Document:

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED

CREDIT AGREEMENT

This FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is entered into and effective as of July 23, 2007 among FIG LLC (f/k/a FORTRESS INVESTMENT GROUP LLC), a Delaware limited liability company and certain of its Affiliates (collectively the “Borrowers”), certain Subsidiaries and Affiliates of the Borrowers (the “Guarantors”), the Lenders party hereto and BANK OF AMERICA, N.A., as Administrative Agent and L/C Issuer (the “Administrative Agent”). Capitalized terms used herein and not otherwise
defined shall have the meanings set forth in the Credit Agreement (as defined below).

RECITALS

WHEREAS, the Borrowers, the Guarantors, the Lenders and the Administrative Agent are party to that certain Second Amended and Restated Credit Agreement dated as of May 10, 2007 (as amended and modified from time to time, the “Credit Agreement”);

WHEREAS, the Borrowers have requested an amendment to the Credit Agreement as described below; and

WHEREAS, the Required Lenders are willing to agree to such amendment, subject to the terms set forth herein as more fully set forth below.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

1. Amendments to Credit Agreement. 

(a)  Definitions. 

(i) The following definition in Section 1.01 of the Credit Agreement is amended and restated in its entirety to read as follows:

“Direct Investments” means any Investment by a Loan Party or any of its Subsidiaries other than a Fortress Fund Investment, a Co-Investment Fund Investment or an Exchange Loan.

(ii) The following definitions are added to Section 1.01 of the Credit Agreement in the appropriate alphabetical order:

“Exchange Loan” means a loan from a Borrower to FIG Corp. for the purpose of facilitating an exchange by the Principals of equity in the Top Tier Borrowers for equity in Public FIG.

“Top Tier Borrowers” means, collectively, FOE I, FOE II, FOE III and Principal Holdings LP.

 

 

(b)  Calculations.  Section 1.03(c) of the Credit Agreement is amended and restated in its entirety to read as follows:

(c) Calculations. Notwithstanding the above, the parties hereto acknowledge and agree that all calculations of, or compliance with, the financial covenants in Section 8.10 shall (i) be made on a Pro Forma Basis and (ii) be made using the Asset Value of Investments as of the most recent date that such Asset Value has been marked-to-market (it being understood that Asset Values must be marked-to-market at least once each fiscal quarter).

(c)  Restricted Payments. 

(i) Sections 8.06(d) and (e) of the Credit Agreement are amended by deleting the word “and” after clause (d) and substituting the words “; and” for the “.” at the end of clause (e).

(ii)  A new Section 8.06(f) is added to the Credit Agreement to read as follows:

(f) a Loan Party may make Distributions to FIG Corp, a Delaware corporation, FIG Asset Co. LLC, a Delaware limited liability company or the Principals in connection with a proposed Investment to be made by a Loan Party; provided that (i) the Administrative Agent receives written notice of any such Distribution at least one Business Day prior to the making of such Distribution, (ii) at the time of such notice, the Borrowers deliver to the Administrative Agent a certificate describing the proposed Investment and demonstrating that, both before and after giving effect to such Distribution, the Loan Parties will be in compliance with the financial covenants set forth in Section 8.10 of the Credit Agreement and (iii)  an amount equal to such Distribution is reinvested into
a Loan Party within one Business Day after such Distribution is made.

(d) Transactions with Affiliates and Insiders. A new sentence is added at the end of Section 8.08 of the Credit Agreement to read as follows:

It is understood and agreed that an Exchange Loan made to FIG Corp shall not be considered a violation of this Section 8.08 as long as (i) the Administrative Agent receives written notice of any such Exchange Loan at least one Business Day prior to the making of such Exchange Loan, (ii) at the time of such notice the Borrowers deliver to the Administrative Agent a certificate describing such Exchange Loan and demonstrating that, both before and after giving affect to such Exchange Loan, the Loan Parties will be in compliance with the financial covenants set forth in Section 8.10 of the Credit Agreement,(iii) the Exchange Loan is made to FIG Corp and is repaid within one Business Day of when made, (iv) if  such Exchange Loan  is evidenced by an instrument then such instrument  is
pledged to the Administrative Agent, for the benefit of the Lenders, in accordance with the terms of clause 6(i) of the Security Agreement and (v) the obligation of FIG Corp to a Borrower in connection with 

 

 

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such Exchange Loan shall be superior to the repayment of the demand notes between FIG Corp. and FIG Asset Co. LLC  on terms reasonably acceptable to the Administrative Agent.

2. Effectiveness; Conditions Precedent. This Amendment shall be effective upon receipt by the Administrative Agent of copies of this Amendment duly executed by the Borrowers, the Guarantors and the Required Lenders.

3. Ratification of Credit Agreement. The term “Credit Agreement” as used in each of the Loan Documents shall hereafter mean the Credit Agreement as amended and modified by this Amendment. Except as herein specifically agreed, the Credit Agreement, as amended by this Amendment, is hereby ratified and confirmed and shall remain in full force and effect according to its terms. Each of the Loan Parties acknowledge and consent to the modifications set forth herein and agree that this Amendment does not impair, reduce or limit any of its obligations under the Loan Documents (including, without limitation, the indemnity obligations and guaranty obligations set forth therein) and that, after the date hereof, this Amendment shall constitute a Loan Document.

4. Authority/Enforceability. Each of the Loan Parties represents and warrants as follows:

(a) It has taken all necessary action to authorize the execution, delivery and performance of this Amendment.

(b) This Amendment has been duly executed and delivered by such Person and constitutes such Person’s legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

(c) No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by such Person of this Amendment.

(d) The execution and delivery of this Amendment does not (i) violate, contravene or conflict with any provision of its, or its Subsidiaries’ organizational documents or (ii) materially violate, contravene or conflict with any Requirement of Law or any other law, regulation, order, writ, judgment, injunction, decree or permit applicable to it or any of its Subsidiaries.

5. Representations and Warranties of the Loan Parties. The Loan Parties represent and warrant to the Administrative Agent and the Lenders that (a) the representations and warranties of the Loan Parties set forth in Article VI of the Credit Agreement are true and correct in all material respects as of the date hereof (except to the extent a representation and warranty specifically refers to an earlier date and then as of such earlier date), (b) after giving effect to this Amendment, no event has occurred and is continuing which constitutes a Default or an Event of Default and (c) the Collateral Documents continue to create a valid perfected security interest in the Collateral prior to all Liens other than Permitted Liens. 

 

 

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6. Release. In consideration of the Administrative Agent and the Required Lenders entering into this Amendment on behalf of the Lenders, the Loan Parties hereby release the Administrative Agent, the L/C Issuer, each of the Lenders, and the Administrative Agent’s, the L/C Issuer’s and each of the Lenders’ respective officers, employees, representatives, agents, counsel and directors from any and all actions, causes of action, claims, demands, damages and liabilities of whatever kind or nature, in law or in equity, now known or unknown, suspected or unsuspected to the extent that any of the foregoing arises from any action or failure to act solely in connection with the Loan Documents on or prior to the date hereof.

7. Counterparts/Telecopy. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of executed counterparts of this Amendment by telecopy shall be effective as an original and shall constitute a representation that an original shall be delivered promptly upon request.

8. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

[remainder of page intentionally left blank]

 

 

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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Amendment to be duly executed and delivered and this Amendment shall be effective as of the date first above written.

 

	
                        BORROWERS:
 	
                         
 	
                        FIG LLC,
 a Delaware limited liability company
 (formerly known as Fortress Investment Group LLC)
 
	
                          
 	
                         
 	
                        

                          

                        By: 
 	
        
 	
                         
 
	
                         
 	
                         
 	
      Name: 
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 	
   
 

 

	
                         
 	
                         
 	
                        

                        FORTRESS OPERATING ENTITY I LP,

          a Delaware limited partnership
 (formerly known as Fortress Investment Holdings LLC)
 
	
                         
 	
                         
 	
                        

                          

                        By: 
 	
        
 	
                         
 
	
                         
 	
                         
 	
      Name: 
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 	
   
 

 

	
                         
 	
                         
 	
                        

                        FORTRESS OPERATING ENTITY II LP,

          a Delaware limited partnership
 (formerly known as Fortress Principal Investment Holdings II LLC)
 
	
                         
 	
                         
 	
                        

                          

                        By: 
 	
        
 	
                         
 
	
                         
 	
                         
 	
      Name: 
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 	
   
 

 

	
                         
 	
                         
 	
                        

                        FORTRESS OPERATING ENTITY III LP,

          a Delaware limited partnership
 (formerly known as FIG Partners Pool (P) LLC)
 
	
                         
 	
                         
 	
                        

                          

                        By: 
 	
        
 	
                         
 
	
                         
 	
                         
 	
      Name: 
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 	
   
 

 

 

5

 

 

	
                         
 	
                         
 	
                        PRINCIPAL HOLDINGS I LP,
 a Delaware limited partnership
 (formerly known as Fortress Principal Investment Holdings III LLC)
 
	
                         
 	
                         
 	
                        

                        By: 
 	
        
 	
                         
 
	
                         
 	
                         
 	
      Name: 
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 	
   
 

 

	
                        GUARANTORS:
 	
                         
 	
                        

                        FORTRESS PRINCIPAL INVESTMENT HOLDINGS LLC,

          a Delaware limited liability company
 
	
                         
 	
                         
 	
                        

                          

                        By: 
 	
        
 	
                         
 
	
                         
 	
                         
 	
      Name: 
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 	
   
 

 

	
                         
 	
                         
 	
                        

                        FORTRESS PRINCIPAL INVESTMENT GROUP LLC,

          a Delaware limited liability company
 
	
                         
 	
                         
 	
                        

                          

                        By: 
 	
        
 	
                         
 
	
                         
 	
                         
 	
      Name: 
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 	
   
 

 

	
                         
 	
                         
 	
                        

                        FORTRESS INVESTMENT FUND GP (HOLDINGS) LLC,

          a Delaware limited liability company
 
	
                         
 	
                         
 	
                        

                          

                        By: 
 	
        
 	
                         
 
	
                         
 	
                         
 	
      Name: 
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 	
   
 

 

	
                         
 	
                         
 	
                        

                        FIG PARTNERS POOL (A) LLC,

          a Delaware limited liability company
 
	
                         
 	
                         
 	
                        

                          

                        By: 
 	
        
 	
                         
 
	
                         
 	
                         
 	
      Name: 
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 	
   
 

 

 

6

 

 

	
                         
 	
                         
 	
                        FIG PARTNERS POOL (P2) LLC,
 a Delaware limited liability company
 
	
                         
 	
                         
 	
                        

                        By: 
 	
        
 	
                         
 
	
                         
 	
                         
 	
      Name: 
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 	
   
 

 

	
                         
 	
                         
 	
                                                

                        FORTRESS PRINCIPAL INVESTMENT HOLDINGS IV LLC,

          a Delaware limited liability company
 
	
                         
 	
                         
 	
                        

                          

                        By: 
 	
        
 	
                         
 
	
                         
 	
                         
 	
      Name: 
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 	
   
 

 

 

7

 

 

	
                        ADMINISTRATIVE
 AGENT:
 	
                         
 	
                        BANK OF AMERICA, N.A.,
 
	
                         
 	
                         
 	
                        

                        By: 
 	
        
 	
                         
 
	
                         
 	
                         
 	
      Name: 
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 	
   
 

 

	
                        LENDERS:
 	
                         
 	
                        

                        BANK OF AMERICA, N.A., as a Lender and L/C Issuer
 
	
                         
 	
                         
 	
                        

                          

                        By: 
 	
        
 	
                         
 
	
                         
 	
                         
 	
      Name: 
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 	
   
 

 

 

8

 

 

	
                         
 	
                         
 	
                        CITIBANK, N.A.,
 as a Lender
 
	
                         
 	
                         
 	
                        

                          

                        By: 
 	
        
 	
                         
 
	
                         
 	
                         
 	
      Name: 
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 	
   
 

 

 

9

 

 

	
                         
 	
                         
 	
                        WELLS FARGO BANK, N.A.,
 as a Lender
 
	
                         
 	
                         
 	
                        

                          

                        By: 
 	
        
 	
                         
 
	
                         
 	
                         
 	
      Name: 
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 	
   
 

 

 

10

 

 

	
                         
 	
                         
 	
                        JPMORGAN CHASE BANK, N.A.,
 as a Lender
 
	
                         
 	
                         
 	
                        

                          

                        By: 
 	
        
 	
                         
 
	
                         
 	
                         
 	
      Name: 
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 	
   
 

 

 

11

 

 

	
                         
 	
                         
 	
                        DEUTSCHE BANK AG NEW YORK BRANCH,
 as a Lender
 
	
                         
 	
                         
 	
                        

                          

                        By: 
 	
        
 	
                         
 
	
                         
 	
                         
 	
      Name: 
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 	
   
 

 

 

12

 

 

	
                         
 	
                         
 	
                        GOLDMAN SACHS CREDIT PARTNERS, L.P.,
 as a Lender
 
	
                         
 	
                         
 	
                        

                          

                        By: 
 	
        
 	
                         
 
	
                         
 	
                         
 	
      Name: 
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 	
   
 

 

 

13

 

 

	
                         
 	
                         
 	
                        LEHMAN COMMERCIAL PAPER, INC.,
 as a Lender
 
	
                         
 	
                         
 	
                        

                          

                        By: 
 	
        
 	
                         
 
	
                         
 	
                         
 	
      Name: 
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 	
   
 

 

 

14CREDIT AGREEMENT
	 

	 
		BETWEEN
	 

	 
		CPI AEROSTRUCTURES, INC. 
(the
		“Borrower”)
	 

	 
		AND
	 

	 
		SOVEREIGN BANK
	 

	 
		(the “Bank”)
	 

	 
		DATED AS OF AUGUST 13, 2007
	 

	 
		 
	 

	 
		 
	 

	 
		CREDIT AGREEMENT dated as of August 13,
		2007, between CPI AEROSTRUCTURES, INC., a New York corporation, with an office
		at 60 Heartland Boulevard, Edgewood, New York 11717 (the “Borrower”),
		and SOVEREIGN BANK, a New York bank, with an office at 3 Huntington Quadrangle,
		Melville, New York 11747 (the “Bank”).
	 

