Document:

Exhibit 10.6

    

      CREDIT
        AND SECURITY AGREEMENT

      

      THIS
        CREDIT AND SECURITY AGREEMENT (the “Agreement”)
        dated
        as of August 12, 2005 is entered into among OBLIO TELECOM, INC., a Delaware
        corporation (“Oblio”),
        each
        of its direct and indirect subsidiaries signatory hereto (Oblio and each
        such
        subsidiary are referred to, individually and collectively, jointly and severally
        as the “Borrower”),
        and
        CAPITALSOURCE FINANCE LLC, a Delaware limited liability company (the
“Lender”).

      

      WHEREAS,
        Borrower has requested that Lender make available to Borrower a revolving
        credit
        facility (the “Revolving Facility”) in a maximum principal amount at any time
        outstanding of up to FIFTEEN MILLION DOLLARS ($15,000,000) (the “Facility
        Cap”),
        a
        term loan A (the “Term
        Loan A”)
        in a
        maximum principal amount of FIVE MILLION DOLLARS ($5,000,000) (the “Maximum
        Term Loan A Amount”)
        and a
        term loan B (the “Term
        Loan B”)
        in a
        maximum principal amount of SIX MILLION FOUR HUNDRED THOUSAND DOLLARS
        ($6,400,000) (the “Maximum
        Term Loan B Amount”)
        (Term
        Loan A and Term Loan B collectively, the “Term
        Loan Facilities”),
        the
        proceeds of which shall be used by Borrower to fund a portion of the purchase
        price of the Acquisition (as hereafter defined) and for payments to Lender
        hereunder and for any other lawful purpose authorized by this Agreement;
        and

      

      WHEREAS,
        Lender is willing to make the Revolving Facility and the Term Loan Facilities
        available to Borrower upon the terms and subject to the conditions set forth
        herein.

      

      NOW,
        THEREFORE, in consideration of the foregoing and for other good and valuable
        consideration, the receipt and adequacy of which hereby are acknowledged,
        Borrower and Lender hereby agree as follows:

       

      
        	
                I.

              	
                DEFINITIONS

              

      

      
        	 	
                1.1.

              	
                General
                  Terms

              

      

      

      For
        purposes of this Agreement, in addition to the definitions above and elsewhere
        in this Agreement, the terms listed in Appendix A and Annex I hereto shall
        have
        the meanings given such terms in Appendix A and Annex I, which are incorporated
        herein and made a part hereof. All capitalized terms used which are not
        specifically defined herein shall have meanings provided in Article 9
        of
        the UCC in effect on the date hereof to the extent the same are used or defined
        therein. Unless otherwise specified herein or in Appendix A, Annex I, any
        agreement, contract or instrument referred to herein or in Appendix A or
        Annex I
        shall mean such agreement, contract or instrument as modified, amended, restated
        or supplemented from time to time. Unless otherwise specified, as used in
        the
        Loan Documents or in any certificate, report, instrument or other document
        made
        or delivered pursuant to any of the Loan Documents, all accounting terms
        not
        defined in Appendix A, Annex I or elsewhere in this Agreement shall have
        the
        meanings given to such terms in and shall be interpreted in accordance with
        GAAP. References herein to “Eastern Time” shall mean eastern standard time or
        eastern daylight savings time as in effect on any date of determination in
        the
        eastern United States of America.

       

      
        	
                II.

              	
                ADVANCES,
                  PAYMENT AND INTEREST

              

      

      
        	 	
                2.1.

              	
                The
                  Revolving Facility

              

      

      

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

      (a) Subject
        to the provisions of this Agreement, Lender shall make Advances to Borrower
        under the Revolving Facility from time to time during the Term, provided
        that,
        notwithstanding any other provision of this Agreement, the aggregate amount
        of
        all Advances at any one time outstanding under the Revolving Facility shall
        not
        exceed the lesser of (a) the Facility Cap, and (b) the Availability.
        The
        Revolving Facility is a revolving credit facility, which may be drawn, repaid
        and redrawn, from time to time as permitted under this Agreement. Any
        determination as to whether there is Availability for Advances shall be made
        by
        Lender in its sole discretion and is final and binding upon Borrower. Unless
        otherwise permitted by Lender, each Advance shall be in an amount of at least
        $1,000. Subject to the provisions of this Agreement, Borrower may request
        Advances under the Revolving Facility up to and including the value, in U.S.
        Dollars, of the sum of (i) the Receivables Percentage of the Borrowing Base
        for
        Eligible Receivables, and (ii) the Inventory Percentage of the Borrowing
        Base
        for Eligible Inventory minus, if applicable, amounts adjusted or reserved
        pursuant to this Agreement (such calculated amount being referred to herein
        as
        the “Availability”).
        Advances under the Revolving Facility automatically shall be made for the
        payment of interest on the Loan and other Obligations on the date when due
        to
        the extent available and as provided for herein.

      

      (b) Lender
        has established the above-referenced advance rate for Availability and, in
        its
        Permitted Discretion, may adjust such advance rate by applying percentages
        (known as “dilution factors”) to Eligible Receivables based upon Borrower’s
        actual recent collection history in a manner consistent with Lender’s
        underwriting practices and procedures, including without limitation Lender’s
        review and analysis of, among other things, Borrower’s historical returns,
        rebates, discounts, credits and allowances (collectively, the “Dilution
        Items”).
        Also,
        Lender shall have the right to establish from time to time, in its Permitted
        Discretion, reserves against the Borrowing Base, which reserves shall have
        the
        effect of reducing the amounts otherwise eligible to be disbursed to Borrower
        under the Revolving Facility pursuant to this Agreement.

       

      
        	 	
                2.2.

              	
                The
                  Revolving Loans; Revolving Facility Maturity
                  Date

              

      

      

      All
        amounts outstanding under the Loans and other Obligations shall be due and
        payable in full in cash, if not earlier in accordance with this Agreement,
        on
        the last day of the Term (such earlier date being the “Revolving
        Facility Maturity Date”).

       

      
        	 	
                2.3.

              	
                Interest
                  on the Revolving Facility

              

      

      `                                                                                                                                                                                                                                                        

      Interest
        on outstanding Advances under the Facility shall be payable monthly in arrears
        on the first day of each calendar month at an annual rate of Prime Rate plus
        one
        percent (1%), provided, however, that, notwithstanding any provision of any
        Loan
        Document, for the purpose of calculating interest hereunder, the Prime Rate
        shall be not less than six and one quarter percent (6.25%), in each case
        calculated on the basis of a 360-day year and for the actual number of calendar
        days elapsed in each interest calculation period. Interest accrued on each
        Advance under the Facility shall be due and payable on the first day of each
        calendar month, in accordance with the procedures provided for in Section
        2.5
        and Section 2.12, commencing September 1, 2005, and continuing until
        the
        later of the expiration of the Term and the full performance and irrevocable
        payment in full in cash of the Obligations and termination of this Agreement.
        

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

      
        	 	
                2.4.

              	
                Revolving
                  Facility Disbursements; Requirement to Deliver Borrowing
                  Certificate

              

      

      

      So
        long
        as no Default or Event of Default shall have occurred and be continuing,
        Borrower may give Lender irrevocable written notice requesting an Advance
        under
        the Revolving Facility by delivering to Lender not later than 11:00 a.m.
        (Eastern Time) at least one but not more than four Business Days before the
        proposed borrowing date of such requested Advance (the “Borrowing
        Date”),
        a
        completed Borrowing Certificate and relevant supporting documentation
        satisfactory to Lender, which shall (i) specify the proposed Borrowing
        Date
        of such Advance which shall be a Business Day, (ii) specify the principal
        amount of such requested Advance, (iii) certify the matters contained
        in
        Section 4.2, and (iv) specify the amount of any recoupments of any
        third
        party payor being sought, requested or claimed, or, to Borrower’s knowledge,
        threatened against Borrower or Borrower’s Affiliates. Each time a request for an
        Advance is made, and, in any event and regardless of whether an Advance is
        being
        requested, on Tuesday of each week during the Term (and more frequently if
        Lender shall so request) until the Obligations are indefeasibly paid in cash
        in
        full and this Agreement is terminated, Borrower shall deliver to Lender a
        Borrowing Certificate accompanied by a separate detailed aging and categorizing
        of Borrower’s accounts receivable and accounts payable and such other supporting
        documentation with respect to the figures and information in the Borrowing
        Certificate as Lender shall reasonably request from a credit or security
        perspective or otherwise. On each Borrowing Date, Borrower irrevocably
        authorizes Lender to disburse the proceeds of the requested Advance to the
        appropriate Borrower’s account(s) as set forth on Schedule 2.4, in all cases for
        credit to the appropriate Borrower (or to such other account as to which
        the
        appropriate Borrower shall instruct Lender) via Federal funds wire transfer
        no
        later than 4:00 p.m. (Eastern Time).

       

      
        	 	
                2.5.

              	
                Revolving
                  Facility Collections; Repayment; Borrowing Availability and
                  Lockbox

              

      

      

      Borrower
        shall maintain one or more lockbox accounts (individually and collectively,
        the
“Lockbox
        Account”)
        with
        one or more banks acceptable to Lender (each, a “Lockbox
        Bank”),
        and
        shall execute with each Lockbox Bank one or more agreements acceptable to
        Lender
        (individually and collectively, the “Lockbox Agreement”), and such other
        agreements related thereto as Lender may require. Each Borrower shall ensure
        that all collections of Borrower’s Accounts and all other cash payments received
        by Borrower are paid and delivered directly from Account Debtors and other
        Persons into the appropriate Lockbox Account. The Lockbox Agreements shall
        provide that the Lockbox Banks immediately will transfer all funds paid into
        the
        Lockbox Accounts into a depository account or accounts maintained by Lender
        or
        an Affiliate of Lender at such bank as Lender may communicate to Borrower
        from
        time to time (the “Concentration
        Account”).
        Notwithstanding and without limiting any other provision of any Loan Document,
        Lender shall apply, on a daily basis, all funds transferred into the
        Concentration Account pursuant to the Lockbox Agreement and this
        Section 2.5 in such order and manner as determined by Lender. To the
        extent
        that any Accounts are collected by Borrower or any other cash payments received
        by Borrower are not sent directly to the appropriate Lockbox Account but
        are
        received by Borrower or any of Borrower’s Affiliates, such collections and
        proceeds shall be held in trust for the benefit of Lender and immediately
        remitted (and in any event within two (2) Business Days), in the form received,
        to the appropriate Lockbox Account for immediate transfer to the Concentration
        Account. Borrower acknowledges and agrees that compliance with the terms
        of this
        Section 2.5 is an essential term of this Agreement, and that, in addition
        to and
        notwithstanding any other rights Lender may have hereunder, under any other
        Loan
        Document, under applicable law or at equity, upon each and every failure
        by
        Borrower or any of Borrower’s Affiliates to comply with any such terms Lender
        shall be entitled to assess a lockbox non-compliance fee which shall operate
        to
        increase the Applicable Rate by two percent (2%) per annum during any period
        of
        lockbox non-compliance, whether or not a Default or an Event of Default occurs
        or is declared, provided that nothing shall prevent Lender from considering
        any
        failure to comply with the terms of this Section 2.5 to be a Default
        or an
        Event of Default. All funds transferred to the Concentration Account for
        application to the Obligations under the Revolving Facility shall be applied
        to
        reduce the Obligations under the Revolving Facility, but, for purposes of
        calculating interest hereunder, shall be subject to a five Business Day
        clearance period. If as the result of collections of Accounts and/or any
        other
        cash payments received by Borrower pursuant to this Section 2.5 a credit
        balance
        exists with respect to the Concentration Account, such credit balance shall
        not
        accrue interest in favor of a Borrower, but shall be available to Borrower
        upon
        Borrower’s written request. If applicable, at any time prior to the execution of
        all or any of the Lockbox Agreements and operation of all or any of the Lockbox
        Accounts, Borrower and Borrower’s Affiliates shall direct all collections or
        proceeds it receives on Accounts or from other Collateral to the accounts(s)
        and
        in the manner specified by Lender in its sole discretion. Notwithstanding
        the
        foregoing, by no later than August 19, 2005, Borrower shall have delivered
        an
        executed Lockbox Agreement satisfactory to Lender and such other agreements
        related thereto as Lender may require; provided Borrower shall pay the sum
        of
        $2,000 for each day beyond August 19, 2005 (commencing August 22, 2005) that
        a
        satisfactory Lockbox Agreement has not been delivered. Until the delivery
        of the
        Lockbox Agreement, Borrower shall endorse all receipts to Lender and remit
        them
        into an account at Bank of America in Lender's name as further described
        on
        Schedule 6.8 (or such other account as may be identified by Lender from time
        to
        time) until such date as a satisfactory Lockbox Agreement has been
        delivered.

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      
        	 	
                2.6.

              	
                The
                  Term Loan A Facility

              

      

      

      Subject
        to the terms and conditions set forth in this Agreement, Lender agrees to
        loan
        to Borrower on the Closing Date the Maximum Term Loan A Amount in the form
        of
        Term Loan A to be constituted of a single draw equal to such Maximum Term
        Loan A
        Amount to be disbursed to the Borrower’s account(s) as set forth on Schedule
        2.4. Term Loan A is not a revolving credit facility, and any repayments of
        principal shall be applied to permanently reduce Term Loan A. 

       

      
        	 	
                2.7.

              	
                Interest
                  on Term Loan
                  A

              

      

      

      Interest
        on the outstanding balance of Term Loan A shall be payable monthly in arrears
        on
        the first day of each calendar month at an annual rate of the Prime Rate
        plus
        4.0%, provided,
        however,
        that,
        notwithstanding, any other provision of any Loan Document, the Prime Rate
        shall
        be not less than six and one quarter percent (6.25%), in each case calculated
        on
        the basis of a 360-day year and for the actual number of calendar days elapsed
        in each interest calculation period. Interest accrued on Term Loan A shall
        be
        due and payable on the first day of each calendar month commencing September
        1,
        2005, and continuing until the later of the Term Loan A Maturity Date and
        the
        full performance and irrevocable payment in full in cash of the Obligations
        due
        and owing under Term Loan A pursuant to this Agreement. Advances under the
        Revolving Facility shall be made automatically for the payment of interest
        on
        Term Loan A and other Obligations on the date when due to the extent available
        and as provided for herein. 

       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

      
        	 	
                2.8.

              	
                Repayment
                  of Term Loan A; Maturity

              

      

      

      (a) Payment
        of principal (in addition to the interest payments in Section 2.7) and all
        other
        amounts outstanding under Term Loan A shall be payable in fifteen equal monthly
        installments of $208,333.33 each beginning October 1, 2005 and continuing
        on the
        first day of each month thereafter through and including December 1, 2006.
        

      

      (b) The
        unpaid principal amount of Term Loan A and all other Obligations under Term
        Loan
        A shall be due and payable in full, if not earlier in accordance with this
        Agreement, on the earlier of (i) the occurrence of an Event of Default if
        required pursuant hereto or Lender’s demand upon an Event of Default, and (ii)
        December 1, 2006 (such earlier date being the “Term
        Loan A Maturity Date”).

       

      
        	 	
                2.9.

              	
                The
                  Term Loan B Facility

              

      

      

      Subject
        to the terms and conditions set forth in this Agreement, Lender agrees to
        loan
        to Borrower on the Closing Date the Maximum Term Loan B amount in the form
        of
        Term Loan B to be constituted of a single draw equal to such Maximum Term
        Loan B
        Amount to be disbursed to the Borrower’s account(s) as set forth on Schedule
        2.4. Term Loan B is not a revolving credit facility, and any repayments of
        principal shall be applied to permanently reduce Term Loan B. 

       

      
        	 	
                2.10.

              	
                Interest
                  on Term Loan B

              

      

      

      Interest
        on the outstanding balance of Term Loan B shall be payable monthly in arrears
        on
        the first day of each calendar month at an annual rate of the Prime Rate
        plus
        4.0%, provided, however, that, notwithstanding, any other provision of any
        Loan
        Document, the Prime Rate shall not be less than six and one quarter percent
        (6.25%), in each case calculated on the basis of a 360-day year and for the
        actual number of calendar days elapsed in each interest calculation period.
        Interest accrued on Term Loan B shall be due and payable on the first day
        of
        each calendar month commencing September 1, 2005, and continuing until the
        later
        of the Term Loan B Maturity Date and the full performance and irrevocable
        payment in full in cash of the Obligations due and owing under the Term Loan
        B
        pursuant to this Agreement. Advances under the Revolving Facility shall be
        made
        automatically for the payment of interest on Term Loan B and other Obligations
        on the date when due to the extent available and as provided for
        herein.

       

      
        	 	
                2.11.

              	
                Repayment
                  of Term Loan B; Maturity

              

      

      

      (a) Payment
        of principal (in addition to the interest payments in Section 2.10) and all
        other amounts outstanding under Term Loan B shall be payable in fifteen equal
        monthly installments of $266,666.67 each beginning October 1, 2005 and
        continuing on the first day of each month thereafter through and including
        December 1, 2006.

      

      (b) The
        unpaid principal amount of Term Loan B and all other Obligations under Term
        Loan
        B shall be due and payable in full, if not earlier in accordance with this
        Agreement, on the earlier of (i) the occurrence of an Event of Default if
        required pursuant hereto or Lender’s demand upon an Event of Default, and (ii)
        December 1, 2006 (such earlier date being the “Term
        Loan B Maturity Date”).

       

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

      
        	 	
                2.12.

              	
                Promise
                  to Pay; Manner of Payment

              

      

      

      Borrower
        absolutely and unconditionally promises to pay principal, interest and all
        other
        amounts payable hereunder, or under any other Loan Document, without any
        right
        of rescission and without any deduction whatsoever, including any deduction
        for
        any setoff, counterclaim or recoupment, and notwithstanding any damage to,
        defects in or destruction of the Collateral or any other event, including
        obsolescence of any property or improvements. All payments made by Borrower
        (other than payments automatically paid through Advances under the Revolving
        Facility as provided herein), shall be made only by wire transfer on the
        date
        when due, without offset or counterclaim, in U.S. Dollars, in immediately
        available funds to such account as may be indicated in writing by Lender
        to
        Borrower from time to time. Any such payment received after 2:00 p.m. (Eastern
        Time) on the date when due shall be deemed received on the following Business
        Day. Whenever any payment hereunder shall be stated to be due or shall become
        due and payable on a day other than a Business Day, the due date thereof
        shall
        be extended to, and such payment shall be made on, the next succeeding Business
        Day, and such extension of time in such case shall be included in the
        computation of payment of any interest (at the interest rate then in effect
        during such extension) and/or fees, as the case may be.

       

      
        	 	
                2.13.

              	
                Repayment
                  of Excess Advances

              

      

      

      Any
        balance of Advances under the Revolving Facility outstanding at any time
        in
        excess of the lesser of the Facility Cap or the Availability shall be
        immediately due and payable by Borrower without the necessity of any demand,
        at
        the Payment Office, whether or not a Default or Event of Default has occurred
        or
        is continuing and shall be paid in the manner specified in Section
        2.12.

       

      
        	 	
                2.14.

              	
                Voluntary
                  Prepayments

              

      

      

      (a) Subject
        to the terms of this Section 2.14, Borrower may prepay to Lender, without
        penalty, the outstanding principal amount of the Term Loans, in whole or
        in
        part, at any time.

      

      (b) If
        Borrower elects to make any prepayment of the Term Loans pursuant to this
        Section 2.14, Borrower shall give irrevocable notice of such prepayment to
        Lender not less than five (5) Business Days prior to the date such prepayment
        is
        to be made, specifying (i) the date on which such prepayment is to be made,
        (ii)
        the amount of such prepayment and (iii) the amount of accrued interest
        applicable to such prepayment. Such notice shall be accompanied by a certificate
        of an officer of Borrower on behalf of Borrower stating that such payment
        is
        being made in compliance with this Section 2.14. Notice of prepayment having
        been so given, the aggregate principal amount of the Term Loan so specified
        to
        be prepaid, together with accrued interest thereon, shall be due and payable
        on
        the prepayment date set forth in such notice.

      

      (c) Any
        voluntary partial prepayment with respect to the Term Loan shall be applied
        in
        the following order of priority of the payment of: (i) any and all Obligations
        relating to such Term Loan that are due and owing pursuant to the terms of
        the
        Loan Documents, except the principal balance of the Loans and accrued and
        unpaid
        interest thereon; (ii) accrued and unpaid interest on the portion of the
        principal balance of the Term Loan being prepaid; and (iii) the principal
        balance of the Term Loan, which shall be applied to the scheduled installments
        thereof in inverse order of maturities. 

      

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

      (d) All
        prepayments made pursuant to this Section 2.14 shall be designated as a
        prepayment pursuant to this Section 2.14 on the applicable wire. The amount
        of
        any partial prepayment of the principal balance of the Term Loans shall not
        be
        less than $100,000 or, if in excess thereof, in integral multiples of $100,000
        in excess thereof.

       

      
        	 	
                2.15.

              	
                Other
                  Mandatory Prepayments 

              

      

      

      In
        addition to and without limiting any provision of any Loan Document:

      

      (a) if
        a
        Change of Control occurs on or prior to the first Business Day following
        the
        date of such Change of Control, Borrower shall prepay the Loans, including,
        without limitation, all outstanding Advances and all other Obligations, in
        full
        in cash together with accrued interest thereon to the date of prepayment
        and all
        other amounts owing to Lender under the Loan Documents; and

      

      (b) if
        Borrower (i) sells any of its material assets or properties (other than a
        sale
        in the ordinary course of business of assets which have become obsolete or
        worn
        out the proceeds of which are used to purchase replacement property), (ii)
        sells
        or issues any debt or equity securities other than Permitted Indebtedness,
        (iii)
        receives any property damage insurance award which is not used to repair
        or
        replace the property covered thereby or (iv) incurs any Indebtedness except
        for
        Permitted Indebtedness, then it shall apply 100% of the proceeds thereof
        to the
        prepayment of the Loans together with accrued interest thereon and all other
        Obligations owing to Lender under the Loan Documents, such payment to be
        applied
        in such manner and order as Lender shall decide in its sole
        discretion.

      

      (c) until
        such time as the Obligations relating to the Term Loan Facilities are
        indefeasibly paid in full in cash and fully performed, on or before the day
        of
        delivery to Lender of Borrower’s monthly financial statements in accordance with
        the terms of this Agreement, but in any event not later than the 30th day
        after
        the end of each month (commencing with the calendar month ending September
        30,
        2005), Borrower shall furnish Lender with a written calculation of Excess
        Cash
        Flow for such month and deliver to Lender an amount equal to one hundred
        percent
        (100%) of Borrower’s Excess Cash Flow for such month (the “Excess Cash Flow
        Amount”), to be applied by Lender to reduce the Obligations as follows: first,
        to all then unpaid fees and expenses; second, to all accrued and unpaid interest
        on the Term Loan Facilities; third, fifty percent (50%) of such
        Excess Cash Flow Amount shall
        be
        applied to the principal payment outstanding under Term Loan A in the inverse
        order of maturities and fifty percent (50%) of such Excess Cash Flow Amount
        shall be applied to the principal payment outstanding under Term Loan B in
        the
        inverse order of maturities; provided,
        further,
        one
        hundred percent (100%) of Borrower’s Excess Cash Flow shall be applied to either
        Term Loan A or Term Loan B, as the case may be, if the balance of either
        Term
        Loan equals zero; provided,
        further,
        that
        the reduction of the principal balance of the Term Loan Facilities shall
        not
        affect the amount or timing of principal payments (other than the extent
        to
        which reductions have been made with respect to such principal payments as
        allocated pursuant to this paragraph) required under this Agreement until
        the
        balance of such Term Loan Facilities is reduced to zero.

      

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

      (d) Notwithstanding
        anything contained in this Section 2.15 to the contrary, if any Overadvance
        exists at the time a payment is due under this Section 2.15, such payment
        shall
        be applied first to eliminate the Overadvance and then shall be distributed
        according to the provisions of this Section 2.15. An “Overadvance” shall exist
        if the aggregate amount of all Advances at any time outstanding under the
        Revolving Facility shall exceed the lesser of (A) the Facility Cap and (b)
        the
        Availability.

       

      
        	 	
                2.16.

              	
                Payments
                  by Lender

              

      

      

      Should
        any amount required to be paid under any Loan Document be unpaid, such amount
        may be paid by Lender, which payment shall be deemed a request for an Advance
        under the Revolving Facility as of the date such payment is due, and Borrower
        irrevocably authorizes disbursement of any such funds to Lender by way of
        direct
        payment of the relevant amount, interest or Obligations. No payment or
        prepayment of any amount by Lender or any other Person shall entitle any
        Person
        to be subrogated to the rights of Lender under any Loan Document unless and
        until the Obligations have been fully performed and paid irrevocably in cash
        and
        this Agreement has been terminated. Any sums expended by Lender as a result
        of
        Borrower’s or Guarantor’s failure to pay, perform or comply with any Loan
        Document or any of the Obligations may be charged to Borrower’s account as an
        Advance under the Revolving Facility and added to the Obligations.

       

      
        	 	
                2.17.

              	
                Grant
                  of Security Interest;
                  Collateral

              

      

      

      (a) To
        secure
        the payment and performance of the Obligations, Borrower hereby grants to
        Lender
        a continuing security interest in and Lien upon, and pledges to Lender, all
        of
        its assets, now owned or hereafter acquired, including with limitation all
        of
        Borrower’s right, title and interest to the following (collectively and each
        individually, the “Collateral”),
        which
        security interest is intended to be a first priority security
        interest:

      

      (i) all
        of
        Borrower’s tangible personal property, including without limitation all present
        and future Inventory and Equipment (including items of equipment which are
        or
        become Fixtures), Computer Hardware and Software now owned or hereafter
        acquired; 

      

      (ii) all
        of
        Borrower’s intangible personal property, including without limitation all
        present and future Accounts, contract rights, Permits, General Intangibles,
        Chattel Paper, Documents, Instruments, Deposit Accounts, Investment Property,
        Letter-of-Credit Rights and Supporting Obligations, rights to the payment
        of
        money or other forms of consideration of any kind, tax refunds, insurance
        proceeds, now owned or hereafter acquired, and all intangible and tangible
        personal property relating to or arising out of any of the foregoing;

      

      (iii) all
        of
        Borrower’s present and future Government Contracts and rights thereunder and the
        related Government Accounts and proceeds thereof, now or hereafter owned
        or
        acquired by Borrower; provided,
        however,
        that
        Lender shall not have a security interest in any rights under any Government
        Contract of Borrower or in the related Government Account where the taking
        of
        such security interest is a violation of an express prohibition contained
        in the
        Government Contract (for purposes of this limitation, the fact that a Government
        Contract is subject to, or otherwise refers to, Title 31, § 203 or
        Title 41, § 15 of the United States Code shall not be deemed an
        express prohibition against assignment thereof) or is prohibited by applicable
        law, unless in any case consent is otherwise validly obtained; and

      

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

      (iv) any
        and
        all additions and accessions to any of the foregoing, and any and all
        replacements, products and proceeds (including insurance proceeds) of any
        of the
        foregoing.

      

      (b) Notwithstanding
        the foregoing provisions of this Section 2.17, such grant of a security
        interest shall not extend to, and the term “Collateral” shall not include, any
        General Intangibles of Borrower to the extent that (i) such General
        Intangibles are not assignable or capable of being encumbered as a matter
        of law
        or under the terms of any license or other agreement applicable thereto (but
        solely to the extent that any such restriction shall be enforceable under
        applicable law) without the consent of the licensor thereof or other applicable
        party thereto, and (ii) such consent has not been obtained; provided,
        however, that the foregoing grant of a security interest shall extend to,
        and
        the term “Collateral” shall include, each of the following: (a) any General
        Intangible which is in the nature of an Account or a right to the payment
        of
        money or a proceed of, or otherwise related to the enforcement or collection
        of,
        any Account or right to the payment of money, or goods which are the subject
        of
        any Account or right to the payment of money, (b) any and all proceeds
        of
        any General Intangible that is otherwise excluded to the extent that the
        assignment, pledge or encumbrance of such proceeds is not so restricted,
        and
        (c) upon obtaining the consent of any such licensor or other applicable
        party with respect to any such otherwise excluded General Intangible, such
        General Intangible as well as any and all proceeds thereof that might
        theretofore have been excluded from such grant of a security interest and
        from
        the term “Collateral.”

      

      (c) In
        addition to the foregoing,

      

      (i) to
        secure
        the payment and performance of the Obligations, (A) Parent has pledged to
        Lender
        100% of the common stock of Borrower pursuant to the Parent Stock Pledge
        Agreement and (B) Oblio has pledged to Lender 100% of the common stock of
        its
        Subsidiaries, including Pinless Inc., pursuant to the Subsidiary Stock Pledge
        Agreement.

      

      (ii) to
        secure
        the payment and performance of the Obligations in respect of Term Loan B,
        Farwell has pledged to Lender 3,000,000 shares of common stock of Thomas
        Equipment, Inc. (Symbol: TEQI) (“Thomas
        Stock”)
        pursuant to the Thomas Stock Pledge Agreement, which Thomas Stock shall either
        be delivered directly to Lender or held in a securities account subject to
        Lender’s dominion and control pursuant to a control agreement satisfactory to
        Lender in its sole discretion in a manner satisfactory to Lender. Commencing
        after the date of receipt by Lender of Borrower’s annual audited financial
        statements prepared in accordance with this Agreement for the fiscal year
        of
        Borrower ending August 31, 2006, Lender shall release its Lien upon the Thomas
        Stock to the extent (A) the ratio of the market value of the Thomas Stock
        to the
        outstanding amount of Term Loan B is not less than 3.0:1 and (B) there does
        not
        then exist a Default or Event of Default and Borrower is otherwise in compliance
        with all provisions of this Agreement. Notwithstanding anything herein to
        the
        contrary, Lender shall immediately release its Lien upon the Thomas Stock
        upon
        Borrower’s payment in full in cash of the outstanding Obligations with respect
        to Term Loan B.

