Document:

EXHIBIT
10.8

     

    SIXTH
LOAN MODIFICATION AGREEMENT

     

    This Sixth Loan Modification Agreement
(this “Loan Modification Agreement”) is entered into as of July 16, 2010, by and
among (a) SILICON VALLEY
BANK, a California corporation, with its principal place of business at
3003 Tasman Drive, Santa Clara, California 95054 and with a loan production
office located at One Newton Executive Park, Suite 200, 2221 Washington Street,
Newton, Massachusetts 02462 (“Bank”) and (b) (i) GLOBALOPTIONS, INC., a
Delaware corporation with offices at 1501 M Street,
N.W., Washington, D.C. 20005 (“Global”), and (ii) THE BODE TECHNOLOGY GROUP,
INC., a Delaware corporation with offices at 1501 M Street,
N.W., Washington, D.C. 20005 (“Bode”) (Global and Bode are jointly and
severally, individually and collectively, referred to herein as the
“Borrower”).

     

    1.            DESCRIPTION OF EXISTING
INDEBTEDNESS AND OBLIGATIONS.  Among other indebtedness and
obligations which may be owing by Borrower to Bank, Borrower is indebted to Bank
pursuant to a loan arrangement dated as of March 31, 2008, evidenced by, among
other documents, a certain Fourth Amended and Restated Loan and Security
Agreement dated as of March 31, 2008, among Borrower and Bank, as amended by a
certain First Loan Modification Agreement dated as of March 30, 2009, as further
amended by a certain Second Loan Modification Agreement dated as of August 27,
2009, as further amended by a certain Third Loan Modification Agreement dated as
of December 31, 2009, as further amended by a certain Fourth Loan Modification
Agreement dated as of April 15, 2010, and as further amended by a certain Fifth
Loan Modification Agreement dated as of July 12, 2010 (as amended, the “Loan
Agreement”).  Capitalized terms used but not otherwise defined herein
shall have the same meaning as in the Loan Agreement.

     

    2.            DESCRIPTION OF
COLLATERAL.  Repayment of the Obligations is secured by (a) the
Collateral as described in the Loan Agreement, (b) the Intellectual Property
Collateral as described in a certain Intellectual Property Security Agreement
dated as of March 31, 2008 between Bank and Global (the “Global IP Security
Agreement”), and (c) the Intellectual Property Collateral as described in a
certain Intellectual Property Security Agreement dated as of March 31, 2008
between Bank and Bode (the “Bode IP Security Agreement”) (together with any
other collateral security granted to Bank, the “Security
Documents”).  Hereinafter, the Security Documents, together with all
other documents evidencing or securing the Obligations shall be referred to as
the “Existing Loan Documents”.

     

    3.            DESCRIPTION OF CHANGE IN
TERMS.

     

    
      	
               
      

            	
              A.

            	
              Modifications
      to Loan Agreement.

            

    

     

    
      	
               
      

            	
              1

            	
              Borrower
      hereby acknowledges, confirms and agrees that (a) upon the occurrence of
      the Sale Event, all outstanding Obligations in connection with Financed
      Receivables being sold pursuant to the Sale Event shall be paid in full
      immediately, and (b) upon the sale of any assets owned by Global and/or
      Guarantor with respect to the James Lee Witt Associates business unit,
      including, without limitation, any assets sold pursuant to that certain
      Asset Purchase Agreement dated as of May 13, 2010 by and among Borrower,
      Guarantor and Witt Group Holdings, LLC (the “Witt Division Sale Event”),
      all outstanding Obligations in connection with Financed Receivables being
      sold pursuant to the Witt Division Sale Event shall be paid in full
      immediately.

            

    

     

    
      	
               
      

            	
              2

            	
              The
      Loan Agreement shall be amended by deleting the following language,
      appearing in Section 2.1.1(b)
thereof:

            

    

     

    “In
addition and notwithstanding the foregoing, (i) prior to the occurrence of the
Sale Event, (A) the aggregate amount of Advances outstanding at any time may not
exceed Ten Million Dollars ($10,000,000.00), and (B) the aggregate amount of
Advances made based upon Aggregate Eligible Accounts outstanding at any time may
not exceed Two Million Five Hundred Thousand Dollars ($2,500,000.00), and (ii)
upon and after the occurrence of the Sale Event, the aggregate amount of
Advances outstanding at any time may not exceed Seven Million Five Hundred
Thousand Dollars ($7,500,000.00).”

     

    and inserting in lieu thereof the
following:

     

    “In
addition and notwithstanding the foregoing, (i) the aggregate amount of Advances
outstanding at any time may not exceed Five Million Dollars ($5,000,000.00), and
(ii) prior to the occurrence of the Sale Event, the aggregate amount of Advances
made based upon Aggregate Eligible Accounts outstanding at any time may not
exceed Two Million Five Hundred Thousand Dollars
($2,500,000.00).”