	 
		The parties hereto hereby agree as
		follows:
	 

	 
		SECTION 1. DEFINITIONS
	 

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

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

	 
		“Agreement”
		shall mean this Credit Agreement, as the same from time to time may be amended,
		supplemented or modified.
	 

	 
		“Business Day” or “Banking Day” shall mean, with respect to Libor Rate Loans, a
		London Banking Day and, with respect to Prime Rate Loans and in all other
		cases, any day other than a day on which commercial banks in New York are
		required or permitted by law to close.
	 

	 
		“Capital Expenditures” shall mean, for any period, the aggregate amount
		of all payments made by any Person directly or indirectly for the purpose of
		acquiring, constructing or maintaining fixed assets, real property or
		equipment, which, in accordance with GAAP, would be added as a debit to the
		fixed asset account of such Person, including, without limitation, all amounts
		paid or payable with respect to capitalized lease obligations and interest
		which are required to be capitalized in accordance with GAAP.
	 

	 
		“Commitment”
		shall mean the obligation of the Bank to make Revolving Credit Loans to the
		Borrower during the Commitment Period pursuant to the terms hereof as such
		Commitment is described in Section 2.1 hereof and is subject to reduction in
		accordance with the terms hereof.
	 

	 
		“Commitment Period” shall mean the period from and including the date
		hereof to and including the Termination Date or such earlier date as the
		Commitment shall terminate as provided herein.
	 

	 
		“Cleanup Laws” shall mean any Federal, state or local statute or
		regulation relating to hazardous or toxic wastes or substances or the removal
		thereof.
	 

	 
		 
	 

	 
		 
	 

	 
		“Contractual Obligations” shall mean, as to any Person, any provision of
		any security issued by such Person or of any agreement, instrument or
		undertaking to which such Person is a party or by which it or any of its
		property is bound.
	 

	 
		“Control”
		means the possession, directly or indirectly, of the power to direct or cause
		the direction of the management or policies of a Person, whether through the
		ability to exercise majority voting power, by contract or otherwise.
		“Controlling” and “Controlled” have meanings correlative
		thereto.
	 

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

	 
		“Dollars” or
		“$” shall mean dollars in lawful currency of the United States of
		America.
	 

	 
		“Environmental Laws” shall mean any Federal, state or local statute or
		regulation relating to hazardous or toxic wastes or substances or the removal
		thereof.
	 

	 
		“ERISA”
		shall mean the Employee Retirement Income Security Act of 1974, as amended from
		time to time.
	 

	 
		“Event of Default” shall mean any of the events specified in Section
		8 hereof, provided that any requirement for the giving of notice, the lapse of
		time, or both, or any other condition, has been satisfied.
	 

	 
		“GAAP” shall
		mean generally accepted accounting principles in the United States applied in a
		manner consistent with that employed in the preparation of the financial
		statements described in Section 3.1.
	 

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

	 
		“Guaranty” or
		“Guaranties” shall mean
		the guaranty or guaranties executed by the Guarantors on the Bank’s
		standard form.
	 

	 
		“Guarantors”
		shall mean any Person or Persons who guarantee the payment and performance of
		the Borrower’s indebtedness and obligations (including the Obligations)
		hereunder, including (without limitation) all Persons required to guarantee
		pursuant to Section 5.9 hereof.
	 

	 
		“Indebtedness” shall mean, with respect to any Person, (a) all
		obligations of such Person for borrowed money or with respect to deposits or
		advances of any kind, (b) all obligations of such Person evidenced by bonds,
		debentures, notes or other similar instruments, (c) all obligations of such
		Person for the deferred purchase price of property or services, except current
		accounts payable
	 

	 
		 
	 

	 
		-2-
	 

	 
		 
	 

	 
		arising in the ordinary course of business
		and not overdue beyond such period as is commercially reasonable for such
		Person’s business, (d) all obligations of such Person under conditional
		sale or other title retention agreements relating to property purchased by such
		Person, (e) all payment obligations of such Person with respect to interest
		rate or currency protection agreements, (f) all obligations of such Person as
		an account party under any letter of credit or in respect of bankers
		acceptances, (g) all obligations of any third party secured by property or
		assets of such Person (regardless of whether or not such Person is liable for
		repayment of such obligations), (h) all guarantees of such Person and (i) the
		redemption price of all redeemable preferred stock of such Person, but only to
		the extent that such stock is redeemable at the option of the holder or
		requires sinking fund or similar payments at any time prior to the Termination
		Date.
	 

	 
		“Intellectual Property” shall mean the collective reference to all
		rights, provisions and privileges relating to intellectual property, whether
		arising under United States, multinational, or foreign laws or otherwise,
		including, without limitation, copyrights, copyright licenses, patents, patent
		licenses, trademarks, trademark licenses, technology, know-how and processes,
		and all rights to sue at law or in equity for any infringement or other
		impairment thereof, including the right to receive all proceeds and damages
		therefrom.
	 

	 
		“Interest Expense” shall mean, with respect to the Borrower and its
		Subsidiaries for the applicable period of determination thereof, the interest
		expense of the Borrower and its Subsidiaries during such period determined on a
		consolidated basis in accordance with GAAP, and shall in any event include
		without limitation, (i) the amortization of debt discounts, (ii) the
		amortization of all fees payable in connection with the incurrence of
		Indebtedness to the extent included in interest expense, and (iii) the portion
		of any capitalized lease obligation allocable to interest expense.
	 

	 
		“Interest Period” shall mean any period during which a Revolving
		Credit Loan bears interest at a Libor Rate as elected by the Borrower in
		accordance with the terms of this Agreement.
	 

	 
		(a) If any Interest Period would otherwise
		end on a day which is not a Business Day, that Interest Period shall be
		extended to the next succeeding Business Day unless the result of such
		extension would be to extend such Interest Period into another calendar month,
		in which event such Interest Period shall end on the immediately preceding
		Business Day.
	 

	 
		(b) No Interest Period shall extend beyond
		the Termination Date.
	 

	 
		“Libor Rate Loan” shall mean Revolving Credit Loans hereunder (or
		any portion of the outstanding principal balance thereof) that bear interest
		for the Interest Period applicable thereto at a rate of interest based upon the
		Libor Rate plus the applicable margin.
	 

	 
		“Libor Rate”
		shall mean as applicable to any Libor Rate Loan and Interest Period applicable
		thereto, (i) a rate per annum (rounded upward, if necessary, to the nearest
		1/32 of one percent) equal to the composite London Interbank Offered Rate which
		appears on the Telerate page 3750 as of 11:00 a.m. London time on the day that
		is two (2) London Banking Days preceding the first day of such Interest Period
		(or if not reported thereon, then as determined by the Bank from another
		recognized source or interbank quotation). In the event that the Board of
		Governors of the
	 

	 
		 
	 

	 
		-3-
	 

	 
		 
	 

	 
		Federal Reserve System shall impose a
		Reserve Percentage with respect to Libor deposits of the Bank, then for any
		period during which such Reserve Percentage shall apply, Libor shall be equal
		to the amount determined above divided by an amount equal to 1 minus the
		Reserve Percentage. “Reserve Percentage” shall mean the maximum
		aggregate reserve requirement (including all basic, supplemental, marginal and
		other reserves) which is imposed on member banks of the Federal Reserve System
		against “Euro-currency Liabilities” as defined in Regulation D.
		
	 

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

	 
		“Loan Documents” shall mean, collectively, this Agreement, the
		Revolving Credit Note, the Security Agreement, the Additional Documents (as
		defined in Section 10.14 hereof), the Replacement Documents (as defined in
		Section 10.15 hereof) and each document, agreement and instrument executed in
		connection herewith or pursuant hereto together with each document, agreement
		and instrument made by the Borrower or any Guarantor with or in favor of or
		owing to the Bank.
	 

	 
		“London Banking Day” shall mean, with respect to Libor Rate Loans, any
		day on which commercial banks are open for international business (including
		dealing in U.S. Dollar ($) deposits) in London, England and New York.
	 

	 
		“Obligations” shall have the meaning set forth in Section
		9.1.
	 

	 
		“Person”
		shall mean any individual, corporation, partnership, joint venture, trust,
		unincorporated organization or any juridical entity, or a government or state
		or any agency or political subdivision thereof.
	 

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

	 

	 
		“Post Default Rate” shall mean at any time a rate of interest equal
		to four (4%) percent per annum in excess of the rate that would then be
		applicable to the Revolving Credit Loans.
	 

	 
		“Prime Rate”
		shall mean the rate per annum from time to time established by the Bank as the
		Prime Rate and made available by the Bank at its main office or, in the
		discretion of the Bank, the base, reference or other rate then designated by
		the Bank for general commercial loan reference purposes, it being understood
		that such rate is a reference rate, not necessarily the lowest, established
		from time to time, which serves as the basis upon which effective interest
		rates are calculated for loans making reference thereto (the
		“Index”). The Index is not necessarily the lowest rate charged by the
		Bank on its loans and is set by the Bank in its sole discretion. If the Index
		becomes unavailable during the term of this Agreement, the Bank may designate a
		substitute index after notifying the Borrower. The Bank will tell the Borrower
		the current Index rate upon the
	 

	 
		-4-
	 

	 
		Borrower’s request. The interest rate
		change will not occur more often than each time as and when the Index
		changes.
	 

	 
		“Prime Rate Loan” shall mean Revolving Credit Loans hereunder (or
		any portion of the outstanding principal balance thereof) which bear interest
		based upon the Prime Rate.
	 

	 
		“Real Property” shall mean any real property owned or leased by
		any Specified Person.
	 

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

	 
		“Requirements of Law” shall mean, as to any Person, the certificate of
		incorporation and by-laws or other organizational or governing documents of
		such Person, and any law, treaty, rule or regulation, or determination of any
		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.
	 

	 
		“Revolving Credit Loan” shall mean a loan made pursuant to Section 2.1
		hereof.
	 

	 
		“Revolving Credit Note” shall mean the note referred to in Section 2.2
		hereof.
	 

	 
		“Security Agreement” shall mean the security agreement referred to in
		Section 4.1(b) hereof.
	 

	 
		“Specified Person” shall mean the Borrower, any Guarantor, any
		Subsidiaries of the Borrower or any Guarantor, or the Subsidiaries of any of
		their Subsidiaries.
	 

	 
		“Subordination Agreement” shall mean the Subordination Agreement by the
		Borrower and the Bank in favor of the United States of America of even date
		herewith.
	 

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

	 
		“Termination Date” shall mean August 13, 2009 or, if such date is
		not a Business Day, the Business Day next succeeding such date.
	 

	 
		 
	 

	 
		-5-
	 

	 
		 
	 

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

	 
		SECTION 2.
	 

	 
		AMOUNT AND TERMS OF REVOLVING CREDIT
		COMMITMENT
	 

	 
		2.1 Revolving Credit Commitment. Subject to the terms and conditions hereof, the Bank
		agrees to make revolving credit loans to the Borrower (collectively, the
		“Revolving Credit Loans”) from time to time during the Commitment
		Period in the aggregate principal amount at any one time outstanding of up to
		(but not exceeding) $2,500,000.00, as such maximum available amount may be
		hereafter reduced as provided in this Agreement (the “Commitment”).
		During the Commitment Period, the Borrower may use the Commitment for obtaining
		Revolving Credit Loans by borrowing, paying, prepaying in whole or in part and
		reborrowing on a revolving basis, all in accordance with the terms and
		conditions hereof provided that no more than three (3) types of Libor Rate
		Loans may be outstanding at any time.
	 