      

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

      (d) Upon
        the
        execution and delivery of this Agreement, and upon the proper filing of the
        necessary financing statements recordation of the Collateral Patent, Trademark
        and Copyright Assignment in the United States Patent and Trademark Office
        and/or
        the United States Copyright Office, and proper delivery of the necessary
        stock
        certificates, without any further action, Lender will have a good, valid
        and
        perfected first priority Lien and security interest in the Collateral, subject
        to no transfer or other restrictions or Liens of any kind in favor of any
        other
        Person except for Permitted Liens. No financing statement relating to any
        of the
        Collateral is on file in any public office except those (i) on behalf of
        Lender,
        and/or (ii) in connection with Permitted Liens. 

       

      
        	 	
                2.18.

              	
                Collateral
                  Administration

              

      

      

      (a) Borrower
        shall cause all Collateral (except Deposit Accounts) to be kept at the locations
        set forth on Schedule 5.18B hereto and shall not, without thirty (30)
        calendar days prior written notice to Lender, remove or permit the removal
        therefrom, and in any case shall not move any Collateral outside the continental
        United States.

      

      (b) Borrower
        shall keep accurate and complete records of its Accounts and all payments
        and
        collections thereon and shall submit such records to Lender on such periodic
        bases as Lender may request. In addition, if Accounts of Borrower in an
        aggregate face amount in excess of $75,000 become ineligible because they
        fall
        within one of the specified categories of ineligibility set forth in the
        definition of Eligible Receivables, Borrower shall notify Lender of such
        occurrence on the first Business Day following such occurrence and the Borrowing
        Base shall thereupon be adjusted to reflect such occurrence. If requested
        by
        Lender, Borrower shall execute and deliver to Lender formal written assignments
        of all of its Accounts weekly or daily as Lender may request, including all
        Accounts created since the date of the last assignment, together with copies
        of
        claims, invoices and/or other information related thereto. To the extent
        that
        collections from such assigned accounts exceed the amount of the Obligations,
        such excess amount shall not accrue interest in favor of Borrower, but shall
        be
        available to Borrower upon Borrower’s written request.

      

      (c) Whether
        or not an Event of Default has occurred, any of Lender’s officers, employees,
        representatives or agents shall have the right, at any time during normal
        business hours upon reasonable notice, (except upon the occurrence and during
        the continuance of an Event of Default, in which event no such notice shall
        be
        required) in the name of Lender, any designee of Lender or Borrower, to verify
        the validity, amount or any other matter relating to any Accounts of Borrower.
        Borrower shall cooperate fully with Lender in an effort to facilitate and
        promptly conclude such verification process.

      

      (d) To
        expedite collection, Borrower shall endeavor in the first instance to make
        collection of its Accounts for Lender. Lender shall have the right at all
        times
        after the occurrence and during the continuance of an Event of Default to
        notify
        Account Debtors owing Accounts to Borrower that their Accounts have been
        assigned to Lender and to collect such Accounts directly in its own name
        and to
        charge collection costs and expenses, including reasonable attorney’s fees, to
        Borrower.

      

      (e) As
        and
        when determined by Lender in its sole discretion, Lender will perform the
        searches described in clauses (i) and (ii) below against Borrower and Guarantors
        (the results of which are to be consistent with Borrower’s representations and
        warranties under this Agreement), all at Borrower’s expense: (i) UCC searches
        with the Secretary of State of the jurisdiction of organization of Borrower
        and
        Guarantor and the Secretary of State and local filing offices of each
        jurisdiction where Borrower and/or Guarantor maintain their respective executive
        offices, a place of business or assets; (ii) lien searches with the United
        States Patent and Trademark Office and the United States Copyright Office;
        and
        (iii) judgment, federal tax lien and corporate and partnership tax
        lien
        searches, in each jurisdiction searched under clause (i) above.

      

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

      (f) Borrower
        (i) shall provide prompt written notice to its current bank to transfer all
        items, collections and remittances to the Concentration Account, (ii) shall
        provide prompt written notice to each Account Debtor that Lender has been
        granted a lien and security interest in, upon and to all Accounts applicable
        to
        such Account Debtor and shall direct each Account Debtor to make payments
        to the
        appropriate Lockbox Account, and Borrower hereby authorizes Lender, upon
        any
        failure to send such notices and directions within ten (10) calendar days
        after
        the date of this Agreement (or ten (10) calendar days after the Person becomes
        an Account Debtor), to send any and all similar notices and directions to
        such
        Account Debtors, and (iii) shall do anything further that may be lawfully
        required by Lender to create and perfect Lender’s lien on any collateral and
        effectuate the intentions of the Loan Documents. At Lender’s request, Borrower
        shall immediately deliver to Lender all items for which Lender must receive
        possession to obtain a perfected security interest and all notes, certificates,
        and documents of title, Chattel Paper, warehouse receipts, Instruments, and
        any
        other similar instruments constituting Collateral.

       

      
        	 	
                2.19.

              	
                Power
                  of Attorney

              

      

      

      Lender
        is
        hereby irrevocably made, constituted and appointed the true and lawful attorney
        for Borrower (without requiring Lender to act as such) with full power of
        substitution to do the following: (i) endorse the name of any such Person
        upon
        any and all checks, drafts, money orders, and other instruments for the payment
        of money that are payable to such Person and constitute collections on its
        or
        their Accounts; (ii) execute in the name of such Person any financing
        statements, schedules, assignments, instruments, documents, and statements
        that
        it is or they or are obligated to give Lender under any of the Loan Documents;
        and (iii) do such other and further acts and deeds in the name of such Person
        that Lender may deem necessary or desirable to enforce any Account or other
        Collateral or to perfect Lender’s security interest or lien in any Collateral.
        In addition, if any such Person breaches its obligation hereunder to direct
        payments of Accounts or the proceeds of any other Collateral to the appropriate
        Lockbox Account, Lender, as the irrevocably made, constituted and appointed
        true
        and lawful attorney for such Person pursuant to this paragraph, may, by the
        signature or other act of any of Lender’s officers or authorized signatories
        (without requiring any of them to do so), direct any federal, state or private
        payor or fiscal intermediary to pay proceeds of Accounts or any other Collateral
        to the appropriate Lockbox Account.

       

      
        	 	
                2.20.

              	
                Evidence
                  of Loans

              

      

      

      (a) Lender
        shall maintain, in accordance with its usual practice, electronic or written
        records evidencing the indebtedness and obligations to such Lender resulting
        from each Loan made by such Lender from time to time, including without
        limitation, the amounts of principal and interest payable and paid to such
        Lender from time to time under this Agreement.

      

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

      (b) The
        entries made in the electronic or written records maintained pursuant to
        this
        Section 2.20 (the “Register”)
        shall
        be prima facie evidence of the existence and amounts of the obligations and
        indebtedness therein recorded; provided, however, that the failure of the
        Lender
        to maintain such records or any error therein shall not in any manner affect
        the
        obligations of the Borrower to repay the Loans or Obligations in accordance
        with
        their terms.

      

      (c) Lender
        will account to Borrower monthly with a statement of Advances under the
        Revolving Facility, and any charges and payments made pursuant to this
        Agreement, and in the absence of manifest error, such accounting rendered
        by
        Lender shall be deemed final, binding and conclusive unless Lender is notified
        by Borrower in writing to the contrary within fifteen (15) calendar days
        of
        Receipt of each accounting, which notice shall be deemed an objection only
        to
        items specifically objected to therein.

      

      (d) The
        Borrower agrees that:

      

      (i) upon
        written notice by Lender to the Borrower that a promissory note or other
        evidence of indebtedness is requested by Lender to evidence the Loans and
        other
        Obligations owing or payable to, or to be made by, such Lender, the Borrower
        shall promptly (and in any event within five (5) Business Days of any such
        request) execute and deliver to Lender an appropriate promissory note or
        notes
        in form and substance reasonably acceptable to the Lender and Borrower, payable
        to the order of Lender or in a principal amount equal to the amount of the
        Loans
        owing or payable to Lender;

      

      (ii) all
        references to Notes in the Loan Documents shall mean Notes, if any, to the
        extent issued (and not returned to the Borrower for cancellation) hereunder,
        as
        the same may be amended, modified, divided, supplemented and/or restated
        from
        time to time; and

      

      (iii) upon
        Lender’s written request, and in any event within five (5) Business Days of any
        such request, borrower shall execute and deliver to Lender new notes and/or
        divide the notes in exchange for then existing notes in such smaller amounts
        or
        denominations as Lender shall specify in its sole and absolute discretion;
        provided, that the aggregate principal amount of such new Notes shall not
        exceed
        the aggregate principal amount of the Notes outstanding at the time such
        request
        is made; and provided, further, that such notes that are to be replaced shall
        then be deemed no longer outstanding hereunder and replaced by such new notes
        and returned to the Borrower within a reasonable period of time after Lender’s
        receipt of the replacement notes.

       

      
        	
                III.

              	
                FEES
                  AND OTHER CHARGES

              

      

      
        	 	
                3.1.

              	
                Commitment
                  Fee

              

      

      

      On
        or
        before the Closing Date, Borrower shall pay to Lender an amount equal to
        $264,000, less $150,000 heretofore remitted to Lender in partial payment
        thereof
        as a nonrefundable commitment fee.

       

      
        
          
          

        

        
          -12-

          
            

          

        

        
          
          

        

      

      
        	 	
                3.2.

              	
                Unused
                  Line Fee

              

      

      

      Borrower
        shall pay to Lender monthly an unused line fee (the “Unused
        Line Fee”)
        in an
        amount equal to 0.021% per month, pro rated for any portion thereof, of the
        difference derived by subtracting (i) the daily average amount of the balances
        under the Revolving Facility outstanding during the preceding month, from
        (ii)
        the Facility Cap. The Unused Line Fee shall be payable monthly in arrears
        on the
        first day of each successive calendar month (starting with the month in which
        the Closing Date occurs). 

       

      
        	 	
                3.3.

              	
                Collateral
                  Management Fee

              

      

      

      Borrower
        shall pay Lender as additional interest a monthly collateral management fee
        (the
“Collateral
        Management Fee”)
        equal
        to 0.042%, pro rated for any portion thereof, per month of the Loan Amount.
        The
        Collateral Management Fee shall be payable monthly in arrears on the first
        day
        of each successive calendar month (starting with the month in which the Closing
        Date occurs). 

       

      
        	 	
                3.4.

              	
                Computation
                  of Fees; Lawful Limits

              

      

      

      All
        fees
        hereunder shall be computed on the basis of a year of 360 days and for the
        actual number of days elapsed in each calculation period, as applicable.
        In no
        contingency or event whatsoever, whether by reason of acceleration or otherwise,
        shall the interest and other charges paid or agreed to be paid to Lender
        for the
        use, forbearance or detention of money hereunder exceed the maximum rate
        permissible under applicable law which a court of competent jurisdiction
        shall,
        in a final determination, deem applicable hereto. If, due to any circumstance
        whatsoever, fulfillment of any provision hereof, at the time performance
        of such
        provision shall be due, shall exceed any such limit, then, the obligation
        to be
        so fulfilled shall be reduced to such lawful limit, and, if Lender shall
        have
        received interest or any other charges of any kind which might be deemed
        to be
        interest under applicable law in excess of the maximum lawful rate, then
        such
        excess shall be applied first to any unpaid fees and charges hereunder, then
        to
        unpaid principal balance owed by Borrower hereunder, and if the then remaining
        excess interest is greater than the previously unpaid principal balance,
        Lender
        shall promptly refund such excess amount to Borrower and the provisions hereof
        shall be deemed amended to provide for such permissible rate. The terms and
        provisions of this Section 3.4 shall control to the extent any other provision
        of any Loan Document is inconsistent herewith.

       

      
        	 	
                3.5.

              	
                Default
                  Rate of Interest

              

      

      

      Upon
        the
        occurrence and during the continuation of an Event of Default, the Applicable
        Rate of interest in effect at such time with respect to the Obligations shall
        be
        increased by 4.0% per annum (the “Default
        Rate”).

       

      
        	 	
                3.6.

              	
                Acknowledgement
                  of Joint and Several
                  Liability

              

      

      

      Borrower
        acknowledges that it is jointly and severally liable for all of the Obligations
        under the Loan Documents. Borrower expressly understands, agrees and
        acknowledges that (i) Borrower is an Affiliated entity by common ownership
        of
        each other Borrower, (ii) each Borrower desires to have the availability
        of one
        common credit facility instead of separate credit facilities, (iii) each
        Borrower has requested that Lender extend such a common credit facility on
        the
        terms herein provided, (iv) Lender will be lending against, and relying on
        a
        lien upon, all of Borrowers’ assets even though the proceeds of any particular
        loan made hereunder may not be advanced directly to a particular Borrower,
        (v)
        Borrower will nonetheless benefit by the making of all such loans by Lender
        and
        the availability of a single credit facility of a size greater than each
        could
        independently warrant, and (vi) all of the representations, warranties,
        covenants, obligations, conditions, agreements and other terms 

       

      
        
          
          

        

        
          -13-

          
            

          

        

        
          
          

        

      

      
        	
                IV.

              	
                CONDITIONS
                  PRECEDENT

              

      

      
        	 	
                4.1.

              	
                Conditions
                  to Initial Advance and
                  Closing

              

      

      

      The
        obligations of Lender to consummate the transactions contemplated herein
        and to
        make the initial Advance under the Revolving Facility (the “Initial
        Advance”)
        and to
        fund the Term Loan Facilities are subject to the satisfaction, in the sole
        judgment of Lender, of the following:

      

      (a) (i)
        Borrower shall have delivered to Lender (A) the Loan Documents to which it
        is a
        party, each duly executed by an authorized officer of Borrower and the other
        parties thereto (other than Lender), (B) a Borrowing Certificate for
        the
        Initial Advance under the Revolving Facility executed by an authorized officer
        of Borrower, and (ii) each Guarantor shall have delivered to Lender the Loan
        Documents to which such Guarantor is a party, each duly executed and delivered
        by Guarantor or an authorized officer of such Guarantor, as applicable, and
        the
        other parties thereto;

      

      (b) all
        in
        form and substance satisfactory to Lender in its sole discretion, Lender
        shall
        have received (i) a report of Uniform Commercial Code financing statement,
        tax
        and judgment lien searches performed with respect to Borrower and Guarantor
        in
        each jurisdiction determined by Lender in its sole discretion, and such report
        shall show no Liens on the Collateral (other than Permitted Liens), (ii)
        each
        document (including, without limitation, any Uniform Commercial Code financing
        statement) required by any Loan Document or under law or requested by Lender
        to
        be filed, registered or recorded to create in favor of Lender, a perfected
        first
        priority security interest upon the Collateral, and (iii) evidence
        of each
        such filing, registration or recordation and of the payment by Borrower of
        any
        necessary fee, tax or expense relating thereto;

      

      (c) Lender
        shall have received (i) the Charter and Good Standing Documents, all in form
        and
        substance acceptable to Lender, (ii) a certificate of the corporate secretary
        or
        assistant secretary of Borrower and Guarantor dated the Closing Date, as
        to the
        incumbency and signature of the Persons executing the Loan Documents, in
        form
        and substance acceptable to Lender, and (iii) the written legal opinion of
        counsel for Borrower and Guarantors, in form and substance satisfactory to
        Lender and its counsel; 

      

      (d) Lender
        shall have received a certificate of the chief financial officer (or, in
        the
        absence of a chief financial officer, the chief executive officer) of Borrower
        and Guarantor, in form and substance satisfactory to Lender (each, a
“Solvency
        Certificate”),
        certifying (i) the solvency of such Person after giving effect to the
        transactions and the Indebtedness contemplated by the Loan Documents and
        by the
        Acquisition Documents (including, without limitation, the Seller Note), and
        (ii)
        as to such Person’s financial resources and ability to meet its obligations and
        liabilities as they become due, to the effect that as of the Closing Date
        and
        the Borrowing Date for the Initial Advance (and the date of funding the Term
        Loan Facilities) and after giving effect to such transactions and Indebtedness:
        (A) the assets of such Person, at a Fair Valuation, exceed the total liabilities
        (including contingent, subordinated, unmatured and unliquidated liabilities)
        of
        such Person, and (B) no unreasonably small capital base with which to engage
        in
        its anticipated business exists with respect to such Person;

      

      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

        

      

      (e) Lender
        shall have completed examinations, the results of which shall be satisfactory
        in
        form and substance to Lender, of the Collateral, the financial statements
        and
        the books, records, business, obligations, financial condition and operational
        state of each Borrower and Guarantor, and each such Person shall have
        demonstrated to Lender’s satisfaction that (i) its operations comply, in
        all respects deemed material by Lender, in its sole judgment, with all
        applicable federal, state, foreign and local laws, statutes and regulations,
        (ii) its operations are not the subject of any governmental investigation,
        evaluation or any remedial action which could result in any expenditure or
        liability deemed material by Lender, in its sole judgment, and (iii) it
        has
        no liability (whether contingent or otherwise) that is deemed material by
        Lender, in its sole judgment;

      

      (f) Lender
        shall have received all fees, charges and expenses payable to Lender on or
        prior
        to the Closing Date pursuant to the Loan Documents;

      

      (g) all
        in
        form and substance satisfactory to Lender in its sole discretion, Lender
        shall
        have received such consents, approvals and agreements, including, without
        limitation, any applicable Landlord Waivers and Consents with respect to
        any and
        all leases set forth on Schedule 5.4, from such third parties as Lender and
        its
        counsel shall determine are necessary or desirable with respect to (i) the
        Loan
        Documents and/or the transactions contemplated thereby, and/or (ii) claims
        against Borrower or Guarantor (other than Parent) or the
        Collateral;

      

      (h) Borrower
        shall be in compliance with Section 6.5, and Lender shall have received copies
        of all insurance policies or binders, original certificates of all insurance
        policies of Borrower confirming that they are in effect and that the premiums
        due and owing with respect thereto have been paid in full and endorsements
        of
        such policies issued by the applicable Insurers and in each case and naming
        Lender as loss payee or additional insured, as appropriate;

      

      (i) all
        corporate and other proceedings, documents, instruments and other legal matters
        in connection with the transactions contemplated by the Loan Documents
        (including, but not limited to, those relating to corporate and capital
        structures of Borrower) shall be satisfactory to Lender;

      

      
        
          
          

        

        
          -15-

          
            

          

        

        
          
          

        

      

      (j) Lender
        shall have received from Borrower (i) evidence of the consummation of the
        closing under the Acquisition Agreement and all other Acquisition Documents
        (including, with limitation, the Seller Note, which Seller Note shall be
        subordinated to the Obligations in a manner satisfactory to Lender); (ii)
        the
        aggregate purchase price under the Acquisition Agreement shall not exceed
        $30,500,000; (iii) evidence of the consummation of a cash equity investment
        in
        Borrower by Seller equal to a minimum amount of Eight Million Five Hundred
        Thousand Dollars ($8,500,000); and (iv) copies of all documents, agreements
        and
        other instruments entered into or otherwise related to each transaction
        described above, each in form and substance satisfactory to Lender;

      

      (k) Borrower
        must have Available Cash equal to a minimum of $1,000,000.

      

      (l) Borrower
        shall have executed and filed IRS Form 8821 with the appropriate office of
        the
        Internal Revenue Service; 

       

      (m) Lender
        shall have received such other documents, certificates, information or legal
        opinions as Lender may reasonably request, all in form and substance reasonably
        satisfactory to Lender; 

      

      (n) All
        Indebtedness of Borrower other than Permitted Indebtedness shall have been
        paid
        or satisfied in full and all Liens other than Permitted Liens shall have
        been
        unconditionally released and terminated; 

      

      (o) Sammy
        Jibrin and Radu Archiriloaie shall have executed employment agreements with
        Borrower in form and substance satisfactory to Lender; 

      

      (p) Lender
        shall have received each of the executed Seller Subordination Agreement,
        the
        Preferred Stock Subordination Agreement and the Laurus Intercreditor Agreement,
        all in form and substance satisfactory to Lender; 

      

      (q) Lender
        shall have received each of the executed Stock Pledge Agreements along with
        certificates representing the stock pledged therein along with stock powers
        executed in blank, all in form and substance satisfactory to the Lender;
        and

      

      (r) CS
        Equity, LLC or Lender shall have received 1,250,000 shares of Parent’s common
        stock pursuant to documentation satisfactory to Lender in its Permitted
        Discretion including, without limitation, the Registration Rights Agreement
        with
        respect thereto.

       

      
        	 	
                4.2.

              	
                Conditions
                  to Each Advance 

              

      

      

      The
        obligations of Lender to make any Advance (including, without limitation,
        the
        Initial Advance) are subject to the satisfaction, in the sole judgment of
        Lender, of the following additional conditions precedent:

      

      (a) Borrower
        shall have delivered to Lender a Borrowing Certificate for the Advance executed
        by an authorized officer of Borrower, which shall constitute a representation
        and warranty by Borrower as of the Borrowing Date of such Advance that the
        conditions contained in this Section 4.2 have been satisfied; provided, however,
        that any determination as to whether to fund Advances or extensions of credit
        shall be made by Lender in its sole discretion;

      

      (b) each
        of
        the representations and warranties made by Borrower in or pursuant to this
        Agreement shall be accurate, before and after giving effect to such Advance,
        and
        no Default or Event of Default shall have occurred or be continuing or would
        exist after giving effect to the Advance under the Revolving Facility on
        such
        date;

      

      
        
          
          

        

        
          -16-

          
            

          

        

        
          
          

        

      

      (c) immediately
        after giving effect to the requested Advance, the aggregate outstanding
        principal amount of Advances under the Revolving Facility shall not exceed
        either the Availability or the Facility Cap, the aggregate outstanding principal
        amount of Term Loan A shall not exceed the Maximum Term Loan A Amount and
        the
        aggregate outstanding principal amount of Term Loan B shall not exceed the
        Maximum Term Loan B Amount;

      

      (d) except
        as
        disclosed in the historical financial statements, there shall be no liabilities
        or obligations with respect to Borrower of any nature whatsoever which, either
        individually or in the aggregate, would reasonably be likely to have a Material
        Adverse Effect; 

      

      (e) Lender
        shall have received all fees, charges and expenses payable to Lender on or
        prior
        to such date pursuant to the Loan Documents; and 

      

      (f) all
        in
        form and substance satisfactory to Lender in its sole discretion, Lender
        shall
        have received such consents, approvals and agreements, including, without
        limitation, any applicable Warehouse Waivers and Consents with respect to
        any
        and all leases, warehouses and other locations set forth on Schedule 5.4,
        from
        such third parties as Lender and its counsel shall determine are necessary
        or
        desirable with respect to (i) the Loan Documents and/or the transactions
        contemplated thereby, and/or (ii) claims against Borrower or Guarantor (other
        than Parent) or the Collateral.

       

      
        	
                V.

              	
                REPRESENTATIONS
                  AND WARRANTIES

              

      

      

      Borrower,
        jointly and severally, represents and warrants as of the date hereof, the
        Closing Date, and each Borrowing Date as follows: 

       

      
        	 	
                5.1.

              	
                Organization
                  and Authority

              

      

      

      Borrower
        is a corporation duly organized, validly existing and in good standing under
        the
        laws of its state of formation. Borrower (i) has all requisite corporate
        or
        entity power and authority to own its properties and assets and to carry
        on its
        business as now being conducted and as contemplated in the Loan Documents,
        (ii) is duly qualified to do business in every jurisdiction in which
        failure so to qualify would reasonably be likely to have a Material Adverse
        Effect, and (iii) has all requisite power and authority (A) to execute,
        deliver and perform the Loan Documents to which it is a party, (B) to borrow
        hereunder, (C) to consummate the transactions contemplated under the Loan
        Documents, and (D) to grant the Liens with regard to the Collateral pursuant
        to
        the Security Documents to which it is a party. Borrower is not an “investment
        company” registered or required to be registered under the Investment Company
        Act of 1940, as amended, or is controlled by such an “investment
        company.”

       

      
        	 	
                5.2.

              	
                Loan
                  Documents

              

      

      

      The
        execution, delivery and performance by Borrower of the Loan Documents to
        which
        it is a party, and the consummation of the transactions contemplated thereby,
        (i) have been duly authorized by all requisite action of Borrower
        and have
        been duly executed and delivered by or on behalf of Borrower; (ii) do not
        violate any provisions of (A) applicable law, statute, rule, regulation,
        ordinance or tariff, (B) any order of any Governmental Authority binding
        on
        Borrower or any of their respective properties, or (C) the certificate
        of
        incorporation or bylaws (or any other equivalent governing agreement or
        document) of Borrower, or any agreement between Borrower and its respective
        stockholders, members, partners or equity owners or among any such stockholders,
        members, partners or equity owners; (iii) are not in conflict with, and do
        not
        result in a breach or default of or constitute an event of default, or an
        event,
        fact, condition or circumstance which, with notice or passage of time, or
        both,
        would constitute or result in a conflict, breach, default or event of default
        under, any indenture, agreement or other instrument to which Borrower is
        a
        party, or by which the properties or assets of Borrower are bound;
        (iv) except as set forth therein, will not result in the creation
        or
        imposition of any Lien of any nature upon any of the properties or assets
        of
        Borrower, and (v) except as set forth on Schedule 5.2, do not require
        the
        consent, approval or authorization of, or filing, registration or qualification
        with, any Governmental Authority or any other Person. When executed and
        delivered, each of the Loan Documents to which Borrower is a party will
        constitute the legal, valid and binding obligation of Borrower, enforceable
        against Borrower in accordance with its terms, subject to the effect of any
        applicable bankruptcy, moratorium, insolvency, reorganization or other similar
        law affecting the enforceability of creditors’ rights generally and to the
        effect of general principles of equity which may limit the availability of
        equitable remedies (whether in a proceeding at law or in equity).

       

      
        
          
          

        

        
          -17-

          
            

          

        

        
          
          

        

      

      
        	 	
                5.3.

              	
                Subsidiaries,
                  Capitalization and Ownership
                  Interests

              

      

      

      Except
        as
        listed on Schedule 5.3, Borrower has no Subsidiaries. Schedule 5.3
        states
        the authorized and issued capitalization of Borrower, the number and class
        of
        equity securities and/or ownership, voting or partnership interests issued
        and
        outstanding of Borrower and the record and beneficial owners thereof (including
        options, warrants and other rights to acquire any of the foregoing). The
        ownership or partnership interests of Borrower that is a limited partnership
        or
        a limited liability company are not certificated, the documents relating
        to such
        interests do not expressly state that the interests are governed by Article
        8 of
        the Uniform Commercial Code, and the interests are not held in a securities
        account. The outstanding equity securities and/or ownership, voting or
        partnership interests of Borrower have been duly authorized and validly issued
        and are fully paid and nonassessable, and each Person listed on
        Schedule 5.3 owns beneficially and of record all the equity securities
        and/or ownership, voting or partnership interests it is listed as owning
        free
        and clear of any Liens other than Liens created by the Security Documents.
        Schedule 5.3 also lists the directors, members, managers and/or partners
        of
        Borrower. Except as listed on Schedule 5.3, Borrower does not own an interest
        in, participate in or engage in any joint venture, partnership or similar
        arrangements with any Person.

       

      
        	 	
                5.4.

              	
                Properties

              

      

      

      Borrower
        (i) is the sole owner and has good, valid and marketable title to, or a valid
        leasehold interest in, all of its properties and assets, including the
        Collateral, whether personal or real, subject to no transfer restrictions
        or
        Liens of any kind except for Permitted Liens, and (ii) is in compliance in
        all
        material respects with each lease to which it is a party or otherwise bound.
        Schedule 5.4 lists all real properties (and their locations) owned
        or
        leased by or to, and all other assets or property that are leased or licensed
        by, Borrower and all leases (including leases of leased real property) covering
        or with respect to such properties and assets all warehouses, fulfillment
        houses
        or other locations at which any of Borrower’s Inventory is located. Borrower
        enjoys peaceful and undisturbed possession under all such leases and such
        leases
        are all the leases necessary for the operation of such properties and assets,
        are valid and subsisting and are in full force and effect. 

       

      
        
          
          

        

        
          -18-

          
            

          

        

        
          
          

        

      

      
        	 	
                5.5.

              	
                Other
                  Agreements

              

      

      

      Borrower
        is not (i) a party to any judgment, order or decree or any agreement, document
        or instrument, or subject to any restriction, which would affect its ability
        to
        execute and deliver, or perform under, any Loan Document or to pay the
        Obligations, (ii) in default in the performance, observance or fulfillment
        of
        any obligation, covenant or condition contained in any agreement, document
        or
        instrument to which it is a party or to which any of its properties or assets
        are subject, which default, if not remedied within any applicable grace or
        cure
        period would reasonably be likely to have a Material Adverse Effect, nor
        is
        there any event, fact, condition or circumstance which, with notice or passage
        of time or both, would constitute or result in a conflict, breach, default
        or
        event of default under, any of the foregoing which, if not remedied within
        any
        applicable grace or cure period would reasonably be likely to have a Material
        Adverse Effect; or (iii) a party or subject to any agreement, document or
        instrument with respect to, or obligation to pay any, management or service
        fee
        with respect to, the ownership, operation, leasing or performance of any
        of its
        business or any facility, nor is there any manager with respect to any such
        facility.

       

      
        	 	
                5.6.