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              3

            	
              The
      Loan Agreement shall be amended by deleting the following text, appearing
      in Section 2.1.1(f):

            

    

     

    “If this
Agreement is terminated (A) by Bank in accordance with clause (ii) in the
foregoing sentence, or (B) by Borrower for any reason, Borrower shall pay to
Bank a termination fee in an amount equal to (1) prior to the occurrence of the
Sale Event, Fifty Thousand Dollars ($50,000.00), and (2) upon and after the
occurrence of the Sale Event, Thirty Seven Thousand Five Hundred Dollars
($37,500.00) (the “Early Termination Fee”).”

     

    and
inserting in lieu thereof the following:

     

    “If this
Agreement is terminated (A) by Bank in accordance with clause (ii) in the
foregoing sentence, or (B) by Borrower for any reason, Borrower shall pay to
Bank a termination fee in an amount equal to Twenty Five Thousand Dollars
($25,000.00) (the “Early Termination Fee”).”

     

    
      	
               
      

            	
              4

            	
              The
      Loan Agreement shall be amended by deleting the following text, appearing
      in Section 2.2.4 thereof:

            

    

     

    “           (a)           Prior
to the occurrence of the Sale Event, Borrower will pay to Bank a collateral
handling fee equal to 0.20% (or, with respect to Financed Receivables based upon
Aggregate Eligible Accounts, 0.30%) per month of the Financed Receivable Balance
for each Financed Receivable outstanding based upon a 360 day year (the
“Collateral Handling Fee”), provided, however, for any Subject Month (as of the
first calendar day of such month) to the extent that Borrower maintained
Liquidity of greater than Twelve Million Five Hundred Thousand Dollars
($12,500,000.00) at all times during the applicable Testing Month, the
Collateral Handling Fee shall be 0.0% (or, with respect to Financed Receivables
based upon Aggregate Eligible Accounts, 0.10%) per month of the Financed
Receivable Balance for each Financed Receivable outstanding based upon a 360 day
year.  This fee is charged on a daily basis which is equal to the
Collateral Handling Fee divided by 30, multiplied by the number of days each
such Financed Receivable is outstanding, multiplied by the outstanding Financed
Receivable Balance.  Except as otherwise provided in Section
2.3.1(b)(i), the Collateral Handling Fee is payable when the Advance made based
on such Financed Receivable is payable in accordance with Section 2.3
hereof.

     

    (b)           Upon
and after the occurrence of the Sale Event, Borrower will pay to Bank a
collateral handling fee equal to 0.20% per month of the Financed Receivable
Balance for each Financed Receivable outstanding based upon a 360 day year (the
“Collateral Handling Fee”), provided, however, for any Subject Month (as of the
first calendar day of such month) to the extent that Borrower maintained
Liquidity of greater than Twelve Million Five Hundred Thousand Dollars
($12,500,000.00) at all times during the applicable Testing Month, the
Collateral Handling Fee shall be 0.0% per month of the Financed Receivable
Balance for each Financed Receivable outstanding based upon a 360 day
year.  This fee is charged on a daily basis which is equal to the
Collateral Handling Fee divided by 30, multiplied by the number of days each
such Financed Receivable is outstanding, multiplied by the outstanding Financed
Receivable Balance.  The Collateral Handling Fee is payable when the
Advance made based on such Financed Receivable is payable in accordance with
Section 2.3 hereof.”

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    and
inserting in lieu thereof the following:

     

    “           (a)           Prior
to the occurrence of the Sale Event, Borrower will pay to Bank a collateral
handling fee equal to 0.20% (or, with respect to Financed Receivables based upon
Aggregate Eligible Accounts, 0.30%) per month of the Financed Receivable Balance
for each Financed Receivable outstanding based upon a 360 day year (the
“Collateral Handling Fee”), provided, however, for any Subject Month (as of the
first calendar day of such month) to the extent that Borrower maintained
Liquidity of greater than Six Million Two Hundred Fifty Thousand Dollars
($6,250,000.00) at all times during the applicable Testing Month, the Collateral
Handling Fee shall be 0.0% (or, with respect to Financed Receivables based upon
Aggregate Eligible Accounts, 0.10%) per month of the Financed Receivable Balance
for each Financed Receivable outstanding based upon a 360 day
year.  This fee is charged on a daily basis which is equal to the
Collateral Handling Fee divided by 30, multiplied by the number of days each
such Financed Receivable is outstanding, multiplied by the outstanding Financed
Receivable Balance.  Except as otherwise provided in Section
2.3.1(b)(i), the Collateral Handling Fee is payable when the Advance made based
on such Financed Receivable is payable in accordance with Section 2.3
hereof.

