Document:

Exhibit
      10.1

     

      
        

      

    

     

    AMENDED
      AND RESTATED

    LOAN
      AND
      SECURITY AGREEMENT

     

    Dated
      as
      of September 11, 2006

    (as
      amended and restated as of June 30, 2008)

     

    Between

     

    MDU
      COMMUNICATIONS (USA) INC.

     

    (Borrower)

     

    and

     

    FCC,
      LLC,
      d/b/a First Capital

     

    (as
      Agent
      and as Lender)

    

    and

     

    FULL
      CIRCLE FUNDING, LP

    

    (as
      Lender)

     

      
        

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

    

      
        	 	 	 	 	
                Page

              
	 	 	 	 	 
	
                1.

              	 	
                DEFINITIONS

              	 	
                1

              
	 	 	 	 	 
	
                2.

              	 	
                BORROWING

              	 	
                7

              
	 	 	 	 	 
	
                3.

              	 	
                INTEREST
                  AND FEES

              	 	
                10

              
	 	 	 	 	 
	
                4.

              	 	
                REPRESENTATIONS
                  AND WARRANTIES OF BORROWER

              	 	
                11

              
	 	 	 	 	 
	
                5.

              	 	
                COLLATERAL

              	 	
                12

              
	 	 	 	 	 
	
                6.

              	 	
                FINANCIAL
                  COVENANTS

              	 	
                13

              
	 	 	 	 	 
	
                7.

              	 	
                COLLATERAL
                  COVENANTS

              	 	
                13

              
	 	 	 	 	 
	
                8.

              	 	
                NEGATIVE
                  COVENANTS

              	 	
                19

              
	 	 	 	 	 
	
                9.

              	 	
                REPORTING
                  AND INFORMATION

              	 	
                21

              
	 	 	 	 	 
	
                10.

              	 	
                INSPECTION
                  RIGHTS; EXPENSES; ETC.

              	 	
                22

              
	 	 	 	 	 
	
                11.

              	 	
                RIGHTS
                  OF SETOFF, APPLICATION OF PAYMENTS, ETC.

              	 	
                23

              
	 	 	 	 	 
	
                12.

              	 	
                ATTORNEY-IN-FACT

              	 	
                23

              
	 	 	 	 	 
	
                13.

              	 	
                DEFAULTS
                  AND REMEDIES

              	 	
                24

              
	 	 	 	 	 
	
                14.

              	 	
                INDEMNIFICATION

              	 	
                26

              
	 	 	 	 	 
	
                15.

              	 	
                GENERAL
                  PROVISIONS

              	 	
                27

              
	 	 	 	 	 
	
                16.

              	 	
                AGENT

              	 	
                29

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Attachments:

    

    

    Schedule

    Exhibit
      A – Form of Borrowing Base Certificate

    Exhibit
      B – Form of Compliance Certificate

    Exhibit
      C – Forms of Customer Contracts

    Exhibit
      D – Supplier Contracts 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    AMENDED
      AND RESTATED

     

    LOAN
      AND SECURITY AGREEMENT

     

    This
      AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”)
      is
      entered into as of the 11th day of September, 2006 (as amended and restated
      as
      of June 30, 2008) between MDU Communications (USA) Inc., a Washington
      corporation (“Borrower”),
      and
      Full Circle Funding, L.P., a Delaware limited partnership (“Full Circle”) and
      FCC, LLC, d/b/a FIRST CAPITAL, a Florida limited liability company
      (“First
      Capital”)
      in its
      capacity as a Lender and as Agent, (each of Full Circle and First Capital a
      “Lender” and collectively “Lenders”).

     

    RECITALS:

     

    WHEREAS,
      the
      Borrower and the Lenders are parties to a Loan and Security Agreement dated
      as
      of September 11, 2006 (as amended to date, the “Original Credit
      Agreement”);

     

    WHEREAS,
      Borrower has requested that Lenders provide Borrower with an increased secured
      lending facility; 

     

    WHEREAS,
      Lenders are willing to provide an increased secured lending facility to Borrower
      on the terms set forth in this Agreement; and

     

    WHEREAS,
      the parties have agreed that, effective on the Restatement Date, the Original
      Credit Agreement shall be amended and restated so as to read, in its entirety,
      as herein set forth.

     

    NOW,
      THEREFORE, Borrower and Lenders hereby agree as follows:

     

    1. Definitions.
      For
      purposes of this Agreement:

    

    “Accounts”
means
      all presently existing or hereafter arising accounts receivable due to Borrower
      (including medical and health-care-insurance receivables), book debts, notes,
      drafts and acceptances and other forms of obligations now or hereafter owing
      to
      Borrower, whether arising from the sale or lease of goods or the rendition
      of
      services by Borrower (including any obligation that might be characterized
      as an
      account, contract right, general intangible or chattel paper under the UCC),
      all
      of Borrower’s rights in, to and under all purchase orders now or hereafter
      received by Borrower for goods and services, all proceeds from the sale of
      Inventory, all monies due or to become due to Borrower under all contracts
      for
      the sale or lease of goods or the rendition of services by Borrower (whether
      or
      not yet earned) (including the right to receive the proceeds of said purchase
      orders and contracts), all collateral security and guarantees of any kind given
      by any obligor with respect to any of the foregoing, and all goods returned
      to
      or reclaimed by Borrower that correspond to any of the foregoing.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “Affiliate”
means,
      with respect to a Person, (a) any family member, officer, director or managing
      agent of such Person, and (b) any other Person (i) that, directly or indirectly,
      through one or more intermediaries, controls, or is controlled by, or is under
      common control with, such given Person, (ii) that, directly or indirectly
      beneficially owns or holds 10% or more of any class of voting stock or
      partnership or other interest of such Person or any subsidiary of such Person,
      or (iii) 10% or more of the voting stock or partnership or other interest
      of which is directly or indirectly beneficially owned or held by such Person
      or
      a subsidiary of such Person. The term “control” means the possession, directly
      or indirectly, of the power to direct or cause the direction of the management
      and policies of a Person, whether through ownership of voting securities or
      partnership or other interests, by contract or otherwise.

    

    “Agent”
means
      First Capital in its capacity as agent for the Lenders under the Loan Documents
      and any successor in such capacity appointed pursuant to section
      16.

    

    “Aggregate
      Contracts”
shall
      mean all of the Bulk Contracts, Choice Contacts, and Exclusive Contracts,
      Consumer Service Agreements, Other Contracts and Supplier Contracts and any
      other agreements with suppliers of satellite, cable, or other service that
      Borrower resells as part of its business and rights, title, and interest in
      and
      payments under any of the foregoing.

    

    “Agreement
      Date”
means
      the date as of which the Original Agreement is dated.

    

    “Borrowing
      Base”
has
      the
      meaning set forth in Item
      1
      of the Schedule.

    

    “Borrowing
      Base Certificate”
means
      the certificate, substantially in the form of Exhibit
      A,
      with
      appropriate insertions, to be submitted to Agent by Borrower pursuant to this
      Agreement and certified as true and correct by the Chief Executive Officer
      or
      the Chief Financial Officer of Borrower.

    

    “Bulk
      Contract”
shall
      mean those Contracts with Commercial Customers that provide for provision of
      services to all units in the Property owned by the Commercial Customer and
      a
      monthly payment to Borrower from such Commercial Customer covering all units
      in
      the Property regardless of whether the Consumer Customer or resident in the
      individual units in such Property elect to utilize the services provided by
      Borrower and all rights, title and interest in and payments under any of the
      foregoing.

    

    “Business
      Day”
      means
      any
      day excluding Saturday, Sunday, and any day which is a legal holiday under
      the
      laws of the State of New York or which is a day on which any Lender is otherwise
      closed for transacting business with the public.

    

    “Change
      of Control”
      means
      [redacted];

    

    “Choice
      Contracts”
shall
      mean those Contracts with Commercial Customers where Borrower has a nonexclusive
      right to sell its services in the Property owned by the Commercial Customer
      and
      all rights, title, and interest in and payments under any of the
      foregoing.

    

    “Collateral”
has
      the
      meaning set forth in Section
      5(a).

    

    “Commercial
      Customer”
means
      a
      party to a Contract that owns or manages a multiple dwelling unit and that
      is
      not a Consumer Customer.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Consumer
      Customer”
means
      a
      customer that is an individual tenant or resident at a Property and that is
      the
      end user for the services provided by the Borrower to a Property.

    

    “Contracts”
shall
      mean those agreements or contracts entered into by and between Borrower (or
      acquired by Borrower through an acquisition pursuant to which Borrower acquired
      all of its predecessor in interest’s rights, title, interests and benefits under
      the agreement), and its Customers [redacted] pursuant to which Borrower provides
      digital satellite television programming, private cable video service, high
      speed internet services, voice over internet protocol, other voice or data
      delivery services, and other goods and services reasonable related thereto
      in
      the multiple dwelling unit market and all rights, title, and interest in and
      payments under any of the foregoing, including all Contracts entered into after
      the Agreement Date.

    

    “Customer”
means
      all of Borrower’s Commercial Customers and Consumer Customers.

    

    “Customer
      Contracts”
      means
      all of the Bulk Contract, Choice Contracts, Competitive Contracts, Digital
      Satellite Agreements and Other Agreements, whether now existing or entered
      into
      after the Agreement Date.

    

    “Default”
has
      the
      meaning set forth in Section
      13(a).

    

    “Consumer
      Service Agreement”
means
      the agreements between Borrower and its Consumer Customers that provide digital
      satellite television service, high speed Internet and access thereto, including
      without limitation, the agreement titled CN Work Order (Digital Satellite
      Television Service) and the Terms and Conditions For Digital Satellite
      Television Service, High-Speed Internet Activation and the related DirecTV
      Multiple Unit Dwelling Programming Agreement. 

    

    “Direct
      Costs”
means,
      on a per Customer Contract basis, [redacted].

     

    “Discounted
      Cash Flow”
shall
      mean an amount equal to the sum of [redacted]. 

     

    “Eligible
      Contracts”
means
      those Contracts arising from the sale of Inventory or performance of services
      in
      the ordinary course of Borrower’s business including Bulk Contracts, Exclusive
      Contracts, Choice Contracts and Supplier Contracts under which payments are
      due;
provided,
      however,
      that
      Eligible Contracts shall
      not
      include
      the following: [redacted]

    

    “Equipment”
means
      all of Borrower’s machinery, apparatus, equipment, motor vehicles, tractors,
      trailers, rolling stock, fittings, fixtures and other tangible personal property
      of every kind and description, together with all parts, accessories and special
      tools and all increases and accessions thereto and substitutions and
      replacements therefore.

    

    “Exclusive
      Contracts”
shall
      mean those Contracts with Commercial Customers that provide for Borrower to
      have
      the exclusive rights to sell its services to the Consumer Customers or other
      residents of the Property owned by the Commercial Customer, but does not provide
      for a payment to Borrower by the Commercial Customer other than for services
      such Commercial Customer purchases for its own account and all rights, title,
      and interest in and payments under any of the foregoing.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “GAAP”
means
      generally accepted accounting principles set forth in the opinions and
      pronouncements of the Accounting Principles Board of the American Institute
      of
      Certified Public Accountants and statements and pronouncements of the Financial
      Accounting Standards Board that are applicable to the circumstances as of the
      date of determination and applied on a consistent basis.

    

    “General
      Intangibles”
means
      all of Borrower’s present and future general intangibles and all other presently
      owned or hereafter acquired intangible personal property of Borrower (including
      payment intangibles and any and all choses or things in action, goodwill,
      patents and patent applications, tradenames, servicemarks, trademarks and
      trademark applications, copyrights, blueprints, drawings, purchase orders,
      customer lists, monies due or recoverable from pension funds, route lists,
      infringement claims, software, computer programs, computer discs, computer
      tapes, literature, reports, catalogs, deposit accounts, tax refunds and tax
      refund claims) other than Goods and Accounts, as well as Borrower’s books and
      records relating to any of the foregoing.

    

    “Goods”
means
      all of Borrower’s present and hereafter acquired goods, as defined in the UCC,
      wherever located, including imbedded software to the extent included in “goods”
as defined in the UCC, manufactured homes, and standing timber that is cut
      and
      removed for sale.

    

    “Gross
      Profit”
means,
      on a per Contract basis, [redacted]. 

    

    “Guarantor”
means
      MDU Communications International, Inc. and any other Person that has guaranteed
      all or any part of the Obligations.

    

    “Indebtedness”
as
      applied to any Person, means, without duplication [redacted].

     

    “Inventory”
means
      all of Borrower’s inventory as defined in the UCC, together with all of
      Borrower’s present and future inventory, including goods held for sale or lease
      or to be furnished under a contract of service and all of Borrower’s present and
      future raw materials, work in process, finished goods, shelving and racking
      upon
      which the inventory is stored and packing and shipping materials, wherever
      located, and any documents of title representing any of the above.

    

    “Lien”
means
      any
      security interest, security title, mortgage, deed to secure debt, deed of trust,
      lien, pledge, charge, conditional sale or other title retention agreement,
      or
      other encumbrance of any kind in respect of any property, including
      the interest of each lessor under any capitalized lease in, of or on any assets
      or properties of a Person, whether now owned or hereafter acquired and whether
      arising by agreement or operation of law.

    

    “Loan
      Documents”
means,
      collectively,
      this Agreement and any other agreements, instruments, certificates (including
      any Borrowing Base Certificate) or other documents entered into in connection
      with this Agreement, including collateral documents, letter of credit
      agreements, security agreements, pledges, guaranties, mortgages, deeds of trust,
      assignments and subordination agreements, warrant purchase agreements and
      registration rights agreements and any other agreement executed or delivered
      by
      any Obligor or any Affiliate of any Obligor pursuant hereto or in connection
      herewith.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Loans”
means
      a
      collective reference to the Revolving Loans and the Term Loan Tranche
      A.

    

    “Negotiable
      Collateral”
means
      all of Borrower’s present and future letters of credit, advises of credit,
      notes, drafts, instruments, and documents, including, without limitation, bills
      of lading, leases, and chattel paper, and Borrower’s books and records relating
      to any of the foregoing.

    

    “Obligations”
means
      all Revolving Loans and Indebtedness, obligations and liabilities of Borrower
      to
      Agent and each Lender and their respective Affiliates under this Agreement
      and
      the Loan Documents of every kind and description, direct or indirect, secured
      or
      unsecured, joint or several, absolute or contingent, due or to become due,
      including any overdrafts, whether for payment or performance, now existing
      or
      hereafter arising, whether presently contemplated or not, regardless of how
      the
      same arise, or by what instrument, agreement or book account they may be
      evidenced, or whether evidenced by any instrument, agreement or book account,
      including, but not limited to, all loans (including any loan by modification,
      renewal or extension), all Indebtedness arising from any derivative
      transactions, all undertakings to take or refrain from taking any action, all
      Indebtedness, liabilities or obligations owing from Borrower to others which
      a
      Lender may have obtained by purchase, negotiation, discount, assignment or
      otherwise, and all interest, taxes, fees, charges, expenses and attorney’s fees
      (whether or not such attorney is a regularly salaried employee of a Lender
      or
      any of its Affiliates) chargeable to Borrower or incurred by a Lender under
      this
      Agreement or the Loan Documents.

    

    “Obligor”
means
      Borrower, any Guarantor, any validity guarantor or any other Person primarily
      or
      secondarily, directly or indirectly, liable on any of the
      Obligations.

    

    “Original
      Loan Agreement”
has
      the
      meaning set forth in the recitals hereto.

    

    “Other
      Contracts”
means
      those Contracts to provide services to Customers that are not Bulk Contracts,
      Choice Contracts, or Competitive Contracts, but which are from a similar line
      or
      type of business or a new line or type of business.

    

    “Permitted
      Acquisitions”
shall
      mean acquisitions of [redacted].

    

    “Permitted
      Liens”
means
      (a) Liens or charges for current taxes, assessments or other governmental
      charges which are not delinquent or remain payable without any penalty, or
      the
      validity of which is contested in good faith by appropriate proceedings upon
      stay of execution of the enforcement thereof and for which appropriate reserves
      have been established in accordance with GAAP; (b) deposits or pledges to secure
      (i) statutory obligations, (ii) surety or appeal bonds, or (iii) bonds for
      release of attachment, stay of execution or injunction; (c) statutory Liens
      on
      property arising in the ordinary course of business which, in the aggregate,
      do
      not materially impair the use of such property or materially detract from the
      value of such property; (d) Liens existing on the Agreement Date and described
      on Item
      3
      of the Schedule;
      (e)
      Liens on Equipment securing all or part of the purchase price of such Equipment;
      provided,
      however,
      that
      (i) such Lien is created contemporaneously with or within 30 days after the
      acquisition of such Equipment, (ii) such Lien attaches only to the specific
      items of Equipment so acquired, and (iii) such Lien secures only the
      Indebtedness incurred to acquire such Equipment; and (f) Liens in favor of
      Agent
      for the benefit of Lenders.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    “Person” means
      an
      individual, corporation, partnership, limited liability company, association,
      trust, unincorporated organization, government or any agency or political
      subdivision thereof, or any other entity.

    

    “Property”
means
      all multiple dwelling unit type properties, including but not limited to
      apartments, condominiums, coops, military bases, gated communities, town homes
      and dormitories owned by a Commercial Customer.

    

    “Restatement
      Date”
means
      June 30, 2008.

    

    “Revolving
      Loans”
means
      the total of all loans and advances made to Borrower hereunder and all interest
      fees and expense reimbursement obligations of Borrower relating thereto and
      shall include all of, Revolving Loan Tranche B, Revolving Loan Tranche C,
      Revolving Loan Tranche D, Revolving Loan Tranche E and Revolving Loan Tranche
      F

    

    “Revolving
      Loan Tranche B”
shall
      mean all amounts outstanding under the Loans in excess of $5 million dollars
      but
      less than or equal to $10 million dollars.

    

    “Revolving
      Loan Tranche C”
shall
      mean all amounts outstanding under the Loans in excess of $10 million dollars
      but less than or equal to $15 million dollars.

    

    “Revolving
      Loan Tranche D”
shall
      mean all amounts outstanding under the Loans in excess of $15 million dollars
      but less than or equal to $20 million dollars.

    

    “Revolving
      Loan Tranche E”
shall
      mean all amounts outstanding under the Loans in excess of $20 million dollars
      but less than or equal to $25 million dollars.

    

    “Revolving
      Loan Tranche F”
shall
      mean all amounts outstanding under the Loans in excess of $25 million dollars
      but less than or equal to $30 million dollars.

    

    “Subordinated
      Debt”
means
      all of the Indebtedness owed by Borrower to any other Person, the repayment
      of
      which is subordinated to the repayment of the Obligations pursuant to the terms
      of a subordination agreement reasonably acceptable to Agent.

    

    “Supplier
      Contracts”
means
      contracts or agreements with [redacted] and any other suppliers of satellite,
      cable or other service that Borrower resells as part of its business and all
      rights, title and interest in and payments under any of the
      forgoing.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “Term
      Loan Tranche A”
shall
      mean a term loan in the original principal amount of $5 million dollars and
      all
      interest, fees and expense reimbursement obligations of Borrower relating
      thereto.

