Document:

exhibit_101.htm

    Exhibit 10.1

     

    AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT

     

    
      This
AMENDED AND RESTATED
LOAN AND SECURITY
AGREEMENT (this “Agreement”) dated as of the Effective Date is between
SILICON VALLEY BANK, a
California corporation (“Bank”), with its principal place of business at 3003
Tasman Drive, Santa Clara, California 95054 and BETAWAVE CORPORATION, a
Delaware corporation (“Borrower”), with its principal place of business at 706
Mission Street, 10th
Floor, San Francisco, California 94103, and provides the terms on which Bank
shall lend to Borrower, and Borrower shall repay Bank.

       

      
        
          The
Borrower and Bank entered into that certain Loan and Security Agreement dated
March 27, 2009 (as amended from time to time, the “Prior Loan
Agreement”).  Pursuant to the Prior Loan Agreement, Bank made a
revolving loan facility available to Borrower in the original maximum principal
amount of Four Million Dollars ($4,000,000).  Borrower and Bank have
agreed pursuant to this Agreement to replace, amend and restate the Prior Loan
Agreement in its entirety.  The parties agree that the Prior Loan
Agreement is hereby replaced, amended and restated in its entirety as
follows:

           

          
            
              
                	
                        1  

                      	
                        ACCOUNTING AND OTHER
      TERMS

                      

              

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

                 

                
                  
                    
                      	
                              2  

                            	
                              LOAN AND TERMS OF
      PAYMENT

                            

                    

                    
                      
                         

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

                        
                          
                            2.1.1 Financing of
Accounts.

                             

                            
                              
                                (a) Availability.  Subject
to the terms of this Agreement, Borrower may request that Bank finance specific
Eligible Accounts.  Bank may, in its good faith business discretion,
finance such Eligible Accounts by extending credit to Borrower in an amount
equal to the result of the Advance Rate multiplied by the face amount of the
Eligible Account (the “Advance”).  Bank may, in its sole discretion,
change the percentage of the Advance Rate for a particular Eligible Account on a
case by case basis.  When Bank makes an Advance, the Eligible Account
becomes a “Financed Receivable.”

                                
                                  
                                    
                                      
                                      

                                    

                                    
                                      
                                      

                                      
                                        

                                      

                                    

                                    
                                      
                                      

                                    

                                  

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

                                    
                                      
                                         

                                        (c) Borrowing
Procedure.  Borrower will deliver an Invoice Transmittal for
each Eligible Account it offers.  Bank may rely on information set
forth in or provided with the Invoice Transmittal.

                                        
                                          
                                             

                                            (d) Credit Quality;
Confirmations.  Bank may, at its option, conduct a credit check
of the Account Debtor for each Account requested by Borrower for financing
hereunder in order to approve any such Account Debtor’s credit before agreeing
to finance such Account.  Bank may also verify directly with the
respective Account Debtors the validity, amount and other matters relating to
the Accounts (including confirmations of Borrower’s representations in
Section 5.3) by means of mail, telephone or
otherwise, either in the name of Borrower or Bank from time to time in its sole
discretion.

                                            
                                              
                                                 

                                                (e) Accounts
Notification/Collection.  Bank may notify any Person owing
Borrower money of Bank’s security interest in the funds and verify and/or
collect the amount of the Account.

                                                
                                                  
                                                     

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

                                                    
                                                      
                                                         

                                                        (g) Suspension of
Advances.  Borrower’s ability to request that Bank finance
Eligible Accounts hereunder will terminate if, in Bank’s sole discretion, there
has been a material adverse change in the general affairs, management, results
of operation, condition (financial or otherwise) or the prospect of repayment of
the Obligations, or there has been any material adverse deviation by Borrower
from the most recent business plan of Borrower presented to and accepted by Bank
prior to the execution of this Agreement.

                                                        
                                                          
                                                             

                                                            (h) Prior Loan Agreement
Obligations.  On the Effective Date the outstanding Obligations
under the Prior Loan Agreement shall be deemed to be an Advance hereunder and
the Bank shall choose specific Eligible Accounts which shall be deemed to be the
Financed Receivables in regard to such Advance.

                                                            
                                                              
                                                                 

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

                                                                
                                                                  
                                                                     

                                                                    2.2.1 Collections.  Collections will
be credited to the Financed Receivable Balance for such Financed Receivable, but
if there is an Event of Default, Bank may apply Collections to the Obligations
in any order it chooses.  If Bank receives a payment for both a
Financed Receivable and a non-Financed Receivable, the funds will first be
applied to the Financed Receivable and, if there is no Event of Default then
existing, the excess will be remitted to Borrower, subject to Section 2.2.7.

                                                                    
                                                                      
                                                                        
                                                                          
                                                                          

                                                                        

                                                                        
                                                                          
                                                                          

                                                                          
                                                                            

                                                                          

                                                                        

                                                                        
                                                                          
                                                                          

                                                                        

                                                                      

                                                                      
                                                                        2.2.2 Restructuring
Fee.  A
fully earned, non refundable loan restructuring fee (fully earned as of the
Effective Date) of Fifteen Thousand Dollars ($15,000) (the “Restructuring Fee”)
is due as follows: (a) Seven Thousand Five Hundred Dollars ($7,500) was due upon
execution of the term sheet in regard to this Agreement and has been received by
Bank, and (b) the remaining Seven Thousand Five Hundred Dollars ($7,500) is due
upon the earliest to occur of (i) the Obligations becoming due and payable
according to the terms hereof because of the occurrence and continuance of an
Event of Default, (ii) the prepayment of the Obligations prior to the Maturity
Date or (iii) the Restructuring Fee Date.

                                                                        
                                                                          
                                                                             

                                                                            2.2.3 Finance
Charges.  In computing
Finance Charges on the Obligations under this Agreement, all Collections
received by Bank shall be deemed applied by Bank on account of the Obligations
one (1) Business Day after receipt of the Collections.  Borrower will
pay a finance charge (the “Finance Charge”) on the Financed Receivable Balance
which is equal to the Applicable Rate divided by 360 multiplied by the number of
days each such Financed Receivable is outstanding multiplied by the outstanding
Financed Receivable Balance.  The Finance Charge is payable when the
Advance made based on such Financed Receivable is payable in accordance with
Section 2.3 hereof.  While any Event of Default has occurred and
is continuing, the Applicable Rate will increase an additional five percent
(5.0%) per annum effective immediately upon the occurrence of such Event of
Default. In the event that the sum of the aggregate amount of Finance Charges
earned by Bank in any Reconciliation Period plus the aggregate Collateral
Handling Fee earned by Bank in such Reconciliation Period is less than the
Minimum Finance Charge, Borrower shall pay to Bank an additional Finance Charge
equal to (i) the Minimum Finance Charge minus (ii) the sum of (A) the aggregate
amount of all Finance Charges earned by Bank in such Reconciliation Period plus
(B) the aggregate Collateral Handling Fee earned by Bank in such Reconciliation
Period.  Such additional Finance Charge shall be payable on the first
day of the next Reconciliation Period.

                                                                            
                                                                              
                                                                                 

                                                                                2.2.4 Collateral
Handling Fee.  Borrower will pay
to Bank a collateral handling fee equal to 0.50% per month of the Financed
Receivable Balance for each Financed Receivable outstanding based upon a 360 day
year (the “Collateral Handling Fee”).  This fee is charged on a daily
basis which is equal to the Collateral Handling Fee divided by 30, multiplied by
the number of days each such Financed Receivable is outstanding, multiplied by
the outstanding Financed Receivable Balance.  The Collateral Handling
Fee is payable when the Advance made based on such Financed Receivable is
payable in accordance with Section 2.3
hereof.  In computing Collateral Handling Fees under this Agreement,
all Collections received by Bank shall be deemed applied by Bank on account of
Obligations one (1) Business Days after receipt of the
Collections.  While any Event of Default has occurred and is
continuing, the Collateral Handling Fee will increase an additional 0.50%
effective immediately upon such Event of Default.

                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                        

                                                                                      

                                                                                      
                                                                                        
                                                                                        

                                                                                        
                                                                                          

                                                                                        

                                                                                      

                                                                                      
                                                                                        
                                                                                        

                                                                                      

                                                                                    

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

                                                                                    
                                                                                      
                                                                                         

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

                                                                                        
                                                                                          
                                                                                             

                                                                                            2.2.7 Lockbox; Account Collection
Services.

                                                                                            
                                                                                              
                                                                                                 

                                                                                                (a) Borrower
shall direct each Account Debtor (and each depository institution where proceeds
of Accounts are on deposit) to remit payments with respect to the Accounts to a
lockbox account established with Bank or to wire transfer payments to a cash
collateral account that Bank controls (collectively, the
“Lockbox”).  It will be considered an immediate Event of Default if
the Lockbox is not set-up and operational within thirty (30) days after the
Effective Date.

                                                                                                
                                                                                                  
                                                                                                     

                                                                                                    (b) Until
such Lockbox is established, the proceeds of the Accounts shall be paid by the
Account Debtors to an address consented to by Bank.  Bank hereby
consents to the following address: 3003 Tasman Drive, Santa Clara, California
95054.  Upon receipt by Borrower of such proceeds, Borrower shall
immediately transfer and deliver same to Bank, along with a detailed cash
receipts journal.  Provided no Event of Default exists or an event
that with notice or lapse of time will be an Event of Default, within three (3)
days of receipt of such amounts by Bank, Bank will turn over to Borrower the
proceeds of the Accounts other than Collections with respect to Financed
Receivables and the amount of Collections in excess of the amounts for which
Bank has made an Advance to Borrower, less any amounts due to Bank, such as the
Finance Charge, the Restructuring Fee, payments due to Bank, other fees and
expenses, or otherwise; provided, however, Bank may hold such excess amount with
respect to Financed Receivables as a reserve until the end of the applicable
Reconciliation Period if Bank, in its discretion, determines that other Financed
Receivable(s) may no longer qualify as an Eligible Account at any time prior to
the end of the subject Reconciliation Period.  This Section does not
impose any affirmative duty on Bank to perform any act other than as
specifically set forth herein.  All Accounts and the proceeds thereof
are Collateral and if an Event of Default occurs, Bank may apply the proceeds of
such Accounts to the Obligations while such Event of Default is
continuing.

                                                                                                    
                                                                                                      
                                                                                                         

                                                                                                        2.2.8 Bank
Expenses.  Borrower shall
pay all Bank Expenses (including reasonable attorneys’ fees and expenses (which
attorney’s fees for the documentation and negotiation of this Agreement will not
exceed $5,000 as of the Effective Date unless this Agreement involves heavy
negotiations or issues that arise require more time from Bank’s counsel), plus
expenses, for documentation and negotiation of this Agreement) incurred through
and after the Effective Date, when due.

                                                                                                        
                                                                                                          
                                                                                                            
                                                                                                              
                                                                                                                
                                                                                                                

                                                                                                              

                                                                                                              
                                                                                                                
                                                                                                                

                                                                                                                
                                                                                                                  

                                                                                                                

                                                                                                              

                                                                                                              
                                                                                                                
                                                                                                                

                                                                                                              

                                                                                                            

                                                                                                            2.3 Repayment of Obligations;
Adjustments.

                                                                                                            
                                                                                                              
                                                                                                                 

                                                                                                                2.3.1 Repayment.  Borrower will
repay each Advance on the earliest of:  (a) the date on which payment
is received of the Financed Receivable with respect to which the Advance was
made, (b) the date on which the Financed Receivable is no longer an Eligible
Account, except to the extent a Financed Receivable is determined to no longer
be an Eligible Account in the discretion of the Bank, in which case, the
Borrower shall repay such Advance within three (3) Business Days after receipt
of written notice from Bank that such Financed Receivable is no longer an
Eligible Account, (c) within three (3) Business Days after the date on which any
Adjustment is asserted to the Financed Receivable (but only to the extent of the
Adjustment if the Financed Receivable remains otherwise an Eligible Account),
(d) the date on which there is a breach of any warranty or representation set
forth in Section 5.3, or a breach of any
covenant in this Agreement or (e) the Maturity Date (including any early
termination). Each payment will also include all accrued Finance Charges and
Collateral Handling Fees with respect to such Advance and all other amounts then
due and payable hereunder.

                                                                                                                
                                                                                                                  
                                                                                                                     

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

                                                                                                                    
                                                                                                                      
                                                                                                                         

                                                                                                                        2.3.3 Debit of
Accounts.  Bank may debit
any of Borrower’s deposit accounts for payments or any amounts Borrower owes
Bank hereunder.  Bank shall promptly notify Borrower when it debits
Borrower’s accounts.  These debits shall not constitute a
set-off.

