Document:

EXHIBIT
10.1

    
       

      LOAN
AND SECURITY AGREEMENT

    

     

    This LOAN
AND SECURITY AGREEMENT dated and effective as of September 4, 2009 (the “Agreement”), is
executed by and between THE WOOD ENERGY GROUP, INC., a Missouri corporation (the
“Borrower”),
whose address is 2255 Glades Road, Suite 342-W, Boca Raton, Florida 33431 and
FIFTH THIRD BANK, a Michigan banking corporation (the “Bank”), whose address
is 222 South Riverside Plaza, 32nd Floor,
Chicago, Illinois, 60606.

     

    In
consideration of the mutual agreements hereinafter set forth, the Borrower and
the Bank hereby agree as follows:

     

    
      	
              1. 

            	
              DEFINITIONS.

            

    

     

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

     

    “Account Debtor” shall
mean any party who is obligated on any Account.

     

    “Accounts”  shall
mean all “accounts,” as such term is defined in the UCC, now owned or hereafter
acquired by Borrower, including: (a) all accounts receivable, other receivables,
book debts and other forms of obligations (other than forms of obligations
evidenced by Chattel Paper or Instruments) (including any such obligations that
may be characterized as an account or contract right under the UCC); (b) all of
Borrower’s rights in, to, and under, all purchase orders or receipts for goods
or services; (c) all of Borrower’s rights to any goods represented by any of the
foregoing (including unpaid sellers’ rights of rescission, replevin, reclamation
and stoppage in transit and rights to returned, reclaimed or repossessed goods);
(d) all rights to payment due to Borrower for Goods or other property sold,
leased, licensed, assigned or otherwise disposed of, for a policy of insurance
issued or to be issued, for a secondary obligation incurred or to be incurred,
arising out of the use of a credit card or charge card, or for services rendered
or to be rendered by Borrower or in connection with any other transaction
(whether or not yet earned by performance on the part of Borrower); (e) all
health care insurance receivables; and (f) all collateral security of any kind
given by any Account Debtor or any other Person with respect to any of the
foregoing.

     

    “Acquisitions” shall
mean any transaction, or any series of related transactions, consummated on or
after the date of this Agreement, by which the Borrower:  (i) acquires
any going business or all or substantially all of the assets of any firm,
corporation or division thereof, whether through purchase of assets, merger or
otherwise, or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding partnership interests of a partnership or
equity interests in a limited liability company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Affiliate” shall mean
any Person which, directly or indirectly, owns or controls, on an aggregate
basis, including all beneficial ownership and ownership or control as a trustee,
guardian or other fiduciary, any of the outstanding equity interest having
ordinary voting power to elect a majority of the board of directors or other
managing group (irrespective of whether at the time, an equity interest of any
other class or classes of such entity have or might have voting power by reason
of the happening of any contingency) of the Borrower or which controls, or is
controlled by or is in control with the Borrower or any shareholders of the
Borrower.  For purposes hereof, “control” means the possession,
directly or indirectly, of the power to direct or cause a direction of
management and policies, whether through the ownership of voting securities, by
contract or otherwise.  For the avoidance of doubt, Patriot Rail Corp.
shall not be considered an Affiliate.

     

    “Applicable Margin”
shall mean, with respect to a LIBOR Loan, four and one-half percent (4.5%), and
with respect to a Prime Loan, five percent (5%).

     

    “Appraiser” shall mean
any Equipment appraiser acceptable to Bank in its sole and absolute
discretion.

     

    “Asset Disposition”
shall mean the sale, lease, assignment or other transfer for value (each a
“Disposition”) by the Borrower to any Person of any Collateral (including, the
loss, destruction or damage of any thereof or any actual or threatened (in
writing to the Borrower) condemnation, confiscation, requisition, seizure or
taking thereof), or any other real property owned by Borrower, other than (a)
the disposition of any asset which is to be replaced, and is in fact replaced,
within ninety (90) days with another asset performing the same or a similar
function or, (b) the sale or lease of inventory, equipment and other property in
the ordinary course of business.

     

    “Authorized Borrower
Representative” shall mean any of Gary O. Marino, Bennett Marks, Larry
Rutstein and Greg Smith, or any other person identified as such by the Borrower
to the Bank in writing.

     

    “B.H.I.T. Inc.” shall
mean the parent company of Borrower.

     

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

     

    “Borrower” shall mean
The Wood Energy Group, Inc., a Missouri corporation, having its principal place
of business at 2255 Glades Road, Suite 342-W, Boca Raton, Florida
33431.  Any and all references to Borrower in this Agreement shall be
deemed to collectively include the aforesaid corporation, and its
Subsidiaries.

     

    “Borrowing Base
Amount” shall mean, in relation to advances under the Working Capital
Facility, the total, without duplication, of the following: (i) eighty percent
(80%) of the face amount of all then existing Eligible Accounts as set forth on
the Borrowing Base Certificate delivered by Borrower to the Bank from time to
time, minus all finance charges and prompt payment, volume and all other
discounts, credits or allowances which may be taken by or granted to Account
Debtors, minus 100% of the face amount of all proceeds of the Eligible Accounts
listed on such Borrowing Base Certificate which Borrower has received since the
date of the most recently delivered Borrowing Base Certificate delivered to the
Bank plus (ii)
fifty percent (50%) of the value of Borrower’s Inventory.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    “Business Day” shall
mean any day other than a Saturday, Sunday or a legal holiday on which banks are
authorized or required to be closed for the conduct of commercial banking
business in Chicago, Illinois.

     

    “Capex Facility” shall
mean a Capex Loan in the principal amount of One Million Five Hundred Thousand
and No/100 Dollars ($1,500,000.00), converting to a Term Loan, for the purpose
of financing the purchase of Equipment.

     

    “Capex Interest
Rate”  shall mean, with respect to the Capex Loan, an interest
rate (determined at Borrower’s option from time to time) equal to either (i) the
Prime Rate plus
the Applicable Margin, or (ii) the LIBOR Rate plus the Applicable
Margin.

     

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

     

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

     

    “Capex Loan
Commitment” shall mean an amount equal to One Million Five Hundred
Thousand and No/100 Dollars ($1,500,000.00) for the Capex Facility.

     

    “Capex Loan Maturity
Date” shall mean September 3, 2010.

     

    “Capex Note” shall
have the meaning set forth in Section 4.2
hereof.

     

    “Capital Expenditures”
shall mean expenditures (including Capital Lease obligations which should be
capitalized under GAAP) for the acquisition of fixed assets, machinery,
equipment (including Equipment), land and buildings or other property which are
required to be capitalized under GAAP.

     

    “Cash” and “Cash Equivalents”
shall mean (1) cash held by Borrower in accounts with the Bank, (2) direct
obligations of the United States Government, including, without limitation,
treasury bills, notes and bonds held by Borrower in accounts with the Bank, and
(3) repurchase agreements with the Bank fully secured by the United States
Government or agency collateral equal to or exceeding the principal amount on a
daily basis and held in safekeeping held by Borrower in accounts with the
Bank.

     

    “Change in Control”
shall have the meaning set forth in Section 11.9
hereof.

     

    “Collateral” shall
have the meaning set forth in Section
6.1.

     

    
      
         

      

      
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    “Computation Period”
means each period of twelve (12) consecutive calendar months ending on the last
day of each calendar month.

     

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

     

    “Converted Loan” shall
have the meaning set forth in Section
2.1(c).

     

    “Corporate Guaranty”
shall have the meaning set forth in Section 3.1
hereof.

     

    “Default Rate” shall
mean a per annum rate of interest then in effect plus 2% per annum.

     

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

     

    “EBITDA” shall mean,
for any period, the sum for such period of:  (i) Net Income, plus (ii)
Interest Charges, plus (iii) federal and state income taxes (including the
Illinois replacement tax) as determined in accordance with GAAP, plus (iv)
Depreciation and Amortization, plus (v) extraordinary losses as defined by GAAP
and all other non-cash charges, plus (vi) Permitted Distributions, minus (vii)
any items of gain which are extraordinary items as defined by GAAP, including,
without limitation, that portion of Net Income arising out of the sale of assets
outside of the ordinary course of business, in each case to the extent included
in determining Net Income for such period.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    “Eligible Accounts”
shall mean all Accounts, except for the following:

     

    
      	
               
      

            	
              (1)

            	
              Accounts
      which remain unpaid for more than ninety (90) days after their invoice
      date;

            

    

     

    
      	
               
      

            	
              (2)

            	
              Accounts
      owing by a single Account Debtor, including a currently scheduled Account,
      if twenty-five percent (25%) of the balance owing (excluding retainage) by
      said Account Debtor on such Account remains unpaid  more than
      ninety (90) days after the invoice
date;

            

    

     

    
      	
               
      

            	
              (3)

            	
              Accounts
      which are not due and payable within at least thirty (30) days after their
      invoice date;

            

    

     

    
      	
               
      

            	
              (4)

            	
              Accounts
      with respect to which the Account Debtor is a director, officer, employee
      or agent of Borrower or is a Parent, a Subsidiary or an Affiliate of
      Borrower (for the avoidance of doubt, this will not include Accounts with
      Patriot Rail Corp.);

            

    

     

    
      	
               
      

            	
              (5)

            	
              Accounts
      with respect to which the Account Debtor (1) is not a resident, a citizen
      of or otherwise located in the United States of America; or (2) is not
      subject to service of process in the United States of America, unless, in
      each case, such Accounts are supported by foreign credit insurance in form
      and substance acceptable to Lender;

            

    

     

    
      	
               
      

            	
              (6)

            	
              Accounts
      with respect to which the Account Debtor is (1) the United States of
      America or any department, agency or instrumentality thereof, unless
      Borrowers assign their right to payment of such Accounts to the Bank in
      accordance with the Assignment of Claims Act of 1940, as amended, or (2)
      any country other than the United States of America or any department,
      agency or instrumentality thereof;

            

    

     

    
      	
               
      

            	
              (7)

            	
              The
      face amount of any Accounts with respect to which Borrower is or may
      become liable to the Account Debtor for Goods sold or services rendered by
      such Account Debtor to Borrower, but only to the extent of the maximum
      aggregate amount of Borrower’s liability to such Account
      Debtor;

            

    

     

    
      	
               
      

            	
              (8)

            	
              If
      applicable, Accounts with respect to which (1) the Goods giving rise
      thereto have not been shipped and delivered to and accepted as
      satisfactory by the Account Debtor, or (2) the services performed have not
      been completed and accepted as satisfactory by the Account
      Debtor;

            

    

     

    
      	
               
      

            	
              (9)

            	
              If
      applicable, Accounts which are not invoiced, dated as of such date and
      sent to the Account Debtor concurrently with or promptly after the
      shipment and delivery to and acceptance by said Account Debtor of the
      goods or the performance of the services giving rise
    thereto;

            

    

     

    
      
        	
              	
                (10)

              	
                Accounts
      which are owing by any Account Debtor involved as a debtor in any
      bankruptcy or insolvency proceeding, whether voluntary or
      involuntary;

              

      

    

     

    
      
        	
              	
                (11)

              	
                Accounts
      which arise in any manner other than the sale of inventory or services in
      the ordinary course of Borrower’s
business;

              

      

    

     

    
      
         

      

      
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                (12)

              	
                The
      portion of any Account which constitutes retainage under the applicable
      contract;

              

      

    

     

    
      
        	
              	
                (13)

              	
                The
      portion of any Account which is subject to a priority claim in favor of a
      bonding or surety company;

              

      

    

     

    
      
        	
              	
                (14)

              	
                Accounts
      which arise in any manner other than (1) the performance of services by
      Borrower in the ordinary course of Borrower’s business, and such services
      have been fully performed and acknowledged and accepted by the Account
      Debtor thereunder; or (2) the sale or lease of Goods by Borrower in the
      ordinary course of Borrower’s business, and (x) such Goods have been
      completed in accordance with the Account Debtor’s specifications (if any)
      and delivered to the Account Debtor, (y) such Account Debtor has not
      refused to accept, returned or offered to return, any of the Goods which
      are the subject of such Account, and (z) Borrower has possession of, or
      Borrower has delivered to the Bank (at the Bank’s request) shipping and
      delivery receipts  evidencing delivery of such
      Goods;

              

      

    

     

    
      
        	
              	
                (15)

              	
                Accounts
      as to which the Bank, at any time or times hereafter, determines in good
      faith that the prospect of payment or performance by the Account Debtor is
      or will be materially
impaired.

              

      

    

     

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

     

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

     

    “Equipment” shall mean
all wood grinders or related equipment or maintenance-of-way equipment utilized
by Borrower in connection with its business.

     

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

     

    “Event of Default”
shall mean any of the events or conditions set forth in Article 11
hereof.

     

    
      
         

      

      
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    “Excess Cash Flow”
shall mean EBITDA minus (i)
non-financed Capital Expenditures, (ii) actual cash taxes paid (net of tax
credits), (iii) principal and interest payments due and owing in accordance with
this Agreement or any other agreement with the Bank, and (iv) Management Fees
(not to exceed Fifty Thousand and No/100 Dollars ($50,000.00) in
2009).

     

    “Funded Indebtedness”
shall mean, as to any Person, all outstanding Indebtedness of such Person, but
not including Contingent Liabilities and Rate Management
Obligations.  The outstanding amounts under the Loans (not including
the Rate Management Agreements) shall be considered as being included within
Funded Indebtedness of the Borrower.

     

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

     

    “Governmental
Authority” shall mean the United States of America, any state, territory
or district thereof, and any other political subdivision or body politic created
pursuant to any applicable Law, and any court, agency, department, commission,
board, bureau or instrumentality of any of the foregoing.

     

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

     

     “Indebtedness” shall
mean at any time (i) all Liabilities of the Borrower to the Bank, (ii) all
Capital Lease obligations of the Borrower, (iii) all other debt, secured or
unsecured, created, issued, incurred or assumed by the Borrower for money
borrowed or for the deferred purchase price of any fixed or capital asset, (iv)
indebtedness secured by any Lien existing on property owned by the Borrower
whether or not the Indebtedness secured thereby has been assumed, and (v) all
Rate Management Obligations.

     

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

     

    “Interest Charges”
shall mean, for any period, the sum of:  (i) all cash interest,
charges and related expenses payable with respect to that fiscal period to a
lender in connection with borrowed money or the deferred purchase price of
assets that are treated as interest in accordance with GAAP, plus (ii) the
portion of rent payable with respect to that fiscal period under Capital Leases
that should be treated as interest in accordance with GAAP, plus (iii) all
charges paid or payable (without duplication) during that period with respect to
any Rate Management Agreements.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    “Interest Period”
shall mean, with regard to any LIBOR Loan, successive one, three or six-month
periods as selected from time to time by the Borrower by notice given to the
Bank not less than two Business Days prior to the first day of each respective
Interest Period; provided, however, that: (i) each such Interest Period
occurring after the initial Interest Period of any LIBOR Loan shall commence on
the day on which the preceding Interest Period for such LIBOR Loan expires, (ii)
whenever the last day of any Interest Period would otherwise occur on a day
other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided, however, that
if such extension would cause the last day of such Interest Period to occur in
the next following calendar month, then the last day of such Interest Period
shall occur on the immediately preceding Business Day, (iii) whenever the first
day of any Interest Period occurs on a day of a month for which there is no
numerically corresponding day in the calendar month in which such Interest
Period terminates, such Interest Period shall end on the last Business Day of
such calendar month, (iv) if the Capex, Term, and/or Revolving Loans are subject
to a mandatory prepayment, the last Business Day of the then current Interest
Period for all Capex, Term, and/or Revolving Loans which are LIBOR Loans must
coincide with the date of the mandatory prepayment, and (v) the final Interest
Period must be such that its expiration occurs on or before the applicable
Capex, Revolving Loan and Term Loan Maturity Dates, respectively.

