Document:

exv4w10

 

Exhibit 4.10

THIS NOTE IS NOT REQUIRED TO BE, AND HAS NOT BEEN, REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED. THIS NOTE EVIDENCES OBLIGATIONS THAT ARE NOT INSURED BY THE U.S. FEDERAL DEPOSIT
INSURANCE CORPORATION OR BY ANY OTHER GOVERNMENTAL AGENCY.

Deutsche Bank Aktiengesellschaft

U.S. $1,950,000,025

7.60% PERPETUAL SUBORDINATED NOTE

          Deutsche Bank Aktiengesellschaft (the “Bank”), for value received, hereby promises to pay to
Deutsche Bank Contingent Capital LLC III, or registered assigns, the aggregate principal sum of ONE
BILLION AND NINE HUNDRED AND FIFTY MILLION AND TWENTY FIVE
U.S. DOLLARS (U.S. $1,950,000,025) (the
“Principal Amount”) upon presentation and surrender hereof upon the redemption hereof, and to pay
interest on the Principal Amount from and including the date of issue, at a rate and at such times
as determined in accordance with the provisions herein until the principal hereof is paid or duly
made available for payment. This Security is one of the 7.60% Perpetual Subordinated Notes in the
aggregate principal amount of $1,950,000,025 (such Notes, as outstanding from time to time, the
“Outstanding Securities”).

          1. Payments; Interest

          (a) Interest will be payable on the Principal Amount quarterly in arrears on February 20, May
20, August 20 and November 20 of each year, commencing on May 20, 2008. Each such date is referred
to herein as an “Interest Payment Date.” Interest payments payable on each Interest Payment Date
will be calculated as provided below and will accrue from and including the immediately preceding
Interest Payment Date (or from and including February 20, 2008, with respect to the first Interest
Payment Date) to but excluding the relevant Interest Payment Date or date fixed for redemption
(each such period, an “Interest Period”).

          Interest will be payable on the Principal Amount at a fixed rate of 7.60% per annum,
calculated on the basis of a 360-day year of twelve 30-day months. The interest rate is referred
to herein as the “Stated Rate.”

          Each calculation of the amount of interest due hereunder shall be made as if this Security
represented 1,949,999 individual subordinated notes, each with a principal amount of U.S. $1,000
and one individual subordinated note with a principal amount of U.S.$1,025.

          (b) Interest payable on any Interest Payment Date will be paid to the person in whose name
this Security is registered on the register (each such person the “Holder” of this Security)
maintained by the Bank for such purpose (the “Register”) at the close of business on the Business
Day immediately preceding such Interest Payment Date, or, in the case of interest payable on a date
fixed for redemption (the “Obligation Redemption Date”) that is not an Interest Payment Date, to
the person in whose name this Security is registered on the Register at the close of business on
the 15th day (whether or not a Business

 

 

Day) prior to the Obligation Redemption Date (each a “Regular Record Date”). Any interest not
so punctually paid or duly provided for (“Unpaid Interest Amounts”) shall forthwith cease to be
payable to the person registered in the Register on such Regular Record Date and may be paid to the
person in whose name this Security is registered at the close of business on a special record date
(“Special Record Date”) set by the Bank for the payment of such Unpaid Interest Amounts. Unpaid
Interest Amounts may be paid at any time in any lawful manner. “Regular Record Date” and “Special
Record Date” are each referred to herein as the “Record Date”. As used herein, “Business Day”
shall mean any day other than Saturday, Sunday or a day on which banks in New York City are
required or authorized by law to close.

          (c) If any Interest Payment Date or Obligation Redemption Date falls on a day that is not a
Business Day, payment of all amounts otherwise payable on such date will be made on the next
succeeding Business Day, without adjustment, interest or further payment as a result thereof.

          (d) Payments of interest and Additional Interest Amounts (as defined herein), if any, on this
Security, including interest payable on the Obligation Redemption Date, will be made in immediately
available funds in The City of New York, to the person in whose name this Security is registered on
the Register on the relevant Record Date by wire transfer to a bank account designated by such
person in a written notice received by the Bank prior to such Record Date.

          (e) The Principal Amount hereof will be paid in immediately available funds on the Obligation
Redemption Date upon presentation and surrender of this Security, to the person in whose name this
Security is registered on the Register on the related Record Date by wire transfer to an account
designated by such person in a written notice received by the Bank prior to such Record Date.

          (f) Prior to due presentment of this Security for registration of transfer, the Bank (or any
agent of the Bank) may treat the person in whose name this Security is registered on the Register
as the owner hereof for the purpose of receiving payment of the principal of, and interest and any
Additional Interest Amounts on, this Security and for all other purposes whatsoever, whether or not
this Security shall be overdue. The Bank shall not be affected by notice to the contrary.

          (g) No provision of this Security shall alter or impair the obligation of the Bank, which is
direct, subordinated as provided herein, unconditional and unsecured, to pay the Principal Amount
of and interest and any Additional Interest Amounts on this Security in accordance with and subject
to the terms hereof at the times, place and rate, and in the coin or currency herein prescribed.

          2. Currency

          Payments of the Principal Amount of and interest and Additional Interest Amounts, if any, on
this Security shall be made in United States Dollars or in such other coin or currency of the
United States that at the time of payment is legal tender for the payment of public and private
debts. Until the date on which this Security shall have been delivered to the Bank for
cancellation, or shall have become due and payable in full and a sum sufficient to pay all unpaid
Principal Amount of and interest and any Additional Interest Amounts on this Security has been duly
made available for payment and either paid or returned to the Bank as provided herein, the Bank
shall at all times maintain an office or agency in the The City of New York, where this Security
may be presented or surrendered for payment.

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          3. Status

          This Security is a direct, unsecured subordinated debt obligation of the Bank.

          Except for the amount corresponding to the Tier 1 Percentage of the Trust Preferred
Securities, if any, the obligations of the Bank under this Security upon the bankruptcy, insolvency
or liquidation of the Bank will rank (x) subordinate and junior in right of payment to the prior
payment in full of all senior and subordinated indebtedness and other liabilities of the Bank
(including profit participation rights (Genussscheine)); (y) senior to all preference shares,
Preferred Tier 1 Capital Securities and the common shares of the Bank and (z) pari passu with any
instrument or contractual obligation of the Bank ranking junior to any of the instruments included
in clause (x) above and senior to any of the instruments or contractual obligations of the Bank
included in clause (y) above.

          For the amount corresponding to the Tier 1 Percentage of the Trust Preferred Securities, in
any, the obligations of the Bank under this Security upon the bankruptcy, insolvency or liquidation
of the Bank will rank (x) subordinate and junior to all senior and subordinated debt obligations of
the Bank that do not expressly rank on parity with the obligations of the Bank under the
Guarantees, (y) on parity with the most senior ranking preference shares of the Bank, if any,
and with its obligations under any guarantee or support agreement or undertaking relating to any
preference shares or other instrument of any subsidiary of the Bank qualifying as consolidated Tier
1 capital of the Bank that does not expressly rank junior to the obligation of the Bank under
the Guarantees and (z) senior to the Junior Securities.

          Pursuant to § 10, paragraph (5a) of the German Banking Act (Kreditwesengesetz), if the Bank
redeems or repays this Security prior to a date on which such redemption or repayment is permitted
under the terms thereof, notwithstanding any agreements to the contrary, any amounts so paid to a
Holder of this Security must be repaid to the Bank unless a statutory exemption (replacement of the
Principal Amount with at least equivalent own funds or prior approval of the German Federal
Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) (“BaFin”))
applies.

          The Bank may not secure its obligations under this Security by any lien, security interest or
other encumbrance on any property of the Bank or any other person, and except as permitted by
applicable law, the Bank shall not, directly or indirectly, acquire for its own account, finance
for the account of any other person the acquisition of, or accept as security for any obligation
owed to it, any of this Security.

          The Holder agrees by its acceptance of this Security that it waives any and all rights it may
have to set off claims under this Security against claims the Bank may have against it.

          “Tier 1 Qualification Date” means the date, which must be a Payment Date and may be no later
then the Payment Date falling closest to, but not later than, the
fifth anniversary of the date of issue of this security, on which a Tier 1 Qualification Election will be effective.

          “Tier 1 Qualification Election” means the election of the Bank to replace specified terms of
all or a portion of each and every Trust Preferred Security or Class B Preferred Security, as
applicable, with terms specified to be applicable from and after such election.

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          “Tier 1 Percentage” means the Specified Increment of each Trust Preferred Security or Class B
Preferred Security, as applicable, with respect to which Tier 1 Qualification Elections have been
made after giving effect to such elections.

          “Upper Tier 2 Percentage” means the portion of each Trust Preferred Security or Class B
Preferred Security, as applicable, with respect to which no Tier 1 Qualification Election has been
made.

          “Specified Increment” means the percentage of the aggregate liquidation preference amount of
the Trust Preferred Securities or the Class B Preferred Securities, as applicable, to which a
Tier 1 Qualification Election relates, which percentage may only be (a) zero or (b) 20% or an
integral multiple thereof.

          “Preferred Tier 1 Capital Securities” of any person means each class of the most senior
ranking preference shares of such person and any other instruments of such person (other than
common shares) qualifying as Tier 1 regulatory capital and, if such person is the Bank, Preferred
Tier 1 Subsidiary Securities.

          “Preferred Tier 1 Securities” means (i) each class of the most senior ranking preference shares of
the Bank, if any, and (ii) preference shares or any other instrument of any subsidiary of the Bank
subject to any guarantee or support agreement of the Bank which guarantee or support undertaking
ranks on parity with the obligations of the Bank under the Guarantees.

          “Preferred
Tier 1 Subsidiary Securities” means the most senior ranking preference shares and any
other instruments of any person other than the Bank, which, in each case, qualify as Tier 1
regulatory capital and are subject to any agreement of the Bank that guarantees or otherwise
provides support of such preference shares or other instruments.

          “Junior Securities” means (i) ordinary shares of common stock of the Bank, (ii) each class of
preference shares of the Bank ranking junior to Preferred Tier 1 Securities of the Bank, if any,
and any other instrument of the Bank ranking on parity with such preference shares or junior
thereto and (iii) preference shares or any other instrument of any subsidiary of the Bank subject
to any guarantee or support agreement of the Bank which guarantee or support undertaking ranks
junior to the obligations of the Bank under the Guarantees.

          “Guarantees”
means collectively (i) the agreement by the Bank with The Bank of New York as class B
preferred guarantee trustee for the benefit of the holders of the Class B Preferred Securities to
guarantee payment, on a subordinated basis, of certain payments on the Class B Preferred Securities
and (ii) the agreement by the Bank with The Bank of New York as trust preferred guarantee trustee
for the benefit of the holders of the Trust Preferred Securities to guarantee the payment, on a
subordinated basis, of certain payments on the Trust Preferred Securities.

          4. Redemption

          (a) The Bank may redeem this Security, in whole but not in part, upon at least 30 days’ prior
notice, on any Interest Payment Date on or after February 20, 2018, provided the Bank has obtained any required regulatory approvals.

          (b) This Security may be redeemed by the Bank in whole but not in part, upon at least 30 days’
prior notice, at any time if both (i) a Special Redemption Event has occurred and Deutsche Bank
Contingent Capital LLC III (the “Company”) has decided to redeem its Class B Preferred Securities
(the “Class B Preferred Securities”) in whole and (ii) the Bank has either (x) replaced the
Principal Amount by paying in other, at least equivalent, own funds (haftendes Eigenkapital) within
the meaning of the German Banking Act, or (y) obtained prior approval of the BaFin or any successor
authority for such early redemption.

          (c) This Security may be redeemed by the Bank at any time in whole or in part, if it is
replaced in whole or in such part, as applicable, with Substitute Obligations (as defined below),
subject to Section 5 below.

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          (d) Any redemption of this Security will be at a redemption price equal to the Principal
Amount to be redeemed plus accrued and unpaid interest thereon to the Obligation Redemption Date,
and Additional Interest Amounts, if any.

          “Special Redemption Event” means (i) a Regulatory Event, (ii) a Tax Event or (iii) an
Investment Company Act Event.

          “Regulatory Event” means that the Bank is notified by a relevant regulatory authority that, as
a result of the occurrence of any amendment to, or change (including any change that has been
adopted but has not yet become effective) in, the applicable banking laws of Germany (or any rules,
regulations or interpretations thereunder, including rulings of the relevant banking authorities)
or the guidelines of the Committee on Banking Supervision at the Bank for International
Settlements, in each case effective after the date of the issuance of the Class B Preferred
Securities, the Bank is not, or will not be, allowed to treat (i) the Upper Tier 2 Percentage of
the Class B Preferred Securities, if any, as supplementary capital (Ergänzungskapital) or Upper
Tier 2 regulatory capital or (ii) the Tier 1 Percentage of the Class B Preferred Securities, if
any, as core capital (Kernkapital) or Tier I regulatory capital, in each case for capital adequacy
purposes on a consolidated basis.

          “Tax Event” means (A) the receipt by the Bank of an opinion of a nationally recognized law
firm or other tax adviser in the United States or Germany or, during any period in which any
Substitute Obligations are outstanding, in the jurisdiction of residence of any obligor on such
Substitute Obligations (or any jurisdiction from which payments are made) (each, a “Relevant
Jurisdiction”) experienced in such matters, to the effect that, as a result of (i) any amendment
to, or clarification of, or change (including any announced prospective change) in, the laws (or
any regulations promulgated thereunder) of a Relevant Jurisdiction or any political subdivision or
taxing authority thereof or therein affecting taxation, (ii) any judicial decision, official
administrative pronouncement, published or private ruling, regulatory procedure, notice or
announcement (including any notice or announcement of intent to adopt such procedures or
regulations) by any legislative body, court, governmental authority or regulatory body (an
“Administrative Action”), or (iii) any amendment to, clarification of, or change in the official
position or the interpretation of such Administrative Action or any interpretation or pronouncement
that provides for a position with respect to such Administrative Action that differs from the
theretofore generally accepted position, in each case, by any legislative body, court, governmental
authority or regulatory body, irrespective of the manner in which such amendment, clarification or
change is made known, which amendment, clarification or change is effective, or which
Administrative Action, pronouncement or decision is announced, after the date of issuance of the
Class B Preferred Securities, there is more than an insubstantial risk that (a) the Trust or the
Company is or will be subject to more than a de minimis amount of taxes, duties or other
governmental charges, (b) the Trust or the Company would be obligated to pay additional amounts in
respect of the Trust Preferred Securities or the Class B Preferred Securities, as applicable, the
Bank would be obligated to pay additional amounts under the Trust Preferred Guarantee or the
Class B Preferred Guarantee, as applicable, or an obligor on the Obligations would be obligated to
pay Additional Interest Amounts, or (c) the Bank would be subject to tax on income of the Company
under the rules of the German Foreign Tax Act (Aussensteuergesetz) except in cases where the
capital payments may not be declared by the Company, or (B) a final determination has been made by
the German tax authorities to the effect that the Bank, as obligor on the Obligations, may not, in
the determination of its taxable income for the purposes of determining German corporate income tax
in any year, deduct in full interest payments on the Obligations (except to the extent such
interest payments are determined to be connected with income of a branch that is not subject to

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taxation in Germany). However, none of the foregoing will constitute a Tax Event if it may be
avoided by the Bank, the Trust or the Company taking reasonable measures under the circumstances.
“Obligations” means (i) the Outstanding
Securities, (ii) an obligation, if any, issued by the Bank in
connection with a notice to the Company to issue additional Class B Preferred Securities (in
connection with the exercise of the underwriters’ over-allotment option or otherwise) and having
the same terms and conditions as the Outstanding
Securities in all respects except for the issue date,
the date from which interest accrues, the issue price and any other deviations required for
compliance with applicable law and (iii) the Substitute Obligations, if any.

          “Investment Company Act Event” means that the Bank has requested and received an opinion of a
nationally recognized U.S. law firm experienced in such matters to the effect that there is more
than an insubstantial risk that the Company or Deutsche Bank
Contingent Capital Trust III is or will be considered an “investment
company” within the meaning of the Investment Company Act of 1940, as amended, as a result of any
judicial decision, pronouncement or interpretation (irrespective of the manner in which the same is
made known), the adoption or amendment of any law, rule or regulation, or any notice or
announcement (including any notice or announcement of intent to adopt such law, rule or regulation)
by any U.S. legislative body, court, governmental agency, or regulatory authority, in each case
after the date of issuance of the Class B Preferred Securities.

          5. Substitution

          At any time, the Bank will have the right to (i) substitute another obligor on this Security,
in whole or in part, which obligor will be either a branch of the Bank or a Subsidiary, or (ii)
replace this Security, in whole or in part, with one or more Substitute Obligations.

          “Substitute Obligations” means a subordinated obligation issued in substitution for this
Security by the Bank or a Subsidiary with the same aggregate principal amount and interest rate and
payment dates as those of this Security and a maturity that is perpetual or is not earlier than
February 20, 2038 and terms otherwise substantially identical to those of this Security, provided,
that unless the Bank itself is the issuer of the Substitute Obligations, the Bank (which may act
through a branch) guarantees on a subordinated basis, at least equal to the ranking of this
Security, the obligations of the new substitute obligor; provided, in each case, that (a) the Bank
has received the written opinion of a nationally recognized law firm in the United States that
reinvestment in such Substitute Obligation will not adversely affect the “qualified dividend
income” eligibility for purposes of Section 1(h)(11) of the Internal Revenue Code of 1986, as
amended (or any successor legislation), of capital payments on the Trust Preferred Securities
issued by Deutsche Bank Contingent Capital Trust III (the “Trust Preferred Securities”), or cause
the holders thereof to recognize gain or loss for U.S. federal income tax purposes and (b) such
substitution or replacement does not result in a Special Redemption Event, and provided, further in
each case that the Bank has obtained any required regulatory approvals.

          “Subsidiary” means a subsidiary (i) that is consolidated with the Bank for German bank
regulatory purposes and (ii) of which the Bank owns or controls, directly or indirectly, more than
(x) fifty percent (50%) of the outstanding voting stock or other equity interest entitled
ordinarily to vote in the election of the directors or other governing body (however designated)
and (y) fifty percent (50%) of the outstanding capital stock or other equity interest.

