Document:

exv10w1

Exhibit 10.1

SILICON VALLEY BANK AMENDED AND RESTATED LOAN AND SECURITY

AGREEMENT

     This AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of June ___,
2009, between SILICON VALLEY BANK, a California chartered bank, with its principal place of
business at 3003 Tasman Drive, Santa Clara, California 95054 (FAX (408) 980-6410) (“Bank”) and
GLOBAL TELECOM & TECHNOLOGY, INC., a Delaware corporation (“GTTI”) and GLOBAL TELECOM & TECHNOLOGY
AMERICAS, INC., a Virginia corporation (“GTTA” and together with GTTI, each a “Borrower” and
collectively, the “Borrowers”) each with offices at 8484 Westpark Drive, Suite 720, McLean, VA
22102 (Fax (703) 442-5501), provides the terms on which Bank shall lend to Borrowers and Borrowers
shall repay Bank. This Agreement amends and restates that certain Loan and Security Agreement among
the parties, dated March 17, 2008, in its entirety. The parties agree as follows:

ARTICLE 1

ACCOUNTING AND OTHER TERMS

     Accounting terms not defined in this Agreement shall be construed following GAAP.
Calculations and determinations must be made following GAAP, to the extent applicable. The term
“financial statements” includes the notes and schedules. The terms “including” and “includes”
always mean “including (or includes) without limitation,” in this or any Loan Document.
Capitalized terms in this Agreement shall have the meanings set forth in Section 13. All other
terms contained in this Agreement, unless otherwise indicated, shall have the meanings provided by
the Code, to the extent such terms are defined therein.

ARTICLE 2

LOAN AND TERMS OF PAYMENT

     Section 2.1 Promise to Pay. Borrowers hereby unconditionally promise to pay Bank the
unpaid principal amount of all Advances hereunder with all interest, fees and finance charges due
thereon as and when due in accordance with this Agreement.

          2.1.1 Financing of Accounts or Cash Collections.

          (a) Advance Rate Applicability. During the term of this Agreement, for any Subject
Month when GTTI’s T3M EBITDA is greater than $50,000 or GTTI’s Net Liquidity is greater than
$500,000 during any Testing Month, the Streamline Advance Rate will apply and Bank will finance
Borrower’s Streamline Eligible Accounts, as set forth herein. At all other times, the
Non-Streamline Advance Rate will apply and Bank will finance Borrower’s Non-Streamline Eligible
Accounts as set forth herein.

          (b) Availability. Subject to the terms of this Agreement, during any Subject Month in
which the Non-Streamline Advance Rate applies, Borrowers may request that Bank finance specific
Non-Streamline Eligible Accounts. Bank may, in its good faith business discretion, finance such
Non-Streamline Eligible Accounts by extending credit to Borrowers in an amount equal to the result
of the Non-Streamline Advance Rate multiplied by the face amount of the Non-Streamline Eligible
Account (a “Non-Streamline Advance”). Subject to the terms of this Agreement, during any Subject
Month in which the Streamline Advance Rate applies, Borrowers may request that Bank finance
Streamline Eligible Accounts. Bank may, in its good faith business discretion, finance such
Streamline Eligible Accounts by extending credit to Borrowers in an amount not to exceed the
Streamline Advance Rate multiplied by the aggregate face amount of the Streamline Eligible
Accounts, as determined by Bank from Borrower’s most recent Streamline Accounts Listing (a
“Streamline Advance”). Bank may, in its sole discretion, (a) change the percentage of the
Non-Streamline Advance Rate for a particular Non-Streamline Eligible Account on a case by case
basis or (b) change the

 

 

percentage of the Streamline Advance Rate for a particular Streamline Eligible Account on a
case by case basis. When Bank makes an Advance the Eligible Account becomes a “Financed
Receivable.”

          (c) Maximum Advances. The aggregate face amount of all Financed Receivables
outstanding at any time may not exceed the Facility Amount.

          (d) Borrowing Procedure.

          (i) Non-Streamline Advances. Borrowers will deliver an Advance Request/Invoice
Transmittal Form for each Non-Streamline Eligible Account it offers. Bank may rely on
information set forth in or provided with the Advance Request/Invoice Transmittal Form.

          (ii) Streamline Advances. Subject to the prior satisfaction of all other
applicable conditions to the making of a Streamline Advance set forth in this Agreement, to
obtain a Streamline Advance, Borrower shall notify Bank (which notice shall be irrevocable)
by electronic mail, facsimile, or telephone by 3:00 p.m. Eastern time on the Funding Date of
the Streamline Advance. Together with any such electronic or facsimile notification,
Borrower shall deliver to Bank by electronic mail or facsimile a completed Advance
Request/Invoice Transmittal Form executed by a Responsible Officer or his or her designee.
Bank may rely on any telephone notice given by a person whom Bank believes is a Responsible
Officer or designee.

          (e) Credit Quality; Confirmations. Bank may, at its option, conduct a credit check of
the Account Debtor for each Account requested by Borrowers for financing as an Advance hereunder in
order to approve any such Account Debtor’s credit before agreeing to finance such Account. Bank
may also verify directly with Account Debtors, from time to time and not necessarily all at one
time, the validity, amount and other matters relating to such Accounts (including confirmations of
Borrowers’ representations in Section 5.3) by means of mail, telephone or otherwise, either in the
name of Borrowers or Bank from time to time in its sole discretion.

          (f) Accounts Notification/Collection. Bank may notify any Person owing Borrowers
money of Bank’s security interest in the funds and verify and/or, if an Event of Default has
occurred and is continuing, collect the amount of the Account.

          (g) Early Termination. This Agreement may be terminated prior to the Maturity Date as
follows: (i) by Borrowers, effective three Business Days after written notice of termination is
given to Bank; or (ii) by Bank at any time after the occurrence and during the continuance of an
Event of Default, without notice, effective immediately. If this Agreement is terminated (A) by
Bank in accordance with clause (ii) in the foregoing sentence, or (B) by Borrowers for any reason,
Borrowers shall pay to Bank a termination fee in an amount equal to Twenty Thousand Dollars
($20,000.00) (the “Early Termination Fee”). The Early Termination Fee shall be due and payable on
the effective date of such termination and thereafter shall bear interest at a rate equal to the
highest rate applicable to any of the Obligations. Notwithstanding the foregoing, Bank agrees to
waive the Early Termination Fee if Bank agrees to refinance and redocument this Agreement under
another division of Bank (in its sole and exclusive discretion) prior to the Maturity Date. In
addition, (a) if a court of competent jurisdiction finds that Bank has breached this Agreement, and
Borrower has terminated this Agreement due to such breach, Borrower shall not have to pay the Early
Termination Fee or (b) if Bank decreases the Advance Rate, and Borrower terminates this Agreement
solely due to such change in Advance Rate, Borrower shall not have to pay the Early Termination Fee
as a result of such termination.

          (h) Maturity. This Agreement shall terminate and all Obligations outstanding
hereunder shall be immediately due and payable on the Maturity Date.

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          (i) Suspension of Advances. Borrowers’ ability to request that Bank finance Eligible
Accounts hereunder will terminate if, in Bank’s sole discretion, there has been a Material Adverse
Change.

          (j) Borrower Liability. Either Borrower may, acting singly, request Advances
hereunder. Each Borrower hereby appoints the other as agent for the other for all purposes
hereunder, including with respect to requesting Advances hereunder. Each Borrower hereunder shall
be obligated to repay all Advances made hereunder, regardless of which Borrower actually receives
said Advance, as if each Borrower hereunder directly received all Advances.
Notwithstanding any other provision of this Agreement or other related document, each Borrower
irrevocably waives all rights that it may have at law or in equity (including, without limitation,
any law subrogating Borrower to the rights of Bank under this Agreement) to seek contribution,
indemnification or any other form of reimbursement from any other Borrower, or any other Person now
or hereafter primarily or secondarily liable for any of the Obligations, for any payment made by
Borrower with respect to the Obligations in connection with this Agreement or otherwise and all
rights that it might have to benefit from, or to participate in, any security for the Obligations
as a result of any payment made by Borrower with respect to the Obligations in connection with
this Agreement or otherwise. Any agreement providing for indemnification, reimbursement or any
other arrangement prohibited under this Article shall be null and void. If any payment is made to
a Borrower in contravention of this Section, such Borrower shall hold such payment in trust for
Bank and such payment shall be promptly delivered to Bank for application to the Obligations,
whether matured or unmatured.

     Section 2.2 Collections, Finance Charges, Remittances and Fees. The Obligations
shall be subject to the following fees and Finance Charges. Unpaid fees and Finance Charges may,
in Bank’s discretion, accrue interest and fees as described in Section 9.2 hereof.

          2.2.1 Collections. Collections for Non-Streamline Advances will be credited to the
Financed Receivable Balance for such Financed Receivable and for Streamline Advances, will be
remitted to the applicable Borrower, subject to Section 2.2.7, but if there is an Event of Default,
Bank may apply Collections to the Obligations in any order it chooses. If Bank receives a payment
for both a Financed Receivable and a non-Financed Receivable, the funds will first be applied to
the Financed Receivable for Non-Streamline Advances and, if there is no Event of Default then
existing, the excess (or if such payments are received during any period when Streamline Advances
are outstanding, the entire amount) will be remitted to the applicable Borrower, subject to Section
2.2.7.

          2.2.2 Facility Fee. A fully earned, non-refundable facility fee of Seventeen Thousand
Five Hundred Dollars ($17,500.00) is due upon execution of this Agreement.

          2.2.3 Finance Charges. In computing Finance Charges on the Obligations under this
Agreement, all Collections received by Bank shall be deemed applied by Bank on account of the
Obligations (a) three (3) Business Days after receipt of the Collections for all Non-Streamline
Advances and (b) one and one-half (1.5) Business Days after receipt of the Collections for all
Streamline Advances. Borrowers will pay a finance charge (the “Finance Charge”) on each Financed
Receivable which is equal to the Applicable Rate divided by 360 multiplied by the
number of days each such Financed Receivable is outstanding multiplied by (x) for
Non-Streamline Advances, the outstanding Financed Receivable Balance for such Financed Receivable
and (y) for Streamline Advances, the Streamline Advance Rate multiplied by the outstanding
Financed Receivable Balance for such Financed Receivable. The Finance Charge is payable when the
Advance made based on such Financed Receivable is payable in accordance with Section 2.3 hereof. In
the event that the aggregate amount of Finance Charges and Collateral Handling Fees earned by Bank
in any quarter is less than the Minimum Finance Charge, Borrowers shall pay to Bank an additional
Finance Charge equal to (i) the Minimum Finance Charge minus (ii) the aggregate amount of all
Finance Charges and Collateral Handling Fees earned by Bank in such quarter. Such additional
Finance Charge shall be payable on the first day of next quarter

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          2.2.4 Collateral Handling Fee. Borrower will pay to Bank a collateral handling fee
(the “Collateral Handling Fee”) equal to (a) for any Subject Month (as of the first calendar day of
such month), to the extent that Borrower qualifies for the Streamline Advance Rate, 0.15% per month
of (i) the Streamline Advance Rate multiplied by (ii) the Financed Receivable Balance for
each Financed Receivable outstanding, based upon a 360 day year or (b) for any Subject Month (as of
the first calendar day of such month), to the extent that Borrower qualifies for the Non-Streamline
Advance, 0.35% per month of the Financed Receivable Balance for each Financed Receivable
outstanding based upon a 360 day year. This fee is charged on a daily basis which is equal to the
Collateral Handling Fee divided by 30, multiplied by the number of days each such Financed
Receivable is outstanding, multiplied by the outstanding Financed Receivable Balance. The
Collateral Handling Fee is payable when the applicable Advance is payable in accordance with
Section 2.3 hereof. In computing Collateral Handling Fees under this Agreement, all Collections
received by Bank shall be deemed applied by Bank on account of Obligations (x) three (3) Business
Days after receipt of Collections for all Non-Streamline Advances and (y) one and one-half (1.5)
Business Days after receipt of Collections for all Streamline Advances . If an Event of Default has
occurred and is continuing, the Collateral Handling Fee will increase an additional 0.50% effective
immediately upon such Event of Default.

          2.2.5 Accounting. After each Reconciliation Period, Bank will provide an accounting
of the transactions for that Reconciliation Period, including the amount of all Financed
Receivables, all Collections, Adjustments, Finance Charges, Collateral Handling Fees and the
Facility Fee. If Borrowers do not object to the accounting in writing within thirty (30) days it
shall be considered accurate. All Finance Charges and other interest and fees are calculated on
the basis of a 360 day year and actual days elapsed.

          2.2.6 Deductions. Bank may deduct fees, Finance Charges, Advances which become due
pursuant to Section 2.3, and other amounts due pursuant to this Agreement from any Advances made or
Collections received by Bank.

          2.2.7 Lockbox; Account Collection Services. GTTA shall direct each Account Debtor
(and each depository institution where proceeds of Accounts are on deposit) to remit payments with
respect to the Accounts to a lockbox account established with Bank or to wire transfer payments to
a cash collateral account that Bank controls (collectively, the “Lockbox”). Upon receipt by GTTA
of any such proceeds, GTTA shall immediately transfer and deliver same to Bank, along with a
detailed cash receipts journal. Provided no Event of Default exists or an event that with notice
or lapse of time will be an Event of Default, within three (3) Business Days of receipt of such
amounts by Bank, (a) when GTTA has Non-Streamline Advances outstanding, Bank will turn over to the
applicable Borrower the proceeds of the Accounts other than Collections with respect to Financed
Receivables and the amount of Collections in excess of the amounts for which Bank has made a
Non-Streamline Advance to GTTA, less any amounts due to Bank, such as the Finance Charge, the
Facility Fee, payments due to Bank, other fees and expenses, or otherwise or (b) when GTTA has
Streamline Advances outstanding, Bank will turn over to the applicable Borrower the proceeds of the
Accounts, less any amounts due to Bank, such as the Finance Charge, the Facility Fee, payments due
to Bank, other fees and expenses, or otherwise; provided, however, Bank may hold
such excess amount, when Non-Streamline Advances are outstanding, with respect to Financed
Receivables as a reserve until the end of the applicable Reconciliation Period if Bank, in its
discretion, determines that other Financed Receivable(s) may no longer qualify as an Eligible
Account at any time prior to the end of the subject Reconciliation Period. This Article does not
impose any affirmative duty on Bank to perform any act other than as specifically set forth herein.
All Accounts and the proceeds thereof are Collateral and if an Event of Default occurs and is
continuing, Bank may apply the proceeds of such Accounts to the Obligations.

     Section 2.3 Repayment of Obligations; Adjustments.

          (a) Repayment.

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          (i) Borrowers will repay each Non-Streamline Advance on the earliest of: (a) the date
on which payment is received of the Financed Receivable with respect to which the
Non-Streamline Advance was made, (b) the date on which the Financed Receivable is no longer
an Non-Streamline Eligible Account, (c) the date on which any Adjustment is asserted to the
Financed Receivable (but only to the extent of the Adjustment if the Financed Receivable
remains otherwise an Eligible Account), (d) the date on which there is a breach of any
warranty or representation set forth in Section 5.3 or a breach of any covenant in this
Agreement, or (e) the Maturity Date (including any early termination). Each payment will
also include all accrued Finance Charges and Collateral Handling Fees with respect to such
Non-Streamline Advance and all other amounts then due and payable hereunder.

