              Default under
      Security – if there is any default, event of default or failure in
      the observance or performance of any covenant in the
    Security;

            

    

     

    
      	
               
      

            	
              (7)

            	
              Insurance Lapse
      – if any insurance on the properties or assets of the Borrower lapses and
      such coverage shall not be reinstated within fifteen (15) Business Days of
      such lapse;

            

    

     

    
      	
               
      

            	
              (8)

            	
              Insolvency – if
      the Borrower or any of its material Subsidiaries is unable to pay its
      debts as such debts become due or is adjudged or declared to be, or admits
      to being, bankrupt or insolvent;

            

    

     

    
      
         

      

      
        - 30
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (9)

            	
              Voluntary
      Proceedings – if the Borrower makes a general assignment for the
      benefit of creditors; or any proceeding or filing is instituted or made by
      the Borrower seeking relief on its behalf as debtor, or to adjudicate it a
      bankrupt or insolvent, or seeking liquidation, winding-up, reorganization,
      arrangement, adjustment or composition of it or its debts under any
      similar law relating to bankruptcy, insolvency, reorganization or relief
      of debtors, or seeking appointment of a receiver, trustee, custodian or
      other similar official for it or for any substantial part of its
      properties or assets; or the Borrower takes any corporate action to
      authorize any of the actions set forth in this subsection
      10.01(9);

            

    

     

    
      	
               
      

            	
              (10)

            	
              Involuntary
      Proceedings – if any notice of intention is filed or any proceeding
      or filing is instituted or made against the Borrower in any jurisdiction
      seeking to have an order for relief entered against it as debtor or to
      adjudicate it a bankrupt or insolvent, or seeking liquidation, winding-up,
      reorganization, arrangement, adjustment or composition of it or its debts
      under any law relating to bankruptcy, insolvency, reorganization or relief
      of debtors, or seeking appointment of a receiver, trustee, custodian or
      other similar official for it or for any substantial part of its
      properties or assets or seeking possession, foreclosure or retention, or
      sale or other disposition of, or other proceedings to enforce security
      over, all or a substantial part of the assets of the Borrower unless the
      same is being contested actively and diligently in good faith by
      appropriate and timely proceedings and is dismissed, vacated or stayed
      within thirty (30) days of institution
thereof;

            

    

     

    
      	
               
      

            	
              (11)

            	
              Receiver, etc.
      – if a receiver, liquidator, trustee, sequestrator or other officer with
      like powers is appointed with respect to, or an encumbrancer pursuant to a
      Security Interest or otherwise takes possession of, or forecloses or
      retains, or sells or otherwise disposes of, or otherwise proceeds to
      enforce security over any of the properties or assets of the Borrower or
      gives notice of its intention to do
so;

            

    

     

    
      	
               
      

            	
              (12)

            	
              Execution,
      Distress – if any writ, attachment, execution, sequestration,
      extent, distress or any other similar process becomes enforceable against
      the Borrower or if a distress or any analogous process is levied against
      any of the properties or assets of the Borrower, except where the same is
      being contested actively and diligently in good faith by appropriate and
      timely proceedings and the enforcement or levy has been
      stayed;

            

    

     

    
      	
               
      

            	
              (13)

            	
              Suspension or
      Termination of Business – if the Borrower or any of its material
      Subsidiaries suspends or ceases or threatens to suspend or cease its
      business, dissolves, liquidates, or undertakes to carry out any of the
      foregoing;

            

    

     

    
      	
               
      

            	
              (14)

            	
              Sale
      –  if the Borrower or any of its material Subsidiaries sells or
      otherwise disposes of, or threatens to sell or otherwise dispose of, all
      or a substantial part of its undertaking and property and assets to any
      arm’s length third party, whether in one transaction or a series of
      related transactions, other than pursuant to a Permitted Asset
      Sale;

            

    

     

    
      	
               
      

            	
              (15)

            	
              Change in
      Control – if the Borrower or any of its material Subsidiaries
      engage in a merger, sale of stock, share exchange, reorganization,
      conversion, or similar event following which the beneficial owners of the
      Borrower or Subsidiary (as the case may be) prior to such transaction
      control less than fifty percent (50%) of the voting or economic interests
      in the Borrower or Subsidiary (as the case may
  be);

            

    

     

    
      
         

      

      
        - 31
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (16)

            	
              Assignment – if
      the Borrower assigns or attempts to assign its rights under this Agreement
      or any of the Security or any interest herein or therein to a third party
      without the prior consent of the
Lender;

            

    

     

    
      	
               
      

            	
              (17)

            	
              Value of
      Security – if the value of the Borrower's average accounts
      receivable is, over the course of twenty (20) consecutive Business Days,
      less than seventy-five percent (75%) of the Outstanding Obligations during
      such time;

            

    

     

    
      	
               
      

            	
              (18)

            	
              Cross-Default –
      if the Borrower defaults in the payment, when due, of any indebtedness for
      borrowed money in the principal amount of US$25,000 or greater, and such
      default has not been waived within the applicable cure period, if any, or
      if such indebtedness is accelerated or otherwise becomes due and payable
      prior to the stated maturity thereof;
and

            

    

     

    
      	
               
      

            	
              (19)

            	
              Material Adverse
      Change – if (i) there occurs a material adverse change in the
      general affairs, business, property, assets, management or condition
      (financial or otherwise) of the Borrower or any of its Subsidiaries or
      (ii) there is, in the Lender’s good faith business judgment acting
      reasonably, a material impairment of the prospect of repayment of any
      portion of the Outstanding Obligations owing to the Lender or an
      impairment of the value or priority of the Lender’s Security Interest
      (each, an “Impairment”). If the
      Borrower disputes whether an Impairment has occurred, then the Borrower
      can request that such determination be made by an auditor of national
      reputation selected by the Borrower and reasonably acceptable to the
      Lender. The fees and expenses of such independent determination shall be
      borne by (a) the Borrower if the auditor determines that an Impairment has
      occurred or (b) the Lender if the auditor determines that an Impairment
      has not occurred.