    

    “UCC”
means
      the Uniform Commercial Code, as in effect from time to time, of the State of
      New
      York or of any other state the laws of which are required as a result thereof
      to
      be applied in connection with the issue of perfection of security interests;
      provided,
      that to
      the extent that the UCC is used to define any term herein or in any other
      documents and such term is defined differently in different Articles or
      Divisions of the UCC, the definition of such term contained in Article or
      Division 9 shall govern.

    

    Other
      Definitional Provisions.
      References to the “Schedule” or any “Section” or “Exhibit” refer to the Schedule
      or a section or exhibit, respectively, of this Agreement unless otherwise
      specifically provided. Any of the terms defined in Section 1
      may,
      unless the context otherwise requires, be used in the singular or the plural
      depending on the reference. In this Agreement: words importing any gender
      include the other genders; the words “including”, “includes” and “include” shall
      be deemed to be followed by the words “without limitation”; references to
      agreements and other contractual instruments shall be deemed to include
      subsequent amendments, assignments, and other modifications thereto, but only
      to
      the extent such amendments, assignments and other modifications are not
      prohibited by the terms of this Agreement; references to any Person includes
      their respective permitted successors and assigns or people succeeding to the
      relevant functions of such Persons; any and all terms which are defined in
      the
      UCC and are not defined herein shall be construed and defined in accordance
      with
      the definition of such terms under the UCC; all references to statutes and
      related regulations shall include any amendments of same and any successor
      statutes and regulations; and all references to time of day shall refer to
      New
      York, New York time.

    

    2. Borrowing.

     

    (a) Amount
      Available to Be Borrowed.
      (i)
      From time to time Borrower may request, and each Lender severally, agrees to
      lend, subject to the other terms and conditions of this Agreement, to Borrower
      up to an amount equal to their agreed upon portion of the Borrowing Base at
      any
      time. Except with respect to the Term Loan Tranche A, borrowed amounts that
      are
      repaid may be reborrowed upon the terms and conditions of this
      Agreement.

     

    (i) Borrower
      has borrowed $5,000,000, constituting Term Loan Tranche A. Provided that no
      Default has occurred and sufficient availability exists under the Borrowing
      Base, Borrower must maintain the outstanding balance of the Term Loan Tranche
      A,
      subject to Borrower’s right to prepay the Obligations in their entirety under
      section 2 (h) hereof. Upon the request of Agent, the
      Term
      Loan Tranche A shall be evidenced by promissory notes.

     

    (ii) Not
      withstanding the forgoing, Borrower may not borrow amounts in excess of Term
      Loan Tranche A and Revolving Loan Tranche B unless it meets the positive EBITDA
      Covenant set forth in Item 21(e) of the Schedule.

     

    (b) Standards.
      Agent
      will determine eligibility and the loan value of Collateral, Agent’s reasonable
      judgment, consistent with Agent’s experience, prudent business judgment and
      standards of commercial reasonableness applicable to asset-based credits and
      in
      good faith. Any Revolving Loans requested by Borrower and made by Lenders or
      at
      any time outstanding in excess of the Borrowing Base or any other limitation
      set
      forth in this Agreement will, nevertheless, be subject to the terms of this
      Agreement, will constitute Obligations for all purposes and be entitled to
      the
      benefits of the Collateral.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (c) Persons
      Authorized to Request Loans.
      Borrower
      hereby authorizes and directs Agent to make Revolving Loan advances to or for
      the benefit of Borrower upon receipt of instructions from any of the persons
      listed on Item
      4
      of the Schedule.
      Neither
      Agent nor Lenders shall have any liability whatsoever to Borrower or any other
      Person for acting upon any such instructions which Agent, in good faith,
      believes were given by any such person, and Agent shall have no duty to inquire
      as to the propriety of any disbursement. Agent
      is
      hereby authorized to make the Revolving Loans provided for herein based on
      instructions received by facsimile, electronic mail, telephone or other method
      of communication from any of such persons. Although Agent shall make a
      reasonable effort to determine the person’s identity, Agent shall not be
      responsible for determining the authenticity of any such instructions, and
      Agent
      may act on the instructions of anyone it perceives to be one of the persons
      authorized to request loans hereunder. Agent
      shall have the right to accept the instructions of any of the foregoing persons
      unless and until Agent actually receives from Borrower (in accordance with
      the
      notice provisions of this Agreement) written notice of termination of the
      authority of that person. Borrower may change persons designated to give Agent
      borrowing instructions only by delivering to Agent written notice of such
      change. Borrower will ensure that each telephone instruction from any person
      designated in or pursuant to this paragraph shall be followed by written
      confirmation of the request for disbursement in such form as Agent makes
      available to Borrower from time to time for such purpose; provided,
      however, that Borrower’s failure to provide written confirmation of any
      telephonic instruction shall not invalidate such telephonic
      instruction.

    

    (d) Application
      of Remittances.
      [redacted]. 

     

    (e) Conditions
      to Obligation to Make Loans.
      Borrower acknowledges that Agent’s and each Lender’s obligation to make
      Revolving Loans to Borrower (or to issue or create or cause the issuance or
      creation by Lenders or its Affiliates of letters of credit or acceptances for
      Borrower’s account) is subject to the following terms and
      conditions:

     

    (i) Agent
      and
      each Lender shall
      have no obligation to make the initial Revolving Loan to Borrower or to extend
      any other financial accommodation to Borrower unless and until each condition
      precedent specified on Item
      6
      of the Schedule has
      been
      fulfilled to Agent’s and Lenders’ satisfaction.

     

    (ii) Agents
      and each Lender’s
      obligation to make any loans to Borrower and extend other financial
      accommodations to Borrower (including the initial loans) is subject to the
      conditions that, as of the date of any such loan or other accommodation, no
      Default will have occurred and be continuing hereunder, there will have occurred
      no material adverse change in Borrower’s financial condition or operations or in
      Borrower’s business prospects as compared to the state of facts existing on the
      Agreement Date, and Borrower’s representations and warranties set forth in this
      Agreement (including any amendment, modification, supplement or extension
      hereof) will be true and correct as if made on and as of the date of each
      subsequent credit request. Each request for a borrowing or other financial
      accommodation by Borrower will be deemed to be a reaffirmation of each of
      Borrower’s warranties and representations hereunder.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (f) Repayment
      of Loans.
      In the
      event of Default by Borrower or upon termination of this Agreement, Borrower
      will repay upon demand all of the Obligations. If no demand is earlier made,
      Borrower will repay all Obligations in full, without demand or notice, on the
      last day of the term of this Agreement (as provided in clause (g)
      below).
      If at any time for any reason, the aggregate outstanding principal amount of
      all
      Loans exceeds the Borrowing Base or any other limitation on the amount available
      to be borrowed hereunder, Borrower will immediately, without notice or demand,
      repay the outstanding principal amount of the Loans, together with accrued
      and
      unpaid interest on the amount repaid, in an amount equal to such excess.
      Borrower shall make each payment required hereunder or under any other Loan
      Document without setoff, deduction or counterclaim.

     

    (g) Maturity.
      This
      Agreement will continue in full force and effect from the Agreement Date until
      the termination date provided for in Item
      7
      of the Schedule.

     

    (h) Voluntary
      Termination.
      Borrower may terminate this Agreement at any time upon at least 30 days’ prior
      written notice to Lenders. On the date specified in such notice, termination
      will be effective, so long as Borrower has paid to Lenders, in same day funds,
      an amount equal to the aggregate principal amount of all Loans outstanding
      on
      such date, together with accrued interest thereon, the originals of all letters
      of credit and bankers acceptances, if any, issued, created or guaranteed by
      Agent or Lenders or any of their Affiliates for Borrower’s account have been
      returned for cancellation or have been presented and paid by Borrower or other
      arrangements satisfactory to Agent and Lenders have been made, all other
      Obligations outstanding and unpaid including any prepayment or other fees
      provided for hereunder have been paid in full in cash, and Borrower has provided
      Lenders and Agent an indemnification agreement satisfactory to Agent and Lenders
      with respect to returned and dishonored items and such other matters as Agent
      and Lenders shall reasonably require. 

     

    (i) Termination
      on Default.
      Notwithstanding the foregoing, should a Default occur and be continuing, Lenders
      will have the right to terminate this Agreement at any time without
      notice.

     

    (j) Survival.
      Notwithstanding termination, all the terms, conditions, and provisions hereof
      (including Agent’s and Lenders security interest in the Collateral, but
      excluding any obligations of Agent or Lenders hereunder) will continue to be
      fully operative until all Obligations have been paid, satisfied, and
      liquidated.

     

    (k) Payments
      as Loans.
      Borrower’s failure to pay any amount due from Borrower under this Agreement or
      any other Loan Document, whether for principal, interest, fees, premiums, costs,
      expenses or otherwise, shall be deemed to be a request by Borrower for a loan
      hereunder, and Agent on behalf of Lenders may charge Borrower’s loan account for
      any such amount. Additionally, if Lenders determine in their reasonable judgment
      that extensions of credit are necessary to protect the Collateral, Agent is
      hereby authorized to make such extensions of credit and charge them to
      Borrower’s loan account.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    3. Interest
      and Fees.

    

    (a) Interest
      on Loans.
      

     

    
      	 	
              (i)

            	
              Borrower
                will pay to Agent for the benefit of Lenders or, at Agent’s option, Agent
                may charge Borrower’s loan account with, interest on the average daily net
                principal amount of Loans outstanding hereunder, calculated monthly
                and
                payable on the first day of each calendar month, at a rate (computed
                on
                the basis of the actual number of days elapsed over a year of 360
                days)
                equal to the Prime Rate plus the interest margin specified in Item
                8
                of the Schedule.
                The “Prime
                Rate”
                is, at any time, the rate of interest noted in The
                Wall Street Journal,
                Money Rates section, as the “Prime Rate” (currently defined as the base
                rate on corporate loans posted by at least 75% of the nation’s thirty (30)
                largest banks) but in no event shall the Prime Rate be less than
                7.75%. In
                the event that The
                Wall Street Journal
                quotes more than one rate, or a range of rates, as the Prime Rate,
                then
                the Prime Rate shall mean the average of the quoted rates. In the
                event
                that The
                Wall Street Journal
                ceases to publish a Prime Rate, then the Prime Rate shall be the
                average
                of the “prime” or “base” rates quoted by the three (3) largest U.S. money
                center commercial banks, as determined by Lender. The “Prime Rate” may not
                be the lowest or best rate at which Agent calculates interest or
                extends
                credit. Any change in the Prime Rate shall be effective for purposes
                of
                calculating interest hereunder as of the date of such change.
                

            

    

     

    (b) Default
      Interest.
      To the
      extent permitted by law and without limiting any other right or remedy of Agent
      or Lenders hereunder, whenever there a Default has occurred and is continuing
      under this Agreement, the rate of interest on the unpaid principal balance
      of
      the Obligations shall, at the option of Lenders, be increased by adding the
      default margin identified on Item
      9
      of the Schedule
      to the
      interest rate otherwise in effect hereunder. Agent, on behalf of Lenders may
      charge such default interest rate retroactively beginning on the date the
      applicable Default first occurred or existed. Borrower acknowledges that: (i)
      such additional rate is a material inducement to Lenders to make the loans
      described herein; (ii) Lenders would not have made the loans in the absence
      of
      the agreement of Borrower to pay such additional rate; (iii) such additional
      rate represents compensation for increased risk to Lenders that the loans will
      not be repaid; and (iv) such rate is not a penalty and represents a reasonable
      estimate of (A) the cost to Lenders in allocating its resources (both personnel
      and financial) to the ongoing review, monitoring, administration and collection
      of the loans, and (B) compensation to Lenders for losses that are difficult
      to
      ascertain. In the event of termination of this Agreement by either party hereto
      when such charge has otherwise become payable, Lenders entitlement to this
      charge will continue until all Obligations are paid in full.

     

    (c) Fees.
      Borrower will pay to Agent on behalf of Lenders the fees set forth in
Item
      10
      of the Schedule.

    

    (d) No
      Usury.
      Borrower acknowledges that neither Agent nor Lenders intends to reserve, charge
      or collect interest on money borrowed under this Agreement at any rate in excess
      of the rates permitted by applicable law and that, should any interest rate
      provided for in this Agreement exceed the legally permissible rate(s), the
      rate
      will automatically be reduced to the maximum rate permitted under applicable
      law. If Agent or Lenders should collect any amount from Borrower which, if
      it
      were interest, would result in the interest rate charged hereunder exceeding
      the
      maximum rate permitted by applicable law, such amount will be applied to reduce
      principal of the Obligations or, if no Obligations remain outstanding, will
      be
      refunded to Borrower.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (e) Monthly
      Statements. Agent
      will render a statement to Borrower each month for loans, payments, and other
      transactions pursuant to this Agreement, and such statement rendered by Agent
      will be binding upon Borrower unless Agent is notified in writing to the
      contrary within 60 days after the date such statement is rendered.

     

    4. Representations
      and Warranties of Borrower.

     

    (a) Authority,
      Compliance with Laws, Litigation, No Material Adverse Change,
      Etc.
      Borrower
      represents and warrants to Agent and each Lender that: (i) Borrower’s exact
      legal name, type of organization, state of organization and organizational
      identification number are fully and accurately set forth on Item
      11
      of the Schedule,
      and
      Borrower is duly organized and validly existing under the laws of such state
      of
      organization; (ii) the execution, delivery, and performance of this Agreement
      and the other Loan Documents are within Borrower’s corporate powers, have been
      duly authorized, do not violate Borrower’s constituent documents, any law or
      regulation, including without limitation, any law or regulation relating to
      occupational health and safety or protection of the environment, applicable
      to
      Borrower, or any indenture, agreement, or undertaking to which Borrower is
      a
      party or by which Borrower or Borrower’s property is bound; (iii) this Agreement
      and the other Loan Documents to which Borrower is a party constitute valid,
      binding and enforceable obligations of Borrower in accordance with the terms
      hereof and thereof, except as enforceability may be limited by bankruptcy,
      insolvency, fraudulent conveyance, moratorium or other similar laws applicable
      to creditors’ rights generally or by generally applicable equitable principles
      affecting the enforcement of creditors’ rights; (iv) Borrower has no
      subsidiaries or other investments in other Persons, except as set forth on
      Item
      12
      of the Schedule;
      (v)
      Borrower is in compliance in all material respects with all laws, rules and
      regulations applicable to Borrower, including laws, rules or regulations
      concerning the environment, occupational health and safety and pensions or
      other
      employee benefits; (vi) except as set forth on Item
      13
      of the Schedule,
      there
      is no litigation or investigation pending against Borrower (or, so far as
      Borrower is aware, threatened) which, if it were decided adversely to Borrower,
      could reasonably be expected to have a material adverse effect on Borrower,
      Borrower’s financial or operational condition or Borrower’s prospects (taking
      into account any insurance coverage that has been acknowledged by the insurer);
      (vii) other than debt that is to be repaid from the proceeds of the first
      advance hereunder, Borrower is not indebted to any other Person for money
      borrowed nor has Borrower issued any guaranty of payment or performance by
      any
      other Person, except as set forth on Item
      14
      of the Schedule;
      (viii)
      since the date of the financial statements of Borrower most recently delivered
      to Lender, there has been no material adverse change in Borrower’s business,
      Borrower’s financial or operational condition or Borrower’s business prospects;
      and (ix) Borrower is, and after giving effect to the initial loans under this
      Agreement and the application of the proceeds of such loans Borrower will be,
      solvent and has sufficient revenues to pay Borrower’s obligations as they come
      due and adequate capital with which to conduct Borrower’s business.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (b) Title
      to Assets, Other Collateral Matters.
      Borrower represents and warrants to Agent and Lenders that: (i) Borrower has
      good and marketable title to the Collateral, free of all Liens except for
      Permitted Liens, and no financing statement, mortgage, notice of Lien, deed
      of
      trust, security agreement, or any other agreement or instrument creating or
      giving notice of any Lien against any of the Collateral has been signed,
      authorized or delivered by Borrower, except in Agent’s (on behalf of Lenders)
      favor or with respect to Permitted Liens; (ii) with regard to each Aggregate
      Contract and any account related thereto, except as set forth on a Borrowing
      Base Certificate including such Aggregate Contract and any account related
      thereto: (A) the Customer or Supplier has accepted the Contract; and (B) all
      representations, warranties and covenants set forth herein relating to Aggregate
      Contracts are met; (iii) all Equipment is in good condition and state of repair,
      ordinary wear and tear excepted and is currently usable or saleable in the
      ordinary course of Borrower’s business; (iv) all Collateral meets applicable
      government standards; (v) in the past five years, except as set forth on
Item
      15
      of the Schedule
      (A)
      Borrower has not used any other legal, trade or fictitious names, and (B)
      Borrower has not been a party to any merger or purchased assets from any other
      Person other than in the ordinary course of business; and (vii) each of
      Borrower’s chief executive office and principal place of business, all
      Inventory, all Equipment and all other Collateral (other than the Inventory
      and
      Equipment installed at Customer locations in the ordinary course of business)
      is
      located at the addresses set forth on Item
      16
      of the Schedule and
      has
      not been located at any other location during the five year period prior to
      the
      Agreement Date.

     

    (c) Ownership
      Structure. Borrower
      represents and warrants that (i) Item
      17
      of the Schedule
      accurately describes the ownership of Borrower’s capital stock, membership
      interests or other equity interests, and (ii) the individual(s) listed on
Item
      17
      of the Schedule
      have,
      directly or indirectly, voting and managerial control of Guarantor.

     

    (d) Additional
      Representations.
      Borrower represents and warrants to each Lender that: (i) Borrower is not
      engaged as one of Borrower’s principal activities in owning, carrying or
      financing the purchase or ownership by others of “margin stock” (as defined in
      Regulation U of the Board of Governors of the Federal Reserve System); (ii)
      Borrower owns no real property and leases no real property other than as listed
      on Item
      18
      of the Schedule;
      (iii) a
      true, correct and complete list of any warehousemen, processors, consignees
      or
      other bailees with possession or control of any Inventory (excluding Customers)
      is set forth on Item
      18
      of the Schedule;
      and
      (iv) a list and brief description of all bank accounts maintained by Borrower
      with any bank or financial institution is set forth on Item
      19
      of the Schedule.

