Document:

EXHIBIT
10.1

     

    NOTE AND STOCK PURCHASE
AGREEMENT

     

    THIS NOTE
AND STOCK PURCHASE AGREEMENT (this “Agreement”) is made
as of the 14th day of April, 2009, by and between ONSTREAM MEDIA CORPORATION., a
Florida corporation (the “Company”) and
ROCKRIDGE CAPITAL HOLDINGS LLC, a Virginia limited liability company (the “Investor”).

     

    WITNESSETH

     

    WHEREAS,
the Company desires to enter into this Agreement with the Investor to sell and
issue (i) a promissory Note of the Company in the principal amount of up to
$1,000,000.00 which Note shall be in the form attached hereto as Exhibit A (the “Note”), and (ii)
1,500,000 restricted shares (the “Shares”) of Common
Stock, par value $.0001 per share (the “Common Stock”) of the
Company; and

     

    WHEREAS,
the Investor desires to enter into this Agreement to acquire the Note and the
Shares on the terms and conditions set forth herein;

     

    NOW,
THEREFORE, in consideration for the mutual covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

     

    1.           Authorization
and Sale; Security Interest.

     

    a.           Authorization.  The
Company has authorized the issuance and sale of the Note and the
Shares.

     

    b.           Sale.  Subject
to the terms and conditions hereof, the Investor agrees to make advances up to
the aggregate maximum principal amount of $1,000,000 to the Company from time to
time during the period from the date of this Agreement up to, but not including
the Maturity Date.  At Closing, Investor shall advance an initial
amount of $750,000.00 which loan shall be evidenced by and repaid with interest
in accordance with the Note.  After the date of Closing, Investor
agrees to make additional advances to the Company under the Note up to an
aggregate maximum principal amount of $250,000 from time to time during the
period from the date of the Agreement up to, but not including, the Maturity
Date (as defined the Note) provided that the aggregate maximum principal amount
of the Note shall at no time exceed $1,000,000.  As an origination fee
for the Note, the Investor shall have the option to require the Company to issue
the Shares upon not less than sixty-one (61) days prior written notice to the
Company.  Upon receipt of such written notice, the Company shall issue
the Shares to the Investor on the date requested in such notice.  The
Company hereby authorizes Investor to record on the Note or in its internal
computerized records the amount of each payment of principal received by
Investor on account of the loans evidenced by such Note, which recordation
shall, in the absence of manifest error, be conclusive as to the outstanding
principal balance of such Note and shall be considered correct and binding on
Investor provided, that, the failure to
make such recordation with respect to any payment shall not limit or otherwise
affect the obligations of the Company under this Agreement or such
Note.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    c.           Security
Interest.  In connection with the Note, the Company has granted
Investor a first priority perfected security interest in the Collateral (as
defined in the Security Agreement and with exceptions as to priority to certain
of the Collateral as specified in the Security
Agreement).   Regardless of the foregoing, the Note will be
subordinated to the Company’s loan obligation to Thermo Credit, LLC, including
the collateral described in Section 2.1 of that certain Security Agreement by
and between the Company and Thermo Credit, LLC dated December 28, 2007 (and
amended August 29, 2008), as well as any similar successor loan secured by the
general equivalent of those same assets.

     

    d.           Guaranty of Value of
Shares.  In the event the Company borrows in excess of $750,000
hereunder, the Company hereby guaranties to Investor that: (i) on the date or
dates, as applicable, in which Investor sells all or a portion of the Shares
which have become saleable by the Investor and (ii) on the Maturity Date, the
Shares shall have a minimum per share value of $.20 (the “Minimum Per Share
Value”).  On the Maturity Date, provided that the Company has borrowed in
excess of $750,000 from Investor, the Company shall pay the Investor the sum of
(i) the cash difference between the Minimum Per Share Value and the average sale
price for each previously sold Shares (whether such number is
positive or negative) multiplied by the number of sold Shares and (ii)
for the Shares which were not previously sold by Investor, the cash difference
between the Minimum Per Share Value and the market value of the Shares at the
Maturity Date (whether such number is positive or negative) multiplied by the
number of unsold shares, up to a maximum amount of $75,000 in the aggregate for
items (i) and (ii).   Stock prices shall be subject to adjustment
for stock splits, stock dividends, and other similar transactions.

    

    2.           Closing;
Delivery.

     

    a.           Closing.  The
closing of the purchase and sale of the Note and the Shares under this Agreement
shall take place, by facsimile, overnight delivery, e-mail or other means,
simultaneously at the offices of the Investor’s counsel, Shipman & Goodwin
LLP, One Constitution Plaza, Hartford, Connecticut 06103-1919 on April 14, 2009
(which time and place are designated as the “Closing”) or at such
other time and place as the parties may agree.

     

    b.           Delivery.  At
the Closing, subject to the terms and conditions hereof, the Company will
deliver to the Investor: (i) the Note, (ii) the items specified in Section 4 hereof; and
(iii) such other certificates, consents, waivers and agreements as are
reasonably requested by the Investor (together with this Agreement, collectively
the “Transaction
Documents”), dated the date of the Closing, against payment of the
$750,000 by Investor to the Company as of the date of the Closing by wire
transfer.

     

    3.           Representations and
Warranties of the Company.  Except as expressly set forth (with
a reference to a specific section in this Section 3) on Schedule 1 (the
“Disclosure Schedules”) hereto as of the Closing, the Company represents and
warrants to the Investor as follows:

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    3.1           Organization, Standing and
Qualification; Articles and Bylaws.

    a.          
  The Company is a corporation duly organized, validly existing and in
good standing under the laws of the state of its jurisdiction of organization,
and is qualified, licensed or domesticated, in each jurisdiction where the
nature of its activities or properties owned or leased by it makes such
qualification, licensing or domestication necessary.  The Company has
all requisite corporate power and authority to own and operate its properties
and assets and to carry on its business as now conducted.  Schedule 3.1 sets
forth all jurisdictions in which the Company owns or leases property worth in
excess of $50,000.

     

    b.           
 The Company has made available to Investor true, correct and complete
copies of the certificate incorporation and bylaws of the Company, and all
amendments thereto through and including the date of the Closing (the “Charter
Documents”).  The Company is not in material breach of any of
the provisions of its Charter Documents.

     

    3.2           Corporate
Power.  The Company has all requisite power to enter into and
to carry out and perform its obligations under this Agreement and the Note, and
each of the other Transaction Documents to which it is a party and to sell and
issue the Shares.

     

    3.3           Authorization.  All
corporate action on the part of the Company, its officers, directors and
stockholders necessary for the authorization, execution and delivery of this
Agreement, the Note, and the other Transaction Documents, the performance of all
obligations of the Company hereunder and thereunder, and the authorization,
issuance (or reservation for issuance) and delivery of the Note and the Shares,
has been taken or will be taken prior to the Closing.  The Transaction
Documents, when executed and delivered by the Company, shall constitute valid
and legally binding obligations of the Company, enforceable against the Company
in accordance with their terms except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, and other laws of
general application affecting enforcement of creditors’ rights generally, and as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies.

     

    3.4           Valid Issuance of Note and
Shares.  The offer, sale and issuance of the Note and the
Shares as contemplated by this Agreement have been conducted in accordance with
all applicable state and federal securities laws of the United
States.  The Shares have been duly and validly issued, are fully paid
and nonassessable and free of restrictions on transfer, and will be issued in
compliance with all applicable federal and state securities laws.

     

    3.5           Contracts.  The
Company is not in default in any respect under any material contract or
commitment, and no event has occurred and no condition exists which, with notice
or the passage of time or both, would constitute a default under any such
contract or commitment by the Company or to the Company’s knowledge, by any
other party except for such default which would not have a material adverse
effect on the Company.  No party to such contract or commitment has
threatened to terminate or has any intention of terminating its obligations
thereunder.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    3.6           Financial
Statements.  Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the Company under the
Securities Act of 1933 (“Securities Act”) and the Securities and Exchange Act of
1934 (“Exchange Act”), for the two years preceding the date hereof (the
foregoing materials, including exhibits thereto and documents incorporated by
reference therein, being collectively referred to as the “SEC Reports”), on a
timely basis or has received a valid extension of such time for filing all such
SEC Reports prior to the expiration of any such extension.  As of
their respective dates, the SEC Reports compiled in all material respects with
the requirements of the Securities Act and the Exchange Act, as applicable, and
none of the SEC Reports, when filed contained any untrue statement of a material
fact or submitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they made, not misleading.  The financial
statements of the Company, included in the SEC Reports (the “Financial
Statements”), comply in all material with applicable accounting
requirements and the rules and regulations of the Securities and Exchange
Commission with respect thereto as in effect at the time of
filing.  The Financial Statements have been prepared in accordance
with the United States generally accepted accounting principles applied on a
consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in the Financial Statements and the notes thereto and except
that unaudited Financial Statements may not contain all footnotes required by
GAAP, and fairly present in all material respects the financial condition of the
Company and its consolidated subsidiaries as of an for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the
case of unaudited adjustments, the normal, year-end audit
adjustments.

     

    3.7           Absence of Certain
Changes.  Since the date of the latest financial statements in
the Company’s SEC Reports, except as disclosed in subsequent SEC Reports, there
has not been any development or threatened development of a nature that would be
materially adverse to the continuation of the business of the
Company.

     

    3.8           Taxes.  Except
for matters that would not individually or in the aggregate have a material
adverse effect on the Company, the Company has filed all tax returns and reports
required to be filed and has paid all taxes due in connection therewith. The
Company has withheld or collected from each payment made to each of its
employees, the amount of all taxes required to be withheld or collected
therefrom, and has paid the same to the proper tax receiving officers or
authorized depositaries.