                                                                                                                        
                                                                                                                          
                                                                                                                             

                                                                                                                            2.3.4 Adjustments.  If, at any time
during the term of this Agreement, any Account Debtor asserts an Adjustment,
Borrower issues a credit memorandum, or any of the representations and
warranties in Section 5.3 or covenants in this
Agreement are no longer true in all material respects, Borrower will promptly
advise Bank.

                                                                                                                            
                                                                                                                              
                                                                                                                                 

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

                                                                                                                                
                                                                                                                                  
                                                                                                                                    
                                                                                                                                      
                                                                                                                                        
                                                                                                                                        

                                                                                                                                      

                                                                                                                                      
                                                                                                                                        
                                                                                                                                        

                                                                                                                                        
                                                                                                                                          

                                                                                                                                        

                                                                                                                                      

                                                                                                                                      
                                                                                                                                        
                                                                                                                                        

                                                                                                                                      

                                                                                                                                    

                                                                                                                                    
                                                                                                                                      	
                                                                                                                                              3  

                                                                                                                                            	
                                                                                                                                              CONDITIONS OF
      LOANS

                                                                                                                                            

                                                                                                                                    

                                                                                                                                    
                                                                                                                                      
                                                                                                                                         

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

                                                                                                                                        
                                                                                                                                          
                                                                                                                                             

                                                                                                                                            (a) a
certificate of the Secretary of Borrower with respect to articles, bylaws,
incumbency and resolutions authorizing the execution and delivery of this
Agreement;

                                                                                                                                            
                                                                                                                                              
                                                                                                                                                 

                                                                                                                                                (b) Perfection
Certificate by Borrower;

                                                                                                                                                
                                                                                                                                                  
                                                                                                                                                     

                                                                                                                                                    (c) payment
of the fees and Bank Expenses then due and payable; and

                                                                                                                                                    
                                                                                                                                                      
                                                                                                                                                         

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

                                                                                                                                                        
                                                                                                                                                          
                                                                                                                                                             

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

                                                                                                                                                            
                                                                                                                                                              
                                                                                                                                                                 

                                                                                                                                                                (a) receipt
of the Invoice Transmittal;

                                                                                                                                                                
                                                                                                                                                                  
                                                                                                                                                                     

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

                                                                                                                                                                    
                                                                                                                                                                      
                                                                                                                                                                         

                                                                                                                                                                        (c) each of
the representations and warranties in Section 5 shall be true and correct in all material respects
on the date of the Invoice Transmittal and on the effective date of each Advance
and no Event of Default shall have occurred and be continuing, or result from
the Advance.  Each Advance is Borrower’s representation and warranty
on that date that the representations and warranties in Section 5 remain true and correct in all material
respects.

                                                                                                                                                                        
                                                                                                                                                                          
                                                                                                                                                                             

                                                                                                                                                                            (d) in Bank’s
sole discretion, there has not been a Material Adverse Change.

                                                                                                                                                                             

                                                                                                                                                                            
                                                                                                                                                                              
                                                                                                                                                                                
                                                                                                                                                                                  	
                                                                                                                                                                                          4  

                                                                                                                                                                                        	
                                                                                                                                                                                          CREATION OF SECURITY
      INTEREST

                                                                                                                                                                                        

                                                                                                                                                                                

                                                                                                                                                                                
                                                                                                                                                                                  
                                                                                                                                                                                     

                                                                                                                                                                                    4.1 Grant of
Security Interest.  Borrower hereby
grants Bank, to secure the payment and performance in full of all of the
Obligations, a continuing security interest in, and pledges to Bank, the
Collateral, wherever located, whether now owned or hereafter acquired or
arising, and all proceeds and products thereof.  Borrower represents,
warrants, and covenants that the security interest granted herein shall be a
first priority security interest in the Collateral (subject to any Permitted
Liens that may have superior priority to Bank’s Lien under this
Agreement).  If Borrower shall at any time, acquire commercial tort
claims in the aggregate amount of Fifty Thousand Dollars ($50,000) or more in
any twelve-month period, Borrower shall promptly notify Bank in a writing signed
by Borrower of the general details thereof and grant to Bank in such writing a
security interest therein and in the proceeds thereof, all upon the terms of
this Agreement, with such writing to be in form and substance satisfactory to
Bank in its reasonable discretion.

                                                                                                                                                                                    
                                                                                                                                                                                      
                                                                                                                                                                                        
                                                                                                                                                                                          
                                                                                                                                                                                          

                                                                                                                                                                                        

                                                                                                                                                                                        
                                                                                                                                                                                          
                                                                                                                                                                                          

                                                                                                                                                                                          
                                                                                                                                                                                            

                                                                                                                                                                                          

                                                                                                                                                                                        

                                                                                                                                                                                        
                                                                                                                                                                                          
                                                                                                                                                                                          

                                                                                                                                                                                        

                                                                                                                                                                                      

                                                                                                                                                                                      If this
Agreement is terminated, Bank’s Lien in the Collateral shall continue until the
Obligations (other than inchoate indemnity obligations) are repaid in full in
cash.  Upon payment in full in cash of the Obligations and at such
time as Bank’s obligation to make Advances has terminated, Bank shall, at
Borrower’s sole cost and expense, release its Liens in the Collateral and all
rights therein shall revert to Borrower.

                                                                                                                                                                                      
                                                                                                                                                                                        
                                                                                                                                                                                           

                                                                                                                                                                                          4.2 Authorization
to File Financing Statements.  Borrower hereby
authorizes Bank to file financing statements, without notice to Borrower, with
all appropriate jurisdictions to perfect or protect Bank’s interest or rights
hereunder, including a notice that any disposition of the Collateral, by either
Borrower or any other Person, shall be deemed to violate the rights of Bank
under the Code.  Any such financing statements may indicate the
Collateral as “all assets of the Debtor” or words of similar effect, or as being
of an equal or lesser scope, or with greater detail, all in Bank’s
discretion.

                                                                                                                                                                                           

                                                                                                                                                                                          
                                                                                                                                                                                            
                                                                                                                                                                                              
                                                                                                                                                                                                	
                                                                                                                                                                                                        5  

                                                                                                                                                                                                      	
                                                                                                                                                                                                        REPRESENTATIONS AND
      WARRANTIES

                                                                                                                                                                                                      

                                                                                                                                                                                              

                                                                                                                                                                                              
                                                                                                                                                                                                 

                                                                                                                                                                                                Borrower
represents and warrants as follows:

                                                                                                                                                                                                
                                                                                                                                                                                                  
                                                                                                                                                                                                     

                                                                                                                                                                                                    5.1 Due
Organization and Authorization.  Borrower and each
of its Subsidiaries are duly existing and in good standing as a Registered
Organization in their respective jurisdictions of formation and are qualified
and licensed to do business and are in good standing in any jurisdiction in
which the conduct of their respective business or ownership of property requires
that they be qualified except where the failure to do so could not reasonably be
expected to have a material adverse effect on Borrower’s business.  In
connection with this Agreement, Borrower has delivered to Bank a completed
certificate signed
by Borrower, entitled “Perfection Certificate”.  Borrower represents
and warrants to Bank that (a) Borrower’s exact legal name is that indicated on
the Perfection Certificate and on the signature page hereof; (b) Borrower is an
organization of the type and is organized in the jurisdiction set forth in the
Perfection Certificate; (c) the Perfection Certificate accurately sets forth
Borrower’s organizational identification number or accurately states that
Borrower has none; (d) the Perfection Certificate accurately sets forth
Borrower’s place of business, or, if more than one, its chief executive office
as well as Borrower’s mailing address (if different than its chief executive
office); (e) Borrower (and each of its predecessors) has not, in the past five
(5) years, changed its jurisdiction of formation, organizational structure or
type, or any organizational number assigned by its jurisdiction, except as set
forth in the Perfection Certificate; and (f) all other information set forth on
the Perfection Certificate pertaining to Borrower and each of its Subsidiaries
is accurate and complete (it being understood and agreed that Borrower may from
time to time update certain information in the Perfection Certificate after the
Effective Date to the extent permitted by one or more specific provisions in
this Agreement).  If Borrower is not now a Registered Organization but
later becomes one, Borrower shall promptly notify Bank of such occurrence and
provide Bank with Borrower’s organizational identification number.

                                                                                                                                                                                                    
                                                                                                                                                                                                      
                                                                                                                                                                                                        
                                                                                                                                                                                                          
                                                                                                                                                                                                          

                                                                                                                                                                                                        

                                                                                                                                                                                                        
                                                                                                                                                                                                          
                                                                                                                                                                                                          

                                                                                                                                                                                                          
                                                                                                                                                                                                            

                                                                                                                                                                                                          

                                                                                                                                                                                                        

                                                                                                                                                                                                        
                                                                                                                                                                                                          
                                                                                                                                                                                                          

                                                                                                                                                                                                        

                                                                                                                                                                                                      

                                                                                                                                                                                                      The
execution, delivery and performance by Borrower of the Loan Documents to which
it is a party have been duly authorized, and do not (i) conflict with any of
Borrower’s organizational documents, (ii) contravene, conflict with, constitute
a default under or violate any material Requirement of Law, (iii) contravene,
conflict or violate any applicable order, writ, judgment, injunction, decree,
determination or award of any Governmental Authority by which Borrower or any
its Subsidiaries or any of their property or assets may be bound or affected,
(iv) require any action by, filing, registration, or qualification with, or
Governmental Approval from, any Governmental Authority (except such Governmental
Approvals which have already been obtained and are in full force and effect and
except for filings with the Securities and Exchange Commission or NASDAQ, which
shall be made following the Effective Date) or (v) constitute an
event of default under any material agreement by which Borrower is
bound.  Borrower is not in default under any agreement to which it is
a party or by which it is bound in which the default could reasonably be
expected to have a material adverse effect on Borrower’s business.

                                                                                                                                                                                                      
                                                                                                                                                                                                        
                                                                                                                                                                                                           

                                                                                                                                                                                                          5.2 Collateral.  Borrower has good
title, has rights in, and the power to transfer each item of the Collateral upon
which it purports to grant a Lien hereunder, free and clear of any and all Liens
except Permitted Liens.  Borrower has no deposit accounts other than
the deposit accounts with Bank, the deposit accounts, if any, described in the
Perfection Certificate delivered to Bank in connection herewith, or of which
Borrower has given Bank notice and taken such actions as are necessary to give
Bank a perfected security interest therein; provided, however, that Borrower may
maintain accounts that are not subject to control agreements in favor of Bank so
long as such accounts have a balance of less than Fifty Thousand Dollars
($50,000) in the aggregate.  The Accounts are bona fide, existing
obligations of the Account Debtors.

                                                                                                                                                                                                          
                                                                                                                                                                                                             

                                                                                                                                                                                                            The
Collateral is not in the possession of any third party bailee (such as a
warehouse) except as otherwise provided in the Perfection
Certificate.  None of the components of the Collateral shall be
maintained at locations other than as provided in the Perfection Certificate or
as permitted pursuant to Section 7.2, except to the extent that less than
Twenty-Five Thousand Dollars ($25,000) in Collateral is maintained at a location
not described in the Perfection Certificate or in Section 7.2 and to the extent
that less than One Hundred Thousand Dollars ($100,000) in Collateral is
maintained at all locations not described in the Perfection Certificate or in
Section 7.2.  In the event that Borrower, after the date hereof,
intends to store or otherwise deliver any portion of the Collateral to a bailee,
then Borrower will first receive the written consent of Bank and such bailee
must execute and deliver a bailee agreement in form and substance satisfactory
to Bank in its sole discretion.

                                                                                                                                                                                                            
                                                                                                                                                                                                               

                                                                                                                                                                                                              Borrower
is the sole owner of its intellectual property, except for non-exclusive
licenses granted to its customers in the ordinary course of
business.  Each patent is valid and enforceable, and no part of the
intellectual property has been judged invalid or unenforceable, in whole or in
part, and to the best of Borrower’s knowledge, no claim has been made that any
part of the intellectual property violates the rights of any third party except
to the extent such claim could not reasonably be expected to have a material
adverse effect on Borrower’s business.