              	
                Litigation

              

      

      

      There
        is
        no action, suit, proceeding or investigation pending or, to their knowledge,
        threatened against Borrower that (i) questions or could prevent the validity
        of
        any of the Loan Documents or the right of Borrower to enter into any Loan
        Document or to consummate the transactions contemplated thereby, (ii) would
        reasonably be likely to be or have, either individually or in the aggregate,
        any
        Material Adverse Change or Material Adverse Effect, or (iii) would
        reasonably be likely to result in any Change of Control or other change in
        the
        current ownership, control or management of Borrower. Borrower is not aware
        that
        there is any basis for the foregoing. Borrower is not a party or subject
        to any
        order, writ, injunction, judgment or decree of any Governmental Authority.
        There
        is no action, suit, proceeding or investigation initiated by Borrower currently
        pending. Borrower has no existing accrued and/or unpaid Indebtedness to any
        Governmental Authority or any other governmental payor. 

       

      
        	 	
                5.7.

              	
                Hazardous
                  Materials

              

      

      

      Borrower
        is in compliance with all applicable Environmental Laws the non-compliance
        with
        which could reasonably be expected to have a Material Adverse Effect. Borrower
        has not been notified of any action, suit, proceeding or investigation (i)
        relating in any way to compliance by or liability of Borrower under any
        Environmental Laws, (ii) which otherwise deals with any Hazardous Substance
        or
        any Environmental Law, or (iii) which seeks to suspend, revoke or terminate
        any
        license, permit or approval necessary for the generation, handling, storage,
        treatment or disposal of any Hazardous Substance.

       

      
        	 	
                5.8.

              	
                Potential
                  Tax Liability; Tax Returns; Governmental
                  Reports

              

      

      

      (a) Except
        as
        disclosed in Schedule 5.8, Borrower (i) has not received any oral or written
        communication from the Internal Revenue Service with respect to any
        investigation or assessment relating to the Borrower directly, or relating
        to
        any consolidated tax return which was filed on behalf of Borrower, (ii) is
        not
        aware of any year which remains open pending tax examination or audit by
        the
        IRS, and (iii) is not aware of any information that could give rise to an
        IRS
        tax liability or assessment.

      

      
        
          
          

        

        
          -19-

          
            

          

        

        
          
          

        

      

      (b) Borrower
        (i) has filed all federal, state, foreign (if applicable) and local tax returns
        and other reports which are required by law to be filed by Borrower, (ii)
        has
        paid all taxes, assessments, fees and other governmental charges, including,
        without limitation, payroll and other employment related taxes, in each case
        that are due and payable, except only for items that Borrower is currently
        contesting in good faith with adequate reserves under GAAP, which contested
        items are described on Schedule 5.8. 

       

      
        	 	
                5.9.

              	
                Financial
                  Statements and Reports

              

      

      

      All
        financial statements and financial information relating to Borrower that
        have
        been or may hereafter be delivered to Lender by Borrower are accurate and
        complete and have been prepared in accordance with GAAP consistently applied
        with prior periods. Borrower has no material obligations or liabilities of
        any
        kind not disclosed in such financial information or statements, and since
        the
        date of the most recent financial statements submitted to Lender, there has
        not
        occurred any Material Adverse Change, Material Adverse Effect to Borrower’s
        knowledge, any other event or condition that would reasonably be likely to
        have
        a Material Adverse Effect.

       

      
        	 	
                5.10.

              	
                Compliance
                  with Law

              

      

      

      Borrower
        (i) is in compliance with all laws, statutes, rules, regulations, ordinances
        and
        tariffs of any Governmental Authority applicable to Borrower and/or Borrower’s
        business, assets or operations, including, without limitation, ERISA, and
        (ii)
        is not in violation of any order of any Governmental Authority or other board
        or
        tribunal, except where noncompliance or violation could not reasonably be
        expected to have a Material Adverse Effect. There is no event, fact, condition
        or circumstance which, with notice or passage of time, or both, would constitute
        or result in any noncompliance with, or any violation of, any of the foregoing,
        in each case except where noncompliance or violation could not reasonably
        be
        expected to have a Material Adverse Effect. Borrower has not received any
        notice
        that Borrower is not in compliance in any respect with any of the requirements
        of any of the foregoing. Borrower has (a) not engaged in any Prohibited
        Transactions as defined in Section 406 of ERISA and Section 4975
        of
        the Internal Revenue Code of 1986, as amended, and the rules and regulations
        promulgated thereunder, (b) not failed to meet any applicable minimum funding
        requirements under Section 302 of ERISA in respect of its plans and
        no
        funding requirements have been postponed or delayed, (c) no knowledge of
        any
        amounts due but unpaid to the Pension Benefit Guaranty Corporation, or of
        any
        event or occurrence which would cause the Pension Benefit Guaranty Corporation
        to institute proceedings under Title IV of ERISA to terminate any of the
        employee benefit plans, (d) no fiduciary responsibility under ERISA for
        investments with respect to any plan existing for the benefit of Persons
        other
        than its employees or former employees, or (e) not withdrawn, completely
        or
        partially, from any multi-employer pension plans so as to incur liability
        under
        the MultiEmployer Pension Plan Amendments of 1980. With respect to Borrower,
        there exists no event described in Section 4043 of ERISA, excluding
        Subsections 4043(b)(2) and 4043(b)(3) thereof, for which the thirty
        (30)
        day notice period contained in 12 C.F.R. § 2615.3 has not been waived.

       

      
        
          
          

        

        
          -20-

          
            

          

        

        
          
          

        

      

      
        	 	
                5.11.

              	
                Intellectual
                  Property

              

      

      

      Except
        as
        set forth on Schedule 5.11, Borrower does not own, license or utilize, and
        is
        not a party to, any patents, patent applications, trademarks, trademark
        applications, service marks, registered copyrights, copyright applications,
        copyrights, trade names, trade secrets, software or licenses (collectively,
        the
“Intellectual
        Property”).

       

      
        	 	
                5.12.

              	
                Licenses
                  and Permits; Labor

              

      

      

      Borrower
        is in compliance with and has all Permits and Intellectual Property necessary
        or
        required by applicable law or Governmental Authority for the operation of
        its
        businesses. All of the foregoing are in full force and effect and not in
        known
        conflict with the rights of others. Borrower is not (i) in breach of or default
        under the provisions of any of the foregoing, nor is there any event, fact,
        condition or circumstance which, with notice or passage of time or both,
        would
        constitute or result in a conflict, breach, default or event of default under,
        any of the foregoing which, if not remedied within any applicable grace or
        cure
        period would reasonably be likely to have a Material Adverse Effect, (ii)
        a
        party to or subject to any agreement, instrument or restriction that is so
        unusual or burdensome that it might have a Material Adverse Effect, and/or
        (iii)
        and has not been, involved in any labor dispute, strike, walkout or union
        organization which would reasonably be likely to have a Material Adverse
        Effect.

       

      
        	 	
                5.13.

              	
                No
                  Default

              

      

      

      There
        does not exist any Default or Event of Default or any event, fact, condition
        or
        circumstance which, with the giving of notice or passage of time or both,
        would
        constitute or result in a Default or Event of Default.

       

      
        	 	
                5.14.

              	
                Disclosure

              

      

      

      No
        Loan
        Document nor any other agreement, document, certificate, or statement furnished
        to Lender by or on behalf of Borrower in connection with the transactions
        contemplated by the Loan Documents, nor any representation or warranty made
        by
        Borrower in any Loan Document, contains any untrue statement of material
        fact or
        omits to state any fact necessary to make the statements therein not materially
        misleading. There is no fact known to Borrower which has not been disclosed
        to
        Lender in writing which would reasonably be likely to have a Material Adverse
        Effect. 

       

      
        	 	
                5.15.

              	
                Existing
                  Indebtedness; Investments, Guarantees and Certain
                  Contracts

              

      

      

      Except
        as
        contemplated by the Loan Documents or as otherwise set forth on
        Schedule 5.15A, Borrower (i) has no outstanding Indebtedness, (ii)
        is not
        subject or party to any mortgage, note, indenture, indemnity or guarantee
        of,
        with respect to or evidencing any Indebtedness of any other Person, or (iii)
        does not own or hold any equity or long-term debt investments in, and does
        not
        have any outstanding advances to or any outstanding guarantees for the
        obligations of, or any outstanding borrowings from, any Person. Borrower
        has
        performed all material obligations required to be performed by Borrower pursuant
        to or in connection with any items listed on Schedule 5.15A and there
        has
        occurred no breach, default or event of default under any document evidencing
        any such items or any fact, circumstance, condition or event which, with
        the
        giving of notice or passage of time or both, would constitute or result in
        a
        breach, default or event of default thereunder. Schedule 5.15B sets forth
        all
        Indebtedness with a maturity date during the Term of the Loan, and identifies
        such maturity date. 

       

      
        
          
          

        

        
          -21-

          
            

          

        

        
          
          

        

      

      
        	 	
                5.16.

              	
                Other
                  Agreements

              

      

      

      Except
        as
        set forth on Schedule 5.16, to the best of Borrower’s knowledge (i) there are no
        existing or proposed agreements, arrangements, understandings or transactions
        between Borrower and any of Borrower’s officers, directors, stockholders, or
        Affiliates or any members of their respective immediate families, and (ii)
        none
        of the foregoing Persons are directly or indirectly, indebted to or have
        any
        direct or indirect ownership, partnership or voting interest in, to Borrower’s
        knowledge, any Affiliate of Borrower or any Person that competes with Borrower
        (except that any such Persons may own stock in (but not exceeding two (2%)
        percent of the outstanding capital stock of) any publicly traded company
        that
        may compete with Borrower.

       

      
        	 	
                5.17.

              	
                Insurance

              

      

      

      Borrower
        has in full force and effect such insurance policies as are customary in
        its
        industry and as may be required pursuant to Section 6.5 hereof. All such
        insurance policies are listed and described on Schedule 5.17.

       

      
        	 	
                5.18.

              	
                Names;
                  Location of Offices, Records and
                  Collateral

              

      

      

      During
        the preceding five years, Borrower has not conducted business under or used
        any
        name (whether corporate, partnership or assumed) other than as shown on Schedule
        5.18A. Borrower is the sole owner of all of its names listed on Schedule
        5.18A,
        and any and all business done and invoices issued in such names are Borrower’s
        sales, business and invoices. Each trade name of Borrower represents a division
        or trading style of Borrower. Borrower maintains its places of business and
        chief executive offices only at the locations set forth on Schedule 5.18B,
        and
        all Accounts of Borrower arise, originate and are located, and all of the
        Collateral, including Inventory and all books and records in connection
        therewith or in any way relating thereto or evidencing the Collateral are
        located and shall only be located, in and at such locations. All of the
        Collateral is located only in the continental United States.

       

      
        	 	
                5.19.

              	
                Non-Subordination

              

      

      

      The
        Obligations are not subordinated in any way to any other obligations of Borrower
        or to the rights of any other Person, except as otherwise provided by
        law.

       

      
        	 	
                5.20.

              	
                Accounts
                  and Inventory

              

      

      

      
        
          
          

        

        
          -22-

          
            

          

        

        
          
          

        

      

      (a) In
        determining which Accounts are Eligible Receivables, Lender may rely on all
        statements and representations made by Borrower with respect to any Account.
        Unless otherwise indicated in writing to Lender, (i) each Account of Borrower
        is
        genuine and in all respects what it purports to be and is not evidenced by
        a
        judgment, (ii) each Account of Borrower arises out of a completed, bona fide
        sale and delivery of goods or rendering of services by Borrower in the ordinary
        course of business and in accordance with the terms and conditions of all
        purchase orders, contracts, certifications, participations and other documents
        relating thereto or forming a part of the contract between Borrower and the
        Account Debtor, (iii) each Account of Borrower is for a liquidated amount
        maturing as stated in a claim or invoice covering such sale of goods or
        rendering of services, a copy of which has been furnished or is available
        to
        Lender, (iv) each Account of Borrower together with Lender’s security interest
        therein, is not and will not be in the future (by voluntary act or omission
        by
        Borrower), subject to any offset, lien, deduction, defense, dispute,
        counterclaim or other adverse condition, is absolutely owing to Borrower
        and is
        not contingent in any respect or for any reason, (v) there are no facts,
        events
        or occurrences which in any way impair the validity or enforceability of
        any
        Account of Borrower or tend to reduce the amount payable thereunder from
        the
        face amount of the claim or invoice and statements delivered to Lender with
        respect thereto, (vi) (A) the Account Debtor under each Account of Borrower
        had
        the capacity to contract at the time any contract or other document giving
        rise
        thereto was executed and (B) each such Account Debtor is solvent,
        (vii) there are no proceedings or actions which are threatened or
        pending
        against any Account Debtor under any Account of Borrower which might result
        in
        any Material Adverse Change in such Account Debtor’s financial condition or the
        collectability thereof, (viii) each Account of Borrower has been billed and
        forwarded to the Account Debtor for payment in accordance with applicable
        laws
        and is in compliance and conformance with any requisite procedures, requirements
        and regulations governing payment by such Account Debtor with respect to
        such
        Account, and, (ix) Borrower has obtained and currently has all Permits necessary
        in the generation of each Account of Borrower.

      

      (b) In
        determining which Inventory is Eligible Inventory, Lender may rely on all
        statements and representations made by Borrower with respect to any Inventory.
        Unless otherwise indicated in writing to Lender (including, without limitation,
        any Borrowing Certificate), (i) Borrower has at all times maintained correct
        and
        accurate records itemizing and describing the kind, type, quality and quantity
        of Inventory in all material respects, Borrower’s cost therefore and daily
        withdrawals therefrom and additions thereto; (b) has not removed any Inventory
        from the locations set forth or permitted herein, except for sales of Inventory
        in the ordinary course of Borrower’s business and except to move Inventory
        directly from one location set forth or permitted herein to another such
        location; (c) has produced, used, stored, shipped and maintained Inventory
        with
        all reasonable care and caution and in accordance with applicable standards
        of
        any insurance and in conformity with applicable laws (including the requirements
        of the Federal Fair Labor Standards Act of 1938, as amended and all rules,
        regulations and orders related thereto); (d) except as set forth on Schedule
        5.20, has not sold Inventory to any customer on approval, or any other basis
        which entitles the customer to return or may obligate Borrower to repurchase
        such Inventory; (e) has kept Inventory in good and marketable condition;
        and (f)
        has not acquired or accepted any Inventory on consignment or approval except
        as
        set forth on Schedule 5.20 and (g) has not permitted Inventory to be subject
        to
        any Lien except Liens in favor of Lender.

       

      
        	 	
                5.21.

              	
                Survival

              

      

      

      
        
          
          

        

        
          -23-

          
            

          

        

        
          
          

        

      

      Borrower
        makes the representations and warranties contained herein with the knowledge
        and
        intention that Lender is relying and will rely thereon. All such representations
        and warranties will survive the execution and delivery of this Agreement
        and the
        making of the Advances under the Revolving Facility and the funding of the
        Term
        Loan Facilities. 

       

      
        	
                VI.

              	
                AFFIRMATIVE
                  COVENANTS

              

      

      

      Borrower,
        jointly and severally, covenants and agrees that, until full performance
        and
        satisfaction, and indefeasible payment in full in cash, of all the Obligations
        and termination of this Agreement:

       

      
        	 	
                6.1.

              	
                Financial
                  Statements, Borrowing Certificate, Financial Reports and Other
                  Information

              

      

      

      (a) Financial
        Reports. In addition to providing the Borrowing Certificate in accordance
        with
        Section 2.4, Borrower shall furnish to Lender (i) as soon as available and
        in
        any event within ninety (90) calendar days (subject to extension, as permitted
        by Rule 12b-25 promulgated under the Securities Exchange Act of 1934, as
        amended) after the end of each fiscal year of Borrower, audited annual
        consolidated and consolidating financial statements of Parent and its
        Subsidiaries, including the notes thereto, consisting of a consolidated and
        consolidating balance sheet at the end of such completed fiscal year and
        the
        related consolidated and consolidating statements of income, retained earnings,
        cash flows and owners’ equity for such completed fiscal year, which financial
        statements shall be prepared and certified without qualification by an
        independent certified public accounting firm satisfactory to Lender and
        accompanied by related management letters, if available, and (ii) as soon
        as
        available and in any event within thirty (30) calendar days after the end
        of
        each calendar month, unaudited consolidated and consolidating financial
        statements of Parent and its Subsidiaries consisting of a balance sheet and
        statements of income, retained earnings, cash flows and owners’ equity as of the
        end of the immediately preceding calendar month. All such financial statements
        shall be prepared in accordance with GAAP consistently applied with prior
        periods. With each such financial statement, Borrower shall also deliver
        a
        certificate of its chief financial officer in substantially the form of Exhibit
        B hereto (a “Compliance
        Certificate”)
        stating that (A) such person has reviewed the relevant terms of the Loan
        Documents and the condition of Borrower, (B) no Default or Event of Default
        has
        occurred or is continuing, or, if any of the foregoing has occurred or is
        continuing, specifying the nature and status and period of existence thereof
        and
        the steps taken or proposed to be taken with respect thereto, and (C) Borrower
        is in compliance with all financial covenants attached as Annex I hereto.
        Such
        certificate shall be accompanied by the calculations necessary to show
        compliance with the financial covenants in a form satisfactory to
        Lender.

      

      (b) Other
        Materials. Borrower shall furnish to Lender as soon as available, and in
        any
        event within ten (10) calendar days after the preparation or issuance thereof
        or
        at such other time as set forth below: (i) copies of such financial statements
        (other than those required to be delivered pursuant to Section 6.1(a))
        prepared by, for or on behalf of Borrower and any other notes, reports and
        other
        materials related thereto, including, without limitation, any pro forma
        financial statements, (ii) any reports, returns, information, notices and
        other
        materials that Borrower shall send to its stockholders, members, partners
        or
        other equity owners at any time, (iii) copies of licenses and permits required
        by any applicable federal, state, foreign or local law, statute ordinance
        or
        regulation or Governmental Authority for the operation of its business, (iv)
        within fifteen (15) calendar days after the end of each calendar month for
        such
        month, a sales and collection report and accounts receivable and accounts
        payable aging schedule, including a report of sales, credits issued and
        collections received, all such reports showing a reconciliation to the amounts
        reported in the monthly financial statements, (v) promptly upon receipt thereof,
        copies of any reports submitted to Borrower by its independent accountants
        in
        connection with any interim audit of the books of such Person or any of its
        Affiliates and copies of each management control letter provided by such
        independent accountants, (vi) within fifteen (15) calendar days after the
        execution thereof, a copy of any contracts with the federal government or
        with a
        Governmental Authority in the State of New York, Vermont or Washington, and
        (vii) such additional information, documents, statements, reports and other
        materials as Lender may reasonably request from a credit or security perspective
        or otherwise from time to time. 

      

      
        
          
          

        

        
          -24-

          
            

          

        

        
          
          

        

      

      (c) Notices.
        Borrower shall promptly, and in any event within three (3) Business
        Days
        after Borrower or any authorized officer of Borrower obtains knowledge thereof,
        notify Lender in writing of (i) any pending or threatened litigation, suit,
        investigation, arbitration, dispute resolution proceeding or administrative
        proceeding brought or initiated by Borrower or otherwise affecting or involving
        or relating to Borrower or any of its property or assets to the extent (A)
        the
        amount in controversy exceeds $50,000, or (B) to the extent any of the foregoing
        seeks injunctive or declarative relief, (ii) any Default or Event of Default,
        which notice shall specify the nature and status thereof, the period of
        existence thereof and what action is proposed to be taken with respect thereto,
        (iii) any other development, event, fact, circumstance or condition
        that
        would reasonably be likely to have a Material Adverse Effect, in each case
        describing the nature and status thereof and the action proposed to be taken
        with respect thereto, (iv) any notice received by Borrower from any payor
        of a
        claim, suit or other action such payor has, claims or has filed against
        Borrower, (v) any matter(s) affecting the value, enforceability or
        collectability of any of the Collateral, including, without limitation, claims
        or disputes in the amount of $50,000 or more, singly or in the aggregate,
        in
        existence at any one time, (vi) any notice given by Borrower to any other
        lender
        of Borrower, which notice to Lender shall be accompanied by a copy of the
        applicable notice given to the other Lender, (vii) receipt of any notice
        or
        request from any Governmental Authority or governmental payor regarding any
        liability or claim of liability, (viii) receipt of any notice by Borrower
        regarding termination of any manager of any facility owned, operated or leased
        by Borrower, (ix) any Account becoming evidenced or secured by an Instrument
        or
        Chattel Paper, and/or (x) receipt of any notice from any Account Debtor under
        a
        material contract notifying Borrower of a material breach under or termination
        of such contract.

      

      (d) Consents.
        Borrower shall obtain and deliver from time to time all required and not
        previously obtained consents, approvals and agreements from such third parties
        as Lender shall determine are necessary or desirable in its sole discretion,
        each of which must be satisfactory to Lender in its sole discretion, with
        respect to (i) the Loan Documents and the transactions contemplated thereby,
        (ii) claims against Borrower or the Collateral, and/or (iii) any agreements,
        consents, documents or instruments to which Borrower is a party or by which
        any
        properties or assets of Borrower or any of the Collateral is or are bound
        or
        subject, including, without limitation, Landlord Waivers and Consents with
        respect to leases. 

      

      
        
          
          

        

        
          -25-

          
            

          

        

        
          
          

        

      

      (e) Operating
        Budget. Borrower shall furnish to Lender on or prior to the Closing Date
        and for
        each fiscal year of Borrower thereafter not less than thirty (30) calendar
        days
        prior to the commencement of such fiscal year, consolidated and consolidating
        month by month projected operating budgets, annual projections, profit and
        loss
        statements, balance sheets and cash flow reports of and for Borrower for
        such
        upcoming fiscal year (including an income statement for each month and a
        balance
        sheet as at the end of the last month in each fiscal quarter), in each case
        prepared in accordance with GAAP consistently applied with prior
        periods.

       

      
        	 	
                6.2.

              	
                Payment
                  of Obligations

              

      

      

      Borrower
        shall make full and timely indefeasible payment in cash of the principal
        of and
        interest on the Loans, Advances and all other Obligations. 

       

      
        	 	
                6.3.

              	
                Conduct
                  of Business and Maintenance of Existence and
                  Assets

              

      

      

      Borrower
        shall (i) conduct its business in accordance with good business practices
        customary to the industry, (ii) engage principally in the same or similar
        lines
        of business substantially as heretofore conducted, (iii) collect its Accounts
        in
        the ordinary course of business, (iv) maintain all of its material properties,
        assets and equipment used or useful in its business in good repair, working
        order and condition (normal wear and tear excepted and except as may be disposed
        of in the ordinary course of business and in accordance with the terms of
        the
        Loan Documents and otherwise as
        determined by Borrower using commercially reasonable business
        judgment),
        (v)
        from time to time to make all necessary or desirable repairs, renewals and
        replacements thereof, as determined by Borrower using commercially reasonable
        business judgment, (vi) maintain and keep in full force and effect its existence
        and all material Permits and qualifications to do business and good standing
        in
        each jurisdiction in which the ownership or lease of property or the nature
        of
        its business makes such Permits or qualification necessary and in which failure
        to maintain such Permits or qualification could reasonably be likely to have
        a
        Material Adverse Effect; and (vii) remain in good standing and maintain
        operations in all jurisdictions in which currently located.

       

      
        	 	
                6.4.

              	
                Compliance
                  with Legal and Other
                  Obligations

              

      

      

      Borrower
        shall (i) comply with all laws, statutes, rules, regulations, ordinances
        and tariffs of all Governmental Authorities applicable to it or its business,
        assets or operations; (ii) pay all taxes, assessments, fees, governmental
        charges, claims for labor, supplies, rent and all other obligations or
        liabilities of any kind, except liabilities being contested in good faith
        and
        against which adequate reserves have been established in accordance with
        GAAP,
        (iii) perform in accordance with its terms each contract, agreement or other
        arrangement to which it is a party or by which it or any of the Collateral
        is
        bound, except where the failure to comply, pay or perform could not reasonably
        be expected to have a Material Adverse Effect, and (iv) maintain and comply
        with
        all Permits necessary to conduct its business and comply with any new or
        additional requirements that may be imposed on it or its business. 

       

      
        	 	
                6.5.

              	
                Insurance

              

      

      

      
        
          
          

        

        
          -26-

          
            

          

        

        
          
          

        

      

      Borrower
        shall (i) keep all of its insurable properties and assets including without
        limitation Inventory that is in transit (whether by vessel, air or land)
        adequately insured in all material respects against losses, damages and hazards
        as are customarily insured against by businesses engaging in similar activities
        or owning similar assets or properties and at least the minimum amount required
        by applicable law (and with respect to Inventory that is in transit, maintain
        insurance covering the same for its full replacement cost under all risk
        marine
        insurance policies endorsed to cover all risks required by Lender and with
        such
        amounts of coverage and deductibles as Lender determines, in its Permitted
        Discretion, issued by such insurance carriers as are acceptable to Lender),
        including, without limitation, professional liability insurance, as applicable;
        and maintain general public liability insurance at all times against liability
        on account of damage to persons and property having such limits, deductibles,
        exclusions and co-insurance and other provisions as are customary for a business
        engaged in activities similar to those of Borrower; and (ii) maintain insurance
        under all applicable workers’ compensation laws; all of the foregoing insurance
        policies to (A) be satisfactory in form and substance to Lender, (B)
        name
        Lender as loss payee and additional insured thereunder, and (C) expressly
        provide that they cannot be altered, amended, modified or canceled without
        thirty (30) Business Days prior written notice to Lender and
        that they
        inure to the benefit of Lender notwithstanding any action or omission or
        negligence of or by Borrower or any insured thereunder. 

       

      
        	 	
                6.6.

              	
                True
                  Books

              

      

      

      Borrower
        shall (i) keep true, complete and accurate books of record and account in
        accordance with commercially reasonable business practices in which true
        and
        correct entries are made of all of its and their dealings and transactions
        in
        all material respects; and (ii) set up and maintain on its books such reserves
        as may be required by GAAP with respect to doubtful accounts and all taxes,
        assessments, charges, levies and claims and with respect to its business,
        and
        include such reserves in its quarterly as well as year end financial
        statements.

       

      
        	 	
                6.7.

              	
                Inspections;
                  Periodic Audits and
                  Reappraisals

              

      

      

      Borrower
        shall permit the representatives of Lender, at the expense of Borrower, from
        time to time during normal business hours upon reasonable notice, to (i)
        visit
        and inspect any of its offices or properties or any other place where Collateral
        is located to inspect the Collateral and/or to examine or audit all of its
        books
        of account, records, reports and other papers, (ii) make copies and extracts
        therefrom, and (iii) discuss its business, operations, prospects, properties,
        assets, liabilities, condition and/or Accounts and Inventory with its officers
        and independent public accountants (and by this provision such officers and
        accountants are authorized to discuss the foregoing). Lender is also authorized,
        from time to time to conduct or obtain, at the Borrower’s expense, but not more
        frequently than quarterly, audits, except upon or after the occurrence of
        an
        Event of Default; and obtain at the Borrower’s expense, but not more frequently
        than annually, updated appraisals of Inventory by appraisers acceptable to
        the
        Lender in its discretion, except upon or after the occurrence of an Event
        of
        Default.

       

      
        	 	
                6.8.

              	
                Further
                  Assurances; Post Closing 

              

      

      

      At
        Borrower’s cost and expense, Borrower shall (i) take such further actions,
        obtain such consents and approvals and duly execute and deliver such further
        agreements, assignments, instructions or documents as Lender may reasonably
        request with respect to the purposes, terms and conditions of the Loan Documents
        and the consummation of the transactions contemplated thereby, and
        (ii) without limiting and notwithstanding any other provision of any
        Loan
        Document, execute and deliver, or cause to be executed and delivered, such
        agreements and documents, and take or cause to be taken such actions, and
        otherwise perform, observe and comply with such obligations, as are set forth
        on
        Schedule 6.8.

       

      
        
          
          

        

        
          -27-

          
            

          

        

        
          
          

        

      

      
        	 	
                6.9.

              	
                Payment
                  of Indebtedness

              

      

      

      Except
        as
        otherwise prescribed in the Loan Documents, Borrower shall pay, discharge
        or
        otherwise satisfy at or before maturity (subject to applicable grace periods
        and, in the case of trade payables, to ordinary course payment practices)
        all of
        its material obligations and liabilities, except when the amount or validity
        thereof is being contested in good faith by appropriate proceedings and such
        reserves as Lender may deem proper and necessary in its sole discretion shall
        have been made. 

       

      
        	 	
                6.10.

              	
                Lien
                  Searches

              

      

      

      If
        Liens
        other than Permitted Liens exist, Borrower immediately shall take, execute
        and
        deliver all actions, documents and instruments necessary to release and
        terminate such Liens.

       

      
        	 	
                6.11.

              	
                Use
                  of Proceeds

              

      

      

      Borrower
        shall use the proceeds from the Revolving Facility only for the purposes
        set
        forth in the first “WHEREAS” clause of this Agreement. 

       

      
        	 	
                6.12.

              	
                Collateral
                  Documents; Security Interest in
                  Collateral

              

      

      

      Borrower
        shall (i) execute, obtain, deliver, file, register and/or record any and
        all
        financing statements, continuation statements, stock powers, instruments
        and
        other documents, or cause the execution, filing, registration, recording
        or
        delivery of any and all of the foregoing, that are necessary or required
        under
        law or otherwise or reasonably requested by Lender to be executed, filed,
        registered, obtained, delivered or recorded to create, maintain, perfect,
        preserve, validate or otherwise protect the pledge of the Collateral to Lender
        and Lender’s perfected first priority Lien on the Collateral (and Borrower
        irrevocably grants Lender the right, at Lender’s option, to file any or all of
        the foregoing), (ii) immediately upon learning thereof, report to Lender
        any
        reclamation, return or repossession of goods in excess of $50,000 (individually
        or in the aggregate), and (iii) defend the Collateral and Lender’s perfected
        first priority Lien thereon against all claims and demands of all Persons
        at any
        time claiming the same or any interest therein adverse to Lender, and pay
        all
        reasonable costs and expenses (including, without limitation, in-house
        documentation and diligence fees and legal expenses and reasonable attorneys’
        fees and expenses) in connection with such defense, which may at Lender’s
        discretion be added to the Obligations.