     

    For
purposes of this Agreement “material adverse effect” means:

     

    a.        
    a material adverse effect on the properties, business
(as presently conducted and as is proposed to be conducted), operations, profits
or financial condition of the Company taken as a whole;

     

    b.             a
material adverse effect on the ability of the Company or any subsidiary to
perform its obligations under this Agreement or any of the Transaction
Documents;

     

    c.             a
material adverse effect on the legality, validity or enforceability of any of
the Company’s obligations under this Agreement, the Note, or the other
Transaction Documents; or

     

    d.             the
creation of any liability or obligation (other than the obligations expressly
set forth in the Transaction Documents) upon the Investor resulting from an act
or omission of the Company or resulting from the transactions contemplated by
the Transaction Documents.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    3.9           Transactions With Related
Parties.  Except as disclosed in the SEC Reports and in each
case in excess of $100,000, there is no loan, lease or other continuing
transaction or arrangement of any kind between the Company and any Company
Affiliate or Related Party and the Company does not receive any services,
support; facilities or other assistance of any kind from Affiliates or Related
Parties. As used in this Agreement, “Company Affiliate”
shall mean any person or entity controlling, controlled by or under common
control with the Company and “Related Party” shall
mean the Company’s employees, officers, directors and shareholders (as
applicable), or any affiliate or relative of any such person.

     

    3.10           Litigation.  Except
as disclosed in the SEC Reports and in each case in excess of $100,000, there is
neither pending nor to the Company’s knowledge threatened any action, suit,
proceeding or claim, to which the Company or any executive officer of the
Company (in his/her capacity as such an employee) is or may be named as a party
or to which the Company or its property is or may be subject.

     

    3.11           Governmental
Consents.  No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of the Company is
required in connection with the consummation of the transactions contemplated by
this Agreement, except for certain post-closing filings required pursuant to
applicable state and federal securities laws.  All such filings
required in connection with the consummation of the transactions contemplated by
this Agreement due by the Closing shall have been made by the Company by the
Closing; and any such filings to be made thereafter shall be made by the Company
in a timely manner following the Closing.

     

    3.12           Title to Property and
Assets; Leases.  Except as set forth on Schedule 3.12 or in
the SEC Reports and in each case in excess of $10,000 (the “Permitted Liens”),
the Company has good and marketable title to its property that is material to
the business of the Company and assets free and clear of all mortgages, liens,
loans and encumbrances, except such encumbrances and liens which arise in the
ordinary course of business and do not materially impair the Company’s ownership
or use of such property or assets.  With respect to the property and
assets it leases, the Company is in material compliance with such leases and, to
the Company’s knowledge, the Company holds a valid leasehold interest free of
any liens, claims or encumbrances.

     

    3.13           Leases.  Set
forth in the SEC Reports is a correct and complete list of all leases under
which the Company is a lessee, other than personal property leases requiring
rental payments of less than $10,000 per year, all of which
rental payments do not in the aggregate exceed $100,000 per year.  The
Company is not in default in any material respect, and no event has occurred and
no condition exists which, with notice or the passage of time or both, would
constitute such a default.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    3.14           Patents and
Trademarks.  The Company and its subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trade applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses and
other intellectual property rights and similar rights necessary and material for
use in connection with their respective businesses described in the SEC Reports
and for which the failure to do so have or could have a material adverse effect
(collectively, the “Intellectual Property
Rights”).  Neither the Company nor a subsidiary has received a
written notice from any person that Intellectual Property Rights used by the
Company or a subsidiary violates or infringes upon the rights of any
person.  To the knowledge of the Company, all such Intellectual
Property Rights are enforceable and there is no existing infringement by any
other person of any of the Intellectual Property Rights.  The Company
has taken reasonable security measures to protect the secrecy and
confidentiality of its Intellectual Properties, except where failure to do so
could not, individually, in the aggregate reasonably be expected to have a
material adverse effect on the Company.

     

    3.15           Compliance with Other
Instruments and Laws.  The Company is not in violation or
default in respect of any provisions of any mortgage, indenture, contract,
agreement, instrument, judgment, order, writ, decree to which the Company is
subject or by which it is bound except for such violations or defaults which
individually or in the aggregate would not have a material adverse effect on the
Company.  The execution, delivery and performance of this Agreement
and the other Transaction Documents and the consummation of the transactions
contemplated hereby or thereby will not (i) violate or be subject to any
preemptive rights or rights of first refusal, or (ii) result in a material
violation of any instrument, judgment, order, writ, decree or contract to which
it is a party or by which it is bound, or (iii) be in conflict with or
constitute, with or without the passage of time and giving of notice, either (A)
a material default under any such provision, instrument, judgment, order, writ,
decree or contract or (B) an event which results in the creation of any material
lien, charge or encumbrance upon any assets of the Company except in the case of
clauses (ii) and (iii), such as could not have a material adverse effect on the
Company.  To the Company’s knowledge, the Company is not in violation
of any federal or state judgment, order, written decree, statute, rule,
regulation or restriction applicable to the Company except for such violations
which individually or in the aggregate would not have a material adverse effect
on the Company.

     

    3.16           Business of The
Company.  The Company has no knowledge or belief that (i) there
is pending or threatened any claim or litigation against or affecting the
Company contesting its right to sell or use any product or service presently
sold or used or planned to be sold or used by the Company, (ii) there exists, or
there is pending or planned, any statute, rule, law, regulation, standard or
code which would result in a material adverse effect on the Company or (iii)
there is any other fact which in the future may result in a material adverse
effect on the Company other than those occurring as a result of general industry
developments that affect the Company and other participants in its industry in
the same general fashion.

     

    3.17           Use of Proceeds. The
Company will use the funds advanced under the Note for general working capital,
to fund the purchase of certain equipment and software, and for general
corporate purposes.  None of the transactions contemplated in this
Agreement (including, without limitation, the use of the proceeds from the sale
of the Note or Shares) will violate or result in a violation of Section 7 of the
Exchange Act, or any regulations issued pursuant thereto.  The Company
does not own or intend to carry or purchase any “margin security” within the
meaning of said regulations, including margin securities originally issued by
it.  None of the proceeds from the sale of the Note or Shares will be
used to purchase or carry (or refinance any borrowing the proceeds of which were
used to purchase or carry) any “security” within the meaning of the Securities
Act.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    3.18           Applicability of and
Compliance With Other Laws.  Borrower shall comply (to the
extent necessary so that any failure to do so will not materially and adversely
affect the business or property of borrower) with all laws that are applicable
to Borrower’s business activities, including, without limitation, all law
regarding (i) the collection, payment and deposit of employees’ income,
unemployment, Social Security, sales and excise taxes; (ii) the filing of
returns and payment of taxes; (iii) pension liabilities including ERISA
requirements; (iv) environment al protection; and (v) occupational safety and
health.

     

    3.19           Indebtedness.  The
SEC Reports contain a true and materially complete list and descriptions of the
terms thereof (including without limitation a description of the material
collateral securing such debt), of all debt instruments, loan agreements,
indentures, or guaranties to which the Company is a party or is otherwise bound,
other than obligations which may be terminated without payment or penalty by the
Company upon not more than thirty (30) days notice and obligations which are
otherwise disclosed in this Agreement.  All of the aforesaid items
were entered into in the ordinary course of business, are valid and binding, in
full force and effect and are enforceable in accordance with their respective
terms and there exists no breach or default, or except as set forth on Schedule 3.19, any
event which with notice or lapse of time or both, would constitute a material
breach or default by any party thereto.  All of the indebtedness of
Company which is required to be disclosed under GAAP is disclosed on the
Financial Statements.

     

    3.20           Insurance
Coverage.  The Company shall maintain insurance coverage in
accordance with Section 10 of the Security Agreement.

     

    3.21           Brokers or
Finders.  Except as set forth on Schedule 3.21, there
is no contract, arrangement or understanding with each broker, finder or other
similar person to which the Company has any commitment with respect to the
transactions contemplated by this Agreement.

     

    3.22           Illegal or Unauthorized
Payments; Political Contributions.  Neither the Company nor, to
its knowledge, any of the officers, directors, employees, agents or other
representatives of the Company or any other business entity or enterprise with
which the Company is or has been affiliated or associated, has, directly or
indirectly, made or authorized any payment, contribution or gift of money,
property, or services, whether or not in contravention of applicable law, (a) as
a kickback or bribe to any person or (b) to any political organization, or the
holder of or any aspirant to any elective or appointive public office except for
personal political contributions not involving the direct or indirect use of
funds of the Company.

     

    3.23           Disclosure.  Neither
this Agreement, the exhibits and schedules hereto, the Transaction Documents or
any certificate required to be delivered by the Company under this Agreement or
any Transaction Document to the Investor or its attorneys or agents in
connection herewith or therewith or with the transactions contemplated hereby or
thereby, when read or considered together, contains any untrue statement of a
material fact nor knowingly omits to state a material fact necessary in order to
make the statements contained herein or therein not misleading.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    3.24           Patriot
Act.  To the best of the Company’s knowledge, the Company has
not been designated, and is not owned or controlled, by a “suspected terrorist”
as defined in Executive Order 13224.  The Company hereby acknowledges
that Investor seeks to comply with all applicable laws concerning money
laundering and related activities.  In furtherance of those efforts,
the Company hereby represents, warrants and agrees that:  (i) none of
the cash or property that the Company will pay or will contribute to the Company
has been or shall be derived from, or related to, any activity that is deemed
criminal under United States law; and (ii) no contribution or payment by the
Company to Investor, to the extent that they are within the Company’s and/or its
subsidiaries’ control shall cause Investor to be in violation of the United
States Bank Secrecy Act, the United States International Money Laundering
Control Act of 1986 or the United States International Money Laundering
Abatement and Anti-Terrorist Financing Act of 2001.  The Company
understands and agrees that if at any time it is discovered that any of the
foregoing representations are incorrect, or if otherwise required by applicable
law or regulation related to money laundering similar activities, the Company
may undertake appropriate actions to ensure compliance with applicable law or
regulation. The Company further understands that the Investor may release
confidential information about the Company and, if applicable, any underlying
beneficial owners, to proper authorities if Investor, in its sole discretion,
determines that it is required by law under the laws set forth in subsection
(ii) above.