     

    “Inventory” shall mean
all present and future goods intended for sale, lease or other disposition
including, without limitation, all raw materials, work in process, finished
goods and other retail inventory, goods in the possession of outside processors
or other third parties, consigned goods (to the extent of the consignee’s
interest therein), materials and supplies of any kind, nature or description
which are or might be used in connection with the manufacture, packing,
shipping, advertising, selling or finishing of any such goods, all documents of
title or documents representing the same and all records, files and writings
with respect thereto.

     

    “Invoice” shall mean,
in the case of purchased Equipment, the purchase invoice tendered by the
Equipment seller to Borrower for the Equipment purchased by
Borrower.

     

    “Law” shall mean any
federal, state or local law, statute, ordinance, order, decree, rule or
regulation.

     

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

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    “LIBOR” shall mean the
per annum rate of interest determined on the basis of the rate for deposits in
United States Dollars for a period equal to the relevant Interest Period for
such Loan, commencing on the first day of such Interest Period, appearing on
Page BBAM of the Bloomberg Financial Markets Information Service as of 11:00
a.m. (Chicago, Illinois time) (or as soon thereafter as practical), two (2)
Business Days prior to the first day of such Interest Period.  In the
event that such rate does not appear on Page BBAM of the Bloomberg Financial
Markets Information Service (or otherwise on such Service), then the term
“LIBOR” shall be determined by reference to such other publicly available
service for displaying Eurodollar rates as may be agreed upon by Bank and
Borrower, or, in the absence of such agreement, “LIBOR” shall, instead, mean the
per annum rate equal to the average (rounded upward, if necessary, to the
nearest one-sixteenth of one percent (1/16%)) of the rate at which Bank is
offered dollar deposits at or about 11:00 a.m. (Chicago, Illinois time) (or as
soon thereafter as practical), two (2) Business Days prior to the first day of
such Interest Period in the interbank Eurodollar market in an amount comparable
to the principal amount of the respective LIBOR-based Loan which is to bear
interest at such LIBOR-based rate and for a period equal to the relevant
Interest Period.  The Bank’s determination of LIBOR shall be
conclusive, absent manifest error.

     

    “LIBOR Loan” or “LIBOR Loans” shall
mean that portion, and collectively, those portions of the aggregate outstanding
principal balance of the Loans that will bear interest at the LIBOR Rate plus
the Applicable Margin.

     

    “LIBOR Rate” shall
mean a per annum rate of interest equal to LIBOR for the relevant Interest
Period (rounded upward if necessary, to the nearest 1/16 of
1.00%).    Notwithstanding the foregoing, with respect to
the Term Loan and Capex Loans, LIBOR shall be a minimum of two percent (2%)
during any and all Interest Periods.

     

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

     

    “Loans” shall mean,
collectively, all Capex Loans, Revolving Loans and the Term Loan (whether Prime
Loans or LIBOR Loans) made by the Bank to the Borrower, under and pursuant to
this Agreement.

     

    “Loan Documents” shall
have the meaning set forth in Section
3.1.

     

    “Management Fees”
shall mean reasonable fees paid to B.H.I.T. Inc. for administrative
services.

     

    “Net Income” shall
mean, with respect to any period, the amount shown opposite the caption “Net
Income” or a similar caption on the financial statements of the Borrower,
prepared in accordance with GAAP.

     

    “Notes” shall mean
collectively the Term Note, the Capex Note and the Revolving Note.

     

    “Obligations” shall
mean the Loans, as evidenced by the Notes, all interest accrued thereon, any
fees due the Bank hereunder, any expenses incurred by the Bank hereunder and any
and all other liabilities and obligations of the Borrower (and of any
partnership in which the Borrower is or may be a partner) to the Bank, howsoever
created, arising or evidenced, and howsoever owned, held or acquired, whether
now or hereafter existing, whether now due or to become due, direct or indirect,
absolute or contingent, and whether several, joint or joint and several,
including, but not limited to, any and all Rate Management
Obligations.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

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

     

    “Permitted
Distributions” shall mean (i) Tax Distributions and (ii) distributions
for the payment of Management Fees to B.H.I.T. Inc. as and to the extent
permitted under this Agreement, not to exceed Fifty Thousand and No/100 Dollars
($50,000.00) in 2009.

     

    “Permitted Liens”
shall mean Liens permitted under Section 8.2
hereof.

     

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

     

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

     

    “Prime Rate” shall
mean a per annum rate of interest equal to Prime for the relevant
period.

     

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

     

    “Rate Management
Agreement” means any agreement, device or arrangement providing for
payments which are related to fluctuations of interest rates, exchange rates,
forward rates, or equity prices, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants, and any
agreement pertaining to equity derivative transactions (e.g., equity or equity
index swaps, options, caps, floors, collars and forwards), including without
limitation any ISDA Master Agreement between Borrower and Bank or any affiliate
of the Bank, and any schedules, confirmations and documents and other confirming
evidence between the parties confirming transactions thereunder, all whether now
existing or hereafter arising, and in each case as amended, modified or
supplemented from time to time.

     

    “Rate Management
Obligations” means any and all obligations of Borrower to Bank or any
affiliate of the Bank, whether absolute, contingent or otherwise and howsoever
and whensoever (whether now or hereafter) created, arising, evidenced or
acquired (including all renewals, extensions and modifications thereof and
substitutions therefore), under or in connection with (i) any and all Rate
Management Agreements, and (ii) any and all cancellations, buy-backs, reversals,
terminations or assignments of any Rate Management Agreement.

     

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

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    “Revolving Interest
Rate” shall mean, with respect to a Revolving Loan, an interest rate
(determined at Borrower’s option from time to time) equal to either (i) the
Prime Rate plus
the Applicable Margin, or (ii) the LIBOR Rate plus the Applicable
Margin.

     

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

     

    “Revolving Loan
Commitment” shall mean an amount equal to Five Hundred Thousand and
No/100 Dollars ($500,000.00) for the Working Capital Facility Revolving
Loan.

     

    “Revolving Loan Maturity
Date” shall mean September 3, 2010.

     

    “Revolving Note” shall
have the meaning set forth in Section 4.1
hereof.

     

    “Stock” shall mean all
shares, options, interests, participations or other equivalents, howsoever
designated, of or in a corporation, partnership, limited liability company or
similar entity whether voting or nonvoting, including, common stock, warrants,
preferred stock, convertibles, debentures, partnership interest and all
agreements, instruments and documents convertible, in whole or in part, into any
one or more of the foregoing.

     

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

     

    “Tax
Distributions” means, for any taxable
year for which Borrower is treated under the Internal Revenue Code of 1986, as
amended from time to time (the “Code”) as a
partnership for income tax purposes or otherwise similarly disregarded under the
Code for income tax purposes, dividends and/or distributions paid by Borrower to
its member(s) in an amount not to exceed the product of (i) taxable income
related to such member’s ownership interest in the applicable Borrower
multiplied by (ii) the sum of the highest marginal individual federal and state
income tax rates in any state in which such member is subject to tax that were
applicable in such taxable year.

     

    “Term Interest Rate”
shall mean, with respect to the Term Loan, an interest rate (determined at
Borrower’s option from time to time) equal to either (i) the Prime Rate plus the Applicable
Margin, or (ii) the LIBOR Rate plus the Applicable
Margin.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    “Term Loan” shall mean
the advance of either a Prime Loan or a LIBOR Loan made by the Bank to the
Borrower under and pursuant to this Agreement, as set forth in Section 2.2
hereof.

     

    “Term Loan Commitment”
shall mean an amount equal to Three Million and No/100 Dollars ($3,000,000.00),
as such amount may be increased on account of the Converted Loans pursuant to
Section 2.1(c)
hereof.

     

    “Term Loan Maturity
Date” shall mean September 3, 2014.

     

    “Term Note” shall have
the meaning set forth in Section 4.3
hereof.

     

    “Total Debt” shall
mean the Funded Indebtedness of Borrower less Cash and Cash
Equivalents.

     

    “UCC” shall mean the
Uniform Commercial Code in effect in Illinois from time to time.

     

    “Unmatured Event of
Default” shall mean any event which has occurred and/or condition which
exists which, with the giving of notice or lapse of time, or both, would
constitute an Event of Default.

     

    “Working Capital
Facility” shall mean a facility encompassing Revolving Loans in the
principal amount of Five Hundred Thousand and No/100 Dollars ($500,000.00) for
the purposes of financing working capital and other reasonable and appropriate
corporate purposes.

     

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

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

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

     

    1.4           Other Definitional
Provisions; Construction.  Whenever it is provided in this
Agreement that a party “may” perform an act or do anything, it will be construed
that such party “may, but will not be obligated to,” so perform or so
do.  The following words and phrases will be construed as follows: (i)
“at any time” will be construed as “at any time or from time to time;” (ii)
“any” will be construed as “any one or all”; (iii) “include” and “including”
will be construed as “including but not limited to;” and (iv) “will” and “shall”
will each be construed as mandatory.  Except as otherwise specifically
indicated, all references to Article and Section numbers and letters will refer
to the Articles and Sections of this Agreement.  The words “hereby,”
“hereof,” “hereto,” “herein” and “hereunder” and any similar terms will refer to
this Agreement as a whole and not to any particular paragraph.  The
word “hereafter” will mean after the date hereof and the word “heretofore” will
mean before the date hereof.  Words of the masculine, feminine or
neuter gender will mean and include the corresponding words of other genders,
and words implying the singular number will mean and include the plural number
and vice versa.  The Article and Section headings are inserted in this
Agreement for convenience only and are not intended to, and will not be
construed to limit, enlarge or affect the scope or intent of this Agreement or
the meaning of any provision hereof.  All references to “Exhibits” and
“Schedules” shall mean the Exhibits and Schedules attached to this Agreement.
All references to any agreement or instrument (including this Agreement) will be
to such agreement or instrument as in effect from time to time, including any
amendments, replacements, restatements, modifications and/or supplements
thereto. An Event of Default or Unmatured Event of Default shall “continue” or
be “continuing” until such Event of Default or Unmatured Event of Default has
been cured or waived in accordance with Section
13.3.  References in this Agreement to any party shall include
such party’s successors and permitted assigns. To the extent any of the
provisions of the other Loan Documents are inconsistent with the terms of this
Loan Agreement, the provisions of this Loan Agreement shall govern.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	
              2.

            	
              COMMITMENT OF THE
      BANK.

            

    

     

    2.1           Capex and Revolving
Loans.

    
      	
               
      

            	
              (a)

            	
              Capex and Revolving
      Loan Commitment.  Subject to the terms and conditions of
      this Agreement and the other Loan Documents, and in reliance upon the
      representations and warranties of the Borrower, herein and in the other
      Loan Documents, the Bank agrees to make such Capex and Revolving Loans at
      such times as the Borrower may from time to time request until, but not
      including, the Capex and Revolving Loan Maturity Date, respectively, and
      in such amounts as the Borrower may from time to time request, provided,
      however, that (i) the principal amount of no single Capex Loan encompassed
      within the Capex Facility shall exceed 80% of the related Invoice with
      respect to Equipment, (ii) the aggregate principal balance of all Capex
      and/or Revolving Loans outstanding at any time with respect to a
      particular Facility shall not exceed the applicable Capex or Revolving
      Loan Commitment for that Facility, and (iii) the aggregate principal
      balance of all Revolving Loans outstanding at any time shall not exceed
      the Borrowing Base Amount. With respect to the Working Capital Facility,
      Revolving Loans made by the Bank may be repaid and, subject to the terms
      and conditions hereof, borrowed again up to, but not including the
      Revolving Loan Maturity Date or the time that a Revolving Loan is
      otherwise terminated or extended as provided in this
      Agreement.  With respect to the Capex Facility, Capex Loans made
      by the Bank, when repaid, may not be
reborrowed.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Capex and Revolving
      Loan Interest and Payments.  The principal amount of the
      Capex and Revolving Loans outstanding from time to time shall bear
      interest at the applicable Capex and Revolving Interest Rates,
      respectively.  Accrued and unpaid interest on the unpaid
      principal balance of all Capex and Revolving Loans outstanding from time
      to time which are Prime Loans, shall be due and payable monthly, in
      arrears, commencing on September 30, 2009 and continuing on the last day
      of each calendar month thereafter, and on the Capex and Revolving Loan
      Maturity Dates, respectively.  Accrued and unpaid interest on
      the principal balance of all Capex and Revolving Loans outstanding from
      time to time which are LIBOR Loans shall be payable on the last Business
      Day of each Interest Period, commencing on the first such date to occur
      after the date hereof, on the date of any principal repayment of a LIBOR
      Loan, and on the Capex and Revolving Loan Maturity Dates,
      respectively.  Any amount of principal or interest on the Capex
      and Revolving Loans which is not paid when due, whether at stated
      maturity, by acceleration or otherwise, shall bear interest payable on
      demand at the Default Rate.

            

    

     

    
      
        	
              	
                (c)

              	
                Terming out of Capex
      Loans.  On the applicable Capex Loan Maturity Date, all
      then-outstanding Capex Loans shall automatically be converted into a Term
      Loan maturing on the Term Loan Maturity Date bearing interest at the same
      rate as the Term Loan (each a “Converted Loan”
      and collectively “Converted
      Loans”).  The principal balance of the Converted Loans
      with respect to the Capex Facility will be amortized over a 60-month
      period and principal and interest thereon will be payable in arrears on
      the last day of each calendar month. In order to effectuate the foregoing,
      Borrower will execute a note evidencing such Converted Loans in the form
      set forth in Exhibit
      G attached hereto on the Capex Loan Maturity
      Date.  Provided that there is no Unmatured Event of Default or
      Event of Default at that time, the Bank agrees to increase the aggregate
      Term Loan Commitment by the amount of the Converted Loans then being
      converted.

              

      

    

     

    
      	
               
      

            	
              (d)

            	
              Capex and Revolving
      Loan Principal Repayments.

            

    

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (i)

            	
              Mandatory Principal
      Repayments.  Each Revolving Loan hereunder with respect
      to the Working Capital Facility shall be repaid by the Borrower on the
      Revolving Loan Maturity Date, unless payable sooner pursuant to the
      provisions of this Agreement.  Each Capex Loan hereunder shall
      be repaid by the Borrower on the Capex Loan Maturity Date, unless payable
      sooner pursuant to the provisions of this Agreement or unless converted to
      a Term Loan pursuant to the provisions of Section
      2.1(c).

