Document:

Exhibit 10.3 - Promissory Note (Revolving) _ Dougherty's Pharmacy, Inc and
      Medicine Man

    
      
                Exhibit
          10.3

        PROMISSORY
          NOTE

        (Revolving)

         

        $2,000,000.00                                                     Dallas,
          Texas                   
            February 20,
          2007

         

        FOR
          VALUE RECEIVED, each of the undersigned DOUGHERTY’S PHARMACY, INC., a Texas
          corporation, ALVIN MEDICINE MAN, LP, a Texas limited partnership, ANGLETON
          MEDICINE MAN, LP, a Texas limited partnership, SANTA FE MEDICINE MAN, LP,
          a
          Texas limited partnership (herein called "Maker," whether one or more),
          hereby
          jointly and severally promises to pay to the order of AMEGY BANK NATIONAL
          ASSOCIATION, a national banking association ("Payee"), at its offices at
          1807
          Ross Avenue, Suite 400, Dallas, Dallas County, Texas  75201, in lawful
          money of the United States of America, the principal sum of TWO MILLION
          AND
          NO/100 DOLLARS ($2,000,000.00), or so much thereof as may be advanced and
          outstanding hereunder, together with interest on the outstanding principal
          balance from day to day remaining, at a varying rate per annum which shall
          from
          day to day be equal to the lesser of (a) the Maximum Rate (hereinafter
          defined),
          or (b) the Prime Rate (hereinafter defined) of Payee in effect from day
          to day,
          each such change in the rate of interest charged hereunder to become effective,
          without notice to Maker, on the effective date of each change in the Prime
          Rate
          or the Maximum Rate, as the case may be; provided, however, if at any time
          the
          rate of interest specified in clause (b) preceding shall exceed the Maximum
          Rate, thereby causing the interest rate hereon to be limited to the Maximum
          Rate, then any subsequent reduction in the Prime Rate shall not reduce
          the rate
          of interest hereon below the Maximum Rate until the total amount of interest
          accrued hereon equals the amount of interest which would have accrued hereon
          if
          the rate specified in clause (b) preceding had at all times been in
          effect.  Accrued and unpaid interest on this Note shall be due and payable
          in monthly installments commencing on March 20, 2007, with additional payments
          of all accrued and unpaid interest due on the 20th day of each
          calendar month thereafter until February 20, 2009 (“Maturity Date”), when all
          outstanding principal hereunder plus all accrued and unpaid interest is
          due and
          payable in full.  

         

        Interest
          on the indebtedness evidenced by this Note shall be computed on the basis
          of a
          year of 360 days and the actual number of days elapsed (including the first
          day
          but excluding the last day) unless such calculation would result in a usurious
          rate, in which case interest shall be calculated on the basis of a year
          of 365
          or 366 days, as the case may be.

         

        As
          used in this Note, the following terms shall have the respective meanings
          indicated below:

         

        "Agreement"
          means that certain Loan Agreement of even date herewith between Maker and
          Payee,
          as the same may be amended or modified from time to time.

         

        "Default
          Rate" means the Maximum Rate or, if no Maximum Rate exists, the sum of
          the
          Prime Rate in effect from day to day plus three percent (3.0%).

         

        "Maximum
          Rate" means the maximum rate of nonusurious interest permitted from day
          to
          day by applicable law, including the Texas Finance Code, as supplemented
          by the
          Texas Credit Title, but otherwise without limitation, that rate based upon
          the
          "Weekly Ceiling" and calculated after taking into account any and all relevant
          fees, payments, and other charges in respect of this Note which are deemed
          to be
          interest under applicable law.

         

        "Prime
          Rate" means, at any time, the rate of interest per annum then most recently
          established by Payee as its Prime Rate.  The Prime Rate is not necessarily
          the lowest rate charged by Payee on its loans.

         

        This
          Note is the Revolving Note provided for in the Agreement.  Maker may prepay
          the principal of this Note upon the terms and conditions specified in the
          Agreement.  Maker may borrow, repay, and reborrow hereunder upon the terms
          and conditions specified in the Agreement.  A Borrowing Base is provided in
          the Agreement and the maximum amount outstanding under this Note shall
          not
          exceed the Borrowing Base.  If the amount outstanding exceeds the Borrowing
          Base, Maker shall make a principal payment in an amount sufficient to reduce
          the
          outstanding principal amount to the amount of the Borrowing Base as provided
          in
          the Agreement.

         

        
          
            
            

          

          
            -34-

            
              

            

          

          
            
            

          

        

        Notwithstanding
          anything to the contrary contained herein, no provisions of this Note shall
          require the payment or permit the collection of interest in excess of the
          Maximum Rate.  If any excess of interest in such respect is herein provided
          for, or shall be adjudicated to be so provided, in this Note or otherwise
          in
          connection with this loan transaction, the provisions of this paragraph
          shall
          govern and prevail, and neither Maker nor the sureties, guarantors, successors
          or assigns of Maker shall be obligated to pay the excess amount of such
          interest, or any other excess sum paid for the use, forbearance or detention
          of
          sums loaned pursuant hereto.  If for any reason interest in excess of the
          Maximum Rate shall be deemed charged, required or permitted by any court
          of
          competent jurisdiction, any such excess shall be applied as a payment and
          reduction of the principal of indebtedness evidenced by this Note; and,
          if the
          principal amount hereof has been paid in full, any remaining excess shall
          forthwith be paid to Maker.  In determining whether or not the interest
          paid or payable exceeds the Maximum Rate, Maker and Payee shall, to the
          extent
          permitted by applicable law, (i) characterize any non-principal payment
          as an
          expense, fee, or premium rather than as interest, (ii) exclude voluntary
          prepayments and the effects thereof, and (iii) amortize, prorate, allocate,
          and
          spread in equal or unequal parts the total amount of interest throughout
          the
          entire contemplated term of the indebtedness evidenced by this Note so
          that the
          interest for the entire term does not exceed the Maximum Rate.

        
           

        

        This
          Note is secured by all security agreements, assignments and other writings
          of
          every kind and nature heretofore, now or hereafter executed by Maker or
          any
          other person to secure any indebtedness of Maker which is now or hereafter
          owing
          to any holder of this Note, whether or not any of such writings describe,
          cover,
          pertain or affect any property, rights or interests which are similar or
          dissimilar to any of the following described property, rights or interests,
          and
          whether or not such writings were originally executed or delivered to of
          for the
          benefit of any holder of this Note or executed or delivered to or for the
          benefit of any other person and acquired by purchase or otherwise by any
          holder
          of this Note, and whether or not any such lien or security interest or
          other
          interest was created by any then owner of any interest in or to any of
          the
          property, rights or interests which are described in or covered by any
          such
          writing or to which any such writing may pertain or affect.  Maker further
          hereby agrees and consents to all of the terms, provisions, agreements,
          covenants and warranties set forth or contained in all of the security
          agreements, assignments and other writings now or hereafter securing or
          pertaining to the loan evidenced by this Note and agrees that all of the
          writings now or hereafter securing or pertaining to the loan evidenced
          by this
          Note (and all terms, provisions, agreements, covenants and warranties contained
          in such writings) shall be binding in all respects on Maker of this Note
          (whether or not Maker has executed such writings) and on the heirs, successors,
          legal representatives and assigns of Maker.