     

    4.           Conditions to
Closing.

     

    The
obligation of Investor to make the Loans is subject to the fulfillment to its
satisfaction on or prior to the Closing of each of the following
conditions:

     

    4.1           Financing
Documents.  The Company shall have executed and delivered this
Agreement, the Note and each of the Transaction Documents, including without
limitation:

     

    a.     
       Security
Agreement.  A Security Agreement in form and substance
satisfactory to Investor (the “Security Agreement”)
granting a security interest to Investor in the Collateral (as defined in the
Security Agreement) and such other security agreements as may be required by
Investor (together with the Security Agreement, the “Security
Documents”).

     

    4.2           The Company’s Closing
Certificate.  Concurrently with the delivery of Note to
Investor at the Closing, Investor shall have received a certificate signed by
the President of the Company, the truth and accuracy of which shall be a
condition to Investor’s obligation to purchase the Note and Shares at the
Closing, to the effect that (i) the representations and warranties contained in
Section 3 are
true on and as of the Closing Date, (ii) the Company has not changed its
jurisdiction of incorporation or been a party to any merger or consolidation and
has not succeeded to all or any substantial part of the liabilities of any other
entity since the date of the Financial Statements, and (iii) the Company is not
in default and except as set forth on Schedule 4.2, no
waiver of default is currently in effect with respect to any obligations
relating to any Indebtedness (as defined in Section 5.1(b)(i)(c)
of this Agreement) of the Company, and to its knowledge, except as set forth on
Schedule 4.2,
no event has occurred or condition exists and is continuing with respect to any
such Indebtedness that would permit (or except as set forth on Schedule 4.2, that
with notice or the lapse of time, or both, would permit) one or more persons to
cause such Indebtedness to become due and payable before its stated maturity or
before its regularly scheduled dates of payment.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    4.3           Legal
Opinions.  Investor shall have received from the Company’s
counsel, its opinion dated as of the Closing, substantially in the form of Exhibit
4.3.

     

    4.4           Funding
Instructions.  On or prior to the Closing, Investor shall have
received written instructions executed by a responsible officer of the Company
directing the manner of the payment of funds and setting forth (i) the account
name and number into which funds are to be deposited, and (ii) the name and
telephone number of the account representative responsible for verifying receipt
of such funds.

     

    4.5           Authority.  Investor
shall have received the following, in each case in form and substance
satisfactory to it and its counsel: a copy of resolutions of the Board of
Directors of the Company, certified by an authorized officer of the Company as
of the Closing, duly authorizing the borrowing contemplated by this Agreement
and the Note and the execution, delivery and performance by the Company of this
Agreement, the Transaction Documents and any other documents executed by or on
behalf of such party in connection with the transactions contemplated hereby;
and an incumbency certificate of the Company as to the person or persons
executing and delivering each such document.

     

    4.6           Compliance With Applicable
Law.  No fact or condition shall exist under applicable law or
applicable regulations thereunder or interpretations thereof by any regulatory
authority which in Investor’s reasonable opinion would make it not legal for the
Company to borrow money or for the Company to perform its obligations under this
Agreement and each of the Transaction Documents.

     

    4.7           Satisfactory
Proceedings.  Such proceedings taken in connection with the
transactions contemplated by this Agreement, and such documents necessary to the
consummation thereof (including without limitation all Transaction Documents)
shall have been executed by the appropriate parties thereto, shall be reasonably
satisfactory in form and substance to Investor and its counsel, and Investor
shall have received a copy (executed or certified as may be appropriate) of all
legal documents or proceedings taken in connection with the consummation of said
transactions.

     

    4.8           Fees and
Expenses.  The Company shall have paid to Investor all of its
reasonable fees and expenses, including the reasonable fees and out of pocket
costs of Shipman & Goodwin LLP, due and payable by the Company at the
Closing.

     

    4.9           Material Adverse
Change.  Since the date of the Financial Statements and except
as disclosed in the SEC Reports, no adverse material change in the financial
condition of Borrower has occurred.

     

    4.10           Waiver of
Conditions.  If on the Closing Date the Company fails to tender
to Investor any Note or Shares to be issued to Investor on such date or if any
of the conditions specified in this Section 4 have not
been fulfilled, Investor may thereupon elect to be relieved of all further
obligations under this Agreement.  Without limiting the foregoing, if
any of the conditions specified in this Section 4 have not
been fulfilled, Investor may waive compliance by the Company with any such
condition to such extent as it may in its sole discretion
determine.  Nothing contained in this Section 4.10 shall
operate to relieve the Company of any of its obligations hereunder or to waive
any rights of Investor against the Company.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    5.           Covenants of the
Company.

     

    5.1.          a.           Affirmative
Covenants.  The Company covenants and agrees that for so long
as the Note remains outstanding, the Company will:

     

    (i)        
   Payment.  Duly
and punctually pay, or cause to be paid, the principal and interest on the Note
on the date(s) on which such principal, premium (if any) and interest becomes
due and comply with its obligations under the Transaction
Documents;

     

    (ii)           Financial
Reporting.  Make available to the Investor:

     

    
      	
               
      

            	
                (a)

            	
              its
      Form 10-K or 10KSB, within three (3) days of filing the same with the
      SEC;

            

    

     

    
      	
               
      

            	
                (b)

            	
              each
      Form 10-Q, within three (3) days of filing the same with the SEC;
      and

            

    

     

    
      	
               
      

            	
                (c)

            	
              within
      three (3) days of filing the same; copies of all documents, forms, or
      reports filed with the SEC or any governmental or regulatory agency;
      and

            

    

     

    
      	
               
      

            	
                (d)

            	
              such
      other information as the Investor may reasonably require from time to
      time.

            

    

     

    (iii)          Taxes.  Promptly
pay and discharge, or cause to be paid and discharged, when due and payable,
unless contested by the Company in good faith, all lawful taxes, assessments and
governmental charges or levies imposed upon the income, profits, property or
business of the Company or any subsidiary;

     

    (iv)          Properties.  Keep
its properties in good repair, working order and condition, reasonable wear and
tear excepted, and from time to time make all needful and proper, or legally
required, repairs, renewals, replacements, additions and improvements thereto;
and the Company will at all times materially comply with each provision of all
material leases to which it is a party or under which it occupies, or has
possession of, any property;

     

    (v)           Insurance.  Keep
its material assets which are of an insurable character insured by financially
sound and reputable insurers, against loss or damage by fire, extended coverage
and explosion and insurance against other hazards and risks and liability to
persons and property all to the extent, in amounts and in the manner customary
for companies in similar businesses similarly situated;

     

    (vi)          Compliance With
Laws.  Duly observe and conform to in all material respect all
laws, rules, regulations and requirements of governmental authorities relating
to the conduct of its business or to its property or assets;

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (vii)          Legal
Existence.   Maintain in full force and effect its legal
existence, rights, government approvals and franchises and all licenses and
other rights to use patents, processes, licenses, trademarks, trade names or
copyrights owned or possessed by it; and

     

    (viii)         Subsidiaries.  Cause
any subsidiary which it may now have and/or which it may organize or acquire in
the future to comply fully with all terms and provisions of this Article 5 to
the same extent as if such subsidiary or subsidiaries were the "Company"
herein.

     

    (ix)           Payment of
Indebtedness.  The Company will:

     

    
      	
               
      

            	
                (a)

            	
              pay
      or cause to be paid the principal of and the premium or other prepayment
      charge, if any, and interest on all Indebtedness (as defined below),
      whether heretofore or hereafter incurred or assumed by it, when and as the
      same shall become due and payable subject to any applicable grace period
      and not permit any such Indebtedness which is subordinate to the Note to
      be paid in advance of its scheduled due
date;

            

    

     

    
      	
               
      

            	
                (b)

            	
              faithfully
      perform, observe and discharge all covenants, conditions and obligations
      imposed on it by all instruments evidencing such Indebtedness and all
      indentures and other agreements securing such Indebtedness or pursuant to
      which such indebtedness is issued except for such violations which would
      not have a material adverse effect on the Company;
  and

            

    

     

    
      	
               
      

            	
                (c)

            	
              not
      permit the occurrence of any act or omission that is or may be declared to
      be a default under any such instrument, indenture or
      agreement.

            

    

     

    (x)           Prompt Notice of Materially
Adverse Events or Events of Default.  Provide prompt notice of
the commencement of any action or proceeding relating to the Company or any
subsidiary in any court or before any governmental authority or arbitration
board or tribunal as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, is reasonably likely, in the
Company’s sole judgment, to have a material adverse effect; and of any other
development that could, in the Company’s sole judgment, have a material adverse
effect.

     

    (xi)           Notices of
Default.  Provide prompt notice by telephone (confirmed by
written notice) of:

     

    
      	
               
      

            	
                (a)

            	
              the
      occurrence of any Event of Default under this Agreement or any Transaction
      Document, or of the occurrence of any event that upon the giving of notice
      or lapse of time or both would constitute such an Event of
      Default;

            

    

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
                (b)

            	
              the
      occurrence of any default respecting Indebtedness of the Company, or, as
      to any event that requires notice from the holder of such Indebtedness in
      order to constitute such default, the receipt of such notice, or, as to
      the occurrence of any event that does not require notice from the holder
      of such Indebtedness but that with the lapse of time would constitute such
      default, the occurrence of such
event;

            

    

     

    
      	
               
      

            	
                (c)

            	
              the
      waiver by the holder of any Indebtedness of any such default or of any
      such event;

            

    

     

    
      	
               
      

            	
                (d)

            	
              acceleration
      by the holder of any such Indebtedness of the maturity thereof, any demand
      for payment by the holder of any Indebtedness for borrowed money of the
      Company or any subsidiary that is payable upon demand; or the exercise of
      any put or similar right requiring the Company to repurchase such
      Indebtedness; and

            

    

     

    
      	
               
      

            	
                (e)

            	
              any
      action by the holder of any Indebtedness to exercise its rights respecting
      any collateral for such
Indebtedness.