       

      
        	 	
                6.13.

              	
                Right
                  of First Refusal

              

      

      

      
        
          
          

        

        
          -28-

          
            

          

        

        
          
          

        

      

      (a) If
        at any
        time Borrower receives from a third party an offer, term sheet or commitment
        or
        makes a proposal accepted by any Person (each, an “Offer”)
        which
        provides for any type of financing to or for Borrower, Borrower shall
        immediately notify such third party making the offer of Lender’s rights under
        this Section 6.13, and further shall immediately notify Lender of the Offer
        in
        writing (including all material terms of the Offer). Lender shall have ten
        (10)
        Business Days after Receipt of such notice (the “Option
        Period”)
        to
        agree to provide similar financing in the place of such Person upon
        substantially the same terms and conditions (or terms more favorable to
        Borrower) as set forth in the Offer. Lender shall notify Borrower in writing
        of
        Lender’s acceptance of the Offer pursuant hereto (the “Acceptance
        Notice”),
        in
        which Borrower shall obtain such financing from Lender and shall not accept
        the
        Offer from such other Person. If no Acceptance Notice has been Received from
        Lender within the Option Period, Borrower may consummate the Offer with the
        other Person on the terms and conditions set forth in the Offer (the
“Transaction”);
        provided, however, that none of foregoing or any failure by Lender to issue
        an
        Acceptance Notice shall be construed as a waiver of any of the terms, covenants
        or conditions of any of the Loan Documents. If the Transaction is not
        consummated on the terms set forth in the Offer or with the Person providing
        the
        Offer or during the one hundred eighty (180) calendar day period following
        the
        expiration of the Option Period, Borrower shall not be permitted to consummate
        the Transaction without again complying with this Section 6.13. The
        provisions of this Section 6.13 shall survive the payment in full of the
        Obligations and termination of this Agreement for a period of six months.
        For
        purposes of this Section 6.13, “Lender” shall include CapitalSource Finance LLC
        and any of its parents, subsidiaries or Affiliates.

       

      
        	 	
                6.14.

              	
                Taxes
                  and Other Charges

              

      

      

      (a) All
        payments and reimbursements to Lender made under any Loan Document shall
        be free
        and clear of and without deduction for all taxes, levies, imposts, deductions,
        assessments, charges or withholdings, and all liabilities with respect thereto
        of any nature whatsoever, excluding taxes to the extent imposed on Lender’s net
        income. If Borrower shall be required by law to deduct any such amounts from
        or
        in respect of any sum payable under any Loan Document to Lender, then the
        sum
        payable to Lender shall be increased as may be necessary so that, after making
        all required deductions, Lender receives an amount equal to the sum it would
        have received had no such deductions been made. Notwithstanding any other
        provision of any Loan Document, if at any time after the Closing (i) any
        change in any existing law, regulation, treaty or directive or in the
        interpretation or application thereof, (ii) any new law, regulation, treaty
        or
        directive enacted or any interpretation or application thereof, or
        (iii) compliance by Lender with any request or directive (whether
        or not
        having the force of law) from any Governmental Authority: (A) subjects Lender
        to
        any tax, levy, impost, deduction, assessment, charge or withholding of any
        kind
        whatsoever with respect to any Loan Document, or changes the basis of taxation
        of payments to Lender of any amount payable thereunder (except for net income
        taxes, or franchise taxes imposed in lieu of net income taxes, imposed generally
        by federal, state or local taxing authorities with respect to interest or
        commitment fees or other fees payable hereunder or changes in the rate of
        tax on
        the overall net income of Lender), or (B) imposes on Lender any other condition
        or increased cost in connection with the transactions contemplated thereby
        or
        participations therein; and the result of any of the foregoing is to increase
        the cost to Lender of making or continuing any Loan hereunder or to reduce
        any
        amount receivable hereunder, then, in any such case, Borrower shall promptly
        pay
        to Lender any additional amounts necessary to compensate Lender, on an after-tax
        basis, for such additional cost or reduced amount as determined by Lender.
        If
        Lender becomes entitled to claim any additional amounts pursuant to this
        Section
        6.14 it shall promptly notify Borrower of the event by reason of which Lender
        has become so entitled, and each such notice of additional amounts payable
        pursuant to this Section 6.14 submitted by Lender to Borrower shall, absent
        manifest error, be final, conclusive and binding for all purposes. 

      

      
        
          
          

        

        
          -29-

          
            

          

        

        
          
          

        

      

      (b) Borrower
        shall promptly, and in any event within five (5) Business Days after Borrower
        or
        any authorized officer of Borrower obtains knowledge thereof, notify Lender
        in
        writing of any oral or written communication from the Internal Revenue Service
        or otherwise with respect to any (i) tax investigations, relating to the
        Borrower directly, or relating to any consolidated tax return which was filed
        on
        behalf of Borrower, (ii) notices of tax assessment or possible tax assessment,
        (iii) years that are designated open pending tax examination or audit, and
        (iv)
        information that could give rise to an IRS tax liability or
        assessment.

       

      
        	 	
                6.15.

              	
                Payroll
                  Taxes

              

      

      

      Without
        limiting or being limited by any other provision of any Loan Document, Borrower
        at all times shall retain and use a Person acceptable to Lender to process,
        manage and pay its payroll taxes and shall cause to be delivered to Lender
        within ten (10) calendar days after the end of each calendar month a report
        of
        its payroll taxes for the immediately preceding calendar month and evidence
        of
        payment thereof. 

       

      
        	 	
                6.16.

              	
                Inventory
                  Covenants

              

      

      

      With
        respect to the Inventory, Borrower: (a) shall at all times maintain inventory
        records reasonably satisfactory to Lender, keeping correct and accurate records
        itemizing and describing the kind, type, quality and quantity of Inventory,
        Borrower’s cost therefore and daily withdrawals therefrom and additions thereto;
        (b) shall not remove any Inventory from the locations set forth or permitted
        herein, without the prior written consent of Lender, which consent shall
        not be
        unreasonably denied or delayed, except for sales of Inventory in the ordinary
        course of Borrower’s business and except to move Inventory directly from one
        location set forth or permitted herein to another such location; (c) shall
        produce, use store, ship and maintain the Inventory with all reasonable care
        and
        caution and in accordance with applicable standards of any insurance and
        in
        conformity with applicable laws (including the requirements of the Federal
        Fair
        Labor Standards Act of 1938, as amended and all rules, regulations and orders
        related thereto); (d) assumes all responsibility and liability arising from
        or
        relating to the production, use, sale or other disposition of the Inventory;
        (e)
        shall not sell Inventory to any customer on approval, or any other basis
        which
        entitles the customer to return or may obligate Borrower to repurchase such
        Inventory; (f) shall keep the Inventory in good and marketable condition;
        and
        (g) shall not, without prior written notice to Lender, acquire or accept
        any
        Inventory on consignment or approval.

      

      

      
        	
                VII.

              	
                NEGATIVE
                  COVENANTS

              

      

      

      Each
        Borrower, jointly and severally, covenants and agrees that, until full
        performance and satisfaction, and indefeasible payment in full in cash, of
        all
        of the Obligations and termination of this Agreement: 

       

      
        
          
          

        

        
          -30-

          
            

          

        

        
          
          

        

      

      
        	 	
                7.1.

              	
                Financial
                  Covenants

              

      

      

      Borrower
        shall not violate the financial covenants set forth on Annex I to this
        Agreement, which is incorporated herein and made a part hereof. 

       

      
        	 	
                7.2.

              	
                Permitted
                  Indebtedness

              

      

      

      Borrower
        shall not create, incur, assume or suffer to exist any Indebtedness, except
        the
        following (collectively, “Permitted
        Indebtedness”):
        (i)
        Indebtedness under the Loan Documents, (ii) any Indebtedness set forth
        on
        Schedule 7.2, (iii) Capitalized Lease Obligations incurred after the
        Closing Date and Indebtedness incurred pursuant to purchase money Liens
        permitted by Section 7.3(v), provided that the aggregate amount of
        such
        Capitalized Lease Obligations and purchase money indebtedness outstanding
        at any
        time shall not exceed $250,000, (iv) Indebtedness in connection with
        advances made by a stockholder in order to cure any default of the financial
        covenants set forth on Annex I; provided, however, that such Indebtedness
        shall
        be on an unsecured basis, subordinated in right of repayment and remedies
        to all
        of the Obligations and to all of Lender’s rights pursuant to a subordination
        agreement in form and substance satisfactory to Lender; (v) accounts
        payable to trade creditors and current operating expenses (other than for
        borrowed money) which are not aged more than 180 calendar days from the billing
        date or more than 60 days from the due date, in each case incurred in the
        ordinary course of business and paid within such time period, unless (A)
        Borrower and such trade creditors have agreed on payment terms that permit
        longer time periods or (B) the same are being contested in good faith and
        by
        appropriate and lawful proceedings and such reserves, if any, with respect
        thereto as are required by GAAP and deemed adequate by Borrower’s independent
        accountants shall have been reserved; (vi) borrowings incurred in the ordinary
        course of business and not exceeding $100,000 individually or in the aggregate
        outstanding at any one time (excluding trade payables in the ordinary course
        of
        business), provided, however, that such Indebtedness shall be on an unsecured
        basis, subordinated in right of repayment and remedies to all of the Obligations
        and to all of Lender’s rights pursuant to a subordination agreement in form and
        substance satisfactory to Lender; (vii) Permitted Subordinated Debt; and
        (viii)
        any payments due and other reasonable costs contemplated under the Acquisition
        Agreement, as more fully described on Schedule 7.6 (“Permitted Acquisition
        Payments”), and not to exceed the amounts set forth on Schedule 7.6. Borrower
        shall not make prepayments on any existing or future Indebtedness to any
        Person
        other than to Lender or to the extent specifically permitted by this Agreement
        or any subsequent agreement between Borrower and Lender. 

       

      
        	 	
                7.3.

              	
                Permitted
                  Liens

              

      

      

      Borrower
        shall not create, incur, assume or suffer to exist any Lien upon, in or against,
        or pledge of, any of the Collateral or any of its properties or assets or
        any of
        its shares, securities or other equity or ownership or partnership interests,
        whether now owned or hereafter acquired, except the following (collectively,
        “Permitted
        Liens”):
        (i)
        Liens under the Loan Documents or otherwise arising in favor of Lender, (ii)
        Liens imposed by law for taxes (other than payroll taxes), assessments or
        charges of any Governmental Authority for claims not yet due or which are
        being
        contested in good faith by appropriate proceedings and with respect to which
        adequate reserves or other appropriate provisions are being maintained by
        such
        Person in accordance with GAAP to the satisfaction of Lender in its sole
        discretion, (iii) (A) statutory Liens of landlords (provided that any such
        landlord has executed a Landlord Waiver and Consent in form and substance
        satisfactory to Lender) and of carriers, warehousemen, mechanics, materialmen,
        and (B) other Liens imposed by law or that arise by operation of law
        in the
        ordinary course of business from the date of creation thereof, in each case
        only
        for amounts not yet due or which are being contested in good faith by
        appropriate proceedings and with respect to which adequate reserves or other
        appropriate provisions are being maintained by such Person in accordance
        with
        GAAP to the satisfaction of Lender in its sole discretion, (iv) Liens (A)
        incurred or deposits made in the ordinary course of business (including,
        without
        limitation, surety bonds and appeal bonds) in connection with workers’
        compensation, unemployment insurance and other types of social security benefits
        or to secure the performance of tenders, bids, leases, contracts (other than
        for
        the repayment of Indebtedness), statutory obligations and other similar
        obligations, or (B) arising as a result of progress payments under
        government contracts, (v) purchase money Liens (A) securing Indebtedness
        permitted under Section 7.2(iii), or (B) in connection with
        the
        purchase by such Person of equipment in the normal course of business, provided
        that such payables shall not exceed any limits on Indebtedness provided for
        herein and shall otherwise be Permitted Indebtedness hereunder, (vi) Liens
        securing Permitted Subordinated Debt, provided that such Liens are subordinated
        to the Liens in favor of Lender pursuant to a written agreement acceptable
        to
        Lender; and (vii) Liens disclosed on Schedule 7.3.

       

      
        
          
          

        

        
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                7.4.

              	
                Investments;
                  New Facilities or Collateral;
                  Subsidiaries

              

      

      

      Borrower,
        directly or indirectly, shall not (i) purchase, own, hold, invest
        in or
        otherwise acquire obligations or stock or securities of, or any other interest
        in, or all or substantially all of the assets of, any Person or any joint
        venture, or (ii) make or permit to exist any loans, advances or guarantees
        to or for the benefit of any Person or assume, guarantee, endorse, contingently
        agree to purchase or otherwise become liable for or upon or incur any obligation
        of any Person (other than those created by the Loan Documents and Permitted
        Indebtedness and other than (A) trade credit extended in the ordinary
        course of business, (B) advances for business travel and similar temporary
        advances made in the ordinary course of business to officers, directors and
        employees, and (C) the endorsement of negotiable instruments for deposit
        or
        collection or similar transactions in the ordinary course of business).
        Borrower, directly or indirectly, shall not purchase, own, operate, hold,
        invest
        in or otherwise acquire any facility, property or assets or any Collateral
        that
        is not located at the locations set forth on Schedule 5.18B unless Borrower
        shall provide to Lender at least ten (10) Business Days prior written notice.
        Borrower shall have no Subsidiaries other than those Subsidiaries, if any,
        existing at Closing and set forth in Schedule 5.3.

       

      
        	 	
                7.5.

              	
                Dividends;
                  Redemptions

              

      

      

      Borrower
        shall not (i) declare, pay or make any dividend or Distribution on any shares
        of
        capital stock or other securities or interests other than dividends or
        Distributions payable in its stock, of split-ups or reclassifications of
        its
        stock, (ii) apply any of its funds, property or assets to the acquisition,
        redemption or other retirement of any capital stock or other securities or
        interests or of any options to purchase or acquire any of the foregoing
        (provided, however, that as long as no Default or Event of Default has occurred
        and is continuing (or would be caused by or result therefrom) (A) Borrower
        may
        redeem its capital stock from terminated employees pursuant to, but only
        to the
        extent required under the terms of the related employment agreements (B)
        Sellers
        may convert its preferred stock in Oblio (the “Oblio Preferred Stock”) to common
        stock of Parent in accordance with the Certificate of Designations of Series
        A
        Cumulative Convertible Preferred Stock, dated as of the date hereof and executed
        by the Borrower (the “Certificate of Designation”) and (C) after the payment in
        full in cash of the Obligations with respect to the Term Loan Facilities,
        Borrower may (x) pay regularly scheduled quarterly dividend payments as provided
        in the Certificate of Designation as in effect on the date of this Agreement
        and
        (y) redeem the Oblio Preferred stock (a) by applying up to 75% of the Company’s
        Excess Cash Flow Amount for any month, as demonstrated by a written calculation
        of such Excess Cash Flow Amount prepared by the Borrower and delivered to
        Lender
        and certified by the Borrower’s chief financial officer (b) from the proceeds of
        an equity contribution (so long as such equity contribution does not result
        in a
        Change of Control and is otherwise on terms satisfactory to Lender) or (c)
        with
        the proceeds of an Advance, with the prior written consent of Lender
provided,
        if
        Lender does not consent to such redemption (in the absence of a Default or
        Event
        of Default), the Company may prepay the Obligations in full without application
        of the Minimum Termination Fee then due, (iii) otherwise make any payments
        or
        Distributions to any stockholder, member, partner or other equity owner in
        such
        Person’s capacity as such, or (iv) make any payment of any management or service
        fee, and provided further, that Borrower shall not make or suffer to exist
        any
        such payment described in (i) through (iv) above if a Default or Event of
        Default has occurred and is continuing or would result therefrom.

       

      
        
          
          

        

        
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                7.6.

              	
                Transactions
                  with Affiliates

              

      

      

      Borrower
        shall not enter into or consummate any transaction of any kind with any of
        its
        Affiliates or any Guarantor or any of their respective Affiliates other than:
        (i) salary, bonus, employee stock option and other compensation and employment
        arrangements with directors or officers in the ordinary course of business,
        provided, that no payment of any bonus shall be permitted if a Default or
        Event
        of Default has occurred and remains in effect or would be caused by or result
        from such payment, (ii) Distributions and dividends permitted pursuant to
        Section 7.5, (iii) transactions with Lender or any Affiliate of Lender, (iv)
        payments permitted under and pursuant to written agreements entered into
        by and
        between Borrower and one or more of its Affiliates that both (A) reflect
        and constitute transactions on overall terms at least as favorable to Borrower
        as would be the case in an arm’s-length transaction between unrelated parties of
        equal bargaining power, and (B) are subject to such terms and conditions
        as
        determined by Lender in its sole discretion; provided, that notwithstanding
        the
        foregoing Borrower shall not (Y) enter into or consummate any transaction
        or
        agreement pursuant to which it becomes a party to any mortgage, note, indenture
        or guarantee evidencing any Indebtedness of any of its Affiliates or otherwise
        to become responsible or liable, as a guarantor, surety or otherwise, pursuant
        to agreement for any Indebtedness of any such Affiliate, or (Z) make any
        payment
        to any of its Affiliates in excess of $10,000 without the prior written consent
        of Lender; and (v) Permitted Acquisition Payments. 

       

      
        	 	
                7.7.

              	
                Charter
                  Documents; Fiscal Year; Name; Jurisdiction of Organization; Dissolution;
                  Use of Proceeds

              

      

      

      Borrower
        shall not (i) amend, modify, restate or change its certificate of incorporation
        or formation or bylaws or similar charter documents in a manner that would
        be
        adverse to Lender, (ii) change its fiscal year unless Borrower demonstrates
        to Lender’s satisfaction compliance with the covenants contained herein for both
        the fiscal year in effect prior to any change and the new fiscal year period
        by
        delivery to Lender of appropriate interim and annual pro forma, historical
        and
        current compliance certificates for such periods and such other information
        as
        Lender may reasonably request, (iii) without at least 20 days prior written
        notice to Lender, change its name or change its jurisdiction of organization;
        (iv) amend, alter or suspend or terminate or make provisional in any material
        way, any Permit without the prior written consent of Lender, which consent
        shall
        not be unreasonably withheld, (v) wind up, liquidate or dissolve
        (voluntarily or involuntarily) or commence or suffer any proceedings seeking
        or
        that would result in any of the foregoing, or (vi) use any proceeds of any
        Advance for “purchasing” or “carrying”“margin stock” as defined in Regulations
        U, T or X of the Board of Governors of the Federal Reserve System. 

       

      
        
          
          

        

        
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                7.8.

              	
                Truth
                  of Statements

              

      

      

      Borrower
        shall not furnish to Lender any certificate or other document that contains
        any
        untrue statement of a material fact or that omits to state a material fact
        necessary to make it not misleading in light of the circumstances under which
        it
        was furnished.

       

      
        	 	
                7.9.

              	
                IRS
                  Form 8821

              

      

      

      Borrower
        shall not alter, amend, restate, or otherwise modify, or withdraw, terminate
        or
        re-file the IRS Form 8821 required to be filed pursuant to the Conditions
        Precedent in Section 4.1 hereof.

       

      
        	 	
                7.10.

              	
                Transfer
                  of Assets

              

      

      

      Notwithstanding
        any other provision of this Agreement or any other Loan Document, Borrower
        shall
        not sell, lease, transfer, assign or otherwise dispose of any interest in
        any
        properties or assets (other than obsolete equipment or excess equipment no
        longer needed in the conduct of the business in the ordinary course of business
        and sales of Inventory in the ordinary course of business), or agree to do
        any
        of the foregoing at any future time, except that:

      

      (a) Borrower
        may lease (as lessee) real or personal property or surrender all or a portion
        of
        a lease of the same, in each case in the ordinary course of business (so
        long as
        such lease does not create or result in and is not otherwise a Capitalized
        Lease
        Obligation prohibited under this Agreement), provided that a Landlord Waiver
        and
        Consent and such other consents as are required by Lender are signed and
        delivered to Lender with respect to any lease of real or other property,
        as
        applicable;

      

      (b) Borrower
        may arrange for warehousing, fulfillment or storage of Inventory at locations
        not owned or leased by Borrower in each case in the ordinary course of business,
        provided that a Warehouse Waiver and Consent and such other consents as are
        required by Lender are signed and delivered to Lender with respect to any
        such
        location;

      

      (c) Borrower
        may license or sublicense Intellectual Property or customer lists from third
        parties in the ordinary course of business, provided, that such licenses
        or
        sublicenses shall not interfere with the business or other operations of
        Borrower and that Borrower’s rights, title and/or interest in or to such
        Intellectual Property and customer lists and interests therein are pledged
        to
        Lender as further security for the Obligations and included as part of the
        Collateral; and

      

      
        
          
          

        

        
          -34-

          
            

          

        

        
          
          

        

      

      (d) Borrower
        may consummate such other sales or dispositions of property or assets (including
        any sale or transfer or disposition of all or any part of its assets and
        thereupon and within one year thereafter rent or lease the assets so sold
        or
        transferred) only to the extent prior written notice has been given to Lender
        and to the extent Lender has given its prior written consent thereto, subject
        in
        each case to such conditions as may be set forth in such consent.

      
        	 	
                7.11.

              	
                Payment
                  on Permitted Subordinated
                  Debt

              

      

      

      Borrower
        shall not (i) make any prepayment of any part or all of any Permitted
        Subordinated Debt; provided,
        however,
        (A)
        Borrower shall be permitted to make regularly scheduled payments of interest
        on
        the Seller Note on a quarterly basis and at an annual interest rate of not
        greater than one percent (1%) subject to the terms and conditions of the
        Seller
        Subordination Agreement and (B) upon the payment in full in cash of the
        Obligations relating to the Term Loans, Borrower may prepay, in whole or
        in
        part, the Seller Note; provided, further that in no event may Borrower make
        any
        payment or distribution on the Seller Note if before and after giving effect
        to
        such payment there exists an Event of Default, (ii) repurchase, redeem or
        retire
        any instrument evidencing any such Permitted Subordinated Debt prior to
        maturity, or (iii) enter into any agreement (oral or written) which could
        in any
        way be construed to amend, modify, alter or terminate any one or more
        instruments or agreements evidencing or relating to any Permitted Subordinated
        Debt in a manner adverse to Lender, as determined by Lender in its sole
        discretion.

       

      
        	
                VIII.

              	
                EVENTS
                  OF DEFAULT

              

      

      
        	 	
                8.1.

              	
                Events
                  of Default

              

      

      

      The
        occurrence of any one or more of the following shall constitute an “Event of
        Default:”

      

      (a) Borrower
        shall fail to pay any amount on the Obligations or provided for in any Loan
        Document when due (whether on any payment date, at maturity, by reason of
        acceleration, by notice of intention to prepay, by required prepayment or
        otherwise);

      

      (b) any
        representation, statement or warranty made or deemed made by Borrower or
        Guarantor in any Loan Document or in any other certificate, document, report
        or
        opinion delivered in conjunction with any Loan Document to which it is a
        party,
        shall not be true and correct in all material respects or shall have been
        false
        or misleading in any material respect on the date when made or deemed to
        have
        been made (except to the extent already qualified by materiality, in which
        case
        it shall be true and correct in all respects and shall not be false or
        misleading in any respect);

      

      (c) Borrower
        or Guarantor or other party thereto other than Lender shall be in violation,
        breach or default of, or shall fail to perform, observe or comply with any
        covenant, obligation or agreement set forth in, any Loan Document and such
        violation, breach, default or failure shall not be cured within the applicable
        period set forth in the applicable Loan Document; provided that, with respect
        to
        the affirmative covenants set forth in Article VI (other than Sections 6.1(c),
        6.2, 6.3, 6.5, 6.8, 6.9, 6.11 and 6.16 for which there shall be no cure period),
        there shall be a fifteen (15) calendar day cure period commencing from the
        earlier of (i) Receipt by such Person of written notice of such breach,
        default, violation or failure, and (ii) the time at which such Person
        or
        any authorized officer thereof knew or became aware, or should have known
        or
        been aware, of such failure, violation, breach or default, but no Advances
        will
        be made during the cure period;

      

      
        
          
          

        

        
          -35-

          
            

          

        

        
          
          

        

      

      (d) (i)
        any
        of the Loan Documents ceases to be in full force and effect, or (ii) any
        Lien
        created thereunder ceases to constitute a valid perfected first priority
        Lien on
        the Collateral in accordance with the terms thereof, or Lender ceases to
        have a
        valid perfected first priority security interest in any of the Collateral
        or any
        securities pledged to Lender pursuant to the Security Documents;

      

      (e) one
        or
        more tax assessments, judgments or decrees is rendered against Borrower or
        Guarantor (other than Parent) in an amount in excess of $25,000 individually
        or
        $125,000 in the aggregate, which is/are not satisfied, stayed, vacated or
        discharged of record within thirty (30) calendar days of being rendered but
        no
        Advances will be made before the judgment is stayed, vacated or discharged;
        

      

      (f) (i) any
        default occurs, which is not cured or waived, (x) in the payment of
        any
        amount with respect to any Indebtedness (other than the Obligations) of Borrower
        or Guarantor (other than Parent) in excess of $50,000, (y) in the
        performance, observance or fulfillment of any provision contained in any
        agreement, contract, document or instrument to which Borrower or Guarantor
        (other than Parent) is a party or to which any of their properties or assets
        are
        subject or bound under or pursuant to which any Indebtedness was issued,
        created, assumed, guaranteed or secured and such default continues for more
        than
        any applicable grace period or permits the holder of any Indebtedness to
        accelerate the maturity thereof, or (z) in the performance, observance or
        fulfillment of any provision contained in any agreement, contract, document
        or
        instrument between Borrower or Guarantor and Lender or any Affiliate of Lender
        (other than the Loan Documents), or (ii) any Indebtedness of Borrower or
        Guarantor (other than Parent) is declared to be due and payable or is required
        to be prepaid (other than by a regularly scheduled payment) prior to the
        stated
        maturity thereof, or any obligation of such Person for the payment of
        Indebtedness (other than the Obligations) is not paid when due or within
        any
        applicable grace period, or any such obligation becomes or is declared to
        be due
        and payable before the expressed maturity thereof, or there occurs an event
        which, with the giving of notice or lapse of time, or both, would cause any
        such
        obligation to become, or allow any such obligation to be declared to be,
        due and
        payable; 

      

      (g) Borrower
        or Guarantor shall (i) be unable to pay its debts generally as they become
        due,
        (ii) have total liabilities (including contingent, subordinated, unmatured
        and
        unliquidated liabilities) that exceed its assets, at a Fair Valuation, (iii)
        have an unreasonably small capital base with which to engage in its anticipated
        business, (iv) file a petition under any insolvency statute, (v) make
        a
        general assignment for the benefit of its creditors, (vi) commence a proceeding
        for the appointment of a receiver, trustee, liquidator or conservator of
        itself
        or of the whole or any substantial part of its property, or (vii) file
        a
        petition seeking reorganization or liquidation or similar relief under any
        Debtor Relief Law or any other applicable law or statute;

      

      
        
          
          

        

        
          -36-

          
            

          

        

        
          
          

        

      

      (h) a
        court
        of competent jurisdiction shall (A) enter an order, judgment or decree
        appointing a custodian, receiver, trustee, liquidator or conservator of Borrower
        or Guarantor or the whole or any substantial part of any such Person’s
        properties, which shall continue unstayed and in effect for a period of thirty
        (30) calendar days, (B) shall approve a petition filed against Borrower or
        Guarantor seeking reorganization, liquidation or similar relief under the
        any
        Debtor Relief Law or any other applicable law or statute, which is not dismissed
        within thirty (30) calendar days or, (C) under the provisions of any
        Debtor
        Relief Law or other applicable law or statute, assume custody or control
        of
        Borrower or Guarantor or of the whole or any substantial part of any such
        Person’s properties, which is not irrevocably relinquished within thirty (30)
        calendar days, or (ii) there is commenced against Borrower or Guarantor
        any
        proceeding or petition seeking reorganization, liquidation or similar relief
        under any Debtor Relief Law or any other applicable law or statute and either
        (A) any such proceeding or petition is not unconditionally dismissed within
        thirty (30) calendar days after the date of commencement, or (B) Borrower
        or
        Guarantor takes any action to indicate its approval of or consent to any
        such
        proceeding or petition, but no Advances will be made before any such order,
        judgment or decree described above is stayed, vacated or discharged, any
        such
        petition described above is dismissed, or any such custody or control described
        above is relinquished;

      

      (i) (i)
        any
        Change of Control occurs or any agreement or commitment to cause or that
        may
        result in any such Change of Control is entered into, (ii) any Material Adverse
        Effect, or Material Adverse Change occurs or is reasonably expected to occur,
        or
        (iii) Borrower or Guarantor (other than Parent) ceases a material portion
        of its
        business operations as currently conducted; 

      

      (j) Lender
        receives any indication or evidence that Borrower or Guarantor (other than
        Parent) may have directly or indirectly been engaged in any type of activity
        which, in Lender’s judgment, might result in forfeiture of any property to any
        Governmental Authority which shall have continued unremedied for a period
        of ten
        (10) calendar days after written notice from Lender (but no Advances will
        be
        made before any such activity ceases);

      

      (k) an
        Event
        of Default occurs under any other Loan Document; 

      

      (l) uninsured
        damage to, or loss, theft or destruction of, any portion of the Collateral
        occurs that exceeds $50,000 in the aggregate; 

      

      (m) Borrower
        or Guarantor (other than Parent) or any of their respective directors or
        senior
        officers is criminally indicted or convicted under any law that could lead
        to a
        forfeiture of any Collateral; 

      

      (n) the
        issuance of any process for levy, attachment or garnishment or execution
        upon or
        prior to any judgment against Borrower or Guarantor (other than Parent) or
        any
        of their property or assets; or

      

      (o) Borrower
        or Guarantor does, or enters into or becomes a party to any agreement or
        commitment to do, or cause to be done, any of the things described in this
        Article VIII or otherwise prohibited by any Loan Document (subject to any
        cure
        periods set forth therein); then, and in any such event, notwithstanding
        any
        other provision of any Loan Document, Lender may, without notice or demand,
        do
        any of the following: (i) terminate its obligations to make Advances hereunder,
        whereupon the same shall immediately terminate and (ii) elect all or any
        of the
        Loans and/or Notes, all interest thereon and all other Obligations to be
        due and
        payable immediately (except in the case of an Event of Default under Section
        8(d), (g), (h) or (i)(iii), in which event all of the foregoing shall
        automatically and without further act by Lender be due and payable, provided
        that, with respect to non-material breaches or violations that constitute
        Events
        of Default under clause (ii) of Section 8(d), there shall be a three (3)
        Business Day cure period (but no Advances will be made during any such cure
        period) commencing from the earlier of (A) Receipt by the applicable
        Person
        of written notice of such breach or violation or of any event, fact or
        circumstance constituting or resulting in any of the foregoing, and (B) the
        time
        at which such Person or any authorized officer thereof knew or became aware,
        or
        should have known or been aware, of such breach or violation and resulting
        Event
        of Default or of any event, fact or circumstance constituting or resulting
        in
        any of the foregoing), in each case without presentment, demand, protest
        or
        further notice of any kind, all of which are hereby expressly waived by
        Borrower. 

