Document:

exv4w1

Exhibit 4.1

Loan and Security Agreement

Dated as of March 31, 2009

by and between

Fifth Third Bank

and

Pulse Systems, LLC

 

 

Fifth Third Bank

Pulse Systems, LLC

Loan and Security Agreement

Table of Contents

	 	 	 	 	 
	 	 	Page	 
	1 . Definitions And Terms
	 	 	1	 
	2 . Loans: Disbursements, Interest Rates, Loan Requests and Fees
	 	 	11	 
	2.1 Loans
	 	 	11	 
	2.2 Letters of Credit
	 	 	12	 
	2.3 Interest Rates and Fees
	 	 	13	 
	2.4 LIBOR Loans
	 	 	14	 
	2.5 Computation of Interest
	 	 	16	 
	3 . Loans: General Terms
	 	 	16	 
	3.1 Payments
	 	 	16	 
	3.2 Late Payment Provision
	 	 	17	 
	3.3 Notes
	 	 	17	 
	3.4 One Loan
	 	 	17	 
	3.5 Use of Loan Proceeds
	 	 	18	 
	3.6 Representation and Warranty
	 	 	18	 
	3.7 Authorization to Disburse
	 	 	18	 
	3.8 Payment of Costs, Fees and Expenses
	 	 	18	 
	3.9 Debit of Accounts
	 	 	18	 
	3.10 Application of Payments
	 	 	19	 
	4. Collateral: General Terms
	 	 	19	 
	4.1 Grant of Security Interest
	 	 	19	 
	4.2 Supplemental Documentation
	 	 	19	 
	4.3 Inspections and Verifications
	 	 	20	 
	4.4 Liens/Collateral Locations
	 	 	21	 
	4.5 Lockbox
	 	 	21	 
	4.6 Account Earnings Credit
	 	 	22	 
	4.7 Assignment of Competing Security Interest
	 	 	22	 
	4.8 Special Collateral
	 	 	22	 
	4.9 Additional Collateral
	 	 	22	 
	4.10 No Custom or Waiver
	 	 	22	 
	4.11 Lien on Realty
	 	 	22	 
	4.12 Releases
	 	 	23	 
	5. Collateral: Accounts
	 	 	23	 
	5.1 Eligible Accounts
	 	 	23	 
	5.2 Notice of Ineligible Accounts
	 	 	25	 
	5.3 Additional Representations, Warranties and Covenants
	 	 	26	 
	5.4 Revolving Loans
	 	 	26	 

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	 	 	Page	 
	5.5 Verification of Accounts
	 	 	26	 
	5.6 Notices Regarding Account Debtors
	 	 	26	 
	5.7 Notice Regarding Disputed Accounts
	 	 	27	 
	5.8 Attorney and Agent-In-Fact
	 	 	27	 
	6 . Collateral: Inventory
	 	 	27	 
	6.1 Inventory Representations, Warranties and Covenants
	 	 	27	 
	6.2 Sale of Inventory
	 	 	28	 
	6.3 Responsibility for Inventory
	 	 	28	 
	7 . Equipment
	 	 	28	 
	7.1 Representations, Warranties and Covenants
	 	 	28	 
	7.2 Maintenance of Equipment
	 	 	28	 
	7.3 Evidence of Ownership
	 	 	28	 
	7.4 Records and Schedules of Equipment
	 	 	28	 
	8 . Insurance and Taxes
	 	 	29	 
	8.1 Insurance
	 	 	29	 
	8.2 Taxes
	 	 	30	 
	9 . Representations, Warranties and Covenants: General
	 	 	30	 
	9.1 Representations and Warranties
	 	 	30	 
	9.2 Covenants
	 	 	33	 
	9.3 Negative Covenants
	 	 	36	 
	9.4 Financial Covenants
	 	 	38	 
	9.5 Financial Reporting
	 	 	39	 
	10 . Conditions Precedent
	 	 	40	 
	10.1 Conditions to Initial Funding
	 	 	40	 
	10.2 Conditions to Subsequent Fundings
	 	 	41	 
	11 . Event of Default; Remedies
	 	 	42	 
	11.1 Events of Default
	 	 	42	 
	11.2 Cumulative Remedies
	 	 	44	 
	11.3 Discontinuing Advances
	 	 	44	 
	11.4 Remedies
	 	 	44	 
	11.5 Assembling Collateral
	 	 	45	 
	11.6 Notice of Sale
	 	 	45	 
	11.7 Postponement of Sale
	 	 	45	 
	12 . General
	 	 	45	 
	12.1 Bank Accounts
	 	 	45	 
	12.2 Application of Payments
	 	 	45	 
	12.3 Additional Representations, Warranties and Covenants
	 	 	45	 
	12.4 Modification and Assignment of Loan Documents
	 	 	46	 
	12.4 Waiver of Defaults
	 	 	46	 
	12.5 Severability
	 	 	46	 
	12.6 Successors and Assigns
	 	 	46	 
	12.7 Incorporation of Other Agreements; Exhibits; and Schedules
	 	 	46	 
	12.8 Survival on Termination
	 	 	47	 
	12.9 Waiver of Notices
	 	 	47	 
	12.10 Authority to Execute and Borrow
	 	 	47	 
	12.11 Costs, Fees and Expenses
	 	 	47	 
	12.12 Binding Agreement; Governing Law
	 	 	48	 
	12.13 Notices
	 	 	48	 

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	 	 	Page	 
	12.14 Release of Claims
	 	 	48	 
	12.15 Capital Adequacy Charge
	 	 	49	 
	12.16 Headings
	 	 	49	 
	12.17 Maximum Interest
	 	 	49	 
	12.18 Construction
	 	 	49	 
	12.19 Revival of Liabilities
	 	 	49	 
	12.20 General Indemnity
	 	 	50	 
	12.21 Environmental and Safety and Health Indemnity
	 	 	50	 
	12.22 Completion of Loan Agreement and Other Agreements
	 	 	51	 
	12.23 Patriot Act
	 	 	51	 
	12.24 Disclosure of Information
	 	 	51	 
	12.25 Merger Clause
	 	 	51	 
	12.26 SERVICE OF PROCESS
	 	 	51	 
	12.27 JURISDICTION; VENUE
	 	 	51	 
	12.28 JURY WAIVER
	 	 	52	 

Schedule 1.1 Permitted Liens

Schedule 4.1 Commercial Tort Claims

Schedule 4.2 Borrower’s Information

Schedule 4.4 Chief Executive Office and Collateral Locations

Schedule 4.11 Real Property Owned by Borrower

Schedule 9.1(F) Litigation

Schedule 9.1(Q) borrower and its Subsidiaries’ Corporate Information

Schedule 9.1(S) Labor Relations

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Loan And Security Agreement

     This Loan and Security Agreement (this “Loan Agreement”) is made and entered into as of
March 31, 2009, by and among Fifth Third Bank, a Michigan banking corporation, with an office
located at 222 South Riverside Plaza, 30th Floor, Chicago, Illinois 60606 (“Lender”),
and Pulse Systems, LLC, a Delaware limited liability company, with its chief executive office
located at 4090 Nelson Avenue, Suite J, Concord, California 94520 (“Borrower”).

W
I T N E S S E T H:

     Whereas, Borrower desires Lender to provide certain extensions of credit, loans or other
financial accommodations to Borrower in accordance with this Loan
Agreement (collectively the “Financial Accommodations”); and

     Whereas, Lender is willing to provide the Financial Accommodations to Borrower, but
solely on the terms and subject to the conditions set forth in this Loan Agreement and the other
documents, instruments and agreements executed and delivered pursuant to this Loan Agreement or
referenced herein.

     Now Therefore, in consideration of the Financial Accommodations, the mutual promises
and understandings of Lender and Borrower set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, Lender and Borrower
hereby agree as set forth in this Loan Agreement.

1 . Definitions And Terms 

The following words, terms or phrases shall have the following meanings:

     “Account”, “Account Debtor”, “Chattel Paper”, “Commercial
Tort Claims”, “Deposit Account”, “Document”, “Document of Title”,
“Electronic Chattel Paper”, “Equipment”, “Fixture”,
“General Intangibles”, “Goods”, “Instrument”,
“Inventory”, “Investment Property”, “Letter of Credit Rights”, “Payment
Intangibles”, “Proceeds”, “Supporting Obligations” and
“Tangible Chattel Paper”: shall have their respective meanings as set forth in
the Illinois Uniform Commercial Code, as amended or restated from time to time.

     “Accounts
Dilution”: shall mean all non-cash reductions to the amount of
an Account as originally invoiced, including, without limitation, all credit memo, discount,
allowance or bad debt reductions.

     “Adjusted
EBITDA”: shall mean, for any period, (1) Consolidated Net
Income for such period plus, (2) to the extent deducted in determining such Consolidated Net
Income, the sum of (a) Interest Expense, (b) net income tax expense, including permitted tax
distributions to Members, (c) depreciation and amortization, (d) non-cash equity compensation
expense, and (e) expenses for management fees, and (f) the expensed portion of the Closing Fee and
other fees and expenses incurred in connection with the
Financial Accommodations, in each case incurred during such period, all as determined for
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.

1

 

     “Adjusted LIBOR Rate”: means, with respect to any LIBOR Loan for any Interest Period,
the greater of (1) an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of
1%) equal to (a) the LIBOR Rate for such Interest Period multiplied by (b) the Statutory Reserve
Rate, or (2) three percent (3%) per annum.

     “Affiliate”: shall mean any Person that directly or indirectly, through one or more
intermediaries, owns, controls or is controlled by, or is under common control with, Borrower. A
Person shall be presumed to control Borrower if such Person is the direct or indirect legal or
beneficial owner of more than ten percent (10%) of the outstanding Equity Interests of Borrower.

     “Borrowing Base”: shall mean the total, without duplication, of the following:

     (1) up to eighty percent (80%) of the face amount of all then existing Eligible
Accounts as set forth on the Borrowing Base Certificate delivered by Borrower to Lender
from time to time, minus all finance charges and prompt payment, volume and all other
discounts, credits or allowances which may be taken by or granted to Account Debtors,
minus 100% of the face amount of all proceeds of such Eligible Accounts listed on such
Borrowing Base Certificate which Borrower has received since the date of the most recently
delivered Borrowing Base Certificate delivered to Lender,

     (2) less, such reserves as Lender may reasonably establish from time to time in
Lender’s sole discretion.

     “Borrowing Base Certificate”: shall mean the certificate summarizing the Borrowing
Base delivered from time to time by Borrower to Lender in accordance with the terms of this Loan
Agreement, in form and substance acceptable to Lender, which shall, among other things, certify to
Lender Borrower’s state of formation.

     “Business Day”: shall mean any day other than a Saturday, a Sunday or (1) with
respect to all matters, determinations, fundings and payments in connection with LIBOR Loans, any
day on which banks in London, England or Chicago, Illinois are required or permitted to close, and
(2) with respect to all other matters, any day that banks in Chicago, Illinois are required or
permitted to close.

     “Capital Expenditures”: shall mean, as to any Person, any and all expenditures of
such Person for fixed or capital assets all as determined in accordance with GAAP; provided,
however, Capital Expenditures shall not include expenditures for fixed or capital assets to the
extent such expenditures are paid for or reimbursed from the proceeds of insurance or Capitalized
Lease Obligations.

     “Capital Lease”: shall mean a capitalized lease of real or personal property, or
conditional sale or other title retention agreement, as determined in accordance with GAAP, whether
or not the rights and remedies of the lessor, seller or lender thereof are limited to repossession
of the property giving rise to such obligations or liabilities.

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     “Capitalized Lease Obligations”: shall mean all obligations or liabilities created or
arising under any capitalized lease of real or personal property, or conditional sale or other
title retention agreement, whether or not the rights and remedies of the lessor, seller or lender
thereof are limited to repossession of the property giving rise to such obligations or liabilities.

     “Charges”: shall mean all national, federal, state, county, city, municipal or other
governmental, including, but not limited to, any instrumentality, division, agency, body or
department thereof, taxes, levies, assessments, charges, liens, claims or encumbrances upon or
relating to the Collateral, the Liabilities, Borrower’s business, ownership or use of any of its
assets, or Borrower’s income or gross receipts.

     “Closing Fee”: shall have the meaning ascribed to such term in Section 2.3(B)
below.

     “Collateral”: shall have the meaning ascribed to such term in Section 4.1 below.

     “Consolidated Net Income”: shall mean the net income (or loss) of Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.

     “Constituent Documents”: shall mean, for Borrower, as applicable, Borrower’s articles
or certificate of incorporation, formation or organization, by-laws, operating agreement, limited
partnership agreement, general partnership agreement and any other similar documents, agreements or
certificates relating to Borrower’s legal formation.

     “Covenants”: shall mean all now existing and hereafter arising covenants, duties, obligations
and agreements of Borrower to and with Lender, whether pursuant to this Loan Agreement, the Other
Agreements or otherwise.

     “CVP”: means Chicago Venture Partners, L.P., an Illinois limited
partnership.

     “Daily LIBOR Rate”: shall mean, the Adjusted LIBOR Rate based upon a one month
Interest Period, which rate shall be determined as of each Business Day.

     “Daily LIBOR Rate Loan”: shall mean all or any portion of a Loan which bears interest
at the Daily LIBOR Rate plus the LIBOR Rate Margin.

     “Default Rate”: shall mean, for each Loan, four percent (4%) per annum in excess of
the otherwise applicable interest rate for such Loan, and for all other Liabilities, shall mean
nine percent (9%) per annum in excess of the Index Rate.

     “Eligible Accounts”: shall have the meaning ascribed to such term in Section 5.1
below.

     “Environmental Laws”: shall mean all federal, state and local laws, rules,
regulations, ordinances, programs, permits, guidances, orders and consent decrees relating to
health, safety and environmental matters, as may be amended from time to time, including, but not
limited to, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Toxic Substances Control Act, the Clean Water Act, the
River and Harbor Act, Water Pollution Control Act, the Marine Protection Research and Sanctuaries
Act, the Deep-Water Port Act, the Safe Drinking Water Act, the SuperFund

3

 

Amendments and Reauthorization Act of 1986, the Federal Insecticide, Fungicide and Rodenticide Act,
the Mineral Lands and Leasing Act, the Surface Mining Control and Reclamation Act, state and
federal superlien and environmental clean up programs and laws, and U.S. Department of
Transportation regulations.

     “Equity Interests”: shall mean any and all shares and other equity and
ownership interests, however designated, of or in a Person, whether or not voting, including, but
not limited to, common stock, warrants, membership interests, preferred stock, convertible
debentures and all agreements, instruments and documents convertible, in whole or in part, into any
one or more of the foregoing.

     “ERISA”: shall mean the Employee Retirement Income Security Act of 1974
and all rules and regulations from time to time promulgated thereunder.

     “Event of Default”: shall have the meaning ascribed to such term in
Section 11.1 below.

     “Excess Cash Flow”: shall mean, for any period, determined for Borrower
and its Subsidiaries on a consolidated basis, (1) Consolidated Net Income for such period, (2)
plus, to the extent deducted in determining such Consolidated Net Income, the sum of Interest
Expense, net income tax expense, depreciation and amortization, (3) plus, to the extent
deducted in determining such Consolidated Net Income, expenses for management fees, (4) minus
Capital Expenditures made or incurred during such period which are financed by the Revolving Loan
or cash from day-to-day operations generated during the period in question, (5) minus taxes paid in
cash during such period, including permitted tax distributions to Members, (6) minus Fixed Charges
for such period, (7) minus optional prepayments of principal on Term Loan A paid during such
period, and (8) minus payments required by Section 3.1(C) below.

     “Financials”: shall mean all year-end financial statements, projections,
interim financial statements, tax returns, reports and similar documentation and information
previously delivered by Borrower to Lender and the documents described in Section 9.5 below,
individually or collectively.

     “Fiscal Year”: shall mean each twelve (12) month accounting period of
Borrower which ends on December 31 of each year.

     “Fixed Charge Coverage Ratio”: for any trailing twelve month period,
shall mean, Free Cash Flow divided by Fixed Charges, all as determined for Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP.

     “Fixed
Charges”: for any period, shall mean, the sum of, without
duplication, (1) cash payments in satisfaction of Interest Expense (other than tax distributions to
Members characterized as preferred equity interest expense), plus (2) scheduled or required
payments of principal on Indebtedness other than payments required by Section 3.1(C) below, plus
(3) scheduled principal payments on Capital Leases, each as paid or payable for such period and all
as determined for Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.

4

 

     “Free Cash Flow”: means, for any period, (1) Adjusted EBITDA, less (2)
Capital Expenditures (other than Capital Expenditures financed with the proceeds of purchase money
Indebtedness or Capital Leases to the extent permitted hereunder), less (3) income taxes paid in
cash, dividends paid in cash and management fees paid in cash to the extent permitted under this
Loan Agreement, all as determined for Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP.

     “Funded Debt”: shall mean the sum of all outstanding Loan balances under
this Loan Agreement plus the principal amount of all other interest bearing Indebtedness for
borrowed money maintained with any lender (including Capital Leases).

     “Funded Debt to Adjusted EBITDA Ratio”: shall mean, as of the last day of
any period, the ratio of Funded Debt to Adjusted EBITDA calculated on a trailing twelve (12) month
basis, all as determined for Borrower and its Subsidiaries on a consolidated basis in accordance
with GAAP.

     “GAAP”: shall mean generally accepted accounting principles consistently
applied from time to time.

     “Hazardous Substances”: shall have the meaning set forth in 42 USC §
9601(14), 42 USC § 9601(33) and 42 USC § 6991(8) or any state or local counterpart Environmental
Law.

     “Indebtedness”: shall mean all of a Person’s liabilities, obligations and
indebtedness to any Person of any and every kind and nature, whether primary, secondary, direct,
indirect, absolute, contingent, fixed, or otherwise, heretofore, now or hereafter owing, due, or
payable, however evidenced, created, incurred, acquired or owing and however arising, whether under
written or oral agreement, by operation of
law, or otherwise. Without in any way limiting the generality of the foregoing, Indebtedness
of Borrower specifically includes (1) the Liabilities, (2) all obligations or liabilities of any
Person that are secured by any lien, claim, encumbrance, or security interest upon property owned
by Borrower, even though Borrower has not assumed or become liable for the payment thereof, (3) all
obligations or liabilities created or arising under any lease of real or personal property, or
conditional sale or other title retention agreement with respect to property used and/or acquired
by Borrower, even though the rights and remedies of the lessor, seller and/or lender thereunder are
limited to repossession of such property, (4) all unfunded pension fund obligations and
liabilities, and (5) all Capitalized Lease Obligations.

     “Indemnified Liabilities”: shall have the meaning ascribed to such term
in Section 12.21 below.

     “Indemnitees”: shall have the meaning ascribed to such term in Section
12.21 below.

     “Index Rate”: shall mean a rate per annum equal to the greater of (1) the
prime rate of interest announced from time to time by Lender (which is not necessarily the lowest
rate charged to any customer), changing when and as said prime rate changes, or (2) as of the date
of determination, the one month Adjusted LIBOR Rate, subject to the Adjusted LIBOR Rate floor. The
rate described in clause (2) of this definition shall be established on the first day of each
calendar month hereafter without notice to Borrower and shall remain in effect until the first day
of the next subsequent calendar month.

5

 

     “Index Rate Loan”: shall mean all or the portion of any Loan which bears interest at
the Index Rate plus the Index Rate Margin.

     “Index Rate Margin”: shall mean (1) with respect to the Revolving Loan, four hundred
(400) basis points, and (2) with respect to Term Loan A, six hundred fifty (650) basis points.

     “Interest Expense”: shall mean, with reference to any period, total interest expense
(including that attributable to Capitalized Lease Obligations and accrued preferred equity interest
expense) of Borrower and its Subsidiaries for such period with respect to all outstanding
Indebtedness of Borrower and its Subsidiaries (including all commissions, discounts and other fees
and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs
under Rate Management Agreements in respect of interest rates to the extent such net costs are
allocable to such period in accordance with GAAP), calculated on a consolidated basis for Borrower
and its Subsidiaries for such period in accordance with GAAP.