     

    5. Collateral.

     

    (a) Grant
      of Security Interest.
      To
      induce Lenders to accept this Agreement and to make loans to Borrower from
      time
      to time pursuant to its terms, Borrower hereby grants to Agent on behalf of
      Lenders, a security interest in, and assigns, mortgages and pledges to Agent
      on
      behalf of Lenders, all of Borrower’s right, title and interest in and to all of
      Borrower’s property, whether real or personal, tangible or intangible, now owned
      or existing or hereafter acquired or arising, including all of the following
      (collectively, the “Collateral”):

     

    (i) all
      Accounts,
      Contracts, Inventory,
      Equipment, Goods, General Intangibles, Negotiable Collateral, Aggregate
      Contracts, Supplier Contracts, all Customer Contracts and all other Contracts
      or
      other agreements and all rights title and interests in and to and payments
      under
      any of the foregoing;

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (ii) all
      investment property, securities and securities accounts and financial assets,
      as
      well as all bank and depository accounts;

     

    (iii) all
      chattel paper (whether tangible or electronic) and contract rights;

     

    (iv) all
      guaranties, collateral, Liens on real or personal property, leases, letters
      of
      credit, letter-of-credit rights, supporting obligations, and all other rights,
      agreements, and property securing or relating to payment of Accounts or any
      other Collateral;

     

    (v) all
      documents, books and records relating to any Collateral or to Borrower’s
      business; 

     

    (vi) all
      other
      property of Borrower’s now or hereafter in the possession or control of Agent,
      any Lender or any of Agent’s or any Lender’s respective Affiliates (including
      cash, money, credits and balances of Borrower held by or on deposit with Agent
      or any Lender or any Affiliate of Agent or Lenders); 

     

    (vii) all
      other
      assets of any Obligor in which Agent or any Lender receives a security interest
      to secure all or part of the Obligations or which hereafter come into the
      possession, custody or control of Agent or Lenders or any Affiliate of Agent
      or
      Lender;

    

    (viii) all
      of
      Borrower’s commercial tort claims listed on (A) Item
      20
      of the Schedule (which
      Borrower represents and warrants is a true, accurate and complete list of all
      of
      Borrower’s commercial tort claims as of the Agreement Date) or (B) any other
      writing provided to Agent pursuant to Section
      7(f);
      and

    

    (ix) all
      proceeds and products of all of the foregoing in any form, including amounts
      payable under any policies of insurance insuring all or any of the foregoing
      against loss or damage, all parts, accessories, attachments, special tools,
      additions, replacements, substitutions and accessions to or for all or any
      of
      the foregoing, all condemnation or requisition payments with respect to all
      or
      any of the foregoing and all increases and profits received from all or any
      of
      the foregoing.

     

    (b) Obligations.
      Such
      grant, assignment, mortgage and transfer is made for the purpose of securing
      and
      the Collateral secures and will continue to secure all of the
      Obligations.

     

    6. Financial
      Covenants.
      Borrower shall comply with each of the financial covenants set forth on
Item
      21
      of the Schedule.

    

    7. Collateral
      Covenants.

    

    (a) Accounts.
      After a
      Default has occurred and is continuing, if Agent so elects, Agent will have
      the
      right at all times to settle, compromise, adjust, or litigate all material
      Customer disputes directly with the Customer or other complainant upon such
      terms and conditions as Agent deems advisable without incurring liability to
      Borrower for Agent’s performance of such acts. All of Borrower’s books and
      records concerning Accounts and a copy of Borrower’s general ledger will be
      maintained at the address of Borrower’s chief executive office set forth on
Item
      16
      of the Schedule.
      All
      Accounts included on any Borrowing Base Certificate will be, except as indicated
      on such Borrowing Base Certificate or subsequently in writing to Lender, bona
      fide and
      existing obligations of Customers arising out of the sale of goods and/or the
      rendering of services by Borrower in the ordinary course of Borrower’s business,
      owned by and owing to Borrower without defense, setoff or counterclaim, and
      will
      be subject to a perfected, first-priority security interest in Lender’s favor
      and will be free and clear of all other Liens except Permitted
      Liens.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (b) Equipment.
      Borrower will maintain all Equipment used or useful in Borrower’s business in
      good and workable condition, ordinary wear and tear excepted, subject to a
      perfected, first-priority security interest in Agents on behalf of Lenders
      favor
      and free and clear of all other Liens (other than Permitted Liens), at one
      of
      the locations set forth on Item
      16
      of the Schedule
      as the
      current location of Borrower’s chief executive office or a current location of
      other Collateral, or at another location established in accordance with this
      Agreement.

     

    (c) Defense
      of Title.
      All
      Collateral will at all times be owned by Borrower, and Borrower will defend
      Borrower’s title to the Collateral against the claims of third parties. Borrower
      will at all times keep accurate and complete records of the
      Collateral.

     

    (d) Perfection;
      Further Assurances.
      Borrower will give Agent at least 30 days’ prior written notice of any change in
      Borrower’s name, state of organization or organizational identification number,
      any change in the location of Borrower’s principal place of business or chief
      executive office, any change in the locations of Borrower’s Contracts, Inventory
      or Equipment and any acquisition by Borrower of any interest in real property.
      Borrower will, at Borrower’s expense, promptly execute and deliver from time to
      time at Agent’s request and pay the costs of filing such additional financing
      statements, mortgages, or other evidences of Liens as may be necessary or
      desirable to perfect or continue perfection of Agents on behalf of Lenders
      security interest in Borrower’s property or, at Agent’s request, to create and
      perfect a Lien on newly acquired real property. Borrower will use all
      commercially reasonable efforts to obtain from any landlord, warehouseman,
      processor or other third party operator of premises on which any Collateral
      is
      located (other than Customers) an acceptable Lien waiver or subordination
      agreement in Agent’s on behalf of Lender’s favor with respect to such
      Collateral. All Collateral is and will continue to be, except as expressly
      consented to by Agent on behalf of Lenders, personal property and will not,
      by
      reason of attachment or connection to any realty, either become or be deemed
      to
      be a fixture or appurtenance to such realty and will at all times be readily
      removable without material damage to any realty, provided, however that Agent
      and Lenders acknowledge that certain Inventory or Equipment such as satellite
      dishes and other equipment installed in connection with the services Borrower
      provides under its Customer Contracts may be affixed to realty of the particular
      Customer. In the event that any Collateral, including proceeds, is evidenced
      by
      or consists of Negotiable Collateral, Borrower shall, immediately upon written
      request therefor from Agent, endorse and assign such Negotiable Collateral
      over
      to Lenders and deliver actual physical possession of the Negotiable Collateral
      to Agents on behalf of Lenders. Borrower shall at any time and from time to
      time
      use commercially reasonable efforts as Lenders may request for Agent on behalf
      of Lenders (i) to obtain an acknowledgment, in form and substance satisfactory
      to Agent on behalf of Lenders, of any bailee having possession of any of the
      Collateral that such bailee holds such Collateral for Lenders, (ii)
      to
      obtain “control” of any investment property, deposit accounts, letter-of-credit
      rights or chattel paper (including electronic chattel paper) in accordance
      with
      Article 9 of the UCC, with any agreements establishing control to be in form
      and
      substance satisfactory to Lenders, and (iii)
      otherwise to insure the continued perfection and priority of Lenders’ security
      interest in any of the Collateral and of the preservation of its rights therein.
      Borrower shall only keep funds on deposit in bank or other deposit accounts
      covered by deposit account control agreements except for those bank or deposit
      accounts which are either zero balance accounts or maintain minimal balances
      (i.e. less than $10,000 on an average basis). Lenders may, not more frequently
      than once per year at Borrower’s expense (unless a Default has occurred and is
      continuing), obtain an appraisal on some or all of the Collateral.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (e) Insurance.
      Borrower will obtain and maintain in full force and effect insurance covering
      the Collateral against all risks to which the Collateral is exposed, including
      loss, damage, fire, theft, business interruption and all other such risks,
      in
      such amounts, with such companies, under such policies and in such form as
      will
      be reasonably satisfactory to Agent, which policies will name Agent on behalf
      of
      Lenders as an additional insured and provide that loss thereunder will be
      payable to Agent as Agent on behalf of Lenders’ interests may appear upon a loss
      payee endorsement acceptable to Agent on behalf of Lender. All proceeds of
      any
      such insurance will be paid over to Agent directly, and Agent on behalf of
      Lenders may apply such proceeds to payment of the Obligations, whether or not
      due, in such order of application as Agent on behalf of Lenders determines,
      provided that so long as no Default has occurred and is continuing, Agent shall
      permit Borrower to apply such proceeds, in whole or in part, to the replacement,
      restoration or rebuilding of the lost or damaged property. Borrower will provide
      to Agent from time to time certificates showing such coverage in effect and,
      at
      Lender’s request, the underlying policies. Borrower shall obtain a life
      insurance policy covering [redacted]. Borrower shall execute such assignment
      documents as Agent may request and shall deliver the original of such policy
      to
      Agent. 

     

    (f) Commercial
      Tort Claims.
      If
      Borrower shall at any time acquire a commercial tort claim, Borrower shall
      immediately notify Agent in a writing signed by Borrower of the details thereof
      and grant to Agent in such writing a security interest therein and in the
      proceeds thereof, all upon the terms of this Agreement, with such writing to
      be
      in form and substance satisfactory to Agent.

     

    (g) Financing
      Statements.
      Agent
      on behalf of Lenders’ may at any time and from time to time file financing
      statements, continuation statements and amendments thereto that describe the
      Collateral as “all assets” of Borrower or words of similar effect and which
      contain any other information required by Part 5 of Article 9 of the UCC
      for the sufficiency or filing office acceptance of any financing statement,
      continuation statement or amendment, including whether Borrower is an
      organization, the type of organization and any organization identification
      number issued to Borrower. Borrower agrees to furnish any such information
      to
      Agent promptly upon request. Any such financing statements, continuation
      statements or amendments may be signed by Agent on behalf of Borrower or filed
      by Agent without the signature of Borrower and may be filed at any time in
      any
      jurisdiction. Borrower
      acknowledges that it is not authorized to file any financing statement or
      amendment or termination statement with respect to any financing statement
      naming Borrower as the debtor and Agent on behalf of Lenders’ as the secured
      party without the prior written consent of Agent, and Borrower agrees that
      it
      shall not do so without the prior written consent of Agent.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (h) Customer
      Contracts Representations and Covenants.
      Borrower
      makes the following representations, warranties and covenants with respect
      to
      Customer Contracts (which shall be deemed to be continuing representations
      and
      warranties so long as any credit hereunder shall be available and until the
      Obligations have been paid in full, other than contingent indemnification
      obligations with respect to which there exists no claim):

    

    (i) Borrower
      represents and warrants that all Customer Contracts are and will be bona fide
      existing obligations created by the sale or lease of goods or the rendition
      of
      services to Customers in the ordinary and usual course of business and will
      be
      owed to Borrower without any known defenses, disputes, offsets or counterclaims,
      or any rights of return or cancellation without payment (except as disclosed
      to
      Agent in accordance with this Agreement and except for normal service-related
      credits accurately reflected in Borrower’s records); Borrower shall have
      received no notice of actual or imminent bankruptcy or insolvency of more than
      [redacted] of its Customers and, to the best of Borrower’s knowledge, each
      Customer shall be able to timely discharge all of its obligations to
      Borrower.

    

    (ii)
       Borrower
      represents and warrants it owns each Customer Contract and has not granted
      to
      any other Person any participation or similar interest therein, and none of
      Borrower’s rights under any Customer Contract are subject to any security
      interest, lien or encumbrance, other than the security interest in favor of
      Lenders created under this Agreement and other Permitted Liens.

    

    (iii) Borrower
      represents and warrants that the Collateral, including without limitation,
      all
      Customer Contracts, is subject to a prior security interest in favor of Lenders,
      

    

    (iv) Borrower
      represents and warrants that neither any Customer Contract nor any transaction
      entered into in connection therewith contravenes any applicable statute, law
      or
      regulation.

    

    (v) Borrower
      represents and warrants that each Customer Contract that has been duly
      authorized, executed and delivered by the Borrower and, to the best of
      Borrower’s knowledge, by the other parties thereto and is enforceable in
      accordance with its terms, except as enforceability may be limited by
      bankruptcy, insolvency or similar laws affecting creditors’ rights generally, or
      by principles of equity, and all amounts due to Borrower under any Customer
      Contract are payable without defense, offset, claim or
      counterclaim.

    

    (vi) Borrower
      represents and warrants that each Customer Contract correctly sets forth the
      terms of Borrower’s fees and other charges payable thereunder from the
      applicable Customer. Borrower shall provide Lenders with prompt notice of any
      material breach of, or nonpayment by or termination of more than [redacted]
      of
      Customer Contracts. 

    

    (vii) Borrower
      shall cause each Customer to remit all payments due under a Customer Contract
      or
      otherwise directly to the Lockbox provided that with respect to payments
      received directly by Borrower or its employees upon installation of equipment
      for any Consumer Customer, Borrower shall forward such payments directly to
      the
      Lockbox.

    

    (viii) Borrower
      acknowledges and agrees that Lenders are not undertaking any authority or
      responsibility with respect to any of the Customer Contracts entered into by
      Borrower, nor are Lenders assuming any risk with respect to any Customer
      Contract owned by or pledged to Borrower, nor are Lenders in any way involved
      in
      Borrower’s pricing, underwriting, installation or servicing or credit decisions
      with respect to any Customer Contract.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (ix) Borrower
      represents and warrants that it has provided Lenders with true, correct and
      complete copies of each form of Customer Contracts, including Bulk Contract,
      Choice Contracts, Exclusive Contracts, Competitive Contracts and Consumer
      Service Agreements. Attached hereto as Exhibit
      C
      are a
      sample of each of the versions of forms of Customer Contracts used by Borrower,
      together with the forms of ancillary documents used by Borrower in connection
      therewith and Borrower will not make any changes to the form of its
      documentation with Customers without the prior written consent of Lenders,
      which
      consent shall not be unreasonably withheld. Borrower agrees that no Customer
      Contract shall be modified or amended in any material way without Lender’s prior
      written consent, which consent shall not be unreasonably withheld.

    

    (x) Borrower
      shall establish and maintain reasonable procedures (which may include random
      sampling) to verify that Customers have been receiving the goods and/or services
      that are the subject of the Customer Contracts.

     

    (xi) Borrower
      shall deliver to Lenders, as Lenders may from time to time require, Customer
      Contracts and other documentation as applicable to each Customer Contract.
      Absent such a request by Lenders, copies of all such documentation shall be
      held
      by Borrower as custodian for Lenders.

    

    (xii) At
      the
      time of inclusion of each Customer Contract in any Borrowing Base Certificate
      as
      an Eligible Customer Contract, such Customer Contract will be due and payable
      in
      accordance with the terms set forth in such Contract and on the back up schedule
      to the Borrowing Base.

    

    (xiii) To
      Borrower’s knowledge, no agreement exists permitting any return, deduction or
      discount (other than the discount stated on the invoice) by a Customer. Borrower
      will immediately notify Lenders in the event that a Customer alleges any dispute
      or claim with respect to more than [redacted] in monthly revenue of total
      Customer Contracts or of any other circumstances known to Borrower that may
      impair the validity or collectibility of more than [redacted] in monthly revenue
      of total Customer Contracts, provided, however that Borrower shall notify
      Lenders of any material dispute relating to its Bulk Contracts. After the
      occurrence of an Event of Default, Borrower shall not, without the prior consent
      of Lenders, adjust, settle or compromise the amount or payment of any Customer
      Contract, or release wholly or partly any Customer or obligor thereof, or allow
      any credit or discount thereon.

    

    (xiv) Lenders
      shall have the right, at any time or times hereafter, to verify the validity,
      amount or any other matter relating to a Customer Contract, by mail in its
      name
      or by telephone in conjunction with or in the presence of Borrower or its
      designated employee. 

    

    (xv) Agent
      agrees that, notwithstanding the foregoing, Customer Contracts acquired in
      a
      Permitted Acquisition do not have to meet the foregoing representations for
      a
      period of [redacted].

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (i) Supplier
      Contract Representations and Covenants.
      Borrower
      makes the following representations, warranties and covenants with respect
      to
      Supplier Contracts (which shall be deemed to be continuing representations
      and
      warranties so long as any credit hereunder shall be available and until the
      Obligations have been paid in full, other than contingent indemnification
      obligations with respect to which there exists no claim):

    

    (i) Borrower
      represents and warrants that all Supplier Contracts are and will be binding,
      bona fide existing agreements between the parties thereto, in full force and
      effect in accordance with their respective terms and not subject to any default
      or breach that with the passage of time could become a default, without any
      known defenses, disputes, offsets or counterclaims, or any rights of return
      or
      cancellation (except as disclosed to Agent); Borrower shall have received no
      notice of actual or imminent bankruptcy or insolvency of any Supplier and,
      to
      the best of Borrower’s knowledge, each Supplier shall be able to timely
      discharge all of its obligations under the Supplier Contracts.

    

    (ii)
       Borrower
      represents and warrants that it has not granted to any other Person any
      participation or similar interest therein, and none of Borrower’s rights under
      any Supplier Contract are subject to any security interest, lien or encumbrance,
      other than the security interest in favor of Lenders created under this
      Agreement.

    

    (iii) Borrower
      represents and warrants that the Collateral, including without limitation,
      all
      Supplier Contracts, is subject to a prior security interest in favor of Lenders,
      

    

    (iv) Borrower
      represents and warrants that neither any Supplier Contract nor any transaction
      entered into in connection therewith contravenes any applicable statute, law
      or
      regulation.

    

    (v) Borrower
      represents and warrants that each Supplier Contract that has been duly
      authorized, executed and delivered by the parties thereto and is enforceable
      in
      accordance with its terms, except as enforceability may be limited by
      bankruptcy, insolvency or similar laws affecting creditors’ rights generally, or
      by principles of equity.

    

    (vi) Borrower
      represents and warrants that each Supplier Contract, where applicable, correctly
      sets forth the terms of Borrower’s fees and other charges payable thereunder to
      the applicable Supplier by a Supplier Contract. Borrower shall provide Lenders
      with prompt notice of any material breach of, or nonpayment by or termination
      of
      any Supplier Contract. 

    

    (vii) Borrower
      shall cause each Supplier to remit all payments due under a Supplier Contract
      or
      otherwise directly to the Lockbox.

    

    (viii) Borrower
      acknowledges and agrees that Lenders are not undertaking any authority or
      responsibility with respect to any of the Supplier Contracts entered into by
      Borrower, nor are Lenders assuming any risk with respect to any Supplier
      Contract owned by or pledged to Borrower, nor are Lenders in any way involved
      in
      Borrower’s pricing, underwriting, installation or servicing or credit decisions
      with respect to any Supplier Contract.

     

    
      
        
        

      

      
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    (ix) Borrower
      represents and warrants that it has provided Lenders with true, correct and
      complete copies of each Supplier Contract. Attached hereto as Exhibit
      D
      are all
      Supplier Contracts [redacted].

    

    (x) Borrower
      shall deliver to Lenders, as Lenders may from time to time require, Supplier
      Contracts and other documentation as applicable to each Supplier Contract.
      Absent such a request by Lenders, copies of all such documentation shall be
      held
      by Borrower as custodian for Lenders.

    

    (xi) Lenders
      shall have the right, at any time or times hereafter, to verify the validity,
      amount or any other matter relating to a Supplier Contract, by mail in its
      name
      or by telephone in conjunction with or in the presence of Borrower or its
      designated employee.

    

    (xv) All
      payments due under any Supplier Contract by the Supplier to Borrower have been
      made pursuant to such Supplier Contract.

    

    8. Negative
      Covenants.

     

    (a) No
      Merger.
      Borrower will not merge or consolidate with any other Person or sell, transfer,
      lease, abandon, or otherwise dispose of all or substantially all of Borrower’s
      assets or a significant portion of any of the Collateral or any interest therein
      without Agent’s prior written consent which shall not be unreasonably withheld,
      except that, so long as no Default has occurred and is continuing, Borrower
      may
      sell Inventory in the ordinary course of Borrower’s business.