            

    

     

    Section
10.02       Lender May
Waive

     

    The Lender may at any time waive any
Default or Event of Default which may have occurred, provided that no such
waiver shall extend to or be taken in any manner whatsoever to affect any
subsequent Default or Event of Default or the rights or remedies resulting
therefrom.  No such waiver shall be effective unless given by the
Lender in writing.

     

    Section
10.03       Remedies are
Cumulative

     

    For greater certainty, the rights and
remedies of the Lender under this Agreement are cumulative and are in addition
to and not in substitution for any rights or remedies provided by law; and any
single or partial exercise by the Lender of any right or remedy for a Default or
Event of Default or breach of any term, covenant, condition or agreement herein
contained shall not be deemed to be a waiver of or to alter, affect or prejudice
any other right or remedy to which the Lender may be lawfully entitled for the
same Default or breach, and any waiver by the Lender of the strict observance,
performance or compliance with any term, covenant, condition or agreement herein
contained and any indulgence granted by the Lender shall not be deemed to be a
waiver of that or any subsequent Default.

    
      
         

      

      
        - 32
-

        
          

        

      

      
         

      

    

     

    Section
10.04       Set-Off

     

    The Lender shall be entitled at any
time or from time to time after the occurrence of an Event of Default which is
continuing, without notice to set-off, consolidate and to apply any or all
deposits and any other indebtedness at any time held by or owing by the Lender
to the Borrower against and on account of the debts, liabilities or obligations
of the Borrower to the Lender, whether or not due and payable and whether or not
the Lender has made Demand therefor.

     

    ARTICLE
ELEVEN

     

    ENVIRONMENTAL
MATTERS

     

    Section
11.01       Representations and
Warranties

     

    The Borrower hereby represents and
warrants as follows:

     

    
      	
               
      

            	
              (1)

            	
              the
      business of the Borrower has been operated in compliance in all material
      respects with all applicable Environmental Laws and with all permits,
      licenses and authorizations issued pursuant to Environmental Laws;
      and

            

    

     

    
      	
               
      

            	
              (2)

            	
              there
      are no claims, investigations, litigation, administrative proceedings,
      whether pending or threatened relating to any Contaminants, Releases or
      other forms of pollution or alleged violation of applicable Environmental
      Laws (collectively, “Environmental Matters”)
      that may reasonably be expected to have a material adverse effect upon the
      Borrower. The Borrower has not assumed any material liability of any other
      Person for response, removal, remediation, investigation, clean up,
      compliance or required capital expenditures in connection with any
      Environmental Matter arising prior to the date
  hereof.

            

    

     

    Section
11.02       Environmental
Covenants

     

    The Borrower covenants with the Lender
as follows:

     

    
      	
               
      

            	
              (1)

            	
              Compliance.  The
      Borrower shall comply in all material respects with the requirements of
      any Environmental Law applicable to
it.

            

    

     

    
      	
               
      

            	
              (2)

            	
              Notification.  The
      Borrower shall promptly forward to the Lender copies of all material
      orders, notices, permits, applications or other communications and reports
      in its possession in connection with any Environmental Law affecting or
      relating to the Property or the operations and activities of the
      Borrower.

            

    

     

    
      
         

      

      
        - 33
-

        
          

        

      

      
         

      

    

     

    ARTICLE
TWELVE

     

    GENERAL

     

    Section
12.01       Notices

     

    Any notice, request or other
communication hereunder to any of the parties hereto shall be in writing and be
well and sufficiently given if delivered personally, via reputable overnight
courier, or sent by prepaid registered mail to its address and to the attention
of the person set forth below:

     

    
      	
               
      

            	
              (1)

            	
              In
      the case of the Borrower:

            

    

     

    DILIGENT
BOARD MEMBER SERVICES, INC.

    39 West
37 Street, 8th
Floor

    New York,
New York  10018

    Attn:
Alessandro Sodi, Chief Executive Office

    

    
      	
               
      

            	
              (2)

            	
              In
      the case of the Lender:

            

    

     

    SPRING
STREET PARTNERS, L.P.

    488
Madison Ave., 21st Floor

    New York,
New York  10022

    Attn:
David Liptak

    

    Any such
notice shall be deemed to be given and received, if delivered personally or by
courier, when delivered, and if mailed, on the third Business Day following the
date on which it was mailed, unless an interruption of postal services occurs or
is continuing on or within the three (3) Business Days after the date of mailing
in which case the notice shall be deemed to have been received on the third
Business Day after postal service resumes.  Either party may by notice
to the other, given as aforesaid, designate a changed address.

     

    Section
12.02       Performance of Covenants by
the Lender

     

    If, as a result of an Event of Default,
any of the covenants or obligations contained herein shall not be performed by
the Borrower, the Lender may perform such covenant or obligation and, if in so
doing the Lender spends money or incurs liability, the amount of money
reasonably so spent or liability incurred shall be added to the Outstanding
Obligations.