	 
		2.2 Revolving Credit Note. The Revolving Credit Loans made by the Bank to the
		Borrower pursuant to Section 2.1 hereof shall be evidenced by a promissory note
		of the Borrower substantially in the form of Exhibit A hereto with appropriate
		insertions (the “Revolving Credit Note”), payable to the order of the
		Bank and representing the obligation of the Borrower to pay the lesser of (a)
		the amount of the Commitment, or (b) the aggregate unpaid principal amount of
		all Revolving Credit Loans made by the Bank to the Borrower, with interest
		thereon as hereinafter prescribed. The Revolving Credit Note shall (i) be dated
		the date hereof, (ii) be stated to mature on the Termination Date and (iii)
		bear interest with respect to the unpaid principal balance thereof from time to
		time outstanding at a rate per annum to be elected by the Borrower in
		accordance with the notice provisions set forth in Section 2.3 hereof, and, in
		the case of Libor Rate Loans, for the Interest Period therein specified, equal
		to (y) 2.0% in excess of the Libor Rate, or (z) the Prime Rate. All
		computations of interest under this Agreement shall be made on the basis of a
		three hundred sixty (360) day year and the actual number of days elapsed. In
		all cases, interest shall be payable as provided in Section 2.9(a) hereof,
		subject to Section 10.13 hereof. After any stated or accelerated maturity, the
		Revolving Credit Note shall bear interest at the rate set forth in Section
		2.9(c) hereof, subject to Section 10.13 hereof.
	 

	 
		2.3 Procedure for Borrowing. The Borrower may borrow under the Commitment during
		the Commitment Period on any Business Day by giving the Bank irrevocable
		written notice of a request for a Revolving Credit Loan hereunder (a) in the
		case of Libor Rate Loans, three (3) Business Days before a proposed borrowing
		or continuation or conversion and (b) in the case of all other Revolving Credit
		Loans, not less than one (1) nor more than five (5) Business Days before a
		proposed borrowing or continuation or conversion, setting forth (i) the amount
		of the loan request, which shall not be less than $100,000.00, (ii) the
		requested borrowing date or Interest Period commencement date, as the case may
		be, (iii) whether the borrowing or Interest Period is to be for a Libor Rate
		Loan or a Prime Rate Loan or a combination thereof, and (iv) if entirely or
		partially a Libor Rate Loan, the length of the Interest Period therefor, which
		shall be one (1), two (2), three (3), four (4), five (5) or six (6) months. As
		used in this Section 2.3, “conversion” shall mean the conversion from
		one interest rate to another interest rate as more fully described in Section
		2.7 
	 

	 
		-6-
	 

	 
		hereof. Such notice shall be written
		(including, without limitation, via facsimile transmission) and shall be
		sufficient if received by 1:00 p.m. on the date on which such notice is to be
		given. If any such request is sent by facsimile it shall be confirmed in
		writing sent by the Borrower to the Bank within two (2) Business Days
		thereafter. Unless notification is otherwise furnished by the Borrower to the
		Bank (in a manner consistent with the requirements of this Section 2.3),
		Revolving Credit Loans will be made by credits to the Borrower’s demand
		deposit account maintained with the Bank. If the Borrower furnishes such notice
		but no election is made as to the type of loan or the Interest Period to be
		applicable thereto, the Revolving Credit Loan will automatically then be made
		as a Prime Rate Loan until such required information is furnished pursuant to
		the terms hereof.
	 

	 
		2.4 Commitment Fee.
		As additional compensation for the Commitment on the revolving basis provided
		for herein, the Borrower agrees to pay the Bank a commitment fee for the
		Commitment Period at the rate of .25% per annum on the average daily unused
		portion of the Commitment hereunder. Such commitment fee shall be payable
		quarterly, on the last day of each March, June, September and December during
		the Commitment Period, commencing September 30, 2007, and on the Termination
		Date. If the Borrower so fails to pay any such amount to the Bank the
		obligations to make such payment shall bear interest from such date not paid
		when due at the Post Default Rate. The obligation to so pay interest shall not
		be construed so as to waive the requirement to pay the commitment fees as
		hereinabove set forth.
	 

	 
		2.5 Regulatory Changes in Capital Requirements. If, after the date hereof, the
		Bank reasonably determines that (i) the adoption of a change in law, rule,
		regulation or guideline regarding capital requirements for banks or bank
		holding companies, or any change in the interpretation or application thereof
		by any Governmental Authority charged with the administration thereof, or (ii)
		compliance by the Bank or its parent bank holding company with any guideline,
		request, or directive of any such entity regarding capital adequacy (whether or
		not having the force of law), the effect of reducing the return on the
		Bank’s or such holding company’s capital as a consequence of the
		Bank’s Commitment hereunder to a level below that which the Bank or such
		holding company could have achieved but for such adoption, change or compliance
		(taking into consideration the Bank’s or such holding company’s then
		existing policies with respect to capital adequacy and assuming the full
		utilization of such entity’s capital) by any amount deemed by the Bank to
		be material, then the Bank may notify the Borrower thereof. Following receipt
		of such notice, the Borrower agrees to pay the Bank on demand the amount of
		such reduction of return on capital as and when such reduction is determined,
		payable within ninety (90) days after presentation by the Bank of a statement
		in the amount and setting forth in reasonable detail the Bank’s
		calculation thereof and the assumptions upon which such calculation was based
		(which statement shall be deemed true and correct absent manifest error). In
		determining such amount, the Bank may use any reasonable averaging and
		attribution methods.
	 

	 
		2.6 Termination or Reduction of Commitment. The Borrower shall have the right, upon not less than
		three (3) Business Days’ irrevocable written notice, to terminate the
		Commitment or, from time to time, to reduce the amount of the Commitment,
		provided that (a) any such reduction (i) shall be in the minimum amount of
		$100,000.00 or a multiple thereof, (ii) shall reduce permanently the amount of
		the Commitment then in effect, and (iii) shall be accompanied by prepayment of
		the Revolving Credit Loans outstanding to the extent, if any, that the
		aggregate of the Revolving Credit Loans then outstanding exceed the amount of
		the Commitment as then reduced, together with 
	 

	 
		 
	 

	 
		-7-
	 

	 
		 
	 

	 
		accrued interest on the amount so prepaid to
		and including the dates of each such prepayment and any amounts payable
		pursuant to Section 2.12 in connection therewith and the payment of any unpaid
		commitment fee then accrued hereunder; and (b) any such termination of the
		Commitment shall be accompanied by prepayment in full of the Revolving Credit
		Loans outstanding (together with accrued interest thereon to and including the
		date of prepayment) the payment of any amounts payable pursuant to Section 2.12
		in connection therewith and the payment of any unpaid commitment fee then
		accrued hereunder.
	 

	 
		2.7 Continuation and Conversion of Loans. The Borrower shall have the right at any time on prior
		irrevocable written or facsimile notice to the Bank as specified in Section
		2.3: (i) to continue any Revolving Credit Loan into a subsequent Interest
		Period, (ii) to convert any Loan into another type of Loan (specifying, in the
		case of a Libor Rate Loan, the Interest Period to be applicable thereto), and
		(iii) to convert any Prime Rate Loan into a Libor Rate Loan (specifying the
		Interest Period to be applicable thereto), subject to the following:
	 

	 
		(a) in the case of a conversion of less than
		all of the outstanding Revolving Credit Loans, the aggregate principal amount
		of Revolving Credit Loans converted shall not be less than $100,000.00 and
		shall be an integral multiple thereof;
	 

	 
		(b) no Revolving Credit Loan (other than a
		Prime Rate Loan) shall be converted at any time other than at the end of an
		Interest Period applicable thereto;
	 

	 
		(c) any portion of a Revolving Credit Loan
		maturing or required to be prepaid in less than one month may not be converted
		into or continued as a Libor Rate Loan; and
	 

	 
		(d) no more than three (3) types of Libor
		Rate Loans may be outstanding at any one time.
	 

	 
		In the event that the Borrower shall not
		give notice to continue any Libor Rate Loan into a subsequent Interest Period
		or convert any such Revolving Credit Loan, into a Revolving Credit Loan of
		another type, on the last day of the Interest Period thereof, such Revolving
		Credit Loan (unless prepaid) shall automatically be converted into a Prime Rate
		Loan. The Interest Period applicable to any Libor Rate Loan resulting from a
		conversion or continuation shall be specified by the Borrower in the
		irrevocable notice delivered by the Borrower pursuant to this Section and
		Section 2.3; provided, however, that, if such notice does not specify either
		the type of loan or the Interest Period to be applicable thereto, the Revolving
		Credit Loan shall automatically be converted into, or continued as, as the case
		may be, a Prime Rate Loan until such required information is furnished pursuant
		to the terms hereof. Notwithstanding anything to the contrary contained above,
		if an Event of Default shall have occurred and is continuing, no Libor Rate
		Loan may be continued into a subsequent Interest Period and no Prime Rate Loan
		may be converted into a Libor Rate Loan.
	 

	 
		2.8 Prepayment.
	 

	 
		(a) Voluntary. The
		Borrower may prepay any Prime Rate Loan in whole or in part without premium or
		penalty; provided, however, that each partial prepayment on account of any
		Prime Rate Loan shall be in an amount not less than $50,000.00. Except as
		provided in Section 
	 

	 
		 
	 

	 
		-8-
	 

	 
		 
	 

	 
		2.8(b) or in connection with a termination
		or reduction of the Commitment pursuant to Section 2.6, the Borrower may not
		prepay any Libor Rate Loan prior to the last day of the Interest Period
		therefor. Any amount prepaid on account of a Revolving Credit Loan may be
		reborrowed in accordance with the provisions of Section 2.1 hereof. 
	 

	 
		(b) Mandatory. If,
		at any time, the aggregate outstanding principal balance of Revolving Credit
		Loans exceeds the Commitment, within three (3) days of the first day there
		exists such excess the Borrower shall make payment to the Bank in an amount
		equal to such excess together with any amounts payable pursuant to Section 2.12
		in connection therewith. Such payment shall be applied to reduce the aggregate
		unpaid principal balance of Revolving Credit Loans then outstanding in the
		Bank’s reasonable discretion. Each prepayment shall be made together with
		payment of accrued interest on the amount prepaid to and including the date of
		prepayment.
	 

	 
		2.9 Payments.

	 

	 
		(a) Interest accrued on each Revolving
		Credit Loan shall be payable, without duplication, on:
	 

	 
		(i) the Termination Date;
	 

	 
		(ii) with respect to any portion of any
		Revolving Credit Loan repaid or prepaid pursuant to this Agreement, the date of
		such repayment or prepayment, as the case may be;
	 

	 
		(iii) with respect to that portion of the
		outstanding principal amount of all Revolving Credit Loans maintained as Prime
		Rate Loans, the first day of each month and commencing with the first such date
		following the date of the making of such Revolving Credit Loans;
	 

	 
		(iv) with respect to that portion of the
		outstanding principal amount maintained as Libor Rate Loans, the last day of
		each applicable Interest Period (and, if such Interest Period shall exceed
		three months, on the last day of each three-month period occurring during such
		Interest Period); and
	 

	 
		(v) with respect to that portion of the
		outstanding principal amount converted into Prime Rate Loans or Libor Rate
		Loans on a day when interest would not otherwise have been payable pursuant to
		Sections 2.9(a)(iii) or 2.9(a)(iv), the date of such conversion.
	 

	 
		(b) All payments (including prepayments) to
		be made by the Borrower on account of principal or interest with respect to any
		Revolving Credit Loan or on account of fees or any other obligations of the
		Borrower to the Bank hereunder shall be made to the Bank at the office of the
		Bank set forth in Section 10.1 hereof or at such other place as the Bank may
		from time to time designate in writing in lawful money of the United States of
		America in immediately available funds. The Borrower hereby authorizes the Bank
		to deduct from any general deposit account of the Borrower the amount of any
		loan payment including all payments of interest, principal and other sums due
		(“Automatic Payment”), from time to time, under this Agreement and/or
		the Revolving Credit Note; the Bank will thereafter promptly notify the
		Borrower of the amount so charged. If the
	 

	 
		 
	 

	 
		-9-
	 

	 
		 
	 

	 
		funds in the account are insufficient to
		cover any payment due, the Bank shall not be obligated to advance funds to
		cover the payment. The failure of the Bank so to charge any account or to give
		any such notice shall not affect the obligation of the Borrower to pay
		interest, principal or other sums as provided herein or in the Revolving Credit
		Note, at any time and for any reason the Borrower or the Bank may voluntarily
		terminate the Automatic Payment. Termination by the Borrower of the Automatic
		Payment must be made by written notice to the Bank. Subject to the provisions
		of subparagraph (a) in the definition of Interest Period set forth in Section
		1.1 hereof, if any payment to be so made hereunder, or under the Revolving
		Credit Note, becomes due and payable on a day other than a Business Day, such
		payment shall be extended to the next succeeding Business Day and, to the
		extent permitted by applicable law, interest thereon shall be payable at the
		then applicable rate during such extension.
	 