       

      
        
          
          

        

        
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                IX.

              	
                RIGHTS
                  AND REMEDIES AFTER DEFAULT

              

      

      
        	 	
                9.1.

              	
                Rights
                  and Remedies

              

      

      

      (a) In
        addition to the acceleration provisions set forth in Article VIII above,
        upon
        the occurrence and continuation of an Event of Default, Lender shall have
        the
        right to exercise any and all rights, options and remedies provided for in
        the
        Loan Documents, under the UCC or at law or in equity, including, without
        limitation, the right to (i) apply any property of Borrower held by Lender
        to
        reduce the Obligations, (ii) foreclose the Liens created under the Security
        Documents, (iii) realize upon, take possession of and/or sell any
        Collateral or securities pledged with or without judicial process,
        (iv) exercise all rights and powers with respect to the Collateral
        as
        Borrower, as applicable, might exercise, (v) collect and send notices regarding
        the Collateral, with or without judicial process, (vi) by its own means or
        with
        judicial assistance, enter any premises at which Collateral and/or pledged
        securities are located, or render any of the foregoing unusable or dispose
        of
        the Collateral and/or pledged securities on such premises without any liability
        for rent, storage, utilities, or other sums, and no Borrower shall resist
        or
        interfere with such action, (vii) at Borrower’s expense, require that all or any
        part of the Collateral be assembled and made available to Lender at any place
        designated by Lender, (viii) reduce or otherwise change the Facility Cap,
        (ix)
        assess the Non-Compliance Fee, and/or (x) relinquish or abandon any Collateral
        or securities pledged or any Lien thereon. Notwithstanding any provision
        of any
        Loan Document, Lender, in its sole discretion, shall have the right, at any
        time
        that Borrower fails to do so, and from time to time, without prior notice,
        to:
        (i) obtain insurance covering any of the Collateral to the extent required
        hereunder; (ii) pay for the performance of any of Obligations; (iii) discharge
        taxes or Liens on any of the Collateral that are in violation of any Loan
        document unless Borrower is in good faith with due diligence by appropriate
        proceedings contesting those items; and (iv) pay for the maintenance and
        preservation of the Collateral. Such expenses and advances shall be added
        to the
        Obligations until reimbursed to Lender and shall be secured by the Collateral,
        and such payments by Lender shall not be construed as a waiver by Lender
        of any
        Event of Default or any other rights or remedies of Lender.

      

      (b) Borrower
        agrees that notice received by it at least ten (10) calendar days before
        the
        time of any intended public sale, or the time after which any private sale
        or
        other disposition of Collateral is to be made, shall be deemed to be reasonable
        notice of such sale or other disposition. If permitted by applicable law,
        any
        perishable Collateral which threatens to speedily decline in value or which
        is
        sold on a recognized market may be sold immediately by Lender without prior
        notice to Borrower. At any sale or disposition of Collateral or securities
        pledged, Lender may (to the extent permitted by applicable law) purchase
        all or
        any part thereof free from any right of redemption by Borrower which right
        is
        hereby waived and released. Borrower covenants and agrees not to, and not
        to
        permit or cause any of its Subsidiaries to, interfere with or impose any
        obstacle to Lender’s exercise of its rights and remedies with respect to the
        Collateral. Lender, in dealing with or disposing of the Collateral or any
        part
        thereof, shall not be required to give priority or preference to any item
        of
        Collateral or otherwise to marshal assets or to take possession or sell any
        Collateral with judicial process.

       

      
        
          
          

        

        
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                9.2.

              	
                Application
                  of Proceeds

              

      

      

      In
        addition to any other rights, options and remedies Lender has under the Loan
        Documents, the UCC, at law or in equity, all dividends, interest, rents,
        issues,
        profits, fees, revenues, income and other proceeds collected or received
        from
        collecting, holding, managing, renting, selling, or otherwise disposing of
        all
        or any part of the Collateral or any proceeds thereof upon exercise of its
        remedies hereunder shall be applied in the following order of priority:
        (i) first, to the payment of all costs and expenses of such collection,
        storage, lease, holding, operation, management, sale, disposition or delivery
        and of conducting Borrower’s business and of maintenance, repairs, replacements,
        alterations, additions and improvements of or to the Collateral, and to the
        payment of all sums which Lender may be required or may elect to pay, if
        any,
        for taxes, assessments, insurance and other charges upon the Collateral or
        any
        part thereof, and all other payments that Lender may be required or authorized
        to make under any provision of this Agreement (including, without limitation,
        in
        each such case, in-house documentation and diligence fees and legal expenses,
        search, audit, recording, professional and filing fees and expenses and
        reasonable attorneys’ fees and all expenses, liabilities and advances made or
        incurred in connection therewith); (ii) second, to the payment of all
        Obligations in such order as Lender may determine in its Permitted Discretion;
        (iii) third, to the satisfaction of Indebtedness secured by any subordinate
        security interest of record in the Collateral if written notification of
        demand
        therefore is received before distribution of the proceeds is completed,
        provided, that, if requested by Lender, the holder of a subordinate security
        interest shall furnish reasonable proof of its interest, and unless it does
        so,
        Lender need not address its claims; and (iv) fourth, to the payment
        of any
        surplus then remaining to Borrower, unless otherwise provided by law or directed
        by a court of competent jurisdiction, provided that Borrower shall be liable
        for
        any deficiency if such proceeds are insufficient to satisfy the Obligations
        or
        any of the other items referred to in this section.

       

      
        	 	
                9.3.

              	
                Rights
                  of Lender to Appoint
                  Receiver

              

      

      

      Without
        limiting and in addition to any other rights, options and remedies Lender
        has
        under the Loan Documents, the UCC, at law or in equity, upon the occurrence
        and
        continuation of an Event of Default, Lender shall have the right to apply
        for
        and have a receiver appointed by a court of competent jurisdiction in any
        action
        taken by Lender to enforce its rights and remedies in order to manage, protect,
        preserve, sell or dispose the Collateral and continue the operation of the
        business of Borrower and to collect all revenues and profits thereof and
        apply
        the same to the payment of all expenses and other charges of such receivership
        including the compensation of the receiver and to the payments as aforesaid
        until a sale or other disposition of such Collateral shall be finally made
        and
        consummated.

       

      
        
          
          

        

        
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                9.4.

              	
                Rights
                  and Remedies not Exclusive

              

      

      

      Lender
        shall have the right in its sole discretion to determine which rights, Liens
        and/or remedies Lender may at any time pursue, relinquish, subordinate or
        modify, and such determination will not in any way modify or affect any of
        Lender’s rights, Liens or remedies under any Loan Document, applicable law or
        equity. The enumeration of any rights and remedies in any Loan Document is
        not
        intended to be exhaustive, and all rights and remedies of Lender described
        in
        any Loan Document are cumulative and are not alternative to or exclusive
        of any
        other rights or remedies which Lender otherwise may have. The partial or
        complete exercise of any right or remedy shall not preclude any other further
        exercise of such or any other right or remedy. 

       

      
        	
                X.

              	
                WAIVERS
                  AND JUDICIAL PROCEEDINGS

              

      

      
        	 	
                10.1.

              	
                Waivers

              

      

      

      Except
        as
        expressly provided for herein, Borrower hereby waives setoff, counterclaim,
        demand, presentment, protest, all defenses with respect to any and all
        instruments and all notices and demands of any description, and the pleading
        of
        any statute of limitations as a defense to any demand under any Loan Document.
        Borrower hereby waives any and all defenses and counterclaims it may have
        or
        could interpose in any action or procedure brought by Lender to obtain an
        order
        of court recognizing the assignment of, or Lien of Lender in and to, any
        Collateral. With respect to any action hereunder, Lender conclusively may
        rely
        upon, and shall incur no liability to Borrower in acting upon, any request
        or
        other communication that Lender reasonably believes to have been given or
        made
        by a person authorized on Borrower’s behalf, whether or not such person is
        listed on the incumbency certificate delivered pursuant to Section 4.1
        hereof.  In each such case, Borrower hereby waives the right to dispute
        Lender’s action based upon such request or other communication, absent manifest
        error.

       

      
        	 	
                10.2.

              	
                Delay;
                  No Waiver of Defaults

              

      

      

      No
        course
        of action or dealing, renewal, release or extension of any provision of any
        Loan
        Document, or single or partial exercise of any such provision, or delay,
        failure
        or omission on Lender’s part in enforcing any such provision shall affect the
        liability of Borrower or Guarantor or operate as a waiver of such provision
        or
        affect the liability of Borrower or Guarantor or preclude any other or further
        exercise of such provision. No waiver by any party to any Loan Document of
        any
        one or more defaults by any other party in the performance of any of the
        provisions of any Loan Document shall operate or be construed as a waiver
        of any
        future default, whether of a like or different nature, and each such waiver
        shall be limited solely to the express terms and provisions of such waiver.
        Notwithstanding any other provision of any Loan Document, by completing the
        Closing under this Agreement and/or by making Advances, Lender does not waive
        any breach of any representation or warranty under any Loan Document, and
        all of
        Lender’s claims and rights resulting from any such breach or misrepresentation
        are specifically reserved.

       

      
        
          
          

        

        
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                10.3.

              	
                Jury
                  Waiver

              

      

      

      EACH
        PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY
        OF
        ANY CLAIM OR CAUSE OF ACTION ARISING UNDER THE LOAN DOCUMENTS OR IN ANY WAY
        CONNECTED WITH OR INCIDENTAL TO THE DEALINGS OF THE PARTIES WITH RESPECT
        TO THE
        LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY, WHETHER NOW EXISTING
        OR
        HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. EACH
        PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL
        BE
        DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT
        MAY
        FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
        WRITTEN
        EVIDENCE OF THE CONSENTS OF THE PARTIES TO THE WAIVER OF THEIR RESPECTIVE
        RIGHTS
        TO TRIAL BY JURY.

       

      
        	 	
                10.4.

              	
                Cooperation
                  in Discovery and
                  Litigation

              

      

      

      In
        any
        litigation, arbitration or other dispute resolution proceeding relating to
        any
        Loan Document, Borrower waives any and all defenses, objections and
        counterclaims it may have or could interpose with respect to (i) any of its
        directors, officers, employees or agents being deemed to be employees or
        managing agents of Borrower for purposes of all applicable law or court rules
        regarding the production of witnesses by notice for testimony (whether in
        a
        deposition, at trial or otherwise), (ii) Lender’s counsel examining any such
        individuals as if under cross-examination and using any discovery deposition
        of
        any of them as if it were an evidence deposition, and/or (iii) using all
        commercially reasonable efforts to produce in any such dispute resolution
        proceeding, at the time and in the manner requested by Lender, all Persons,
        documents (whether in tangible, electronic or other form) and/or other things
        under its control and relating to the dispute.

       

      
        	
                XI.

              	
                EFFECTIVE
                  DATE AND TERMINATION

              

      

      
        	 	
                11.1.

              	
                Termination
                  and Effective Date Thereof

              

      

      

      (a) Subject
        to Lender’s right to terminate and cease making Advances upon or after any Event
        of Default, this Agreement shall continue in full force and effect until
        the
        full performance and indefeasible payment in cash of all Obligations, unless
        terminated sooner as provided in this Section 11.1. Borrower may terminate
        this Agreement at any time upon not less than ninety (90) calendar days’ prior
        written notice to Lender and upon full performance and indefeasible payment
        in
        full in cash of all Obligations on or prior to such ninetieth (90th) calendar
        day after Receipt by Lender of such written notice. All of the Obligations
        shall
        be immediately due and payable upon any such termination on the termination
        date
        stated in any notice of termination (the “Termination
        Date”);
        provided that, notwithstanding any other provision of any Loan Document,
        the
        Termination Date shall be effective no earlier than the first Business Day
        of
        the month following the expiration of the ninety (90) calendar days’ prior
        written notice period. Notwithstanding any other provision of any Loan Document,
        no termination of this Agreement shall affect Lender’s rights or any of the
        Obligations existing as of the effective date of such termination, and the
        provisions of the Loan Documents shall continue to be fully operative until
        the
        Obligations have been fully performed and indefeasibly paid in cash in full.
        Except as otherwise provided in the Loan Documents, the Liens granted to
        Lender
        under the Security Documents and the financing statements filed pursuant
        thereto
        and the rights and powers of Lender shall continue in full force and effect
        notwithstanding the fact that Borrower’s borrowings hereunder may from time to
        time be in a zero or credit position until all of the Obligations have been
        fully performed and indefeasibly paid in full in cash. 

       

      
        
          
          

        

        
          -41-

          
            

          

        

        
          
          

        

      

      (b) If
        (i)
        Borrower terminates the Revolving Facility under this Section 11.1,
        (ii) Borrower
        voluntarily or involuntarily repays the Obligations (other than reductions
        to
        zero of the outstanding balance of the Revolving Facility resulting from
        the
        ordinary course operation of the provisions of Section 2.5), whether by virtue
        of Lender’s exercising its right of set off or otherwise; (iii) the Obligations
        are accelerated by Lender (each of the events described in (i), (ii) and
        (iii)
        above being hereinafter referred to as, a “Revolver
        Termination”),
        then
        at the effective date of any such Revolver Termination, Borrower shall pay
        Lender (in addition to the then outstanding principal, accrued interest and
        other Obligations relating to the Revolving Facility and the Term Loan
        Facilities pursuant to the terms of this Agreement and any other Loan Document),
        to compensate Lender for the loss of bargain and not as a penalty, an amount
        equal to the applicable Minimum Termination Fee. 

       

      
        	 	
                11.2.

              	
                Survival

              

      

      

      All
        obligations, covenants, agreements, representations, warranties, waivers
        and
        indemnities made by Borrower in any Loan Document shall survive the execution
        and delivery of the Loan Documents, the Closing, the making of the Advances
        and
        any termination of this Agreement until all Obligations are fully performed
        and
        indefeasibly paid in full in cash. The obligations and provisions of Sections
        3.4, 3.5, 6.13, 10.1, 10.3, 11.1, 11.2, 12.4, 12.7 and 12.10 shall survive
        termination of the Loan Documents and any payment, in full or in part, of
        the
        Obligations.

       

      
        	
                XII.

              	
                MISCELLANEOUS

              

      

      
        	 	
                12.1.

              	
                Governing
                  Law; Jurisdiction; Service of Process;
                  Venue

              

      

      

      The
        Loan
        Documents shall be governed by and construed in accordance with the internal
        laws of the State of Maryland without giving effect to its choice of law
        provisions. Any judicial proceeding against Borrower with respect to the
        Obligations, any Loan Document or any related agreement may be brought in
        any
        federal or state court of competent jurisdiction located in the State of
        Maryland. By execution and delivery of each Loan Document to which it is
        a
        party, Borrower (i) accepts the non-exclusive jurisdiction of the aforesaid
        courts and irrevocably agrees to be bound by any judgment rendered thereby,
        (ii)
        waives personal service of process, (iii) agrees that service of process
        upon it
        may be made by certified or registered mail, return receipt requested, pursuant
        to Section 12.5 hereof, (iv) waives any objection to jurisdiction
        and venue
        of any action instituted hereunder and agrees not to assert any defense based
        on
        lack of jurisdiction, venue or convenience, and
        (v)
        agrees that this loan was made in Maryland, that Lender has accepted in Maryland
        Loan Documents executed by Borrower and has disbursed Advances under the
        Loan
        Documents in Maryland.
        Nothing
        shall affect the right of Lender to serve process in any manner permitted
        by law
        or shall limit the right of Lender to bring proceedings against Borrower
        in the
        courts of any other jurisdiction having jurisdiction. Any judicial proceedings
        against Lender involving, directly or indirectly, the Obligations, any Loan
        Document or any related agreement shall be brought only in a federal or state
        court located in the State of Maryland. All parties acknowledge that they
        participated in the negotiation and drafting of this Agreement and that,
        accordingly, no party shall move or petition a court construing this Agreement
        to construe it more stringently against one party than against any
        other.

       

      
        
          
          

        

        
          -42-

          
            

          

        

        
          
          

        

      

      
        	 	
                12.2.

              	
                Successors
                  and Assigns; Participations; New
                  Lenders

              

      

      

      The
        Loan
        Documents shall inure to the benefit of Lender, Transferees and all future
        holders of the Loan, any Note, the Obligations and/or any of the Collateral,
        and
        each of their respective successors and assigns. Each Loan Document shall
        be
        binding upon the Persons’ other than Lender that are parties thereto and their
        respective successors and assigns, and no such Person may assign, delegate
        or
        transfer any Loan Document or any of its rights or obligations thereunder
        without the prior written consent of Lender. No rights are intended to be
        created under any Loan Document for the benefit of any third party donee,
        creditor or incidental beneficiary of Borrower or Guarantor. Nothing contained
        in any Loan Document shall be construed as a delegation to Lender of any
        other
        Person’s duty of performance. BORROWER
        ACKNOWLEDGES AND AGREES THAT LENDER AT ANY TIME AND FROM TIME TO TIME MAY
        (I)
        DIVIDE AND RESTATE ANY NOTE, AND/OR (II) SELL, ASSIGN OR GRANT PARTICIPATING
        INTERESTS IN OR TRANSFER ALL OR ANY PART OF ITS RIGHTS OR OBLIGATIONS UNDER
        ANY
        LOAN DOCUMENT, LOANS, ANY NOTE, THE OBLIGATIONS AND/OR THE COLLATERAL TO
        OTHER
        PERSONS (EACH SUCH TRANSFEREE, ASSIGNEE OR PURCHASER, A “TRANSFEREE”).
        Each
        Transferee shall have all of the rights and benefits with respect to the
        Loans,
        Obligations, any Notes, Collateral and/or Loan Documents held by it as fully
        as
        if the original holder thereof, and either Lender or any Transferee may be
        designated as the sole agent to manage the transactions and obligations
        contemplated therein; provided that, notwithstanding anything to the contrary
        in
        any Loan Document, Borrower shall not be obligated to pay under this Agreement
        to any Transferee any sum in excess of the sum which Borrower would have
        been
        obligated to pay to Lender had such participation not been effected.
        Notwithstanding any other provision of any Loan Document, Lender may disclose
        to
        any Transferee all information, reports, financial statements, certificates
        and
        documents obtained under any provision of any Loan Document.

       

      
        	 	
                12.3.

              	
                Application
                  of Payments

              

      

      

      To
        the
        extent that any payment made or received with respect to the Obligations
        is
        subsequently invalidated, determined to be fraudulent or preferential, set
        aside
        or required to be repaid to a trustee, debtor in possession, receiver, custodian
        or any other Person under any Debtor Relief Law, common law or equitable
        cause
        or any other law, then the Obligations intended to be satisfied by such payment
        shall be revived and shall continue as if such payment had not been received
        by
        Lender. Any payments with respect to the Obligations received shall be credited
        and applied in such manner and order as Lender shall decide in its sole
        discretion.

       

      
        	 	
                12.4.

              	
                Indemnity

              

      

      

      Borrower
        jointly and severally shall indemnify Lender, its Affiliates and its and
        their
        respective managers, members, officers, employees, Affiliates, agents,
        representatives, successors, assigns, accountants and attorneys (collectively,
        the “Indemnified
        Persons”)
        from
        and against any and all liabilities, obligations, losses, damages, penalties,
        actions, judgments, suits, costs, expenses and disbursements of any kind
        or
        nature whatsoever (including, without limitation, reasonable fees and
        disbursements of counsel and in-house documentation and diligence fees and
        legal
        expenses) which may be imposed on, incurred by or asserted against any
        Indemnified Person with respect to or arising out of, or in any litigation,
        proceeding or investigation instituted or conducted by any Person with respect
        to any aspect of, or any transaction contemplated by or referred to in, or
        any
        matter related to, any Loan Document or any agreement, document or transaction
        contemplated thereby, whether or not such Indemnified Person is a party thereto,
        except to the extent that any of the foregoing arises out of the gross
        negligence or willful misconduct of such Indemnified Person. If any Indemnified
        Person uses in-house counsel for any purpose for which Borrower is responsible
        to pay or indemnify, Borrower expressly agrees that its indemnification
        obligations include reasonable charges for such work commensurate with the
        fees
        that would otherwise be charged by outside legal counsel selected by such
        Indemnified Person in its sole discretion for the work performed. Lender
        agrees
        to give Borrower reasonable notice of any event of which Lender becomes aware
        for which indemnification may be required under this Section 12.4, and Lender
        may elect (but is not obligated) to direct the defense thereof, provided
        that
        the selection of counsel shall be subject to Borrower’s consent, which consent
        shall not be unreasonably withheld or delayed. Any Indemnified Person may,
        in
        its reasonable discretion, take such actions as it deems necessary and
        appropriate to investigate, defend or settle any event or take other remedial
        or
        corrective actions with respect thereto as may be necessary for the protection
        of such Indemnified Person or the Collateral. Notwithstanding the foregoing,
        if
        any Insurer agrees to undertake the defense of an event (an “Insured
        Event”),
        Lender agrees not to exercise its right to select counsel to defend the event
        if
        that would cause Borrower’s Insurer to deny coverage; provided, however, that
        Lender reserves the right to retain counsel to represent any Indemnified
        Person
        with respect to an Insured Event at its sole cost and expense. To the extent
        that Lender obtains recovery from a third party other than an Indemnified
        Person
        of any of the amounts that Borrower has paid to Lender pursuant to the indemnity
        set forth in this Section 12.4, then Lender shall promptly pay to Borrower
        the
        amount of such recovery.

       

      
        
          
          

        

        
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                12.5.

              	
                Notice

              

      

      

      Any
        notice or request under any Loan Document shall be given to any party to
        this
        Agreement at such party’s address set forth beneath its signature on the
        signature page to this Agreement, or at such other address as such party
        may
        hereafter specify in a notice given in the manner required under this Section
        12.5. Any notice or request hereunder shall be given only by, and shall be
        deemed to have been received upon (each, a “Receipt”):
        (i) registered or certified mail, return receipt requested, on the
        date on
        which received as indicated in such return receipt, (ii) delivery
        by a
        nationally recognized overnight courier, one (1) Business Day after deposit
        with
        such courier, or (iii) facsimile transmission, in each case upon telephone
        or
        further electronic communication from the recipient acknowledging receipt
        (whether automatic or manual from recipient), as applicable. 

       

      
        	 	
                12.6.

              	
                Severability;
                  Captions; Counterparts; Facsimile
                  Signatures

              

      

      

      If
        any
        provision of any Loan Document is adjudicated to be invalid under applicable
        laws or regulations, such provision shall be inapplicable to the extent of
        such
        invalidity without affecting the validity or enforceability of the remainder
        of
        the Loan Documents which shall be given effect so far as possible. The captions
        in the Loan Documents are intended for convenience and reference only and
        shall
        not affect the meaning or interpretation of the Loan Documents. The Loan
        Documents may be executed in one or more counterparts (which taken together,
        as
        applicable, shall constitute one and the same instrument) and by facsimile
        transmission, which facsimile signatures shall be considered original executed
        counterparts. Each party to this Agreement agrees that it will be bound by
        its
        own facsimile signature and that it accepts the facsimile signature of each
        other party. 

       

      
        
          
          

        

        
          -44-

          
            

          

        

        
          
          

        

      

      
        	 	
                12.7.

              	
                Expenses

              

      

      

      Borrower
        shall pay, whether or not the Closing occurs, all costs and expenses incurred
        by
        Lender and/or its Affiliates, including, without limitation, documentation
        and
        diligence fees and expenses, all search, audit, appraisal, recording,
        professional and filing fees and expenses and all other out-of-pocket charges
        and expenses (including, without limitation, UCC and judgment and tax lien
        searches and UCC filings and fees for post-Closing UCC and judgment and tax
        lien
        searches and wire transfer fees and audit expenses), and reasonable attorneys’
        fees and expenses, (i) in any effort to enforce, protect or collect payment
        of
        any Obligation or to enforce any Loan Document or any related agreement,
        document or instrument, (ii) in connection with entering into, negotiating,
        preparing, reviewing and executing the Loan Documents and/or any related
        agreements, documents or instruments, (iii) arising in any way out of
        administration of the Obligations, (iv) in connection with instituting,
        maintaining, preserving, enforcing and/or foreclosing on Lender’s Liens in any
        of the Collateral or securities pledged under the Loan Documents, whether
        through judicial proceedings or otherwise, (v) in defending or prosecuting
        any
        actions, claims or proceedings arising out of or relating to Lender’s
        transactions with Borrower, (vi) in seeking, obtaining or receiving any advice
        with respect to its rights and obligations under any Loan Document and any
        related agreement, document or instrument, and/or (vii) in connection with
        any
        modification, restatement, supplement, amendment, waiver or extension of
        any
        Loan Document and/or any related agreement, document or instrument. All of
        the
        foregoing shall be charged to Borrower’s account and shall be part of the
        Obligations. If Lender or any of its Affiliates uses in-house counsel for
        any
        purpose under any Loan Document for which Borrower is responsible to pay
        or
        indemnify, Borrower expressly agrees that its Obligations include reasonable
        charges for such work commensurate with the fees that would otherwise be
        charged
        by outside legal counsel selected by Lender or such Affiliate in its sole
        discretion for the work performed. Without limiting the foregoing, Borrower
        shall pay all taxes (other than taxes based upon or measured by Lender’s income
        or revenues or any personal property tax), if any, in connection with the
        issuance of any Note and the filing and/or recording of any documents and/or
        financing statements. 

       

      
        	 	
                12.8.

              	
                Entire
                  Agreement

              

      

      

      This
        Agreement and the other Loan Documents to which Borrower is a party constitute
        the entire agreement between Borrower and Lender with respect to the subject
        matter hereof and thereof, and supersede all prior agreements and
        understandings, if any, relating to the subject matter hereof or thereof.
        Any
        promises, representations, warranties or guarantees not herein contained
        and
        hereinafter made shall have no force and effect unless in writing signed
        by
        Borrower and Lender. No provision of this Agreement may be changed, modified,
        amended, restated, waived, supplemented, discharged, canceled or terminated
        orally or by any course of dealing or in any other manner other than by an
        agreement in writing signed by Lender and Borrower. Each party hereto
        acknowledges that it has been advised by counsel in connection with the
        negotiation and execution of this Agreement and is not relying upon oral
        representations or statements inconsistent with the terms and provisions
        hereof.

       

      
        
          
          

        

        
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                12.9.

              	
                Lender
                  Approvals

              

      

      

      Unless
        expressly provided herein to the contrary, any approval, consent, waiver
        or
        satisfaction of Lender with respect to any matter that is subject of any
        Loan
        Document may be granted or withheld by Lender in its sole and absolute
        discretion.

       

      
        	 	
                12.10.

              	
                Confidentiality
                  and Publicity

              

      

      

      (a) Borrower
        agrees, and agrees to cause each of its Affiliates, (i) not to transmit or
        disclose provisions of any Loan Document to any Person (other than to Borrower’s
        advisors and officers on a need-to-know basis or to any other Person as may
        be
        required by law, including, without limitation, the Securities Act of 1933,
        as
        amended, or the Securities Exchange Act of 1934, as amended and the rules
        and
        regulations promulgated thereunder) or as otherwise may be required by law)
        without Lender’s prior written consent, (ii) to inform all Persons of the
        confidential nature of the Loan Documents and to direct them not to disclose
        the
        same to any other Person and to require each of them to be bound by these
        provisions. Borrower agrees to submit to Lender and Lender reserves the right
        to
        review and approve all materials that Borrower or any of its Affiliates prepares
        that contain Lender’s name or describe or refer to any Loan Document, any of the
        terms thereof or any of the transactions contemplated thereby. Borrower shall
        not, and shall not permit any of its Affiliates to, use Lender’s name (or the
        name of any of Lender’s Affiliates) in connection with any of its business
        operations, including without limitation, advertising, marketing or press
        releases or such other similar purposes, without Lender’s prior written consent,
        which shall not be unreasonably withheld or delayed. Nothing contained in
        any
        Loan Document is intended to permit or authorize Borrower or any of its
        Affiliates to contract on behalf of Lender. 