                                                                                                                                                                                                              
                                                                                                                                                                                                                
                                                                                                                                                                                                                  
                                                                                                                                                                                                                    
                                                                                                                                                                                                                      
                                                                                                                                                                                                                      

                                                                                                                                                                                                                    

                                                                                                                                                                                                                    
                                                                                                                                                                                                                      
                                                                                                                                                                                                                      

                                                                                                                                                                                                                      
                                                                                                                                                                                                                        

                                                                                                                                                                                                                      

                                                                                                                                                                                                                    

                                                                                                                                                                                                                    
                                                                                                                                                                                                                      
                                                                                                                                                                                                                      

                                                                                                                                                                                                                    

                                                                                                                                                                                                                  

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

                                                                                                                                                                                                                  
                                                                                                                                                                                                                    
                                                                                                                                                                                                                       

                                                                                                                                                                                                                      (a) Such
Financed Receivable is an Eligible Account;

                                                                                                                                                                                                                      
                                                                                                                                                                                                                        
                                                                                                                                                                                                                           

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

                                                                                                                                                                                                                          
                                                                                                                                                                                                                            
                                                                                                                                                                                                                               

                                                                                                                                                                                                                              (c) The
correct amount is on the Invoice Transmittal and is not disputed;

                                                                                                                                                                                                                              
                                                                                                                                                                                                                                
                                                                                                                                                                                                                                   

                                                                                                                                                                                                                                  (d) Payment
is not contingent on any obligation or contract and Borrower has fulfilled all
its obligations as of the Invoice Transmittal date;

                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                       

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

                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                           

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

                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                               

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

                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                   

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

                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                       

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

                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                           

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

                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                               

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

                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                  5.5 No
Material Deviation in Financial Statements.  All consolidated
financial statements for Borrower and any Subsidiaries delivered to Bank fairly
present in all material respects Borrower’s consolidated financial condition and
Borrower’s consolidated results of operations (subject to normal year-end
adjustments and the absence of footnotes).  There has not been any
material deterioration in Borrower’s consolidated financial condition since the
date of the most recent financial statements submitted to Bank.

                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                      5.6 Solvency.  The fair salable
value of Borrower’s assets (including goodwill minus disposition costs) exceeds
the fair value of its liabilities; Borrower is not left with unreasonably small
capital after the transactions in this Agreement; and Borrower is able to pay
its debts (including trade debts) as they mature.

                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                          5.7 Regulatory
Compliance.  Borrower is not
an “investment company” or a company “controlled” by an “investment company”
under the Investment Company Act of 1940, as amended.  Borrower is not
engaged as one of its important activities in extending credit for margin stock
(under Regulations X, T and U of the Federal Reserve Board of
Governors).  Neither Borrower nor any of its Subsidiaries is a
“holding company” or an “affiliate” of a “holding company” or a “subsidiary
company” of a “holding company” as each term is defined and used in the Public
Utility Holding Company Act of 2005.  Borrower has complied in all
material respects with the Federal Fair Labor Standards Act.  Borrower
has not violated any laws, ordinances or rules, the violation of which could
reasonably be expected to cause a Material Adverse Change.  None of
Borrower’s or any Subsidiary’s properties or assets has been used by Borrower or
any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in
disposing, producing, storing, treating, or transporting any hazardous substance
other than legally.  Borrower and each of its Subsidiaries have
obtained all consents, approvals and authorizations of, made all declarations or
filings with, and given all notices to, all Governmental Authorities that are
necessary to continue their respective businesses as currently
conducted.

                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                               

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

                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                   

                                                                                                                                                                                                                                                                                  5.9 Tax
Returns and Payments; Pension Contributions.  Borrower and each
Subsidiary have timely filed all required tax returns and reports, and Borrower
and each Subsidiary have timely paid all material foreign, federal, state and
local taxes, assessments, deposits and contributions owed by Borrower and each
Subsidiary, except those that are being contested in good faith pursuant to
proceedings being diligently pursued and for which reserves in accordance with
GAAP have been created.  Borrower may defer payment of any contested
taxes, provided that Borrower (a) in good faith contests its obligation to pay
the taxes by appropriate proceedings promptly and diligently instituted and
conducted, (b) notifies Bank in writing of the commencement of, and any material
development in, the proceedings, (c) posts bonds or takes any other steps
required to prevent the governmental authority levying such contested taxes from
obtaining a Lien upon any of the Collateral that is other than a “Permitted
Lien”.  Borrower is unaware of any claims or adjustments proposed for
any of Borrower’s prior tax years which could result in additional taxes
becoming due and payable by Borrower.  Borrower has paid all amounts
necessary to fund all present pension, profit sharing and deferred compensation
plans in accordance with their terms, and Borrower has not withdrawn from
participation in, and has not permitted partial or complete termination of, or
permitted the occurrence of any other event with respect to, any such plan which
could reasonably be expected to result in any liability of Borrower, including
any liability to the Pension Benefit Guaranty Corporation or its successors or
any other governmental agency.

                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                      5.10 Full
Disclosure.  No written
representation, warranty or other statement of Borrower in any certificate or
written statement given to Bank, as of the date such representation, warranty,
or other statement was made, taken together with all such written certificates
and written statements given to Bank, contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
contained in the certificates or statements not misleading (it being recognized
by Bank that projections and forecasts provided by Borrower in good faith and
based upon reasonable assumptions are not viewed as facts and that actual
results during the period or periods covered by such projections and forecasts
may differ from the projected or forecasted results).

                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                    6  

                                                                                                                                                                                                                                                                                                  	
                                                                                                                                                                                                                                                                                                    AFFIRMATIVE
      COVENANTS

                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                            Borrower
shall do all of the following:

                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                6.1 Government
Compliance.

                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                    (a) Maintain
its and all its Subsidiaries’ legal existence and good standing in their
respective jurisdictions of formation and maintain qualification in each
jurisdiction in which the failure to so qualify would reasonably be expected to
have a material adverse effect on Borrower’s business or
operations.  Borrower shall comply, and have each Subsidiary comply,
with all laws, ordinances and regulations to which it is subject, noncompliance
with which could have a material adverse effect on Borrower’s
business.

                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                        (b) Obtain
all of the Governmental Approvals necessary for the performance by Borrower of
its obligations under the Loan Documents to which it is a party and the grant of
a security interest to Bank in all of its property.  Borrower shall
promptly provide copies of any such obtained Governmental Approvals to
Bank.

                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                            6.2 Financial Statements,
Reports, Certificates.

                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                (a) Deliver
to Bank (all of which are subject to Section 12.10):  (i) as soon as
available, but no later than thirty (30) days after the last day of each month,
a company prepared consolidated balance sheet and income statement covering
Borrower’s consolidated operations during the period certified by a Responsible
Officer and in a form acceptable to Bank; (ii) as soon as available, but no
later than one hundred eighty (180) days after the last day of Borrower’s fiscal
year, audited  consolidated financial statements prepared under GAAP,
consistently applied, together with an unqualified opinion (other than in
respect to a going concern qualification) on the financial statements from an
independent certified public accounting firm reasonably acceptable to Bank;
(iii) within five (5) days of filing, copies of all statements, reports and
notices made available to Borrower’s security holders or to any holders of
Subordinated Debt and all reports on Form 10-K, 10-Q and 8 K filed with the
Securities and Exchange Commission; (iv) a prompt report of any legal actions
pending or threatened against Borrower or any Subsidiary that could result in
damages or costs to Borrower or any Subsidiary of One Hundred Thousand Dollars
($100,000.00) or more; (v) prompt notice of any material change in the
composition of the Intellectual Property Collateral, or the registration of any
copyright, including any subsequent ownership right of Borrower in or to any
copyright, patent or trademark not shown in the IP Agreement or knowledge of an
event that materially adversely affects the value of the Intellectual Property
Collateral; and (vi) budgets, sales projections, operating plans or other
financial information reasonably requested by Bank.

                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                    (b) Within
thirty (30) days after the last day of each month, deliver to Bank with the
monthly financial information required in Section 6.2(a)(i) above, a Compliance
Certificate signed by a Responsible Officer in the form of Exhibit B.

                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                        (c) within
thirty (30) days after the Effective Date, an annual operating budget (including
income statements, balance sheets and cash flow statements) for the upcoming
twelve-month period, commensurate with those provided to Borrower’s board of
directors, together with any related business forecasts used in the preparation
of such operating budget;

                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                            (d) At
reasonable times, on three (3) Business Day’s notice (provided no notice is
required if an Event of Default has occurred and is continuing), Bank, or its
agents, shall have the right to inspect the Collateral, including, but not
limited to, Borrower’s Accounts, and the right to audit and copy Borrower’s
Books.  Such audits shall be conducted no more often than once every
six (6) months, except that if an Event of Default has occurred and is
continuing, such audits shall be conducted as frequently as Bank, in its sole
discretion, deems appropriate.   The foregoing inspections and
audits shall be at Borrower’s expense, and the charge therefor shall be $850 per
person per day (or such higher amount as shall represent Bank’s then-current
standard charge for the same), plus reasonable out-of-pocket expenses, and
Borrower shall not be obligated to pay audit fees in excess of Six Thousand
Dollars ($6,000) each year with respect to audits conducted when no Event of
Default exists.  In the event Borrower and Bank schedule an audit more
than ten (10) days in advance, and Borrower cancels or seeks to reschedules the
audit with less than ten (10) days written notice to Bank, then (without
limiting any of Bank’s rights or remedies), Borrower shall pay Bank a fee of
$1,000 plus any out-of-pocket expenses incurred by Bank to compensate Bank for
the anticipated costs and expenses of the cancellation or
rescheduling  After the occurrence and during the continuance of an
Event of Default, Bank may audit Borrower’s Collateral, including, but not
limited to, Borrower’s Accounts, at Borrower’s expense and at Bank’s sole and
exclusive discretion and without notification and authorization from
Borrower.

                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                 

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

                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                    (f) Provide
Bank with, as soon as available, but no later than thirty (30) days following
each Reconciliation Period, an aged listing of accounts receivable and accounts
payable by invoice date, in form acceptable to Bank, and a schedule of Publisher
Guarantees and Publisher Advances, together with a schedule of the amounts
currently payable and the minimum amounts guaranteed by Borrower under such
Publisher Guarantees, in form acceptable to Bank.

                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                        (g) Provide
Bank with, as soon as available, but no later than thirty (30) days following
each Reconciliation Period, a Deferred Revenue report, in form acceptable to
Bank.

                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                            (h) Provide
Bank with prompt written notice of any event or circumstance that could cause a
Financed Receivable to no longer be an Eligible Account.

                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                 

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

                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                    6.4 Insurance.  Keep its business
and the Collateral insured for risks and in amounts standard for companies in
Borrower’s industry and location, and as Bank may reasonably
request.  Insurance policies shall be in a form, with companies, and
in amounts that are satisfactory to Bank.  All property policies shall
have a lender’s loss payable endorsement showing Bank as lender loss payee and
waive subrogation against Bank, and all liability policies shall show, or have
endorsements showing, Bank as an additional insured.  All policies (or
the loss payable and additional insured endorsements) shall provide that the
insurer must give Bank at least twenty (20) days notice before canceling,
amending, or declining to renew its policy.  At Bank’s request,
Borrower shall deliver certified copies of policies and evidence of all premium
payments. Proceeds payable under any policy shall, at Bank’s option, be payable
to Bank on account of the Obligations.  Notwithstanding the foregoing,
(a) so long as no Event of Default has occurred and is continuing, Borrower
shall have the option of applying the proceeds of any casualty policy up to One
Hundred Thousand Dollars ($100,000), in the aggregate, toward the replacement or
repair of destroyed or damaged property; provided that any such replaced or
repaired property (i) shall be of equal or like value as the replaced or
repaired Collateral and (ii) shall be deemed Collateral in which Bank has been
granted a first priority security interest and (b) after the occurrence and
during the continuance of an Event of Default, all proceeds payable under such
casualty policy shall, at the option of Bank, be payable to Bank on account of
the Obligations. If
Borrower fails to obtain insurance as required under this Section 6.4 or to pay any amount or furnish any required proof
of payment to third persons and Bank, Bank may make all or part of such payment
or obtain such insurance policies required in this Section 6.4, and take any action under the policies Bank deems
prudent.

                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                        6.5 Accounts.

                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                            (a) To permit
Bank to monitor Borrower’s financial performance and condition, Borrower shall
maintain Borrower’s primary and its Subsidiaries’ primary operating and other
deposit accounts and securities accounts with Bank and Bank’s
Affiliates.