     “Interest Period”: shall mean the period commencing on the date a LIBOR Loan is made
and ending, as selected by Borrower, one month, two months or three months thereafter.

     “Inventory Report”: shall mean a report certified as to accuracy and completeness by
the chief financial officer or any other senior officer of Borrower and (1) describing the Value of
Borrower’s Inventory, (2) describing the status of the Inventory as more fully described in Section
6.2(B) below, and, showing the location, composition, quantity and Value thereof, and (3)
describing such other matters relating to the Inventory as Lender may reasonably request.

     “Letters of Credit”: shall mean any letters of credit which are now or at any time
hereafter issued by Lender at the request of and for the account of Borrower.

     “Letter of Credit Obligations”: shall mean the sum of the aggregate outstanding face
amount available to be drawn under all of the Letters of Credit, plus the aggregate outstanding
face amount of any unpaid drafts presented under any of the Letters of Credit.

     “Liabilities”: shall mean any and all obligations, liabilities, indebtedness, fees,
costs and expenses, now or hereafter owed or owing by Borrower to Lender, including, but not
limited to, all principal, interest, debts, claims and indebtedness of any and every kind and
nature, howsoever created, arising or evidenced, whether primary or secondary, direct or indirect,
absolute or contingent, insured or uninsured, liquidated or unliquidated, or otherwise, and whether
arising or existing under written or oral agreement or by operation of law, together with all
costs, fees and expenses of Lender, including, but not limited to, (1) the indebtedness evidenced
by the Notes, (2) attorneys’ and paralegals’ fees or charges relating to the preparation of this
Loan Agreement and the Other Agreements and the enforcement of Lender’s rights and remedies
pursuant to this Loan Agreement and the Other Agreements, and (3) all Rate Management Obligations.

     “LIBOR Contract Loan”: shall mean all or any portion of a Loan subject to a single
Interest Period which bears interest at the Adjusted LIBOR Rate plus the LIBOR Rate Margin. For
purposes of clarification, LIBOR Contract Loans shall not include Daily LIBOR Rate Loans.

6

 

     “LIBOR Loan”: shall mean (1) each LIBOR Contract Loan, and (2) each Daily LIBOR Rate
Loan.

     “LIBOR Rate”: shall mean, with respect to any LIBOR Loan for any Interest Period, the
interest rate determined by Lender by reference to Reuters Screen LIBOR01, formerly known as Page
3750 of the Moneyline Telerate Service (together with any successor or substitute, the “Service”)
or any successor or substitute page of the Service providing rate quotations comparable to those
currently provided on such page of the Service, as determined by Lender from time to time for
purposes of providing quotations of interest rates applicable to dollar deposits in the London
interbank market (the “Page”), to be the rate at approximately 11:00 a.m. London time, determined
either (y) on each Business Day for Daily LIBOR Rate Loans, or (z) two Business Days prior to the
commencement of the Interest Period for dollar deposits with a maturity equal to such
Interest Period with respect to LIBOR Contract Loans. If no LIBOR Rate is available to Lender,
the applicable LIBOR Rate for the relevant Interest Period shall instead be the rate determined by
Lender to be the rate at which Lender offers to place U.S. dollar deposits having a maturity equal
to such Interest Period with first-class banks in the London interbank market at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period. Each
determination of the LIBOR Rate made by Lender shall be conclusive and binding on Borrower absent
manifest error.

     “LIBOR Rate Margin”: shall mean (1) with respect to the Revolving Loan, four hundred
(400) basis points, and (2) with respect to Term Loan A, six hundred fifty (650) basis points.

     “Loan or Loans”: shall mean, individually and collectively, the Revolving Loan, Term
Loan A and any other loans provided by Lender to the Borrower from time to time.

     “Loan Documents”: shall mean this Loan Agreement, as amended, renewed, restated or
replaced from time to time, together with the Other Agreements.

     “Management Agreement”: means that certain Management Service Agreement, dated as of
June 1, 2004, between Borrower and CVM, Inc., an Illinois corporation.

     “Material Adverse Effect”: means a material adverse effect on (1) the business,
assets, operations, prospects or condition, financial or otherwise, of the Borrowers and their
Subsidiaries taken as a whole, (2) the ability of any Obligor to perform any of its obligations
under the Loan Documents to which it is a party, (3) the Collateral, or the Lender’s liens on the
Collateral or the priority of such liens, or (4) the rights of or benefits available to the Lender
thereunder.

     “Maximum Revolving Loan”: shall mean an amount equal to One Million Five Hundred
Thousand and no/100 Dollars ($1,500,000.00).

     “Multiemployer Plan”: shall have the meaning ascribed to such term in Section
4001(a)(3) of ERISA.

     “Notes”: shall mean, respectively, each of and collectively, the Revolving
Note, Term Note A and any other promissory notes evidencing a Loan.

7

 

     “Obligor”: shall mean Borrower and each other Person who is or shall
become primarily or secondarily liable for any of the Liabilities or who provides any collateral as
security for all or any portion of the Liabilities.

     “Other Agreements”: shall mean all agreements, instruments and
documents, including, but not limited to, guaranties, mortgages, deeds of trust, pledges, powers of
attorney, consents, assignments, contracts, notices, security agreements, leases, financing
statements and all other writings heretofore, now or from time to time hereafter executed by or on
behalf of Borrower or any other Person and delivered to Lender in connection with the Liabilities
or any of the transactions contemplated herein, together with any amendments, modifications,
extensions or renewals thereto, including, but not limited to, the documents, instruments and
agreements described in Section 10.1(A) of this Loan Agreement.

     “Out-of-Formula Event”: shall mean, if at any time, the principal
amount of the Revolving Loans outstanding plus the aggregate outstanding Letter of Credit
Obligations shall exceed the lesser of the Maximum Revolving Loan or the Borrowing Base.

     “Parent”: shall mean any Person, now or at any time or times hereafter, owning or
controlling, directly or indirectly, at least a majority of the issued and outstanding Equity
Interests of Borrower or any Subsidiary.

     “Permitted Indebtedness”: shall mean (1) existing Indebtedness set forth and
described in the most recent Financials delivered to Lender, (2) trade payables arising in the
ordinary course of Borrower’s business, (3) other Indebtedness of Borrower incurred in the ordinary
course of Borrower’s business as presently conducted that are not (a) past due, unless such
Indebtedness is being contested in good faith by appropriate proceedings, or (b) incurred through
the borrowing of money or the obtaining of credit, (4) Indebtedness in respect of taxes,
assessments, governmental charges or levies and claims for labor, materials and supplies that is
incurred in the ordinary course of Borrower’s business as presently conducted and is not past due;
provided, however, Borrower shall have the right to contest in good faith, by an appropriate
proceeding properly initiated and diligently conducted, the validity, amount or imposition of any
such taxes, and upon such good faith contest, to delay or refuse payment thereof, if (i) Borrower
establishes with Lender adequate reserves to cover such contested taxes, and (ii) either such
contest will not affect the priority or value of Lender’s lien on the Collateral or Borrower
otherwise takes steps reasonably acceptable to Lender to protect the priority and value of Lender’s
lien on the Collateral, (5) Indebtedness in respect of judgments or awards which do not constitute
an Event of Default hereunder, (6) Indebtedness in respect of employee benefit plans and programs
that is incurred in the ordinary course of Borrower’s business as presently conducted and is not
past due, (7) Indebtedness owing to Lender, and (8) Indebtedness for Capital Leases and purchase
money financing incurred to financing the acquisition of Equipment provided the aggregate
outstanding principal amount of all such Capital Leases and purchase money financing does not
exceed $500,000 at any time.

     “Permitted Liens”: shall mean (1) liens for current taxes and duties not delinquent
or for taxes being contested in good faith, by appropriate proceedings which do not involve, in the
sole determination of Lender, any material danger of the sale or loss of any of the Collateral and
with respect to which Borrower has provided for and are maintaining adequate reserves in accordance

8

 

with GAAP, (2) liens in Lender’s favor, (3) liens incurred in the ordinary course of business
in connection with workers’ compensation, unemployment insurance and other statutory obligations,
provided that such obligations are not past due and owing, (4) easements, rights of way,
restrictions and other similar charges or encumbrances with respect to real property not
interfering in any material respect with the ordinary conduct of Borrower’s business, (5) subject
to the limitation set forth in the definition of Permitted Indebtedness, liens incurred in
connection with Capital Leases of Equipment and liens that constitute purchase money security
interests on any Equipment securing Indebtedness incurred for the purpose of financing all or any
part of the cost of acquiring such Equipment, provided that any such lien attaches to such
Equipment within twenty (20) days of the acquisition thereof and attaches solely to the Equipment
so acquired, and (6) the security interests and liens listed on Schedule 1.1 attached hereto.

     “Person”: shall mean any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization, association,
corporation, institution, entity, party or foreign or United States government, whether federal,
state, county, city, municipal or otherwise, including, but not limited to, any instrumentality,
division, agency, body or department thereof

     “Plan”: shall mean an employee benefit plan now or hereafter maintained
for employees of Borrower that is covered by Title IV of ERISA.

     “Prohibited Transaction”: shall mean any transaction set forth in Section
406 of ERISA or Section 4975 of the Internal Revenue Code of 1986.

     “Rate Management Agreement”: means any agreement, device or arrangement
providing for payments which are related to fluctuations of interest rates, exchange rates, forward
rates, or equity prices, including, but not limited to, dollar-denominated or cross-currency
interest rate exchange agreements, forward currency exchange agreements, interest rate cap or
collar protection agreements, forward rate currency or interest rate options, puts and warrants,
and any agreement pertaining to equity derivative transactions (e.g., equity or equity index swaps,
options, caps, floors, collars and forwards), including without limitation any ISDA Master
Agreement between Borrower and Lender or any affiliate of Fifth Third Bancorp, and any schedules,
confirmations and documents and other confirming evidence between the parties confirming
transactions thereunder, all whether now existing or hereafter arising, and in each case as
amended, modified or supplemented from time to time.

     “Rate Management Obligations”: means any and all obligations of Borrower
to Lender or any affiliate of Fifth Third Bancorp, whether absolute, contingent or otherwise and
howsoever and whensoever (whether now or hereafter) created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and substitutions therefor), under or
in connection with (1) any and all Rate Management Agreements, and (2) any and all cancellations,
buy-backs, reversals, terminations or assignments of any Rate Management Agreement.

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

     “Restricted Payments”: shall mean any of the following: (1) any dividend,
distribution or return of capital to any shareholder, member or other owner of Borrower, or any
other

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payment or delivery of property or cash to any of Borrower’s shareholders or other owners, or
any redemption, retirement, purchase or other acquisition of all or any portion of the Equity
Interests of Borrower, (2) any distribution, loan, or advance to any Affiliate, Subsidiary, Parent,
employee, officer, director, member or manager of Borrower, and (3) any management fee payments.

     “Revolving Loan”: shall mean, individually and collectively, the loans
provided by Lender from time to time to Borrower pursuant to Section 2.1(A) below.

     “Revolving
Loan Termination Date”: shall mean March 30, 2010.

     “Revolving Note”: shall mean that certain Revolving Note of even date
herewith executed and delivered by Borrower to Lender in a maximum aggregate principal amount not
to exceed $1,500,000.00, as amended, renewed, restated or replaced from time to time.

     “Special Collateral”: shall mean that portion of the Collateral evidenced
by Chattel Paper, Instruments or Documents.

     “Statutory Reserve Rate”: shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the number one minus the
aggregate of the maximum reserve percentages (including any marginal, special, emergency or
supplemental reserves) expressed as a decimal established by the Board to which the Lender is
subject with respect to the Adjusted LIBOR Rate, for eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Board). Such reserve percentages shall include
those imposed pursuant to such Regulation D. LIBOR Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.

     “Subordinated Debt”: shall mean Borrower’s Indebtedness which is
subordinated to the payment of all of the Liabilities to Lender pursuant to a written subordination
agreement in form and substance acceptable to Lender.

     “Subsidiary”: shall mean any Person who is under the direct or indirect
ownership or control of Borrower.

     “Supplemental Documentation”: shall have the meaning set forth in
Section 4.2 below.

     “Tax”: shall mean, in relation to any LIBOR Loans and the applicable Adjusted
LIBOR Rate, any tax, levy, impost, duty, deduction, withholding or charges of whatever nature
required to be paid by Lender and/or to be withheld or deducted from any payment otherwise required
hereby to be made by Borrower to Lender; provided, that the term “Tax” shall not include any taxes
imposed upon the net income of Lender.

     “Term Loan A”: shall have the meaning set forth in Section 2.1(B) below.

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     “Term Loans”: shall mean Term Loan A and any other term loans provided by
Lender to Borrower under this Loan Agreement, as amended from time to time.

     “Term Note A”: shall mean that certain Term Note A of even date herewith
executed and delivered by Borrower to Lender in the original principal amount of Seven Million and
no/100 Dollars ($7,000,000.00), as amended, renewed or restated from time to time.

     “Unmatured Event of Default”: shall mean the occurrence or existence of
any event or condition which with notice, lapse of time or both would constitute an Event of
Default.

     1.2 Except as otherwise defined in this Loan Agreement or the Other Agreements, any
accounting terms used in this Loan Agreement which are not specifically defined herein shall have
the meanings customarily given them in accordance with GAAP. Unless the context indicates
otherwise, all other words, terms or phrases used herein shall be defined by the applicable
definition therefor, if any, in the Uniform Commercial Code as adopted by the State of Illinois
from time to time.

          2 . Loans: Disbursements, Interest Rates, Loan Requests and Fees

     2.1 Loans.

          (A) Revolving Loans.

          (1) Provided that an Unmatured Event of Default or Event of Default does not then
exist or would not be created by such Revolving Loan advance, and all of the conditions
precedent in Section 10 of this Loan Agreement have been satisfied, from the date hereof
through and including the Revolving Loan Termination Date, Lender shall loan to Borrower on
a revolving credit basis, an amount not to exceed the lesser of (a) the Maximum Revolving
Loan less the outstanding Letter of Credit Obligations from time to time, or (b) the
Borrowing Base less the outstanding Letter of Credit Obligations from time to time. The
Revolving Loan shall be evidenced by and repaid in accordance with the Revolving Note
and the terms of this Loan Agreement. Notwithstanding anything contained in this Loan
Agreement or the Other Agreements to the contrary, Lender may, in its sole reasonable
discretion, change, at any time and from to time, the method of calculating the Borrowing
Base, including, but not limited to, reducing advance rates against Eligible Accounts and
deducting additional or other reserves from the Borrowing Base. Without in any way limiting
Lender’s sole reasonable discretion as set forth above, Lender may from time to time modify
the advance rate against Eligible Accounts based upon the Borrower’s Accounts Dilution
percent.

          (2) A request for a Revolving Loan shall be made, or shall be deemed made, in the
following manner: (a) Borrower may give Lender notice of its intention to borrow in
accordance with the provisions of this Section 2.1(A), or (b) if any amount required to be
paid under this Loan Agreement or the Other Agreements becomes due, such occurrence shall
be deemed irrevocably to be a request for a Revolving Loan on the due date in the amount
then due and such Revolving Loan advance will be deemed an advance to Borrower.

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          (3) Each request for a Revolving Loan, other than LIBOR Loans (the borrowing of which shall be
governed by Section 2.4) shall be made by notice, given not later than 11:00 A.M. (Chicago time) on
the Business Day of the proposed Revolving Loan, from Borrower to Lender. If requested by Lender,
such notice shall be accompanied by a Borrowing Base Certificate in form and substance satisfactory
to Lender.

     (B)
Term Loan A. Provided that an Unmatured Event of Default or Event of Default
does not exist and all of the conditions precedent in Section 10 of this Loan Agreement have been
satisfied, Lender shall loan to Borrower the principal amount of Seven Million and no/100 Dollars
($7,000,000.00) (“Term Loan A”), which Loan shall be evidenced by and repaid in accordance with
Term Note A and the terms of this Loan Agreement.

     2.2 Letters of Credit

     (A) Provided that an Unmatured Event of Default or Event of Default does not then exist
and all of the conditions precedent in Section 10 of this Loan Agreement have been satisfied,
Lender may, at Borrower’s request and for the account of Borrower, issue one or more Letters of
Credit in an aggregate undrawn face amount outstanding at any one time not to exceed the lesser of
(1) the Borrowing Base less the outstanding amount of the Revolving Loans, (2) the Maximum
Revolving Loan less the outstanding amount of the Revolving Loans, or (3) Five Hundred Thousand and
no/100 Dollars
($500,000.00). The Letters of Credit shall have an expiration date of the earlier of (a) one
(1) year from the date of issuance, or (b) the Revolving Loan Termination Date. Borrower shall
reimburse Lender, immediately upon demand, for any payments made by
Lender to any Person with respect to any Letter of Credit and until Lender shall be so
reimbursed by Borrower such payments by Lender shall be deemed to be a part of the Revolving Loans.
The obligation of Borrower to reimburse Lender for payments and disbursements made by Lender under
or on account of the Letters of Credit shall be absolute and unconditional irrespective of any
setoff, counterclaim or defense to payment which Borrower may have or have had against Lender or
such beneficiary, including, but not limited to, any defense based on the failure of such demand
for payment to conform to the terms of the Letters of Credit, any non-application or misapplication
by such beneficiary of the proceeds of such demand for payment or the legality, validity,
regularity or enforceability of the Letters of Credit or any document or contract related to or
required to be presented under the terms of the Letters of Credit; provided, however, that Borrower
shall not be obligated to reimburse Lender for any wrongful payment or disbursement made by Lender
under or on account of the Letters of Credit as a result of acts or omissions constituting gross
negligence or willful misconduct on the part of Lender or any of its officers, employees or agents.
If any of the terms and provisions set forth in this Section 2.2 contradict or conflict with the
terms and provisions of any reimbursement agreement or master letter of credit agreement executed
and delivered prior hereto, contemporaneously herewith or hereafter by Borrower to Lender, the
terms of such reimbursement agreement or master letter of credit agreement shall govern and
control.

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     (B) In the event that Lender has issued any Letters of Credit for the account of Borrower,
Lender may, at any time after (1) the occurrence and during the continuation of an
Event of Default, (2) this Loan Agreement shall terminate for any reason, or (3) the sum of the
outstanding principal balance of the Revolving Loan and the Letter of Credit Obligations exceeds
the Borrowing Base or the Maximum Revolving Loan, request of Borrower, and Borrower shall thereupon
deliver to Lender, cash collateral for any Letter of Credit issued for the account of Borrower. If
Borrower fails to deliver such cash to Lender promptly upon Lender’s request therefor, Lender may,
without limiting Lender’s rights or remedies arising from such failure to deliver cash, retain, as
cash collateral, cash proceeds of the Collateral in an amount equal to the aggregate undrawn face
amount of all Letters of Credit then outstanding. Lender may at any time apply any or all of such
cash and cash collateral to the payment of any or all of the Liabilities, including, without
limitation, to the payment of any or all of Borrower’s reimbursement obligations with respect to
any Letter of Credit. Pending such application, Lender may (but shall not be obligated to) (a)
invest the same in a savings account, under which deposits are available for immediate withdrawal,
with Lender or such other bank as Lender may, in its sole discretion select, or (b) hold the same
as a credit balance in an account with Lender in Borrower’s name. Interest payable on any such
savings account described in the foregoing sentence shall be collected by Lender and shall be paid
to Borrower as it is received by Lender, less any fees owing by Borrower to Lender with respect to
any Letter of Credit and less any amounts necessary to pay any of the Liabilities which may be due
and payable at such time.

     2.3 Interest Rates and Fees.

          (A)
Interest Rates.

          (1) Borrower hereby promises to pay interest on the unpaid principal amount of the
Revolving Loan as provided in Section 3.1 below at the floating per annum rate of interest equal
to the Index Rate plus the Index Rate Margin for the period commencing on the date such Loan is
disbursed until the date such Loan is paid in full. Provided, however, subject to the terms of
Section 2.4 below, Borrower shall have the option of borrowing all or a portion of the Revolving
Loan at, or converting the interest rate for all or a portion of the Revolving Loan to, either (a)
the Adjusted LIBOR Rate plus the LIBOR Rate Margin, in each case subject to an Interest Period of
one month, two months or three months, as selected by Borrower, or (b) the Daily LIBOR Rate, which
Daily LIBOR Rate shall adjust on a daily basis for each Business Day in which the Daily LIBOR Rate
changes. With respect to each LIBOR Loan under subsection 2.3(A)(1)(a) above, the LIBOR Rate shall
remain fixed for the duration of each Interest Period.