     

    Section
12.03       Indemnity

     

    In addition to any other indemnity
provided for herein, the Borrower shall defend, indemnify and hold harmless Bank
and its officers, employees, and agents against (i) all obligations,
demands, claims, and liabilities claimed or asserted by any other party in
connection with the transactions contemplated by this Agreement or any
instrument delivered hereunder; and (ii) all losses or expenses (including
any losses or expenses sustained or incurred in liquidating or redeploying
deposits or other funds contracted for or acquired or used to effect or maintain
the Outstanding Obligations or part thereof) in any way suffered, incurred, or
paid by the Lender, its officers, employees and agents as a result of or in
anyway arising out of, following, or consequential to transactions between the
Lender and the Borrower under this Agreement or the Security, or otherwise
(including without limitation reasonable attorneys fees and expenses), except to
the extent that any such losses are caused by the Lender’s gross negligence or
willful misconduct.

    
      
         

      

      
        - 34
-

        
          

        

      

      
         

      

    

     

    Section
12.04       No Set-Off or
Counterclaim

     

    The obligations of the Borrower to make
payments hereunder shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, any set-off, compensation,
counterclaim, recoupment, defence or other right which the Borrower may have
against the Lender.

     

    Section
12.05       Severability

     

    Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

     

    Section
12.06       Time of
Essence

     

    Time shall, in all respects, be of the
essence of this Agreement.

     

    Section
12.07       Assignment

     

    The Borrower may not assign this
Agreement or any part hereof without the prior written consent of the
Lender.  Upon giving written notice thereof to the Borrower, this
Agreement shall be assignable by the Lender, in whole or in part.

     

    Section
12.08       Entire
Agreement

     

    This Agreement, together with the Note,
Security and any other instruments contemplated hereby, constitutes the entire
agreement between the parties with respect to the matters covered hereby and
supersedes any other prior agreements or representations.

     

    Section
12.09       Amendments

     

    No amendment, modification or waiver of
any provision of this Agreement or consent by the Lender to any departure from
any provision of this Agreement is in any way effective unless it is in writing
and signed by the Borrower and the Lender, in which event the amendment,
modification, waiver or consent is effective only in the specific instance and
for the specific purpose for which it is given.

     

    Section
12.10       Governing
Law

     

    This Agreement shall be governed by and
construed in accordance with the laws of the State of New York therein and shall
be treated in all respects as a New York contract.

    
      
         

      

      
        - 35
-

        
          

        

      

      
         

      

    

     

    Section
12.11       Conflict

     

    In the event that there is any conflict
or inconsistency between the provisions contained in this Agreement and the
provisions contained in any document delivered pursuant hereto or in connection
herewith including, without limitation, the Security, the provisions of this
Agreement shall have priority over and shall override the provisions contained
in the other document to the extent of such conflict or
inconsistency.

     

    Section
12.12       Successors and
Assigns

     

    This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
permitted assigns.

     

    Section
12.13       Counterparts

     

    This Agreement may be executed by one
or more of the parties to this Agreement by facsimile and in any number of
separate counterparts, each such counterpart to be deemed an original and all
said counterparts when taken together shall be deemed to constitute one and the
same instrument.

     

    Section
12.14       Waiver of Trial by
Jury.

     

    THE
BORROWER AND THE LENDER EACH HEREBY KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT
OF COUNSEL WAIVE TRIAL BY JURY IN ANY ACTIONS, PROCEEDINGS, CLAIMS OR
COUNTER-CLAIMS, WHETHER IN CONTRACT OR TORT OR OTHERWISE, AT LAW OR IN EQUITY,
ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT OR THE SECURITY OR
NOTE.

     

    IN WITNESS WHEREOF, the parties have
executed this Agreement on the day and year first above
written.

     

    [Signatures
on following page]

    
      
         

      

      
        - 36
-

        
          

        

      

      
         

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  BORROWER:

                                
	 
	
                                  DILIGENT
      BOARD MEMBER SERVICES, INC.

                                
	 
      	 
      	 
      
	
                                  By:

                                	
                                  /s/ Alessandro Sodi

                                
	
                                  Name:  Alessandro
      Sodi

                                
	
                                  Title:  CEO
      and President

                                
	 
      	 
      	 
      
	
                                  LENDER:

                                
	 
	
                                  SPRING
      STREET PARTNERS, L.P.

                                
	 	 
	
                                  By:

                                	
                                  Spring
      Street Partners, Inc.

                                
	
                                  Its:

                                	
                                  General
      Partner

                                
	 
      	 
      	 
      
	 
      	
                                  By: 

                                	
                                    /s/ David
  Liptak

                                
	 
      	 
      	
                                  David
      Liptak,
President

                                

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        - 37
-

        
          

        

      

      
         

      

    

     

    SCHEDULE
“A”

     

    FORM
OF OPINION

     

    

     

    March 12,
2010

     

    To Spring
Street Partners L.P.

     

    Re:           Credit
Agreement, dated March 12, 2010 (the “Credit Agreement”) among Diligent Board
Member Services, Inc. (the “Company”) and Spring Street Partners L.P. (the
“Lender”).

     

    Ladies
and Gentlemen,

     

    I am
delivering this opinion to you in my capacity as General Counsel of the Company
pursuant to Section 6.01(6) of the Credit Agreement.  Unless otherwise
defined in this opinion letter or the context otherwise requires, all
capitalized terms used herein shall have the respective meanings assigned to
them in the Credit Agreement.

