Document:

Exhibit 10.6

 

BUSINESS LOAN AGREEMENT (ASSET BASED)

 

	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No.

  	
   

  	
  Call / Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  
	
  $ 1,300,000.00

  	
   

  	
  02-27-2008

  	
   

  	
  02-27-2009

  	
   

  	
  3001400

  	
   

  	
  4a / 0047

  	
   

  	
  1239

  	
   

  	
  100

  	
   

  	
   

  

 

References in the boxes above are for Lender’s
use only and do not limit the applicability of this document to any particular
loan or item. Any item above containing “***” has been omitted due to text
length limitations.

 

	
  Borrower:

  	
   

  	
  Aspyra, Inc.

  26115-A Mureau Road

  Calabasas, CA 91302

  	
   

  	
  Lender:

  	
   

  	
  Western Commercial Bank

  21550 Oxnard Street, Suite 100

  Woodland Hills, CA 91367

  

 

THIS BUSINESS LOAN AGREEMENT (ASSET BASED) dated February 27,
2008, is made and executed between Aspyra, Inc. (“Borrower”) and Western
Commercial Bank (“Lender”) on the following terms and conditions. Borrower has
received prior commercial loans from Lender or has applied to Lender for a
commercial loan or loans or other financial accommodations, including those
which may be described on any exhibit or schedule attached to this Agreement.
Borrower understands and agrees that: (A) in granting, renewing, or
extending any Loan, Lender is relying upon Borrower’s representations,
warranties, and agreements as set forth in this Agreement; (B) the
granting, renewing, or extending of any Loan by Lender at all times shall be
subject to Lender’s sole judgment and discretion; and (C) all such Loans
shall be and remain subject to the terms and conditions of this Agreement.

 

TERM. This
Agreement shall be effective as of February 27, 2008, and shall continue
in full force and effect until such time as all of Borrower’s Loans in favor of
Lender have been paid in full, including principal, interest, costs, expenses,
attorneys’ fees, and other fees and charges, or until such time as the parties
may agree in writing to terminate this Agreement.

 

ADVANCE AUTHORITY. The following person or persons are authorized, except as provided in
this paragraph, to request advances and authorize payments under the loan until
Lender receives from Borrower, at Lender’s address shown above, written notice
of revocation of such authority: Jim Zierick, President & CEO of Aspyra, Inc.;
and Ana Villafane, Secretary of Aspyra, Inc. Minimum advance amount of $1,000.00.

 

PRIMARY CREDIT FACILITY. Lender agrees to make Advances to Borrower
from the date of this Agreement to the Expiration Date, provided the aggregate
amount of such Advances does not exceed the Borrowing Base. This facility is
not a revolving line of credit, and thus, Borrower may not reborrow any amounts
it pays or prepays under the credit facility.

 

Conditions Precedent to Each Advance. Lender’s obligation to make any Advance to or
for the account of Borrower under this Agreement is subject to the following
conditions precedent, with all documents, instruments, opinions, reports, and
other items required under this Agreement to be in form and substance
satisfactory to Lender:

 

(1) 
Lender shall have received evidence that this Agreement and all Related
Documents have been duly authorized, executed, and delivered by Borrower to
Lender.

 

(2) 
Lender shall have received such opinions of counsel, supplemental opinions, and
documents as Lender may request.

 

(3) 
The security interests in the Collateral shall have been duly authorized,
created, and perfected with first lien priority and shall be in full force and
effect.

 

(4) 
All guaranties required by Lender for the credit facility(ies) shall have been
executed by each Guarantor, delivered to Lender, and be in full force and
effect.

 

(5) 
Lender, at its option and for its sole benefit, shall have conducted an audit
of Borrower’s Accounts, Inventory, books, records, and operations, and Lender
shall be satisfied as to their condition.

 

(6) 
Borrower shall have paid to Lender all fees, costs, and expenses specified in
this Agreement and the Related Documents as are then due and payable.

 

(7) 
There shall not exist at the time of any Advance a condition which would
constitute an Event of Default under this Agreement, and Borrower shall have
delivered to Lender the compliance certificate called for in the paragraph
below titled “Compliance Certificate.”

 

Making Loan Advances. Advances under this credit facility, as well
as directions for payment from Borrower’s accounts, may be requested orally or
in writing by authorized persons. Lender may, but need not, require that all
oral requests be confirmed in writing. Each Advance shall be conclusively
deemed to have been made at the request of and for the benefit of Borrower (1) when
credited to any deposit account of Borrower maintained with Lender or (2) when
advanced in accordance with the instructions of an authorized person, Lender,
at its option, may set a cutoff time, after which all requests for Advances
will be treated as having been requested on the next succeeding Business Day.
Under no circumstances shall Lender be required to make any Advance in an
amount less than $1,000.00.

 

Mandatory Loan Repayments. If at any time the aggregate principal amount
of the outstanding Advances shall exceed the applicable Borrowing Base, Borrower,
immediately upon written or oral notice from Lender, shall pay to Lender an
amount equal to the difference between the outstanding principal balance of the
Advances and the Borrowing Base. On the Expiration Date, Borrower shall pay to
Lender in full the aggregate unpaid principal amount of all Advances then
outstanding and all accrued unpaid interest, together with all other applicable
fees, costs and charges, if any, not yet paid.

 

Loan Account. Lender shall maintain on its books a record of account in which Lender
shall make entries for each Advance and such other debits and credits as shall
be appropriate in connection with the credit facility. Lender shall provide
Borrower with periodic statements of Borrower’s account, which statements shall
be considered to be correct and conclusively binding on Borrower unless
Borrower notifies Lender to the contrary within thirty (30) days after Borrower’s
receipt of any such statement which Borrower deems to be incorrect.

 

COLLATERAL. To secure payment of the Primary Credit Facility and performance of all
other Loans, obligations and duties owed by Borrower to Lender, Borrower (and
others, if required) shall grant to Lender Security Interests in such property
and assets as Lender may require. Lender’s Security Interests in the Collateral
shall be continuing liens and shall include the proceeds and products of the
Collateral, including without limitation the proceeds of any insurance. With
respect to the Collateral, Borrower agrees and represents and warrants to Lender:

 

Perfection of Security Interests. Borrower agrees to execute all documents
perfecting Lender’s Security Interest and to take whatever actions are
requested by Lender to perfect and continue Lender’s Security Interests in the
Collateral. Upon request of  Lender,
Borrower will deliver to Lender any and all of the documents evidencing or
constituting the Collateral, and Borrower will note Lender’s interest upon any
and all chattel paper and instruments if not delivered to Lender for possession
by Lender. Contemporaneous with the execution of this Agreement, Borrower will
execute one or more UCC financing statements and any similar statements as may
be required by applicable law, and Lender will file such financing statements
and all such similar statements in the appropriate location or locations.
Borrower hereby appoints Lender as its irrevocable attorney-in-fact for the
purpose of executing any documents necessary to perfect or to continue any
Security Interest. Lender may at any time, and without further authorization
from Borrower, file a carbon, photograph, facsimile, or other

 

 

BUSINESS
LOAN AGREEMENT (ASSET BASED)

(Continued)

 

reproduction
of any financing statement for use as a financing statement. Borrower will
reimburse Lender for all expenses for the perfection, termination, and the
continuation of the perfection of Lender’s security interest in the Collateral.
Borrower promptly will notify Lender before any change in Borrower’s name
including any change to the assumed business names of Borrower. Borrower also
promptly will notify Lender before any change in Borrower’s Social Security
Number or Employer Identification Number. Borrower further agrees to notify
Lender in writing prior to any change in address or location of Borrower’s
principal governance office or should Borrower merge or consolidate with any
other entity.