                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                (b) Provide
Bank five (5) days prior written notice before establishing any Collateral
Account at or with any bank or financial institution other than Bank or Bank’s
Affiliates.  For each Collateral Account that Borrower at any time
maintains, Borrower shall cause the applicable bank or financial institution
(other than Bank) at or with which any Collateral Account is maintained to
execute and deliver a Control Agreement or other appropriate instrument with
respect to such Collateral Account to perfect Bank’s Lien in such Collateral
Account in accordance with the terms hereunder.  The provisions of the
previous sentence shall not apply to deposit accounts exclusively used for
payroll, payroll taxes and other employee wage and benefit payments to or for
the benefit of Borrower’s employees and identified to Bank by Borrower as such
or accounts with a balance of less than Twenty-Five Thousand Dollars ($25,000)
individually and less than One Hundred Thousand Dollars ($100,000) in the
aggregate.

                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                    6.6 Inventory;
Returns.  Keep all
Inventory in good and marketable condition, free from material defects, except
for ordinary wear and tear in the ordinary course of Borrower’s
business.  Returns and allowances between Borrower and its Account
Debtors shall follow Borrower’s customary practices as they exist at the
Effective Date.

                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                        6.7 Protection
and Registration of Intellectual Property Rights.  Borrower
shall:  (a) use commercially reasonable efforts to protect, defend and
maintain the validity and enforceability of its intellectual property; (b)
promptly advise Bank in writing of material infringements of its intellectual
property; and (c) not allow any intellectual property material to Borrower’s
business to be abandoned, forfeited or dedicated to the public without Bank’s
written consent.  If Borrower (i) obtains any patent, registered
trademark or servicemark, registered copyright, registered mask work, or any
pending application for any of the foregoing, whether as owner, licensee or
otherwise, or (ii) applies for any patent or the registration of any trademark
or servicemark, then Borrower shall promptly provide written notice thereof to
Bank and shall execute such intellectual property security agreements and other
documents and take such other actions as Bank shall request in its good faith
business judgment to perfect and maintain a first priority perfected security
interest in favor of Bank in such property.  If Borrower decides to
register any copyrights or mask works in the United States Copyright Office,
Borrower shall: (x) provide Bank with at least fifteen (15) days prior written
notice of Borrower’s intent to register such copyrights or mask works together
with a copy of the application it intends to file with the United States
Copyright Office (excluding exhibits thereto); (y) execute an intellectual
property security agreement and such other documents and take such other actions
as Bank may request in its good faith business judgment to perfect and maintain
a first priority perfected security interest in favor of Bank in the copyrights
or mask works intended to be registered with the United States Copyright Office;
and (z) record such intellectual property security agreement with the United
States Copyright Office contemporaneously with filing the copyright or mask work
application(s) with the United States Copyright Office.  Borrower
shall promptly provide to Bank copies of all applications that it files for
patents or for the registration of trademarks, servicemarks, copyrights or mask
works, together with evidence of the recording of the intellectual property
security agreement necessary for Bank to perfect and maintain a first priority
perfected security interest in such property.

                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                            6.8 Litigation
Cooperation.  From the date
hereof and continuing through the termination of this Agreement, make available
to Bank, without expense to Bank, Borrower and its officers, employees and
agents and Borrower’s Books and records, to the extent that Bank may deem them
reasonably necessary to prosecute or defend any third-party suit or proceeding
instituted by or against Bank with respect to any Collateral or relating to
Borrower.

                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                6.9 Further
Assurances.  Execute any further instruments and take further
action as Bank reasonably requests to perfect or continue Bank’s Lien in the
Collateral or to effect the purposes of this Agreement.  Deliver to
Bank, within five
(5) Business Days after the same are sent or received, copies of all
correspondence, reports, documents and other filings with any Governmental
Authority regarding compliance with or maintenance of Governmental Approvals or
Requirements of Law or that could reasonably be expected to have a material
effect on any of the Governmental Approvals or otherwise on the operations of
Borrower or any of its Subsidiaries.

                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                      	
                                                                                                                                                                                                                                                                                                                                                                                              7  

                                                                                                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                                                                                                              NEGATIVE
      COVENANTS

                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                                      Borrower
shall not do any of the following without Bank’s prior written
consent.

                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                                                                                                                                          7.1 Dispositions.  Convey, sell,
lease, transfer, assign, or otherwise dispose of (collectively a “Transfer”), or
permit any of its Subsidiaries to Transfer, all or any part of its business or
property, except for Transfers (a) of Inventory in the ordinary course of
business; (b) of worn-out or obsolete Equipment; (c) in connection with
Permitted Liens and Permitted Investments, (c) issuance and Transfer of shares
of capital stock of Borrower in capital raising transactions approved by
Borrower’s Board of Directors; (d) of the domain name “gofish.com”; and (e)
other Transfers of assets (other than Accounts) not otherwise permitted under
this Section 7.1, provided that the aggregate book value of all such Transfers
does not exceed Twenty-Five Thousand Dollars ($25,000) in any fiscal
year.

                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                               

                                                                                                                                                                                                                                                                                                                                                                                              7.2 Changes in Business; Change in
Control; Jurisdiction of Formation.  Engage in any material
line of business other than those lines of business conducted by Borrower and
its Subsidiaries on the date hereof and any businesses reasonably related,
complementary or incidental thereto or reasonable extensions thereof; permit or suffer any
Change in Control.  Borrower shall not, without at least thirty (30)
days prior written notice to Bank: (1) change its jurisdiction of organization,
(2) change its organizational structure or type, (3) change its legal name,
or (4) change any organizational number (if any) assigned by its
jurisdiction of organization; provided, however, that Borrower may change its
jurisdiction of organization within less than thirty (30) days of the Effective
Date, without giving thirty (30) days’ prior notice, so long as Borrower gives
Bank notice of the change as soon as possible and in any event within five (5)
Business Days of its occurrence.  Borrower shall not add any new
offices or business locations, including warehouses (unless such new offices or
business locations contain less than Twenty-Five Thousand Dollars ($25,000) in
Borrower’s assets or property), unless Borrower provides written notice of such
new location within five (5) Business Days thereafter.

                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                  7.3 Mergers or
Acquisitions.  Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with any other Person, or acquire, or
permit any of its Subsidiaries to acquire, all or substantially all of the
capital stock or property of another Person.  A Subsidiary may merge
or consolidate into another Subsidiary or into Borrower.

                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                       

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

                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                           

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

                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                               

                                                                                                                                                                                                                                                                                                                                                                                                              7.6 Distributions;
Investments.  (a) Pay any dividends or make any distribution or
payment or redeem, retire or purchase any capital stock other than Permitted
Distributions; or (b) directly or indirectly acquire or own any Person, or make
any Investment in any Person, other than Permitted Investments, or permit any of
its Subsidiaries to do so.

                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                   

                                                                                                                                                                                                                                                                                                                                                                                                                  7.7 Transactions with
Affiliates.  Directly or indirectly enter into or permit to
exist any material transaction with any Affiliate of Borrower except for (a)
transactions that are in the ordinary course of Borrower’s business, upon fair
and reasonable terms (when viewed in the context of any series of transactions
of which it may be a part, if applicable) that are no less favorable to Borrower
than would be obtained in an arm’s length transaction with a non-affiliated
Person; or (b) transactions among Borrower and its Subsidiaries and among
Borrower’s Subsidiaries so long as no Event of Default exists or could result
therefrom.

                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                                                                      7.8 Subordinated
Debt.  (a) Make or
permit any payment on any Subordinated Debt, except under the terms of the
subordination, intercreditor, or other similar agreement to which such
Subordinated Debt is subject, or (b) amend any provision in any document
relating to the Subordinated Debt which would increase the amount thereof or
adversely affect the subordination thereof to Obligations owed to
Bank.

                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                                                                                                                                                                          7.9 Compliance.  Become an
“investment company” or a company controlled by an “investment company”, under
the Investment Company Act of 1940, as amended, or undertake as one of its
important activities extending credit to purchase or carry margin stock (as
defined in Regulation U of the Board of Governors of the Federal Reserve
System), or use the proceeds of any Advance for that purpose; fail to meet the
minimum funding requirements of ERISA, permit a Reportable Event or Prohibited
Transaction, each as defined in ERISA, to occur; fail to comply with the Federal
Fair Labor Standards Act or violate any other law or regulation, if the
violation could reasonably be expected to have a material adverse effect on
Borrower’s business, or permit any of its Subsidiaries to do so; withdraw or
permit any Subsidiary to withdraw from participation in, permit partial or
complete termination of, or permit the occurrence of any other event with
respect to, any present pension, profit sharing and deferred compensation plan
which could reasonably be expected to result in any liability of Borrower,
including any liability to the Pension Benefit Guaranty Corporation or its
successors or any other governmental agency.

                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                	
                                                                                                                                                                                                                                                                                                                                                                                                                                        8  

                                                                                                                                                                                                                                                                                                                                                                                                                                      	
                                                                                                                                                                                                                                                                                                                                                                                                                                        EVENTS OF
      DEFAULT

                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                Any one
of the following shall constitute an event of default (an “Event of Default”)
under this Agreement:

                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                     

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

                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                         

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

                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                            8.3 Material
Adverse Change.  A Material
Adverse Change occurs;

                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                8.4 Attachment;
Levy; Restraint on Business.  (a) (i) The
service of process seeking to attach, by trustee or similar process, any funds
of Borrower or of any entity under control of Borrower (including a Subsidiary)
on deposit with Bank or any Bank Affiliate, or (ii) a notice of lien, levy, or
assessment is filed against any of Borrower’s assets by any government agency,
and the same under subclauses (i) and (ii) hereof are not, within ten (10) days
after the occurrence thereof, discharged or stayed (whether through the posting
of a bond or otherwise); provided, however, no Advances shall be made during any
ten (10) day cure period; or (b) (i) any material portion of Borrower’s assets
is attached, seized, levied on, or comes into possession of a trustee or
receiver, or (ii) any court order enjoins, restrains, or prevents Borrower from
conducting any part of its business;

                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                                                                                                    8.5 Insolvency.  (a) Borrower is
unable to pay its debts (including trade debts) as they become due or otherwise
becomes insolvent; (b) Borrower begins an Insolvency Proceeding; or (c) an
Insolvency Proceeding is begun against Borrower and not dismissed or stayed
within forty-five (45) days (but no Advances shall be made while of any of the
conditions described in clause (a) exist and/or until any Insolvency Proceeding
is dismissed);

                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                        8.6 Other
Agreements.  There is a default in any agreement to which
Borrower or any Guarantor is a party with a third party or parties resulting in
a right by such third party or parties, whether or not exercised, to accelerate
the maturity of any Indebtedness (other than a Publisher Guarantee) in an amount
in excess of Fifty Thousand Dollars ($50,000) or that could have a material
adverse effect on Borrower’s or any Guarantor’s business; there is a default in
any Publisher Guarantee resulting in the acceleration the maturity of the
Indebtedness thereunder in an amount in excess of Fifty Thousand Dollars
($50,000);

                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                            8.7 Judgments.  One or more
judgments, orders, or decrees for the payment of money in an amount,
individually or in the aggregate, of at least Fifty Thousand Dollars ($50,000)
(not covered by independent third-party insurance as to which liability has been
accepted by such insurance carrier) shall be rendered against Borrower and shall
remain unsatisfied, unvacated, or unstayed for a period of ten (10) days after
the entry thereof (provided that no Advances will be made prior to the
satisfaction, vacation, or stay of such judgment, order, or
decree);

                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                8.8 Misrepresentations.  Borrower or any
Person acting for Borrower makes any representation, warranty, or other
statement now or later  in this Agreement, any Loan Document or in
writing delivered to Bank or to induce Bank to enter this Agreement or any Loan
Document, and such representation, warranty, or other statement is incorrect in
any material respect when made;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                                                                                                                    8.9 Subordinated
Debt.  A default or
breach occurs under any agreement between Borrower and any creditor of Borrower
that signed a subordination agreement, intercreditor agreement, or other similar
agreement with Bank, or any creditor that has signed such an agreement with Bank
breaches any terms of the agreement; or

                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                        8.10 Guaranty.  (a)
Any guaranty of any Obligations terminates or ceases for any reason to be in
full force and effect; (b) any Guarantor does not perform any obligation or
covenant under any guaranty of the Obligations; (c) any circumstance described
in Sections 8.4, 8.5, 8.7, or 8.8 occurs with respect to any Guarantor,
(d) the death, liquidation, winding up, or termination of existence of any
Guarantor; or (e) (i) a material impairment in the perfection or
priority of Bank’s Lien in the collateral provided by Guarantor or in the value
of such collateral or (ii)] a material adverse
change in the general affairs, management, results of operation, condition
(financial or otherwise) or the prospect of repayment of the Obligations occurs
with respect to any Guarantor.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      9  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      BANK’S RIGHTS AND
      REMEDIES

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                (h) Demand
and receive possession of Borrower’s Books; and

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    (i) Exercise
all rights and remedies available to Bank under the Loan Documents or at law or
equity, including all remedies provided by the Code (including disposal of the
Collateral pursuant to the terms thereof).