     

    In
rendering the opinions contained in this opinion letter, I have examined and
relied upon such records, documents, instruments, certificates of public
officials and certificates of officers of the Company as I have deemed
appropriate, including without limitation:

     

    
      	
               
      

            	
              A.

            	
              The
      Amended and Restated Certificate of Incorporation of the Company (the
      "Amended
      Certificate").

            

    

     

    
      	
               
      

            	
              B.

            	
              The
      Credit Agreement, executed by the Company and the
    Purchasers.

            

    

     

    
      	
               
      

            	
              C.

            	
              The
      Security Agreement, dated March 12, 2010 executed by
    Company.

            

    

     

    
      	
               
      

            	
              D.

            	
              The
      Revolving Promissory Note, dated March 12, 2010, executed by Company (the
      “Note”).

            

    

     

    
      	
               
      

            	
              E.

            	
              The
      Financing Statement naming the Borrower as debtor and naming the Lender as
      secured party, which I understand and assume has been duly filed and
      indexed in the office of the Secretary of State of the State of
      Delaware.

            

    

     

    
      	
               
      

            	
              F.

            	
              A
      copy of the Amended and Restated Bylaws of the
  Company.

            

    

     

    
      	
               
      

            	
              G.

            	
              A
      copy of the Written Consent in Lieu of Meeting executed by all of the
      Directors of the Company.

            

    

     

    
      	
               
      

            	
              H.

            	
              A
      Certificate of the Delaware Secretary of State with respect to the
      Company’s good standing in such jurisdiction.  Our opinions as
      to the good standing of the Company are based solely upon such
      certificate.

            

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    The
Credit Agreement, the Security Agreement and the Note are sometimes referred to
in this opinion letter as the “Transaction
Documents”).  I express no opinion as to any matter relating to
the laws of any jurisdiction other than the laws of the State of New
York.

     

    As to
matters of fact, we have relied, to the extent I deem proper, upon the
representations of the Company and the Lender set forth in the Transaction
Documents, and upon certificates of officers of the Company. I have assumed due
authorization, execution and delivery of the Transaction Documents by, and the
enforceability of the Transaction Documents against, all parties thereto other
than the Company.  I have also assumed the correctness of all
statements of fact contained in all agreements, certificates and other documents
examined by me; the correctness of all statements of fact made in response to my
inquiries by officers and other representatives of the Company and by public
officials; the legal capacity of all natural persons; the genuineness of all
signatures on all agreements and other documents examined by me; the
authenticity of all documents submitted to me as originals; and the conformity
to authentic original documents of all documents submitted to me as
copies.  I have also assumed that the transactions contemplated by the
Credit Agreement and Security Agreement have been consummated.

     

    Whenever
any opinion or other statement in this letter is indicated to be as “known to
me” or based upon “my knowledge,” or is similarly qualified, the qualification
signifies that, in the course of my representation of the Company, no
information has come to my attention which causes me to think that such opinion
is not correct, but that I have not undertaken any independent investigation to
determine the existence of any information respecting matters addressed in such
opinions.

     

    Based
solely upon and in reliance on the documents and statements referred to above,
and subject to the assumptions, qualifications, limitations and exceptions set
forth herein, I am of the opinion that:

     

    1.         The
Company is a corporation organized and existing under the law of the State of
Delaware, the state of its incorporation, and is in good standing.

     

    2.         The
Company has the corporate power and authority to (a) own its own properties, (b)
to conduct its business as currently conducted, and (c) to execute, deliver and
perform its obligations under each of the Transaction Documents to which it is a
party.  The Company has duly authorized the execution and delivery of
the Transaction Documents to which it is intended to be a party, and the
performance by the Company of its obligations thereunder.

     

    3.         The
Transaction Documents have been duly executed and delivered by the
Company.  The execution and delivery by the Company of the Transaction
Documents, and the performance by the Company of its obligations thereunder, do
not (a) violate the provisions of any New York law; (b) violate the provisions
of the Amended Certificate or the Company’s Bylaws, each as amended to date; (c)
to my knowledge, violate any judgment, decree, order or award of any court,
governmental body or arbitrator specifically naming the Company; (d) violate, to
my knowledge, any mortgage, indenture, lease, contract or other agreement,
instrument or undertaking to which the Company is a party, or by which the
company or any of its assets may be bound; or (e) to my knowledge, result in the
creation or imposition of any lien on any of the Company’s properties or assets
(other than as contemplated by the Credit and Security Agreement) pursuant to
the provisions of any such mortgage, indenture, lease, contract or other
agreement, instrument or undertaking.

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

    

     

    4.         Subject
to the limitations contained in the next paragraph, the Transaction Documents to
which the Company is a party are valid and binding upon and enforceable against
the Company.

     

    My
opinion concerning the validity, binding effect and enforceability of each
Transaction Document means that:  (a) each such document constitutes an
effective contract under applicable law, (b) each such document is not invalid
because of a specific statutory prohibition or public policy and is not subject
in its entirety to a contractual defense, and (c) subject to the remaining
sentences of this paragraph, some remedy is available if there is material
default under any such document.  However, the validity, binding effect and
enforceability of each such document may be limited or otherwise affected by (x)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar statutes, rules, regulations or other laws affecting the
enforcement of creditors' rights and remedies generally and (y) the
unavailability of, or limitation on the availability of, a particular right or
remedy (whether in a proceeding in equity or at law) because of an equitable
principle or a requirement as to commercial reasonableness, conscionability or
good faith.