          (ii) Borrower will pay Finance Charges and Collateral Handling Fees on Streamline
Advances monthly, on the first day of the month. Payments of Finance Charges and/or
Collateral Handling Fees received after 3:00 p.m. Eastern time are considered received at
the opening of business on the next Business Day. When a payment is due on a day that is
not a Business Day, the payment is due the next Business Day and additional fees or
interest, as applicable, shall continue to accrue. In addition, all payments of Finance
Charges and/or Collateral Handling Fees for Streamline Advances shall be deemed applied by
Bank on account of Obligations one and one-half (1.5) Business Days following receipt of
such payment. The principal amount of all outstanding Streamline Advances, plus all accrued
but unpaid interest thereon are due on the Maturity Date.

          (iii) Notwithstanding anything to the contrary in the forgoing, during any Subject
Month in which the Non-Streamline Advance Rate applies, any outstanding Streamline Advances
will be immediately converted to Non-Streamline Advances and repaid in accordance with
subsection (i) above. If Borrower does not have enough Non-Streamline Eligible Accounts to
finance the total Streamline Advances then-outstanding, Borrower must immediately repay Bank
the excess. Conversely, during any Subject Month in which the Streamline Advance Rate
applies, any outstanding Non-Streamline Advances will be immediately converted to Streamline
Advances and repaid in accordance with subsection (ii) above. If Borrower does not have
enough Streamline Eligible Accounts to finance the total Non-Streamline Advances
then-outstanding, Borrower must immediately repay Bank the excess.

          (b) Repayment on Event of Default. If an Event of Default has occurred and is
continuing, Borrowers will, if Bank demands (or, upon the occurrence of an Event of Default under
Section 8.5, immediately without notice or demand from Bank) repay all of the Advances. The demand
may, at Bank’s option, include the Advance for each Financed Receivable then outstanding, and all
accrued Finance Charges, the Early Termination Fee, Collateral Handling Fees, attorneys and
professional fees, court costs and expenses, and any other Obligations.

          (c) Debit of Accounts. Bank may debit any of Borrowers’ deposit accounts for
payments or any amounts Borrowers owe Bank hereunder, as and when due. Bank shall promptly notify
Borrowers when it debits Borrowers’ accounts. These debits shall not constitute a set-off.

          (d) Adjustments. If at any time during the term of this Agreement any Account Debtor
asserts an Adjustment with respect to a Financed Receivable or if a Borrower issues a credit
memorandum with respect to a Financed Receivable, or if any of the representations, warranties or
covenants set forth in Section 5.3 are no longer true in all material respects, such Borrower will
promptly advise Bank.

     Section 2.4 Power of Attorney. Each Borrower irrevocably appoints Bank and its
successors and assigns as attorney-in-fact and authorizes Bank, to: (i) following the occurrence
and during the continuance of an Event of Default, sell, assign, transfer, pledge, compromise, or
discharge all or any part of the Financed Receivables; (ii) following the occurrence and during the
continuance of an Event of Default, demand, collect,

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sue, and give releases to any Account Debtor for monies due and compromise, prosecute, or
defend any action, claim, case or proceeding about the Financed Receivables, including filing a
claim or voting a claim in any bankruptcy case in Bank’s or Borrower’s name, as Bank chooses; (iii)
following the occurrence and during the continuance of an Event of Default, prepare, file and sign
Borrower’s name on any notice, claim, assignment, demand, draft, or notice of or satisfaction of
lien or mechanics’ lien or similar document; (iv) regardless of whether there has been an Event of
Default, notify all Account Debtors to pay Bank directly; (v) regardless of whether there has been
an Event of Default, receive, open, and dispose of mail addressed to Borrower; (vi) regardless of
whether there has been an Event of Default, endorse Borrower’s name on checks or other instruments
(to the extent necessary to pay amounts owed pursuant to this Agreement); and (vii) regardless of
whether there has been an Event of Default, execute on Borrower’s behalf any instruments,
documents, financing statements to perfect Bank’s interests in the Financed Receivables and
Collateral and do all acts and things necessary or expedient, as determined solely and exclusively
by Bank, to protect or preserve, Bank’s rights and remedies under this Agreement, as directed by
Bank.

ARTICLE 3

CONDITIONS OF LOANS

     Section 3.1 Conditions Precedent to Initial Advance. Bank’s agreement to make the
initial Advance is subject to the condition precedent that Bank shall have received, in form and
substance satisfactory to Bank, such documents, and completion of such other matters, as Bank may
reasonably deem necessary or appropriate, including, without limitation, subject to the condition
precedent that Bank shall have received, in form and substance satisfactory to Bank, the following:

          (a) duly executed original signatures to the Loan Documents to which it is a party;

          (b) duly executed original signatures to the completed Corporate Borrowing Certificates for
each Borrower;

          (c) good standing certificate/certificate of foreign qualification from the Secretary of State
of the State of Delaware and Virginia State Corporation Commission for GTTI and good standing
certificate from the Virginia State Corporation Commission for GTTA, dated no later than 30 days
prior to the Effective Date.

          (d) the Perfection Certificates executed by each Borrower;

          (e) evidence satisfactory to Bank that the insurance policies required by Section 6.4 hereof
are in full force and effect, together with appropriate evidence showing loss payable and/or
additional insured clauses or endorsements in favor of Bank; and

          (f) such other documents, and completion of such other matters, as Bank may reasonably deem
necessary or appropriate.

     Section 3.2 Conditions Precedent to all Advances. Bank’s agreement to make each
Advance, including the initial Advance, is subject to the following:

          (a) receipt of the Advance Request/Invoice Transmittal Form, as the case may be;

          (b) Bank shall have (at its option) conducted the confirmations and verifications as described
in Section 2.1.1(e); and

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          (c) each of the representations and warranties in Article 5 shall be true on the date of the
Advance Request/Invoice Transmittal Form, as the case may be, and on the effective date of each
Advance and no Event of Default shall have occurred and be continuing, or result from the Advance.
Each Advance is a Borrower’s representation and warranty on that date that the representations and
warranties in Article 5 remain true.

ARTICLE 4

CREATION OF SECURITY INTEREST

     Section 4.1 Grant of Security Interest. Each Borrower hereby grants Bank, to secure
the payment and performance in full of all of the Obligations and the performance of each of such
Borrower’s duties under the Loan Documents, a continuing security interest in, and pledges and
assigns to Bank, the Collateral, wherever located, whether now owned or hereafter acquired or
arising, and all proceeds and products thereof. Each Borrower warrants and represents that the
security interest granted herein shall be a first priority security interest in the Collateral.

     Except as noted on the Perfection Certificate with respect to such Borrower, no Borrower is a
party to, nor is bound by, any material license or other agreement with respect to which such
Borrower is the licensee that prohibits or otherwise restricts such Borrower from granting a
security interest in such Borrower’s interest in such license or agreement or any other property.
Without prior consent from Bank, no Borrower shall enter into, or become bound by, any such license
or agreement which is reasonably likely to have a material impact on such Borrower’s business or
financial condition. Borrowers shall take such steps as Bank requests to obtain the consent of, or
waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights
to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be
restricted or prohibited by law or by the terms of any such license or agreement, whether now
existing or entered into in the future.

     If the Agreement is terminated, Bank’s lien and security interest in the Collateral shall
continue until Borrowers fully satisfy their Obligations. If either Borrower shall at any time,
acquire a commercial tort claim, such Borrower shall promptly notify Bank in a writing signed by
such Borrower of the brief details thereof and grant to Bank in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be
in form and substance satisfactory to Bank.

     Upon the termination of this Agreement and the payment in full of all monetary Obligations,
Bank shall, promptly send the Borrowers, (i) for each jurisdiction in which a UCC financing
statement is on file to perfect the security interests granted to Bank hereunder, a termination
statement to the effect that Bank no longer claims a security interest in such financing statement,
and (ii) such other documents necessary or appropriate to terminate the security interests granted
to Bank hereunder as may be reasonably requested by the Borrowers, all at Borrower’s sole cost and
expense.

     Section 4.2 Authorization to File Financing Statements. Each Borrower hereby
authorizes Bank to file financing statements, without notice to such Borrower, with all appropriate
jurisdictions in order to perfect or protect Bank’s interest or rights hereunder, which financing
statements may indicate the Collateral as “all assets of the Debtor” or words of similar effect, or
as being of an equal or lesser scope, or with greater detail, all in Bank’s discretion.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES

          Each Borrower represents and warrants, jointly and severally, as follows:

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     Section 5.1 Due Organization and Authorization. Borrower and each Subsidiary is duly
existing and in good standing in its state of formation and qualified and licensed to do business
in, and in good standing in, any state in which the conduct of its business or its ownership of
property requires that it be qualified except where the failure to do so could not reasonably be
expected to cause a Material Adverse Change. Borrower represents and warrants to Bank that: (a)
Borrower’s exact legal name is that indicated on the Perfection Certificate and on the signature
page hereof; and (b) Borrower is an organization of the type, and is organized in the jurisdiction,
set forth in the Perfection Certificate; and (c) the Perfection Certificate accurately sets forth
Borrower’s organizational identification number or accurately states that Borrower has none; and
(d) the Perfection Certificate accurately sets forth Borrower’s place of business, or, if more than
one, its chief executive office as well as Borrower’s mailing address if different, and (e) all
other information set forth on the Perfection Certificate pertaining to Borrower is accurate and
complete. If Borrower does not now have an organizational identification number, but later obtains
one, Borrower shall forthwith notify Bank of such organizational identification number.

          The execution, delivery and performance of the Loan Documents have been duly authorized, and
do not conflict with Borrower’s organizational documents, nor constitute an event of default under
any material agreement by which Borrower is bound. Borrower is not in default under any agreement
to which or by which it is bound in which the default could reasonably be expected to cause a
Material Adverse Change.

     Section 5.2 Collateral. Borrower has good title to the Collateral, free of Liens
except Permitted Liens. All inventory is in all material respects of good and marketable quality,
free from material defects. Borrower has no deposit account, other than the deposit accounts with
Bank and deposit accounts described in the Perfection Certificate delivered to Bank in connection
herewith. The Collateral is not in the possession of any third party bailee (such as a warehouse).
Except as hereafter disclosed to Bank in writing by Borrower, none of the components of the
Collateral shall be maintained at locations other than as provided in the Perfection Certificate.
In the event that Borrower, after the date hereof, intends to store or otherwise deliver any
portion of the Collateral to a bailee, then Borrower will first receive the written consent of Bank
and such bailee must acknowledge in writing that the bailee is holding such Collateral for the
benefit of Bank.

     Section 5.3 Financed Receivables. Borrower represents and warrants for each Financed
Receivable:

          (a) Such Financed Receivable is an Eligible Account;

          (b) Borrower is the owner of and has the legal right to sell, transfer, assign and encumber
such Financed Receivable;

          (c) The correct amount is on the Advance Request/Invoice Transmittal Form and is not disputed;

          (d) Other than for Deferred Revenue financed with a Streamline Advance, payment is not
contingent on any obligation or contract and Borrower has fulfilled all its obligations as of the
Advance Request/Invoice Transmittal Form date;

          (e) Such Financed Receivable is based on an actual sale and delivery of goods and/or services
rendered, is due to Borrower, is not in default, has not been previously sold, assigned,
transferred, or pledged and is free of any liens, security interests and encumbrances other than
Permitted Liens;

          (f) There are no defenses, offsets, counterclaims or agreements for which the Account Debtor
may claim any deduction or discount;

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          (g) Borrower reasonably believes no Account Debtor is insolvent or subject to any Insolvency
Proceedings;

          (h) Borrower has not filed or had filed against it Insolvency Proceedings and does not
anticipate any filing;

          (i) Bank has the right to endorse and/ or require Borrower to endorse all payments received on
Financed Receivables and all proceeds of Collateral; and

          (j) No representation, warranty or other statement of Borrower in any certificate or written
statement given to Bank contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statement contained in the certificates or statement not
misleading.

     Section 5.4 Litigation. There are no actions or proceedings pending or, to the
knowledge of Borrower’s Responsible Officers, threatened by or against Borrower or any Subsidiary
in which an adverse decision could reasonably be expected to cause a Material Adverse Change.

     Section 5.5 No Material Deviation in Financial Statements. All consolidated
financial statements for Borrower and any Subsidiary delivered to Bank fairly present in all
material respects Borrower’s consolidated financial condition and Borrower’s consolidated results
of operations. There has not been any material deterioration in Borrower’s consolidated financial
condition since the date of the most recent financial statements submitted to Bank.

     Section 5.6 Solvency. Borrower is able to pay its debts (including trade debts) as
they mature.

     Section 5.7 Regulatory Compliance. Borrower is not an “investment company” or a
company “controlled” by an “investment company” under the Investment Company Act. Borrower is not
engaged as one of its important activities in extending credit for margin stock (under Regulations
X, T and U of the Federal Reserve Board of Governors). Borrower has complied in all material
respects with the Federal Fair Labor Standards Act. Borrower has not violated any laws, ordinances
or rules, the violation of which could reasonably be expected to cause a Material Adverse Change.
None of Borrower’s or any Subsidiary’s properties or assets has been used by Borrower or any
Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in disposing, producing,
storing, treating, or transporting any hazardous substance other than legally. Borrower and each
Subsidiary has timely filed all required tax returns and paid, or made adequate provision to pay,
all material taxes, except those being contested in good faith with adequate reserves under GAAP.
Borrower and each Subsidiary has obtained all consents, approvals and authorizations of, made all
declarations or filings with, and given all notices to, all government authorities that are
necessary to continue its business as currently conducted except where the failure to obtain or
make such consents, declarations, notices or filings would not reasonably be expected to cause a
Material Adverse Change.

     Section 5.8 Subsidiaries. Borrower does not own any stock, partnership interest or
other equity securities except for Permitted Investments.

     Section 5.9 Full Disclosure. No written representation, warranty or other statement
of Borrower in any certificate or written statement given to Bank contains any untrue statement of
a material fact or omits to state a material fact necessary to make the statements contained in the
certificates or statements not misleading.

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ARTICLE 6

AFFIRMATIVE COVENANTS

     Until all monetary Obligations are paid in full and this Agreement has terminated, Borrowers
shall do all of the following:

     Section 6.1 Government Compliance. Each Borrower shall maintain its and all
Subsidiaries’ legal existence and good standing in its jurisdiction of formation and maintain
qualification in each jurisdiction in which the failure to so qualify would reasonably be expected
to have a Material Adverse Change. Each Borrower shall comply, and have each Subsidiary comply,
with all laws, ordinances and regulations to which it is subject, noncompliance with which could
have a material adverse effect on such Borrower’s business or operations or would reasonably be
expected to cause a Material Adverse Change.

     Section 6.2 Financial Statements, Reports, Certificates.

          (a) Each Borrower shall deliver to Bank, unless otherwise noted: (i) as soon as available,
but no later than thirty (30) days after the last day of each month, a company prepared
consolidating balance sheet and income statement covering Borrowers’ operations during the period
certified by a Responsible Officer and in substantially the same form as provided to Bank in
connection with its underwriting; (ii) (A) within five (5) days of mailing, copies of all
statements, reports and notices mailed to GTTI’s security holders or to any holders of Subordinated
Debt and (B) within five (5) days of filing, if such reports have not been made public, all reports
on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission; (iii) a prompt report
of any legal actions pending or threatened in writing against Borrower or any Subsidiary that could
reasonably be expected to result in damages or costs to Borrower or any Subsidiary of One Hundred
Thousand Dollars ($100,000.00) or more; and (iv) budgets, sales projections, operating plans or
other financial information reasonably requested by Bank.