     

    (b)           Upon
and after the occurrence of the Sale Event, Borrower will pay to Bank a
collateral handling fee equal to 0.20% per month of the Financed Receivable
Balance for each Financed Receivable outstanding based upon a 360 day year (the
“Collateral Handling Fee”), provided, however, for any Subject Month (as of the
first calendar day of such month) to the extent that Borrower maintained
Liquidity of greater than Six Million Two Hundred Fifty Thousand Dollars
($6,250,000.00) at all times during the applicable Testing Month, the Collateral
Handling Fee shall be 0.0% per month of the Financed Receivable Balance for each
Financed Receivable outstanding based upon a 360 day year.  This fee
is charged on a daily basis which is equal to the Collateral Handling Fee
divided by 30, multiplied by the number of days each such Financed Receivable is
outstanding, multiplied by the outstanding Financed Receivable
Balance.  The Collateral Handling Fee is payable when the Advance made
based on such Financed Receivable is payable in accordance with Section 2.3
hereof.”

     

    
      	
               
      

            	
              5

            	
              The
      Loan Agreement shall be amended by deleting the following, appearing as
      Section 6.7:

            

    

     

    “           6.7           Financial
Covenants.  Borrower shall maintain at all times, to be tested
as of the last day of each month:

     

    (a)           EBDA.  EBDA
for the three-month period ending on the last day of each month of at
least:

    

    
      
        
          
            
              	
                      Period

                    	 
      	
                      Minimum
      EBDA

                    
	
                      April
      1, 2010 through June 30, 2010

                    	 
      	
                      ($1,500,000.00)

                    
	
                      May
      1, 2010 through July 31, 2010

                    	 
      	
                      If
      the Sale Event has occurred: ($1,500,000.00)

                      If
      the Sale Event has not occurred: ($1,000,000.00)

                    
	
                      June
      1, 2010 through August 31, 2010

                    	 
      	
                      If
      the Sale Event has occurred: ($600,000.00)

                      If
      the Sale Event has not occurred: ($500,000.00)

                    
	
                      July
      1, 2010 through September 30, 2010

                    	 
      	
                      If
      the Sale Event has occurred: ($400,000.00)

                      If
      the Sale Event has not occurred: ($100,000.00)

                    
	
                      August
      1, 2010 through October 31, 2010, and for each three-month period ending
      on the last day of each month thereafter

                    	 
      	
                      If
      the Sale Event has occurred: $1.00

                      If
      the Sale Event has not occurred:
($100,000.00)”

                    

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    and
inserting in lieu thereof the following:

     

    “           6.7           Financial
Covenants.  Borrower shall maintain at all times, to be tested
as of the last day of each month:

     

    (a)           EBDA.  EBDA
for the three-month period ending on the last day of each month of at
least:

    

    
      
        
          
            
              
                	
                        May
      1, 2010 through July 31, 2010

                      	 	$	(1,500,000.00	)
	
                        June
      1, 2010 through August 31, 2010

                      	 	$	(1,000,000.00	)
	
                        July
      1, 2010 through September 30, 2010

                      	 	$	(1,500,000.00	)
	
                        August
      1, 2010 through October 31, 2010, and for each three-month period ending
      on the last day of each month thereafter

                      	 	$	(1,000,000.00	)”

              

            

          

        

      

    

     

    
      	
               
      

            	
              6

            	
              The
      Loan Agreement shall be amended by deleting the following definitions,
      appearing in Section 13.1 thereof:

            

    

     

    “           “Applicable Rate” is a per
annum rate equal to the Prime Rate plus one and three quarters of one percent
(1.75%), provided, however, for any Subject Month (as of the first calendar day
of such month), to the extent that Borrower maintained Liquidity of greater than
Twelve Million Five Hundred Thousand Dollars ($12,500,000.00) at all times
during the applicable Testing Month, the Applicable Rate shall be a per annum
rate equal to the Prime Rate plus one percent (1.0%).”

     

    “           “EBDA” means (a) Net Income,
plus (b) to the extent deducted in the calculation of Net Income, depreciation
expense, amortization expense, non-cash impairment charges and non-cash stock
compensation expenses, plus (c) gains and/or losses related to the sale of
certain divisions and/or Subsidiaries of Borrower consented to by Bank in
writing on a case-by-case basis in Bank’s sole discretion.”

     

    “           “Facility Amount” is (a) prior
to the occurrence of the Sale Event, Twelve Million Five Hundred Thousand
Dollars ($12,500,000.00), and (b) upon and after the occurrence of the Sale
Event, Nine Million Three Hundred Seventy Five Thousand Dollars
($9,375,000.00).”

     

    and inserting in lieu thereof the
following:

     

    “           “Applicable Rate” is a per
annum rate equal to the Prime Rate plus one and three quarters of one percent
(1.75%), provided, however, for any Subject Month (as of the first calendar day
of such month), to the extent that Borrower maintained Liquidity of greater than
Six Million Two Hundred Fifty Thousand Dollars ($6,250,000.00) at all times
during the applicable Testing Month, the Applicable Rate shall be a per annum
rate equal to the Prime Rate plus one percent (1.0%).”