            

    

     

    
      	
               
      

            	
              (ii)

            	
              Optional
      Prepayments.  The Borrower may from time to time prepay
      the Capex and Revolving Loans which are Prime Loans and, subject to
      Section 2.3(a) hereof, LIBOR Loans, in whole or in part, without any
      prepayment penalty whatsoever, subject to the following
      conditions:  (i) each partial prepayment shall be in an
      amount equal to Fifty Thousand and No/100 Dollars ($50,000.00) or a higher
      integral multiple of Twenty-Five Thousand and No/100 Dollars ($25,000.00);
      and (ii) any prepayment of the entire principal balance of the Capex
      and/or Revolving Loans shall include accrued interest on such Capex and/or
      Revolving Loans to the date of such prepayment and payment in full of all
      other Obligations pertaining to such Capex and Revolving Loans, then due
      and payable.

            

    

     

    2.2           Term
Loans.

     

    
      	
               
      

            	
              (a)

            	
              Term Loan
      Commitment.  Subject to the terms and conditions of this
      Agreement and the other Loan Documents, and in reliance upon the
      representations and warranties of the Borrower set forth herein and in the
      other Loan Documents, the Bank agrees to make a Term Loan equal to the
      Term Loan Commitment.  The Term Loan shall be available to the
      Borrower in a single principal advance.  The Term Loan shall be
      used by Borrower for the acquisition of the Wood Energy Group and
      transaction expenses.  The Term Loan may be prepaid in whole or
      in part at any time without penalty (except for any LIBOR breakage fees),
      but shall be due in full on the Term Loan Maturity Date, unless the credit
      extended under the Term Loan is otherwise terminated or extended as
      provided in this Agreement.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Term Loan Interest and
      Payments.  Except as otherwise provided in this Section
      2.2(b),
      the principal amount of the Term Loan outstanding from time to time shall
      bear interest at the Term Interest Rate. Accrued and unpaid interest on
      that portion of the unpaid principal balance of the Term Loan outstanding
      from time to time which is a Prime Loan shall be due and payable monthly,
      in arrears, commencing on September 30, 2009 and continuing on the last
      day of each calendar month thereafter, and on the Term Loan Maturity
      Date.  Accrued and unpaid interest on that portion of the unpaid
      principal balance of the Term Loan outstanding from time to time which is
      a LIBOR Loan shall be payable on the last Business Day of each Interest
      Period, commencing on the first such date to occur after the date hereof,
      on the date of any principal repayment of a LIBOR Loan and on the Term
      Loan Maturity Date.  Any amount of principal or interest on the
      Term Loan which is not paid when due, whether at stated maturity, by
      acceleration or otherwise, shall bear interest payable on demand at the
      Default Rate.

            

    

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (c)

            	
              Term Loan Principal
      Payments.  The outstanding principal balance of the Term
      Loan shall be repaid in equal monthly principal installments of Fifty
      Thousand Dollars and No/100 Dollars ($50,000.00), together with an
      additional amount representing accrued interest as set forth above,
      beginning on September 30, 2009, and continuing on the last day of each
      month thereafter, with a final payment of all outstanding principal and
      accrued interest due on the Term Loan Maturity Date.  Principal
      amounts repaid on the Term Note may not be borrowed
  again.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Mandatory Term Loan
      Prepayments.  Upon receipt of proceeds from an Asset
      Disposition, Borrower shall, without notice or demand of any kind,
      immediately pay to the Bank an amount greater than or equal to 100% of the
      net cash proceeds resulting from such Disposition, and such amount shall
      be applied to the then-outstanding Term Loan balance.  In lieu
      of making Term Loan pre-payments in the foregoing-computed amount,
      Borrower shall be permitted to pre-pay Capex and/or Revolving Loans in the
      same amount if such amount of the Capex and/or Revolving Loans is then
      outstanding.

            

    

     

    If
Borrower has generated Excess Cash Flow during any calendar year that this
Agreement remains in effect (commencing September 4, 2009 – December 31, 2009,
and each calendar year thereafter), then seventy-five percent (75%) of that
Excess Cash Flow shall constitute a required Mandatory Term Loan Prepayment,
Borrower shall, without notice or demand of any kind, pay to the Bank
seventy-five percent (75%) of such Excess Cash Flow within one hundred twenty
(120) days after the end of each such calendar year, and such amount shall be
applied to the then-outstanding Term Loan balance.

     

    Notwithstanding
the foregoing, in calendar year 2010 and in each calendar year thereafter, such
Excess Cash Flow payment shall not be required if, on December 31 of each such
calendar year, the Indebtedness of Borrower to Bank does not exceed the
aggregate of 80% of the value of Borrower’s Accounts Receivable plus 50% of the
value of Borrower’s Inventory plus 80% of the appraised fair market value of
Borrower’s owned Equipment.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    2.3           Additional LIBOR Loan
Provisions.

     

    
      	
               
      

            	
              (a)

            	
              LIBOR Loan
      Prepayments.  If, for any reason, a LIBOR Loan is paid
      prior to the last Business Day of any Interest Period, then Borrower
      agrees to pay to the Bank the Bank’s normal and customary LIBOR breakage
      fees, if any, actually incurred, plus any cost or expense incurred by the
      Bank as a result of such
prepayment.

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    2.4           Interest and Fee
Computation; Collection of Funds.  Except as otherwise set
forth herein, all interest and fees shall be calculated on the basis of a year
consisting of 360 days and shall be paid for the actual number of days
elapsed.  Principal payments submitted in funds not immediately
available shall continue to bear interest until collected.  If any
payment to be made by the Borrower hereunder or under the Notes shall become due
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in
computing any interest in respect of such payment.

     

    
      	
              3.

            	
              CONDITIONS OF
      BORROWING.

            

    

     

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

     

    3.1           Loan
Documents.  The Borrower shall have failed to execute and
deliver to the Bank any of the following Loan Documents (collectively, the
“Loan
Documents”), all of which must be satisfactory to the Bank and the Bank’s
counsel in form, substance and execution:

     

    
      	
               
      

            	
              (a)

            	
              Loan
      Agreement.  Three (3) copies of this
      Agreement.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Revolving Note
      (Working Capital Facility).  The Revolving Note in the
      form attached hereto as Exhibit
      A.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Capex Note (Capex
      Facility).  The Capex Note in the form attached hereto as
      Exhibit
      B.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Term
      Note.  The Term Note in the form attached hereto as Exhibit
      C.

            

    

     

    
      	
               
      

            	
              (e)

            	
              Corporate
      Guaranty.  The Corporate Guaranty of B.H.I.T. Inc. in the
      form attached hereto as Exhibit
      D.

            

    

     

    
      	
               
      

            	
              (f)

            	
              Search
      Results.  Copies of UCC search reports (and/or, in the
      sole discretion of the Bank, opinions of counsel), dated such a date as is
      reasonably acceptable to the Bank, with respect to (i) effective UCC
      financing statements in all applicable jurisdictions which name the
      Borrower, under its present names and previous names, as debtors, together
      with copies of such UCC financing statements, and (ii) such Surface
      Transportation Board Filings as the Bank shall reasonably require to
      determine the ownership of any one or more of the Rail
      Equipment.

            

    

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (g)

            	
              Filings.  Such
      UCC filings and Surface Transportation Board Filings as the Bank shall
      have required to (i) establish a first priority lien in favor of the
      Bank in and to all Collateral, or (ii) to establish the Borrower’s
      ownership of any Rail Equipment.

            

    

     

    
      	
               
      

            	
              (h)

            	
              Organizational and
      Authorization Documents.  Copies of (i) the Articles
      of Incorporation and Bylaws of the Borrower; (ii) resolutions of the
      directors or members of the Borrower approving and authorizing such
      Person’s execution, delivery and performance of the Loan Documents to
      which it is party and the transactions contemplated thereby;
      (iii) signature and incumbency certificates of the officers and
      directors of the Borrower, executing any of the Loan Documents, each of
      which the Borrower hereby certifies to be true and complete, and in full
      force and effect without modification, it being understood that the Bank
      may conclusively rely on each such document and certificate until formally
      advised by the Borrower of any changes therein; and (iv) good
      standing certificates in the state of formation of the Borrower and in
      each other state requested by the
Bank.

            

    

     

    
      	
               
      

            	
              (i)

            	
              Insurance.  Evidence
      satisfactory to the Bank of the existence of insurance required to be
      maintained pursuant to Section 9.4,
      together with evidence that the Bank has been named as a lender’s loss
      payee with respect to each policy of property or casualty insurance and as
      an additional insured with respect to all liability
    policies.

            

    

     

    
      	
               
      

            	
              (j)

            	
              Additional
      Documents.  Such other certificates, financial
      statements, schedules, resolutions, opinions of counsel, notes and other
      documents which are provided for hereunder or which the Bank shall
      reasonably require, including any and all Rate Management Agreements with
      the Bank.

            

    

     

    3.2           Event of
Default.  Any Event of Default, or Unmatured Event of Default
shall have occurred and be continuing.

     

    3.3           Adverse
Changes.  A material adverse change in the condition,
operations or affairs of the Borrower, whether pertaining to the Borrower’s
finances or otherwise, as determined in the Bank’s sole and complete discretion,
shall have occurred.

     

    3.4           Litigation.  Any
litigation or governmental proceeding shall have been instituted against the
Borrower or any of its officers or shareholders which in the discretion of the
Bank, reasonably exercised, materially adversely affects the financial condition
or continued operation of the Borrower.

     

    3.5           Representations and
Warranties.  Any representation or warranty of the Borrower
contained herein or in any Loan Document shall be untrue or incorrect in any
material respect as of the date of any Loan as though made on such date, except
to the extent such representation or warranty expressly relates to an earlier
date.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    3.6           Closing
Fee.  The Borrower shall have failed to pay to the Bank a
Closing Fee in the amount of One Hundred Thousand Dollars and No/100
($100,000.00), payable from the funds advanced by Bank with respect to the Term
Loan.

     

    
      	
              4.

            	
              NOTES EVIDENCING
      LOANS.

            

    

     

    4.1           Revolving
Note.  The Revolving Loans shall be evidenced by a Revolving
Note (together with any and all renewal, extension, modification or replacement
notes executed by the Borrower and delivered to the Bank and given in
substitution therefore, the “Revolving Note”),
duly executed by the Borrower and payable to the order of the
Bank.  At the time of the initial disbursement of a Revolving Loan and
at each time an additional Revolving Loan shall be requested hereunder or a
repayment made in whole or in part thereon, an appropriate notation thereof
shall be made on the books and records of the Bank.  All amounts
recorded shall be, absent demonstrable error, conclusive and binding evidence of
(i) the principal amount of the Revolving Loans advanced hereunder, (ii) any
unpaid interest owing on the Revolving Loans, and (iii) all amounts repaid on
the Revolving Loans.  The failure to record any such amount or any
error in recording such amounts shall not, however, limit or otherwise affect
the obligations of the Borrower under the Revolving Note to repay the principal
amount of the Revolving Loans, together with all interest accruing
thereon.

     

    4.2           Capex
Note.  The Capex Loans shall be evidenced by a Capex Note
(together with any and all renewal, extension, modification or replacement notes
executed by the Borrower and delivered to the Bank and given in substitution
therefore, the “Capex Note”), duly executed by the Borrower and payable to the
order of the Bank.  At the time of the initial disbursement of a Capex
Loan and at each time an additional Capex Loan shall be requested hereunder or a
repayment made in whole or in part thereon, an appropriate notation thereof
shall be made on the books and records of the Bank.  All amounts
recorded shall be, absent demonstrable error, conclusive and binding evidence of
(i) the principal amount of the Capex Loans advanced hereunder, (ii) any unpaid
interest owing on the Capex Loans, and (iii) all amounts repaid on the Capex
Loans.  The failure to record any such amount or any error in
recording such amounts shall not, however, limit or otherwise affect the
obligations of the Borrower under the Capex Note to repay the principal amount
of the Capex Loans, together with all interest accruing thereon.

     

    4.3           Term
Note.  The Term Loan shall be evidenced by a Term Note
(together with any and all renewal, extension, modification or replacement notes
executed by the Borrower and given in substitution therefore, the “Term Note”), duly
executed by the Borrower and payable to the order of the Bank.  At the
time any disbursement is made under the Term Loan or a repayment is made under
the Term Loan in whole or in part thereon, an appropriate notation thereof shall
be made on the books and records of the Bank.  All amounts recorded
shall be, absent demonstrable error, conclusive and binding evidence of (i) the
principal amount of the Term Loan advanced hereunder, (ii) any unpaid interest
owing on the Term Loan and (iii) all amounts repaid on the Term
Loan.  The failure to record any such amounts or any error in
recording such amounts shall not, however, limit or otherwise affect the
obligations of the Borrowers under the Term Note to repay the principal amount
of the Term Loan, together with all interest accruing thereon.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    
      	
              5.

            	
              MANNER OF
      BORROWING.

            

    

     

    5.1           All
Loans.  Each Loan shall be made available to the Borrower upon
its request, from any Person whose authority to so act has not been revoked by
the Borrower in writing previously received by the Bank.  Each Loan
may be advanced either as a Prime Loan or a LIBOR Loan, provided, however, that
at any time and from time to time, the Borrower may identify no more than three
(3) Loans which may be LIBOR Loans.  A request for a Prime Loan must
be received by no later than 11:00 a.m. Chicago, Illinois time, on the day it is
to be funded.  A request for a LIBOR Loan must be (i) received by no
later than 11:00 a.m. Chicago, Illinois time, two days before the day it is to
be funded, and (ii) in an amount greater than or equal to Fifty Thousand and
No/100 Dollars ($50,000.00).  If for any reason the Borrower shall
fail to select timely an Interest Period for an existing LIBOR Loan, then such
LIBOR Loan shall be immediately converted to a Prime Loan on the last Business
Day of the then existing Interest Period, all without demand, presentment,
protest or notice of any kind, all of which are hereby waived by the
Borrower.  The proceeds of each Prime Loan or LIBOR Loan shall be made
available at the office of the Bank by credit to the account of the Borrower or
by other means requested by the Borrower and acceptable to the
Bank.

     

    5.2           Capex and Revolving
Loans.  Each request for a Capex Loan with respect to the Capex
Facility shall be accompanied by a certificate setting forth the amount of the
Invoice of the Equipment for which such Capex Loan is being
requested.  Upon receipt of a request for a Capex or a Revolving Loan
with respect to the Working Capital Facility or the Capex Facility,
respectively, the Bank shall either advance such Capex or Revolving Loan as
provided in Section
5.1 hereof or promptly notify the Borrower of the reason that such Capex
or Revolving Loan is not being so advanced.

     

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

     

    
      	
              6.

            	
              SECURITY FOR THE
      OBLIGATIONS.