     

    (b) No
      Debt or Liens; Taxes.
      Borrower will not obtain or attempt to obtain from any Person other than Agent
      on behalf of Lenders any loans, advances, or other financial accommodations
      or
      Indebtedness of any kind, nor will Borrower enter into any direct or indirect
      guaranty of any obligation of another Person, other than (i) Subordinated Debt,
      (ii) Indebtedness in connection with purchase money security interests
      constituting Permitted Liens (and capital leases) not to exceed, in aggregated
      principal amount, the amount set forth on Item
      22
      of the Schedule
      at any
      one time outstanding, (iii) performance and surety bonds in the ordinary course
      of business, and (iv) customary Indebtedness arising in connection with deposit
      accounts. Borrower will not permit any of Borrower’s assets to be subject to any
      Lien other than Permitted Liens. Borrower shall pay when due (or before the
      expiration of any extension period) any tax or other assessment (including
      all
      required payments or deposits with respect to withholding taxes), and Borrower
      will, upon request by Agent, promptly furnish Agent with proof satisfactory
      to
      Agent that Borrower has made such payments and deposits.

     

    (c) No
      Distributions.
      Borrower will not retire, repurchase or redeem any of Borrower’s capital stock
      or other ownership interest in Borrower, nor declare or pay any dividend in
      cash
      or other property (other than additional shares of capital stock or additional
      ownership interests) to any owner or holder of Borrower’s shares or other
      ownership interest. Notwithstanding the foregoing, provided that i) so long
      as
      no Default exists hereunder or would be caused by any such transaction, and
      ii)
      sufficient availability exists under the Borrowing Base to effect such
      transaction, Borrower may acquire up to [redacted] of its capital stock or
      equity interests without any additional consent from Lenders. In addition,
      provided that i) so long as no Default exists hereunder or would be caused
      by
      any such transaction, and ii) sufficient availability exists under the Borrowing
      Base to effect such transaction, Borrower may request Lenders’ consent to
      purchases by Borrowers of more than [redacted] of its capital stock or equity
      interests, which consent shall not be unreasonably withheld.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (d) No
      ERISA Liabilities.
      Borrower will make timely payments of all contributions required to meet the
      minimum funding standards for Borrower’s employee benefit plans subject to the
      Employee Retirement Income Security Act of 1974 (as amended, “ERISA”)
      and
      will promptly report to Agent the occurrence of any reportable event (as defined
      in ERISA) and any giving or receipt by Borrower of any governmental notice
      (other than routine requests for information) in respect of any such
      plan.

     

    (e) Transactions
      with Affiliates.
      Borrower will not engage in any transaction with any of Borrower’s officers,
      directors, employees, owners or other Affiliates, except for an “arms-length”
transaction on terms no less favorable to Borrower than would be granted to
      Borrower in a transaction with a Person who is not an Affiliate, which
      transaction shall be approved by Borrower’s disinterested directors and shall be
      disclosed in a timely manner to Agent prior to the consummation of the
      transaction.

     

    (f) Loans/Investments.
      Borrower will not make any loans or advances to or extend any credit to any
      Person except (i) the extension of trade credit in the ordinary course of
      business; and (ii) advances to employees (other than cashless exercise
      transactions) not to exceed an aggregate outstanding amount of [redacted] at
      any
      one time outstanding for all employees, without the consent of Lender. Borrower
      shall not purchase, acquire or otherwise invest in any Person except: (A)
      existing investments in Borrower’s subsidiaries described on Item
      12
      of the Schedule;
      (B)
      direct obligations of the United States of America maturing within one year
      from
      the acquisition thereof; (C) certificates of deposit issued by, or investment
      accounts in, banks or financial institutions having a net worth of not less
      than
      $50,000,000; (D) commercial paper rated A-1 by Standard & Poor’s Ratings
      Group or P-1 by Moody’s Investors Service, Inc. and (E) so long as no Default
      has occurred or is continuing, Permitted Acquisitions. Without limiting the
      generality of the foregoing, Borrower shall not create any new
      subsidiary.

     

    (g) Capital
      Expenditures.
      Borrower shall not make or incur capital expenditures in excess of the amount
      set forth on Item
      21(a)
      of the Schedule
      during
      any fiscal year.

     

    (h) Compensation.
      Borrower shall not increase the total compensation paid to its officers or
      directors (or any of their relatives), including salaries, withdrawals, fees,
      bonuses, commissions, drawing accounts and other payments, whether directly
      or
      indirectly, in money or otherwise, during any fiscal year of Borrower during
      the
      term of this Agreement in an aggregate amount for all such officers and
      directors in excess of the limit specified in Item
      28
      of the Schedule.

     

    (i) Amendments
      of Documents.
      Borrower shall not materially amend or modify any note, instrument or agreement
      in connection with any Subordinated Debt without the prior written consent
      of
      Agent on behalf of Lenders, which consent shall not be unreasonably
      withheld.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    (j) Use
      of Proceeds.
      Borrower shall not use the proceeds of any Loans for any purpose other than
      to
      finance the development, build-out and installation of digital
      satellite television systems and broadband internet services to multiple
      dwelling units under contract to the Borrower or to acquire any such systems
      or
      service contracts, develop or acquire new services or lines of business in
      the
      multiple dwelling unit market, make permitted acquisitions of Borrower’s capital
      stock and fund general working capital needs of the Borrower.

     

    9. Reporting
      and Information.

     

    (a) Financial
      Statements.
      Borrower will submit to Agent as soon as available, and in any case not later
      than 30 days after the end of each month, a balance sheet, and a statement
      of
      profit and loss, in each case prepared in accordance with GAAP by Borrower’s
      chief financial or accounting officer as presenting fairly, in accordance with
      GAAP, Borrower’s financial condition as of the last day of such month and
      Borrower’s results of operations for such month and for the portion of
      Borrower’s fiscal year ending with such month. Borrower will also submit to
      Agent annual financial statements within 90 days after the end of each fiscal
      year, including a balance sheet, the related statement of profit and loss and
      stockholders’ equity and a statement of cash flows, in each case prepared in
      accordance with the requirements set forth on Item
      23
      of the Schedule.
      Borrower will also submit to Agent annually within 30 days after Borrower’s
      fiscal year end forecasted financial statements for the upcoming fiscal year,
      containing a projected balance sheet and profit and loss statement. Together
      with each monthly and annual financial statement, Borrower will deliver to
      Agent
      the certification of Borrower’s chief financial or accounting officer in the
      form of Exhibit
      B
      attached
      hereto to the effect that Borrower is in compliance with the terms and
      conditions of this Agreement, and setting forth in detail the calculation of
      all
      financial covenants, or, if Borrower is not in compliance, describing the nature
      of any noncompliance and the steps Borrower is taking or proposes to take to
      remedy the same. Borrower shall also submit a copy of each Federal income tax
      return filed by it within 5 business days of the date of such filing and copies
      of all filings made by Borrower with the Securities and Exchange Commission
      with
      5 business days of such filings.

     

    (b) Collateral
      Reports.
      Concurrent with the execution of this Agreement by Borrower and concurrent
      with
      each request for a loan pursuant to Section
      2(a),
      but no
      less frequently than as required by Item
      24
      of the Schedule,
      Borrower shall deliver to Agent a fully completed Borrowing Base Certificate
      certified by the Chief Executive Officer or Chief Financial Officer of Borrower
      as being true and correct. Concurrent with the delivery of each such Borrowing
      Base Certificate, Borrower shall provide a written report to Agent of all
      materially significant returns, disputes and claims, chargebacks, cancellations,
      together with sales and other reports relating to the Collateral as required
      by
      Agent. Borrower shall deliver to Agent within ten (10) days after the end of
      each month a report, reflecting the status as of the end of each month and
      certified by the Chief Executive Officer or Chief Financial Officer of Borrower
      as being true and correct, containing (i)
      a
      current detailed aging, by total and by Customer, of Borrower’s Accounts, and
      (ii)
      a
      current detailed aging, by total and by vendor, of Borrower’s accounts payable,
      all of which shall be set forth in a form and shall contain such information
      as
      is acceptable to Agent. Borrower shall deliver to Agent at least semiannually
      a
      list of locations of Inventory and the types and values of Inventory at each
      such location, in such form as Agent may require. At Agent’s request, Borrower
      shall deliver such information with respect to the Collateral, Borrower or
      Borrower’s business or financial condition as Agent may reasonably
      request.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    (c) Obligor
      Financials.
      At
      least once during each twelve-month period (or more frequently if Lenders shall
      so request), Borrower will cause each Obligor (other than Borrower) to deliver
      to Agent a financial statement for such Obligor as of a date satisfactory to
      Agent, in such form as Agent may reasonably request.

     

    (d) Other
      Information.
      Borrower will notify Agent as promptly as possible of any Default, any receipt
      by Borrower of notice from any governmental authority that Borrower has or
      may
      have violated any law, rule or regulation applicable to Borrower or the terms
      or
      conditions of any permit or license Borrower holds or is required to hold in
      connection with the conduct of Borrower’s business, any amendment to Borrower’s
      constituent documents and any change in Borrower’s management or ownership, and
      the commencement of any material litigation, claim or action against
      Borrower.

     

    10. Inspection
      Rights; Expenses; Etc.

     

    (a) Inspection.
      Agent
      and Lenders’ may examine and make copies of Borrower’s records, the Collateral
      and all other assets of Borrower or any portion thereof, wherever located,
      and
      may enter upon Borrower’s premises for such purposes, with reasonable prior
      notice, during business hours. Borrower will assist Agent and Lenders in
      whatever way as reasonably necessary to make each such examination. Agent may
      discuss Borrower’s financial condition with Borrower’s independent accountants
      without liability to Lenders or such accountants.

     

    (b) Performance
      by Lender.
      Agent
      on behalf of Lenders may, from time to time at Agents or Lender’s option,
      perform any obligation of Borrower’s hereunder which Borrower fails to perform
      and take any other action which Agent or Lenders deem necessary for the
      maintenance or preservation of any of the Collateral or Agents or Lenders’
interest therein, and Borrower agrees to reimburse Agent immediately on demand
      for all of Agent or Lenders’ expenses in connection with the foregoing
      (including, without being limited to, reasonable fees and expenses of legal
      counsel), together with interest thereon at the default rate of interest
      provided for herein from the date any such expense is incurred until reimbursed
      by Borrower.

     

    (c) Field
      Examinations; Inspections.
      Agent
      on behalf of Lenders shall have the right without hindrance or delay to conduct
      field examinations to inspect the Collateral, Borrower’s books and records and
      all other aspects of Borrower’s business. Borrower agrees to pay for such
      examinations as more fully described on Item
      25
      of the Schedule.
      Agent
      on behalf of Lenders shall have full access to all records available to Borrower
      from any credit reporting service, bureau or similar service and shall have
      the
      right to examine and make copies of any such records. Agent and Lenders’ may
      exhibit a copy of this Agreement to such service and such service shall be
      entitled to rely on the provisions hereof in providing access to Agent on behalf
      of Lenders as provided herein.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    11. Rights
      of Setoff, Application of Payments, Etc.
      Agent on
      behalf of Lenders will be entitled to hold or set off all sums and all other
      property of Borrower at any time to Borrower’s credit or in Agent’s or Lender’s
      possession (or the possession of any of Agent or Lender’s Affiliates) by pledge
      or otherwise or upon or in which Agent or any Lender may have a Lien, as
      security for any and all of the Obligations. Agent on behalf of Lenders will
      have the right and is hereby irrevocably authorized and directed to charge
      to
      Borrower’s loan account the amounts of any and all such Obligations. Recourse to
      the Collateral or other security for the Obligations will not at any time be
      required and Borrower hereby waives any right of marshalling Borrower may have.
      Borrower’s obligation to pay or repay the Obligations is unconditional. Borrower
      agrees that Agent, on behalf of Lenders, may take such action with regard to
      the
      custody and after a Default has occurred and is continuing, collection of
      Collateral assigned to Agent on behalf Lenders as Agent may deem necessary.
      Borrower agrees that failure to take any action with regard to any given Account
      will not be unreasonable until and unless Agent or Lenders receives a written
      request for specific action from Borrower with regard thereto and fails to
      respond thereto within a commercially reasonable time. Borrower irrevocably
      waives the right to direct the application of any and all payments and
      collections at any time or times hereafter received by Agent from or on behalf
      of Borrower, and Borrower hereby irrevocably agrees that Agent or Lenders shall
      have the continuing exclusive right to apply and reapply any and all such
      payments and collections received at any time or times hereafter by Agent or
      a
      Lender or its agent against the Obligations, in such manner and in such order
      as
      such Lender may deem advisable.

     

    12. Attorney-in-Fact.
      Borrower hereby appoints and constitutes Agent on behalf of Lenders as
      Borrower’s attorney-in-fact: (a) at any time, (i) to endorse Borrower’s name
      upon any notes, acceptances, checks, drafts, money orders, and other evidences
      of payment that come into Agent or Lenders’ possession and to deposit or
      otherwise collect the same; (ii) to send verifications of accounts to Customers;
      and (iii) to execute in Borrower’s name any financing statements, affidavits and
      notices with regard to any and all Lien rights; and (b) while any Default
      exists, (i) to receive, open, and dispose of all mail addressed to Borrower;
      (ii) to notify the postal authorities to change the address and delivery of
      mail
      addressed to Borrower to such address as Agent may designate; (iii) to sign
      Borrower’s name on any invoice or bill of lading relating to the Collateral, on
      drafts against Customers, and notices to Customers; (iv) to sign any agreement
      or certificate in connection with any insurance policy of Borrower (including
      any documentation to receive benefit payments due thereunder or to cancel such
      insurance policy and receive a refund of the unearned premium with respect
      thereto); and (v) to do all other acts and things necessary to carry out this
      Agreement. All acts of said attorney-in-fact are hereby authorized, ratified
      and
      approved, and said attorney-in-fact will not be liable for any errors or mistake
      of fact or law. This power, being coupled with an interest, is irrevocable
      while
      any of the Obligations remain unpaid or Lenders have any commitment to Borrower
      under this Agreement or otherwise. 

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    13. Defaults
      and Remedies.

     

    (a) Defaults.
      For
      purposes of this Agreement, “Default”
means
      the occurrence of any of the following events: (i) non-payment when due of
      any
      amount payable on any of the Obligations or breach of any covenant or failure
      to
      perform any agreement or failure to meet any of Borrower’s or any other
      Obligor’s obligations contained herein, in any other Loan Document or in any
      other agreement out of which any of the Obligations arose; (ii) non-payment
      when
      due of the premium on any insurance policy required to be maintained hereunder
      which continues for 10 days; (iii) any material statement, representation,
      or
      warranty made in writing in this Agreement, any other Loan Document or in any
      other writing or statement at any time furnished or made by Borrower or any
      other Obligor to Agent or any Lender proves to have been untrue in any material
      respect as of the date furnished or made or deemed furnished or made; (iv)
      Borrower’s default under any other agreement for borrowed money or any other
      agreement involving more than the amount set forth on Item
      26
      of the Schedule
      which
      continues for more than 10 days; (v) suspension of the operation of Borrower’s
      present business; (vi) any Obligor becomes insolvent or unable to pay its debts
      as they mature, or admits in writing that it is insolvent or unable to pay
      its
      debts, makes an assignment for the benefit of creditors, makes a conveyance
      fraudulent as to creditors under any state or federal law, or a proceeding
      is
      instituted by or against any Obligor alleging that such Obligor is insolvent
      or
      unable to pay debts as they mature, or a petition under any provision of Title
      11 of the United States Code, as amended, is filed by or against any Obligor;
      (vii) entry of any judgment in excess of the amount set forth on Item
      27
      of the Schedule
      against
      any Obligor or creation, assertion, or filing of any judgment or tax Lien
      against the property of any Obligor, in each case which remains undischarged
      or
      unbonded for 10 days after such entry or filing; (viii) death of any Obligor
      who
      was a natural person, or dissolution, merger, or consolidation of any Obligor
      which is a corporation, partnership or limited liability company; (ix) transfer
      of a substantial part (determined by market value) of the property of Borrower;
      (x) sale, transfer or exchange, either directly or indirectly, of a controlling
      stock or equity ownership interest of any Obligor; (xi) termination,
      unenforceability or withdrawal of any guaranty or validity guaranty for the
      Obligations, or failure of any Obligor to perform any of its obligations under
      such a guaranty or validity guaranty or assertion by any Obligor that it has
      no
      liability or obligation under such a guaranty or validity guaranty; (xii)
      appointment of a receiver for the Collateral or for any other property in which
      Borrower has an interest to the extent the total amount of monthly revenue
      derived from the Properties or Customers for which a receiver has been appointed
      exceed [redacted] of monthly gross revenues; (xiii) seizure of any Collateral
      by
      any Person other than Lender; (xiv) a Change of Control (xv) the occurrence
      of
      any act, omission, event or circumstance which has or could reasonably be
      expected to have a materially adverse effect on Borrower or any other Obligor;
      (xvi) payment by Borrower on any Subordinated Debt in violation of the
      applicable subordination agreement; (xvii) the Pension Benefit Guaranty
      Corporation or the Department of Labor commences proceedings under ERISA to
      terminate any of Borrower’s employee pension benefit plans; (xviii) the loss of
      Bulk Contracts covering more than [redacted] net subscribers; or (xix) default
      or termination shall occur with respect to any Supplier
      Contract.

    

    (b) Remedies.
      If a
      Default occurs and is continuing, in each case without demand or notice to
      Borrower, any other Obligor or any other Person (unless such notice is expressly
      required hereunder or under applicable law):

     

    (i) Agent
      may
      and shall upon request of a Lender to terminate each such Lenders’ commitment,
      if any, to make loans or to extend other financial accommodations to Borrower,
      and may declare the entire principal amount of all loans outstanding hereunder,
      all interest thereon, any unpaid fees and all other Obligations of any kind
      or
      nature to be, and thereupon the same will immediately become, due and payable
      in
      full; and, in the event of a Default described under clause (vi) of Section
      13(a),
      such
      termination and acceleration shall automatically occur without any notice,
      demand or presentment of any kind. Borrower agrees to deposit with Agent on
      behalf of Lenders a cash sum equal to the amount of letters of credit and
      acceptances issued or guaranteed by Agent or Lenders or any Affiliate of Agent
      or Lenders which have not been drawn upon or matured, which funds will be used
      to reimburse Agent or Lenders or such Affiliate of Agent or Lenders upon drawing
      under any letter of credit or maturity of any acceptance.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    (ii) Agent
      may, and upon request of Lenders, shall decrease the advance rates set forth
      in
      the definition of “Borrowing Base” in Lender’s discretion.

    

    (iii) Agent
      may, and upon request of Lenders, shall designee may notify Customers that
      the
      Accounts have been assigned to Lenders and that Lenders have a security interest
      therein, collect them directly, and charge the collection costs and expenses
      to
      Borrower’s loan account.

    

    (iv) Agent
      may, and upon request of Lenders shall (A) exercise any of its remedies under
      any other Loan Document, (B) apply any cash collateral to the Obligations
      (without limiting the foregoing, Lenders may instruct any bank or other
      financial institution holding any cash, certificate of deposit or other
      Collateral to pay over such Collateral to Agent on behalf of Lenders), and
      (C)
      draw on any letter of credit issued for the benefit of Agent on behalf of
      Lenders in connection with this Agreement or any other Loan Document and apply
      the proceeds thereof to the Obligations, in each case without demand or notice
      to Borrower or any other Person.