          (2) Borrower hereby promises to pay interest on the unpaid principal amount of Term Loan A as
provided in Section 3.1 below at the floating per annum rate of interest equal to the Adjusted
LIBOR Rate plus the LIBOR Rate Margin, in accordance with Section 2.4 below. Each LIBOR Rate Loan
for Term Loan A shall be subject to an Interest Period of one month, two months or three months, as
selected by Borrower pursuant to Section 2.4 below. If Borrower has not timely selected an Interest
Period with respect to all or any portion of Term Loan A, a one month Interest Period

13

 

shall be deemed selected by Borrower. With respect to each LIBOR Loan under this subparagraph
(2), the LIBOR Rate shall remain fixed for the duration of each Interest Period.

          (3) Notwithstanding the foregoing, upon the occurrence and during the continuance of an Event
of Default, the unpaid principal amount of the Loans shall, at Lender’s option bear interest at
the Default Rate.

     (B) Closing
Fee. Contemporaneously herewith, Borrower shall pay to Lender a
fully earned, non-refundable closing fee in the amount of Two Hundred Twelve Thousand Five Hundred
and no/100 Dollars ($212,500.00) (the “Closing Fee”).

     (C) Letter
of Credit Fees. For each standby Letter of Credit issued by Lender,
Borrower shall pay to Lender a fee computed on a daily basis equal to the amount of such Letter of
Credit multiplied by one hundred fifty (150) basis points per annum, payable monthly in arrears on
the first day of each month. Prior to the issuance of each documentary Letter of Credit and on
each annual anniversary of the issuance thereof, Borrowers shall remit to Lender a Letter of
Credit fee at the rate quoted by Lender to
Borrowers at the time of issuance. In addition, Borrowers shall pay to and/or reimburse
Lender for any costs, fees and expenses incurred by Lender in connection with the application for,
issuance of or amendment to any Letter of Credit upon Lender’s demand therefor and any amounts not
so paid shall bear interest at the Default Rate until paid.

     (D) Unused
Commitment Fee. From and after the date hereof, Borrower shall pay to
Lender, monthly in arrears on the first Business Day of each calendar month for the immediately
preceding month, an unused commitment fee at the rate of one-half of one percent (1/2%) per annum
of the difference between (1) the Maximum Revolving Loan for the immediately preceding month, and
(2) the average daily outstanding balance of the Revolving Loan and the Letter of Credit
Obligations during the immediately preceding month. Such fee shall be computed on the basis of a
360 day year.

     2.4 LIBOR Loans.

     (A) With respect to the Revolving Loan, each LIBOR Contract Loan shall be in the minimum
amount of One Hundred Thousand and no/100 Dollars ($100,000.00), with increments of One Hundred
Thousand and no/100 Dollars ($100,000.00) thereafter. Not more than five (5) nor less than two (2)
Business Days prior to the requested date of any borrowing at or conversion to a LIBOR Loan,
Borrower shall deliver to Lender an irrevocable written or telephonic notice setting forth
(1) the requested date and amount of such LIBOR Loan, (2) the Interest Period
applicable thereto, and (3) with respect to the Revolving Loan, whether the LIBOR Loan is a Daily
Rate LIBOR Loan or a LIBOR Contract Loan. Unless Borrower notifies Lender to the contrary, upon the
expiration of any applicable Interest Period for a LIBOR Contract Loan, such LIBOR Loan shall
automatically convert to an Index Rate Loan, with respect to the Revolving Loan, or a new LIBOR
Contract Loan with a 30 day Interest Period, with respect to Term Loan A. Each Daily LIBOR Rate
Loan shall continue until such time as Borrower elects to convert such Daily LIBOR Rate Loan into
an Index Rate Loan or a LIBOR Contract

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Loan in accordance with the terms hereof. Borrower shall not (x) request a LIBOR Contract Loan for
an Interest Period that expires on any date after the repayment date of all or any portion of such
LIBOR Contract Loan, (y) request, nor permit to be in effect, more than five (5) LIBOR Loans at
any time, nor (z) prepay any LIBOR Contract Loan unless Borrower pays to Lender all breakage costs
incurred by Lender as a result of such prepayment. If Borrower pays any LIBOR Contract Loan on any
day other than the last day of the Interest Period, then Borrower shall pay to Lender all of
Lender’s costs, fees and expenses incurred in connection therewith, including, without limitation,
charges or costs associated with changing LIBOR Rates prior to the expiration of their scheduled
Interest Period. Lender’s determination of such breakage costs shall be conclusive absent manifest
error.

     (B) If Lender determines, in good faith (which determination shall be conclusive, absent
manifest error), prior to the commencement of any Interest Period that (1) U.S. Dollar deposits of
sufficient amount and maturity for funding the LIBOR Loans are not
available to Lender in the London Interbank Eurodollar market in the ordinary course of
business, or (2) by reason of circumstances affecting the London Interbank Eurodollar market,
adequate and fair means do not exist for ascertaining the rate of interest to be applicable to the
Loans requested by Borrower to be LIBOR Loans or the LIBOR Loans shall not represent the effective
pricing to Lender for U.S. Dollar deposits of a comparable amount for the relevant period (such
as, for example, but not limited to, official reserve requirements required by Regulation D to the
extent not given effect in determining the rate), Lender shall promptly notify Borrower and all
existing LIBOR Loans shall convert to Index Rate Loans upon the end of the applicable Interest
Period. Thereafter, no additional LIBOR Loans shall be made until such circumstances are cured.

     (C) If, after the date hereof, the introduction of, or any change in any applicable law,
treaty, rule, regulation or guideline or in the interpretation or administration thereof by any
governmental authority or any central bank or other fiscal, monetary or other authority having
jurisdiction over Lender or its lending offices (a “Regulatory Change”), shall, in the opinion of
counsel to Lender, make it unlawful for Lender to make or maintain LIBOR Loans, then Lender shall
promptly notify Borrower thereof, and the LIBOR Loans shall convert to Index Rate Loans upon the
end of the applicable Interest Period or on such earlier date as required by law. Thereafter, no
additional LIBOR Loans shall be made until such circumstance is cured.

     (D) If any Regulatory Change (whether or not having the force of law) shall (1) impose, modify
or deem applicable any assessment, reserve, special deposit or similar requirement against assets
held by, or deposits in or for the account of or loans by, or any other acquisition of funds or
disbursements by, Lender; (2) subject Lender or the LIBOR Loans to any Tax or change the basis of
taxation of payments to Lender of principal or interest due from Borrower to Lender hereunder
(other than a change in the taxation of the overall net income of Lender); or (3) impose on Lender
any other condition regarding the LIBOR Loans or Lender’s funding thereof, and Lender shall
determine (which determination shall be conclusive, absent any manifest error) that the result of
the foregoing is to increase the cost to Lender of making or maintaining the LIBOR Loans or to
reduce the amount of principal or interest received by Lender hereunder, then

15

 

Borrower shall pay to Lender, on demand, such additional amounts as Lender shall, from time
to time, determine are sufficient to compensate and indemnify Lender from such increased
cost or reduced amount.

     (E) Lender shall receive payments of amounts of principal of and interest with respect
to the LIBOR Loans free and clear of, and without deduction for, any Taxes. If (1) Lender
shall be subject to any Tax in respect of any LIBOR Loans or any part thereof or, (2)
Borrower shall be required to withhold or deduct any Tax from any such amount, the Adjusted
LIBOR Rate applicable to such LIBOR Loans shall be adjusted by Lender to reflect all
additional costs incurred by Lender in connection with the payment by Lender or the
withholding by Borrower of such Tax and Borrower shall provide Lender with a statement
detailing the amount of any such Tax actually paid by Borrower. Determination
by Lender of the amount of such costs shall be conclusive, absent manifest error. If
after any such adjustment any part of any Tax paid by Lender is subsequently recovered by
Lender, Lender shall reimburse Borrower to the extent of the amount so recovered. A
certificate of an officer of Lender setting forth the amount of such recovery and the basis
therefor shall be conclusive, absent manifest error.

     2.5 Computation of Interest. Interest on the Loans shall be computed for the actual
number of days elapsed on the basis of a three hundred sixty (360) day year.

3. Loans: General Terms

     3.1 Payments.

     (A) Scheduled Payments. Except as otherwise provided in this Loan Agreement or the
Other Agreements, that portion of the Liabilities consisting of: (1) the principal portion
of the Revolving Loan shall be payable in full by Borrower to Lender on or before the
Revolving Loan Termination Date; (2) principal under Term Loan A shall be paid as set forth
in Term Note A; (3) interest on the Loans, other than that portion of the Loans
constituting LIBOR Contract Loans, shall be payable by Borrower to Lender in arrears on the
first Business Day of each month, as debited by Lender; (4) interest on each LIBOR Contract
Loan shall be payable by Borrower to Lender on the last day of the applicable Interest
Period with respect to such LIBOR Contract Loan, as debited by Lender; (5) all costs, fees
and expenses payable pursuant to this Loan Agreement and the Other Agreements shall be
payable by Borrower to Lender, or to such other Persons designated by Lender, on demand;
and (6) the balance of the Liabilities, if any, shall be payable by Borrower to Lender on
demand. All such payments to Lender shall be payable at Lender’s principal office in
Chicago, Illinois, or at such other place or places as Lender may designate in writing to
Borrower. All such payments to Persons other than Lender shall be payable at such place or
places as Lender may designate in writing to Borrower, and paid by Borrower without offset
or other reduction.

     (B) Revolving Loan Mandatory Prepayments. Borrower agrees that if at any time an
Out-of-Formula Event occurs, then (1) such occurrence shall constitute an immediate Event
of Default hereunder, and (2) it will forthwith make a mandatory

16

 

payment of principal in an amount equal to such excess within five (5) days after the
occurrence thereof.

     (C) Excess Cash Flow. In addition to the scheduled payments of principal
required pursuant to Term Note A, within 7 days after the delivery by Borrower to Lender of
audited Fiscal Year-end financial statements for each Fiscal Year of Borrower ending from
and after December 31, 2009, Borrower
shall make a prepayment of Term Loan A until Term Loan A is paid in full, in an amount
equal to 75% of Borrower’s Excess Cash Flow for such Fiscal Year. Each such mandatory
prepayment shall be without premium or penalty and shall be applied by Lender to the
outstanding principal balance of Term Loan A in the inverse order of maturity.

     (D) Prepayment Premium. Except as otherwise provided under any Rate
Management Agreement, Borrower may from time to time prepay the Liabilities at any time, in
whole or in part, without premium or penalty. All prepayments shall be applied to
installments of principal in their inverse order of maturity, and no prepayments shall
reduce the dollar amount of fixed principal installments required to be paid, until the
Liabilities are paid in full.

     (E) Sales of Assets. Upon receipt of the proceeds of the sale or other
disposition of any Equipment or real property of Borrower which is subject to a lien or
mortgage in favor of Lender, or if any of the Equipment or real property subject to such
lien or mortgage is damaged, destroyed or taken by condemnation in whole or in part, the
proceeds thereof, including insurance proceeds, shall be paid by Borrower to Lender as a
mandatory prepayment of the Terms Loans, as selected by Lender, such payment to be applied
against the remaining installments of principal in the inverse order of their maturities
until the Term Loans are repaid in full, and then against the other Liabilities, as
determined by Lender, in its sole discretion; provided, however, if the proceeds of any
sale or series of related sales is less than $25,000, and no Unmatured Event of Default or
Event of Default then exists, then Borrower shall not be required to prepay the Liabilities
with such sale proceeds.

     3.2 Late Payment Provision. If any payment required under this Loan
Agreement is ten (10) days or more late, Borrower will be charged five percent (5.0%) of the
regularly scheduled payment or Twenty-Five and no/100 Dollars ($25.00), whichever is greater.

     3.3 Notes. Loans made by Lender to Borrower pursuant to this Loan Agreement may or may
not, at Lender’s discretion, be evidenced by notes or other instruments issued or executed and
delivered by Borrower to Lender, including, but not limited to, the Notes. Where such Loans are not
so evidenced, such Loans shall be evidenced by entries upon the ledgers, books, records or computer
records of Lender maintained for that purpose. Lender’s failure to record any portion of the
Liabilities on such books and records shall not limit or otherwise affect the obligations and
liabilities of Borrower to repay the Liabilities due and owing to Lender pursuant to this Loan
Agreement and the Other Agreements.

     3.4 One Loan. All of the Liabilities shall constitute one loan secured by
Lender’s security interest and lien in the Collateral and by all other security interests, liens,
mortgages,

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claims and encumbrances heretofore, now or from time to time hereafter granted by Borrower to
Lender.

     3.5 Use of Loan Proceeds. Borrower represents, warrants and covenants unto Lender
that Borrower shall use the proceeds of all Loans made by Lender to Borrower pursuant to this Loan
Agreement and the Other Agreements as follows: (A) the initial draw on the Revolving Loan, together
with the proceeds of Term Loan A, shall be used to repay in full all loans owed by Borrower to its
existing senior and mezzanine lenders (including, without limitation, Merrill Weber), (B) from time
to time hereafter, the Revolving Loan shall be used to meet Borrower’s general operating capital
needs to the extent consistent with this Loan Agreement, and (C) proceeds of all Loans shall be
used solely for proper business purposes and consistent with all applicable laws and statutes,
including, but not limited to, Illinois Compiled Statutes, Chapter 815, Act 205, Section 4 (815
ILCS 205/4). Borrower further represents and warrants to Lender that Borrower does not and will not
at any time hereafter own any margin securities, and that none of the proceeds of the Loans shall
be used for the purpose of (1) purchasing or carrying any margin securities, (2) reducing or
retiring any indebtedness which was originally incurred to purchase any margin securities, or (3)
any other purpose not permitted by Regulation U of the Board of Governors of the Federal Reserve
System, as in effect from time to time.

     3.6 Representation and Warranty. Each request for a Loan advance made by Borrower to
Lender pursuant to this Loan Agreement and the Other Agreements shall constitute an automatic
representation and warranty by Borrower to Lender that there does not then exist an Unmatured Event
of Default or Event of Default.

     3.7 Authorization to Disburse. Borrower hereby authorizes and directs Lender to
disburse for and on behalf of Borrower, and for the Borrower’s account, the proceeds of Loans made
by Lender to Borrower pursuant to this Loan Agreement to such Person or Persons as Borrower or any
Person specified in Paragraph 12.11 of this Loan Agreement shall direct, whether in writing or
orally, except that after the initial disbursement hereunder by Lender, any borrowing of $50,000 or
more shall require the written approval of John Fife or such other Person as he may designate in
writing to Lender.

     3.8 Payment of Costs, Fees and Expenses. Lender, in its reasonable discretion, may
disburse any or all proceeds of Loans made to Borrower pursuant to this Loan Agreement or the Other
Agreements to pay any costs, fees, expenses or other amounts required to be paid by Borrower
hereunder and not timely paid, or to pay any Person as Lender reasonably deems necessary to insure
that the security interest and lien granted to Lender in the Collateral shall at all times be a
first priority, perfected security interest and lien, subject to any Permitted Liens. All monies so
disbursed by Lender shall be part of the Liabilities, secured by the Collateral and payable by
Borrower to Lender on demand.

     3.9 Debit of Accounts. Borrower hereby authorizes Lender to debit Borrower’s accounts
with Lender for (A) the principal, interest and other costs, fees and expenses arising under or
pursuant to this Loan Agreement and the Other Agreements, and (B) all amounts due Lender, and any
principal, interest and other costs, fees and expenses arising under or pursuant to this Loan
Agreement, the Other Agreements or otherwise.

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     3.10 Application of Payments. Any check, draft, wire transfer or similar item of
payment by or for the account of Borrower delivered to Lender on account of the Liabilities shall
be applied by Lender to the Liabilities as follows: (A) wire transfers of immediately available
funds and other cash deposits will be credited on the day of receipt by Lender, (B) ACH transfers
will be credited on the first Business Day after receipt by Lender, and (C) checks and other
instruments will be credited by Lender, provided the same is honored by Lender and final settlement
thereof is reflected by irrevocable credit to Lender, on account of the Liabilities two (2)
Business Days after such check or other instrument is actually received by Lender.

4. Collateral: General Terms 

     4.1 Grant of Security Interest. To secure the full and timely payment and
performance by Borrower to Lender of the Liabilities and the Covenants, Borrower hereby grants to
Lender a first position priority security interest and lien in all of Borrower’s now existing or
owned and hereafter arising or acquired: (1) Accounts; (2) Goods for sale, lease or other
disposition by Borrower which have given rise to Accounts and have been returned to or repossessed
or stopped in transit by Borrower; (3) contract rights and documents, instruments, contracts or
other writings executed in connection therewith, including, but not limited to, all real and
personal property lease rights; (4) Chattel Paper, Electronic Chattel Paper, Tangible Chattel
Paper, Documents of Title, Instruments, Documents, General Intangibles, Payment Intangibles, Letter
of Credit Rights, letters of credit and Supporting Obligations; (5) patents, trademarks, trade
names, trademark registrations and copyrights, all applications therefor, service marks, trade
secrets, goodwill, inventions, processes, designs, formulas, and other intellectual or proprietary
rights or interests, of any kind, nature or description whatsoever, and all registrations,
licenses, franchises, customer lists, tax refund claims, claims against carrier and shippers,
insurance claims, guaranty claims, all other claims, proof of claims filed in any bankruptcy,
insolvency or other proceeding, contract rights, choses in action, security interests, security
deposits and rights to indemnification; (6) Goods, including, without limitation, Inventory,
Equipment, Fixtures, trade fixtures and vehicles; (7) Investment Property; (8) deposits, cash and
cash equivalents and any other property of Borrower now or hereafter in the possession, custody or
control of Lender, whether for safekeeping, deposit, collection, custody, pledge, transmission or
otherwise; (9) Commercial Tort Claims listed on Schedule 4.1 hereto, as amended from time to time;
(10) deposit accounts held with Lender or any other depository institution; (11) all other personal
property of Borrower of any kind or nature; and (12) additions and accessions to,
substitutions for and replacements, products and cash and non-cash Proceeds of all of the
foregoing property, including, but not limited to, Proceeds of all insurance policies insuring the
foregoing and all of Borrower’s books and records relating to any of the foregoing and to
Borrower’s business (all of the foregoing property, together with all other real or personal
property of any other Person now or hereafter pledged to Lender to secure, either directly or
indirectly, repayment of any of the Liabilities, is collectively referred to as the “Collateral”).
Borrower shall make appropriate entries upon its financial statements and books and records
disclosing Lender’s first position priority security interest and lien in the Collateral.

     4.2 Supplemental Documentation . Borrower shall execute and deliver to Lender, at any
time and from time to time, all agreements, instruments, documents and other written matter (the
“Supplemental Documentation”) that Lender may request, in form and substance acceptable to Lender,
to perfect and maintain perfected Lender’s first position priority security

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interest and lien in the Collateral (subject to any Permitted Liens) and to consummate the
transactions contemplated by this Loan Agreement and the Other Agreements. Borrower, irrevocably,
hereby makes, constitutes and appoints Lender, and all Persons designated by Lender for that
purpose, as Borrower’s true and lawful attorney and agent-in-fact, to sign the name of Borrower on
the Supplemental Documentation and to deliver such Supplemental Documentation to such Persons as
Lender may reasonably elect. Borrower hereby irrevocably authorizes Lender at any time, and from
time to time, to file in any jurisdiction any initial financing statements and amendments thereto
without the signature of Borrower that (a) indicate the Collateral (1) is comprised of all assets
of the Borrower or words of similar effect, regardless of whether any particular asset comprising a
part of the Collateral falls within the scope of Article 9 of the Uniform Commercial Code of the
jurisdiction wherein such financing statement or amendment is filed, or (2) as being of an equal or
lesser scope or within greater detail as the grant of the security interest set forth herein, and
(b) contain any other information required by Section 5 of Article 9 of the Uniform Commercial Code
of the jurisdiction wherein such financing statement or amendment is filed regarding the
sufficiency or filing office acceptance of any financing statement or amendment, including (i)
whether Borrower is an organization, the type of organization and any organizational identification
number issued to Borrower, and (ii) in the case of a financing statement filed as a fixture filing
or indicating Collateral as as-extracted collateral or timber to be cut, a sufficient description
of the real property to which the Collateral relates. Borrower further ratifies and affirms its
authorization for any financing statements and/or amendments thereto, executed and/or filed by
Lender in any jurisdiction prior to the date of this Loan Agreement. Schedule 4.2 attached hereto
sets forth Borrower’s exact legal name, state of organization and organizational identification
number.