     

    5.
        To my knowledge, there is no
action, proceeding or investigation pending or overtly threatened against the
Company before any court or administrative agency that questions the validity of
the Transaction Documents or might be reasonably likely to have a material
adverse effect on the Company.

     

    6.         No
action of, or notice to or filing with, any governmental authority or regulatory
body (other than filings to perfect security interests) is required in
connection with the execution, delivery and performance of the Transaction
Documents by the Company.

     

    The
opinions set forth in this opinion letter are effective as of the date
hereof.  I express no opinions other than as herein expressly set
forth, and no expansion of my opinions may be made by implication or
otherwise.  I do not undertake to advise you of any matter within the
scope of this opinion letter which comes to my attention after the delivery of
this letter and disclaim any responsibility to advise you of future changes in
law or fact which may affect the above opinions.

     

    This opinion letter is being furnished
to the Lender in connection with the transactions contemplated by the Credit
Agreement, the Security Agreement and the Note for its use and the use of its
counsel.  This opinion letter is not to be relied upon for any other
purpose or by any other person, or distributed or quoted from, in whole or in
part, without my express written consent.

     

    
      
        
          
            
              	
                      Respectfully
      yours,

                    
	 
	
                      DILIGENT
      BOARD MEMBER SERVICES, INC.

                    
	 
      
	 
      
	
                      Robert
      Norton

                    
	 
	
                      General
      Counsel

                    

            

          

        

      

    

    
      
         

      

      
        - 3
-

        
          

        

      

      
         

      

    

     

    SCHEDULE
“B”

     

    LITIGATION

     

    None.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    SCHEDULE
“C”

     

    OWNED
PROPERTIES

     

    None.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    SCHEDULE
“D”

     

    LEASED
PROPERTIES

     

    Headquarters
at 39 West 37th Street,
New York, New York 10018 (“Headquarters Office”)

     

    Finance
at 155 Willowbrook Boulevard, Wayne, New Jersey 07470 (“Finance
Office”)

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    SCHEDULE
“E”

     

    FORM
OF PROMISSORY NOTE

     

     REVOLVING
PROMISSORY NOTE

     

    
      
        	
                U.S.$1,000,000

              	
                Dated:
      March 12, 2010.

              

      

    

     

    FOR VALUE RECEIVED, the
undersigned, DILIGENT BOARD
MEMBER SERVICES, INC. (the “Borrower”), HEREBY PROMISES TO
PAY to the order of SPRING
STREET PARTNERS, L.P. (the “Lender”), the principal amount
of One Million United States Dollars (US$1,000,000), or, if less, the
Outstanding Borrowings and to pay all other amounts due on the days and in the
amounts set forth in the credit agreement referred to below (the “Credit Agreement”).  Unless
defined herein, capitalized terms which are defined in the Credit Agreement
shall have the meanings attributed thereto.

     

    The Outstanding Obligations shall be
payable in full on the Maturity Date, or such earlier date as provided for in
the Credit Agreement.

     

    Interest on the Outstanding Borrowings
of this Note from the date of this Note until such principal amount is paid in
full shall accrue at the Interest Rate (as detailed in the Credit Agreement) and
shall be payable on the dates and in the manner set forth in the Credit
Agreement.  The Commitment Fee shall be calculated and be payable on
the dates and in the manner set forth in the Credit Agreement.

     

    The Outstanding Obligations are payable
in US Dollars to the Lender as follows: SPRING STREET PARTNERS, L.P. (as
detailed in the Credit Agreement), in immediately available
funds.  The Borrowings advanced by the Lender to the Borrower and the
interest rate applicable thereto, and all payments made with respect thereto,
shall be recorded by the Lender on its books.

     

    This Note is the Note referred to in,
and is entitled to the benefits of, the Credit Agreement, dated March 12, 2010,
between the Borrower and the Lender.  The Credit Agreement, among
other things, (a) provides for the establishment of a secured Credit Facility by
the Lender to the Borrower in the principal amount of up to US$1,000,000 and (b)
contains provisions for acceleration of the maturity thereof upon the happening
of certain stated events.

     

    Presentment for payment, demand, notice
of protest and protest all other demands and notices of any kind in connection
with the execution, delivery, performance and enforcement of this Note are
hereby waived.

     

    This Note shall be non-assignable by
the Borrower and the obligation of the Borrower to repay the Outstanding
Obligations is secured under the Security.

     

    Upon
giving written notice thereof to the Borrower, this Note shall be assignable by
the Lender, in whole or in part, in accordance with the assignment provisions
contained in the Credit Agreement. Whenever in this Note reference is made to
Lender or Borrower, such reference shall be deemed to include, as applicable, a
reference to their respective successors and assigns.  The provisions
of this Note shall be binding upon Borrower and its successors, and shall inure
to the benefit of Lender and its successors and assigns.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    The Borrower shall pay, in accordance
with the terms of the Credit Agreement, all reasonable fees and expenses,
including, without limitation, reasonable legal fees and costs, incurred by the
Lender in the enforcement or in an attempt to enforce any of the Borrower’s
obligations hereunder not performed when due.  This Note shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of New York, without regard to conflicts of law
principles.  Whenever possible, each provision of this Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but in case any provision of or obligation under this Note shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.

     

    IN WITNESS WHEREOF the
Borrower has caused this Note to be duly executed on the date
hereof.

     

    
      
        
          
            	
                    DILIGENT
      BOARD MEMBER SERVICES, INC.