 

Collateral Records. Borrower does now, and at all times hereafter shall, keep correct and
accurate records of the Collateral, all of which records shall be available to
Lender or Lender’s representative upon demand for inspection and copying at any
reasonable time. With respect to the Accounts, Borrower agrees to keep and
maintain such records as Lender may require, including without limitation
information concerning Eligible Accounts and Account balances and agings.
Records related to Accounts (Receivables) are or will be located at 26115-A
Mureau Road, Calabasas, CA 91302. With respect to the Inventory, Borrower
agrees to keep and maintain such records as Lender may require, including
without limitation information concerning Eligible Inventory and records
itemizing and describing the kind, type, quality, and quantity of Inventory,
Borrower’s Inventory costs and selling prices, and the daily withdrawals and
additions to Inventory. Records related to Inventory are or will be located at
26115-A Mureau Road, Calabasas, CA 91302. The above is an accurate and complete
list of all locations at which Borrower keeps or maintains business records
concerning Borrower’s collateral.

 

Collateral Schedules. Concurrently with the execution and delivery
of this Agreement, Borrower shall execute and deliver to Lender schedules of
Accounts and Inventory and schedules of Eligible Accounts and Eligible
Inventory in form and substance satisfactory to the Lender. Thereafter
supplemental schedules shall be delivered according to the following schedule:
With respect to Eligible Accounts, schedules shall be delivered monthly. With
respect to Eligible Inventory, schedules shall be delivered Monthly.

 

Representations and Warranties Concerning Accounts. With respect to the Accounts, Borrower
represents and warrants to Lender: (1) Each Account represented by
Borrower to be an Eligible Account for purposes of this Agreement conforms to
the requirements of the definition of an Eligible Account; (2) All Account
information listed on schedules delivered to Lender will be true and correct,
subject to immaterial variance; and (3) Lender, its assigns, or agents
shall have the right at any time and at Borrower’s expense to inspect, examine,
and audit Borrower’s records and to confirm with Account Debtors the accuracy
of such Accounts.

 

Representations and Warranties Concerning Inventory. With respect to the Inventory, Borrower
represents and warrants to Lender: (1) All Inventory represented by
Borrower to be Eligible Inventory for purposes of this Agreement conforms to
the requirements of the definition of Eligible Inventory; (2) All
Inventory values listed on schedules delivered to Lender will be true and
correct, subject to immaterial variance; (3) The value of the Inventory
will be determined on a consistent accounting basis; (4) Except as agreed
to the contrary by Lender in writing, all Eligible Inventory is now and at all
times hereafter will be in Borrower’s physical possession and shall not be held
by others on consignment, sale on approval, or sale or return; (5) Except
as reflected in the Inventory schedules delivered to Lender, all Eligible
Inventory is now and at all times hereafter will be of good and merchantable
quality, free from defects; (6) Eligible Inventory is not now and will not
at any time hereafter be stored with a bailee, warehouseman, or similar party
without Lender’s prior written consent, and, in such event, Borrower will
concurrently at the time of bailment cause any such bailee, warehouseman, or
similar party to issue and deliver to Lender, in form acceptable to Lender,
warehouse receipts in Lender name evidencing the storage of Inventory; and (7) Lender,
its assigns, or agents shall have the right at any time and at Borrower’s
expense to inspect and examine the Inventory and to check and test the same as
to quality, quantity, value, and condition.

 

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender’s obligation to make the initial
Advance and each subsequent Advance under this Agreement shall be subject to
the fulfillment to Lender’s satisfaction of all of the conditions set forth in
this Agreement and in the Related Documents.

 

Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the
Note; (2) Security Agreements granting to Lender security interests in the
Collateral; (3) financing statements and all other documents perfecting
Lender’s Security Interests; (4) evidence of insurance as required below; (5) together
with all such Related Documents as Lender may require for the Loan; all in form
and substance satisfactory to Lender and Lender’s counsel.

 

Borrower’s Authorization. Borrower shall have provided in form and
substance satisfactory to Lender properly certified resolutions, duly
authorizing the execution and delivery of this Agreement, the Note and the
Related Documents. In addition, Borrower shall have provided such other
resolutions, authorizations, documents and instruments as Lender or its
counsel, may require.

 

Fees and Expenses Under This Agreement. Borrower shall have paid to Lender all fees,
costs, and expenses specified in this Agreement and the Related Documents as
are then due and payable.

 

Representations and Warranties. The representations and warranties set forth
in this Agreement, in the Related Documents, and in any document or certificate
delivered to Lender under this Agreement are true and correct.

 

No Event of Default. There shall not exist at the time of any Advance a condition which
would constitute an Event of Default under this Agreement or under any Related
Document.

 

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:

 

Organization. Borrower is a corporation for profit which is, and at all times shall
be, duly organized, validly existing, and in good standing under and by virtue
of the laws of the State of California. Borrower is duly authorized to transact
business in all other states in which Borrower is doing business, having
obtained all necessary filings, governmental licenses and approvals for each
state in which Borrower is doing business. Specifically, Borrower is, and at
all times shall be, duly qualified as a foreign corporation in all states in
which the failure to so qualify would have a material adverse effect on its
business or financial condition. Borrower has the full power and authority to
own its properties and to transact the business in which it is presently
engaged or presently proposes to engage. Borrower maintains an office at
26115-A Mureau Road, Calabasas, CA 91302. Unless Borrower has designated otherwise
in writing, the principal office is the office at which Borrower keeps its
books and records including its records concerning the Collateral. Borrower
will notify Lender prior to any change in the location of Borrower’s state of
organization or any change in Borrower’s name. Borrower shall do all things
necessary to preserve and to keep in full force and effect its existence,
rights and privileges, and shall comply with all regulations, rules,
ordinances, statutes, orders and decrees of any governmental or
quasi-governmental authority or court applicable to Borrower and Borrower’s
business activities.

 

Assumed Business Names. Borrower has filed or recorded all documents
or filings required by law relating to all assumed business names used by
Borrower. Excluding the name of Borrower, the following is a complete list of
all assumed business names under which Borrower does business: None.

 

Authorization. Borrower’s execution, delivery, and performance of this Agreement and
all the Related Documents have been duly authorized by all necessary action by
Borrower and do not conflict with, result in a violation of, or constitute a
default under (1) any provision of (a) Borrower’s articles of
incorporation or organization, or bylaws, or (b) any agreement or other
instrument binding upon

 

2

 

Borrower or (2) any
law, governmental regulation, court decree, or order applicable to Borrower or
to Borrower’s properties.

 

Financial
Information. Each of Borrower’s financial statements supplied
to Lender truly and completely disclosed Borrower’s financial condition as of
the date of the statement, and there has been no material adverse change in
Borrower’s financial condition subsequent to the date of the most recent financial
statement supplied to Lender. Borrower has no material contingent obligations
except as disclosed in such financial statements.

 

Legal
Effect. This Agreement constitutes, and any instrument or
agreement Borrower is required to give under this Agreement when delivered will
constitute legal, valid, and binding obligations of Borrower enforceable
against Borrower in accordance with their respective terms.