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        9.2 Protective
Payments.  If Borrower fails
to obtain insurance called for by Section 6.4
or fails to pay any premium thereon or fails to pay any other amount which
Borrower is obligated to pay under this Agreement or by any other Loan Document,
Bank may obtain such insurance or make such payment, and all amounts so paid by
Bank are Bank Expenses and immediately due and payable, bearing interest at the
then highest applicable rate, and secured by the Collateral.  Bank
will make reasonable effort to provide Borrower with notice of Bank obtaining
such insurance at the time it is obtained or within a reasonable time
thereafter. No payments by Bank are deemed an agreement to make similar payments
in the future or Bank’s waiver of any Event of Default.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                9.4 Remedies
Cumulative.  Bank’s failure,
at any time or times, to require strict performance by Borrower of any provision
of this Agreement or any other Loan Document shall not waive, affect, or
diminish any right of Bank thereafter to demand strict performance and
compliance herewith or therewith.  No waiver hereunder shall be
effective unless signed by Bank and then is only effective for the specific
instance and purpose for which it is given.  Bank’s rights and
remedies under this Agreement and the other Loan Documents are
cumulative.  Bank has all rights and remedies provided under the Code,
by law, or in equity.  Bank’s exercise of one right or remedy is not
an election, and Bank’s waiver of any Event of Default is not a continuing
waiver.  Bank’s delay in exercising any remedy is not a waiver,
election, or acquiescence.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  10  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  NOTICES.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          All
notices, consents, requests, approvals, demands, or other communication
(collectively, “Communication”), other than Advance requests, by any party to
this Agreement or any other Loan Document must be in writing and be delivered or
sent by facsimile at the addresses or facsimile numbers listed
below.  Bank or Borrower may change its notice address by giving the
other party written notice thereof.  Each such Communication shall be
deemed to have been validly served, given, or delivered: (a) upon the earlier of
actual receipt and three (3) Business Days after deposit in the U.S. mail,
registered or certified mail, return receipt requested, with proper postage
prepaid; (b) upon transmission, when sent by facsimile transmission (with such
facsimile promptly confirmed by delivery of a copy by personal delivery or
United States mail as otherwise provided in this Section 10); (c) one (1)
Business Day after deposit with a reputable overnight courier with all charges
prepaid; or (d) when delivered, if hand-delivered by messenger, all of which
shall be addressed to the party to be notified and sent to the address or
facsimile number indicated below.  Advance requests must be in writing
and may be in the form of electronic mail, delivered to Bank by Borrower at the
e-mail address of Bank provided below and shall be deemed to have been validly
served, given, or delivered when sent (with such electronic mail promptly
confirmed by delivery of a copy by personal delivery or United States mail as
otherwise provided in this Section 10).  Bank or Borrower may change
its address, facsimile number, or electronic mail address by giving the other
party written notice thereof in accordance with the terms of this
Section 10.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            If to
Borrower:   Betawave Corporation

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                706 Mission Street,
10th Floor

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                San Francisco, CA
94103

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Attn:  Tabreez
Verjee, President

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Fax:  415-692-8206

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Email:           tabreez@betawave.com

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            With a
copy to: Betawave Corporation

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                706 Mission Street,
10th Floor

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                San Francisco, CA
94103

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Attn:  David
Lorie

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Fax:  415-692-8206

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Email:           dlorie@betawave.com

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            If to
Bank:          Silicon Valley
Bank

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                4420 Rosewood Drive,
Suite 2540

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   Pleasanton,
California 94588

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Attn:  Mark
Harris

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   Fax:  925-227-1842

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    Email:           mharris@svb.com

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          11  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          CHOICE OF LAW, VENUE,
      JURY TRIAL WAIVER AND JUDICIAL
REFERENCE

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  California
law governs the Loan Documents without regard to principles of conflicts of
law.  Borrower and Bank each submit to the exclusive jurisdiction of
the State and Federal courts in Santa Clara County, California; provided,
however, that nothing in this Agreement shall be deemed to operate to preclude
Bank from bringing suit or taking other legal action in any other jurisdiction
to realize on the Collateral or any other security for the Obligations, or to
enforce a judgment or other court order in favor of Bank.  Borrower
expressly submits and consents in advance to such jurisdiction in any action or
suit commenced in any such court, and Borrower hereby waives any objection that
it may have based upon lack of personal jurisdiction, improper venue, or forum
non conveniens and hereby consents to the granting of such legal or equitable
relief as is deemed appropriate by such court.  Borrower hereby waives
personal service of the summons, complaints, and other process issued in such
action or suit and agrees that service of such summons, complaints, and other
process may be made by registered or certified mail addressed to Borrower at the
address set forth in Section 10 of this Agreement and that service so made
shall be deemed completed upon the earlier to occur of Borrower’s actual receipt
thereof or three (3) days after deposit in the U.S. mails, proper postage
prepaid

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    WITHOUT
INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE
RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is
not enforceable, the parties hereto agree that any and all disputes or
controversies of any nature between them arising at any time shall be decided by
a reference to a private judge, mutually selected by the parties (or, if they
cannot agree, by the Presiding Judge of the Santa Clara County, California
Superior Court) appointed in accordance with California Code of Civil Procedure
Section 638 (or pursuant to comparable provisions of federal law if the
dispute falls within the exclusive jurisdiction of the federal courts), sitting
without a jury, in Santa Clara County, California; and the parties hereby submit
to the jurisdiction of such court.  The reference proceedings shall be
conducted pursuant to and in accordance with the provisions of California Code
of Civil Procedure §§ 638 through 645.1, inclusive.  The private judge
shall have the power, among others, to grant provisional relief, including
without limitation, entering temporary restraining orders, issuing preliminary
and permanent injunctions and appointing receivers.  All such
proceedings shall be closed to the public and confidential and all records
relating thereto shall be permanently sealed.  If during the course of
any dispute, a party desires to seek provisional relief, but a judge has not
been appointed at that point pursuant to the judicial reference procedures, then
such party may apply to the Santa Clara County, California Superior Court for
such relief.  The proceeding before the private judge shall be
conducted in the same manner as it would be before a court under the rules of
evidence applicable to judicial proceedings.  The parties shall be
entitled to discovery which shall be conducted in the same manner as it would be
before a court under the rules of discovery applicable to judicial
proceedings.  The private judge shall oversee discovery and may
enforce all discovery rules and order applicable to judicial proceedings in the
same manner as a trial court judge.  The parties agree that the
selected or appointed private judge shall have the power to decide all issues in
the action or proceeding, whether of fact or of law, and shall report a
statement of decision thereon pursuant to the California Code of Civil Procedure
§ 644(a).  Nothing in this paragraph shall limit the right of any
party at any time to exercise self-help remedies, foreclose against collateral,
or obtain provisional remedies.  The private judge shall also
determine all issues relating to the applicability, interpretation, and
enforceability of this paragraph.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  12  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  GENERAL
      PROVISIONS

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            12.1 Successors
and Assigns.  This Agreement
binds and is for the benefit of the successors and permitted assigns of each
party.  Borrower may not assign this Agreement or any rights or
obligations under it without Bank’s prior written consent which may be granted
or withheld in Bank’s discretion.  Bank has the right, without the
consent of or notice to Borrower, to sell, transfer, negotiate, or grant
participation in all or any part of, or any interest in, Bank’s obligations,
rights and benefits under this Agreement, the Loan Documents or any related
agreement.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                12.2 Indemnification.  Borrower agrees
to indemnify, defend, and hold Bank and its officers, directors, employees,
agents, attorneys or any other Person affiliated with or representing Bank
(each, an “Indemnified Person”) harmless against:  (a) all
obligations, demands, claims, and liabilities (collectively, “Claims”) asserted
by any other party in connection with the transactions contemplated by the Loan
Documents; and (b) all losses or Bank Expenses incurred, or paid by such
Indemnified Person from, following, or arising from transactions between Bank
and Borrower (including reasonable attorneys’ fees and expenses), except for
Claims, Bank Expenses and/or losses directly caused by such Indemnified Person’s
gross negligence or willful misconduct.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    12.3 Right of
Set-Off.  Borrower hereby
grants to Bank, a lien, security interest and right of setoff as security for
all Obligations to Bank, 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 Bank or any entity under the
control of Bank (including a Bank subsidiary) or in transit to any of
them.  At any time after the occurrence and during the continuance of
an Event of Default, without demand or notice, Bank may set off the same or any
part thereof and apply the same to any liability or obligation of Borrower even
though unmatured and regardless of the adequacy of any other collateral securing
the Obligations.  ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS
RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE
OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH
DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            12.5 Severability
of Provisions.  Each provision of
this Agreement is severable from every other provision in determining the
enforceability of any provision.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                12.6 Correction
of Loan Documents.  Bank may correct
patent errors and fill in any blanks in this Agreement and the other Loan
Documents consistent with the agreement of the parties.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            12.9 Survival.  All covenants,
representations and warranties made in this Agreement continue in full force
until this Agreement has terminated pursuant to its terms and all Obligations
(other than inchoate indemnity obligations and any other obligations which, by
their terms, are to survive the termination of this Agreement) have been
satisfied.  The obligation of Borrower in Section 12.2 to indemnify Bank shall survive until the statute
of limitations with respect to such claim or cause of action shall have
run.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                12.10 Confidentiality.  In handling any
confidential information, Bank shall exercise the same degree of care that it
exercises for its own proprietary information, but disclosure of information may
be made: (a) to Bank’s Subsidiaries or Affiliates; (b) to prospective
transferees or purchasers (other than a competitor of Borrower) of any interest
in the Advances (provided, however, Bank shall use commercially reasonable
efforts to obtain such prospective transferee’s or purchaser’s agreement to the
terms of this provision); (c) as required by law, regulation, subpoena, or other
order; (d) to Bank’s regulators or as otherwise required in connection with
Bank’s examination or audit; (e) as Bank considers appropriate in exercising
remedies under the Loan Documents; and (f) to third-party service providers of
Bank so long as such service providers have executed a confidentiality agreement
with Bank with terms no less restrictive than those contained
herein.  Confidential information does not include information that
either: (i) is in the public domain or in Bank’s possession when disclosed to
Bank, or becomes part of the public domain after disclosure to Bank; or (ii) is
disclosed to Bank by a third party, if Bank does not know that the third party
is prohibited from disclosing the information.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  Bank may
use confidential information for any purpose, including, without limitation, for
the development of client databases, reporting purposes, and market analysis, so
long as Bank does not disclose Borrower’s identity or the identity of any person
associated with Borrower unless otherwise expressly permitted by this
Agreement.  The provisions of the immediately preceding sentence shall
survive the termination of this Agreement.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          12.12 Waiver of
Default. Borrower is currently in default of the Prior Loan Agreement for
failing to maintain the required minimum Tangible Net Worth under Section
6.10(b) for the period commencing September 1, 2009 through the Effective Date
(the “Existing Default”).  Bank hereby waives Borrower's Existing
Default.  The waiver set forth in this Section 12.12 is effective for
the purposes set forth herein and shall be limited precisely as written and
shall not be deemed to (a) be a consent to any amendment, waiver or
modification of any other term or condition of any Loan Document, or
(b) otherwise prejudice any right or remedy which Bank may now have or may
have in the future under or in connection with any Loan Document.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        13  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        DEFINITIONS

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  13.1 Definitions.  In this
Agreement:

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    “Account” is any “account” as
defined in the Code with such additions to such term as may hereafter be made,
and includes, without limitation, all accounts receivable and other sums owing
to Borrower.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          “Advance” is defined in
Section 2.1.1.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            “Advance
Rate”  eighty percent (80.0%), net of any offsets related to
each specific Account Debtor, including, without limitation, Deferred Revenue,
or such other percentage as Bank establishes under Section 2.1.1.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                “Applicable Rate” is a per
annum rate equal to the greater of either (i) the Prime Rate plus three percent
(3.0%), or (ii) seven percent (7.0%).

