Document:

f10k2008ex4iii_fund.htm

    Exhibit 4.3

     

    
      EXHIBIT
D

      

      THE
SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES
HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS
AMENDED, (II) SUCH SECURITIES MAY BE SOLD WITHOUT RESTRICTIONS OR VOLUME
LIMITATIONS PURSUANT TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR QUALIFICATION UNDER
APPLICABLE STATE SECURITIES LAWS.

      

      THIS
WARRANT SHALL BE VOID AFTER 5:00 P.M. EASTERN TIME ON DECEMBER 31,
2014.

      

      No.
___

      

      FUND.COM
INC.

       

      WARRANT
TO PURCHASE 2,338,333 SHARES OF

      CLASS
A COMMON STOCK, PAR VALUE $0.001 PER SHARE

      

      FOR VALUE RECEIVED, IP GLOBAL INC. (the “Lender”) and/or its
Affiliates (collectively, the “Warrant Holder”), is
entitled to purchase, subject to the terms and condition of this Warrant, from
FUND.COM INC., a
Delaware corporation (the “Corporation”), at any
time or from time to time from the “Initial Exercise
Date” (as hereinafter defined) and not later than 5:00 P.M., Eastern
time, on the “Warrant
Expiration Date” (as hereinafter defined), an aggregate
of  2,338,333 shares (the “Warrant Shares”) of
the Corporation’s Class A Common Stock (as hereinafter defined), at an exercise
price per Warrant Share equal to sixty cents ($0.60) (the “Exercise
Price”).  The number of Warrant Shares issuable upon exercise
of this Warrant and the Exercise Price shall be subject to adjustment from time
to time as described herein.

      

      This Warrant is the “Warrant” constituting
Exhibit D,
referred to in that certain revolving credit loan agreement dated as of April
30, 2009, by and between the Corporation and the Lender (the “Loan
Agreement”).

      

      The Corporation shall maintain books
for the transfer and registration of the Warrant.  Upon the initial
issuance of this Warrant, the Corporation shall issue and register the Warrant
in the name of the Warrant Holder.

      

      Definitions.                                Unless
otherwise separately defined in this Warrant, all capitalized terms when used
herein shall have the same meaning as they are defined in the Loan
Agreement.  As used in this Warrant, the following terms shall have
the meanings set forth below.

      

      A           “Affiliate” of any
particular Person means any other Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by or under common
control with such Person.  For purposes of this definition, “ control ” (including
the terms “ controlling ,” “
controlled by ”
and “ under common
control with ”) means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or
otherwise.

      

       B.           “Bloomberg” shall mean
Bloomberg, L.P. (or any successor to its function of reporting stock
prices).

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      C.           "Business Day" means
any day, other than a Saturday or Sunday, or a day on which banking institutions
in the State of New York are authorized or obligated by law, regulation or
executive order to close.

      

      D.           “Class A Common Stock”
means the Class A common stock of the Corporation, par value $0.001 per share,
together with any securities into which the common stock may be reclassified and
any additional class of stock of the Corporation having no preference as to
dividends or distributions on liquidation, provided that the shares purchasable
pursuant to this Warrant shall include only shares of Class A Common Stock,
$0.001 par value per share, in respect of which this Warrant is exercisable, or
shares resulting from any subdivision or combination of such Class A Common
Stock, or in the case of any reorganization, reclassification, consolidation,
merger, or sale of the character referred to in Section 4(e) hereof, the stock
or other securities or property provided for in such Section.

      

      E.           “Class A Common Stock Deemed
Outstanding” shall mean the number of shares of Class A Common Stock
actually outstanding (not including shares of Class A Common Stock held in the
treasury of the Corporation), plus (x) pursuant to Section 4(f)(i) hereof, the
maximum total number of shares of Class A Common Stock issuable upon the
exercise of options (the “Options”), as of the
date of such issuance or grant of such Options, if any, and (y) pursuant to
Section 4(f)(ii) hereof, the maximum total number of shares of Class A Common
Stock issuable upon conversion or exchange of convertible securities (the
“Convertible Securities”), as of the date of issuance of such Convertible
Securities, if any.

      

      F.           "Exercise Date" means,
for any one or more exercises of this Warrant, the date specified in the notice
of exercise in the form attached hereto (the "Notice of Exercise"),
so long as a copy of the Notice of Exercise is faxed, emailed or delivered by
other means resulting in receipt by the Corporation before 11:59 p.m, New York
City time, on the Warrant Expiration Date.

      

      G.           "Exercise Price" means
initially Sixty Cents ($0.60) per Warrant Share, or such other amount into which
such Exercise Price may be adjusted pursuant to Section 4 of this
Warrant.

       

      H.            “Initial Exercise
Date” shall mean the date of this Warrant.

      

      I.            “Market Price” means,
as of any Trading Day, (i) the average of the last reported sale prices for the
shares of Class A Common Stock on a national securities exchange which is the
principal trading market for the Class A Common Stock for the twenty (20)
Trading Days immediately preceding such date as reported by Bloomberg or (ii) if
no national securities exchange is the principal trading market for the shares
of Class A Common Stock, the average of the last reported sale prices on the
principal trading market for the Class A Common Stock during the same period as
reported by Bloomberg, or (iii) if market value cannot be calculated as of such
date on any of the foregoing bases, the Market Price shall be the fair market
value as reasonably determined in good faith by the Corporation’s Board of
Directors in the exercise of its good faith judgment.  The manner of
determining the Market Price of the Class A Common Stock set forth in the
foregoing definition shall apply with respect to any other security in respect
of which a determination as to market value must be made hereunder.

      

      J.            “Trading Day” shall
mean any day on which the Class A Common Stock is traded for any period on the
principal securities exchange or other securities market on which the Class A
Common Stock is then being traded.

      

      L.            
“Warrant Expiration
Date” shall mean 5:00 p.m. (Eastern time) on December 31,
2014.

      

      M.            Warrant Holder” shall
mean the collective reference to the Investor, its Affiliates or any one or more
holder(s) of this Warrant.

       

       

       

      
        
          
          

        

        
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      N.           
“Warrant
Shares” shall mean the shares of Class A Common Stock issuable upon the
full or partial exercise of this Warrant, as such shares may be adjusted
pursuant to the terms of this Warrant.

       

      This
Warrant is subject to the following terms, provisions, and
conditions:

       

      Section
1. Manner of
Exercise.

       

       a.           Procedure. Subject
to the provisions hereof, this Warrant may be exercised by the Holder, in whole
or in part, by the surrender of this Warrant, together with a completed exercise
agreement in the form attached hereto (the “Exercise Agreement”), to the
Corporation during normal business hours on any day that banks are generally
open for business in New York City (a “Business Day”) at the Corporation’s
principal executive offices (or such other office or agency of the Corporation
as it may designate by notice to the Holder), and upon (i) payment to the
Corporation in cash, by certified or official bank check or by wire transfer for
the account of the Corporation of the Exercise Price for the Warrant Shares
specified in the Exercise Agreement or (ii) by delivery to the Corporation of a
written notice of an election to effect a Cashless Exercise (as defined in Section 1(c) below)
for the Warrant Shares specified in the Exercise Agreement.  The
Warrant Shares so purchased shall be deemed to be issued to the Holder or such
Holder’s designee, as the record owner of such shares, as of the close of
business on the date on which the completed Exercise Agreement shall have been
delivered, and payment shall have been made for such shares as set forth
above.  Certificates for the Warrant Shares so purchased, representing
the aggregate number of shares specified in the Exercise Agreement, shall be
delivered to the Holder (without restrictive legend thereon when such exercise
occurs while a registration statement registering under the Securities Act of
1933, as amended (the “Securities Act”) the resale of the Warrant Shares so
purchased is effective or such Warrant Shares so purchased may be resold by the
Holder pursuant to Rule 144(i) or any similar successor rule) within a
reasonable time, not exceeding five (5) Business Days, after this Warrant shall
have been so exercised.  The certificates so delivered shall be in
such denominations as may be requested by the Holder and shall be registered in
the name of the Holder or such other name as shall be designated by the
Holder.  If this Warrant shall have been exercised only in part, then,
at the option of the Holder (i) the Holder may surrender this Warrant to the
Corporation and, unless this Warrant has expired, the Corporation shall, at its
expense, within a reasonable time, not exceeding twenty (20) Business Days,
after this Warrant shall have been so exercised, deliver to the Holder a new
Warrant representing the number of shares with respect to which this Warrant
shall not then have been exercised, or (ii) the Holder may retain this Warrant
and the Warrant Shares purchasable under this Warrant shall be reduced by such
number of Warrant Shares so exercised by the Holder and properly delivered by
the Corporation hereunder.

       

      b.           Cashless
Exercise.  Notwithstanding any provisions herein to the
contrary, if during the Exercise Period the fair market value of one share of
the Common Stock is greater than the Exercise Price (at the date of calculation
as set forth below), in lieu of exercising this Warrant by payment of cash or by
check, the Holder may exercise this Warrant in whole or in part by presentation
and surrender of this Warrant to the Corporation at its principal executive
offices, with a written notice of the Holders intention to effect a cashless
exercise, including a calculation of the number of share of Class A Common Stock
to be issued upon such exercise in accordance with the terms hereof (a “Cashless
Exercise”).  In the event of a Cashless Exercise, in lieu of paying
the Exercise Price in cash, the Holder shall surrender this Warrant for that
number of shares of Class A Common Stock determined by multiplying the number of
Warrant Shares to which such Holder would otherwise be entitled by a fraction
(i) the numerator of which shall be the difference between (A) the average
Market Price per share of the Class A Common Stock for the twenty (20) Trading
Days immediately prior to the date the completed Exercise Agreement shall have
been delivered to the Corporation (the “Cashless Exercise Market
Price”) and (B) the Exercise Price (as adjusted to the date of such
calculation), multiplied by the number of shares of Common Stock purchasable
under this Warrant or, if only a portion of this Warrant is being exercised, the
portion of this Warrant being canceled (at the date of such calculation) and
(ii) the denominator of which shall be the Cashless Exercise Market
Price.

       

       

       

      
        
          
          

        

        
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      Section
2. Period of
Exercise.

       

       

      This
Warrant is exercisable at any time or from time to time on or after the date
hereof and before 5:00 p.m., New York, New York time on March 31, 2014 (the
“Exercise
Period”).

       

      Section
3. Certain Agreements of the
Corporation.

       

      The
Corporation hereby covenants and agrees as follows:

      

       a.           Shares to be Fully
Paid.  All Warrant Shares will, upon issuance in accordance
with the terms of this Warrant, be validly issued, fully paid, and nonassessable
and free from all taxes, liens, and charges with respect to the issue
thereof.

       

       b.           Reservation of
Shares.  During the Exercise Period, the Corporation shall at
all times have authorized, and reserved for the purpose of issuance upon
exercise of this Warrant, a sufficient number of shares of Class A Common Stock
to provide for the exercise of this Warrant.

       

       c.           Listing.  If
the Corporation’s Class A Common Stock is listed as of the date of this Warrant,
or if so listed in the future, the Corporation shall maintain its listing of its
Class A Common Stock on each national securities exchange or automated quotation
system, as the case may be, and shall maintain such listing of any other shares
of capital stock of the Corporation issuable upon the exercise of this Warrant
if and so long as any shares of the same class shall be listed on such national
securities exchange or automated quotation system.

       

       d.           Certain Actions
Prohibited.  The Corporation will not, by amendment of its
charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the Holder of this
Warrant in order to protect the exercise privilege of the Holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant.  Without limiting the generality of the foregoing, the
Corporation (i) will not increase the par value of any shares of Class A Common
Stock receivable upon the exercise of this Warrant above the Exercise Price then
in effect, and (ii) will take all such actions as may be necessary or
appropriate in order that the Corporation may validly and legally issue fully
paid and nonassessable shares of Class A Common Stock upon the exercise of this
Warrant.

       

       e.           Successors and
Assigns.  This Warrant will be binding upon any entity
succeeding to the Corporation by merger, consolidation, or acquisition of all or
substantially all the Corporation’s assets.

       

       f.           Delivery of Class A Common
Stock by Electronic Transfer.  In lieu of delivering physical
certificates representing the Class A Common Stock issuable upon exercise,
provided the Corporation’s transfer agent is participating in the Depository
Trust Corporation (“DTC”) Fast Automated Securities Transfer program and the
Corporation has activated such programs, upon request of the Holder and its
compliance with the provisions contained in Section 1, the Corporation shall use
its best efforts to cause its transfer agent to electronically transmit the
Class A Common Stock issuable upon exercise to the Holder by crediting the
account of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent
Commission system.

       

       

      
        
          
          

        

        
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      Section
4. Antidilution
Provisions.  During the Exercise Period, the Exercise Price and
the number of Warrant Shares shall be subject to adjustment from time to time as
provided in this Section 4.  In the event that any adjustment of the
Exercise Price as required herein results in a fraction of a cent, such Exercise
Price shall be rounded up to the nearest cent.

       

       a.           Subdivision or Combination
of Class A Common Stock.  If the Corporation at any time
subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Class A Common
Stock acquirable hereunder into a greater number of shares, then, after the date
of record for effecting such subdivision, the Exercise Price in effect
immediately prior to such subdivision will be proportionately
reduced.  If the Corporation at any time combines (by any reverse
stock split, recapitalization, reorganization, reclassification or otherwise)
the shares of Class A Common Stock acquirable hereunder into a smaller number of
shares, then, after the date of record for effecting such combination, the
Exercise Price in effect immediately prior to such combination will be
proportionately increased.

       

       b.           Adjustment in Number of
Shares.  Upon each adjustment of the Exercise Price pursuant to
the provisions of this Section 4, the number of shares of Class A Common Stock
issuable upon exercise of this Warrant shall be adjusted by multiplying a number
equal to the Exercise Price in effect immediately prior to such adjustment by
the number of shares of Class A Common Stock issuable upon exercise of this
Warrant immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.

       

       c.           Recapitalization,
Reorganization, Reclassification, Consolidation, Merger or
Sale.