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          6. Taxation

          Payments of interest and principal in respect of this Security and any repayment upon
redemption thereof shall be payable free and clear of, and without deduction or withholding for, or
on account of, any present or future taxes, duties or other governmental charges of whatever nature
imposed, levied or collected by or on behalf of any Relevant Jurisdiction or by or on behalf of any
political subdivision or authority therein or thereof having the power to tax (all such taxes
herein called “Withholding Taxes”), unless such deduction or withholding is required by law. In
such event, the Bank shall pay as additional interest such amounts (“Additional Interest Amounts”)
as may be necessary in order that the net amount actually received by any Holder of this Security
after such deduction or withholding for or on account of Withholding Taxes, shall equal the amounts
such Holder would have received had no such Withholding Taxes been withheld or deducted from such
payment; provided, that the foregoing obligation of the Bank to pay such Additional
Interest Amounts shall not apply to any of the following:

          (i) any Withholding Tax which is payable otherwise than by deduction or withholding;

          (ii) any tax imposed on the net income of the Holder or beneficial owner hereof (or of any
Substitute Obligation) or that is payable by reason of the Holder or beneficial owner hereof (or of
any Substitute Obligation) having some connection with any Relevant Jurisdiction other than by
reason only of the mere holding or beneficial ownership of this Security (or of any Substitute
Obligation);

          (iii) any Withholding Taxes which are deducted or withheld pursuant to (i) European Council
Directive 2003/48/EC or any other European Union Directive or Regulation implementing the
conclusions of the ECOFIN Council meeting of 26-27 November 2000 on the taxation of savings income,
or (ii) any international treaty or understanding entered into for the purpose of facilitating
cooperation in the reporting and collection of savings income and to which (x) the United States,
and (y) the European Union or Germany are parties, or (iii) any provision of law implementing, or
complying with, or introduced to conform with, such Directive, Regulation, treaty or understanding;

          (iv) any Withholding Tax to the extent the same would not have been so imposed but for the
presentation of this Security (or of any Substitute Obligation) for payment on a date more than 15
days after the date on which such payment became due and payable or the date on which payment
thereof is duly provided for, whichever occurs later; or

          (v) to the extent such deduction or withholding can be avoided or reduced if the holder or
beneficial owner of the Trust Preferred Securities makes a declaration of non-residence or other
similar claim for exemption to the relevant tax authority or complies with any reasonable
certification, documentation, information or other reporting requirement imposed by the relevant
tax authority; provided, however, that the exclusion set forth in this clause shall not apply if
the certification, documentation, information or other reporting requirement would be materially
more onerous (in form, procedure or the substance of information required to be disclosed) to the
holder or the beneficial owner of Trust Preferred Securities than comparable information or other
reporting requirements imposed under U.S. tax law, regulation and administrative practice (such as
IRS Forms W-8 and W-9).

          7. Assignment

          (a) An assignment of any claims arising from this Security shall be valid only if the Holder
gives notice of the assignment in writing, stating the name and address of the assignee (a “Notice
of Assignment”) and surrenders the Security to the Bank. The

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parties to the assignment may agree that the assignment shall become effective at a later
date, provided, however, that such agreement be specified in the Notice of
Assignment for it to be effective against the Bank.

          (b) Upon receipt of the Notice of Assignment and the Security, the Bank shall promptly deliver
a new Security to the assignee registered in the assignee’s name. The terms and conditions of the
new registered security (the “New Security”) shall be identical to the terms and conditions of this
Security, although the New Security may state the principal amount due to the assignee and identify
the assignee as the Holder thereof as indicated in the Notice of Assignment.

          (c) If the Holder assigns claims only to some, but not all, of the Principal Amount of this
Security, paragraph (b) of this Section 7 shall apply mutatis mutandis to the Holder’s remaining
claims after the assignment.

          8. Jurisdiction

          The Bank irrevocably consents and agrees, for the benefit of the holders from time to time of
this Security or of any security issued upon the registration of assignment hereof, or in exchange
hereof or in lieu hereof, that any legal action, suit or proceeding against it with respect to its
obligations or liabilities arising out of or in connection with this Security may be brought in the
courts in the City of New York and, until all amounts due and to become due in respect of this
Security have been paid, hereby irrevocably consents and submits to the non-exclusive jurisdiction
of each such court in personam, generally and unconditionally with respect to any such action, suit
or proceeding for itself and in respect of its properties, assets and revenues.

          9. Notices

          (a) All notices to the Bank under this Security shall be in writing and addressed to the Bank
at Theodor-Heuss-Allee 70, D-60486 Frankfurt am Main, telecopier no. (+49) 69 910-35092; Attention:
Group Treasury, and with a copy to Group Legal Services of the Bank, Theodor-Heuss-Allee 70,
D-60486 Frankfurt am Main; or to such other address as the Bank may notify the registered Holder of
this Security.

          (b) Where this Security provides for notice to the Holder of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to the Holder at his last address as it appears in the Register.
Neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular
Holder shall affect the sufficiency of such notice with respect to other Holders. Where this
Security provides for notice in any manner, such notice may be waived in writing by the person
entitled to receive such notice, either before or after the event, and such waiver shall be the
equivalent of such notice.

          (c) In case, by reason of the suspension of or irregularities in regular mail service, it
shall be impractical to mail notice of any event to Holders of this Security when such notice is
required to be given pursuant to any provision of this Security, then any manner of giving such
notice as shall be reasonably satisfactory to the Bank shall be deemed to be sufficient giving of
such notice.

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          10. Enforcement

          In the event the Bank shall fail to make any payment of interest and Additional Interest
Amounts, if any, any Holder of the Outstanding Securities may bring an action or proceeding to
enforce such payment, provided that the Bank is not in default in the payment of interest under any
indebtedness to which this Security is subordinated pursuant to Section 3 hereof. The Holders of
the Outstanding Securities shall have no right to accelerate payment of this Security in the case
of a failure of the Bank to make any payment of principal of, interest on, or other amounts owing
under, the Outstanding Securities or a failure to perform any other covenant of the Bank contained
in the Outstanding Securities.

          11. Amendments and Modifications

          (a) This Security, the rights and obligations of the Bank hereunder and the rights of the
Holder of this Security hereunder may be modified and amended, and any failure by the Bank to make
any payment of interest and Additional Interest Amounts hereunder may be waived, in each case with
the consent of the Holders of not less than a majority in aggregate Principal Amount of the
Outstanding Securities, provided that no such modification, amendment or waiver may, without the
consent of Holders of 100% in aggregate Principal Amount of the Outstanding Securities (i) waive a
failure to make any payment of interest or Additional Interest Amounts on, or change the stated
maturity of the interest or Additional Interest Amount on, any Outstanding Security, or reduce the
principal amount thereof or the rate of interest thereon, or change the obligation of the Bank to
pay Additional Interest Amounts, or change any place where, or the coin or currency in which, any
Outstanding Security or any interest or Additional Interest Amount thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on or with respect to any
Outstanding Security; (ii) reduce the percentage of Outstanding Securities the consent of whose
Holders is required to modify or amend this Security or for the waiver of any past failure to make
payments of interest or Additional Interest Amounts; (iii) modify the obligations of the Bank
hereunder to maintain offices or agencies in Frankfurt am Main; (iv) modify the obligation of the
Bank to pay amounts under this Security; or (v) modify the above provisions, except to provide that
modification, amendment or waiver of other provisions of this Security shall not be effective as to
any Outstanding Security without the consent of the Holder of such Outstanding Security.

          (b) This Security may also be amended or modified by the Bank, without the consent of the
Holder of this Security (i) to add to the covenants of the Bank for the benefit of the Holder of
this Security, (ii) to surrender any right or power conferred upon the Bank, (iii) to cure any
ambiguity, correct or supplement any provisions of this Security which may be inconsistent with any
other provision herein or to make any other provisions with respect to matters or questions arising
under this Security, provided that such action shall not adversely affect the interests of the
Holder of this Security in any material respect.

          (c) Notwithstanding the foregoing, no amendment or modification of this Security may be made
which (i) limits the subordination provisions of this Security pursuant to Section 3 or (ii)
shortens the period prior to which the Bank can redeem this Security pursuant to Section 4.

          (d) Any amendment, modification or waiver of or to this Security and the rights and
obligations of the Bank hereunder and the rights of the Holder of this Security hereunder in
accordance with the foregoing provisions will be conclusive and binding upon the Holder of this
Security, and of any securities issued upon the registration of assignment hereof or in exchange
herefor or in lieu hereof, whether or not the Holder shall have given its

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consent and whether or not notation of such amendment, modification or waiver is made upon
this Security.

          12. Conditions Precedent

          The Bank hereby certifies and declares that all acts, conditions and things required to be
done and performed and to have happened precedent to the creation and issuance of this Security,
and to constitute the same a legal, valid and binding obligation of the Bank enforceable in
accordance with its terms, have been done and performed and have happened in due and strict
compliance with all applicable law.

          13. Governing Law

          This Security shall be governed by, and construed in accordance with, the laws of the State of
New York.

          14. Headings

          Headings and sub-headings are for ease of reference only and shall not affect the construction
of the terms of this Security.

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          IN WITNESS WHEREOF, the Bank has caused this Security to be duly executed by two of its duly
authorized officers as of the date first above written.

	 	 	 	 	 
	 	DEUTSCHE BANK AKTIENGESELLSCHAFT

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:credit.htm

    

      EXHIBIT 10.1

      CREDIT AGREEMENT

      

      CREDIT AGREEMENT (the “Agreement”) dated
as of October 11, 2007, by and among SOVEREIGN BANK, a federal savings bank (the
“Lender”) and INDUSTRIAL ENTERPRISES OF AMERICA, INC., a Nevada corporation,
having its principal office at 711 Third Avenue, New York, New York 10017
(“Parent”), UNIFIDE INDUSTRIES, LIMITED LIABILITY COMPANY, a New Jersey limited
liability company, having its principal office at 121 Highway 36, Suite 125,
West Long Branch, NJ 07764 (“Unifide”), PITT PENN OIL CO., LLC, an Ohio limited
liability company, having its principal office at 426 Freeport Road, P.O. Box
296, Creighton, PA 15030 (“Pitt Penn”), EMC PACKAGING, INC., a Delaware
corporation, having its principal office at 550 James Street, Lakewood, NJ 08701
(“EMC”), TODAYS WAY MANUFACTURING LLC, a New Jersey limited liability company,
having its principal office at 1081 Rosemary Boulevard, Akron, Ohio 44306
(“Todays Way”), and PITT PENN HOLDING CO., LLC, an Ohio limited liability
company having its principal office at 426 Freeport Road, P.O. Box 296,
Creighton, Pennsylvania 15030 (“Pitt Holding”, together with Parent, Unifide,
Pitt Penn, EMC and Todays Way, each a “Borrower” and collectively, the
“Borrowers”).

       

      W I T N E S S E T H:

      

      WHEREAS, the Borrowers desire to borrow,
on a joint and several basis, Revolving Credit Loans (as defined herein) from
the Lender;

      

      WHEREAS, the Lender may make such
Revolving Credit Loans to the Borrowers, on a joint and several basis, on the
terms and conditions hereinafter set forth;

       

      NOW, THEREFORE, in consideration of the
premises and the agreements hereinafter set forth and for other good and
valuable consideration, the parties hereto agree as follows:

      

      SECTION 1. DEFINITIONS

      

      1.1           Defined
Terms. As used herein, the
following terms shall have the following meanings:

      

      “Accounts” shall mean those accounts receivable
arising out of the sale of Inventory by the Borrowers or processing and contract
manufacturing by the Borrowers.

      

      “Account
Debtor”
shall mean the person who
is obligated on or under an Account.

      

      “Affiliate” shall mean a Person (1) which directly
or indirectly controls, or is controlled by, or is under common control with a
Borrower or any of its Subsidiaries, (2) which directly or indirectly
beneficially owns or holds ten (10%) percent or more of any class of voting
stock of a Borrower or any of its Subsidiaries, or (3) ten (10%) percent or more
of the voting stock of which is directly or indirectly beneficially owned or
held by a Borrower or any of its Subsidiaries. The term “control” means the
possession, directly or indirectly, 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.

      

      “Aggregate
Outstandings” shall mean,
on the date of determination, the sum of (a) the Letter of Credit Exposure, and
(b) the aggregate outstanding principal amount of all Revolving Credit
Loans.

      

      “Board” shall mean the Board of Governors of
the Federal Reserve System of the United States of America.

      

      “Borrowing
Base” shall mean (i) 80%
(or such lesser percentage as shall be determined by Lender from time to time)
of the Eligible Accounts plus (ii) the lesser of (a) 50% (or such lesser
percentage as shall be determined by Lender from time to time) of the Eligible
Inventory or (b) $2,000,000; provided, however, if no Borrowing Base Certificate
has been delivered as and when required by Section 5.1 (g) hereof, the Borrowing
Base shall be deemed to be zero until the Borrowing Base Certificate has been
delivered with respect to the Borrowing Base as of the end of the immediately
preceding month.

      

      “Borrowing
Base Certificate” shall mean a certificate of Parent in
the form of Exhibit A hereto setting forth the Parent’s calculation of the
Borrowing Base, subject to any reasonable modifications to such form of
certificate as required by Lender from time to time.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      “Business
Day”
shall mean (a) subject to
(b) of this definition, a day other than a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close and (b) relative to the date of (i) making a LIBOR Loan, continuing a
LIBOR Loan as, or converting a Prime Rate Loan to, a LIBOR Loan, (ii) making any
payment or prepayment of principal of or payment of interest on a LIBOR Loan, or
(iii) the Borrower giving any notice (or the number of Business Days to elapse
prior to the effectiveness thereof) in connection with any matter referred to in
(b)(i) or (b)(ii), any day on which commercial banks are open for international
business (including dealings in U.S. dollar deposits) in London,
England.

      
 

      “Capital
Leases”
shall mean capital leases,
conditional sales contracts and other title retention agreements, relating to
the purchase or acquisition of assets that in accordance with GAAP are required
or permitted to be depreciated or amortized on a balance
sheet.

      

      “Collateral” shall mean all existing and
future assets and properties of the Borrowers and their Subsidiaries, including
without limitation, all “Collateral” defined as such in the Security
Agreement.

      

      “Compliance
Certificate”
shall mean the certificate of the Chief Financial Officer of the Parent provided
pursuant to Section 5.1(a) and (b) in the form attached hereto as Exhibit B,
subject to any reasonable modifications to such form of certificate as required
by Lender from time to time.

      

      “Consolidated
Lease Expense”
shall mean, for any period, lease expense determined for Parent and its
Subsidiaries (including the other Borrowers) on a consolidated basis in
accordance with GAAP.

      

      “Contingent
Obligation”
shall mean, with respect to any Person, any obligations, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Funded Debt or
other obligation of any other Person, or providing financial assistance with
respect to the financial condition, or the payment of the obligations of, such
other Person (including, without limitation, purchase or repurchase agreements,
reimbursement agreements with respect to letters of credit or acceptances,
indemnity arrangements, grants of security interests to support the obligations
of another Person, keepwell agreements and take-or-pay or through-put
arrangements) which has the effect of assuring or holding harmless any third
Person against loss with respect to one or more obligations of any other Person;
provided that the term “Contingent Obligation” shall not include endorsements of
instruments for deposit or collection in the ordinary course of
business.  The amount of any Contingent Obligation of any Person shall
be deemed to be the maximum amount for which such contingently liable Person may
be liable pursuant to the terms of the instrument embodying such Contingent
Obligation.

      

      “Contractual
Obligations” shall mean as to any Person, any
provision of any security issued by such Person or of any agreement, instrument
or undertaking to which such Person is a party or by which it or any of its
property is bound (including, without limitation, any agreement, instrument or
undertaking with stock-holders of any such Person).

      

      “Current
Assets” shall mean, at any time, all Inventory,
Accounts and cash (subject to reserves and allowances for doubtful Accounts) of
the Parent and its Subsidiaries on a consolidated basis that in accordance with
GAAP are properly classified as current assets.

      

      “Current
Liabilities” shall mean, at any time, all
liabilities of the Parent and its Subsidiaries on a consolidated basis payable
on demand or maturing within one (1) year from the date as of which current
liabilities are to be determined, and such other liabilities that in accordance
with GAAP are properly classified as current liabilities.

      

      “Default” shall mean any of the events specified
in Section 8 hereof, whether or not any requirement for the giving of notice,
the lapse of time, or both, or any other condition, has been satisfied or given,
as the case may be.

      

      “Default
Rate”
shall mean at any time a
rate per annum equal to four (4) percentage points per annum in excess of the
Prime Rate in effect from time to time.

      

      “Dollars” and “$” shall mean lawful currency of the United
States of America. 

      

      “Eligible
Accounts” shall mean the gross outstanding balance
(less all fees and other amounts which are unearned, and less all sale, excise
taxes or similar taxes) of those Accounts of the Borrowers which are
satisfactory to the Lender and with respect to which, the Lender has a valid and
perfected first priority and only security interest, there is no violation of
the negative, affirmative or collateral covenants or other provisions of this
Agreement or any other Loan Document and which the Lender deems to be Eligible
Accounts based on such credit, collateral and other considerations as the
Lender

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       may deem appropriate. All returns,
deductions, discounts, claims, disputes, credits and allowances of any nature
(whether issued, granted, owing, claimed or outstanding) shall be deducted from
Eligible Accounts.  Without limiting the Lender’s discretion, as set
forth above, an Account of any of the Borrowers can only be an Eligible Account
if:

      

      (a) such Account (i) arises from the actual
and bona fide
sale and delivery of
finished goods Inventory or rendition of services in the ordinary course of
business which sale and delivery and services, as applicable, are completed in
accordance with the terms and provisions contained in any documents related
thereto, (ii) is not evidenced by or payable pursuant to invoices or similar
documentation issued by, or calling for payment to, any other Person and (iii)
does not arise from or in connection with any sales of Inventory or rendition of
services to any Borrower or an Affiliate or any Subsidiary or related Person of
a Borrower;

      

      (b) such Account is not unpaid more than
ninety (90) days after date of original invoice;

      

      (c) such Account does not arise from sales
on consignment, guaranteed sale, sale and return, sale on approval, or other
terms under which payment by the Account Debtor may be conditional or
contingent;

      

      (d) either (i) the chief executive office of
the Account Debtor with respect to such Accounts is located in the United States
of America, including Puerto Rico (the “US Requirement”), and such Account is
subject to receivables or credit insurance issued by an insurer pursuant to duly
documented written insurance policies in which the Lender is named as a loss
payee and on terms and in an amount and from an insurer acceptable to the Lender
or (ii) the US Requirement is not satisfied and such account is guaranteed or
insured by EXIM Bank pursuant to documentation acceptable to the Lender in which
EXIM Bank has agreed to pay such guarantee or insurance proceeds to Lender;
provided, however, any portion of such Account which is not so guaranteed or
insured shall not be deemed an Eligible Account, (iii) the Account is
backed by a letter of credit issued by Lender, or (iv) the Account Debtor in
respect of such Account is identified on Exhibit C;

      

      (e) such Account does
not consist of progress billings, bill and hold invoices or retainage
invoices;

      

      (f) the Account Debtor with respect to such
Account has not asserted a counterclaim, defense or dispute and does not have,
and does not engage in transactions which may give rise to, any right of setoff
against such Account, and is not a supplier to or creditor of the Borrower or
any of its Subsidiaries;

      

      (g) there are no facts, events or
occurrences which would impair the validity, enforceability or collectability of
such Account or reduce the amount payable or delay payment
thereunder;

      

      (h) the Account Debtor with respect to such
Account is not any foreign government, the United States of America, any State,
political subdivision, department, agency or instrumentality of any of the
foregoing;

      

      (i) the Account does not arise out of or in
connection with any contract for services or involving projects entered into by
any Borrower that requires a bond, guaranty or other similar surety as credit
support;

      

      (j) such Account is
owed by any Account Debtor which is not insolvent, is not the subject of a
bankruptcy, insolvency, arrangement, reorganization, receivership or similar
proceeding and is not negotiating a compromise of its debts or calling a meeting
for such purpose and has not filed a petition or other application for relief or
had filed against it a petition or other application for relief under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors, has not
failed or suspended business operations or had or suffered a receiver or a
trustee to be appointed for all or a significant portion of its assets or
affairs;

      

      (k) such Account is owed by an Account
Debtor deemed creditworthy at all times by the Lender, as determined by the
Lender;

      

      (l) such Account is not evidenced by an
instrument or chattel paper (as defined in the UCC);

      

      (m) the Account Debtor, any insurer with
respect to such Account and EXIM Bank, if a guarantor or insurer with respect to
such Account, has been notified in writing to send all payments on such Account
and any guarantee or insurance in respect of such Account to the Lockbox Account
or such other place as instructed by the Lender and such notice has not been
revoked; and

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      (n) the Account is owing in
Dollars.