         

        Upon
          the occurrence of any Event of Default, as such term is defined in the
          Agreement, the holder hereof may, at its option, declare the entire unpaid
          principal of and accrued interest on this Note immediately due and payable
          without notice, demand or presentment, all of which are hereby waived,
          and upon
          such declaration, the same shall become and shall be immediately due and
          payable, and the holder hereof shall have the right to foreclose or otherwise
          enforce all liens or security interests securing payment hereof, or any
          part
          hereof, and offset against this Note any sum or sums owed by the holder
          hereof
          to Maker. Failure of the holder hereof to exercise this option shall not
          constitute a waiver of the right to exercise the same upon the occurrence
          of a
          subsequent Event of Default.  During the continuance of an Event of
          Default, this Note shall bear interest at the Default Rate.

         

        If
          the holder hereof expends any effort in any attempt to enforce payment
          of all or
          any part or installment of any sum due the holder hereunder, or if this
          Note is
          placed in the hands of an attorney for collection, or if it is collected
          through
          any legal proceedings, Maker agrees to pay all reasonable collection costs,
          expenses, and fees incurred by the holder, including reasonable attorneys'
          fees.

         

        This
          Note shall be governed by and construed in accordance with the laws of
          the State
          of Texas and the applicable laws of the United States of America.  This
          Note is performable in Dallas County, Texas.  Any action or proceeding
          under or in connection with this Note against Maker or any other party
          ever
          liable for payment of any sums of money payable on this Note may be brought
          in
          any state or federal court in Dallas County, Texas.  Maker and each such
          other party hereby irrevocably (i) submits to the nonexclusive jurisdiction
          of
          such courts, and (ii) waives any objection it may now or hereafter have
          as to
          the venue of any such action or proceeding brought in such court or that
          such
          court is an inconvenient forum.  Nothing herein shall affect the right of
          Payee to bring any action or proceeding against Maker or any other party
          liable
          hereunder or with respect to any collateral in any state or federal court
          in any
          other Jurisdiction.  Any action or proceeding by Maker or any other party
          liable hereunder against Payee shall be brought only in a court located
          in
          Dallas County, Texas.

         

        
          
            
            

          

          
            -35-

            
              

            

          

          
            
            

          

        

        Maker
          and each surety, guarantor, endorser, and other party ever liable for payment
          of
          any sums of money payable on this Note jointly and severally waive notice,
          presentment, demand for payment, protest, notice of protest and non-payment
          or
          dishonor, notice of acceleration, notice of intent to accelerate, notice
          of
          intent to demand, diligence in collecting, grace, and all other formalities
          of
          any kind, and consent to all extensions without notice for any period or
          periods
          of time and partial payments, before or after maturity, and any impairment
          of
          any collateral securing this Note, all without prejudice to the holder. 
The holder shall similarly have the right to deal in any way, at any time,
          with
          one or more of the foregoing parties without notice to any other party,
          and to
          grant any such party any extensions of time for payment of any of said
          indebtedness, or to release or substitute part or all of the collateral
          securing
          this Note, or to grant any other indulgences or forbearances whatsoever,
          without
          notice to any other party and without in any way affecting the personal
          liability of any party hereunder.

         

        Maker
          hereby authorizes the holder hereof to record in the records of holder
          hereof
          all advances made to Maker hereunder and all payments made on account of
          the
          principal thereof, which records shall be prima facie evidence as to the
          outstanding principal amount of this Note; provided, however, any failure
          by the
          holder hereof to make any recordation shall not limit or otherwise affect
          the
          obligations of Maker under the Agreement or this Note.

         

      

      MAKER:

       

      DOUGHERTY’S
        PHARMACY, INC.,

      a
        Texas corporation

       

      By:                  
        /s/ David E. Bowe        

      Name: 
        David E. Bowe

      Title:    
        President and Chief Executive Officer

       

      ALVIN
        MEDICINE MAN, LP,

      a
        Texas limited partnership

       

      By:
              Alvin Medicine Man GP, LLC,

                 
        a Texas limited liability company,

                 
        its General Partner

       

                 
        By:      
            /s/ David
        E. Bowe        

                 
        Name:  David E. Bowe

                 
        Title:     President and Chief Executive Officer

       

      ANGLETON
        MEDICINE MAN, LP,

      a
        Texas limited partnership

       

      By:      
        Angleton Medicine Man GP, LLC,

                 
        a Texas limited liability company,

                 
        its General Partner

       

                 
        By:      
            /s/ David
        E. Bowe        

                 
        Name:  David E. Bowe

                 
        Title:     President and Chief Executive Officer

       

      SANTA
        FE MEDICINE MAN, LP,

      a
        Texas limited partnership

       

      By:      
        Santa Fe Medicine Man GP, LLC,

                 
        a Texas limited liability company,

                 
        its General Partner 

       

                 
        By:      
            /s/ David
        E. Bowe        

                 
        Name:  David E. Bowe

                 
        Title:     President and Chief Executive Officer

    

     -36-Exhibit 10.4 - Form of Security Agreement

                                                                                Exhibit
      10.4 

    

    SECURITY
      AGREEMENT

     

    THIS
      SECURITY AGREEMENT
      ("Agreement")
      is
      made as of the 20th
      day of
      February, 2007, by ______________________, a  ___________ (hereinafter
      called "Debtor",
      whether one or more), in favor of AMEGY BANK NATIONAL ASSOCIATION, a national
      banking association ("Bank").
      Debtor hereby agrees with Bank as follows:

    

    1. Definitions.
      As used
      in this Agreement, the following terms shall have the meanings indicated
      below:

    

    (a) The
      term
      "Borrower"
      shall
      mean Debtor and the other Borrowers (as defined in the Loan Agreement), or
      any
      of them.

    

    (b) The
      term
      "Code"
      shall
      mean the Uniform Commercial Code as in effect in the State of Texas on the
      date
      of this Agreement or as it may hereafter be amended from time to
      time.

    

    (c) The
      term
      "Collateral"
      shall
      mean all of the property set forth below, including without limitation, any
      property specifically described on Schedule
      "A"
      attached
      hereto and made a part hereof:

    

    (i) All
      present and future accounts, chattel paper (including electronic and tangible),
      contract rights, documents, instruments, deposit accounts, commercial tort
      claims, health care insurance receivables, and general intangibles (including
      payment intangibles and other any right to payment for goods sold or services
      rendered arising out of the sale or delivery of personal property or work done
      or labor performed by Debtor), now or hereafter owned, held, or acquired by
      Debtor, together with any and all books of account, customer lists and other
      records relating in any way to the foregoing (including, without limitation,
      computer software, whether on tape, disk, card, strip, cartridge or any other
      form), and in any case where an account arises from the sale of goods, the
      interest of Debtor in such goods.

    

    (ii) All
      present and hereafter acquired inventory (including without limitation, all
      raw
      materials, work in process and finished goods) held, possessed, owned, held
      on
      consignment, or held for sale, lease, return or to be furnished under contracts
      of services, in whole or in part, by Debtor wherever located, all records
      relating in any way to the foregoing (including, without limitation, any
      computer software, whether on tape, disk, card, strip, cartridge or any other
      form).