      

      (i)           Subject
at all times to the provisions of Section 4(c)(iii) below, in case the
Corporation after the Original Issue Date shall do any of the following (each, a
“Triggering Event”): (a) consolidate or merge with or into any other Person and
the Corporation shall not be the continuing or surviving corporation of such
consolidation or merger, or (b) permit any other Person to consolidate with or
merge into the Corporation and the Corporation shall be the continuing or
surviving Person but, in connection with such consolidation or merger, any
Capital Stock of the Corporation shall be changed into or exchanged for
Securities of any other Person or cash or any other property, or (c) transfer
all or substantially all of its properties or assets to any other Person, or (d)
effect a capital reorganization or reclassification of its Class A Common Stock
and/or Preferred Stock (collectively, “Capital Stock”), then, and in the case of
each such Triggering Event, proper provision shall be made to the Exercise Price
and the number of shares of Warrant Stock that may be purchased upon exercise of
this Warrant so that, upon the basis and the terms and in the manner provided in
this Warrant, the Holder of this Warrant shall be entitled upon the exercise
hereof at any time after the consummation of such Triggering Event, to the
extent this Warrant is not exercised prior to such Triggering Event, to receive
at the Exercise Price in effect at the time immediately prior to the
consummation of such Triggering Event, in lieu of the Class A Common Stock
issuable upon such exercise of this Warrant prior to such Triggering Event, the
Capital Stock, cash and property to which such Holder would have been entitled
upon the consummation of such Triggering Event if such Holder had exercised the
rights represented by this Warrant immediately prior thereto (including the
right of a shareholder to elect the type of consideration it will receive upon a
Triggering Event), subject to adjustments (subsequent to such corporate action)
as nearly equivalent as possible to the adjustments provided for elsewhere in
this Section 4; provided, however, the Holder
at its option may elect to receive an amount in unregistered shares of the
common stock of the surviving entity equal to the value of this Warrant
calculated in accordance with the Black-Scholes formula; provided, further, such shares
of Class A Common Stock shall be valued at a twenty percent (20%) discount to
the VWAP of the Class A Common Stock for the twenty (20) Trading Days
immediately prior to the Triggering Event.  Immediately upon the occurrence
of a Triggering Event, the Corporation shall notify the Holder in writing of
such Triggering Event and provide the calculations in determining the number of
shares of Warrant Stock issuable upon exercise of the new warrant and the
adjusted Exercise Price.  Upon the Holder’s request, the continuing or
surviving corporation as a result of such Triggering Event shall issue to the
Holder a new warrant of like tenor evidencing the right to purchase the adjusted
number of Warrant Shares and the adjusted Exercise Price pursuant to the terms
and provisions of this Section 4(c)(i).  Notwithstanding the foregoing to
the contrary, this Section 4(c)(i) shall only apply if the surviving entity
pursuant to any such Triggering Event is a company that has a class of equity
securities registered pursuant to the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”), and its common stock is listed or quoted on a national securities
exchange, national automated quotation system or the OTC Bulletin Board. 
In the event that the surviving entity pursuant to any such Triggering Event is
not a public company that is registered pursuant to the Exchange Act or its
common stock is not listed or quoted on a national securities exchange, national
automated quotation system or the OTC Bulletin Board, then the Holder shall have
the right to demand that the Corporation pay to the Holder an amount in cash
equal to the value of this Warrant calculated in accordance with the
Black-Scholes formula.

       

       

      
        
          
          

        

        
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      (ii)           In
the event that the Holder has elected not to exercise this Warrant prior to the
consummation of a Triggering Event and has also elected not to receive an amount
in cash equal to the value of this Warrant calculated in accordance with the
Black-Scholes formula pursuant to the provisions of Section 4(c)(i) above, so
long as the surviving entity pursuant to any Triggering Event is a company that
has a class of equity securities registered pursuant to the Exchange Act and its
common stock is listed or quoted on a national securities exchange, national
automated quotation system or the OTC Bulletin Board, the surviving entity
and/or each Person (other than the Corporation) which may be required to deliver
any Securities, cash or property upon the exercise of this Warrant as provided
herein shall assume, by written instrument delivered to, and reasonably
satisfactory to, the Holder of this Warrant, (A) the obligations of the
Corporation under this Warrant (and if the Corporation shall survive the
consummation of such Triggering Event, such assumption shall be in addition to,
and shall not release the Corporation from, any continuing obligations of the
Corporation under this Warrant) and (B) the obligation to deliver to such Holder
such Securities, cash or property as, in accordance with the foregoing
provisions of this subsection (a), such Holder shall be entitled to receive, and
the surviving entity and/or each such Person shall have similarly delivered to
such Holder an opinion of counsel for the surviving entity and/or each such
Person, which counsel shall be reasonably satisfactory to such Holder, or in the
alternative, a written acknowledgement executed by the President or Chief
Financial Officer of the Corporation, stating that this Warrant shall thereafter
continue in full force and effect and the terms hereof (including, without
limitation, all of the provisions of this subsection (a)) shall be applicable to
the Capital Stock, cash or property which the surviving entity and/or each such
Person may be required to deliver upon any exercise of this Warrant or the
exercise of any rights pursuant hereto.

      

      (iii)           Notwithstanding
anything to the contrary contained in this Section 4(c), the provisions of
Section 4(c)(i) or Section 4(c)(ii) above shall not apply in the event that the
consideration paid or received by the Corporation or its stockholders in
connection with any Triggering Event shall be accretive (and not dilutive) to
the Corporation and/or its stockholders, in that the consideration received or
receivable by the Corporation or its stockholders in connection with such
Triggering Event, shall have a fair market value equal to or in excess of 100%
of the Exercise Price then in effect.  The provisions of this Section 4(c)
shall also not apply to an acquisition by the Corporation or any subsidiary, in
which the Corporation shall remain the surviving entity and the ability to elect
the board of directors of the Corporation shall not be transferred to or vested
in any other Person or Persons not previously affiliated with the
Corporation.

      

       d.           Distribution of
Assets.  In case the Corporation shall declare or make any
distribution of its assets (including cash) to holders of Class A Common Stock
as a partial liquidating dividend, by way of return of capital or otherwise,
then, after the date of record for determining shareholders entitled to such
distribution, but prior to the date of distribution, the Holder of this Warrant
shall be entitled upon exercise of this Warrant for the purchase of any or all
of the shares of Class A Common Stock subject hereto, to receive the amount of
such assets which would have been payable to the Holder had the Holder been the
holder of such shares of Class A Common Stock on the record date for the
determination of shareholders entitled to such distribution.

       

       

      
        
          
          

        

        
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       e.           Adjustment Due to Dilutive
Issuance.  If, at any time when any Warrants are issued and
outstanding, the Corporation issues or sells, or in accordance with this Section
4(e) or Section 4(f) is deemed to have issued or sold, any shares of Class A
Common Stock for no consideration or for a consideration per share (before
deduction of reasonable expenses or commissions or underwriting discounts or
allowances in connection therewith) less than the Exercise Price in effect on
the date of such issuance (or deemed issuance) of such shares of Class A Common
Stock (a “Dilutive Issuance”), then immediately upon the Dilutive Issuance, the
Exercise Price will be reduced to the price determined by multiplying the
Exercise Price in effect immediately prior to the Dilutive Issuance by a
fraction, (A) the numerator of which is an amount equal to the sum of (x) the
number of shares of Class A Common Stock Deemed Outstanding immediately prior to
the Dilutive Issuance, plus (y) the quotient of the aggregate consideration,
calculated as set forth in Section 4(f), received by the Corporation upon such
Dilutive Issuance divided by the Exercise Price in effect immediately prior to
the Dilutive Issuance, and (B) the denominator of which is the Class A Common
Stock Deemed Outstanding (as defined below) immediately after the Dilutive
Issuance; provided that only one adjustment will be made for each Dilutive
Issuance.  The term “Class A Common Stock Deemed Outstanding” shall
mean the number of shares of Class A Common Stock actually outstanding (not
including shares of Class A Common Stock held in the treasury of the
Corporation), plus (i) the maximum total number of shares of Class A Common
Stock issuable upon the exercise of Options, as of the date of such issuance or
grant of such Options, if any, and (ii) the maximum total number of shares of
Class A Common Stock issuable upon conversion or exchange of Convertible
Securities, as of the date of issuance of such Convertible Securities, if
any.  No adjustment to the Exercise Price shall have the effect of
increasing the Exercise Price above the Exercise Price in effect immediately
prior to such adjustment.

       

       f.           Effect on Exercise Price of
Certain Events.  For purposes of determining the adjusted
Exercise Price, the following will be applicable:

       

       (i)           Issuance of Rights or
Options.  If the Corporation in any manner issues or grants any
Warrants, rights or options, whether or not immediately exercisable, to
subscribe for or to purchase Class A Common Stock or other securities
convertible into or exchangeable for Class A Common Stock (“Convertible
Securities”) (such Warrants, rights and options to purchase Class A Common Stock
or Convertible Securities are hereinafter referred to as “Options”) and the
price per share for which Class A Common Stock is issuable upon the exercise of
such Options is less than the Exercise Price on the date of issuance or grant of
such Options, then the maximum total number of shares of Class A Common Stock
issuable upon the exercise of all such Options will, as of the date of the
issuance or grant of such Options, be deemed to be outstanding and to have been
issued and sold by the Corporation for such price per share.  For
purposes of the preceding sentence, the “price per share for which Class A
Common Stock is issuable upon the exercise of such Options” is determined by
dividing (i) the total amount, if any, received or receivable by the Corporation
as consideration for the issuance or granting of all such Options, plus the
minimum aggregate amount of additional consideration, if any, payable to the
Corporation upon the exercise of all such Options, plus, in the case of
Convertible Securities issuable upon the exercise of such Options, the minimum
aggregate amount of additional consideration payable upon the conversion or
exchange thereof at the time such Convertible Securities first become
convertible or exchangeable, by (ii) the maximum total number of shares of Class
A Common Stock issuable upon the exercise of all such Options (assuming full
conversion of Convertible Securities, if applicable).  No further
adjustment to the Exercise Price will be made upon the actual issuance of such
Class A Common Stock upon the exercise of such Options or upon the conversion or
exchange of Convertible Securities issuable upon exercise of such
Options.

       

       

      
        
          
          

        

        
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       (ii)           Issuance of Convertible
Securities.  If the Corporation in any manner issues or sells
any Convertible Securities, whether or not immediately convertible (other than
where the same are issuable upon the exercise of Options) and the price per
share for which Class A Common Stock is issuable upon such conversion or
exchange is less than the Exercise Price on the date of issuance, then the
maximum total number of shares of Class A Common Stock issuable upon the
conversion or exchange of all such Convertible Securities will, as of the date
of the issuance of such Convertible Securities, be deemed to be outstanding and
to have been issued and sold by the Corporation for such price per
share.  For the purposes of the preceding sentence, the “price per
share for which Class A Common Stock is issuable upon such conversion or
exchange” is determined by dividing (i) the total amount, if any, received or
receivable by the Corporation as consideration for the issuance or sale of all
such Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon the conversion or
exchange thereof at the time such Convertible Securities first become
convertible or exchangeable, by (ii) the maximum total number of shares of Class
A Common Stock issuable upon the conversion or exchange of all such Convertible
Securities.  No further adjustment to the Exercise Price will be made
upon the actual issuance of such Class A Common Stock upon conversion or
exchange of such Convertible Securities.

       

       (iii)           Change in Option Price or
Conversion Rate.  If there is a change at any time in (i) the
amount of additional consideration payable to the Corporation upon the exercise
of any Options; (ii) the amount of additional consideration, if any, payable to
the Corporation upon the conversion or exchange of any Convertible Securities;
or (iii) the rate at which any Convertible Securities are convertible into or
exchangeable for Class A Common Stock (other than under or by reason of
provisions designed to protect against dilution), the Exercise Price in effect
at the time of such change will be readjusted to the Exercise Price which would
have been in effect at such time had such Options or Convertible Securities
still outstanding provided for such changed additional consideration or changed
conversion rate, as the case may be, at the time initially granted, issued or
sold.

       

       (iv)           Subdivision or Combination
of Class A Common Stock.  If the Corporation at any time
subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Class A Common
Stock acquirable hereunder into a greater number of shares, then, after such
date of record for effecting such subdivision, the Exercise Price in effect
immediately prior to such subdivision will be proportionately
reduced.  If the Corporation at any time combines (by reverse stock
split, recapitalization, reorganization, reclassification or otherwise) the
shares of Class A Common Stock acquirable hereunder into a smaller number of
shares, then, after the date of record for effecting such combination, the
Exercise Price in effect immediately prior to such combination shall be
proportionately increased.

       

       (v)           Treatment of Expired Options
and Unexercised Convertible Securities.  If, in any case, the
total number of shares of Class A Common Stock issuable upon exercise of any
Option or upon conversion or exchange of any Convertible Securities is not, in
fact, issued and the rights to exercise such Option or to convert or exchange
such Convertible Securities shall have expired or terminated, the Exercise Price
then in effect will be readjusted to the Exercise Price which would have been in
effect at the time of such expiration or termination had such Option or
Convertible Securities, to the extent outstanding immediately prior to such
expiration or termination (other than in respect of the actual number of shares
of Class A Common Stock issued upon exercise or conversion thereof), never been
issued.

       

       (vi)           Calculation of Consideration
Received.  If any Class A Common Stock, Options or Convertible
Securities are issued, granted or sold for cash, the consideration received
therefor for purposes of the holder’s Note will be the amount received by the
Corporation therefor, before deduction of reasonable commissions, underwriting
discounts or allowances or other reasonable expenses paid or incurred by the
Corporation in connection with such issuance, grant or sale.  In case
any Class A Common Stock, Options or Convertible Securities are issued or sold
for a consideration part or all of which shall be other than cash, the amount of
the consideration other than cash received by the Corporation will be the fair
value of such consideration, except where such consideration consists of
securities, in which case the amount of consideration received by the
Corporation will be the Market Price thereof as of the date of
receipt.  In case any Class A Common Stock, Options or Convertible
Securities are issued in connection with any acquisition, merger or
consolidation in which the Corporation is the surviving corporation, the amount
of consideration therefor will be deemed to be the fair value of such portion of
the net assets and business of the non-surviving corporation as is attributable
to such Class A Common Stock, Options or Convertible Securities, as the case may
be.  The fair value of any consideration other than cash or securities
will be determined in good faith by the Board of Directors of the
Corporation.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

       

       

       (vii)           Exceptions to Adjustment of
Exercise Price.  No adjustment to the Exercise Price will be
made (A) upon the issuance of shares of Class A Common Stock or options to
purchase Class A Common Stock to employees of the Corporation pursuant to any
stock or option plan duly adopted by the Board of Directors of the Corporation,
(B) the issuance of shares of Class A Common Stock upon exercise of Warrants or
conversion of any of the Initial Closing Note or other Notes issued under the
Loan Agreement or (C) the issuance of securities pursuant to and as contemplated
by the Securities Purchase Agreement between the Company, Amalphis Group Inc.,
and Global Asset Fund Limited.