    

    (v) Agent
      may, and upon request of Lenders shall, make such payments and do such acts
      as
      Agent or Lenders consider necessary or reasonable to protect its security
      interest in the Collateral. Borrower authorizes Agent and Lenders to enter
      each
      premise where any Collateral is located, take and maintain possession of the
      Collateral, or any part of it, and to pay, purchase, contest or compromise
      any
      Lien which in Agent or Lenders opinion appears to be prior or superior to its
      security interest and to pay all expenses incurred in connection
      therewith.

    

    (vi) As
      permitted by the UCC, Agent may, and upon request of Lenders shall, ship,
      reclaim, recover, store, finish, maintain, repair, continue to provides services
      required by the Contracts, prepare for sale, advertise for sale and sell the
      Collateral. Any
      such
      sale may be either a public or private sale, or both, by way of one or more
      contracts or transactions, for cash or on terms. It is not necessary that the
      Collateral be present at any such sale.

    

    (vii) Agent
      may, and upon request of Lenders shall, without regard to any waste, adequacy
      of
      the security or solvency of Borrower, apply for the appointment of a receiver
      of
      the Collateral, to which appointment Borrower hereby consents, whether or not
      foreclosure proceedings have been commenced hereunder or under any other Loan
      Document and whether or not a foreclosure sale has occurred.

    

    (viii) Reserved.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    (ix) Agent
      may, at Lender’s option, exercise any of the remedies available to Lender as a
      secured party under the Uniform Commercial Code as in effect in any applicable
      jurisdiction, or otherwise available to Agents or Lenders under applicable
      law.
      Borrower agrees, upon Default, to cease the sale or other disposition of the
      Collateral, except with Lenders’ prior written consent, and to assemble at
      Borrower’s expense all the Collateral at a convenient place acceptable to agent.
      Agent may charge to Borrower’s loan account and Borrower will pay Agent upon
      demand all costs and expenses, including reasonable attorneys’ fees (including
      fees of attorneys that are regular salaried employees of Agent or a Lender
      or
      any of its Affiliates), in connection with: (A) the liquidation of any
      Collateral; (B) obtaining or enforcing payment of the Obligations; (C) the
      settlement, adjustment, compromise, or litigation of Customer disputes; or
      (D)
      the prosecution or defense of any action or proceeding either against Agent
      or a
      Lender or against Borrower concerning any matter growing out of or in connection
      with this Agreement and/or any Collateral and/or any Obligations. If at any
      time
      Agent or any Lender pays any state, city, local, federal, or other tax or levy
      attributable to the Collateral, Borrower will repay to Agent or such Lender
      the
      amount of tax so paid by Agent. Borrower agrees that Agent may apply any
      proceeds from disposition of the Collateral first to satisfy obligations secured
      by Liens prior to Lender’s security interest. Borrower will remain liable and
      will pay on demand any deficiencies arising upon the liquidation of any
      Collateral held by Lender.

     

    (c) Notices.
      If any
      notice of intended disposition of the Collateral or of any other act by Agent
      is
      required by law and a specific time period is not stated therein, such notice,
      if given ten days before such disposition or act, in accordance with the
      provisions of Section
      15(a),
      will be
      deemed reasonably and properly given.

     

    (d) License.
      Borrower hereby grants to Agent on behalf of Lenders a license or other right
      to
      use, without charge, Borrower’s labels, patents, copyrights, rights of use of
      any name, trade secrets, trade names, trademarks and advertising matter, or
      any
      property of a similar nature, as it pertains to the Collateral, in completing
      production of, advertising for sale and selling any Collateral and Borrower’s
      rights under all licenses, and all franchise agreements shall inure to Agent
      for
      Lenders benefit.

    

    (e) Remedies
      Cumulative.
      Agent’s
      and Lenders rights and remedies under this Agreement and all other Loan
      Documents shall be cumulative. Agent and Lenders shall have all other rights
      and
      remedies not inconsistent herewith as provided under the UCC, by law, or in
      equity. No exercise by Agent or Lenders of one right or remedy shall be deemed
      an election, and no waiver by Agent or any Lender of any default on Borrower’s
      part shall be deemed a continuing waiver. No delay by Agent or any Lender shall
      constitute a waiver, election or acquiescence by it.

    

    14. Indemnification.
      Borrower agrees to defend, indemnify, and hold harmless Agent, each Lender
      and
      Agent’s and each Lender’s respective directors, officers, employees, Affiliates,
      representatives, attorneys and agents (each an “Indemnified
      Person”)
      from
      and against any and all penalties, fines, liabilities, damages, costs, or
      expenses of whatever kind or nature asserted against any such Indemnified
      Person, arising out of, or in any way related to this Agreement or any other
      Loan Document, or the transactions contemplated hereby or thereby, including
      by
      reason of the violation of any law or regulation relating to the protection
      of
      the environment or the presence, generation, disposal, release, or threatened
      release of any hazardous materials in connection with Borrower’s business on, at
      or from any property at any time owned or operated by Borrower, including,
      without limitation, reasonable attorneys’ and consultants’ fees, investigation
      and laboratory fees, court costs, and litigation expenses actually incurred.
      Without limiting the foregoing, Borrower represents and warrants that there
      has
      been no loan broker or investment banker other than Morgan Joseph involved
      in
      connection with the transactions contemplated hereby and Borrower agrees to
      indemnify and hold Agent and each Lender harmless from any claim of compensation
      payable to any loan broker or investment banker in connection with the
      transactions contemplated hereby.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    15. General
      Provisions.

     

    (a) Notices.
      Except
      as specifically provided in this Agreement or in any of the other Loan
      Documents, all notices and communications hereunder and thereunder will be
      in
      writing or by telephone subsequently confirmed in writing. Notices in writing
      will be delivered personally or sent by overnight courier service, by certified
      or registered mail, postage pre-paid, or by facsimile transmission and will
      be
      deemed received, in the case of personal delivery, when delivered; in the case
      of overnight courier service, on the next Business Day after delivery to such
      service; in the case of mailing, on the fourth Business Day after mailing;
      and,
      in the case of facsimile transmission, upon transmittal if confirmed by the
      sender’s facsimile device; provided
      that in
      the case of notices to Agent and Lenders, Agent and Lenders will be charged
      with
      knowledge of the contents thereof only when such notice is actually received
      by
      Agent or Lenders. A telephonic notice to Agent as understood by Agent will
      be
      deemed to be the controlling and proper notice in the event of a discrepancy
      with or failure to receive a confirming written notice. Notices to Agent,
      Lenders or Borrower will be sent to the addresses set forth on Item
      29
      the Schedule,
      or any
      other address for either of Borrower, Lenders or Agent of which the other is
      notified by like notice. 

    

    (b) No
      Waiver.
      No
      waiver hereunder will be valid unless in writing signed by Agent on behalf
      of
      Lenders and then only to the extent therein stated. No delay or failure by
      Agent
      on behalf of Lenders in the exercise of any right or remedy hereunder will
      operate as a waiver thereof or of Agent’s or Lender’s right to exercise any
      other right or remedy.

    

    (c) Time
      of Essence.
      Time is
      of the essence of this Agreement.

     

    (d) Severability.
      Wherever possible, each provision of this Agreement will be interpreted in
      such
      manner as to be effective and valid under applicable law, but if any provision
      of this Agreement will be prohibited by or invalid under applicable law, such
      provision will be ineffective to the extent of such prohibition or invalidity,
      without invalidating the remainder of such provision or the remaining provisions
      of this Agreement. 

     

    (e) Successors
      and Assigns.
      Borrower’s, Agent’s and Lenders’ rights and obligations hereunder will inure to
      the benefit of Borrower’s, Agent’s and Lender’s respective successors and
      assigns, provided
      that
      Borrower acknowledges and agrees that without Agent’s or Lenders prior written
      consent, which may be withheld for any reason or no reason, Borrower may not
      assign Borrower’s rights or obligations or any part thereof hereunder to any
      other Person. Notwithstanding anything herein to the contrary, each Lender
      may,
      without the consent of Borrower, grant a security interest in, sell or assign,
      grant or sell participations or otherwise transfer all or any portion of its
      rights and obligations hereunder to one or more Persons.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    (f) Governing
      Law; Submission
      to Jurisdiction; Service; Etc.
      This
      Agreement and the other Loan Documents shall be governed by and construed in
      accordance with the substantive laws (other than conflict of law provisions
      and
      principles) of the State of New York. Borrower hereby consents to the
      non-exclusive jurisdiction of any United States Federal Court sitting in or
      with
      direct or indirect jurisdiction over the Southern District of New York or any
      New York state court located in New York County in any action, suit or other
      proceeding arising out of or relating to this Agreement or any of the other
      Loan
      Documents, and Borrower irrevocably agrees that all claims and demands in
      respect of any such action, suit or proceeding may be heard and determined
      in
      any such court and irrevocably waives any objection it may now or hereafter
      have
      as to the venue of any such action, suit or proceeding brought in any such
      court
      or that such court is an inconvenient forum. Borrower waives personal service
      of
      any and all process upon it and consents that all such service of process may
      be
      made by registered mail (return receipt requested) directed to Borrower at
      Borrower’s address for notices pursuant to this Agreement, and service so made
      shall be deemed to be completed five (5) days after the same shall have been
      so
      deposited in the United States mails. Nothing herein shall limit the right
      of
      Agent or Lenders to bring proceedings against Borrower or any of its Affiliates
      in the courts of any other jurisdiction. Any judicial proceeding commenced
      by
      Borrower against Agent or Lenders or any other holder of any Obligations, or
      any
      Affiliate of Agent or Lenders or any other holder of any Obligations, involving,
      directly or indirectly, any matter in any way arising out of, related to or
      connected with any Loan Document shall be brought only in a United States
      Federal Court sitting in or with direct jurisdiction over the Southern District
      of New York or any New York state court sitting in New York county. Nothing
      in
      this Agreement shall be deemed or operate to affect the right of the Agent
      or
      Lenders to serve legal process in any other manner permitted by law or to
      preclude the enforcement by Agent or Lenders of any judgment or order obtained
      in such forum or the taking of any action under this Agreement to enforce same
      in any other appropriate forum or jurisdiction.

     

    (g) Waiver
      of Jury Trial.
      TO THE
      FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER, AGENT AND LENDERS HEREBY
      IRREVOCABLY AND EXPRESSLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
      PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE)
      ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, THE
      OBLIGATIONS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR EITHER
      PARTY’S ACTIONS IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT HEREOF OR
      THEREOF. EACH OF BORROWER, AGENT AND EACH LENDER ACKNOWLEDGES THAT SUCH WAIVER
      IS MADE WITH FULL KNOWLEDGE AND UNDERSTANDING OF THE NATURE OF THE RIGHTS AND
      BENEFITS WAIVED HEREBY, AND WITH THE BENEFIT OF ADVICE OF COUNSEL OF ITS
      CHOOSING.

     

    (h) Waiver
      of Hearing.
      BORROWER HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY WAIVES ALL RIGHTS
      WHICH
      BORROWER HAS UNDER APPLICABLE LAW TO NOTICE AND TO A JUDICIAL HEARING PRIOR
      TO
      THE ISSUANCE OF A WRIT OF POSSESSION ENTITLING LENDER, ITS SUCCESSORS AND
      ASSIGNS TO POSSESSION OF THE COLLATERAL UPON A DEFAULT. WITHOUT LIMITING THE
      GENERALITY OF THE FOREGOING AND WITHOUT LIMITING ANY OTHER RIGHT WHICH AGENT
      OR
      ANY LENDER MAY HAVE, BORROWER CONSENTS THAT, IF AGENT OR ANY LENDER FILES A
      PETITION FOR AN IMMEDIATE WRIT OF POSSESSION UNDER APPLICABLE LAW AND THIS
      WAIVER OR A COPY HEREOF IS ALLEGED IN SUCH PETITION AND ATTACHED THERETO, THE
      COURT BEFORE WHICH SUCH PETITION IS FILED MAY DISPENSE WITH ALL RIGHTS AND
      PROCEDURES HEREIN WAIVED AND MAY ISSUE FORTHWITH AN IMMEDIATE WRIT OF
      POSSESSION, WITHOUT THE NECESSITY OF AN ACCOMPANYING BOND AS OTHERWISE REQUIRED
      BY ANY PROVISION OF APPLICABLE LAW.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    (i) Expenses.
      Borrower shall pay on demand all of Agent and Lenders’ reasonable costs and
      expenses in connection with underwriting and performing due diligence with
      respect to the transactions contemplated hereby and the preparation,
      reproduction, execution, delivery, and administration of this Agreement, and
      all
      such costs and expenses of Agent and Lenders in connection with the enforcement
      hereof, including the reasonable fees and out-of-pocket expenses of Agent and
      Lenders’ counsel, in each case whether incurred on, prior or subsequent to the
      Agreement Date. In addition, Borrower shall pay any and all stamp and other
      taxes and recording and filing fees payable in connection with the execution
      and
      delivery of all other instruments and documents to be delivered hereunder.
      Such
      amounts may be charged by Agent and Lenders to Borrower’s account as one or more
      loans hereunder. All provisions in this Agreement providing for the payment
      or
      reimbursement of Agent and Lenders’ attorneys’ fees and expenses include,
      without limitation, such fees and expenses incurred pursuant to or in connection
      with proceedings brought under 11 U.S.C., the Federal Bankruptcy
      Code.

     

    (j) Execution
      in Counterparts; Execution by Fax; Waiver of Acceptance.
      This
      Agreement may be executed in separate counterparts, all of which shall
      constitute one and the same agreement. Delivery of an executed counterpart
      of
      this Agreement or any other Loan Document by facsimile or electronic mail shall
      be equally as effective as delivery of an original executed counterpart of
      this
      Agreement or such other Loan Document. Any party delivering an executed
      counterpart of this Agreement or any other Loan Document by facsimile or
      electronic mail shall deliver an original executed counterpart of this Agreement
      or such other Loan Document, but the failure to deliver an original executed
      counterpart shall not affect the validity, enforceability, and binding effect
      of
      this Agreement or such other Loan Document. To the fullest extent permitted
      by
      applicable law, Borrower waives notice of Lender’s acceptance of this Agreement
      and the other Loan Documents.

     

    (k) Entire
      Agreement.
      This
      Agreement and the other Loan Documents embody the entire agreement and
      understanding between Agent, each Lender and Borrower and supersede all prior
      agreements and understandings relating to the subject matter
      hereof.

     

    16. Agent.
      

     

    (A)
       Appointment.
      Each
      Lender hereby designates and appoints First Capital as its agent under this
      Agreement and the Loan Documents, and each Lender hereby irrevocably authorizes
      Agent to take such action or to refrain from taking such action on its behalf
      under the provisions of this Agreement and the Loan Documents and to exercise
      such powers as are set forth herein or therein, together with such other powers
      as are reasonably incidental thereto. Agent is authorized and empowered to
      amend, modify, or waive any provisions of this Agreement or the other Loan
      Documents on behalf of Lenders. The provisions of this Section 16 are solely
      for
      the benefit of Agent and Lenders and neither Borrower nor any Loan Party shall
      have any rights as a third party beneficiary of any of the provisions hereof.
      In
      performing its functions and duties under this Agreement, Agent shall act solely
      as an administrative representative of Lenders and does not assume and shall
      not
      be deemed to have assumed any obligation toward or relationship of agency or
      trust with or for Lenders, Borrower or any Loan Party. Agent may perform any
      of
      its duties hereunder, or under the Loan Documents, by or through its agents
      or
      employees.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    (B) Reliance
      Agent
      shall be entitled to rely upon any written notices, statements, certificates,
      orders or other documents or any telephone message or other communication
      (including any writing, telex, telecopy or telegram) believed by it in good
      faith to be genuine and correct and to have been signed, sent or made by the
      proper Person, and with respect to all matters pertaining to this Agreement
      or
      any of the Loan Documents and its duties hereunder or thereunder, upon advice
      of
      counsel selected by it. Agent shall be entitled to rely upon the advice of
      legal
      counsel, independent accountants, and other experts selected by Agent in its
      sole discretion.

    

    (C) First
      Capital Individually.
      With
      respect to the Loans made by it, First Capital shall have and may exercise
      the
      same rights and powers hereunder and is subject to the same obligations and
      liabilities as and to the extent set forth herein for any other Lender. The
      terms "Lenders" or any similar terms shall, unless the context clearly otherwise
      indicates, include First Capital in its individual capacity as a Lender. First
      Capital may lend money to, and generally engage in any kind of banking, trust
      or
      other business with any Loan Party as if it were not acting as Agent pursuant
      hereto.

    

    (D) Successor
      Agent

    

    (1) Resignation.
      Agent
      may resign from the performance of all its functions and duties hereunder at
      any
      time by giving at least thirty (30) Business Days' prior written notice to
      Borrower and the Lenders. Such resignation shall take effect upon the acceptance
      by a successor Agent of appointment pursuant to clause (2) below or as otherwise
      provided below.

    

    (2) Appointment
      of Successor
      Upon any
      such notice of resignation pursuant to clause (G)(1) above, Lenders shall,
      upon
      receipt of Borrower's prior consent which shall not unreasonably be withheld,
      appoint a successor Agent. If a successor Agent shall not have been so appointed
      within said thirty (30) Business Day period, the retiring Agent, upon notice
      to
      Borrower, shall then appoint a successor Agent who shall serve as Agent until
      such time, as Lenders, upon receipt of Borrower's prior written consent which
      shall not be unreasonably withheld, appoint a successor Agent as provided
      above.

    

    (3) Successor
      Agent
      Upon the
      acceptance of any appointment as Agent under the Loan Documents by a successor
      Agent, such successor Agent shall thereupon succeed to and become vested with
      all the rights, powers, privileges and duties of the retiring Agent, and the
      retiring Agent shall be discharged from its duties and obligations under the
      Loan Documents. 

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    (E) Confirmation
      of Authority; Execution of Releases.
      Without
      in any manner limiting Agent's authority to act without any specific or further
      authorization or consent by Lenders, each Lender agrees to confirm in writing,
      upon request by Borrower, the authority to release any property covered by
      this
      Agreement or the Loan Documents. So long as no Event of Default is then
      continuing, upon receipt by Agent of confirmation from the requisite percentage
      of Lenders, of its authority to release any particular item or types of property
      covered by this Agreement or the Loan Documents, and upon at least five (5)
      Business Days prior written request by Borrower, Agent shall (and is hereby
      irrevocably authorized by Lenders to) execute such documents as may be necessary
      to evidence the release of the Liens granted to Agent for the benefit of Lenders
      herein or pursuant hereto upon such Collateral; provided,
      however,
      that
      (i) Agent shall not be required to execute any such document on terms which,
      in
      Agent's opinion, would expose Agent to liability or create any obligation or
      entail any consequence other than the release of such Liens without recourse
      or
      warranty, and (ii) such release shall not in any manner discharge, affect or
      impair the Obligations or any Liens upon (or obligations of any Loan Party,
      in
      respect of), all interests retained by any Loan Party, including, without
      limitation, the proceeds of any sale, all of which shall continue to constitute
      part of the property covered by this Agreement or the Loan
      Documents.

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, Borrower, Agent and Lenders have executed this Agreement as
      of
      the day and year first above written.

    

    
      	 	 	
              BORROWER:

            
	 	 	 
	 	 	
              MDU
                COMMUNICATIONS (USA) INC.