            

    

     

    6.1           Security for
Obligations. As security for the payment of the Obligations, the Borrower
does hereby pledge, assign, transfer and deliver to the Bank and does hereby
grant to the Bank a continuing and unconditional first priority security
interest in and to any and all of the following property of the Borrower,
whether now existing or hereafter arising or acquired, (all of which property,
along with the products and proceeds therefrom, are individually and
collectively referred to as the “Collateral”):

     

    
      	
               
      

            	
              (a)

            	
              all
      property of, or for the account of, the Borrower now or hereafter coming
      into the possession, control or custody of, or in transit to, the Bank or
      any agent or bailee for the Bank or any parent, affiliate or subsidiary of
      the Bank or any participant with the Bank in the Loans (whether for
      safekeeping, deposit, collection, custody, pledge, transmission or
      otherwise), including all earnings, dividends, interest, or other rights
      in connection therewith and the products and proceeds therefrom, including
      the proceeds of insurance thereon;
and

            

    

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (b)

            	
              the
      additional property of the Borrower whether now existing or hereafter
      arising or acquired, and wherever now or hereafter located, together with
      all additions and accessions thereto, substitutions for, and replacements,
      products and proceeds therefrom, and all of the Borrower’s books and
      records and recorded data relating thereto (regardless of the medium of
      recording or storage), together with all of the Borrower’s right, title
      and interest in and to all computer software required to utilize, create,
      maintain and process any such records or data on electronic media,
      identified and set forth as
follows:

            

    

     

    
      	
               
      

            	
              (i)

            	
              All
      Accounts (whether or not Eligible Accounts) and all Goods whose sale,
      lease or other disposition by the Borrower has given rise to Accounts and
      have been returned to, or repossessed or stopped in transit by, the
      Borrower, or rejected or refused by an Account
  Debtor;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              All
      Inventory, including, without limitation, raw materials, work-in-process
      and finished goods;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              All
      Goods (other than Inventory), including, without limitation, embedded
      software, equipment, vehicles, furniture and
  fixtures;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              All
      Software and computer programs;

            

    

     

    
      	
               
      

            	
              (v)

            	
              All
      Securities, Investment Property, Financial Assets, Credit Cards, and
      Deposit Accounts;

            

    

     

    
      	
               
      

            	
              (vi)

            	
              All
      Chattel Paper, Electronic Chattel Paper, Instruments, Documents, Letter of
      Credit Rights, all proceeds of letters of credit, Health-care-insurance
      receivables, Certificates of Title,  Supporting Obligations,
      notes secured by real estate, Commercial Tort Claims and General
      Intangibles, including Payment Intangibles;
and

            

    

     

    
      	
               
      

            	
              (vii)

            	
              All
      Stock of Borrower.

            

    

     

    
      	
               
      

            	
              (viii)

            	
              All
      Equipment now owned or hereafter acquired, including but not limited to
      the Equipment listed on Schedule 6.1
      hereto.

            

    

     

    
      	
               
      

            	
              (ix)

            	
              All
      insurance policies and proceeds insuring the foregoing property or any
      part thereof, including unearned
premiums.

            

    

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    6.2           Possession and Transfer of
Collateral.  Until an Event of Default has occurred and is
continuing hereunder, the Borrower shall be entitled to possession or use of the
Collateral.  The cancellation or surrender of the Notes, upon payment
or otherwise, shall not affect the right of the Bank to retain the Collateral
for any other of the Obligations.  The Borrower shall not sell, assign
(by operation of law or otherwise), license, lease or otherwise dispose of, or
grant any option with respect to any of the Collateral, except that the Borrower
may sell Equipment in the ordinary course of business provided that, unless
replacement Equipment is purchased within ninety (90) days,  the net
sales proceeds will be used to repay the Bank on the Term Loan in accordance
with Section
2.2(d) hereof.

     

    6.3           Financing
Statements.  The Borrower shall, at the Bank’s request, at any
time and from time to time, execute and deliver to the Bank such financing
statements, amendments and other documents and do such acts as the Bank deems
necessary in order to establish and maintain valid, attached and perfected first
security interests in the Collateral in favor of the Bank, free and clear of all
Liens and claims and rights of third parties whatsoever (except as otherwise
specifically set forth in Section
8.2).  The Borrower hereby irrevocably authorizes the Bank at
any time, and from time to time, to file in any jurisdiction any initial
financing statements and amendments thereto that (i) indicate the Collateral is
comprised of all assets of the Borrower or words of similar effect, regardless
of whether any particular asset comprised in the Collateral falls within the
scope of Article 9 of the Uniform Commercial Code of the jurisdiction wherein
such financing statement or amendment is filed; and (ii) contain any other
information required by Section 5 of Article 9 of the Uniform Commercial Code of
the jurisdiction wherein such financing statement or amendment is filed
regarding the sufficiency or filing office acceptance of any financing statement
or amendment, including (A) whether the Borrower is an organization, the type of
organization and any organization identification number issued to the Borrower,
and (B) in the case of a financing statement filed as a fixture filing or
indicating Collateral as real estate, as-extracted collateral or timber to be
cut, a sufficient description of real property to which the Collateral
relates.  Not in limitation of the generality of the foregoing, the
Borrower hereby irrevocably authorizes the Bank to file with the Surface
Transportation Board pursuant to 49 U.S.C. §11301 this Agreement, any memorandum
thereof, any amendment hereto or thereto or any other document as the Bank deems
necessary in order to establish and maintain valid, attached and perfected, the
security interests in the Equipment of the Borrower.  The Borrower
agrees to furnish any such information to the Bank promptly upon
request.  The Borrower further ratifies and affirms its authorization
for any financing statements and/or amendments thereto, executed and filed by
the Bank in any jurisdiction prior to the date of this Agreement.

     

    6.4           Additional
Collateral.  The Borrower shall deliver to the Bank immediately
upon its demand, such other collateral as the Bank may from time to time
request, should the value of the Collateral, in the Bank’s sole and absolute
discretion, decline, deteriorate, depreciate or become impaired, and does hereby
grant to the Bank a continuing security interest in such other collateral,
which, when pledged, assigned and transferred to the Bank shall be and become
part of the Collateral.  The Bank’s security interests in each of the
foregoing Collateral shall be valid, complete and perfected whether or not
covered by a specific assignment.

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    6.5           Preservation of the
Collateral.  The Bank may, but is not required to, take such
action from time to time as the Bank deems reasonably appropriate to maintain or
protect the Collateral. The Bank shall have exercised reasonable care in the
custody and preservation of the Collateral if it takes such action as the
Borrower shall reasonably request in writing; provided, however, that such
request shall not be inconsistent with the Bank’s status as a secured party, and
the failure of the Bank to comply with any such request shall not be deemed a
failure to exercise reasonable care.  In addition, any failure of the
Bank to preserve or protect any rights with respect to the Collateral against
prior or third parties, or to do any act with respect to preservation of the
Collateral, not so requested by the Borrower, shall not be deemed a failure to
exercise reasonable care in the custody or preservation of the
Collateral.  The Borrower shall have the sole responsibility for
taking such action as may be necessary, from time to time, to preserve all
rights of the Borrower and the Bank in the Collateral against prior or third
parties.  Without limiting the generality of the foregoing, where
Collateral consists in whole or in part of securities, the Borrower represents
to, and covenants with, the Bank that the Borrower has made arrangements for
keeping informed of changes or potential changes affecting the securities
(including, but not limited to, rights to convert or subscribe, payment of
dividends, reorganization or other exchanges, tender offers and voting rights),
and the Borrower agrees that the Bank shall have no responsibility or liability
for informing the Borrower of any such or other changes or potential changes or
for taking any action or omitting to take any action with respect
thereto.

     

    6.6           Other Actions as to any and
all Collateral.  The Borrower further agrees to take any other
action reasonably requested by the Bank to insure the attachment, perfection and
first priority of, and the ability of the Bank to enforce, the Bank’s security
interest in any and all of the Collateral including, without limitation, (i)
executing, delivering and, where appropriate, filing financing statements and
amendments relating thereto under the Uniform Commercial Code, to the extent, if
any, that the Borrower’s signature thereon is required therefore, (ii) causing
the Bank’s name to be noted as secured party on any certificate of title for a
titled good if such notation is a condition to attachment, perfection or
priority of, or ability of the bank to enforce, the Bank’s security interest in
such Collateral, (iii) complying with any provision of any statute, regulation
or treaty of the United States as to any Collateral if compliance with such
provision is a condition to attachment, perfection or priority of, or ability of
the Bank to enforce, the Bank’s security interest in such Collateral (including,
but not limited to, §11301 of Title 49 of the United States Code in respect of
Equipment), (iv) obtaining governmental and other third party consents and
approvals, including without limitation any consent of any licensor, lessor or
other Person obligated on Collateral, (v) obtaining waivers from mortgagees and
landlords in form and substance satisfactory to the Bank, and (vi) taking all
actions required by the UCC in effect from time to time or by other law, as
applicable in any relevant UCC jurisdiction, or by other law as applicable in
any foreign jurisdiction.

     

    6.7           Collateral in the Possession
of a Warehouseman or Bailee.  If any of the Collateral at any
time is in the possession of a warehouseman or bailee, the Borrower shall
promptly notify the Bank thereof, and if requested by the Bank, shall promptly
obtain an acknowledgement from the warehouseman or bailee, in form and substance
satisfactory to the Bank, that the warehouseman or bailee holds such Collateral
for the benefit of the Bank and shall act upon the instructions of the Bank,
without the further consent of the Borrower.

     

    6.8           Letter-of-Credit
Rights.  If the Borrower at any time is a beneficiary under a
letter of credit now or hereafter issued in favor of the Borrower that pertains
to any of the Collateral, the Borrower shall promptly notify the Bank thereof
and, at the request and option of the Bank, the Borrower shall, pursuant to an
agreement in form and substance satisfactory to the Bank, either (i) arrange for
the issuer and any confirmer of such letter of credit to consent to an
assignment to the Bank of the proceeds of any drawing under the letter of
credit, or (ii) arrange for the Bank to become the transferee beneficiary of the
letter of credit, with the Bank agreeing, in each case, that the proceeds of any
drawing under the letter to credit are to be applied as provided in this
Agreement.

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    6.9           Commercial Tort
Claims.  If the Borrower shall at any time hold or acquire a
commercial tort claim that pertains to any of the Collateral, the Borrower shall
immediately notify the Bank in writing signed by the Borrower of the details
thereof and grant to the Bank in such writing a security interest therein and in
the proceeds thereof, all upon the terms of this Agreement, with such writing to
be in form and substance satisfactory to the Bank.

     

    6.10         Electronic Chattel Paper and
Transferable Records.  If the Borrower at any time holds or
acquires an interest in any electronic chattel paper or any “transferable
record” that pertains to any of the Collateral, as that term is defined in
Section 201 of the federal Electronic Signatures in Global and National Commerce
Act, or in §16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction, the Borrower shall promptly notify the Bank thereof and,
at the request of the Bank, shall take such action as the Bank may reasonably
request to vest in the Bank control under Section 9-105 of the UCC of such
electronic chattel paper or control under Section 201 of the federal Electronic
Signatures in Global and National Commerce Act or, as the case may be, §16 of
the Uniform Electronic Transactions Act, as so in effect in such jurisdiction,
of such transferable record.

     

    
      	
              7.

            	
              REPRESENTATIONS AND
      WARRANTIES.

            

    

     

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

     

    7.1           Borrower Organization and
Name.  The Borrower is: The Wood Energy Group, Inc. a Missouri
corporation duly organized, existing in good standing under the laws of the
State of Missouri, with full and adequate corporate power to carry on and
conduct its business as presently conducted and its state issued organizational
identification number is 00505610.  The Borrower is duly licensed or
qualified in all foreign jurisdictions wherein the nature of its activities
require such qualification or licensing, except where the failure to be so
qualified could not reasonably be expected to have a material adverse
effect.  The exact legal name of the Borrower is as set forth in the
first paragraph of this Agreement, and, except as set forth in Schedule 7.1 hereto,
Borrower currently does not conduct, nor has it during the last five (5) years
conducted, business under any other names or trade names.

     

    7.2           Authorization;
Validity.  The Borrower has full right, power and authority to
enter into this Agreement, to make the borrowings and execute and deliver the
Loan Documents as provided herein and to perform all of its duties and
obligations under this Agreement and the Loan Documents.  The
execution and delivery of this Agreement and the Loan Documents will not, nor,
to the Borrower’s knowledge, will the observance or performance of any of the
matters and things herein or therein set forth, violate or contravene any
provision of law or of the articles of incorporation or bylaws of the
Borrower.  All necessary and appropriate corporate action has been
taken on the part of the Borrower to authorize the execution and delivery of
this Agreement and the Loan Documents.  This Agreement and the Loan
Documents are valid and binding agreements and contracts of the Borrower in
accordance with their respective terms.

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    7.3           Compliance With
Laws.  The nature and transaction of the Borrower’s business
and operations and the use of its properties and assets, including, but not
limited to, the Collateral or any real estate owned or occupied by the Borrower,
do not and during the term of the Loans shall not, violate or conflict, in any
material respect, with any applicable law, statute, ordinance, rule, regulation
or order of any kind or nature, including, without limitation, the provisions of
the Fair Labor Standards Act or any zoning, land use, building, noise abatement,
occupational health and safety or other laws, any building permit or any
condition, grant, easement, covenant, condition or restriction, whether recorded
or not.

     

    7.4           Environmental Laws and
Hazardous Substances.  The Borrower represents, warrants and
agrees with the Bank that, to its knowledge (i) the Borrower has not generated,
used, stored, treated, transported, manufactured, handled, produced or disposed
of any Hazardous Materials, on or off any of the premises of the Borrower
(whether or not owned by it) in any manner which at any time violates any
Environmental Law or any license, permit, certificate, approval or similar
authorization thereunder, (ii) the operations of the Borrower comply in all
material respects with all Environmental Laws and all licenses, permits
certificates, approvals and similar authorizations thereunder, (iii) there has
been no investigation, proceeding, complaint, order, directive, claim, citation
or notice by any governmental authority or any other Person, nor is any pending
or, to the Borrower’s knowledge, threatened, and the Borrower shall immediately
notify the Bank upon becoming aware of any such investigation, proceeding,
complaint, order, directive, claim, citation or notice, and shall take prompt
and appropriate actions to respond thereto, with respect to any non-compliance
with, or violation of, the requirements of any Environmental Law by the Borrower
or the release, spill or discharge, threatened or actual, of any Hazardous
Material or the generation, use, storage, treatment, transportation,
manufacture, handling, production or disposal of any Hazardous Material or any
other environmental, health or safety matter, which materially affects the
Borrower or its business, operations or assets or any properties at which the
Borrower has transported, stored or disposed of any Hazardous Materials, (iv)
the Borrower has no material liability in connection with a release, spill or
discharge, threatened or actual, of any Hazardous Materials or the generation,
use, storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Material; and (v) without limiting the generality of
the foregoing, the Borrower shall, following determination by the Bank that
there is non-compliance, or any condition which requires any action by or on
behalf of the Borrower in order to avoid any non-compliance, with any
Environmental Law, at the Borrower’s sole expense, cause an independent
environmental engineer acceptable to the Bank to conduct such tests of the
relevant site as are appropriate, and prepare and deliver a report setting forth
the result of such tests, a proposed plan for remediation and an estimate of the
costs thereof.