      

      Criteria for Eligible Accounts may be
established and revised from time to time by the Lender and the Lender reserves
the right to create, from time to time, additional categories of ineligible
Accounts. Any Accounts which are not Eligible Accounts shall nevertheless be
part of the Collateral.  Lender will endeavor to provide Parent with
ten days’ notice of any material revision of the criteria for Eligible Accounts;
provided, however, the failure to provide such notice will not prevent the
revision from being effective or make Lender liable as a result of or in respect
of such revision or such failure.

      

      “Eligible
Inventory” shall mean all Inventory in which Lender
has a first priority and only perfected security interest and which is
satisfactory to Lender consisting of raw materials, finished goods and packaging
material owned by the Borrowers exclusive of (i) work in process,
(ii) private label goods held in inventory for over ninety (90) days,
(iii) Inventory which can only be sold to a Governmental Authority or
(iv) Inventory which a Borrower does not have good and marketable title to,
and less reserves determined in accordance with GAAP and less Inventory which
incorporates patents, trademarks or intellectual property of Persons other than
the Borrowers provided to or used by or licensed to a Borrower pursuant to a
license or other agreement or arrangement unless Borrowers provide Lender with a
waiver and consent from each third party licensor, or owner or Person with
rights to such patents, trademarks or intellectual property, satisfactory to
Lender.  Eligible Inventory shall be valued at the lower of book value
(based on a FIFO valuation) and fair market value.  Eligible Inventory
shall be reduced by (a) all Inventory not present in the United States of
America, (b) all Inventory returned or rejected by Borrower’s customers (other
than goods that are undamaged and resalable in the normal course of business)
and Inventory to be returned to Borrower’s suppliers, (c) Inventory which is not
in good condition or fails to meet standards for sale or use imposed by
governmental agencies, departments or divisions having regulatory authority over
such Inventory, and Inventory which cannot be sold in compliance with all
Requirements of Law without a license, permit, approval or authorization of a
Governmental Authority, (d) Inventory which is not useable or saleable at prices
approximating their cost in the ordinary course of such Borrower’s business
(including without duplication the amount of any reserves for obsolescence,
unsalability or decline in value), and (e) the amount of such other reserves
against Inventory as the Lender deems necessary in the exercise of its business
judgment, including, without limitation, reserves for discontinued, slow-moving
and obsolete Inventory, market value declines, bill and hold (deferred
shipment), shrinkage and any applicable customs, freight, duties and
taxes.

      

      Criteria for Eligible Inventory may be
established and revised from time to time by the Lender and the Lender reserves
the right to create, from time to time, additional categories of ineligible
Inventory.  Any Inventory which is not Eligible Inventory shall
nevertheless be part of the Collateral.  Lender will endeavor to
provide Parent with ten (10) days’ notice of any material revision of the
criteria for Eligible Inventory; provided, however, the failure to provide such
notice will not prevent the revision from being effective or make Lender liable
as a result of or in respect of such revision or failure.

      

      “Environmental
Laws”
shall mean all applicable
federal, state or local statutes, laws, ordinances, codes, rules, regulations,
guidelines, requirements of any Governmental Authority, any and all Requirements
of Law and any common law requirements, rules and basis of liability (including
consent decrees and administrative orders) relating to public health and safety,
standards of conduct concerning pollution and protection of the environment, as
now or may at any time hereafter be in effect.

      

      “ERISA” shall mean the Employee Retirement
Income Security Act of 1974, and all rules and regulations promulgated pursuant
thereto, as the same may from time to time be supplemented or
amended.

      

      “ERISA
Affiliate” shall mean any trade or business
(whether or not incorporated) which together with any of the Borrowers or their
respective Subsidiaries would be treated as a single employer under Section 4001
of ERISA.

      

      “Event
of Default” shall have the meaning specified in
Section 8 hereof.

      

      “EXIM
Bank” shall mean the Export-Import Bank of
the United States and any successor thereto.

      

      “Field
Audit”
shall have the meaning
assigned thereto in Section 5.1 (f) hereof.

      

      “Funded
Debt”
shall mean, on a
consolidated basis with respect to any Person and its Subsidiaries, without
duplication, (i) all indebtedness and obligations for borrowed money, (ii) all
obligations to pay the deferred purchase price of property or services (other
than trade payables arising in the ordinary course of business which are not
overdue), (iii) all obligations as lessee under Capital Leases, (iv) all
obligations evidenced by bonds, debentures, notes or equivalent
or

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       similar instruments, (v) all
reimbursement and other obligations (contingent or otherwise) in respect of
letters of credit, acceptance drafts, bankers acceptances or similar
instruments, (vi) all Funded Debt of others secured by a Lien on any property or
assets of such Person, whether or not the Funded Debt is assumed by such Person,
(vii) all liabilities under interest rate cap agreements, interest rate swap
agreements, collars, foreign currency exchange agreements and other hedging
agreements or arrangements and (viii) all Contingent Obligations of such
Person.

      

      “GAAP” shall mean generally accepted accounting
principles applied in a manner consistent with that employed in the preparation
of the Parent’s certified annual consolidated financial statements for its most
recent fiscal year prior to the date of this Agreement.

      

      “Governmental
Authority” shall mean any nation or government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled (through stock or capital ownership or otherwise) by any of the
foregoing.

      

      “Guarantee” or “Guarantees” shall mean, collectively, any guarantee
hereafter delivered by any Subsidiaries of the Borrowers required to deliver a
Guarantee pursuant to Section 5.11 hereof, as the same may hereafter be amended,
restated, supplemented or otherwise modified from time to
time.

      

      “Guarantors” shall mean, collectively, each
Subsidiary of any of the Borrowers (other than the Borrowers), and each other
Subsidiary of any of the Borrowers which, from time to time hereafter, is
required to execute a Guarantee in accordance with Section 5.11
hereof.

      

      “Hazardous
Materials” shall mean any hazardous or toxic
substances, materials or wastes, defined, listed, classified or regulated as
such in or under any Environmental Laws, including, without limitation,
asbestos, petroleum or petroleum products (including gasoline, crude oil or any
fraction thereof), polychlorinated biphenyls, and urea-formaldehyde
insulation.

      

      “Intellectual
Property Security Agreements” shall mean any and all assignments
and/or security agreements required by Lender in respect of any Borrower’s
existing or future intellectual property, including, without limitation, patent,
trademark and copyright assignments and security agreements, as amended,
supplemented, restated or modified from time to time.

      

      “Intercreditor
Agreement” shall mean the Intercreditor Agreement
dated as of even date herewith between the Lender and GSL of Ill, LLC, as
amended, restated, supplemented or modified from time to
time.

      

       “Interest
Period”
with respect to any LIBOR
Loan shall mean:

      

      (a) initially, the period commencing on the
date such LIBOR Loan is made and ending one, two or three months thereafter as
selected by the Borrowers by irrevocable written notice from the Parent to the
Lender not less than three (3) Business Days prior to the requested LIBOR Loan;
and

      

      (b) thereafter, each period commencing on
the last day of the next preceding Interest Period applicable to such LIBOR Loan
and ending one, two or three months thereafter, as selected by the applicable
Borrower by irrevocable written notice to the Lender not less than three (3)
Business Days prior to the last day of the then current Interest Period with
respect to such LIBOR Loan; provided, however, that all of the foregoing
provisions relating to Interest Periods are subject to the
following:

      

      (i)           if any Interest Period pertaining to a
LIBOR Loan would otherwise end on a day which is not a Business Day, the
Interest Period shall be extended to the next succeeding Business Day unless the
result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the immediately
preceding Business Day;

       

      (ii)           if the Borrower shall fail to give
notice as provided in clause (a) or (b) above, the Borrower shall be deemed to
have requested a Prime Rate Loan (in the case of (a)) or a conversion of the
affected LIBOR Loan to a Prime Rate Loan on the last day of the then current
Interest Period with respect thereto (in the case of
(b));

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (iii)           any Interest Period that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the applicable calendar month;
and

      

      (iv)           no Interest Period may be selected which
ends later than the Termination Date.

      

      “Inventory”  shall mean all present and
hereafter acquired inventory (as defined in the UCC) including, without
limitation, all merchandise and inventory in all stages of production (from raw
materials through work-in-process to finished goods), and all additions,
substitutions and replacements thereof, wherever located, together with all
goods and materials used or usable in manufacturing, processing, packaging, selling, promoting or shipping of the
foregoing, and all Proceeds of any of the foregoing.

      

      “Investment
Property” shall mean all present and
hereafter acquired investment property (as defined in the UCC) together with all
stock and other equity interests in any Borrower’s subsidiaries, and all
Proceeds thereof.

      

      “Joint
Venture” shall mean that certain joint venture
between the Parent and Sinochem Ningbo, Ltd. for the packaging of refrigerant
gases  in China for worldwide distribution as evidenced by a Joint
Venture Agreement dated February 1, 2007, or by any other documentation,
arrangement or agreement related to such joint venture.

      

      “Letter
of Credit” or
“Letters
of Credit” shall mean letters of credit issued by
the Lender pursuant to the Letter of Credit Documentation for the account of the
Borrowers.

      

      “Letter
of Credit Documentation” shall mean all documentation from time
to time in effect relating to or evidencing the Letters of Credit or
reimbursement obligations with respect thereto, as amended, restated,
supplemented or modified from time to time.

      

      “Letter
of Credit Exposure” shall mean at any time the sum of (a)
the aggregate undrawn amount of all outstanding Letters of Credit, and (b)
unless constituting the Revolving Credit Loans hereunder, the aggregate amount
of all drawings under Letters of Credit for which the Lender shall not have been
reimbursed.

      

      “Leverage
Ratio” shall mean as at any date of
determination, the ratio of (a) Total Liabilities on such date to (b) the
Tangible Net Worth on such date.

      

      “LIBOR” shall mean as applicable to a LIBOR Loan
and such Interest Period, as determined by Lender, a rate per
annum  (rounded upward, if necessary, to the nearest 1/32 of one
percent) equal to the composite LIBOR or London Interbank Offered Rate which
appears on the Sovereign Bank Treasury Group Rate Sheet as of 11:00 a.m. New
York time on the day that is two (2) Business Days preceding the first day of
such Interest Period (or if not reported thereon, then as determined by the
Lender from a page, source or interbank quotation selected by the
Lender).  In the event that the Board shall impose a Reserve
Percentage with respect to LIBOR deposits of the Lender, then for any period
during which such Reserve Percentage shall apply, LIBOR shall be equal to the
amount determined above divided by an amount equal to 1 minus the Reserve
Percentage.

      

      “LIBOR
Loan”
shall mean any Revolving
Credit Loan when and to the extent that the interest rate therefor is determined
by reference to LIBOR.

      

      “Lien” shall mean any mortgage, pledge,
security interest, hypothecation, assignment, deposit arrangement, encumbrance,
lien (statutory or other), or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction pursuant to any of the
types of security interests or other interests referred to
herein).

      

      “Loan
Documents” shall mean, collectively, this
Agreement, the Revolving Credit Note, the Letter of Credit Documentation, the
Security Agreement, the Guarantees, the Intellectual Property Security
Agreements, the Lock Box Agreement, the Perfection Certificate, the Post-Closing
Letter and any other documents executed by the Borrowers or the Guarantors or
any of them or any of their respective officers, members, managers or other
representatives in connection herewith or therewith including any and all
amendments, restatements, supplements or other modifications to any
such

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      documents; provided, however, documents
relating to the previous line of credit in the amount of $1,000,000 previously
provided to Pitt Penn shall not constitute Loan Documents.

      

      “Lockbox
Account” shall mean the post office box or post
office boxes established under the Lockbox Agreement with respect to which
payments on all Accounts are to be made.

      

      “Lockbox
Agreement” shall mean,
collectively, the agreement(s) regarding lockbox accounts of the Borrowers
and/or cash management services, by and among the Borrowers, the Lender and/or
any other parties acceptable to the Lender, together with any other documents
between the Borrowers, the Lender and any such parties, relating to the
foregoing all as amended, restated, supplemented or
modified.

      

      “Multiemployer
Plan”
shall mean any Plan
described in Section 4001(a)(3) of ERISA.

      

      “Obligations” shall have the meaning set
forth in the Security Agreement.

       

      “PBGC” shall mean the Pension Benefit Guaranty
Corporation or any successor thereto.

      

      “Perfection
Certificate” shall mean the Perfection Certificate
or Perfection Certificates executed by or on behalf of the Borrowers and/or the
Guarantors or any of them or any of their respective representatives as of even
date herewith or any other date, as amended, restated, supplemented or modified
from time to time.

      

      “Permitted
Acquisition” shall mean an acquisition by a Borrower
or any Affiliate or Subsidiary of a Borrower by purchase of a voting majority of
the stock or other Investment Property of another Person or the purchase of all
or substantially all of the assets of another Person (or of a division or other
operating component of another Person) (an “Acquisition”) if all of the
following conditions are met:

      

      (i)             The total consideration for such
Acquisition and all related Acquisitions of Affiliates of such acquired Person,
including, without limitation, the cash purchase price, any Funded Debt incurred
or assumed in connection therewith, any earn-outs, debt and equity
consideration, does not exceed $4,000,000 in the aggregate (with a fair
valuation of equity and debt consideration and consideration which is contingent
or tied to an earn-out or to be paid in the future);

      

      (ii)           The Acquisition is identified as a
“Permitted Acquisition” by such Borrower in writing to the Lender at least
thirty (30) days before such Acquisition;

      

      (iii)           The Lender shall have received a
certificate satisfactory to the Lender signed by the chief financial officer of
the Parent at least twenty (20) days before such Acquisition to the effect that
(and including calculations indicating that) on a pro forma basis for the next
four (4) quarters after giving effect to such Acquisition: (a) all
representations and warranties contained in the Loan Documents will remain true
and correct except those, if any, made as of a specific time which shall have
been true and correct when made, (b) the Borrowers on a consolidated basis will
remain in compliance with all covenants contained in the Loan Documents, and (c)
no Default or Event of Default has occurred and is continuing or will occur
after giving effect to the consummation of such Acquisition;

      

      (iv)           With respect to such Person which is the
subject of an Acquisition, such Acquisition has been (x) approved by the board
of directors or other appropriate governing body of such Person or (y)
recommended for approval by such board of directors or governing body to the
shareholders, members, partners, or other owners of such Person, as required
under applicable law or the certificate of incorporation and by-laws or other
organizational documents of such Person and subsequently approved by the
shareholders, members, partners or other owners if such approval is required
under applicable law or by the certificate of incorporation and by-laws or other
organizational documents of such Person or (z) otherwise agreed to by all
shareholders, members, partners or owners of such Person;

      

      (v)           Substantially all of the revenue of the
Person(s) or assets being acquired is derived from products and services
substantially similar to those currently provided by the
Borrowers;

      

      (vi)            The Lender shall have received a first
priority and only perfected security interest in all existing and future assets
and equity of such Person(s) being acquired on terms satisfactory to the
Lender;

      

      (vii)           At least thirty days before such
Acquisition, the Lender shall have received (A) at least two (2) years of
historical financial statements of such Person (or, if such Person has been in
business for less than two (2) years,

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      financial statements for such lesser
number of years), and (B) UCC, tax lien and judgment searches on such Person
satisfactory to the Lender;

      

      (viii) No Event of Default has occurred and is
continuing; and

      

      (ix)             The Borrower and such other Person, if
any, has complied with the provisions of Section 5.11
hereof.

      

      “Person” shall mean any individual, corporation,
partnership (general or limited), joint venture, limited liability company,
trust, unincorporated organization or any other juridical entity, or a
government or state or any agency or political subdivision thereof and any other
entity of any kind.

      

      “Plan” shall mean any plan of a type described
in Section 4021(a) of ERISA in respect of which the Borrower or any of its
Subsidiaries or any ERISA Affiliate is an “employer” as defined in Section 3(5)
of ERISA.

      

      “Post-Closing
Letter” shall mean the Post-Closing Letter
dated as of even date herewith among Lender and Borrowers.

      

      “Prime
Rate”
shall mean the rate per annum from time to time
established by the Lender as the Prime Rate and made available by the Lender at
its main office or, in the discretion of the Lender, the base, reference or
other rate then designated by the Lender for general commercial loan reference
purposes, it being understood that such rate is a reference rate, not
necessarily the lowest, established from time to time, which serves as the basis
upon which effective interest rates are calculated for loans making reference
thereto.  Each change in the Prime Rate shall be effective on the date
such change is established.

      

      “Prime
Rate Loan” shall mean any Revolving Credit Loan
when and to the extent that the interest rate therefor is determined by
reference to the Prime Rate.

      

      “Proceeds” shall have
the meaning given to such term in the UCC, including, without limitation, all
(a) payments or other proceeds from an insurance carrier with respect to any
loss, casualty or damage to or in respect of Collateral, and (b) payments
received on account of any condemnation or other governmental taking of any
Collateral.

      

      “Prohibited
Transaction” means any transaction set forth in
Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1986, as
amended from time to time.

      

      “Reportable
Event”
shall mean any of the
events set forth in Section 4043(b) of ERISA or the regulations
thereunder.

      

      “Requirements
of Law”
shall mean, as to any
Person, the certificate of incorporation and by-laws and articles of
organization and certificate of formation and operating agreement and limited
liability company agreement or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation, or any determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

      

      “Reserve
Percentage” shall mean, the maximum aggregate
reserve requirement (including all basic, supplemental, marginal and other
reserves), which is imposed on member banks of the Federal Reserve System
against “Euro-currency Liabilities” as defined in Regulation D of the Board
regulations.

      

      “Revolving
Credit Line Facility” or “Revolving
Credit Loan Facility” shall mean the revolving credit line
facility provided by the Lender to the Borrowers during the Revolving Loan
Period pursuant to the terms described in this Agreement.

      

      “Revolving
Credit Loan(s)” shall mean a loan or loans, as
applicable, made pursuant to the terms of Section 2.1
hereof.

      

      “Revolving
Credit Note” shall mean the Revolving Credit Note
defined in Section 2.3 hereof in the form of Exhibit D
hereto.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      “Revolving
Loan Period” shall mean the period from and including
the date hereof to, but not including, the Termination Date or such earlier date
as the Revolving Credit Line Facility shall terminate as provided
herein.

      

      “Security
Agreement” shall mean a Security Agreement dated as
of even date herewith executed by each of the Borrowers in favor of the Lender,
as amended, restated, supplemented or modified from time to time, together with
any other Security Agreement hereafter executed by any Subsidiary of a Borrower
under Section 5.11 of this Agreement, as amended, restated, supplemented or
modified from time to time.

      

      “Subordinated
Debt”
shall mean indebtedness of
the Borrowers subordinated in right of payment to the obligations to the Lender
under this Agreement pursuant to subordination, documentation between the Lender
and the applicable subordinated creditor containing maturities, amortization
schedules, covenants, defaults, remedies, subordination provisions and other
terms in form and substance satisfactory to the Lender.

      

      “Subsidiary” shall mean with respect to any Person
(the “parent”) at any date, any corporation, limited liability company,
partnership, association or other entity the accounts of which would be
consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as
of such date, as well as any other corporation, limited liability company,
partnership, association or other entity of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power or, in the case of a partnership, more than 50% of the
partnership interests are, as of such date, owned, controlled or held, directly
or indirectly, by the parent.