 

Properties.
Except as contemplated by this Agreement or as previously
disclosed in Borrower’s financial statements or in writing to Lender and as
accepted by Lender, and except for property tax liens for taxes not presently
due and payable, Borrower owns and has good title to all of Borrower’s
properties free and clear of all Security Interests, and has not executed any
security documents or financing statements relating to such properties. All of
Borrower’s properties are titled in Borrower’s legal name, and Borrower has not
used or filed a financing statement under any other name for at least the last
five (5) years.

 

Hazardous
Substances. Except as disclosed to and acknowledged by Lender
in writing, Borrower represents and warrants that: (1) During the period
of Borrower’s ownership of the Collateral, there has been no use, generation,
manufacture, storage, treatment, disposal, release or threatened release of any
Hazardous Substance by any person on, under, about or from any of the
Collateral. (2) Borrower has no knowledge of, or reason to believe that
there has been (a) any breach or violation of any Environmental Laws; (b) any
use, generation, manufacture, storage, treatment, disposal, release or
threatened release of any Hazardous Substance on, under, about or from the
Collateral by any prior owners or occupants of any of the Collateral; or (c) any
actual or threatened litigation or claims of any kind by any person relating to
such matters. (3) Neither Borrower nor any tenant, contractor, agent or
other authorized user of any of the Collateral shall use, generate,
manufacture, store, treat, dispose of or release any Hazardous Substance on,
under, about or from any of the Collateral; and any such activity shall be
conducted in compliance with all applicable federal, state, and local laws,
regulations, and ordinances, including without limitation all Environmental
Laws. Borrower authorizes Lender and its agents to enter upon the Collateral to
make such inspections and tests as Lender may deem appropriate to determine
compliance of the Collateral with this section of the Agreement. Any
inspections or tests made by Lender shall be at Borrower’s expense and for
Lender’s purposes only and shall not be construed to create any responsibility
or liability on the part of Lender to Borrower or to any other person. The
representations and warranties contained herein are based on Borrower’s due
diligence in investigating the Collateral for hazardous waste and Hazardous
Substances. Borrower hereby (1) releases and waives any future claims
against Lender for indemnity or contribution in the event Borrower becomes
liable for cleanup or other costs under any such laws, and (2) agrees to
indemnify, defend, and hold harmless Lender against any and all claims, losses,
liabilities, damages, penalties, and expenses which Lender may directly or
indirectly sustain or suffer resulting from a breach of this section of the
Agreement or as a consequence of any use, generation, manufacture, storage,
disposal, release or threatened release of a hazardous waste or substance on
the Collateral. The provisions of this section of the Agreement, including the
obligation to indemnify and defend, shall survive the payment of the
Indebtedness and the termination, expiration or satisfaction of this Agreement
and shall not be affected by Lender’s acquisition of any interest in any of the
Collateral, whether by foreclosure or otherwise.

 

Litigation
and Claims. No litigation, claim, investigation,
administrative proceeding or similar action (including those for unpaid taxes)
against Borrower is pending or threatened, and no other event has occurred which
may materially adversely affect Borrower’s financial condition or properties,
other than litigation, claims, or other events, if any, that have been
disclosed to and acknowledged by Lender in writing.

 

Taxes.
To the best of Borrower’s knowledge, all of Borrower’s tax returns and reports
that are or were required to be filed, have been filed, and all taxes,
assessments and other governmental charges have been paid in full, except those
presently being or to be contested by Borrower in good faith in the ordinary
course of business and for which adequate reserves have been provided.

 

Lien
Priority. Unless otherwise previously disclosed to Lender in
writing, Borrower has not entered into or granted any Security Agreements, or
permitted the filing or attachment of any Security Interests on or affecting
any of the Collateral directly or indirectly securing repayment of Borrower’s
Loan and Note, that would be prior or that may in any way be superior to Lender’s
Security Interests and rights in and to such Collateral.

 

Binding
Effect. This Agreement, the Note, all Security Agreements (if
any), and all Related Documents are binding upon the signers thereof, as well
as upon their successors, representatives and assigns, and are legally
enforceable in accordance with their respective terms.

 

AFFIRMATIVE
COVENANTS. Borrower covenants and agrees with Lender that, so
long as this Agreement remains in effect, Borrower will:

 

Notices
of Claims and Litigation. Promptly inform Lender in writing
of (1) all material adverse changes in Borrower’s financial condition, and
(2) all existing and all threatened litigation, claims, investigations,
administrative proceedings or similar actions affecting Borrower or any
Guarantor which could materially affect the financial condition of Borrower or
the financial condition of any Guarantor.

 

Financial
Records. Maintain its books and records in accordance with
GAAP, applied on a consistent basis, and permit Lender to examine and audit
Borrower’s books and records at all reasonable times.

 

Financial
Statements. Furnish Lender with such financial statements and
other related information at such frequencies and in such detail as Lender may
reasonably request.

 

Additional
Information. Furnish such additional information and
statements, as Lender may request from time to time.

 

Insurance.
Maintain fire and other risk insurance, public liability
insurance, and such other insurance as Lender may require with respect to
Borrower’s properties and operations, in form, amounts, coverages and with
insurance companies acceptable to Lender. Borrower, upon request of Lender,
will deliver to Lender from time to time the policies or certificates of
insurance in form satisfactory to Lender, including stipulations that coverages
will not be cancelled or diminished without at least thirty (30) days prior
written notice to Lender. Each insurance policy also shall include an
endorsement providing that coverage in favor of Lender will not be impaired in
any way by any act, omission or default of Borrower or any other person. In
connection with all policies covering assets in which Lender holds or is
offered a security interest for the Loans, Borrower will provide Lender with
such lender’s loss payable or other endorsements as Lender may require.

 

Insurance
Reports. Furnish to Lender, upon request of Lender, reports
on each existing insurance policy showing such information as Lender may
reasonably request, including without limitation the following: (1) the
name of the insurer; (2) the risks insured; (3) the amount of the
policy; (4) the properties insured; (5) the then current property
values on the basis of which insurance has been obtained, and the manner of
determining those values; and (6) the expiration date of the policy. In
addition, upon request of Lender (however not more often than annually),
Borrower will have an independent appraiser satisfactory to Lender determine,
as applicable, the actual cash value or replacement cost of any Collateral. The
cost of such appraisal shall be paid by Borrower.

 

3

 

Other
Agreements. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and any other
party and notify Lender immediately in writing of any default in connection
with any other such agreements.

 

Loan
Proceeds. Use all Loan proceeds solely for Borrower’s
business operations, unless specifically consented to the contrary by Lender in
writing.

 

Taxes,
Charges and Liens. Pay and discharge when due all of its
indebtedness and obligations, including without limitation all assessments,
taxes, governmental charges, levies and liens, of every kind and nature,
imposed upon Borrower or its properties, income, or profits, prior to the date
on which penalties would attach, and all lawful claims that, if unpaid, might
become a lien or charge upon any of Borrower’s properties, income, or profits.
Provided however. Borrower will not be required to pay and discharge any such
assessment, tax, charge, levy, lien or claim so long as (1) the legality
of the same shall be contested in good faith by appropriate proceedings, and (2) Borrower
shall have established on Borrower’s books adequate reserves with respect to
such contested assessment, tax, charge, levy, lien, or claim in accordance with
GAAP.

 

Performance.
Perform and comply, in a timely manner, with all terms,
conditions, and provisions set forth in this Agreement, in the Related
Documents, and in all other instruments and agreements between Borrower and
Lender. Borrower shall notify Lender immediately in writing of any default in
connection with any agreement.