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  “Bank Expenses” are all audit
fees and expenses, costs, and expenses (including reasonable attorneys’ fees and
expenses) for preparing, amending, negotiating, administering, defending and
enforcing the Loan Documents (including, without limitation, those incurred in
connection with appeals or Insolvency Proceedings) or otherwise incurred with
respect to Borrower.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        “Change in Control” means any
event, transaction, or occurrence as a result of which (a) any “person” (as such
term is defined in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act
of 1934, as an amended (the “Exchange Act”)), other than a trustee or other
fiduciary holding securities under an employee benefit plan of Borrower, is or
becomes a beneficial owner (within the meaning Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of securities of Borrower, representing
forty percent (40%) or more of the combined voting power of Borrower’s then
outstanding securities; or (b) during any period of twelve consecutive calendar
months, individuals who at the beginning of such period constituted the Board of
Directors of Borrower (together with any new directors whose election by the
Board of Directors of Borrower was approved by a vote of at least two-thirds of
the directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason other than death or disability to constitute a
majority of the directors then in office.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          “Code” is the Uniform
Commercial Code, as the same may, from time to time, be enacted and in effect in
the State of California; provided, that, to the extent that the Code is used to
define any term herein or in any Loan Document and such term is defined
differently in different Articles or Divisions of the Code, the definition of
such term contained in Article or Division 9 shall govern; provided further,
that in the event that, by reason of mandatory provisions of law, any or all of
the attachment, perfection, or priority of, or remedies with respect to, Bank’s
Lien on any Collateral is governed by the Uniform Commercial Code in effect in a
jurisdiction other than the State of California, the term “Code” shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes on the provisions thereof relating to such attachment,
perfection, priority, or remedies and for purposes of definitions relating to
such provisions.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            “Collateral” is any and all
properties, rights and assets of Borrower described on
Exhibit A.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              “Collateral Handling Fee” is
defined in Section 2.2.4.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  “Commodity Account” is any
“commodity account” as defined in the Code with such additions to such term as
may hereafter be made.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    “Compliance Certificate” is
attached as Exhibit B.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        “Control Agreement” is any
control agreement entered into among the depository institution at which
Borrower maintains a Deposit Account or the securities intermediary or commodity
intermediary at which Borrower maintains a Securities Account or a Commodity
Account, Borrower, and Bank pursuant to which Bank obtains control (within the
meaning of the Code) over such Deposit Account, Securities Account, or Commodity
Account.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            “Deposit Account” is any
“deposit account” as defined in the Code with such additions to such term as may
hereafter be made.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              “Effective Date” is the date
Bank executes this Agreement as indicated on the signature page
hereof.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        (b) Accounts
billed in the United States and owing from an Account Debtor which does not have
its principal place of business in the United States or Canada unless such
Accounts are otherwise Eligible Accounts and (i) covered in full by credit
insurance satisfactory to Bank, less any deductible, (ii) supported by letter(s)
of credit acceptable to Bank, (iii) supported by a guaranty from the
Export-Import Bank of the United States, or (iv) that Bank otherwise approves of
in writing;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            (c) Accounts
billed and payable outside of the United States unless the Bank has a first
priority, perfected security interest or other enforceable Lien in such
Accounts;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                (d) Accounts
owing from an Account Debtor to the extent that Borrower is indebted or
obligated in any manner to the Account Debtor (as creditor, lessor, supplier or
otherwise - sometimes called “contra” accounts, accounts payable, customer
deposits or credit accounts), with the exception of customary credits,
adjustments and/or discounts given to an Account Debtor by Borrower in the
ordinary course of its business;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                (h) Accounts
owing from an Account Debtor that has not been invoiced or where goods or
services have not yet been rendered to the Account Debtor (sometimes called memo
billings or pre-billings);

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    (i) Accounts
subject to contractual arrangements between Borrower and an Account Debtor where
payments shall be scheduled or due according to completion or fulfillment
requirements where the Account Debtor has a right of offset for damages suffered
as a result of Borrower’s failure to perform in accordance with the contract
(sometimes called contracts accounts receivable, progress billings, milestone
billings, or fulfillment contracts);

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        (j) Accounts
owing from an Account Debtor the amount of which may be subject to withholding
based on the Account Debtor’s satisfaction of Borrower’s complete performance
(but only to the extent of the amount withheld; sometimes called retainage
billings);

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            (k) Accounts
subject to trust provisions, subrogation rights of a bonding company, or a
statutory trust;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                (l) Accounts
owing from an Account Debtor that has been invoiced for goods that have not been
shipped to the Account Debtor unless Bank, Borrower, and the Account Debtor have
entered into an agreement acceptable to Bank in its sole discretion wherein the
Account Debtor acknowledges that (i) it has title to and has ownership of the
goods wherever located, (ii) a bona fide sale of the goods has occurred, and
(iii) it owes payment for such goods in accordance with invoices from Borrower
(sometimes called “bill and hold” accounts);

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    (m) Accounts
for which the Account Debtor has not been invoiced;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        (n) Accounts
that represent non-trade receivables or that are derived by means other than in
the ordinary course of Borrower’s business;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            (o) Accounts
subject to chargebacks or others payment deductions taken by an Account Debtor
(but only to the extent the chargeback is determined invalid and subsequently
collected by Borrower);

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                (p) Accounts
owing from an Account Debtor with respect to which Borrower has received
Deferred Revenue (but only to the extent of such Deferred Revenue);

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    (q) Accounts
in which the Account Debtor disputes liability or makes any claim (but only up
to the disputed or claimed amount), or if the Account Debtor is subject to an
Insolvency Proceeding, or becomes insolvent, or goes out of business;
and

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        (r) Accounts
for which Bank in its good faith business judgment determines collection to be
doubtful.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              “Facility Amount” is One
Million Eight Hundred Seventy-Five Thousand Dollars ($1,875,000).

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                “Finance Charges” is defined in
Section 2.2.3.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      “GAAP” is generally accepted
accounting principles set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other Person as may be
approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of the date of determination.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        “General Intangibles” is all
“general intangibles” as defined in the Code in effect on the date hereof with
such additions to such term as may hereafter be made, and includes without
limitation, all copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work, whether published or unpublished, any patents, trademarks, service marks
and, to the extent permitted under applicable law, any applications therefor,
whether registered or not, any trade secret rights, including any rights to
unpatented inventions, payment intangibles, royalties, contract rights,
goodwill, franchise agreements, purchase orders, customer lists, route lists,
telephone numbers, domain names, claims, income and other tax refunds, security
and other deposits, options to purchase or sell real or personal property,
rights in all litigation presently or hereafter pending (whether in contract,
tort or otherwise), insurance policies (including without limitation key man,
property damage, and business interruption insurance), payments of insurance and
rights to payment of any kind.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          “Good Faith Deposit” is defined
in Section 2.2.8.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            “Governmental Approval” is any
consent, authorization, approval, order, license, franchise, permit,
certificate, accreditation, registration, filing or notice, of, issued by, from
or to, or other act by or in respect of, any Governmental
Authority.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              “Governmental Authority” is any
nation or government, any state or other political subdivision thereof, any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative functions of or pertaining to government, any securities exchange
and any self-regulatory organization.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                “Guarantor” is any present or
future guarantor of the Obligations.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    “Indemnified Person” is defined
in Section 12.2.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        “Intellectual Property
Collateral” is defined in the IP Agreement.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          “Inventory” is all “inventory”
as defined in the Code in effect on the date hereof with such additions to such
term as may hereafter be made, and includes without limitation all merchandise,
raw materials, parts, supplies, packing and shipping materials, work in process
and finished products, including without limitation such inventory as is
temporarily out of Borrower’s custody or possession or in transit and including
any returned goods and any documents of title representing any of the
above.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              “Invoice Transmittal” shows
Eligible Accounts which Bank may finance and, for each such Account, includes
the Account Debtor’s, name, address, invoice amount, invoice date and invoice
number.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                “IP Agreement” is that certain
Intellectual Property Security Agreement executed and delivered by Borrower to
Bank.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  “Lien” is a claim, mortgage,
deed of trust, levy, charge, pledge, security interest or other encumbrance of
any kind, whether voluntarily incurred or arising by operation of law or
otherwise against any property.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      “Lockbox” is defined in
Section 2.2.7.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        “Material Adverse Change” is:
(a) a material impairment in the perfection or priority of Bank’s security
interest in the Collateral or in the value of such Collateral; or (b) a material
adverse change in the business, operations, or financial condition of
Borrower.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          “Maturity Date” is January 31,
2010.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            “Minimum Finance Charge” is
Five Thousand Five Hundred Dollars ($5,500).

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              “Obligations” are Borrower’s
obligation to pay when due any debts, principal, interest, Bank Expenses, and
other amounts Borrower owes Bank now or later, whether under this Agreement, the
Loan Documents, or otherwise, including, without limitation, any interest
accruing after Insolvency Proceedings begin and debts, liabilities, or
obligations of Borrower assigned to Bank, and the performance of Borrower’s
duties under the Loan Documents.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                “Perfection Certificate” is a
certain Perfection Certificate completed and delivered by Borrower to Bank in
connection with this Agreement.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  “Permitted Distributions”
means:

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    (a) purchases
of capital stock from former employees, consultants and directors pursuant to
repurchase agreements or other similar agreements in an aggregate amount not to
exceed One Hundred Thousand Dollars ($100,000) in any fiscal year provided that
at the time of such purchase no Default or Event of Default has occurred and is
continuing;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      (b) distributions
or dividends consisting solely of Borrower's capital stock;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        (c) purchases
for value of any rights distributed in connection with any stockholder rights
plan;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          (d) purchases
of capital stock or options to acquire such capital stock with the proceeds
received from a substantially concurrent issuance of capital stock or
convertible securities;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            (e) purchases
of capital stock pledged as collateral for loans to employees;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              (f) purchases
of capital stock in connection with the exercise of stock options or stock
appreciation rights by way of cashless exercise or in connection with the
satisfaction of withholding tax obligations;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                (g) purchases
of fractional shares of capital stock arising out of stock dividends, splits or
combinations or business combinations; and

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  (h) the
settlement or performance of such Person’s obligations under any equity
derivative transaction, option contract or similar transaction or combination of
transactions.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    “Permitted Indebtedness”
is:

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      (a) Borrower’s
Indebtedness to Bank under this Agreement and any other Loan
Document;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        (b) Indebtedness
existing on the Effective Date and shown on the Perfection
Certificate;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          (c) Subordinated
Debt;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            (d) unsecured
Indebtedness to trade creditors and with respect to surety bonds and similar
obligations incurred in the ordinary course of business;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              (e) Indebtedness
incurred as a result of endorsing negotiable instruments received in the
ordinary course of business;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                (f) Indebtedness
consisting of interest rate, currency, or commodity swap agreements, interest
rate cap or collar agreements or arrangements designated to protect Borrower
against fluctuations in interest rates, currency exchange rates, or commodity
prices;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  (g) Indebtedness
among any of Borrower’s Subsidiaries (for purposes of clarification,
Indebtedness between Borrower and its Subsidiaries is not “Permitted
Indebtedness”);

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    (h) Indebtedness
with respect to documentary letters of credit;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      (i) capitalized
leases and purchase money Indebtedness not to exceed $100,000, in the aggregate
in any fiscal year secured by Permitted Liens;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        (j) Indebtedness
under (i) any Publisher Guarantee in effect on the Effective Date, and (ii) any
Publisher Guarantee that becomes effective after the Effective Date, provided
that in the case of a Publisher Guarantee taking effect after the Effective Date
with aggregate potential payments in excess of Five Hundred Thousand Dollars
($500,000), Borrower’s Board of Directors, with the affirmative vote of at least
six (6) of its directors, has approved such Publisher Guarantee;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          (k) Indebtedness
not otherwise permitted above which does not exceed Fifty Thousand Dollars
($50,000) in the aggregate in any fiscal year; and

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            (l) Refinanced,
replaced or extended Permitted Indebtedness, provided that the amount of such
Indebtedness is not increased except by an amount equal to a reasonable premium
or other reasonable amount paid in connection with such refinancing and by an
amount equal to any existing, but unutilized, commitment
thereunder.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              “Permitted Investments”
are:

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                (a) Investments
existing on the Effective Date;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  (b) (i) marketable
direct obligations issued or unconditionally guaranteed by the United States or
its agencies or any State maturing within 1 year from its acquisition, (ii)
commercial paper maturing no more than 2 years after its creation and having the
highest rating from either Standard & Poor’s Corporation or Moody’s
Investors Service, Inc., and (iii) Bank’s certificates of deposit maturing no
more than 2 years after issue;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    (c) Investments
permitted by Borrower’s investment policy, as amended from time to time,
provided that such investment policy (and any such amendment) has been approved
in writing by Bank;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      (d) Investments
by Subsidiaries in other Subsidiaries or in Borrower (for purposes of
clarification, Investments by Borrower in Subsidiaries are not “Permitted
Investments”);

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        (e) Investments
consisting of Collateral Accounts in the name of Borrower or any Subsidiary so
long as Bank has a first priority, perfected security interest in such
Collateral Accounts;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          (f) Investments
consisting of extensions of credit to Borrower’s or its Subsidiaries’ customers
in the nature of accounts receivable, prepaid royalties or notes receivable
arising from the sale or lease of goods, provision of services or licensing
activities of Borrower;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            (g) Investments
received in satisfaction or partial satisfaction of obligations owed by
financially troubled obligors;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              (h) Investments
acquired in exchange for any other Investments in connection with or as a result
of a bankruptcy, workout, reorganization or recapitalization;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                (i) Investments
acquired as a result of a foreclosure with respect to any secured
Investment;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  (j) Investments
consisting of interest rate, currency, or commodity swap agreements, interest
rate cap or collar agreements or arrangements designated to protect a Person
against fluctuations in interest rates, currency exchange rates, or commodity
prices;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    (k) Investments
consisting of Publisher Advances;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      (l) Investments
consisting of the non-cash consideration received by Borrower or any Subsidiary
in connection with a Transfer permitted hereunder;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        (m) Investments
consisting of loans and advances to employees in an aggregate amount not to
exceed One Hundred Thousand Dollars ($100,000); and

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          (n) Investments
not otherwise permitted by this definition so long as the aggregate amount of
such Investments does not exceed Fifty Thousand Dollars ($50,000) in any fiscal
year.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            “Permitted Liens”
are:

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              (a) (i) Liens
securing Permitted Indebtedness described under clause (b) of the definition of
“Permitted Indebtedness” or (ii) Liens arising under this Agreement or other
Loan Documents;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                (b) Liens for
taxes, fees, assessments or other government charges or levies, either not
delinquent or being contested in good faith and for which Borrower maintains
adequate reserves on its Books, provided that no
notice of any such Lien has been filed or recorded under the Internal Revenue
Code of 1986, as amended, and the Treasury Regulations adopted
thereunder;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  (c) Liens
(including with respect to capital leases) (i) on property (including
accessions, additions, parts, replacements, fixtures, improvements and
attachments thereto, and the proceeds thereof) acquired or held by Borrower or
its Subsidiaries incurred for financing such property (including accessions,
additions, parts, replacements, fixtures, improvements and attachments thereto,
and the proceeds thereof) other than Accounts and Inventory, or (ii) existing on
property (and accessions, additions, parts, replacements, fixtures, improvements
and attachments thereto, and the proceeds thereof) when acquired other than
Accounts and Inventory, if the Lien is confined to such property (including
accessions, additions, parts, replacements, fixtures, improvements and
attachments thereto, and the proceeds thereof);

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      (e) leases or
subleases of real property granted in the ordinary course of business, and
leases, subleases, non-exclusive licenses or sublicenses of property (other than
real property or intellectual property) granted in the ordinary course of
Borrower’s business, if the leases,
subleases, licenses and sublicenses do not prohibit granting Bank a security
interest;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        (f) non-exclusive
license of intellectual property granted to third parties in the ordinary course
of business, and licenses of intellectual property that could not result in a
legal transfer of title of the licensed property that may be exclusive in
respects other than territory and that may be exclusive as to territory only as
to discreet geographical areas outside of the United States;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          (g) leases or
subleases granted in the ordinary course of Borrower’s business, including in
connection with Borrower’s leased premises or leased property;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            (h) Liens
arising from attachments or judgments, orders, or decrees in circumstances not
constituting an Event of Default under Sections 8.4 and 8.7;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              (i) Liens in
favor of other financial institutions arising in connection with Borrower’s
deposit or securities accounts held at such institutions;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                (j) Liens of
carriers, warehousemen, suppliers, or other Persons that are possessory in
nature arising in the ordinary course of business so long as such Liens attach
only to Inventory, securing liabilities in the aggregate amount not to exceed
One Hundred Thousand Dollars ($100,000), and which are not delinquent or remain
payable without penalty or which are being contested in good faith and by
appropriate proceedings which proceedings have the effect of preventing the
forfeiture or sale of the property subject thereto;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  (k) Liens to
secure payment of workers’ compensation, employment insurance, old-age pensions,
social security and other like obligations incurred in the ordinary course of
business (other than Liens imposed by ERISA); and

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    (l) Liens on
the proceeds of an insurance policy securing the payment of financed insurance
premiums with respect to such policy.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          “Publisher Advances” means
advances made to certain customers of Borrower for prepaid
expenses.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            “Publisher Guarantees” means
revenue guaranties made by Borrower in favor of its customers consisting of
publishers, made in the ordinary course of business.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                “Reconciliation Period” is each
calendar month.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  “Registered Organization” is
any “registered organization” as defined in the Code with such additions to such
term as may hereafter be made.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    “Requirement of Law” is as to
any Person, the organizational or governing documents of such Person, and any
law (statutory or common), treaty, rule or regulation or 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.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        “Restructuring Fee” is defined
in Section 2.2.2.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          “Restructuring Fee Date” is the
Maturity Date; provided, however, that if the Maturity Date is extended beyond
January 31, 2010 by Bank then the “Restructuring Fee Date” shall be the earlier
to occur of (a) the extended Maturity Date or (b) March 27, 2010.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            “Securities Account” is any
“securities account” as defined in the Code with such additions to such term as
may hereafter be made.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              “Subordinated Debt” is
(a) Indebtedness incurred by Borrower subordinated to Borrower’s
Indebtedness owed to Bank and which is reflected in a written agreement in a
manner and form reasonably acceptable to Bank and approved by Bank in writing,
and (b) to the extent the terms of subordination do not change adversely to
Bank, refinancings, refundings, renewals, amendments or extensions of any of the
foregoing.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                “Subsidiary” is, with respect
to any Person, any Person of which more than 50.0% of the voting stock or other
equity interests (in the case of Persons other than corporations) is owned or
controlled directly or indirectly by such Person or one or more of Affiliates of
such Person.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  “Warrant” is that certain
Warrant to Purchase Stock, dated as of March 27, 2009, executed by Borrower in
favor of Bank.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     [Signature
page follows.]

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      BORROWER:

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      BETAWAVE
CORPORATION

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      By /s/
Tabreez Verjee

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      Name:
Tabreez Verjee

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      Title:
President

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      BANK:

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      SILICON
VALLEY BANK

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      By /s/
Vincent Vallejos

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      Name:
Vincent Vallejos

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      Title:
Relationship Manager

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      Effective
Date: November 25, 2009

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        EXHIBIT
A

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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

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

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  The
foregoing notwithstanding, the Collateral does not include more than sixty five
percent (65%) of the presently existing and hereafter arising issued and
outstanding shares of capital stock owned by Borrower of any Subsidiary
organized or formed in a non-U.S. jurisdiction which shares entitle the holder
thereof to vote for directors or any other matter.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      EXHIBIT
B

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          SPECIALTY
FINANCE DIVISION

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              Compliance
Certificate

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                I, an
authorized officer of Betawave Corporation (“Borrower”) certify under the
Amended and Restated Loan and Security Agreement (the “Agreement”) between
Borrower and Silicon Valley Bank (“Bank”) as follows (all capitalized terms used
herein shall have the meaning set forth in the Agreement):

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  Borrower
represents and warrants for each Financed Receivable:

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    Each
Financed Receivable is an Eligible Account.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      Borrower
is the owner with legal right to sell, transfer, assign and encumber such
Financed Receivable;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        The
correct amount is on the Invoice Transmittal and is not disputed;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Payment
is not contingent on any obligation or contract and Borrower has fulfilled all
its obligations as of the Invoice Transmittal date;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                It
reasonably believes no Account Debtor is insolvent or subject to any Insolvency
Proceedings;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  It has
not filed or had filed against it Insolvency Proceedings and does not anticipate
any filing;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Additionally,
Borrower represents and warrants as follows:

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              Borrower
is not an “investment company” or a company “controlled” by an “investment
company” under the Investment Company Act of 1940, as
amended.  Neither Borrower nor any of its Subsidiaries is a “holding
company” or an “affiliate” of a “holding company” or a “subsidiary company” of a
“holding company” as each term is defined and used in the Public Utility Holding
Company Act of 2005.  Borrower is not engaged as one of its important
activities in extending credit for margin stock (under Regulations X, T and U of
the Federal Reserve Board of Governors).  Borrower has complied in all
material respects with the Federal Fair Labor Standards Act.  Borrower
has not violated any laws, ordinances or rules, the violation of which could
reasonably be expected to cause a Material Adverse Change.  None of
Borrower’s or any Subsidiary’s properties or assets has been used by Borrower or
any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in
disposing, producing, storing, treating, or transporting any hazardous substance
other than legally.  Borrower and each Subsidiary has timely filed all
required tax returns and paid, or made adequate provision to pay, all material
taxes, except those being contested in good faith with adequate reserves under
GAAP.  Borrower and each Subsidiary has obtained all consents,
approvals and authorizations of, made all declarations or filings with, and
given all notices to, all government authorities that are necessary to continue
its business as currently conducted except where the failure to obtain or make
such consents, declarations, notices or filings would not reasonably be expected
to cause a Material Adverse Change.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
	 
      	 
      	 
      
	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Reporting Covenant

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Required

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Complies

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
	 
      	 
      	 
      
	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Monthly
      balance sheet and income statement with Compliance
    Certificate

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Monthly
      within 30 days

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Yes  No

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Annual
      financial statement (CPA Audited) + CC

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          FYE
      within 180 days

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Yes  No

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          10
      Q, 10 K and 8-K

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Within
      5 days after filing with SEC

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Yes  No

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          A/R
      & A/P Agings, Deferred Revenue Report, Schedule of Publisher
      Guarantees and Publisher Advances

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Monthly
      within 30 days

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Yes  No

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          12-month
      financial projections

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Within
      30 days of the Effective Date

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Yes  No

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
	 
      	 
      	 
      
	
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          The
      following Intellectual Property was registered after the Effective Date
      (if no registrations, state “None”)

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

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

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  Sincerely,

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  Betawave
Corporation

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  ____________________________________

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  Signature

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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TECHNICAL CONSULTANCY & SERVICES AGREEMENT

[translation]

THIS TECHNICAL CONSULTANCY & SERVICES AGREEMENT (this “Agreement”) is dated May 23, 2007, and is entered into in Xi’an City of China

BETWEEN

(1)           Vallant Pictures Entertainment Co., Ltd., with a registered address at OMC Chambers, P.O. Box 3152, Road Town, Tortola, British Virgin Islands (“ Party A ”),

AND

(2) Xi’an TV Media Inc., with a registered address at Room 2802, Block B, Zhong Lian Yi Hua Yuan, No. 190 Wen Yi Bei Road, Xi’an City, China (“Party B ”),.

Party A and Party B are referred to collectively in this Agreement as the “Parties”.

RECITALS

(1)Party A, a company limited by shares and incorporated under law of British Virgin Islands
and has the expertise in providing consultancy advice and services in relation to the production of television mini-series, features and commercials;

 

(2)Party B, a private-owned limited company incorporated in Xi’an City of China and
is engaged in the business of (1) production and distribution of television mini-series, features and commercials; (2) production and agency service of printed and outdoor advertisements; (3) planning and organization cultural events and arts performance; (4) agency and training of artists; (5) design and production of stage performance; (6) leasing of lightings, sound and filming facilities; (7) information technology network construction, operation and maintenance; (8) development and construction of studios
as tourism facilities (the “Business”);

 

(3)The Parties desire that Party A provide to Party B technical consultancy and services
in relation to production and distribution of television mini-series, features and commercials; and Party A is entitled to a compensation that is equivalent to the net profit of Party B as audited under US GAAP;

 

(4)In order to ensure that Party B will perform its obligations under this Agreement, and
in order to provide an additional mechanism for the Party A to enforce its rights to collect the Consulting Services Fees from Party B, over a simple majority of the shareholders of Party B agree to pledge their equity interest in Party B as security for the performance of the obligations of Party B under this Agreement and the payment of Consulting Services Fees under this Agreement;

 

(5)The Parties are entering into this Agreement to set forth the terms and conditions under
which Party A shall provide consultancy and related services to Party B and hence to ensure that the wholly-owned shareholder of Party A may enforce its rights to control the business of Party B.