            

    

     

    The
Company shall, promptly upon receipt thereof by the Company, transmit to the
Investors a copy of any notice from any holder of such Indebtedness relating to
any of the events described in this Section 5.1(a)(xi)
provided that
for purposes of this section 5.1(a)(xi), notice pursuant to Sections
5.1(a)(xi)(b) through Section 5.1(a)(xi)(e) above shall only be required in the
event that such Indebtedness is in excess of an aggregate fifty thousand dollars
($50,000.00).

     

    5.1           b.           Negative
Covenants.  The Company covenants and agrees that for so long
as the Note remains outstanding, the Company will not do any of the following
without the written consent of Investor:

     

    (i)           Indebtedness; Liens;
Subsidiary Liabilities.

     

    
      	
               
      

            	
                (a)

            	
              Create,
      incur, issue, assume, guarantee or otherwise become or remain directly or
      indirectly liable for any Indebtedness of the Company provided that
      the Company may incur Indebtedness without Investor’s prior written
      consent if: (i) such Indebtedness is and becomes at all times junior and
      subordinate to the Indebtedness represented by the Note; (ii) such
      Indebtedness is purchase money indebtedness securing the cost of
      acquisition of assets and subject to purchase money liens or security
      interests (it being agreed that the currently outstanding $1 million
      convertible debentures meets such definition); or (iii) such Indebtedness
      relates to accounts receivable financing from Thermo Credit LLC or a
      successor accounts receivable financer to Thermo Credit LLC, if
      any.

            

    

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
               
      (b)

            	
              Create,
      assume or permit, any Lien upon any of its properties or assets, whether
      now owned or hereafter acquired, which is superior in priority or title to
      the lien and security interest granted to Investor herein and by the
      Security Agreement (with such limitations as to priority as specified in
      the Security Agreement) except (i) Liens existing as of the date hereof
      and disclosed in Section 3.12 of
      the Disclosure Schedules, (ii) any Lien created on any real property or
      equipment in connection with the leasing of such real property or
      equipment, and (iii) Permitted
Liens.

            

    

     

    
      	
               
      

            	
               
      (c)

            	
              For
      purposes of this Agreement:

            

    

     

    “Indebtedness” shall
mean, at any time, with respect to the Company:(i) liabilities for borrowed
money (whether or not evidenced by a security);(ii) any liabilities for borrowed
money secured by any Lien (as defined below) existing on property owned by such
person (whether or not such person is personally liable in respect
thereof);(iii) any obligations in respect
of any capital lease of such person;(iv) all obligations of such
person in respect of banker’s acceptances, other acceptances, letters of credit
and other instruments serving a similar function issued or accepted by banks and
other financial institutions for the account of such person (whether or not
incurred in connection with the borrowing of money);(v) all unfunded pension
fund, employee medical or welfare obligations and liabilities; and (vi) any guaranty of such person
of any obligation or liability of another person of a type described in any of
clause (i) through clause (vi), inclusive, of this definition.

     

    “Lien” shall mean any
and all liens, claims, mortgages, security interests, charges, encumbrances, and
restrictions on transfer of any kind;

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    “Permitted Liens”
shall mean (i) Liens for taxes and assessments or governmental charges or levies
not at the time due or in respect of which the validity thereof shall currently
be contested in good faith by appropriate proceedings conducted with due
diligence and for the payment of which the Company has furnished adequate
security; (ii) Liens in respect of pledges or deposits under workers’
compensation laws or similar legislation, carriers’, warehousemen’s, mechanics’,
laborers’ and materialmen’s and similar liens, if the obligations secured by
such Liens are not then delinquent or are being contested in good faith by
appropriate proceedings conducted with due diligence and for the payment of
which the Company has furnished adequate security; (iii) statutory Liens
incidental to the conduct of the business of the Company which were not incurred
in connection with the borrowing of money or the obtaining of advances or
credits and which do not in the aggregate materially detract from the value of
its property or materially impair the use thereof in the operation of its
business; (iv) personal property leases and similar liens and purchase money
liens or security interests securing the cost of acquisition of assets subject
to such liens or security interests; and (v) any action, proceeding, attachment,
prejudgment remedy or post judgment remedy for the payment of money which in the
aggregate are less than $200,000 or if such amount is released, vacated or
discharged within sixty (60) days of notice of the same or is stayed pending
appeal.

     

    (ii)           Conflicting
Agreements.  Become subject to any agreement or instrument,
which by its terms would (under any circumstances) restrict the Company’s right
to perform any of its obligations pursuant to the terms of this Agreement, the
Note, or any of the other Transaction Documents.

     

    (iii)           Related Party
Transactions. Enter into any
material transaction with any Related Party or affiliate of the Company which is
not, in the reasonable judgment of the Company, an arms length
transaction.

     

    6.           Events of Default; Remedies;
Demand Obligation.

     

    a.           Events of
Default.  The following events are “Events of Default”
under this Agreement:

     

    (i)           The
Company shall default in the due and punctual payment of the principal of or
interest on the Note as and when such principal or interest shall become due and
payable, whether upon maturity or by acceleration, demand or otherwise and such
default shall continue for a period of ten (10) days after written notice
thereof by the Investor;

     

    (ii)           The
Company shall fail to comply with any of its other agreements or covenants in,
or provisions of, this Agreement, the Note, or any other Transaction Document
and such default shall have continued for a period of ten (10) days after the
written notice thereof by the Investor to the Company;

     

    (iii)           The
institution of bankruptcy or insolvency proceedings under the Bankruptcy Code,
or any other similar applicable federal or state law, which in the case of an
involuntary filing remains and is charged ninety (90) days after such
filing;

     

    (iv)           There
is entered a decree or order of a court having jurisdiction over the matter for
the appointment of a receiver or liquidator, or trustee, or assignee in
bankruptcy or insolvency of the Company or of all or substantially all of its
property, or for the winding up or the liquidation of its affairs, and such
decree or order has continued in force undischarged or unstayed for a period of
ninety (90) days;

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    (v)           The
Company institutes proceedings to be adjudged a voluntary bankrupt, or consents
to the filing of bankruptcy proceeding against it, or files a petition or answer
or consent seeking reorganization under the Bankruptcy Code or any other similar
or applicable federal or state law, or consents to the filing of any such
petition, or consents to the appointment of a receiver, liquidator or trustee in
bankruptcy, or makes a general assignment for the benefit of creditors, or
admits in writing its inability to pay its debts generally as they become
due;

     

    (vi)           The
Company merges with or into or consolidates with any other corporation and it is
not the surviving entity or sells, leases, transfers or otherwise disposes of
all or substantially all of its assets, properties or business to any person,
firm, corporation or organization;

     

    (vii)           The
Company is in default of the payment of principal or interest on any outstanding
Indebtedness for borrowed money to a third party the default of which would have
a material adverse effect on the Company;

     

    (viii)          Any
representation, warranty, certification or statement made by or on behalf of the
Company in this Agreement, the Note, any other Transaction Document or in any
certificate or other document delivered pursuant hereto or thereto shall have
been incorrect when made in a respect that is material to the validity or
enforceability of any of the Transaction Documents or to the creditworthiness of
the Company, or this Agreement, the Note or any other Transaction Document shall
for any reason cease to be in full force and effect (except in accordance with
its express terms) or shall be declared null and void, or the Company shall deny
or contest the enforceability thereof; or

     

    (ix)           The
Security Agreement shall for any reason, except to the extent permitted by the
terms thereof or by the Company’s failure (through no fault of Investor) to take
such steps to maintain perfection of such security interest, cease to create a
valid and perfected security interest in any material part of the Collateral (as
defined in the Security Agreement).

     

    b.           
Remedies Upon Default;
Payment Upon Demand.

     

    (i)           Upon
the occurrence of any of the Events of Default set forth in Section 6(a)(iii)
through (vi), or (ix) of this Agreement, the aggregate unpaid balance of the
principal amount of the Note and accrued and unpaid interest thereon shall
automatically become immediately due and payable without notice, presentment,
demand, protest or other requirements of any kind, all of which are expressly
hereby waived.

     

    (ii)           Upon
the occurrence of any other Event of Default set forth above, the Investor may
at its option, by written notice to the Company, declare the principal amount of
the Note, all accrued interest thereon and all other amounts due hereunder and
under any Transaction Document to be immediately due and payable.

     

    (iii)           The
Investor may take any action or proceeding at law or in equity which it deems
advisable for the protection of its interest to collect and enforcement payment,
and to protect and realize on any collateral securing the Note, and the Company
shall pay all expenses, court costs and reasonable attorneys’ fees incurred in
connection with or arising out of any default or demand for payment
hereunder.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    7.           Survival of
Warranties/Indemnification.

     

    a.           Survival of
Warranties.  The representations and warranties of the Company
and the Investor contained in this Agreement shall survive the execution and
delivery of this Agreement and the Closing.