     

    “           “EBDA” means (a) Net Income,
plus (b) to the extent deducted in the calculation of Net Income, depreciation
expense, amortization expense, non-cash impairment charges and non-cash stock
compensation expenses, plus (c) gains and/or losses related to the sale of
certain divisions and/or Subsidiaries of Borrower consented to by Bank in
writing on a case-by-case basis in Bank’s sole discretion, so long as such gains
and/or losses are in accordance with the estimates previously provided by
Borrower to Bank, as determined by Bank in Bank’s sole discretion, plus (d)
extraordinary severance and bonus expenses paid out in accordance with a
triggered change in control under the employment contracts of Harvey Schiller,
Barry Watson and Jeff Nyweide, so long as such severance and bonus expenses are
in accordance with the estimates previously provided by Borrower to Bank, as
determined by Bank in its sole discretion.”

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “           “Facility Amount” is Six
Million Two Hundred Fifty Thousand Dollars ($6,250,000.00).”

     

    
      	
               
      

            	
              7

            	
              The
      Loan Agreement shall be amended by deleting the Compliance Certificate
      appearing as Exhibit
      B thereto and inserting in lieu thereof the Compliance Certificate
      attached on Schedule
      1 hereto.

            

    

     

    4.        
   FEES.  Borrower
shall pay to Bank a modification fee equal to Ten Thousand Dollars ($10,000.00),
which fee shall be due on the date hereof and shall be deemed fully earned as of
the date hereof.   Borrower shall also reimburse Bank for all
legal fees and expenses incurred in connection with this amendment to the
Existing Loan Documents.

     

    5.       
    RATIFICATION OF IP SECURITY
AGREEMENTS.

     

    (a)           Global
hereby ratifies, confirms and reaffirms, all and singular, the terms and
conditions of the Global IP Security Agreement and acknowledges, confirms and
agrees that the Global IP Security Agreement contains an accurate and complete
listing of all Intellectual Property Collateral as defined therein.

     

    (b)           Bode
hereby ratifies, confirms and reaffirms, all and singular, the terms and
conditions of the Bode IP Security Agreement and acknowledges, confirms and
agrees that the Bode IP Security Agreement contains an accurate and complete
listing of all Intellectual Property Collateral as defined therein.

     

    6.      
     RATIFICATIONS OF PERFECTION
CERTIFICATES.

     

    (a)           Global
hereby ratifies, confirms and reaffirms, all and singular, the terms and
disclosures contained in a certain Perfection Certificate dated as of March 31,
2008 between Global and Bank, and acknowledges, confirms and agrees the
disclosures and information Global provided to Bank in the Perfection
Certificate have not changed, as of the date hereof.

     

    (b)           Bode
hereby ratifies, confirms and reaffirms, all and singular, the terms and
disclosures contained in a certain Perfection Certificate dated as of March 31,
2008 between Bode and Bank, and acknowledges, confirms and agrees the
disclosures and information Bode provided to Bank in the Perfection Certificate
have not changed, as of the date hereof.

     

    7.        
   CONSISTENT
CHANGES.  The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.

     

    8.       
    RATIFICATION OF LOAN
DOCUMENTS.  Borrower hereby ratifies, confirms, and reaffirms
all terms and conditions of all security or other collateral granted to the
Bank, and confirms that the indebtedness secured thereby includes, without
limitation, the Obligations.

     

    9.      
      NO DEFENSES OF
BORROWER.  Borrower hereby acknowledges and agrees that
Borrower has no offsets, defenses, claims, or counterclaims against Bank with
respect to the Obligations, or otherwise, and that if Borrower now has, or ever
did have, any offsets, defenses, claims, or counterclaims against Bank, whether
known or unknown, at law or in equity, all of them are hereby expressly WAIVED
and Borrower hereby RELEASES Bank from any liability thereunder.

     

    10.     
      CONTINUING
VALIDITY.  Borrower understands and agrees that in modifying
the existing Obligations, Bank is relying upon Borrower’s representations,
warranties, and agreements, as set forth in the Existing Loan
Documents.  Except as expressly modified pursuant to this Loan
Modification Agreement, the terms of the Existing Loan Documents remain
unchanged and in full force and effect.  Bank’s agreement to
modifications to the existing Obligations pursuant to this Loan Modification
Agreement in no way shall obligate Bank to make any future modifications to the
Obligations.  Nothing in this Loan Modification Agreement shall
constitute a satisfaction of the Obligations.  It is the intention of
Bank and Borrower to retain as liable parties all makers of Existing Loan
Documents, unless the party is expressly released by Bank in
writing.  No maker will be released by virtue of this Loan
Modification Agreement.

     

    11.           COUNTERSIGNATURE.  This
Loan Modification Agreement shall become effective only when it shall have been
executed by Borrower and Bank.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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remainder of this page is intentionally left blank]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    This Loan Modification Agreement is
executed as a sealed instrument under the laws of the Commonwealth of
Massachusetts as of the date first written above.

    

    
      
        	
                BORROWER:

              	 
      	
                BANK:

              
	 
      	 
      	 
      
	
                GLOBALOPTIONS,
      INC.