 

Operations.
Maintain executive and management personnel with
substantially the same qualifications and experience as the present executive
and management personnel; provide written notice to Lender of any change in
executive and management personnel; conduct its business affairs in a
reasonable and prudent manner.

 

Environmental
Studies. Promptly conduct and complete, at Borrower’s
expense, all such investigations, studies, samplings and testings as may be
requested by Lender or any governmental authority relative to any substance, or
any waste or by-product of any substance defined as toxic or a hazardous
substance under applicable federal, state, or local law, rule, regulation,
order or directive, at or affecting any property or any facility owned, leased
or used by Borrower.

 

Compliance
with Governmental Requirements. Comply with all laws,
ordinances, and regulations, now or hereafter in effect, of all governmental
authorities applicable to the conduct of Borrower’s properties, businesses and
operations, and to the use or occupancy of the Collateral, including without
limitation, the Americans With Disabilities Act. Borrower may contest in good
faith any such law, ordinance, or regulation and withhold compliance during any
proceeding, including appropriate appeals, so long as Borrower has notified
Lender in writing prior to doing so and so long as, in Lender’s sole opinion,
Lender’s interests in the Collateral are not jeopardized. Lender may require
Borrower to post adequate security or a surety bond, reasonably satisfactory to
Lender, to protect Lender’s interest.

 

Inspection.
Permit employees or agents of Lender at any reasonable time
to inspect any and all Collateral for the Loan or Loans and Borrower’s other
properties and to examine or audit Borrower’s books, accounts, and records and
to make copies and memoranda of Borrower’s books, accounts, and records. If
Borrower now or at any time hereafter maintains any records (including without
limitation computer generated records and computer software programs for the
generation of such records) in the possession of a third party. Borrower, upon
request of Lender, shall notify such party to permit Lender free access to such
records at all reasonable times and to provide Lender with copies of any
records it may request, all at Borrower’s expense.

 

Compliance
Certificates. Unless waived in writing by Lender, provide
Lender at least annually, with a certificate executed by Borrower’s chief
financial officer, or other officer or person acceptable to Lender, certifying
that the representations and warranties set forth in this Agreement are true
and correct as of the date of the certificate and further certifying that, as
of the date of the certificate, no Event of Default exists under this
Agreement.

 

Environmental
Compliance and Reports. Borrower shall comply in all respects
with any and all Environmental Laws; not cause or permit to exist, as a result
of an intentional or unintentional action or omission on Borrower’s part or on
the part of any third party, on property owned and/or occupied by Borrower, any
environmental activity where damage may result to the environment, unless such
environmental activity is pursuant to and in compliance with the conditions of
a permit issued by the appropriate federal, state or local governmental
authorities; shall furnish to Lender promptly and in any event within thirty
(30) days after receipt thereof a copy of any notice, summons, lien, citation, directive,
letter or other communication from any governmental agency or instrumentality
concerning any intentional or unintentional action or omission on Borrower’s
part in connection with any environmental activity whether or not there is
damage to the environment and/or other natural resources.

 

Additional
Assurances. Make, execute and deliver to Lender such
promissory notes, mortgages, deeds of trust, security agreements, assignments,
financing statements, instruments, documents and other agreements as Lender or
its attorneys may reasonably request to evidence and secure the Loans and to
perfect all Security Interests.

 

LENDER’S
EXPENDITURES. If any action or proceeding is commenced that
would materially affect Lender’s interest in the Collateral or if Borrower
fails to comply with any provision of this Agreement or any Related Documents,
including but not limited to Borrower’s failure to discharge or pay when due
any amounts Borrower is required to discharge or pay under this Agreement or
any Related Documents, Lender on Borrower’s behalf may (but shall not be
obligated to) take any action that Lender deems appropriate, including but not
limited to discharging or paying all taxes, liens, security interests,
encumbrances and other claims, at any time levied or placed on any Collateral
and paying all costs for insuring, maintaining and preserving any Collateral.
All such expenditures incurred or paid by Lender for such purposes will then
bear interest at the rate charged under the Note from the date incurred or paid
by Lender to the date of repayment by Borrower. All such expenses will become a
part of the Indebtedness and, at Lender’s option, will (A) be payable on
demand; (B) be added to the balance of the Note and be apportioned among
and be payable with any installment payments to become due during either (1) the
term of any applicable insurance policy; or (2) the remaining term of the
Note; or (C) be treated as a balloon payment which will be due and payable
at the Note’s maturity.

 

NEGATIVE
COVENANTS. Borrower covenants and agrees with Lender that
while this Agreement is in effect, Borrower shall not, without the prior
written consent of Lender:

 

Indebtedness
and Liens. (1) Except for trade debt incurred in the
normal course of business and indebtedness to Lender contemplated by this
Agreement, create, incur or assume indebtedness for borrowed money, including
capital leases, (2) sell, transfer, mortgage, assign, pledge, lease, grant
a security interest in, or encumber any of Borrower’s assets (except as allowed
as Permitted Liens), or (3) sell with recourse any of Borrower’s accounts,
except to Lender.

 

Continuity
of Operations. (1) Engage in any business activities
substantially different than those in which Borrower is presently engaged, (2) cease
operations, liquidate, merge, transfer, acquire or consolidate with any other
entity, change its name, dissolve or transfer or sell Collateral out of the
ordinary course of business, or (3) pay any dividends on Borrower’s stock
(other than dividends payable in its stock), provided, however that
notwithstanding the foregoing, but only so long as no Event of Default has
occurred and is continuing or would result from the payment of dividends, if
Borrower is a “Subchapter S Corporation” (as defined in the Internal Revenue
Code of 1986, as amended), Borrower may pay cash dividends on its stock to its
shareholders from time to time in amounts necessary to enable the shareholders
to pay income taxes and make estimated income tax payments to satisfy their
liabilities under federal and state law which

 

4

 

arise solely from their
status as Shareholders of a Subchapter S Corporation because of their ownership
of shares of Borrower’s stock, or purchase or retire any of Borrower’s
outstanding shares or alter or amend Borrower’s capital structure.

 

Loans,
Acquisitions and Guaranties. (1) Loan, invest in or
advance money or assets to any other person, enterprise or entity, (2) purchase,
create or acquire any interest in any other enterprise or entity, or (3) incur
any obligation as surety or guarantor other than in the ordinary course of
business.

 

Agreements.
Borrower will not enter into any agreement containing any
provisions which would be violated or breached by the performance of Borrower’s
obligations under this Agreement or in connection herewith.

 

CESSATION
OF ADVANCES. If Lender has made any commitment to make any
Loan to Borrower, whether under this Agreement or under any other agreement,
Lender shall have no obligation to make Loan Advances or to disburse Loan
proceeds if: (A) Borrower or any Guarantor is in default under the terms
of this Agreement or any of the Related Documents or any other agreement that
Borrower or any Guarantor has with Lender; (B) Borrower or any Guarantor
dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy
or similar proceedings, or is adjudged a bankrupt; (C) there occurs a
material adverse change in Borrower’s financial condition, in the financial
condition of any Guarantor, or in the value of any Collateral securing any
Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit,
modify or revoke such Guarantor’s guaranty of the Loan or any other loan with
Lender; or (E) Lender in good faith deems itself insecure, even though no
Event of Default shall have occurred.

 

RIGHT OF
SETOFF. To the extent permitted by applicable law, Lender
reserves a right of setoff in all Borrower’s accounts with Lender (whether
checking, savings, or some other account). This includes all accounts Borrower
holds jointly with someone else and all accounts Borrower may open in the
future. However, this does not include any IRA or Keogh accounts, or any trust
accounts for which setoff would be prohibited by law. Borrower authorizes Lender,
to the extent permitted by applicable law, to charge or setoff all sums owing
on the Indebtedness against any and all such accounts.