       

       (viii)           Notice of
Adjustment.  Upon the occurrence of any event which requires
any adjustment of the Exercise Price, then, and in each such case, the
Corporation shall give notice thereof to the Holder of this Warrant, which
notice shall state the Exercise Price resulting from such adjustment and the
increase or decrease in the number of Warrant Shares purchasable at such price
upon exercise, setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based.  Such calculation
shall be certified by the Chief Financial Officer of the
Corporation.

       

       (ix)           Minimum Adjustment of
Exercise Price.  No adjustment of the Exercise Price shall be
made in an amount of less than 1% of the Exercise Price in effect at the time
such adjustment is otherwise required to be made, but any such lesser adjustment
shall be carried forward and shall be made at the time and together with the
next subsequent adjustment which, together with any adjustments so carried
forward, shall amount to not less than 1% of such Exercise Price.

       

       g.           No Fractional
Shares.  No fractional shares of Class A Common Stock are to be
issued upon the exercise of this Warrant.  In lieu of the Company
issuing any fractional shares to which the Holder would otherwise be entitled,
the Company shall round the number of shares to be issued upon conversion up to
the nearest whole number of share.

       

       h.           Other
Notices.  In case at any time:

       

       (i)           the
Corporation shall declare any dividend upon the Class A Common Stock payable in
shares of stock of any class or make any other distribution (including dividends
or distributions payable in cash out of retained earnings) to the holders of the
Class A Common Stock;

       

       (ii)           the
Corporation shall offer for subscription pro rata to the holders of the Class A
Common Stock any additional shares of stock of any class or other
rights;

       

       (iii)           there
shall be any capital reorganization of the Corporation, or reclassification of
the Class A Common Stock, or consolidation or merger of the Corporation with or
into, or sale of all or substantially all its assets to, another corporation or
entity; or

       

       (iv)           there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Corporation;

       

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

       

       

      then, in
each such case, the Corporation shall give to the Holder of this Warrant (a)
notice of the date on which the books of the Corporation shall close or a record
shall be taken for determining the holders of Class A Common Stock entitled to
receive any such dividend, distribution, or subscription rights or for
determining the holders of Class A Common Stock entitled to vote in respect of
any such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding-up and (b) in the case of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, or other such fundamental change, notice of the date
(or, if not then known, a reasonable approximation thereof by the Corporation)
when the same shall take place.  Such notice shall also specify the
date on which the holders of Class A Common Stock shall be entitled to receive
such dividend, distribution, or subscription rights or to exchange their Class A
Common Stock for stock or other securities or property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, or winding-up, as the case may be.  Such notice shall be
given at least thirty (30) days prior to the record date or the date on which
the Corporation’s books are closed in respect thereto.  Failure to
give any such notice or any defect therein shall not affect the validity of the
proceedings referred to in clauses (i), (ii), (iii) and (iv) above.

       

      Section
5. Issue
Tax.

       

      The
issuance of certificates for Warrant Shares upon the exercise of this Warrant
shall be made without charge to the Holder of this Warrant or such shares for
any issuance tax or other costs in respect thereof, provided that the
Corporation shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of any certificate in a
name other than the Holder of this Warrant.

       

      Section
6. No Rights or Liabilities as
a Stockholder.

       

      This
Warrant shall not entitle the Holder to any voting rights or other rights as a
stockholder of the Corporation.  No provision of this Warrant, in the
absence of affirmative action by the Holder to purchase Warrant Shares, and no
mere enumeration herein of the rights or privileges of the Holder, shall give
rise to any liability of the Holder for the Exercise Price or as a stockholder
of the Corporation, whether such liability is asserted by the Corporation or by
creditors of the Corporation.

       

      Section
7. Transfer, Exchange, and
Replacement of Warrant.

       

       a.           Restriction on
Transfer.  This Warrant and the rights granted to the Holder
are transferable, in whole or in part, upon surrender of this Warrant, together
with a properly executed assignment in the form attached hereto, at the office
or agency of the Corporation referred to in Section 7(e) below, provided,
however, that any transfer or assignment shall be subject to the conditions set
forth in Section 7(f) hereof and to the applicable provisions of the Loan
Agreement.  Until due presentment for registration of transfer on the
books of the Corporation, the Corporation may treat the registered holder hereof
as the owner and holder hereof for all purposes, and the Corporation shall not
be affected by any notice to the contrary.

       

       b.           Warrant Exchangeable for
Different Denominations.  This Warrant is exchangeable, upon
the surrender hereof by the Holder at the office or agency of the Corporation
referred to in Section 7(e) below, for new Warrants of like tenor representing
in the aggregate the right to purchase the number of shares of Class A Common
Stock, in not less than 1,000 increments, which may be purchased hereunder, each
of such new Warrants to represent the right to purchase such number of shares as
shall be designated by the Holder at the time of such surrender.

       

       c.           Replacement of
Warrant.  Upon receipt of evidence reasonably satisfactory to
the Corporation of the loss, theft, destruction, or mutilation of this Warrant
and, in the case of any such loss, theft, or destruction, upon delivery of an
indemnity agreement reasonably satisfactory in form and amount to the
Corporation, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Corporation, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

       

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

       

       d.           Cancellation; Payment of
Expenses.  Upon the surrender of this Warrant in connection
with any transfer, exchange, or replacement as provided in this Section 7, this
Warrant shall be promptly canceled by the Corporation.  The
Corporation shall pay all taxes (other than securities transfer taxes) and all
other expenses (other than legal expenses, if any, incurred by the Holder) and
charges payable in connection with the preparation, execution, and delivery of
Warrants pursuant to this Section 7.

       

       e.           Register.  The
Corporation shall maintain, at its principal executive offices (or such other
office or agency of the Corporation as it may designate by notice to the
Holder), a register for this Warrant, in which the Corporation shall record the
name and address of the person in whose name this Warrant has been issued, as
well as the name and address of each transferee and each prior owner of this
Warrant.

       

       f.           Exercise or Transfer Without
Registration.  If, at the time of the surrender of this Warrant
in connection with any exercise, transfer, or exchange of this Warrant, this
Warrant (or, in the case of any exercise, the Warrant Shares issuable
hereunder), shall not be registered under the Securities Act and under
applicable state securities or blue sky laws, the Corporation may require, as a
condition of allowing such exercise, transfer, or exchange, (i) that the Holder
furnish to the Corporation a written opinion of counsel, which opinion and
counsel are acceptable to the Corporation, to the effect that such exercise,
transfer, or exchange may be made without registration under the Securities Act
and under applicable state securities or blue sky laws, (ii) that the Holder
execute and deliver to the Corporation an investment letter in form and
substance reasonably acceptable to the Corporation and (iii) that the transferee
be an “accredited investor” as defined in Rule 501(a) promulgated under the
Securities Act; provided, however, that no such opinion, letter or status as an
“accredited investor” shall be required in connection with a transfer pursuant
to Rule 144 under the Securities Act.  The first Holder of this
Warrant, by taking and holding the same, represents to the Corporation that such
Holder is acquiring this Warrant for investment and not with a view to the
distribution thereof.

       

      g.           Compliance with Securities
Laws.  The Holder of this Warrant, by acceptance hereof,
acknowledges that this Warrant and Warrant Shares to be issued upon exercise
hereof are being acquired solely for the Holder's own account and not as a
nominee for any other party, and for investment, and that the Holder will not
offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be
issued upon exercise hereof except pursuant to an effective registration
statement, or an exemption from registration, under the Securities Act and any
applicable state securities laws.

      

      (ii)           Except
as otherwise provided in Section 1(a) or 7(f), this Warrant and all certificates
representing the Warrant Shares issued upon exercise hereof shall be stamped or
imprinted with a legend in substantially the following form:

      

      THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS
IS NOT REQUIRED.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      

      Section
8. Notices.  Any
notice, request or other communication required or permitted hereunder shall be
in writing and shall be deemed to have been duly given if given in accordance
with the Loan Agreement.

       

      Section
9. Governing
Law.  This Warrant shall be enforced, governed by and construed
in accordance with the laws of the State of New York applicable to agreements
made and to be performed entirely within such state, without regard to the
principles of conflict of laws.  The Corporation hereby submits to the
exclusive jurisdiction of the United States federal courts and New York state
courts located in New York, New York with respect to any dispute arising under
this Warrant, the agreements entered into in connection herewith or the
transactions contemplated hereby or thereby.  The Corporation
irrevocably waives the defense of an inconvenient forum to the maintenance of
such suit or proceeding.  The Corporation further agrees that service
of process upon it mailed by first class mail shall be deemed in every respect
effective service of process upon the Corporation in any such suit or
proceeding.  Nothing herein shall affect the Holder’s right to serve
process in any other manner permitted by law.  A final non-appealable
judgment in any such suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on such judgment or in any other lawful
manner.

       

      Section
10. Miscellaneous.

       

       a.           Amendments.  This
Warrant and any provision hereof may be amended by an instrument in writing
signed by the Corporation and holders of a majority of the then-unexercised
Warrant Shares underlying the Warrants issued pursuant to the Loan
Agreement.  All such amendments shall be binding to all Holders of
Warrants issued pursuant to the Loan Agreement.

       

       b.           Descriptive
Headings.  The descriptive headings of the several sections of
this Warrant are inserted for purposes of reference only, and shall not affect
the meaning or construction of any of the provisions hereof.

       

       c.           Remedies.  The
Corporation acknowledges that a breach by it of its obligations hereunder will
cause irreparable harm to the Holder, by vitiating the intent and purpose of the
transaction contemplated hereby.  Accordingly, the Corporation
acknowledges that the remedy at law for a breach of its obligations under this
Warrant will be inadequate and agrees, in the event of a breach or threatened
breach by the Corporation of the provisions of this Warrant, that the Holder
shall be entitled, in addition to all other available remedies at law or in
equity, and in addition to the penalties assessable herein, to an injunction or
injunctions restraining, preventing or curing any breach of this Warrant and to
enforce specifically the terms and provisions thereof, without the necessity of
showing economic loss and without any bond or other security being
required.

       

      d.           Facsimile
Signature.                                           This
Warrant may be issued to the Holder containing a facsimile signature of Gregory
Webster, the Chief Executive Officer of the Corporation; which facsimile
signature the Corporation acknowledges and agrees shall have the same validity
and enforceability as those the same were a ribbon original
signature.

      

      [remainder
of page intentionally left blank]

       

       

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      IN WITNESS WHEREOF, the Corporation has
caused this Warrant to be signed by its duly authorized officer.

      

      FUND.COM
INC.

      

      

      

      
        	
                 
      

              	
                By:
      /s/  Gregory
      Webster

              

      

      
        	
                 
      

              	
                Name:  Gregory
      Webster,

              

      

      
        	
                 
      

              	
                Title:  CEO

              

      

      

      

      

      

      

      

      Dated as
of ___________ __, 2009

       

       

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

       

      FORM OF
EXERCISE AGREEMENT

      

      Dated:  ________ __,
200_

      

      To:                          Fund.com
Inc.

      455
Broadway, 4th
floor

      New York,
New York 10012

      Attn: President

      

      The undersigned, pursuant to the
provisions set forth in the within Warrant, hereby agrees to purchase ________
shares of Class A Common Stock covered by such Warrant, and makes payment
herewith in full therefor at the price per share provided by such
Warrant:

      

      [check
applicable box]

      

      ___                      in
cash or by certified or official bank check or by wired funds in the amount of,
or,

      

      ___                      by
surrender of securities issued by the Corporation (including a portion of the
Warrant) having a market value (in the case of a portion of this Warrant,
determined in accordance with the cashless exercise provisions set forth in
Section 1b of
the Warrant) equal to $_________.

      

      Please
issue a certificate or certificates for such shares of Class A Common Stock in
the name of and pay any cash for any fractional share to:

       

      
        
          
            
              
                
                  
                    	
                            Name:

                          	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                            Signature:

                          	 
      	 
      
	
                            Address:

                          	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                            Note:

                          	
                            The
      above signature should correspond exactly with the name on the face of the
      within Warrant, if applicable.

                          
	 
      	 
      	 
      

                  

                

              

            

          

        

      

      
 

       

      and, if
said number of shares of Class A Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

       

      FORM OF
ASSIGNMENT

      

      FOR VALUE
RECEIVED, the undersigned hereby sells, assigns, and transfers all the rights of
the undersigned under the within Warrant, with respect to the number of shares
of Class A Common Stock covered thereby set forth herein below, to:

       

      
 

      
        
          	
                  Name of Assignee

                	 
      	
                  Address

                	 
      	
                  No of
Shares

                

        

      

      , and
hereby irrevocably constitutes and appoints ___________________________________
as agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the
premises.

      

      
        
          
            
              
                
                  
                    
                      
                        	
                                Dated:                      ________
      __, 200_

                              	 
      	 
      
	
                                In
      the presence of:

                              	 
      	 
      
	 
      	
                                Name:

                              	 
      
	 
      	 
      	 
      
	 
      	
                                Signature:

                              	 
      
	 
      	
                                Title
      of Signing Officer or Agent (if any):

                              
	 
      	 
      	 
      
	 
      	
                                Address:

                              	 
      
	 
      	 
      	 
      
	 	 	 
	 
      	
                                Note:

                              	
                                The
      above signature should correspond exactly with the name on the face of the
      within Warrant, if
applicable.f10k2008ex10xviii_fund.htm

    Exhibit 10.18

     

    
      REVOLVING
CREDIT LOAN AGREEMENT

       

      This Revolving Credit Loan
Agreement (this “Agreement”) dated as of April
30, 2009 (the “Execution
Date”) and effective as of May 1, 2009 (the “Effective Date”), is made and
entered into by and among IP
GLOBAL INVESTORS LTD., a Nevada corporation (the “Lender”), located at 499 N.
Canon, Beverly Hills, CA 90210; and FUND.COM INC., a Delaware
corporation (the “Borrower”), located at 14
Wall Street, New York, New York 10005; and certain of the Subsidiaries of the
Borrower who have executed this Agreement on the signature page hereof (the
“Subsidiaries”).  The
Lender,  the Borrower and the Subsidiaries are hereinafter sometimes
referred to individually as a “Party” and collectively as
“Parties”.