              	 
      	
                SILICON
      VALLEY BANK

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/ Jeffrey O. Nyweide

              	 
      	
                By:

              	
                /s/ Christine Egitto

              
	 
      	 
      	 
      	 
      	 
      
	
                Name: 

              	
                Jeffrey O. Nyweide

              	 
      	
                Name: 

              	
                Christine Egitto

              
	 
      	 
      	 
      	 
      	 
      
	
                Title:

              	
                CFO

              	 
      	
                Title:

              	
                VP

              
	 
      	 
      	 
      	 
      	 
      
	
                THE
      BODE TECHNOLOGY GROUP, INC.

              	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/ Jeffrey O. Nyweide

              	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                Name:

              	
                Jeffrey O. Nyweide

              	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                Title:

              	
                CFO

              	 
      	 
      	 
      

      

    

    

    The
undersigned, GLOBALOPTIONS
GROUP, INC. (“Guarantor”) hereby ratifies, confirms and reaffirms, all
and singular, the terms and conditions of (a) a certain Unconditional Guaranty
(the “Guaranty”) dated as of March 31, 2008, executed and delivered by
Guarantor, pursuant to which Guarantor unconditionally guaranteed the prompt,
punctual and faithful payment and performance of all Obligations of Borrower to
Bank, (b) a certain Security Agreement (the “Security Agreement”) dated as of
March 31, 2008, between Guarantor and Bank, pursuant to which Guarantor granted
Bank a continuing first priority security interest in the Collateral (as the
term is defined therein) to secure the payment and performance of the
Obligations under the Guaranty in accordance with the terms of the Security
Agreement, and (c) a certain Intellectual Property Security Agreement (the “IP
Agreement”) dated as of March 31, 2008, between Guarantor and Bank, pursuant to
which Guarantor granted Bank a continuing first priority security interest in
the Intellectual Property Collateral (as the term is defined therein) to secure
the payment and performance of the Obligations under the Guaranty in accordance
with the terms of the IP Agreement.  In addition, Guarantor
acknowledges, confirms and agrees that the Guaranty, Security Agreement, and IP
Agreement shall remain in full force and effect and shall in no way be limited
by the execution of this Loan Modification Agreement, or any other documents,
instruments and/or agreements executed and/or delivered in connection
herewith.

    

    
      
        	
                GLOBALOPTIONS
      GROUP, INC.

              
	 
      	 
      
	
                By:

              	
                /s/Harvey Schiller

              
	 
      	 
      
	
                Name:

              	
                Harvey Schiller

              
	 
      	 
      
	
                Title:

              	
                Chairman and
CEO

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Schedule
1

    

    EXHIBIT
B

    

    

    

    SPECIALTY
FINANCE DIVISION

    Compliance
Certificate

    

    I, an authorized officer of
GlobalOptions, Inc. and The Bode Technology Group, Inc. (individually and
collectively, jointly and severally, “Borrower”) certify under the Fourth
Amended and Restated Loan and Security Agreement, as amended from time to time
(as amended, the “Agreement”) between Borrower and Silicon Valley Bank (“Bank”)
as follows (all capitalized terms used herein shall have the meaning set forth
in the Agreement):

    

    Borrower
represents and warrants for each Financed Receivable:

    

    Each
Financed Receivable is an Eligible Account;

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

    Additionally,
Borrower represents and warrants as follows:

    

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

    

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Borrower
is not an “investment company” or a company “controlled” by an “investment
company”  under the Investment Company Act.  Borrower is not
engaged as one of its important activities in extending credit for margin stock
(under Regulations X, T and U of the Federal Reserve Board of
Governors).  Borrower has complied in all material respects with the
Federal Fair Labor Standards Act.  Borrower has not violated any laws,
ordinances or rules, the violation of which could reasonably be expected to
cause a Material Adverse Change.  None of Borrower’s or any
Subsidiary’s properties or assets have been used by Borrower or any Subsidiary
or, t o the best of Borrower’s knowledge, by previous Persons, in disposing,
producing, storing, treating, or transporting any hazardous substance other than
legally.  Borrower and each Subsidiary has timely filed all required
tax returns and paid, or made adequate provision to pay, all material taxes,
except those being contested in good faith with adequate reserves under
GAAP.  Borrower and each Subsidiary has obtained all consents,
approvals and authorizations of, made all declarations or filings with, and
given all notices to, all government authorities that are necessary to continue
its business as currently conducted except where the failure to obtain or make
such consents, declarations, notices or filings would not reasonably be expected
to cause a Material Adverse Change.

    

    Borrower
is in compliance with the financial covenant set forth in Section 6.7 of the
Agreement.

    

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

    

    Pricing
Reduction

    

    
      
        
          	 
      	 
      	
                  Required

                	 
      	
                  Actual

                	 
      	
                  Pricing Change

                
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                  Liquidity

                	
                    

                	
                  >$6,250,000

                	
                    

                	
                  $_______

                	
                    

                	
                  Yes No

                

        

      

    

    

    Financial
Covenant

    

    
      
        
          
            	 
      	 
      	
                    Required

                  	 
      	
                    Actual

                  	 
      	
                    Compliance

                  
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                    EBDA

                  	
                      

                  	
                    $_________*

                  	
                      

                  	
                    $_________

                  	
                      

                  	
                    Yes
      No

                  

          

        

      

    

    

    *As set
forth in Section 6.7(a) of the Agreement.