          (b) Within thirty (30) days after the last day of each month, Borrower shall deliver to Bank
with the monthly financial statements a Compliance Certificate signed by a Responsible Officer in
the form of Exhibit B.

          (c) During any Subject Month in which the Streamline Advance Rate applies, provide Bank with,
as soon as available, but no later than five (5) days following each Reconciliation Period, a
Streamline Accounts Listing.

          (d) Upon Bank’s request, provide a written report respecting any Financed Receivable, if
payment of any Financed Receivable does not occur by its due date and include the reasons for the
delay.

          (e) Provide Bank with, as soon as available, but no later than thirty (30) days following each
Reconciliation Period, an aged listing of accounts receivable and accounts payable by invoice date,
in substantially the same form as provided to Bank in connection with its underwriting.

          (f) Provide Bank with, as soon as available, but no later than thirty (30) days following each
Reconciliation Period, a Deferred Revenue report, in substantially the same form as provided to
Bank in connection with its underwriting.

          (g) Borrower will allow Bank to audit Borrower’s Collateral, including, but not limited to,
Borrower’s Accounts and accounts receivable, at Borrower’s expense, upon reasonable notice to
Borrower; provided, however, that Borrower shall be obligated to pay for not more than one (1)
audit per year, unless an Event of Default has occurred and is continuing. If an Event of Default
has occurred and is continuing, Bank may audit Borrower’s Collateral, including, but not limited
to, Borrower’s Accounts and accounts receivable at
Borrower’s expense and at Bank’s sole and exclusive discretion and without notification and
authorization from Borrower.

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     Section 6.3 Taxes. Each Borrower shall make, and cause each Subsidiary to make,
timely payment of all material federal, state, and local taxes or assessments (other than taxes and
assessments which such Borrower is contesting in good faith, with adequate reserves maintained in
accordance with GAAP) and will deliver to Bank, on demand, appropriate certificates attesting to
such payments.

     Section 6.4 Insurance. Each Borrower shall keep its business and the Collateral
insured for risks and in amounts as Bank may reasonably request. Insurance policies shall be in a
form, with companies, and in amounts that are reasonably satisfactory to Bank. All property
policies shall have a lender’s loss payable endorsement showing Bank as an additional loss payee
and all liability policies shall show Bank as an additional insured and all policies shall provide
that the insurer must give Bank at least twenty (20) days notice before canceling its policy. At
Bank’s request, Borrowers shall deliver certified copies of policies and evidence of all premium
payments. Proceeds payable under any policy shall, at Bank’s option, following the occurrence and
during the continuance of an Event of Default, be payable to Bank on account of the Obligations.
If either Borrower fails to obtain insurance as required under this Article or to pay any amount or
furnish any required proof of payment to third persons and Bank, Bank may make all or part of such
payment or obtain such insurance policies required in this Article and take any action under the
policies Bank deems prudent.

     Section 6.5 Accounts.

          (a) In order to permit Bank to monitor Borrowers’ financial performance and condition, Each
Borrower, and all of such Borrower’s U.S. Subsidiaries, shall maintain such Borrower’s, and such
U.S. Subsidiaries, primary depository and operating accounts and securities accounts with Bank,
which accounts shall represent at least 95% of the dollar value of such Borrower’s and all of such
U.S. Subsidiaries accounts at all financial institutions.

          (b) Each Borrower shall identify to Bank, in writing, any bank or securities account opened by
such Borrower with any institution other than Bank. In addition, for each such account that a
Borrower at any time opens or maintains, such Borrower shall, at Bank’s request and option,
pursuant to an agreement in form and substance acceptable to Bank, cause the depository bank or
securities intermediary to agree that such account is the collateral of Bank pursuant to the terms
hereunder. The provisions of the previous sentence shall not apply to deposit accounts exclusively
used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit
of a Borrower’s employees.

     Section 6.6 Further Assurances. Each Borrower shall execute any further instruments
and take further action as Bank reasonably requests to perfect or continue Bank’s security interest
in the Collateral or to effect the purposes of this Agreement.

ARTICLE 7 NEGATIVE COVENANTS

     Until all monetary Obligations are paid in full and this Agreement has terminated, no Borrower
shall do any of the following without Bank’s prior written consent.

     Section 7.1 Dispositions. Convey, sell, lease, transfer or otherwise dispose of
(collectively a “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its
business or property, except for Transfers (i) of inventory in the ordinary course of business;
(ii) of non-exclusive licenses and similar arrangements for the use of the property of Borrower or
its Subsidiaries in the ordinary course of business; or (iii) of worn-out or obsolete equipment.

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     Section 7.2 Changes in Business, Ownership, Management or Business Locations. Engage
in or permit any of its Subsidiaries to engage in any business other than the businesses currently
engaged in by Borrower ), enter into any transaction or series of related transactions in which the
stockholders of Borrower who were not stockholders immediately prior to the first such transaction
own more than 40% of the voting stock of Borrower immediately after giving effect to such
transaction or related series of such transactions (other than by the sale of Borrower’s equity
securities in a public offering), or have a change in both its Chief Executive Officer and
Chief Financial Officer. Borrower shall not, without at least thirty (30) days prior written
notice to Bank: (i) relocate its chief executive office, or add any new offices or business
locations, including warehouses (unless such new offices or business locations contain less than
Ten Thousand Dollars ($10,000.00) in Borrower’s assets or property), or (ii) change its
jurisdiction of organization, or (iii) change its organizational structure or type, or (iv) change
its legal name, or (v) change any organizational number (if any) assigned by its jurisdiction of
organization.

     Section 7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its
Subsidiaries to acquire, all or substantially all of the capital stock or property of another
Person, except where (a) no Event of Default has occurred and is continuing or would exist after
giving effect to the transaction, (b) Borrower is the surviving legal entity and (c) the
transaction does not result in a decrease to Borrower’s Tangible Net Worth of more than 25%. A
Subsidiary may merge or consolidate into another Subsidiary or into Borrower.

     Section 7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness,
or permit any Subsidiary to do so, other than Permitted Indebtedness.

     Section 7.5 Encumbrance. Create, incur, or allow any Lien on any of its property, or
assign or convey any right to receive income, including the sale of any Accounts, or permit any of
its Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not to be subject
to the first priority security interest granted herein. The Collateral may also be subject to
Permitted Liens.

     Section 7.6 Distributions; Investments. (a) Directly or indirectly acquire or own any
Person, or make any Investment in any Person, other than Permitted Investments or Investments
permitted in Section 7.3, or permit any of its Subsidiaries to do so; or (b) pay any dividends or
make any distribution or payment or redeem, retire or purchase any capital stock; provided that (i)
Borrower may convert any of its convertible securities into other securities pursuant to the terms
of such convertible securities or otherwise in exchange thereof, (ii) Borrower may pay dividends
solely in common stock; and (iii) Borrower may repurchase the stock of former employees or
consultants pursuant to stock repurchase agreements so long as an Event of Default does not exist
at the time of such repurchase and would not exist after giving effect to such repurchase, provided
such repurchase does not exceed in the aggregate of One Hundred Thousand Dollars ($100,000) in any
fiscal year.

     Section 7.7 Transactions with Affiliates. Directly or indirectly enter into or permit
to exist any material transaction with any Affiliate of Borrower, except for transactions that are
in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less
favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated
Person.

     Section 7.8 Subordinated Debt. Make or permit any payment on any Subordinated Debt,
except under the terms of the Subordinated Debt, or amend any provision in any document relating to
the Subordinated Debt, without Bank’s prior written consent.

     Section 7.9 Compliance. Become an “investment company” or a company controlled by an
“investment company”, under the Investment Company Act of 1940 or undertake as one of its important
activities extending credit to purchase or carry margin stock, or use the proceeds of any Advance
for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event
or Prohibited

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Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair Labor
Standards Act or violate any other law or regulation, if the violation could reasonably be expected
to have a material adverse effect on Borrower’s business or operations or would reasonably be
expected to cause a Material Adverse Change, or permit any of its Subsidiaries to do so.

ARTICLE 8 EVENTS OF DEFAULT

          Any one of the following is an Event of Default:

     Section 8.1 Payment Default. Either Borrower fails to pay any of the Obligations when due;

     Section 8.2 Covenant Default. Either Borrower fails or neglects to perform any
obligation in Article 6 or violates any covenant in Article 7 or fails or neglects to perform,
keep, or observe any other material term, provision, condition, covenant or agreement contained in
this Agreement, any Loan Documents and as to any default under such other term, provision,
condition, covenant or agreement that can be cured, has failed to cure the default within ten (10)
days after the occurrence thereof; provided, however, grace and cure periods provided under this
section shall not apply to financial covenants or any other covenants that are required to be
satisfied, completed or tested by a date certain;

     Section 8.3 Material Adverse Change. A Material Adverse Change occurs;

     Section 8.4 Attachment. (i) Any portion of either Borrower’s assets is attached,
seized, levied on, or comes into possession of a trustee or receiver and the attachment, seizure or
levy is not removed in ten (10) days; (ii) the service of process upon either Borrower seeking to
attach, by trustee or similar process, any funds of such Borrower on deposit with Bank, or any
entity under the control of Bank (including a subsidiary); (iii) either Borrower is enjoined,
restrained, or prevented by court order from conducting any part of its business; (iv) a judgment
or other claim becomes a Lien on a portion of either Borrower’s assets; or (v) a notice of lien,
levy, or assessment is filed against any of either Borrower’s assets by any government agency and
not paid within ten (10) days after such Borrower receives notice;

     Section 8.5 Insolvency. (i) Either Borrower is unable to pay its debts (including
trade debts) as they become due or otherwise becomes insolvent; (ii) either Borrower begins an
Insolvency Proceeding; or (iii) an Insolvency Proceeding is begun against either Borrower and not
dismissed or stayed within thirty (30) days (but no Advances shall be made before any Insolvency
Proceeding is dismissed);

     Section 8.6 Other Agreements. If there is a default in any agreement to which either
Borrower is a party with a third party or parties resulting in a right by such third party or
parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in
excess of One Hundred Thousand Dollars ($100,000) or that could result in a Material Adverse
Change;

     Section 8.7 Judgments. If a judgment or judgments for the payment of money in an
amount, individually or in the aggregate, of at least Two Hundred Thousand Dollars ($200,000) shall
be rendered against either Borrower and shall remain unsatisfied and unstayed for a period of ten
(10) days (provided that no Advances will be made prior to the satisfaction or stay of such
judgment);

     Section 8.8 Misrepresentations. If either Borrower or any Person acting for such
Borrower makes any material misrepresentation or material misstatement now or later in any warranty
or representation in this Agreement or in any writing delivered to Bank or to induce Bank to enter
this Agreement or any Loan Document;

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     Section 8.9 Subordinated Debt. A default or breach occurs under any agreement between
either Borrower and any creditor of such Borrower that signed a subordination agreement with Bank,
or any creditor that has signed a subordination agreement with Bank breaches any terms of the
subordination agreement, in each case, that is not cured within the cure periods set forth for any
such breach therein.

ARTICLE 9 BANK’S RIGHTS AND REMEDIES

     Section 9.1 Rights and Remedies. When an Event of Default occurs and continues Bank
may, without notice or demand, do any or all of the following:

     (a) Declare all Obligations immediately due and payable (but if an Event of Default
described in Section 8.5 occurs all Obligations are immediately due and payable without any
action by Bank);

     (b) Stop advancing money or extending credit for Borrowers’ benefit under this
Agreement or under any other agreement between either Borrower and Bank;

     (c) Settle or adjust disputes and claims directly with Account Debtors for amounts, on
terms and in any order that Bank considers advisable and notify any Person owing either
Borrower money of Bank’s security interest in such funds and verify the amount of such
account. Borrower shall collect all payments in trust for Bank and, if requested by Bank,
immediately deliver the payments to Bank in the form received from the Account Debtor, with
proper endorsements for deposit;

     (d) Make any payments and do any acts it considers necessary or reasonable to protect
its security interest in the Collateral. Borrower shall assemble the Collateral if Bank
requests and make it available as Bank designates. Bank may enter premises where the
Collateral is located, take and maintain possession of any part of the Collateral, and pay,
purchase, contest, or compromise any Lien which appears to be prior or superior to its
security interest and pay all expenses incurred. Each Borrower grants Bank a license to
enter and occupy any of its premises, without charge, to exercise any of Bank’s rights or
remedies;

     (e) Apply to the Obligations any (i) balances and deposits of either Borrower it holds,
or (ii) any amount held by Bank owing to or for the credit or the account of either
Borrower;

     (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale,
advertise for sale, and sell the Collateral. Bank is hereby granted a non-exclusive,
royalty-free license or other right to use, without charge, Borrower’s labels, patents,
copyrights, mask works, rights of use of any name, trade secrets, trade names, trademarks,
service marks, and advertising matter, or any similar property as it pertains to the
Collateral, in completing production of, advertising for sale, and selling any Collateral
and, in connection with Bank’s exercise of its rights under this Section, Borrowers’ rights
under all licenses and all franchise agreements inure to Bank’s benefit;

     (g) Place a “hold” on any account maintained with Bank and/or deliver a notice of
exclusive control, any entitlement order, or other directions or instructions pursuant to
any control agreement or similar agreements providing control of any Collateral; and

     (h) Exercise all rights and remedies and dispose of the Collateral according to the
Code.

     Section 9.2 Bank Expenses; Unpaid Fees. Any amounts paid by Bank pursuant to Section
9.1 shall constitute Bank Expenses and are immediately due and payable, and shall bear interest at
the Default Rate and be secured by the Collateral. No payments by Bank shall be deemed an
agreement to make similar

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payments in the future or Bank’s waiver of any Event of Default. In addition, any amounts
advanced hereunder which are not based on Financed Receivables (including, without limitation,
unpaid fees and Finance Charges as described in Section 2.2) shall accrue interest at the Default
Rate and be secured by the Collateral.

     Section 9.3 Bank’s Liability for Collateral. So long as Bank complies with reasonable
banking practices regarding the safekeeping of collateral, Bank shall not be liable or responsible
for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any
diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman,
bailee, or other Person. Borrowers bear all risk of loss, damage or destruction of the Collateral.

     Section 9.4 Remedies Cumulative. Bank’s rights and remedies under this Agreement, the
Loan Documents, and all other agreements are cumulative. Bank has all rights and remedies provided
under the Code, by law, or in equity. Bank’s exercise of one right or remedy is not an election,
and Bank’s waiver of any Event of Default is not a continuing waiver. Bank’s delay is not a waiver,
election, or acquiescence. No waiver hereunder shall be effective unless signed by Bank and then is
only effective for the specific instance and purpose for which it was given.

     Section 9.5 Demand Waiver. Each Borrower waives demand, notice of default or
dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper,
and guarantees held by Bank on which Borrower is liable.

     Section 9.6 Default Rate. If an Event of Default has occurred and is continuing, all
Obligations shall accrue interest at the Applicable Rate plus five percent (5.0%) per annum (the
“Default Rate”).

ARTICLE 10

NOTICES. 