       

      RECITALS

       

      A.           The
Borrower desires to receive loans and advances from the Lender (the “Advances”) for the purpose of
obtaining additional working capital for its business; and

       

      B.           The
Lender is willing to make Advances to the Borrower of up to “Maximum Advances” (as
hereinafter defined) all upon the terms and subject to the conditions
hereinafter set forth.

       

      NOW, THEREFORE, in
consideration of the foregoing recitals, the following mutual and respective
covenants and agreements of the Parties, intending to be legally bound, the
Parties agree as follows:

       

      1.           Definitions. Except as
otherwise specifically indicated, the following terms shall have the following
meanings in this Agreement (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):

       

      “Accounts” shall mean all
“accounts” (as defined in the UCC) of Borrower and its Subsidiaries (or, if
referring to another Person, of such other Person) that relates to the operation
of the businesses of Borrower and each of its Subsidiaries, as now conducted or
may hereafter be conducted until all of the Obligations shall have been paid and
satisfied, including without limitation, accounts, accounts receivables, monies
due or to become due and obligations in any form (whether arising in connection
with contracts, contract rights, Instruments, General Intangibles or Chattel
Paper), in each case whether arising out of goods sold or services rendered or
from any other transaction and whether or not earned by performance, now or
hereafter in existence, and all documents of title or other documents
representing any of the foregoing, and all collateral security and guaranties of
any kind, now or hereafter in existence, given by any Person with respect to any
of the foregoing; provided
however that the definition of Accounts shall not include any of the
securities or collateral as is contemplated by (i) that certain Securities
Purchase Agreement dated as of April 7, 2009 by and between the Borrower and
National Holdings Corporation and all related documents thereto (the “SPA”);
(ii) that certain Demand Promissory Note dated as of April 7, 2009 by and
between the Borrower and Global Asset Fund Limited (“GAF”) and all related
documents thereto, and (iii) that certain securities purchase agreement by and
between the Borrower, Amalphis Group, Inc. and GAF (the “Amalphis Transaction
Documents” and together with the SPA and the GAF Note, the “NHC-GAF
Collateral”).

       

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

       

                    
 “AdvisorShares”
means AdvisorShares LLC, a partially owned subsidiary of the Borrower which is
not a party to this Agreement or the other Transaction Documents.

       

       

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

       

      
 

      “Affiliate” means, with respect
to any particular Person means any other Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by or under
common control with such Person.  For purposes of this definition, “control” (including
the terms “ controlling,” “ controlled by ” and “
under common control
with”) means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise.

      

      “Advances” means periodic loans
and advances made from time to time by the Lender under this Agreement to the
Borrower following the receipt of a Borrowing Report.

       

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

       

      “Borrowing Report” means a
report, in substantially the form of Exhibit
A annexed hereto and made a part hereof,  to be delivered to
the Lender by the Borrower prior to or in connection with each request for an
Advance under this Agreement, setting forth, inter alia (a) the date by which
the Borrower needs the Funds, which must be a Business Day, (b) the requested
Advance amount (c) the purpose and use of the Funds to be received from the
Advance, including the name of the Person to whom payments will be made by the
Borrower, (d) delivery instructions for the Advance, and (e) such other
information as the Lender may, from time to time, reasonably request as is
necessary for the Lender to issue the Advance to the Borrower.

       

      “Certificate of
Deposit”  means the restricted certificate of deposit maturing
in approximately eighteen months (the “CD Maturity Date”) in the
amount of Twenty Million Dollars ($20,000,000) issued by Global Bank of Commerce
Limited and constituting as asset of the Borrower.

       

      “CD Release Fee” means that
number of shares of the authorized and previously unissued shares of Common
Stock of the Borrower determined by dividing (a) $1,343,000, by (b) the
Conversion Price.

       

                    
 “Closing Date”
means the date of execution and delivery of this Agreement and all other
Transaction Documents and the funding of the initial Advance by the
Lender.

       

      “Collateral” shall have the
meaning defined in Section 6 of this Agreement.

       

      “Common Stock” means the shares
of common stock of the Borrower, $0.001 par value per share.

       

      “Conversion Price” means sixty
cent ($0.60) per share, subject to adjustment as provided in the
Note.

       

      “Conversion Shares” means the
number of shares of Common Stock of the Borrower issuable upon conversion of any
or all of the Note.

       

      “Exercise Price” means sixty
cent ($0.60) per share, subject to adjustment as provided in the
Warrant.

       

      “Funds” means the United States
Dollars that the Lender provides to the Borrower as Advances.

       

      “GAF Note” means the Borrower’s
$18,000 note, issued in December 2008, originally payable to Global Asset Fund,
Ltd. (“GAF”), but which
Lender purchased from Global Asset Fund, Ltd.

       

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

       

       

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

       

      “Guarantors” means each of the
Subsidiaries of the Borrower.

       

      “Guaranty Agreement” means the
guaranty of each of the Guarantors of the Obligations, as set forth in the
guaranty agreement annexed hereto as Exhibit
B and made a part hereof.

       

      “Insolvency Event” occurs, with
respect to the Borrower or any Guarantor, when such Entity: (a) is dissolved,
becomes insolvent, generally fails to pay or admits in writing, its inability
generally to pay its debts as they become due; (b) makes a general assignment,
arrangement or composition agreement with or for the benefit of its creditors;
or (c) files a petition in bankruptcy or institutes any action under federal or
state law for relief from debts or seeks or consents to the appointment of an
administrator, receiver, custodian, or similar entity for the winding up of its
business (or has such a petition or action filed against it and such petition,
action or appointment is not dismissed or stayed within 50 days).

       

      “Intellectual Property” shall
mean all present and future:  trade secrets, know-how and other
proprietary information; Trademarks, internet domain names (including, without
limitation, the domain name “www.fund.com”), service marks, trade dress, trade
names, business names, designs, logos, slogans (and all translations,
adaptations, derivations and combinations of the foregoing) indicia and other
source and/or business identifiers, and the goodwill of the business relating
thereto and all registrations or applications for registrations which have
heretofore been or may hereafter be issued thereon throughout the world;
Copyrights (including Copyrights for computer programs) and all tangible and
intangible property embodying the Copyrights, unpatented inventions (whether or
not patentable); Patents; industrial design applications and registered
industrial designs; license agreements related to any of the foregoing and
income therefrom; books, records, writings, computer tapes or disks, flow
diagrams, specification sheets, computer software, source codes, object codes,
executable code, data, databases and other physical manifestations, embodiments
or incorporations of any of the foregoing; the right to sue for all past,
present and future infringements of any of the foregoing; all other intellectual
property; and all common law and other rights throughout the world in and to all
of the foregoing.

       

       “Interest Rate” means an amount
equal to nine percent (9%) per annum on the outstanding amount of all Advances
made by the Lender pursuant to this Agreement.

       

      “Investment” means the
aggregate dollar amount of all Advances made by the Lender to the Borrower
during the Term.

       

      “Lenders Shares” means the
collective reference to the (a) Conversion Shares; (b) the Warrant Shares; and
(c) the shares of Common Stock payable in respect of the CD Release
Fee.

       

      “Loan Servicing Fees” means the
sum of $16,500 per month to cover the servicing and monitory of all Advances
under this Agreement.

       

      “Material Adverse Effect” means
a material adverse effect on (a) the assets, liabilities, results of operations,
condition (financial or otherwise), business or prospects of the Borrower or any
of its Subsidiaries, whether individually or taken as a consolidated whole, or
(b) the ability of any of the Borrower or any of its Subsidiaries to perform
their respective obligations under the Transaction Documents.

       

       

      
        
          
          

        

        
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      “Maximum Advances” means the
sum of One Million Three Hundred and Forty Three Thousand United States Dollars
($1,343,000), which Maximum Advances may be increased only in the sole and
absolute discretion of the Lender.

       

      “Note” means the revolving
credit convertible note, dated as of the Effective Date, and in the form of
Exhibit
C annexed hereto and made a part hereof.

       

      “Obligations” means the
collective reference to (a) the obligation of the Borrower and each Guarantor to
repay Approved Advances, interest at the Interest Rate on all Advances made
under this Agreement, (b) all Loan Servicing Fees, (c) the CD Release Fee, and
(d) the respective obligations of the Borrower and its Subsidiaries under other
Transaction Documents.

       

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

       

      “Person” means an individual,
corporation, partnership, limited liability company, trust, business trust,
association, joint stock company, joint venture, sole proprietorship,
unincorporated organization, governmental authority or any other form of entity
not specifically listed herein.

       

       “Prior Advances” means the
collective reference to the sum of approximately $723,000, representing (a) a
loan of $325,000 made by the Lender to the Borrower and evidenced by the Prior
Note, (b) the $18,000 loan from Global Asset Fund Ltd. (“GAF”) originally evidenced by
the GAF Note which was purchased by the Lender from GAF; and (c) approximately
$380,000 of other loans and Advances made by the Lender to the Borrower prior to
the Execution Date of this Agreement.

       

      “Prior Note” shall mean the
note from Borrower to Lender in the principal amount of $325,000 and payable
within 30 days of demand for payment by the Lender.

       

      “SEC Filings” means all
reports, schedules, forms, statements and other documents the Corporations are
required to file with the Securities and Exchange Commission pursuant to the
reporting requirements of the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”), including material filed pursuant to Section 13(a) or 15(d) of the
Exchange Act.

       

      “Subsidiary” means any
corporation or other entity of which at least a majority of the securities or
other ownership interest having ordinary voting power (absolutely or
contingently) for the election of directors or other persons performing similar
functions are at the time owned directly or indirectly by the Borrower and/or
any of its other subsidiaries.  For purposes of this Agreement, as at
the date hereof and the Closing Date, the Subsidiaries of the Borrower are the
Persons who have executed this Agreement on the signature page hereof, but shall
not include AdvisorShares.

       

      “Term” shall mean one year from
the Execution Date, subject to extension by the Parties.

       

      “Trademarks” shall mean, with
respect to any Person, all of such Person’s now existing or hereafter acquired
right, title, and interest in and to: (i) trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade styles,
service marks, logos, other business identifiers, prints and labels on which any
of the foregoing have appeared or appear, all applications, registrations and
recordings relating to the foregoing as may at any time be filed in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof, any political subdivision thereof or in any
other country, and all research and development relating to the foregoing; (ii)
all renewals thereof; and (iii) all designs and general intangibles of a like
nature.

       

       

       

      
        
          
          

        

        
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      “Transaction Documents” means
the collective reference to this Agreement, the Note, the Warrant and the
Guaranty Agreement.

       

      “Warrant”  means a
warrant to be delivered to the Lender on the Closing Date entitling the Lender
to purchase to purchase that number of shares of Common Stock of the Borrower
determined by dividing: (a) $1,343,000, by (b) the Exercise Price, and in the
from of Exhibit
D annexed hereto and made a part hereof.

       

      “Warrant Shares” means the
number of shares of Common Stock of the Borrower issuable upon exercise of any
or all of the Warrant.

       

      2.           Advances

       

      (a)           Subject
to the provisions of this Agreement the Lender shall make Advances to the
Borrower from time to time during the Term; provided
that, notwithstanding any other provision of this Agreement, the
aggregate amount of all Advances at any one time outstanding under this
Agreement shall not exceed the (i) the Maximum Advances, less
(ii) the sum of (A) the Prior Advances, and (B) the outstanding amount of
all additional Advances made under this Agreement (the “Availability”).

       

      (b)           The
Advances made under this Agreement is in the nature of a revolving credit
facility, which may be drawn, repaid and redrawn, from time to time as permitted
under this Agreement.  Advances shall be made by the Lender under this
Agreement following delivery to the Lender of a Borrowing Report in form and
substance reasonably acceptable to the Lender, in the exercise of its Permitted
Discretion.

       

      (c)           Advances
shall be made during the Term.  Each Advance subsequent to the
Execution Date Advance, shall be in an amount of at least $10,000 and in
increments of $10,000 in excess thereof.  Subject to the provisions of
this Agreement, Borrower may request Advances under this Agreement up to and
including the Availability.

       

      (d)           All
Advances and all other Obligations under this Agreement shall be due and payable
in full in cash, if not earlier in accordance with this Agreement, on the
earlier of (i) the occurrence of an Event of Default if required pursuant hereto
or Lender’s demand upon the occurrence and during the continuation of an Event
of Default, and (ii) the last day of the Term (such earlier date being the “Maturity Date”).

       

      (e)           Interest
on all outstanding Advances under this Agreement shall be payable monthly in
arrears on the first day of each month, commencing June 1, 2009 (each an “Interest Calculation Period”)
at the Interest Rate, calculated on the basis of a 360-day year and for the
actual number of calendar days elapsed in each Interest Calculation
Period.  Interest accrued on each Advance under the this Agreement
shall be due and payable on the first day of each month, commencing June 1,
2009, and continuing until the later of the expiration of the Term and the full
performance and irrevocable payment in full in cash of the Obligations and
termination of this Agreement.  To the extent Advances are then
available under this Agreement, Advances shall be automatically made for the
payment of interest on the Obligations at the Interest Rate on the date when
such interest is due to the extent available and as provided for
herein.

       

       

      
        
          
          

        

        
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      (f)           For
so long as no Event of Default shall have occurred and be continuing, Borrower
may give Lender irrevocable written notice requesting an Advance under this
Agreement by delivering to Lender not later than 11:00 a.m. (New York City time)
at least three (3) Business Days before the Borrower requires such Advance (the
“Borrowing Date”), a
completed Borrowing Report in substantially the same form as Exhibit
A attached hereto, and relevant supporting documentation satisfactory to
Lender, in the exercise of its Permitted Discretion.  If specified by
the Borrower in the Borrowing Report, the Borrower irrevocably authorizes Lender
to disburse the proceeds of the requested Advance directly to the creditor of
the Borrower, in all cases for credit to the Borrower (or to such other account
as to which the Borrower shall instruct Lender) via Federal funds wire transfer
no later than 4:00 p.m. (New York City time).

       

      (g)           Subject
to its approval of the form and content of such Borrowing Report (which approval
shall be given in the exercise of Lender’s Permitted Discretion, which shall not
be unreasonably withheld or delayed), the Lender shall disburse the Advance as
set forth in the Borrowing Report within three (3) Business Days after receipt
of such Borrowing Report.