      

      (b) Borrower
        hereby agrees that Lender or any Affiliate of Lender may (i) disclose a general
        description of transactions arising under the Loan Documents for advertising,
        marketing or other similar purposes and (ii) use Borrower’s or Guarantor’s name,
        logo or other indicia germane to such party in connection with such advertising,
        marketing or other similar purposes.

       

      
        	 	
                12.11.

              	
                Release
                  of Lender

              

      

      

      Notwithstanding
        any other provision of any Loan Document, Borrower voluntarily, knowingly,
        unconditionally and irrevocably, with specific and express intent, for and
        on
        behalf of itself, its managers, members, directors, officers, employees,
        stockholders, Affiliates, agents, representatives, accountants, attorneys,
        successors and assigns and their respective Affiliates (collectively, the
        “Releasing
        Parties”),
        hereby fully and completely releases and forever discharges the Indemnified
        Parties and any other Person or Insurer which may be responsible or liable
        for
        the acts or omissions of any of the Indemnified Parties, or who may be liable
        for the injury or damage resulting therefrom (collectively, with the Indemnified
        Parties, the “Released
        Parties”),
        of
        and from any and all actions, causes of action, damages, claims, obligations,
        liabilities, costs, expenses and demands of any kind whatsoever, at law or
        in
        equity, matured or unmatured, vested or contingent, that any of the Releasing
        Parties has against any of the Released Parties as of the date of the Closing.
        Borrower acknowledges that the foregoing release is a material inducement
        to
        Lender’s decision to extend to Borrower the financial accommodations hereunder
        and has been relied upon by Lender in agreeing to make the Advances.

       

      
        
          
          

        

        
          -46-

          
            

          

        

        
          
          

        

      

      
        	 	
                12.12.

              	
                Agent

              

      

      

      Lender
        and its successors and assigns hereby (i) designate and appoint CapitalSource
        Finance LLC, a Delaware limited liability company, and its successors and
        assigns (“CapitalSource”),
        to
        act as agent for Lender and its successors and assigns under this Agreement
        and
        all other Loan Documents, (ii) irrevocably authorize CapitalSource to take
        all
        actions on its behalf under the provision of this Loan Agreement and all
        other
        Loan Documents, and (iii) to exercise all such powers and rights, and to
        perform
        all such duties and obligations hereunder and thereunder.  CapitalSource,
        on behalf of Lender, shall hold all Collateral, payments of principal and
        interest, fees, charges and collections received pursuant to this Agreement
        and
        all other Loan Documents.  Borrower acknowledges that Lender and its
        successors and assigns transfer and assign to CapitalSource the right to
        act as
        Lender’s agent to enforce all rights and perform all obligations of Lender
        contained herein and in all of the other Loan Documents.  Borrower
        shall
        within ten (10) Business Days after Lender’s reasonable request, take such
        further actions, obtain such consents and approvals and duly execute and
        deliver
        such further agreements, amendments, assignments, instructions or documents
        as
        Lender may request to evidence the appointment and designation of CapitalSource
        as agent for Lender and other financial institutions from time to time party
        hereto and to the other Loan Documents.

       

      
        	 	
                12.13.

              	
                Agreement
                  Controls

              

      

      

      In
        the
        event of any inconsistency between this Agreement and any other Loan Documents,
        the terms of this Agreement shall control.

      

      [SIGNATURES
        APPEAR ON THE FOLLOWING PAGE]

      
        
          
          

        

        
          -47-

          
            

          

        

        
          
          

          
          

        

      

      

      IN
        WITNESS WHEREOF, each of the parties has duly executed this Credit and Security
        Agreement as of the date first written above.

      

      

      

      OBLIO
        TELECOM, INC.

      

      By:__________________________________

      Name:
        Daniel Guimond

      Its:
        Chief Financial Officer

      

      

      Address
        for Notices:

      

      407
        International Parkway, Suite 403

      Richardson,
        Texas 75081 

      Attention: David
        Marks

      Telephone: (972)
        470-9100

      Facsimile: (972)
        470-9105

      

      PINLESS,
        INC.

      

      

      By:__________________________________

      Name:
        Daniel Guimond

      Its:
        Chief Financial Officer

      

      

      Address
        for Notices:

      

      407
        International Parkway, Suite 403

      Richardson,
        Texas 75081 

      Attention: David
        Marks

      Telephone: (972)
        470-9100

      Facsimile: (972)
        470-9105

      

      

      

      
        
          
          

        

        
          -48-

          
            

          

        

        
          
          

          
          

        

      

      CAPITALSOURCE
        FINANCE LLC

      

      

      By:_________________________________

      Name:
        Stephen M. Klein

      Its:
        Managing Director

      

      

      Address
        for Notices:

      

      CapitalSource
        Finance LLC

      4445
        Willard Avenue, 12th Floor

      Chevy
        Chase, MD 20815

      Attention: Business
        Credit Services

      HFG,
        Portfolio Manager

      Telephone: 301-841-2700
        

      Facsimile: 301-841-2340

      

      

      

      

      
        
          
          

        

        
          -49-

          
            

          

        

        
          
          

          
          

        

      

      

      SCHEDULES

      

      
        	 Schedule 2.4	
                 --

              	Borrower’s Account(s)
	
                 Schedule
                  5.2

              	
                 --

              	Required Consents
	 Schedule 5.3	
                 --

              	
                Capitalization,
                  Organization Chart (including all subsidiaries,
                  

              
	 	 	authorized/issued capitalization,
                owners,
                directors, officers and 
	 	 	managers) and Joint
                Ventures 
	 Schedule 5.4	
                 --

              	Liens; Real and Personal Property
                Owned or
                Leased; Leases
	 Schedule 5.8	
                 --

              	Taxes
	 Schedule 5.11	
                 --

              	Intellectual Property
	 Schedule 5.15A	
                 --

              	Existing Indebtedness
	 Schedule 5.15B	
                 --

              	Indebtedness Maturing During
                Term
	 Schedule 5.16	
                 --

              	Other Agreements 
	
                 Schedule
                  5.17 

              	
                 --

              	Insurance 
	 Schedule 5.18A 	
                --

              	Corporate Names 
	 Schedule 5.18B 	
                 --

              	Places of Business 
	 Schedule 5.20 	
                 --

              	Inventory Disclosures 
	 Schedule 6.8	
                 --

              	Further Assurances/Post
                Closing 
	 Schedule 7.2	
                 --

              	Permitted Indebtedness 
	 Schedule 7.3	
                 --

              	Permitted Liens 
	 Schedule 7.6	
                 --

              	Transactions with
                Affiliates 

      

       

       

      

      
        
          
          

        

        
          -50-

          
            

          

        

        
          
          

          
          

        

      

      ANNEX
        I

      FINANCIAL
        COVENANTS

      1) Minimum
        EBITDA

      

      Borrower
        shall maintain for each period set forth below a minimum EBITDA of not less
        than
        the amount set forth below opposite such period and for the Test Period ending
        on each subsequent month thereafter in an amount not less than
        $11,500,000.

       

      
        	
                Period:

              	 	
                Minimum
                  EBITDA:

              
	
                For
                  the one (1) month period ending September 30, 2005

              	 	
                $625,000

              
	
                For
                  the two (2) month period ending October 31, 2005

              	 	
                $1,352,000

              
	
                For
                  the three (3) month period ending November 30, 2005

              	 	
                $2,187,000

              
	
                For
                  the four (4) month period ending December 31, 2005

              	 	
                $3,077,000

              
	
                For
                  the five (5) month period ending January 31, 2006

              	 	
                $3,967,000

              
	
                For
                  the six (6) month period ending February 28, 2006

              	 	
                $4,868,000

              
	
                For
                  the seven (7) month period ending March 31, 2006

              	 	
                $5,819,000

              
	
                For
                  the eight (8) month period ending April 30, 2006

              	 	
                $6,825,000

              
	
                For
                  the nine (9) month period ending May 31, 2006

              	 	
                $7,886,000

              
	
                For
                  the ten (10) month period ending June 30, 2006

              	 	
                $8,999,000

              
	
                For
                  the eleven (11) month period ending July 31, 200

              	 	
                $10,208,000

              
	
                For
                  the twelve (12) month period ending August 31, 2006

              	 	
                $11,500,000

              

      

      

      2) Fixed
        Charge Coverage Ratio (EBITDA/Fixed Charges)

       

      Borrower
        shall not permit the Fixed Charge Coverage for the Test Periods ending on
        the
        last day of the fiscal quarters ending August 31, 2005, November 30, 2005,
        February 28, 2006, May 31, 2006 and for the twelve month period ending August
        31, 2006 and at the end of each month thereafter for the twelve months then
        ended to be less than 1.5:1.00.

      

      3) Minimum
        Liquidity and Working Capital

      

      
        
          
          

        

        
          -51-

          
            

          

        

        
          
          

        

      

      Borrower
        shall at all times have not less than $500,000 of Available Cash on hand;
        provided, however, that payments made by Borrower prior to Closing, including
        without limitation, commitment fees paid to Lender and all out of pocket
        expenses in connection with this transaction (for the avoidance of doubt,
        such
        amounts shall include $150,000 paid by Farwell with respect to the Commitment
        Fee and $100,000 paid by Farwell for expenses incurred in connection with
        the
        Closing) will reduce such Available Cash requirement on a dollar for dollar
        basis; provided,
        further,
        that if
        Available Cash on hand is less than $500,000 at any time, Borrower shall
        be
        required to raise additional equity in an amount sufficient to restore the
        $500,000 of Available Cash by not later than ten (10) calendar days after
        the
        occurrence of such breach and otherwise pursuant to documentation and terms
        satisfactory to Lender.

      4) Capital
        Expenditures and Operating Leases

      

      Borrower
        shall not permit its Capital Expenditures and amounts owed under operating
        leases, individually and collectively on a consolidated and consolidating
        basis,
        in the aggregate to exceed $250,000 in any one fiscal year.

      

      For
        purposes of the covenants set forth in this Annex I, the terms listed below
        shall have the following meanings:

      

      “Available
        Cash”
        shall
        mean, for and on any date, the sum without duplication of the following for
        Borrower: (a) unrestricted cash on hand on such date, (b) Cash Equivalents
        held
        on such date, and (c) the unborrowed Availability on and as of such
        date.

      

      “Cash
        Equivalents”
        shall
        mean (a) securities issued, or directly and fully guaranteed or insured,
        by the
        United States or any agency or instrumentality thereof (provided that the
        full
        faith and credit of the United States is pledged in support thereof) having
        maturities of not more than six months from the date of acquisition, (b)
        U.S.
        dollar denominated time deposits, certificates of deposit and bankers’
        acceptances of (i) any domestic commercial bank of recognized standing having
        capital and surplus in excess of $500,000,000, or (ii) any bank (or the parent
        company of such bank) whose short-term commercial paper rating from Standard
        & Poor’s Ratings Services (“S&P”)
        is at
        least A-2 or the equivalent thereof or from Moody’s Investors Service, Inc.
        (“Moody’s”)
        is at
        least P-2 or the equivalent thereof in each case with maturities of not more
        than six months from the date of acquisition (any bank meeting the
        qualifications specified in clauses (b)(i) or (ii), an “Approved
        Bank”),
        (c) repurchase obligations with a term of not more than seven days
        for
        underlying securities of the types described in clause (a), above, entered
        into
        with any Approved Bank, (d) commercial paper issued by any Approved Bank
        or by
        the parent company of any Approved Bank and commercial paper issued by, or
        guaranteed by, any industrial or financial company with a short-term commercial
        paper rating of at least A-2 or the equivalent thereof by S&P or at least
        P-2 or the equivalent thereof by Moody’s, or guaranteed by any industrial
        company with a long term unsecured debt rating of at least A or A2, or the
        equivalent of each thereof, from S&P or Moody’s, as the case may be, and in
        each case maturing within six months after the date of acquisition and (e)
        investments in money market funds substantially all of whose assets are
        comprised of securities of the type described in clauses (a) through (d)
        above.

       

      “EBITDA”
        shall
        mean, for any Test Period, the sum, without duplication, of the following
        for
        Borrower, on a consolidated basis: Net Income determined in accordance with
        GAAP, plus, (a) Interest Expense, (b) taxes on income, whether paid,
        payable or accrued, (c) depreciation expense, (d) amortization expense,
        (e)
        all other non-cash, non-recurring charges and expenses, excluding accruals
        for
        cash expenses made in the ordinary course of business, and (f) loss from
        any
        sale of assets, other than sales in the ordinary course of business, all
        of the
        foregoing determined in accordance with GAAP, minus (a) gains from any sale
        of
        assets, other than sales in the ordinary course of business and (b) other
        extraordinary or non-recurring gains.

      

      
        
          
          

        

        
          -52-

          
            

          

        

        
          
          

        

      

      “Fixed
        Charge Coverage
        Ratio”
        shall mean, for Borrower collectively on a consolidated basis, the ratio
        of
        (a) EBITDA for the Test Period, to (b) Fixed Charges for the Test
        Period.

      

      “Fixed
        Charges”
        shall
        mean, the sum of the following: (a) Total Debt Service, (b) Capital
        Expenditures, (c) income taxes paid in cash or accrued, and (d) dividends
        paid
        or accrued or declared.

      

      “Intangible
        Assets”
        means
        all intangible assets (determined in conformity with GAAP) including, without
        limitation, goodwill, intellectual property, licenses, organizational costs,
        deferred amounts, covenants not to compete, unearned income, restricted funds,
        investments in Subsidiaries, intercompany receivables and accumulated
        depreciation.

      

      “Interest
        Expense”
        shall
        mean, for any Test Period, total interest expense (including attributable
        to
        Capital Leases in accordance with GAAP) fees with respect to all outstanding
        Indebtedness including capitalized interest but excluding commissions, discounts
        and other fees owed with respect to letters of credit and bankers’ acceptance
        financing and net costs under Interest Rate Agreements. 

      

      “Interest
        Rate Agreement”
        shall
        mean any interest rate swap, cap or collar agreement or other similar agreement
        or arrangement designed to hedge the position with respect to interest
        rates.

      

      “Net
        Income”
        shall
        mean, the net income (or loss) determined in conformity with GAAP, provided
        that
        there shall be excluded (i) the income (or loss) of any Person in which any
        other Person (other than Borrower) has a joint interest, except to the extent
        of
        the amount of dividends or other distributions actually paid to a Borrower
        by
        such Person, (ii) the income (or loss) of any Person accrued prior to the
        date
        it becomes a Borrower or is merged into or consolidated with a Borrower or
        that
        Person’s assets are acquired by a Borrower, (iii) the income of any Subsidiary
        of Borrower to the extent that the declaration or payment of dividends or
        similar distributions of that income by that Subsidiary is not at the time
        permitted by operation of the terms of the charter or any agreement, instrument,
        judgment, decree, order, statute, rule or governmental regulation applicable
        to
        that Subsidiary, (iv) compensation expense resulting from the issuance of
        capital stock, stock options or stock appreciation rights issued to former
        or
        current employees, including officers, of a Borrower, or the exercise of
        such
        options or rights, in each case to the extent the obligation (if any) associated
        therewith is not expected to be settled by the payment of cash by a Borrower
        or
        any affiliate thereof, and (v) compensation expense resulting from
        the
        repurchase of capital stock, options and rights described in clause (iv)
        of
        this definition of Net Income.

       

      
        
          
          

        

        
          -53-

          
            

          

        

        
          
          

        

      

      “Net
        Leverage Ratio”
        shall
        mean, at any date of determination, for Borrower individually and collectively
        on a consolidated and consolidating basis, the ratio of (i) Total
        Debt on
        such date, to (ii) EBITDA for the Test Period most recently ended
        before
        such date (taken as one accounting period).

      

      “Tangible
        Net Worth”
        means
        assets (excluding Intangible Assets) less liabilities (determined in conformity
        with GAAP).

      

      “Test
        Period”
        shall
        mean the twelve most recent calendar months then ended (taken as one accounting
        period), or such other period as specified in the Agreement or any Annex
        thereto; provided that for (i) the Test Period ended September 30, 2005 shall
        mean the one month period then ended, (ii) the
        Test
        Period ended October 31, 2005 shall mean the two month period then ended,
        (iii)
        the
        Test Period ended November 30, 2005 shall mean the three month period then
        ended, (iv) the Test Period ended December 31, 2005 shall mean the four month
        period then ended, (v) the Test Period ended January 31, 2006 shall mean
        the
        five month period then ended, (vi) the
        Test
        Period ended February 28, 2006 shall mean the six month period then ended,
        (vii)
        the
        Test Period ended March 31, 2006 shall mean the seven month period then ended,
        (viii) the Test Period ended April 30, 2006 shall mean the eight month period
        then ended, (ix) the Test Period ended May 31, 2006 shall mean the nine month
        period then ended, (x) the Test Period ended June 30, 2006 shall mean the
        ten
        month period then ended, (xi) the Test Period ended July 31, 2006 shall mean
        the
        eleven month period then ended, and (xii) the Test Period ended August 31,
        2006
        shall mean the twelve month period then ended. 

      

      “Total
        Debt”
        shall
        mean, at any date of determination, for Borrower individually and collectively
        on a consolidated and consolidating basis, the total Indebtedness on such
        date
        less cash and Cash Equivalents held on such date.

      

      “Total
        Debt Service”
        shall
        mean the sum of (i) all payments of principal on Indebtedness, and (ii) Interest
        Expense, in each case for such period. 

      

       

      

      

      
        
          
          

        

        
          -54-

          
            

          

        

        
          
          

          
          

        

      

      APPENDIX
        A

      DEFINITIONS

      

      “Acceptance
        Notice”
        shall
        have the meaning given such term in Section 6.13.

      

      “Accounts”
        shall
        mean all “accounts” (as defined in the UCC) of Borrower (or, if referring to
        another Person, of such other Person), including without limitation, accounts,
        accounts receivables, monies due or to become due and obligations in any
        form
        (whether arising in connection with contracts, contract rights, Instruments,
        General Intangibles or Chattel Paper), in each case whether arising out of
        goods
        sold or services rendered or from any other transaction and whether or not
        earned by performance, now or hereafter in existence, and all documents of
        title
        or other documents representing any of the foregoing, and all collateral
        security and guaranties of any kind, now or hereafter in existence, given
        by any
        Person with respect to any of the foregoing.

      

      “Account
        Debtor”
        shall
        mean any Person who is obligated under an Account.

      

      “Acquisition”
        shall
        mean the acquisition of all of the business of Seller by Oblio pursuant to
        the
        Acquisition Agreement and the transfer by Farwell to Parent of 100% of the
        outstanding equity of Oblio pursuant to the Stock Purchase
        Agreement.

      

      “Acquisition
        Agreement”
        shall
        mean the Asset Purchase Agreement dated as of July 28, 2005 among Farwell,
        Oblio, Seller and Sammy Jibrin and Radu Achiriloaie, as owners.

      

      “Acquisition
        Documents”
        shall
        mean, collectively, the Acquisition Agreement and all other agreements,
        documents, certificates and instruments executed and/or delivered in connection
        therewith.

      

      “Advance”
        shall
        mean a borrowing under the Revolving Facility. Any amounts paid by Lender
        on
        behalf of Borrower or Guarantor under any Loan Document shall be an Advance
        for
        purposes of the Agreement.

      

      “Affiliate”
        shall
        mean, as to any Person, any other Person (a) that, directly or indirectly
        through one or more intermediaries, controls, is controlled by, or is under
        common control with, such Person, (b) who is a director or officer (i) of
        such
        Person, (ii) of any Subsidiary of such Person, or (iii) of any Person described
        in clause (a) above with respect to such Person, or (c) which, directly or
        indirectly through one or more intermediaries, is the beneficial or record
        owner
        (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended,
        as
        the same is in effect on the date hereof) of five percent (5%) or more of
        any
        class of the outstanding voting stock, securities or other equity or ownership
        interests of such Person. For purposes of this definition, the term “control”
        (and the correlative terms, “controlled by” and “under common control with”)
        shall mean the possession, directly or indirectly, of the power to direct
        or
        cause the direction of the management or policies, whether through ownership
        of
        securities or other interests, by contract or otherwise. “Affiliate”
        shall
        include any Subsidiary.

      

      “Applicable
        Rate”
        shall
        mean the interest rates applicable from time to time to Advances under the
        Agreement.

      

      
        
          
          

        

        
          -55-

          
            

          

        

        
          
          

        

      

      “Availability”
        shall
        have the meaning given such term in Section 2.1(a).

      

      “Borrowing
        Base for Eligible Inventory”
        shall
        mean, as of any date of determination, the lesser
        of
        the cost (computed on a first in, first out basis in accordance with GAAP)
        or
        market value in U.S. Dollars of
        Eligible Inventory, as determined with reference to the most recent Borrowing
        Certificate and otherwise in accordance with this Agreement, but in no event
        in
        excess of ninety percent (90%) of the appraised net orderly liquidation value
        thereof, as determined by the most recent appraisal accepted by Lender;
provided,
        however,
        that if
        as of such date the most recent Borrowing Certificate is of a date more than
        four Business Days before or after such date, the Borrowing Base shall be
        determined by Lender in its sole discretion.

      

      “Borrowing
        Base for Eligible Receivables”
        shall
        mean, as of any date of determination, the net collectible U.S. Dollar value
        of
        Eligible Receivables, as determined with reference to the most recent Borrowing
        Certificate and otherwise in accordance with this Agreement; provided, however,
        that if as of such date the most recent Borrowing Certificate is of a date
        more
        than four Business Days before or after such date, the Borrowing Base shall
        be
        determined by Lender in its sole discretion. 

      

      “Borrowing
        Certificate”
        shall
        mean a Borrowing Certificate substantially in the form of Exhibit
        A.

      

      “Borrowing
        Date”
        shall
        have the meaning given such term in Section 2.4.

      

      “Business
        Day”
        shall
        mean any day other than a Saturday, Sunday or other day on which the Federal
        Reserve or Lender is closed.

      

      “Capital
        Expenditures”
        shall
        mean, for any Test Period, the sum (without duplication) of all expenditures
        (whether paid in cash or accrued as liabilities) during the Test Period that
        are
        or should be treated as capital expenditures under GAAP.

      

      “Capital
        Lease”
        shall
        mean, as to any Person, a lease of any interest in any kind of property or
        asset
        by that Person as lessee that is, should be or should have been recorded
        as a
“capital lease” in accordance with GAAP.

      

      “Capitalized
        Lease Obligations”
        shall
        mean all obligations of any Person under Capital Leases, in each case, taken
        at
        the amount thereof accounted for as a liability in accordance with
        GAAP.

      

      “Change
        of Control”
        shall
        mean, with respect to, Borrower or any Guarantor (other than Parent), the
        occurrence of any of the following: (i) a merger, consolidation, reorganization,
        recapitalization or share or interest exchange, sale or transfer or any other
        transaction or series of transactions in which its stockholders, managers,
        partners or interest holders immediately prior to such transaction or series
        of
        transactions receive, in exchange for the stock or interests owned by them,
        cash, property or securities of the resulting or surviving entity or any
        Affiliate thereof, and, as a result thereof, Persons who, individually or
        in the
        aggregate, were holders of 50% or more of its voting stock, securities or
        equity, partnership or ownership interests immediately prior to such transaction
        or series of transactions hold less than 50% of the voting stock, securities
        or
        other equity, partnership or ownership interests of the resulting or surviving
        entity or such Affiliate thereof, calculated on a fully diluted basis, (ii)
        a
        direct or indirect sale, transfer or other conveyance or disposition, in
        any
        single transaction or series of transactions, of all or substantially all
        of its
        assets,
        (iii)
        consummation of the initial public offering of its securities, (iv)
        any
“change in/of control” or “sale” or “disposition” or similar event as defined in
        any document governing indebtedness of such Person which gives the holder
        of
        such indebtedness the right to accelerate or otherwise require payment of
        such
        indebtedness prior to the maturity date thereof, (v) Parent ceases to own
        or
        control 100% of the voting stock of Borrower, or (vi) Sammy Jibrin and Radu
        Archiriloaie shall cease to be employed as executive officers of Borrower
        actively engaged in the management of Borrower, except to the extent that
        Borrower retains a replacement reasonably acceptable to Lender within ninety
        (90) days.

      

      
        
          
          

        

        
          -56-

          
            

          

        

        
          
          

        

      

      “Charter
        and Good Standing Documents”
        shall
        mean, for Borrower and Guarantor (i) a copy of the certificate of incorporation
        or formation (or other charter document) certified as of a date satisfactory
        to
        Lender before the Closing Date by the applicable Governmental Authority of
        the
        jurisdiction of incorporation or organization of Borrower and Guarantor,
        (ii) a
        copy of the bylaws or similar organizational documents certified as of a
        date
        satisfactory to Lender before the Closing Date by the corporate secretary
        or
        assistant secretary of Borrower and Guarantor, (iii) an original
        certificate of good standing as of a date acceptable to Lender issued by
        the
        applicable Governmental Authority of the jurisdiction of incorporation or
        organization of Borrower and Guarantor and of every other jurisdiction in
        which
        Borrower has an office or conducts business or is otherwise required to be
        in
        good standing, and (iv) copies of the resolutions of the Board of
        Directors
        or managers (or other applicable governing body) and, if required, stockholders,
        members or other equity owners authorizing the execution, delivery and
        performance of the Loan Documents to which Borrower and Guarantor is a party,
        certified by an authorized officer of such Person as of the Closing
        Date.

      

      “Closing”
        shall
        mean the satisfaction, or written waiver by Lender, of all of the conditions
        precedent set forth in the Agreement required to be satisfied prior to the
        consummation of the transactions contemplated hereby.

      

      “Closing
        Date”
        shall
        mean the date of this Agreement. 

      

      “Collateral”
        shall
        have the meaning given such term in Section 2.17.

      

      “Collateral
        Management Fee”
        shall
        have the meaning given such term in Section 3.3.

      

      “Collateral
        Patent, Trademark and Copyright Assignment”
        shall
        mean any patent, trademark, or copyright assignment or acknowledgement executed
        by and between Borrower and Lender, as such may be modified, amended or
        supplemented from time to time.

      

      “Computer
        Hardware and Software”
        shall
        mean all of Borrower’s rights (including rights as licensee and lessee) with
        respect to (a) computer and other electronic data processing hardware, including
        all integrated computer systems, central processing units, memory units,
        display
        terminals, printers, computer elements, card readers, tape drives, hard and
        soft
        disk drives, cables, electrical supply hardware, generators, power equalizers,
        accessories, peripheral devices and other related computer hardware; (b)
        all
        Software and all software programs designed for use on the computers and
        electronic data processing hardware described in clause (a) above, including
        all
        operating system software, utilities and application programs in any form
        (source code and object code in magnetic tape, disk or hard copy format or
        any
        other listings whatsoever) and any other Software; (c) any firmware associated
        with any of the foregoing; (d) any other Software; and (e) any
        documentation for or related to hardware, Software and firmware described
        in
        clauses (a), (b), (c) and (d) above, including flow charts, logic diagrams,
        manuals, specifications, training materials, charts and pseudo
        codes.

      

      
        
          
          

        

        
          -57-

          
            

          

        

        
          
          

        

      

      “Concentration
        Account”
        shall
        have the meaning given such term in Section 2.5.

      

      “Debtor
        Relief Law”
        shall
        mean, collectively, the Bankruptcy Code of the United States of America and
        all
        other applicable liquidation, conservatorship, bankruptcy, moratorium,
        rearrangement, receivership, insolvency, reorganization or similar debtor
        relief
        laws from time to time in effect affecting the rights of creditors generally,
        as
        amended from time to time.

      

      “Default”
        shall
        mean any event, fact, circumstance or condition that, with the giving of
        applicable notice or passage of time or both, would constitute or be or result
        in an Event of Default.

      

      “Dilution
        Items”
        shall
        have the meaning given such term in Section 2.1(b).

      

      “Distribution”
        shall
        mean any fee, payment, bonus or other remuneration of any kind, and any
        repayment of or debt service on loans or other indebtedness. 

      

      “Dollar”
        and the
        sign “$” shall mean lawful money of the United States of America.