     

    b.           Indemnification of the
Purchaser.  The Company (the “Indemnifying Party”), agrees to
indemnify, defend and hold the Investor and its current and future affiliates
and their respective current and future officers, directors, managers, partners,
employees and agents (each, an “Indemnified Party”) harmless from and against
all liabilities, losses, claims, actions, costs, expenses and damages, together
with all reasonable costs and expenses related thereto (including, without
limitation, reasonable legal and accounting fees and expenses incurred in
connection with investigating, preparing or defending any action, claim or
proceeding, whether or not in connection with pending or threatened litigation
to which an Indemnified Party is a party) (collectively, “Losses”) suffered by
any of them, directly or indirectly, as a result of or in connection with losses
suffered by any of them directly or indirectly, as a result of a breach of any
representation or warranty made by the Company contained in Section 3
hereof.

     

    c.           Notice of
Claim.  After obtaining knowledge of any claim or demand which
has given rise to a claim for indemnification under this Section 7 (referred to
herein as an “Indemnification Claim”), an Indemnified Party will be required to
give written notice to the Company of such Indemnification Claim (“Notice of
Claim”).  A Notice of Claim will be given with respect to all
Indemnification Claims; provided, however, that the failure to give Notice of
Claim to the Company will not relieve the Company from any liability that it may
have to an Indemnified Party hereunder to the extent that the Company is not
prejudiced by such failure.  The Notice of Claim will set forth the
amount (or a reasonable estimate) of the Losses suffered, or which may be
suffered, by an Indemnified Party as a result of such Indemnification Claim and
a brief description of the facts giving rise to such Indemnification
Claim.

     

    8.           Miscellaneous.

     

    a.           Successors and
Assigns.  This Agreement may not be assigned by any party
hereto, except that the Investor may assign or transfer all or a portion of the
Shares, subject to compliance with applicable securities laws.  Any
assignment in violation of the terms of this Agreement shall be null and
void.  The terms and conditions of this Agreement shall inure to the
benefit of, and be binding upon, the respective successors and permitted assigns
of the parties.  Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties hereto or their
respective successors and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement.

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    b.           Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut without regard to the
principles of conflict of laws thereof.

     

    c.           Counterparts; Delivery by
Facsimile.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  Delivery of
this Agreement may be effected by facsimile.

     

    d.           Titles and
Subtitles.  The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.

     

    e.           Notices.  Unless
otherwise provided, any notice required or permitted hereunder shall be given by
personal service upon the party to be notified, by nationwide overnight delivery
service or upon deposit with the United States Post Office, by certified mail,
return receipt requested and:

     

    (i)           if
to the Company, addressed to:

     

    Onstream
Media Corporation

    1291 SW
29 Avenue

    Pompano
Beach, FL  33069-4359

    Attention:  Randy
S. Selman, Chairman, President and CEO

    

    With a
copy to:

    

    Roetzel
& Andress, LPA

    100 S.E.
3rd
Avenue, 8th
Floor

    Fort
Lauderdale, FL  33394

    Attn:  Joel
D. Mayersohn, Esq.

    

    (ii)           if
to the Investor, addressed to:

     

    Rockridge
Capital Holdings LLC

    300 Bic
Drive, 2nd
Floor

    Milford,
CT  06461

    Attn:  David
Friedman, Managing Director

    

    With a
copy to:

    

    Shipman
& Goodwin LLP

    One
Constitution Plaza

    Hartford,
Connecticut 06103-1919

    Attn:  James
C. Schulwolf, Esq.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    

    or at
such other address as the Company or the Investor, respectively, may designate
by notice to the other parties in accordance with the provisions of this Section
7.f.

     

    f.           Expenses.  Except
as set forth in Section 4.9, the
Company and the Investor shall bear their own expenses and legal fees incurred
on their behalf with respect to the negotiation and execution of this Agreement
and the closing of the transactions contemplated hereby.  The Company
shall pay the reasonable legal fees incurred by the Investor with respect to the
enforcement of this Agreement, the Note, the other Transaction Documents and/or
with respect to responding to any request made by the Company for the consent of
the Investor to any action that the Company wishes to take that is either barred
under the terms of any such document or requires the consent of the Investor
therefore.

     

    g.           Trial by
Jury.  EACH PARTY HEREBY WAIVES ITS RIGHT TO CLAIM A TRIAL BY
JURY WITH RESPECT TO ANY ACTION BY OR AGAINST SUCH PARTY ARISING
HEREUNDER.

     

    h.           Waiver.  EACH
PARTY ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS AGREEMENT IS A PART IS A
COMMERCIAL TRANSACTION. TO THE EXTENT ALLOWED UNDER APPLICABLE LAW, STATE OR
FEDERAL, THE COMPANY HEREBY WAIVES ITS RIGHTS TO NOTICE AND HEARING WITH RESPECT
TO ANY PREJUDGMENT REMEDY WHICH INVESTOR, AND/OR THE SUCCESSORS OR ASSIGNS OF
INVESTOR MAY DESIRE TO USE.

     

    i.           Amendments and
Waivers.  Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either prospectively or retroactively), only with the
written consent of the Company and the Investor.

     

    j.           Severability. In case
any provision of this Agreement shall be invalid, illegal or unenforceable, it
shall, to the extent practicable, be modified so as to make it valid, legal and
enforceable and to retain as nearly as practicable the intent of the parties,
and the validity, legality and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.

     

    k.           Entire
Agreement.  This Agreement (including the exhibits hereto) and
the documents referred to herein constitute the entire agreement among the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the parties hereto.

     

    l.           Delays or Omissions.
No delay or omission to exercise any right, power or remedy accruing to the
Company or the Investor upon any breach, default or noncompliance of the
Investor or the Company under this Agreement shall impair any such right, power
or remedy, nor shall it be construed to be a waiver of any such breach, default
or noncompliance, or any acquiescence therein, or of any similar breach, default
or noncompliance thereafter occurring.  It is further agreed that any
waiver, permit, consent or approval of any kind or character on the part of the
Company or the Investor of any breach, default or noncompliance under this
Agreement or any waiver on the Company’ or the Investor’s part of any provisions
or conditions of this Agreement must be in writing and shall be effective only
to the extent specifically set forth in such writing and that all remedies,
either under this Agreement, by law, or otherwise afforded to the Company and
the Investor, shall be cumulative and not alternative.

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    [SIGNATURES
APPEAR ON FOLLOWING PAGE]

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.

     

    
      
        
          
            	
                    COMPANY:

                  	 
      
	 
      	 
      	 
      
	 
      	
                    ONSTREAM
      MEDIA CORPORATION

                  	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    /s/ Randy S. Selman

                  	 
      
	 
      	 
      	
                    Name:

                  	
                    Randy
      S. Selman

                  	 
      
	 
      	 
      	
                    Title:

                  	
                    President
      and Chief Executive Officer

                  	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                    INVESTOR:

                  	 
      
	 
      	 
      	 
      	 
      
	 
      	
                    ROCKRIDGE
      CAPITAL HOLDINGS, LLC

                  	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    /s/ David Friedman

                  	 
      
	 
      	 
      	
                    Name:

                  	
                    David
      Friedman

                  	 
      
	 
      	 
      	
                    Title:

                  	
                    Managing
      DirectorEXHIBIT
10.2

    

    SECURITY
AGREEMENT

    

    SECURITY AGREEMENT, dated as
of April 14, 2009, between ONSTREAM MEDIA CORPORATION, a
Florida corporation (the "Company") and ROCKRIDGE CAPITAL HOLDINGS,
LLC, a limited liability company (hereinafter, the "Investor").

    

    WHEREAS,
the Investor and the Company have entered into that certain Note and Stock
Purchase Agreement dated as of even date herewith (as amended and in effect from
time to time, the "Purchase
Agreement"), pursuant to which the Investor, subject to the terms and
conditions contained therein, is to make loans or otherwise to extend credit or
provide financial accommodations to the Company; and

    

    WHEREAS,
it is a condition precedent to the Investor's making any loans or otherwise
extending credit or providing financial accommodations to the Company under the
Purchase Agreement that the Company execute and deliver to the Investor a
security agreement in substantially the form hereof; and

    

    WHEREAS,
the Company wishes to grant a security interest in favor of the Investor as
herein provided;

    

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

    

    1.           Definitions.  All
capitalized terms used herein without definitions shall have the respective
meanings provided therefor in the Purchase Agreement.  The term
"State," as used herein, means the State of Connecticut.  All terms
defined in the Uniform Commercial Code of the State and used herein shall have
the same definitions herein as specified therein.  However, if a term
is defined in Article 9 of the Uniform Commercial Code of the State differently
than in another Article of the Uniform Commercial Code of the State, the term
has the meaning specified in Article 9.  The term "Obligations," as
used herein, means all of the indebtedness, obligations and liabilities of the
Company to the Investor, individually or collectively, whether direct or
indirect, joint or several, absolute or contingent, due or to become due, now
existing or hereafter arising under or in respect of the Purchase Agreement, any
promissory notes or other instruments or agreements executed and delivered
pursuant thereto or in connection therewith or this Agreement, and the term
"Event of Default," as used herein, means as defined in the Purchase
Agreement.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    2.           Grant of
Security Interest.
The Company hereby grants to the Investor, to secure the payment and
performance in full of all of the Obligations, a security interest in and
pledges and assigns to the Investor the following properties, assets and rights
of the Company, wherever located, whether now owned or hereafter acquired or
arising, and all proceeds and products thereof (all of the same being
hereinafter called the "Collateral"):  all
corporate assets, (provided that with
respect to accounts receivable of the Company, including without limitation all
assets related to Company’s accounts receivable, customer contracts and
insurance policies on such accounts Investor is granted a security interest
junior in priority to (i) Thermo Credit LLC or (ii) any successor of Thermo
Credit LLC or other similar accounts receivable financing (on terms and
conditions similar to Thermo Credit LLC and on terms no more materially onerous
to the Company than those granted to Thermo Credit LLC), personal and fixture
property of every kind and nature, including, goods (including inventory,
equipment, excluding that listed on Schedule 2 and any accessions thereto),
instruments (including promissory notes), documents, chattel paper (whether
tangible or electronic), deposit accounts, letter-of-credit rights (whether or
not the letter of credit is evidenced by a writing), commercial tort claims,
securities and all other investment property, supporting obligations, any other
contract rights or rights to the payment of money, insurance claims and
proceeds, all general intangibles and intellectual property rights (including
all payment intangibles), and all products and proceeds of the
foregoing.  Regardless of the foregoing, to the extent that the terms
of the loan with Thermo Credit provide a priority security interest on any of
the above listed items, Investor’s security interest will be junior in priority
to that claim.   The Investor acknowledges that the attachment of
its security interest in any commercial tort claim as original collateral is
subject to the Company's compliance with §4.7.  The Investor may
retain money or funds received as proceeds from the Collateral as additional
collateral, which shall become part of the "Collateral" under this agreement,
and the Investor shall not be required to apply such proceeds to the secured
obligations or to remit them to the Company.