      

      “Tangible
Net Worth” shall mean, for the Parent and its
Subsidiaries (including the other Borrowers) on a consolidated basis in
accordance with GAAP subject to this paragraph, at any date, the excess of Total
Assets minus Total Liabilities, excluding, however, from the determination of
Total Assets (i) monies due from Affiliates or Subsidiaries or officers or
managers or related Persons of any Borrowers, (ii) the value of any investment
made and capital account in the Joint Venture, (iii) the value of any restricted
stock or restricted stock grants or privately held stock or equity, (iv) any
prepayments made to consultants of any of the Borrowers or any of their
Subsidiaries and (v) all assets which would be classified as intangible assets
under GAAP, including, without limitation, goodwill, patents, trademarks, trade
names, copyrights and franchises.

      

      “Termination
Date”
shall mean October 31, 2008
or, if such date is not a Business Day, the Business Day next preceding such
date.

      

      “Total
Assets” shall mean as of the date of
determination, all assets of the Parent and its Subsidiaries (including the
other Borrowers), determined on a consolidated basis in conformity with
GAAP.

      

      “Total
Liabilities” shall mean as of the date of
determination, all liabilities of the Parent and its Subsidiaries (including the
other Borrowers), determined on a consolidated basis in conformity with
GAAP.

      

      “UCC” shall mean the Uniform
Commercial Code as the same is in effect on this date in the State of New
York.

       

      1.2           Accounting
Terms. As used herein and
in any certificate or other documents made or delivered pursuant hereto,
accounting terms not specifically defined herein shall have the respective
meanings given to them under GAAP.

      

      SECTION 2. AMOUNT AND
TERMS OF REVOLVING CREDIT LINE FACILITY

      

      2.1           Revolving
Credit Line Facility.
Subject to the terms and conditions and relying upon the representations and
warranties herein set forth, the Lender may make Revolving Credit Loans to the
Borrowers, on a joint and several basis, at any time and from time to time from
the date hereof to the Termination Date, or until the earlier termination of this
Revolving Credit Line Facility in accordance with the terms hereof, in an
aggregate principal amount at any time outstanding not to exceed $5,000,000.
Notwithstanding the foregoing, the Aggregate Outstandings shall not at any time
exceed the lesser of (a) $5,000,000 or (b) the Borrowing Base, and Revolving
Credit Loans shall not be made that would result in Aggregate Outstandings
exceeding the lesser of (a) or (b). The Revolving Credit Line Facility shall
automatically and permanently terminate, and all Obligations shall be due and
payable in full, on the earlier of the Termination Date or the end of the
Revolving Loan Period, or earlier, as set forth elsewhere in this
Agreement.

      

      Notwithstanding anything in this
Agreement, the making of any Revolving Credit Loan to the Borrowers is within
the absolute, unqualified and sole discretion of the Lender, and Lender has the
absolute, unqualified right, in its sole

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      discretion, to refrain from making any
Revolving Credit Loan to the Borrowers for any reason or no reason at all and
without regard to any Borrowing Base calculation.

      

      Within the foregoing limits, the
Borrowers may borrow, repay (or, subject to the provisions of Section 2.9
hereof, prepay) and reborrow, during the Revolving Loan Period, subject to the
terms, provisions and limitations set forth in this
Agreement.

      

      2.2           Revolving
Credit Loans. (a) The
Revolving Credit Loans made by a Lender on any date shall be in a minimum
aggregate amount of $100,000 or an integral multiple
thereof.

      

      (b)           Each Revolving Credit Loan shall be
either a Prime Rate Loan or a LIBOR Loan as the Borrowers may request pursuant
to Section 2.5 hereof. Revolving Credit Loans of more than one type and Interest
Period may be outstanding at the same time.

       

      2.3           Revolving
Credit Note. (a) The
Revolving Credit Loans made by the Lender pursuant to Section 2.1 hereof
shall be evidenced by a joint and several promissory note of the Borrowers
substantially in the form of Exhibit “D” hereto with appropriate insertions (the
“Revolving Credit Note”), payable to the order of the Lender and evidencing the
joint and several obligations of the Borrowers to pay to the Lender on the
earlier of the Termination Date or the end of the Revolving Loan Period, or
earlier, as specified in the Revolving Credit Note or this Agreement, the lesser
of (i) $5,000,000 or (ii) the aggregate unpaid principal amount of all Revolving
Credit Loans made by the Lender, with interest thereon as hereinafter prescribed
in Section 2.4 hereof.

      

      (b)           The date and amount of each Revolving
Credit Loan, the basis for calculating interest with respect thereto, the
Interest Period (if any) applicable thereto and each payment of principal with
respect thereto may be endorsed by the Lender on the schedule annexed to and
constituting a part of the Revolving Credit Note. The aggregate unpaid amount of
Revolving Credit Loans set forth on such schedule shall be presumed to be the
principal amount owing and unpaid thereon. The failure of the Lender to make
such endorsement on such schedule shall not prejudice the Lender in any way, nor
affect its rights hereunder with respect to any Revolving Credit Loans or
Borrowers’ obligations relating thereto. The Revolving Credit Note shall be
dated the date of this Agreement and be stated to mature on the Termination Date
or earlier, as specified in the Revolving Credit Note.

      

      2.4           Interest. Interest on each Revolving Credit Loan
shall be at a per annum rate to be elected by the Borrowers, in accordance with
Section 2.5 hereof, and shall be either a fluctuating rate equal to the Prime
Rate minus 0.25% or, subject to availability, the LIBOR for Interest Periods
selected by the Borrowers plus 2.00%. Interest on each Prime Rate Loan shall be
payable monthly in arrears to the Lender, on the first Business Day of each
month, commencing on the first such day to occur after the pertinent Revolving
Credit Loan is made and upon payment in full thereof.  Interest on
each LIBOR Loan shall be payable to the Lender in arrears on the last Business
Day of the Interest Period applicable to such LIBOR Loan, commencing on the
first such day to occur after the pertinent Revolving Credit Loan is made and
upon payment in full thereof. Whenever the unpaid principal balance of any
Revolving Credit Loan shall become due and payable (whether at the stated
maturity thereof, by acceleration or otherwise) or an Event of Default shall
have occurred, interest on all Revolving Credit Loans and all other obligations
under this Agreement shall thereafter accrue and be payable, on demand, to the
Lender at the Default Rate. Interest on each Revolving Credit Loan shall be
calculated on the basis of a year of 360 days for the actual number of days
elapsed.

      

      2.5           Procedure
for Revolving Credit Borrowing. Subject to the terms of this
Agreement, the Borrowers may borrow under the Revolving Credit Line Facility
during the Revolving Loan Period on any Business Day by Parent giving the Lender
irrevocable notice of a request for a Revolving Credit Loan hereunder setting
forth the amount of the Revolving Credit Loan requested, the date thereof,
whether it is to be a LIBOR Loan or a Prime Rate Loan and, if it is to be a
LIBOR Loan, the duration of the Interest Period applicable thereto. Requests for
LIBOR Loans shall be received by the Lender not later than 11:00 a.m. (New York
time) three (3) Business Days prior to the first day of the Interest Period for
each such Revolving Credit Loan. Requests for Prime Rate Loans may be made up to
11:00 a.m. (New York time) on the day such Revolving Credit Loan is to be made.
Any request for a Revolving Credit Loan may be written or oral, but if oral, it
shall be confirmed in writing sent by the Parent to the Lender by the close of
business of such Business Day. Each request for a Revolving Credit Loan shall be
in a minimum aggregate amount of $100,000 or an integral multiple
thereof.

      

      2.6           Conversion
and Renewals. With Lender’s
prior consent, subject to the terms of this Agreement, the Borrowers may elect
from time to time to convert all or a part of one type of Revolving Credit Loan
into another type of Revolving Credit Loan or to renew all or part of a
Revolving Credit Loan by giving the Lender notice by 11 a.m.
(New

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      York time) on the day of the conversion
into a Prime Rate Loan and at least three (3) Business Days before the
conversion into or renewal of a LIBOR Loan, specifying: (1) the renewal or
conversion date; (2) the amount of the Revolving Credit Loan to be converted or
renewed; (3) in the case of conversions, the type of Revolving Credit Loan to be
converted into; and (4) in the case of renewals of or a conversion into LIBOR
Loans, the duration of the Interest Period applicable thereto; provided that (a)
the minimum principal amount of each Revolving Credit Loan of a Lender
outstanding after a renewal or conversion to a LIBOR Loan or to a Prime Rate
Loan shall be $100,000 or an integral multiple thereof; and (b) LIBOR Loans can
be converted only on the last day of the Interest Period of such Revolving
Credit Loan. All notices given under this Section 2.6 shall be irrevocable and
shall be given not later than 11:00 a.m. (New York time) on the day which is the
day or not less than the number of Business Days, as the case may be, specified
above for such notice. Any request for a conversion or a renewal under this
Section 2.6 may be written or oral, but if oral, it shall be confirmed in
writing sent by the Parent to the Lender by the close of business of such
Business Day. If the Parent shall fail to give the Lender the notice as
specified above for the renewal or conversion of a LIBOR Loan prior to the end
of the Interest Period with respect thereto, such LIBOR Loan shall automatically
be converted into a Prime Rate Loan on the last day of the Interest Period for
such Revolving Credit Loan.

      

      2.7           Suspension
of LIBOR Loans.

      

      (a) Increased
Costs.

      

      (i) If the
adoption of, or any change in, any Requirement of Law or in the interpretation
or application thereof or compliance by the Lender with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:

      

      (A)           shall
subject the Lender to any tax of any kind whatsoever with respect to this
Agreement, the Revolving Credit Note or any LIBOR Loan made by it, or change the
basis of taxation of payments to the Lender in respect thereof (except for taxes
covered by subsection (c) below and changes in the rate of tax on the overall
net income of the Lender);

      

      (B)           shall
impose, modify or hold applicable any reserve, special deposit, compulsory loan
or similar requirement against assets held by, deposits or other liabilities in
or for the account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of the Lender which is not otherwise
included in the determination of LIBOR hereunder, including, without limitation,
the imposition of any reserves with respect to Eurocurrency Liabilities under
Regulation D of the Board; or

      

      (C)           shall
impose on the Lender any other condition;

      

      and the
result of any of the foregoing is to increase the cost to the Lender, by an
amount which the Lender deems to be material, of making, converting into,
continuing or maintaining LIBOR Loans or to reduce any amount receivable
hereunder in respect thereof then, in any such case, the Borrowers, on a joint
and several basis, shall promptly pay the Lender, for such increased cost or
reduced amount receivable.  If the Lender becomes entitled to claim
any additional amounts pursuant to this subsection, it shall notify the Parent
of the event by reason of which it has become so entitled.  A
certificate as to any additional amounts payable pursuant to this subsection
submitted by the Lender to the Parent shall be conclusive in the absence of
clearly demonstrable error.  This covenant shall survive the
termination of this Agreement and the Revolving Credit Line Facility and the
payment of the Revolving Credit Note and all other amounts payable hereunder and
under the other Loan Documents and all other Obligations.

      

      (ii)           In
the event that the Lender shall have determined that any change in any
Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by the Lender or any corporation controlling
the Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority made subsequent to
the date hereof does or shall have the effect of reducing the rate of return on
the Lender’s or such corporation’s capital as a consequence of its obligations
hereunder to a level below that which such Lender or such corporation could have
achieved but for such change or compliance (taking into consideration the
Lender’s or such corporation’s then existing policies with respect to capital
adequacy and assuming full utilization of such entity’s capital) by an amount
deemed by the Lender to be material, then from time to time, after submission by
the Lender to the Parent of a written request therefore accompanied by a
statement in the amount and setting forth in reasonable detail the Lender’s
calculation thereof and the assumptions upon which such calculation is based
(which statement shall be deemed true and correct absent manifest error), within
ninety (90) days of Parent’s receipt of such

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      request
and statement, the Borrowers shall pay, on a joint and several basis, to the
Lender such additional amount or amounts as will compensate the Lender for such
reduction

      

      (b)           Illegality. Notwithstanding any other provisions
herein, if any Requirements of Law, regulation, order or decree or any change
therein or in the interpretation or application thereof shall make it unlawful
for the Lender to make or maintain LIBOR Loans as contemplated by this
Agreement, in addition to the Lender’s right to refrain from making Revolving
Credit Loans for any reason or no reason under Section 2.1 hereof, the Lender
may refrain from making further LIBOR Loans and the Revolving Credit Loans of
the Lender then outstanding as LIBOR Loans, if any, shall, at the option of the
Borrowers, be prepaid in full together with all interest accrued and unpaid to
the date of any such prepayment together with any amounts required by Section
2.9 hereof, or converted into a Prime Rate Loan at the end of the then current
Interest Periods with respect to such LIBOR Loans or within such earlier period
as required by law and subject to the payment obligations of the amounts
required by Section 2.9 hereof.

      

      (c)           Taxes. (i) All payments made by the
Borrowers under this Agreement and the Revolving Credit Note shall be made free
and clear of, and without deduction or withholding for or on account of, any
present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority (excluding net
income taxes and franchise taxes imposed in lieu of net income taxes imposed on
the Lender as a result of a present or former connection between the
jurisdiction of the Governmental Authority imposing such tax and the Lender
(except a connection arising solely from the Lender having executed, delivered
or performed its obligations or received a payment under, or enforced, this
Agreement or the Revolving Credit Note)) (all such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions and withholdings being hereinafter
called “Taxes”).  If any Taxes are required to be withheld from any
amounts payable to the Lender hereunder or under the Revolving Credit Note,
(i) the amounts so payable to the Lender shall be increased to the extent
necessary to yield to the Lender (after payment of all Taxes on the additional
amounts payable under this Section 2.7(c)) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement and
the Revolving Credit Note, and (ii) the Borrowers shall pay the full amount
withheld to the relevant taxation authority in accordance with applicable
law.  Whenever any Taxes are payable by any of the Borrowers, as
promptly as possible thereafter such Borrower shall send to the Lender a
certified copy of an original official receipt received by such Borrower showing
payment thereof.  If a Borrower fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Lender the required
receipts or other required documentary evidence, the Borrowers, on a joint and
several basis, shall indemnify the Lender for any incremental taxes, interest or
penalties that may become payable by the Lender as a result of any such
failure.  The agreements in this subsection shall survive the
termination of this Agreement and the Revolving Credit Line Facility and the
payment of the Revolving Credit Note and all other amounts payable hereunder and
under the other Loan Documents and all other Obligations.

      

      (ii)           The
Borrowers, on a joint and several basis, shall indemnify the Lender, within
thirty (30) days after written demand therefor from the Lender, for the full
amount of any Taxes paid by such Person on or with respect to any payment by or
on account of any obligation of the Borrowers hereunder (including Taxes imposed
or asserted on or attributable to amounts payable under this Section 2.7(c)),
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, including, without limitation, attorneys’ fees and expenses,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority.  A certificate as to the amount of
such payment or liability delivered to the Borrower by the Lender shall be
conclusive absent demonstrable error.

      

      2.8           Upfront
Fees; Other Fees.

      

      (a)           Upfront
Fees.
As compensation for the
execution and delivery of this Agreement, the Borrowers agree to pay to the
Lender an upfront fee equal to $2,000 which fee shall be payable on or prior to
the date of this Agreement and has been fully earned.

      

      (b)           Letter
of Credit Fees. In
connection with Letters of Credit, the Borrowers will pay the Lender a (i)
non-refundable Letter of Credit Fee equal to 0.25% per annum on the amount
available to be drawn under such Letter of Credit, which fee shall be payable to
the Lender upon issuance, and (ii) fee equal to 1/8 of 1% of the amount of such
Letter of Credit due at the settlement thereof.  The Borrowers agree
to pay to the Lender the customary administration, amendment, and transfer fees
charged by the Lender in connection with its issuance and administration of
Letters of Credit, as in effect and changed from time to time, as well as all
charges and fees specified in any Letter of Credit
Documentation.

      

      (c)           Payment
of All Fees. All fees
payable hereunder shall be paid on the dates due, in immediately available
funds, to the Lender. All fees paid shall not be refundable under any
circumstances.  All legal fees and expenses

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      incurred by Lender in connection with
the execution, delivery and negotiation of this Agreement and the Loan Documents
and all fees and expenses incurred by Lender in connection with the Field Audit
performed by or for Lender prior to this date shall be paid in full on or before
the date of this Agreement, and all other legal, audit and accounting fees and
expenses incurred by Lender after this date, including, without limitation, in
connection with any amendment, modification of this Agreement and the Loan
Documents, shall be paid by Borrowers within two (2) Business Days of demand by
Lender.

      

      2.9           Indemnity. The Borrowers shall indemnify the
Lender against any loss or expense (including loss of margin) which the Lender
has sustained or incurred as a consequence of any

      

      (i)           payment, prepayment or conversion of any
part of any LIBOR Loan on a day other than the last day of the applicable
Interest Period (whether or not such payment, prepayment or conversion is
mandatory or automatic and whether or not such payment or prepayment is then
due, including pursuant to payments, prepayments or conversions contemplated by
Section 2.7 hereof),

      

      (ii)           attempt by the Borrowers to revoke
(expressly, by later inconsistent notices or otherwise) in whole or part any
notice stated herein to be irrevocable (the Lender having in its sole discretion
the options (A) to give effect to such attempted revocation and obtain indemnity
under this Section 2.9 or (B) to treat such attempted revocation as having no
force or effect, as if never made), or

      

      (iii)           default by the Borrowers in the
performance or observance of any covenant or condition contained in this
Agreement or the Revolving Credit Note or any Loan Documents, including without
limitation any failure of the Borrowers to pay when due (by acceleration or
otherwise) any principal, interest, fee or other amount due hereunder or under
the Revolving Credit Note or any Loan Documents.

      

      If the Lender sustains or incurs any
such loss or expense it shall from time to time notify the Person of the amount
determined in good faith by the Lender (which determination shall be conclusive)
to be necessary to indemnify the Lender for such loss or expense. Such amount
shall be due and payable by the Borrowers to the Lender ten (10) Business Days
after such notice is given. All references to “Lender” shall be deemed to
include any participant in or assignee of the Lender’s Revolving Credit Line
Facility or the Revolving Credit Loans and all other amounts payable hereunder
and under the other Loan Documents.

      

      The indemnities set forth herein shall
survive the termination of this Agreement and the Revolving Credit Line
Facility and the payment in full
of all Revolving Credit Loans made pursuant to this Agreement and all other
Obligations.

      

      2.10           Prepayment. Subject to the indemnity agreement
with respect to LIBOR Loans set forth in Section 2.9 hereof, the Borrowers (a)
may prepay any Revolving Credit Loan in whole or in part without premium or
penalty and (b) shall prepay Revolving Credit Loans to the extent that the
Aggregate Outstandings exceed the Borrowing Base no later than one (1) Business
Day after the occurrence of such excess. Each prepayment shall be made together
with interest accrued on the amount prepaid to the date of prepayment.
Prepayments of Revolving Credit Loans may be reborrowed on a revolving basis as
aforesaid subject to the terms of this Agreement.

      

      2.11           Payments.

      

      (a)           All payments (including prepayments) to
be made by the Borrowers on account of principal, interest, charges and fees and
Letters of Credit shall be made without setoff, defense or counterclaim and
shall be made to the Lender on the date of payment at the office of the Lender
pursuant to Section 10.1 hereof or at such other place as the Lender may from
time to time designate in writing on or before 11:00 a.m. (New York time). All
such payments shall be made in lawful money of the United States of America and
in immediately available funds. If any payment hereunder (other than payments on
LIBOR Loans) becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension. If any payment on a LIBOR Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month in which
event such payment shall be made on the immediately preceding Business Day and,
in the event of any extension, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such
extension.