            
	 	 	 
	 	 	
              By:

            	 
	 	 	
              Name: 

            	 
	 	 	
              Title:

            	 

    

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    

    
      	 	
              AGENT
                AND LENDER:

            
	 	 
	 	
              FCC,
                LLC, d/b/a FIRST CAPITAL

            
	 	 
	 	
              By:

            	 
	 	
              Name: 

            	 
	 	
              Title:

            	 

    

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    
      	 	
              LENDER:

            
	 	 
	 	
              FULL
                CIRCLE FUNDING, LP

            
	 	 
	 	
              By
                its General Partner

            
	 	
               

            
	 	
              FULL
                CIRCLE FUNDING, LLC

            
	 	 
	 	 	
              By
                its Managing Members

            
	 	 	 
	 	 	
              By: 

            	 
	 	 	
              Name:
                Robert A. Blum

            
	 	 	
              Title:
                Managing Member

            
	 	 	 
	 	 	
              By:

            	 
	 	 	
              Name:
                John E. Stuart

            
	 	 	
              Title:
                Managing Member

            

    

    

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    

    NOTARY
      JURAT FOR EXECUTION OF

    WRITTEN
      OBLIGATIONS TO PAY MONEY

    

    On
      this
      the ____ day of ______________, 2008, before me, the undersigned, a Notary
      Public in and for the State of _____________, County of _________________,
      ___________________________ personally appeared, who is personally known to
      me
      or proved to me on the basis of satisfactory evidence to be the
      _______________________________ of ___________________________, a
      _____________________ corporation, who, being by me first duly sworn, stated
      that:

    

    
      	1.	
              He
                executed the foregoing Loan and Security Agreement on behalf of such
                corporation pursuant to its by-laws or a resolution of its board
                of
                directors, said execution taking place in the State of
                ______________________, County of ________________;
                and

            

    

    

    
      	2.	
              He
                has this day delivered the foregoing Loan and Security Agreement
                to FCC,
                LLC, d/b/a FIRST CAPITAL, AND FULL CIRCLE FUNDING, L.P. at Oklahoma
                City,
                Oklahoma via overnight courier.

            

    

     

    
      	 	
              Signature
                of Borrower’s Officer:

            
	 	 
	 	
              By:__________________________________________________

            
	 	
              Name:________________________________________________

            

    

     

    Sworn
      to
      and subscribed before me this ___ day of _______________, 20__:

    

    __________________________________

    Notary
      Signature

    

    My
      Commission Expires:

    

    _________________________________

    [Affix
      Notarial Seal]

    

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    

    AFFIDAVIT
      REGARDING DELIVERY

    

    On
      this
      the ____ day of _______________, 2008, before me, the undersigned, a Notary
      Public in and for the State of New York, County of _______________,
      _______________________ personally appeared, personally known to me or proved
      to
      me on the basis of satisfactory evidence to be the ________________________
      of
      FCC, LLC, d/b/a FIRST CAPITAL, who, being by me first duly sworn, stated that
      he/she has received delivery of the foregoing Loan and Security Agreement on
      behalf of FCC, LLC, d/b/a FIRST CAPITAL in the State of New York, County of
      New
      York. 

     

    
      	 	 
	 	Signature
              of Officer of FCC, LLC, d/b/a First
              Capital

    

     

    Sworn
      to
      and subscribed before me this ___ day of _______________, 2008:

    

    __________________________________

    Notary
      Signature

    

    My
      Commission Expires:

    

    _________________________________

    [Affix
      Notarial Seal]

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    AFFIDAVIT
      REGARDING DELIVERY

    

    On
      this
      the ____ day of _______________, 2008, before me, the undersigned, a Notary
      Public in and for the State of New York, County of _______________,
      _______________________ personally appeared, personally known to me or proved
      to
      me on the basis of satisfactory evidence to be the ________________________
      of
      FULL CIRCLE FUNDING, LLC, the General Partner of FULL CIRCLE FUNDING, L.P.
      being
      by me first duly sworn, stated that he/she has received delivery of the
      foregoing Loan and Security Agreement on behalf of FULL CIRCLE FUNDING, LLC
      in
      the State of New York, County of New York. 

     

    
      	 	 
	 	Signature
              of Officer of Full Circle Funding, LLC

    

     

    Sworn
      to
      and subscribed before me this ___ day of _______________, 2008:

    

    __________________________________

    Notary
      Signature

    

    My
      Commission Expires:

    

    _________________________________

    [Affix
      Notarial Seal]

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    SCHEDULE

    

    This
      Schedule is a part of the foregoing Amended and Restated Loan and Security
      Agreement dated as
      of the
      11th day of September 2006 (as amended and restated as of June 30, 2008) between
      MDU Communications (USA) Inc., a Washington corporation (“Borrower”),
      and
      Full Circle Funding, L.P. a Delaware limited partnership (“Full Circle”) and
      FCC, LLC, d/b/a First Capital, a Florida limited liability company
      (“First
      Capital”)
      in its
      capacity as a Lender and as Agent, (each of Full Circle and First Capital a
      “Lender” and collectively “Lenders”).

     

    
      
        	1.	
                Borrowing
                  Base

              

      

    

    

    “Borrowing
      Base” means, at any time, an amount equal to: [redacted]

     

    
      	2.	
              Accounts
                Eligibility

            

    

    

    (a) Contract
      Ageing: [redacted]
      

    

    (b) Concentration
      Limit:
      [redacted]

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    
      	3.	
              Permitted
                Liens

            

    

    

    Existing
      Liens and financing statements:

    

    
      	
              Financing
                Statement Number,

            	 	
               

            	 	
               

            
	
              Jurisdiction
                and Filing Date

            	 	
              Secured
                Party

            	 	
              Collateral

            
	
              2001-213-0091,
                Washington Secretary of State 

            	 	
              Cisco
                Systems

            	 	
              Specific
                Leased

            
	
              August
                1, 2001

            	 	
              Capital
                Corporation

            	 	
              Equipment

            
	 	 	 	 	 
	
              200610098101,
                Washington Secretary of State 

            	 	
              Leasing
                Innovations,

            	 	
              Specific
                Leased

            
	
              April
                10, 2006

            	 	
              Incorporated

            	 	
              Equipment

            
	 	 	 	 	 
	
              200610819935,
                Washington Secretary of State 

            	 	
              Leasing
                Innovations

            	 	
              Specific
                Leased

            
	
              April
                17, 2006

            	 	
              Innovations

            	 	
              Equipment

            
	 	 	 	 	 
	
              200616794007,
                Washington Secretary of State 

            	 	
              Leasing
                Innovations

            	 	
              Specific
                Leased

            
	
              June
                15, 2006

            	 	
              Innovations

            	 	
              Equipment

            
	 	 	 	 	 
	
              200620598721,
                Washington Secretary of State
July, 24, 2006

            	 	
              Citicorp
                Leasing, Inc.

            	 	
              Specific
                Leased 

              Equipment

            

    

     

    
      	4.	
              Persons
                Authorized to Request
                Loans

            

    

    

      
        	
                Name:

              	 	
                Title:

              
	
                Sheldon
                  Nelson

              	 	
                President
                  and Chief Executive Officer

              
	
                Carmen
                  Ragusa

              	 	
                Vice
                  President

              
	
                Brad
                  Holmstrom

              	 	
                Secretary
                  and Legal Counsel

              

      

    

     

    5. Collection
      Days: 2
      Business Days

    

    6. Conditions
      To Initial Loans

    

    Items
      listed below are required to be delivered, in form and substance satisfactory
      to
      Agent in its sole discretion, as a condition to each Lender’s obligation to fund
      the initial loan or extend the first financial accommodation to Borrower under
      this Agreement.

     

    Certified
      copy of articles/certificate of incorporation 

    

    Bylaws

    

    Secretary’s
      certificate as to constituent documents, bylaws, authorizing action (e.g.,
      corporate resolutions) and incumbency of officers/status and specimen signatures
      of authorized signers

    

    Good
      Standing Certificate (state of organization and all other states in which
      Borrower is qualified to do business)

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    Lien
      search results

    

    Payoff
      letter from any lender whose loans are to be refinanced from proceeds of loans
      made under this Agreement

    

    Lien
      termination documents from existing lender, any other creditor whose filings
      are
      to be terminated, etc.

    

    Landlord,
      warehouseman or other bailee waivers

    

    Collateral
      Assignment of all Customer Contracts 

    

    Agreement
      with any third party billing and collecting agents

    

    Lockbox,
      blocked account or agency account agreement(s)

    

    Financial
      statements

    

    Borrowing
      Base Certificate, together with schedules of Accounts and Inventory and other
      supporting documentation, in each case as of a date acceptable to
      Lenders

    

    Financing
      statements

    

    Officer’s
      certificate as to representations, warranties and no defaults

    

    Solvency
      certificates

    

    Opinion
      letter of Borrower’s legal counsel

    

    Warrant
      Agreements (including as of the Restatement Date)

    

    Registration
      Rights Agreements (including as of the Restatement Date)

    

    Assignment
      of a Life Insurance Policy [redacted] 

    

    All
      other
      items described on the Schedule of Closing Documents previously delivered by
      Lenders or Lenders’ counsel to Borrower or Borrower’s counsel

    

    7. Termination
      Date

    This
      Agreement will terminate on the third anniversary of the Restatement Date,
      provided, however, that the term shall automatically be extended for an
      additional month at the end of each month during the first twenty-four (24)
      month period starting on the Restatement Date up to a maximum term of sixty
      (60)
      months from the Restatement Date.

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    8. Interest
      Margin:  Term
      Loan Tranche
      A: Prime Rate plus 410 basis points (4.10%);

    

    Revolving
      Loan Tranche B: Prime Rate plus 3%;

    

    Revolving
      Loan Tranche C: Prime Rate plus 2%; and

    

    Revolving
      Loan Tranche D: Prime Rate plus 1%.

    

    Revolving
      Loans Tranches E and F: Prime Rate plus
      the
      margins set forth below (the “Margin”),
      subject to adjustment with respect to each fiscal quarter, based on the
      following Total Leverage Ratios:

    

      
        	
                 

                Total
                  Leverage Ratio

              	
                Margin

                (in
                  basis points)

              
	 	 
	
                [redacted]

              	
                [redacted]

              
	
                [redacted]

              	
                [redacted]

              
	
                [redacted]

              	
                [redacted]

              
	
                [redacted]

              	
                [redacted]

              

      

    

    

    “Total
      Leverage Ratio” shall mean the ratio of (i) the aggregate stated balance sheet
      amount of Indebtedness (solely under clause (i) of the definition thereof)
      of
      the Borrower determined in accordance with GAAP to (ii) EBITDA (calculated
      as
      set forth in Item 21(e) of the Schedule) provided that at the option of the
      Borrower EBITDA shall be calculated based on the higher of (i) trailing twelve
      months results or (ii) trailing six months results multiplied by two
      (2).

    

    
      	9.	
              Default
                Margin: 3%

            

    

    

    
      	10.	
              Fees

            

    

    a. Upon
      execution of this Agreement, in consideration of Lender’s structuring, approving
      and committing to this Agreement, and for services by Lenders in connection
      with
      Lenders continuing administration of the Loans, but without affecting Borrower’s
      obligation to reimburse Lenders for costs associated with this Agreement and
      the
      transactions contemplated hereby as provided elsewhere in this Agreement,
      Borrower agrees to pay to Agent for the benefit of Lenders Closing/Annual Fees
      as follows:

    

    Closing
      Fee of 3.5% of Term Loan Tranche A shall be due and payable at closing,
      regardless of whether all of Tranche A is borrowed at Closing.

    Closing/Annual
      Fee of 1% shall be and payable on the entire amount of Revolving Loan Tranche
      B
      (i.e. on the full $5 Million of such Tranche) at such time as the outstanding
      principal balance of the Loans exceed $5,000,000 and on each anniversary of
      the
      date the outstanding principal balance first exceeded $5 Million.

    Closing/Annual
      Fee of 1% shall be and payable on the entire amount of Revolving Loan Tranche
      C
      (i.e. on the full $5 Million of such Tranche) at such time as the outstanding
      principal balance of the Loan exceed $10,000,000, and on each anniversary of
      the
      date the outstanding principal balance first exceeded $10 Million.

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

       

    

    Closing/Annual
      Fee of 1% shall be and payable on the entire amount of Revolving Loan Tranche
      D
      (i.e. on the full $5 Million of such Tranche) at such time as the outstanding
      principal balance of the Loans exceed $15,000,000, and on each anniversary
      of
      the date the outstanding principal balance first exceeded $15
      Million.

    Closing/Annual
      Fee of 1% shall be and payable on the entire amount of Revolving Loan Tranche
      E
      (i.e. on the full $5 Million of such Tranche) at such time as the outstanding
      principal balance of the Loans exceed $20,000,000, and on each anniversary
      of
      the date the outstanding principal balance first exceeded $20
      Million.

    Closing/Annual
      Fee of 1% shall be and payable on the entire amount of Revolving Loan Tranche
      F
      (i.e. on the full $5 Million of such Tranche) at such time as the outstanding
      principal balance of the Loans exceed $25,000,000, and on each anniversary
      of
      the date the outstanding principal balance first exceeded $25
      Million.

    

    Any
      Annual Fee shall be prorated to the extent there are less than 12 months
      remaining in the original term at the time such Annual Fee is charged, based
      on
      the number of months remaining in the original term to 12 months.

    

    b. In
      consideration of the maintenance of Lender’s commitment hereunder, Borrower will
      pay Agent for the benefit of Lenders a fee as set forth below on the daily
      average unused portion of Lender’s commitment to make Revolving Loans hereunder,
      payable monthly in arrears on the first day of each calendar month, beginning
      on
      the first such date following the Agreement Date.

    

    An
      Unused
      line fee on Revolving Loan Tranche B (i.e. on the full $5 Million of such
      Tranche) of one half of one percent (.50%) per annum, charged monthly in
      arrears, on the average unused amount of Tranche B at such time as the
      outstanding principal balance of the Loans exceeds $5,000,000 and continuing
      thereafter regardless of whether the balance on the Loans drops below $5
      Million. 

    An
      Unused
      line fee on Revolving Loan Tranche C (i.e. on the full $5 Million of such
      Tranche) of one third of one percent (.33%) per annum, charged monthly in
      arrears, on the average unused amount of Tranche C at such time as the
      outstanding principal balance of the Loans exceeds $10,000,000 and continuing
      thereafter regardless of whether the balance on the Loan drops below $10
      Million. 

    An
      Unused
      line fee on Revolving Loan Tranche D (i.e. on the full $5 Million of such
      Tranche) of one quarter of one percent (.25%) per annum, charged monthly in
      arrears, on the average unused amount of Tranche D at such time as the
      outstanding principal balance of the Loans exceeds $15,000,000 and continuing
      thereafter regardless of whether the balance on the Loan drops below $15
      Million.

    An
      Unused
      line fee on Revolving Loan Tranche E (i.e. on the full $5 Million of such
      Tranche) of one quarter of one percent (.25%) per annum, charged monthly in
      arrears, on the average unused amount of Tranche D at such time as the
      outstanding principal balance of the Loans exceeds $20,000,000 and continuing
      thereafter regardless of whether the balance on the Loan drops below $20
      Million.

    An
      Unused
      line fee on Revolving Loan Tranche F (i.e. on the full $5 Million of such
      Tranche) of one quarter of one percent (.25%) per annum, charged monthly in
      arrears, on the average unused amount of Tranche F at such time as the
      outstanding principal balance of the Loans exceeds $25,000,000 and continuing
      thereafter regardless of whether the balance on the Loan drops below $25
      Million.

    

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    c. In
      the
      event that this Agreement is terminated for any reason Borrower will pay to
      Agent for the benefit of Lenders on or prior to the effective date of such
      termination an early termination fee as follows: The Borrower may elect to
      prepay the Loans in whole upon 30 days’ notice to Lender. Such prepayment shall
      be at the following pre-payment prices as a percentage of pre-paid principal
      based
      on
      the highest principal amount of Loans outstanding at any time during the
      immediately preceding twelve month period:

    

      
        	
                Months
                  0-12 after Restatement Date

              	 	 	
                102

              	
                %

              
	
                Months
                  13-24 after Restatement Date

              	 	 	
                101

              	
                %

              
	
                Months
                  25-33 after Restatement Date

              	 	 	
                101

              	
                %

              

      

    

     

    (No
      fee
      shall apply to Prepayments made within the last 3 months of the original term
      or
      during any automatic extension period.)

    

    All
      of
      the foregoing fees constitute compensation to Agent for the benefit of Lenders
      for services rendered and are not interest or a charge for the use of money.
      Each installment of such fees shall be fully earned when due and payable and
      shall not be subject to refund or rebate.

    

    
      	11.	
              Organizational
                Information

            

    

    Exact
      Legal Name of Borrower: MDU
      Communications (USA) Inc.

    State
      of Organization:
      Washington

    Type
      of Organization:
      Corporation

    Organizational
      Identification Number:
      52-2233408

    

    
      	12.	
              Subsidiaries
                and Investments in Other Persons:
                None

            

    

     

    
      	13.	
              Pending
                Litigation:
                None

            

    

     

    
      	14.	
              Existing
                Debt and Guarantees:
                

            

    

    Loan
      from
      Wachovia Bank in the amount of [redacted] secured by deposit accounts maintained
      at Wachovia

     

    Lease
      obligations to Leasing Innovations secured by the liens identified in Item
      3 of
      the Schedule in principal amount of [redacted]

    

    Lease
      obligations to Citicorp Leasing Inc. secured by the liens identified in Item
      3
      of the Schedule in principal amount of [redacted]

    

    Lease
      obligations to Cisco Systems Capital Corporation secured by the liens identified
      in Item 3 of the Schedule in principal amount of [redacted]

    

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

    

    
      	15.	
              Prior
                Legal Names:
                None

            

    

    

    Prior
      or Current Trade or Fictitious Names:
      MDU
      Communications

    

    

    Mergers
      and Acquisitions:
      Digital
      Solutions LLC, a Connecticut limited liability company

    Direct
      Satellite, Inc., an Illinois corporation

    PCM
      Acquisitions Corp., a Delaware corporation

     

    
      	16.	
              Locations
                of Offices
                and Collateral: 60 Commerce Way, Totowa, New Jersey
                07512 

              
                  2275
                  SW 66th Terrace, Suite 1, Davie, Florida, 33317

                  400
                  N. May Street, Unit 207, Chicago, Illinois, 60622

                  5535
                  Wilkins Court, Rockville, Maryland, 20850

                  20955
                  Pathfinder Road, Suite 100, Diamond Bar, California
                  91765

              

            

  

    Current
      Chief Executive Office:
      60
      Commerce Way, Totowa, New Jersey 07512

    

    Other
      Locations of Chief Executive Office in past five years:
      None

    

    Other
      Current Collateral Locations:
      None

     

    
      	17.	
              Ownership
                Structure:
                100%
                of stock and equity interest owned by MDU Communications International,
                Inc.

            

    

    

    
      	18.	
              Owned
                Real Property: None

            

    

     

    Leased
      Real Property (including legal name of landlord and monthly
      rent):

    

    [redacted]

    

    Warehousemen,
      processors, consignees or other bailees in possession or control of any
      Inventory (include name, address where Inventory is stored and description
      of
      the arrangement):
      None

     

    
      	19.	
              Bank
                Accounts: [redacted]

            

    

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    
      	20.	
              Commercial
                Tort Claims:

            

    

    None

    

    
      	21.	
              Financial
                Covenants:
                

            

    

    

    (a) Capital
      expenditures (excluding those incurred in connection with the installation
      or
      development and build-out of digital satellite television systems and broadband
      internet services to multiple dwelling units under Contract to the Borrower),
      shall not exceed [redacted].
      