     4.3 Inspections and Verifications. Borrower shall permit Lender, or any Persons
designated by Lender, to call at Borrower’s places of business at any reasonable
times and upon reasonable advance written notice to Borrower, and, without hindrance or delay,
to inspect the Collateral and to inspect, audit, check and make extracts from Borrower’s books,
records, journals, orders, receipts and any correspondence and other data relating to Borrower’s
business, the Collateral or any transactions between the parties hereto, and shall have the right
to make such verification concerning Borrower’s business as Lender may reasonably consider
necessary or advisable under the circumstances. Lender, at its discretion, may perform field audits
from time to time and Borrower shall fully cooperate and assist Lender in the performance of all
such field audits. Borrower shall furnish to Lender such information relevant to Lender’s rights
under this Loan Agreement as Lender shall at any time and from time to time reasonably request.
Lender, through its officers, employees or agents shall have the right, at any time and from time
to time, in Lender’s name, to verify the validity, amount or any other matter relating to any of
Borrower’s Accounts, by mail, telephone, telegraph or otherwise. Borrower authorizes Lender to
discuss the affairs, finances and business of Borrower with any officers, employees or directors of
Borrower or with its Parent or any Affiliate or the officers, employees or directors of its Parent
or any Affiliate, and to discuss the financial condition of Borrower with Borrower’s independent
public accountants. Any such discussions shall be without liability to Lender or to Borrower’s
independent public accountants. Borrower shall pay to Lender all fees and all costs and
out-of-pocket expenses reasonably incurred by Lender in the exercise of its rights hereunder. All
such fees, costs and expenses shall constitute Liabilities hereunder, shall be payable on demand
and, until paid, shall bear interest at the Default Rate; provided, however, if no Event of Default
exists, Borrower shall not be required to pay for more than two (2) field audits each Fiscal Year.

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     4.4 Liens/Collateral Locations. Borrower represents, warrants and covenants unto
Lender that: (A) Lender’s security interest and lien in the Collateral is now and at all times
hereafter shall be perfected and have a first priority, subject to any Permitted Liens; (B) except
for the Permitted Liens, the Collateral is and shall remain free and clear of all security
interests, liens and other encumbrances; (C) Borrower’s chief executive office, all other offices
and places of business and the offices and locations where Borrower keeps the Collateral are at the
locations specified on Schedule 4.4; (D) other than the sale of Inventory in the ordinary course of
Borrower’s business, Borrower shall not remove the Collateral from the locations specified on
Schedule 4.4 and shall not keep any of the Collateral at any other office or location unless
Borrower give Lender thirty (30) days prior written notice; and (E) the Collateral is and shall
remain within the continental United States of America. Borrower shall provide Lender with thirty
(30) days prior written notice of the opening of any new office or place of business, the closing
of any existing office or place of business or delivering any Collateral to a warehouse or other
storage facility not listed on Schedule 4.4. Borrower covenants unto and agrees with Lender that
any new office or place of business shall be within the continental United States of America.

     4.5 Lockbox

     (A) Upon request of Lender, Borrower shall direct all Account Debtors to make payments
on Accounts directly into a lockbox established by Borrower over which Lender shall have
sole control and authority pursuant to a Lockbox Agreement between Borrower and Lender (the
“Lockbox”). If any monies, checks, notes, drafts or other payment for or proceeds of the
Collateral shall come into the possession or under the control of Borrower, or any of its
shareholders, directors, officers, employees, agents or those Persons acting for or in
concert with Borrower, Borrower shall receive same as the sole and exclusive property of
Lender and as trustee for Lender, and Borrower shall remit or cause the same to be
remitted, in kind, to Lender or to any agent or agents appointed by Lender for that
purpose, and such monies, checks, notes, drafts or other payment for or proceeds of the
Collateral shall be credited to the “Cash Collateral Account” (hereinafter defined), unless
Lender shall otherwise elect. Lender, now or at any time or times hereafter, in its sole
discretion, may take control of and endorse Borrower’s name to any of the items of payment
or proceeds described in this Section 4.5. For the purposes of this Section, Borrower
irrevocably, hereby makes, constitutes and appoints Lender, and all persons designated by
Lender for that purpose, as Borrower’s true and lawful attorney and agent-in-fact to take
any such actions. All such items of payment or proceeds received through the Lockbox or
directly from Borrower shall, unless Lender shall otherwise elect, be deposited into a cash
collateral account maintained with Lender (the “Cash Collateral Account”) over which Lender
has sole authority and shall be applied by Lender to the Liabilities.

     (B) Borrower shall execute all documents requested by Lender with respect to the Cash
Collateral Account and the Lockbox and agrees to pay to Lender promptly upon demand for any
and all fees, costs and expenses which Lender reasonably incurs or customarily charges in
connection with the opening and maintaining of the Cash Collateral Account and the Lockbox
and depositing for collection by Lender any monies,

21

 

checks, notes, drafts or other items of payment received and/or delivered on account
of the Liabilities.

     4.6 Account Earnings Credit. Should Lender’s operating costs relating to Borrower’s
operating accounts and any lockbox exceed the earnings credit rate associated with the account
balances in any one month, such deficiency shall be part of the Liabilities, secured by the
Collateral and payable by Borrower to Lender on demand.

     4.7 Assignment of Competing Security Interest. Lender, in its reasonable discretion,
without waiving or releasing any obligation, liability or duty of Borrower under this Loan
Agreement and the Other Agreements or any Unmatured Event of Default or Event of Default, may at
any time or times hereafter, but shall not be obligated
to do so, pay, acquire or accept an assignment of any security interest, lien, encumbrance or
claim asserted by any Person against the Collateral. All sums paid by Lender in connection
therewith and all costs, fees and expenses, including, but not limited to, reasonable attorneys’
fees, court costs, expenses and other charges relating thereto incurred by Lender on account
thereof shall be part of the Liabilities, secured by the Collateral and payable by Borrower to
Lender on demand.

     4.8 Special Collateral. Immediately upon Borrower’s receipt of any Special
Collateral, Borrower shall mark the same to show that such Special Collateral is subject to a first
position security interest and lien in favor of Lender and shall deliver the original thereof to
Lender, together with an appropriate endorsement or other specific evidence of assignment in form
and substance acceptable to Lender.

     4.9 Additional Collateral.

Upon the occurrence of an Unmatured Event of Default or Event of Default, Lender may, in its
discretion, retain as additional Collateral, such portion of the monies, reserves and proceeds
received by Lender with respect to the Collateral as Lender may determine. Borrower hereby grants
to Lender a first position priority security interest and lien in all such monies, reserves and
proceeds and other property of Borrower in the possession of Lender at any time or times hereafter
as additional Collateral hereunder, and, in Lender’s discretion, may be held by Lender until the
Liabilities are indefeasibly paid in full or be applied by Lender on account of the Liabilities.

     4.10 No Custom or Waiver.

     No authorization given by Lender pursuant to this Loan Agreement or the Other Agreements to
sell any specified portion of the Collateral or any items thereof, and no waiver by Lender in
connection therewith, shall establish a custom or constitute a waiver of the prohibition contained
in this Loan Agreement or the Other Agreements against such sales, with respect to any portion of
the Collateral or any item thereof not covered by said authorization.

     4.11 Lien on Realty.

     Borrower represents and warrants to Lender that Borrower is not the direct or indirect legal
or beneficial owner of any real property, except the real property set forth on Schedule 4.11
hereto. If Borrower shall acquire at any time or times hereafter an interest in any real property

22

 

other than as set forth on Schedule 4.11 hereto, Borrower agrees promptly to execute and
deliver to Lender as additional security and Collateral for the Liabilities, deeds of trust,
security deeds, mortgages or other collateral assignments satisfactory in form and
substance to Lender, and its counsel (herein collectively referred to as “New Mortgages” )
covering such real property. Each New Mortgage shall be duly recorded in each office where such
recording is required to constitute a valid lien on the real property covered thereby. Borrower
shall deliver to Lender at Borrower’s expense, mortgagee title insurance policies issued by a title
insurance company satisfactory to Lender insuring Lender as mortgagee; such policies shall be in
form and substance satisfactory to Lender and shall insure a valid lien in favor of Lender and the
property covered thereby, subject only to those exceptions reasonably acceptable to Lender and its
counsel. Borrower shall deliver to Lender such other documents as Lender and its counsel may
reasonably request relating to any such New Mortgages.

     4.12 Releases.

     (A) At such time as the Liabilities have been paid in full and all Loan and other
credit commitments from Lender to Borrower have been terminated, Lender shall execute and
deliver the appropriate authorizations to terminate financing statements and such other
releases and terminations necessary to release the Collateral as Obligors may reasonably
request, in each case at Borrower’s sole cost and expense.

     (B) If any of the Collateral is sold, transferred or otherwise disposed of by any
Obligor in a transaction permitted by this Agreement, then Lender, at the request of such
Obligor, shall promptly execute and deliver to such Obligor all releases or other documents
reasonably necessary or desirable for the release of the liens on such Collateral created
by this Agreement.

5.
Collateral: Accounts

     5.1
 Eligible Accounts.  An “Eligible Account” is an Account that, when
scheduled to Lender and at all times thereafter, does not violate the negative covenants and other
provisions of this Section 5 and does satisfy the positive covenants and other provisions of this
Section 5. The following Accounts are not and shall not be considered Eligible Accounts:

     (A) (i) With respect to Accounts invoiced upon terms of thirty (30) days or less, all
such Accounts which remain unpaid for more than ninety (90) days after their invoice date,
(ii) with respect to Accounts which are invoiced upon terms greater than thirty (30) days,
but less than or equal to sixty (60) days, all such Accounts which remain unpaid more than
thirty (30) days after their due date, and (iii) all Accounts which are not due and payable
within at least sixty (60) days after their invoice dates;

     (B) Accounts owing by a single Account Debtor, including a currently scheduled
Account, if twenty-five percent (25%) of the balance owing by said Account Debtor is
ineligible as a result of Section 5.1(A) above;

     (C) Accounts which are owing by any Account Debtor involved as a debtor in any
bankruptcy or insolvency proceeding, whether voluntary or involuntary;

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     (D) Accounts with respect to which the Account Debtor is a director, officer, employee
or agent of Borrower or is a Parent, a Subsidiary or an Affiliate of Borrower;

     (E) Accounts with respect to which payment by the Account Debtor is or becomes conditional
upon the Account Debtor’s approval of the Goods or services, or is otherwise subject to any
repurchase obligation or return right, as with sales made on a bill-and-hold, guaranteed sale, sale
on approval, sale or return or consignment basis;

     (F) Accounts with respect to which the Account Debtor (1) is not a resident, a citizen of or
otherwise located in the United States of America or Canada; or (2) is not subject to service of
process in the United States of America or Canada, unless, in either case, such Account is either
backed by a letter of credit acceptable to Lender in its sole discretion which is in the
possession of, has been assigned to and is directly drawable by Lender, or is insured by credit
insurance which has been assigned to Lender and is acceptable to Lender in its sole discretion;

     (G) Accounts with respect to which the Account Debtor is (1) the United States of America or
any department, agency or instrumentality thereof, unless Borrower assigns its right to payment of
such Accounts to Lender in accordance with the Assignment of Claims Act of 1940, as amended, or
(2) any country other than the United States of America or any department, agency or
instrumentality thereof;

     (H) The face amount of any Accounts with respect to which Borrower is or may become liable to
the Account Debtor for Goods sold or services rendered by such Account Debtor to Borrower, but
only to the extent of the maximum aggregate amount of Borrower’s liability to such Account Debtor;

     (I) Accounts with respect to which (1) the Goods giving rise thereto have not been shipped
and delivered to and accepted as satisfactory by the Account Debtor, or (2) the services performed
have not been completed and accepted as satisfactory by the Account Debtor;

     (J) Accounts which are not invoiced, dated as of such date and sent to the Account Debtor
concurrently with the shipment and delivery to and acceptance by said Account Debtor of the goods
or the performance of the services giving rise thereto;

     (K) Accounts with respect to which possession or control of the goods sold is held,
maintained or retained by Borrower, or by any agent or custodian of Borrower, for the account of
or subject to further or future direction from the Account Debtor;

     (L) Accounts with respect to which the Account Debtor is located in a state which requires
Borrower, as a precondition to commencing or maintaining an action in the courts of that state,
either to (1) receive a certificate of authority to do business and be in good standing in such
state, or (2) file a notice of business activities report or similar report with such state’ s
taxing authority, unless (a) Borrower has taken one of the actions
described in clauses (1) or (2), (b) the failure to take one of the actions described in
either clause (1) or (2) may be cured retroactively by Borrower at its election, or (c) Borrower

24

 

has proven, to Lender’s satisfaction, that it is exempt from any such requirements under
any such state’s laws;

     (M) All or any portion of an Account to the extent there exists or the Account Debtor
has asserted a counterclaim or dispute; provided, however, if the amount of such
counterclaim or dispute is equal to or greater than ten percent (10%) of the total Account
owing from such Account Debtor to the applicable Borrower, then the full amount of such
Account shall be deemed an ineligible Account;

     (N) Accounts for any Account Debtor which exceed a credit limit established by Lender
for such Account Debtor;

     (O) Accounts as to which any covenant, representation or warranty with respect to such
Account has been breached;

     (P) Accounts which arise in any manner other than (1) the performance of services by
Borrower in the ordinary course of Borrower’s business, and such services have been fully
performed and acknowledged and accepted by the Account Debtor thereunder; or (2) the sale
or lease of Goods by Borrower in the ordinary course of Borrower’s business, and (x) such
Goods have been completed in accordance with the Account Debtor’s specifications (if any)
and delivered to the Account Debtor, (y) such Account Debtor has not returned or offered to
return, or refused to accept, any of the Goods which are the subject of such Account, and
(z) Borrower has possession of, or Borrower has delivered to Lender (at Lender’s request)
shipping and delivery receipts evidencing delivery of such Goods;

     (Q) Accounts due from any single Account Debtor, other than the Abbott Laboratories
International Co., to the extent the aggregate amount of such Accounts exceed 20% of the
total Eligible Accounts, or Accounts due from Abbott Laboratories International Co. to the
extent the aggregate amount of such Accounts exceed 60% of the total Eligible Accounts;

     (R) Accounts arising from the delivery of consigned Inventory;

     (S) Accounts which constitute progress billings; and

     (T) Accounts as to which Lender, at any time or times hereafter, determines in good
faith that the prospect of payment or performance by the Account Debtor is or will be
impaired.

     5.2 Notice of Ineligible Accounts. Immediately upon learning thereof, Borrower shall
notify Lender that an Account is no longer an Eligible Account if the effect thereof is to require
Borrower to make a mandatory prepayment in accordance with Section 3.1(B). Borrower shall
immediately pay to Lender an amount of money equal to
the monies theretofore advanced by Lender to Borrower upon an Account that is no longer an
Eligible Account, if any, and Lender shall apply such payment to and on account of the Liabilities,
or Lender, in its discretion, may pay to itself, for the account of Borrower, from (A) future loans
or advances to be made by Lender to Borrower pursuant to this Loan Agreement and the Other
Agreements, and

25

 

(B) monies, reserves and proceeds received or collected by Lender pursuant to Section 4.9 above, in
an amount necessary to satisfy in whole or in part the foregoing requirement. If Borrower does not
fully and timely make such payment or if the funds referred to in clauses (A) and (B) above are not
sufficient therefor, the same shall be deemed an immediate Event of Default by Borrower under this
Loan Agreement.

     5.3 Additional Representations, Warranties and Covenants. With respect to each of the
Eligible Accounts, Borrower represents, warrants and covenants unto Lender that: (A) they are and
shall be genuine, in all respects what they purport to be and are not evidenced by a judgment; (B)
they represent undisputed, bona fide transactions completed in accordance with the terms and
provisions contained in the invoices and other documents delivered to Lender with respect thereto;
(C) the amounts thereof, which may be shown on any Borrowing Base Certificate or invoices and
statements delivered to Lender with respect thereto, are and shall be actually and absolutely owing
to Borrower and are not contingent for any reason; (D) no payments have been or shall be made
thereon except payments immediately delivered to Lender pursuant to this Loan Agreement and the
Other Agreements; (E) there are no setoffs, counterclaims or disputes existing or asserted with
respect thereto and Borrower has not made and will not make any agreement with any Account Debtor
for any deduction therefrom, except regular discounts allowed by Borrower in the ordinary course of
its business for prompt payment; (F) there are no facts, events or occurrences which in any way
impair the validity or enforcement thereof or tend to reduce the amount payable thereunder; (G) all
Account Debtors have the capacity to contract and are solvent; (H) the services furnished or Goods
sold giving rise thereto are not subject to any lien, claim, encumbrance or security interest,
except the first position priority security interest and lien of Lender; (I) Borrower has no
knowledge of any fact or circumstance which would impair the validity or collectibility thereof;
and (J) there are no proceedings or actions which are threatened or pending against any Account
Debtor which might result in any material adverse change in its financial condition.

     5.4 Revolving Loans. Borrower shall not request nor permit Lender to make any
Revolving Loans with respect to any Account contained on any Borrowing Base Certificate, except and
only so long as such Account is an Eligible Account.

     5.5 Verification of Accounts. Any of Lender’s officers, employees or agents shall
have the right, at any time or times hereafter, in Lender’s name or in the name of a nominee of
Lender, to verify the validity, amount or any other matter relating to any Accounts by mail,
telephone, facsimile transmission, telegraph or otherwise. All costs, fees and expenses relating
thereto incurred by Lender, or for which Lender becomes obligated, shall be part of the
Liabilities, secured by the Collateral and payable by Borrower to Lender on demand.

     5.6 Notices Regarding Account Debtors. Borrower shall: (A) promptly upon Borrower
learning thereof, inform Lender, in writing, of any material delay in Borrower’s performance of any
of its obligations to any Account Debtor and of any assertion of any claims, offsets or
counterclaims by any Account Debtor and of any
allowances, credits or other monies granted by Borrower to any Account Debtor; (B) not permit
or agree to any extension, compromise or settlement or make any change or modification of any kind
or nature with respect to any Account, including, but not limited to, any of the terms relating
thereto, other than in the ordinary course of business as presently conducted; and (C) promptly
upon Borrower’s receipt or

26

 

learning thereof, furnish to and inform Lender of all material adverse information relating to the
financial condition of any Account Debtor.

     5.7 Notice Regarding Disputed Accounts. In the event any amount due and owing in
excess of Ten Thousand and no/100 Dollars ($10,000.00) is in dispute for a period of thirty (30)
days or more after Borrower receives notice or obtains knowledge thereof between Borrower and an
Account Debtor, Borrower shall provide Lender with written notice thereof at the time of submission
of the next Borrowing Base Certificate explaining in detail the reason for the dispute, all claims
related thereto and the amount in controversy; provided, however, in the event the aggregate total
of such amounts in dispute exceeds Fifty Thousand and no/100 Dollars ($50,000.00), such written notice must be provided to Lender immediately upon Borrower having
knowledge of such disputes.