     

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

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    7.6           Collateral
Representations.

     

    
      	
               
      

            	
              (a)

            	
              The
      Borrower is the sole owner of or has other rights in the Collateral, free
      from any Lien of any kind, other than the Lien of the Bank and Permitted
      Liens.

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      Borrower is the owner of or has other rights in the Collateral and grants
      the security interest made in Section 6.1 in
      consideration of value given by the Bank, the sufficiency of which the
      Borrower hereby acknowledges.

            

    

     

    
      	
               
      

            	
              (c)

            	
              No
      financing statement or other document concerning the Collateral is on file
      at any public office, except for any financing statements or other
      documents filed on behalf of the Bank, or the financing statements or
      other documents specified on Schedule 7.6,
      each of which the Borrower represents and warrants shall be terminable
      after the initial funding of the Term Loan, the Capex Loan and the
      Revolving Loan.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Except
      for Equipment stored on project sites in the ordinary course of business,
      all Collateral is kept solely at the location or locations identified in
      Schedule
      7.6.  Except as specified on Schedule 7.6,
      no Collateral is or shall be kept, stored or maintained with a bailee,
      warehouseman, carrier or similar party without the Bank’s prior written
      consent.

            

    

     

    
      	
               
      

            	
              (e)

            	
              All
      of the Borrower’s places of business, including the Borrower’s principal
      office, are described on Schedule
      7.6.  During the preceding five years, neither Borrower
      nor any predecessor of Borrower has maintained a place of business, or any
      property at any location not identified with respect to it on Schedule
      7.6.  Except for Equipment stored on project sites in the
      ordinary course of business, all Collateral covered by this Agreement is
      and will be kept only at location(s) specified on Schedule
      7.6.  Collateral shall not be removed to, or kept at, any
      other place without the prior written consent of the Bank, other than new
      locations within the 48 contiguous states, provided that (i) at least 60
      days prior to the establishment of such new location, the Borrower shall
      have given Bank written notice thereof, and (ii) prior to the
      establishment of such new location, the Borrower shall have delivered to
      Bank such financing statements, third-party lien waivers and other
      documentation as Bank shall require in connection therewith.  If
      Collateral is at any time kept or located at locations other than those
      listed, the Bank’s security interest therein shall
    continue.

            

    

     

    
      	
               
      

            	
              (f)

            	
              To
      Borrower’s knowledge, during the preceding five years, neither the
      Borrower nor any predecessor of the Borrower has been known as or used any
      corporate, fictitious or trade names or trade styles, other than those
      disclosed on Schedule
      7.6.

            

    

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (g)

            	
              The
      Equipment listed on Schedule 6.1
      constitutes all of the Equipment that the Borrower owns or
      leases.

            

    

     

    7.7           Financial
Statements.  All financial statements, including any pro-forma
financial statements submitted to the Bank have been prepared in accordance with
GAAP on a basis, except as otherwise noted therein, consistent with the previous
fiscal year and truly and accurately reflect the financial condition of the
Borrower and the results of the operations for the Borrower as of such date and
for the periods indicated. Since the date of the most recent financial statement
submitted by the Borrower to the Bank, there has been no material adverse change
in the financial condition or in the assets or liabilities of the Borrower, or
any changes except those occurring in the ordinary course of
business.

     

    7.8           Litigation and
Taxes.  Other than as set forth in Schedule 7.8 attached
hereto, there is no litigation, demand, charge, claim, petition or governmental
investigation or proceeding pending, or to the Borrower’s knowledge, threatened,
against the Borrower, which, if adversely determined, would result in any
material adverse change in the financial condition or properties, business or
operations of the Borrower.  The Borrower has duly filed all
applicable income or other tax returns and has paid all income or other taxes
when due.  There is no controversy or objection pending, or to the
best knowledge of the Borrower, threatened in respect of any tax returns of the
Borrower.

     

    7.9           Event of
Default.  Except as previously disclosed to the Bank and
regarding which the Bank has agreed to forbear, no Event of Default has occurred
and is continuing, and no Unmatured Event of Default has occurred and the
Borrower is not in default (without regard to grace or cure periods) under any
contract or agreement to which it is a party, the effect of which default shall
materially adversely affect the performance by the Borrower of its obligations
pursuant to and as contemplated by the terms and provisions of this
Agreement.

     

    7.10         ERISA
Obligations.  All Employee Plans of the Borrower meet the
minimum funding standards of Section 302 of ERISA where applicable and each such
Employee Plan that is intended to be qualified within the meaning of Section 401
of the Internal Revenue Code of 1986 is qualified.  No withdrawal
liability has been incurred under any such Employee Plans and no “Reportable
Event” or “Prohibited Transaction” (as such terms are defined in ERISA), has
occurred with respect to any such Employee Plans, unless approved by the
appropriate governmental agencies.  The Borrower has promptly paid and
discharged all obligations and liabilities arising under ERISA of a character
which if unpaid or unperformed might result in the imposition of a Lien against
any of its properties or assets.

     

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

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

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

     

    7.13         Business
Loan.  The Loans, including interest rate, fees and charges as
contemplated hereby, (i) are business loans within the purview of 815 ILCS
205/4(1)(c), as amended from time to time, (ii) are an exempted transaction
under the Truth In Lending Act, 12 U.S.C. 1601 et seq., as amended from time to
time, and (iii) do not, and when disbursed shall not, violate the provisions of
the Illinois usury laws, any consumer credit laws or the usury laws of any state
which may have jurisdiction over this transaction, the Borrower or any property
securing the Loans.

     

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

     

    7.15         Governmental
Regulation.  The Borrower is not, and after giving effect to
any loan will not be, subject to regulation under the Federal Power Act or the
Investment Company Act of 1940 or to any federal or state statute or regulation
limiting its ability to incur indebtedness for borrowed money.

     

    7.16         Bank
Accounts.  The account numbers and locations of all deposit
accounts and other bank accounts of the Borrower are listed on Schedule
7.16.

     

    7.17         Place of
Business.  The principal places of business of the Borrower are
listed on Schedule
7.6, and the Borrower shall promptly notify the Bank of any change in
such location.  The Borrower will not remove or permit the Collateral
to be removed from such location without the prior written consent of the Bank,
except for Equipment owned by Borrower and sold in the usual and ordinary course
of the Borrower’s business.

     

    7.18         Indebtedness.  The
Borrower has no outstanding Indebtedness (except to the Bank) or other
obligation for borrowed money, or for the deferred purchase price of property or
services and the Borrower is not obligated as a guarantor, cosigner or otherwise
on any Indebtedness or other obligation of any other kind of any Person, except
and to the extent disclosed on the financial statements at the date of this
Agreement or incurred in the ordinary course of business.  Except as
set forth on Schedule
7.18, Borrower has no Indebtedness to any Affiliate.

     

    7.19         Authorization
Consent.  No authorization, consent, license or approval of, or
filing or registration with or notification to, any governmental authority is
required in connection with the execution, delivery or performance of the Loan
Documents by the Borrower.

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    7.20         Title to
Assets.  The Borrower has good and marketable title to all of
its assets, all subject to no security interest, encumbrance, lien or claim of
any Person excepting only Permitted Liens, and there are no financing statements
or other evidence of any such security interest, encumbrance or lien or any
claim of any Person on file in any public office other than those evidencing
liens in favor of the Bank and Permitted Liens, and the financing statements
specified on Schedule
7.6, each of which the Borrower represents and warrants shall be
terminable after the initial funding of the Term Loan, the Capex Loan and the
Revolving Loan.

     

    7.21         Subsidiaries.  The
Borrower has no Subsidiaries and does not own, directly or indirectly, any Stock
in any Person.  All outstanding shares of the Stock of the Borrower
have been duly authorized, validly issued, fully paid and are not
assessable.

     

    7.22         Insolvency.  The
Borrower is solvent, no transaction under or contemplated by this Agreement
renders or will render the Borrower insolvent, the Borrower retains sufficient
capital for the business and transactions in which it engages or intends to
engage, no obligation incurred hereby is beyond the ability of the Borrower to
pay as such obligation matures, the Borrower is not contemplating either the
filing of a petition under any state or federal bankruptcy or insolvency laws or
the liquidation of all or a major portion of any of its property, and Borrower
has no knowledge of any Person contemplating the filing of any such petition
against it.

     

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

     

    
      	
              8.

            	
              NEGATIVE
      COVENANTS.

            

    

     

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

     

    
      	
               
      

            	
              (a)

            	
              the
      Obligations;

            

    

     

    
      	
               
      

            	
              (b)

            	
              obligations
      of the Borrower for taxes, assessments, municipal or other governmental
      charges which are not yet due and
payable;

            

    

     

    
      	
               
      

            	
              (c)

            	
              obligations
      of the Borrower for accounts payable, other than for money borrowed,
      incurred in the ordinary course of
business;

            

    

     

    
      	
               
      

            	
              (d)

            	
              obligations
      arising under Capital Leases for property acquired (or deemed to be
      acquired) by the Borrower or claims arising from the use or loss of, or
      damage to, such property;

            

    

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (e)

            	
              Indebtedness
      to Affiliates to the extent not inconsistent with Section 8.11
      hereof;

            

    

     

    
      	
               
      

            	
              (f)

            	
              purchase-money
      indebtedness not exceeding in the aggregate Five Hundred Thousand and
      No/100 Dollars ($500,000.00) incurred during any twelve (12) month period,
      unless otherwise consented to in writing by the Bank;
  and

            

    

     

    
      	
               
      

            	
              (g)

            	
              performance
      bonds obtained by Borrower to comply with bid requirements on projects in
      the ordinary course of business.

            

    

     

    8.2           Encumbrances.  The
Borrower shall not, either directly or indirectly, create, assume, incur or
suffer or permit to exist any Lien or charge of any kind or character upon any
asset of the Borrower, whether owned at the date hereof or hereafter acquired
except (“Permitted
Liens”):

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

            	
              pledges
      or deposits to secure obligations under worker’s compensation laws or
      similar legislation;

            

    

     

    
      	
               
      

            	
              (e)

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

            

    

     

    
      	
               
      

            	
              (f)

            	
              deposits
      to secure public or statutory obligations of the
  Borrower;

            

    

     

    
      	
               
      

            	
              (g)

            	
              Liens
      securing obligations permitted under Sections
      8.1(d), and/or 8.1(f);

            

    

     

    
      	
               
      

            	
              (h)

            	
              Liens
      granted to the Bank hereunder; and

            

    

     

    
      	
               
      

            	
              (i)

            	
              Liens
      set forth in Schedule 7.6
      (but only remaining in effect to the extent set forth in Section 7.6(c)
      and Section
      7.20).

            

    

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    8.3           Equipment.  The
Borrower shall not change any markings or serial numbers on any of the Equipment
owned by Borrower until after the Borrower has provided written notice to the
Bank of its intention to make such change.  The Borrower agrees to
notify the Bank of any other Equipment that the Borrower may hereafter acquire
or lease from a third party.  The Borrower agrees that it will execute
and deliver to the Bank supplemental security agreements and other instruments
and file the same in appropriate recording offices (i) at any time, with respect
to the Equipment listed on Schedule 6.1 hereto,
and (ii) at such times as any assignable right, title or interest is acquired in
the future by the Borrower in any other Equipment.  All such
supplemental security agreements shall secure all of the Obligations pro rata
and shall be on terms and conditions satisfactory to the Bank as evidenced by
its written consent thereto.

     

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

     

    
      	
               
      

            	
              (a)

            	
              investments
      in direct obligations of the United
States;

            

    

     

    
      	
               
      

            	
              (b)

            	
              investments
      in certificates of deposit issued by the Bank or any bank with assets
      greater than One Hundred Million and No/100 Dollars
      ($100,000,000.00);

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    8.5           Transfer;
Merger.  The Borrower shall not, either directly or indirectly,
merge, consolidate, sell, transfer, license, lease, encumber or otherwise
dispose of all or any part of its property or business or all or any substantial
part of its assets, or sell or discount (with or without recourse) any of its
Promissory Notes, Chattel Paper, Payment Intangibles or Accounts, except that
Borrower shall be permitted to sell Equipment owned by Borrower in the ordinary
course of business provided that, unless replacement Equipment is purchased
within sixty (60) days, the net sales proceeds will be used to repay the Bank on
the Term Loan in the amounts required under Section 2.2(d)
hereof.

     

    8.6           Issuance of
Stock.  Without the prior written consent of the Bank, the
Borrower shall not, either directly or indirectly, issue or distribute any
additional capital stock or other securities of the Borrower.

     

    8.7           Distributions.  Except
for Permitted Distributions, Borrower shall not, either directly or indirectly,
purchase or redeem any shares of its Stock, or declare or pay any dividends
(other than stock or equity dividends), whether in cash or otherwise, or set
aside any funds for any such purpose or make any distribution to its
members.

     

    8.8           Bank
Accounts.  The Borrower shall not establish any new deposit
accounts or other bank accounts, other than bank accounts established at or with
the Bank.

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

    8.9           Change of Legal
Status.  The Borrower shall not change its name, its
organizational identification number, if it has one, its type of organization,
its jurisdiction of organization or other legal structure without the Bank’s
prior written consent which the Bank may withhold if it reasonably determines
that such change negatively impacts the creditworthiness of Borrower or
negatively impacts the Collateral.

     

    8.10         Prepayment.  Borrower
shall not, without the prior written consent of Bank, prepay any Indebtedness
except as expressly permitted hereunder, or enter into or modify any agreement
as a result of which the terms of payment of any Indebtedness are waived or
modified.

     

    8.11         Transactions with
Affiliates.  The Borrower shall not enter into, or be a party
to, any transaction with any Affiliate, except in the ordinary course of and
pursuant to the reasonable requirements of its business and upon fair and
reasonable terms which are fully disclosed in writing to the Bank and no more
favorable to such Person than would be obtained in a comparable arm’s length
transaction with a person not an Affiliate.  Borrower may make
Management Fee payments to B.H.I.T. Inc.; provided, however, such fees shall not
exceed Fifty Thousand and No/100 Dollars ($50,000.00) in 2009.

     

    8.12         Fiscal
Year.  The Borrower shall not change its fiscal
year.

     

    8.13         Disposition of
Assets.  The Borrower shall not dispose by sale, assignment,
lease, sale and lease-back or otherwise any of its properties or assets, (other
than obsolete or worn out property or equipment not used or useful in its
business), whether now owned or hereafter acquired and including, without
limitation, any notes, Accounts, equipment or machinery, except that so long as
no Event of Default shall have occurred and be continuing, the Borrower
may  sell its Equipment owned by Borrower in the ordinary course of
business provided that, unless replacement Equipment is purchased within sixty
(60) days, the net sales proceeds will be used to repay the Bank on the Term
Loan in the amount determined under Section 2.2(d)
hereof.  Borrower shall not transfer, directly or indirectly, any of
its assets or payout, directly or indirectly, money or property or provide
services or do any other act, or fail to do any act, which would have the effect
of materially and adversely affecting its ability to perform its Obligations
hereunder.