    

    3.           Authorization
to File Financing Statements.  The Company hereby irrevocably
authorizes the Investor at any time and from time to time to file in any filing
office in any Uniform Commercial Code jurisdiction any initial financing
statements and amendments thereto that (a) indicate the Collateral as described
in paragraph 2 and (b) provide any other information required by part 5 of
Article 9 of the Uniform Commercial Code of the State or such other
jurisdictions for the sufficiency or filing office acceptance of any financing
statement or amendment, including (i) whether the Company is an organization,
the type of organization and any organizational identification number issued to
the Company and, (ii) in the case of a financing statement filed as a fixture
filing or indicating Collateral as as-extracted collateral or timber to be cut,
a sufficient description of real property to which the Collateral
relates.  The Company agrees to furnish any such information to the
Investor promptly upon the Investor's request.  The Company also
ratifies its authorization for the Investor to have filed in any Uniform
Commercial Code jurisdiction any like initial financing statements or amendments
thereto if filed prior to the date hereof.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    4.           Other
Actions.  Further to insure
the attachment, perfection and priority of, and the ability of the Investor to
enforce, the Investor's security interest in the Collateral, the Company agrees,
in each case at the Company's expense, at the Investor's option, to take any and
all other actions as the Investor may determine to be necessary or useful for
the attachment, perfection and priority of, and the ability of the Investor to
enforce, the Investor's security interest in any and all of the Collateral,
including, without limitation, (a) executing, delivering and, where appropriate,
filing financing statements and amendments relating thereto under the Uniform
Commercial Code, to the extent, if any, that the Company's signature thereon is
required therefor, (b) causing the Investor's name to be noted as secured party
on any certificate of title for a titled good if such notation is a condition to
attachment, perfection or priority of, or ability of the Investor to enforce,
the Investor's security interest in such Collateral, (c) complying with any
provision of any statute, regulation or treaty of the United States as to any
Collateral if compliance with such provision is a condition to attachment,
perfection or priority of, or ability of the Investor to enforce, the Investor's
security interest in such Collateral, (d) obtaining governmental and other third
party waivers, consents and approvals in form and substance satisfactory to the
Investor, including, without limitation, any consent of any licensor, lessor or
other person obligated on Collateral, (e) obtaining waivers from mortgagees and
landlords in form and substance satisfactory to the Investor, (f) taking all
actions under any earlier versions of the Uniform Commercial Code or under any
other law, as reasonably determined by the Investor to be applicable in any
relevant Uniform Commercial Code or other jurisdiction, including any foreign
jurisdiction; and (g) obtaining control agreements, bailee acknowledgements,
non-offset letters and warehouse man waivers in form and substance satisfactory
to the Investor and subject to the rights of Thermo Credit LLC and any successor
thereof.

    

    5.           Reserved.

    

    6.           Representations
and Warranties Concerning Company's Legal Status. The Company represents
and warrants to the Investor as follows:  (a) the Company's exact
legal name is that indicated on the signature page hereof, (b) the Company is an
organization of the type, and is organized in the jurisdiction, set forth on the
Perfection Certificate dated April 14, 2009, substantially in the
form attached hereto as Exhibit 1 (the
“Perfection Certificate), (c) the Perfection Certificate accurately sets forth
the organizational identification number or accurately states that the Company
has none, (d) the Perfection Certificate accurately sets forth the Company's
place of business or, if more than one, its chief executive office, as well as
the Company's mailing address, if different, and (e) all other information set
forth on the Perfection Certificate pertaining to the Company is accurate and
complete.

    

    7.           Covenants
Concerning Company's Legal Status.  The Company covenants with
the Investor as follows:  (a) without providing at least 15 days prior
written notice to the Investor, the Company will not change its name, its
principal place of business or, if more than one, chief executive office, or its
mailing address or organizational identification number if it has one, (b) if
the Company does not have an organizational identification number and later
obtains one, the Company will promptly notify the Investor of such
organizational identification number, and (c) the Company will not change its
type of organization, jurisdiction of organization or other legal
structure.

    

    8.           Representations
and Warranties Concerning Collateral Etc.  The Company
further represents and warrants to the Investor as follows:  (a) the
Company is the owner of or has other rights in or power to transfer the
Collateral, free from any right or claim of any person or any adverse lien,
security interest or other encumbrance, except for the security interest created
by this Agreement, disclosed in the Purchase Agreement and Permitted Liens, (b)
none of the Collateral constitutes, or is the proceeds of, "farm products" as
defined in §9-102(a)(34) of the Uniform Commercial Code of the State, (c) the
Company holds no commercial tort claim except as indicated on the Perfection
Certificate, (d) the Company to its knowledge, currently operates its business
in compliance with all applicable provisions of the federal Fair Labor Standards
Act, as amended, and to its knowledge with all applicable provisions of federal,
state and local statutes and ordinances dealing with the control, shipment,
storage or disposal of hazardous materials or substances, and (e) all other
information set forth on the Perfection Certificate pertaining to the Collateral
is accurate and complete.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    9.           Covenants
Concerning Collateral, Etc.  The Company
further covenants with the Investor as follows:  (a) the Collateral,
to the extent not delivered to the Investor pursuant to §4, will be kept at
those locations listed on the Perfection Certificate and the Company will not
remove the Collateral from such locations, without providing at least 30 days
prior written notice to the Investor, (b) except for the security interest
herein granted and Permitted Liens, the Company shall be the owner of or have
other rights in or power to transfer the Collateral free from any right or claim
of any other person or any lien, security interest or other encumbrance, and the
Company shall defend the same against all claims and demands of all persons at
any time claiming the same or any interests therein adverse to the Investor, (c)
the Company shall not pledge, mortgage or create, or suffer to exist any right
of any person in or claim by any person to the Collateral, or any security
interest, lien or other encumbrance in the Collateral in favor of any person,
other than the Investor except for Permitted Liens, (d) the Company will keep
the Collateral in good order and repair, with reasonable wear and tear
accepted,  and will not use the same in violation of law or any policy
of insurance thereon, (e) the Company will permit the Investor, or its designee,
to inspect the Collateral during regular business hours wherever located, (f)
the Company will pay promptly when due all taxes, assessments, governmental
charges and levies upon the Collateral or incurred in connection with the use or
operation of the Collateral or incurred in connection with this Agreement, other
than those being contested in good faith (g) the Company will continue to
operate its business in compliance with all applicable provisions of the federal
Fair Labor Standards Act, as amended, and with all applicable provisions of
federal, state and local statutes and ordinances dealing with the control,
shipment, storage or disposal of hazardous materials or substances other than
those violations that will not have a material adverse effect on the Company,
(h) the Company will not sell or otherwise dispose, or offer to sell or
otherwise dispose, of the Collateral or any interest therein except for (i)
sales and leases of inventory and licenses of general intangibles in the
ordinary course of business and (ii) so long as no Event of Default has occurred
and is continuing, dispositions permitted by the Purchase Agreement and
consistence with past practices, (i) the Company shall not file a correction
statement relating to the Collateral or to any financing statement or fixture
filing filed by the Investor without the Investor’s prior written consent, (j)
if the Company is a corporation, limited liability company, limited partnership
or other registered organization the Company shall, at its expense, furnish to
Investor a certified copy of the Company’s organization documents verifying its
correct legal name or, at Investor’s election, shall permit the Investor to
obtain such certified copy at the Company’s expense; and (k) from time to time,
at Investor’s election, the Investor may obtain a certified copy of the
Company’s organization documents and a search of such Uniform Commercial Code
filing offices as it shall deem appropriate, at the Company’s expense, to verify
the Company’s compliance with the terms of this Agreement.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    10.           Insurance.

    

    10.1.        Maintenance
of Insurance.  The Company will maintain with financially sound
and reputable insurers insurance with respect to its properties and business
against such casualties and contingencies as shall be in accordance with general
practices of businesses engaged in similar activities in similar geographic
areas.   Such insurance shall be in such minimum amounts that the
Company will not be deemed a co-insurer under applicable insurance laws,
regulations and policies and otherwise shall be in such amounts, contain such
terms, be in such forms and be for such periods as may be reasonably
satisfactory to the Investor.  In addition, all such insurance shall
be payable to the Investor as loss payee under a "standard" or "New York" loss
payee clause.  Without limiting the foregoing, the Company will (i)
keep all of its physical property insured with casualty or physical hazard
insurance on an "all risks" basis, (ii) maintain all such workers' compensation
or similar insurance as may be required by law and (iii) maintain, in amounts
and with deductibles equal to those generally maintained by businesses engaged
in similar activities in similar geographic areas, general public liability
insurance against claims of bodily injury, death or property damage occurring,
on, in or about the properties of the Company; business interruption
insurance.