     5.8 Attorney and Agent-In-Fact. Borrower irrevocably hereby designates,
makes, constitutes and appoints Lender, and all Persons designated by Lender, as Borrower’s true
and lawful attorney and agent-in fact, in Borrower’s or Lender’s name, to at any time: (A) demand
payment of the Accounts and Special Collateral; (B) enforce payment of the Accounts and Special
Collateral by legal proceedings or otherwise; (C) exercise all of Borrower’s rights and remedies
with respect to the collection of the Accounts and Special Collateral; (D) settle, adjust,
compromise, extend or renew the Accounts and Special Collateral; (E) settle, adjust or compromise
any legal proceedings brought to collect the Accounts and Special Collateral; (F) sell or assign
the Accounts and Special Collateral upon such terms, for such amounts and at such time or times as
Lender deems advisable; (G) discharge and release the Accounts and Special Collateral; (H) take
control, in any manner, of any item of payment or proceeds referred to in Section 4.5 above; (I)
prepare, file and sign Borrower’s name on any notice of lien, assignment or satisfaction of lien or
similar document in connection with the Accounts and Special Collateral; (J) prepare, file and sign
Borrower’s name on any Proof of Claim in bankruptcy or similar document against any Account Debtor;
(K) do all acts and things necessary, in Lender’s sole discretion, to fulfill Borrower’s
obligations under this Loan Agreement; (L) endorse the name of Borrower upon any of the items of
payment or proceeds referred to in Section 4.5 above and to deposit the same on account of the
Liabilities; (M) endorse the name of Borrower upon any Chattel Paper, Document, Instrument,
invoice, freight bill, bill of lading or similar document or agreement relating to the Accounts and
Special Collateral; and (N) sign the name of Borrower to verifications of the Accounts and Special
Collateral and notices thereof to Account Debtors. Notwithstanding the foregoing, the remedies set
forth in clauses (A) through (K) of this Section 5.8 will not be exercised by Lender until after
the occurrence and during the continuance of an Event of Default.

6 . Collateral: Inventory 

     6.1 Inventory Representations, Warranties and Covenants. Borrower represents and
warrants to and covenants with Lender that: (A) the Inventory shall be kept only at the locations
specified on Schedule 4.4; (B) Borrower now keeps and
hereafter at all times shall keep correct and accurate records itemizing and describing the
age, kind, type and quantity of Inventory and Borrower’s stated actual cost therefor, together with
withdrawals therefrom and additions thereto for each month, all of which records shall be
available, upon demand, to any of Lender’s officers, employees or agents for inspection and copying
thereof; (C) all Inventory is

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now and hereafter at all times shall be of good and merchantable quality, free from defects; and
(D) any of Lender’s officers, employees or agents shall, now and at any time or times hereafter,
have the right, upon demand, to inspect and examine the Inventory and to check and test the same as
to quality, quantity, value and condition, subject to Section 4.3 above. All costs, fees and
expenses incurred by Lender in connection with this Section 6, or which Lender becomes obligated to
pay, shall be part of the Liabilities, secured by the Collateral and payable by Borrower to Lender
on demand.

     6.2 Sale of Inventory.

     Until an Unmatured Event of Default or Event of Default has occurred, Borrower may sell
Inventory in the ordinary course of business, but may not transfer any Inventory in partial or
total satisfaction of any of the Indebtedness. In no event shall Borrower make any sale of
Inventory which would violate the terms and provisions of the Loan Agreement and the Other
Agreements.

     6.3 Responsibility for Inventory. Borrower shall be liable or responsible for: (A) the
safekeeping of Inventory; (B) any loss, damage or destruction to the Inventory occurring or arising
in any manner or fashion; (C) any diminution in the value thereof; or (D) any act or event of
default of any carrier, warehouseman, bailee or forwarding agency thereof or any other Person.

7. Equipment

     7.1 Representations, Warranties and Covenants. Borrower represents and
warrants to and covenants with Lender that (A) Borrower has and shall have good, indefeasible and
merchantable title, free and clear of all security interests, claims and encumbrances to and
ownership of the Equipment, except for the Permitted Liens; and (B) the Equipment shall be kept and
maintained solely at Borrower’s places of business specified on Schedule 4.4.

     7.2 Maintenance of Equipment. Borrower shall keep and maintain the Equipment in good
operating condition and repair and shall make all necessary replacements thereof and renewals
thereto so that the value and operating efficiency of the Equipment shall at all times be
maintained and preserved. Borrower shall not permit any of the Equipment to become a Fixture to
real estate or accession to other personal property.

     7.3 Evidence of Ownership. Upon Lender’s request, Borrower shall deliver to Lender
any and all evidence of ownership to, including, without limitation, certificates of title to and
applications for title to, any of the Equipment.

     7.4 Records and Schedules of Equipment. Borrower shall maintain accurate records
itemizing and describing the kind, type, quality, quantity and value of its Equipment and all
dispositions thereof, and shall furnish Lender with a current schedule containing the foregoing
information upon request by Lender.

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8. Insurance and Taxes

     8.1 Insurance. Borrower, at its sole cost and expense, shall keep and maintain: (1)
the Collateral insured for the full insurable value against loss or damage by fire, theft,
explosion, sprinklers and all other hazards and risks ordinarily insured against by other owners
or users of such properties in similar businesses; (2) business interruption insurance, workmen’s
compensation insurance, public liability insurance and property damage insurance relating to
Borrower’s business and ownership and use of its assets, and (3) within thirty (30) days after the
date hereof, product liability insurance.

     (B) All such policies of insurance shall be in form and substance, in such amounts and with
insurers recognized as adequate by prudent business persons, as may be reasonably satisfactory to
Lender. Borrower shall deliver to Lender the original, or certified copy, of each policy of
insurance or a certificate of insurance, and evidence of payment of all premiums for each such
policy. All property insurance policies shall contain an endorsement, in form and substance
acceptable to Lender, showing Lender as lender’s loss payee and all liability insurance policies
shall contain an endorsement, in form and substance acceptable to Lender, showing Lender as
additional insured. Such endorsement or independent instrument furnished to Lender shall provide
that the insurance companies will give Lender at least thirty (30) days written notice before any
such policy or policies of insurance shall be altered or canceled and that no act or default of
Borrower or any other person shall affect the right of Lender to recover under such policy or
policies of insurance in case of loss or damage. With the exception of the policies to be delivered
within thirty (30) days after the date hereof pursuant to Section 8.1(A), Lender acknowledges and
agrees that the policies of insurance maintained by Borrower as of the date of this Agreement are
satisfactory to Lender.

     (C) Borrower hereby directs all insurers under such policies of insurance to pay all proceeds
payable thereunder directly to Lender. Borrower irrevocably, makes, constitutes and appoints
Lender, and all officers, employees or agents designated by Lender, as Borrower’s true and lawful
attorney and agent-in-fact for the purpose of making, settling and adjusting claims in excess of
$100,000 under such policies of insurance with respect to the Collateral, endorsing the name of
Borrower on any check, draft, instrument or other item of payment constituting the proceeds of such
policies of insurance with respect to the Collateral at any time or times hereafter, and for making
all determinations and decisions with respect to such policies of insurance. If Borrower at any
time or times hereafter shall fail to obtain or maintain any of the policies of insurance required
above or to pay any premium in whole or in part relating thereto, then Lender, without waiving or
releasing any obligation, Unmatured Event of Default or Event of Default by Borrower hereunder, may
at any time or times thereafter, but shall not be obligated to do so, obtain and maintain such
policies of insurance, pay such premium and take any other action with respect thereto which Lender
deems advisable. All sums so disbursed by Lender, including, but not limited to, reasonable
attorneys’ fees, court costs, expenses and other charges relating thereto, shall be part of the
Liabilities, secured by the Collateral and payable by Borrower to Lender on demand.

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     (D) Borrower hereby acknowledges that the following notice by Lender is required by
and given in full compliance with the Illinois Collateral Protection Act, 815 ILCS 180/15:

Unless Borrower provides Lender with evidence of the insurance coverage required by this
Loan Agreement, Lender may purchase insurance at Borrower’s expense to protect Lender’s
interest in the Collateral. This insurance may, but need not, protect Borrower’s interests.
The coverage that Lender purchases may not pay any claim that Borrower makes or any claim
that is made against Borrower in connection with the Collateral. Borrower may later cancel
any insurance purchased by Lender, but only after providing Lender with evidence that
Borrower has obtained insurance as required by this Loan Agreement. If Lender purchases
insurance for the Collateral, Borrower will be responsible for the cost of that insurance,
including interest and any other charges Lender may impose in connection with the placement
of the insurance, until the effective date of the cancellation or expiration of the
insurance. The cost of the insurance may be added to Borrower’s total outstanding balance
or obligation. The cost of insurance may be more than the cost of insurance Borrower may be
able to obtain on its own.

     8.2 Taxes. Borrower represents, warrants and covenants unto Lender that it shall fully
and timely pay, when due, all of the Charges, and that it shall not permit the Charges to arise, or
to remain, and will promptly discharge the same. In the event Borrower, at any time or times
hereafter, shall fail to pay the Charges or to obtain such discharges, Borrower shall so advise
Lender thereof in writing. Lender may, without waiving or releasing any obligation or liability of
Borrower hereunder or any Event of Default, at any time or times thereafter, make such payment, or
any part thereof, obtain such discharge or take any other action with respect thereto which Lender
deems advisable. All sums so paid by Lender and any expenses, including, but not limited to,
reasonable attorneys’ fees, court costs, expenses and other charges relating thereto, shall be part
of the Liabilities, secured by the Collateral and payable by Borrower to Lender on demand.

9. Representations, Warranties and Covenants: General 

     9.1 Representations and Warranties. To induce Lender to enter into this
Loan Agreement and to make Loans hereunder, Borrower represents and warrants to Lender that:

     (A) Organization and Qualification. Borrower is the type of legal
entity set forth on Schedule 4.2 of this Loan Agreement for Borrower, duly organized and
existing and in good standing under the laws of the State of its formation reflected on
such Schedule, and qualified or licensed to do business in all states in which the laws
thereof require Borrower to be so qualified or licensed.

     (B) Power and Authority. Borrower has the right, power and
capacity and is duly authorized and empowered to enter into, execute, deliver and perform
this Loan Agreement and the Other Agreements.

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     (C) No Violation of Law. The execution, delivery and performance by
Borrower of this Loan Agreement and the Other Agreements do not and shall not, by the lapse of
time, the giving of notice or otherwise, constitute a violation of any applicable law or breach of
any provision contained in Borrower’s Constituent Documents, or contained in any agreement,
instrument or document to which Borrower is a party or by which it is bound.

     (D) Title to Collateral. Borrower has good, indefeasible and merchantable title to and
ownership of the Collateral, free and clear of all liens, claims, security interests and
encumbrances, except for the Permitted Liens.

     (E) Solvency. Borrower (1) is solvent, (2) has adequate cash flow to pay
its debts as they mature or otherwise become due, (3) has sufficient capital to conduct its
business in the ordinary course, and (4) has property and assets which, if valued at fair market
valuation, are greater than the sum of Borrower’s debts and liabilities.

     (F) Litigation. Except as disclosed on Schedule 9.1(F) attached hereto,
there are no suits or proceedings pending, or to the knowledge of Borrower, threatened against or
affecting any Borrower, and no proceedings before any governmental body are pending or, to the
knowledge of Borrower, threatened against Borrower.

     (G) Indebtedness. Borrower has no Indebtedness, except Permitted Indebtedness.

     (H) Government Contracts. Borrower is not subject to the renegotiation of
any material government contracts.

     (I) Adequate Assets/Trademarks/Copyrights/Patents. Borrower possesses
adequate assets, licenses, patents, copyrights, trademarks and trade names to continue to conduct
its business as previously conducted by it. Borrower does not own any patents, trademarks or
copyrights, except as set forth in a separate collateral assignment of intellectual property
executed contemporaneously herewith.

     (J) Good Standing. Borrower has been and is in good standing with respect
to all governmental permits, certificates, consents and franchises necessary to continue to conduct
its business as previously conducted by it and to own or lease and operate its properties as now
owned or leased by it and none of said permits, certificates, consents or franchises contain any
term, provision, condition or limitation more burdensome than such as are generally applicable to
Persons engaged in the same or similar business as Borrower.

     (K) Burdensome Agreements. Borrower is not a party to any contract or
agreement or subject to any charge, restriction, judgment, decree or order which could reasonably
be expected to have a Material Adverse Effect.

     (L) Violation of Law. Borrower is not in violation of any applicable
statute, regulation or ordinance of the United States of America, any state, city, town,

31

 

municipality, county, or any other jurisdiction, or any agency thereof, which could reasonably be
expected to have a Material Adverse Effect.

     (M) Breach of Other Loan Documents. Borrower is not in default with
respect to any indenture, loan agreement, mortgage, deed or other similar agreement relating to the
borrowing of monies to which it is a party or by which it is bound.

     (N) Financial Information. The Financials delivered to Lender prior hereto
or contemporaneously herewith fairly and accurately present the information set forth therein which
may include, but is not limited to, the assets, liabilities, financial conditions and results of
operations of Borrower and such other Persons described therein as of and for the period ending on
such dates and have been prepared in accordance with GAAP and such principles have been applied on
a basis consistently followed in all material respects throughout the periods involved, subject, in
the case of interim financial statements, to normal year-end adjustments and the absence of
footnotes.

     (O) Material Adverse Change. There has been no material adverse change in
the assets, liabilities or financial condition of Borrower since the date of the most recent
Financials for the Borrower delivered to Lender.

     (P) Change of Name or Identity. Borrower has not within the previous five
(5) years changed its name, state of formation, identity or chief executive office.

     (Q) Capital Structure. Schedule 9.1(Q) attached hereto and made a part
hereof states (1) the correct name of each of the Subsidiaries of Borrower, and the jurisdiction of
incorporation or formation and the percentage of voting Equity Interests owned by Borrower, (2) the
name of Borrower’s corporate or joint venture Affiliates and the nature of the affiliation, (3) the
number, nature and holder of all outstanding Equity Interests of Borrower and each Subsidiary of
Borrower, and (4) the number of authorized and issued Equity Interests of Borrower and each
Subsidiary of Borrower. Borrower has good and marketable title to all of the Equity Interests it
purports to own of each Subsidiary, free and clear in each case of any lien other than Permitted
Liens. All such Equity Interests have been duly issued and are fully paid and non-assessable.
Except as described on Schedule 9.1(Q), there are not outstanding any options to purchase, or any
rights or warrants to obligations convertible into, or any powers of attorney relating to, shares
of Equity Interests of Borrower. Except as described on Schedule 9.1(Q), there are not outstanding
any agreements or instruments binding upon any of Borrower’s shareholders or members relating to
the ownership of its Equity Interests.

     (R) Pension Plans. Borrower has not received any notice to the effect that
it is not in full compliance with any of the requirements of ERISA and the regulations promulgated
thereunder. No fact or situation that could lead to a Material Adverse Effect, including, but not
limited to, any Reportable Event or Prohibited Transaction, exists in connection with any Plan.
Borrower has no withdrawal liability in connection with a Multiemployer Plan.

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     (S) Labor Relations. Except as described on Schedule 9.1(S) attached hereto
and made a part hereof, Borrower is not a party to any collective bargaining agreement, and
there are no material grievances, disputes or controversies with any union or any other
organization of Borrower’s employees, or threats of strikes, work stoppages or any asserted
pending demands for collective bargaining by any union or organization.

     (T) Trade Relations. There exists no actual or threatened termination,
cancellation or limitation of, or any modification or change in, the business relationship
between Borrower and any customer or any group of customers whose purchases individually or
in the aggregate are material to the business of Borrower, or with any material supplier,
and there exists no present condition or state of facts or circumstances which would
materially adversely affect Borrower or prevent Borrower from conducting such business
after the consummation of the transaction contemplated by this Loan Agreement in
substantially the same manner in which it has heretofore been conducted.

     (U) Environmental Matters. Borrower is in compliance in all material respects
with all applicable Environmental Laws.

     (V) Encumbrances. There are no liens, claims or other encumbrances upon any
of the Collateral, except for the Permitted Liens.

     (W) Levies and Attachments. There are no levies, attachments or restraints
affecting any of Borrower’s assets or the Collateral.

     (X) Receiver, Trustee or Assignee. There is no receiver, trustee or assignee
for the benefit of creditors currently appointed to take possession of all or any of
Borrower’s assets or any of the Collateral.

     (Y) Surety. Except for guarantees in favor of Lender, Borrower is not liable,
whether through the execution of a guaranty or otherwise, with respect to the obligations
or liabilities of any other Person except by endorsement of instruments or items of payment
for deposit to the general account of Borrower or for delivery to Lender on account of the
Liabilities.

     (Z) Affiliate Transactions. Except for the Management Agreement, Borrower has
not entered into any transaction with an Affiliate, except for transactions in the ordinary
course of business pursuant to the reasonable requirements of Borrower’s business and upon
fair and reasonable terms no less favorable to Borrower than Borrower would obtain in a
comparable arms-length transaction.

     (AA) Commercial Tort Claims. All Commercial Tort Claims in which Borrower is a
claimant are set forth on Schedule 4.1 attached hereto.

     9.2 Covenants. Until the termination of this Loan Agreement and thereafter until all
Liabilities are paid in full, Borrower agrees that, unless at any time Lender shall otherwise
expressly consent in writing:

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     (A) Organization and Qualification. Borrower at all times shall be the
type of legal entity specified for Borrower on Schedule 4.2 of this Loan Agreement, duly organized
and existing and in good standing under the laws of the State of its formation reflected on such
Schedule, and shall be qualified or licensed to do business in all states in which the laws thereof
require Borrower to be so qualified or licensed.

     (B) No Violation of Law. The execution, delivery and performance by
Borrower of this Loan Agreement and the Other Agreements shall not hereafter, by the lapse of time,
the giving of notice or otherwise, constitute a violation of any applicable law or breach of any
provision contained in Borrower’s Constituent Documents, or contained in any agreement, instrument
or document to which Borrower is now or hereafter a party or by which it is or may become bound.

     (C) Title to Collateral. Borrower at all times hereafter shall have good,
indefeasible and merchantable title to and ownership of the Collateral, free and clear of all
liens, claims, security interests and encumbrances, except for the Permitted Liens.

     (D) Solvency. Borrower shall at all times hereafter (1) remain solvent,
(2) have adequate cash flow to pay its debts as they mature or otherwise become due, (3) have
sufficient capital to conduct its business in the ordinary course, and (4) have property and assets
which, if valued at fair market valuation, are greater than the sum of Borrower’s debts and
liabilities.

     (E) Adequate Assets/Trademarks/Copyrights/Patents. Borrower shall continue
to possess adequate assets, licenses, patents, copyrights, trademarks and trade names to continue
to conduct its business as previously conducted by it. Borrower shall notify Lender if Borrower
acquires ownership of or a license or other interest in any patents, trademarks or copyrights and
shall execute and deliver such documents to Lender as Lender shall request to assign to Lender as
security Borrower’s interest in such patents, copyrights and trademarks.

     (F) Good Standing. Borrower shall remain in good standing with respect
to all governmental permits, certificates, consents and franchises necessary to continue to
conduct its business as previously conducted by it and to own or lease and operate its properties
as now owned or leased by it and none of said permits, certificates, consents or franchises
contain any term, provision, condition or limitation more burdensome than such as are generally
applicable to persons engaged in the same or similar business as Borrower.

     (G) Violation of Law. Borrower shall not be in violation of any
applicable statute, regulation or ordinance of the United States of America, any state, city, town,
municipality, county, or any other jurisdiction, or any agency thereof, in any material respect
affecting its business, property, assets, operations or condition, financial or otherwise.

34

 

     (H) Breach of Other Loan Documents. Borrower shall not be in default with respect to
any indenture, loan agreement, mortgage, deed or other similar agreement relating to the borrowing
of monies to which it is a party or by which it is bound.

     (I) Financial Statements. Borrower shall, from time to time, provide Financials to
Lender pursuant to Section 9.5 which fairly and accurately present the assets, liabilities and
financial conditions and results of operations of Borrower and such other Persons described therein
as of and for the period ending on the dates described therein. Such Financials will be, unless
otherwise indicated therein, prepared in accordance with GAAP and such principles will be applied
on a basis consistently followed in all material respects throughout the periods involved, subject,
in the case of interim financial statements, to normal year-end adjustments and the absence of
footnotes.