	 
		(c) If all or a portion of the principal or
		interest of any Revolving Credit Loan shall not be paid when due (whether at
		the stated or any accelerated maturity of such Revolving Credit Loan) or if any
		fee or other amount due hereunder shall not be paid when due, or upon the
		occurrence of an Event of Default, the Borrower’s right to select pricing
		options shall cease and all Revolving Credit Loans, and such interest, fee or
		amount due hereunder, to the extent permitted by applicable law, shall bear
		interest (payable on demand) (i) in all cases other than Libor Rate Loans at
		the Post Default Rate until paid and (ii) in the case of Libor Rate Loans at
		the Post Default Rate until the expiration of the Interest Period applicable to
		such Revolving Credit Loan, at which time the Revolving Credit Loan will
		automatically be converted into a Prime Rate Loan and until paid shall bear
		interest at the Post Default Rate. In no event, however, shall interest payable
		hereunder be in excess of the maximum rate of interest permitted under
		applicable law. The obligation to so pay interest upon any reimbursement
		obligation of the Borrower to the Bank shall not be construed so as to waive
		the requirement for reimbursement on the same date that payment is made by the
		Bank as set forth in this Agreement. If a regularly scheduled payment is
		fifteen (15) days or more late, the Borrower will be charged five (5.0%)
		percent of the unpaid portion of the regularly scheduled payment, or $10.00,
		whichever is greater.
	 

	 
		(d) All payments received will be applied
		first to interest, then to fees, and then to principal.
	 

	 
		(e) The Borrower hereby expressly authorizes
		the Bank to record on the schedule attached to the Revolving Credit Note the
		amount and date of each Revolving Credit Loan, the rate of interest thereon,
		the date and amount of each payment of principal and the unpaid principal
		balance; provided, however, that the failure of the Bank to make any such
		notation shall not in any manner affect the obligation of the Borrower to repay
		any Revolving Credit Loan in accordance with the terms hereof. All such
		notations shall be presumed to be correct.
	 

	 
		2.10 Use of Proceeds.
		The proceeds of Revolving Credit Loans hereunder shall be used to finance
		working capital requirements of the Borrower and for general corporate
		purposes. No part of the proceeds of any Revolving Credit Loan will be used,
		whether directly or indirectly, for any purpose that entails a violation of any
		of the Federal Reserve Board Regulations including Regulations T, U and
		X
	 

	 
		 
	 

	 
		-10-
	 

	 
		 
	 

	 
		2.11 Increased Costs.
		If the Bank determines that the effect of any applicable law or government
		regulation, guideline or order or the interpretation thereof by any
		Governmental Authority charged with the administration thereof (such as, for
		example, a change in official reserve requirements which the Bank is required
		to maintain in respect of loans or deposits or other funds procured for funding
		such loans) is to increase the cost to the Bank of making or continuing Libor
		Rate Loans hereunder or to reduce the amount of any payment of principal or
		interest receivable by the Bank thereon, then the Borrower will pay to the Bank
		on demand such additional amounts as the Bank may reasonably determine to be
		required to compensate the Bank for such additional costs or reduction. Any
		additional payment under this section will be computed from the effective date
		at which such additional costs have to be borne by the Bank. A certificate as
		to any additional amounts payable pursuant to this Section 2.11 setting forth
		the basis and method of determining such amounts shall be conclusive, absent
		manifest error, as to the determination by the Bank set forth therein if made
		reasonably and in good faith. The Borrower shall pay any amounts so certified
		to it by the Bank within ten (10) days of receipt of any such certificate. For
		purposes of this Section 2.11 all references to the “Bank” shall be
		deemed to include any participant in the Commitment and/or Revolving Credit
		Loans.
	 

	 
		2.12 Indemnities. The
		Borrower hereby indemnifies the Bank against any and all loss and reasonable
		expenses which the Bank may sustain or incur as a consequence of any of the
		following:
	 

	 
		(a) default in payment of the principal
		amount of any Libor Rate Loan or any part thereof or interest accrued thereon,
		or any other amount due in connection with the Loan Documents;
	 

	 
		(b) the occurrence of any other Default
		under this Agreement; or
	 

	 
		(c) the failure of the Borrower to borrow a
		Libor Rate Loan after sending notice of the amount and requested interest rate
		with respect to the making of any such Revolving Credit Loan;
	 

	 
		(d) the receipt or recovery by the Bank of
		all or any part of a Libor Rate Loan prior to the last day of the Interest
		Period thereof (whether by prepayment, acceleration or otherwise); or
	 

	 
		(e) the conversion, prior to the last day of
		an applicable Interest Period, of one type of Libor Rate Loan into another type
		of Libor Rate Loan or into a Prime Rate Loan.
	 

	 
		Without limiting the effect of the
		foregoing, the amount to be paid by the Borrower to the Bank in order to so
		indemnify the Bank for any loss occasioned by any of the events described in
		the proceeding paragraph, and as liquidated damages therefor, shall be equal to
		the excess, discounted to its present value as of the date paid to the Bank, of
		(i) the amount of interest which otherwise would have accrued on the principal
		amount so received, recovered, converted or not borrowed during the period (the
		“Indemnity Period”) commencing with the date of such receipt,
		recovery, conversion, or failure to borrow to the last day of the applicable
		Interest Period for such Libor Rate Loan at the rate of interest applicable to
		such Revolving Credit Loan (or rate of interest agreed to in the case of a
		failure to borrow), provided for herein (prior to a Default) over (ii) the
		amount of interest which 
	 

	 
		 
	 

	 
		-11-
	 

	 
		 
	 

	 
		would be earned by the Bank during the
		Indemnity Period if it invested the principal amount so received, recovered,
		converted or not borrowed at the rate per annum determined by the Bank as the
		rate it would bid in the London interbank market for a deposit of eurodollars
		in an amount approximately equal to such principal amount for a period of time
		comparable to the Indemnity Period.
	 

	 
		A certificate as to any additional amounts
		payable pursuant to this Section 2.12 setting forth the basis and method of
		determining such amounts shall be presumed correct, absent manifest error, as
		to the determination by the Bank set forth therein if made reasonably and in
		good faith. The Borrower shall pay any amounts so certified to it by the Bank
		within ten (10) days of receipt of any such certificate. For purposes of this
		Section 2.12, all references to the “Bank” shall be deemed to include
		any participant in the Commitment and/or Revolving Credit Loans.
	 

	 
		2.13 Alternate Rate of Interest. In the event, and on each occasion, that on the day
		two Business Days prior to the commencement of any Interest Period for a
		Revolving Credit Loan, the Bank shall have reasonably determined (i) that
		dollar deposits in the amount of the requested principal amount of such Loan
		are not generally available in the London Interbank Market, (ii) that the rate
		at which such dollar deposits are being offered will not adequately and fairly
		reflect the cost to the Bank of making or maintaining such Loan during such
		Interest Period, or (iii) that reasonable means do not exist for ascertaining
		the Libor Rate, the Bank shall, as soon as practicable thereafter, give written
		or facsimile notice of such determination to the Borrower. In the event of any
		such determination, until the circumstances giving rise to such notice no
		longer exist, no Libor Rate Loans will be made hereunder. Each determination by
		the Bank hereunder shall be conclusive absent manifest error. For purposes of
		this Section 2.13, all references to the “Bank” shall be deemed to
		include any participant in the Commitment and/or the Revolving Credit
		Loans.
	 

	 
		2.14 Change in Legality.
	 

	 
		(a) Notwithstanding anything to the contrary
		herein contained, if any change in any law or regulation or in the
		interpretation thereof by any governmental authority charged with the
		administration or interpretation thereof shall make it unlawful for the Bank to
		make or maintain any Libor Rate Loan, then, by written notice to the Borrower,
		the Bank may:
	 

	 
		(i) declare that Libor Rate Loans will not
		thereafter be made by the Bank hereunder, whereupon the Borrower shall be
		prohibited from requesting Libor Rate Loans from the Bank hereunder unless such
		declaration is subsequently withdrawn; and
	 

	 
		(ii) require that all outstanding Libor Rate
		Loans made by it be converted to Prime Rate Loans, in which event (x) all such
		Libor Rate Loans shall be automatically converted to Prime Rate Loans as of the
		effective date of such notice as provided in paragraph (b) below and (y) all
		payments and prepayments of principal which would otherwise have been applied
		to repay the converted Libor Rate Loans shall instead be applied to repay the
		Prime Rate Loans resulting from the conversion of such Libor Rate Loans.

	 

	 
		(b) For purposes of this Section 2.14, (i) a
		notice to the Borrower by the Bank pursuant to paragraph (a) above shall be
		effective, if lawful, on the last day of the then current 
	 

	 
		 
	 

	 
		-12-
	 

	 
		 
	 

	 
		Interest Period; in all other cases, such
		notice shall be effective on the day of receipt by the Borrower and (ii) for
		purposes of this Section 2.14, all references to the “Bank” shall be
		deemed to include any participant in the Commitment and/or the Revolving Credit
		Loans.
	 

	 
		SECTION 3. REPRESENTATIONS AND WARRANTIES
	 

	 
		In order to induce the Bank to enter into
		this Agreement and to make the financial accommodations herein provided for,
		the Borrower hereby covenants, represents and warrants to the Bank that:

	 

	 
		3.1 Financial Condition. The balance sheet of the Borrower as at December 31,
		2006, and the related statements of income, retained earnings and cash flows
		for the fiscal year ended on such date, audited by J.H. Cohn LLP, CPAs and the
		unaudited balance sheet of the Borrower as at March 31, 2007 and the related
		statements of income, retained earnings and cash flows for the fiscal quarter
		ended on such date, copies of which statements have heretofore been furnished
		to the Bank, are complete and correct and present fairly the financial
		condition of the Borrower as at such dates, and the results of its operations
		and changes in financial position for the fiscal periods then ended. Such
		financial statements, including schedules and notes thereto, have been prepared
		in accordance with GAAP. The Borrower does not have any material contingent
		obligations, contingent liabilities or liabilities for taxes, long-term leases
		or unusual forward or long-term commitments, which are not reflected in the
		foregoing statements or in the notes thereto. Since the date of the
		aforementioned financial statements, there has been no material adverse change
		in the business, operations, assets or financial or other condition of the
		Borrower.
	 

	 
		3.2 Corporate Existence; Compliance with the
		Law. The Borrower and each of its
		Subsidiaries (a) is duly organized, validly existing and in good standing under
		the laws of the jurisdiction of its incorporation; (b) has the corporate power
		and authority and the legal right to own and operate its property, and to
		conduct the business in which it is currently engaged; (c) is duly qualified as
		a corporation and is in good standing under the laws of each jurisdiction where
		its ownership or operation of property or the conduct of its business require
		such qualification; and (d) is in compliance with all Requirements of
		Law.
	 

	 
		3.3 Corporate Power; Authorization; Enforceable
		Obligations. The Borrower has the
		corporate power, authority and legal right to make, execute, deliver and
		perform its obligations under this Agreement and the Loan Documents to which it
		is a party and to borrow hereunder; and has taken all necessary corporate
		action to authorize the borrowings on the terms and conditions of this
		Agreement and such Loan Documents and to authorize the execution, delivery and
		performance of this Agreement and such Loan Documents. No consent or
		authorization of, filing with, or other act by or in respect of any other
		Person (including shareholders and creditors of the Borrower) or any
		Governmental Authority, other than the filing of UCC-1 Financing Statements
		with the applicable office in connection with the Security Agreement, is
		required in connection with the borrowings hereunder or with the execution,
		delivery, performance, validity or enforceability of this Agreement or such
		Loan Documents. This Agreement and such Loan Documents will be duly executed
		and delivered on behalf of the Borrower, and this Agreement and such Loan
		Documents, when executed and delivered, will each constitute a legal, valid and
		binding obligation of the Borrower enforceable against the Borrower in
		accordance with its terms, except as enforceability 
	 

	 
		 
	 

	 
		-13-
	 

	 
		 
	 

	 
		may be limited by applicable bankruptcy,
		insolvency, reorganization, moratorium, fraudulent conveyance or similar laws
		affecting the enforcement of creditors’ rights generally.
	 

	 
		3.4 No Legal Bar.
		The execution, delivery and performance of the Loan Documents and the
		borrowings hereunder and the use of the proceeds thereof by the Borrower and
		the execution, delivery and performance of the Loan Documents to which it is a
		party by any Specified Person, will not violate any Requirement of Law or any
		Contractual Obligation of any Specified Person, and will not result in, or
		require, the creation or imposition of any Lien on any of its properties or
		revenues pursuant to any Requirement of Law or Contractual Obligation except
		those in favor of the Bank provided herein.
	 

	 
		3.5 No Material Litigation. No litigation, investigation or proceeding of or
		before any arbitrator or Governmental Authority is pending by or against any
		Specified Person or against any of their properties or revenues (a) with
		respect to the Loan Documents or any of the transactions contemplated hereby or
		thereby, or (b) which if adversely determined, would have a material adverse
		effect on the business, operations, property or financial or other condition of
		any Specified Person.
	 