       

      (b)           The
Borrowers hereby authorize the Lender to automatically deduct from any deposit
account of the Borrowers or any of them held by the Lender the amount of any
loan payment or Letter of Credit unreimbursed drawing

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      or other
amounts owed in respect of Revolving Credit Loans or Letters of Credit,
including all payments of interest, principal, fees and other sums due
(“Automatic Payment”), from time to time, under this Agreement, the Revolving
Credit Note, the Letter of Credit Documentation or the other Loan Documents; the
Lender will thereafter notify the Parent of the amount so charged.  If
the funds in the account are insufficient to cover any payment due, the Lender
shall not be obligated to advance funds to cover the payment.  The
failure of the Lender so to charge any account or to give any such notice shall
not affect the obligation of the Borrowers to pay interest, principal, fees or
other sums as provided herein, in the Revolving Credit Note, the Letter of
Credit Documentation or the other Loan Documents.  At any time and for
any reason, the Borrowers or the Lender may voluntarily terminate the Automatic
Payment.  Termination by the Borrowers of the Automatic Payment must
be made by written notice to the Lender.

       

      2.12           Use of
Proceeds. The proceeds of
any Revolving Credit Loans shall be used by the Borrower only for working
capital purposes consistent with past practices or to fund Permitted
Acquisitions subject to the conditions with respect thereto contained in the
definition thereof.  No portion of the proceeds of any Revolving
Credit Loan shall be used by the Borrowers in any manner which might cause the
borrowing of such Revolving Credit Loan or the application of such proceeds to
violate Regulation U, Regulation T or Regulation X of the
Board.

      

      2.13           Letters of
Credit. If the Lender
issues letters of credit for the account of any Borrower (each a “Letter of
Credit and collectively, the “Letters of Credit”), without limiting this
Agreement or the other Loan Documents, the terms of such Letters of Credit and
obligations relating thereto shall be governed by the Letters of Credit
Documentation.  All unpaid reimbursement obligations in respect of
Letters of Credit shall constitute Revolving Credit Loans that accrue interest
at the Default Rate with all such unpaid reimbursement obligations and interest
payable on demand from the date the reimbursement obligation arises and are
payable in accordance with this Agreement and the other Loan
Documents.

      
 

      SECTION 3. REPRESENTATIONS
AND WARRANTIES

      

      In order to induce the Lender to enter
into this Agreement and to make the Revolving Credit Loans and to issue Letters
of Credit, each of the Borrowers hereby represents and warrants to the Lender
that, on the date hereof and on the date of each Revolving Credit Loan and
Letter of Credit issuance:

      

      3.1           Financial
Condition. The consolidated
balance sheet and consolidated statements of income, retained earnings and cash
flows of the Parent and its Subsidiaries as at and for the periods ending June
30, 2005 and June 30, 2006 respectively audited by Beckstead and Watts, LLP and
the interim consolidated balance sheet and related consolidated statements of
income, retained earnings and cash flows as of March 31, 2007 have heretofore
been furnished to the Lender, and fairly present the financial condition of the
Parent and its Subsidiaries (including the other Borrowers) as at such dates,
and the results of their operations for the fiscal years and fiscal quarters,
respectively, then ended, except to the extent of any exception specifically set
forth on Schedule 3.1 hereto. All such annual and interim financial statements
have been prepared in accordance with GAAP on a consistent basis, with the
annual financial statements, subject to year end adjustments in the case of the
interim financial statements. Neither the Borrowers nor any of their
Subsidiaries has any material contingent obligations, contingent liabilities or
liability for taxes, long-term lease or unusual forward or long-term commitment,
or other material liabilities, which are not reflected in the balance sheet
contained in the foregoing financial statements dated as of March 31, 2007 or in
the notes thereto.

      

      3.2           No
Change. Since June 30,
2006, there has been no material adverse change in the business, operations,
assets, cash flow, earnings, liabilities or financial or other condition or
prospects of the Borrowers and their Subsidiaries taken as a whole or any
individual Borrower.

      

      3.3           Corporate
Existence; Compliance with Law; Subsidiaries. Each of the Borrowers and each of
their Subsidiaries (i) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation, (ii) has
the power and authority and the legal right to own and operate its properties,
and to conduct the business in which it is currently engaged, (iii) does not own
or operate properties or conduct business which requires qualification as a
foreign corporation or limited liability company in any jurisdiction in which it
is not so qualified, and (iv) is in compliance with all Requirements of
Law.

      

      3.4           Corporate
Power; Authorization; Enforceable Obligations. Each of the Borrowers and each of
their Subsidiaries has the power and authority and the legal right to execute,
deliver and perform its obligations under the Loan Documents and, in the case of
the Borrowers, to borrow and obtain other extensions of credit hereunder and
grant the Lender a first priority perfected security interest in the Collateral.
Each of the Borrowers has taken all necessary action to authorize the borrowings
and other extensions of credit hereunder and the above referenced security
interest grant on the

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      terms and conditions of this Agreement
and the other Loan Documents and each of the Borrowers and each of their
respective Subsidiaries has taken all necessary action to authorize the
execution, delivery and performance of the Loan Documents and the above
referenced security interest grant. No consent or authorization of, filing with,
or other act by or in respect of any other Person (including stockholders and
creditors of the Borrowers or their Subsidiaries) or any Governmental Authority,
is required in connection with the borrowings and other extensions of credit
hereunder or with the execution, delivery, performance, validity or
enforceability of the Loan Documents or the above security interest grant. Each
of the Loan Documents has been duly executed and delivered on behalf of the
Borrowers or their Subsidiaries, as applicable, and each of the Loan Documents
constitutes a legal, valid and binding obligation of the Borrowers or their
Subsidiaries, as applicable, enforceable against the Borrowers or their
Subsidiaries, as applicable, in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally.

       

      3.5           Legal
Bar. The execution,
delivery and performance of each of the Loan Documents and the borrowings and
other extensions of credit hereunder and the use of the proceeds thereof and the
security interest grant referenced in Section 3.4, and compliance with Section
7.7 and all of Section 7 and all of the other provisions of this Agreement will
not violate any of the Requirements of Law or Contractual Obligations of the
Borrowers or their Subsidiaries, and will not result in, or require the creation
or imposition of, any Lien (except in favor of the Lender) on any of their
respective properties or revenues pursuant to any Requirements of Law or
Contractual Obligations.

      

      3.6           No Material
Litigation. No litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending by or against the Borrowers or any Subsidiary or, to the
knowledge of the Borrowers, threatened against or affecting the Borrowers or any
of their Subsidiaries or any of their respective properties or revenues (a) with
respect to any of the Loan Documents or any of the transactions contemplated
hereby or thereby, (b) which if adversely determined, would have a material
adverse effect on the business, operations, property or financial or other
condition or prospects of the Borrowers and their Subsidiaries taken as a whole
or any Borrower taken individually or (c) subject to Schedule 3.6, involves a
claim against any Borrower or any Subsidiary in excess of
$100,000.

      

      3.7           No
Default. Neither the
Borrowers nor any of their Subsidiaries is in default under or with respect to
any Contractual Obligations in any respect which would be materially adverse to
the business, operations, property or financial or other condition or prospects
of the Borrowers and their Subsidiaries taken as whole or which would materially
and adversely affect the ability of the Borrowers or their Subsidiaries to
perform their respective obligations under any of the Loan Documents. No Default
or Event of Default has occurred and is continuing.

      

      3.8           No
Burdensome Restrictions. No
Contractual Obligations of the Borrowers or their Subsidiaries and no
Requirements of Law materially adversely affect, or insofar as the Borrowers or
their Subsidiaries may reasonably foresee may so materially adversely affect,
the business, operations, property or financial or other condition or prospects
of the Borrower and their Subsidiaries taken as a whole.

      

      3.9           Federal
Regulations. Neither the
Borrowers nor their Subsidiaries are engaged nor will they engage, principally
or as one of their important activities, in the business of extending credit for
the purpose of “purchasing” or “carrying” any “margin stock” within the
respective meanings of each of the quoted terms under Regulation U of the Board
as now and from time to time hereafter in effect. No part of the proceeds of any
Revolving Credit Loans hereunder, and no Letter of Credit, will be used for
“purchasing” or “carrying” “margin stock” as so defined or for any purpose which
violates, or which would be inconsistent with, the provisions of the regulations
of the Board.

      

      3.10           Environmental
Matters. Except as set
forth on Schedule 3.10 hereto:

      

      (a)           The Borrowers’ and their Subsidiaries’
properties and each of them do not contain, and have not previously contained,
any Hazardous Materials in amounts or concentrations that constitute or
constituted a violation of, or could give rise to liability under, Environmental
Laws.

      

      (b)           The Borrowers’ and their Subsidiaries’
properties and all operations at the Borrowers’ and their Subsidiaries’
properties and each of their properties and operations are in compliance and at
all times have been in compliance with all Environmental Laws, and there is no
contamination at, under or about the Borrowers’ or their Subsidiaries’
properties which could interfere with the continued operation of the Borrowers’
and their Subsidiaries’ properties or impair the fair market value
thereof.  The Borrowers and their Subsidiaries and each of them have
not assumed any liability of any Person under Environmental
Laws.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (c)           Neither of the Borrowers nor any of
their Subsidiaries has received or is aware of any claim or notice of violation,
alleged violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to the
Borrowers’ or Subsidiaries’ properties nor do the Borrowers have knowledge or
reason to believe that any such action is being contemplated, considered or
threatened.

      

      (d)           Hazardous Materials have not been
transported or disposed of from any of the Borrowers’ or their Subsidiaries’
properties in violation of, or in a manner or to a location which could give
rise to liability under, Environmental Laws, nor have any Hazardous Materials
been generated, treated, stored or disposed of at, on or under any of the
Borrowers’ or Subsidiaries’ properties in violation of, or in a manner that
could give rise to liability under, any applicable Environmental
Laws.

      

      (e)           There are no judicial proceedings or
governmental or administrative actions pending, contemplated or threatened under
any Environmental Laws to which the any of the Borrowers or their Subsidiaries
is or will be named as a party with respect to any Borrowers’ or their
Subsidiaries’ properties, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect to
any of the Borrowers’ properties.

      

      (f)           There has been no release or threat of
release of Hazardous Materials at or from any of the Borrowers’ or any of their
Subsidiaries’ properties, or arising from or related to the operations of any of
the Borrowers in connection with any of the Borrowers’ or their Subsidiaries’
properties, in violation of or in amounts or in a manner that could give rise to
liability under Environmental Laws.

      

      (g)           Each of the representations and
warranties set forth in paragraphs 3.10(a) through 3.10(f) is true and correct
with respect to each facility and parcel of real property owned or operated by
any of the Borrowers or their Subsidiaries.

      

      (h)           A complete list of all current permits,
registrations and licenses of any of the Borrowers relating to manufacturing,
storage, handling, transportation and disposal operations is attached on
Schedule 3.10 and the Borrowers are in full compliance with the requirements
thereof.

      

      (i)           All governmental disclosure requirements
relating to manufacturing, storage, handling, transportation and disposal
operations of any of the Borrowers are set forth on Schedule
3.10.

      

      (j)           All legally mandated inventory control
requirements of any of the Borrowers are set forth on Schedule 3.10 and the
Borrowers are in full compliance therewith.

      

      (k)           All other information, such as knowledge
of releases or potential liabilities with respect to disposal sites of
Borrowers, which would likely be included in public disclosures, are set forth
on Schedule 3.10.

      

      3.11           Title to
Properties. Each of the
Borrowers and their Subsidiaries have valid leases of or good and marketable
title to its respective properties and assets, including the properties and
assets reflected in the most recent balance sheet described in Section 3.1
hereof. Such properties and assets are not subject to any Lien, except as
otherwise permitted by Section 7.2 hereof.

      

      3.12           Taxes. The Borrowers and their Subsidiaries
have filed all Federal, state and other tax returns which are required to be
filed and have paid all taxes required to be paid by them or shown as due and
payable on said returns or on any assessments made against them or any of their
respective properties except such taxes, if any, as are being contested in good
faith and by proper proceedings and as to which adequate reserves have been
maintained on the financial statements referenced in Section 3.1 in conformity
with GAAP for such unpaid taxes.  Neither the Borrowers nor any
of their Subsidiaries has given or been requested to give a waiver of the
statute of limitations relating to the payment of any federal, state, local and
foreign taxes or other impositions, and no tax Lien has been filed with respect
to the Borrowers of any of their Subsidiaries.  There is no proposed
tax assessment against the Borrowers or any of their Subsidiaries and there is
no basis for such assessment.  The period within which United States
federal income taxes may be assessed against any of the Borrowers or any of
their Subsidiaries has expired for all taxable years ending on or before
December 31, 2002.

      

      3.13           ERISA. Based upon ERISA and the regulations
and published interpretations thereunder, each of the Borrowers, their
Subsidiaries and each ERISA Affiliate is in compliance in all material respects
with all applicable provisions, if any, of ERISA. Neither a Reportable Event nor
a Prohibited Transaction has occurred and is continuing
with

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      respect to any Plan; no notice of intent
to terminate a Plan has been filed nor has any Plan been terminated; no
circumstances exist which constitute grounds under Section 4042 of ERISA
entitling the PBGC to institute proceedings to terminate, or appoint a trustee
to administer, a Plan, nor has the PBGC instituted such proceedings; each of the
Borrowers, their Subsidiaries and each ERISA Affiliate has met its minimum
funding requirements under ERISA with respect to all of its Plans and the
present fair market value of all Plan assets exceeds the present value of all
vested benefits under each Plan, as determined on the most recent valuation date
of such Plan in accordance with the provisions of ERISA and the regulations
thereunder for calculating the potential liability of the Borrowers, their
Subsidiaries and each ERISA Affiliate to the PBGC or such Plan under Title IV of
ERISA, and neither the Borrowers, their Subsidiaries nor an ERISA Affiliate has
incurred any liability to the PBGC under ERISA.

       

      3.14           Operation of
Business. The Borrowers and
their Subsidiaries possess all licenses, permits, franchises, patents,
copyrights, trademarks, and trade names, or rights thereto, necessary to conduct
their respective businesses substantially as now conducted and as presently
proposed to be conducted, and neither the Borrowers nor any Subsidiary is in
material violation of any valid rights of others with respect to any of the
foregoing except where the failure to obtain licenses or permits does not
individually or in the aggregate materially and adversely impair the ability of
any of the Borrowers or any of their Subsidiaries to operate its business or
perform its obligations under a Loan Document.  No permits, licenses,
approvals or authorizations of any Governmental Authority is required under any
Requirements of Law to sell any Inventory of any of the
Borrowers.

      

      3.15           Security
Agreement. The Security
Agreement executed by the Borrowers and each of their Subsidiaries pursuant to
its terms and applicable law, constitutes a valid and continuing lien on and
security interest in the Collateral in favor of the Lender, which shall be prior
to all other Liens, claims and rights of all other Persons in such
collateral.  Such security interest constitutes a first priority
perfected security interest in all such collateral as security for all
Obligations; provided, however, the existence of Liens permitted by Section 7.2
hereof shall not constitute a violation of this
Section 3.15.

      

      3.16           Accuracy and
Completeness of Information.  All information, reports
and other papers and data with respect to the Borrowers and their Subsidiaries,
this Agreement, the other Loan Documents and any transaction contemplated hereby
or thereby furnished to the Lender by any of the Borrowers or on behalf of any
of the Borrowers, were, at the time the same were so furnished, complete and
correct in all material respects, or have been subsequently supplemented by
other information, reports or other papers or data, to the extent necessary to
give the Lender a true and accurate knowledge of the subject matter in all
material respects.  No fact is known to any of the Borrowers which
materially and adversely affect or may reasonably be expected to materially
adversely affect the business, assets, liabilities, financial or other condition
or prospects of any of the Borrowers or their Subsidiaries, which has not been
disclosed in writing to the Lender prior to the date hereof.  No
document furnished or statement made in writing to the Lender by any of the
Borrowers in connection with the negotiation, preparation or execution of this
Agreement contains any untrue statement of a material fact, or omits to state
any such material fact necessary in order to make the statements contained
therein not misleading, in either case which has not been corrected,
supplemented or remedied by subsequent documents furnished or statements made in
writing to the Lender.

      

      3.17           Subsidiaries
and Affiliates.  Other than those
Subsidiaries and Affiliates of the Borrowers expressly set forth on Schedule
3.17 hereto, Parent has no other Subsidiaries or Affiliates.  All
Subsidiaries of Parent are Borrowers.

      

      3.18           Funded
Debt.  Schedule
3.18 sets forth a true and correct list of all Funded Debt of Parent, each other
Borrower and each of their respective Subsidiaries, together with a list of the
principal balances thereof, payment dates with respect thereto, and a true and
correct description of any Liens securing such Funded Debt.

      

      3.19           Solvency.  Each Borrower is, and the
Borrowers on a consolidated basis are, not Insolvent and will not be Insolvent
after giving effect to the execution, delivery and performance of this Agreement
and the other Loan Documents and the consummation of the transactions
contemplated under this Agreement and the other Loan Documents.  For
purposes of this representation and warranty, "Insolvent” as used herein means,
with respect to any Borrower or the Borrowers on a consolidated basis, on a
particular date, that on such date (i) the fair value of the property of such
Borrower or the Borrowers on a consolidated basis, is less than the total amount
of liabilities (including the reasonably estimated amount of the contingent,
unliquidated, disputed and unmatured liabilities) of such Borrower or the
Borrowers on a consolidated basis; (ii) the present fair market value of the
assets of such Borrower or the Borrowers on a consolidated basis, is less than
the amount that will be required to pay the probable liability of such Borrower
or the Borrowers on a consolidated basis, on its or their existing debts
(contingent, unliquidated, disputed, unmatured or otherwise) as they become
absolute and matured; (iii) such Borrower or the Borrowers on a consolidated
basis, is/are not able to pay its or

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      their, as applicable, debts and other
liabilities, contingent obligations and other commitments as they mature in the
normal course of business; or (iv) such Borrower or the Borrowers on a
consolidated basis, is/are engaged in a business or transaction for which the
property remaining with such Borrower or the Borrowers on a consolidated basis,
is an unreasonably small capital.

      

      SECTION 4. CONDITIONS
PRECEDENT

      

      4.1           Conditions
to Initial Revolving Credit Loan. Without limiting Section 2 of this
Agreement, the initial extension of credit to the Borrowers hereunder is subject
to the satisfaction of the following conditions precedent:

      

      (a) Revolving
Credit Note. The Lender shall have received a
Revolving Credit Note conforming to the requirements hereof and duly executed by
the Borrowers.

      

      (b) Legal
Opinion. The Lender shall have received
favorable opinions of counsel to the Borrowers satisfactory in form and
substance to the Lender and its counsel and covering such matters incident to
the transactions contemplated by this Agreement as the Lender shall
require.

      

      (c) Guarantee. Intentionally
omitted.

      

      (d) Security
Agreement. The Lender shall have received the
Security Agreement and all Intellectual Property Security Agreements duly
executed by the Borrowers, together with UCC-1 financing statements in favor of
the Lender (including fixture filings), Form UCC-3 termination statements or
amendments (if required), UCC, tax, judgment and litigation searches, patent,
trademark and copyright searches with the U.S. Patent and Trademark Office and
all other documents required by the Lender to provide it with a first priority
perfected security interest in all collateral subject to said security
agreement.

       

      (e) Lockbox
Agreement. The Lender shall have received the
Lockbox Agreement duly executed by the Borrowers in favor of the
Lender.