       

      (h)           Borrower
absolutely and unconditionally promises to pay principal, interest and all other
amounts and Obligations payable hereunder, or under any other Transaction
Document, without any right of rescission and without any deduction whatsoever,
including any deduction for any setoff, counterclaim or recoupment, and
notwithstanding any damage to, defects in or destruction of the Collateral or
any other event, including obsolescence of any property or
improvements.

       

      (i)           As
of the Effective Date, each of the Guarantors shall unconditionally and
irrevocably guaranty payment and performance of all outstanding Advances and
interest thereon at the Interest Rate, pursuant to the Guaranty
Agreement.

       

      (j)           As
of the Effective Date, the Prior Note shall be deemed cancelled and replaced by
the Note issued under this Agreement.

       

      (k)           Should
any amount required to be paid under any Transaction Document to the Lender be
unpaid, such amount may be paid by Lender, which payment shall be deemed a
request for an Advance under this Agreement as of the date such payment is due,
and Borrower irrevocably authorizes disbursement of any such funds to Lender by
way of direct payment of the relevant amount, interest or Obligations without
necessity of any demand.  No payment or prepayment of any amount by
Lender or any other Person shall entitle any Person to be subrogated to the
rights of Lender under any Transaction Document unless and until the Obligations
have been fully performed and paid irrevocably in cash and this Agreement has
been terminated.  Any sums expended by Lender as a result of the
failure of the Borrower or the Guarantors to pay, perform or comply with any
Transaction Document or any of the Obligations may be charged to the account of
Borrower and the Guarantors and added to the Obligations.

       

      (l)           Subject
at all times to (i) there being adequate Availability at the time a request for
an Advance is made and after giving effect to the funding thereof, (ii) such
request for an Advance is accompanied by a duly completed Borrowing Report
furnished to the Lender as provided in this Agreement, and (iii) requests for
Advances are approved for proper business purposes of the Borrower and its
Subsidiaries, as determined by the Lender in the exercise of its Permitted
Discretion (which approval shall not be unreasonably withheld or delayed), in
the event that the Lender shall fail to make any such requested Advance within
five (5) Business Days of the date such Advance is approved, the Lender shall
not be entitled to receive or accrue any fees or interest on then outstanding
Advances for the month or applicable part thereof that the Advance was so
approved and funding delayed.

       

       

      
        
          
          

        

        
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      3.           Payment
of Fees.

       

      (a)           Each
of the Lender and the Borrower do hereby covenant and agree that all Loan
Servicing Fees payable under this Agreement shall accrue and shall be paid to
the Lender on the Maturity Date and shall be deemed part of the
Obligations.

       

      (b)           Each
of the Lender and the Borrower do hereby agree that the CD Release Fee shall
only be payable to the Lender in the event that the Lender is able to arrange
for the Borrower to effect a payment of and drawdown on the Certificate of
Deposit prior to the CD Maturity Date, all upon such terms and conditions as
shall be satisfactory to the Borrower.

       

      4.           Representations
and Warranties

       

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

       

      4.1           Organization and
Authority

       

      Borrower
and each of Borrower’s Subsidiaries is a corporation or limited liability
company duly organized, validly existing and in good standing under the laws of
its state of formation.  Borrower and each of its Subsidiaries
(i) has all requisite corporate or entity power and authority to own its
properties and assets and to carry on its business as now being conducted and as
contemplated in the Transaction Documents, (ii) is duly qualified to do
business in every jurisdiction in which failure so to qualify would reasonably
be likely to have a Material Adverse Effect, and (iii) has all requisite power
and authority (A) to execute, deliver and perform the Transaction Documents
to which it is a party, (B) to borrow hereunder, and (C) to consummate the
transactions contemplated under the Transaction Documents.  Except as
set forth on Schedule 4.1, neither Borrower nor any of its Subsidiaries is an
“investment company” registered or required to be registered under the
Investment Company Act of 1940, as amended, or is controlled by such an
“investment company.”

       

      4.2           Transaction
Documents

       

      Except as set forth on Schedule 4.2, the
execution, delivery and performance by the Borrower and each of Borrower’s
Subsidiaries (collectively, the “Corporations”) of the
Transaction Documents to which it is a party, and the consummation of the
transactions contemplated thereby, (i) have been duly authorized by all
requisite action of each such Person and have been duly executed and delivered
by or on behalf of each such Person; (ii) do not violate any provisions of
(A) applicable law, statute, rule, regulation, ordinance or tariff,
(B) any order of any Governmental Authority binding on any such Person or
any of their respective properties, or (C) the certificate of incorporation
or bylaws (or any other equivalent governing agreement or document) of any such
Person, or any agreement between any such Person and its respective
stockholders, members, partners or equity owners or among any such stockholders,
members, partners or equity owners; (iii) are not in conflict with, and do not
result in a breach or default of or constitute an event of default, or an event,
fact, condition or circumstance which, with notice or passage of time, or both,
would constitute or result in a conflict, breach, default or event of default
under, any indenture, agreement or other instrument to which any such Person is
a party, or by which the properties or assets of such Person are bound;
(iv) except as set forth therein, will not result in the creation or
imposition of any Lien of any nature upon any of the properties or assets of any
such Person, and (v)  do not require the consent, approval or authorization
of, or filing, registration or qualification with, any Governmental Authority or
any other Person.  When executed and delivered, each of the
Transaction Documents to which Borrower and each of the other Corporations is a
party will constitute the legal, valid and binding obligation of such Person,
enforceable against such Person in accordance with its terms, subject to the
effect of any applicable bankruptcy, moratorium, insolvency, reorganization or
other similar law affecting the enforceability of creditors’ rights generally
and to the effect of general principles of equity which may limit the
availability of equitable remedies (whether in a proceeding at law or in
equity).

       

      
        
          
          

        

        
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      4.3           Subsidiaries,
Capitalization and Ownership Interests

       

      Schedule 4.11
states the names of all of the Subsidiaries of the Borrower who have executed
this Agreement, other than AdvisorShares LLC (“AdvisorShares”) which is not a
party to this Agreement or any of the other Transaction
Documents.  Schedule 4.3 sets
forth, the number and class of equity securities and/or ownership, voting or
partnership interests issued and outstanding of Borrower and each of its
Subsidiaries and the record and beneficial owners thereof (including options,
warrants and other
rights to acquire any of the foregoing).  The outstanding equity
securities and/or ownership, voting or partnership interests of Borrower and its
Subsidiaries have been duly authorized and validly issued and are fully paid and
nonassessable, and each Person listed on Schedule 4.3
owns beneficially and of record all the equity securities and/or ownership,
voting or partnership interests it is listed as owning free and clear of any
Liens other than Liens created by the Transaction Documents.  Schedule 4.3
also lists the directors, members, managers and/or partners of Borrower and each
of its Subsidiaries.

       

      4.4           Agreements

       

      Except as set forth on Schedule 4.4 or as
otherwise disclosed in the Corporations’ SEC filings, none of the Corporations
is (i) a party to any judgment, order or decree or any agreement, document or
instrument, or subject to any restriction, which would affect its ability to
execute and deliver, or perform under, any Transaction Document or to pay the
Obligations, (ii) in default in the performance, observance or fulfillment of
any obligation, covenant or condition contained in any agreement, document or
instrument to which it is a party or to which any of its properties or assets
are subject, which default, if not remedied within any applicable grace or cure
period would reasonably be likely to have a Material Adverse Effect, nor is
there any event, fact, condition or circumstance which, with notice or passage
of time or both, would constitute or result in a conflict, breach, default or
event of default under, any of the foregoing which, if not remedied within any
applicable grace or cure period would reasonably be likely to have a Material
Adverse Effect; or (iii) a party or subject to any agreement, document or
instrument with respect to, or obligation to pay any, management or service fee
with respect to, the ownership, operation, leasing or performance of its
business.

       

      4.5           Litigation

       

      Except as
set forth on Schedule
4.5, there is no action, suit, proceeding or investigation pending or, to
Borrower’s knowledge, threatened against any of the Corporations that (i)
questions or could prevent the validity of any of the Transaction Documents or
the right of such Person to enter into any Transaction Document or to consummate
the transactions contemplated thereby, (ii) would reasonably be likely to be or
have, either individually or in the aggregate, any Material Adverse Effect, or
(iii) would reasonably be likely to result in any change of control or
other change in the current ownership, control or management of any of the
Corporations.  Except as set forth on Schedule 4.5, neither
Borrower nor any of the Guarantors is aware that there is any basis for the
foregoing.  None of the Corporations is a party or subject to any
order, writ, injunction, judgment or decree of any Governmental
Authority.  There is no action, suit, proceeding or investigation
initiated by any of the Corporations currently pending.  None of the
Corporations has any existing accrued and/or unpaid indebtedness or other
payment obligations to any Governmental Authority.

       

       

      
        
          
          

        

        
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      4.6           Compliance
with Law

       

      Each of the Corporations (i) is in
compliance with all laws, statutes, rules, regulations, ordinances and tariffs
of any Governmental Authority applicable to such Person and/or such Person’s
business, assets or operations, including, without limitation, ERISA, and (ii)
is not in violation of any order of any Governmental Authority or other board or
tribunal, except where noncompliance or violation could not reasonably be
expected to have a Material Adverse Effect.  There is no event, fact,
condition or circumstance which, with notice or passage of time, or both, would
constitute or result in any noncompliance with, or any violation of, any of the
foregoing, in each case except where noncompliance or violation could not
reasonably be expected to have a Material Adverse Effect.  None of the
Corporations has received any notice that such Corporation is not in compliance
in any respect with any of the requirements of any of the
foregoing.  None of the Corporations have (a) engaged in any
Prohibited Transactions as defined in Section 405 of ERISA and
Section 4965 of the Internal Revenue Code of 1985, as amended, and the
rules and regulations promulgated thereunder, (b) failed to meet any applicable
minimum funding requirements under Section 302 of ERISA in respect of its
plans and no funding requirements have been postponed or delayed, (c) any
knowledge of any amounts due but unpaid to the Pension Benefit Guaranty
Corporation, or of any event or occurrence which would cause the Pension Benefit
Guaranty Corporation to institute proceedings under Title IV of ERISA to
terminate any of the employee benefit plans, (d) any fiduciary responsibility
under ERISA for investments with respect to any plan existing for the benefit of
Persons other than its employees or former employees, or (e) withdrawn,
completely or partially, from any multi-employer pension plans so as to incur
liability under the MultiEmployer Pension Plan Amendments of 1980.

       

      4.7           Intellectual
Property

       

      Each of
the Corporations owns, licenses or utilizes, and is a party to, all patents,
patent applications, trademarks, trademark applications, service marks,
registered copyrights, copyright applications, copyrights, trade names, trade
secrets, software, licenses and other Intellectual Property, necessary to
operate the business of the Borrower and its Subsidiaries.

       

      4.8           Licenses
and Permits; Labor

       

      Each of the Corporations is in
compliance with and has all permits and Intellectual Property necessary or
required by applicable law or Governmental Authority for the operation of such
Corporation’s businesses.  All of the foregoing are in full force and
effect and not in known conflict with the rights of others.  None of
the Corporations is (i) in breach of or default under the provisions of any of
the foregoing, nor is there any event, fact, condition or circumstance which,
with notice or passage of time or both, would constitute or result in a
conflict, breach, default or event of default under, any of the foregoing which,
if not remedied within any applicable grace or cure period would reasonably be
likely to have a Material Adverse Effect, (ii) a party to or subject to any
agreement, instrument or restriction that is so unusual or burdensome that it
might have a Material Adverse Effect, and/or (iii) and has not been, involved in
any labor dispute, strike, walkout or union organization which would reasonably
be likely to have a Material Adverse Effect.

       

      
        
          
          

        

        
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      4.9           Disclosure

       

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

       

      4.10           Insurance

       

      Each of Borrower and each of its
Subsidiaries has in full force and effect such insurance policies as are
customary in its industry.

       

      4.11           Names;
Location of Offices, Records and Collateral

       

      During
the preceding two years, neither the Borrower nor any of its Subsidiaries
has  conducted business under or used any name (whether corporate,
partnership or assumed) other than as shown on Schedule
4.11.  The Corporations, as applicable, is the sole owner of
all of its names listed on Schedule 4.11, and
any and all business done and invoices issued in such names are such Person’s
sales, business and invoices.  Each trade name of Borrower or, as
applicable, the Borrower’s Subsidiary represents a division or trading style of
Borrower or such Subsidiary.  Borrower and each of its Subsidiaries
maintains its places of business and chief executive offices only at the
locations set forth on Schedule 4.11, and
all Accounts of Borrower arise, originate and are located, and all of the
Collateral granted by Borrower and its Subsidiaries and all books and records in
connection therewith or in any way relating thereto or evidencing such
Collateral are located and shall only be located, in and at such locations of
Borrower and its Subsidiaries.  All of the Collateral is located only
in the continental United States.

       

      4.12           Non-Subordination

       

      The
Obligations are not subordinated in any way to any other obligations of Borrower
or any of its Subsidiaries or to the rights of any other Person.

       

      4.13           Accounts

       

      Unless
otherwise indicated in writing to Lender or on Schedule 4.13: (i)
each Account of Borrower and its Subsidiaries is genuine and in all respects
what it purports to be and is not evidenced by a judgment, (ii) each Account of
Borrower and its Subsidiaries arises out of a completed, bona fide sale and
delivery of goods or rendering of services by Borrower in the ordinary course of
business and in accordance with the terms and conditions of all purchase orders,
contracts, certifications, participations and other documents relating thereto
or forming a part of the contract between Borrower and the Account Debtor,
(iii)each Account of Borrower and its Subsidiaries together with Lender’s
security interest therein, is not and will not be in the future (by voluntary
act or omission by Borrower), subject to any offset, lien, deduction, defense,
dispute, counterclaim or other adverse condition, is absolutely owing to
Borrower or its Subsidiaries and is not contingent in any respect or for any
reason, (iv) there are no facts, events or occurrences which in any way impair
the validity or enforceability of any Account of Borrower or tend to reduce the
amount payable thereunder from the face amount of the claim or invoice and
statements delivered to Lender with respect thereto, (v) there are no
proceedings or actions which are threatened or pending against any Account
Debtor under any Account of Borrower which might result in any Material Adverse
Effect on the Borrower or any other Subsidiaries (vi) each Account of Borrower
has been billed and forwarded to the Account Debtor for payment in accordance
with applicable laws and is in compliance and conformance with any requisite
procedures, requirements and regulations governing payment by such Account
Debtor with respect to such Account, and, (vii) Borrower has obtained and
currently has all permits necessary in the generation of each Account of such
Person.