     Notices or demands by either party about this Agreement must be in writing and personally
delivered or sent by an overnight delivery service, by certified mail postage prepaid return
receipt requested, or by fax to the addresses listed at the beginning of this Agreement. A party
may change notice address by written notice to the other party.

ARTICLE 11

CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER

     Virginia law governs the Loan Documents without regard to principles of conflicts of law.
Each Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in
the Commonwealth of Virginia and Borrower accepts jurisdiction of the courts and venue in Fairfax
County, Virginia. NOTWITHSTANDING THE FOREGOING, BANK SHALL HAVE THE RIGHT TO BRING ANY ACTION OR
PROCEEDING AGAINST EITHER BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH
BANK DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE
BANK’S RIGHTS AGAINST SUCH BORROWER OR ITS PROPERTY.

     BORROWERS AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION,
INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT
FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS
COUNSEL.

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ARTICLE 12

GENERAL PROVISIONS

     Section 12.1 Successors and Assigns. This Agreement binds and is for the benefit of
the successors and permitted assigns of each party. No Borrower may assign this Agreement or any
rights or Obligations under it without Bank’s prior written consent which may be granted or
withheld in Bank’s discretion. Bank has the right, without the consent of or notice to Borrowers,
to sell, transfer, negotiate, or grant participation in all or any part of, or any interest in,
Bank’s obligations, rights and benefits under this Agreement, the Loan Documents or any related
agreement.

     Section 12.2 Indemnification. Each Borrower hereby indemnifies, defends and holds
Bank and its officers, employees, directors and agents harmless against: (a) all obligations,
demands, claims, and liabilities asserted by any other party in connection with the transactions
contemplated by the Loan Documents; and (b) all losses or Bank Expenses incurred, or paid by Bank
from, following, or consequential to transactions between Bank and such Borrower (including
reasonable attorneys’ fees and expenses), except for losses caused by Bank’s gross negligence or
willful misconduct.

     Section 12.3 Time of Essence. Time is of the essence for the performance of all
Obligations in this Agreement.

     Section 12.4 Severability of Provision. Each provision of this Agreement is severable
from every other provision in determining the enforceability of any provision.

     Section 12.5 Amendments in Writing; Integration. All amendments to this Agreement
must be in writing signed by both Bank and Borrower. This Agreement and the Loan Documents
represent the entire agreement about this subject matter, and supersede prior negotiations or
agreements. All prior agreements, understandings, representations, warranties, and negotiations
between the parties about the subject matter of this Agreement and the Loan Documents merge into
this Agreement and the Loan Documents.

     Section 12.6 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which, when executed and
delivered, are an original, and all taken together, constitute one Agreement.

     Section 12.7 Survival. All covenants, representations and warranties made in this
Agreement continue in full force while any Obligations remain outstanding. The obligation of
Borrower in Section 12.2 to indemnify Bank shall survive until the statute of limitations with
respect to such claim or cause of action shall have run.

     Section 12.8 Confidentiality. In handling any confidential information, Bank shall
exercise the same degree of care that it exercises for its own proprietary information, but
disclosure of information may be made: (i) to Bank’s subsidiaries or affiliates in connection with
their business with Borrower; (ii) to prospective transferees or purchasers of any interest in the
Advances (provided, however, Bank shall use commercially reasonable efforts in obtaining such
prospective transferee’s or purchaser’s agreement to the terms of this provision); (iii) as
required by law, regulation, subpoena, or other order, (iv) as required in connection with Bank’s
examination or audit; and (v) as Bank considers appropriate in exercising remedies under this
Agreement. Confidential information does not include information that either: (a) is in the public
domain or in Bank’s possession when disclosed to Bank, or becomes part of the public domain after
disclosure to Bank, other than as a result of a breach by Bank or its Affiliates of their
confidentiality obligations hereunder; or (b) is disclosed to Bank by a third party, if Bank does
not know that the third party is prohibited from disclosing the information.

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     Section 12.9 Attorneys’ Fees, Costs and Expenses. In any action or proceeding
between either Borrower and Bank arising out of the Loan Documents, the prevailing party will be
entitled to recover its reasonable attorneys’ fees and other reasonable costs and expenses
incurred, in addition to any other relief to which it may be entitled.

ARTICLE 13

DEFINITIONS

     Section 13.1 Definitions. In this Agreement:

     “Accounts” are all existing and later arising accounts, contract rights, and other obligations
owed Borrowers in connection with its sale or lease of goods (including licensing software and
other technology) or provision of services, all credit insurance, guaranties, other security and
all merchandise returned or reclaimed by Borrowers and Borrowers’ Books relating to any of the
foregoing.

     “Account Debtor” is as defined in the Code and shall include, without limitation, any person
liable on any Financed Receivable, such as, a guarantor of the Financed Receivable and any issuer
of a letter of credit or banker’s acceptance.

     “Adjustments” are all discounts, allowances, returns, disputes, counterclaims, offsets,
defenses, rights of recoupment, rights of return, warranty claims, or short payments, asserted by
or on behalf of any Account Debtor for any Financed Receivable.

     “Advance Request/Invoice Transmittal Form” is that certain form attached hereto as Exhibit C.

     “Advance” is a Streamline Advance and/or Non-Streamline Advance.

     “Advance Rate” is the Streamline Advance Rate and/or the Non-Streamline Advance Rate.

     “Affiliate” is a Person that owns or controls directly or indirectly the Person, any Person
that controls or is controlled by or is under common control with the Person, and each of that
Person’s senior executive officers, directors, partners and, for any Person that is a limited
liability company, that Person’s managers and members.

     “Applicable Rate” is a per annum rate equal to (a) for any Subject Month (as of the first
calendar day of such month), to the extent that Borrower qualifies for the Streamline Advance Rate,
the Prime Rate plus one and three-quarters percent (1.75%) or (b) for any Subject Month (as of the
first calendar day of such month), to the extent that Borrower qualifies for the Non-Streamline
Advance Rate, the Prime Rate plus two percent (2.0%).

     “Bank Expenses” are all audit fees and expenses and reasonable costs or expenses (including
reasonable attorneys’ fees and expenses) for preparing, negotiating, administering, defending and
enforcing the Loan Documents (including appeals or Insolvency Proceedings).

     “Borrower’s Books” are all Borrower’s books and records including ledgers, records regarding
Borrower’s assets or liabilities, the Collateral, business operations or financial condition and
all computer programs or discs or any equipment containing the information.

     “Business Day” is any day that is not a Saturday, Sunday or a day on which Bank is closed.

     “Code” is the Uniform Commercial Code as adopted in Virginia, as amended and as may be amended
and in effect from time to time.

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     “Collateral” is any and all properties, rights and assets of Borrowers granted by Borrowers to
Bank or arising under the Code, now, or in the future, in which Borrower obtains an interest, or
the power to transfer rights, as described on Exhibit A.

     “Collateral Handling Fee” is defined in Section 2.2.4.

     “Collections” are all funds received by Bank from or on behalf of an Account Debtor for
Financed Receivables.

     “Compliance Certificate” is attached as Exhibit B.

     “Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or
not, of that Person for (i) any indebtedness, lease, dividend, letter of credit or other obligation
of another such as an obligation directly or indirectly guaranteed, endorsed, co-made, discounted
or sold with recourse by that Person, or for which that Person is directly or indirectly liable;
(ii) any obligations for undrawn letters of credit for the account of that Person; and (iii) all
obligations from any interest rate, currency or commodity swap agreement, interest rate cap or
collar agreement, or other agreement or arrangement designated to protect a Person against
fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent
Obligation” does not include endorsements in the ordinary course of business. The amount of a
Contingent Obligation is the stated or determined amount of the primary obligation for which the
Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability
for it determined by the Person in good faith; but the amount may not exceed the maximum of the
obligations under the guarantee or other support arrangement.

     “Default Rate” is defined in Section 9.6.

     “Deferred Revenue” is all amounts received or invoiced, as appropriate, in advance of
performance under contracts and not yet recognized as revenue.

     “Early Termination Fee” is defined in Section 2.1.1.

     “EBITDA” means earnings before interest, taxes, depreciation and amortization plus non-cash
compensation expense, in accordance with past practices.

     “Effective Date” is the date of this Agreement.

     “Eligible Accounts” are Streamline Eligible Accounts and/or Non-Streamline Eligible Accounts.

     “ERISA” is the Employment Retirement Income Security Act of 1974, and its regulations.

     “Events of Default” are set forth in Article 8.

     “Facility Amount” is Two Million Five Hundred Thousand Dollars ($2,500,000.00).

     “Facility Fee” is defined in Section 2.2.2.

     “Finance Charges” are Streamline Finance Charges and/or Non-Streamline Finance Charges.

     “Financed Receivables” are all those Eligible Accounts, including their proceeds which Bank
finances and makes an Advance, as set forth in Section 2.1.1. A Financed Receivable stops being a
Financed Receivable (but remains Collateral) when the Advance made for the Financed Receivable has
been fully paid.

18

 

     “Financed Receivable Balance” is the total outstanding gross face amount, at any time, of any
Financed Receivable.

     “Funding Date” is any date on which an Advance is made to or on account of Borrower which
shall be a Business Day.

     “GAAP” is generally accepted accounting principles.

     “Guarantor” is any present or future guarantor of the Obligations, including GTT Global
Telecom, LLC, GTT Global Telecom Government Services, LLC and Global Internetworking of Virginia,
Inc.

     “Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or
services, such as reimbursement and other obligations for surety bonds and letters of credit, (b)
obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease
obligations and (d) Contingent Obligations.

     “Insolvency Proceeding” is any proceeding by or against any Person under the United States
Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit
of creditors, compositions, extensions generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.

     “Investment” is any beneficial ownership of (including stock, partnership interest or other
securities) any Person, or any loan, advance or capital contribution to any Person.

     “Lockbox” is defined in Section 2.2.7.

     “Lien” is a mortgage, lien, deed of trust, charge, pledge, security interest or other
encumbrance.

     “Loan Documents” are, collectively, this Agreement, any note, or notes or guaranties executed
by Borrower or Guarantor, and any other present or future agreement between Borrower and/or for the
benefit of Bank in connection with this Agreement, all as amended, extended or restated.

     “Material Adverse Change” is: (i) A material impairment in the perfection or priority of
Bank’s security interest in the Collateral or in the value of such Collateral; (ii) a material
adverse change in the business, operations, or condition (financial or otherwise) of Borrower; or
(iii) a material impairment of the prospect of repayment of any portion of the Obligations.

     “Maturity Date” is June 15, 2010.

     “Minimum Finance Charge” is Five Thousand Dollars ($5,000.00).

     “Net Liquidity” is, as of the date of determination, GTTI’s cash or cash equivalents held at
Bank or Bank’s Affiliates, less Borrowers’ outstanding Obligations.

     “Non-Streamline Advance” is defined in Section 2.1.1.

     “Non-Streamline Advance Rate” is eighty percent (80.0%), net of any offsets related to each
specific Account Debtor, or such other percentage as Bank establishes under Section 2.1.1(b).

     “Non-Streamline Eligible Accounts” are billed Accounts in the ordinary course of a GTTA’s
business that meet all such Borrower’s representations and warranties in Section 5.3, have been, at
the option of Bank, confirmed in accordance with Section 2.1.1(d), and are due and owing from
Account Debtors deemed creditworthy by Bank in its sole discretion. Without limiting the fact that
the determination of which Accounts

19

 

are eligible hereunder is a matter of Bank discretion in each instance, Eligible Accounts
shall not include the following Accounts (which listing may be amended or changed in Bank’s
discretion with notice to Borrowers):

     (a) Accounts that the Account Debtor has not paid within ninety (90) days of invoice
date;

     (b) Accounts for an Account Debtor, fifty percent (50%) or more of whose Accounts have
not been paid within ninety (90) days of invoice date;

     (c) Accounts for which the Account Debtor does not have its principal place of business
in the United States, unless agreed to by Bank in writing, in its sole discretion, on a
case-by-case basis;

     (d) Accounts owing from an Account Debtor which is a United States government entity or
any department, agency, or instrumentality thereof unless Borrower has assigned its payment
rights to Bank and the assignment has been acknowledged under the Federal Assignment of
Claims Act of 1940, as amended;

     (e) Accounts for which Borrower owes the Account Debtor, but only up to the amount owed
(sometimes called “contra” accounts, accounts payable, customer deposits or credit
accounts);

     (f) Accounts for demonstration or promotional equipment, or in which goods are
consigned, sales guaranteed, sale or return, sale on approval, bill and hold, or other terms
if Account Debtor’s payment may be conditional;

     (g) Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee,
or agent;

     (h) Accounts in which the Account Debtor disputes liability or makes any claim and Bank
believes there may be a basis for dispute (but only up to the disputed or claimed amount),
or if the Account Debtor is subject to an Insolvency Proceeding, or becomes insolvent, or
goes out of business;

     (i) Accounts owing from an Account Debtor with respect to which Borrower has received
Deferred Revenue (but only to the extent of such Deferred Revenue), other than Deferred
Revenue in connection with advanced monthly billings; and

     (j) Accounts for which Bank reasonably determines collection to be doubtful or any
Accounts which are unacceptable to Bank for any reason.

     “Obligations” are, as of the date of determination, all advances, liabilities, obligations,
covenants and duties owing, arising, due or payable by Borrower to Bank now or later under this
Agreement or any other document, instrument or agreement, account (including those acquired by
assignment) primary or secondary, such as all Advances, Finance Charges, Facility Fee, Early
Termination Fee, Collateral Handling, interest, fees, expenses, professional fees and attorneys’
fees, or other amounts now or hereafter owing by Borrower to Bank.

     “Perfection Certificates” are attached hereto as Exhibit D.

     “Permitted Indebtedness” is, for each Borrower:

     (a) Borrower’s indebtedness to Bank under this Agreement or the Loan Documents;

     (b) Subordinated Debt;

     (c) Indebtedness to trade creditors incurred in the ordinary course of business; and

     (d) Indebtedness secured by Permitted Liens.

20

 

     “Permitted Investments” are: (a) marketable direct obligations issued or unconditionally
guaranteed by the United States or its agency or any state maturing within 1 year from its
acquisition, (b) commercial paper maturing no more than 1 year after its creation and having the
highest rating from either Standard & Poor’s Corporation or Moody’s Investors Service, Inc., (c)
Bank’s certificates of deposit issued maturing no more than 1 year after issue, (d) any other
investments administered through Bank, (e) Investments (including ownership of Subsidiaries)
existing on the Effective Date and listed on the Perfection Certificate, and (f) no more than
$2,500,000 in the aggregate in equity investments or inter-company debt by Borrowers or Borrowers’
Subsidiaries to GTT-EMEA, Ltd from the Effective Date through the Maturity Date.

     “Permitted Liens” are:

     (a) Liens arising under this Agreement or other Loan Documents;

     (b) Liens for taxes, fees, assessments or other government charges or levies, either
not delinquent or being contested in good faith and for which a Borrower maintains adequate
reserves on its Books, if they have no priority over any of Bank’s security interests;

     (c) Purchase money Liens securing no more than $1,500,000.00 in the aggregate amount
outstanding (i) on equipment acquired or held by Borrowers incurred for financing the
acquisition of the equipment, or (ii) existing on equipment when acquired, if the
Lien is confined to the property and improvements and the proceeds of the equipment;

     (d) Leases or subleases and non-exclusive licenses or sublicenses granted in the
ordinary course of a Borrower’s business, if the leases, subleases, licenses and
sublicenses permit granting Bank a security interest;

     (e) Liens in favor of other financial institutions arising solely in connection with
Borrower’s or any Subsidiary’s deposit accounts that are pledged as collateral for letters
of credit; and

     (f) Liens incurred in the extension, renewal or refinancing of the indebtedness secured
by Liens described in (a) through (e), but any extension, renewal or replacement
Lien must be limited to the property encumbered by the existing Lien and the principal
amount of the indebtedness may not increase.