                  
	 
	
                    By:  

                  	 
      
	 
      	
                    Name:  Alessandro
      Sodi

                  
	 
      	 
      
	 
      	
                    Title:  CEO
      and President

                  

          

        

      

    

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

    

     

    SCHEDULE
“F”

     

    FORM
OF DRAWDOWN REQUEST

     

    FORM OF DRAWDOWN
REQUEST

     

    I, ____________________,
the _______________________________________
of Diligent Board Member Services, Inc., a Delaware corporation (the “Borrower”), do hereby certify,
on behalf of the Borrower, pursuant to the provisions of that certain Credit
Agreement, dated as of March 12, 2010 (as amended, restated, supplemented or
replaced from time to time, the “Credit Agreement”; capitalized
terms used herein without definition shall have the meanings ascribed thereto in
the Credit Agreement), by and between the Borrower and Spring Street Partners,
L.P. (the “Lender”),
that:

     

    1.           The
Borrower hereby requests a Drawdown in the aggregate principal amount of
$____________ [must be $100,000 or
a whole-number multiple thereof] to be made on _________________, 20__,
under the Credit Agreement.  The proceeds of the Drawdown should be
wired on behalf of the Borrower as set forth below.  The foregoing
instructions shall be irrevocable.

     

    Bank Name:

    Bank Address:

    ABA#:

    Account Name:

    Account Number:

    Federal Tax I.D. #:

    

    2.           After
giving effect to the foregoing, the amount of the Outstanding Borrowings shall
not exceed the Commitment.

     

    3.           All
representations and warranties of the Borrower made in the Credit Agreement and
the Security are true and correct as of the date hereof, both before and
immediately after giving effect to the application of the proceeds of the
Drawdown in connection with which this Drawdown Request is given, and all
applicable conditions set forth in Section 6.01 of the Credit Agreement have
been and continue to be satisfied as of the date hereof or appropriately waived
in writing by the Lender.

     

    4.           The
amount of all accounts receivable of the Borrower as of the date hereof is equal
to $________________.

     

    DATED the
___ day of ____________, 20__.

     

    
      
        
          	
                  DILIGENT
      BOARD MEMBER SERVICES, INC.

                
	 
	
                  By:

                	 
      
	 
      	
                  Name:  Alessandro
      Sodi

                
	 
      	 
      
	 
      	
                  Title:  CEO
      and President

                

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    SCHEDULE
“G”

     

    PERMITTED
ENCUMBRANCES

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Collateral

                              	 
      	
                                Secured

                                Party

                              	 
      	
                                Debtor

                              	 
      	
                                UCC

                                Filing

                              	 
      	
                                UCC Filing #

                              
	
                                NOTICE
      FILING:  The ‘Collateral’ defined below is covered by this
      financing statement only to the extent such Collateral is provided to or
      obtained by Debtor in connection with present or future:  (i)
      leases, loans, conditional sale agreements or other agreements with
      Secured Party, or (ii) obligations funded by Secured Party on behalf of or
      at the direction of Debtor.  Copies of applicable agreements
      with specific Collateral listings can be obtained from Secured
      Party.  To the extent listed in applicable agreements,
      Collateral consist of all Debtor’s right, title and interest in the listed
      licenses, equipment, inventory and goods (including, without limitation,
      attachments, accessories, accessions and replacements), wherever located
      and whether now or hereafter acquired or existing, together with all
      related:  (a) contracts, documents of title, investment
      property, chattel paper, notes and instruments (b) accounts, contract
      rights and general intangibles (c) records, data, information and
      documentation (d) proceeds, whether cash or non-cash, and products of the
      foregoing in any form and (e) all rights, claims and remedies of Debtor
      arising in connection with any of the foregoing.  Debtor has no
      independent or separate power, right or authority to encumber, transfer or
      dispose of such Collateral or of any interest therein except as expressly
      directed by Secured Party.

                              	 
      	
                                Key
      Equipment Finance, Inc.

                              	 
      	
                                Diligent
      Board

                                Member

                                Services,
      LLC

                              	 
      	
                                YES

                              	 
      	
                                6315973-8

                              
	 	 	 	 	 	 	 	 	 
	
                                All
      of the following equipment together with all related software, whether now
      owned or hereafter acquired and wherever located (all as more fully
      described on IBM Credit LLC Supplement(s) # D37186) IBM Equipment Type
      8849 9992 9993 9994  All additions, attachments, accessories,
      accessions and upgrades thereto and any and all substitutions,
      replacements or exchanges for any such item of equipment or software and
      any and all proceeds of any of the foregoing, including, without
      limitations, payments under insurance or any indemnity or warranty
      relating to loss or damage to such equipment and software.  IBM
      Credit LLC files this notice as a precautionary filing.  See UCC
      9-505.  (12/11/06) UCC Log
      Number:  CPVP0D37186   2566587

                              	 
      	
                                IBM
      Credit LLC

                              	 
      	
                                Diligent
      Board

                                Member

                                Services,
      LLC

                              	 
      	
                                YES

                              	 
      	
                                6432384-6

                              
	 	 	 	 	 	 	 	 	 
	
                                All
      equipment and other personal property, including but not limited to
      furniture, fixtures and equipment subject to that certain Agreement Number
      LA#092607JE2-003 dated September 26, 2007, between Secured Party as
      Lessor/Creditor and Debtor as Lessee/Debtor, and subject to any and all
      existing and future schedule entered into pursuant to and incorporating
      said Agreement, together with all accessories, parts, attachments and
      appurtenances appertaining or attached to any of the Equipment, and all
      substitutions, trade-ins, proceeds, renewals and replacements of, and
      improvements and accessions to the Equipment.  LA
      #092607JE2-003.