       

      
        
          
          

        

        
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      4.14           Survival

       

      Borrower and its Subsidiaries makes the
representations and warranties contained herein with the knowledge and intention
that Lender is relying and will rely thereon.  All such
representations and warranties will survive the execution and delivery of this
Agreement and the making of Advances under this Agreement.

       

      5.           Affirmative
Covenants

       

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

       

      5.1           Financial
Statements, Borrowing Report, Financial Reports and Other
Information

       

      (a)           Financial
Reports.  In addition to providing the Borrowing Report in
accordance with this Agreement, Borrower shall furnish the following reports to
Lender; provided,
however, if any such report described below is available on the SEC’s
EDGAR Filing System then Borrower need not deliver a hard copy of such document
to the Lender:

       

      (i) as soon as available and in any
event within one hundred and twenty (120) calendar days after the end of each
fiscal year of Borrower, audited annual consolidated financial statements of
Borrower and its Subsidiaries, including the notes thereto, consisting of a
consolidated and consolidating balance sheet at the end of such completed fiscal
year and the related consolidated and consolidating statements of income,
retained earnings, cash flows and owners’ equity for such completed fiscal year,
which financial statements shall be prepared and certified without qualification
by an independent certified public accounting firm accompanied by related
management letters, if available, and

       

      (ii) as soon as available and in any
event within forty-five (45) calendar days after the end of each calendar
quarter, unaudited quarterly consolidated financial statements of Borrower and
its Subsidiaries consisting of a balance sheet and statements of income,
retained earnings and cash flows as of  the end of the immediately
preceding calendar quarter.

       

      All such
financial statements shall be prepared in accordance with United States
generally accepted accounting principles (“GAAP”) consistently applied
with prior periods.  With each such financial statement, Borrower
shall also deliver a certificate of its chief financial officer stating that (A)
such person has reviewed the relevant terms of the Transaction Documents and the
condition of Borrower, and (B) no Default or Event of Default has occurred or is
continuing, or, if any of the foregoing has occurred or is continuing,
specifying the nature and status and period of existence thereof and the steps
taken or proposed to be taken with respect thereto.

       

      
        
          
          

        

        
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      (b)           Notices.  Borrower,
as applicable, shall promptly, and in any event within five (5) calendar
days after Borrower or any authorized officer of Borrower obtains knowledge
thereof, notify Lender in writing of (i) any pending or threatened litigation,
suit, investigation, arbitration, dispute resolution proceeding or
administrative proceeding brought or initiated against Borrower or any of its
Subsidiaries or otherwise affecting or involving or relating to Borrower or any
of its Subsidiaries or any of such Person’s property or assets to the extent (A)
the amount in controversy exceeds $10,000, or (B) to the extent any of the
foregoing seeks injunctive or declarative relief, (ii) any Default or Event of
Default, which notice shall specify the nature and status thereof, the period of
existence thereof and what action is proposed to be taken with respect thereto,
(iii) any other development, event, fact, circumstance or condition that
would reasonably be likely to have a Material Adverse Effect, in each case
describing the nature and status thereof and the action proposed to be taken
with respect thereto, or (iv) receipt of any notice or request from any
Governmental Authority regarding any liability or claim of
liability.

       

      5.2           Conduct
of Business and Maintenance of Existence and Assets

       

      Each of
the Corporations shall (i) conduct its business in accordance with good business
practices customary to the industry, (ii) engage principally in the same or
similar lines of business substantially as heretofore conducted, (iii) collect
its Accounts in the ordinary course of business, (iv) maintain and keep in full
force and effect its existence and all material Permits and qualifications to do
business and good standing in each jurisdiction in which the ownership or lease
of property or the nature of its business makes such Permits or qualification
necessary and in which failure to maintain such Permits or qualification could
reasonably be likely to have a Material Adverse Effect; and (v) remain in good
standing and maintain operations in all jurisdictions in which currently
located.

       

      5.3           Compliance
with Legal and Other Obligations

       

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

       

      5.4           Insurance

       

      Borrower
shall, and Borrower shall cause each of its Subsidiaries to maintain all
insurance as is normally required for similar businesses within the Borrower’s
and Subsidiaries’ industry, including Officers and Directors Insurance, General
Worker’s Compensation Insurance and General Liability Insurance.

       

      5.5           True
Books

       

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

       

       

      
        
          
          

        

        
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      5.5           Inspection;
Periodic Audits

       

      Lender has the right to audit the
Borrower once each calendar quarter and Borrower shall cause each of its
Subsidiaries to, permit the representatives of Lender from time to time during
normal business hours upon 10 Business Days prior notice, to (i) examine or
audit all of its books of account, records, reports and other papers, (ii) make
copies and extracts therefrom, and (iii) discuss its business, operations,
prospects, properties, assets, liabilities, condition and/or Accounts with its
officers and independent public accountants (and by this provision such officers
and accountants are authorized to discuss the foregoing). If the audit shows a
discrepancy of more than 10% that cannot be resolved after further review, then
the audit shall be paid by Borrower.  If the discrepancy is less than
10% that cannot be resolved after further review, then the cost of the audit
shall be paid by the Lender.

       

      5.6           Further
Assurances; Post Closing

       

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

       

      5.7           Payment
of Indebtedness

       

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

       

      5.8           Intentionally
Omitted.

       

      5.9           Reservation
of Lenders Shares.

       

      Borrower shall reserve, out of its
authorized and unissued Common Stock, all of the Lenders Shares.

       

      5.10           Issuance
of Lenders Shares.

       

      (a)           Not
later than five Business Days after Lender gives a notice of conversion under
the Note, the Borrower shall issue to the Lender all of the applicable number of
Conversion Shares determined by dividing (a) the amount of the Note and all
accrued interest at the Interest Rate set forth in the Notice of Conversion, by
(b) the Conversion Price.

       

      (b)           Not
later than five Business Days after Lender gives a notice of exercise under the
Warrant, the Borrower shall issue to the Lender all of the applicable number of
Warrant Shares determined by dividing (a) the amount of the Warrant being
exercised as set forth in the Notice of Exercise, by (b) the Exercise
Price.

       

       

      
        
          
          

        

        
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      (c)           Not
later than five Business Days after the CD Release Fee becomes due and payable,
the Borrower shall issue to the Lender all of the applicable shares of Common
Stock payable to the Lender in respect of such CD Release Fee.

       

       

      
        	
                6.

              	
                Grant
      of Security Interest; Collateral

              

      

       

      (a)           To
secure the payment and performance of the Obligations, Borrower and each of the
Subsidiaries do hereby jointly and severally grant to the Lender a continuing
security interest in and lien upon, and pledge to Lender, all of its and their
respective right, title and interest in and to all of its Accounts (other than
the NHC-GAF Collateral) and all Intellectual Property, whether now owned or
hereafter acquired, including, without limitation, the following, which security
interest is intended to be a first priority security interest:

       

      (i)           all
intangible personal property, including without limitation all present and
future Accounts except for the NHC-GAF Collateral, securities, contract rights,
permits, general intangibles, Intellectual Property, chattel paper, documents,
instruments, deposit accounts, rights to the payment of money or other forms of
consideration of any kind and tax refunds now owned or hereafter acquired, and
all intangible and tangible personal property relating to or arising out of any
of the foregoing; and

       

      (ii)           any
and all additions and accessions to any of the foregoing, and any and all
replacements, products and proceeds of any of the foregoing,

       

      all of
the foregoing herein collectively referred to as the “Collateral.”  For
the avoidance of doubt, Collateral shall not include the NHC-GAF
Collateral.

       

      (b)           Borrower
and each of the Subsidiaries has the full right and power to grant to Lender a
perfected, first priority security interest and lien in the Collateral pursuant
to this Agreement.  Upon the execution and delivery of this Agreement,
and upon the filing of the necessary financing statements and/or appropriate
filings, as applicable, without any further action, Lender will have a good,
valid and first priority and perfected Lien and security interest in the
Collateral granted to Lender pursuant to this Agreement, subject to no transfer
or other restrictions or liens of any kind in favor of any other
Person.  No financing statement relating to any of the Collateral is
on file in any public office except those on behalf of Lender.  Except
for Schedule
6(b), Borrower represents and warrants to Lender that neither it nor any
of its Subsidiaries is a party to any agreement, document or instrument that
conflicts with this Section
6(b).

       

      (c)           Borrower
and each of its Subsidiaries hereby authorizes Lender, as Borrower’s agent and
attorney in fact to execute or file with the appropriate filing authorities in
Delaware, New York or other locations where the Collateral may be situated, such
financing statements under the Uniform Commercial Code as may be required to
perfect Lender’s interest in the Collateral.

       

      7           Closing.  The
closing in connection with this Agreement (the “Closing”) shall take place
simultaneous with the execution and delivery of this Agreement and the other
Transaction Documents (the “Closing Date”) at a mutually
agreeable place and time.  Alternatively, the Parties may, by mutual
consent, forego a formal closing.

       

       

      
        
          
          

        

        
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      8.           Term
of Agreement; Termination

       

      (a)           Term. This Agreement is
effective from the Effective Date and shall continue until April 30, 2010 (the
“Initial Term”), unless
terminated earlier as provided below.

       

      (b)           Renewal. After the Initial
Term, the Agreement shall, at the sole option of both the Lender and the
Borrower be extended for an additional period of one (1) year (a “Renewal Term”), unless
terminated earlier as provided below:

       

      (c)           Termination.  This
Agreement is subject to termination by the applicable Party set forth below,
after providing prior written notice to the other Parties upon the occurrence of
one or more of the following events:

       

      (i)           Mutual
Agreement.   Immediately following the written mutual
agreement among all of the Parties to terminate this Agreement; or

       

      (ii)           Default or Event of
Default.    By the Lender in the event that a Default
or Event of Default under this Agreement shall occur and be continuing, after
notice as provided in Section 9 below; or

       

      (iii)           Breach.   By
the Lender, on one hand, or the Borrower on the other hand, in the event of the
other Party or Parties breach of a material obligation under this Agreement or
any other Transaction Document; provided such breach is not the result of the
actions or inactions of the terminating Party or Parties and such breaching
Party or Parties has failed to cure such breach within thirty (30) days of its
receipt of written notice of such breach, except in the case of failure to pay
any undisputed amount due hereunder, which must be cured within ten (10)
Business Days of receipt of written notice of such nonpayment;

       

      (iv)           Insolvency
Event.    By the Lender, in the event the Borrower
suffers an Insolvency Event; or

       

      (v)           Material Adverse
Effect.  By the Lender or the Borrower, as applicable, in the
event of: (A) a Material Adverse Effect upon the other Party or any Subsidiary
of Borrower or a change in any governmental requirements, laws or regulations,
that, in the opinion of legal counsel for the terminating Party, renders the
continued performance of this Agreement either illegal or commercially
unreasonable; or (B) a Party has been directed by any regulatory authority to
cease or materially limit its performance of its obligations under this
Agreement; and, in each case, the Parties cannot find a legal and commercially
reasonable solution or alternative within a reasonable amount of time which
shall not be greater than one hundred twenty (120) days; or

       

      (vi)           Failure
to Make Advances.  By the Borrower, in the event that the Lender shall
fail to make any requested Advance within five (5) Business Days of the date
such Advance is approved, as contemplated by Section 2(l)
above.

       

      (d)           Survival of Obligations upon
Termination of this Agreement. Upon notice of termination of this
Agreement this Agreement and all Transaction Documents shall continue in full
force and effect and each Party shall continue to fulfill its obligations
hereunder and thereunder (except that no further Advances shall be required to
be made by the Lender hereunder or thereunder) until such time as all
Obligations under this Agreement and the other Transaction Documents shall have
been paid in full.  Upon any permitted termination of this Agreement
by the Lender, all Obligations under this Agreement and the other Transaction
Documents shall become immediately due and payable.

       

      
        
          
          

        

        
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      9.           Events
of Default

       

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

       

      (a)           Borrower
and its Subsidiaries shall fail to pay any amount on the Obligations or provided
for in any Transaction Document when due (whether on any payment date, at
maturity, by reason of acceleration, by notice of intention to prepay, by
required prepayment or otherwise) and such default has not been cured for five
(5) Business Days after written notice of default is given to the Borrower by
the Lender;

       

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

       

      (c)           Borrower
or any Guarantor shall be in violation, breach or default of, or shall fail to
perform, observe or comply with any covenant, obligation or agreement set forth
in, any Transaction Document and such violation, breach, default or failure
shall not be cured within the applicable period set forth in the applicable
Transaction Document; there shall be a thirty (30) calendar day cure period
commencing from the earlier of (i) receipt by such Person of written notice
of such breach, default, violation or failure, and (ii) the time at which
such Person or any authorized officer thereof knew or became aware, or should
have known or been aware, of such failure, violation, breach or default, but no
Advances will be made during the cure period;

       

      (d)           (i)
any of the Transaction Documents ceases to be in full force and effect, or (ii)
Lender ceases to have a valid perfected first priority security interest in any
of the Collateral or any securities pledged to Lender pursuant to the
Transaction Documents;

       

       (e)           one
or more tax assessments, judgments or decrees is rendered against Borrower or
any Guarantor in an amount in excess of $25,000 individually or $100,000 in the
aggregate, which is/are not satisfied, stayed, vacated or discharged of record
within thirty (30) calendar days of being rendered;

       

      (f)           Any
of the Corporations shall be subject to any Insolvency Event;

       

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

       

       

      
        
          
          

        

        
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      (h)           an
Event of Default occurs and is continuing under any other Transaction Document;
or,

       

      then, and
in any such event, notwithstanding any other provision of any Transaction
Document, if any such Event of Default shall occur and be continuing, the Lender
may, without notice or demand, do any of the following: (i) terminate its
obligations to make Advances hereunder and (ii) declare all or any of the
Advances, all interest thereon and all other Obligations to be due and payable
immediately, in each case without presentment, demand, protest or further notice
of any kind, all of which are hereby expressly waived by the
Corporations.