	 
		3.6 No Default. No
		Specified Person is in default under or with respect to any Contractual
		Obligation in any respect which could be materially adverse to the business,
		operations, property or financial or other condition of such Specified Person,
		or which could materially and adversely affect the ability of any Specified
		Person to perform its respective obligations under the Loan Documents to which
		it is a party. No Default or Event of Default has occurred and is
		continuing.
	 

	 
		3.7 No Burdensome Restrictions. No Contractual Obligation of any Specified Person and
		no Requirement of Law materially adversely affects, or insofar as the Borrower
		may reasonably foresee may so affect, the business, operations, property or
		financial or other condition of any such Specified Person.
	 

	 
		3.8 Taxes. Each
		Specified Person has filed or caused to be filed all tax returns which to the
		knowledge of the Borrower are required to be filed or has received extensions
		that are validly in effect, and have paid all taxes shown to be due and payable
		on said returns or on any assessments made against them or any of their
		property.
	 

	 
		3.9 Federal Regulations. The Borrower is not engaged nor will it engage,
		principally or as one of its important activities, in the business of extending
		credit for the purpose of “purchasing” or “carrying” any
		“margin stock” within the respective meanings of each of the quoted
		terms under Regulation U of the Board of Governors of the Federal Reserve
		System as now and from time to time hereafter in effect. No part of the
		proceeds of any Revolving Credit Loans hereunder will be used for
		“purchasing” or “carrying” “margin stock” as so
		defined or for any purpose which violates, or which would be inconsistent with,
		the provisions of the Regulations of such Board of Governors.
	 

	 
		3.10 Environmental Matters.
	 

	 
		 
	 

	 
		-14-
	 

	 
		 
	 

	 
		(a) None of the Real Property contains, or
		to the best knowledge of the Borrower has previously contained, any hazardous
		or toxic waste or substances or underground storage tanks.
	 

	 
		(b) The Real Property is in material
		compliance with all applicable Federal, state and local environmental standards
		and requirements affecting such Real Property, and there are no environmental
		conditions which could materially interfere with the continued use of the Real
		Property.
	 

	 
		(c) No Specified Person has received any
		notices of violations or advisory action by regulatory agencies regarding
		environmental control matters or permit compliance.
	 

	 
		(d) To the knowledge of the Borrower,
		hazardous waste has not been transferred from any of the Real Property to any
		other location which is not in compliance with all applicable environmental
		laws, regulations or permit requirements.
	 

	 
		(e) With respect to the Real Property, there
		are no proceedings, governmental administrative actions or judicial proceedings
		pending or, to the best knowledge of the Borrower, contemplated under any
		Federal, state or local law regulating the discharge of hazardous or toxic
		materials or substances into the environment, to which the Borrower or any of
		its Subsidiaries is named as a party.
	 

	 
		3.11 Ownership of Property; Liens. Each Specified Person has title in fee simple to, or a
		valid leasehold interest in, all Real Property, and good title to, or a valid
		leasehold interest in, all its other property, and none of such property is
		subject to any Lien except as permitted by Section 7.4 hereof.
	 

	 
		3.12 Intellectual Property. Each Specified Person owns, or is licensed to use, all
		Intellectual Property necessary for the conduct of its business as currently
		conducted. No material claim has been asserted and is pending by any Person
		challenging or questioning the use of any Intellectual Property or the validity
		or effectiveness of any Intellectual Property, nor does the Borrower know of
		any valid basis for any such claim. To the knowledge of the Borrower, the use
		of Intellectual Property by any Specified Person does not infringe on the
		rights of any Person in any material respect.
	 

	 
		3.13 Labor Matters.
		There are no strikes or other labor disputes against any Specified Person
		pending, or, to the knowledge of the Borrower, threatened that (individually or
		in the aggregate) could reasonable be expected to have a material adverse
		effect upon the Borrower’s business, operations or property. Hours worked
		by any payment to employees of each Specified Person have not been in violation
		of the Fair Labor Standards Act or any other applicable Requirement of Law
		dealing with such matters that (individually or in the aggregate) could
		reasonably be expected to have a material adverse effect upon the
		Borrower’s business, operations or property. All payments due from any
		Specified Person on account of employee health and welfare insurance that
		(individually or in the aggregate) could reasonably be expected to have a
		material adverse effect upon the Borrower’s business, operations or
		property if not paid have been paid or accrued as a liability on the books of
		each Specified Person.
	 

	 
		 
	 

	 
		-15-
	 

	 
		 
	 

	 
		3.14 Borrower Subsidiaries. The Borrower has no Subsidiaries as of the date
		hereof.
	 

	 
		SECTION 4. CONDITIONS PRECEDENT.
	 

	 
		4.1 Conditions of Initial Extensions of
		Credit. The obligation of the Bank to
		make the initial extension of credit to the Borrower hereunder is subject to
		the satisfaction of the following conditions precedent:
	 

	 
		(a) Revolving Credit Note. The Bank shall have received the Revolving Credit Note
		conforming to the requirements hereof substantially in the form of Exhibit A
		hereto with appropriate insertions and duly executed by the Borrower.
	 

	 
		(b) Security Agreement. The Bank shall have received the Security Agreement
		duly executed by the Borrower together with security agreement questionnaire in
		the form provided by the Bank, UCC searches and insurance certificates and paid
		receipts naming the Bank as loss payee, evidencing personal property coverage
		(for inventory and equipment) on ACORD Form 27 and general liability coverage
		on ACORD Form 25.
	 

	 
		(c) Assignment Statements. The Bank shall have received UCC-3 Assignment
		Statements and other evidence of assignment of the prior JPMorgan Chase Bank
		lien upon the Borrower’s property, which lien shall be superior to that
		held by Citibank, N.A.
	 

	 
		(d) Legal Opinion.
		The Bank shall have received a favorable opinion of counsel to the Borrower.
		Such opinion shall cover such matters incident to the transactions contemplated
		by this Agreement as the Bank shall reasonably require.
	 

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

	 
		(i) certificates of good standing from the
		Secretary of State of New York if incorporated or formed under the laws of the
		State of New York or doing business in New York and, if incorporated or formed
		in a jurisdiction other than New York, from the Secretary of State or
		applicable Governmental Authority of such jurisdiction of incorporation and
		from the Secretary of State or applicable Governmental Authority of each
		jurisdiction in which an office is maintained; and
	 

	 
		(ii) certificates of an officer of the
		Borrower dated on or about the date of this Agreement certifying as to (w) true
		and current copies of the Borrower’s certificate of incorporation and all
		amendments thereto, (x) true and correct copies of the bylaws of the Borrower
		and all amendments thereto, (y) true and correct copies of resolutions adopted
		by the board of directors of the Borrower authorizing (1) the execution,
		delivery and performance by the Borrower of each of the Loan Documents to which
		it is a party and the performance by the Borrower of its obligations under each
		of the Loan Documents to which it is a party, (2) approving forms in
		substantially execution form of each of the Loan Documents to which it is a
		party, and (3) authorizing officers of the Borrower to execute and deliver each
		of the Loan Documents to which it
	 

	 
		 
	 

	 
		-16-
	 

	 
		 
	 

	 
		is a party, and (z) the incumbency and
		specimen signatures of the duly authorized officers of the Borrower executing
		the Loan Documents and any other documents delivered to the Bank by the
		Borrower in connection herewith.
	 

	 
		(f) Searches, Etc. The Bank shall have received and reviewed satisfactory
		lien, judgment and tax lien searches against the Borrower.
	 

	 
		(g) Fees. The Bank
		shall have received evidence of the payment of (1) the Bank’s commitment
		fee in the amount of $5,000.00, and (2) the fees and disbursements of the
		Bank’s counsel.
	 

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

	 
		4.2 Conditions to All Loans. The obligation of the Bank to make any Revolving
		Credit Loan (including the initial Revolving Credit Loan) to be made by it
		hereunder is subject to the satisfaction of the following conditions
		precedent:
	 

	 
		(a) Representations and Warranties. The representations and warranties made by the
		Borrower herein or which are contained in any certificate, document or
		financial or other statement furnished at any time under or in connection
		herewith, shall be correct on and as of the borrowing date for such extension
		of credit as if made on and as of such date.
	 

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

	 
		SECTION 5. AFFIRMATIVE COVENANTS.
	 

	 
		The Borrower hereby agrees that, so long as
		the Commitment remains in effect, the Revolving Credit Note remains outstanding
		and unpaid, or any amount is owing to the Bank hereunder, the Borrower will and
		will cause each Specified Person, as applicable, to:
	 

	 
		5.1 Existence, Qualification and Conduct of
		Business. Take the necessary steps to
		preserve its corporate existence and its right to conduct business in all
		states in which the nature of its business requires qualification to do
		business, and continue to engage in business of the same general type as now
		conducted by it, and maintain all rights, privileges, licenses and franchises
		necessary or desirable in the ordinary course of its business.
	 

	 
		5.2 Financial Information and Compliance
		Certificates.
	 

	 
		 
	 

	 
		(a) Keep its books of record and account in
		accordance with GAAP and furnish to the Bank:
	 

	 
		-17-
	 

	 
		 
	 

	 
		(i) within (y) ninety (90) days after the
		last day of each of its fiscal years, the consolidated balance sheets of the
		Borrower and consolidated statements of income, retained earnings and cash
		flows prepared in accordance with GAAP consistently applied and audited by J.H.
		Cohn LLP, CPAs or another firm of independent certified public accountants
		selected by the Borrower and reasonably satisfactory to the Bank; and (z)
		within sixty (60) days after the close of each of the first, second and third
		quarters of each fiscal year, a consolidated balance sheet of the Borrower and
		consolidated statements of income, retained earnings and cash flows as of the
		last day of and for such quarter and for the period of the fiscal year ended as
		of the close of the particular quarter, all such quarterly statements to be in
		reasonable detail, and certified by the chief financial or chief executive
		officer of the Borrower as having been prepared in accordance with GAAP
		(subject to year-end adjustments).
	 

	 
		(ii) within twenty (20) days after the end
		of each month, a schedule of projects in which the Borrower is then involved
		(each a “Work-in-Progress Schedule”), in form and substance
		satisfactory to the Bank and including, without limitation: (y) an
		identification of each project by name, and (z) the contract price for each
		such project (including any change orders), the costs incurred to date, gross
		profit to date, contract billings to date, costs and estimated earnings in
		excess of billings and billings in excess of costs and estimated earnings, and
		costs to complete. The Work-in-Progress Schedule will include contract revenues
		earned and contract costs for the period reported. Each such Work-in-Progress
		Schedule shall be certified by the chief financial or chief executive officer
		of the Borrower as being true, correct and complete to the best of such
		officer’s knowledge.
	 

	 
		(iii) with each corresponding
		Work-in-Progress Schedule as specified in subsection (ii) above, an accounts
		receivable aging schedule in form and detail reasonably acceptable to the
		Bank.
	 

	 
		The Borrower will also, with reasonable
		promptness, furnish such other data as may be reasonably requested by the Bank
		and will at all times and from time to time permit the Bank by or through any
		of its officers, agents, employees, attorneys or accountants to inspect and
		make extracts from the Borrower’s books and records.
	 

	 
		(b) At the same time as it delivers the
		financial statements called for by Section 5.2(a)(i), deliver a certificate of
		the chief financial or chief executive officer of the Borrower evidencing a
		computation of compliance with the provisions of Section 6 (inclusive) hereof
		and stating that in each case, except as disclosed in such certificate, the
		person making such certificate has no knowledge of any Default or Event of
		Default.
	 

	 
		(c) Within ten (10) days of any executive
		officer of the Borrower obtaining knowledge of any Default, if such Default is
		then continuing, the Borrower shall furnish to the Bank a certificate of the
		chief financial officer of the Borrower setting forth the details thereof and
		the action which the Borrower is taking or proposes to take with respect
		thereto.
	 

	 
		5.3 Insurance.
		Maintain insurance with responsible and reputable insurance companies or
		associations in such amounts and covering such risks as is usually carried by
		companies engaged 
	 

	 
		 
	 

	 
		-18-
	 

	 
		 
	 

	 
		in similar businesses and owning similar
		properties in the same general areas in which the Borrower operates.
	 

	 
		5.4 Preservation of Properties; Compliance with
		Law. Maintain and preserve all of its
		properties which are used or which are useful in the conduct of its business in
		good working order and condition, ordinary wear and tear excepted and comply
		with all Requirements of Law.
	 

	 
		5.5 Taxes. Duly pay
		and discharge all taxes or other claims which might become a lien upon any of
		its property except to the extent that any thereof are being in good faith
		appropriately contested with adequate reserves provided therefor.
	 

	 
		5.6 Maintain Relationship. Maintain its primary commercial banking relationship
		with the Bank and its primary operating accounts with the Bank.
	 

	 
		5.7 Notice of Litigation. Promptly notify the Bank in writing of any litigation,
		legal proceeding or dispute, other than disputes in the ordinary course of
		business or, whether or not in the ordinary course of business, involving
		amounts in excess of $250,000.00, affecting the Borrower or any other Specified
		Person whether or not fully covered by insurance, and regardless of the subject
		matter thereof (excluding, however, any actions relating to workers’
		compensation claims or negligence claims relating to use of motor vehicles, if
		fully covered by insurance, subject to deductibles).
	 