     (J) Material Adverse Change. There shall be no material adverse change in the
assets, liabilities or financial condition of Borrower since the date of the most recent
Financials for the Borrower delivered to Lender.

     (K) Change of Name or Identity. Borrower shall not at any time hereafter, without
Lender’s prior written consent, change its name, identity, ownership (except in connection with the
contribution of additional equity capital by existing holders of Equity Interests or the issuance
of Equity Interests to employees and consultants), chief executive office or state of formation.

     (L) Pension Plans. No fact or situation that could lead to a Material Adverse Effect,
including, but not limited to, any Reportable Event or Prohibited Transaction, shall exist in
connection with any Plan. Borrower shall continue to have no withdrawal liability in connection
with a Multiemployer Plan.

     (M) Notices to Lender. Borrower shall notify Lender in writing: (1) promptly after
Borrower learns thereof, of the commencement of any litigation affecting Borrower or any of its
real or personal property, whether or not the claim is considered by Borrower to be covered by
insurance, and of the institution of any administrative proceeding which may have a Material
Adverse Effect; (2) at least thirty (30) days prior thereto, of Borrower’s opening of any new
office or place of business or Borrower’s closing of any existing office or place of business; (3)
promptly after Borrower learns thereof, of any labor dispute to which Borrower may become a party,
any strikes or walkouts relating to any of its plants or other facilities, and the expiration of
any labor contract to which it is a party or by which it is bound; (4) promptly after Borrower
learns thereof, of any material default by Borrower under any note, indenture, loan agreement,
mortgage, lease, deed, guaranty or other similar agreement relating to any Indebtedness of Borrower
exceeding Ten Thousand and no/100 Dollars ($10,000.00); (5) promptly after the occurrence thereof,
of any Unmatured Event of Default or Event of Default; (6) promptly after the occurrence thereof,
of any default by any obligor under any note or other evidence of Indebtedness payable to Borrower;
(7) promptly after the rendition thereof, of any judgment rendered against Borrower or any of its
Subsidiaries; and

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(8) promptly after Borrower learns thereof, of any material adverse finding of any state or
federal government entity in connection with all or any part of the Collateral.

     (N) Landlord and Storage Agreements. Borrower shall provide
Lender with copies of all agreements between Borrower and any landlord or warehouseman
which owns any premises at which any Collateral may, from time to time, be located, and
shall deliver to Lender an original executed landlord’s agreement or warehouse agreement,
as the case may be, for each such location in form and substance satisfactory to Lender.

     (O) Subordinations. Borrower shall provide Lender with debt
subordination agreements, in form and substance satisfactory to Lender, executed by
Borrower and any Person who is an officer, director, member, manager or Affiliate of
Borrower to whom Borrower is or hereafter becomes indebted for borrowed money.

     (P) Environmental Matters.

          (1) Borrower shall and shall cause each of its Subsidiaries to (a) comply
strictly and in all respects with all applicable Environmental Laws, (b) take promptly any
remediation and/or corrective action necessary to cure any violation of Environmental Laws
of which Borrower has knowledge, (c) notify the proper governmental agency promptly in the
event of any release of any Hazardous Substances reportable under 42 USC §9603, 42 USC
§11044, 33 USC §1321(b)(5) or any counterpart or similar state or local requirements, (d)
promptly forward to Lender, upon its request, a copy of any order, notice, permit,
application, or any other communication or report in connection with any such release of
any Hazardous Substance or any other material matter relating to the Environmental Laws as
they may affect their premises.

          (2) Borrower shall provide Lender with such evidence, reports and/or other
documentation as reasonably requested by Lender to insure that Borrower is in compliance
with the terms of this Section 9.2(P).

     (Q) Commercial Tort Claims. Borrower will advise Lender of any new
Commercial Tort Claim upon the filing of any such action. Borrower hereby authorizes Lender
to amend Schedule 4.1 from time to time to reflect such new Commercial Tort Claims and to
prepare and file any required Uniform Commercial Code financing statements or amendments
and take any other actions necessary for Lender to perfect its security interest in such
Commercial Tort Claims.

     (R) Rate Hedging. Within 30 days after the initial funding of the
Loans hereunder, Borrower will obtain interest rate protection pursuant to a
contract with Lender, in form and substance satisfactory to Lender, for a principal
amount of not less $4,000,000 and for a period of not less than three (3) years.

     9.3 Negative Covenants. Borrower covenants unto Lender that Borrower shall not now or
at any time hereafter, unless Borrower obtains the prior written consent of Lender:

     (A) Additional Encumbrances. Grant a security interest in,
assign, sell or transfer any of the Collateral to any Person except as permitted herein or
permit, grant, or

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suffer a lien, claim or encumbrance upon any of the Collateral, except for the Permitted
Liens.

     (B) Levies and Attachments. Permit or suffer any levy, attachment or
restraint to be made affecting any of its assets or the Collateral.

     (C) Receiver, Trustee or Assignee. Permit or suffer any receiver, trustee
or assignee for the benefit of creditors to be appointed to take possession of all or any of
Borrower’s assets or any of the Collateral.

     (D) Mergers and Acquisitions. Merge, consolidate with or acquire any
Person.

     (E) Ordinary Course of Business. Enter into any transaction not in the
ordinary course of its business as presently conducted.

     (F) Investments. Other than in the ordinary course of business, make any
investment in the securities of any Person; provided, however, notwithstanding the foregoing,
Borrower may make investments in certificates of deposit of Lender or any of its affiliates or such
other banking institution having a net worth in excess of $100,000,000, or in securities of the
United States of America or commercial paper with a P1 rating (all of the foregoing maturing within
one year).

     (G) Surety. Except for guarantees in favor of Lender, guaranty or
otherwise, in any way, become liable with respect to the obligations or liabilities of any Person
except by endorsement of instruments or items of payment for deposit to the general account of
Borrower or for delivery to Lender on account of the Liabilities.

     (H) Capital Structure. Make any material change in Borrower’s capital
structure or in any of its business objectives, purposes and operations which might in any way
adversely affect the repayment of the Liabilities.

     (I) Encumbrance or Sale. Encumber, sell, pledge, mortgage, lease, or
otherwise dispose of or transfer, whether by merger, consolidation or otherwise, any of Borrower’s
assets, except Permitted Liens and as otherwise expressly permitted herein.

     (J) Sale of Equity Interests. Sell or issue any Equity Interests of
Borrower except in connection with the contribution of additional equity capital by existing
holders of Equity Interests or the issuance of Equity Interests to employees or consultants.

     (K) Indebtedness. Incur Indebtedness, except Permitted Indebtedness.

     (L) Restricted Payments. Make any Restricted Payments, other than,
provided an Unmatured Event of Default or Event of Default does not then exist or would not be
created thereby, (a) if Borrower continues to be a pass-through entity for income tax purposes,
dividend and distribution payments to Borrower’s Equity Interest holders in an aggregate amount not
greater than the state and United States federal income tax
liabilities in respect of the Consolidated Net Income earned by Borrower determined based upon
the highest marginal state and United States federal income tax rates, and (b)

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management fee payments in amounts not exceeding those permitted under the Management
Agreement, provided such management fee payments do not exceed $150,000 in the aggregate
for any fiscal year.

     (M) Constituent Documents/Fiscal Year End. Amend or restate Borrower’s
Constituent Documents in a manner adverse to Lender or change Borrower’s fiscal year-end
from December 31, provided however, if Borrower modifies the Constituent Documents in a
manner that is not adverse to Lender, it shall provide notice to Lender of those changes.

     (N) Affiliate Transactions. Enter into any transaction with an Affiliate,
except for transactions in the ordinary course of business pursuant to the reasonable
requirements of Borrower’s business and upon fair and reasonable terms no less favorable to
Borrower than Borrower would obtain in a comparable arms-length transaction.

     (O) Subsidiaries. Form, acquire or otherwise maintain any
Subsidiaries, unless such Subsidiary provides a guaranty to Lender of all of the
Liabilities and grants to Lender a first position priority security interest in such
Subsidiary’s assets as security for the Liabilities, in each case pursuant to documents
satisfactory to Lender in its sole discretion.

     (P) Operating Leases. Except for operating leases in existence on
the date of this Loan Agreement, make or become obligated to make operating lease payments
in any Fiscal Year in an aggregate amount in excess of $100,000.00.

     9.4 Financial Covenants. During the term of this Loan Agreement, and thereafter for
so long as there are any outstanding Liabilities owed to Lender, Borrower covenants that:

     (A) Adjusted EBITDA. Borrower’s Adjusted EBITDA, calculated on a trailing
twelve (12) month basis as of the last day of each calendar quarter beginning with the
calendar quarter ending June 30, 2009, shall not be less than $3,750,000.

     (B) Funded Debt to Adjusted EBITDA Ratio. Borrower shall not permit its
Funded Debt to Adjusted EBITDA Ratio, tested as of the last day of each calendar quarter
after the date of this Loan Agreement, to exceed (i) 2.25 to 1.0 as of March 31, 2009, or
as of the last day of any calendar quarter thereafter through and including December 31,
2009, or (ii) 1.75 to 1.0 as of March 31, 2010, or as of the last day of any calendar
quarter thereafter.

     (C) Fixed Charge Coverage Ratio. Borrower shall not permit its Fixed Charge
Coverage Ratio, tested as of the last day of each calendar quarter after the date of this
Loan Agreement, to be less than 1.25 to 1.0.

     (D) Capital Expenditures. Borrower’s total aggregate unfinanced Capital
Expenditures in any calendar year shall not exceed $250,000.00.

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     9.5 Financial Reporting. Borrower represents, warrants and covenants unto Lender that
it will deliver to Lender the following financial information, all of which shall accurately
reflect the financial condition of Borrower and the other parties set forth therein at and for the
periods of time described therein and shall be prepared in accordance with GAAP:

     (A) As soon as available but in no event later than one hundred twenty (120) days
after the close of each fiscal year of Borrower, the audited consolidated and consolidating
financial statements of Borrower, including, but not limited to, (1) a balance sheet, (2) a
statement of income and retained earnings, and (3) a statement of cash flows, together with
an unqualified opinion of a firm of independent certified public accountants selected by
Borrower and approved by Lender in writing in its reasonable discretion, including any
management letters issued by such certified public accounting firm to Borrower.

     (B) Concurrently with the delivery of the financial statements described in Section
9.5(A) above, certificates of the chief financial officer or any other senior officer of
Borrower in form and substance acceptable to Lender, certifying to Lender that, based upon
such financial statements, (1) Borrower is in compliance with all financial covenants and
ratios contained in this Loan Agreement, together with the calculations for the financial
covenants and ratios described therein; and (2) the chief financial officer or such other
senior officer, as the case may be, is not aware of any event or occurrence which
constitutes an Unmatured Event of Default or Event of Default.

     (C) As soon as available but in no event later than twenty-eight (28) days after the
end of each calendar month, Borrower’s internally prepared consolidated and consolidating
financial statements, including, but not limited to, (1) a balance sheet, (2) a statement
of income and retained earnings, and (3) a statement of cash flows all for the previous
calendar month, and the year-to-date statement for that portion of Borrower’s Fiscal Year
then elapsed.

     (D) Concurrently with the delivery of Borrower’s internally prepared financial
statements pursuant to Section 9.5(C) above, certificates of the chief financial officer or
any other senior officer of Borrower, in form and substance acceptable to Lender,
certifying to Lender that, based upon the internally prepared financial statements, (1)
Borrower is in compliance with all financial covenants contained in this Loan Agreement,
together with the calculations for the financial covenants and ratios described herein, and
(2) the chief financial officer or any other senior officer of Borrower, as the case may
be, is not aware of any event or occurrence which constitutes an Unmatured Event of Default
or Event of Default. Each month, Borrower shall provide financial covenant calculations
concurrently with the delivery of Borrower’s financial statements, notwithstanding that the
financial covenants will only be tested quarterly or at year-end in accordance with Section
9.4 above.

     (E) As soon as available, but in no event later than twenty-eight (28) days after the
end of each month, the following reports dated as of the last day of the immediately
preceding month: (1) an accounts payable aging, and (2) a backlog report of all of
Borrower’s jobs.

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     (F) As soon as available, but in no event later than twenty-eight (28) days after the
end of each calendar month, the following reports dated as of the last day of the
immediately preceding month: (1) Accounts receivable aging, (2) Accounts receivable summary
report (including a reconciliation of Borrower’s cash and Accounts to Borrower’s general
ledger), and (3) a Borrowing Base Certificate.

     (G) As soon as available, but in no event later than twenty-eight (28) days after the
end of each quarter, an Inventory Report dated as of the last day of the immediately
preceding quarter.

     (H) As soon as available, but in no event later than the end of each Fiscal Year,
Borrower’s internally prepared financial projections and business plans for the forthcoming
year, including, without limitation, (1) a balance sheet, (2) a statement of income and
retained earnings, and (3) a statement of cash flows, all for the forthcoming year prepared
on a month by month and year-to-date basis.

     (I) Such other data and information, financial and otherwise as Lender, from time to
time, may reasonably request, including, without limitation, more frequent financial
reporting and reporting with respect to the Collateral.

10. Conditions Precedent

     10.1 Conditions to Initial Funding. Lender’s obligation to make the initial Loan
pursuant to this Loan Agreement and the Other Agreements is subject to the full and timely
performance of the following covenants prior to or contemporaneously with the making of the initial
Loan.

     (A) Lender shall have received each of the following, in form and substance
satisfactory to Lender and its counsel:

     (1) A fully executed original of a Company General Certificate for Borrower.

     (2) A fully executed original of this Loan Agreement.

     (3) A fully executed original of the Revolving Note.

     (4) A fully executed original of Term Note A.

     (5) A favorable written opinion from Borrower’s counsel.

     (6) A fully executed subordination agreement from each subordinate lender as required
pursuant to Section 9.2(0), if any.

     (7) Copies of the Uniform Commercial Code, tax lien and pending suit and judgment
searches from such jurisdictions as Lender deems necessary with respect to the Obligors,
which shall not have disclosed any prior lien or security interest in the Collateral,
except for the Permitted Liens.

40

 

     (8) An initial Borrowing Base Certificate, Accounts receivable summary report and
Inventory Report dated as of the date of this Loan Agreement.

     (9) Certificates of insurance with lender’s loss payable and additional insured
clauses covering all collateral for the Liabilities and meeting the requirements of this
Loan Agreement and the Other Agreements.

     (10) A fully executed original of a landlord’s agreement for each location leased by
Borrower, if any.

     (11) A fully executed original of a warehouse agreement for all warehouses not owned
by Borrower, if any, where the Collateral is located.

     (12) Such other documents, instruments or agreements as Lender may request.

     (B) No Unmatured Event of Default or Event of Default shall have occurred and be
continuing.

     (C) There shall have been no material adverse change in the business, financial
condition or results of operations since the date of Borrower’s then most recently
delivered Financials.

     (D) The representations and warranties contained in this Loan Agreement shall be true
and correct as of the making of the initial Loan.

     (E) Lender shall have determined that immediately after giving effect to (i) the
making of the initial Loans and any Letters of Credit requested to be made on the date of
the initial funding hereunder, (ii) the payment of all fees due upon such date, (iii) all
reserves under the Borrowing Base, and (iv) the payment or reimbursement by Borrower to
Lender for all closing costs and expenses incurred in connection with the transactions
contemplated hereby, and assuming all of Borrower’s trade payables and outstanding debt
which remain unpaid more than sixty (60) days after the due dates thereof on the date of
determination, are paid by drawing additional Revolving Loans, on a pro forma basis, the
availability of Borrower to borrow additional Revolving Loans shall be not less than Five
Hundred Thousand and no/100 Dollars ($500,000.00).

     10.2 Conditions to Subsequent Fundings. Lender’s obligation to make any subsequent
Loans pursuant to this Loan Agreement and the Other Agreements is subject to the full and timely
performance of each of the following covenants either prior to or contemporaneously with the making
of each subsequent Loan.

     (A) No Unmatured Event of Default or Event of Default shall have occurred and be
continuing.

     (B) No claims, litigation, arbitration proceedings or governmental proceedings not
disclosed in writing to Lender prior to the date of the last previous Loan shall be pending
or known to be threatened against Borrower and no known material development

41

 

not so disclosed shall have occurred in any claims, litigation, arbitration
proceedings or governmental proceedings so disclosed which in the opinion of Lender is
likely to materially adversely affect the financial position or business of Borrower or
capability of Borrower to pay the Liabilities.

     (C) There shall have been no material adverse change in the business, financial
condition or results of operations since the date of Borrower’s then most recently
delivered Financials or the previous Loan advance.

     (D) The representations and warranties of Borrower contained in this Loan Agreement
shall be true and correct as of the making of any subsequent Loan, with the same effect as
though made on such date of each subsequent Loan.

11. Event of Default; Remedies 

     11.1 Events of Default. The occurrence of any one of the following events shall
constitute a default (an “Event of Default”) by Borrower under this Loan Agreement:

     (A) Borrower fails to fully and timely pay the Liabilities, when due and payable or
declared due and payable, or the occurrence of an Out-of-Formula Event;

     (B) Borrower fails or neglects to perform, keep or observe any of the Covenants;
provided however, Borrower shall have a period of thirty (30) days after the occurrence
thereof to cure any failure or neglect to perform, keep or observe any of the Covenants set
forth in subsections 9.2(E), (F), (G), (H), (L), (N), (0), (P) and (Q) of this Loan
Agreement;

     (C) any representation, warranty, statement, report or certificate made or delivered
by any Obligor, or any of such Obligor’s officers, members, managers, employees, or agents,
to Lender is not true and correct in all material respects, whether made in this Loan
Agreement, the Other Agreements or otherwise;

     (D) any assets of an Obligor which owns, directly or indirectly, in excess of one and
one half percent (1.50%) of the Equity Interests of Borrower are attached, seized,
subjected to a writ or distress warrant, or are levied upon, or come within the possession
of any receiver, trustee, custodian or assignee for the benefit of creditors;

     (E) a petition under the United States Bankruptcy Code or any similar federal, state
or local law, statute or regulation shall be filed by any Obligor which owns, directly or
indirectly, in excess of one and one half percent (1.50%) of the Equity Interests of
Borrower;

     (F) a petition under the United States Bankruptcy Code or any similar federal, state
or local law, statute or regulation shall be filed against any Obligor
which owns, directly or indirectly, in excess of one and one half percent (1.50%) of
the Equity Interests of Borrower, which petition is granted or is not dismissed or
discharged within sixty (60) days after filing;

42

 

     (G) any Obligor which owns, directly or indirectly, in excess of one and one half percent
(1.50%) of the Equity Interests of Borrower shall make an assignment for the benefit of creditors,
or an application is made by any Obligor for the appointment of a receiver, trustee, custodian or
conservator for such Obligor or any of its assets;

     (H) an application is made against any Obligor which owns, directly or indirectly, in excess
of one and one half percent (1.50%) of the Equity Interests of Borrower for the appointment of a
receiver, trustee, custodian or conservator for such Obligor or any of its assets, which
application is not dismissed, discharged or revoked within sixty (60) days after being made;

     (I) any Obligor is enjoined, restrained or in any way prevented by court order from conducting
any part of its business affairs;

     (J) a lawsuit or other proceeding is filed against any Obligor which owns, directly or
indirectly, in excess of one and one half percent (1.50%) of the Equity Interests of Borrower
claiming in the aggregate, more than Five Hundred Thousand and no/l00 Dollars ($500,000) in
damages, which lawsuit or other proceeding is not dismissed or discharged within sixty (60) days
after being filed;

     (K) a notice of a lien, levy or assessment is filed of record with respect to any of the
assets of any Obligor which owns, directly or indirectly, in excess of one and one half percent
(1.50%) of the Equity Interests of Borrower by the United States of America or any department,
agency or instrumentality thereof, or by any state, county, municipal or other governmental
department, agency, or instrumentality, including without limitation, the Pension Benefit Guaranty
Corporation;

     (L) Borrower or CVP defaults in the payment of any of its other obligations or liabilities
which are in excess of $25,000.00, and such default is not cured within the time, if any,
specified therefor;

     (M) the occurrence of a breach, default or event of default under any agreement, instrument or
document executed and delivered by any Person to Lender pursuant to which such Person has
guarantied to Lender the payment of all or any portion of the Liabilities or provided collateral to
secure all or any portion of the Liabilities, or such Person terminates or purports to terminate
its guaranty of the Liabilities to Lender;

     (N) a breach, default or event of default occurs under any of the Other Agreements, after the
expiration of applicable grace or cure periods;

     (O) there shall be entered against Borrower or CVP one or more judgments or decrees in excess
of Twenty-Five Thousand and no/100 Dollars ($25,000.00) in the aggregate at any one time
outstanding for Borrower or CVP, excluding those judgments or decrees (i) that shall have been
stayed, vacated or bonded, (ii) that shall have been outstanding less than 30 days from the entry
thereof, or (iii) for and to the extent to which
Borrower or CVP is insured and with respect to which the insurer specifically has assumed
responsibility in writing;

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     (P) The failure of CVP to own and have voting control of more than thirty-five percent
(35%) of the outstanding Equity Interests of Borrower determined on a fully diluted basis;

     (Q) The failure of CVP to be actively and consistently involved in the management of
Borrower; or

     (R) Lender, in good faith, believes its prospect of payment or performance of the
Liabilities or the Covenants is impaired.