      

      (f) Insurance. The Borrowers shall have delivered to
the Lender evidence satisfactory to the Lender that: (i) all insurance required
by this Agreement or any Loan Documents is in full force and effect and (ii) the
Lender has been named as additional insured or loss payee, as the case may be,
with respect thereto in a manner satisfactory to the Lender.

      

      (g) Intercreditor
Agreement.  The
Lender shall have received the duly executed Intercreditor Agreement in form and
substance satisfactory to it.

      

      (h) Perfection
Certificate.  The
Lender shall have received the Perfection Certificate duly executed by the
Borrowers.

      

      (i) Certified
Copies and Other Documents. The Lender shall have received such
certificates and other documents relating to the Borrowers with respect to the
matters herein contemplated as the Lender may request, including but not limited
to:

      

      (i)           certificates of good standing from the
Secretary of State or applicable Governmental Authority of each jurisdiction of
incorporation or formation and from the Secretary of State or applicable
Governmental Authority of each jurisdiction in which an office is maintained and
where any Borrower is qualified to do business or is required to be qualified to
do business;

      

      (ii)            certificates of incorporation or
formation or articles of organization and all amendments thereto certified by
the applicable Secretary of State or applicable Governmental Authority;
and

      

      (iii)            certificates of an officer of each of
the Borrowers dated the date of this Agreement certifying (x) true and correct
copies of the by-laws of such Borrower or operating agreement as in effect on
the date of adoption of the resolutions referred to in (y) of this subsection
(iii), (y) true and correct copies of resolutions adopted by the board of
directors, stockholders, members or managers of such Borrower, as applicable,
(1) authorizing the borrowings and the other extensions of credit from the
Lender hereunder, the execution, delivery and performance by such Borrower of
each of the Loan Documents to which it is a party, (2) approving forms in
substantially execution form of each of the Loan

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Documents to which it is a party, and
(3) authorizing officers of such Borrower to execute and deliver each of the
Loan Documents to which it is a party, and (z) the incumbency and specimen
signatures of the officers of the Borrower executing any documents delivered to
the Lender by the Borrower in connection herewith.

      

      (i)           Fees. The Lender shall have received evidence
of payment of an upfront fee in the amount of $2,000 and all sums required to be
paid on or before this date under Section 2.8(c).

      

      (j)           Field
Audit. The Lender shall have received an
updated field examination satisfactory in all respects to the
Lender.

      

      (k)           Stock
Certificates. The Lender shall have received all stock
certificates of all issued and outstanding stock of EMC and undated stock powers
for such stock executed in blank in form and substance satisfactory to
Lender.

      

      (l)           Additional
Matters. All other documents and legal matters
in connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Lender and its
counsel.

      

      4.2           Conditions
to All Revolving Credit Loans, Etc. Without limiting Section 2 of this
Agreement, any Revolving Credit Loan (including the initial Revolving Credit
Loan) to be made hereunder, and any Letter of Credit to be issued hereunder or
under the Letter of Credit Documentation is subject to the satisfaction of the
following conditions precedent:

      

      (a)           Representations
and Warranties. The representations and warranties made
by the Borrowers herein or which are contained in any other Loan Document or any
certificate, document or financial or other statement furnished at any time
under or in connection herewith, shall be correct on and as of the date of such
extension of credit as if made on and as of such date except to the extent that
such representation is stated to be made as of a date certain in which case it
shall be true and correct as of such earlier date.

       

      (b) No
Default or Event of Default. No Default or Event of Default shall
have occurred and be continuing on the date of such extension of credit or after
giving effect to the extension of credit to be made on such
date.

      

      (c) Availability.  Such Revolving Credit Loan
shall be agreed to be made by Lender under Section 2 of this Agreement and after
giving effect to such extension of credit, the Aggregate Outstandings shall not
exceed the lesser of $5,000,000 or the Borrowing Base.

      

      Each extension of credit to the
Borrowers hereunder shall constitute a representation and warranty by the
Borrowers hereunder as of the date of each such extension of credit that the
conditions in clauses (a), (b) and (c) of this Section 4.2 have been
satisfied.

      

      SECTION 5. AFFIRMATIVE
COVENANTS

      

      Each of the Borrowers hereby agrees that
so long as the Revolving Credit Line Facility remains in effect, the Revolving
Credit Note, any Revolving Credit Loan or any Letter of Credit remains issued,
or outstanding and unpaid, or any Obligations remain unpaid, the Borrowers shall
and shall cause each of their Subsidiaries to:

      

      5.1           Information. Furnish to the Lender or cause to be
furnished to the Lender:

      

      (a)           As soon as available, but not more than
one hundred twenty (120) days after the close of each fiscal year of the Parent
(the “Annual Delivery Date”), the Parent’s Form 10-K and the financial
statements of the Parent and its Subsidiaries including the consolidated and
consolidating balance sheets of the Parent and its Subsidiaries with related
consolidated and consolidating statements of income, retained earnings and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures as of the end of and for the previous fiscal year, all prepared in
accordance with GAAP consistently applied and audited by a firm of independent
certified public accountants acceptable to the Lender and without qualification.
Such financial statements shall be accompanied by (i) copy of the management
letter, if any, prepared by such firm and (ii) a Compliance Certificate of the
chief financial officer of the Parent with computations demonstrating compliance
with the financial covenants contained in Section 6 of this Agreement and to the
effect that, having read this Agreement and the other Loan Documents and based
upon an examination which in the opinion of such officer was sufficient to
enable such officer to make an informed statement, nothing came to such
officer’s attention which

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      would cause such officer to believe that
an Event of Default or Default had occurred, and, if so, stating the facts with
respect thereto and whether the same has been cured prior to the date of such
certificate, and, if not, what action is proposed to be taken with respect
thereto all in substantially the form attached hereto as Exhibit B, as modified
from time to time by the Lender.

      

      (b)           As soon as possible, but not more than
forty-five (45) days after the close of the first three (3) fiscal quarters of
each year (the “Quarterly Delivery Date”), the Parent’s Form 10-Q and the
financial statements of the Parent and its Subsidiaries including consolidated
and consolidating balance sheets of the Parent and its Subsidiaries with related
consolidated and consolidating statements of income, retained earnings and cash
flows as of the last day of and for such quarter and for the period of the
fiscal year ended as of the close of the particular quarter, all such quarterly
statements to be in reasonable detail, all prepared in accordance with GAAP and
on a consistent basis with the annual financial statements, subject to year end
adjustments and certified as to fairness of presentation by the chief financial
officer of the Parent. Such financial statements shall be accompanied by a
Compliance Certificate signed by the chief financial officer of Parent to the
same extent and covering the same matters as specified in paragraph (a)(ii)
above all in substantially the form attached hereto as Exhibit B, as modified
from time to time by the Lender.

       

      (c)           Prompt written notice if: (i) any
obligation (other than an obligation under this Agreement) of the Borrowers or
any of their Subsidiaries for borrowed money or for the deferred purchase price
of any property or any Funded Debt is declared or shall become due and payable
prior to its stated maturity, (ii) the holder of any note (other than a
Revolving Credit Note) or Funded Debt, or other evidence of indebtedness,
certificate or security evidencing any such obligation, has the right to declare
such obligation due and payable prior to its stated maturity, or (iii) there
shall occur an Event of Default or a Default.

      

      (d)           Prompt written notice of: (i) any
citation, summons, subpoena, order to show cause or other order naming any of
the Borrowers or any of their Subsidiaries a party to any proceeding before any
governmental body which relates to any of the Loan Documents or which if
adversely determined would have a material adverse effect on the property,
business, profits, condition (financial or otherwise), operations or prospects
of the Borrowers and their Subsidiaries taken as a whole or any Borrower or
Subsidiary, and include with such notice a copy of such citation, summons,
subpoena, order to show cause or other order, (ii) any lapse or other
termination of a license, permit or other authorization issued to any of the
Borrowers or any of their Subsidiaries by any Governmental Authority or Person,
which lapse or other termination would have a material adverse effect on the
property, business, profits, condition (financial or otherwise), operations or
prospects of the Borrowers and their Subsidiaries taken as a whole or any
Borrower or Subsidiary, (iii) any refusal by any Governmental Authority or any
other Person to renew or extend such license, permit or other authorization, and
(iv) any suit between the Borrowers or any of their Subsidiaries and any
Governmental Authority or any other Person or formal demand made upon any of the
Borrowers or any of their Subsidiaries by any Governmental Authority or any
other Person which if adversely determined would have a material adverse effect
on the property, business, profits, condition (financial or otherwise),
operations or prospects of the Borrowers and their Subsidiaries taken as a whole
or any Borrower or Subsidiary.

      

      (e)           Within ten (10) days after the filing
thereof, copies of all other periodic reports which the Parent or any of its
Subsidiaries (including the other Borrowers) may now or hereafter be required to
file with or deliver to any securities exchange or to the Securities and
Exchange Commission, or any other Governmental Authority succeeding to the
functions thereof.

      

      (f)           At all times each of the Borrowers shall
grant reasonable access to the Lender and/or its duly authorized representatives
or agents, and cooperate fully with the Lender in any inspection of the
Borrowers’ and their Subsidiaries books and records and all collateral wherever
located (“Field Audit”) as well as a review of Accounts, Inventory, accounts
payable, taxes and insurance of the Borrowers and their Subsidiaries, provided
that, Lender shall give reasonable notice prior to any Field Audit unless during
the continuance of an Event of Default and, other than during the continuance of
an Event of Default, such Field Audits will be limited to one in each fiscal
year of Parent.

      

      (g)           Within ten (10) days after the close of
each month, an accounts receivable aging report for Accounts of the Parent and
its Subsidiaries as of the end of such immediately preceding month satisfactory
to the Lender accompanied by a Borrowing Base Certificate as of the end of such
immediately preceding month; provided however, Borrowers may also provide a
Borrowing Base Certificate as of the end of the immediately preceding week if
they elect to do so.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (h)           Promptly upon request therefor, such
other information and reports relating to the financial condition and operations
of the Borrowers or any of their Subsidiaries as the Lender at any time or from
time to time may reasonably request.

      

      5.2           Corporate
Existence; Continuance of Business. Preserve and maintain its corporate or
limited liability company existence, as applicable, and its rights, privileges
and franchises, continue to engage in substantially the same line of business in
which it was engaged on the date hereof and its right to conduct business in all
states in which the nature of its business requires qualification to do
business.

       

      5.3           Payment of
Obligations. Pay and
discharge all taxes, assessments and governmental charges or levies imposed upon
it or upon its income and profits, or upon any property belonging to it, prior
to the date upon which penalties attach thereto except where contested in good
faith and by proper proceedings if appropriate reserves are maintained with
respect thereto in conformity with GAAP.

      

      5.4           Insurance. Maintain insurance, at all times
throughout the term of this Agreement, on its property with responsible
insurance carriers licensed or authorized to do business in each state in which
the Borrowers or any of their Subsidiaries conducts business against such risks,
loss, damage and liability (including liability to third parties) and in such
amounts as is customarily maintained by similar businesses.  Without
regard to the immediately preceding sentence, Borrowers shall maintain
receivables or credit insurance on all Accounts where the Account Debtor’s chief
executive office is in the United States of America except for Account Debtors
identified on Exhibit C, casualty insurance and public liability and workers’
compensation insurance, and file with the Lender within ten (10) Business Days
after request therefor certificates of such insurance policies then in effect on
Acord form or other similar form acceptable to the Lender so that the Lender is
listed as a loss payee with respect to the receivables or credit insurance
policies and casualty insurance policies maintained by the Borrowers or any of
their Subsidiaries and as an additional insured with respect to all other
insurance policies maintained by the Borrowers and any of their
Subsidiaries.

      

      5.5           Payment of
Indebtedness and Performance of Obligations. Pay and discharge promptly all lawful
claims for labor, materials and supplies or otherwise.

      

      5.6           Condition of
Property. At all times,
maintain, protect and keep in good repair, working order and condition, normal
wear and tear excepted, all property of the Borrowers and their Subsidiaries
necessary and useful in the judgment of the Borrowers and their Subsidiaries in
connection with the proper conduct of the business of the Borrowers and their
Subsidiaries.

      

      5.7           Observance
of Legal Requirements.
Observe and comply in all respects with all material laws (including but not
limited to ERISA), ordinances, orders, judgments, rules, regulations,
certifications, franchises, permits, licenses, directions and requirements of
all governmental bodies which now or at any time hereafter may be applicable to
the Borrowers or any of their Subsidiaries.

      

      5.8           Books and
Records. Keep proper and
accurate books of record and account.

      

      5.9           Inspection. At any reasonable times and from time
to time, upon reasonable notice (with no such notice required during an Event of
Default) permit the Lender, through officers or employees or authorized
representatives to visit and inspect any of the properties of the Borrowers or
any of their Subsidiaries, and to examine the minute books, books of account,
reports and other records of the Borrowers and their Subsidiaries including
records relating to the Accounts and Inventory and, at Borrowers’ expense, make
copies thereof or extracts therefrom, and discuss the affairs, finances and
accounts of the Borrowers and their Subsidiaries with their officers or with
such Borrowers’ independent accountants. Such right of inspection shall
encompass, without limitation, the conduct of a Field Audit by the Lender or its
duly authorized representatives.

       

      5.10           Compliance
with Environmental Laws; Indemnity.

      

      (a)           Comply with, and ensure compliance by,
all tenants and subtenants, if any, with, all applicable Environmental Laws and
obtain and comply with and maintain, and ensure that all tenants and subtenants
obtain and comply with and maintain, any and all licenses, approvals,
registrations or permits required by applicable Environmental
Laws;

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (b)           Immediately notify the Lender in writing
and in reasonable detail of (i) any release or discharge by the Borrowers or any
of their Subsidiaries of any Hazardous Material required to be reported under
Environmental Laws to any Governmental Authority, (ii) any condition,
circumstance, occurrence or event that could result in the imposition of any
Lien or other restriction on the title, ownership or transferability of any of
the Borrowers’ or their Subsidiaries’ properties, and (iii) any proposed action
to be taken by any of the Borrowers or their Subsidiaries to any material
additional or different requirements or liabilities under Environmental
Laws;

      

      (c)           Conduct and complete all investigations,
studies, sampling and testing, and all remedial, removal and other actions
required under Environmental Laws and promptly comply with all orders and
directives of all Governmental Authorities respecting Environmental Laws;
and

      

      (d)           Indemnify, defend and hold harmless the
Lender and its employees, agents, officers, directors, successors and assigns
from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to any
violation of, noncompliance with or liability under any Environmental Laws or
any orders, requirements or demands of Governmental Authorities related thereto
(including, without limitation, attorneys’ and consultants’ fees, investigation
and laboratory fees, response costs, court costs and litigation expenses),
except to the extent that any of the foregoing arise out of the gross negligence
or willful misconduct of the party seeking indemnification
therefor.  Notwithstanding anything herein contained to the contrary,
the provisions of this paragraph shall survive payment in full of the Revolving
Credit Loans and the termination of this Agreement and the payment of the
Obligations.

      

      5.11           New
Subsidiaries. Give the
Lender thirty days’ prior written notice of the creation, establishment or
acquisition, in any manner, of any Subsidiary of any Borrower not existing on
the date of this Agreement. Upon such formation, the Parent shall cause any
Subsidiary formed after the date of this Agreement to become a Guarantor of all
debts and obligations of the Borrowers under this Agreement and cause (a) such
Subsidiary upon formation to execute a Guarantee and the Security Agreement
together with a related perfection certificate which shall be acceptable to the
Lender in all respects, as well as all documents required by the Lender to
provide it with a first priority perfected security interest in all existing and
future assets and properties of such Subsidiary and (b) the person owning the
equity in such Subsidiary to cause such equity to become subject to Lender’s
pledge of all Subsidiary equity and such person shall execute all documents to
provide Lender with a first priority perfected security interest in such equity.
On the creation, establishment, or acquisition of such Subsidiary, the Parent
shall deliver or cause to be delivered such proof of corporate or limited
liability company action, incumbency of officers, opinions of counsel and other
documents as are consistent with those delivered as to each Borrower pursuant to
Section 4.1 hereof or as the Lender shall request, each in form and substance
satisfactory to the Lender.  

      

      SECTION 6. FINANCIAL
COVENANTS

      

      Each of the Borrowers hereby agrees
that, so long as the Revolving Credit Line Facility remains in effect, the
Revolving Credit Note, any Revolving Credit Loan or any Letter of Credit remains
issued, or outstanding and unpaid, or any Obligations remain unpaid, each of the
Borrowers shall cause compliance with the following financial covenants, which
for the avoidance of doubt shall be calculated for the Parent and its
Subsidiaries on a consolidated basis:

      

      6.1           Leverage
Ratio. A Leverage Ratio
shall be maintained that is at all times equal to or less than 2.50 to
1.00.

      

      6.2           Current
Ratio. A ratio of Current
Assets to Current Liabilities shall be maintained that is at all times equal to
or more than 1.20 to 1.00.

      

      6.3           Minimum
Tangible Net Worth. A
Tangible Net Worth shall be maintained that is at all times equal to or more
than $10,000,000.

      

      Except as specifically otherwise
provided, all financial covenants shall be calculated in accordance with GAAP
consistently applied.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SECTION 7. NEGATIVE
COVENANTS

      

      Each of the Borrowers hereby agrees
that, so long as the Revolving Credit Line Facility remains in effect, the
Revolving Credit Note, any Revolving Credit Loans or any Letter of Credit
remains issued, or outstanding and unpaid, or any Obligations remain unpaid,
each of the Borrowers shall not, nor shall they permit any Subsidiary
to:

      

      7.1           Indebtedness
for Borrowed Money. Incur,
or permit to exist, any Funded Debt except (i) Funded Debt to Lender, (ii)
existing purchase money Funded Debt (used to finance the cost or acquisition of
equipment (as defined in the UCC)) identified on Schedule 3.18 (with no increase
in Funded Debt as compared to the outstanding Funded Debt on such items on this
date) and secured only by Liens described in Section 7.2(iii) hereof,
(iii) Funded Debt, only if previously incurred, of not more than $717,500
outstanding to GSL of Ill, LLC if the Lien securing such Funded Debt is
permitted by Section 7.2(iv), and (iv) other unsecured Funded Debt which shall
not exceed in the aggregate for the Borrowers and all their Subsidiaries, at any
time outstanding, the sum of $3,700,000.

      

      7.2           Liens. Create, assume or permit to exist any
Lien on any of its property or assets now owned or hereafter acquired except (i)
Liens in favor of the Lender; (ii) Liens for taxes or other governmental charges
which are not delinquent; (iii) purchase money Liens on equipment (as defined in
the UCC) granted to secure either the unpaid balance of the purchase price
thereof or a loan made to finance the purchase of such assets, all to the extent
permitted under Section 7.1(ii) hereof and identified on Schedule 7.2; and
(iv) as long as the Intercreditor Agreement is in effect, Liens in favor of
GSL of Ill, LLC securing not more than $717,500 at any time
outstanding.

       

      7.3           Loans and
Investments. Lend or
advance money, credit or property to or invest in (by capital contribution,
loan, purchase or otherwise) any firm, corporation, or other Person except (i)
investments in United States Government obligations, certificates of deposit of
any banking institution with combined capital and surplus of at least
$200,000,000 and commercial paper of the highest credit rating given by Moody’s
Investors Service, Inc. or Standard and Poor’s Ratings Services, and (ii)
investments in existing Subsidiaries or investments in stocks, securities or
assets of other Persons which qualify as a Permitted
Acquisition.