     

    8.14         Material Change in Ownership
or Structure.  Without the prior written consent of the Bank or
as otherwise permitted in this Agreement, Borrower shall not make any material
change in its ownership or financial structure, including the creation of any
Subsidiaries.

     

    8.15         Change of
Business.  Borrower shall not engage in business activities or
operations substantially different from or unrelated to its business activities
on the date of this Agreement.

     

    8.16         Untrue
Statements.  The Borrower shall not furnish to the Bank any
certificate or other document that will contain or that does contain any untrue
statement of material fact or that will omit or does omit to state a material
fact necessary to make it not misleading in light of the circumstances under
which it was furnished.

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

    8.17         Inconsistent
Agreements.  The Borrower shall not enter into any agreement
containing any provision which would (a) be violated or breached by any
borrowing by the Borrower hereunder or by the performance by the Borrower of any
of its Obligations hereunder or under any other Loan Document or (b) prohibit
the Borrower from granting to the Bank a Lien on any of its assets.

     

    
      	
              9.

            	
              AFFIRMATIVE
      COVENANTS.

            

    

     

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

     

    9.2           Corporate
Existence.  The Borrower shall at all times preserve and
maintain its corporate existence, rights, franchises and privileges, and shall
at all times continue as a going concern in the business which the Borrower is
presently conducting.  If the Borrower does not have a state issued
identification number and later obtains one, the Borrower shall promptly notify
the Bank of such organizational identification number.

     

    9.3           Maintain
Property.  The Borrower shall at all times maintain, preserve
and keep its plant, properties and equipment, including, but not limited to, any
Collateral, in good repair, working order and condition, normal wear and tear
excepted, and shall from time to time make all needful and proper repairs,
renewals, replacements, and additions thereto so that at all times the
efficiency thereof shall be fully preserved and maintained.

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

    9.4           Maintain
Insurance.  The Borrower shall at all times insure and keep
insured in insurance companies acceptable to the Bank, all insurable property
owned by it which is of a character usually insured by companies similarly
situated and operating like properties against loss or damage from fire and such
other hazards or risks as are customarily insured against by companies similarly
situated and operating like properties, in an amount of not less than full
replacement cost, naming the Bank as Lender’s Loss Payee, and a commercial
general liability policy in an amount not less than Ten Million and No/100
Dollars ($10,000,000.00) per occurrence and in the aggregate naming Lender as an
Additional Insured; and shall similarly insure employers’ public and
professional liability risks.  Prior to the date of the funding of the
Notes, the Borrower shall deliver to the Bank a certificate setting forth in
summary form the nature and extent of the insurance maintained by the Borrower
pursuant to this Section
9.4.  In the event Borrower purchases any Equipment, real
estate and/or fixtures subsequent to the date of this Agreement, Borrower shall,
within thirty (30) days of said purchase, deliver to the Bank a certificate
setting forth in summary form the nature and extent of the insurance maintained
by the Borrower pursuant to this Section 9.4 with
respect to said purchased Equipment, real estate and fixtures.  All
such policies of insurance must be satisfactory to the Bank in relation to the
amount and term of the Obligations and type and value of the Collateral and
assets of the Borrower, shall identify the Bank as lender’s loss payee or
mortgagee and/or as an additional insured, as applicable.  In the
event the Borrower either fails to provide the Bank with evidence of the
insurance coverage required by this Section or at any time hereafter shall fail
to obtain or maintain any of the policies of insurance required above, or to pay
any premium in whole or in part relating thereto, then the Bank, without waiving
or releasing any obligation or default by the Borrower hereunder, may at any
time (but shall be under no obligation to so act), obtain and maintain such
policies of insurance and pay such premium and take any other action with
respect thereto, which the Bank deems advisable.  This insurance
coverage (i) may, but need not, protect the Borrower’s interest in such
property, including, but not limited to the Collateral, and (ii) may not pay any
claim made by, or against, the Borrower in connection with such property,
including, but not limited to the Collateral.  The Borrower may later
cancel any such insurance purchased by the Bank, but only after providing the
Bank with evidence that the Borrower has obtained the insurance coverage
required by Section
9.4.  The costs of such insurance obtained by the Bank, through
and including the effective date such insurance coverage is canceled or expires,
shall be payable on demand by the Borrower to the Bank, together with interest
at the Default Rate on such amounts until repaid and any other charges by the
Bank in connection with the placement of such insurance.  The costs of
such insurance, which may be greater than the cost of insurance which the
Borrower may be able to obtain on its own, together with interest thereon at the
Default Rate and any other charges by the Bank in connection with the placement
of such insurance may be added to the total Obligations due and
owing.

     

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

     

    9.6           ERISA Liabilities; Employee
Plans.  The Borrower shall (i) keep in full force and effect
any and all Employee Plans which are presently in existence or may, from time to
time, come into existence under ERISA, and not withdraw from any such Employee
Plans, unless such withdrawal can be effected or such Employee Plans can be
terminated without liability to the Borrower; (ii) make contributions to all of
such Employee Plans in a timely manner and in a sufficient amount to comply with
the standards of ERISA, including the minimum funding standards of ERISA; (iii)
comply with all material requirements of ERISA which relate to such Employee
Plans; (iv) notify the Bank immediately upon receipt by the Borrower of any
notice concerning the imposition of any withdrawal liability or of the
institution of any proceeding or other action which may result in the
termination of any such Employee Plans or the appointment of a trustee to
administer such Employee Plans; (v) promptly advise the Bank of the occurrence
of any “Reportable Event” or “Prohibited Transaction” (as such terms are defined
in ERISA), with respect to any such Employee Plans; and (vi) amend any Employee
Plan that is intended to be qualified within the meaning of Section 401 of the
Internal Revenue Code of 1986 to the extent necessary to keep the Employee Plan
qualified, and to cause the Employee Plan to be administered and operated in a
manner that does not cause the Employee Plan to lose its qualified
status.

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

     

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

     

    
      	
               
      

            	
              (a)

            	
              as
      soon as available, and in any event, within one hundred twenty (120) days
      after the close of each of its fiscal years, a copy of the annual audited
      financial statements of B.H.I.T. Inc. and Borrower on a consolidated and
      consolidating basis, including balance sheet, statement of income and
      retained earnings, prepared and certified by Grant Thornton LLP, or any
      other independent certified public accountant acceptable to the Bank,
      containing an unqualified opinion;

            

    

     

    
      	
               
      

            	
              (b)

            	
              as
      soon as available, and in any event, within forty-five (45) days following
      the end of each calendar month, a copy of the financial statements of the
      Borrower regarding such calendar month, including balance sheet, statement
      of income and retained earnings, statement of cash flows for the calendar
      month then ended in the format and detail and such other information
      (including non-financial information) required by the Securities and
      Exchange Commission or as the Bank may request, in reasonable detail,
      prepared and certified as accurate by the Borrower;
  and

            

    

     

    
      	
               
      

            	
              (c)

            	
              such
      other information (including non-financial information) as the Bank may
      reasonably request.

            

    

     

    No change
with respect to such accounting principles shall be made by the Borrower without
giving prior notification to the Bank.  The Borrower represents and
warrants to the Bank that the financial statements delivered to the Bank at or
prior to the execution and delivery of this Agreement and to be delivered at all
times thereafter accurately reflect and will accurately reflect the financial
condition of the Borrower.  The Bank shall have the right at all times
during business hours to inspect the books and records of the Borrower and make
extracts therefrom.  The Borrower agrees to advise the Bank
immediately of any adverse change in the financial condition, the operations or
any other status of the Borrower.

     

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

    
      
         

      

      
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    9.9           Aged Accounts
Schedule.  The Borrower shall, within forty-five (45) days
after the end of each calendar month, deliver to the Bank an aged schedule of
the Accounts of the Borrower, listing the name and amount due from each such
Account Debtor and showing the aggregate amounts due from (a) 0-30 days, (b)
31-60 days, (c) 61-90 days and (d) more than 90 days, and certified as accurate
by the Borrower.

     

    9.10         Field
Audits.  The Borrower shall allow the Bank, upon two (2) weeks’
notice, at the Borrower’s sole expense, to conduct a field examination of the
Collateral, the results of which must be satisfactory to the Bank in the Bank’s
sole and absolute discretion, provided that the Bank shall be reimbursed in an
amount not to exceed $5,000.00 for only one (1) such field examination during
any twelve (12) month period unless an Event of Default has
occurred.

     

    9.11         Banking
Relationship.  The Borrower covenants and agrees, at all times
during the term of this Agreement, to utilize the Bank as its exclusive bank of
account and depository for all cash management services, including all receipts,
disbursements, cash management and related service, assuming commercially
reasonable rates.

     

    9.12         Covenant Compliance
Report.  The Borrower shall, within forty-five (45) days after
the end of each fiscal quarter commencing with the first fiscal quarter
completed subsequent to the date hereof, deliver to the Bank a report showing
compliance by the Borrower with the financial covenants set forth in Article 10
hereof in a form and in such detail as the Bank may specify, and certified as
accurate by the Borrower.

     

    9.13         Other
Reports.  The Borrower shall, within such period of time as the
Bank may specify, deliver to the Bank such other schedules and reports as the
Bank may reasonably require.

     

    9.14         Collateral
Records.  Borrower shall keep full and accurate books and
records relating to the Collateral and shall mark such books and records to
indicate the Bank’s Lien in the Collateral including, without limitation,
placing a legend, in form and content acceptable to the Bank, on all Chattel
Paper created by the Borrower indicating that the Bank has a Lien in such
Chattel Paper.

     

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

     

    9.16         Bank Closing and
Documentation Fees.  Reasonable out-of-pocket expenses for
attorneys’ and paralegals’ fees (whether such attorneys and paralegal are
employees of the Bank or separately engaged by the Bank) and reasonable costs
incurred by the Bank in connection with negotiation, documentation and closing
of this Agreement are payable by the Borrower upon the Bank’s
demand.  Additionally, all reasonable out-of-pocket expenses for
attorneys’ and paralegals’ fees (whether such attorneys and paralegals are
employees of the Bank or separately engaged by the Bank) and reasonable costs
incurred by the Bank subsequent to Closing in connection with documentation,
filings and all related matters pertaining to this Agreement up to ninety (90)
days after closing are payable by the Borrower upon the Bank’s demand; provided, however, in no event shall
such reimbursement exceed Twenty-Five Thousand Dollars
($25,000.00).

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

     

    9.17         Notice of
Default.  The Borrower shall, immediately after the
commencement thereof, give notice to the Bank in writing of the occurrence of an
Event of Default or of any Unmatured Event of Default.

     

    9.18         Covenants Regarding
Collateral.

     

    
      	
               
      

            	
              (a)

            	
              Immediately
      upon the Borrower’s receipt of that portion of the Collateral, if any,
      which is evidenced by an agreement, instrument and/or document, including
      promissory notes, documents of title and warehouse receipts (collectively
      the “Special
      Collateral”) for the purpose of perfecting the Bank’s security
      interest in such Special Collateral, the Borrower shall deliver the
      original thereof to the Bank, together with appropriate endorsements
      and/or specific evidence of the assignment thereof to the Bank, in form
      and substance acceptable to the
Bank.

            

    

     

    
      	
               
      

            	
              (b)

            	
              If
      and to the extent that any of the Collateral is evidenced by, or arises
      under, any contract with the United States of America or any agency or
      instrumentality thereof, the Borrower will immediately notify the Bank of
      same.

            

    

     

    
      	
               
      

            	
              (c)

            	
              The
      Borrower covenants and agrees with the Bank as
  follows:

            

    

     

    
      	
               
      

            	
              (i)

            	
              The
      Borrower will not hereafter grant a security interest in the Collateral,
      or sell the Collateral to any other Person, except as specifically
      permitted by this Agreement.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              The
      Borrower will at all times defend the Collateral against any and all
      claims of any Person adverse to the claims of the
  Bank.

            

    

     

    
      	
               
      

            	
              (d)

            	
              The
      Borrower shall permit the Bank to inspect and evaluate the Collateral and
      any books and records of the Borrower relating thereto at all reasonable
      times and to verify any Accounts by any reasonable (standard and
      customary) method satisfactory to the Bank, all at the expense and risk of
      the Borrower, provided that the Bank (i) provides to the Borrower five (5)
      business days advance notice and (ii) shall only be reimbursed on a
      reasonable basis for one (1) complete inspection of all the Collateral
      during any twelve (12) month period unless an Event of Default has
      occurred.

            

    

     

    
      	
               
      

            	
              (e)

            	
              By
      identifying Accounts on any schedule or other document delivered to Bank
      the Borrower shall be deemed to be making the representations and
      warranties contained in Section 7.6
      with respect to such Accounts.

            

    

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (f)

            	
              With
      respect to Accounts pertaining to the Borrower’s lease or rental of
      Equipment, the Borrower shall:

            

    

     

    
      	
               
      

            	
              (i)

            	
              promptly
      upon the Borrower’s learning thereof, inform the Bank in writing of any
      material delay in the Borrower’s performance of any of its obligations to
      any Account Debtor and of any assertion of any claims, offsets or
      counterclaims by any Account Debtor and of any extraordinary allowances,
      credits and/or other monies granted by the Borrower to any Account
      Debtor;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              not
      permit or agree to any extension, compromise or settlement or make any
      change or modification of any kind or nature with respect to any Accounts,
      including any of the terms relating thereto, unless such action is taken
      in the ordinary course of the Borrower’s business and the Bank is
      contemporaneously notified thereof;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              promptly
      upon the Borrower’s receipt or learning thereof, furnish to and inform the
      Bank of all material adverse information relating to the financial
      condition of any Account Debtor that would reasonably be expected to
      result in a material adverse effect upon the Borrower’s business;
      and

            

    

     

    
      	
               
      

            	
              (iv)

            	
              keep
      all goods returned by any Account Debtor and all goods repossessed or
      stopped in transit by the Borrower from any Account Debtor segregated from
      the other property of the Borrower, immediately notify the Bank of the
      Borrower’s possession of such goods and hold the same as trustee for the
      Bank until otherwise directed in writing by the
  Bank.

            

    

     

    
      	
               
      

            	
              (g)

            	
              The
      Borrower shall keep and maintain the Collateral 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; provided, however, that the
      Borrower may (i) sell obsolete Equipment for a price which reasonably
      approximates its fair market value if the proceeds thereof are
      contemporaneously reinvested in replacement Equipment or are paid directly
      to the Bank, and (ii) sell Equipment in the ordinary course of business
      provided that, unless replacement Equipment is purchased within ninety
      (90) days,  the net sales proceeds will be used to repay the
      Bank on the Term Loan in accordance with Section 2.2(d)
      hereof.

            

    

     

    
      	
               
      

            	
              (h)

            	
              The
      Borrower shall, immediately on demand by the Bank, deliver to the Bank any
      and all evidence of ownership of any additional Equipment, real estate,
      fixtures, and inventory including any certificates of title and/or
      applications for title thereto.