     11.2 Cumulative Remedies. All of Lender’s rights and remedies under this Loan
Agreement and the Other Agreements are cumulative and non-exclusive.

     11.3 Discontinuing Advances. Upon the occurrence of an Unmatured Event of Default or
Event of Default, without notice or demand by Lender to Borrower, Lender shall have no further
obligation to and may immediately cease advancing monies or extending credit to or for the benefit
of Borrower under this Loan Agreement and the Other Agreements. Upon the occurrence of an Event of
Default under Sections 11.1(E) or 11.1(F) hereof, without notice or demand by Lender to Borrower,
the Liabilities shall be immediately due and payable, including, without limitation, all of
Borrower’s contingent liabilities with respect to any Letters of Credit. Upon the occurrence of any
Event of Default (other than an Event of Default under Sections 11.1(E) or 11.1(F)), at the
election of Lender without notice or demand by Lender to Borrower, the Liabilities shall be
immediately due and payable, including, without limitation, all of Borrower’s contingent
liabilities with respect to any Letters of Credit. ANY ADVANCES MADE BY LENDER TO BORROWER AFTER
THE OCCURRENCE OF AN UNMATURED EVENT OF DEFAULT OR AN EVENT OF DEFAULT SHALL NOT ESTABLISH A CUSTOM
OR COURSE OF DEALING AND LENDER SHALL BE ENTITLED TO CEASE MAKING ADVANCES AT ANY TIME THEREAFTER.

     11.4 Remedies. Upon the occurrence of an Event of Default, Lender, in its discretion,
may: (A) exercise any one or more of the rights and remedies accruing to a “secured party” under
the Uniform Commercial Code of Illinois and any other applicable law upon a default by a debtor;
(B) enter, with or without process of law and without breach of the peace, any premises where the
Collateral is or may be located, and without charge or liability to Lender therefor, seize and
remove the Collateral from said premises or remain upon said premises and use the same for the
purpose of collecting, preparing and disposing of the Collateral; (C) sell or otherwise dispose of
the Collateral at public or private sale for cash or credit, provided, however, that Borrower shall
be credited with the net proceeds of such sale only when such proceeds are actually received by
Lender; (D) take control, in any manner, of any item of payment or proceeds of the Collateral and
to direct all Account Debtors to make payments directly to Lender; (E) notify any or all Account
Debtors that the Accounts and Special Collateral have been assigned to Lender and that Lender has a
first position priority security interest and lien therein; (F) direct such Account Debtors to make
all payments due from them to Borrower upon the Accounts and Special Collateral directly to Lender;
and (G) enforce payment of and
collect, by legal proceedings or otherwise, the Accounts and Special Collateral in the name of
Lender and Borrower.

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     11.5 Assembling Collateral. Upon an Event of Default, Borrower, immediately upon
demand by Lender, shall assemble the Collateral and make it available to Lender at a place or
places to be designated by Lender which are reasonably convenient to Lender and Borrower. Borrower
recognizes that if it fails to perform, observe or discharge any of its obligations or liabilities
under this Loan Agreement or the Other Agreements, no remedy of law will provide adequate relief to
Lender, and Borrower agrees that Lender shall be entitled to temporary and permanent injunctive
relief in any such case without the necessity of proving actual damages.

     11.6 Notice of Sale.

       Any notice required to be given by Lender of a sale, lease or other disposition of the
Collateral or any other intended action by Lender, if provided not less than ten (10) days prior to
such proposed action, shall constitute commercially reasonable and fair notice to Borrower thereof.

     11.7 Postponement of Sale. Borrower agrees that Lender may, if Lender deems it
reasonable, postpone or adjourn any such sale of the Collateral from time to time by an
announcement at the time and place of sale, without being required to give a new notice of sale.
Further, Borrower agrees that Lender has no obligation to preserve rights against prior parties to
the Collateral.

12. General

     12.1 Bank Accounts. Borrower shall keep and maintain all of its checking,
depository and other bank accounts with Lender. Each statement of account by Lender delivered to
Borrower relating to the Liabilities shall be presumed correct and accurate and shall constitute an
account stated between Borrower and Lender unless, within thirty (30) days after Borrower’s receipt
of said statement, Borrower delivers to Lender notice specifying the error or errors, if any,
contained in any such statement.

     12.2 Application of Payments. Except as otherwise provided in this Agreement,
Borrower waives the right to direct the application of any and all payments at any time or times
hereafter received by Lender on account of the Liabilities and Borrower agrees that Lender shall
have the continuing exclusive right to apply and re-apply any and all such payments in such manner
and in such order as Lender may deem advisable, including, without limitation, to the payment of
any costs, fees and expenses payable by Borrower under this Loan Agreement, notwithstanding any
entry by Lender upon any of its books and records.

     12.3 Additional Representations, Warranties and Covenants. Borrower represents,
warrants and covenants unto Lender that (A) all representations and warranties of Borrower
contained in this Loan Agreement and the Other Agreements shall be true at the time of Borrower’s
execution of this Loan Agreement and the Other Agreements, shall survive the execution, delivery
and acceptance thereof by the parties thereto and the closing of the transactions described therein
and shall be true as of the date of each borrowing under this Loan Agreement, and (B) Borrower
shall fully and
timely comply and maintain all covenants set forth in this Loan Agreement and the Other
Agreements.

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     12.4 Modification and Assignment of Loan Documents. This Loan Agreement and the Other
Agreements may not be modified, altered or amended, except by an agreement in writing signed by
Borrower and Lender. Borrower may not sell, assign or transfer this Loan Agreement or the Other
Agreements or any portion thereof, including, without limitation, Borrower’s rights, titles,
interests, remedies, powers or duties thereunder. Borrower hereby consents to Lender’s sale,
assignment, grant of participations, transfer or other disposition, at any time and from time to
time hereafter, of this Loan Agreement and the Other Agreements or of any portion thereof,
including, without limitation, Lender’s rights, titles, interests, remedies, powers or duties.

     12.5 Waiver of Defaults. Lender’s failure at any time or times hereafter to require
strict performance by Borrower of any provision of this Loan Agreement shall not waive, affect or
diminish any right of Lender thereafter to demand strict compliance and performance therewith. Any
suspension or waiver by Lender of an Unmatured Event of Default or Event of Default by Borrower
under this Loan Agreement or the Other Agreements shall not suspend, waive or affect any other
Unmatured Event of Default or Event of Default by Borrower under this Loan Agreement or the Other
Agreements, whether the same is prior or subsequent thereto and whether of the same or of a
different type. NONE OF THE UNDERTAKINGS, AGREEMENTS, WARRANTIES, COVENANTS AND REPRESENTATIONS OF
BORROWER CONTAINED IN THIS LOAN AGREEMENT OR THE OTHER AGREEMENTS AND NO EVENT OF DEFAULT BY
BORROWER UNDER THIS LOAN AGREEMENT OR THE OTHER AGREEMENTS SHALL BE DEEMED TO HAVE BEEN SUSPENDED
OR WAIVED BY LENDER UNLESS SUCH SUSPENSION OR WAIVER IS IN WRITING SIGNED BY AN OFFICER OF LENDER
AND DIRECTED TO BORROWER SPECIFYING SUCH SUSPENSION OR WAIVER.

     12.6 Severability. Wherever possible, each provision of this Loan Agreement shall be
interpreted in such manner as to be valid and enforceable under applicable law, but if any
provision of this Loan Agreement is held to be invalid or unenforceable by a court of competent
jurisdiction, such provision shall be severed herefrom and such invalidity or unenforceability
shall not affect any other provision of this Loan Agreement, the balance of which shall remain in
and have its intended full force and effect. Provided, however, if such provision may be modified
so as to be valid and enforceable as a matter of law, such provision shall be deemed to be modified
so as to be valid and enforceable to the maximum extent permitted by law.

     12.7 Successors and Assigns. This Loan Agreement and the Other Agreements shall be
binding on Borrower and upon the successors of Borrower, and shall inure to the benefit of Lender,
its successors, assigns, affiliates, divisions and parents and may be assigned by Lender without
notice to Borrower. This provision, however, shall not be deemed to modify Section 12.4 hereof.

     12.8 Incorporation of Other Agreements; Exhibits; and Schedules. The terms and
provisions of the Other Agreements are incorporated herein by this reference thereto.
The Exhibits and Schedules referred to herein are attached hereto, made a part hereof and
incorporated herein by this reference thereto.

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     12.9 Survival on Termination. Except as otherwise provided in this Loan Agreement or
the Other Agreements, no termination or cancellation of this Loan Agreement or the Other Agreements
shall in any way affect or impair the powers, obligations, duties, rights and liabilities of
Borrower or Lender in any way or respect relating to (A) any transaction or event occurring prior
to such termination or cancellation, (B) the Collateral, or (C) any of the undertakings,
agreements, covenants, warranties and representations of Borrower contained in this Loan Agreement
or the Other Agreements. All such undertakings, agreements, representations, warranties and
covenants shall survive such termination or cancellation.

     12.10 Waiver of Notices. Except as otherwise expressly provided herein, Borrower
waives any and all notices or demands which Borrower might be entitled to receive with respect to
this Loan Agreement or the Other Agreements by virtue of any applicable law, statute or regulation,
and waives presentment, demand, protest, notice, default, dishonor, non-payment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper, Accounts, contract
rights, Documents, Instruments, Chattel Paper and guaranties at any time held by Lender on which
Borrower may in any way be liable, and hereby ratifies and confirms whatever Lender may do in this
regard.

     12.11 Authority to Execute and Borrow Until Lender is notified by Borrower to the
contrary, the signature upon this Loan Agreement or upon any of the Other Agreements of any officer
or any other Person duly authorized by the Managers of Borrower shall bind Borrower and be deemed
to be the duly authorized act of Borrower. Each such Person shall have the authority to borrow
funds on behalf of Borrower pursuant to the terms of this Loan Agreement, except that after the
initial funding hereunder by Lender any borrowing of $50,000 or more shall require the written
approval of John Fife or such other Person as he may designate in writing to Lender.

     12.12 Costs, Fees and Expenses. Borrower shall reimburse Lender for all costs, fees
and expenses incurred by Lender, or for which Lender becomes obligated, whether before or after the
occurrence of an Unmatured Event of Default or Event of Default, in connection with the
negotiation, preparation, administration, enforcement and conclusion of this Loan Agreement and the
Other Agreements, including, but not limited to, reasonable attorneys’ and paralegals’ fees, costs
and expenses, other professional fees, search fees, costs and expenses, filing and recording fees,
all taxes payable in connection with this Loan Agreement or the Other Agreements, and any costs and
fees incurred in connection with any proceeding to protect, collect, sell, liquidate or otherwise
dispose of any of the Collateral. Subject to Section 4.3 above, Borrower shall further reimburse
Lender, upon demand, for the costs, fees and expenses incurred or charged by Lender, its agents or
employees, with respect to audits (Lender’s current rate is $850 per man-day) or other business
analysis performed in the administration of this Loan Agreement, plus all of the out-of-pocket
costs or expenses incurred by Lender in the performance of such audit or analysis. All such costs,
fees and expenses referenced in this Section shall be part of the Liabilities payable by Borrower
to Lender upon demand with interest at the Default Rate until actually paid. Without limiting the
generality of the foregoing, such costs and
expenses shall include the fees, expenses and charges of attorneys, paralegals, accountants,
investment bankers, appraisers, valuation and other specialists, experts, expert witnesses,
auctioneers, court reporters, telegram, management consultants, telex and telefax charges,
overnight delivery services, messenger services and expenses for travel, lodging and

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meals. In the event of any assignment or participation of this Agreement that results in more than
one Person holding rights of Lender, Borrower shall be obligated to pay costs, fees and expenses
with respect to only Fifth Third Bank.

     12.13 Binding Agreement; Governing Law. This Loan Agreement and the Other Agreements
are submitted by Borrower to Lender, for Lender’s acceptance or rejection thereof, at Lender’s
office in Chicago, Illinois, as an offer by Borrower to borrow monies from Lender and shall not be
binding upon Lender or become effective until and unless accepted by Lender, in writing, at said
place of business. THIS LOAN AGREEMENT AND THE OTHER AGREEMENTS SHALL BE INTERPRETED, CONSTRUED AND
GOVERNED BY AND UNDER THE LAWS OF THE STATE OF ILLINOIS AS TO INTERPRETATION, ENFORCEMENT,
VALIDITY, CONSTRUCTION, EFFECT, AND IN ALL OTHER RESPECTS INCLUDING, BUT NOT LIMITED TO, THE
LEGALITY OF THE INTEREST RATE AND OTHER CHARGES, BUT EXCLUDING ILLINOIS’ CHOICE OF LAW PROVISIONS.

     12.14 Notices. Any and all notices, demands, requests, consents, designations,
waivers and other communications required or desired hereunder shall be in writing and shall be
deemed effective upon personal delivery, upon confirmed facsimile transmission, upon receipted
delivery by reputable overnight carrier, or three (3) days after mailing if mailed by registered or
certified mail, return receipt requested, postage prepaid, to Borrower or Lender at the following
addresses or facsimile numbers or such other addresses and facsimile numbers as Borrower or Lender
may specify in like manner; provided, however, that notices of a change of address or facsimile
number shall be effective only upon receipt thereof:

	 	 	 

	If to Borrower, then to:

	 	If to Lender, then to:
	 
	 	 
	Pulse Systems, LLC

	 	Fifth Third Bank
	4090 Nelson Avenue, Suite J

	 	222 South Riverside Plaza, 30th Floor
	Concord, California 94520

	 	Chicago, Illinois 60606
	Attention: Herbert J. Bellucci

	 	Attention: Mr. Jeremy F. Stump
	Facsimile No.: (925) 798-4848

	 	Facsimile No.: (312) 704-4127
	 
	 	 
	With a copy to:

	 	With a copy to:
	 
	 	 
	Wildman Harrold Allen & Dixon LLP

	 	Thompson Coburn LLP
	225 W. Wacker Drive, Suite 3000

	 	55 East Monroe Street, 37        th Floor
	Chicago, Illinois 60606

	 	Chicago, Illinois 60603
	Attention: Alan B. Roth, Esq.

	 	Attention: Victor A. Des Laurier, Esq.
	Facsimile No.: (312) 201-2555

	 	Facsimile No.: (312) 782-1746

     12.15 Release of Claims. Excepting only causes of action or claims for Lender’s gross
negligence or willful misconduct, Borrower hereby releases Lender from any and all causes of action
or claims which Borrower may now or hereafter have for any asserted loss or damage to Borrower
caused by or arising from: (A) any failure of Lender to protect, enforce or collect in whole or in
part any of the Collateral; (B) Lender’s notification to any Account Debtor of

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Lender’s security interest and lien in the Accounts and Special Collateral; (C) Lender
directing any Account Debtor to pay any sums owing to Borrower directly to Lender; and (D) any
other act or omission to act on the part of Lender, its officers, agents or employees.

     12.16 Capital Adequacy Charge. In the event that Lender shall have determined that
the adoption of any law, rule or regulation regarding capital adequacy, or any change therein or in
the interpretation or application thereof or compliance by Lender with any directive regarding
capital adequacy (whether or not having the force of law) from any central bank or governmental
authority does or shall have the effect of reducing the rate of return on Lender’s capital as a
consequence of its obligations hereunder to a level below that which Lender could have achieved but
for such adoption, change or compliance (taking into consideration Lender’s policies with respect
to capital adequacy) by an amount deemed by Lender, in its sole discretion, to be material, then
from time to time, after submission by Lender to Borrower of a written demand therefor, Borrower
shall pay to Lender such additional amount or amounts as will compensate Lender for such reduction.
A certificate of Lender claiming entitlement to payment as set forth above shall be conclusive in
the absence of manifest error. Such certificate shall set forth the nature of the occurrence giving
rise to such payment, the additional amount or amounts to be paid to Lender, and the method by
which such amounts were determined. In determining such amount, Lender may use any reasonable
averaging and attribution method.

     12.17 Headings. The captions contained in this Loan Agreement are inserted only as a
matter of convenience and shall in no way define, limit or extend the scope or intent of this Loan
Agreement or any provision of this Loan Agreement, and shall not affect the construction or
interpretation of this Loan Agreement.

     12.18 Maximum Interest It is the intent of Borrower and Lender that the
rate of interest and the other charges of Borrower under this Loan Agreement shall be lawful;
therefore, if for any reason, the interest or other charges payable under this Loan Agreement are
found by a court of competent jurisdiction to exceed the limit which Lender may lawfully charge
Borrower, then the obligation to pay interest and other charges shall automatically be reduced to
such limits. If Borrower has paid an amount in excess of such limit, then such amount shall be
applied to reduce the principal portion of the Liabilities.

     12.19 Construction. Any provision of this Loan Agreement which requires a party to
perform any act shall be construed as requiring the party to perform the act or cause such act to
be performed. Any provision of this Loan Agreement which requires a party to refrain from taking
any act shall be construed as requiring the party to refrain from taking the act, to refrain from
causing such act to be taken and to cause those under his/her control from taking the act. Wherever
the term “including” is used, the same shall be deemed to mean, “including, but not limited to”.
“Any” shall be deemed to mean “any and all “ whenever applicable. The singular shall be deemed to
include the plural, and the plural shall be deemed to include the singular. The masculine pronoun
shall be deemed to
include the feminine and neuter pronouns, and vice versa. “Copies” means photostatic or other
reproduced originals which accurately, truly, correctly and completely present the original of the
document copied.

     12.20 Revival of Liabilities. To the extent that Lender receives any payment on
account of the Liabilities, or any proceeds of the Collateral are applied on account of the

49

 

Liabilities, and any such payment or proceeds or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid by Lender to
Borrower, its estate, trustee, receiver or any other party under the United States Bankruptcy Code
or any similar federal, state or local law, statute or regulation, then, to the extent of such
payment or proceeds received, the Liabilities shall be revived and continue in full force and
effect, as if such payment or proceeds had not been received by Lender and applied on account of
the Liabilities.

     12.21 General Indemnity. In addition to the payment of expenses pursuant to Section
12.12, whether or not the transactions contemplated hereby shall be consummated, Borrower agrees to
indemnify, pay and hold Lender and its successors and assigns and the officers, directors,
employees, agents, and affiliates of Lender and its successors and assigns (collectively the
“Indemnitees”), harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any
kind or nature whatsoever (including, without limitation, the reasonable fees and disbursements of
counsel for any of such Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not any of such Indemnitees shall be
designated a party thereto) that may be imposed on, incurred by, or asserted against any Indemnitee
in any manner relating to or arising out of the Loan Documents or any other agreements executed and
delivered by Borrower or any guarantor of the Liabilities in connection herewith, the statements
contained in any commitment or proposal letter delivered by Lender, Lender’s agreement to make the
Loans or the use or intended use of the proceeds of any of the Loans hereunder (collectively the
“Indemnified Liabilities”); provided that Borrower shall have no obligation to an Indemnitee
hereunder with respect to Indemnified Liabilities arising from the gross negligence or willful
misconduct of such Indemnitee. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it is violative of any
law or public policy, Borrower shall contribute the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by the Indemnitees or any of them. The provisions of the undertakings and indemnification
set out in this Section shall survive satisfaction and payment of the Liabilities and termination
of this Loan Agreement.