    

    Sincerely,

    

    
      
        
          
            
              
                	 
      
	 
      
	 
      
	
                        Signature

                      
	 
      
	
                        Title

                      
	 
      
	
                        DateUnassociated Document

    Exhibit
10.1

    

    XO
Holdings, Inc.

    2010
Annual Executive Bonus Plan

    

    
      	
              I.           Overview

            
	
               

              This
      document describes the terms of the 2010 Annual Executive Bonus Plan for
      XO Holdings, Inc and its subsidiaries (“XOH” or the
      “Company”).  The
      2010 Annual Executive Bonus Plan (the “Plan”) rewards
      eligible executive officers for their contributions to the Company’s
      success in meeting Corporate Goals, Functional Unit Goals and Individual
      Goals.  This document sets forth how the Plan works and how it
      is administered.

               

            
	
              II.           Plan
      Administration

            
	
               

              The
      Plan is provided by XOH at its sole discretion.  The Plan is
      administered by XOH’s Human Resources Department, subject to the
      supervision of XOH’s CEO, COO, CFO and SVP HR, the Bonus Plan Committee or
      “BPC”, at the direction of the Compensation Committee of the XOH Board of
      Directors (“Compensation
      Committee”). The Compensation Committee is responsible for
      establishing performance metrics and determining whether a bonus will be
      paid pursuant to the Plan.  The Compensation Committee may, at
      its sole discretion, and without prior notice, modify, change, alter or
      terminate the Plan or determine whether or not a Plan bonus will be
      paid.  No bonus payment is payable without the authorization and
      final approval by the Compensation Committee of the Board of
      Directors.

               

              In
      the event of a claim or dispute brought forth by a participant, the
      decision of the Compensation Committee as to the facts in the case and the
      meaning and intent of any provision of the Plan, or its application, shall
      be final, binding and conclusive.

               

            
	
              III.           Bonus
      Period

            
	
               

              The
      period over which bonuses may be earned under the Plan is XOH’s 2010
      fiscal year, beginning on January 1, 2010 and ending on December 31, 2010
      (the “Bonus
      Period”).  The performance goals applicable to the Bonus
      Period will be as specified by the Compensation Committee and may vary
      from year to year.

               

            
	
              IV.           Eligibility
      Requirements

            
	
               

              An
      executive officer is eligible to participate in the Plan only if all of the following
      criteria are met:

               

              ·    
      Designated as eligible to participate by the Compensation
      Committee;

              ·    
      Occupies an eligible position for a minimum of three consecutive
      months during the applicable Bonus Period;

              ·    
      Renders overall satisfactory work performance; and

              ·    
      On XOH’s payroll and actively employed on the date of the Plan
      bonus payment, which, if applicable, is expected to occur during the
      subsequent fiscal year.

               

              An
      Executive Officer who is selected to participate in the Plan is referred
      to as a “participant”.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      
        	2010 Annual
      Executive Bonus Plan	2 of
  5

      

       

       

    

    
      	
              The
      following individuals are ineligible to participate in the Plan, except as
      otherwise specified by the Compensation Committee:

               

              ·    
      Executive Officers hired, rehired or moved into a bonus-eligible
      position on or after October 1st
      of the Bonus Period;

              ·    
      Otherwise-eligible executive officers who either voluntarily or
      involuntarily discontinue employment at XOH prior to the date of any bonus
      payment; and/or

              ·    
      Any person, regardless of his or her position or title, to the
      extent not designated as eligible to participate by the Compensation
      Committee.

               

            
	
              V.           Plan
      Funding Level and Corporate Goals

            
	
               

              XOH’s
      corporate performance will be evaluated using the following financial
      metrics: Cash Flow; Adjusted EBITDA; and Revenue.  Other and/or
      additional financial metrics may be applicable from time to time, as
      specified by the Compensation Committee.  Subject to
      Compensation Committee approval, achievement of the applicable financial
      metrics will determine whether the Plan is funded and bonuses are paid for
      the Bonus Period.  The combination of achievement of all metrics
      results in the Plan Funding Level percentage (“PFL”) specified
      by the Compensation Committee.  XOH reserves the right to set
      one or more minimum thresholds for the Plan’s corporate financial metrics;
      if XOH’s actual performance relative to these metrics does not exceed the
      applicable minimum threshold(s), there will be no bonus payout with
      respect to the Bonus Period.  Subject to Compensation Committee
      approval, XOH also reserves the right to increase the size of the bonus
      pool available for the Bonus Period to account for financial performance
      materially exceeding the applicable target performance
levels.