     

    (b) Ratio
      of
      Subscriber Acquisition Costs to Monthly Subscriber Revenue/ROI: [redacted]
      

     

    (c) Minimum
      gross monthly revenue of $900,000 during the first 12 months following the
      Closing Date; $1,200,000 for months 13 through 24 following the Closing Date;
      and [redacted] for each month thereafter. 

    

    (d) Minimum
      Number of Subscribers prior to Borrower drawing Loans in the specified Tranche
      as follows:

    

      
        	
                Tranche
                  A

              	
                Minimum
                  40,000 Subscribers

              
	
                Tranche
                  B

              	
                Minimum
                  45,000 Subscribers

              
	
                Tranche
                  C

              	
                Minimum
                  50,000 Subscribers

              
	
                Tranche
                  D

              	
                Minimum
                  55,000 Subscribers

              
	
                Tranche
                  E

              	
                Minimum
                  60,000 Subscribers

              
	
                Tranche
                  F

              	
                Minimum
                  65,000 Subscribers

              

      

    

     

    Such
      minimum must be met while any balance remains outstanding under the applicable
      Tranche.

    

    (e)
       Prior
      to
      funding any advances under Tranche C or Tranche D, Borrower’s EBITDA must
      be
      positive. Prior to funding and advances under Tranche E and for so long as
      any
      portion of Tranche E is outstanding, Borrower’s EBITDA must be at least
      [redacted], provided that solely for purposes of Tranche E, EBITDA shall be
      calculated based on the higher of (i) trailing twelve month results or (ii)
      trailing six month results multiplied by two (2). Prior to funding and advances
      under Tranche F and for so long as any portion of Tranche F is outstanding,
      Borrower’s EBITDA must be at least [redacted]. EBITDA shall mean Borrower’s
      net income (excluding extraordinary gains and non-cash charges) before provision
      for interest expense, taxes, depreciation and amortization. For purposes of
      this
      calculation, the Closing Fee due hereunder and any fees paid to Morgan Joseph
      shall be excluded. This
      covenant
      will be measured on a trailing a 3-month basis at each month end during the
      period beginning on July 1, 2006 and ending September 30, 2006, on a trailing
      6
      month basis at each month end during the period beginning October 1, 2006 and
      ending on December 31, 2006, on a trailing 9 months basis at each month end
      for
      the period beginning on January 1, 2007 and ending on March 31, 2007 and on
      a
      trailing 12 months basis at each month end after April 30, 2007 and
      thereafter.

     

    (f)
      [redacted] 

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

    22. Permitted
      Purchase Money Debt: [redacted]

    

    23. Annual
      Financial Statements: To
      be
      audited and certified without qualification by an independent practicing
      certified public accountant acceptable to Lender.

    

    24. Borrowing
      Base Certificates: Borrower
      shall deliver to Agent a Borrowing Base Certificate no less frequently than
      monthly (by the fifth Business Day of each month and determined as of the close
      of business on the last Business Day of the immediately preceding
      month).

    

    25. Field
      Examinations: Borrower
      agrees to pay to Agent its customary fees and disbursements relating to field
      examinations of the Collateral, Borrower, Borrower’s business and Borrower’s
      books and records, which, as of the Agreement Date, are $850 per examiner per
      day plus all of the out-of-pocket examination costs and travel and other
      expenses incurred by such examiners.

    

    26. Cross
      Default Amount: [redacted]

    

    27. Judgment
      Cross Default Amount:  [redacted]

    

    28. Maximum
      Annual Increase in Officers’ Compensation:  Borrower
      represents and warrants to Agent that the aggregate cash compensation paid
      and
      to be paid to Borrower’s executive officers and directors for Borrower’s current
      fiscal year is $1,800,000. Such compensation shall not increase by more than
      15%
      per fiscal year hereafter provided however that so long as EBITDA (as defined
      in
      Item 21 (e) of the Schedule is more than $5,000,000 on a trailing 12 month
      basis, the foregoing limit shall not apply.

    

    29. Notice
      Addresses:

    

    
      	
              If
                to Borrower:

            	
              MDU
                Communications (USA), Inc.

            
	 	
              60
                Commerce Way, Unit D

            
	 	
              Totowa,
                New Jersey, 07512

            
	 	
              Attn.:President

            
	 	
              Facsimile
                No.: 973-237-9243

            
	 	 
	
              If
                to Agent:

            	
              FCC,
                LLC, d/b/a First Capital

            
	 	
              3520
                N. W. 58th Street

            
	 	
              Oklahoma
                City, Ok 73112

            
	 	
              Attention:
                John Curtis

            
	 	
              Facsimile
                No.: (405) 917-9660

            
	 	 
	
              With
                a copy to:

            	
              FCC,
                LLC d/b/a First Capital

            
	 	
              125
                Town Park Drive, Suite 190

            
	 	
              Kennesaw,
                Georgia, 30144

            
	 	
              Attention:
                Kimberly Finch Withrow

            
	 	
              Facsimile
                No.: (678) 594-5901

            

    

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    And
      to:

    

    
      	
              If
                to Lenders:

            	
              FCC,
                LLC, d/b/a First Capital

            
	 	
              3520
                N. W. 58th Street

            
	 	
              Oklahoma
                City, Ok 73112

            
	 	
              Attention:
                John Curtis

            
	 	
              Facsimile
                No.: (405) 917-9660

            

    

     

    
      	 	
              Full
                Circle Funding, LP

            
	 	
              800
                Westchester Avenue

            
	 	
              Suite
                S-620

            
	 	
              Rye
                Brook, NY 10573

            
	 	
              Attn.:
                Robert A. Blum

            
	 	
              Facsimile
                No.: (914) 220-6301

            

    

    

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    First
      Capital Corporation –
      Online
      Asset Based Lending

    

    
      	
              Certificate
                #

            	 	
              Client:

            	
              MDU
                Communications

            
	 	 	 	 
	
              Certificate
                Date:

            	 	
              User:

            	 
	 	 	 	 
	
              Loan
                # - Type

            	
              MDUC01

            	 	 
	 	 	 	 
	
              Collateral
                Balance

            	 	 	 
	 	 	 	 
	
              Sales/Additions

            	 	 	 
	 	 	 	 
	
              +
                Adjustments

            	 	 	 
	 	 	 	 
	
              Cash
                (Memo)/Removals

            	 	 	 
	 	 	 	 
	
              Discounts

            	 	 	 
	 	 	 	 
	
              Returns
                & Allowances

            	 	 	 
	 	 	 	 
	
              Non-AR
                Cash

            	 	 	 
	 	 	 	 
	
              Bad
                Debt Write-Offs

            	 	 	 
	 	 	 	 
	
              -
                Adjustments

            	 	 	 
	 	 	 	 
	
              New
                Collateral Balance

            	 	 	 
	 	 	 	 
	
              Ineligibles

            	 	 	 
	 	 	 	 
	
              Advance
                Rate

            	
              [redacted]

            	 	 
	
               

            	 	 	 
	
              Reserves

            	 	 	 
	 	 	 	 
	
              Collateral
                Limit

            	
              [redacted]

            	 	 
	 	 	 	 
	
              New
                Net Collateral

            	 	 	 
	 	 	 	 
	
              Revolving
                Limit

            	
              25,000,000

            	 	 
	 	 	 	 
	
              Term
                Limit

            	
              $5,000,000

            	 	 
	 	 	 	 
	
              Total
                Line Limit

            	
              30,000,000

            	 	 
	 	 	 	 
	
              Total
                Collateral

            	 	 	 
	 	 	 	 
	
              Loan
                Balance

            	 	 	 
	 	 	 	 
	
              Advance
                Request

            	 	 	 
	 	 	 	 
	
              DDA
                Account

            	 	 	 
	 	 	 	 
	
              Collections
                (Memo)

            	 	 	 
	 	 	 	 
	
              New
                Loan Balance

            	 	 	 
	 	 	 	 
	
              New
                Availability

            	 	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

    

    FORM
      OF COMPLIANCE CERTIFICATE

    

    [to
      be provided on borrower’s letterhead]

    

    __________________,
      200__

    

    FCC,
      LLC,
      d/b/a First Capital

    3520
      NW
      58th
      Street

    Oklahoma
      City OK 73112

    Attn.:
      John Curtis

    

    The
      undersigned, the     of
      MDU
      Communications (USA) Inc., a
      Washington corporation (“Borrower”), gives this certificate to FCC,
      LLC,
      d/b/a
      First Capital, a Florida limited liability company (“Agent”),
      in accordance with the requirements of that certain Loan and Security Agreement
      dated as of September 11, 2006 (as amended and restated as June __ __, 2008)
      between Borrower, Agent and Lenders (as amended from time to time, the “Loan
      Agreement”). Capitalized terms used in this Certificate, unless otherwise
      defined herein, shall have the meanings ascribed to them in the Loan
      Agreement.

    

    No
      Default exists on the date hereof, other than:    [if
      none,
      so state].

    

    As
      of the
      date hereof, Borrower is current in its payment of all accrued rent and other
      charges to Persons who own or lease any premises where any of the Collateral
      is
      located, and there are no pending disputes or claims regarding Borrower’s
      failure to pay or delay in payment of any such rent or other
      charges.

    

    Set
      forth
      on Appendix 1 attached hereto is a true, accurate and complete calculation
      with
      respect to the financial covenants of Borrower under the Loan
      Agreement.

    

    
      	 	
              Yours
                truly,

            
	 	 
	 	
              MDU
                Communications (USA) Inc.

            
	 	 
	 	
              By:__________________________________________

            
	 	
              Name:__________________________________________

            
	 	
              Title:__________________________________________Exhibit
      10.2

    

    REGISTRATION
      RIGHTS AGREEMENT

     

    This
      REGISTRATION
      RIGHTS AGREEMENT
      (this
“Agreement”)
      is
      made as of the date of the signature of the Company set forth on the signature
      pages hereto, by and among
      MDU COMMUNICATIONS INTERNATIONAL, INC., a
      Delaware corporation, with its principal offices at 60-D Commerce Way, Totowa,
      New Jersey 07512 (including its wholly-owned subsidiary, MDU Communications
      (USA) Inc., as more fully described below, the “Company”),
      and
      each person identified as a Holder on the signature pages hereto (collectively,
      the “Holders”).
      All
      terms used herein but not defined herein shall have the meaning given to them
      in
      the Purchase Agreement (as defined below).

     

    WITNESSETH:

     

    WHEREAS,
      the Company and the Holders have entered into a Warrant to Purchase Common
      Stock
      dated as of June 30, 2008, providing, among other things, for the right of
      the
      Holders to acquire for each (1) warrant (1) share (each a “Share,”
      collectively, the “Shares”)
      of the
      Company’s common stock, par value $0.001 per share (the “Common
      Stock”),
      at an
      exercise price of $0.60 per share (each a “Warrant,”
      collectively the “Warrants”);
      and

    

    WHEREAS,
      it is a condition to the closing of the Amended and Restated Loan and Security
      Agreement between Holder and MDU Communications (USA) Inc. dated as of even
      date
      herewith that the Company execute and deliver this Agreement and provide for
      the
      registration rights set forth herein.

    

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

     

    SECTION
      1

     

    DEFINITIONS

     

    For
      purposes of this Agreement the following terms shall be defined as
      follows:

     

    The
      term
      the “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended.

     

    The
      terms
“register,” “registered”
      and
“registration”
      refer to
      a registration effected by preparing and filing a registration statement or
      statements or similar documents in compliance with the Securities Act and
      pursuant to Rule 415 under the Securities Act or any successor rule providing
      for offering securities on a continuous basis (“Rule
      415”),
      and
      the declaration or ordering of effectiveness of such registration statement
      or
      document by the SEC.

     

    The
      term
“Registrable
      Securities”
      means
      the Warrants and any securities issued or issuable in respect thereof in
      connection with, among other things, a dividend, distribution or split,
      recapitalization, merger, consolidation, any reorganization or other
      distribution with respect to or in exchange for or in replacement of the and
      the
      shares of Common Stock issued upon the exercise of the Warrants (the
“Warrant
      Shares”).

     

    The
      term
“Registration
      Statement”
      means
      any registration statement or comparable document of the Company under the
      Securities Act through which a public sale or distribution of the Company's
      securities may be registered (except a form exclusively for the sale or
      distribution of securities in connection with an employee or consultant stock
      option or purchase plan or for use exclusively in connection with a business
      combination), the prospectus contained therein and all amendments and
      supplements to such Registration Statement, including post-effective amendments,
      all exhibits and all material incorporated by reference in such Registration
      Statement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The
      term
      the “Securities
      Act”
means
      the Securities Act of 1933, as amended.

     

    SECTION
      2

     

    REGISTRATION
      RIGHTS

     

    2.1 Shelf
      Registration.

     

    (a) Holder
      and Company agree that the issuance of the Warrant and Warrant Shares to Holder
      is pursuant to a private placement transaction. Upon demand by Holder of the
      Warrant, the Company shall prepare and file a Registration Statement on a form
      that shall (A) be available for the sale of the Registrable Securities by the
      selling Holders thereof and (B) comply as to form with the requirements of
      the
      applicable form on which such Registration Statement is filed and include all
      financial statements required by the SEC to be filed therewith (“Shelf
      Registration”)
      with
      the SEC to provide for the offer and sale of the Registrable Securities within
      [redacted] of such demand and shall cause the Shelf Registration to become
      effective under the Act no later than the earlier of [redacted] following the
      date on which the Company is notified by the SEC that such Shelf Registration
      will not be reviewed or is no longer subject to further review and comments
      (“Effective
      Date”).

     

    (b)
      In
      the
      event the Shelf Registration is not declared effective by the Effective Date,
      the Company shall promptly, but no later than ten (10) days from the Effective
      Date, issue to the Holder, any designee or assignee thereof, or each then holder
      of the Registrable Securities (“Holder”)
      a
      number of shares of Common Stock equal to [redacted] of the sum of the number
      of
      Common Stock issuable upon exercise of the Warrants issued to the Holder. In
      addition, for each thirty (30) day period (each such period consisting of thirty
      consecutive days) after the Effective Date that the Shelf Registration has
      not
      been declared effective (each a “Default
      Period”),
      the
      Company shall be obligated to issue to the Holder (or any assignee thereof)
      a
      number of shares of Common Stock equal to [redacted] of the sum of the number
      of
      (x) shares of Common Stock issuable upon exercise of the Warrants issued to
      the
      Holder and (y) the number of Liquidated Damages Shares (as defined below)
      issuable pursuant to this Section 2.1(b) prior to the date of determination.
      Any
      issuances of Common Stock the Company is obligated to make for subsequent
      Default Periods shall be made no later than ten (10) days from the last day
      of
      such Default Period. Each share of Common Stock issued pursuant to this Section
      2.1(b) shall be hereinafter referred to as a “Liquidated
      Damages Share.”
      

     

    (c)
      Notwithstanding
      the foregoing, the Company’s obligation to issue the Liquidated Damages Shares
      in connection therewith shall cease one (1) year from the date hereof so long
      as
      the Company has remained current, and remains current for at least one (1)
      contiguous year thereafter, with respect to all of its filings required under
      to
      the Exchange Act (the “Filings”).
      Further, should the Company not be listed on any securities exchange at the
      time
      of the demand, it shall incur no liability for Liquidated Damages Shares.

    

    (d)
      The
      Holder may demand the Company register such Registrable Securities at any time
      and up to three times in total, provided however that all such costs incurred
      in
      connection with such Registration shall be borne as follows: (i) the expenses
      for the first demand shall be borne by the Company except to the extent such
      demand occurs within one (1) year from the date hereof , in which case the
      expenses shall be borne by the Holder; (ii) the expenses for the demands after
      the first year following the date hereof shall be borne by the Holder except
      to
      the extent Holder bore the expenses for a demand in the first year following
      the
      date hereof, in which case Company shall bear the cost for the second demand
      and
      Holder shall bear the cost for the third demand.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.2  Piggyback
      Registration.
      From and
      after the Closing Date and until such time as the Registrable Securities are
      freely saleable under Rule 144 promulgated under the Securities Act without
      volume limitations, if the Company shall determine to proceed with the
      preparation and filing of a Registration Statement in connection with the
      proposed offer and sale of any of its securities by it or any of its security
      holders (other than a registration statement on Form S-4, S-8 or other
      limited purpose form), the Company will give written notice of its determination
      to all record holders of the Registrable Securities. Upon receipt of a written
      request from any such holder within thirty (30) days after receipt of any such
      notice from the Company, the Company will, except as herein provided, cause
      all
      the Registrable Securities owned by such holders to be included in such
      Registration Statement, all to the extent requisite to permit the sale or other
      disposition by the prospective seller or sellers of the Registrable Securities
      to be so registered. If any registration pursuant to this Section 2.2 shall
      be underwritten in whole or in part, the Company may require that the
      Registrable Securities requested for inclusion pursuant to this Section 2.2
      be included in the underwriting on the same terms and conditions as the
      securities otherwise being sold through the underwriters. The obligation of
      the
      Company under this Section 2.2 shall be unlimited as to the number of
      Registration Statements to which it applies.

     

    SECTION
      3

     

    REGISTRATION
      PROCEDURES

     

    If
      and
      whenever the Company is required by the provisions of Sections 2.1 or 2.2
      to effect the registration of Registrable Securities under the Securities Act,
      the Company will:

     

    3.1  use
      its
      best efforts to cause such a Registration Statement to become and remain
      effective for a period of two (2) years; provided,
      however,
      that
      any Registration Statement filed pursuant to Section 2.2 may be kept effective
      for such lesser period of time until which all Registrable Securities included
      thereunder are freely salable (without restriction, except with regard to
      Registrable Securities held by persons deemed to be “affiliates” of the Company)
      under Rule 144, if applicable.

     

    3.2  prepare
      and file with the SEC such amendments to such Registration Statement and
      supplements to the prospectus contained therein as may be necessary to keep
      such
      Registration Statement effective for the period of time described in paragraph
      (a) above.