     “Person” is any individual, sole proprietorship, partnership, limited liability company, joint
venture, company, trust, unincorporated organization, association, corporation, institution, public
benefit corporation, firm, joint stock company, estate, entity or government agency.

     “Prime Rate” is Bank’s most recently announced “prime rate,” even if it is not Bank’s lowest
rate.

     “Reconciliation Day” is the last calendar day of each month.

     “Reconciliation Period” is each calendar month.

     “Responsible Officer” is each of the Chief Executive Officer, President, Chief Financial
Officer and Controller of a Borrower.

     “Streamline Accounts Listing” is a summary of Streamline Eligible Accounts in form and
substance acceptable to Bank in all respects.

21

 

     “Streamline Advance” is defined in Section 2.1.1.

     “Streamline Advance Rate” is eighty percent (80.0%), net of any offsets related to each
specific Account Debtor, other than Deferred Revenue, or such other percentage as Bank establishes
under Section 2.1.1(b).

     “Streamline Eligible Accounts” are billed Accounts in the ordinary course of a GTTA’s business
that meet all such Borrower’s representations and warranties in Section 5.3, have been, at the
option of Bank, confirmed in accordance with Section 2.1.1(d), and are due and owing from Account
Debtors deemed creditworthy by Bank in its sole discretion. Without limiting the fact that the
determination of which Accounts are eligible hereunder is a matter of Bank discretion in each
instance, Eligible Accounts shall not include the following Accounts (which listing may be amended
or changed in Bank’s discretion with notice to Borrowers):

     (a) Accounts that the Account Debtor has not paid within ninety (90) days of invoice
date;

     (b) Accounts for an Account Debtor, fifty percent (50%) or more of whose Accounts have
not been paid within ninety (90) days of invoice date;

     (c) Accounts owing from an Account Debtor, including Affiliates, whose total
obligations to Borrower exceed thirty percent (30%) of all Accounts, for the amounts that
exceed that percentage, unless Bank approves in writing

     (d) Accounts for which the Account Debtor does not have its principal place of business
in the United States;

     (e) Accounts owing from an Account Debtor which is a United States government entity or
any department, agency, or instrumentality thereof unless Borrower has assigned its payment
rights to Bank and the assignment has been acknowledged under the Federal Assignment of
Claims Act of 1940, as amended;

     (f) Accounts for which Borrower owes the Account Debtor, but only up to the amount owed
(sometimes called “contra” accounts, accounts payable, customer deposits or credit
accounts);

     (g) Accounts for demonstration or promotional equipment, or in which goods are
consigned, sales guaranteed, sale or return, sale on approval, bill and hold, or other terms
if Account Debtor’s payment may be conditional;

     (h) Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee,
or agent;

     (i) Accounts in which the Account Debtor disputes liability or makes any claim and Bank
believes there may be a basis for dispute (but only up to the disputed or claimed amount),
or if the Account Debtor is subject to an Insolvency Proceeding, or becomes insolvent, or
goes out of business; and

     (j) Accounts for which Bank reasonably determines collection to be doubtful or any
Accounts which are unacceptable to Bank for any reason.

     “Subject Month” is the month which is two (2) calendar months after any Testing Month.

22

 

     “Subordinated Debt” is debt incurred by a Borrower subordinated to such Borrower’s debt to
Bank (pursuant to a subordination agreement entered into between Bank, Borrower and the
subordinated creditor), on terms acceptable to Bank.

     “Subsidiary” is any Person, corporation, partnership, limited liability company, joint
venture, or any other business entity of which more than 50% of the voting stock or other equity
interests is owned or controlled, directly or indirectly, by the Person or one or more Affiliates
of the Person.

     “Tangible Net Worth” is, on any date, the consolidated total assets of Borrower and its
Subsidiaries minus (a) any amounts attributable to (i) goodwill, (ii) intangible items including
unamortized debt discount and expense, patents, trade and service marks and names, copyrights and
research and development expenses except prepaid expenses, (iii) notes, accounts receivable and
other obligations owing to Borrower from its officers or other Affiliates, and (iv) reserves not
already deducted from assets, minus (b) Total Liabilities, plus (c) Subordinated Debt.

     “Testing Month” is any month with respect to which Bank has tested GTTI’s T3M EBITDA and
GTTI’s Net Liquidity in order to determine whether Borrowers may request Streamline Advances.

     “T3M EBITDA” is EBITDA, as measured on a trailing three-month basis.

     “Total Liabilities” is on any day, obligations that should, under GAAP, be classified as
liabilities on Borrower’s consolidated balance sheet, including all Indebtedness, and current
portion of Subordinated Debt permitted by Bank to be paid by Borrower, but excluding all other
Subordinated Debt.

[Signature Page Follows]

23

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
Effective Date.

	 	 	 	 	 
	BORROWERS:

GLOBAL TELECOM & TECHNOLOGY, INC.

 	 
	By:  	 	 
	 	Print Name:  	 	 
	 	Title:
	 
	 
	GLOBAL TELECOM & TECHNOLOGY AMERICAS, INC.

 	 
	By:  	 	 
	 	Print Name:  	 	 
	 	Title:
	 
	 
	BANK:

SILICON VALLEY BANK

 	 
	By:  	 	 
	 	Print Name:  	 	 
	 	Title:
	 

24

 

	 	 	 	 	 

EXHIBIT A

The Collateral consists of all of each Borrower’s right, title and interest in and to the following
personal property:

     All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights
or rights to payment of money, leases, license agreements, franchise agreements, General
Intangibles (except as provided below), commercial tort claims, documents, instruments (including
any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts,
fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing),
securities, and all other investment property, supporting obligations, and financial assets,
whether now owned or hereafter acquired, wherever located; and

     all Borrower’s Books relating to the foregoing, and any and all claims, rights and interests
in any of the above and all substitutions for, additions, attachments, accessories, accessions and
improvements to and replacements, products, proceeds and insurance proceeds of any or all of the
foregoing.

     Notwithstanding the foregoing, the Collateral does not include any of the following, whether
now owned or hereafter acquired (a) more than 67% of the presently existing and hereafter arising
issued and outstanding shares of capital stock owned by Borrower of any foreign Subsidiary which
shares entitle the holder thereof to vote for directors or any other matter, or (b) any copyright
rights, copyright applications, copyright registrations and like protections in each work of
authorship and derivative work, whether published or unpublished, any patents, patent applications
and like protections, including improvements, divisions, continuations, renewals, reissues,
extensions, and continuations-in-part of the same, trademarks, service marks and, to the extent
permitted under applicable law, any applications therefor, whether registered or not, and the
goodwill of the business of Borrower connected with and symbolized thereby, know-how, operating
manuals, trade secret rights, rights to unpatented inventions, and any claims for damage by way of
any past, present, or future infringement of any of the foregoing; provided, however, the
Collateral shall include all Accounts, license and royalty fees and other revenues, proceeds, or
income arising out of or relating to any of the foregoing.

     Pursuant to the terms of a certain negative pledge arrangement with Bank, Borrower has agreed
not to encumber any of its copyright rights, copyright applications, copyright registrations and
like protections in each work of authorship and derivative work, whether published or unpublished,
any patents, patent applications and like protections, including improvements, divisions,
continuations, renewals, reissues, extensions, and continuations-in-part of the same, trademarks,
service marks and, to the extent permitted under applicable law, any applications therefor, whether
registered or not, and the goodwill of the business of Borrower connected with and symbolized
thereby, know-how, operating manuals, trade secret rights, rights to unpatented inventions, and any
claims for damage by way of any past, present, or future infringement of any of the foregoing,
without Bank’s prior written consent.

Exh A-1

 

EXHIBIT B

SPECIALTY FINANCE DIVISION

Compliance Certificate

     We, as authorized officers of Global Telecom and Technology, Inc. and Global Telecom &
Technology Americas, Inc. (“Borrowers”) certify under the Amended and Restated Loan and Security
Agreement (the “Agreement”) between Borrowers and Silicon Valley Bank (“Bank”) as follows (all
capitalized terms used herein shall have the meaning set forth in the Agreement):

When Invoice Advances are outstanding, each Borrower represents and warrants for each of its
Financed Receivables:

	•	 	Each Financed Receivable is an Eligible Account.
	 
	•	 	Borrower is the owner with legal right to sell, transfer, assign and encumber such Financed Receivable;
	 
	•	 	The correct amount is on the Advance Request/Invoice Transmittal Form and is not disputed;
	 
	•	 	Payment is not contingent on any obligation or contract and Borrower has fulfilled all its obligations
as of the Advance Request/Invoice Transmittal Form date;
	 
	•	 	Each Financed Receivable is based on an actual sale and delivery of goods and/or services rendered, is
due to Borrower, is not in default, has not been previously sold, assigned, transferred, or pledged
and is free of any liens, security interests and encumbrances other than Permitted Liens;
	 
	•	 	There are no defenses, offsets, counterclaims or agreements for which the Account Debtor may claim any
deduction or discount;
	 
	•	 	It reasonably believes no Account Debtor is insolvent or subject to any Insolvency Proceedings;
	 
	•	 	It has not filed or had filed against it Insolvency Proceedings and does not anticipate any filing;
	 
	•	 	Bank has the right to endorse and/ or require Borrower to endorse all payments received on Financed
Receivables and all proceeds of Collateral.
	 
	•	 	No representation, warranty or other statement of Borrower in any certificate or written statement
given to Bank contains any untrue statement of a material fact or omits to state a material fact
necessary to make the statement contained in the certificates or statement not misleading.

Additionally, each Borrower represents and warrants, jointly and severally, as follows:

	•	 	Borrower and each Subsidiary is duly existing and in good standing in its state of formation and
qualified and licensed to do business in, and in good standing in, any state in which the conduct of
its business or its ownership of property requires that it be qualified except where the failure to do
so could not reasonably be expected to cause a Material Adverse Change. The execution, delivery and
performance of the Loan Documents have been duly authorized, and do not conflict with Borrower’s
organizational documents, nor constitute an event of default under any material agreement by which
Borrower is bound. Borrower is not in

Exh B-1

 

	 	 	default under any agreement to which or by which it is bound in which the
default could reasonably be expected to cause a Material Adverse Change.

	•	 	Borrower has good title to the Collateral, free of
Liens except Permitted Liens. All inventory is in
all material respects of good and marketable quality,
free from material defects.

	•	 	Borrower is not an “investment company” or a company
“controlled” by an “investment company” under the
Investment Company Act. Borrower is not engaged as
one of its important activities in extending credit
for margin stock (under Regulations X, T and U of the
Federal Reserve Board of Governors). Borrower has
complied in all material respects with the Federal
Fair Labor Standards Act. Borrower has not violated
any laws, ordinances or rules, the violation of which
could reasonably be expected to cause a Material
Adverse Change. None of Borrower’s or any
Subsidiary’s properties or assets has been used by
Borrower or any Subsidiary or, to the best of
Borrower’s knowledge, by previous Persons, in
disposing, producing, storing, treating, or
transporting any hazardous substance other than
legally. Borrower and each Subsidiary has timely
filed all required tax returns and paid, or made
adequate provision to pay, all material taxes, except
those being contested in good faith with adequate
reserves under GAAP. Borrower and each Subsidiary
has obtained all consents, approvals and
authorizations of, made all declarations or filings
with, and given all notices to, all government
authorities that are necessary to continue its
business as currently conducted except where the
failure to obtain or make such consents,
declarations, notices or filings would not reasonably
be expected to cause a Material Adverse Change.

Please indicate compliance status by circling Yes/No under “Complies” column.

	 	 	 	 	 	 	 
	Reporting Covenant	 	Required	 	Complies
	 
	 	 	 	 	 	 
	Monthly financial statements with 

Compliance Certificate

	 	Monthly within 30 days
	 	Yes
	 	No
	 
	 	 	 	 	 	 
	10-Q, 10-K and 8-K

	 	Within 5 days after filing
with SEC unless otherwise
made public
	 	Yes
	 	No
	 
	 	 	 	 	 	 
	Borrowing Base Certificate A/R &

A/P Agings & Deferred Revenue 

Schedule

	 	Monthly within 30 days
	 	Yes
	 	No
	 
	 	 	 	 	 	 
	Monthly Streamline Accounts Report

	 	Monthly within 5 days
	 	Yes
	 	No

	 	 	 	 	 	 	 	 	 	 	 
	Performance Pricing	 	 
	 	 	Applicable Rate	 	CHF	 	Applies
	 
	If GTTI’s T3M EBITDA > $50,000 OR if
GTTI’s Net Liquidity > $500,000

	 	Prime + 1.75%
	 	 	0.15	%	 	Yes
	 	No
	 
	If GTTI’s T3M EBITDA < $50,000 AND if
GTTI’s Net Liquidity < $500,000

	 	Prime + 2.0%
	 	 	0.35	%	 	Yes
	 	No

	 	 	 	 	 
	Financial Reporting	 	Actual
	GTTI’s T3M EBITDA
	 	$              	 	 
	GTTI’s Net Liquidity
	 	$              	 	 

Exh B-2

 

All representations and warranties in the Agreement are true and correct in all material respects
on this date, and the Borrower represents that there is no existing Event of Default.

Dated as of:                                         

Sincerely,

	 	 	 	 	 	 	 
	GLOBAL TELECOM & TECHNOLOGY, INC.

	 	 
	 	BANK USE ONLY
	 	 
	 
	 

	 	 	 	Received by:  
	 	 
	 

	 	 	 	authorized signer	 	 
	By: 

	 	 	 	 	 	 
	Print Name: 

	 	 	 	Date: 
	 	 
	Title: 

	 	 	 	Verified:  
	 	 
	 

	 	 	 	authorized signer	 	 
	 

	 	 	 	Date:  
	 	 
	GLOBAL TELECOM & TECHNOLOGY AMERICAS, INC.

	 	 	 	Compliance Status:     Yes     No	 	 
	 
	 	 	 	 	 	 
	By: 

	 	 	 	 	 	 
	Print Name: 

	 	 	 	 	 	 
	Title: 

	 	 	 	 	 	 

Exh B-3

 

EXHIBIT C

ADVANCE REQUEST/INVOICE TRANSMITTAL FORM

(Attached)

Exh C-1

 

EXHIBIT D

PERFECTION CERTIFICATES

(Attached)

Exh D-1Exhibit 10.1

Exhibit 10.1

Financing Agreement

This Financing Agreement is made and entered into by and between Summit Financial Resources,
L.P., 2455 East Parley’s Way, Suite 200, Salt Lake City, Utah 84109, Attention: Senior Portfolio
Manager, and Irvine Sensors Corporation, a Delaware corporation, 3001 Red Hill Avenue, Building 4,
Suite 108, Costa Mesa, California 92626, Attention: John Stuart.