      

      7.4           Fundamental
Changes and Transfers. Wind
up, liquidate, or dissolve itself (or suffer any liquidation or dissolution),
reorganize, merge or consolidate with or into, or convey, sell, assign,
transfer, lease, or otherwise dispose of (whether in one transaction or a series
of transactions) its property, business or assets, (whether now owned or
hereafter acquired other than sales of inventory and obsolete equipment in the
ordinary course of business) to any Person, or, except with respect to a
Permitted Acquisition, acquire all or substantially all of the property,
business or assets of any Person except that upon prior written notice to Lender
a wholly owned Subsidiary of a Borrower that is a Borrower or a Guarantor may
merge into or consolidate with any of the Borrowers, provided that in each case
that immediately after giving effect thereto, the surviving entity is obligated
under this Agreement and no event shall occur and be continuing which
constitutes a Default or an Event of Default.

      

      7.5           Contingent
Liabilities. Assume,
endorse, be or become liable for or guarantee the obligations of any Person
excluding, however, (i) the endorsement of negotiable instruments for deposit or
collection in the ordinary course of business, (ii) guarantees given by the
Borrowers for obligations of other Borrowers and guarantees given by the
Guarantors for the obligations of the Borrowers.

       

      7.6           Sales of
Receivables; Sale - Leasebacks. Sell, discount or otherwise dispose of
notes, accounts receivable or other obligations owing to the Borrowers or their
Subsidiaries, with or without recourse, except for the purpose of collection in
the ordinary course of business, or sell any asset pursuant to an arrangement to
thereafter lease such asset from the purchaser thereof.

      

      7.7           Dividends. Declare or pay any dividends on its
capital stock (other than dividends payable solely in shares of its own common
stock), or purchase, redeem, retire or otherwise acquire any of its capital
stock (or any warrants or options to purchase its capital stock) at any time
outstanding or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of any Borrower or
any Subsidiary, except for the payments of dividends or other distributions or
purchases of Parent stock upon presentation to the Lender of a certificate
signed by the chief financial officer of the Parent to the effect that (and
including calculations indicating that) on a pro forma basis after giving effect
to such payment of dividends and/or purchases of Parent stock: (a) all
representations and warranties contained in the Loan Documents will remain true
and correct except those, if any, made as of a specific time which shall have
been true and correct when made, (b) the Borrowers on a consolidated basis will
remain in compliance with all covenants contained in the Loan Documents,
including, without limitation, those contained in Section 6, and
(c) no

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Default or Event of Default has occurred
and is continuing or will occur as a result of the payment of such dividends
and/or purchases of Parent stock.  For the avoidance of doubt, this
Section 7.7 shall not apply to dividends or other distributions declared and
paid to the Parent by any of its wholly owned Subsidiaries or to any other
Borrower by a wholly owned Subsidiary thereof.

      

      7.8           Supply and
Purchase Contracts. Enter
into or be a party to any contract for the purchase of materials, supplies or
other property if such contract requires that payment for such materials,
supplies or other property be made whether or not delivery of such materials,
supplies or other property is ever made or tendered.

      

      7.9           Nature of
Business. Materially alter
the nature of the Borrowers’ or their Subsidiaries’ business, or engage in any
business except for the
manufacturing, sale, packaging and marketing, as an aftermarket supplier, of
anti-freeze, auto fluids, charcoal fluids and other additives, liquid and
aerosol products, chemicals and automotive and chemical products (including
without limitation, engine oils, transmission oils, washer solvents, brake
fluids, and gasoline additives) and, packaged refrigerators for the automotive
and chemical markets.

      

      7.10           Stock of
Subsidiaries. Sell or
otherwise dispose of any Borrower or any Subsidiary of a Borrower (except in
connection with a merger or consolidation of a Subsidiary of a Borrower or a
Borrower into any Borrower) or any equity of a Borrower or any Subsidiary of a
Borrower or permit a Subsidiary of the Borrowers to issue any additional shares
of its capital stock except pro rata to its existing
stockholders.

       

      7.11           Transactions
with Affiliates. Except for
existing employment and other agreements identified on Schedule 7.11 hereto and
any stock options or warrants of the Parent or except in the ordinary course of
and pursuant to the reasonable requirements of the Borrowers’ or any of their
Subsidiaries’ business and upon fair and reasonable terms no less favorable to
the Borrowers or such Subsidiary than would obtain in a comparable arms’ length
transaction with a Person not an Affiliate, enter into any transaction,
including, without limitation, the purchase, sale, or exchange of property or
the rendering of any service, with any Affiliate or related Person of any
Borrower.

      

      7.12           ERISA. (a) Terminate any Plan so as to result
in any material liability of a Borrower or any Subsidiary to the PBGC, (b)
engage in or permit any Person to engage in any Prohibited Transaction involving
any Plan which would subject the Borrowers or any of their Subsidiaries to any
tax, penalty or other liability, (c) incur or suffer to exist any material
“accumulated funding deficiency” (as defined in Section 202 of ERISA), whether
or not waived, involving any Plan, or (d) allow or suffer to exist any event or
condition, which presents a risk of incurring a liability of the Borrowers or
any Subsidiary to the PBGC by reason of termination of any
Plan.

      

      7.13           Amend
Charter Documents.  Make any change in or
amendment to either of the Borrowers’ or the Guarantors’ charter documents
unless such change or amendment will not have any adverse effect on the Lender’s
interest under the Loan Documents or the Guarantor’s or Borrowers’ obligations
under the Loan Documents and does not involve a change of name of any such
Person.

      

      7.14           Limitation
on Leases.  Permit Consolidated Lease
Expense for any fiscal year of the Parent to exceed
$500,000.

      

      7.15           Limits on
Capital Expenditures.  Make or commit to make (by
way of acquisition of securities of Person or otherwise) any expenditure in
respect of the purchase or other acquisition of fixed or capital assets except
for expenditures, not exceeding in the aggregate, for the Parent and its
Subsidiaries during any fiscal year of the Parent, $500,000.

      

      SECTION 8. EVENTS OF
DEFAULT

      

      Upon the occurrence of any of the
following events (each an “Event of Default”):

      

      (a) The Borrowers shall fail to pay on the
due date thereof any interest under or principal of the Revolving Credit Note or
any other amount payable hereunder or under any of the other Loan Documents,
including, without limitation, amounts necessary to pay to the Lender the amount
of a draw under a Letter of Credit; or

       

      (b) Any representation or warranty or
statement or certification made or deemed made by the Borrowers herein or which
is contained in any certificate, document or financial or other statement
furnished at any time

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      under or in connection with this
Agreement or any other Loan Documents shall prove to have been false or
misleading in any material respect on or as of the date made or deemed made or
furnished; or

      

      (c) The Borrowers shall default in the
observance or performance of any of their covenants or agreements set forth in
Sections 2.12, 5.2, 5.4, 5.10, 5.11, 6 or 7 hereof; or Sections 5(c)(ii) or
(iii) of the Security Agreement, or Section 5(d) or 5(f) of the Security
Agreement; or

      

      (d) The Borrowers shall default or breach or
violate in the observance or performance of any other covenant or agreement
contained in this Agreement or the other Loan Documents (not referenced in (a)
or (c) above) and such default, breach or violation shall continue unremedied
for a period of ten (10) days after written notice thereof is given to the
Parent by the Lender; or

      

      (e) With respect to any Funded Debt, the
Borrowers or any Subsidiary of the Borrowers shall (i) default in any payment of
any such Funded Debt; or (ii) default in the observance or performance of any
other agreement or condition relating to any such Funded Debt or contained in
any instrument or agreement evidencing, securing or relating thereto or any
other event shall occur or condition exist, in each case in this (ii) the effect
of which default or other event or condition is to entitle the holder or holders
of such Funded Debt (or a trustee or agent on behalf of such holder or holders)
to cause such Funded Debt to become due prior to its stated maturity;
or

      

      (f) (i) Any of the Borrowers or any of their
Subsidiaries shall commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial part of its
assets, or any of the Borrowers or any of their Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against any of the Borrowers or any of their Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a period of
thirty (30) days; or (iii) there shall be commenced against any of the Borrowers
or any of their Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of
an order for any such relief which shall have not been vacated, discharged, or
stayed or bonded pending appeal within twenty (20) days from the entry thereof;
or (iv) any of the Borrowers or any of their Subsidiaries shall take any action
in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii) or (iii) of this Section 8(f);
or (v) any of the Borrowers or any of their Subsidiaries shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its debts as
they become due; or

       

      (g) Any of the following events occur or
exist with respect to any Borrower or an ERISA Affiliate: (1) any Prohibited
Transaction involving any Plan, (2) any Reportable Event shall occur with
respect to any Plan, (3) a notice of intent to terminate any Plan shall be filed
or the termination of any Plan, (4) any event or circumstance exists which might
constitute grounds entitling the PBGC to institute proceedings for the
termination of, or for the appointment of a trustee to administer, any Plan, or
the institution by the PBGC of any such proceedings, or (5) the complete or
partial withdrawal from any Multiemployer Plan, and in each case above, such
event or condition, together with all other events or conditions listed above,
if any, would reasonably be expected to subject such Borrower or any Subsidiary
of such Borrower to any tax, penalty, or other liability to a Plan, the PBGC or
otherwise (or a combination thereof) which in the aggregate exceeds or may
exceed Ten Thousand and 00/100 ($10,000) Dollars; or

      

      (h) The rendition by any court of a final
judgment or judgments against any of the Borrowers or any of their Subsidiaries
which shall not be satisfactorily stayed, discharged, vacated or set aside
within sixty (60) days of the making thereof; or the attachment of any property
of the Borrowers or any of their Subsidiaries which has not been released or
provided for to the reasonable satisfaction of the Lender within sixty (60) days
after the making thereof, which judgment or attachment is for an amount of Ten
Thousand and 00/100 ($10,000) or more; or

      

      (i) A Loan Document or the Intercreditor
Agreement shall cease, for any reason, to be in full force and effect or shall
be declared null and void, a default shall occur thereunder or any party thereto
shall assert that it has no further obligation to the Lender thereunder (unless
such party has been discharged from such obligation under such Loan Document by
the Lender in writing) or the Security Agreement shall for any reason, except to
the extent permitted by this Agreement or any other Loan Document, cease to
create, or the Lender (for any reason other than termination or release
as

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      permitted by this Agreement) shall cease
to have, for the benefit of itself, a valid, enforceable and perfected first
priority security interest in the Collateral or any portion thereof free of all
Liens except Liens permitted by Section 7.2, or any Guarantor shall attempt to
terminate a Guarantee,

      

      (j) John Mazzuto shall cease to serve in the
position of Chairman of Parent’s Executive Committee, or its
equivalent;

      

      (k) Any Borrower will terminate or attempt
to terminate any Automatic Payment or notify any Account Debtor, EXIM Bank or any guarantor or insurer of any
Account to make payment on any Account or guarantee thereof or insurance with
respect thereto other than to the Lender or the Lockbox
Account;

      

      (l) The failure to comply with any provision
of the Post-Closing Letter; or

      

      (m) Any material adverse change occurs or is
discovered in the financial condition or results of operations or prospects of
Borrowers as compared to the financial condition, results of operations and
prospects reflected in Borrowers’ financial statements as of June 30, 2006,
without taking into account for these purposes any disclosure in Schedule 3.1 of
this Agreement;

      

      Then, in any such event in any of (a)
through (m) above, any or all of the following actions shall be taken: (i) the
Lender may declare the Revolving Credit Line Facility to be terminated
forthwith, whereupon the Revolving Credit Line Facility shall no longer be
available to the Borrowers and the Lender shall no longer make Revolving Credit
Loans or issue Letters of Credit and the Revolving Loan Period shall end; (ii)
the Lender may, by notice of default to the Parent, declare the entire amounts
due under the Revolving Credit Note (with accrued interest thereon) and all
other amounts owing or outstanding under this Agreement and the other Loan
Documents and all Obligations to be immediately due and payable; provided,
however, that, subject to Section 2.1 hereof, upon the happening of an event
specified in subsection (f) of this Section 8, the Lender shall no longer make
further Revolving Credit Loans or issue Letters of Credit and the Revolving
Credit Notes and all other amounts owing under this Agreement and all
Obligations shall be immediately due and payable without declaration or other
notice to the Parent or any other Borrower; and/or (iii) the Lender may exercise
any and all rights and remedies under this Agreement, the other Loan Documents
and/or applicable law. Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived. For the avoidance of doubt, no election by the Lender in its
sole, unqualified and absolute discretion pursuant to Section 2.1 hereof to
terminate the credit hereunder shall relieve the Borrowers or the Guarantors of
their respective obligations hereunder and under any other Loan
Document.

       

      SECTION 9. JOINT AND
SEVERAL LIABILITY OF THE BORROWERS

      

      9.1           Joint and
Several Liability.  Each of the Borrowers is
and shall be jointly and severally liable for each and every obligation and
Obligation of any of the Borrowers arising or incurred under or in respect of
this Agreement or any other Loan Documents or in respect of any of the Revolving
Credit Loans made, any Letter of Credit or other instruments at any time
evidencing any thereof.  Each of the Borrowers agrees that it shall be
jointly and severally liable for all fees, as well as each of the other
obligations and Obligations of any of the Borrowers arising or incurred under or
in respect of this Agreement or any of the other Loan
Documents.

      

      9.2           Consideration.  Each of the Borrowers is
accepting joint and several liability hereunder in consideration of the
financial accommodations to be provided by the Lender under this Agreement and
the other Loan Documents, for the mutual benefit, directly or indirectly, of
each of the Borrowers and in consideration of the undertakings of each of the
Borrowers to accept joint and several liability for the obligations of each of
them.

      

      9.3           Co-Debtors.  Each of the Borrowers
jointly and severally hereby irrevocably and unconditionally accepts, not merely
as a surety but as a co-debtor, joint and several liability with the other
Borrowers with respect to the payment and performance of all of the obligations
arising under this Agreement and the other Loan Documents and all Obligations,
it being the intention of the parties hereto that all obligations and all
Obligations shall be the joint and several obligations of each of the Borrowers
without preferences or distinction among them.

      

      9.4           Payment.  If and to the extent that
any of the Borrowers shall fail to make any payment with respect to any of the
obligations hereunder or any Obligations as and when due or to perform any of
such obligations or any Obligations in accordance with the terms thereof, then
in each such event, the other Borrowers will make such payment with respect to,
or perform, such obligation and all Obligations. 

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      9.5           Waivers.

      

      (a)           Except as otherwise expressly provided
herein, each Borrower hereby waives promptness, diligences, presentment, demand,
protest, notice of acceptance of its joint and several liability, notice of any
and all advances of the Revolving Credit Loans made under this Agreement and the
Revolving Credit Note, notice of occurrence of any Default or Event of Default
(except to the extent notice is expressly required to be given pursuant to the
terms of this Agreement or any of the other Loan Documents), or of any demand
for any payment under this Agreement, notice of any action at any time taken or
omitted to be taken by the Lender under or in respect of the obligations
hereunder or the Obligations, any requirement of diligence and, generally, all
demands, notices and other formalities of every kind in connection with this
Agreement or the other Loan Documents.

      

      (b)           Each Borrower hereby waives all defenses
which may be available by virtue of any valuation, stay, moratorium law or other
similar law now or hereafter in effect, any right to require the marshaling of
assets of the Borrowers and any other entity or Person primarily or secondarily
liable with respect to the Obligations, and all suretyship defenses generally
and all other defenses.

      

      (c)           Each Borrower hereby assents to, and
waives notice of, any extension or postponement of the time for the payment, or
place or manner of payment, compromises, refinancing, consolidation or renewals
of any of the obligations hereunder or under the other Loan Documents, the
acceptance of any partial payment thereon, any waiver, consent or other action
or acquiescence by the Lender at any time or times in respect of any default by
any Borrower in the performance or satisfaction of any term, covenant, condition
or provision of this Agreement and the other Loan Documents, any and all other
indulgences whatsoever by the Lender in respect of any of the obligations
hereunder or the Obligations, and the taking, addition, substitution or release,
in whole or in part, at any time or times, of any security for any of such
obligations or the Obligations or the addition, substitution or release, in
whole or in part, of any Borrower or any other entity or Person primarily or
secondarily liable for any obligation hereunder or the
Obligations.

      

      (d)           Each Borrower further agrees that its
obligations hereunder and the Obligations shall not be released or discharged,
in whole or in part, or otherwise affected by the adequacy of any rights which
the Lender may have against any collateral security or other means of obtaining
repayment of any other obligations hereunder, the impairment of any collateral
security securing the obligations hereunder or the Obligations, including,
without limitation, the failure to protect or preserve any rights with the
Lender may have in such collateral security or the substitution, exchange,
surrender, release, loss or destruction of any such collateral security, any
other act or omission which might in any manner or to the extent vary the risk
of the Borrowers, or otherwise operate as a release or discharge of such
Borrowers, all of which may be done without notice to such Borrowers; provided,
however, that the foregoing shall in no way be deemed to create commercially
unreasonable standards in violation of the UCC.

      

      (e)           If for any reason any of the Borrowers
has no legal existence or is under no legal obligation to discharge any of the
obligations hereunder or the Obligations, or if any of the obligations hereunder
or the Obligations have become irrecoverable from any of the other Borrowers by
reason of such other Borrower’s insolvency, bankruptcy or reorganization or by
other operation of law or for any reason, this Agreement and the other Loan
Documents to which it is a party shall nevertheless be binding on such Borrower
and all other Borrowers to the same extent as if such Borrower and all other
Borrowers at all times had been the sole obligor on such obligations and the
Obligations.  Without limiting the generality of the foregoing, each
Borrower assents to any other action or delay in acting or failure to act on the
part of the Lender, including, without limitation, any failure strictly or
diligently to assert any right or to pursue any remedy or to comply fully with
the applicable laws or regulations thereunder which might, but for the
provisions of this Section 9.5, afford grounds for terminating, discharging or
relieving such Borrower, in whole or in part, from any of its obligations under
this Section 9.5 which shall not be discharged except by performance and then
only to the extent of such performance.  The obligations of each
Borrower under this Section 9.5 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, reconstruction or
similar proceeding with respect to any Borrower or the
Lender.

      

      (f)           The joint and several liability of the
Borrowers hereunder shall continue in full force and effect notwithstanding any
absorption, merger, amalgamation or any other change whatsoever in the name,
membership, constitution or place of formation of any Borrower or the Lender and
shall be enforceable without any defense, setoff or counterclaim of the
Borrowers, all of which are hereby waived.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      9.6           Enforcement.  The provisions of this
Section 9.6 are made for the benefit of the Lender and its successors and
assigns, and may be enforced by it from time to time against any of the
Borrowers as often as occasion therefor may arise and without requirement on the
part of the Lender first to marshal any of its claims or to exercise any of its
rights against the other Borrowers or to exhaust any remedies available to it
against the other Borrowers or to resort to any other source or means of
obtaining payment of any of the obligations hereunder or to elect any other
remedy.  The provisions of this Section 9.6 shall remain in effect
until all of the obligations and all Obligations hereunder shall have been paid
in full or otherwise fully satisfied and the Revolving Credit Line Facility
shall have been terminated and no Letters of Credit are
outstanding.  If at any time, any payment, or any part thereof, made
in respect of any of the Obligations, is rescinded or must otherwise be restored
or returned by the Lender upon the insolvency, bankruptcy or reorganization of
the Borrowers, or otherwise, the provisions of this Section 9.6 will forthwith
be reinstated in effect as though such payment had not been
made.