    

    10.2.        Continuation
of Insurance.  The Company shall provide Investor with at least
30 days prior written notice prior to the Company’s cancellation of any
insurance policy and shall provide Investor with any notices of cancellation
delivered by the insurance providers within 5 days of receipt of such
notice.  In the event of failure by the Company to provide and
maintain insurance as herein provided, the Investor may, at its option, provide
such insurance and charge the amount thereof to the Company.  The
Company shall furnish the Investor with certificates of insurance and policies
evidencing compliance with the foregoing insurance provision.  Such
insurance maintained by the Company shall include, without limitation, insurance
coverage on Collateral in the possession of the Investor or its agent or
contractor.

    

    

    11.           Collateral
Protection Expenses:  Preservation of Collateral.

    

    11.1.        Expenses
Incurred by Investor.  In the Investor's discretion after 5
days prior notice to the Company, if the Company fails to do so, the Investor
may discharge taxes not paid and not being contested in good faith and other
encumbrances at any time levied or placed on any of the Collateral, make repairs
thereto, maintain any of the Collateral, and pay any necessary filing fees or
insurance premiums.  The Company agrees to reimburse the Investor on
demand for all expenditures so made.  The Investor shall have no
obligation to the Company to make any such expenditures, nor shall the making
thereof be construed as a waiver or cure of any Default or Event of
Default.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    11.2.        Investor's
Obligations and Duties.  Anything herein to the contrary
notwithstanding, the Company shall remain obligated and liable under each
contract or agreement comprised in the Collateral to be observed or performed by
the Company thereunder subject to the business judgment of the Company’s
officers and directors acting in good faith.  The Investor shall not
have any obligation or liability under any such contract or agreement by reason
of or arising out of this Agreement or the receipt by the Investor of any
payment relating to any of the Collateral, nor shall the Investor be obligated
in any manner to perform any of the obligations of the Company under or pursuant
to any such contract or agreement, to make inquiry as to the nature or
sufficiency of any payment received by the Investor in respect of the Collateral
or as to the sufficiency of any performance by any party under any such contract
or agreement, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to the Investor or to which the Investor may be entitled at any time or
times.  The Investor's sole duty with respect to the custody, safe
keeping and physical preservation of the Collateral in its possession, under
§9-207 of the Uniform Commercial Code of the State or otherwise, shall be to
deal with such Collateral in the same manner as the Investor deals with similar
property for its own account.

    

    12.           Securities
and Deposits.  The Investor may at any time following the
occurrence and during the continuance of an Event of Default, at its option,
transfer to itself or any nominee any securities constituting Collateral,
receive any income thereon and hold such income as additional Collateral or
apply it to the Obligations.  The Investor may following the
occurrence and during the continuance of an Event of Default demand, sue for,
collect, or make any settlement or compromise which it deems desirable with
respect to the Collateral.  Regardless of the adequacy of Collateral
or any other security for the Obligations, any deposits or other sums at any
time credited by or due from the Investor to the Company may at any time be
applied to or set off against any of the Obligations then due and
owing.

    

    

    13.           Notification
to Account Debtors and Other Persons Obligated on
Collateral.  If an Event of Default shall have occurred and be
continuing, the Company shall, at the request and option of the Investor and
subject to the rights of Thermo Credit LLC, notify account debtors and other
persons obligated on any of the Collateral of the security interest of the
Investor in any account, chattel paper, general intangible, instrument or other
Collateral and that payment thereof is to be made directly to the Investor or to
any financial institution designated by the Investor as the Investor's agent
therefor, and the Investor may itself, if an Event of Default shall have
occurred and be continuing, without notice to or demand upon the Company, so
notify account debtors and other persons obligated on
Collateral.  After the making of such a request or the giving of any
such notification, the Company shall hold any proceeds of collection of
accounts, chattel paper, general intangibles, instruments and other Collateral
received by the Company as trustee for the Investor without commingling the same
with other funds of the Company and shall turn the same over to the Investor in
the identical form received, together with any necessary endorsements or
assignments.  The Investor shall apply the proceeds of collection of
accounts, chattel paper, general intangibles, instruments and other Collateral
received by the Investor to the Obligations, such proceeds to be immediately
credited after final payment in cash or other immediately available funds of the
items giving rise to them.

    

    14.           Power of
Attorney.

    

    14.1.        Appointment
and Powers of Investor.  The Company hereby irrevocably
constitutes and appoints the Investor and any officer or agent thereof, with
full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Company or in the
Investor's own name, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments that may be necessary or useful to accomplish the
purposes of this Agreement and, without limiting the generality of the
foregoing, hereby gives said attorneys the power and right, on behalf of the
Company, without notice to or assent by the Company, to do the
following:

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    (a)           upon
the occurrence and during the continuance of an Event of Default, generally to
sell, transfer, pledge, make any agreement with respect to or otherwise dispose
of or deal with any of the Collateral in such manner as is consistent with the
Uniform Commercial Code of the State and as fully and completely as though the
Investor were the absolute owner thereof for all purposes, and to do, at the
Company's expense, at any time, or from time to time, all acts and things which
the Investor deems necessary or useful to protect, preserve or realize upon the
Collateral and the Investor's security interest therein, in order to effect the
intent of this Agreement, all no less fully and effectively as the Company might
do, including, without limitation, (i) the filing and prosecuting of
registration and transfer applications with the appropriate federal, state or
local agencies or authorities with respect to trademarks, copyrights and
patentable inventions and processes, (ii) upon written notice to the Company,
the exercise of voting rights with respect to voting securities, which rights
may be exercised, if the Investor so elects, with a view to causing the
liquidation of assets of the issuer of any such securities and (iii) the
execution, delivery and recording, in connection with any sale or other
disposition of any Collateral, of the endorsements, assignments or other
instruments of conveyance or transfer with respect to such Collateral;
and

    

    (b)           to
the extent that the Company's authorization given in §3 is not sufficient, to
file such financing statements with respect hereto, with or without the
Company's signature, or a photocopy of this Agreement in substitution for a
financing statement, as the Investor may deem appropriate and to execute in the
Company's name such financing statements and amendments thereto and continuation
statements which may require the Company's signature.

    

    (c)           In
the event that any other security interest or lien attaches to the Collateral,
other than the security interest to the Investor, the Company hereby grants to
Investor a power of attorney to, in the name of the Company, request and to
enforce any right of the Company to obtain accountings and information from such
other secured party or lienor relating to the obligations secured and collateral
securing such security interest or lien, which power, being coupled with an
interest, shall not be revocable by the Company.  The Company agrees
to pay or reimburse Investor upon demand for any charges resulting from such
requests for information.

    

    14.2.        Ratification
by Company.  To the extent permitted by law, the Company hereby
ratifies all that said attorneys shall lawfully do or cause to be done by virtue
hereof absent bad faith, willful misconduct or gross negligence.  This
power of attorney is a power coupled with an interest and is
irrevocable.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    14.3.        No Duty
on Investor.  The powers conferred on the Investor hereunder
are solely to protect its interests in the Collateral and shall not impose any
duty upon it to exercise any such powers.  The Investor shall be
accountable only for the amounts that it actually receives as a result of the
exercise of such powers, and neither it nor any of its officers, directors,
employees or agents shall be responsible to the Company for any act or failure
to act, except for the Investor's own gross negligence or willful
misconduct.

    

    15.           Rights
and Remedies.  If an Event of Default shall have occurred and
be continuing, the Investor, without any other notice to or demand upon the
Company, shall have in any jurisdiction in which enforcement hereof is sought,
in addition to all other rights and remedies, the rights and remedies of a
secured party under the Uniform Commercial Code of the State and of such
jurisdiction and any additional rights and remedies as may be provided to a
secured party in any jurisdiction in which Collateral is located, including,
without limitation, the right to take possession of the Collateral, and for that
purpose the Investor may, so far as the Company can give authority therefor,
enter upon any premises on which the Collateral may be situated and remove the
same therefrom.  The Investor may in its discretion require the
Company to assemble all or any part of the Collateral at such location or
locations within the jurisdiction(s) of the Company's principal office(s) or at
such other locations as the Investor may reasonably designate.  Unless
the Collateral is perishable or threatens to decline speedily in value or is of
a type customarily sold on a recognized market, the Investor shall give to the
Company at least five (5) Business Days prior written notice of the time and
place of any public sale of Collateral or of the time after which any private
sale or any other intended disposition is to be made.  The Company
hereby acknowledges that five (5) Business Days prior written notice of such
sale or sales shall be reasonable notice.  In addition, the Company
waives any and all rights that it may have to a judicial hearing in advance of
the enforcement of any of the Investor’s rights and remedies hereunder,
including, without limitation, its right following an Event of Default to take
immediate possession of the Collateral and to exercise its rights and remedies
with respect thereto.