	 
		5.8 Indemnity (Environmental Matters). Indemnify the Bank against any liability, loss, cost,
		damage, or expense (including, without limitation, reasonable attorneys’
		fees) arising from (i) the imposition or recording of a lien by any local,
		state, or Federal government or governmental agency or authority pursuant to
		any Cleanup Laws; (ii) claims of any private parties regarding violations of
		Cleanup Laws; and (iii) costs and expenses (including, without limitation,
		reasonable attorneys’ fees and fees incidental to the securing of
		repayment of such costs and expenses) incurred by any Specified Person or the
		Bank in connection with compliance by any person or the Bank with any statute,
		regulation or order issued pursuant to any Cleanup Laws by any local, state or
		Federal government or governmental agency or authority.
	 

	 
		5.9 New Subsidiaries. Cause any Subsidiary formed after the date this
		Agreement to become a Guarantor of the Obligations and to execute and deliver
		promptly to the Bank: (i) a Guaranty, and (ii) certificates and charter
		documents for such Subsidiary, similar to those requested from the Borrower in
		Section 4.1(e) hereof authorizing the Guarantor’s entry into and
		performance of its the Guaranty, including (without limitation) the unanimous
		written consent of its shareholders.
	 

	 
		5.10 Landlord Waiver and Consent. Within thirty (30) days after written request, the
		Bank shall have received a Landlord Waiver and Consent from the landlord with
		respect to the premises at 60 Heartland Boulevard, Edgewood, New York
		reasonably satisfactory in form and substance to the Bank and its
		counsel.
	 

	 
		SECTION 6. FINANCIAL COVENANTS
	 

	 
		 
	 

	 
		-19-
	 

	 
		 
	 

	 
		The Borrower hereby agrees that, so long as
		the Commitment remains in effect, the Revolving Credit Note remains outstanding
		and unpaid, or any amount is owing to the Bank hereunder, the Borrower
		will:
	 

	 
		6.1 Interest Coverage Ratio. Maintain as of the end of each fiscal quarter, a
		minimum Interest Coverage Ratio (as defined below) of at least 2.0 to 1.0. For
		purposes hereof, “Interest Coverage Ratio” means the ratio of (y)
		EBIT (as hereinafter defined) to (z) Interest Expense for such fiscal period.
		For purposes hereof, “EBIT” means the total of, for each period, (i)
		the net earnings of the Borrower plus (ii) all amounts deducted in computing
		such net income in respect of (a) Interest Expense on Indebtedness and (b)
		taxes based upon or measured by income as determined in accordance with
		GAAP.
	 

	 
		6.2 Net Profit.
		Maintain as of the end of each fiscal quarter, a net profit after taxes of at
		least $1.00.
	 

	 
		SECTION 7. NEGATIVE COVENANTS.
	 

	 
		The Borrower hereby agrees that, so long as
		the Commitment remains in effect, the Revolving Credit Note remains outstanding
		and unpaid, or any amount is owing to the Bank hereunder it will not, nor will
		it permit any of its Subsidiaries or any Specified Person to:
	 

	 
		7.1 Indebtedness for Borrowed Money. Incur, or permit to exist, any Indebtedness for
		borrowed money except (i) Indebtedness incurred pursuant to borrowings
		hereunder and under any other loans made by the Bank in its discretion to the
		Borrower, (ii) Indebtedness existing on the date hereof and reflected in the
		financial statements referred to in Section 3.1 hereof and (iii) purchase money
		Indebtedness incurred in the acquisition of fixed assets permitted under
		Section 7.4(iv) hereof not in excess of $250,000.00 in the aggregate for the
		term of the Commitment.
	 

	 
		7.2 Mergers, Acquisitions and Sales of
		Assets. Enter into any merger or
		consolidation or liquidate, windup or dissolve itself or sell, transfer or
		lease or otherwise dispose of all or any substantial part of its assets (other
		than sales of inventory and obsolescent equipment in the ordinary course of
		business) or acquire by purchase or otherwise the business or assets of, or
		stock of, another business entity; except that any Subsidiary may merge into or
		consolidate with any other Subsidiary which is wholly-owned by the Borrower and
		any Subsidiary which is wholly-owned by the Borrower may merge with or
		consolidate into the Borrower provided that the Borrower is the surviving
		corporation.
	 

	 
		7.3 Loans; Investments. Lend or advance money, credit or property to or invest
		in (by capital contribution, loan, purchase or otherwise) any firm,
		corporation, or other Person except investments in: (i) United States
		Government obligations, certificates of deposit of any banking institution with
		combined capital and surplus of at least $200,000,000.00; (ii) accounts
		receivable arising out of sales of inventory in the ordinary course of
		business; and (iii) loans to and investments in Subsidiaries.
	 

	 
		7.4 Liens. Create,
		assume or permit to exist, any Lien on any of its property or assets now owned
		or hereafter acquired except (i) Liens in favor of the Bank; (ii) other Liens
		incidental to
	 

	 
		 
	 

	 
		 
	 

	 
		-20-
	 

	 
		 
	 

	 
		the conduct of its business or the ownership
		of its property and assets which were not incurred in connection with the
		borrowing of money or the obtaining of advances or credit and which do not
		materially impair the use thereof in the operation of its business; (iii) Liens
		for taxes or other governmental charges which are not delinquent or which are
		being contested in good faith and for which a reserve shall have been
		established in accordance with GAAP; (iv) purchase money Liens granted to
		secure the unpaid purchase price of any fixed assets purchased within the
		limitations of Section 7.8 hereof, provided that (w) such Liens shall be
		created substantially simultaneously with the acquisition of such fixed assets,
		(x) such Liens do not at any time encumber any property other than the property
		financed by such Indebtedness, (y) the amount of Indebtedness secured thereby
		is not increased and (z) the principal amount of such Indebtedness shall not
		exceed 100% of the purchase price of such assets; (v) Liens set forth in the
		financial statements referred to in Section 3.1 hereof; (vi) carriers’,
		warehousemen’s, mechanics’, materialmen’s, repairmen’s or
		other like Liens arising in the ordinary course of business which are not
		overdue for a period of more than thirty (30) days or which are being contested
		in good faith by appropriate proceedings; (vii) pledges or deposits in
		connection with workers’ compensation, unemployment insurance and other
		social security legislation; (viii) deposits to secure the performance of bids,
		trade contracts (other than for borrowed money), leases, statutory obligations,
		surety and appeal bonds, performance bonds and other obligations of a like
		nature incurred in the ordinary course of business; (ix) any interest or title
		of a lessor under any lease entered into by the Borrower or any of its
		Subsidiaries in the ordinary course of its business and covering only the
		assets to be leased; and (x) Liens in favor of the United States of America
		described in the Subordination Agreement.
	 

	 
		7.5 Contingent Liabilities. Assume, endorse, be or become liable for or guarantee
		the obligations of any Person excluding, however, the endorsement of negotiable
		instruments for deposit or collection in the ordinary course of
		business.
	 

	 
		7.6 Limitation on Dividends. Declare or pay any dividend on, or make any payment on
		account of, or set apart assets for a sinking or other analogous fund for the
		purchase, redemption, defeasance, retirement or other acquisition of any shares
		of any class of capital stock of the Borrower or any Subsidiary or any warrants
		or options to purchase any such capital stock, whether now or hereafter
		outstanding, or make any other distribution in respect thereof, either directly
		or indirectly, whether in cash or property or in obligations of the Borrower or
		any Subsidiary (collectively, “Restricted Payments), except that any
		Subsidiary may make Restricted Payments to the Borrower.
	 

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

	 
		7.8 Capital Expenditures; Capitalized Leases. Expend in the aggregate for the Borrower and all
		Subsidiaries in excess of $750,000.00 in any fiscal year for Capital
		Expenditures. For purposes of the foregoing, Capital Expenditures shall include
		payments made on account of any deferred purchase price or on account of any
		indebtedness incurred to finance any such purchase price.
	 

	 
		 
	 

	 
		 
	 

	 
		-21-
	 

	 
		 
	 

	 
		7.9 Nature of Business. Enter into any business, either directly or indirectly
		through any Subsidiary, except for those businesses in which the Borrower and
		its Subsidiaries are engaged on the date of this Agreement or which are
		reasonably related thereto.
	 

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

	 
		7.11 ERISA. (i)
		Terminate any Plan so as to result in any material liability to the Pension
		Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of
		ERISA (the “PBGC”), (ii) engage in or permit any person to engage in
		any “prohibited transaction” (as defined in Section 406 of ERISA or
		Section 4975 of the Internal Revenue Code of 1954, as amended) involving any
		Plan which would subject the Borrower to any material tax, penalty or other
		liability, (iii) incur or suffer to exist any material “accumulated
		funding deficiency” (as defined in Section 302 of ERISA), whether or not
		waived, involving any Plan, or (iv) allow or suffer to exist any event or
		condition, which presents a material risk of incurring a material liability to
		the PBGC by reason of termination of any Plan.
	 

	 
		7.12 Accounting Changes. Make, or permit any Subsidiary to make any change in
		its accounting treatment or financial reporting practices except as required or
		permitted by GAAP in effect from time to time.
	 

	 
		7.13 Transactions with Affiliates. Except as otherwise specifically set forth in this
		Agreement, directly or indirectly purchase, acquire or lease any property from,
		or sell, transfer or lease any property to, or enter into any other
		transaction, with any Affiliate except in the ordinary course of business and
		at prices and on terms not less favorable to it than those which would have
		been obtained in an arm’s-length transaction with a non-affiliated third
		party.
	 

	 
		7.14 Change of Control. Without the prior written consent of the Bank, suffer
		or permit a Change of Control Transaction, as hereinafter defined. Change of
		Control Transaction means the occurrence after the date hereof of any of the
		following: (i) an acquisition after the date hereof by an individual or legal
		entity or “group” (as described in Rule 13d-5(b)(1) promulgated under
		the Exchange Act) of effective control (whether through legal or beneficial
		ownership of capital stock of the Borrower, by contract or otherwise) of in
		excess of 49.99% of the voting securities of the Borrower, or (ii) the Borrower
		merges into or consolidates with any other Person, or any Person merges into or
		consolidates with the Borrower and, after giving effect to such transaction,
		the stockholders of the Borrower immediately prior to such transaction own less
		than a majority of the aggregate voting power of the Borrower or the successor
		entity of such transaction, or (iii) the Borrower sells or transfers all or
		substantially all of its assets to another Person and the stockholders of the
		Borrower immediately prior to such transaction own less than a majority of the
		aggregate voting power of the acquiring entity immediately after the
		transaction, or (iv) a replacement at one time or within a two year period of
		more than one-half of the members of the Borrower’s board of directors
		which is not approved by a majority of those individuals who are members of the
		board of directors on the date hereof (or by those individuals who are serving
		as members of the board of directors on any date whose nomination to the board
		of directors was approved by a majority of the 
	 

	 
		 
	 

	 
		-22-
	 

	 
		 
	 

	 
		members of the board of directors who are
		members on the date hereof), or (v) the execution by the Borrower of an
		agreement to which the Borrower is a party or by which it is bound, providing
		for any of the events set forth in clauses (i) through (iv) above.
	 

	 
		SECTION 8. EVENTS OF DEFAULT.
	 