For good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

1. Definitions. Terms defined in the singular shall have the same meaning when used
in the plural and vice versa. Terms defined in the UCC shall have the meanings set forth in the
UCC, except as otherwise defined herein. As used herein, the term:

“Acceptable Account” means an Account of Client conforming to the representations, warranties,
and requirements of Section 14, Acceptable Accounts.

“Accounts” shall have the meaning set forth in the definition of Collateral.

“Account Debtor” means any person or entity obligated for payment of an Account.

“Account Due Date” means Ninety (90) days from the date of the invoice evidencing the Account.

“Advance” means an advance of any portion of the Purchase Price to or on behalf of Client.

“Advance Rate” means Eighty Percent (80%), or such other Percent as may be determined from
time to time by Summit in its sole discretion.

“Agreement” means this Financing Agreement, together with any amendments, addenda, and
modifications.

“Authorized Overadvance” means an Overadvance authorized in writing by Summit.

“Banking Business Day” means any day not a Saturday, Sunday, legal holiday in the State of
Utah, or day on which national banks in the State of Utah are authorized to close.

“Chargeback Account” means an outstanding Purchased Account which is past the Account Due Date
or is determined to no longer be an Acceptable Account.

“Client” means Irvine Sensors Corporation, a corporation organized and existing under the laws
of the State of Delaware, its successors and assigns.

“Collateral” means the following personal property of Client, wherever located, now owned or
existing or hereafter acquired or created, all additions and accessions thereto, all replacements,
insurance or condemnation proceeds, all documents covering any of the Collateral, all leases of any
of the Collateral, all rents, revenues, issues, profits and proceeds arising from the sale, lease,
license, encumbrance, collection, or any other temporary or permanent disposition of any of the
Collateral or any interest therein, all amendments, modifications, renewals, extensions, and
replacements thereof, and all products and proceeds thereof: (a) all inventory (the “Inventory”);
(b) all accounts (the “Accounts”); (c) all equipment, goods and motor vehicles (collectively, the
“Equipment”); (d) all general intangibles, excluding any and all patents, trademarks and copyrights
(registered or unregistered), trade secrets, domain names and addresses, and intellectual property
licenses; (e) any and all promissory notes and instruments payable to or owing to Client or held by
Client; any and all leases under which Client is the lessor; any and all chattel paper in favor of,
owing to, or held by Client, including, without limitation, any and all conditional sale contracts
or
other sales agreements, whether Client is the original party or the assignee; and any and all
security agreements, collateral and titles to motor vehicles which secure any of the foregoing
obligations; (f) all deposit accounts, including without limitation, all interest, dividends or
distributions accrued or to accrue thereon, whether or not due; (g) all investment property,
including all interest, dividends or distributions accrued or to accrue thereon, whether or not
due; (h) all documents; (i) all letter-of-credit rights; (j) all supporting obligations; and (k)
all balances, deposits, debts or any other amounts or obligations of Summit owing to Client,
including, without limitation, any Reserve, whether or not due.

			
	 	 	 
	Irvine Sensors Corporation
	 	                    
	 
	 	Initials

 

 

“Collateral Management Fee” means One and One-Tenth Percent (1.1%) of the face amount of each
Purchased Account for the first period of Thirty (30) days or portion thereof that the Purchased
Account remains outstanding and Fifty-Five Hundredths Percent (0.55%) of the face amount of each
Purchased Account for each successive period of Fifteen (15) days or portion thereof thereafter
that the Purchased Account remains outstanding until payment in full is applied to the Purchased
Account, due and payable monthly in arrears.

“Collected Payments” means collections and payments received by Summit on Accounts of Client,
less all interest, Fees and Charges, amounts due and payable to Summit by Client, deductions and
setoffs. Credits for Collected Payments shall be provisional and subject to final payment and
collection of the deposited item. For purposes of calculating interest owing, Collected Payments
delivered to a bank or other agent on behalf of Summit shall be deemed received Three (3) Banking
Business Days after the date of receipt of advice by Summit from the bank or agent that the
Collected Payments have been credited to the account of Summit.

“Daily Funds Rate” means the prime rate as announced in the Wall Street Journal plus Two
Percent (2%) divided by 360. The initial prime rate shall be the prime rate in effect on the date
of this Agreement. The Daily Funds Rate may be adjusted from time to time as of the date of any
change in the prime rate.

“Default Rate” means the Daily Funds Rate plus Ten Percent (10%) per annum.

“Equipment” shall have the meaning set forth in the definition of Collateral.

“Event of Default” shall have the meaning set forth in Section 26, Default and
Remedies.

“Fees and Charges” means the Origination Fee, the Renewal Fees, the Collateral Management
Fees, the Supplemental Fee, and the Other Charges.

“Financing Period” means an initial period of one (1) year commencing on the date of this
Agreement and thereafter successive periods of one (1) year each commencing upon completion of each
prior Financing Period.

“Inventory” shall have the meaning set forth in the definition of Collateral.

“Maximum Credit Line” means Two Million Dollars ($2,000,000.00) or such other amount as may be
determined from time to time by Summit in its sole discretion.

“Monthly Minimum” means Two Thousand Dollars ($2,000.00).

“Origination Fee” means One Percent (1%) of the Maximum Credit Line. The Origination Fee
shall be due and payable upon execution of this Agreement. In the event the Maximum Credit Line is
increased during the first year of this Agreement, an additional Origination Fee shall be charged
on the amount of the increase, prorated from the date of the increase to the anniversary date of
this Agreement. Any additional Origination Fee shall be due and payable on the effective date of
the increase in the Maximum Credit Line. In the event of a decrease in the Maximum Credit Line, no
refund or credit shall be given for any Origination Fee which has been paid.

			
	 	 	 
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“Other Charges” means the following fees and charges:

a. Any Payment Conversion Fees.

b. All other charges and fees which may be charged by Summit pursuant to this Agreement, other
than the Origination Fee, Renewal Fees, Collateral Management Fee, and Supplemental Fee.

“Outstanding Advances” means Advances for which Summit has not received Collected Payments in
full and includes Advances against Chargeback Accounts for which Collected Payments in full have
not been received and the full re-purchase price has not been paid.

“Overadvance” means (a) the amount by which the Outstanding Advances exceed the Maximum Credit
Line, or (b) the amount by which the Outstanding Advances exceed Purchased Accounts which are not
Chargeback Accounts multiplied by the Advance Rate.

“Payment Conversion Fee” means Ten Percent (10%) of any payment received by Client on a
Purchased Account which is not tendered to Summit as required in this Agreement.

“Purchase Price” of an Account means the face amount of the Account less all interest and Fees
and Charges.

“Purchased Account” means an Account that has been purchased by Summit pursuant to Section 2,
Purchase of Accounts.

“Qualified Bank Financing” means financing provided directly by a full service commercial bank
whose deposits are insured by the Federal Deposit Insurance Corporation in the form of a revolving
line of credit for which the primary collateral is Client’s Accounts. Financing provided by a
subsidiary, affiliate or division of such a bank does not qualify as Qualified Bank Financing.

“Renewal Fee” means One Percent (1%) of the Maximum Credit Line. The Renewal Fee shall be due
and payable upon each anniversary of the Agreement. In the event the Maximum Credit Line is
increased after the first year of this Agreement, an additional Renewal Fee shall be charged on the
amount of the increase, prorated from the date of increase to the next anniversary date of this
Agreement. Any additional Renewal Fee shall be due and payable on the effective date of the
increase in the Maximum Credit Line. In the event of a decrease in the Maximum Credit Line, no
refund or credit shall be given for any Renewal Fee which has been paid.

“Reserve” means such amount as may be determined from time to time by Summit in its sole
discretion.

“Settlement Date” means dates set by Summit, which dates shall be at least weekly.

“Summit” means Summit Financial Resources, L.P., a Hawaii limited partnership, its successors
and assigns.

“Supplemental Fee” means the amount by which the Monthly Minimum exceeds amount of interest on
Advances and Collateral Management Fees each calendar month, prorated for the first and last months
of this Agreement.

“UCC” means the Uniform Commercial Code, as adopted now or in the future in the State of Utah.

			
	 	 	 
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2. Purchase of Account.

Client shall request purchase of Accounts by submitting to Summit a Schedule of Accounts and
Bill of Sale, copies of the invoices listed on the Schedule of Accounts and Bill of Sale,
supporting documentation for such invoices as requested by Summit, and such other documentation as
required by Summit. Summit shall notify Client which Accounts are purchased by providing reports
to Client.

Unless otherwise agreed in writing by Summit, upon purchase by Summit of any Account, Client
shall thereafter offer all Accounts owing by that Account Debtor for purchase by Summit. Summit
may also require that all Accounts owing by that Account Debtor which Summit declines to purchase
nonetheless be subject to Section 13 Collection Procedures and be paid to Summit.

Summit may purchase from Client such Acceptable Accounts as Summit elects. All purchases
shall be subject to the terms and conditions of this Agreement. THE OBLIGATION OF SUMMIT TO
PURCHASE ACCOUNTS FROM CLIENT IS DISCRETIONARY AND SUMMIT SHALL HAVE NO OBLIGATION TO PURCHASE ANY
ACCOUNT FROM CLIENT, NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT. Summit may
decline to purchase any Account submitted by Client for any reason or for no reason, without
notice, regardless of any course of conduct or past purchases of Accounts by Summit. Each purchase
by Summit shall be a true purchase with transfer of all legal and equitable title and shall not be
deemed to be a loan agreement or secured transaction. Client shall thereafter have no right, title
or interest in or to Purchased Accounts. Client shall make appropriate entries on its books and
records disclosing the sale of Purchased Accounts to Summit.

Summit shall be the sole and exclusive purchaser of Client’s Accounts. Client will not sell,
factor or otherwise finance its Accounts and shall not grant any other security interest in its
Accounts or Inventory.

3. Purchase Price of Accounts.

The Purchase Price shall be payable as follows: (i) an amount equal to the face amount of the
Account multiplied by the Advance Rate shall be payable upon purchase of the Account by Summit; and
(ii) the balance of the Purchase Price shall be payable after receipt of Collected Payments in full
for the Purchased Account, such balance to be paid on the next Settlement Date; provided, however,
that notwithstanding anything to the contrary in this Agreement, Summit shall not be obligated to
make any Advance if, after making the Advance, the amount of all Outstanding Advances will exceed
the Maximum Credit Line.

Payment shall be made in accordance with any written instructions of Client which are agreed
to by Summit. Absent other instructions, payment shall be made by mailing a check to Client.

4. Interest, Fees and Charges.

Interest shall accrue on Outstanding Advances, both before and after judgment, from the date
of disbursement until receipt of Collected Payments, at the Daily Funds Rate. Upon occurrence of
an Event of Default, interest on Outstanding Advances shall thereafter accrue, both before and
after judgment, at the Default Rate until receipt of Collected Payments.

In addition, Client shall pay Summit the Fees and Charges. The Collateral Management Fees are
for monitoring of the Collateral, collection of the Accounts, and administration of this Agreement.
The Collateral Management Fees are not intended to be and shall not be construed to be interest.

Interest and Fees and Charges may be deducted from Advances or from Collected Payments.

			
	 	 	 
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5. Recourse Purchases.

Unless specifically designated otherwise in writing by Summit, all Accounts shall be purchased
with recourse and shall become a Chargeback Account if not paid in full by the Account Due Date.

6. Re-Purchase Obligation and Chargeback Accounts.

If a Purchased Account is not paid in full by the Account Due Date, or if at any time Summit
determines that the Purchased Account is no longer an Acceptable Account, the Purchased Account
shall thereupon automatically be a Chargeback Account without any action by Summit.

Client shall immediately re-purchase all Chargeback Accounts by paying Summit the amount of
the outstanding Advance against the Chargeback Account, plus accrued interest, and Collateral
Management Fees thereon.

Interest shall accrue on Chargeback Accounts at the Default Rate until the re-purchase amount
is paid in full.

7. Overadvance.

Authorized Overadvances shall be due upon demand by Summit. Authorized Overadvances shall
accrue interest at the Daily Funds Rate plus Three Percent (3%) per annum.

If at any time an Overadvance exists which is not an Authorized Overadvance, Client shall
immediately make payment to Summit of an amount equal to the Overadvance. If such payment is not
immediately made, interest shall accrue on the Overadvance at the Default Rate regardless of
whether Summit waives the Event of Default caused by such non-payment.

8. Reserve.

Summit may fund the Reserve by withholding amounts owing to Client for Advances or deducting
amounts from Collected Payments.

Upon non-renewal of the Financing Period, termination of the right of Client to submit
Accounts to Summit as provided in Section 19, Renewal of Financing Period and Termination of
Financing, and payment of all amounts owing to Summit by Client, any balance of the Reserve
shall be paid to Client, provided that if Summit has reasonable grounds to believe that any
collections or other payments received by Summit may be dishonored, voided, or preferential, or
claims may be made against Summit for which Client would be liable, Summit may continue to hold the
Reserve so long as such matters are outstanding and unresolved.

Summit shall be free to use the Reserve as working capital or as Summit otherwise determines.
Summit shall have no obligation to segregate, not commingle, or otherwise account for the use of
the Reserve. Client shall not be entitled to any interest on the Reserve. The Reserve shall be a
debt owed to Client by Summit, payable in accordance with the terms and conditions of this
Agreement.

9. Application of Payments and Collections.

Summit may apply payments and recoveries first to Fees and Charges, second to outstanding and
accrued interest, and third to Outstanding Advances.

10. Setoff and Deduction by Summit.

As to all amounts owing to Summit by Client, Summit may (i) deduct such amount from Collected
Payments received on Accounts, (ii) setoff and deduct such amount against Advances or any amount
owing
by Summit to Client, (iii) demand payment from Client whereupon Client shall promptly pay such
amount to Summit, or (iv) exercise any combination of the alternatives set forth in this Section or
available under this Agreement, at law, or in equity.

			
	 	 	 
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11. Excess Interest.

It is the intent of the parties to comply with any usury law applicable to this Agreement and
to all amounts owing pursuant to this Agreement and it is understood and agreed that in no event
and upon no contingency shall Client or any guarantor be required to pay interest in excess of the
rate allowed by any laws of any state which are determined to be applicable and governing. The
intention of the parties being to conform strictly to any applicable usury laws, this Agreement
shall be held to be subject to reduction to the amount allowed under any applicable and governing
usury laws as now or hereafter construed by the courts having jurisdiction. In the event Summit
receives any interest under this Agreement in excess of any highest permissible rate under any
applicable and governing law, such excess interest (including simple interest thereon at the
highest permissible rate which is applicable and governing) shall be promptly applied to the
amounts owing by Client hereunder and then to Outstanding Advances. To the extent such excess
interest is greater than such amounts, Summit shall promptly remit such overage to Client.

12. Reports and Audits.

Upon request, which request may be made as frequently as determined by Summit, Client will
promptly submit to Summit a current Account Debtor list, which shall include the name, address,
contact person name, phone number and fax number for each active Account Debtor and such other
records and reports concerning its Accounts, Inventory, the Collateral, and operations as may be
requested by Summit.

Client shall, at any reasonable time and from time to time, permit Summit or any
representative of Summit to conduct field audits, examine, audit, and make copies of and extracts
from the records and books of, and visit and inspect the Collateral, properties and assets of,
Client, and to discuss the affairs, finances, and Accounts of Client with any of Client’s officers,
directors, and partners and with Client’s independent accountants.