    

    The
      term
      Collateral, as used herein, shall also include all PRODUCTS and PROCEEDS of
      all
      of the foregoing (including without limitation, insurance payable by reason
      of
      loss or damage to the foregoing property) and any property, securities,
      guaranties or monies of Debtor which may at any time come into the possession
      of
      Secured Party (as hereinafter defined). The designation of proceeds does not
      authorize Debtor to sell, transfer or otherwise convey any of the foregoing
      property except finished goods intended for sale in the ordinary course of
      Debtor's business or as otherwise provided herein. 

    

    (d) The
      term
      "Indebtedness"
      shall
      mean (i) that certain Promissory Note (Revolving) dated of even date herewith
      executed by Borrowers, in the face amount of Two Million and No/100 Dollars
      ($2,000,000.00), being payable to the order of Bank, and any and all renewals,
      extensions and modifications of said Revolving Note or any part thereof (said
      Note and all renewals, extensions and modifications thereof herein collectively
      called “Revolving Note”), (ii) that certain Promissory Note (Term) dated of even
      date herewith executed by Borrower in the face amount of Two Million Two Hundred
      Thousand and No/100 Dollars ($2,200,000.00), being payable to the order of
      Bank,
      and any and all renewals, extensions and modifications of said Term Note or
      any
      part thereof (said Term Note and all renewals, extensions and modifications
      thereof herein collectively called “Term Note”), and (iii) Borrower further
      agrees that this Security Agreement shall secure, in addition to the
      indebtedness and/or obligations described herein, to secure the payment and
      performance of all other indebtednesses and obligations of whatever kind and
      character (except solely any indebtedness which is prohibited from being secured
      hereby under any applicable law of the State of Texas or the United States
      of
      America), owing or which may hereafter become owing or to be performed by any
      one or more of the Borrowers or Obligated Party to Bank whether such
      indebtednesses or obligations are evidenced by a note, open account, overdraft,
      endorsement, surety agreement, guaranty agreement, or otherwise, and whether
      such indebtednesses or obligations are present or future, direct or indirect,
      primary or secondary, joint or several, fixed or contingent or otherwise,
      whether such indebtednesses or obligations were originally owed to Bank or
      to be
      performed for Bank or owed to or to be performed for others and acquired by
      purchase or otherwise by any Bank, and whether or not such indebtedness or
      obligations were created by any then owner of any interest in or to any of
      the
      Collateral, it being contemplated that one or more of the present or future
      Borrowers or Obligated Party may now or hereafter be or become indebted or
      obligated to Bank in further sum or sums; and Borrower further agrees that
      if
      any default ever occurs under any instrument, document or other writing
      whatsoever now or hereafter evidencing or securing any indebtedness now or
      hereafter secured by this Security Agreement, then, in any such event, Bank
      may,
      at its option, (without demand, notice of any such default or event, notice
      of
      intent to accelerate maturity, notice of acceleration of maturity, presentment
      for payment or acceleration or any other act or notice whatsoever), declare
      immediately due and payable any and all indebtednesses then secured hereby.
      

     

    
      -37-

      
        

      

    

    
    

    
    

    (e) The
      term
      "Loan
      Agreement"
      shall
      mean that certain Loan Agreement of even date herewith by and between Bank,
      Debtor and the other Borrowers named therein, as the same may be amended or
      modified. 

    

    (f) The
      term
"Loan
      Documents"
      shall
      mean all instruments and documents evidencing, securing, governing, guaranteeing
      and/or pertaining to the Indebtedness.

    

    (g) The
      term
      "Obligated
      Party"
      shall
      mean any party other than Borrower who secures, guarantees and/or is otherwise
      obligated to pay all or any portion of the Indebtedness.

    

    (h) The
      term
      "Secured
      Party"
      shall
      mean Bank, its successors and assigns, including without limitation, any party
      to whom Bank, or its successors or assigns, may assign its rights and interests
      under this Agreement.

    

    All
      words
      and phrases used herein which are expressly defined in Section 1.201 or Chapter
      9 of the Code shall have the meaning provided for therein. Other words and
      phrases defined elsewhere in the Code shall have the meaning specified therein
      except to the extent such meaning is inconsistent with a definition in Section
      1.201 or Chapter 9 of the Code.

    

    2. Security
      Interest.
      As
      security for the Indebtedness, Debtor, for value received, hereby grants to
      Secured Party a continuing security interest in the Collateral. 

    

    3. Representations
      and Warranties.
      Debtor
      hereby represents and warrants the following to Secured Party:

    

    (a) Due
      Authorization.
      The
      execution, delivery and performance of this Agreement and all of the other
      Loan
      Documents by Debtor have been duly authorized by all necessary corporate action
      of Debtor, to the extent Debtor is a corporation, or by all necessary
      partnership action, to the extent Debtor is a partnership.

    

    (b) Enforceability.
      This
      Agreement and the other Loan Documents constitute legal, valid and binding
      obligations of Debtor, enforceable in accordance with their respective terms,
      except as limited by bankruptcy, insolvency or similar laws of general
      application relating to the enforcement of creditors' rights and except to
      the
      extent specific remedies may generally be limited by equitable
      principles.

    

    (c) Ownership
      and Liens.
      Debtor
      has good and indefeasible title to the Collateral free and clear of all liens,
      security interests, encumbrances or adverse claims, except for the security
      interest created by this Agreement and Liens permitted under Section 9.02 of
      the
      Loan Agreement. No dispute, right of setoff, counterclaim or defense exists
      with
      respect to all or any part of the Collateral. Debtor has not executed any other
      security agreement currently affecting the Collateral and no effective financing
      statement or other instrument similar in effect covering all or any part of
      the
      Collateral is on file in any recording office except as may have been executed
      or filed in favor of Secured Party and as will be terminated upon closing and
      funding of the Indebtedness under the Loan Agreement.

    

    (d) No
      Conflicts or Consents.
      Neither
      the ownership, the intended use of the Collateral by Debtor, the grant of the
      security interest by Debtor to Secured Party herein nor the exercise by Secured
      Party of its rights or remedies hereunder, will (i) conflict with any provision
      of (A) any domestic or foreign law, statute, rule or regulation, (B) the
      articles or certificate of incorporation, charter, bylaws or partnership
      agreement, as the case may be, of Debtor, or (C) any agreement, judgment,
      license, order or permit applicable to or binding upon Debtor, or (ii) result
      in
      or require the creation of any lien, charge or encumbrance upon any assets
      or
      properties of Debtor or of any person except as may be expressly contemplated
      in
      the Loan Documents. Except as expressly contemplated in the Loan Documents,
      no
      consent, approval, authorization or order of, and no notice to or filing with,
      any court, governmental authority or third party is required in connection
      with
      the grant by Debtor of the security interest herein or the exercise by Secured
      Party of its rights and remedies hereunder.