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

	 
		(a) The Borrower shall fail to pay any
		interest on or principal of the Revolving Credit Note when due or shall fail to
		pay any other amount payable hereunder; or the Borrower or any Guarantor shall
		default beyond any applicable notice or cure period, if any) under any other
		Loan Document; or
	 

	 
		(b) Any representation or warranty made or
		deemed made by the Borrower or a Guarantor herein or which is contained in any
		Loan Document, certificate, document or financial or other statement furnished
		at any time under or in connection with this Agreement shall prove to have been
		false in any material respect on or as of the date made or deemed made;
		or
	 

	 
		(c) The Borrower shall default in the
		observance or performance of any covenant or provision contained in Sections
		5.1, 6 (inclusive) or 7 (inclusive) hereof; or
	 

	 
		(d) The Borrower shall default in the
		observance or performance of any other provision contained in this Agreement
		and such default shall continue unremedied for a period of twenty (20) days
		after written notice thereof is given to the Borrower by the Bank, unless such
		provision cannot be reasonably cured within such period provided that Borrower
		commence such cure promptly after discovery and diligently prosecute same
		thereafter; or
	 

	 
		(e) Any Specified Person shall (i) default
		in any payment of any indebtedness for borrowed money in excess of $100,000.00,
		individually or in the aggregate, (other than the Revolving Credit Note) beyond
		the period of grace, if any, provided in the instrument or agreement under
		which such indebtedness was created; or (ii) default in the observance or
		performance of any other agreement or condition relating to any such
		indebtedness or contained in any instrument or agreement evidencing, securing
		or relating thereto or any other event shall occur or condition exist, in each
		case the effect of which default or other event or condition is to cause or
		permit the holder or holders of such indebtedness (or a trustee or agent on
		behalf of such holder or holders) to cause such indebtedness to become due
		prior to its stated maturity; or
	 

	 
		(f) (i) Any Specified Person shall commence
		any case, proceeding or other action (A) under any existing or future law of
		any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
		reorganization or relief of debtors, seeking to have an order for relief
		entered with respect to it, or seeking to adjudicate it a bankrupt or
		insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
		liquidation, dissolution, composition or other relief with respect to it or its
		debts, or (B) seeking appointment of a receiver, trustee, custodian or other
		similar official for it or for all or any substantial part of its assets, or
		any Specified Person shall make a general assignment for the benefit of its
		creditors; or (ii) there shall be commenced against any Specified Person any
		case, proceeding or other action of a nature referred to in clause (i) above
		which (A) results in the entry of an order for relief or any such adjudication
		or appointment or (B) remains undismissed, undischarged or unbonded for a
		period of 60 days; or (iii) there shall be commenced against any 
	 

	 
		 
	 

	 
		-23-
	 

	 
		 
	 

	 
		Specified Person any case, proceeding or
		other action seeking issuance of a warrant of attachment, execution, distraint
		or similar process against all or any substantial part of its assets which
		results in the entry of any order for any such relief which shall have not been
		vacated, discharged, or stayed or bonded pending appeal within 20 days from the
		entry thereof; or (iv) any Specified Person shall take any action in
		furtherance of, or indicate its consent to, approval of, or acquiescence in,
		any of the acts set forth in clause (i), (ii) or (iii) of this Section 8(f); or
		(v) any Specified Person shall admit in writing its inability to, pay its debts
		as they become due; or
	 

	 
		(g) (i) any Specified Person shall engage in
		any “prohibited transaction” (as defined in Section 406 of ERISA or
		Section 4975 of the Code) involving any Plan, (ii) any “accumulated
		funding deficiency” (as defined in Section 302 of ERISA), whether or not
		waived, shall exist with respect to any Plan, (iii) a Reportable Event shall
		occur with respect to, or proceedings shall commence to have a trustee
		appointed, or a trustee shall be appointed, to administer or to terminate, any
		Plan, which Reportable Event or institution of proceedings is, in the
		reasonable opinion of the Bank, likely to result in the termination of such
		Plan for purposes of Title IV of ERISA, and, in the case of a Reportable Event,
		the continuance of such Reportable Event unremedied for 10 days after notice of
		such Reportable Event pursuant to Section 4043(a), (c) or (d) of ERISA is given
		or the continuance of such proceedings for 10 days after commencement thereof,
		as the case may be, (iv) any Plan shall terminate for purposes of Title IV of
		ERISA, and in each case in clauses (i) through (iv) above, such event or
		condition could subject the Borrower to any tax, penalty or other liabilities
		in the aggregate material in relation to the business, operations or property
		of the Borrower; or
	 

	 
		(h) the rendition by any court of a final
		judgment in excess of $100,000.00 against any Specified Person which shall not
		be satisfactorily stayed, discharged, vacated or set aside within thirty (30)
		days of the making thereof; or the attachment of (or enforcement proceeding
		with respect to) any property of any Specified Person which has not been
		released or provided for to the reasonable satisfaction of the Bank within
		thirty (30) days after the making therefor; or
	 

	 
		(i) any Loan Document shall cease to be in
		full force and effect, a default (after the expiration of any applicable grace
		period, if any, or the giving of notice, if required, or both) shall occur
		thereunder, any lien created thereby shall fail to be valid, perfected, or
		maintain its proper lien priority in accordance herewith, or any party thereto
		shall assert that it has no further obligation thereunder; or
	 

	 
		(j) the Bank shall have determined in its
		commercially reasonable discretion that one or more conditions exist or events
		have occurred which have resulted in a material adverse change in the business,
		properties or financial condition of the Borrower;
	 

	 
		then, in any such event, any or all of the
		following actions may be taken: (i) the Bank may, at its option, declare the
		Commitment to be terminated forthwith, whereupon the Commitment and all
		obligations to the Bank to make Revolving Credit Loans shall immediately
		terminate; and (ii) the Bank may, at its option, declare the Revolving Credit
		Loans hereunder (with accrued interest 
	 

	 
		 
	 

	 
		-24-
	 

	 
		 
	 

	 
		thereon) and all other amounts owing under
		this Agreement and the Revolving Credit Note to be due and payable and the
		same, and all interest accrued thereon, shall forthwith become due and payable
		without presentment, demand, protest or notice of any kind (other than any
		notice specified herein), all of which are hereby waived, anything contained
		herein or in any instrument evidencing the Revolving Credit Loans to the
		contrary notwithstanding.
	 

	 
		SECTION 9. COLLATERAL SECURITY
	 

	 
		9.1 General Loan and Collateral Agreement. The Borrower hereby grants to the Bank a lien,
		security interest and a right of setoff as security for the payment of any and
		all sums owing under the Loan Documents and all other obligations, direct or
		contingent, joint, several or independent, of the Borrower now or hereafter
		existing due or to become due to, or held or to be held by the Bank, whether
		created directly or acquired by assignment or otherwise including, without
		limitation, any arising under this Agreement (all of such obligations being
		hereinafter collectively called the “Obligations”), upon and against
		all deposits, credits, collateral and property, now or hereafter in the
		possession, custody, safekeeping or control of the Bank or any entity under the
		control of the Bank, or in transit to any of them. At any time, after the
		occurrence and continuance of an Event of Default, without demand or notice,
		the Bank may set off the same or any part thereof and apply the same to any
		liability or obligation of the Borrower even though unmatured and regardless of
		the adequacy of any other collateral securing the Revolving Credit Loans. ANY
		AND ALL RIGHTS TO REQUIRE THE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH
		RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE REVOLVING CREDIT LOANS PRIOR
		TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR
		OTHER PROPERTY OF THE BORROWER OR ANY GUARANTOR, ARE HEREBY KNOWINGLY,
		VOLUNTARILY AND IRREVOCABLE WAIVED. The Bank shall not be required to marshal
		any present or future security for, or guarantees of, the obligations or to
		resort to any such security or guarantee in any particular order and the
		Borrower waives, to the fullest extent that it lawfully can, (a) any right they
		might have to require to the Bank to pursue any particular remedy before
		proceeding against them and (b) any right to the benefit of, or to direct the
		application of the proceeds of any collateral until the obligations are paid in
		full.
	 

	 
		9.2 Additional Collateral Security. In addition to the collateral described in Section 9.1
		hereof, payment of the Obligations is also secured by, inter
		alia, (a) a first priority security interest in all personal
		property of the Borrower, whether now owned or hereafter acquired, to the
		extent provided in the Security Agreement executed and delivered by the
		Borrower to the Bank, and (b) all right, title and interest of the Borrower in
		and to its cash and marketable securities accounts with the Bank, together with
		all property contained therein and all proceeds of the foregoing in whatever
		form received, in each case whether now owned or hereafter acquired.
	 

	 
		SECTION 10. MISCELLANEOUS.
	 

	 
		10.1 Notices. All
		notices, requests and demands to or upon the respective parties hereto to be
		effective shall be in writing unless otherwise expressly provided herein and
		shall be deemed to have been duly given or made when delivered by hand, or
		telecopy, or when deposited in the mail addressed as follows, or to such
		address as may be hereafter notified in writing by the respective parties
		hereto and any future holders of the Revolving Credit Note:
	 

	 
		 
	 

	 
		-25-
	 

	 
		 
	 

	 
		 
	 

	 
			
				
				  The Borrower:
				

			 	
				
				   
				

			 	
				
				  CPI Aerostructures, Inc.
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				  60 Heartland Boulevard
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				  Edgewood, New York 11717
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				  Attn: Mr. Vincent
				  Palazzolo
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				           Chief
				  Financial Officer
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  with a copy to:
				

			 	
				
				   
				

			 	
				
				  Graubard Miller
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				  405 Lexington Avenue, 19th
				  Floor
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				  New York, New York 10174
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				  Attn: Marci Frankenthaler,
				  Esq.
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  The Bank:
				

			 	
				
				   
				

			 	
				
				  Sovereign Bank
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				  3 Huntington Quadrangle
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				  Suite 101 North and 103 South

				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				  Melville, New York 11747
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				  Attn: Ms. Christine
				  Gerula
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				           Senior
				  Vice President
				

			 

 

	 
		 
	 

	 
		10.2 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on
		the part of the Bank, any right, remedy, power or privilege hereunder shall
		operate as a waiver thereof; nor shall any single or partial exercise of any
		right, remedy, power or privilege hereunder preclude any other or further
		exercise thereof or the exercise of any other right.
	 

	 
		10.3 Survival of Representations and
		Warranties. All representations and
		warranties made hereunder and in any document, certificate or statement
		delivered pursuant hereto or in connection herewith shall survive the execution
		and delivery of this Agreement and the Revolving Credit Note.
	 

	 
		10.4 Payment of Expenses; Examination. The Borrower agrees to pay or reimburse the Bank for
		all its costs and expenses incurred in connection with (a) the preparation of
		the Loan Documents and the closing of the transactions described by the Loan
		Documents, (b) the enforcement or preservation of any rights under this
		Agreement or the Loan Documents or any other instrument or agreement entered
		into in connection herewith or therewith including, without limitation, the
		reasonable fees and disbursements of attorneys for the Bank (which may include,
		without limitation, the allocable cost of the Bank’s internal legal
		counsel), and (c) any claim or action threatened, made or brought against the
		Bank arising out of or relating to any extent to this Agreement, or any Loan
		Documents or any instrument or agreement entered into in connection with the
		transactions contemplated hereby or thereby if the Bank prevails in any such
		action or proceeding or the Borrower makes payment to the Bank on account of
		any sums demanded by it prior to the disposition of any such action or
		proceeding or in settlement thereof.
	 

	 
		10.5 WAIVER OF JURY TRIAL; SET-OFF AND
		COUNTERCLAIM. THE BORROWER AND THE BANK
		MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A
		TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN
		CONNECTION WITH THIS AGREEMENT OR ANY LOAN DOCUMENTS OR ANY COURSE OF CONDUCT,
		COURSE OF 
	 

	 
		 
	 

	 
		-26-
	 

	 
		 
	 

	 
		DEALING, STATEMENTS (WHETHER VERBAL OR IN
		WRITING) OR ACTIONS OF ANY PARTY. THE BORROWER WAIVES THE RIGHT TO INTERPOSE
		ANY SET-OFF OR COUNTERCLAIM OF ANY KIND OR DESCRIPTION IN ANY SUCH LITIGATION.
		THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE BANK TO ACCEPT THIS
		AGREEMENT AND MAKE THE REVOLVING CREDIT LOANS.
	 

	 
		10.6 WAIVER OF AUTOMATIC STAY. THE BORROWER AGREES THAT, IN THE EVENT THAT THE
		BORROWER, ANY GUARANTOR OR ANY OF THE PERSONS OR PARTIES CONSTITUTING THE
		BORROWER OR A GUARANTOR SHALL (i) FILE WITH ANY BANKRUPTCY COURT OF COMPETENT
		JURISDICTION OR BE THE SUBJECT OF ANY PETITION UNDER TITLE 11 OF THE U.S. CODE,
		AS AMENDED (“BANKRUPTCY CODE”), (ii) BE THE SUBJECT OF ANY ORDER FOR
		RELIEF ISSUED UNDER THE BANKRUPTCY CODE, (iii) FILE OR BE THE SUBJECT OF ANY
		PETITION SEEKING ANY REORGANIZATION, ARRANGEMENT, COMPOSITION, READJUSTMENT,
		LIQUIDATION, DISSOLUTION, OR SIMILAR RELIEF UNDER ANY PRESENT OR FUTURE FEDERAL
		OR STATE ACT OR LAW RELATING TO BANKRUPTCY, INSOLVENCY, OR OTHER RELIEF FOR
		DEBTORS, (iv) HAVE SOUGHT OR CONSENT TO OR ACQUIESCED IN THE APPOINTMENT OF ANY
		TRUSTEE, RECEIVER, CONSERVATOR, OR LIQUIDATOR, OR (v) BE THE SUBJECT OF ANY
		ORDER, JUDGMENT, OR DECREE ENTERED BY ANY COURT OF COMPETENT JURISDICTION
		APPROVING A PETITION FILED AGAINST SUCH PARTY FOR ANY REORGANIZATION,
		ARRANGEMENT, COMPOSITION, READJUSTMENT, LIQUIDATION, DISSOLUTION, OR SIMILAR
		RELIEF UNDER ANY PRESENT OR FUTURE FEDERAL OR STATE ACT OR LAW RELATING TO
		BANKRUPTCY, INSOLVENCY, OR RELIEF TO DEBTORS, THE BANK SHALL THEREUPON BE
		ENTITLED AND THE BORROWER IRREVOCABLY CONSENTS TO IMMEDIATE AND UNCONDITIONAL
		RELIEF FROM ANY AUTOMATIC STAY IMPOSED BY SECTION 362 OF THE BANKRUPTCY CODE,
		OR OTHERWISE, ON OR AGAINST THE EXERCISE OF THE RIGHTS AND REMEDIES OTHERWISE
		AVAILABLE TO THE BANK AS PROVIDED FOR HEREIN, IN THE REVOLVING CREDIT NOTE,
		OTHER LOAN DOCUMENTS DELIVERED IN CONNECTION HEREWITH AND AS OTHERWISE PROVIDED
		BY LAW, AND THE BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT TO OBJECT TO SUCH
		RELIEF AND WILL NOT CONTEST ANY MOTION BY THE BANK SEEKING RELIEF FROM THE
		AUTOMATIC STAY AND THE BORROWER WILL COOPERATE WITH THE BANK, IN ANY MANNER
		REQUESTED BY THE BANK, IN ITS EFFORTS TO OBTAIN RELIEF FROM ANY SUCH STAY OR
		OTHER PROHIBITION.
	 