13. Collection Procedures.

a. Unless directed otherwise in writing by Summit, Client shall promptly mail an invoice to
each Account Debtor on each Purchased Account, which invoice shall be stamped or printed with a
notice, in a form acceptable to Summit, stating that the Account is payable to Summit and providing
payment instructions. Except as agreed otherwise in writing by Summit, Summit shall have the
exclusive right to collect and to receive all payments on all Purchased Accounts. Client shall not
otherwise bill for, submit any invoice, or otherwise attempt to collect any Purchased Account,
except as authorized in writing by Summit. Summit is authorized to notify Account Debtors of the
assignment and purchase of Client’s Accounts and to direct Account Debtors to make all payments on
Purchased Accounts directly to Summit.

b. Client authorizes Summit to contact Account Debtors concerning verification and payment of
Accounts and to settle or compromise any Account, in the sole discretion of Summit subject only to
acting in good faith. Client hereby waives and releases any and all claims relating to or arising
out of any act or omission by Summit in the verification and collection of the Accounts, excluding
those based on gross negligence or intentional misconduct.

c. All collections of Purchased Accounts shall be handled by Summit. Collection of Accounts
in a commercially reasonable manner does not require, and Summit is not obligated, to commence any
legal action, including the sending of an attorney’s demand letter, to collect any Account. Client
acknowledges and agrees that Summit is not a collection agency and will not provide debt collection
services for Client’s Accounts. If any Purchased Account is not timely paid, Summit may, but is
not obligated to, engage a collection agency, attorney or other service provider to collect
Purchased Accounts. All commissions, fees and charges of any such collection agency, attorney or
other service provider shall
be paid by Client. CLIENT HEREBY WAIVES AND RELEASES ANY AND ALL CLAIMS RELATING TO OR
ARISING OUT OF ANY ACT OR OMISSION BY SUMMIT IN THE COLLECTION OF PURCHASED ACCOUNTS, GROSS
NEGLIGENCE AND INTENTIONAL MISCONDUCT EXCEPTED.

			
	 	 	 
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d. Client shall promptly and completely respond to all requests from Summit for any
information or records requested to assist in collection of Accounts. If Client fails to respond
to any request within Fifteen (15) days, Summit may deem the Account to no longer be an Acceptable
Account.

e. Upon inquiry from an Account Debtor or upon request of Summit, Client shall notify the
Account Debtor to make payment directly to Summit.

f. Any payments received by Client on Purchased Accounts shall be held in trust by Client for
Summit. In the event an Account Debtor makes payment to Client on any Purchased Account, Client
shall immediately notify Summit of the payment and deliver the payment to Summit. If payment is
made in cash, such payment shall be immediately delivered to Summit. If payment is made by check
or similar instrument, such instrument shall be immediately delivered to Summit in the form
received without negotiation. If payment is made by electronic funds transfer, Client shall
immediately forward such payment to Summit by electronic funds transfer.

If any payment received by Client on any Account is deposited or negotiated by Client, or if
Client fails to tender the payment to Summit within Five (5) Banking Business Days of receipt by
Client, Client shall promptly pay Summit the Payment Conversion Fee.

Client acknowledges and agrees that it has no right, title or interest whatsoever in the funds
constituting payment of Purchased Accounts, that said funds are the sole and exclusive property of
Summit, and that any use of or interference with said funds by Client will result in civil and
criminal liability.

g. Client shall immediately notify Summit of any dispute concerning any Purchased Account and
of any bankruptcy filing, lien, garnishment or other legal action concerning any Purchased Account
or Account Debtor.

h. Summit may, but has no duty to, and Client hereby authorizes Summit to, execute and file,
on behalf of Client or in Summit’s name, mechanic’s liens and all other notices and documents to
create, perfect, preserve, foreclose and/or release any lien for work performed or materials
provided to improve real property.  Except as otherwise instructed by Summit, Client is authorized
to file any such mechanic’s liens and other notices and documents in Client’s discretion.

14. Acceptable Accounts.

An Acceptable Account must meet all of the following requirements and conditions unless waived
in writing by Summit.

a. Client has sole and unconditional good title to the Account and the Account and any goods
sold to create the Account are free from any other security interest, assignment, lien or other
encumbrance of any type.

b. The Account is a bona fide obligation of the Account Debtor for the amount identified on
the records of Client and there have been no payments, deductions, credits, payment terms, or other
modifications or reductions in the amount owing on such Account except as reported to Summit in
writing prior to making an Advance based on the Account.

c. The Account must be submitted to Summit within Sixty (60) days of the date the goods are
sold or the services performed giving rise to the Account are completed.

			
	 	 	 
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d. There are no defenses or setoffs to payment of the Account which can be asserted by way of
defense or counterclaim against Client or Summit.

e. The Account will be timely paid in full by the Account Debtor.

f. There have been no extensions, modifications, or other agreements relating to payment of
such Account except as reported to Summit in writing prior to making an Advance.

g. Any services performed or goods sold which give rise to the Account have been completed and
delivered and have been rendered or sold in compliance with all applicable laws, ordinances, rules
and regulations and were performed or sold in the ordinary course of Client’s business.

h. The Account Debtor is located or authorized to do business within the United States or the
Account has been insured under a policy of credit insurance from an insurer and upon terms
acceptable to Summit.

i. No proceeding has been commenced or petition filed under any bankruptcy or insolvency law
by or against the Account Debtor; no receiver, trustee or custodian has been appointed for any part
of the property of the Account Debtor; and no property of the Account Debtor has been assigned for
the benefit of creditors.

j. Neither the Account, nor any invoice, credit application, bill, billing memorandum,
correspondence, or any other document relating to an Account, contracts for or charges interest or
any other charge in excess of the maximum non-usurious rate allowed pursuant to applicable law.

k. The Account is not past the Account Due Date.

l. If the total of the outstanding Purchased Accounts owing by any single Account Debtor
equals Sixty Percent (60%) or more of the total outstanding Purchased Accounts owing by all
Account Debtors, the portion of the Purchased Accounts owing by that single Account Debtor in
excess of this limit shall not be Acceptable Accounts.

m. If Twenty-Five Percent (25%) or more of the outstanding Accounts owing by an Account Debtor
are past the Account Due Date, none of the Accounts owing by that Account Debtor shall be
Acceptable Accounts.

n. For all Accounts arising under any contract, purchase order, or any other agreement with
the United States Government, or any agency, branch, division, or subdivision thereof, (i) the
Account Debtor has acknowledged and consented to Client’s assignment of Accounts to Summit and has
agreed, in a form acceptable to Summit, to remit payments directly to Summit, and (ii) Summit has
verified, as necessary in Summit’s sole discretion, that the Account is a bona fide obligation of
the Account Debtor for the amount identified on the records of Client and that the Account will be
timely paid in full by the Account Debtor.

15. Grant of Security Interest.

Client hereby grants Summit a security interest in the Collateral. Client and Summit
acknowledge their mutual intent that all security interests contemplated herein are given as a
contemporaneous exchange for new value to Client, regardless of when Advances to Client are
actually made or when the Collateral is acquired.

The Collateral shall secure all of Client’s present and future debts, obligations, and
liabilities of whatever nature to Summit, including, without limitation, (a) all obligations of
Client under this
Agreement, and (b) transactions in which the documents evidencing the indebtedness refer to
this grant of security interest as providing security therefore.

			
	 	 	 
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Client’s obligations under this Agreement may also be secured by other collateral as may be
evidenced by other documentation apart from this Agreement.

16. Representations, Warranties and Covenants of Client.

Client represents, warrants, and covenants that:

a. Client is a corporation organized and existing in good standing under the laws of the State
of Delaware.

b. The complete and exact name of Client is Irvine Sensors Corporation. The organizational
number of Client assigned by its state of organization is 2149404. During the five years preceding
the date of this Agreement: (a) Client has not been known by or used any legal, fictitious or
trade name; (b) Client has not changed its name in any respect; (c) Client has not been the
surviving entity of a merger or consolidation; and (d) Client has not acquired all or substantially
all of the assets of any person or entity.

c. The execution, delivery and performance by Client of this Agreement have been duly
authorized by all necessary action on the part of Client, and are not inconsistent with any
organizational documents of Client, do not and will not contravene any provision of, or constitute
a default under, any indenture, mortgage, contract or other instrument to which Client is a party
or by which it is bound, and upon execution and delivery hereof, this Agreement will constitute a
legal, valid and binding agreement and obligation of Client, enforceable in accordance with its
terms.

d. All financial statements of Client, and of any guarantor of Client’s obligations under this
Agreement, fully and fairly present the financial condition of Client and any guarantor as of the
date thereof and the results of operations for the period or periods covered thereby. Since the
date of such financial statements there has been no material adverse change in the financial
condition of Client or any guarantor. Client agrees to submit financial statements for Client to
Summit and Client shall cause any guarantor to submit financial statements for such guarantor to
Summit as may be requested by Summit, all such financial statements to fully and fairly present the
financial condition of Client or such guarantor, as the case may be, and to be in a form and from a
firm acceptable to Summit.

e. Client shall conduct its business in a lawful manner and in compliance with all applicable
federal, state, and local laws, ordinances, rules, regulations, and orders and shall pay when due
all lawfully imposed taxes upon its property, business and income. No later than the fifth day of
each month, Client shall certify in writing to Summit, in a form acceptable to Summit, that all
federal, state, and other taxes and assessments owing during the prior month have been paid in
full. Such certification shall be accompanied by proof of payment in a form acceptable to Summit.

f. This Agreement, the financial statements referred to herein, and all other statements
furnished by Client to Summit in connection herewith contain no untrue statement of a material fact
and omit no material fact necessary to make the statements contained therein or herein not
misleading. Client represents and warrants that it has not failed to disclose in writing to Summit
any fact that materially and adversely affects, or is reasonably likely to materially and adversely
affect, Client’s business, operations, properties, prospects, profits, condition (financial or
otherwise), or ability to perform this Agreement.

g. No change of control of Client or any guarantor shall occur except with prior written
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Change of control means (1) in the case of a corporation, any sale, assignment, or other
transfer of more than Twenty-Five Percent (25%) of the stock of such corporation or the persons who
are the directors of such corporation as of the date of this Agreement fail to constitute a
majority of the Board of Directors of such corporation, or the president or any other executive
officer of such corporation resigns, is terminated, or otherwise ceases to function in such
position; (2) in the case of a general or limited partnership, any sale, assignment, or other
transfer of more than Twenty-Five Percent (25%) of the general partnership interests of such
partnership, any of the persons or entities who are a general partner of such partnership as of the
date of this Agreement ceases to be a general partner of such partnership, the occurrence of any
change of control in any general partner in such partnership, or any general manager or person
holding a similar position in such partnership resigns, is terminated, or otherwise ceases to
function in such position; or (3) in the case of a limited liability company, any of the persons or
entities who are members of such limited liability company as of the date of this Agreement ceases
to be a member of such limited liability company, any managing member or manager of such limited
liability company resigns, is terminated, or otherwise ceases to function in such position, or the
occurrence of any change of control in any such member, managing member or manager of such limited
liability company.

17. Representations, Warranties and Covenants Concerning Collateral.

Client represents, warrants, and covenants concerning the Collateral as follows:

a. All Purchased Accounts are Acceptable Accounts.

b. Client is the sole owner of the Collateral.

c. The Inventory and Accounts are not subject to, and will be kept free and clear of, any
security interest, lien, assignment, or other encumbrance of any nature whatsoever except for
current taxes and assessments which are not delinquent, the security interests created by this
Agreement, and assignments and security interests created and disclosed in writing to Summit prior
to execution of this Agreement.

d. Summit is authorized to file UCC Financing Statements concerning the Collateral. Client
agrees to execute any notices of assignment and other documents reasonably requested by Summit for
perfection or enforcement of the rights and interests of Summit, and to give good faith, diligent
cooperation to Summit, and to perform such other acts reasonably requested by Summit for perfection
and enforcement of the rights and interests of Summit. Summit is authorized to file, record, or
otherwise utilize such documents as it deems necessary to perfect and/or enforce any security
interest or lien granted hereunder.

e. The place of business of Client, or, if Client has more than one place of business, the
location of its chief executive office, is located in the State of California. During the five
years preceding the date of this Agreement, this location has not been located outside the State of
California. This location will not be moved from the State of California without at least Thirty
(30) days prior written notice to Summit.

f. The Collateral and all records of Client pertaining to the Collateral are located in the
State of California. During the five years preceding the date of this Agreement, the Collateral
and all records of Client pertaining to the Collateral have not been located outside the State of
California.

g. Client shall keep the Equipment, if any, in good repair and be responsible for any loss or
damage to the Equipment. Client shall pay when due all taxes, license fees and other charges on
the Equipment. Client shall not sell, misuse, conceal, or in any way dispose of the Equipment or
permit it to be used unlawfully or for hire or contrary to the provisions of any insurance
coverage. Risk of loss of the Equipment shall be on Client at all times unless Summit takes
possession of the Equipment. Loss of or damage to the Equipment or any part thereof shall not
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h. Client agrees to insure the Equipment and Inventory, at Client’s expense, against loss,
damage, theft, and such other risks as Summit may request to the full insurable value thereof with
insurance companies and policies satisfactory to Summit. Summit shall be named as an additional
insured and loss payee under such policies. All such policies shall provide for a minimum Ten (10)
days written cancellation notice to Summit. Upon request, policies or certificates attesting to
such coverage shall be delivered to Summit. Insurance proceeds may be applied by Summit toward
payment of any obligation secured by this Agreement, whether or not due, in such order of
application as Summit may elect.

i. So long as no Event of Default has occurred, Client shall have the right to sell or
otherwise dispose of the Inventory in the ordinary course of business. No other disposition of the
Inventory may be made without the prior written consent of Summit.

18. Assignment of Rights Concerning Collateral.

Client hereby assigns to Summit all of its interest in and rights to any Inventory which may
be returned by Account Debtors, all rights as an unpaid vendor or lienor, all rights of stoppage in
transit, repletion and reclamation relating thereto, all rights in and to all security therefor and
guarantees thereof, all rights against third parties with respect thereto, and all rights under the
UCC and any other law, statute, regulation or agreement.

19. Renewal of Financing Period and Termination of Financing.

Each Financing Period shall automatically renew for an additional Financing Period unless
Client or Summit provides written notice of non-renewal at least Sixty (60) days prior to the end
of the current Financing Period.

If Client elects to terminate a Financing Period at any time other than the last day of a
Financing Period, except to replace this financing with Qualified Bank Financing as provided herein
after Seven (7) months from the date hereof, or if an Event of Default terminates the financing of
Client’s Accounts, Client shall pay Summit a termination fee equal to the greater of (a) Two
Percent (2%) of the Maximum Credit Line, or (b) the Supplemental Fee for the remainder of the
Financing Period, which termination fee shall be due and payable in full upon such termination.

Client must provide at least Sixty (60) days written notice to Summit of intent to replace
this financing with Qualified Bank Financing, which notice shall itemize the material financial
terms of the Qualified Bank Financing. Within Thirty (30) days of receipt of such notice, Summit
may provide written notice to Client that Summit will match the material financial terms of the
Qualified Bank Financing whereupon Summit and Client shall amend this Agreement to match the
material financial terms of the Qualified Bank Financing and this Agreement shall remain in force.