                              	 
      	
                                Envision
      Capital Group, LLC

                              	 
      	
                                Diligent
      Board

                                Member

                                Services,
      LLC

                              	 
      	
                                YES

                              	 
      	
                                2007-3898516

                              
	 	 	 	 	 	 	 	 	 
	
                                All
      equipment and other personal property, including but not limited to
      furniture, fixtures and equipment subject to that certain Agreement Number
      LA#092607JE3-004 dated September 26, 2007, between Secured Party as
      Lessor/Creditor and Debtor as Lessee/Debtor, and subject to any and all
      existing and future schedule entered into pursuant to and incorporating
      said Agreement, together with all accessories, parts, attachments and
      appurtenances appertaining or attached to any of the Equipment, and all
      substitutions, trade-ins, proceeds, renewals and replacements of, and
      improvements and accessions to the Equipment.  LA
      #092607JE3-004.

                              	 
      	
                                Envision
      Capital Group, LLC

                                 

                                 

                              	 
      	
                                Diligent
      Board 

                                Member

                                Services,
      LLC

                              	 
      	
                                YES

                              	 
      	
                                2007-3898524

                              
	 	 	
                                Assignment
      to: Marlin Leasing Corporation

                              	 	 	 	 	 	
                                2007-4367610

                              

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    
      
        
          
            
              
                
                  	
                          Collateral

                        	 
      	
                          Secured

                          Party

                        	 
      	
                          Debtor

                        	 
      	
                          UCC

                          Filing

                        	 
      	
                          UCC Filing #

                        
	
                          (1)
      Catalyst 3750 24 10/100/1000T+4, SFP enhanced multiplayer, (1)
      CON-SNTP-3750G24T: Smartnet 24x7x4 CAT 3750 24 enhanced multilayer, (1)
      ASA 5520 appliance with SW, HA, 4GE+FE, 3DES/AES, New (1) ASA 5520
      appliance with SW, HA 4GE+FE, 3DES/AES, New (1) CON-SNTP-AS2BUNK9 Smartnet
      24x7x4 (1) CON SNTP-AS2BUNK9 Smartnet 24x7x4, (1) ASA 5500 AIP security
      services module-10, (1) ASA 5500 AIP security services odule-10, (1)
      CON-SU1-ASIP10K9 IPS SVC, AR NBD ASA AIP, (1) CON-SU1-ASIP10K9 IPS SVC AR
      NBD.  “and all replacements, substitutions, accessions, add-ons,
      and all proceeds and accounts of the Debtor arising out of or related to
      the foregoing.  This Financing Statement relates to an Equipment
      Lease between the Debtor (as Lessee) and the Secured Party (as
      Lessor).  The Lease is a “true lease”, and this Financing
      Statement is filed to give notice of Secured Party’s ownership interest in
      the collateral and also as a precautionary measure in the event the Lease
      is determined to be other than a true lease.”

                        	 
      	
                          Marlin
      Leasing Corp

                        	 
      	
                          Diligent
      Board

                          Member

                          Services,
      LLC

                        	 
      	
                          YES

                        	 
      	
                          2007-4333422

                        
	 	 	 	 	 	 	 	 	 
	
                          All
      computer equipment and peripherals (collectively “Equipment”), wherever
      located, heretofore or hereafter financed to DILIGENT BOARD MEMBER
      SERVICES, INC / DILIGENT PARTNERS, LLC by Creditor pursuant to that
      certain revolving credit Account #6879450205000223512, dated March 7, 2008
      (the “Account”) and all of Lessee’s rights, title and interest in and to
      use any software and services (collectively, “Software”) financed under
      and described in the Account, along with any additions, financed amounts,
      modifications or supplements to the Account, and all substitutions,
      additions, accessions and replacements to the Equipment and Software, now
      or hereafter installed in, affixed to, or used in, conjunction with the
      Equipment and Software and the proceeds thereof together with all
      payments, insurance proceeds, any refunds or credits obtained by Debtor
      from a manufacturer, licensor or service provider, or other proceeds and
      payments due and to become due and arising from or relating to said
      Equipment, Software or the Account.

                        	 
      	
                          Dell
      Financial Services L.P.

                        	 
      	
                          Diligent
      Board

                          Member

                          Services,
      Inc.

                        	 
      	
                          YES

                        	 
      	
                          2008-0859817

                        

                

              

            

          

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    
      
        
          
            
              
                
                  	
                          Collateral

                        	 
      	
                          Secured

                          Party

                        	 
      	
                          Debtor

                        	 
      	
                          UCC

                          Filing

                        	 
      	
                          UCC Filing #

                        
	
                          See
      attached equipment listing:

                           