      

      “Eligible
        Inventory”
        shall
        mean Borrower’s saleable Inventory consisting of finished goods, which Inventory
        of finished goods is currently in existence at Borrower’s places of business for
        which Lender has received a Landlord Waiver and Consent and/or Mortgagee
        Waiver
        and Consent in form satisfactory to it and is saleable in the ordinary course
        of
        Borrower’s business and which Lender, in its sole discretion, deems Eligible
        Inventory unless one or more of the following applies which would eliminate
        such
        items or items of Inventory consisting of finished goods from being considered
        as Eligible Inventory:

      

      (a) such
        Inventory is not subject to a valid perfected first priority security interest
        in favor of the Lender; 

      

      (b) any
        consent, license, approval or authorization required to be obtained by Borrower
        in connection with the granting of a security interest under the Security
        Documents or in connection with the manufacture or sale of such Inventory
        has
        not been or was not duly obtained and is not in full force and
        effect;

      

      (c) any
        covenant, representation or warranty contained in this Agreement or in any
        other
        Loan Document with respect to such Inventory has been breached and remains
        uncured;

      

      (d) such
        Inventory is not owned by Borrower;

      

      (e) such
        Inventory does not comply, or was not manufactured in compliance, in all
        material respects, with all applicable requirements of all statutes, laws,
        rules, regulations, ordinances, codes, policies, rules of common law, and
        the
        like, now or hereafter in effect, of any Governmental Authority, including
        any
        judicial or administrative interpretations thereof, and any judicial or
        administrative orders, consents, decrees or judgments; 

      

      
        
          
          

        

        
          -58-

          
            

          

        

        
          
          

        

      

      (f) such
        Inventory does not, or at the time of its purchase from the vendor did not,
        constitute “inventory” under Article 9 of the UCC as then in effect in the
        jurisdiction whose law governs perfection of the security interest;

      

      (g) the
        Person for whose account such Inventory is being or was produced has commenced
        a
        voluntary case under any federal bankruptcy or state or federal insolvency
        laws
        or has made an assignment for the benefit of creditors, or if a decree or
        order
        for relief has been entered by a court having jurisdiction in respect of
        such
        Person in an involuntary case under any federal bankruptcy or state or federal
        insolvency laws, or if any other petition or application for relief under
        any
        federal bankruptcy or state or federal insolvency laws has been filed against
        such Person, or if such Person has failed, suspended business, ceased to
        be
        solvent, called a meeting of its creditors, or has consented to or suffered
        a
        receiver, trustee, liquidator or custodian to be appointed for it or for
        all or
        a significant portion of its assets or affairs; 

      

      (h) the
        transfer of Inventory to Borrower by vendor, supplier or other Person did
        not
        constitute a valid sale and transfer to Borrower of all right, title and
        interest of such Person in the inventory enforceable against all creditors
        of
        and purchasers from such person;

      

      (i) (A)
        Borrower is not the sole owner of all right, title and interest in and to
        such
        Inventory, (B) Borrower does not have a valid ownership interest therein
        free
        and clear of all Liens other than Liens granted under the Loan Documents,
        or
        (C) any offsets, defenses or counterclaims have been asserted or threatened
        in writing against such Inventory;

      

      (j) such
        Inventory is not in good working order or is damaged;

      

      (k) such
        Inventory is not located at a location which is owned by Borrower or subject
        to
        a Landlord Waiver and Consent;

      

      (l) such
        Inventory consists only of packing materials, displays, supplies, parts or
        other
        components or is returned, rejected, repossessed or discontinued product
        or
        Inventory;

      

      (m) such
        Inventory is subject to a bona fide dispute or is or has been classified
        as
        counterfeit or fraudulent; 

      

      (n) such
        Inventory has been sold, assigned, or otherwise encumbered by Borrower except
        pursuant to the Loan Documents; 

      

      (o) such
        Inventory is not associated with a documented purchase order;

      

      (p) such
        Inventory consists of equipment that Borrower offers for rental or that is
        being
        rented from the Borrower or equipment borrowed by Borrower or given to Borrower
        to serve as demonstration equipment;

      

      (q) such
        Inventory constitutes custom Inventory, private-label Inventory, raw materials
        in process, work-in-process, obsolete or unmerchantable Inventory, slow-moving,
        unsaleable, shop-worn, damaged or defective Inventory, Inventory allocated
        to
        current warranty assignments, Inventory that consists of spare parts or
        Inventory subject to a quality assurance hold; 

      

      
        
          
          

        

        
          -59-

          
            

          

        

        
          
          

        

      

      (r) such
        Inventory is in transit;

      

      (s) such
        Inventory is (i) not in Borrower’s possession and control or (ii) outside the
        continental United States;

      

      (t) such
        Inventory otherwise is not satisfactory to the Lender, as determined in the
        sole
        discretion of the Lender; 

      

      (u) such
        Inventory is or has been utilized as demonstration models.

      

      “Eligible
        Receivables”
        shall
        mean each Account arising in the ordinary course of Borrower’s business from the
        sale of goods or rendering of services which Lender, in its sole discretion,
        deems an Eligible Receivable unless: 

      

      (a) it
        is not
        subject to a valid perfected first priority security interest in favor of
        Lender, subject to no other Lien;

      

      (b) it
        is not
        evidenced by an invoice, statement or other documentary evidence satisfactory
        to
        Lender; provided, that Lender in its sole discretion may from time to time
        include as Accounts that are not evidenced by an invoice, statement or other
        documentary evidence satisfactory to Lender as Eligible Receivables and
        determine the advance rate, liquidity factors and reserves applicable to
        Advances made on any such Accounts;

      

      (c) it
        or any
        portion thereof (in which case only such portion shall not be an Eligible
        Receivable) is payable by a beneficiary, recipient or subscriber individually
        and not directly by an Account Debtor;

      

      (d) it
        arises
        out of services rendered or a sale made to, or out of any other transaction
        between Borrower
        or any of its Subsidiaries and, one or more Affiliates of Borrower or any
        of its
        Subsidiaries;

      

      (e) it
        remains unpaid for longer than the earlier of (i) 60 calendar days after
        the
        original due date, and (ii) 90 calendar days after the original invoice
        date;

      

      (f) with
        respect to all Accounts owed by any particular Account Debtor and/or its
        Affiliates, if more than 50% of the aggregate balance of all such Accounts
        owing
        from such Account Debtor and/or its Affiliates remain unpaid for longer than
        the
        earlier of (i) 60 calendar days after the original due date, and (ii) 90
        calendar days after the original invoice date;

      

      (g) with
        respect to all Accounts owed by any particular Account Debtor and/or its
        Affiliates, 25% or more of all such Accounts are not deemed Eligible Receivables
        for any reason hereunder (which percentage may, in Lender’s sole discretion, be
        increased or decreased);

      

      (h) with
        respect to all Accounts owed by any particular Account Debtor and/or its
        Affiliates, if such Accounts exceed 20% of the net collectible dollar value
        of
        all Eligible Receivables at any one time (which percentage may, in Lender’s sole
        discretion, be increased or decreased); 

       

      
        
          
          

        

        
          -60-

          
            

          

        

        
          
          

        

      

      

      (i) any
        covenant, agreement, representation or warranty contained in any Loan Document
        with respect to such Account has been breached and remains uncured;

      

      (j) the
        Account Debtor for such Account has commenced a voluntary case under any
        Debtor
        Relief Law or has made an assignment for the benefit of creditors, or a decree
        or order for relief has been entered by a court having jurisdiction in respect
        of such Account Debtor in an involuntary case under any Debtor Relief Law,
        or
        any other petition or application for relief under any Debtor Relief Law
        has
        been filed against such Account Debtor, or such Account Debtor has failed,
        suspended business, ceased to be solvent, called a meeting of its creditors,
        or
        has consented to or suffered a receiver, trustee, liquidator or custodian
        to be
        appointed for it or for all or a significant portion of its assets or affairs,
        or Borrower, in the ordinary course of business, should have known of any
        of the
        foregoing;

      

      (k) it
        arises
        from the sale of property or services rendered to one or more Account Debtors
        outside the continental United States or that have their principal place
        of
        business or chief executive offices outside the continental United
        States;

      

      (l) it
        represents the sale of goods or rendering of services to an Account Debtor
        on a
        bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment
        or any other repurchase or return basis or is evidenced by Chattel Paper
        or an
        Instrument of any kind or has been reduced to judgment;

      

      (m) the
        applicable Account Debtor for such Account is any Governmental Authority,
        unless
        rights to payment of such Account have been assigned to Lender pursuant to
        the
        Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 3727,
        et
        seq. and 41 U.S.C. Section 15, et seq.), or otherwise only if all
        applicable statutes or regulations respecting the assignment of Government
        Accounts have been complied with;

      

      (n) it
        is
        subject to any offset, credit (including any resource or other income credit
        or
        offset) deduction, defense, discount, chargeback, freight claim, allowance,
        adjustment, dispute or counterclaim, or is contingent in any respect or for
        any
        reason;

      

      (o) there
        is
        any agreement with an Account Debtor for any deduction from such Account,
        except
        for discounts or allowances made in the ordinary course of business for prompt
        payment, all of which discounts or allowances are reflected in the calculation
        of the face value of each invoice related thereto, such that only the discounted
        amount of such Account after giving effect to such discounts and allowances
        shall be considered an Eligible Receivable; 

      

      (p) any
        return, rejection or repossession of goods or services related to it has
        occurred;

      

      (q) it
        is not
        payable to Borrower;

      

      (r) Borrower
        has agreed to accept or has accepted any non-cash payment for such
        Account;

      

      
        
          
          

        

        
          -61-

          
            

          

        

        
          
          

        

      

      (s) with
        respect to any Account arising from the sale of goods, the goods have not
        been
        shipped to the Account Debtor or its designee;

      

      (t) with
        respect to any Account arising from the performance of services, the services
        have not been actually performed or the services were undertaken in violation
        of
        any law; or

      

      (u) such
        Account fails to meet such other specifications and requirements which may
        from
        time to time be established by Lender or is not otherwise satisfactory to
        Lender, as determined in Lender’s sole discretion.

      

      “Environmental
        Laws”
        shall
        mean, collectively and each individually, the Comprehensive Environmental
        Response, Compensation and Liability Act of 1980, the Superfund Amendment
        and
        Reauthorization Act of 1986, the Resource Conservation and Recovery Act,
        the
        Toxic Substances Control Act, the Clean Air Act, the Clean Water Act, any
        other
“Superfund” or “Superlien” law and all other federal, state and local and
        foreign environmental, land use, zoning, health, chemical use, safety and
        sanitation laws, statutes, ordinances and codes relating to the protection
        of
        the environment and/or governing the use, storage, treatment, generation,
        transportation, processing, handling, production or disposal of Hazardous
        Substances, in each case, as amended, and the rules, regulations, policies,
        guidelines, interpretations, decisions, orders and directives of Governmental
        Authorities with respect thereto.

      

      “ERISA”
        shall
        mean the Employee Retirement Income Security Act of 1974, as amended, and
        the
        regulations thereunder.

      

      “Event
        of Default”
        shall
        mean the occurrence of any event set forth in Article VIII.

       

      “Excess
        Cash Flow”
        shall
        mean, for any period of determination, without duplication, an amount equal
        to
        the sum of (i) consolidated net income or loss of Borrower for such period,
        plus
        (ii) an amount equal to the amount of depreciation expenses, amortization
        expense (including the amortization of goodwill), accrued non-cash interest
        expense and all other non-cash charges deducted in arriving at such consolidated
        net income or loss, plus (iii) an amount equal to the aggregate net cash
        proceeds of the sale, lease, transfer or other disposition of assets by Borrower
        during such period to the extent not required to be applied to mandatory
        prepayments or payments on the Loans, plus (iv) an amount equal to the net
        loss
        on the sale, lease, transfer or other disposition of assets by Borrower during
        such period to the extent deducted in arriving at such consolidated net income
        or loss, plus (v) without duplication of other items included in this definition
        an amount equal to any tax refunds or credits received by Borrower during
        such
        period, less (vi) an amount equal to the permitted Capital Expenditures of
        Borrower for such period, less (vii) an amount equal to the sum of all regularly
        scheduled payments and optional and mandatory prepayments of principal on
        Indebtedness for money borrowed of Borrower (other than on the Loans) actually
        made during such period to the extent permitted hereunder, less (viii) an
        amount
        equal to the net gain on the sale, lease, transfer or other disposition of
        assets by Borrower during such period to the extent included in arriving
        at such
        consolidated net income or loss.

      

      “Facility
        Cap”
        shall
        have the meaning given the term in the Recitals of this Agreement.

      

      
        
          
          

        

        
          -62-

          
            

          

        

        
          
          

        

      

      “Fair
        Valuation”
        shall
        mean the determination of the value of the consolidated assets of a Person
        on
        the basis of the amount which may be realized by a willing seller within
        a
        reasonable time through collection or sale of such assets at market value
        on a
        going concern basis to an interested buyer who is willing to purchase under
        ordinary selling conditions in an arm’s length transaction.

      

      “Farwell”
        shall
        mean Farwell Equity Partners, LLC, a Delaware limited liability
        company.

      

      “GAAP”
        shall
        mean generally accepted accounting principles in the United States of America
        in
        effect from time to time as applied by nationally recognized accounting
        firms.

      

      “Government Account”
        shall
        be defined to mean all Accounts arising out of or with respect to any Government
        Contract.

      

      “Government Contract”
        shall
        be defined to mean all contracts with the United States Government or with
        any
        agency thereof, and all amendments thereto.

      

      “Governmental
        Authority”
        shall
        mean any federal, state, municipal, national, local or other governmental
        department, court, commission, board, bureau, agency or instrumentality or
        political subdivision thereof, or any entity or officer exercising executive,
        legislative or judicial, regulatory or administrative functions of or pertaining
        to any government or any court, in each case, whether of the United States
        or a
        state, territory or possession thereof, a foreign sovereign entity or country
        or
        jurisdiction or the District of Columbia.

      

      “Guarantor”
        shall
        mean, collectively and each individually, all guarantors of the Obligations
        (if
        any) or any part thereof. 

      

      “Guaranty”
        shall
        mean, collectively and each individually, all guarantees executed by Guarantor.
        

      

      “Hazardous
        Substances”
        shall
        mean, without limitation, any flammable explosives, radon, radioactive
        materials, asbestos, urea formaldehyde foam insulation, polychlorinated
        biphenyls, petroleum and petroleum products, methane, hazardous materials,
        hazardous wastes, hazardous or toxic substances or related materials as defined
        in or subject to any applicable Environmental Law.

      

      “Indebtedness”
        of any
        Person shall mean, without duplication, (a) all items which, in accordance
        with
        GAAP, would be included in determining total liabilities as shown on the
        liability side of the balance sheet of such Person as of the date as of which
        Indebtedness is to be determined, including any lease which, in accordance
        with
        GAAP would constitute Indebtedness, (b) all indebtedness secured by any
        mortgage, pledge, security, Lien or conditional sale or other title retention
        agreement to which any property or asset owned or held by such Person is
        subject, whether or not the indebtedness secured thereby shall have been
        assumed, (c) all indebtedness of others which such Person has directly or
        indirectly guaranteed, endorsed (otherwise than for collection or deposit
        in the
        ordinary course of business), discounted or sold with recourse or agreed
        (contingently or otherwise) to purchase or repurchase or otherwise acquire,
        or
        in respect of which such Person has agreed to supply or advance funds (whether
        by way of loan, stock, equity or other ownership interest purchase, capital
        contribution or otherwise) or otherwise to become directly or indirectly
        liable.

      

      
        
          
          

        

        
          -63-

          
            

          

        

        
          
          

        

      

      “Indemnified
        Person”
        shall
        have the meaning given such term in Section 12.4.

      

      “Initial
        Advance”
        shall
        have the meaning given such term in Section 4.1.

      

      “Insured
        Event”
        shall
        have the meaning given such term in Section 12.4.

      

      “Insurer”
        shall
        mean a Person that insures another Person against any costs incurred in the
        receipt by such other Person of Services, or that has an agreement with Borrower
        to compensate it for providing services to such Person.

      

      “Inventory”
        shall
        mean all “inventory” (as defined in the UCC) of Borrower (or, if referring to
        another Person, of such other Person), now owned or hereafter acquired, and
        all
        documents of title or other documents representing any of the foregoing,
        and all
        collateral security and guaranties of any kind, now or hereafter in existence,
        given by any Person with respect to any of the foregoing.

      

      “Inventory
        Percentage”
        shall
        mean, from time to time, sixty percent (60%).

      

      “Landlord
        Waiver and Consent”
        shall
        mean a waiver/consent in form and substance satisfactory to Lender from the
        owner/lessor of any premises not owned by Borrower at which any of the
        Collateral is now or hereafter located for the purpose of providing Lender
        access to such Collateral, in each case as such may be modified, amended
        or
        supplemented from time to time.

      

      “Laurus”
        shall
        mean Laurus Master Fund, Ltd.

      

      “Laurus
        Intercreditor Agreement”
        shall
        mean that certain Intercreditor Agreement dated as of the Closing Date among
        Laurus, Lender, Parent and Borrower.

      

      “Lien”
        shall
        mean any mortgage, pledge, security interest, encumbrance, restriction, lien
        or
        charge of any kind (including any agreement to give any of the foregoing,
        any
        conditional sale or other title retention agreement or any lease in the nature
        thereof), or any other arrangement pursuant to which title to the property
        is
        retained by or vested in some other Person for security purposes.

      

      “Loan”
        or
“Loans”
        shall
        mean, individually and collectively, the Term Loan Facilities and all Advances
        under and the Revolving Facility.

      

      “Loan
        Amount”
        shall
        mean the sum of the Facility Cap, the Maximum Term Loan A Amount and the
        Maximum
        Term Loan B Amount.

      

      “Loan
        Documents”
        shall
        mean, collectively and each individually, the Agreement, the Security Documents,
        the Stock Pledge Agreements, the Lockbox Agreements, the Uniform Commercial
        Code
        Financing Statements, the Subordination Agreements, the Landlord Waiver and
        Consents, the Borrowing Certificates, the Registration Rights Agreement and
        all
        other agreements, documents, instruments and certificates heretofore or
        hereafter executed or delivered to Lender in connection with any of the
        foregoing or the Loans, as the same may be amended, modified or supplemented
        from time to time.

      

      
        
          
          

        

        
          -64-

          
            

          

        

        
          
          

        

      

      “Lockbox
        Accounts”
        shall
        have the meaning given such term in Section 2.5.

      

      “Lockbox
        Agreement”
        shall
        have the meaning given such term in Section 2.5.

      

      “Lockbox
        Bank”
        shall
        have the meaning given such term in Section 2.5.

      

      “Material
        Adverse Effect”
        or
“Material
        Adverse Change”
        shall
        mean any event, condition or circumstance or set of events, conditions or
        circumstances or any change(s) which (i) has, had or would reasonably be
        likely
        to have any material adverse effect upon or change in the validity or
        enforceability of any Loan Document, (ii) has been or would reasonably be
        likely
        to be material and adverse to the value of any of the Collateral, to the
        priority of the Lender’s security interest in the Collateral, or to the
        business, operations, prospects, properties, assets, liabilities or condition
        of
        Borrower and/or Guarantors (other than Parent), either individually or taken
        as
        a whole, or (iii) has materially impaired or would reasonably be likely to
        materially impair the ability of Borrower or Guarantor (other than Parent)
        to
        pay any portion of the Obligations or to otherwise perform the Obligations
        or to
        consummate the transactions under the Loan Documents executed by such Person.
        

      

      “Maximum
        Term Loan A Amount”
        shall
        have the meaning set forth in the Recitals to this Agreement.

      

      “Maximum
        Term Loan B Amount”
        shall
        have the meaning set forth in the Recitals to this Agreement.

      

      “Minimum
        Termination Fee”
        shall
        mean (for the time period indicated) the amount equal to (i) $792,000 if
        the
        date of notice of such termination by Borrower is after the Closing Date
        but
        before the first anniversary of the Closing Date; (ii) $528,000 if the date
        of
        notice of such termination by Borrower is on or after the first anniversary
        of
        the Closing Date but before the second anniversary of the Closing Date and
        (iii)
        $264,000 if the date of notice of such termination by Borrower is on or after
        the second anniversary of the Closing Date but before the third anniversary
        of
        the Closing Date.

      

      “Non-Compliance
        Fee”
        shall
        mean a daily fee payable by Borrower equal to the greater of (i) $500, or
        (ii)
        five one-hundredths of one percent (0.05%) of the outstanding principal balance
        of the Obligations as of any date of determination.

      

      “Note”
        or
“Notes”
        shall
        mean Notes issued pursuant to Section 2.20. 

      

      “Obligations”
        shall
        mean all present and future obligations, Indebtedness and liabilities of
        Borrower and/or Guarantors to Lender at any time and from time to time of
        every
        kind, nature and description, direct or indirect, secured or unsecured, joint
        and several, absolute or contingent, due or to become due, matured or unmatured,
        now existing or hereafter arising, contractual or tortious, liquidated or
        unliquidated, under any of the Loan Documents or otherwise relating to the
        Notes
        and/or Loans, including, without limitation, all applicable fees, charges
        and
        expenses and/or all amounts paid or advanced by Lender on behalf of or for
        the
        benefit of Borrower and/or Guarantor for any reason at any time, including
        in
        each case obligations of performance as well as obligations of payment and
        interest that accrue after the commencement of any proceeding under any Debtor
        Relief Law by or against any such Person.

      

      
        
          
          

        

        
          -65-

          
            

          

        

        
          
          

        

      

      “Oblio”
        shall
        have the meaning assigned to such term in the preamble paragraph to this
        Agreement.

      

      “Offer”
        shall
        have the meaning given such term in Section 6.13.

      

      “Option
        Period”
        shall
        have the meaning given such term in Section 6.13.

      

      “Parent”
        shall
        mean Ventures-National Incorporated d/b/a Titan General Holdings, Inc., a
        Utah
        corporation.

      

      “Parent
        Stock Pledge Agreement”
        shall
        mean the Stock Pledge Agreement, dated as of the Closing Date, between the
        Parent and Lender as amended, modified or supplemented from time to time
        with
        respect to the pledge by Parent of the common stock of Borrower.

      

      “Payment
        Office”
        shall
        mean initially the address set forth beneath Lender’s name on the signature page
        of the Agreement, and thereafter, such other office of Lender, if any, which
        it
        may designate by notice to Borrower to be the Payment Office.

      

      “Permit”
        shall
        mean collectively all licenses, leases, powers, permits, franchises,
        certificates, authorizations, approvals, certificates of need, provider numbers
        and other rights.

      

      “Permitted
        Discretion”
        shall
        mean a determination or judgment made by Lender in good faith in the exercise
        of
        reasonable (from the perspective of a secured lender) business
        judgment.

      

      “Permitted
        Indebtedness”
        shall
        have the meaning given such term in Section 7.2.

      

      “Permitted
        Liens”
        shall
        have the meaning given such term in Section 7.3.

      “Permitted
        Subordinated Debt”
        shall
        mean indebtedness with respect to the Seller Note in the original aggregate
        principal amount of $2,500,000.

      

      “Person”
        shall
        mean an individual, a partnership, a corporation, a limited liability company,
        a
        business trust, a joint stock company, a trust, an unincorporated association,
        a
        joint venture, a Governmental Authority or any other entity of whatever
        nature.

      

      “Preferred
        Stock Subordination Agreement”
        shall
        mean the Preferred Stock Subordination Agreement dated as of the Closing
        Date
        among Seller, Lender and Borrower as amended, modified or supplemented from
        time
        to time. 

      

      “Prime
        Rate”
        shall
        mean a fluctuating interest rate per annum equal at all times to the rate
        of
        interest announced publicly from time to time by Citibank, N.A. as its base
        rate; provided, that such rate is not necessarily the best rate offered to
        its
        customers, and, should Lender be unable to determine such rate, such other
        indication of the prevailing prime rate of interest as may reasonably be
        chosen
        by Lender; provided, that each change in the fluctuating interest rate shall
        take effect simultaneously with the corresponding change in the Prime
        Rate.

      

      
        
          
          

        

        
          -66-

          
            

          

        

        
          
          

        

      

      “Receipt”
        shall
        have the meaning given such term in Section 12.5.

      

      “Receivables
        Percentage”
        shall
        mean eighty five percent (85%).

      

      “Registration
        Rights Agreement”
        shall
        mean the Registration Rights Agreement dated as of the Closing date among
        Parent
        and CS Equity LLC, a Delaware limited liability company.

      

      “Released
        Parties”
        shall
        have the meaning given such term in Section 12.11.

      

      “Releasing
        Parties”
        shall
        have the meaning given such term in Section 12.11.

      

      “Revolver
        Termination ”
        shall
        have the meaning given such term in Section 11.1(b).

      

      “Revolving
        Facility Maturity Date”
        shall
        have the meaning assigned to such term in Section 2.2.

      

      “Security
        Documents”
        shall
        mean the Notes, this Agreement, Stock Pledge Agreements, Collateral Patent,
        Trademark, and Copyright Assignment, Lockbox Agreements, Uniform Commercial
        Code
        Financing Statements and all other documents or instruments necessary to
        create
        or perfect the Liens in the Collateral, as such may be modified, amended
        or
        supplemented from time to time.

      

      “Seller”
        shall
        mean F&L L.L.P. (f/k/a Oblio Telecom L.L.P.), a privately held limited
        liability partnership existing under the laws of Texas. 

      

      “Seller
        Note”
        shall
        mean that certain Note and Security Agreement executed by Borrower to the
        order
        of Seller pursuant to the Acquisition Agreement, which Seller Note shall
        be in
        the original principal amount of $2,500,000, shall provide for interest
        quarterly at one percent (1%), shall mature eighteen (18) months after the
        Closing Date and shall otherwise be in form and substance satisfactory to
        Lender.

      

      “Seller
        Subordination Agreement”
        shall
        mean shall mean the Subordination and Intercreditor Agreement dated as of
        the
        Closing Date between Seller, Lender and Borrower as amended, modified or
        supplemented from time to time.

      

      “Solvency
        Certificate”
        shall
        have the meaning given such term in Section 4.1(d).

      

      “Stock
        Pledge Agreements”
        shall
        mean, collectively and each individually, (i) the Parent Stock Pledge Agreement
        (ii) the Thomas Stock Pledge Agreement, and (iii) the Subsidiary Stock Pledge
        Agreement in each case as such may be modified, amended or supplemented from
        time to time.

      

      “Stock
        Purchase Agreement”
        shall
        mean the Stock Purchase Agreement dated August ___, 2005 between Parent and
        Farwell pursuant to which Farwell, as seller, sold 100% of the stock of Oblio
        to
        Parent as purchaser.

      

      “Subordination
        Agreements”
        shall
        mean, collectively and each individually, the Seller Subordination Agreement,
        the Preferred Stock Subordination Agreement, the Laurus Intercreditor Agreement
        and any other subordination agreements to which Lender and other service
        providers or creditors of Borrower are a party.

      

      “Subsidiary
        Stock Pledge Agreement”
        shall
        mean the Stock Pledge Agreement dated as of the Closing Date, between Oblio
        and
        Lender as amended, modified or supplemented from time to time, with respect
        to
        the pledge by Borrower of the common stock of its Subsidiaries.

      

      
        
          
          

        

        
          -67-

          
            

          

        

        
          
          

        

      

      “Subsidiary”
        shall
        mean, (i) as to Borrower, any Person in which more than 50% of all equity,
        membership, partnership or other ownership interests is owned directly or
        indirectly by Borrower or one or more of its Subsidiaries, and (ii) as to
        any
        other Person, any Person in which more than 50% of all equity, membership,
        partnership or other ownership interests is owned directly or indirectly
        by such
        Person or by one or more of such Person’s Subsidiaries.

      

      “Term”
        shall
        mean the period commencing on the date set forth on the first page hereof
        and
        ending on the date that is three years after the Closing Date.

      

      “Term
        Loan A”
        shall
        have the meaning assigned to such term in the Recitals to this
        Agreement.

      “Term
        Loan A Amount”
        shall
        have the meaning assigned to such term in the Recitals to this
        Agreement.

      

      “Term
        Loan A Maturity Date”
        shall
have
        the
        meaning assigned to such term in Section 2.8.

      

      “Term
        Loan B”
        shall
        have the meaning assigned to such term in the Recitals to this
        Agreement.

      

      “Term
        Loan B Amount”
        shall
        have the meaning assigned to such term in the Recitals to this
        Agreement.

      

      “Term
        Loan B Maturity Date”
        shall
        have the meaning assigned to such term in Section 2.11.

      

      “Term
        Loan Facilities”
        shall
        have the meaning assigned to such term in the Recitals of this
        Agreement.

      

      “Thomas
        Stock”
        shall
        have the meaning given such term in Section 2.17(c)(ii).

      

      “Thomas
        Stock Pledge Agreement”
        shall
        mean the Stock Pledge Agreement, dated as of the Closing Date, between Farwell
        and Lender as amended, modified or supplemented from time to time with respect
        to the pledge by the Farwell of the Thomas Stock.

      

      “Termination
        Date”
        shall
        have the meaning given such term in Section 11.1.

      

      “Transaction”
        shall
        have the meaning given such term in Section 6.13.

      

      “Transferee”
        shall
        have the meaning given such term in Section 12.2.

      

      
        
          
          

        

        
          -68-

          
            

          

        

        
          
          

        

      

      “UCC”
        shall
        mean the Uniform Commercial Code as in effect in the State of Maryland from
        time
        to time.

      

      “Unused
        Line Fee”
        shall
        have the meaning given such term in Section 3.2.

      

      “Warehouse
        Waiver and Consent”
        shall
        mean a waiver/consent in form and substance satisfactory to Lender from any
        warehouseman, fulfillment house or other person owning a facility not owned
        by
        Borrower at which any Inventory is now or hereafter located for the purpose
        of
        providing Lender access to such Inventory, in each case as may be modified,
        amended or supplemented from time to time.

      

      

      

      
        
          
          

        

        
          -69-

          
            

          

        

        
          
          

          
          

        

      

      

      

      

      

      

      

      

      

      

      REVOLVING
        CREDIT AND SECURITY AGREEMENT

      

      

      

      

      among

      

      

      

      OBLIO
        TELECOM, INC.

      AND
        ITS SUBSIDIAREIS

      

      

      and

      

      

      

      CAPITALSOURCE
        FINANCE LLC

      

      

      

      

      

      

      

      Dated
        as of 

      August
        12, 2005

      

      

      
        
          
          

        

        
          -70-

          
            

          

        

        
          
          

        

      

      TABLEOFCONTENTS

        

          

            
              
                	 	 	Page 
	 	 	
                      
	
                        I

                      	
                        DEFINITIONS........................................................................................................................................................................................................................................................ 

                      	
                        1

                      
	 	
                        1.1.     
General
                          Terms....................................................................................................................................................................................................................................

                      	
                        1

                      
	
                        II

                      	
                        ADVANCES,
                          PAYMENT AND
                          INTEREST.....................................................................................................................................................................................................

                      	
                        1

                      
	 	
                        2.1.     
The
                          Revolving
                          Facility.....................................................................................................................................................................................................................

                      	
                        1

                      
	 	
                        2.2.     
The
                          Revolving Loans; Revolving Facility Maturity
                          Date..........................................................................................................................................................

                      	
                        2

                      
	 	
                        2.3.     
Interest
                          on the Revolving
                          Facility..................................................................................................................................................................................................

                      	
                        2

                      
	 	
                        2.4.     
Revolving
                          Facility Disbursements; Requirement to Deliver Borrowing
                          Certificate................................................................................................................