 

DEFAULT.
Each of the following shall constitute an Event of Default under this
Agreement:

 

Payment
Default. Borrower fails to make any payment when due under
the Loan.

 

Other
Defaults. Borrower fails to comply with or to perform any
other term, obligation, covenant or condition contained in this Agreement or in
any of the Related Documents or to comply with or to perform any term,
obligation, covenant or condition contained in any other agreement between
Lender and Borrower.

 

False
Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower’s behalf under this Agreement or
the Related Documents is false or misleading in any material respect, either
now or at the time made or furnished or becomes false or misleading at any time
thereafter.

 

Insolvency.
The dissolution or termination of Borrower’s existence as a going business, the
insolvency of Borrower, the appointment of a receiver for any part of Borrower’s
property, any assignment for the benefit of creditors, any type of creditor
workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.

 

Defective
Collateralization. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or lien)
at any time and for any reason.

 

Creditor
or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help, repossession
or any other method, by any creditor of Borrower or by any governmental agency
against any collateral securing the Loan. This includes a garnishment of any of
Borrower’s accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Borrower
as to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice
of the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.

 

Events
Affecting Guarantor. Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or any Guarantor dies or
becomes incompetent, or revokes or disputes the validity of, or liability
under, any Guaranty of the Indebtedness.

 

Change
in Ownership. Any change in ownership of twenty-five percent
(25%) or more of the common stock of Borrower.

 

Adverse
Change. A material adverse change occurs in Borrower’s
financial condition, or Lender believes the prospect of payment or performance
of the Loan is impaired.

 

Insecurity.
Lender in good faith believes itself insecure.

 

Right to
Cure. If any default, other than a default on Indebtedness,
is curable and if Borrower or Grantor, as the case may be, has not been given a
notice of a similar default within the preceding twelve (12) months, it may be
cured if Borrower or Grantor, as the case may be, after receiving written
notice from Lender demanding cure of such default: (1) cure the default
within fifteen (15) days; or (2) if the cure requires more than fifteen
(15) days, immediately initiate steps which Lender deems in Lender’s sole
discretion to be sufficient to cure the default and thereafter continue and
complete all reasonable and necessary steps sufficient to produce compliance as
soon as reasonably practical.

 

EFFECT
OF AN EVENT OF DEFAULT. If any Event of Default shall occur,
except where otherwise provided in this Agreement or the Related Documents, all
commitments and obligations of Lender under this Agreement or the Related
Documents or any other agreement immediately will terminate (including any
obligation to make further Loan Advances or disbursements), and, at Lender’s option,
all Indebtedness immediately will become due and payable, all without notice of
any kind to Borrower, except that in the case of an Event of Default of the
type described in the “Insolvency” subsection above, such acceleration shall be
automatic and not optional. In addition. Lender shall have all the rights and
remedies provided in the Related Documents or available at law, in equity, or
otherwise. Except as may be prohibited by applicable law, all of Lender’s
rights and remedies shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not exclude pursuit
of any other remedy, and an election to make expenditures or to take action to
perform an obligation of Borrower or of any Grantor shall not affect Lender’s
right to declare a default and to exercise its rights and remedies.

 

FINANCIAL
COVENANTS.

 

1. Cash to be no less
than $500,000.00 at any time

 

2. Borrower to comply
with a working capital ratio of no less than .65 to 1. Working capital ratio is
defined as current assets (less prepaids) divided by current assets (less
deferred service contract revenue) as defined by GAAP.

 

3. Financial performance
shall be substantially consistent with projections provided to Bank reflecting
profitability for the quarter end December 31, 2008.

 

4. Preferred debt and/or
interest/dividends cannot be repaid prior to bank debt. Additionally, borrower
has to be in compliance with all banks covenants and profitable prior to
preferred debt being repaid.

 

5

 

5.
Effective Tangible Net Worth will be calculated to include intangibles and
removing goodwill. There will be no re-evaluation of intangibles so long as the
impairment test is completed annually.

 

6.
Borrower to maintain its primary deposit relationship with Lender during the
life of the loan with minimum average balances of $500,000.00 monitored
quarterly

 

7.
No consecutive quarterly losses beginning December 30, 2008, monitored
quarterly.

 

8.
Debt Service coverage to be reviewed annually at 1.25:1.

 

9.
Debt to Effective Tangible Net Worth (Debt to ETNW) not greater than 2:1 and
includes intangibles, monitored quarterly.

 

10.
Withdrawals and distributions not to exceed net profit, monitored quarterly.

 

LENDER AUDITS.

 

Lender
will perform an Accounts Receivable audit annually at borrowers expense.

 

PROGRESS BILLING DEFINITIONS. (continued from Page 9)

 

Eligible Progress Billings. The words “Eligible Progress Billings” mean,
at any time, all of Borrower’s Progress Billings as defined below,

 

Progress Billings. The words “Progress Billings” mean a chain of billings, usually
following the percentage of completion method of measuring sale under a
long-term contract in favor of Borrower (or to a third party grantor acceptable
to Lender).

 

REPORTING REQUIREMENTS.

 

1.
Borrower to provide annual Fiscal Year End Reviewed Financial Statements within
90 days of Fiscal Year End.

 

2.
Borrower to provide monthly Financial Statements within 15 days of month end.

 

3.
Borrower to provide quarterly Financial Statements within 45 days of quarter
end.

 

4.
Borrower to provide Tax Return including all schedules and K-1’s annually
within 15 days of filing or due date.

 

5.
Borrower to provide Trade Accounts Receivable agings, Progressive Billings
Receivable agings, Inventory Listing, Accounts Payable agings and Borrowing
Base Certificate monthly within 15 days of month end

 

6.
Evidence of business insurance and product liability insurance for the life of
loan.

 

CONVERTIBLE DEBT OFFFERING REQUIREMENT.

 

The extension of this
loan is conditioned upon the successful closing of a Convertible Debt Offering
wherein net proceeds are no less than $2,500,000 which is expected to close no
later than March 2008. Should the Convertible Debt Offering not be completed,
the Borrower will be in default under the terms of the original agreements
dated February 27, 2007 and the Bank preserves any and all rights there
under to protect its interest.

 

INTEREST RATE PROVISION.

 

Borrower
agrees to a rate of Wall Street Journal Prime (the “Index”) plus 3.000
percentage points over the index, to accrue and be due not later than December 31,
2008. Until such time, the billable rate will be Wall Street Journal Prime (the
“Index”) plus 0.750 percentage points over the index, resulting in an initial
start rate is 6.75%, due monthly.

 

FUNDING RESTRICTIONS.

 

The
funding under this loan is restricted. The maximum outstanding loan amount
under this, and any other loan for which Borrower is contingently liable, shall
not exceed Western Commercial Bank’s legal lending limit, less the amount of
the participations sold to participating institutions.

 

OVER ADVANCE PROVISION.

 

Not
later than August 15, 2008 Borrower will reduce the over advance if any to
zero ($0.00) by either principal reduction or updated borrowing base as of July 31,
2007, that reflects eligible receivables, progress billings and inventory in
compliance with the Asset Based Business Loan Agreement dated February 27,
2008.