                          1
      CMODEMUS EMC Clarion Service Modum US 2 20 CX4G15450 EMC 146 GB 15K 4GB FC
      3 2 CS4PDAE EMC 4G DAE Factory Install 4 1 CS4SPS EMC CK4-120 Optional
      Second SPS 5 1 CX412CKIT EMC CS4-120 Common RTU & PowerPath Docs 6 1
      CX412OC EMC CX4-120C SPE with Single SPS 7 1 FSBUNDEMCCX4120 WEMC Clarion
      Storage Array 8 1 MPRESW001 EMC Premium SW Support Open SW 36 Mths 9 1
      MPRESW004 EMC Premium SW Support Open SW Mths 10 2 NAVAGTWINKIT EMC
      Navisphere Agent for Windows Kit 11 1 NAVAYZ4KIT EMC Navisphere Analyzer
      CX4 Media Kit 12 1 NAVAY24120 EMC Navisphere Analyzer for the CX4-120 13 1
      NAV4KIT EMC Navisphere Manager CX4 Media Kit 14 1 NAV4120 EMC Navisphere
      Manager fort he CX4-120 15 1 VCX414615K EMC 145GB 15K 4G Drives Vault pack
      Qty 5 16 1 VP4KIT EMC VirtualProvisioning for the CX4-120 18 1 EMC Virtual
      Provisioning for the CX-120 18 1 WUPRESHW001 Premium HW Support Warr UPG
      36mths

                           

                          All
      of the equipment and personal property and all modifications and additions
      thereto and replacements and substitutions therefore, together with all
      accessories, accessions, attachments, in whole or in part, leased or be
      leased by Lessor to Lessee pursuant to Schedule No. 637846 to Master Lease
      Agreement dated October 1, 2009 between Presidio Technology Capital, LLC
      f/k/a Solarcom Capital, LLC (Lessor) and Diligent Board Member Services,
      Inc. (Lessee) together with the proceeds thereof.  This filing
      for precautionary purposes in connection with equipment leasing and is not
      to be construed as indicating the transaction is other than a true
      lease.

                        	 
      	
                          Presidio
      Technology Capital, LLC

                        	 
      	
                          Diligent
      Board

                          Member

                          Services,
      Inc.

                        	 
      	
                          YES

                        	 
      	
                          2009-3291959

                        
	 	 	 	 	 	 	 	 	 
	
                          See
      attached equipment listing:

                           

                          1
      CMODEMUS EMC Clarion Service Modum US 2 20 CX4G15450 EMC 146 GB 15K 4GB FC
      3 2 CS4PDAE EMC 4G DAE Factory Install 4 1 CS4SPS EMC CK4-120 Optional
      Second SPS 5 1 CX412CKIT EMC CS4-120 Common RTU & PowerPath Docs 6 1
      CX412OC EMC CX4-120C SPE with Single SPS 7 1 FSBUNDEMCCX4120 WEMC Clarion
      Storage Array 8 1 MPRESW001 EMC Premium SW Support Open SW 36 Mths 9 1
      MPRESW004 EMC Premium SW Support Open SW Mths 10 2 NAVAGTWINKIT EMC
      Navisphere Agent for Windows Kit 11 1 NAVAYZ4KIT EMC Navisphere Analyzer
      CX4 Media Kit 12 1 NAVAY24120 EMC Navisphere Analyzer for the CX4-120 13 2
      NAV4KIT EMC Navisphere Manager CX4 Media Kit 14 1 NAV4120 EMC Navisphere
      Manager fort he CX4-120 15 1 VCX414615K EMC 145GB 15K 4G Drives Vault pack
      Qty 5 16 1 VP4KIT EMC VirtualProvisioning for the CX4-120 18 1 EMC Virtual
      Provisioning for the CX-120 18 1 WUPRESHW001 Premium HW Support Warr UPG
      36mths

                           

                          All
      of the equipment and personal property and all modifications and additions
      thereto and replacements and substitutions therefore, together with all
      accessories, accessions, attachments, in whole or in part, leased or be
      leased by Lessor to Lessee pursuant to Schedule No. 637848 to Master Lease
      Agreement dated October 1, 2009 between Presidio Technology Capital, LLC
      f/k/a Solarcom Capital, LLC (Lessor) and Diligent Board Member Services,
      Inc. (Lessee) together with the proceeds thereof.  This filing
      for precautionary purposes in connection with equipment leasing and is not
      to be construed as indicating the transaction is other than a true
      lease.

                        	
                            

                        	
                          Presidio
      Technology Capital, LLC

                        	
                            

                        	
                          Diligent
      Board

                          Member

                          Services,
      Inc.

                        	
                            

                        	
                          YES

                        	
                            

                        	
                          2009-3292015

                        

                

              

            

          

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    SCHEDULE
“H”

     

    LOCATION
OF ASSETS

     

    PEER 1,
1000-555 West Hastings Street, Vancouver, BC, Canada V6B 4N5
(Servers)

     

    Elus,
1525 – 10th Avenue
SW, Calgary, AB, Canada T3C 0J4 (Servers)

     

    Equinix,
275 Hartz Way, Secaucus, New Jersey 07094 (Servers)

     

    Switch
and Data Inside Delivery, 151 Front Street, Suite 707, Toronto, ON Canada M5J2N1
(Servers)

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    SCHEDULE
“I”

     

    INTELLECTUAL
PROPERTY

     

    Patents –
NA

     

    Patent
Applications – NA

     

    Trademarks
– Diligent®   Diligent BoardbooksTM

     

    Trade
names – NA

     

    Copyrights
– None filed

     

    
      Licenses
and Rights with Respect to Intellectual Property – Service Agreements
with Clients

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    SCHEDULE
“J”

     

    LICENSES

     

    None.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
“K”

     

    SUBSIDIARIES

     

    Diligent
Board member Services NZ, Limited

     

    Diligent
Boardbooks Limited

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    SCHEDULE
“L”

     

    PREDECESSOR/TRADE
NAMES

     

    None.

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