    

    (e) Security
      Interest.
      Debtor
      has and will have at all times full right, power and authority to grant a
      security interest in the Collateral to Secured Party in the manner provided
      herein, free and clear of any lien, security interest or other charge or
      encumbrance. This Agreement creates a legal, valid and binding security interest
      in favor of Secured Party in the Collateral securing the Indebtedness.
      Possession by Secured Party of all certificates, instruments and cash
      constituting Collateral from time to time and/or the filing of the financing
      statements delivered prior hereto and/or concurrently herewith by Debtor to
      Secured Party will perfect and establish the first priority of Secured Party's
      security interest hereunder in the Collateral. 

    

    (f) Location.
      Debtor's residence or chief executive office, as the case may be, and the office
      where the records concerning the Collateral are kept is located at its address
      set forth on the signature page hereof. Except as specified elsewhere herein,
      all Collateral shall be kept at such address and such other addresses as may
      be
      listed in Schedule
      "B"
      attached
      hereto and made a part hereof. 

    

    
      
        
        

      

      
        -38-

        
          

        

      

      
        
        

      

    

    (g) Solvency
      of Debtor.
      As of
      the date hereof, and after giving effect to this Agreement and the completion
      of
      all other transactions contemplated by Debtor at the time of the execution
      of
      this Agreement, (i) Debtor is and will be solvent, (ii) the fair saleable value
      of Debtor's assets exceeds and will continue to exceed Debtor's liabilities
      (both fixed and contingent), (iii) Debtor is and will continue to be able to
      pay
      its debts as they mature, and (iv) if Debtor is not an individual, Debtor has
      and will have sufficient capital to carry on Debtor's businesses and all
      businesses in which Debtor is about to engage.

    

    (h) Compliance
      with Environmental Laws.
      Except
      as disclosed in writing to Secured Party: (i) Debtor is conducting Debtor's
      businesses in material compliance with all applicable federal, state and local
      laws, statutes, ordinances, rules, regulations, orders, determinations and
      court
      decisions, including without limitation, those pertaining to health or
      environmental matters such as the Comprehensive Environmental Response,
      Compensation, and Liability Act of 1980, as amended by the Superfund Amendments
      and Reauthorization Act of 1986 (collectively, together with any subsequent
      amendments, hereinafter called "CERCLA"),
      the
      Resource Conservation and Recovery Act of 1976, as amended by the Used Oil
      Recycling Act of 1980, the Solid Waste Disposal Act Amendments of 1980, and
      the
      Hazardous Substance Waste Amendments of 1984 (collectively, together with any
      subsequent amendments, hereinafter called "RCRA"),
      the
      Texas Water Code and the Texas Solid Waste Disposal Act; (ii) none of the
      operations of Debtor is the subject of a federal, state or local investigation
      evaluating whether any material remedial action is needed to respond to a
      release or disposal of any toxic or hazardous substance or solid waste into
      the
      environment; (iii) Debtor has not filed any notice under any federal, state
      or
      local law indicating that Debtor is responsible for the release into the
      environment, the disposal on any premises in which Debtor is conducting its
      businesses or the improper storage, of any material amount of any toxic or
      hazardous substance or solid waste or that any such toxic or hazardous substance
      or solid waste has been released, disposed of or is improperly stored, upon
      any
      premise on which Debtor is conducting its businesses; and (iv) Debtor otherwise
      does not have any known material contingent liability in connection with the
      release into the environment, disposal or the improper storage, of any such
      toxic or hazardous substance or solid waste. The terms "hazardous
      substance"
      and
      "release",
      as
      used herein, shall have the meanings specified in CERCLA, and the terms
      "solid
      waste"
      and
      "disposal",
      as
      used herein, shall have the meanings specified in RCRA; provided, however,
      that
      to the extent that the laws of the State of Texas establish meanings for such
      terms which are broader than that specified in either CERCLA or RCRA, such
      broader meanings shall apply.

    

    (i) Inventory.
      The
      security interest in the inventory shall continue through all stages of
      manufacture and shall, without further action, attach to the accounts or other
      proceeds resulting from the sale or other disposition thereof and to all such
      inventory as may be returned to Debtor by its account debtors. 

    

    (j) Accounts.
      Each
      account represents the valid and legally binding indebtedness of a bona fide
      account debtor arising from the sale or lease by Debtor of goods or the
      rendition by Debtor of services and is not subject to contra accounts, setoffs,
      defenses or counterclaims by or available to account debtors obligated on the
      accounts except as disclosed by Debtor to Secured Party from time to time in
      writing. The amount shown as to each account on Debtor's books is the true
      and
      undisputed amount owing and unpaid thereon, subject only to discounts,
      allowances, rebates, credits and adjustments to which the account debtor has
      a
      right and which have been disclosed to Secured Party in writing.

    

    4. Affirmative
      Covenants.
      Debtor
      will comply with the covenants contained in this Section 4 at all times during
      the period of time this Agreement is effective unless Secured Party shall
      otherwise consent in writing.

    

    (a) Ownership
      and Liens.
      Debtor
      will maintain good and indefeasible title to all Collateral free and clear
      of
      all liens, security interests, encumbrances or adverse claims, except for the
      security interest created by this Agreement and the security interests and
      other
      encumbrances expressly permitted by the other Loan Documents. Debtor will not
      permit any dispute, right of setoff, counterclaim or defense to exist with
      respect to all or any part of the Collateral. Debtor will cause any financing
      statement or other security instrument with respect to the Collateral to be
      terminated, except as may exist or as may have been filed in favor of Secured
      Party. Debtor will defend at its expense Secured Party's right, title and
      security interest in and to the Collateral against the claims of any third
      party.

    

    (b) Further
      Assurances.
      Debtor
      will from time to time at its expense promptly execute and deliver all further
      instruments and documents and take all further action necessary or appropriate
      or that Secured Party may reasonably request in order (i) to perfect and protect
      the security interest created or purported to be created hereby and the first
      priority of such security interest, (ii) to enable Secured Party to exercise
      and
      enforce its rights and remedies hereunder in respect of the Collateral, and
      (iii) to otherwise effect the purposes of this Agreement, including without
      limitation: (A) executing and filing such financing or continuation statements,
      or amendments thereto; and (B) furnishing to Secured Party from time to time
      statements and schedules further identifying and describing the Collateral
      and
      such other reports in connection with the Collateral, all in reasonable detail
      satisfactory to Bank.

    

    (c) Inspection
      of Collateral.
      Debtor
      will keep adequate records concerning the Collateral and will permit Secured
      Party and all representatives and agents appointed by Secured Party to inspect
      any of the Collateral and the books and records of or relating to the Collateral
      at any time during normal business hours, to make and take away photocopies,
      photographs and printouts thereof and to write down and record any such
      information. Unless an Event of Default has occurred and is continuing, Secured
      Party shall give Debtor two (2) business days notice of any such inspection
      and
      no more than two (2) such inspections shall be made in any calendar
      year.