      

      9.7           Contribution.  To the extent any Borrower
makes a payment hereunder in excess of the aggregate amount of the benefit
received by such Borrower in respect of the extensions of credit under this
Agreement (the “Benefit Amount”), then such Borrower, only after the payment in
full in cash of all of the obligations under the Loan Documents and all
Obligations and the termination of the Revolving Credit Line Facility and after
no Letter of Credit is outstanding, shall be entitled to recover from each other
Borrower such excess payment, pro rata in accordance with the ratio of the
Benefit Amount received by each such other Borrower to the total Benefit Amounts
received by all Borrowers, and the right to such recovery shall be deemed to be
in asset and property of such Borrower so funding; provided that all such rights
to recovery shall be subordinate and junior in right of payment to and shall not
be exercised until the final and indefeasible repayment in full in cash of all
of the obligations under the Loan Documents and all Obligations and the
termination of the Revolving Credit Line Facility and after no Letter of Credit
is outstanding. 

      

      SECTION 10. MISCELLANEOUS

      

      10.1           Notices. Notices, consents and other
communications provided for herein shall be in writing and shall be faxed,
delivered or mailed (in the case of facsimile communication, delivered with
receipt confirmed) addressed:

      

      (a)           if to the Lender at Sovereign Bank, 551
Fifth Avenue, 25th Floor, New York, New York
10176,  Attn.: Silvana Burdick, Fax Number (212)
682-7450.

      

      (b)           if to any Borrower, to the Parent only,
at the addresses for the Parent set forth on the signature pages to this
Agreement (or facsimile numbers 216-514-5996 to Jim Marguiles, and to Jorge
Yepes 724-226-9976), each Borrower hereby agreeing that any notice to the
Borrowers or any of them shall be effective if sent as described in this Section
10.1 only to the Parent at two addresses.

      

      All notices and other communications
given to any party hereto in accordance with the provisions of this Agreement
shall be deemed to have been given (i) if hand delivered, on the date of
receipt, (ii) if by mail, three (3) Business Days after being sent by registered
or certified mail, postage prepaid, return receipt requested, or the next
Business Day after being sent by overnight mail, or (iii) if by facsimile, upon
receipt during normal business hours on any Business Day (or otherwise the next
Business Day), in each case addressed to such party as provided in this Section
10.1 or in accordance with the latest unrevoked direction from such party,
subject to the fact that any notice to any Borrower shall be effective if sent
only to the Parent at two addresses.

      

      10.2           Survival of
Agreement. All covenants,
agreements, representations and warranties made by the Borrowers or any of their
Subsidiaries herein and in the other Loan Documents and the certificates or
other instruments prepared or delivered in connection with this Agreement or any
other Loan Document shall be considered to have been relied upon by the Lender
and shall survive the making by the Lender of the Revolving Credit Loans and
issuing Letters of Credit and the execution and delivery to the Lender of the
Revolving Credit Note and the Letter of Credit Documentation and the occurrence
of any other extension of credit and shall continue in full force and effect as
long as any Obligation is outstanding and unpaid and so long as the Lender’s
Revolving Credit Line Facility has not been terminated or there are any
outstanding Letters of Credit.

       

      10.3           Successors
and Assigns: Participations.

      

      (a)           Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf the

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Borrowers, any Guarantor, any ERISA
Affiliate, any Subsidiary of any thereof, or the Lender, that are contained in
this Agreement shall bind and inure to the benefit of such Persons and their
respective successors and assigns.  The Lender shall have the
unrestricted right at any time or from time to time and without the Borrowers’
(or any Guarantors’) consent, to sell, assign, endorse, or transfer all or any
portion of its rights and obligations hereunder to one or more banks or other
entities (each, an “Assignee”) and, each of the Borrowers (and each Guarantor)
agrees that it shall execute, or cause to be executed such documents, including,
without limitation, amendments to this Agreement and to any other documents,
instruments and agreements executed in connection herewith as the Lender shall
deem necessary to effect the foregoing.  In addition, at the request
of the Lender and any such Assignee, each of the Borrowers shall issue one or
more new promissory notes, as applicable, to any such Assignee and, if the
Lender has retained any of its rights and obligations hereunder following such
assignment, to the Lender, which new promissory notes shall be issued in
replacement of, but not in discharge of, the liability evidenced by the note
held by the Lender prior to such assignment and shall reflect the amount of the
respective loans held by such Assignee and the Lender after giving effect to
such assignment.  Upon the execution and delivery of appropriate
assignment and documentation, amendments and other documentation required by the
Lender in connection with such assignment, and the payment by Assignee of the
purchase price agreed to by the Lender and such Assignee, such Assignee shall be
a party to this Agreement and shall have all of the rights and obligations of
the Lender hereunder (and under any and all other guaranties, documents,
instruments and agreements executed in connection herewith) to the extent that
such rights and obligations have been assigned by the Lender pursuant to the
assignment documentation between the Lender and Assignee, and the Lender shall
be released from its obligations hereunder and thereunder to a corresponding
extent.  A Borrower may
not assign or transfer any of its rights or obligations hereunder without the
written consent of the Lender, and any such assignment or transfer without such
consent shall be null and void.

      

      (b)           The Lender shall have the unrestricted
right at any time and from time to time, and without the consent of or notice to
any Borrower (or any Guarantor), to grant to one or more institutions or other
persons (each a “Participant”) participating in the Lender’s obligations to lend
hereunder and/or any or all of the Revolving Credit Loans held by the Lender
hereunder.  In the event of any such grant by the Lender of a
participating interest to a Participant, whether or not upon notice to any of
the Borrowers, the Lender shall remain responsible for the performance of its
obligations hereunder and under the other Loan Documents and the Borrowers shall
continue to deal solely and directly with the Lender in connection with the
Lender’s rights and obligations hereunder and thereunder.

      

      (c)            The Lender may furnish any information
concerning the Borrowers, their Subsidiaries and the Guarantors in its
possession from time to time to any prospective or actual Assignees and
Participants.

      

      10.4           Expenses;
Indemnity.

      

      The
Borrowers agree, on a joint and several basis:

      

      (a) to pay or
reimburse the Lender on demand for all its out-of-pocket costs and expenses
incurred in connection with the development, preparation, negotiation and
execution of, and any amendment, supplement or modification to, this Agreement
and the Revolving Credit Note and the other Loan Documents, the Intercreditor
Agreement and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the fees and disbursements of
counsel to the Lender, and the out-of-pocket costs incurred by the Lender in
conducting periodic Field Audits;

      

      (b) to pay or
reimburse the Lender on demand for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the Revolving Credit Note, the other Loan Documents, the
Intercreditor Agreement and any other documents related to any of the foregoing,
including, without limitation, fees and disbursements of counsel to the
Lender;

      

      (c) to pay,
indemnify, and hold the Lender on demand harmless from, any and all recording
and filing fees and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other taxes, if any, which may be payable
or determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the Revolving Credit Note, the other Loan
Documents and any other documents related to any of the foregoing;
and

      

      (d) to pay,
indemnify, and hold the Lender on demand harmless from and against any and all
other liabilities, obligations, losses, damages, penalties, actions (whether
sounding in contract, in tort or on any other ground), judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery,

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      enforcement,
performance and administration of, or in any other way arising out of or
relating to, this Agreement, the Revolving Credit Note, the other Loan
Documents, the Intercreditor Agreement or any other documents contemplated by or
referred to herein or therein or any action taken or omitted to be taken by the
Lender with respect to any of the foregoing (all the foregoing, collectively,
the “indemnified liabilities”), provided, that the Borrowers shall have no
obligation hereunder to the Lender with respect to indemnified liabilities
arising from the gross negligence or willful misconduct of the
Lender.

      

      The
agreements in this subsection shall survive repayment of the Revolving Credit
Note and the Letters of Credit and all other amounts payable hereunder and all
other Obligations and the termination of the Revolving Credit Line Facility and
all Letters of Credit.

      

      10.5           Applicable
Law. THIS AGREEMENT AND THE
REVOLVING CREDIT NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS
PRINCIPLES.

      

      10.6           Right of
Setoff. The Borrowers
hereby grant to the Lender a lien, security interest and a right of set off as
security for all liabilities and obligations to the Lender and all Obligations,
whether now existing or hereafter arising, upon and against all deposits,
credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of the Lender or any entity under the control of the
Lender, or in transit to any of them.  At any time, without demand or
notice, the Lender may set off the same or any part thereof and apply the same
to any liability or obligation of the Borrowers and any Guarantor even though
unmatured and regardless of the adequacy of any other collateral securing the
Revolving Credit Loans and all Obligations.  ANY AND ALL RIGHTS TO
REQUIRE THE LENDER TO EXERCISE ITS RIGHTS AND REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE REVOLVING CREDIT LOANS, PRIOR TO EXERCISING ITS
RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE
BORROWERS OR ANY GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY
WAIVED.  The Lender shall not be required to marshal any present or
future security for, or the guarantees of, the obligations or to resort to any
such security or guarantee in any particular order and the Borrowers and any
Guarantors waive, to the fullest extent that it lawfully can, (a) any right to
they might have to require the Lender to pursue any particular remedy before
proceeding against them and (b) any right to the benefit of, or to direct the
application of the proceeds of any collateral until the obligations are paid in
full.

      

      10.7           Payments on
Business Days. Should the
principal of or interest on the Revolving Credit Note or any fee or other amount
payable hereunder become due and payable on other than a Business Day, payment
in respect thereof may be made on the next succeeding Business Day (except as
otherwise specified in the definition of “Interest Period”), and such extension
of time shall in such case be included in computing interest, if any, in
connection with such payment and fees payable hereunder.

      

      10.8           Late
Charges.  If a principal,
interest, fee, Letter of Credit drawing or other scheduled payment is not paid
when due, without limiting Borrowers’ other obligations or Lender’s other rights
or remedies, the Borrowers will be charged 5.000% of the unpaid portion of the
principal, interest, fee, Letter of Credit drawing or other scheduled payment or
$10.00, whichever is greater.  All charges under this Section 10.8
shall be payable on Lender’s demand.

       

      10.9           Waivers;
Amendments.

      

      (a)           No failure or delay of the Lender in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such right or power, preclude
any other or further exercise thereof or the exercise of any other right or
power. The rights and remedies of the Lender hereunder and under the Loan
Documents are cumulative and not exclusive of any rights or remedies which they
may otherwise have. No waiver of any provision of this Agreement or the
Revolving Credit Note or the Loan Documents nor consent to any departure by the
Borrowers therefrom shall in any event be effective unless the same shall be
authorized as provided in paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any of the Borrowers in any case shall entitle
it to any other or further notice or demand in similar or other circumstances.
Each holder of any of the Revolving Credit Notes shall be bound by any
amendment, modification, waiver or consent authorized as provided herein,
whether or not such Revolving Credit Note shall have been marked to indicate
such amendment, modification, waiver or consent.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (b)           Neither this Agreement nor any provision
hereof may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by all of the Borrowers and the Lender except
that Lender may reasonably modify the form of Compliance Certificate or
Borrowing Base Certificate without Borrower’s consent or
agreement.

      

      10.10           Severability. In the event any one or more of the
provisions contained in this Agreement or in the Revolving Credit Note should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable
provisions.

       

      10.11           Entire
Agreement; Waiver of Jury Trial, Etc.   (a) This Agreement,
the Revolving Credit Note and the other Loan Documents constitute the entire
contract between the parties hereto relative to the subject matter hereof and
thereof. Any previous agreement among the parties hereto or certain of the
parties hereto with respect to the transactions contemplated hereby and thereby
(except for any Lockbox Agreement or other Loan Document previously executed by
the Borrowers or certain of them with or in favor of the Lender, all of which
shall continue in full force and effect) is superseded by this Agreement, the
Revolving Credit Note and the other Loan Documents. Except as expressly provided
in this Agreement, the Revolving Credit Note or the other Loan Documents,
nothing in this Agreement, the Revolving Credit Note or the other Loan Documents
is intended to confer upon any party, other than the parties hereto, any rights,
remedies, obligations or liabilities under or by reason of this Agreement, the
Revolving Credit Note or the other Loan Documents.  For the avoidance
of doubt, the line of credit letter relating to the $1,000,000 line of credit
previously provided by the Lender to Pitt Penn, together with any note executed
by Pitt Penn in connection therewith, and any guarantees of the obligations in
respect of such line of credit, together with any security agreements securing
obligations in connection with such line, are hereby amended, restated and
superseded in their entirety by this Agreement and the other Loan
Documents.

      

      (b)           EACH OF THE BORROWERS AND THE LENDER
MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WIAVE THE RIGHT TO A
TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
ANY PARTY.  THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE
LENDER TO ACCEPT THIS AGREEMENT AND MAKE ANY REVOLVING CREDIT
LOAN.

      

      (c)           Except as prohibited by law, each party
hereto hereby waives any right it may have to claim or recover in any litigation
referred to in paragraph (b) of this Section 10.10 any special, exemplary or
punitive damages.

      

      (d)           Each party hereto (i) certifies that no
representative, agent or attorney of the Lender has represented, expressly or
otherwise, that the Lender would not, in the event of litigation, seek to
enforce the foregoing waivers and (ii) acknowledges that it has been induced to
enter into this Agreement, the Revolving Credit Note or the other Loan
Documents, as applicable, by, among other things, the mutual waivers and
certifications herein.

      

      10.12            Submission
to Jurisdiction.

      

      (a)           Any legal action or proceeding with
respect to this Agreement or the Revolving Credit Note or any other Loan
Document may be brought in the courts of New York County in the State of New
York or of the United States of America for the Southern District of New York,
and, by execution and delivery of this Agreement, each of the Borrowers and each
of the Guarantors hereby accepts for themselves and in respect of their
property, generally and unconditionally, the nonexclusive jurisdiction of the
aforesaid courts.

      

      (b)           Each of the Borrowers and each of the
Guarantors hereby irrevocably waives, in connection with any such action or
proceeding, any objection, including, without limitation, any objection to the
laying of venue or based on the grounds of forum non conveniens, which they may
now or hereafter have to the bringing of any such action or proceeding in such
respective jurisdictions.

      

      (c)           Each of the Borrowers and each of the
Guarantors hereby irrevocably consents to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to each such person,
as the case may be, at its address set forth in Section 10.1
hereof.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      (d)           Nothing herein shall affect the right of
the Lender to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against any Borrower or any Guarantor in
any other jurisdiction.

      

      10.13           Interest
Rate Limitation. The
Borrowers shall not be obligated to pay and the Lender shall not collect
interest at a rate higher than the maximum permitted by law or the maximum that
will not subject the Lender to any civil or criminal penalties.  If,
because of the acceleration of maturity the payment of interest in advance or
any other reason, the Borrowers are required, under the provisions of any Loan
Document or otherwise, to pay interest at a rate in excess of the maximum rate,
the rate of interest under such provisions shall immediately and automatically
be reduced to such maximum rate and any payment made in excess of such maximum
rate, together with interest thereon at the rate provided herein from the date
of such payment shall be immediately and automatically applied to the reduction
of the unpaid principal balance of the Revolving Credit Note as of the date on
which such excess payment was made.  If the amount to be so applied to
reduction of the unpaid principal balance exceeds the unpaid principal balance,
the amount of such excess shall be refunded by the Lender to the
Borrowers.

      

      10.14           Further
Assurances. The Borrowers
agree at any time and from time to time at their joint and several expense, upon
request of the Lender, to promptly execute, deliver, or obtain or cause to be
executed, delivered or obtained any and all further instruments and documents
and to take or cause to be taken all such other action as the Lender may
reasonably deem desirable in obtaining the full benefits of the Loan
Documents.

       

      10.15           Counterparts. This Agreement each of the other Loan
Documents may be executed in counterparts of the entire document, or of
signature pages to the document, each of which shall constitute an original but
all of which when taken together shall constitute but one contract, and shall
become effective when copies which, when taken together, bear the signatures of
each of the parties hereto or thereto shall be delivered to the Lender and the
Borrowers.

      

      10.16           USA PATRIOT
ACT. The Lender hereby
notifies the Borrowers that pursuant to the requirements of the USA PATRIOT ACT
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it
is or may be required to obtain, verify and record information that identifies
the Borrowers and their Subsidiaries which information includes the name and
address of the Borrowers and their Subsidiaries and other information that will
allow the Lender to identify the Borrowers and their Subsidiaries in accordance
with the Act.

      

      10.17           Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only and are not
to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.

      

      10.18           Replacement
Documentation.  Upon receipt of an
affidavit of an officer of the Lender as to the loss, theft, destruction or
mutilation of the Revolving Credit Note or any other Loan Documents and, in the
case of any such destruction or mutilation, upon surrender and cancellation of
such Revolving Credit Note or other Loan Documents, each of the Borrowers will
issue, in lieu thereof, a replacement Revolving Credit Note or other Loan
Document(s) in the same principal amount thereof and otherwise of like
tenor.

      

      10.19 Judgments.  The Borrowers and the
Lender hereby agree that whenever any decision, judgment or determination is to
be made by Lender in this Agreement or any Loan Documents, it shall be made by
Lender in its sole, unqualified and absolute discretion.

      

      10.20 Including.  The Borrowers and Lender
hereby agree that the words “includes”, “include”, and “including”, shall not be
limiting, and shall be deemed to be followed by the words “without limitation”,
without regard to whether such words follow the words “includes”, “include”, and
“including”.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above
written.

      

      

      
        	 
      	
                Lender
      :

                 

                SOVEREIGN BANK

                 

                By:
      ____________________________

                Name:

                Title:

                Address and Facsimile
      Number:

                551 Fifth Avenue, New York, NY
      10176

              

      

           

      
        	
                Notice
      Addresses :

                 

                CITIBANK, N.A.

                 

                Hauppauge, NY
      11788

              	
                Borrowers
      :

                 

                INDUSTRIAL ENTERPRISES
      OF

                AMERICA, INC.

                 

                By:
      ____________________________

                Name:

                Title:

                Address and Facsimile
      Number:

                711 Third Avenue, New York, NY
      10017

                Attention: John
      Mazzuto

                With a copy of all notices
      to:

                James W. Marguiles,
      Esq.

                30100, Chagrin Boulevard, Suite
      250

                Cleveland, OH
      44124

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        	
                 

                 

                New York, NY
      10017

              	
                UNIFIDE INDUSTRIES, LIMITED
      LIABILITY COMPANY

                By:
      ____________________________

                Name:

                Title:

                Address and Facsimile
      Number:

                121 Highway 36, Suite
      125

                West Long Branch, NJ
      07764

              

      

      

      
        	
                 

                 

                New York, NY
      10017

              	
                PITT PENN OIL CO.,
      LLC

                 

                By:
      ____________________________

                Name:

                Title:

                Address and Facsimile
      Number:

                426 Freeport Road, P.O. Box
      296

                Creighton, PA
      15030

              

      

         

      
        	
                BANK OF AMERICA,
      N.A.

                 

                New York, NY
      10036

              	
                EMC PACKAGING,
      INC.

                 

                By:
      ____________________________

                Name:

                Title:

                Address and Facsimile
      Number:

                550 James Street, Lockwood, NJ
      08701

                 

                 

                TODAYS WAY MANUFACTURING
      LLC

                 

                By:
      ____________________________

                Name:

                Title:

                Address and Facsimile
      Number:

                1081 Rosemary Boulevard, Akron, OH
      44306

                 

                 

                PITT PENN HOLDING CO.,
      LLC

                 

                By:
      ____________________________

                Name:

                Title:

                Address and Facsimile
      Number:

                426 Freeport Road, P.O. Box
      296

                Creighton, PA
      15030

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