       

       

      10.           Rights
and Remedies

       

      

      (a)           In
addition to the acceleration provisions set forth in Section 9 above, upon the
occurrence and continuation of an Event of Default, Lender shall have the right
to exercise any and all rights, options and remedies provided for in the
Transaction Documents, under the UCC or at law or in equity, including, without
limitation, the right to (i) apply any Collateral to reduce the Obligations,
(ii) foreclose the liens created hereunder, (iii) realize upon, take
possession of and/or sell any Collateral or securities pledged with or without
judicial process, (iv) exercise all rights and powers with respect to the
Collateral as any of the Corporations might exercise, (v) collect and send
notices regarding the Collateral, with or without judicial process, (vi) by its
own means or with judicial assistance, enter any premises at which Collateral is
located, or render any of the foregoing unusable or dispose of the Collateral on
such premises without any liability for rent, storage, utilities, or other sums,
and Borrower shall not resist or interfere with such action, (vii) require that
all or any part of the Collateral be assembled and made available to Lender at
any place designated by Lender.  Notwithstanding any provision of any
Transaction Document, Lender, in its sole discretion, shall have the right, at
any time that Borrower fails to do so, and from time to time, without prior
notice, to: (i) obtain insurance covering any of the Collateral to the extent
required hereunder; (ii) pay for the performance of any of Obligations; (iii)
discharge taxes or Liens on any of the Collateral that are in violation of any
Loan document unless Borrower is in good faith with due diligence by appropriate
proceedings contesting those items; and (iv) pay for the maintenance and
preservation of the Collateral.  Such expenses and advances shall be
added to the Obligations until reimbursed to Lender and shall be secured by the
Collateral, and such payments by Lender shall not be construed as a waiver by
Lender of any Event of Default or any other rights or remedies of
Lender.

       

      (b)           Borrower and the Guarantors each agree
that notice received by it at least twenty (20) calendar days before the time of
any intended public sale, or the time after which any private sale or other
disposition of Collateral is to be made, shall be deemed to be reasonable notice
of such sale or other disposition.  If permitted by applicable law,
any perishable Collateral which threatens to speedily decline in value or which
is sold on a recognized market may be sold immediately by Lender without prior
notice to any of the Corporations.  At any sale or disposition of
Collateral, Lender may (to the extent permitted by applicable law) purchase all
or any part thereof free from any right of redemption by any of the Corporations
which right is hereby waived and released.  Each of Borrower and the
Guarantors covenants and agrees not to, and not to permit or cause any of the
Corporations to, interfere with or impose any obstacle to Lender’s exercise of
its rights and remedies with respect to the Collateral.  Lender, in
dealing with or disposing of the Collateral or any part thereof, shall not be
required to give priority or preference to any item of Collateral or otherwise
to marshal assets or to take possession or sell any Collateral with judicial
process.

       

       

      
        
          
          

        

        
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      (c)           Each
of the Borrower and the Guarantors hereby grants to Lender, after the occurrence
and during the continuance of an Event of Default, an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation) to use,
assign, license or sublicense any Intellectual Property now owned or hereafter
acquired by any of the Corporations, and wherever the same may be located,
including in such license reasonable access as to all media in which any of the
licensed items may be recorded or stored and to all computer programs and used
for the compilation or printout thereof, in each case in connection with the
exercise of Lender’s remedies hereunder and under the other Transaction
Documents.  All proceeds received by Lender in connection with such
license will be used by Lender to satisfy the Obligations.

       

      (d)           In
addition to the acceleration provisions set forth in Section 10 above, upon the
occurrence and continuation of an Event of Default, Borrower shall take any
action that Lender may request in order to enable Lender to obtain and enjoy the
full rights and benefits granted to Lender hereunder.  Without
limiting the generality of the foregoing, upon the occurrence and continuation
of any Event of Default, at the request of Lender and at Borrower’s sole cost
and expense, each of the Corporations, as applicable, shall execute all
documents and take all other actions requested by Lender to enable Lender, its
designee, any receiver, trustee or similar official or any purchaser of all or
any part of the Collateral to obtain from any Person any required authority
necessary to operate the business of Borrower.

       

      (e)           In
addition to any other rights, options and remedies Lender has under the
Transaction Documents, the UCC, at law or in equity, all profits, fees,
revenues, income and other proceeds collected or received from collecting,
holding, managing, renting, selling, or otherwise disposing of all or any part
of the Collateral or any proceeds thereof upon exercise of its remedies
hereunder shall be applied in the following order of
priority:  (i) first, to the payment
of all costs and expenses of such collection, holding, operation, management,
sale, disposition or delivery with respect to maintaining the Collateral, and to
the payment of all sums which Lender may be required or may elect to pay, if
any, for taxes, assessments, insurance and other charges upon the Collateral or
any part thereof, and all other payments that Lender may be required or
authorized to make under any provision of this Agreement (including, without
limitation, in each such case, in-house documentation and diligence fees and
legal expenses, search, audit, recording, professional and filing fees and
expenses and reasonable attorneys' fees and all expenses, liabilities and
advances made or incurred in connection therewith); (ii) second, to the
payment of all Obligations as provided herein; (iii) third, to the payment
of any surplus then remaining to the Borrower, unless otherwise provided by law
or directed by a court of competent jurisdiction, provided that the
Corporations shall be liable for any deficiency if such proceeds are
insufficient to satisfy the Obligations or any of the other items referred to in
this section.

      

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

       

       

      
        
          
          

        

        
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      11.           Confidentiality

       

      (a)           Confidential Information. The
term “Confidential Information” shall mean this Agreement and all proprietary
information, trade secrets, business methods and plans, marketing data,
financial reports, expense reports, plans and projections, cost structures,
technologies, processes, competitive positions and information, and any other
information, documents or data of any kind whatsoever which: (i) a Party (“Discloser”) discloses, in
writing, orally or visually, to the other Party (“Recipient”) or to which
Recipient obtains access in connection with the negotiation or performance of
this Agreement; and which (ii) relates: (A) to the Discloser; (B) in the case of
the Lender as Recipient, to Borrower and its customers and/or Affiliates; or (C)
in the case of Borrower as Recipient, to the Lender and its affiliates. Each
Party agrees to comply with all federal and state privacy laws.

       

      (b)           Disclosure to Employees, Agents and
others. Each of the Parties, as Recipient, hereby agrees on behalf of
itself and its employees, officers, affiliates and subcontractors that
Confidential Information will not be disclosed or made available to any person
for any reason whatsoever, other than on a “need to know basis” and then only:
(i) to the Parties’ employees and officers and professional advisors; (ii) to
subcontractors and other third Parties specifically permitted under this
Agreement, provided that all such persons are subject to a confidentiality
agreement that is no less restrictive than the confidentiality provisions of
this Agreement; (iii) to independent contractors, agents, and consultants hired
or engaged by the Parties, provided that all such persons are subject to a
confidentiality agreement that is no less restrictive than the confidentiality
provisions of this Agreement; or (iv) as required by law or as otherwise
permitted by this Agreement, either during the term of this Agreement or after
the termination of this Agreement.  Prior to any disclosure of
Confidential Information as required by law, the Recipient shall: (i) notify the
Discloser of any actual or threatened legal compulsion of disclosure, and any
actual legal obligation of disclosure immediately upon becoming so obligated;
and (ii) cooperate with the Discloser’s reasonable, lawful efforts to resist,
limit or delay disclosure.

       

      (c)           Materials. Upon the
termination or expiration of this Agreement, or at any time upon the request of
a Party, the other Party shall return all Confidential Information in the
possession of such Party or in the possession of any third Party over which such
Party has or may exercise control.

       

      (d)           Exceptions. The obligations of
confidentiality in this Agreement shall not apply to any information which a
Party rightfully has in its possession before disclosed to it by the other
Party, information which a Party independently develops, information which is or
becomes known to the public other than by breach of this Agreement or
information rightfully received by a Party from a third Party without the
obligation of confidentiality.

       

      (e)           Publicity.  Except
as provided in this section, the Parties agree that none of them, nor any of
their respective directors, officers, employees or agents shall disclose any of
the terms or provisions of this Agreement to any other Party.  No
Party shall use another Party’s name or trademark or refer to such other Party
directly or indirectly in any media release, public announcement or public
disclosure relating to this Agreement or its subject matter, in any promotional
or marketing materials, lists or business presentations, without consent from
the other Party for each such use or release in accordance with this section.
Any media releases, public announcements, public disclosures and promotional or
marketing materials issued or made by any Party relating to this Agreement or
the subject matter of this Agreement (each, a “Disclosure”), shall be subject
to review and approval, which approval shall not be unreasonably withheld, by
the other Party prior to release; provided, however, that this prior approval
requirement shall not apply to: (i) announcements intended solely for internal
distribution; or (ii) disclosures to the extent required to meet legal or
regulatory requirements beyond the reasonable control of the disclosing
Party.  Such approval shall be deemed to be given if a Party does not
object to a proposed Disclosure within ten (10) Business Days of receiving
it.  Nothing contained in this Agreement shall prohibit any Party from
making any disclosure, which its legal counsel reasonably deems necessary to
comply with applicable law.

       

       

      
        
          
          

        

        
          -19-

          
            

          

        

        
          
          

        

      

       

      (f)           Remedies. In the event of a
breach or the threatened breach of the provisions of this Section 11, the
Discloser shall be entitled to injunctive relief restraining the Recipient from
such breach or threatened breach and to enforce the provisions herein in any
state or federal court located in the state in which the Recipient maintains its
principal place of business.  Nothing herein shall be construed as
prohibiting the Discloser from pursuing any other remedy against the Recipient
on account of such breach or threatened breach.

       

      (g)           Survival. The terms of this
Section 11 shall survive any termination or expiration of this
Agreement.

       

      12.           Lender Representations and
Warranties. Lender hereby represents and warrants to Borrower
that:

       

      (a)           Lender
is duly organized and in good standing in the State of Nevada.  Lender
has all requisite power and authority to conduct its business as currently being
conducted.

       

      (b)           Lender
has all requisite power and authority to execute and deliver this Agreement and
all other documents in connection with this Agreement, and to carry out the
terms of this Agreement, and has taken all action required on its part necessary
for the execution, delivery and performance of this Agreement.  This
Agreement is the legal, valid and binding obligation of the Lender, enforceable
in accordance with its terms, except as its enforceability may be limited by
bankruptcy laws and general principles of equity.

       

      (c)           This
Agreement does not contain any untrue statement of material fact or omits to
state a material fact necessary to make the statements herein
misleading.

       

      (d)           Lender
is in material compliance with all applicable federal, state and local
laws.

       

      (e)           The
execution, delivery and performance of this Agreement do not and will not
conflict with or constitute a material default under any other obligation of the
Lender.

       

      (f)           Lender
is in a financial position to bear the economic risk of the Investment and
withstand a complete loss of the Funds.

       

      (g)           Lender
is taking the position and believes that the Investment is not a security for
the purposes of US Federal Securities Laws and corresponding state blue sky
laws. This fact notwithstanding, the Lender represents to the Borrower that the
Lender is an accredited investor as that term is defined in Rule 501(a) of
Regulation D promulgated under the Securities Act of 1933. Further, at no time
will the Lender transfer any portion of the Investment to any person or entity
that is not an accredited investor.

       

      (h)           Lender
recognizes that the Investment involves a high degree of risk. Lender is aware
that short term loans can have a high rate of default and that the Lender may
not receive the return or any return on its Investment that it hopes to
receive.

       

      (i)           The
Investment is suitable for the Lender based upon its investment objectives and
financial needs and the Lender has adequate net worth and means for providing
for its financial needs and contingencies and has no need for liquidity of
investment with respect to the Investment.

       

       

      
        
          
          

        

        
          -20-

          
            

          

        

        
          
          

        

      

       

       

      (j)           Lender
has obtained, to the extend the Lender deems necessary, the Lender’s own
professional advice with respect to the risks inherent in the Investment and the
suitability of the Investment in light of the Lender’s financial condition and
investment needs.

       

      (k)           Lender
has been furnished with or has had access to such information as a sophisticated
investor would customarily require to evaluate the merits and risks of the
Investment together such additional information as the Lender considers
necessary to verify the accuracy of the information supplied. Lender further
represents that the Lender has had an opportunity to ask questions of Borrower’s
management as the Lender has deemed necessary or desirable. Lender further
represents and acknowledges that the Lender has been solely responsible for the
Lender’s own: (i) due diligence investigation of Borrower, its management and
its assets; (ii) analysis of the merits and risks of the Investment; and (iii)
analysis of the terms of the Investment, and that in taking any action or
performing any role relative to the arranging of the Investment, the Lender has
acted solely in the Lender’s own interest.

       

      (l)           Lender
is an “Accredited Investor” as that term is defined in Rule 501(a) promulgated
under the Securities Act of 1933, as amended (the “Act”). Further, the Lender
further represents that it is a sophisticated investor, can bear the economic
risk of this Investment for an indefinite period of time, and has such knowledge
and experience in financial and business matters so as to be capable of
evaluating the merits and risks of this Investment. Lender further represents
that it is the position of Borrower that this Investment is not a security
within the meaning of the Federal and State securities laws however, if it is
determined that this Investment is a security for the purposes of such laws, the
Investment has been issued pursuant to exemptions from registration under the
applicable securities laws.

       

      (m)           Lender
has purchased the GAF Note from GAF and as a result is the sole beneficiary of
the GAF Note. Lender further represents that no other Person has any rights,
title and interest to the GAF Note.

       

      13.           Covenants of Lender. Lender
shall:

       

      (a)           maintain
its corporate existence in good standing; and

       

      (b)           notify
Borrower within five (5) days of: (i) any lawsuit or proceedings which, if
successful, would materially affect Lender’s ability to make Advances under this
Agreement; and (ii) any agreement to merge, consolidate, or sell its assets to a
third Party.

       

      (c)           cancel
the GAF Note and incorporate it into the Prior Advances and evidenced by the
Note executed by Borrower under this Agreement.