            

    

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

     

    9.19         Annual
Appraisal.  For the period ending December 31, 2010, the Bank
shall engage the Appraiser to conduct a “desk-top” appraisal of all of the
Borrower’s Equipment and an updated net orderly liquidation value appraisal of
Borrower’s real estate, fixtures and inventory.  Thereafter, the Bank
may conduct one appraisal per year on an as needed basis, in its sole
discretion.  The Bank shall instruct the Appraiser to provide a copy
of its appraisal report to the Borrower.  The Borrower shall pay all
reasonable costs in connection with the appraisals, not to exceed Five Thousand
Dollars ($5,000) per appraisal.

     

    9.20         Borrowing Base
Certificates.  The Borrower shall, within forty-five (45) days
after the end of each calendar month commencing with the first calendar month
completed subsequent to the date hereof, deliver to the bank a Borrowing Base
Certificate, certified as accurate by the Borrower and acceptable to the Bank in
its sole discretion.

     

    9.21         Non-Utilization
Fee.  The Borrower agrees to pay the Bank a non-utilization fee
equal to one half of one percent (.5%) of the total of (a) the Revolving Loan
Commitment minus (b) the sum of
(i) the daily average of the aggregate principal amount of all Revolving Loans
outstanding.  The Borrower agrees to pay the Bank a non-utilization
fee equal to one half of one percent (.5%) of the total of (a) the Capex Loan
Commitment minus (b) the sum of
(i) the daily average of the aggregate principal amount of all Capex Loans
outstanding.  The non-utilization fee will be (A) calculated on the
basis of a year consisting of three hundred and sixty (360) days, (B) paid for
the actual number of days elapsed, and (C) payable quarterly in arrears on the
last day of each March, June, September and December, commencing on September
30, 2009, and on the Revolving Loan and Capex Loan Maturity Dates,
respectively.

    

    10.     
    FINANCIAL
COVENANTS.

     

    10.1         Fixed Charge Coverage
Ratio.  As of the end of each fiscal quarter, the Borrower
shall maintain for the then-completed Computation Period, a fixed charge
coverage ratio of not less than 1.20 to 1.00 commencing on December 31,
2009.  The fixed charge coverage ratio shall be computed as a ratio of
(i) EBITDA minus certain charges during such Computation Period consisting of
(x) Federal and State income taxes paid, (y) Permitted Distributions, if any
(pursuant to the terms of this Agreement), and (z) cash payments for Capital
Expenditures not financed by additional Indebtedness, or cash payments from
B.H.I.T. Inc. to Borrower for financing Capital Expenditures, all determined in
accordance with GAAP to (ii) all scheduled principal and interest payments paid
by the Borrower with respect to the Obligations during such Computation
Period.

     

    10.2         Total Debt Coverage
Ratio.  At the end of each fiscal quarter, the Borrower shall
maintain for the then-completed Computation Period a ratio of (i) Total Debt to
(ii) EBITDA, of not more than 3.00 to 1.00.  This ratio shall be
examined at the end of each fiscal quarter commencing on December 31,
2009.  For the Computation Period through and including June 30, 2010,
EBITDA shall be measured on an actual annualized basis.

     

    10.3         Minimum
EBITDA.  At the end of each fiscal quarter, the Borrower shall
maintain for the then completed Computation Period a minimum EBITDA of One
Million Two Hundred Fifty Thousand and No/100 Dollars ($1,250,000.00) for the
Computation Periods through and including June 30, 2010 (measured on an actual
annualized basis), and a minimum EBITDA of One Million Five Hundred Thousand and
No/100 Dollars ($1,500,000.00) for the Computation Periods
thereafter.  This miminum EBITDA shall be examined at the end of each
fiscal quarter commencing on December 31, 2009.

    
      
         

      

      
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    11.          EVENTS OF
DEFAULT.

     

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

     

    11.1         Nonpayment of
Obligations.  Any amount due and owing on the Notes or any of
the Obligations (including any Rate Management Obligation), whether by its terms
or as otherwise provided herein, is not paid within five (5) Business Days of
its due date.

     

    11.2         Misrepresentation.  Any
written warranty, representation, certificate, or statement in this Agreement,
the Loan Documents or any other agreement with the Bank shall be false in any
material respect when made.

     

    11.3         Nonperformance.  Any
failure to perform or default in the performance of any covenant, condition or
agreement contained in Article 8, 9 or 10 hereof and, with respect to other
Sections not expressly referred to in this Article 11, if capable of being
cured, such failure to perform or default in performance continues for a period
of thirty (30) days after the Borrower receives notice or knowledge from any
source of such failure to perform or default in performance.

     

    11.4         Default under Loan
Documents.  A failure to perform or default under any of the
other Loan Documents, including any Rate Management Agreements with the Bank, or
under any other Agreements with the Bank, and such failure to perform or default
continues beyond the applicable grace or cure period, all of which covenants,
conditions and agreements contained therein are hereby incorporated in this
Agreement by express reference, shall be and constitute an Event of Default
under this Agreement and any other of the Obligations.

     

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

     

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

    
      
         

      

      
        41

        
          

        

      

      
         

      

    

     

    11.7         Bankruptcy.  Any
proceeding involving any Obligor, is commenced by or against such Obligor under
any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law or statute of the federal government or any state
government, and in the case of any such proceeding being instituted against such
Obligor, (i) such Obligor, by any action or failure to act indicates its
approval of, consent to or acquiescence therein, or (ii) an order shall be
entered approving the petition in such proceedings and such order is not
vacated, stayed on appeal or otherwise shall not have ceased to continue in
effect within thirty (30) days after the entry thereof.

     

    11.8         Judgments.  The
entry of any judgment, decree, levy, attachment, garnishment or other process,
or the filing of any Lien against any Obligor in excess of $250,000 which is not
fully covered by insurance and such judgment or other process shall not have
been, within thirty (30) days from the entry thereof, either (i) bonded over to
the satisfaction of the Bank and appealed, (ii) vacated, or (iii)
discharged.

     

    11.9         Change in
Control.  Any sale, conveyance, assignment or other transfer of
any ownership interest of the Borrower, which results in any change in the
identity of the individuals or entities previously in control of the
Borrower.  For the purpose hereof, the terms “control” or
“controlling” shall mean the possession of the power to direct, or cause the
direction of, the management and policies of the Borrower by contract or voting
of securities.

     

    11.10       Collateral
Impairment.  The entry of any judgment, decree, levy,
attachment, garnishment or other process, or the filing of any Lien against, any
of the Collateral or any collateral under a separate security agreement securing
any of the Obligations and such judgment or other process shall not have been,
within thirty (30) days from the entry thereof, (i) bonded over to the
satisfaction of the Bank and appealed, (ii) vacated, or (iii) discharged, or the
loss, theft, destruction, seizure or forfeiture, or the occurrence of any
material deterioration or impairment of any of the Collateral or any of the
collateral under any security agreement securing any of the Obligations, or any
material decline or depreciation in the value or market price thereof (whether
actual or reasonably anticipated), which causes the Collateral, in the sole
opinion of the Bank acting in good faith, to become unsatisfactory as to value
or character, or which causes the Bank to reasonably believe that it is insecure
and that the likelihood for repayment of the Obligations is or will soon be
materially impaired, time being of the essence.  The cause of such
deterioration, impairment, decline or depreciation shall include, but is not
limited to, the failure by the Borrower to do any act deemed necessary by the
Bank to preserve and maintain the value and collectability of the
Collateral.

     

    12.          REMEDIES.

     

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

    
      
         

      

      
        42

        
          

        

      

      
         

      

    

     

    12.1         Possession and Assembly of
Collateral.  Upon the occurrence and during the continuance of
an Event of Default, the Bank may, without notice, demand or legal process of
any kind, take possession of any or all of the Collateral (in addition to
Collateral of which the Bank already has possession), wherever it may be found,
and for that purpose may pursue the same wherever it may be found, and may enter
into any of the Borrower’s premises where any of the Collateral may be or is
supposed to be, and search for, take possession of, remove, keep and store any
of the Collateral until the same shall be sold or otherwise disposed of and the
Bank shall have the right to store the same in any of the Borrower’s premises
without cost to the Bank.  At the Bank’s request, the Borrower will,
at the Borrower’s sole expense, assemble the Collateral and make it available to
the Bank at a place or places to be designated by the Bank which is reasonably
convenient to the Bank and the Borrower.

     

    12.2         Sale of
Collateral.  Upon the occurrence of an Event of Default, the
Bank may sell any or all of the Collateral at public or private sale, upon such
terms and conditions as the Bank may deem proper, and the Bank may purchase any
or all of the Collateral at any such sale.  The Bank may apply the net
proceeds, after deducting all costs, expenses, attorneys’ and paralegals’ fees
incurred or paid at any time in the collection, protection and sale of the
Collateral and the Obligations, to the payment of the Notes and/or any of the
other Obligations, returning the excess proceeds, if any, to the
Borrower.  The Borrower shall remain liable for any amount remaining
unpaid after such application, with interest.  Any notification of
intended disposition of the Collateral required by law shall be conclusively
deemed reasonably and properly given if given by the Bank at least ten (10)
Business Days before the date of such disposition.  The Borrower
hereby confirms, approves and ratifies all acts and deeds of the Bank relating
to the foregoing, and each part thereof.

     

    12.3         Standards for Exercising
Remedies.  To the extent that applicable law imposes duties on
the Bank to exercise remedies in a commercially reasonable manner, the Borrower
acknowledges and agrees that it is not commercially unreasonable for the Bank
(i) to fail to incur expenses reasonably deemed significant by the Bank to
prepare Collateral for disposition or otherwise to complete raw material or
work-in-process into finished goods or other finished products for disposition,
(ii) to fail to obtain third party consents for access to Collateral to be
disposed of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (iii) to fail to exercise collection
remedies against Account Debtors or other Persons obligated on Collateral or to
remove liens or encumbrances on or any adverse claims against Collateral, (iv)
to exercise collection remedies against Account Debtors and other Persons
obligated on Collateral directly or through the use of collection agencies and
other collection specialists, (v) to advertise dispositions of Collateral
through publications or media of general circulation, whether or not the
Collateral is of a specialized nature, (vi) to contact other Persons, whether or
not in the same business as the Borrower, for expressions of interest in
acquiring all or any portion of the Collateral, (vii) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the collateral is of a specialized nature, (viii) to dispose of Collateral
by utilizing Internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capability of doing so,
or that match buyers and sellers of assets, (ix) to dispose of assets in
wholesale rather than retail markets, (x) to disclaim disposition warranties,
including, without limitation, any warranties of title, (xi) to purchase
insurance or credit enhancements to insure the Bank against risks of loss,
collection or disposition of Collateral or to provide to the Bank a guaranteed
return from the collection or disposition of Collateral, or (xii) to the extent
deemed appropriate by the Bank, to obtain the services of other brokers,
investment bankers, consultants and other professionals to assist the Bank in
the collection or disposition of any of the Collateral.  The Borrower
acknowledges that the purpose of this Section is to provide non-exhaustive
indications of what actions or omissions by the Bank would not be commercially
unreasonable in the Bank’s exercise of remedies against the Collateral and that
other actions or omissions by the Bank shall not be deemed commercially
unreasonable solely on account of not being indicated in this Section
12.3.  Without limitation upon the foregoing, nothing contained
in this Section
12.3 shall be construed to grant any rights to the Borrower or to impose
any duties on the Bank that would not have been granted or imposed by this
Agreement or by applicable law in the absence of this Section
12.3.

    
      
         

      

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

     

    12.5         Additional
Remedies.  Upon the occurrence and during the continuance of an
Event of Default, the Bank shall have the right and power to:

     

    
      	
               
      

            	
              (a)

            	
              instruct
      the Borrower, at its own expense, to notify any parties obligated on any
      of the Collateral, including, but not limited to, any Account Debtors, to
      make payment directly to the Bank of any amounts due or to become due
      thereunder, or the Bank may directly notify such obligors of the security
      interest of the Bank, and/or of the assignment to the Bank of the
      Collateral and direct such obligors to make payment to the Bank of any
      amounts due or to become due with respect thereto, and thereafter, collect
      any such amounts due on the Collateral directly from such Persons
      obligated thereon;

            

    

    
      
         

      

      
        44

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)

            	
              enforce
      collection of any of the Collateral, including, but not limited to, any
      Accounts, by suit or otherwise, or make any compromise or settlement with
      respect to any of the Collateral, or surrender, release or exchange all or
      any part thereof, or compromise, extend or renew for any period (whether
      or not longer than the original period) any indebtedness
      thereunder;

            

    

     

    
      	
               
      

            	
              (c)

            	
              take
      possession or control of any proceeds and products of any of the
      Collateral, including the proceeds of insurance
  thereon;

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      	
               
      

            	
              (e)

            	
              grant
      releases, compromises or indulgences with respect to the Notes, any of the
      Obligations, any extension or renewal of any of the Obligations, any
      security therefore, or to any other obligor with respect to the Notes or
      any of the Obligations;

            

    

     

    
      	
               
      

            	
              (f)

            	
              transfer
      the whole or any part of securities which may constitute Collateral into
      the name of the Bank or the Bank’s nominee without disclosing, if the Bank
      so desires, that such securities so transferred are subject to the
      security interest of the Bank, and any corporation, association, or any of
      the managers or trustees of any trust issuing any of said securities, or
      any transfer agent, shall not be bound to inquire, in the event that the
      Bank or said nominee makes any further transfer of said securities, or any
      portion thereof, as to whether the Bank or such nominee has the right to
      make such further transfer, and shall not be liable for transferring the
      same;

            

    

     

    
      	
               
      

            	
              (g)

            	
              vote
      the Collateral;

            

    

     

    
      	
               
      

            	
              (h)

            	
              make
      an election with respect to the Collateral under Section 1111 of the
      Bankruptcy Code or take action under Section 364 or any other section of
      the Bankruptcy Code; provided, however, that any such action of the Bank
      as set forth herein shall not, in any manner whatsoever, impair or affect
      the liability of the Borrower hereunder, nor prejudice, waive, nor be
      construed to impair, affect, prejudice or waive the Bank’s rights and
      remedies at law, in equity or by statute, nor release, discharge, nor be
      construed to release or discharge, the Borrower, any guarantor or other
      Person liable to the Bank for the Obligations;
  and

            

    

     

    
      	
               
      

            	
              (i)

            	
              at
      any time, and from time to time, accept additions to, releases,
      reductions, exchanges or substitution of the Collateral, without in any
      way altering, impairing, diminishing or affecting the provisions of this
      Agreement, the Loan Documents, or any of the other Obligations, or the
      Bank’s rights hereunder, under the Notes or under any of the other
      Obligations.

            

    

    
      
         

      

      
        45

        
          

        

      

      
         

      

    

     

    The
Borrower hereby ratifies and confirms whatever the Bank may do with respect to
the Collateral and agrees that the Bank shall not be liable for any error of
judgment or mistakes of fact or law with respect to actions taken in connection
with the Collateral.