                      	
                        3

                      
	 	
                        2.5.     
Revolving
                          Facility Collections; Repayment; Borrowing Availability
                          and
                          Lockbox...............................................................................................................

                      	
                        3

                      
	 	
                        2.6.     
The
                          Term Loan A
                          Facility................................................................................................................................................................................................................

                      	
                        4

                      
	 	
                        2.7.     
                          Interest
                          on Term Loan
                          A.................................................................................................................................................................................................................

                      	
                        4

                      
	 	
                        2.8.     
Repayment
                          of Term Loan A;
                          Maturity..........................................................................................................................................................................................

                      	
                        5

                      
	 	
                        2.9.     
The
                          Term Loan B
                          Facility................................................................................................................................................................................................................

                      	
                        5

                      
	 	
                        2.10.   
Interest
                          on Term Loan
                          B.................................................................................................................................................................................................................

                      	
                        5

                      
	 	
                        2.11.    Repayment
                          of Term Loan B;
                          Maturity..........................................................................................................................................................................................

                      	
                        5

                      
	 	
                        2.12.    Promise
                          to Pay; Manner of
                          Payment.............................................................................................................................................................................................

                      	
                        6

                      
	 	
                        2.13.    Repayment
                          of Excess
                          Advances....................................................................................................................................................................................................

                      	
                        6

                      
	 	
                        2.14.    Voluntary
                          Prepayments....................................................................................................................................................................................................................

                      	
                        6

                      
	 	
                        2.15.    Other
                          Mandatory
                          Prepayments.......................................................................................................................................................................................................

                      	
                        7

                      
	 	
                        2.16.    Payments
                          by
                          Lender..........................................................................................................................................................................................................................

                      	
                        8

                      
	 	
                        2.17.    Grant
                          of Security Interest;
                          Collateral..............................................................................................................................................................................................

                      	
                        8

                      
	 	
                        2.18.    Collateral
                          Administration.................................................................................................................................................................................................................

                      	
                        10

                      
	 	
                        2.19.    Power
                          of
                          Attorney.............................................................................................................................................................................................................................

                      	
                        11

                      

              

               

              
                
                  
                  

                

                
                  -71-

                  
                    

                  

                

                
                  
                  

                

              

               

              
                
                  	 	
                          2.20.   
Evidence
                            of
                            Loans............................................................................................................................................................................................................................

                        	
                          11

                        
	
                          III

                        	
                          FEES
                            AND OTHER
                            CHARGES ..........................................................................................................................................................................................................................

                        	
                          12

                        
	 	
                          3.1.     
Commitment
                            Fee................................................................................................................................................................................................................................

                        	
                          12

                        
	 	
                          3.2.     
Unused
                            Line
                            Fee...............................................................................................................................................................................................................................

                        	
                          13

                        
	 	
                          3.3.     
Collateral
                            Management
                            Fee.............................................................................................................................................................................................................

                        	
                          13

                        
	 	
                          3.4.     
Computation
                            of Fees; Lawful
                            Limits..............................................................................................................................................................................................

                        	
                          13

                        
	 	
                          3.5.     
Default
                            Rate of
                            Interest....................................................................................................................................................................................................................

                        	
                          13

                        
	 	
                          3.6.     
Acknowledgement
                            of Joint and Several
                            Liability........................................................................................................................................................................

                        	
                          13

                        
	
                          IV

                        	
                          CONDITIONS
                            PRECEDENT................................................................................................................................................................................................................................ 

                        	
                          14

                        
	 	
                          4.1.     
Conditions
                            to Initial Advance and
                            Closing..................................................................................................................................................................................

                        	
                          14

                        
	 	
                          4.2.     
Conditions
                            to Each
                            Advance..........................................................................................................................................................................................................

                        	
                          16

                        
	
                          V

                        	
                          REPRESENTATIONS
                            AND
                            WARRANTIES ...................................................................................................................................................................................................

                        	
                          17

                        
	 	
                          5.1.     
Organization
                            and
                            Authority.............................................................................................................................................................................................................

                        	
                          17

                        
	 	
                          5.2.     
Loan
                            Documents................................................................................................................................................................................................................................

                        	
                          17

                        
	 	
                          5.3.     
Subsidiaries,
                            Capitalization and Ownership
                            Interests.................................................................................................................................................................

                        	
                          18

                        
	 	
                          5.4.     
Properties...........................................................................................................................................................................................................................................

                        	
                          18

                        
	 	
                          5.5.     
Other
                            Agreements............................................................................................................................................................................................................................

                        	
                          19

                        
	 	
                          5.6.     
Litigation............................................................................................................................................................................................................................................

                        	
                          19

                        
	 	
                          5.7.     
Hazardous
                            Materials........................................................................................................................................................................................................................

                        	
                          19

                        
	 	
                          5.8.     
Potential
                            Tax Liability; Tax Returns; Governmental
                            Reports.....................................................................................................................................................

                        	
                          19

                        
	 	
                          5.9.     
Financial
                            Statements and
                            Reports.................................................................................................................................................................................................

                        	
                          20

                        
	 	
                          5.10.   
Compliance
                            with
                            Law......................................................................................................................................................................................................................

                        	
                          20

                        
	 	
                          5.11.    Intellectual
                            Property........................................................................................................................................................................................................................

                        	
                          21

                        
	 	
                          5.12.    Licenses
                            and Permits;
                            Labor..........................................................................................................................................................................................................

                        	
                          21

                        
	 	
                          5.13.    No
                            Default.........................................................................................................................................................................................................................................

                        	
                          21

                        
	 	
                          5.14.    Disclosure..........................................................................................................................................................................................................................................

                        	
                          21

                        
	 	
                          5.15.    Existing
                            Indebtedness; Investments, Guarantees and Certain
                            Contracts...............................................................................................................................

                        	
                          21

                        
	 	
                          5.16.    Other
                            Agreements............................................................................................................................................................................................................................

                        	
                          22

                        
	 	
                          5.17.    Insurance..........................................................................................................................................................................................................................................

                        	
                          22

                        
	 	
                          5.18.    Names;
                            Location of Offices, Records and
                            Collateral..................................................................................................................................................................

                        	
                          22

                        
	 	
                          5.19.    Non-Subordination..........................................................................................................................................................................................................................

                        	
                          22

                        
	 	
                          5.20.    Accounts
                            and
                            Inventory................................................................................................................................................................................................................

                        	
                          22

                        
	 	
                          5.21.    Survival.............................................................................................................................................................................................................................................

                        	
                          23

                        
	
                          VI

                        	
                          AFFIRMATIVE
                            COVENANTS...........................................................................................................................................................................................................................

                        	
                          24

                        
	 	
                          6.1.     
Financial
                            Statements, Borrowing Certificate, Financial Reports
                            and Other
                            Information........................................................................................................

                        	
                          24

                        
	 	
                          6.2.     
Payment
                            of
                            Obligations....................................................................................................................................................................................................................

                        	
                          26

                        
	 	
                          6.3.             
                            Conduct
                            of Business and Maintenance of Existence and
                            Assets............................................................................................................................................

                        	
                          26

                        
	 	
                          6.4.     
Compliance
                            with Legal and Other
                            Obligations.............................................................................................................................................................................

                        	
                          26

                        
	 	
                          6.5.     
Insurance...........................................................................................................................................................................................................................................

                        	
                          26

                        
	 	
                          6.6.     
True
                            Books........................................................................................................................................................................................................................................

                        	
                          27

                        
	 	
                          6.7.     
Inspections;
                            Periodic Audits and
                            Reappraisals...........................................................................................................................................................................

                        	
                          27

                        
	 	
                          6.8.     
Further
                            Assurances; Post
                            Closing.................................................................................................................................................................................................

                        	
                          27

                        
	 	
                          6.9.     
Payment
                            of
                            Indebtedness................................................................................................................................................................................................................

                        	
                          28

                        
	 	
                          6.10.   
Lien
                            Searches.....................................................................................................................................................................................................................................

                        	
                          28

                        
	 	
                          6.11.    Use
                            of
                            Proceeds.................................................................................................................................................................................................................................

                        	
                          28

                        
	 	
                          6.12.    Collateral
                            Documents; Security Interest in
                            Collateral..................................................................................................................................................................

                        	
                          28

                        
	 	
                          6.13.    Right
                            of First
                            Refusal........................................................................................................................................................................................................................

                        	
                          28

                        
	 	
                          6.14.    Taxes
                            and Other
                            Charges................................................................................................................................................................................................................

                        	
                          29

                        
	 	
                          6.15.    Payroll
                            Taxes......................................................................................................................................................................................................................................

                        	
                          30

                        

                

                 

                
                  
                    
                    

                  

                  
                    -72-

                    
                      

                    

                  

                  
                    
                    

                  

                

                 

                
                  	 	
                          6.16.    Inventory
                            Covenants......................................................................................................................................................................................................................

                        	
                          30

                        
	
                          VII

                        	
                          NEGATIVE
                            COVENANTS.................................................................................................................................................................................................................................. 

                        	
                          30

                        
	 	
                          7.1.     
Financial
                            Covenants........................................................................................................................................................................................................................

                        	
                          31

                        
	 	
                          7.2.     
Permitted
                            Indebtedness...................................................................................................................................................................................................................

                        	
                          31

                        
	 	
                          7.3.     
Permitted
                            Liens.................................................................................................................................................................................................................................

                        	
                          31

                        
	 	
                          7.4.     
Investments;
                            New Facilities or Collateral;
                            Subsidiaries.............................................................................................................................................................

                        	
                          32

                        
	 	
                          7.5.     
Dividends;
                            Redemptions.................................................................................................................................................................................................................

                        	
                          32

                        
	 	
                          7.6.     
Transactions
                            with
                            Affiliates...........................................................................................................................................................................................................

                        	
                          33

                        
	 	
                          7.7.     
Charter
                            Documents; Fiscal Year; Name; Jurisdiction of Organization;
                            Dissolution;
                            Use of
                            Proceeds...............................................................................

                        	
                          33

                        
	 	
                          7.8.     
Truth
                            of
                            Statements..........................................................................................................................................................................................................................

                        	
                          34

                        
	 	
                          7.9.     
IRS
                            Form
                            8821...................................................................................................................................................................................................................................

                        	
                          34

                        
	 	
                          7.10.   
Transfer
                            of
                            Assets............................................................................................................................................................................................................................

                        	
                          34

                        
	 	
                          7.11.    Payment
                            on Permitted Subordinated
                            Debt...................................................................................................................................................................................

                        	
                          35

                        
	
                          VIII

                        	
                          EVENTS
                            OF
                            DEFAULT ......................................................................................................................................................................................................................................

                        	
                          35

                        
	 	
                          8.1.     
                            Events
                            of
                            Default.............................................................................................................................................................................................................................

                        	
                          35

                        
	
                          IX

                        	
                          RIGHTS
                            AND REMEDIES AFTER
                            DEFAULT................................................................................................................................................................................................

                        	
                          38

                        
	 	
                          9.1.     
Rights
                            and
                            Remedies........................................................................................................................................................................................................................

                        	
                          38

                        
	 	
                          9.2.     
Application
                            of
                            Proceeds..................................................................................................................................................................................................................

                        	
                          39

                        
	 	
                          9.3.     
Rights
                            of Lender to Appoint
                            Receiver...........................................................................................................................................................................................

                        	
                          39

                        
	 	
                          9.4.     
Rights
                            and Remedies not
                            Exclusive...............................................................................................................................................................................................

                        	
                          40

                        
	
                          X

                        	WAIVERS
                          AND JUDICIAL
                          PROCEEDINGS ..................................................................................................................................................................................................	
                          40

                        
	 	
                          10.1.    Waivers..............................................................................................................................................................................................................................................

                        	
                          40

                        
	 	
                          10.2.    Delay;
                            No Waiver of
                            Defaults........................................................................................................................................................................................................

                        	
                          40

                        
	 	
                          10.3.    Jury
                            Waiver.......................................................................................................................................................................................................................................

                        	
                          41

                        
	 	
                          10.4.    Cooperation
                            in Discovery and
                            Litigation......................................................................................................................................................................................

                        	
                          41

                        
	
                          XI

                        	
                          
                            EFFECTIVE
                              DATE AND
                              TERMINATION.......................................................................................................................................................................................................

                          

                        	
                          41

                        
	 	
                          11.1.    Termination
                            and Effective Date
                            Thereof........................................................................................................................................................................................

                        	
                          41

                        
	 	
                          11.2.    Survival...............................................................................................................................................................................................................................................

                        	
                          42

                        
	
                          XII

                        	
                          MISCELLANEOUS...............................................................................................................................................................................................................................................

                        	
                          42

                        
	 	
                          12.1.    Governing
                            Law; Jurisdiction; Service of Process;
                            Venue...........................................................................................................................................................

                        	
                          42

                        
	 	
                          12.2.    Successors
                            and Assigns; Participations; New
                            Lenders.............................................................................................................................................................

                        	
                          43

                        
	 	
                          12.3.    Application
                            of
                            Payments..................................................................................................................................................................................................................

                        	
                          43

                        
	 	
                          12.4.    Indemnity............................................................................................................................................................................................................................................

                        	
                          43

                        
	 	
                          12.5.    Notice..................................................................................................................................................................................................................................................

                        	
                          44

                        
	 	
                          12.6.    Severability;
                            Captions; Counterparts; Facsimile
                            Signatures......................................................................................................................................................

                        	
                          44

                        
	 	
                          12.7.    Expenses............................................................................................................................................................................................................................................

                        	
                          45

                        
	 	
                          12.8.    Entire
                            Agreement.............................................................................................................................................................................................................................

                        	
                          45

                        
	 	
                          12.9.    Lender
                            Approvals............................................................................................................................................................................................................................

                        	
                          46

                        
	 	
                          12.10.         
                            Confidentiality
                            and
                            Publicity..........................................................................................................................................................................................................

                        	
                          46

                        
	 	
                          12.11.          Release
                            of
                            Lender.............................................................................................................................................................................................................................

                        	
                          46

                        
	 	
                          12.12.         
                            Agent..................................................................................................................................................................................................................................................

                        	
                          47

                        
	 	
                          12.13.         
                            Agreement
                            Controls..........................................................................................................................................................................................................................

                        	
                          47Exhibit 4.2.5

 

FIFTH SUPPLEMENTAL INDENTURE

 

FIFTH SUPPLEMENTAL
INDENTURE (the “Supplemental Indenture”), dated as of July 21, 2005,
among Williams Scotsman, Inc., a Maryland corporation (the “Company”),
the guarantors (the “Guarantors”) named in the Indenture (as defined below),
Willscot Equipment, LLC (the “Subordinated Guarantor”) and The Bank of
New York, as trustee (the “Trustee”).

 

WHEREAS, the Company, the
Guarantors, the Subordinated Guarantor and the Trustee are parties to that
certain Indenture, dated as of May 15, 1997 (as supplemented on September 1,
1998, February 4, 1999, June 29, 2001 and March 26, 2002, the “Indenture”),
pursuant to which the Company’s 97¤8%
Senior Notes due 2007 (the “Notes”) were issued.  Capitalized terms used but not defined herein
shall have the same meanings ascribed to such terms in the Indenture;

 

WHEREAS, Section 9.02
of the Indenture provides that the Company and the Trustee may make certain
amendments to the Indenture with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding;

 

WHEREAS, the Company
distributed an Offer to Purchase and Consent Solicitation Statement dated as of
June 23, 2005, as amended on July 5, 2005 (the “Offer to Purchase”),
in order to, among other things, make an offer to purchase (the “Offer”)
all outstanding Notes upon terms and conditions described in the Offer to
Purchase and to solicit consents (the “Consents”) from the Holders to
amendments to the Indenture (the “Amendments”);

 

WHEREAS, Holders of at
least a majority in aggregate principal amount of the Notes outstanding have
given and, as of the date hereof, have not withdrawn their consent to the
Amendments; and

 

WHEREAS, the execution of
this Supplemental Indenture by the parties hereto is in all respects authorized
by the provisions of the Indenture, the Company has delivered to the Trustee an
Officers’ Certificate and an Opinion of Counsel with respect to such
authorization, and all things necessary to make this Supplemental Indenture a
valid agreement of the Company and the Trustee in accordance with its terms
have been done.

 

NOW THEREFORE, in
consideration of the foregoing and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the Company, the Guarantors, the
Subordinated Guarantor and the Trustee mutually covenant and agree as follows:

 

1.                                       Effect.
This Supplemental Indenture shall become effective upon its execution and
delivery by the parties hereto.  Notwithstanding
the foregoing, the amendments set forth in Section 2 below shall only
become operative when validly tendered Notes representing at least a majority
of the then aggregate outstanding principal amount of the Notes (excluding for
such purposes any Notes owned by the Company or 

 

 

any of its Affiliates) are accepted for purchase
pursuant to the Offer.  If, after the
date hereof, either the Offer is terminated or withdrawn or all payments in
respect of the Notes accepted for payment pursuant to the Offer are not made on
the Initial Payment Date or Subsequent Payment Date (as defined in the Offer to
Purchase), as applicable, the amendments set forth in Section 2 shall have
no effect and the Indenture shall be deemed to be amended so that it reads the
same as it did immediately prior to the date hereof.

 

2.                                       Amendments.  The Indenture is hereby amended as follows:

 

(a)                                  The
text of Sections 4.03, 4.04, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15,
4.16 and 4.17 of the Indenture is hereby deleted in its entirety and these
Sections shall be of no further force and effect and the words “[INTENTIONALLY OMITTED]”
shall be inserted, in each case, in place of the deleted text.

 

(b)                                 Section 4.05
is hereby amended to read as follows:

 

“The Issuer shall
comply with TIA § 314(a).”

 

(c)                                  Section 5.01
is hereby amended to read as follows:

 

“The Issuer shall not consolidate with or merge with
or into, or convey, transfer or lease, in one transaction or a series of
transactions, all or substantially all its assets to, any Person (including
Holdings), unless the resulting, surviving or transferee Person (the “Successor
Issuer”) shall expressly assume, by an indenture supplemental thereto,
executed and delivered to the Trustee, in form reasonably satisfactory to the
Trustee, all the obligations of the Issuer under the Notes and this Indenture.

 

The Subordinated Guarantor may be consolidated with,
may be merged into or may transfer all or substantially all its assets to the
Issuer with the consent of the holders of all Subordinated Guarantor Senior
Indebtedness then outstanding (in which case, if such consent has been given,
the Subordinated Guarantee (including, without limitation, the provisions of Section 11.02)
shall terminate and be extinguished).

 

The Successor Issuer shall be the successor to the
Issuer and shall succeed to, and be substituted for, and may exercise every
right and power of, the Issuer under this Indenture, but the predecessor Issuer
in the case of a conveyance, transfer or lease shall not be released from the
obligation to pay the principal of and interest on the Notes.

 

Except as provided above in the second paragraph of
this Section 5.01, the Issuer shall not permit the Subordinated Guarantor
to, and the Subordinated Guarantor shall not, consolidate with or merge into or
with, or convey, transfer or lease, in any transaction or a series of related
transactions, all or substantially all of its assets to any Person; provided
that the Subordinated Guarantor may be consolidated with, merged with or 

 

2

 

into, or transfer all or substantially all its assets
to, any Guarantor with the consent of the holders of all Subordinated Guarantor
Senior Indebtedness then outstanding (in which case, if such consent has been
given, the provisions of the Subordinated Guarantee and Section 11.02 of
this Indenture shall terminate and be extinguished).

 

Notwithstanding the above provisions, (x) one or more
transfers of assets to the Subordinated Guarantor shall be permitted and (y)
the Subordinated Guarantor may lease any or all of its assets to the Issuer or
any Wholly Owned Subsidiary of the Issuer at any time.”

 

(d)                                 Section 6.01
is hereby amended to read as follows:

 

“An “Event of Default” occurs if:

 

(1)                                  the
Issuer defaults in any payment of interest on any Note when the same becomes
due and payable and such default continues for a period of 30 days;

 

(2)                                  the
Issuer defaults in the payment of the principal of any Note when the same
becomes due and payable at its Stated Maturity, upon optional redemption, upon
required repurchase, upon declaration or otherwise, whether or not such payment
shall be prohibited by Article Eleven;

 

(3)                                  the
Issuer fails to comply with Section 5.01;

 

(4)                                  the
Issuer fails to comply with Section 4.05 and such failure continues for 30
days after the notice specified below;

 

(5)                                  [Intentionally
omitted];

 

(6)                                  [Intentionally
omitted];

 

(7)                                  the
Issuer or any Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:

 

(A)                              commences
a voluntary case;

 

(B)                                consents
to the entry of an order for relief against it in an involuntary case;

 

(C)                                consents
to the appointment of a Custodian of it or for any substantial part of its
property; or

 

(D)                               makes
a general assignment for the benefit of its creditors; or takes any comparable
action under any foreign laws relating to insolvency;

 

3

 

(8)                                  a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:

 

(A)                              is
for relief against the Issuer or any Significant Subsidiary in an involuntary
case;

 

(B)                                appoints
a Custodian of the Issuer or any Significant Subsidiary or for any substantial
part of its property; or

 

(C)                                orders
the winding up or liquidation of the Issuer or any Significant Subsidiary; or
any similar relief is granted under any foreign laws and the order or decree
remains unstayed and in effect for 60 days;

 

(9)                                  [Intentionally
omitted]; or

 

(10)                            any of
the Guarantees or the Subordinated Guarantee ceases to be in full force and
effect or any of the Guarantees or the Subordinated Guarantee is declared to be
null and void and unenforceable or any of the Guarantees or the Subordinated
Guarantee is found to be invalid, in each case by a court of competent
jurisdiction in a final non-appealable judgment, or any of the Guarantors or
the Subordinated Guarantor denies its liability under its Guarantee or the
Subordinated Guarantee (other than by reason of release of a Guarantor or the
Subordinated Guarantor in accordance with the terms of this Indenture).

 

The foregoing will constitute Events of Default
whatever the reason for any such Event of Default and whether it is voluntary
or involuntary or is effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body.

 

A Default under clause (4) above is not an Event
of Default until the Trustee or the Holders of at least 25% in principal amount
of the outstanding Notes notify the Issuer of the Default and the Issuer does
not cure such Default within the time specified after receipt of such
notice.  Such notice must specify the
Default, demand that it be remedied and state that such notice is a “Notice of
Default”.

 

The issuer shall deliver to the Trustee, within 30
days after the occurrence thereof, written notice in the form of an Officer’s
Certificate of any Event of Default under clause (4) above, its status and
what action the issuer is taking or proposes to take with respect thereto.”

 

(e)                                  Section 8.01
is hereby amended to read as follows:

 

4

 

“This Indenture will be discharged and will cease to
be of further effect (except as to surviving rights of registration of transfer
or exchange of the Notes, as expressly provided for in this Indenture) as to
all outstanding Notes when (a) either (i) all Notes, theretofore
authenticated and delivered (except lost, stolen or destroyed Notes which have
been replaced or paid and Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Issuer and thereafter
repaid to the Issuer or discharged from such trust) have been delivered to the
Trustee for cancellation or (ii) all Notes not theretofore delivered to
the Trustee for cancellation have become due and payable and the Issuer has
irrevocably deposited or caused to be deposited with the Trustee funds in an
amount sufficient to pay and discharge the entire Indebtedness on the Notes not
theretofore delivered to the Trustee for cancellation, for principal of,
premium, if any, and interest on the Notes to the date of deposit together with
irrevocable instructions from the Issuer directing the Trustee to apply such
funds to the payment thereof at maturity or redemption, as the case may be; (b) the
Issuer has paid all other sums payable under this Indenture by the Issuer; and (c) the
Issuer has delivered to the Trustee an officers’ certificate and an opinion of
counsel stating that all conditions precedent under this Indenture relating to
the satisfaction and discharge of this Indenture have been complied with;
provided, however, that such counsel may rely, as to matters of fact, on a
certificate or certificates of officers of the Issuer.

 

The Issuer may, at its option and at any time, elect
to have its obligations and the obligations of the Guarantors and the
Subordinated Guarantor discharged with respect to the Notes, the Guarantees,
the Subordinated Guarantee and this Indenture (“Legal Defeasance”). Such
Legal Defeasance means that the Issuer shall be deemed to have paid and
discharged the entire indebtedness represented by the outstanding Notes, and
satisfied all of its obligations with respect to the Notes, except for (a) the
rights of Holders to receive payments in respect of the principal of and interest
on the Notes when such payments are due, (b) the Issuer’s obligations with
respect to the Notes concerning issuing temporary Notes, registration of Notes,
mutilated, destroyed, lost or stolen Notes and the maintenance of an office or
agency for payments, (c) the rights, powers, trust, duties and immunities
of the Trustee and the Issuer’s obligations in connection therewith and (d) the
Legal Defeasance provisions of this Section 8.01. In addition, the Issuer
may, at its option and at any time, elect to have the obligations of the
Issuer, Holdings and the Guarantors, if any, released with respect to covenants
contained in Section 4.05 (“Covenant Defeasance”) and thereafter
any omission to comply with such obligations shall not constitute a Default or
Event of Default with respect to the Notes. In the event of Covenant
Defeasance, those events described under Section 6.01(4), (7) (as it
relates to Significant Subsidiaries), (8) (as 

 

5

 

it relates to Significant Subsidiaries) and (10) will
no longer constitute an Event of Default with respect to the Notes.

 

In order to exercise either Legal Defeasance or
Covenant Defeasance:

 

(a)                                  the
Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of
the Holders money or U.S. Government Obligations, or a combination thereof, in
such amounts as will be sufficient to pay 
the principal of, premium, if any, and interest on the Notes to
redemption or maturity, as the case may be;

 

(b)                                 the
Issuer shall have delivered to the Trustee an officers’ certificate stating
that the deposit was not made by the Issuer with the intent of preferring the
Holders over any other creditors of either Issuer or with the intent of
defeating, hindering, delaying or defrauding any other creditors of the Issuer
or others; and

 

(c)                                  the
Issuer shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for or
relating to the Legal Defeasance or the Covenant Defeasance, as the case may
be, have been complied with; provided, however, that such counsel may rely, as
to matters of fact, on a certificate or certificates of officers of the Issuer.”

 

(f)                                    Any
definitions used exclusively in the provisions of the Indenture or Notes that
are deleted pursuant to this Section 2, and any definitions used
exclusively within such definitions, are hereby deleted in their entirety from
the Indenture and the Notes, and all references in the Indenture and the Notes
to paragraphs, Sections, Articles or other terms or provisions of the Indenture
referred to in this Section 2 above or that have been otherwise deleted
pursuant to this Fifth Supplemental Indenture are hereby deleted in their
entirety.

 

3.                                       Notice
of Supplemental Indenture.  The Company
shall mail notice of this Supplemental Indenture to the Holders as required by Section 9.02
of the Indenture.

 

4.                                       Governing
Law. This Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York.

 

5.                                       Counterparts.  This Supplemental Indenture may be executed
in one or more counterparts, each of which shall be an original, but all of
which together shall constitute one and the same document.

 

6.                                       Effect
on Indenture.  This Supplemental Indenture
shall form a part of the Indenture for all purposes, and every Holder of Notes
heretofore or hereafter authenticated and delivered shall be bound hereby.
Except as expressly set forth herein, the Indenture is in all respects ratified
and confirmed and all the terms, conditions and 

 

6

 

provisions thereof shall remain in full force and
effect, including with respect to this Supplemental Indenture.

 

7.                                       Conflict
with Trust Indenture Act.  If any
provision of this Supplemental Indenture limits, qualifies or conflicts with
any provision of the Trust Indenture Act that may not be so limited, qualified
or conflicted with, such provision of such Act shall control.  If any provision of this Supplemental
Indenture modifies or excludes any provision of the Trust Indenture Act that
may be so modified or excluded, the provision of such Act shall be deemed to
apply to the Indenture as so modified or to be excluded by this Supplemental
Indenture, as the case may be.

 

8.                                       Separability
Clause.  In case any provision in
this Supplemental Indenture shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

 

9.                                       Effect
of Headings.  The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.

 

10.                                 Benefits
of Supplemental Indenture, etc. 
Nothing in this Supplemental Indenture, the Indenture or the Notes,
express or implied, shall give to any person, other than the parties hereto and
thereto and their successors hereunder and thereunder and the Holders of Notes,
any benefit of any legal or equitable right, remedy or claim under the
Indenture, this Supplemental Indenture or the Notes.

 

11.                                 Successors
and Assigns.  All agreements of the Company
in this Supplemental Indenture and the Notes shall bind its successors.

 

12.                                 Trustee.  The Trustee makes no representations as to
the validity or sufficiency of this Supplemental Indenture.  The recitals and statements herein are deemed
to be those of the Company and not of the Trustee.

 

[Remainder of page intentionally left blank]

 

7

 

IN WITNESS WHEREOF, the
parties have executed this Supplemental Indenture as of the date first written
above.

 

	
   

  	
  WILLIAMS SCOTSMAN, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Ross

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John B. Ross

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
					

 

	
   

  	
   

  
	
   

  	
  EVERGREEN MOBILE
  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Ross

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John B. Ross

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SPACE MASTER
  INTERNATIONAL, INC.

  
	
   

  	
   

  
					

 

	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Ross

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John B. Ross

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
					

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TRUCK &
  TRAILER SALES, INC.

  
	
   

  	
   

  

 

	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Ross

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John B. Ross

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
					

 

8

 

	
   

  	
  WILLIAM SCOTSMAN OF
  CANADA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Ross

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John B. Ross

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
					

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILLSCOT EQUIPMENT, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  William Scotsman, Inc.

  
	
   

  	
   

  	
   

  	
  as Sole Member

  
	
   

  	
   

  	
   

  

 

	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Ross

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John B. Ross

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  
					

 

	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK,
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Geovanni Barris

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Geovanni Barris

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					

 

9

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