Upon such non-renewal or termination, all other terms and provisions of this Agreement,
including, without limitation, the security interests granted in favor of Summit, shall remain in
full force and effect until all amounts owing to Summit hereunder have been finally paid in full,
except that Client shall be excused from the covenants herein providing that Summit shall be the
sole and exclusive purchaser and source of financing for Client’s Accounts.

Upon expiration of the final Financing Period or any other termination, at the election of
Summit, all outstanding Purchased Accounts will immediately be Chargeback Accounts and all amounts
owing to Summit by Client pursuant to this Agreement shall, without notice of such election,
accelerate and become immediately due and payable in full.

			
	 	 	 
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20. Right to Perform for Client.

Summit may, in its sole discretion, elect to discharge any security interest, lien or other
encumbrance upon any Accounts, elect to pay any subcontractor, vendor, materialman, laborer, or
other
person to whom Client is obligated, whether or not any mechanic’s lien or other encumbrance
has been asserted, and elect to pay any insurance charges payable by Client or provide insurance as
required herein if Client fails to do so. Any such payments and all expenses incurred in
connection therewith shall be immediately due and payable by Client. Summit shall have no
obligation to discharge any such security interest, lien or other encumbrance or pay such insurance
charges or provide such insurance.

21. Power of Attorney to Endorse Checks.

Client does hereby make, constitute and appoint Summit, and its designees, as its true and
lawful attorneys-in-fact, with full power of substitution, with full power to endorse the name of
Client upon any checks or other forms of payment on Accounts and to effect the deposit and
collection thereof. This power of attorney is irrevocable and coupled with an interest. Such
power may be exercised at any time. Client does hereby make, constitute, and appoint Summit, and
its designees, as Client’s true and lawful attorneys in fact, with full power of substitution, such
power to be exercised only upon the occurrence of an Event of Default, to: (a) receive, open, and
dispose of all mail addressed to Client; (b) cause mail relating to Accounts of Client to be
delivered to a designated address of Summit where Summit may open all such mail and remove
therefrom any payment of such Accounts; and (c) Summit may do any and all other things necessary or
proper to carry out the intent of this Agreement and to perfect and protect the rights of Summit
created under this Agreement. This power of attorney is irrevocable and coupled with an interest.
Exercise of any of the foregoing powers shall be in the sole discretion of Summit without any duty
to do so.

22. Disclosure of Information.

Client hereby consents to Summit disclosing to any financial institution or investor providing
financing for Summit or participating in this financing, any and all information, knowledge,
reports and records, including, without limitation, financial statements, concerning Client or any
guarantor.

23. Interest on Unpaid Amounts and Late Fees.

In the event Client fails to pay any amount owing to Summit when due, Client agrees to pay
interest on such amount from the due date until paid, both before and after judgment, at the
Default Rate.

24. No Third Party Beneficiary.

This Agreement is made for the sole and exclusive benefit of Summit and Client and is not
intended to benefit any third party. No such third party may claim any right or benefit or seek to
enforce any term or provision of this Agreement.

25. Indemnification.

CLIENT AGREES TO INDEMNIFY SUMMIT FOR ANY AND ALL CLAIMS WHICH MAY BE ASSERTED AND FOR
LIABILITIES AND DAMAGES WHICH MAY BE AWARDED AGAINST SUMMIT, AND FOR ALL REASONABLE ATTORNEYS FEES,
LEGAL EXPENSES AND OTHER EXPENSES INCURRED IN DEFENDING SUCH CLAIMS, ARISING FROM OR RELATING IN
ANY MANNER TO THE PURCHASE, FINANCING AND/OR COLLECTION OF ACCOUNTS PURSUANT TO THE TERMS OF THIS
AGREEMENT, EXCLUDING CLAIMS BASED ON THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUMMIT. SUMMIT
SHALL HAVE SOLE AND COMPLETE CONTROL OF THE DEFENSE OF ANY SUCH CLAIMS, AND IS HEREBY GIVEN
AUTHORITY TO SETTLE OR OTHERWISE COMPROMISE ANY SUCH CLAIMS AS SUMMIT, IN GOOD FAITH, DETERMINES
SHALL BE IN ITS BEST INTERESTS.

			
	 	 	 
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26. Default and Remedies.

Time is of the essence of this Agreement. The occurrence of any of the following events shall
constitute a default under this Agreement and be termed an “Event of Default”:

a. Failure by Client to pay any amount to Summit when due.

b. Client fails in the payment or performance of any obligation, covenant, agreement, or
liability created by this Agreement.

c. Any representation, warranty, or financial statement made by or on behalf of Client, or any
guarantor, proves to have been materially false or materially misleading when made or furnished.

d. Any default or event which, with the giving of notice or the passage of time or both, would
constitute a default, occurs on any indebtedness of Client or any guarantor.

e. Client or any guarantor becomes dissolved or terminated, dies, or experiences a business
failure.

f. A receiver, trustee, or custodian is appointed for any part of Client’s or any guarantor’s
property, or any part of Client’s or any guarantor’s property is assigned for the benefit of
creditors.

g. Any proceeding is commenced or petition filed under any bankruptcy or insolvency law by or
against Client or any guarantor.

h. Any judgment is entered against Client or any guarantor which may materially affect
Client’s or any guarantor’s financial condition.

i. Client or any guarantor becomes insolvent or unable to pay its debts as they mature.

j. The Purchased Accounts become, for any reason whatsoever, substantially delinquent or
uncollectible.

Waiver of any Event of Default shall not constitute a waiver of any subsequent Event of
Default.

Upon the occurrence of any Event of Default and at any time thereafter, at the election of
Summit and without notice of such election, Summit may immediately terminate the right of Client to
request Advances, treat all outstanding Purchased Accounts as Chargeback Accounts, and all
obligations of Client to Summit shall accelerate and become immediately due and payable in full and
Summit shall have all rights and remedies created by or arising from this Agreement and the
following rights and remedies, in addition to all other rights and remedies existing at law, in
equity, or by statute:

a. Summit shall have all the rights and remedies available under the UCC.

b. Summit shall have the right to enter upon any premises where the Collateral or records
pertaining thereto may be and take possession of the Collateral and records relating thereto.

c. Upon request of Summit, Client shall, at the expense of Client, assemble the Collateral and
records relating thereto at a place designated by Summit and tender the Collateral and records to
Summit.

d. Without notice to Client, Summit may obtain the appointment of a receiver of the business,
property and assets of Client and Client hereby consents to the appointment of Summit or such
person as Summit may designate as such receiver.

			
	 	 	 
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e. Summit may sell, lease or otherwise dispose of any or all of the Collateral and, after
deducting the reasonable costs and out-of-pocket expenses incurred by Summit, including, without
limitation, (i) reasonable attorneys fees and legal expenses, (ii) transportation and storage
costs, (iii) costs of advertising sale of the Collateral, (iv) sale commissions, (v) sales tax,
(vi) costs for improving or repairing the Collateral, and (vii) costs for preservation and
protection of the Collateral, and apply the remainder against, or to hold as a reserve against, the
obligations secured by this Agreement.

Client and any guarantors shall be liable for all deficiencies owing on any obligations
secured by the Collateral after liquidation of the Collateral.

Upon occurrence of an Event of Default, the interest rate on obligations of Client owing to
Summit shall be increased to the Default Rate. After the occurrence of an Event of Default, Summit
shall retain the exclusive right to collect outstanding Chargeback Accounts, regardless of whether
the Chargeback Account has been repurchased by Client, until all obligations owing to Summit by
Client have been paid in full.

The rights and remedies herein conferred are cumulative and not exclusive of any other rights
or remedies and shall be in addition to every other right, power and remedy herein specifically
granted or existing at law, in equity, or by statute which Summit might otherwise have and may be
exercised from time to time and as often and in such order as may be deemed expedient by Summit.
No delay or omission by Summit in the exercise of any such right, power or remedy or in the
pursuance of any remedy shall impair any such right, power or remedy or be construed to be a waiver
of any Event of Default or to be an acquiescence therein.

27. Payment of Expenses and Attorneys Fees.

Client shall pay all reasonable expenses of Summit relating to the negotiation, documentation,
and administration of this Agreement, including, without limitation, title insurance, recording
fees, filing fees, fees of collection services, reasonable attorneys fees and legal expenses,
returned check fees, photocopies, postage, audit and field examination fees and costs, inspection
fees, wire transfer fees, and overnight delivery expenses, whether incurred in making Advances, in
future amendments or modifications to this Agreement, or in ongoing administration of this
financing.

Upon occurrence of an Event of Default, Client agrees to pay all costs and expenses, including
reasonable attorney fees and legal expenses, incurred by Summit in enforcing or exercising any
remedies under this Agreement or any other rights and remedies.

Client agrees to pay all expenses, including reasonable attorney fees and legal expenses,
incurred by Summit in any bankruptcy proceedings of any type involving Client, any guarantor, this
Agreement, the Purchased Accounts, or the Collateral, including, without limitation, expenses
incurred in modifying or lifting the automatic stay, determining adequate protection, use of cash
collateral or relating to any plan of reorganization.

28. Bankruptcy Considerations.

Client covenants that it will notify Summit of any voluntary or involuntary bankruptcy
petition under the United States Bankruptcy Code filed by or against Client or any guarantor, or
any assignment for the benefit of creditors by Client or any guarantor, within Twenty-Four (24)
hours of any such filing or assignment. Failure to notify Summit of any such bankruptcy filing or
assignment within Twenty-Four (24) hours shall constitute an Event of Default.

Client acknowledges that this Agreement is a contract to extend debt financing or financial
accommodations to or for the benefit of Client within the meaning of 11 U.S.C. §365(c)(2) and, as
such, may not be assumed or assigned. Summit shall be under no obligation to provide any financing
under this Agreement from and after the filing of any voluntary or involuntary petition against
Client.

			
	 	 	 
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29. Limitation of Consequential Damages.

Summit and its general and limited partners, the partners, members, officers and directors
thereof, and the employees, representatives, agents, and attorneys of Summit, shall not be liable
to Client or any guarantor for consequential damages arising from or relating to any breach of
contract, tort, or other wrong in connection with the negotiation, documentation, administration of
this Agreement or collection of the Accounts.

30. Force Majeure.

In the event Summit is unable to carryout its obligations under this Agreement due to reasons
beyond its reasonable control, it is agreed that the obligations of Summit hereunder shall be
suspended during the continuance of such inability, Summit shall not be liable for damages, and
Client shall not be entitled to any refund of amounts paid, provided that such cause shall be
remedied as far as reasonably possible with all reasonable dispatch.

31. Revival Clause.

If the incurring of any debt by Client or the payment of any money or transfer of property to
Summit by or on behalf of Client or any guarantor (including collection of any Account) should for
any reason subsequently be determined to be “voidable” or “avoidable” in whole or in part within
the meaning of any state or federal law (collectively “voidable transfers”), including, without
limitation, fraudulent conveyances or preferential transfers under the United States Bankruptcy
Code or any other federal or state law, and Summit is required to repay or restore any voidable
transfers or the amount or any portion thereof, or upon the advice of counsel for Summit is advised
to do so, then, as to any such amount or property repaid or restored, including all reasonable
costs, expenses, and attorneys fees of Summit related thereto, the liability of Client and any
guarantor shall automatically be revived, reinstated and restored and shall exist as though the
voidable transfers had never been made.

32. Joint and Several Liability.

Client and any guarantors shall each be jointly and severally liable for all obligations and
liabilities arising under this Agreement and the other agreements, documents, obligations, and
transactions contemplated by this Agreement.

33. Severability of Invalid Provisions, Headings, Interpretations of Agreement.

Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.

All references in this Agreement to the singular shall be deemed to include the plural when
the context so requires, and visa versa. References in the collective or conjunctive shall also
include the disjunctive unless the context otherwise clearly requires a different interpretation.

34. Notices.

All notices which are expressly required to be in writing may be mailed, postage prepaid,
addressed to the address stated at the beginning of this Agreement, or to such other address which
is provided in accordance with this Section. Any notice so mailed shall be deemed given Three (3)
days after mailing. Any notice otherwise delivered shall be deemed given when received by the
addressee. Any notice which is not expressly required to be given in writing may be given orally.

			
	 	 	 
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35. Survival of Representations, Warranties and Covenants.

All agreements, representations, warranties and covenants made herein by Client shall survive
the execution and delivery of this Agreement and any bankruptcy proceedings involving Client and
shall continue in effect so long as any obligation to Summit contemplated by this Agreement is
outstanding and unpaid, notwithstanding any termination of this Agreement.

36. Jury Waiver, Exclusive Jurisdiction of Utah Courts.

CLIENT HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM
OR COUNTERCLAIM, WHETHER IN CONTRACT OR IN TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY
RELATED TO THIS AGREEMENT.

Client acknowledges that by execution and delivery of this Agreement, Client has transacted
business in the State of Utah and Client hereby voluntarily submits to, consents to, and waives any
defense to the jurisdiction of courts located in the State of Utah as to all matters relating to or
arising from this Agreement.

EXCEPT AS EXPRESSLY AGREED IN WRITING BY SUMMIT, THE STATE AND FEDERAL COURTS LOCATED IN THE
STATE OF UTAH SHALL HAVE SOLE AND EXCLUSIVE JURISDICTION OF ANY AND ALL CLAIMS, DISPUTES, AND
CONTROVERSIES ARISING UNDER OR RELATING TO THIS AGREEMENT. NO LAWSUIT, PROCEEDING, ALTERNATIVE
DISPUTE RESOLUTION, OR ANY OTHER ACTION RELATING TO OR ARISING UNDER THIS AGREEMENT MAY BE
COMMENCED OR PROSECUTED IN ANY OTHER FORUM, EXCEPT AS EXPRESSLY AGREED IN WRITING BY SUMMIT.

37. Assignability.

This Agreement is not assignable or transferable by Client and any such purported assignment
or transfer is void. This Agreement shall be binding upon the successors of Client. Client
acknowledges and agrees that Summit may assign all or any portion of this Agreement, including,
without limitation, assignment of the rights, benefits and remedies of Summit hereunder without any
assignment of the duties, obligations or liabilities of Summit hereunder, and may sell
participations in this financing.

38. Integrated Agreement, Amendment, Headings, Governing Law.

This Agreement replaces and supersedes any prior agreement between Client and Summit. This
Agreement and the documents identified or contemplated herein constitute the entire agreement
between Summit and Client as to the subject matter hereof and may not be altered or amended except
by written agreement signed by Summit and Client. No provision hereof may be waived by Summit
except upon written waiver executed by Summit. This Agreement shall be governed by and construed
in accordance with the laws of the State of Utah and this Agreement shall be deemed to have been
executed by the parties in the State of Utah. This Agreement shall not be deemed to have been
entered into until accepted by Summit at its chief executive office in Salt Lake City, Utah and
shall be performed by Summit and the financing administered by Summit in Salt Lake City, Utah.

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Dated: June 16, 2009.

	 	 	 	 	 	 	 	 	 
	 	 	Summit Financial Resources, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	/s/ Mark J. Picillo	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	Mark J. Picillo 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	SVP 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Irvine Sensors Corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	/s/ John J. Stuart, Jr. 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	John J. Stuart, Jr. 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	Sr. VP & Chief Financial Officer 	 	 
	 

	 	 	 	 	 	 	 	 

			
	 	 	 
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