    

    16.           Standards
for Exercising Rights and Remedies.  To the extent that
applicable law imposes duties on the Investor to exercise remedies in a
commercially reasonable manner, the Company acknowledges and agrees that it is
not commercially unreasonable for the Investor (a) to fail to incur expenses
reasonably deemed significant by the Investor to prepare Collateral for
disposition or otherwise to fail to complete raw material or work in process
into finished goods or other finished products for disposition, (b) to fail to
obtain third party consents for access to Collateral to be disposed of, or to
obtain or, if not required by other law, to fail to obtain governmental or third
party consents for the collection or disposition of Collateral to be collected
or disposed of, (c) to fail to exercise collection remedies against account
debtors or other persons obligated on Collateral or to fail to remove liens or
encumbrances on or any adverse claims against Collateral, (d) to exercise
collection remedies against account debtors and other persons obligated on
Collateral directly or through the use of collection agencies and other
collection specialists, (e) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (f) to contact other persons, whether or not in the
same business as the Company, for expressions of interest in acquiring all or
any portion of the Collateral, (g) to hire one or more professional auctioneers
to assist in the disposition of Collateral, whether or not the collateral is of
a specialized nature, (h) to dispose of Collateral by utilizing Internet sites
that provide for the auction of assets of the types included in the Collateral
or that have the reasonable capability of doing so, or that match buyers and
sellers of assets, (i) to dispose of assets in wholesale rather than retail
markets, (j) to disclaim disposition warranties, (k) to purchase insurance or
credit enhancements to insure the Investor against risks of loss, collection or
disposition of Collateral or to provide to the Investor a guaranteed return from
the collection or disposition of Collateral, or (l) to the extent deemed
appropriate by the Investor, to obtain the services of brokers, investment
bankers, consultants and other professionals to assist the Investor in the
collection or disposition of any of the Collateral.  The Company
acknowledges that the purpose of this §16 is to provide non-exhaustive
indications of what actions or omissions by the Investor would fulfill the
Investor's duties under the Uniform Commercial Code of the State or any other
relevant jurisdiction in the Investor's exercise of remedies against the
Collateral and that other actions or omissions by the Investor shall not be
deemed to fail to fulfill such duties solely on account of not being indicated
in this §16.  Without limitation upon the foregoing, nothing contained
in this §16 shall be construed to grant any rights to the Company or to impose
any duties on the Investor that would not have been granted or imposed by this
Agreement or by applicable law in the absence of this §16.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    17.           No Waiver
by Investor, etc.  The Investor shall not be deemed to have
waived any of its rights and remedies in respect of the Obligations or the
Collateral unless such waiver shall be in writing and signed by the
Investor.  No delay or omission on the part of the Investor in
exercising any right or remedy shall operate as a waiver of such right or remedy
or any other right or remedy.  A waiver on any one occasion shall not
be construed as a bar to or waiver of any right or remedy on any future
occasion.  All rights and remedies of the Investor with respect to the
Obligations or the Collateral, whether evidenced hereby or by any other
instrument or papers, shall be cumulative and may be exercised singularly,
alternatively, successively or concurrently at such time or at such times as the
Investor deems expedient.

    

    18.           Suretyship
Waivers by Company.  The Company waives demand, notice,
protest, notice of acceptance of this Agreement, notice of loans made, credit
extended, Collateral received or delivered or other action taken in reliance
hereon and all other demands and notices of any description.  With
respect to both the Obligations and the Collateral, the Company assents to any
extension or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of or failure to perfect any security interest
in any Collateral, to the addition or release of any party or person primarily
or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising or adjusting of any thereof, all in such manner and at
such time or times as the Investor may deem advisable.  The Investor
shall have no duty as to the collection or protection of the Collateral or any
income therefrom, the preservation of rights against prior parties, or the
preservation of any rights pertaining thereto beyond the safe custody thereof as
set forth in §11.2.  The Company further waives any and all other
suretyship defenses.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    19.           Marshalling.  The
Investor shall not be required to marshal any present or future collateral
security (including but not limited to the Collateral) for, or other assurances
of payment of, the Obligations or any of them or to resort to such collateral
security or other assurances of payment in any particular order, and all of its
rights and remedies hereunder and in respect of such collateral security and
other assurances of payment shall be cumulative and in addition to all other
rights and remedies, however existing or arising.  To the extent that
it lawfully may, the Company hereby agrees that it will not invoke any law
relating to the marshalling of collateral which might cause delay in or impede
the enforcement of the Investor's rights and remedies under this Agreement or
under any other instrument creating or evidencing any of the Obligations or
under which any of the Obligations is outstanding or by which any of the
Obligations is secured or payment thereof is otherwise assured, and, to the
extent that it lawfully may, the Company hereby irrevocably waives the benefits
of all such laws.

    

    20.           Proceeds
of Dispositions; Expenses.  The Company shall pay to the
Investor on demand amounts equal to any and all expenses, including, without
limitation, attorneys' fees and disbursements, incurred or paid by the Investor
in protecting, preserving or enforcing the Investor's rights and remedies under
or in respect of any of the Obligations or any of the
Collateral.  After deducting all of said expenses, the residue of any
proceeds of collection or sale or other disposition of Collateral shall, to the
extent actually received in cash, be applied to the payment of the Obligations
in such order or preference as the Investor may determine or in such order or
preference as is provided in the Purchase Agreement, proper allowance and
provision being made for any Obligations not then due.  Upon the final
payment and satisfaction in full of all of the Obligations and after making any
payments required by Sections 9-608(a)(1)(C) or 9-615(a)(3) of the Uniform
Commercial Code of the State, any excess shall be returned to the
Company.  In the absence of final payment and satisfaction in full of
all of the Obligations, the Company shall remain liable for any
deficiency.

    

    21.           Overdue
Amounts.  Until paid, all amounts due and payable by the
Company hereunder including under Section 11.1 shall be a debt secured by the
Collateral and shall bear, whether before or after judgment, interest if an
event of default exists and is continuing at the default rate of interest set
forth in the Purchase Agreement.

    

    22.           Governing
Law; Consent to Jurisdiction.  THIS AGREEMENT IS INTENDED TO
TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE.  The Company agrees that any
action or claim arising out of any dispute in connection with this Agreement,
any rights or obligations hereunder or the performance or enforcement of such
rights or obligations may be brought in the courts of the State or any federal
court sitting therein and consents to the non-exclusive jurisdiction of such
court and to service of process in any such suit being made upon the Company by
mail at the address specified in the Purchase Agreement.  The Company
hereby waives any objection that it may now or hereafter have to the venue of
any such suit or any such court or that such suit is brought in an inconvenient
court.

    

    23.           Waiver of
Jury Trial.  THE COMPANY WAIVES ITS RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OR
ENFORCEMENT OF ANY SUCH RIGHTS OR OBLIGATIONS.  Except as prohibited
by law, the Company waives any right which it may have to claim or recover in
any litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages.  The Company (i) certifies that neither the Investor
nor any representative, agent or attorney of the Investor has represented,
expressly or otherwise, that the Investor would not, in the event of litigation,
seek to enforce the foregoing waivers or other waivers contained in this
Agreement and (ii) acknowledges that, in entering into the Purchase Agreement
and the other Financing Documents to which the Investor is a party, the Investor
is relying upon, among other things, the waivers and certifications contained in
this §23.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    24.           Prejudgment
Remedy Waiver.
THE COMPANY HEREBY (I) ACKNOWLEDGES THAT THIS AGREEMENT IS PART OF A
COMMERCIAL TRANSACTION AND (II) TO THE EXTENT PERMITTED BY ANY STATE OR FEDERAL
LAW (INCLUDING, BUT NOT LIMITED TO CHAPTER 903a OF THE CONNECTICUT GENERAL
STATUTES), WAIVES ANY RIGHT IT MAY HAVE TO PRIOR NOTICE OF AND A HEARING ON THE
RIGHT OF THE INVESTOR, ITS SUCCESSORS OR ASSIGNS TO ANY REMEDY OR COMBINATION OF
REMEDIES THAT ENABLES THE INVESTOR, ITS SUCCESSORS OR ASSIGNS, BY WAY OF
ATTACHMENT, FOREIGN ATTACHMENT, GARNISHMENT OR REPLEVIN TO DEPRIVE THE COMPANY
OF ITS PROPERTY AT ANY TIME PRIOR TO FINAL JUDGMENT IN ANY LITIGATION INSTITUTED
IN CONNECTION WITH THIS AGREEMENT AND ANY TRANSACTIONS SECURED HEREBY, AND
FURTHER WAIVES ALL RIGHTS TO REQUEST THAT THE INVESTOR POST A BOND, WITH OR
WITHOUT SURETY, TO PROTECT THE COMPANY AGAINST DAMAGES THAT MAY BE CAUSED BY ANY
SUCH REMEDY OR REMEDIES.

    

    25.           Electronic
Self-Help Authorization:  Upon and after an
Event of Default, the Investor shall have, in addition to all other rights and
remedies contained in this Agreement, (which the Company, and, by becoming bound
by the Obligations or this Agreement, all other Obligors, guarantors and any new
debtors accept and agree upon), the right to locate, disable or to take
possession of the Collateral by electronic, digital, magnetic or wireless
optical electromagnetic or similar means after giving any notices required under
applicable law.

    

    26.           Miscellaneous.  The
headings of each section of this Agreement are for convenience only and shall
not define or limit the provisions thereof.  This Agreement and all
rights and obligations hereunder shall be binding upon the Company and its
successors and assigns, and shall inure to the benefit of the Investor and its
successors and assigns.  If any term of this Agreement shall be held
to be invalid, illegal or unenforceable, the validity of all other terms hereof
shall in no way be affected thereby, and this Agreement shall be construed and
be enforceable as if such invalid, illegal or unenforceable term had not been
included herein.  The Company acknowledges receipt of a copy of this
Agreement.

    

    [Signature
page follows]

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, intending to be legally bound, the Company has caused this
Agreement to be duly executed as of the date first above written.

     

    
      
        
          	 
      	
                  ONSTREAM
      MEDIA CORPORATION

                
	 
      	 
      	 
      
	 
      	
                  By:

                	
                  /s/ Randy S. Selman

                
	 
      	
                  Name:

                	
                  Randy
      S. Selman

                
	 
      	
                  Title:

                	
                  President
      and Chief Executive Officer

                

        

      

      

      
        
          
            
              	
                      Accepted:

                    	 
      
	 
      	 
      	 
      
	
                      ROCKRIDGE
      CAPITAL HOLDINGS, LLC

                    	 
      
	 
      	 
      	 
      
	
                      By:

                    	
                      /s/ David Friedman

                    	 
      
	
                      Name:

                    	
                       
      David Friedman

                    	 
      
	
                      Title:

                    	
                       
      Managing Director

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}]]