     

    12.6         Attorney-in-Fact.  The
Borrower hereby irrevocably makes, constitutes and appoints the Bank (and any
officer of the Bank or any Person designated by the Bank for that purpose) as
the Borrower’s true and lawful proxy and attorney-in-fact (and agent-in-fact) in
the Borrower’s name, place and stead, with full power of substitution, to (i)
take such actions as are permitted in this Agreement, (ii) execute and/or file
such financing statements and other documents and to do such other acts as the
Bank may require to perfect and preserve the Bank’s security interest in, and to
enforce such interests in the Collateral, and (iii) upon the occurrence and
during the continuance of an Event of Default, carry out any remedy provided for
in this Agreement, including, without limitation, endorsing the Borrower’s name
to checks, drafts, instruments and other items of payment, and proceeds of the
Collateral, executing change of address forms with the postmaster of the United
States Post Office serving the address of the Borrower, changing the address of
the Borrower to that of the Bank, opening all envelopes addressed to the
Borrower and applying any payments contained therein to the
Obligations.  The Borrower hereby acknowledges that the constitution
and appointment of such proxy and attorney-in-fact are coupled with an interest
and are irrevocable.  The Borrower hereby ratifies and confirms all
that said attorney-in-fact may do or cause to be done by virtue of any provision
of this Agreement.

     

    12.7  
      No
Marshaling.  The Bank shall not be required to marshal any
present or future collateral security (including but not limited to this
Agreement and the Collateral) for, or other assurances of payment of, the
Obligations or any of them or to resort to such collateral security or other
assurances of payment in any particular order.  To the extent that it
lawfully may, the Borrower hereby agrees that it will not invoke any law
relating to the marshaling of collateral which might cause delay in or impede
the enforcement of the Bank’s rights under this Agreement or under any other
instrument creating or evidencing any of the Obligations or under which any of
the Obligations is outstanding or by which any of the Obligations is secured or
payment thereof is otherwise assured, and, to the extent that it lawfully may,
the Borrower hereby irrevocably waives the benefits of all such
laws.

     

    12.8         Application of
Proceeds.  The Bank will within three (3) Business Days after
receipt of cash or solvent credits from collection of items of payment, proceeds
of Collateral or any other source, apply the whole or any part thereof against
the Obligations secured hereby.  The Bank shall further have the
exclusive right to determine how, when and what application of such payments and
such credits shall be made on the Obligations, and such determination shall be
conclusive upon the Borrower.  Any proceeds of any disposition by the
Bank of all or any part of the Collateral may be first applied by the Bank to
the payment of expenses incurred by the Bank in connection with the Collateral,
including attorneys’ fees and legal expenses as provided for in Article 13
hereof.

    
      
         

      

      
        46

        
          

        

      

      
         

      

    

     

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

     

    13.          MISCELLANEOUS.

     

    13.1         Obligations
Absolute.  None of the following shall affect the Obligations
of the Borrower to the Bank under this Agreement or the Bank’s rights with
respect to the Collateral:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

            	
              release
      by the Bank of the Borrower or of all or any part of the Collateral or of
      any party liable with respect to the
  Obligations;

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

            	
              failure
      of the Bank to resort to any other security or to pursue the Borrower or
      any other obligor liable for any of the Obligations before resorting to
      remedies against the Collateral.

            

    

     

    13.2         Entire
Agreement.  This Agreement (i) is valid, binding and
enforceable against the Borrower and the Bank in accordance with its provisions
and no conditions exist as to its legal effectiveness; (ii) constitutes the
entire agreement between the parties; and (iii) is the final expression of the
intentions of the Borrower and the Bank.  No promises, either
expressed or implied, exist between the Borrower and the Bank, unless contained
herein.  This Agreement supersedes all negotiations, representations,
warranties, commitments, offers, contracts (of any kind or nature, whether oral
or written) prior to or contemporaneous with the execution hereof.

     

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

    
      
         

      

      
        47

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

    13.7         Assignability.  The
Bank may at any time assign the Bank’s rights in this Agreement, the Notes, any
of the Loan Documents, the Obligations, or any part thereof and transfer the
Bank’s rights in any or all of the Collateral, and the Bank thereafter shall be
relieved from all liability with respect to such Collateral.  In
addition, the Bank may at any time sell one or more participations in the
Loans.  The Borrower may not sell or assign this Agreement, any of the
Loan Documents or any other agreement with the Bank or any portion thereof,
either voluntarily or by operation of law, without the prior written consent of
the Bank.  This Agreement shall be binding upon the Bank and the
Borrower and their respective legal representatives and
successors.  All references herein to the Borrower shall be deemed to
include any successors, whether immediate or remote.  In the case of a
joint venture or partnership, the term “Borrower” shall be deemed to include all
joint venturers or partners thereof, who shall be jointly and severally liable
hereunder.

     

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

    
      
         

      

      
        48

        
          

        

      

      
         

      

    

     

    13.9         Binding
Effect.  This Agreement shall become effective upon execution
by the Borrower and the Bank.  If this Agreement is not dated or
contains any blanks when executed by the Borrower, the Bank is hereby
authorized, without notice to the Borrower, to date this Agreement as of the
date when it was executed by the Borrower, and to complete any such blanks
according to the terms upon which this Agreement is executed.

     

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

     

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

     

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

     

    13.13       Extensions of Bank’s
Commitment and Notes.  This Agreement shall secure and govern
the terms of any extensions or renewals of the Bank’s commitment hereunder and
the Notes pursuant to the execution of any modification, extension or renewal
note executed by the Borrower and accepted by the Bank in its sole and absolute
discretion in substitution for the Notes.

     

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

     

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

    
      
         

      

      
        49

        
          

        

      

      
         

      

    

     

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

     

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

     

    
      
        	
                If
      to the Borrower:

              	
                The
      Wood Energy Group, Inc.

              
	 
      	
                2255
      Glades Road

              
	 
      	
                Suite
      342-W

              
	 
      	
                Boca
      Raton, Florida 33431

              
	 
      	
                Attn:
      Bennett Marks

              
	 
      	 
      
	
                If
      to the Bank:

              	
                Fifth
      Third Bank

              
	 
      	
                222
      South Riverside Plaza

              
	 
      	
                32nd
      Floor

              
	 
      	
                Chicago,
      Illinois 60606

              
	 
      	
                Attention:  Mr.
      Craig Schuth

              

      

    

    

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

    
      
         

      

      
        50

        
          

        

      

      
         

      

    

     

    13.18       Indemnification.  The
Borrower agrees to defend (with counsel satisfactory to the Bank), protect,
indemnify and hold harmless each Indemnified Party from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and distributions of any kind or nature (including,
without limitation, the disbursements and the reasonable fees of counsel for
each Indemnified Party thereto, which shall also include, without limitation,
attorneys’ fees and time charges of attorneys who may be employees of the Bank,
any parent corporation or affiliated corporation of the Bank), which may be
imposed on, incurred by, or asserted against, any Indemnified Party (whether
direct, indirect or consequential and whether based on any federal, state or
local laws or regulations, including, without limitation, securities,
Environmental Laws and commercial laws and regulations, under common law or in
equity, or based on contract or otherwise) in any manner relating to or arising
out of this Agreement or any of the Loan Documents, or any act, event or
transaction related or attendant thereto, the preparation, execution and
delivery of this Agreement and the Loan Documents, including, but not limited
to, the making or issuance and management of the Loans, the use or intended use
of the proceeds of the Loans, the enforcement of the Bank’s rights and remedies
under this Agreement, the Loan Documents, the Notes, any other instruments and
documents delivered hereunder, or under any other agreement between the Borrower
and the Bank; provided, however, that the Borrower shall not have any
obligations hereunder to any Indemnified Party with respect to matters caused by
or resulting from the willful misconduct or gross negligence of such Indemnified
Party.  To the extent that the undertaking to indemnify set forth in
the preceding sentence may be unenforceable because it violates any law or
public policy, the Borrower shall satisfy such undertaking to the maximum extent
permitted by applicable law.  Any liability, obligation, loss, damage,
penalty, cost or expense covered by this indemnity shall be paid to each
Indemnified Party on demand, and, failing prompt payment, shall, together with
interest thereon at the Default Rate from the date incurred by each Indemnified
Party until paid by the Borrower, be added to the Obligations of the Borrower
and be secured by the Collateral.  The provisions of this Section 13.18 shall
survive the satisfaction and payment of the other Obligations and the
termination of this Agreement.

     

    13.19       Revival and Reinstatement of
Obligations.  If the incurrence or payment of the Obligations
by any Obligor or the transfer to the Bank of any property should for any reason
subsequently be declared to be void or voidable under any state or federal law
relating to creditors’ rights, including provisions of the Bankruptcy Code
relating to fraudulent conveyances, preferences, or other voidable or
recoverable payments of money or transfers of property (collectively, a
“Voidable Transfer”), and if the Bank is required to repay or restore, in whole
or in part, any such Voidable Transfer, or elects to do so upon the reasonable
advice of its counsel, then, as to any such Voidable Transfer, or the amount
thereof that the Bank is required or elects to repay or restore, and as to all
reasonable costs, expenses, and attorneys fees of the Bank, the Obligations
shall automatically shall be revived, reinstated, and restored and shall exist
as though such Voidable Transfer had never been made.

     

    13.20       Customer Identification -
USA Patriot Act Notice.  The Bank hereby notifies the Borrower
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56, signed into law October 26, 2001) (the “Act”), and the Bank’s policies
and practices, the Bank is required to obtain, verify and record certain
information and documentation that identifies the Borrower, which information
includes the name and address of the Borrower and such other information that
will allow the Bank to identify the Borrower in accordance with the
Act.

     

    
      
         

      

      
        51

        
          

        

      

      
         

      

    

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

     

    
      
        
          
            
              	
                      The
      Wood Energy Group, Inc., a Missouri

                    
	
                      corporation

                    
	 
	
                      By:

                    	
                      /s/Gary O. Marino

                    
	
                      Its:

                    	
                      Chairman
      and Chief Executive Officer

                    
	 
      
	
                      Agreed
      and accepted:

                    
	 
      
	
                      FIFTH
      THIRD BANK,

                    
	
                      a
      Michigan banking corporation

                    
	 
      
	
                      By:

                    	
                      /s/ Craig Schuth

                    
	
                      Its:

                    	
                      Vice
      President

                    

            

          

        

      

    

     

    
      
         

      

      
        52EXHIBIT
10.2

    

    TERM
NOTE

     

    
      	
              $3,000,000.00

            	
              Chicago,
      Illinois

            
	 
      	
              September
      4, 2009

            

    

     

    FOR VALUE
RECEIVED, The Wood Energy Group, Inc., a Missouri corporation (“Maker”) promises
to pay to the order of Fifth Third Bank, a Michigan banking corporation (“Bank”)
at its offices at 222 South Riverside Plaza, 32nd Floor,
Chicago, Illinois 60606 or at such other place as the holder of this Note may
designate in writing to the Maker, on or before September 3, 2014, the principal
sum of Three Million and No/100 Dollars ($3,000,000.00).  This Note
represents the Term Loan made to the Maker by the Bank pursuant to, and is
governed by, a certain Loan and Security Agreement made by and between the Maker
and the Bank dated as of even date herewith, as the same may be amended from
time to time (the “Loan Agreement”), the terms of which are incorporated by
reference and made a part of this Note as though fully set out
herein.  Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed to such terms in the Loan Agreement.  The
outstanding amount of the Term Loan as shown on the books and records of the
Bank shall be considered correct and conclusively binding on the Maker absent
manifest error.

     

    The Maker
shall repay the principal amount of the Term Loan, and shall pay interest
thereon, as provided in the Loan Agreement.  Principal amounts repaid
on the Term Loan may not be borrowed again.

     

    All
payments received from the Maker hereunder shall be applied by the Bank in
accordance with the terms of the Loan Agreement.

     

    This Note
and any renewals and extensions hereof, and any other Obligations of the
undersigned to the Holder hereof (the term “Holder” shall include the Bank and
any subsequent holder hereof) due or to become due, now existing or hereafter
contracted, and howsoever acquired by the Holder, are secured in the manner
described in the Loan Agreement.

     

    This Note
is issued under the Loan Agreement and this Note and the Holder are entitled to
all of the benefits provided for by the Loan Agreement or referred to therein,
to which Loan Agreement reference is made for a statement
thereof.  Pre-payments may be made hereon only at the times, in the
events and in the manner provided in the Loan Agreement.

     

    All
unpaid amounts owing on this Note or on any other Obligations immediately shall
become due and payable at the option of the Holder, without notice or demand,
upon the occurrence of any Event of Default.

     

    In the
event of default in the payment of any sums due under this Note, the Maker
hereby agrees that the Bank may offset all money, bank or other deposits or
credits now or hereafter held by the Bank or owed by the Bank to Maker against
all amounts due under this Note or against any other amounts which may be due
the Bank from the Maker.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     No
clause or provision contained in this Note or any documents related hereto shall
be construed or shall so operate (a) to raise the interest rate set forth in
this Note above the lawful maximum, if any, in effect from time to time in the
applicable jurisdiction for loans to borrowers of the type, in the amount, for
the purposes, and otherwise of the kind contemplated, or (b) to require the
payment or the doing of any act contrary to law, but if any clause or provision
contained herein shall otherwise so operate to invalidate this Note, in whole or
in part, then (i) such clauses or provisions shall be deemed modified to the
extent necessary to be in compliance with the law, or (ii) to the extent not
possible, shall be deemed void as though not contained and the remainder of this
Note and such document shall remain operative and in full force and
effect.

     

    All
makers and any endorsers, guarantors, sureties, accommodation parties and all
other persons liable or to become liable for all or any part of this
indebtedness, jointly and severally waive diligence, presentment, protest and
demand, and also notice of protest, of demand, of nonpayment, of dishonor and of
maturity and also recourse or suretyship defenses generally; and they also
jointly and severally hereby consent to any and all renewals, extensions or
modifications of the terms of this Note, including time for payment, and further
agree that any such renewals, extensions or modifications of the terms of this
Note or the release or substitution of any security for the indebtedness under
this Note or any other indulgences shall not affect the liability of any of the
parties for the indebtedness evidenced by this Note.  Any such
renewals, extensions or modifications may be made without notice to any of said
parties.

     

    The Maker
shall be liable to the Holder for all reasonable costs and expenses incurred in
connection with collection, whether by suit or otherwise, of any amount due
under this Note, including, without limitation, attorneys’ fees, as more fully
set forth in the Loan Agreement.

     

    This Note
shall be governed by and construed in accordance with the laws of the State of
Illinois.

     

    
      
        
          	
                  The
      Wood Energy Group, Inc.,

                	 
      	
                  Fifth
      Third Bank,

                
	
                  a
      Missouri corporation

                	 
      	
                  a
      Michigan banking corporation

                
	 
      	 
      	 
      	 
      	 
      
	
                  By:

                	
                  /s/ Gary O. Marino  

                	 
      	
                  By:

                	
                  /s/ Craig Schuth

                
	
                  Its:

                	
                  Chairman
      and Chief Executive Officer

                	 
      	
                  Its:

                	
                  Vice
      President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}]]