               

            
	
              VI.           Individual
      Performance Goals

            
	
               

              Unless
      the Compensation Committee determines otherwise, for all eligible
      participants (other than the CEO) individual performance objectives will
      be jointly established by each of the Plan’s participants and the
      CEO.  Individual goals will include various specific and
      measurable objectives set at the beginning of the Bonus Period and
      intended to support the overall corporate goals.  The individual
      goals may be weighted based upon the relative
      importance.  Periodic assessment of each participant’s
      performance relative to his or her individual performance objectives will
      be conducted by the CEO.

               

              Unless
      the Compensation Committee determines otherwise, at the end of the Bonus
      Period, the evaluation of each participant’s performance (other than the
      CEO) against the pre-established performance objectives will be conducted
      by the CEO.  Individual performance objectives are subject to
      revision during a Bonus Period to address changes in corporate priorities
      or objectives, as determined by the CEO and the Compensation
      Committee.

               

              For
      the CEO, individual performance objectives will be jointly established by
      the CEO and the Compensation Committee. Individual goals will include
      various specific and measurable objectives set at the beginning of the
      Bonus Period and intended to support the overall corporate
      goals.  Individual goals may be weighted based upon their
      relative importance.  Periodic assessment of the CEO’s
      performance relative to his or her individual performance objectives will
      be conducted by the Compensation Committee.

               

              At
      the end of the Bonus Period, the evaluation of the CEO’s performance
      against the pre-established performance objectives will be conducted by
      the Compensation Committee.  Individual performance objectives
      are subject to revision during a Bonus Period to address changes in
      corporate priorities or objectives, as determined by the Compensation
      Committee.

               

            
	
              VII.           Annual
      Bonus Target and Determination of Individual Awards

            
	
               

              The
      Annual Bonus Target (“ABT”) will be a
      percentage of a participant’s eligible base salary for the applicable
      Bonus Period.  Eligible Base Salary is defined in Section
      IX.  Bonus targets are as specified by the Compensation
      Committee; however, individual payouts may be greater than or less than
      the ABT.

               

              The
      bonus pool will be determined by the plan funding level linked to the 2010
      Corporate Goals discussed in Section V for the Bonus Period, subject to
      authorization and approval by the Compensation Committee.  Fifty
      percent (50%) of an employee’s Individual Bonus Award will be based upon
      the achievement of the XOH Cash Flow, Adjusted EBITDA, and Revenue Goals
      and the applicable Business Unit goals.  The other fifty percent
      (50%) of an employee’s Individual Award will be based upon individual
      performance. These combined factors will determine potential bonus payouts
      on an individual basis.  Final bonus awards require the approval
      of the Compensation Committee.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      
         

        
          	2010 Annual
      Executive Bonus Plan	3 of
  5

        

         

      

       

    

    
      	

               

              Achievement
      of the 2010 XOH Goals does not guarantee an individual bonus payout, and
      no bonus attributable to individual goals will be paid unless all three
      plan funding level corporate goals are met. Final bonus awards require
      approval by the Compensation Committee.  If XOH’s financial
      performance does not meet or exceed any minimum thresholds established by
      the Compensation Committee for the Bonus Period, the Plan will not be
      funded and, unless otherwise authorized by the Compensation Committee, no
      bonus will be payable to any Plan participant, regardless of the level of
      individual contribution.

               

            
	VIII.           COMPUTATION
      AND DISBURSEMENT OF FUNDS
	
               

              As
      soon as practicable after the close of the 2010 fiscal year, the Corporate
      Controller shall calculate the financial performance and the proposed
      payout under the Plan based upon the achievement of the financial
      performance measures.  The proposed payout shall be presented to
      the Compensation Committee for final approval.  Once approved,
      payment of the Financial Awards shall be made within 30 days after
      completion of such approval but not later than December 31,
      2011.

               

            
	
              IX.           Administration
      Rules and Definitions

            
	
               

              Eligible Base
      Salary

               

              Bonus
      award calculations will be based upon the participant’s base salary in
      effect as of the end of the Bonus Period.  A participant’s base
      salary shall be determined before both (a) deductions for taxes or
      employee benefits, and (b) deferrals of compensation pursuant to any
      XOH-sponsored benefit plans.  The following are
      exceptions:

               

              ·    
      In cases of grade/target change that occur during the Bonus Period,
      the base salary in effect at the end of each time period will be used to
      compute the target bonus award for each respective portion of the Bonus
      Period.

               

              ·    
      In cases of changes in work schedule, (i.e., 35 to 40 hours or vice
      versa), the base salary in effect at the end of each time period will be
      used to compute the annual target bonus award.

               

              Prorated Bonus
      Awards

               

              In
      order to be eligible to receive a bonus award for the Bonus Period, a
      participant must be employed in a bonus-eligible position for a minimum of
      three months during that Bonus Period, except as otherwise provided by the
      Compensation Committee.  A bonus payout will be based on the
      amount of time the eligible participant is actively and continuously
      employed in a bonus eligible position during the Bonus
Period.

               

              ·    
      New Hires and
      Rehires – Bonus award will be prorated based upon the number of
      months employed during the Bonus Period.  For example, a
      participant initially hired on July 1st
      would be eligible for 50% of the annual bonus award.  In the
      case of rehires, there is no credit for prior service and the rehire date
      must occur prior to October 1st
      in order for the participant to be eligible under the Plan for the Bonus
      Period.