       

      14.           Indemnification

       

      (a)           By the Borrower and its
Subsidiaries.   The Borrower and each of the Subsidiaries
hereby jointly and severally agrees to indemnifies and hold harmless (i) the
Lender; (ii) the Lender’s parents, Subsidiaries, and Affiliates; and (iii) each
of the respective officers, directors, employees, representatives, agents, and
attorneys of the Persons identified in clauses (i), (ii) and (iii) above
(collectively, the “Lender
Indemnified Parties”) from and against any and all losses, liabilities,
damages, penalties, demands, judgments, settlements, costs, and expenses,
including without limitation those costs and expenses relating to any
investigation or any defense or prosecution of any proceedings, and reasonable
fees and expenses of attorneys, (collectively, “Lender Losses”) suffered or
incurred by the Lender Indemnified Parties to the extent arising out of or
resulting from any claims, suits, arbitrations, or actions instituted by a third
Party based on any of the following:

       

       

      
        
          
          

        

        
          -21-

          
            

          

        

        
          
          

        

      

       

      (i)           the
breach in any material respect of any representation or warranty made by the
Borrower and contained in this Agreement or in any other Transaction Document;
and

       

      (ii)           the
failure of Borrower and the Guarantors to pay and perform the Obligations under
this Agreement or any other Transaction Document;

       

      (iii)           the
failure of Borrower and the Guarantors to perform any other covenant and
agreement contained in this Agreement or in any other Transaction Documents;
or

       

      (iv)           the
burglary, fraud, theft, other criminal acts, gross negligence, willful
misconduct of the Borrower and any of the Guarantors or any of their employees,
agents or Affiliates.

       

      (b)           By Lender. Lender hereby
indemnifies and agrees to hold harmless (i) the Borrower and the Guarantors;
(ii) the parent, Subsidiaries, and Affiliates of such Persons; and (iii) each of
the respective officers, directors, employees, representatives, agents, and
attorneys of the Persons described in clauses (i) – (iii) above (collectively,
the “Borrower Indemnified
Parties”) from and against any and all losses, liabilities, damages,
penalties, demands, judgments, settlements, costs, and expenses, including
without limitation those costs and expenses relating to any investigation or any
defense or prosecution of any proceedings, and reasonable fees and expenses of
attorneys, (collectively, “Borrower Losses”) suffered or
incurred by the Borrower Indemnified Parties to the extent arising out of or
resulting from any claims, suits, arbitrations, or actions instituted by a third
Party based on any of the following:

       

      (i)           The
inaccuracy in any material respect of any representation or warranty made by the
Lender and contained in this Agreement; and

       

      (ii)           Lender’s,
its employees’ or its agents’ burglary, fraud, theft, other criminal acts, gross
negligence, willful misconduct or breach of this Agreement.

       

       (c)           General. If any claim or
demand is asserted against any Lender Indemnified Party or Borrower Indemnified
Party (individually or collectively, the “Indemnified Party”) by any
person who is not a Party to this Agreement in respect of which the Indemnified
Party may be entitled to indemnification under the provisions of this Section
14, written notice of such claim or demand shall promptly be given to the Party
(the “Indemnifying
Party”) from whom indemnification may be sought.  The
Indemnifying Party shall have the right, by notifying the Indemnified Party
within ten (10) days of its receipt of the notice of the claim or demand, to
assume the entire control (subject to the right of the Indemnified Party to
participate at the Indemnified Party’s expense and with counsel of the
Indemnified Party’s choice) of the defense, compromise or settlement of the
matter, including, at the Indemnifying Party’s expense, employment of counsel of
the Indemnifying Party’s choice reasonably acceptable to the other
Party.  If the Indemnifying Party gives notice to any Indemnified
Party that the Indemnifying Party will assume control of the defense, compromise
or settlement of the matter, the Indemnifying Party will be deemed to have
waived all defenses to the claims for indemnification by the Indemnified Party
with respect to that matter. Any damages to the Indemnified Party caused by a
failure of the Indemnifying Party to defend, compromise or settle a claim or
demand in a reasonable and expeditious manner, after the Indemnifying Party has
given notice that it will assume control of the defense, compromise or
settlement of the matter, shall be included in the damages for which the
Indemnifying Party shall be obligated to indemnify the Indemnified
Party.

       

      (d)           Survival. The provisions of
this clause 14 shall survive termination or expiration of this Agreement until
the first anniversary of the Maturity Date.

       

       

      
        
          
          

        

        
          -22-

          
            

          

        

        
          
          

        

      

       

       

      15.           Limitations
of Liability

       

      (a)           No Special Damages. Neither
Party shall be liable to the other for any special, indirect, incidental,
consequential, punitive or exemplary damages, including, but not limited to,
lost profits, under any circumstances regardless of the theory of recovery even
if such Party has knowledge of the possibility of such damages.

       

      (b)           Disclaimer of Warranties.
Except as otherwise expressly provided herein, the Parties specifically disclaim
all warranties of any kind, express or implied, arising out of or related to
this Agreement, including without limitation, any warranty of merchantability or
fitness for a particular purpose, each of which is hereby excluded by agreement
of the Parties.

       

      16.           Notices. All notices, requests
and approvals required by this Agreement shall be in writing addressed/directed
to the other Party at the address and facsimile numbers set forth below, or at
such other address of which the notifying Party hereafter receives notice in
conformity with this section.  All such notices, requests, and
approvals shall be deemed given upon the earlier of receipt of facsimile
transmission during normal business hours or actual receipt
thereof.  All such notices, requests and approvals shall be addressed
to the attention of:

       

      If to
Lender:

       

      IP Global Investors Ltd.

      499 North Canon

      Beverly Hills, CA 90210

      Attn: Meghann McEnroe, CEO

      Facsimile: (310) 526-6575

       

      If to
Borrower:

       

      Fund.com Inc.

      14 Wall Street, 20th
Floor

      New York, New York 10005

      Attn: Gregory Webster, CEO

      Facsimile: (212) ___-____

      

      17.           Miscellaneous

       

      (a)           Waiver.  The failure
of either Party to insist upon or enforce performance by the other Party of any
provision of this Agreement or to exercise any right under this Agreement will
not be construed as a waiver or relinquishment to any extent of such Party’s
right to assert or rely upon any such provision or right in that or any other
instance; rather the same will be and remain in full force and
effect.

       

      (b)           Force
Majeure.  Neither Party shall be liable for, or considered in
breach of or default under this Agreement on account of, any delay or failure to
perform as required by the Agreement (except with respect to payment
obligations) as a result of any causes or conditions which are beyond such
Party’s reasonable control and which such Party is unable to overcome by the
exercise of reasonable diligence.  If any force majeure event occurs
(which shall include, without limitation, acts of God, telecommunications,
Internet or network failure, results of vandalism or computer hacking, fire,
explosion, storm or other natural occurrences, any conflicting order, direction,
action or request of the United States government (including, without
limitation, state and local governments) or of any regulatory department,
agency, commission, court, bureau, corporation or other instrumentality, or of
any civil or military authority, national emergencies, insurrections, riots,
wars, strikes, lockouts, work stoppages or other such labor difficulties), the
affected Party will give prompt written notice to the other Party and will use
commercially reasonable efforts to minimize the impact of such
event.  Notwithstanding the foregoing, the Parties' obligations to one
another shall be excused and/or postponed during and only for the duration of
the applicable force majeure event and shall resume as soon as practicable after
the force majeure event has ended.

       

      
        
          
          

        

        
          -23-

          
            

          

        

        
          
          

        

      

       

       

      (c)           Relationship of the
Parties.  The Parties to the Agreement are independent
contractors.  Neither Party is an agent, representative, partner or
employee of the other Party.  Neither Party will have any right,
power, or authority to enter into any agreement on behalf of, or incur any
obligation or liability of, or to otherwise bind the other Party.  The
Agreement will not be interpreted or construed to create an association, agency,
joint venture, or partnership between the Parties or to impose any liability
attributable to such a relationship upon either Party.

       

      (d)           Survival.  In
addition to any provisions which specifically provide for survival or for
continued obligations following the termination of this Agreement, the following
shall survive the termination of this Agreement:  all representations
and warranties; all provisions for payment of any amounts due hereunder,
including but not limited to, expenses or compensation; all provisions for
confidentiality; all provisions for indemnification, until the first anniversary
of the Maturity Date; all provisions for insurance coverage; and all provisions
for arbitration or the resolution of disputes.

       

      (e)           Construction;
Severability.   Each Party acknowledges that the
provisions of this Agreement were negotiated to reflect an informed, voluntary
allocation between them of all the risks (both known and unknown) associated
with the transactions contemplated hereunder.  Further, all provisions
are inserted conditionally on their being valid in law.  In the event
that any provision of the Agreement conflicts with the law under which the
Agreement is to be construed or if any such provision is held invalid or
unenforceable by a court with jurisdiction over the Parties to the
Agreement:  (i) such provision will be restated to reflect as nearly
as possible the original intentions of the Parties in accordance with applicable
law; and (ii) the remaining terms, provisions, covenants, and restrictions of
the Agreement will remain in full force and effect.

       

      (f)           Remedies.   Except
as otherwise specified, the rights and remedies granted to a Party under the
Agreement are cumulative and in addition to, not in lieu of, any other rights
and remedies which the Party may possess at law or in equity.

       

      (g)           Entire
Agreement.  This Agreement and the other Transaction Documents
constitutes the entire and only agreements among the Parties and supersedes any
and all prior agreements, whether written, oral, express, or implied, of the
Parties with respect to the transactions set forth herein and therein. Further,
the Lender must rely on its own examination of Borrower, the proposed Advances
and the terms of this Agreement, including the merits and risks involved in
making a decision to proceed with the transactions contemplated hereby and
thereby. Lender, to the extent permitted by applicable law, agrees not to make a
claim or bring any action and waives and releases any and all claims against
Borrower or Borrower related to any projections furnished by Borrower to the
Lender, which represent only the good faith estimate by Borrower of future
financial performance and / or opportunities and should not be considered as
facts or certainties.

       

      (h)           Amendment.  No
change, amendment, or modification of any provision of the Agreement will be
valid unless set forth in a written instrument signed by all of the
Parties.

       

      (i)           Assignment.  No
Party to the Agreement shall sell, transfer, or assign the Agreement, the other
Transaction Documents or the rights or obligations hereunder or thereunder
without the prior written consent of the other Party or Parties.

       

       

      
        
          
          

        

        
          -24-

          
            

          

        

        
          
          

        

      

       

      (j)           Headings.  The
captions and headings used in the Agreement are inserted for convenience only
and will not affect the meaning or interpretation of the Agreement.

       

      (k)           Counterparts.  The
Agreement may be executed in counterparts, each of which will be deemed an
original and all of which together will constitute one and the same
document.

       

      (l)           Governing Law; Jurisdiction and
Venue.  This Agreement will be interpreted, construed, and
enforced in all respects in accordance with the laws of the State of New York,
without respect to its conflict of laws principles.

       

      (m)           Expenses.   Each
of the Parties will bear their own costs and expenses in connection with the
drafting, negotiation and execution of this Agreement and the other Transaction
Documents; provided,
that on the Closing Date, the Borrower will, in connection with the initial
Advance drawn under this Agreement, pay to Hodgson Russ LLP, as Lender’s counsel
the sum of $25,000 in payment of such counsel’s legal fees incurred on behalf of
the Lender.

       

      (n)           Fees and Costs.  In
the event that any of the Parties hereto institutes any action, suit or
proceeding to enforce the provisions of this Agreement, or for breach thereof,
or to declare the rights of the Parties with respect thereto, the prevailing
Party shall be entitled to recover, in addition to damages, injunctive or other
relief, reasonable costs and expenses including, without limitation, costs and
reasonable attorneys’ fees incurred in the furtherance of such action, suit or
proceeding.

       

      (o)           Contract
Interpretation.  For purposes of contract interpretation,
including resolution of any ambiguity, the Parties acknowledge that this
Agreement was prepared jointly by their respective attorneys and therefore the
terms of the Agreement should not be construed against either Party as the
drafting Party.

       

      (p)           Facsimile
Signature.   This Agreement and any Transaction Document
may be executed by pdf or other facsimile transmission and such signatures
shall, for all purposes, hereunder and thereunder, be treated as ribbon
originals.

       

      [balance
of this page intentionally left blank - signature page follows]

       

       

      
        
          
          

        

        
          -25-

          
            

          

        

        
          
          

        

      

       

       

      IN WITNESS WHEREOF, the
Parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the Effective Date set forth
above.

      

      Borrower:

      

       FUND.COM INC.

      

      

      By: /s/   Gregory Webster                

      Gregory Webster, Chief Executive
Officer

      

      Subsidiaries:

      

      FUND.COM
TECHNOLOGIES INC.

      

      

      By:
/s/   Gregory Webster               

      Gregory Webster, Chief Executive
Officer

      

      FUND.COM
MANAGED PRODUCTS INC.

      

      

      By:
/s/   Gregory Webster                

      Gregory Webster, Chief Executive
Officer

      

      FUND.COM
CAPITAL INC.

      

      

      By:
/s/   Gregory Webster                

      Gregory Webster, Chief Executive
Officer

      

      Lender:

      

      IP
GLOBAL INVESTORS LTD.

      

      

      By:/s/  Meghann McEnroe                

      Meghann McEnroe, Chief Executive
Officer

      

      

      
        
          
          

        

        
          -26-

          
            

          

        

        
          
          

        

      

      

      EXHIBIT
A

      FUND.COM
INC.

      14 Wall
Street,

      20th
floor

      New York,
New York 10005

       

      
        Borrowing
Report

      

      
        
        

      

      ____________,
20__

      IP Global
Inc.

      ______________________

      ______________________

      Attn:  _________________

      

      
        	
                 
      

              	
                Gentlemen:

              

      

       

      Reference is made to the revolving
credit loan agreement, dated April __, 2009 (the “Loan Agreement”),
between Fund.Com Inc. (“Borrower”) and IP
Global Inc. (“Lender”).   Unless
otherwise defined herein, all capitalized terms used in this Borrowing Report
shall have the same meaning as is defined in the Loan Agreement.

       

      Pursuant to Section 2 of the Loan
Agreement, the Borrower does hereby request an Advance of
$____________.  In such connection, the Borrower does hereby
represent, warrant and covenant to the Lender, as follows:

       

      1.           No
Event of Default or other event which (with the passage of time, the giving of
notice or both) would constitute an Event of Default under the Loan Agreement
exists or would exist by virtue of the Advance requested hereby.

       

      2.           The
Borrower will, after giving effect to the Advance requested hereby, continue to
have Availability of not less than $100.00 under the Loan
Agreement.

       

      3.           The
date by which the Borrower needs the Funds under this Advance is
______________.

       

      4.           The
purpose and use of the Advance is as follows:

       

      5.           The
name and addresses of the creditor(s) of the Borrower that will be paid with
Funds from the Advance are as follows:

       

      6.           Please
wire the Advance to the Person(s) listed below and in accordance with the wire
instructions listed below.

       

       

      Very
truly yours,

       

       

      FUND.COM
INC.

       

      By:________________________

                 Name

                 Title:

      
        
        

      

      
-27-

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