    

    
      
        
        

      

      
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    (d) Payment
      of Taxes.
      Debtor
      (i) will timely pay all property and other taxes, assessments and governmental
      charges or levies imposed upon the Collateral or any part thereof, (ii) will
      timely pay all lawful claims which, if unpaid, might become a lien or charge
      upon the Collateral or any part thereof, and (iii) will maintain appropriate
      accruals and reserves for all such liabilities in a timely fashion in accordance
      with generally accepted accounting principles. Debtor may, however, delay paying
      or discharging any such taxes, assessments, charges, claims or liabilities
      so
      long as the validity thereof is contested in good faith by proper proceedings
      and provided Debtor has set aside on Debtor's books adequate reserves therefor;
      provided, however, Debtor understands and agrees that in the event of any such
      delay in payment or discharge and upon Secured Party's written request, Debtor
      will establish with Secured Party an escrow acceptable to Secured Party adequate
      to cover the payment of such taxes, assessments and governmental charges with
      interest, costs and penalties and a reasonable additional sum to cover possible
      costs, interest and penalties (which escrow shall be returned to Debtor upon
      payment of such taxes, assessments, governmental charges, interests, costs
      and
      penalties or disbursed in accordance with the resolution of the contest to
      the
      claimant) or furnish Secured Party with an indemnity bond secured by a deposit
      in cash or other security acceptable to Secured Party. Notwithstanding any
      other
      provision contained in this Subsection, Secured Party may at its discretion
      exercise its rights under Subsection 6(c) at any time to pay such taxes,
      assessments, governmental charges, interest, costs and penalties.

    

    (e) Mortgagee's
      and Landlord's Waivers.
      As
      provided for in the Loan Agreement, Debtor shall cause each mortgagee of real
      property owned by Debtor and each landlord of real property leased by Debtor
      to
      execute and deliver agreements satisfactory in form and substance to Secured
      Party by which such mortgagee or landlord waives or subordinates any rights
      it
      may have in the Collateral.

    

    (f) Condition
      of Goods.
      Debtor
      will maintain, preserve, protect and keep all Collateral which constitutes
      goods
      in good condition, repair and working order and will cause such Collateral
      to be
      used and operated in good and workmanlike manner, in accordance with applicable
      laws and in a manner which will not make void or cancelable any insurance with
      respect to such Collateral. Debtor will promptly make or cause to be made all
      repairs, replacements and other improvements to or in connection with the
      Collateral which Secured Party may request from time to time.

    

    (g) Insurance.
      Debtor
      will, at its own expense, maintain insurance with respect to all Collateral
      which constitutes goods in such amounts, against such risks, in such form and
      with such insurers, as shall be reasonably satisfactory to Secured Party from
      time to time. If reasonably requested by Secured Party in writing, each policy
      for property damage insurance shall provide for all losses to be paid directly
      to Secured Party. If reasonably requested by Secured Party in writing, each
      policy of insurance maintained by Debtor shall (i) name Debtor and Secured
      Party
      as insured parties thereunder (without any representation or warranty by or
      obligation upon Secured Party) as their interests may appear, (ii) contain
      the
      agreement by the insurer that any loss thereunder shall be payable to Secured
      Party notwithstanding any action, inaction or breach of representation or
      warranty by Debtor, (iii) provide that there shall be no recourse against
      Secured Party for payment of premiums or other amounts with respect thereto,
      and
      (iv) provide that at least thirty (30) days prior written notice of cancellation
      or of lapse shall be given to Secured Party by the insurer. Debtor will, if
      requested by Secured Party, deliver to Secured Party original or duplicate
      policies of such insurance and, as often as Secured Party may reasonably
      request, a report of a reputable insurance broker with respect to such
      insurance. Debtor will also, at the written request of Secured Party, duly
      execute and deliver instruments of assignment of such insurance policies and
      cause the respective insurers to acknowledge notice of such assignment. All
      insurance payments in respect of loss of or damage to any Collateral shall
      be
      paid to Secured Party and applied as Secured Party in its sole discretion deems
      appropriate.

    

    (h) Accounts
      and General Intangibles.
      Debtor
      will, except as otherwise provided in Subsection 6(f), collect, at Debtor's
      own
      expense, all amounts due or to become due under each of the accounts and general
      intangibles. In connection with such collections, Debtor may and, at Secured
      Party's direction, will take such action not otherwise forbidden by Subsection
      5(e) as Debtor or Secured Party may deem necessary or advisable to enforce
      collection or performance of each of the accounts and general intangibles.
      Debtor will also duly perform and cause to be performed all of its obligations
      with respect to the goods or services, the sale or lease or rendition of which
      gave rise or will give rise to each account and all of its obligations to be
      performed under or with respect to the general intangibles. Debtor also
      covenants and agrees to take any action and/or execute any documents that
      Secured Party may request in order to comply with the Federal Assignment of
      Claims Act, as amended.

    

    5. Negative
      Covenants.
      Debtor
      will comply with the covenants contained in this Section 5 at all times during
      the period of time this Agreement is effective, unless Secured Party shall
      otherwise consent in writing.

    

    (a) Transfer
      or Encumbrance.
      Debtor
      will not (i) sell, assign (by operation of law or otherwise), transfer,
      exchange, lease or otherwise dispose of any of the Collateral, (ii) grant a
      lien
      or security interest in or execute, file or record any financing statement
      or
      other security instrument with respect to the Collateral to any party other
      than
      Secured Party, or (iii) deliver actual or constructive possession of any of
      the
      Collateral to any party other than Secured Party, except for (A) sales and
      leases of inventory in the ordinary course of business, and (B) the sale or
      other disposal of any item of equipment which is worn out or obsolete and which
      has been replaced by an item of equal suitability and value, owned by Debtor
      and
      made subject to the security interest under this Agreement, but which is
      otherwise free and clear of any lien, security interest, encumbrance or adverse
      claim; provided, however, the exceptions permitted in clauses (A) and (B) above
      shall automatically terminate upon the occurrence of an Event of
      Default.

    

    
      
        
        

      

      
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    (b) Impairment
      of Security Interest.
      Debtor
      will not take or fail to take any action which would in any manner impair the
      enforceability of Secured Party's security interest in any
      Collateral.

    

    (c) Possession
      of Collateral.
      Debtor
      will not cause or permit the removal of any Collateral from its possession,
      control and risk of loss, nor will Debtor cause or permit the removal of any
      Collateral from the address on the signature page hereof and the addresses
      specified on Schedule
      "B"
      to this
      Agreement (or in transit from and to any such locations) other than (i) as
      permitted by Subsection 5(a), or (ii) in connection with the possession of
      any
      Collateral by Secured Party or by its bailee.

    

    (d) Goods.
      Debtor
      will not permit any Collateral which constitutes goods to at any time (i) be
      covered by any document except documents in the possession of the Secured Party,
      (ii) become so related to, attached to or used in connection with any particular
      real property so as to become a fixture upon such real property, or (iii) be
      installed in or affixed to other goods so as to become an accession to such
      other goods unless such other goods are subject to a perfected first priority
      security interest under this Agreement.

    

    (e) Compromise
      of Collateral.
      Debtor
      will not adjust, settle, compromise, amend or modify any Collateral, except
      an
      adjustment, settlement, compromise, amendment or modification in good faith
      and
      in the ordinary course of business; provided, however, this exception shall
      automatically terminate upon the occurrence and during the continuance of an
      Event of Default at Secured Party's written request. Debtor shall provide to
      Secured Party such information concerning (i) any adjustment, settlement,
      compromise, amendment or modification of any Collateral, and (ii) any claim
      asserted by any account debtor for credit, allowance, adjustment, dispute,
      setoff or counterclaim, as Secured Party may request from time to
      time.