               

              ·    
      Leaves of Absence
      - Time taken during a leave of absence is not credited toward
      eligibility for a bonus award; therefore, awards will be prorated for the
      length of time on leave of absence.  Furthermore, bonus payments
      are not considered earned and payable unless and until the participant
      returns to work, with the exception of Military Leave.  If the
      leave of absence lasts nine months or more during the Bonus Period, the
      participant will not have met the three-month eligibility required to earn
      a bonus for that Bonus Period.

               

              ·    
      Promotions and
      Demotions – If the action results in a movement from one
      bonus-eligible position to another bonus-eligible position (with either a
      higher or lower bonus target) a pro-rated bonus award will be
      calculated.  The bonus award will be calculated separately by
      factoring the time in each bonus eligible position by the corresponding
      bonus target and base pay during the participant’s tenure in each
      position.  However, if a participant is both promoted and later
      demoted during the Bonus Period, the participant’s entire bonus
      eligibility and bonus target percent will be determined by the lower
      grade.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      
        
           

          
            	2010 Annual
      Executive Bonus Plan	4 of
  5

          

           

           

        

      

    

    
      	

              ·    
      Status
      Change

               

              o    
      Change in
      employment status – The bonus award is not payable unless the
      participant has occupied a bonus-eligible position for at least three
      months during the Bonus Period and meets all eligibility criteria during
      the last full quarter of the Bonus Period, i.e., from Oct 1st
      through December 31st.  The
      bonus award will be based upon the base salary in effect at the end of the
      applicable time period and the annual bonus target while in the
      bonus-eligible position.

               

              o    
      Bonus-eligible
      position to a non-bonus eligible position – The bonus award is
      prorated based upon the time in a bonus-eligible position as long as the
      participant was in the position for a minimum of three months during the
      Bonus Period.  A participant must occupy a bonus-eligible
      position prior to October 1st
      in order to be eligible to receive a bonus payment for the Bonus
      Period.

               

              o    
      Non-bonus-eligible position to
      a bonus-eligible position – The bonus award will be prorated based
      on the time worked, the corresponding bonus target, and the salary in
      effect at the end of the period while in the bonus-eligible position as
      long as the participant was in the eligible position for a minimum of
      three months during the Bonus Period.  A participant must move
      into the bonus-eligible position prior to October 1st
      in order to be eligible to receive a bonus payment for the Bonus
      Period.

               

              If pro-rated awards
      are granted, the awards shall be paid within 30 days following the final
      approval of bonus awards for the Bonus Period, but not later than December
      31, 2011.

               

              Termination

               

              If
      a participant’s termination of employment occurs prior to the date the
      bonus awards are actually paid, the participant will not be entitled to
      any bonus payment for the Bonus Period during which the termination
      occurs, except as otherwise provided by the Plan or directed by the
      Compensation Committee.  Bonuses are not considered earned until
      they are approved by the Compensation Committee and are actually paid by
      XOH.  Consequently, a participant whose employment with the
      Company is voluntarily or involuntarily terminated prior to the actual
      bonus payment date will be deemed ineligible for a bonus payment, except
      as otherwise provided by the Plan and the Compensation
      Committee.

               

              Other

               

              In
      the event of a situation not covered or clarified by the Plan guidelines,
      the Compensation Committee will make the final determination regarding
      eligibility and bonus calculations.  No bonus payments will be
      made under the Plan without prior approval by the Compensation
      Committee.  Bonus awards are subject to any applicable FICA,
      federal, state and local withholding requirements as well as pretax
      employee contributions to the Company’s 401(k) plan in effect at the time
      of bonus payment.  Employment at XOH is terminable at will
      by either the Company or its employees and is for no definite
      period of time.  Nothing in this Plan constitutes, nor should it
      be construed as, a commitment to employment for a specific duration or at
      all.  The existence of this Plan does not provide any employee
      the right to continued employment with XOH or continued participation in
      any compensation or bonus plan.

               

              No
      right under the Plan shall be assignable, either voluntarily or
      involuntarily by the way of encumbrance, pledge, attachment, level or
      change of any nature (except as may be required by state or federal
      law).

               

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      
        
           

          
            	2010 Annual
      Executive Bonus Plan	5 of
  5

          

           

           

        

      

    

    
      	

              Nothing
      in the Plan shall require the Company to segregate or set aside any funds
      or other property for the purpose of paying any portion of an
      award.  No Participant, beneficiary or other person shall have
      any right, title or interest in any amount awarded under the Plan prior to
      the payment of such award to him or her.

               

              XOH
      determines, at its sole discretion, whether bonuses will be paid. XOH
      reserves the right to amend and/or terminate this or any other bonus,
      reward, and recognition plan at any time without notice.  This
      Plan is not a promise, guarantee, announcement, contract or agreement that
      a bonus will be paid, nor is it a contract of
  employment.

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