	 
		10.7 Modification and Waiver. No modification or waiver of, or with respect to any
		provision of this Agreement or any document or instrument delivered in
		connection therewith shall be effective unless and until it shall be in writing
		and signed by the Bank, and then such modification or waiver shall be effective
		only in the specific instance and for the purpose for which given. No notice to
		or demand on the Borrower in any case shall, of itself, entitle it to any other
		or further notice or demand in similar or other circumstances.
	 

	 
		10.8 USA Patriot Act.
		The Bank is subject to the requirements of the USA Patriot Act (Title III of
		Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) and
		hereby notifies the Borrower that pursuant to the requirements of the Act, it
		is required to obtain, verify and record 
	 

	 
		 
	 

	 
		-27-
	 

	 
		 
	 

	 
		information that identifies the Borrower,
		which information includes the name and address of the Borrower and other
		information that will allow the Bank to identify the Borrower in accordance
		with the Act.
	 

	 
		10.9 Federal Reserve Bank. The Bank may at any time pledge, endorse, assign, or
		transfer all or any portion of its rights under the Loan Documents including
		any portion of the Revolving Credit Note to any of the twelve (12) Federal
		Reserve Banks organized under Section 4 of the Federal Reserve Act. 12 U.S.C.
		Section 341. No such pledge or enforcement thereof shall release the Bank from
		its obligations under any of the Loan Documents. 
	 

	 
		10.10 Successor and Assigns. This Agreement shall be binding upon and inure to the
		benefit of the Borrower, the Bank, all future holders of the Revolving Credit
		Note and their respective successors and assigns, except that the Borrower may
		not assign or transfer any of its rights under this Agreement without the prior
		written consent of the Bank. The term “Bank” as used herein shall be
		deemed to include the Bank and its successors, endorsees and assigns.
	 

	 
		10.11 Governing Law; Consent to Jurisdiction. This Agreement, the Loan Documents and any documents
		and instruments delivered in connection herewith and therewith and the rights
		and duties of the parties hereunder and thereunder shall be governed by, and
		construed and interpreted in accordance with, the law of the State of New York
		and the Borrower consents to the jurisdiction of the courts of the State of New
		York in any action brought to enforce any rights of the Bank under this
		Agreement and any document or instrument related hereto.
	 

	 
		10.12 Entire Agreement. This Agreement and any other agreements, documents and
		instruments executed and delivered pursuant to or in connection with the
		Obligations contain the entire agreement between the parties relating to the
		subject matter hereof and thereof. The Borrower expressly acknowledges that the
		Bank has not made and the Borrower is not relying on any oral representations,
		agreements or commitments of the Bank or any officer, employee, agent or
		representative thereof.
	 

	 
		10.13 Interest Adjustment. Notwithstanding anything to the contrary contained in
		this Agreement or the Revolving Credit Note, the rate of interest payable on
		the Revolving Credit Note shall never exceed the maximum rate of interest
		permitted under applicable law. If at any time the rate of interest otherwise
		prescribed herein shall exceed such maximum rate, and such prescribed rate is
		thereafter below such maximum rate, the prescribed rate shall be increased to
		the maximum rate for such period of time as is required so that the total
		amount of interest received by the Bank is that which would have been received
		by the Bank except for the operation of the first sentence of this Section
		10.13.
	 

	 
		10.14 Errors and Omissions. The Borrower hereby consents and agrees that in the
		event any of the documents evidencing and/or securing the Revolving Credit
		Loans misstate or inaccurately reflect the true and correct terms and
		provisions of the Revolving Credit Loans and said misstatement or inaccuracy is
		due to the unilateral mistake on the part of the Bank, mutual mistake on the
		part of the Bank and the Borrower or clerical error, then in such event the
		Borrower shall, upon request of the Bank and in order to correct such
		misstatement or inaccuracy, execute such new documents as the Bank may deem
		necessary to remedy said inaccuracy or mistake, provided 
	 

	 
		 
	 

	 
		-28-
	 

	 
		 
	 

	 
		however, such obligation on behalf of the
		Borrower shall not extend to the execution of any new or redrafted document
		which materially and adversely adds to or changes the obligations of the
		Borrower beyond those set forth in or contemplated by the terms hereof. The
		Borrower agrees to execute all such other and further documents as may or shall
		be reasonably necessary, as determined solely by the Bank, in order to give
		effect to the documents executed (whether in connection with the Revolving
		Credit Loans or any future loan) and so as to confirm the transaction
		(“Additional Documents”). The Borrower agrees to comply with the
		reasonable requirements of the Bank within ten (10) days after written notice.
		Upon the Borrower failing or refusing to comply with the terms and provisions
		of this Section, such failure shall constitute a default by the Borrower under
		this Agreement and thereupon, the Bank shall have all of the rights and
		remedies against the Borrower as otherwise specified in this Agreement and
		other documents by reason of a default.
	 

	 
		10.15 Replacement Documents. Upon receipt of an affidavit of an officer of the Bank
		as to the loss, theft, destruction or mutilation of the Revolving Credit Note,
		any Loan Document or any other security document(s) which is not of public
		record and, in the case of any such destruction or mutilation, upon surrender
		and cancellation of the Revolving Credit Note, any Loan Document or other
		document(s) (collectively, the “Replacement Documents”), the Borrower
		will issue, in lieu thereof, a replacement note or other document(s) in the
		same principal amount thereof and otherwise of like tenor.
	 

	 
		10.16 Participations.
		The Bank shall have the unrestricted right at any time and from time to time,
		and without the consent of or notice to the Borrower (or any Guarantor), to
		grant to one or more institutions or other persons (each a
		“Participant”) participation interests in the Bank’s obligations
		to lend hereunder and/or any or all of the loans held by the Bank hereunder. In
		the event of any such grant by the Bank of a participating interest to a
		Participant, whether or not upon notice to the Borrower, the Bank shall remain
		responsible for the performance of its obligations hereunder and the Borrower
		shall continue to deal solely and directly with the Bank in connection with the
		Bank’s rights and obligations hereunder. The Bank may furnish any
		information concerning the Borrower in its possession from time to time to any
		prospective assignees and Participants, provided that the Bank shall require
		any such prospective assignee or Participant to maintain the confidentiality of
		such information.
	 

	 
		10.17 Counterparts.
		This Agreement may be signed in any number of counterparts with the same effect
		as if the signatures thereto and hereto were upon the same instrument.
	 

	 
		IN WITNESS WHEREOF, the parties hereto have
		caused this agreement to be duly executed and delivered in Melville, New York
		by their proper and duly authorized officer as of the day and year first above
		written.
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  CPI AEROSTRUCTURES, INC.
				

			 
	
				
				

			 	
				
				   
				

			 	
				
				  By: 
				

			 	
				
				  
 /s/ Vincent Palazzolo
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Vincent Palazzolo 

				  Chief Financial Officer
				

			 

 

	 
		 
	 

	 
		 
	 

	 
		-29-
	 

	 
		 
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  SOVEREIGN BANK
				

			 
	
				
				

			 	
				
				   
				

			 	
				
				  By: 
				

			 	
				
				  
 /s/ Christine Gerula
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Christine Gerula 

				  Senior Vice President
				

			 

 

	 
		 
	 

	 
		 
	 

	 
		-30-
	 

	 
		 
	 

	 
		EXHIBIT A
	 

	 
		FORM OF REVOLVING CREDIT
		NOTE
	 

	 
		REVOLVING CREDIT NOTE
	 

	 
		 
	 

	 
			
				
				  $2,500,000.00
				

			 	
				
				  Melville, New York
				

			 	
				
				  August 13, 2007
				

			 

 

	 
		CPI AEROSTRUCTURES, INC., a New York
		corporation (the “Borrower”), for value received, hereby promises to
		pay to the order of SOVEREIGN BANK (the “Bank”) on the Termination
		Date (as such term is defined in the Agreement), at the office of the Bank
		specified in Section 10.1 of the Credit Agreement dated as of August 13, 2007,
		between the Borrower and the Bank, as amended from time to time (as so amended,
		the “Agreement”; terms defined in the Agreement shall have their
		defined meanings when used in this Note), in lawful money of the United States
		of America and in immediately available funds the principal amount of TWO
		MILLION FIVE HUNDRED THOUSAND AND 00/100 ($2,500,000.00) DOLLARS or, if less
		than such principal amount, the aggregate unpaid principal amount of all
		Revolving Credit Loans made by the Bank to the Borrower pursuant to Section 2.1
		of the Agreement. The Borrower further promises to pay interest at said office
		in like money on the unpaid principal balance of this Note from time to time
		outstanding at an annual rate as selected by the Borrower pursuant to the terms
		of Section 2 (inclusive) of the Agreement. Interest shall be computed on the
		basis of a 360-day year for actual days elapsed and shall be payable as
		provided in the Agreement. All Loans made by the Bank pursuant to subsection
		2.1 of the Agreement and payments of the principal thereon may be endorsed by
		the holder of this Note on the schedule annexed hereto, to which the holder may
		add additional pages. The aggregate net unpaid amount of Revolving Credit Loans
		set forth in such schedule shall be presumed to be the principal balance
		hereof. After the stated or any accelerated maturity hereof, this Note shall
		bear interest at a rate as set forth in the Agreement, payable on demand, but
		in no event in excess of the maximum rate of interest permitted under
		applicable law.
	 

	 
		This Note is the Revolving Credit Note
		referred to in the Agreement, and is entitled to the benefits thereof and may
		be prepaid, and is required to be prepaid, in whole or in part (subject to the
		indemnity provided in the Agreement) as provided therein. 
	 

	 
		Upon the occurrence of any one or more of
		the Events of Default specified in the Agreement, all amounts then remaining
		unpaid on this Note may be declared to be immediately due and payable as
		provided in the Agreement.
	 

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

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  CPI AEROSTRUCTURES, INC.
				

			 

 

	 
		 
	 

	 
		Exhibit A
	 

	 
		 
	 

	 
		SCHEDULE OF LOANS AND PAYMENT OF
		PRINCIPAL
	 

	 
		TO REVOLVING CREDIT NOTE DATED AS OF
		AUGUST 13, 2007
	 

	 
		BY
	 

	 
		CPI AEROSTRUCTURES, INC.
	 

	 
		TO
	 

	 
		SOVEREIGN BANK
	 

	 
		 
	 

	 
			
				
				  Date
				

			 	
				
				   
				

			 	
				
				  Amount 
 of Loan
				

			 	
				
				   
				

			 	
				
				  Interest

				  Rate
				

			 	
				
				   
				

			 	
				
				  Last Day 

				  of Interest Period
				

			 	
				
				   
				

			 	
				
				  Balance Principal Paid
				

			 	
				
				   
				

			 	
				
				  Remaining 
 Unpaid
				

			 	
				
				   
				

			 	
				
				  Notation 
 Made By
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 
		 
	 

	 
			
				
				   
				

			 	

				
				   
				

			 	

				
				   
				

			 	

				
				   
				

			 	

				
				   
				

			 	

				
				   
				

			 	

				
				   
				

			 	

				
				   
				

			 	

				
				   
				

			 	

				
				   
				

			 	

				
				   
				

			 	

				
				   
				

			 	

				
				   
				

			 	
				
				   
				

			 
	

				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	

				
				   
				

			 
	

				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	

				
				   
				

			 
	

				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	

				
				   
				

			 
	

				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	

				
				   
				

			 
	

				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	

				
				   
				

			 
	

				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	

				
				   
				

			 
	

				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	

				
				   
				

			 
	

				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	

				
				   
				

			 
	

				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	

				
				   
				

			 
	

				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	

				
				   
				

			 
	

				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	

				
				   
				

			 
	

				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	

				
				   
				

			 
	

				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	

				
				   
				

			 
	

				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	

				
				   
				

			 
	

				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	

				
				   
				

			 
	

				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	

				
				   
				

			 
	

				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	

				
				   
				

			 
	

				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	

				
				   
				

			 

 

	 
		 
	 

	 
		 
	 

	 
		Exhibit A

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]