     

    3.3  furnish
      to the security holders participating in such registration and to the
      underwriters of the securities being registered such reasonable number of copies
      of such Registration Statement, preliminary prospectus, final prospectus and
      such other documents as such underwriters may reasonably request in order to
      facilitate the public offering of such securities;

     

    3.4  use
      its
      best efforts to register or qualify the securities covered by the Registration
      Statement under such state securities or blue sky laws of such jurisdictions
      as
      such participating holders may reasonably request in writing within twenty
      (20)
      days following the original filing of such Registration Statement, except that
      the Company shall not for any purpose be required to execute a general consent
      to service of process or to qualify to do business as a foreign corporation
      in
      any jurisdiction wherein it is not so qualified;

     

    3.5  in
      the
      event that a registration involves an underwritten offering, enter into and
      perform its obligations under an underwriting agreement, in usual and customary
      form, including, without limitation, customary indemnification and contribution
      obligations, with the managing underwriter or such offering; 

     

    3.6  notify
      the security holders participating in such registration, promptly after it
      shall
      receive notice thereof, of the time when the Registration Statement has become
      effective or a supplement to any prospectus forming a part of the Registration
      Statement has been filed;

     

    3.7  notify
      such holders promptly of any request by the SEC for the amending or
      supplementing the Registration Statement or prospectus or for additional
      information;

     

    3.8  notify
      such holders promptly of the Company’s reasonable determination that a
      post-effective amendment to a Registration Statement or prospectus would be
      appropriate;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.9  prepare
      and file with the SEC, promptly upon the request of any such holders, any
      amendments or supplements to the Registration Statement or prospectus which,
      in
      the opinion of counsel for such holders (and concurred in by counsel for the
      Company), is required under the Securities Act or the rules and regulations
      thereunder in connection with the distribution of the Registrable
      Shares;

     

    3.10  prepare
      and promptly file with the SEC and promptly notify such holders of the filing
      of
      such amendment or supplement to the Registration Statement or prospectus as
      may
      be necessary to correct any statements or omissions if, at the time when a
      prospectus relating to such securities is required to be delivered under the
      Securities Act, any event shall have occurred as the result of which any such
      prospectus or any other prospectus as then in effect would include an untrue
      statement of a material fact or omit to state any material fact necessary to
      make the statements therein, in the light of the circumstances in which they
      were made, not misleading;

     

    3.11  advise
      such holders, promptly after it shall receive notice or obtain knowledge
      thereof, of the issuance of any stop order by the SEC suspending the
      effectiveness of the Registration Statement or the initiation or threatening
      of
      any proceeding for that purpose and promptly use its best efforts to prevent
      the
      issuance of any stop order or to obtain its withdrawal if such stop order should
      be issued;

     

    3.12  at
      the
      request of holders of a majority of the Registrable Securities included in
      the
      Registration Statement, furnish to the underwriters on the date that the
      Registrable Securities are delivered to underwriters for sale in connection
      with
      a registration pursuant to this Agreement (i) an opinion, dated such date,
      of
      the counsel representing the Company for the purposes of such registration,
      in
      form and substance as is customarily given to underwriters in an underwritten
      public offering, addressed to the underwriters and (ii) a letter dated such
      date, from the independent certified accountants of the Company, in form an
      substance as is customarily given by independent certified public accountants
      to
      underwriters in an underwritten public offering, addressed to the
      underwriters;

     

    3.13  make
      available for inspection by any underwriters participating in an offering
      covering Registrable Securities, and the counsel, accountants or other agents
      retained by any such underwriter, all pertinent financial and other records,
      corporate documents, and properties of the Company, and cause the Company's
      officers, directors and employees to supply all information reasonably requested
      by any such underwriters in connection with such offering;

     

    3.14  if
      the
      Common Stock is then listed on a national securities exchange, cause the
      Registrable Securities to be listed on such exchange, or if reported on NASDAQ,
      to be reported on NASDAQ; 

     

    3.15  provide
      a
      transfer agent and registrar, which may be a single entity, for the Registrable
      Securities not later than the effective date of the Registration Statement
      in
      which Registrable Securities are included; and

     

    3.17  comply
      with all applicable rules and regulations of the Commission and make generally
      available to its security holders earning statements satisfying the provisions
      of Section 11(a) of the Securities Act and Rule 158 thereunder no later than
      forty five (45) days after the end of any twelve (12) month period (or ninety
      (90) days after the end of any twelve (12) month period if such period is a
      fiscal year) commencing on the first day of the first fiscal quarter of the
      Company, after the effective date of the Shelf Registration Statement, which
      statements shall cover said twelve (12) month period.

     

    SECTION
      4

     

    EXPENSES

     

    With
      respect to each inclusion of Registrable Securities in a Registration Statement
      pursuant to Sections 2.1 and 2.2 hereof, the fees, costs and expenses of
      registration to be borne by the Company (except as set forth in Section 2.1(c)
      shall include, all registration, filing, and NASD fees; printing expenses,
      fees
      and disbursements of counsel and accountants for the Company; all legal fees
      and
      disbursements and other expenses of complying with state securities or blue
      sky
      laws of any jurisdictions in which the securities to be offered are to be
      registered and qualified. Fees and disbursements of counsel and accountants
      for
      the selling security holders shall be borne by the selling security holders,
      and
      security holders participating in such registration shall bear their pro rata
      share of the underwriting discounts and commissions and transfer
      taxes.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SECTION
      5

     

    CERTAIN
      OBLIGATIONS OF HOLDERS

     

    Each
      Holder agrees that, upon receipt of any notice from the Company of the happening
      of (i) any event of the kind described in 3.6, 3.7, 3.8, 3.10 or 3.11 hereof,
      or
      (ii) a determination by the Company’s Board of Directors that it is advisable to
      suspend use of the prospectus for a discrete period of time due to pending
      corporate developments such as negotiation of a material transaction which
      the
      Company, in its sole discretion after consultation with legal counsel,
      determines it would be obligated to disclose in the Shelf Registration, which
      disclosure the Company believes would be premature or otherwise inadvisable
      at
      such time or would have a material adverse effect on the Company and its
      stockholders, such Holder will forthwith discontinue disposition of such
      Registrable Securities covered by the Shelf Registration or prospectus until
      such Holder’s receipt of the copies of the supplemented or amended prospectus
      contemplated by Section 3.2 hereof, or until such Holder is advised in writing
      by the Company that the use of the applicable prospectus may be resumed, and
      has
      received copies of any additional or supplemental filings that are incorporated
      or deemed to be incorporated by reference in such prospectus. The period of
      time
      in which the use of a prospectus or Shelf Registration is so suspended shall
      be
      referred to as a “Black-Out
      Period.”
The
      Company agrees to so advise such Holder promptly of the commencement and
      termination of any such Black-Out Period, and the Holder agrees to keep the
      fact
      of such Black-Out Period confidential. The Company shall not impose a Black-Out
      Period under this Section 5 for more than thirty (30) consecutive days and
      not
      more than twice in any given twelve (12) month period; provided,
      that at
      least ninety (90) days must pass between Black-Out Periods. Notwithstanding
      the
      foregoing, the Company may suspend the effectiveness of any Shelf Registration
      if the Commission rules and regulations prohibit the Company from maintaining
      the effectiveness of a Shelf Registration because its financial statements
      are
      stale at a time when its fiscal year has ended or it has made an acquisition
      reportable under Item 2 of Form 8-K or any other similar situation until the
      earliest time in which the SEC would allow the Company to re-effect a Shelf
      Registration (provided that the Company shall use its reasonable best efforts
      to
      cure any such situation as soon as possible so that the Shelf Registration
      can
      be made effective at the earliest possible time).

     

    SECTION
      6

     

    INDEMNIFICATION.

     

    6.1  The
      Company will indemnify and hold harmless each holder of Registrable Securities
      which are included in a Registration Statement pursuant to the provisions of
      Sections 2.1 and 2.2 hereof, such Holder’s directors and officers, and any
      underwriter (as defined in the Securities Act) for such holder and each person,
      if any, who controls such holder or such underwriter within the meaning of
      the
      Securities Act, from and against, and will reimburse such holder and each such
      underwriter and controlling person with respect to, any and all loss, damage,
      liability, cost and expense to which such holder or any such underwriter or
      controlling person may become subject under the Securities Act or otherwise,
      insofar as such losses, damages, liabilities, costs or expenses are caused
      by
      any untrue statement or alleged untrue statement of any material fact contained
      in a Registration Statement, any prospectus contained therein or any amendment
      or supplement thereto, or arise out of or are based upon the omission or alleged
      omission to state therein a material fact required to be stated therein or
      necessary to make the statements therein, in light of the circumstances in
      which
      they were made, not misleading; provided, however, that the Company will not
      be
      liable in any such case to the extent that any such loss, damage, liability,
      cost or expenses arises out of or is based upon an untrue statement or alleged
      untrue statement or omission or alleged omission so made in conformity with
      written information furnished by such holder, such underwriter or such
      controlling person specifically for use in the preparation thereof.  
        

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6.2  Each
      holder of Registrable Securities included in a registration pursuant to the
      provisions of Sections 2.1 and 2.2 hereof will indemnify and hold harmless
      the Company, its directors and officers, any controlling person and any
      underwriter from and against, and will reimburse the Company, its directors
      and
      officers, any controlling person and any underwriter with respect to, any and
      all loss, damage, liability, cost or expense to which the Company or any
      controlling person and/or any underwriter may become subject under the
      Securities Act or otherwise, insofar as such losses, damages, liabilities,
      costs
      or expenses are caused by any untrue statement or alleged untrue statement
      of
      any material fact contained in the Registration Statement, any prospectus
      contained therein or any amendment or supplement thereto, or arise out of or
      are
      based upon the omission or alleged omission to state therein a material fact
      required to be stated therein or necessary to make the statements therein,
      in
      light of the circumstances in which they were made, not misleading, in each
      case
      to the extent, but only to the extent, that such untrue statement or alleged
      untrue statement or omission or alleged omission was so made in reliance upon
      and in strict conformity with written information furnished by or on behalf
      of
      such holder specifically for use in the preparation thereof and provided
      further, that the maximum amount that may be recovered from any holder shall
      be
      limited to the net amount of proceeds received by such holder from the sale
      of
      the Registrable Securities.

     

    6.3  Promptly
      after receipt by an indemnified party under this Section 6 of a notice of the
      commencement of any action (including any governmental action) such indemnified
      party will, if a claim in respect thereof is to be made against any indemnifying
      party hereunder, deliver to the indemnifying party a written notice of the
      commencement thereof. The failure to deliver written notice to the indemnifying
      party within a reasonable time of the commencement of any such action shall
      relieve such indemnifying party of any liability to the indemnified party under
      this Section 6 only to the extent prejudicial to its ability to defend such
      action, but the omission so to deliver written notice to the indemnifying party
      will not relieve it of any liability that it may have to an indemnified party
      otherwise than under this Agreement. The indemnifying party shall have the
      right
      to participate in, and, to the extent the indemnifying party so desires, jointly
      with any other indemnifying party similarly noticed, to assume control of the
      defense thereof with counsel mutually satisfactory to the parties; provided,
      however,
      that an
      indemnified party shall have the right to retain its own counsel, with the
      reasonable fees and expenses to be paid by the indemnifying party, if in the
      reasonable determination of counsel for the indemnifying party, representation
      of such indemnified party by the counsel obtained by the indemnifying party
      would be inappropriate due to actual or potential conflicting interests between
      such indemnified party and any other party represented by such counsel in such
      proceeding. After notice from the indemnifying party to such indemnified party
      of its election so to assume the defense thereof, the indemnifying party will
      not be liable to such indemnified party pursuant to the provisions of paragraph
      6.1 or 6.2 above for any legal or other expense subsequently incurred by such
      indemnified party in connection with the defense thereof other than reasonable
      costs of investigation, unless (i) the indemnified party shall have
      employed counsel in accordance with the provisions of the preceding sentence,
      (ii) the indemnifying party shall not have employed counsel reasonably
      satisfactory to the indemnified party to represent the indemnified party within
      a reasonable time after the notice of the commencement of the action or
      (iii) the indemnifying party has authorized in writing the employment of
      counsel for the indemnified party at the expense of the indemnifying
      party.

    

    SECTION
      7

     

    ADDITIONAL
      RIGHTS AND OBLIGATIONS

     

    7.1  Contribution.
      To the
      extent any indemnification by an indemnifying party is prohibited or limited
      by
      law, the indemnifying party agrees to make the maximum contribution with respect
      to any amounts for which it would otherwise be liable under Section 6 hereof
      to
      the extent permitted by law, provided that (i) no contribution shall be made
      under circumstances where the maker would not have been liable for
      indemnification pursuant to the provisions of Section 6 hereof, (ii) no seller
      of Registrable Securities guilty of fraudulent misrepresentation (within the
      meaning of Section 11(f) of the Securities Act) shall be entitled to
      contribution from any seller of Registrable Securities who was not guilty of
      such fraudulent misrepresentation, and (iii) contribution by any seller of
      Registrable Securities shall be limited to the net amount of proceeds received
      by such seller from the sale of such Registrable Securities.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    7.2  Assignable
      Rights.
      The
      rights with respect to the Registrable Securities under this Agreement shall,
      in
      addition to being for the benefit of the parties hereto, be for the benefit
      of
      and enforceable by a transferee of the Registrable Securities. The obligations
      of the Company contained in this Agreement shall be binding upon any successor
      to the Company and continue to be in effect with respect to any securities
      issued by any successor to the Company in substitution or exchange for any
      Registrable Securities.

     

    7.3  Reports
      Under Securities Exchange Act.
      With a
      view to making available to the holders of Registrable Securities the benefits
      of SEC Rule 144 and any other rule or regulation of the SEC that may at any
      time
      permit the holders of the Registrable Securities to sell securities of the
      Parent to the public without registration, the Company agrees to:

     

    (a)  make
      and
      keep public information available, as those terms are understood and defined
      in
      SEC Rule 144, at all times;

     

    (b)  file
      with
      the SEC in a timely manner all reports and other documents required of the
      Company under the Securities Act and the Exchange Act; and

     

    (c)  furnish
      to each holder of Registrable Securities, forthwith upon request (i) a
      written statement by the Company that it has complied with the reporting
      requirements of SEC Rule 144, the Securities Act and the Exchange Act, (ii)
      a
      copy of the most recent annual or quarterly report of the Company and such
      other
      reports and documents so filed by the Company and (iii) such other information
      as may be reasonably requested in availing the holders of any Registrable
      Securities of any rule or regulation of the SEC which permits the selling of
      any
      such securities without registration.

    

    SECTION
      8

     

    MISCELLANEOUS
      PROVISIONS

     

    8.1  Waivers
      and Amendments.
      Except
      as expressly provided herein, neither this Agreement nor any term hereof may
      be
      amended or waived except pursuant to a written instrument executed by the
      Company and the Holders that hold at least two-thirds (662⁄3%) of the Registrable
      Securities held by all Holders. Any amendment or waiver effected in accordance
      with this paragraph shall be binding upon all Holders and the Company. The
      failure of any party to exercise any right or remedy under this Agreement or
      otherwise, or the delay by any party in exercising such right or remedy, shall
      not operate as a waiver thereof.

     

    8.2  Notices.
      Any
      notice, demand or other communication which any party hereto may be required,
      or
      may elect, to give to anyone interested hereunder shall be sufficiently given
      if
      delivered via fax, personally or by nationally recognized overnight courier
      service or sent by registered or certified mail, return receipt requested,
      addressed to such address as may be given herein; provided, however, that
      notices with respect to Sections 3.6, 3.7 and 3.8 hereof may be delivered via
      email; and, except as otherwise noted herein, must be addressed as
      follows:

     

    if
      to the
      Company, to:

     

    MDU
      Communications International, Inc.

    60-D
      Commerce Way

    Totowa,
      New Jersey 07512

    Attn:
      Sheldon Nelson

    Facsimile:
      (973) 237-9499

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    if
      to any
      Holder, to the address shown on such Holder’s signature page hereto, marked for
      attention as there indicated,

     

    or
      to
      such other address as the party to whom notice is to be given may have furnished
      to the other parties in writing in accordance with the provisions of this
      Section 8.2. Any such notice or communication will be deemed to have been
      received: (A) in the case of facsimile, email or personal delivery, on the
      date
      of such delivery; (B) in the case of nationally-recognized overnight courier,
      on
      the next business day after the date sent; and (C) if by registered or certified
      mail, on the third business day following the date postmarked.

     

    8.3  Descriptive
      Headings and References.
      The
      descriptive headings herein have been inserted for convenience only and are
      not
      deemed to limit or otherwise affect the construction of any provisions
      hereof.

     

    8.4  Applicable
      Law; Jurisdiction.
      This
      Agreement shall be governed by and construed under the internal laws of the
      State of New York without regard to conflict of law rules. The parties hereby
      submit to the exclusive jurisdiction of the courts of the State of New York
      located in New York County and the Federal courts located in the Southern
      District of New York, with respect to any action or legal proceeding commenced
      by either party with respect to this Agreement or the Registrable Securities.
      Each party irrevocably waives any objection it now has or hereafter may have
      respecting the venue of any such action or proceeding or the inconvenience
      of
      such forum, and each party consents to the service of process in any such action
      or proceeding in the manner set forth for the delivery of notices herein.

     

    8.5  Waiver
      of Jury Trial.
      The
      parties hereby waive their rights to a trial by jury in any action or proceeding
      involving any matter arising out of or relating to this Agreement or to the
      Registrable Securities.

     

    8.6  Counterparts.
      This
      Agreement may by executed through the use of separate signature pages or in
      any
      number of counterparts, and each of such counterparts shall, for all purposes,
      constitute one agreement binding on all the parties, notwithstanding that all
      parties are not signatories to the same counterpart.

     

    8.7  Entire
      Agreement.
      This
      instrument contains the entire agreement of the parties, and there are no
      representations, covenants or other agreements except as stated or referred
      to
      herein.

     

    8.8  Severability.
      Whenever possible, each provision of this Agreement shall be interpreted in
      such
      a manner as to be effective and valid under applicable law, but if any provision
      of this Agreement shall be deemed prohibited or invalid under such applicable
      law, such provision shall be ineffective only to the extent of such prohibition
      or invalidity, and such prohibition or invalidity shall not invalidate the
      remainder of such provision or the other provisions of this
      Agreement.

     

    8.9  Third
      Party Beneficiaries.
      Except
      as expressly provided herein, no provision of this Agreement is intended to
      confer any rights, benefits or remedies upon any person other than the parties
      hereto and their respective successors and assigns.

     

    8.10  Remedies.
      The
      Holders, in addition to being entitled to exercise all rights granted by law,
      including recovery of damages, shall be entitled to specific performance of
      their rights under this Agreement. The Company agrees that monetary damages
      would not be adequate compensation for any loss incurred by any Holder by reason
      of a breach by it of the provisions of this Agreement and hereby agrees to
      waive
      in any action for specific performance the defense that a remedy at law would
      be
      adequate.

     

    8.11  Further
      Assurances.
      Each of
      the parties hereto shall execute and deliver such documents and perform such
      further acts (including, without limitation, obtaining any consents, exemptions,
      authorizations or other actions by, or giving any notices to, or making any
      filings with, any governmental authority or any other Person) as may be
      reasonably required or desirable to carry out or to perform the provisions
      of
      this Agreement.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
      on
      the day and year first set forth above.

     

    
      	 	 	 	
              MDU
                COMMUNICATIONS INTERNATIONAL, INC.

            
	 	 	 	 
	
              Date:

            	 	 	
              By:

            	 
	 	 	 	 	
              Sheldon
                Nelson

            
	 	 	 	 	
              President
                and Chief Executive Officer

            
	 	 	 	 
	
              Attest:

            	 	 	 
	 	 	 	 
	
              By:

            	 	 	 
	
              Name:

            	 	 	 
	
              Title:

            	 	 	 

    

    

    [HOLDER
      SIGNATURE PAGES FOLLOW]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    HOLDER
      SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

     

    The
      undersigned Holder hereby executes this counterpart signature page to the
      Registration Rights Agreement, dated as of June 30, 2008 by and among MDU
      COMMUNICATIONS INTERNATIONAL, INC. and certain Holders, including the
      undersigned.

     

    
      	 	
              Holder

            
	 	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

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