    

    (f) Financing
      Statement Filings.
      Debtor
      recognizes that financing statements pertaining to the Collateral have been
      or
      may be filed where Debtor maintains any Collateral, has its records concerning
      any Collateral or has its residence or chief executive office, as the case
      may
      be. Without limitation of any other covenant herein, Debtor will not cause
      or
      permit any change in the location of (i) any Collateral, (ii) any records
      concerning any Collateral, or (iii) Debtor's residence or chief executive
      office, as the case may be, to a jurisdiction other than as represented in
      Subsection 3(f) unless Debtor shall have notified Secured Party in writing
      of
      such change at least thirty (30) days prior to the effective date of such
      change, and shall have first taken all action required by Secured Party for
      the
      purpose of further perfecting or protecting the security interest in favor
      of
      Secured Party in the Collateral. In any written notice furnished pursuant to
      this Subsection, Debtor will expressly state that the notice is required by
      this
      Agreement and contains facts that may require additional filings of financing
      statements or other notices for the purpose of continuing perfection of Secured
      Party's security interest in the Collateral.

    

    6. Rights
      of Secured Party.
      Secured
      Party shall have the rights contained in this Section 6 at all times during
      the
      period of time this Agreement is effective.

    

    (a) Additional
      Financing Statements Filings.
      Debtor
      hereby authorizes Secured Party to file, without the signature of Debtor, one
      or
      more financing or continuation statements, and amendments thereto, relating
      to
      the Collateral. Debtor further agrees that a carbon, photographic or other
      reproduction of this Security Agreement or any financing statement describing
      any Collateral is sufficient as a financing statement and may be filed in any
      jurisdiction Secured Party may deem appropriate.

    

    (b) Power
      of Attorney.
      Debtor
      hereby irrevocably appoints Secured Party as Debtor's attorney-in-fact, such
      power of attorney being coupled with an interest, with full authority in the
      place and stead of Debtor and in the name of Debtor or otherwise, from time
      to
      time after the occurrence and during the continuance of an Event of Default
      in
      Secured Party's discretion, to take any action and to execute any instrument
      which Secured Party may deem necessary or appropriate to accomplish the purposes
      of this Agreement, including without limitation: (i) to obtain and adjust
      insurance required by Secured Party hereunder; (ii) to demand, collect, sue
      for,
      recover, compound, receive and give acquittance and receipts for moneys due
      and
      to become due under or in respect of the Collateral; (iii) to receive, endorse
      and collect any drafts or other instruments, documents and chattel paper in
      connection with clause (i) or (ii) above; and (iv) to file any claims or take
      any action or institute any proceedings which Secured Party may deem necessary
      or appropriate for the collection and/or preservation of the Collateral or
      otherwise to enforce the rights of Secured Party with respect to the
      Collateral.

    

    (c) Performance
      by Secured Party.
      If
      Debtor fails to perform any agreement or obligation provided herein, Secured
      Party may itself perform, or cause performance of, such agreement or obligation,
      and the expenses of Secured Party incurred in connection therewith shall be
      a
      part of the Indebtedness, secured by the Collateral and payable by Debtor on
      demand.

    

    (d) Debtor's
      Receipt of Proceeds.
      All
      amounts and proceeds (including instruments and writings) received by Debtor
      in
      respect of such accounts or general intangibles shall be received in trust
      for
      the benefit of Secured Party hereunder and, upon request of Secured Party,
      shall
      be segregated from other property of Debtor and shall be forthwith delivered
      to
      Secured Party in the same form as so received (with any necessary endorsement)
      and applied to the Indebtedness in such manner as Secured Party deems
      appropriate in its sole discretion.

    

    
      
        
        

      

      
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    (e) Notification
      of Account Debtors.
      Upon
      the occurrence and during the continuance of an Event of Default, Secured Party
      may at its discretion from time to time notify any or all obligors under any
      accounts or general intangibles (i) of Secured Party's security interest in
      such
      accounts or general intangibles and direct such obligors to make payment of
      all
      amounts due or to become due to Debtor thereunder directly to Secured Party,
      and
      (ii) to verify the accounts or general intangibles with such obligors. Secured
      Party shall have the right, at the expense of Debtor, to enforce collection
      of
      any such accounts or general intangibles and to adjust, settle or compromise
      the
      amount or payment thereof, in the same manner and to the same extent as
      Debtor.

    

    7. Events
      of Default.
      Each of
      the following constitutes an "Event
      of Default"
      under
      this Agreement:

    

    (a) Default
      Under other Loan Documents.
      The
      occurrence of an event of default under the Loan Agreement any of the other
      Loan
      Documents beyond any applicable notices and/or cure period; or

    

    (b) Execution
      on Collateral.
      The
      Collateral or any portion thereof is taken on execution or other process of
      law
      in any action against Debtor; or

    

    (c) Abandonment.
      Debtor abandons the Collateral or any material portion thereof; or

    

    (d) Action
      by
      Other Lienholder.
      The
      holder of any lien or security interest on any of the assets of Debtor,
      including without limitation, the Collateral (without hereby implying the
      consent of Secured Party to the existence or creation of any such lien or
      security interest on the Collateral), declares a default thereunder or
      institutes foreclosure or other proceedings for the enforcement of its remedies
      thereunder; or

     

    8. Remedies
      and Related Rights.
      If an
      Event of Default shall have occurred, and without limiting any other rights
      and
      remedies provided herein, under any of the other Loan Documents or otherwise
      available to Secured Party, Secured Party may exercise one or more of the rights
      and remedies provided in this Section.

    

    (a) Remedies.
      Secured Party may from time to time at its discretion, without limitation and
      without notice except as expressly provided in any of the Loan
      Documents:

    

    (i)  exercise
      in respect of the Collateral all the rights and remedies of a secured party
      under the Code (whether or not the Code applies to the affected
      Collateral);

    

    (ii)  require
      Debtor to, and Debtor hereby agrees that it will at its expense and upon request
      of Secured Party, assemble the Collateral as directed by Secured Party and
      make
      it available to Secured Party at a place to be designated by Secured Party
      which
      is reasonably convenient to both parties; provided,
      however,
      if
      Secured Party has access to Debtor’s retail locations, such locations shall be
      sufficient as the location of the assembly of the Collateral.