 

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a
part of this Agreement:

 

Amendments. This Agreement, together with any Related Documents, constitutes the
entire understanding and agreement of the parties as to the matters set forth
in this Agreement. No alteration of or amendment to this Agreement shall be
effective unless given in writing and signed by the party or parties sought to
be charged or bound by the alteration or amendment.

 

Arbitration. Borrower and Lender agree that all disputes,
claims and controversies between them whether individual, joint, or class in
nature, arising from this Agreement or otherwise, including without limitation
contract and tort disputes, shall be arbitrated pursuant to the Rules of
the American Arbitration Association in effect at the time the claim is filed,
upon request of either party. No act to take or dispose of any Collateral shall
constitute a waiver of this arbitration agreement or be prohibited by this
arbitration agreement. This includes, without limitation, obtaining injunctive
relief or a temporary restraining order; invoking a power of sale under any
deed of trust or mortgage; obtaining a writ of attachment or imposition of a
receiver; or exercising any rights relating to personal property, including
taking or disposing of such property with or without judicial process pursuant
to Article 9 of the Uniform Commercial Code. Any disputes, claims, or
controversies concerning the lawfulness or reasonableness of any act, or
exercise of any right, concerning any Collateral, including any claim to
rescind, reform, or otherwise modify any agreement relating to the Collateral,
shall also be arbitrated, provided however that no arbitrator shall have the
right or the power to enjoin or restrain any act of any party. Borrower and
Lender agree that in the event of an action for judicial foreclosure pursuant
to California Code of Civil Procedure Section 726, or any similar
provision in any other state, the commencement of such an action will not
constitute a waiver of the right to arbitrate and the court shall refer to
arbitration as much of such action, including counterclaims, as lawfully may be
referred to arbitration. Judgment upon any award rendered by any arbitrator may
be entered in any court having jurisdiction. Nothing in this Agreement shall preclude
any party from seeking equitable relief from a court of competent jurisdiction.
The statute of limitations, estoppel, waiver, laches, and similar doctrines
which would otherwise be applicable in an action brought by a party shall be
applicable in any arbitration proceeding, and the commencement of an
arbitration proceeding shall be deemed the commencement of an action for these
purposes. The Federal Arbitration Act shall apply to the construction,
interpretation, and enforcement of this arbitration provision.

 

Attorneys’ Fees; Expenses. Borrower agrees to pay upon demand all of
Lender’s costs and expenses, including Lender’s attorneys’ fees and Lender’s
legal expenses, incurred in connection with the enforcement of this Agreement.
Lender may hire or pay someone else to help enforce this Agreement, and
Borrower shall pay the costs and expenses of such enforcement. Costs and
expenses include Lender’s attorneys’ fees and legal expenses whether or not
there is a lawsuit, including attorneys’ fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services.
Borrower also shall pay all court costs and such additional fees as may be
directed by the court.

 

Caption Headings. Caption headings in this Agreement are for convenience purposes only and
are not to be used to interpret or define the provisions of this Agreement.

 

6

 

Consent
to Loan Participation. Borrower agrees and consents to Lender’s
sale or transfer, whether now or later, of one or more participation interests
in the Loan to one or more purchasers, whether related or unrelated to Lender.
Lender may provide, without any limitation whatsoever, to any one or more
purchasers, or potential purchasers, any information or knowledge Lender may
have about Borrower or about any other matter relating to the Loan, and
Borrower hereby waives any rights to privacy Borrower may have with respect to
such matters. Borrower additionally waives any and all notices of sale of
participation interests, as well as all notices of any repurchase of such
participation interests. Borrower also agrees that the purchasers of any such
participation interests will be considered as the absolute owners of such
interests in the Loan and will have all the rights granted under the
participation agreement or agreements governing the sale of such participation
interests. Borrower further waives all rights of offset or counterclaim that it
may have now or later against Lender or against any purchaser of such a
participation interest and unconditionally agrees that either Lender or such
purchaser may enforce Borrower’s obligation under the Loan irrespective of the
failure or insolvency of any holder of any interest in the Loan. Borrower
further agrees that the purchaser of any such participation interests may
enforce its interests irrespective of any personal claims or defenses that
Borrower may have against Lender.

 

Governing Law. This Agreement will be governed by federal law
applicable to Lender and, to the extent not preempted by federal law, the laws
of the State of California without regard to its conflicts of law provisions.
This Agreement has been accepted by Lender in the State of California.

 

Choice
of Venue. If there is a lawsuit, Borrower agrees upon Lender’s
request to submit to the jurisdiction of the courts of Los Angeles County,
State of California.

 

No
Waiver by Lender. Lender shall not be deemed to have waived
any rights under this Agreement unless such waiver is given in writing and
signed by Lender. No delay or omission on the part of Lender in exercising any
right shall operate as a waiver of such right or any other right. A waiver by
Lender of a provision of this Agreement shall not prejudice or constitute a
waiver of Lender’s right otherwise to demand strict compliance with that
provision or any other provision of this Agreement. No prior waiver by Lender,
nor any course of dealing between Lender and Borrower, or between Lender and
any Grantor, shall constitute a waiver of any of Lender’s rights or of any of
Borrower’s or any Grantor’s obligations as to any future transactions. Whenever
the consent of Lender is required under this Agreement, the granting of such
consent by Lender in any instance shall not constitute continuing consent to
subsequent instances where such consent is required and in all cases such
consent may be granted or withheld in the sole discretion of Lender.

 

Notices.
Any notice required to be given under this Agreement shall be
given in writing, and shall be effective when actually delivered, when actually
received by telefacsimile (unless otherwise required by law), when deposited
with a nationally recognized overnight courier, or, if mailed, when deposited
in the United States mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this Agreement.
Any party may change its address for notices under this Agreement by giving formal
written notice to the other parties, specifying that the purpose of the notice
is to change the party’s address. For notice purposes, Borrower agrees to keep
Lender informed at all times of Borrower’s current address. Unless otherwise
provided or required by law, if there is more than one Borrower, any notice
given by Lender to any Borrower is deemed to be notice given to all Borrowers.

 

Severability.
If a court of competent jurisdiction finds any provision of this Agreement to
be illegal, invalid, or unenforceable as to any circumstance, that finding
shall not make the offending provision illegal, invalid, or unenforceable as to
any other circumstance. If feasible, the offending provision shall be
considered modified so that it becomes legal, valid and enforceable. If the
offending provision cannot be so modified, it shall be considered deleted from
this Agreement. Unless otherwise required by law, the illegality, invalidity,
or unenforceability of any provision of this Agreement shall not affect the legality,
validity or enforceability of any other provision of this Agreement.

 

Subsidiaries
and Affiliates of Borrower. To the extent the context of any
provisions of this Agreement makes it appropriate, including without limitation
any representation, warranty or covenant, the word “Borrower” as used in this
Agreement shall include all of Borrower’s subsidiaries and affiliates.
Notwithstanding the foregoing however, under no circumstances shall this
Agreement be construed to require Lender to make any Loan or other financial
accommodation to any of Borrower’s subsidiaries or affiliates.

 

Successors
and Assigns. All covenants and agreements by or on behalf of
Borrower contained in this Agreement or any Related Documents shall bind
Borrower’s successors and assigns and shall inure to the benefit of Lender and
its successors and assigns. Borrower shall not, however, have the right to
assign Borrower’s rights under this Agreement or any interest therein, without
the prior written consent of Lender.