 

 

 

1

 

NOW THEREFORE, the Parties agree as follows:

  

1. DEFINITIONS

1.1 Unless otherwise stipulated in this Agreement, the following terms shall have the following meanings:

 

“Business Day,” shall mean the part of a day during which the businesses of banks in China are operating, usually from 9 am to 6 pm Monday through Friday;

“China Laws” shall means the laws and regulations promulgated by the National People’s Congress, State Council, State Commissions of the People’s Republic of China, including all the interim measures, regulations and notices.

“Force Majeure Events” shall mean causes beyond a party's reasonable control and occurring without its fault or negligence, including, without limitation, Acts of God, wars, insurrections and/or any other cause beyond the reasonable control of the party whose performance
is affected

 

“PRC” means the People’s Republic of China and excluding Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan;

 

“US GAAP” shall be the Generally Accepted Accounting Principle of the United States of America;

1.2 Representation and Warranties.  All the Parties represent to the other party that:

	
1.2.1  
	
it is incorporated in accordance with the law in its respective incorporation place;

	
1.2.2  
	
it is legally capable to enter into this Agreement and perform the obligation hereto;

	
1.2.3  
	
its signing party is fully authorized;

	
1.2.4  
	
execution of this Agreement shall not violate any of its business license, article of association, by-laws, or any laws and regulations, or other contracts;

	
1.2.5  
	
to its best knowledge, there is no court notice, orders or suggestions that may adversely affect its performance of its obligation under this Agreement

	
1.2.6  
	
it has fully disclosed to the other party with respect to any governmental policy that may adversely affect its performance of its obligation under this Agreement;

	
1.2.7  
	
it has not become bankruptcy or insolvent or is the subject of proceedings or arrangements for liquidation or dissolution;

  

2. RETENTION AND SCOPE OF SERVICES

  

2.1 Exclusive Services Provider. During the term of this Agreement, Party A shall be the exclusive provider of the services set forth below. Party B shall not seek or accept similar services from other providers unless the prior written approval is obtained from Party A.

2.2 Services. Party B hereby agrees to retain the services of Party A, and Party A accepts such appointment, to provide to Party B services in relation to the current and proposed operations of Party B’s business in the PRC upon the terms and conditions of this Agreement.
The services subject to this Agreement shall include, without limitation: (a) market intelligence and audience preference research to support the production of movie and television mini-series; (b) advisory and assistance relating to films investment; (c) advisory on mini-series and film screenplay creation, principle photography and other related production and planning; (d) collect sales income and service fees on behalf of Party B; (e) advice and assistance in relation to the staffing of Party B, including
assistance in the recruitment, employment, training and secondment of management personnel, administrative personnel and staff of Party B; (f) advice and assistance relating to development of technology and provision of consultancy services, particularly as related to the television mini-series production technology; and (g) such other advice and assistance as may be agreed upon by the Parties.

 

2.3 For the purpose of this Agreement, Party B agree to hire the staff in PRC necessary for Party A to fulfill its obligation as stipulated under this Agreement; and Party B shall be responsible for the cost (including basic salary, subsidy, commission and social insurance) of such staffing.

 

2

 

3. COPYRIGHTS

3.1 Copyrights Related to the Services. Party B shall own all copyrights of television mini-series and films developed in the course of providing Services, or derived from the provision of the Services. Party A shall be entitled to the profit derived as Party B utilize such copyrights.

3.2 Copyrights Ownership. Party B is responsible to hold the copyrights of the mini-series and films derived from the provision of the Services by Party A, and the staffs of Party B shall not claim any right on such copyrights.

3.3 Conditional Transfer of Copyrights. Party B may transfer the copyright to a third party with the prior written consent of Party A.

 

4. PAYMENT

 

4.1 Service Fee. In consideration of the Services provided by Party A hereunder, Party B shall pay to Party A during the term of this Agreement a consulting services fee (the “Consulting Services Fee”),
payable in RMB each year, equal to 62.61% of its revenue for such year based on the annual financial statements audited under US GAAP. Such yearly payment shall be made within once a year after receipt by Party A of the financial statements referenced above.

 

4.2 Pledge. Party B shall permit and cause over a simple majority of Party B’s shareholders to pledge the equity interests of Party B to Party A in the amount of 62.61% for securing the Consulting Services Fee that should be paid by Party B pursuant to this Agreement.

5. TERM AND TERMINATION

5.1 This Agreement shall take effect on the signing date of this Agreement and shall remain in full force and effect until Party B becomes bankruptcy or insolvent or is the subject of proceedings or arrangements for liquidation or dissolution or ceases to carry on business, unless early termination occurs in accordance with relevant provisions
herein or in any other relevant agreements reached by all parties.

5.2 This Agreement can be terminated by either Party giving 30-days prior written notice to the other Party with or without a reason. Under the circumstances that Party B serves the prior written notice to the Party A for termination, Party B hereby agrees to pay a penalty to Party A that is equivalent to the net profit of the last fiscal year.

5.3 This Agreement may be terminated by Party A provided that:

 

5.3.1 if any circumstances (including but not limiting to Force Majeure Events) arise which materially and adversely affect the performance or the objectives of this Agreement

5.3.2 if Party B has committed a material breach of this Agreement (including but not limited to the failure by Party B to pay the Consulting Services Fee) and such breach, if capable of remedy, has not been so remedied within, in the case of breach of a non-financial obligation, 45 days, following receipt of such written notice;

5.3.3 if Party B transfer the copyrights without the prior consent of Party A

 

5.4 Any Party electing properly to terminate this Agreement pursuant to Clause 7.2 shall have no liability to the other Party for indemnity, compensation or damages arising solely from the exercise of such right. The expiration or termination of this Agreement shall not affect the continuing liability of Party B to pay any Consulting Services Fees
already accrued or due and payable to Party A. Upon expiration or termination of this Agreement, all amounts then due and unpaid to Party A by Party B hereunder, as well as all other amounts accrued but not yet payable to Party A by Party B, shall forthwith become due and payable by Party B to Party A.

 

3

 

6. PARTY A’S REMEDY UPON PARTY B’S BREACH

 

6.1 In addition to the remedies provided elsewhere under this Agreement, Party A shall be entitled to remedies, including without limitation penalty charges for any due and outstanding debt owned by Party B at 10% of total Consulting Service Fee payable every 10 days. If the Consulting Service Fee remain as outstanding for consecutive 30 days, Party
A is entitled to terminate this Agreement and all the legal fees incurred to recover losses from such breach.

 

7. FORCE MAJEURE

7.1 Neither party shall be liable for any failure or delay in performance under this Agreement to the extent said failures or delays are proximately caused by Force Majeure Events, provided that, as a condition to the claim of nonliability, the party experiencing the difficulty shall give the other prompt written notice with full details within 15
days following the occurrence of the Force Majeure Event. Dates by which performance obligations are scheduled to be met will be extended for a period of time equal to the time lost due to any delay so caused.

7.2 Either party shall have the right to terminate this Agreement if such delay or default caused by Force Majeure Events persist for 30 consecutive days.

8. ASSIGNMENT

 

8.1No part of this Agreement shall be assigned or transferred by either Party without the prior written consent of the other Party. Any such assignment or transfer shall be void. Party A, however, may assign its rights and obligations hereunder to its wholly-owned subsidiary.

9. GOVERNING LAW

 

9.1 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the People’s Republic of China (“PRC Laws”).

9.2 Change of Governing Laws. Under the circumstances that existing PRC Laws are amended or new PRC Laws become effective (“Change of Governing Laws”), and provided that such changes are in favor to any
Parties, the concerned party shall have the right to apply for the preference treatment as stipulated in such amendment or changes.

9.3 Subject to the adverse effect to the rights of any party due to Change of Governing Laws, the parties hereby agree that:

9.3.1 this Agreement shall be governed by the PRC Laws before the Change; or

9.3.2 any party can terminate this Agreement in the absence of a remedy to the adverse effect due to the Change.

10. DISPUTE RESOLUTION

10.1 Arbitration. Any dispute arising from, out of or in connection with this Agreement shall be settled through friendly consultations between the Parties. Such consultations shall begin immediately after one Party has delivered to the other Party a written request for such consultation.
If within thirty (30) days following the date on which such notice is given, the dispute cannot be settled through consultations, the dispute shall, upon the request of either Party with notice to the other Party, be submitted to arbitration in China under the auspices of Xi’an Arbitration Centre. The outcome of the arbitration shall be final and binding upon the Parties, and its terms enforceable.

10.2 Continuing Obligations. During the period when a dispute is being resolved, the Parties shall in all other respects continue their implementation of this Agreement.

 

4

 

11. GENERAL

11.1 This Agreement shall be valid and binding as of the signing date first set forth above.

11.2 The headings in this Agreement shall not affect the interpretation of this Agreement.

11.3 The knowledge, information, belief or acknowledgement of any party as referred in this Agreement refers to the knowledge, information, belief or acknowledgement of any party acquired after reasonable investigation.

11.4 Unless otherwise stipulated in this Agreement, references herein to Clauses are to be construed as reference to Clause of this Agreement.

11.5 The failure to exercise or delay in exercising a right or remedy under this Agreement shall not constitute a waiver of the right or remedy or waiver of any other rights or remedies and no single or partial exercise of any right or remedy under this Agreement shall prevent any further exercise of the right or remedy or the exercise of any
other right or remedy.

11.6 This Agreement constitutes the entire agreement between the Parties relating to the subject matter of this Agreement and supersedes all previous agreements.

11.7 No amendment, change, or modification of this Agreement shall be valid unless in writing signed by the parties hereto. Any amendment, change or modification that is subject to the approval of the government shall be valid upon receipt of such governmental approval.

11.8 Should any clause or any part of any clause contained in this Agreement be declared invalid or unenforceable for any reason whatsoever, all other clauses or parts of clauses contained in this Agreement shall remain in full force and effect.

11.9 None of the rights or obligations of either of the Parties under this Agreement shall be capable of being assigned or transferred in whole or in part without the consent of the Parties.

11.10 This Agreement shall be executed in two (2) duplicate originals in Chinese. Each Party has received one (1) duplicate original, and all originals shall be equally valid.

11.11 All of the provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, if any, successors, and assigns.

11.12 Any notice, demand or other communication given or made under this Agreement or in connection herewith shall be in writing and delivered personally or by prepaid letter, telegram or cable and shall be deemed to have been received, in the case of a telegram or cable, at the time of dispatch thereof, (provided that, if the date of dispatch is
not a business day, it shall be deemed to have been received at the opening of business on the next such business day) and, in the case of a letter, when delivered personally or 2 days after it has been posted by registered mail. Any notice shall be sufficiently served if sent to the addressee at its above address.

[SIGNATURE PAGE FOLLOWS]

 

5

 

Signature Page

 

IN WITNESS WHEREOF both parties hereto have caused this Agreement to be duly executed by their legal representatives and duly authorized representatives on their behalf as of the date first set forth above. The parties hereto agree that facsimile signatures shall be as effective as if originals.

 

	  	  
	
PARTY A:
	
Vallant Pictures Entertainment Co., Ltd.

 

Authorized Signature: /s/ Li Bin

	  	  
	
PARTY B:
	
Xi’an TV Media Inc.

 

Legal Representative: /s/ Li Dean

	  	  

 

6

 

Appendix 1: The list of Copyrights of Television mini-series and movies owned by Party A.

The list below set forth the copyrights of television mini-series and movies owned by Party B as of the signing date first set forth above. Party A shall be entitled to the profit when Party B makes use of such copyrights. Party A shall be entitled to the profit derived or developed from the intellectual property of any future television mini-series
and/or movies produced in the course of providing Services, or derived from the provision of the Services.

1. Lucky Chicken

2. Tianshan Urgency Action

3. Hard Corps

4. Drive Dragon Gate

5. Lover’s Grief

6. Special Mission

7. Plum Blossom Archive

8. Invisible Wings

9. County Major with Doctor Degree

10. Lotus Lantern Prequel

11. Fox-Hunting

7

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