    

    (iii)  reduce
      its claim to judgment or foreclose or otherwise enforce, in whole or in part,
      the security interest granted hereunder by any available judicial
      procedure;

    

    (iv)  sell
      or
      otherwise dispose of, at its office, on the premises of Debtor or elsewhere,
      the
      Collateral, as a unit or in parcels, by public or private proceedings, and
      by
      way of one or more contracts (it being agreed that the sale or other disposition
      of any part of the Collateral shall not exhaust Secured Party's power of sale,
      but sales or other dispositions may be made from time to time until all of
      the
      Collateral has been sold or disposed of or until the Indebtedness has been
      paid
      and performed in full), and at any such sale or other disposition it shall
      not
      be necessary to exhibit any of the Collateral;

    

    (v)  buy
      the
      Collateral, or any portion thereof, at any public sale;

    

    (vi)  buy
      the
      Collateral, or any portion thereof, at any private sale if the Collateral is
      of
      a type customarily sold in a recognized market or is of a type which is the
      subject of widely distributed standard price quotations;

    

    (vii) apply
      for
      the appointment of a receiver for the Collateral, and Debtor hereby consents
      to
      any such appointment; and

    

    (viii) at
      its
      option, retain the Collateral in satisfaction of the Indebtedness whenever
      the
      circumstances are such that Secured Party is entitled to do so under the Code
      or
      otherwise.

    

    
      
        
        

      

      
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    Debtor
      agrees that in the event Debtor is entitled to receive any notice under the
      Uniform Commercial Code, as it exists in the state governing any such notice,
      of
      the sale or other disposition of any Collateral, reasonable notice shall be
      deemed given when such notice is deposited in a depository receptacle under
      the
      care and custody of the United States Postal Service, postage prepaid, at
      Debtor's address set forth on the signature page hereof, ten (10) days prior
      to
      the date of any public sale, or after which a private sale, of any of such
      Collateral is to be held. Secured Party shall not be obligated to make any
      sale
      of Collateral regardless of notice of sale having been given. Secured Party
      may
      adjourn any public or private sale from time to time by announcement at the
      time
      and place fixed therefor, and such sale may, without further notice, be made
      at
      the time and place to which it was so adjourned.

    

    (b) Application
      of Proceeds.
      If any
      Event of Default shall have occurred, Secured Party may at its discretion apply
      or use any cash held by Secured Party as Collateral, and any cash proceeds
      received by Secured Party in respect of any sale or other disposition of,
      collection from, or other realization upon, all or any part of the Collateral
      as
      follows in such order and manner as Secured Party may elect:

    

    (i)  to
      the
      repayment or reimbursement of the reasonable costs and expenses (including,
      without limitation, reasonable attorneys' fees and expenses) incurred by Secured
      Party in connection with (A) the administration of the Loan Documents, (B)
      the
      custody, preservation, use or operation of, or the sale of, collection from,
      or
      other realization upon, the Collateral, and (C) the exercise or enforcement
      of
      any of the rights and remedies of Secured Party hereunder;

    

    (ii)  to
      the
      payment or other satisfaction of any liens and other encumbrances upon the
      Collateral;

    

    (iii)  to
      the
      satisfaction of the Indebtedness;

    

    (iv)  by
      holding such cash and proceeds as Collateral;

    

    (v)  to
      the
      payment of any other amounts required by applicable law (including without
      limitation, Section 9.504(a)(3) of the Code or any other applicable statutory
      provision); and

    

    (vi)  by
      delivery to Debtor or any other party lawfully entitled to receive such cash
      or
      proceeds whether by direction of a court of competent jurisdiction or
      otherwise.

    

    (c) Deficiency.
      In the
      event that the proceeds of any sale of, collection from, or other realization
      upon, all or any part of the Collateral by Secured Party are insufficient to
      pay
      all amounts to which Secured Party is legally entitled, Borrower and any party
      who guaranteed or is otherwise obligated to pay all or any portion of the
      Indebtedness shall be liable for the deficiency, together with interest thereon
      as provided in the Loan Documents.

    

    (d) Non-Judicial
      Remedies.
      In
      granting to Secured Party the power to enforce its rights hereunder without
      prior judicial process or judicial hearing, Debtor expressly waives, renounces
      and knowingly relinquishes any legal right which might otherwise require Secured
      Party to enforce its rights by judicial process. Debtor recognizes and concedes
      that non-judicial remedies are consistent with the usage of trade, are
      responsive to commercial necessity and are the result of a bargain at arm's
      length. Nothing herein is intended to prevent Secured Party or Debtor from
      resorting to judicial process at either party's option.

    

    (e) Other
      Recourse.
      Debtor
      waives any right to require Secured Party to proceed against any third party,
      exhaust any Collateral or other security for the Indebtedness, or to have any
      third party joined with Debtor in any suit arising out of the Indebtedness
      or
      any of the Loan Documents, or pursue any other remedy available to Secured
      Party. Debtor further waives any and all notice of acceptance of this Agreement
      and of the creation, modification, rearrangement, renewal or extension of the
      Indebtedness. Debtor further waives any defense arising by reason of any
      disability or other defense of any third party or by reason of the cessation
      from any cause whatsoever of the liability of any third party. Until all of
      the
      Indebtedness shall have been paid in full, Debtor shall have no right of
      subrogation and Debtor waives the right to enforce any remedy which Secured
      Party has or may hereafter have against any third party, and waives any benefit
      of and any right to participate in any other security whatsoever now or
      hereafter held by Secured Party. Debtor authorizes Secured Party, and without
      notice or demand and without any reservation of rights against Debtor and
      without affecting Debtor's liability hereunder or on the Indebtedness to (i)
      take or hold any other property of any type from any third party as security
      for
      the Indebtedness, and exchange, enforce, waive and release any or all of such
      other property, (ii) apply such other property and direct the order or manner
      of
      sale thereof as Secured Party may in its discretion determine, (iii) renew,
      extend, accelerate, modify, compromise, settle or release any of the
      Indebtedness or other security for the Indebtedness, (iv) waive, enforce or
      modify any of the provisions of any of the Loan Documents executed by any third
      party, and (v) release or substitute any third party.

    

    
      
        
        

      

      
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    9. Omitted. 

    

    10. Miscellaneous.

    

    (a) Entire
      Agreement.
      This
      Agreement contains the entire agreement of Secured Party and Debtor with respect
      to the Collateral. If the parties hereto are parties to any prior agreement,
      either written or oral, relating to the Collateral, the terms of this Agreement
      shall amend and supersede the terms of such prior agreements as to transactions
      on or after the effective date of this Agreement, but all security agreements,
      financing statements, guaranties, other contracts and notices for the benefit
      of
      Secured Party shall continue in full force and effect to secure the Indebtedness
      unless Secured Party specifically releases its rights thereunder by separate
      release.

    

    (b) Amendment.
      No
      modification, consent or amendment of any provision of this Agreement or any
      of
      the other Loan Documents shall be valid or effective unless the same is in
      writing and signed by the party against whom it is sought to be
      enforced.

    

    (c) Actions
      by Secured Party.
      The
      lien, security interest and other security rights of Secured Party hereunder
      shall not be impaired by (i) any renewal, extension, increase or modification
      with respect to the Indebtedness, (ii) any surrender, compromise, release,
      renewal, extension, exchange or substitution which Secured Party may grant
      with
      respect to the Collateral, or (iii) any release or indulgence granted to any
      endorser, guarantor or surety of the Indebtedness. The taking of additional
      security by Secured Party shall not release or impair the lien, security
      interest or other security rights of Secured Party hereunder or affect the
      obligations of Debtor hereunder.