 

Survival
of Representations and Warranties. Borrower understands and
agrees that in making the Loan, Lender is relying on all representations,
warranties, and covenants made by Borrower in this Agreement or in any
certificate or other instrument delivered by Borrower to Lender under this
Agreement or the Related Documents. Borrower further agrees that regardless of
any investigation made by Lender, all such representations, warranties and
covenants will survive the making of the Loan and delivery to Lender of the
Related Documents, shall be continuing in nature, and shall remain in full
force and effect until such time as Borrower’s Indebtedness shall be paid in
full, or until this Agreement shall be terminated in the manner provided above,
whichever is the last to occur.

 

Time is
of  the Essence. Time
is of the essence in the performance of this Agreement.

 

Waive Jury. To the extent permitted by applicable law, all
parties to this Agreement hereby waive the right to any jury trial in any
action, proceeding, or counterclaim brought by any party against any other
party. (Initial Here
                                
)

 

DEFINITIONS.
The following capitalized words and terms shall have the
following meanings when used in this Agreement. Unless specifically stated to
the contrary, all references to dollar amounts shall mean amounts in lawful
money of the United States of America. Words and terms used in the singular
shall include the plural, and the plural shall include the singular, as the
context may require. Words and terms not otherwise defined in this Agreement
shall have the meanings attributed to such terms in the Uniform Commercial
Code. Accounting words and terms not otherwise defined in this Agreement shall
have the meanings assigned to them in accordance with generally accepted
accounting principles as in effect on the date of this Agreement:

 

Account.
The word “Account” means a trade account, account receivable,
other receivable, or other right to payment for goods sold or services rendered
owing to Borrower (or to a third party grantor acceptable to Lender).

 

Account
Debtor. The words “Account Debtor” mean the person or entity
obligated upon an Account.

 

Advance.
The word “Advance” means a disbursement of Loan funds made,
or to be made, to Borrower or on Borrower’s behalf under the terms and
conditions of this Agreement.

 

Agreement.
The word “Agreement” means this Business Loan Agreement
(Asset Based), as this Business Loan Agreement (Asset Based) may be amended or
modified from time to time, together with all exhibits and schedules attached
to this Business Loan Agreement (Asset Based) from time to time.

 

Borrower.
The word “Borrower” means Aspyra, Inc. and includes all
co-signers and co-makers signing the Note and all their successors and assigns.

 

7

 

Borrowing Base. The words “Borrowing Base” mean as determined by Lender from time to
time, the lesser of (1) $1,300,000.00 or
(2) the sum of (a) 80.000% of
the aggregate amount of Eligible Accounts (not to exceed in corresponding Loan
amount based on Eligible Accounts $1,300,000.00),
plus (b) 30.000% of
the aggregate amount of Eligible Inventory (not to exceed in corresponding Loan
amount based on Eligible Inventory $250,000.00),
plus (c) 40.000% of
the aggregate amount of Eligible Progress Billings (not to exceed in
corresponding Loan amount based on Eligible Progress Billings $300,000.00).

 

Business Day. The words “Business Day” mean a day on which commercial banks are open
in the State of California.

 

Collateral. The word “Collateral” means all property and assets granted as
collateral security for a Loan, whether real or personal property, whether
granted directly or indirectly, whether granted now or in the future, and
whether granted in the form of a security interest, mortgage, collateral
mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage,
collateral chattel mortgage, chattel trust, factor’s lien, equipment trust,
conditional sale, trust receipt, lien, charge, lien or title retention
contract, lease or consignment intended as a security device, or any other
security or lien interest whatsoever, whether created by law, contract, or
otherwise. The word Collateral also includes without limitation all collateral
described in the Collateral section of this Agreement.

 

Eligible Accounts. The words “Eligible Accounts” mean at any time, all of Borrower’s
Accounts which contain selling terms and conditions acceptable to Lender. The
net amount of any Eligible Account against which Borrower may borrow shall
exclude all returns, discounts, credits, and offsets of any nature. Unless
otherwise agreed to by Lender in writing, Eligible Accounts do not include:

 

(1) 
Accounts with respect to which the Account Debtor is employee or agent of
Borrower.

 

(2) 
Accounts with respect to which the Account Debtor is a subsidiary of, or
affiliated with Borrower or its shareholders, officers, or directors.

 

(3) 
Accounts with respect to which goods are placed on consignment, guaranteed
sale, or other terms by reason of which the payment by the Account Debtor may
be conditional.

 

(4) 
Accounts with respect to which the Account Debtor is not a resident of the
United States, except to the extent such Accounts are supported by insurance,
bonds or other assurances satisfactory to Lender.

 

(5) 
Accounts with respect to which Borrower is or may become liable to the Account
Debtor for goods sold or services rendered by the Account Debtor to Borrower.

 

(6) 
Accounts which are subject to dispute, counterclaim, or setoff.

 

(7) 
Accounts with respect to which the goods have not been shipped or delivered, or
the services have not been rendered, to the Account Debtor.

 

(8) 
Accounts with respect to which Lender, in its sole discretion, deems the
creditworthiness or financial condition of the Account Debtor to be
unsatisfactory.

 

(9) 
Accounts of any Account Debtor who has filed or has had filed against it a
petition in bankruptcy or an application for relief under any provision of any
state or federal bankruptcy, insolvency, or debtor-in-relief acts; or who has
had appointed a trustee, custodian, or receiver for the assets of such Account
Debtor; or who has made an assignment for the benefit of creditors or has
become insolvent or fails generally to pay its debts (including its payrolls)
as such debts become due.

 

(10) 
Accounts with respect to which the Account Debtor is the United States
government or any department or agency of the United States.

 

(11) 
Accounts which have not been paid in full within 90 days from the invoice date. The entire balance of any
Account of any single Account Debtor will be ineligible whenever the portion of
the Account which has not been paid within 90
days from the invoice date is in excess of 25.000% of the total amount outstanding on
the Account.

 

(12) 
That portion of the Accounts of any single Account Debtor which exceeds 25.000% of all of Borrower’s Accounts (“Concentrations”).
Insured Concentrations exceeding 25.000% to large customers will exist from
time to time; approval from Lender will be obtained for Concentrations on an as
needed basis.

 

Eligible Inventory. The words “Eligible Inventory” mean, at any time, all of Borrower’s
Inventory as defined below, except:

 

(1) 
Inventory which is not owned by Borrower free and clear of all security
interests, liens, encumbrances, and claims of third parties.

 

(2) 
Inventory which Lender, in its sole discretion, deems to be obsolete,
unsalable, damaged, defective, or unfit for further processing.

 

(3) 
Work in progress.

 

(4) 
Out of state Inventory, or Inventory on consignment.

 

Environmental Laws. The words “Environmental Laws” mean any and all state, federal and local
statutes, regulations and ordinances relating to the protection of human health
or the environment, including without limitation the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601,
et seq. (“CERCLA”), the Superfund Amendments and Reauthorization Act of 1986,
Pub. L. No. 99-499 (“SARA”), the Hazardous Materials Transportation Act,
49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901, et seq.. Chapters 6.5 through 7.7 of Division
20 of the California Health and Safety Code, Section 25100, et seq., or
other applicable state or federal laws, rules, or regulations adopted pursuant
thereto.

 

Event of Default. The words “Event of Default” mean any of the events of default set forth
in this Agreement in the default section of this Agreement.

 

Expiration Date. The words “Expiration Date” mean the date of termination of Lender’s
commitment to lend under this Agreement.

 

GAAP. The
word “GAAP” means generally accepted accounting principles.

 

Grantor. The word “Grantor” means each and all of the persons or entities
granting a Security Interest in any Collateral for the Loan, including without
limitation all Borrowers granting such a Security Interest.

 

Guarantor. The word “Guarantor” means any guarantor, surety, or accommodation party
of any or all of the Loan.

 

Guaranty. The word “Guaranty” means the guaranty from Guarantor to Lender,
including without limitation a guaranty of all or part of the Note.

 

Hazardous Substances. The words “Hazardous Substances” mean
materials that, because of their quantity, concentration or physical, chemical
or infectious characteristics, may cause or pose a present or potential hazard
to human health or the environment when

 

8

 

improperly used, treated,
stored, disposed of, generated, manufactured, transported or otherwise handled.
The words “Hazardous Substances” are used in their very broadest sense and
include without limitation any and all hazardous or toxic substances, materials
or waste as defined by or listed under the Environmental Laws. The term “Hazardous
Substances” also includes, without limitation, petroleum and petroleum
by-products or any fraction thereof and asbestos.

 

Indebtedness.
The word “Indebtedness” means the indebtedness evidenced by
the Note or Related Documents, including all principal and interest together
with all other indebtedness and costs and expenses for which Borrower is
responsible under this Agreement or under any of the Related Documents.

 

Inventory.
The word “Inventory” means all of Borrower’s raw materials,
work in process, finished goods, merchandise, parts and supplies, of every kind
and description, and goods held for sale or lease or furnished under contracts
of service in which Borrower now has or hereafter acquires any right, whether
held by Borrower or others, and all documents of title, warehouse receipts,
bills of lading, and all other documents of every type covering all or any part
of the foregoing. Inventory includes inventory temporarily out of Borrower’s
custody or possession and all returns on Accounts.

 

Lender. The
word “Lender” means Western Commercial Bank, its successors and assigns.

 

Loan.
The word “Loan” means any and all loans and financial accommodations from
Lender to Borrower whether now or hereafter existing, and however evidenced,
including without limitation those loans and financial accommodations described
herein or described on any exhibit or schedule attached to this Agreement from
time to time.

 

Note. The
word “Note” means the Note executed by Aspyra, Inc. in the principal
amount of $1,300,000.00 dated February 27, 2008, together with all
renewals of, extensions of, modifications of, refinancings of, consolidations
of, and substitutions for the note or credit agreement.

 

Permitted
Liens. The words “Permitted Liens” mean (1) liens and
security interests securing Indebtedness owed by Borrower to Lender; (2) liens
for taxes, assessments, or similar charges either not yet due or being
contested in good faith; (3) liens of materialmen, mechanics,
warehousemen, or carriers, or other like liens arising in the ordinary course
of business and securing obligations which are not yet delinquent; (4) purchase
money liens or purchase money security interests upon or in any property
acquired or held by Borrower in the ordinary course of business to secure
indebtedness outstanding on the date of this Agreement or permitted to be
incurred under the paragraph of this Agreement titled “Indebtedness and Liens”;
(5) liens and security interests which, as of the date of this Agreement,
have been disclosed to and approved by the Lender in writing; and (6) those
liens and security interests which in the aggregate constitute an immaterial
and insignificant monetary amount with respect to the net value of Borrower’s
assets.

 

Primary
Credit Facility. The words “Primary Credit Facility” mean the
credit facility described in the Primary Credit Facility section of this
Agreement.

 

Related
Documents. The words “Related Documents” mean all promissory
notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security deeds,
collateral mortgages, and all other instruments, agreements and documents,
whether now or hereafter existing, executed in connection with the Loan.

 

Security
Agreement. The words “Security Agreement” mean and include
without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract, or
otherwise, evidencing, governing, representing, or creating a Security
Interest.

 

Security
Interest. The words “Security Interest” mean, without
limitation, any and all types of collateral security, present and future,
whether in the form of a lien, charge, encumbrance, mortgage, deed of trust,
security deed, assignment, pledge, crop pledge, chattel mortgage, collateral
chattel mortgage, chattel trust, factor’s lien, equipment trust, conditional
sale, trust receipt, lien or title retention contract, lease or consignment
intended as a security device, or any other security or lien interest
whatsoever whether created by law, contract, or otherwise.

 

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
BUSINESS LOAN AGREEMENT (ASSET BASED) AND BORROWER AGREES TO ITS TERMS. THIS
BUSINESS LOAN AGREEMENT (ASSET BASED) IS DATED FEBRUARY 27, 2008.

 

BORROWER:

 

	
  ASPYRA, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Jim Zierick

  	
   

  
	
   

  	
  Jim Zierick, Interim
  CEO of Aspyra, Inc.

  	
   

  

 

LENDER:

 

	
  WESTERN
  COMMERCIAL BANK

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signer

  	
   

  

 

9Exhibit
10.50

 

MAUI LAND &
PINEAPPLE COMPANY, INC.

 

AMENDMENT
NO. 1 TO REGISTRATION RIGHTS AGREEMENT

 

This Amendment No. 1 to Registration Rights
Agreement (the “Amendment”) is entered into as of March 10, 2008,
by and among Maui Land & Pineapple Company, Inc., a Hawaii
corporation (the “Company”), on the one hand, and Ohana Holdings, LLC (“Ohana”),
and ZG Ventures, LLC (“ZG,” and together with Ohana, the “Investors”),
being the holders of not less than a majority in interest of the Registrable
Securities, on the other hand. Reference is made to that certain Registration Rights
Agreement (the “Agreement”), dated March 12, 2007, by and among the
Company and each of the Investors, obligating the Company to file a
registration statement with the Securities and Exchange Commission to register
the Registrable Securities for resale not later than March 12, 2008 (the “Filing
Deadline”).  The Company and the
Investors desire, pursuant to Article X of the Agreement, to amend Section 2.1(a) of
the Agreement to extend the Filing Deadline to March 31, 2008.

 

NOW, THEREFORE, in
consideration of the mutual covenants hereinafter set forth and for good and
valuable consideration, receipt of which is hereby acknowledged, the parties
hereby agree as follows:

 

1.             Definitions. 
Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Agreement.

 

2.             Amendment. The first sentence of Section 2.1(a) of the Agreement is hereby amended to read in full
as follows:

 

  “2.1     (a)             On or before March 31, 2008,
the Company shall prepare, and file with the Commission a Registration
Statement on Form S-3 covering the resale of all of the Registrable
Securities.”

 

3.             Miscellaneous.

 

a.   Ratification; Effect. 
This Amendment shall be construed in connection with and as part of the
Agreement, and all terms, conditions, and covenants set forth in the Agreement
and each other instrument or agreement referred to therein, as applicable,
except as herein amended, are hereby ratified and confirmed and shall remain in
full force and effect.

 

b.     Further
Assurances.  Each party
agrees to execute such other and further instruments and documents as may be
necessary or proper in order to complete the transactions contemplated by this
Amendment.

 

c.     Counterparts.  This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

[Signature
page follows]

 

 

IN
WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 to
Registration Rights Agreement as of the date first set forth above.

 

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
  MAUI LAND & PINEAPPLE COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert I. Webber

  
	
   

  	
   

  	
  Robert I. Webber

  
	
   

  	
   

  	
  Chief Operating Officer and Chief Financial

  
	
   

  	
   

  	
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INVESTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OHANA HOLDINGS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Michael Mohr

  
	
   

  	
   

  	
   Michael Mohr

  
	
   

  	
   

  	
   Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ZG VENTURES, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Miles
  Gilburne

  
	
   

  	
   

  	
   Miles Gilburne

  
	
   

  	
   

  	
   Managing Member

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