    

    (d)  Waiver
      by Secured Party.
      Secured
      Party may waive any Event of Default without waiving any other prior or
      subsequent Event of Default. Secured Party may remedy any default without
      waiving the Event of Default remedied. Neither the failure by Secured Party
      to
      exercise, nor the delay by Secured Party in exercising, any right or remedy
      upon
      any Event of Default shall be construed as a waiver of such Event of Default
      or
      as a waiver of the right to exercise any such right or remedy at a later date.
      No single or partial exercise by Secured Party of any right or remedy hereunder
      shall exhaust the same or shall preclude any other or further exercise thereof,
      and every such right or remedy hereunder may be exercised at any time. No waiver
      of any provision hereof or consent to any departure by Debtor therefrom shall
      be
      effective unless the same shall be in writing and signed by Secured Party and
      then such waiver or consent shall be effective only in the specific instances,
      for the purpose for which given and to the extent therein specified. No notice
      to or demand on Debtor in any case shall of itself entitle Debtor to any other
      or further notice or demand in similar or other circumstances. 

    

    (e) Costs
      and Expenses.
      Debtor
      will upon demand pay to Secured Party the amount of any and all reasonable
      costs
      and expenses (including without limitation, attorneys' fees and expenses),
      which
      Secured Party may incur in connection with (i) the transactions which give
      rise
      to the Loan Documents, (ii) the preparation of this Agreement and the perfection
      and preservation of the security interests granted under the Loan Documents,
      (iii) the administration of the Loan Documents, (iv) the custody, preservation,
      use or operation of, or the sale of, collection from, or other realization
      upon,
      the Collateral, (v) the exercise or enforcement of any of the rights of Secured
      Party under the Loan Documents, or (vi) the failure by Debtor to perform or
      observe any of the provisions hereof.

    

    (f) GOVERNING
      LAW.
      THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
      OF
      THE STATE OF TEXAS AND APPLICABLE FEDERAL LAWS, EXCEPT TO THE EXTENT PERFECTION
      AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST GRANTED
      HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL, ARE GOVERNED BY THE LAWS
      OF
      A JURISDICTION OTHER THAN THE STATE OF TEXAS. 

    

    (g) Venue.
      This
      Agreement has been entered into in the county in Texas where Bank's address
      for
      notice purposes is located, and it shall be performable for all purposes in
      such
      county. Courts within the State of Texas shall have jurisdiction over any and
      all disputes arising under or pertaining to this Agreement and venue for any
      such disputes shall be in the county or judicial district where this Agreement
      has been executed and delivered.

    

    (h) Severability.
      If any
      provision of this Agreement is held by a court of competent jurisdiction to
      be
      illegal, invalid or unenforceable under present or future laws, such provision
      shall be fully severable, shall not impair or invalidate the remainder of this
      Agreement and the effect thereof shall be confined to the provision held to
      be
      illegal, invalid or unenforceable.

    

    (i) No
      Obligation.
      Nothing
      contained herein shall be construed as an obligation on the part of Secured
      Party to extend or continue to extend credit to Borrower.

    

    
      
        
        

      

      
        -44-

        
          

        

      

      
        
        

      

    

    (j) Notices.
      All
      notices and other communications provided for in this Agreement shall be given
      or made by telex, telegraph, telecopy, cable, or in writing and telexed,
      telecopied, telegraphed, cabled, mailed by certified mail return receipt
      requested, or delivered to the intended recipient at the "Address for Notices"
      specified below its name on the signature pages hereof; or, as to any party
      at
      such other address as shall be designated by such party in a notice to the
      other
      party given in accordance with this Section. Except as otherwise provided in
      this Agreement, all such communications shall be deemed to have been duly given
      when transmitted by telex or telecopy, subject to telephone confirmation of
      receipt, or delivered to the telegraph or cable office, subject to telephone
      confirmation of receipt, or when personally delivered or, in the case of a
      mailed notice, when duly deposited in the mails, in each case given or addressed
      as aforesaid.

    

    (k) Binding
      Effect and Assignment.
      This
      Agreement (i) creates a continuing security interest in the Collateral, (ii)
      shall be binding on Debtor and the heirs, executors, administrators, personal
      representatives, successors and assigns of Debtor, and (iii) shall inure to
      the
      benefit of Secured Party and its successors and assigns. Without limiting the
      generality of the foregoing, Secured Party may pledge, assign or otherwise
      transfer the Indebtedness and its rights under this Agreement and any of the
      other Loan Documents to any other party in accordance with the Loan Agreement.
      Debtor's rights and obligations hereunder may not be assigned or otherwise
      transferred without the prior written consent of Secured Party.

    

    (l) Termination.
      It is
      contemplated by the parties hereto that from time to time there may be no
      outstanding Indebtedness, but notwithstanding such occurrences, this Agreement
      shall remain valid and shall be in full force and effect as to subsequent
      outstanding Indebtedness. Upon (i) the satisfaction in full of the Indebtedness,
      (ii) the termination or expiration of any commitment of Secured Party to extend
      credit to Borrower, (iii) written request for the termination hereof delivered
      by Debtor to Secured Party, and (iv) written release or termination delivered
      by
      Secured Party to Debtor, this Agreement and the security interests created
      hereby shall terminate. Upon termination of this Agreement and Debtor's written
      request, Secured Party will, at Debtor's sole cost and expense, return to Debtor
      such of the Collateral as shall not have been sold or otherwise disposed of
      or
      applied pursuant to the terms hereof and execute and deliver to Debtor such
      documents as Debtor shall reasonably request to evidence such
      termination.

    

    (m) Cumulative
      Rights.
      All
      rights and remedies of Secured Party hereunder are cumulative of each other
      and
      of every other right or remedy which Secured Party may otherwise have at law
      or
      in equity or under any of the other Loan Documents, and the exercise of one
      or
      more of such rights or remedies shall not prejudice or impair the concurrent
      or
      subsequent exercise of any other rights or remedies.

    

    (n) Gender
      and Number.
      Within
      this Agreement, words of any gender shall be held and construed to include
      the
      other gender, and words in the singular number shall be held and construed
      to
      include the plural and words in the plural number shall be held and construed
      to
      include the singular, unless in each instance the context requires
      otherwise.

    

    (o) Descriptive
      Headings.
      The
      headings in this Agreement are for convenience only and shall in no way enlarge,
      limit or define the scope or meaning of the various and several provisions
      hereof.

    

    EXECUTED
      as of the date first written above.

    

    
      	
              Debtor’s
                Address:

              16250
                Dallas Parkway     

              Suite
                100       

              Dallas,
                Texas 75248-2622    

              Fax
                No.: (972) 250-0934     

              Telephone
                No.: (972)
                250-0903   

              Attn:
                David E. Bowe

            	
              DEBTOR:

               

              (Debtor)

              a _____________(Entity)

               

              By:
                 /s/
                David E. Bowe 

              Name: David
                E. Bowe

              Title:
                President and Chief Executive
                Officer

            

    

    

    Secured
      Party's Address:

    1807
      Ross
      Avenue, Suite 400

    Dallas,
      Texas 75201

    Fax
      No.:
      (214) 754-6613

    Telephone
      No.: (214) 754-9434

    Attention:
      Commercial Lending

    -45-

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