     12.22 Environmental and Safety and Health Indemnity. Borrower hereby agrees to
indemnify Lender and agrees to hold Lender and its predecessors and successors in interest, and its
affiliates, employees, agents, directors and officers harmless from and against any and all losses,
liabilities, damages, injuries, costs, expenses and claims of any and every kind whatsoever
(including, without limitation, court costs, consulting fees, costs of investigation and reasonable
attorneys’ fees) which at any time or from time to time may be paid, incurred or suffered by, or
asserted against, Lender for, with respect to, or as a direct or indirect result of (A) the
violation or alleged violation by Borrower or any of its predecessors in interest of any
Environmental Laws regarding past, present or future property or operations; (B) the presence on or
under, or the release from, at or to, properties utilized by Borrower and/or any predecessor in
interest of any Hazardous Substances; (C) the existence of any unsafe or unhealthful
condition on or at any premises utilized by Borrower or any predecessor in interest in the
past, present or future; (D) transport, treatment, recycling, storage, disposal, or release or
threatened release, or arrangement therefor, to, at or from any facility owned or operated by
another Person, of any Hazardous Substances generated by Borrower or its predecessors in interest;
(E) any remedial

50

 

action or corrective action arising out of, related to, or in connection with any past,
present or future property or operations of Borrower or any of its predecessors in interest; (F)
asbestos-containing material, in or at any past, present or future property of Borrower or any of
its predecessors in interest; (G) failure to comply with any representations, warranties,
covenants, terms or conditions of this Loan Agreement that relate to Environmental Laws or
Hazardous Substances; and (H) any environmental, health or safety investigation or review conducted
by or on behalf of Lender in connection with this Loan Agreement; provided that Borrower shall have
no obligation to Lender hereunder with respect to any such liabilities arising from the gross
negligence or willful misconduct of Lender. The provisions of and undertakings and indemnification
set out in this Section shall survive satisfaction and payment of the Liabilities and termination
of this Loan Agreement and shall expressly cover time periods when Lender may have come into
possession or control of any of the property of Borrower at any time thereafter.

     12.23 Completion of Loan Agreement and Other Agreements. Borrower hereby authorizes Lender to
correct any patent errors set forth in this Loan Agreement and the Other Agreements and to complete
all blanks in this Loan Agreement and the Other Agreements. Lender shall give Borrower prompt
written notice of any such correction or completion.

     12.24 Patriot Act. Lender hereby notifies Borrower that pursuant to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the “Act”), and
Lender’s policies and practices, Lender is required to obtain, verify and record certain
information and documentation that identifies Borrower, which information includes the name and
address of Borrower and such other information that will allow Lender to identify Borrower in
accordance with the Act.

     12.25 Disclosure of Information. Borrower agrees that Lender may provide any information
Lender may have about Borrower or about any matter relating to this Loan Agreement, the Other
Agreements and all or any portion of the Liabilities to Lender’s subsidiaries or affiliates or
their successors, or to any one or more purchasers or potential purchasers of this Loan Agreement,
the Other Agreements and all or any portion of the Liabilities.

     12.26 Merger Clause. This Loan Agreement constitutes the entire agreement between Lender and
Borrower with regard to the subject matter hereof, and supersedes all prior and contemporaneous
communications, agreements and assurances, whether verbal or written.

     12.27 SERVICE OF PROCESS. BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND
CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED,
DIRECTED TO THE BORROWER AS SET FORTH HEREIN IN THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW,
RULE OF COURT OR OTHERWISE.

     12.28 JURISDICTION; VENUE. BORROWER AND LENDER IRREVOCABLY AGREE, AND HEREBY CONSENT AND
SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS, AND THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS,

51

 

EASTERN DIVISION, WITH REGARD TO ANY ACTIONS OR PROCEEDINGS ARISING FROM, RELATING TO
OR IN CONNECTION WITH THE LIABILITIES, THIS LOAN AGREEMENT, THE OTHER AGREEMENTS OR THE COLLATERAL.
BORROWER HEREBY WAIVES ANY RIGHT BORROWER MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY
LITIGATION FILED IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS, OR THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION.

     12.29 JURY WAIVER. BORROWER AND LENDER HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY
AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER
BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN BORROWER AND LENDER ARISING OUT OF OR IN ANY WAY
RELATED TO THIS LOAN AGREEMENT OR ANY OF THE OTHER AGREEMENTS. THIS PROVISION IS A MATERIAL
INDUCEMENT TO LENDER TO PROVIDE THE FINANCING DESCRIBED HEREIN AND IN THE OTHER AGREEMENTS.
BORROWER HEREBY REPRESENTS AND WARRANTS TO LENDER THAT IT HAS CONSULTED WITH AND BEEN COUNSELED BY
COMPETENT COUNSEL CONCERNING THE WAIVER SET FORTH IN THIS SECTION AND HAS KNOWINGLY MADE SUCH
WAIVER.

[signature page follows]

52

 

     In
Witness Whereof, Lender and Borrower have caused this Loan Agreement to be
executed and delivered by their duly authorized officers as of the date first set forth above.

	 	 	 	 	 	 	 	 	 	 	 

	Fifth Third Bank,	 	 	 	Pulse
Systems, LLC,	 	 
	a Michigan banking corporation	 	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ JEREMY F. STUMP
	 	 	 	By:	 	/s/ John Fife	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	Name:

	 	JEREMY F. STUMP
	 	 	 	Name:	 	John Fife	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	Title:

	 	ASST. VICE PRESIDENT
	 	 	 	Title:	 	Chairman	 	 
	 

	 	 	 	 	 	 	 	 

	 	 

53

 

First
Amendment To Loan And Security Agreement

     This First Amendment to Loan and Security Agreement (this “First Amendment”) is made and
entered into as of September 23, 2009, by and between Fifth Third Bank, a Michigan banking
corporation, with an office located at 222 South Riverside Plaza, Chicago, Illinois 60606
(“Lender”), and Pulse Systems, LLC, a Delaware limited liability company, with its chief
executive office located at 4090 Nelson Avenue, Suite J, Concord, California 94520 (“Borrower”).

W I T N E S S E T H:

     Whereas, prior hereto, Lender provided certain loans, extension of credit and other
financial accommodations to Borrower pursuant to (a) that certain Loan and Security Agreement dated
as of March 31, 2009, by and between Lender and Borrower (the “Loan Agreement”), and (b) the other
documents, agreements and instruments referenced in the Loan Agreement or executed and
delivered pursuant thereto;

     Whereas, Borrower desires Lender to, among other things, (a) waive certain Events of
Default, and (b) modify certain financial covenants (collectively the
“Additional Financial Accommodations”); and

     Whereas, Lender is willing to, provide the Additional Financial Accommodations, but solely on
the terms and subject to the provisions set forth in this First Amendment and the other agreements,
documents and instruments referenced herein or executed and delivered pursuant hereto.

     Now,
Therefore, in consideration of the foregoing, the mutual promises and understandings
of the parties hereto set forth herein and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, Lender and Borrower hereby agree as set
forth in this First Amendment.

1.
Definitions:

     A. Use
of Defined Terms. Except as expressly set forth in this First Amendment,
all terms which have an initial capital letter where not required by the rules of grammar are
defined in the Loan Agreement.

     B. Amended
Definitions. Effective retroactively to June 30, 2009, Section
1.1 of the Loan Agreement is hereby amended by deleting the definitions of “Adjusted EBITDA”,
“Fixed Charges” and “Free Cash Flow” in their entirety and substituting therefor the
following, respectively:

     “Adjusted
EBITDA”: shall mean, for any period, (I) Consolidated Net Income for
such period plus, (2) to the extent deducted in determining such Consolidated Net Income,
the sum of(a) Interest Expense, (b) net income tax expense, (c) depreciation and
amortization, (d) non-cash equity compensation expense, (e) expenses for management fees,
(f) the expensed portion of the Closing Fee and other fees and expenses incurred in
connection with the closing and

- 1 -

 

funding of the initial Financial Accommodations, (g) employee workforce reduction
expenses in an amount equal to $14,320 for severance costs which were expensed during the periods
set forth on Exhibit “A” attached hereto, and (h) compensation expense relating to severed
employees in an amount not to exceed $377,000 for compensation costs which were expensed
during the periods set forth on Exhibit “A” attached hereto, in each case incurred during
such period, all as determined for Borrower and its Subsidiaries on a consolidated basis
in accordance with GAAP.

     “Fixed
Charges”: for any period, shall mean, the sum of, without duplication, (1)
cash payments in satisfaction of Interest Expense, plus (2) scheduled or required payments
of principal on Indebtedness other than payments required by
Section 3.1(C) below,
plus (3) scheduled principal payments on Capital Leases, each as paid or payable for such
period and all as determined for Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP. Notwithstanding the foregoing, for the purpose of calculating Fixed
Charges, the following assumptions shall be made with respect to the test periods identified
below:

     (a) for each test period from June 30, 2009, through March 31, 2010,
Borrower’s total scheduled or required payments of principal on Indebtedness
under subsection (2) above shall be deemed to be $1,400,000;

     (b) Borrower’s Interest Expense for the test period ending June 30, 2009,
shall be deemed to equal the sum of $525,000 plus Borrower’s actual Interest Expense for
the period beginning April 1, 2009, through and including June 30, 2009, but
excluding $62,603 of mezzanine Indebtedness Interest Expense incurred by Borrower in
April and May of 2009;

     (c) Borrower’s Interest Expense for the test period ending September 30,
2009, shall be deemed to equal the sum of $350,000 plus Borrower’s actual Interest
Expense for the period beginning April 1, 2009, through and including September 30,
2009, but excluding $62,603 of mezzanine Indebtedness Interest Expense incurred
by Borrower in April and May of 2009;

     (d) Borrower’s Interest Expense for the test period ending December 31,
2009, shall be deemed to equal the sum of $175,000 plus Borrower’s actual Interest
Expense for the period beginning April 1, 2009, through and including December 31, 2009,
but excluding $62,603 of mezzanine Indebtedness Interest Expense incurred by Borrower
in April and May of 2009; and

     (e)
Borrower’s Interest Expense for the test period ending March 31, 2010, shall
be deemed to equal Borrower’s actual Interest Expense for the period beginning
April 1, 2009, through and including March 31, 2010, but excluding $62,603 of mezzanine
Indebtedness Interest Expense incurred by Borrower in April and May of 2009.

- 2 -

 

     “Free Cash Flow”: means, for any period, (1) Adjusted EBITDA, less (2) Capital
Expenditures (other than Capital Expenditures financed with the proceeds of
purchase money Indebtedness or Capital Leases to the extent permitted
hereunder), less (3) income taxes paid in cash, dividends paid in cash
(including all tax and other distributions paid by Borrower to its members)
and management fees paid in cash to the extent permitted under this Loan
Agreement, all as determined for Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP.

II. Amendments. Effective as of the date of this First Amendment, the Loan
Agreement is hereby amended as follows:

     A. Adjusted EBITDA. Section 9.4(A) of the Loan Agreement is hereby amended
by deleting Section 9.4(A) in its entirety and substituting therefor the following:

     “(A) Adjusted EBITDA. Borrower’s Adjusted EBITDA, calculated on a
trailing twelve (12) month basis as of the last day of each calendar quarter
beginning with the calendar quarter ending September 30, 2009, shall not be
less than $3,100,000.00.”

III. Conditions Precedent. Lender’s obligation to provide
the Additional Financial Accommodations to Borrower is subject to the full and timely
performance of the following covenants prior to or contemporaneously with the making of the initial
loan pursuant to this First Amendment:

     A. Borrower executing and delivering, or causing to be executed and delivered to
Lender, the following documents, each of which shall be in form and substance acceptable to Lender:

(i) a Company General Certificate executed by the Secretary or Assistant Secretary
of Borrower to Lender;

(ii) a new covenant compliance certificate for the period ending June 30, 2009, and
reflecting the covenant modifications set forth in this First Amendment; and

(iii) such other agreements, documents and instruments as Lender may
reasonably request.

     B. No Event of Default or Unmatured Event of Default exists under the Loan
Agreement, as amended by this First Amendment, or the Other Agreements, other than the
“Existing Default” (hereinafter defined);

     C. No claims, litigation, arbitration proceedings or governmental
proceedings not disclosed in writing to Lender prior to the date hereof shall be pending or
known to be threatened against Borrower and no known material development not so disclosed shall
have occurred in any claims, litigation, arbitration proceedings or governmental proceedings so
disclosed which in the opinion of Lender is likely to materially or adversely affect the
financial position or business of Borrower or the capability of Borrower to pay its
obligations and liabilities to Lender; and

- 3 -

 

     D. There shall have been no material or adverse change in the business, financial
condition or results of operations since the date of Borrower’s most recently delivered
financial statements to Lender.

IV. Waiver of Defaults. Borrower hereby acknowledges and agrees that Borrower has
failed to satisfy the Adjusted EBITDA covenant set forth in Section 9.4(A) of the Loan Agreement as
of June 30, 2009 (the “Existing Default”). Borrower hereby represents and warrants to Lender
that no Unmatured Event of Default or Event of Default exists as of the date of this First
Amendment, other than the Existing Default. Provided Borrower satisfies all of the conditions
precedent set forth in Section III above, Lender hereby waives the Existing Default; provided
that such waiver shall not be or be deemed to be a waiver by Lender of any other Events of
Default, whether now existing or hereafter arising or occurring, including, without
limitation, any other Events of Default arising under Section 9.4(A) of the Loan Agreement after
June 30, 2009.

V. Conflict. If, and to the extent, the terms and provisions of this First Amendment
contradict or conflict with the terms and provisions of the Loan Agreement, the terms and
provisions of this First Amendment shall govern and control; provided, however, to the extent the terms and provisions
of this First Amendment do not contradict or conflict with the terms and provisions of the Loan
Agreement, the Loan Agreement, as amended by this First Amendment, shall remain in and have
its intended full force and effect, and Lender and Borrower hereby affirm, confirm and ratify the
same.

VI. Severability. Wherever possible, each provision of this First Amendment shall be
interpreted in such manner as to be valid and enforceable under applicable law, but if any
provision of this First Amendment is held to be invalid or unenforceable by a court of competent jurisdiction,
such provision shall be severed herefrom and such invalidity or unenforceability shall not
affect any other provision of this First Amendment, the balance of which shall remain in and have
its intended full force and effect. Provided, however, if such provision may be modified so as to
be valid and enforceable as a matter of law, such provision shall be deemed to be modified so as to
be valid and enforceable to the maximum extent permitted by law.

VII. Reaffirmation. Borrower hereby reaffirms and remakes all of its
representations, warranties, covenants, duties, obligations and liabilities contained in the
Loan Agreement, as amended hereby.

VIII. Fees, Costs and Expenses. Borrower agrees to pay, upon demand, all
fees, costs and expenses of Lender, including, but not limited to, reasonable attorneys’
fees, in connection with the preparation, execution, delivery and administration of this
First. Amendment and the other agreements, documents and instruments executed and delivered in
connection herewith or pursuant hereto.

IX. Counterpart. This First Amendment may be executed in two or more counterparts,
each of which will be deemed an original, but all of which together will constitute one and
the same instrument. A facsimile or email transmitted executed counterpart to this First
Amendment and the other agreements, documents and instruments executed in connection
herewith will be deemed an acceptable original for purposes of consummating this First Amendment
and such other agreements,

- 4 -

 

documents and instruments; provided, however, Borrower shall be required to deliver to Lender
original executed signature pages in substitution for said facsimile or email transmitted
signature pages upon Lender’s request therefor.

X. Choice of Law. This First Amendment has been delivered and accepted in
Chicago, Illinois, and shall be governed by and construed in accordance with the laws of the
State of Illinois, regardless of the laws that might otherwise govern under applicable
principles of conflicts of law as to all matters, including matters of validity, construction,
effect, performance and remedies.

[signature page follows]

- 5 -

 

     In Witness Whereof, Lender
and Borrower have caused this First Amendment to be
executed and delivered by their duly authorized officers as of the date first set forth above.

	 	 	 	 	 	 	 	 	 	 	 

	Fifth Third Bank,	 	 	 	Pulse Systems, LLC,	 	 
	a Michigan banking corporation	 	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	
/s/ JEREMY STUMP

	 	 
	 	By:
	 	/s/ John Fife
 

	 	 
	Name:

	 	JEREMY STUMP
	 	 	 	Name:
	 	John Fife	 	 
	Title:

	 	ASST. VICE PRESIDENT
	 	 	 	Title:
	 	Chairman	 	 

- 6 -

 

Second Amendment to Loan And Security Agreement

     This Second Amendment to Loan and Security Agreement (this “Second Amendment”) is made and entered
into as of June 18, 2010, by and between Fifth Third Bank, an Ohio banking corporation, as
successor by merger with Fifth Third Bank, a Michigan banking corporation, with an office located
at 222 South Riverside Plaza, Chicago, Illinois 60606 (“Lender”), and Pulse Systems, LLC, a
Delaware limited liability company, with its chief executive office located at 4090 Nelson Avenue,
Suite J, Concord, California 94520 (“Borrower”).

W I T N E S S E T H:

     Whereas, prior hereto, Lender provided certain loans, extensions of credit and other financial
accommodations to Borrower pursuant to (a) that certain Loan and Security Agreement dated as of
March 31, 2009, as amended by that certain First Amendment to Loan and Security Agreement dated as
of September 23, 2009, each by and between Lender and Borrower (the “Loan Agreement”), and (b) the
other documents, agreements and instruments referenced in the Loan Agreement or executed and
delivered pursuant thereto;

     Whereas, prior hereto, Lender extended the Revolving Loan Termination Date from March 30, 2010 to
June 30, 2010 through an undocumented extension;

     Whereas, Borrower desires Lender to, among other things, (a) consent to the acquisition by “United
American Healthcare” (hereinafter defined) of certain Equity Interests of Borrower, (b) extend the
Revolving Loan Termination Date to June 30, 2011, (c) waive certain Events of Default, and (d)
modify certain financial covenants (collectively the “Additional Financial Accommodations”); and

     Whereas, Lender is willing to, provide the Additional Financial Accommodations, but solely on the
terms and subject to the provisions set forth in this Second Amendment and the other agreements,
documents and instruments referenced herein or executed and delivered pursuant hereto.

     Now, Therefore, in consideration of the foregoing, the mutual promises and understandings of the
parties hereto set forth herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Lender and Borrower hereby agree as set forth in this
Second Amendment.

I. Definitions:

     A. Use of Defined Terms. Except as expressly set forth in this Second Amendment, all terms
which have an initial capital letter where not required by the rules of grammar are defined in the
Loan Agreement.

     B. Amended Definitions. Effective as of the date of this Second Amendment, the definitions
of “Adjusted EBITDA”, “Fixed Charges”, “Maximum Revolving Loan”, “Revolving Loan Termination Date”,
“Revolving Note” and “Term Note A” set forth in Section 1 of the Loan

- 1 -

 

Agreement are hereby amended by deleting such definitions in their entirety and substituting
therefor the following, respectively:

     “Adjusted EBITDA”: shall mean, for any period, (1) Consolidated Net Income for such period
plus, (2) to the extent deducted in determining such Consolidated Net Income, the sum of (a)
Interest Expense, (b) net income tax expense, (c) depreciation and amortization, (d) non- cash
equity compensation expense, (e) expenses for management fees, (f) employee workforce reduction
expenses in an amount equal to $14,320 for severance costs which were expensed during the periods
set forth on Exhibit “A” attached hereto, and (g) compensation expense relating to severed
employees in an amount not to exceed $94,250 for compensation costs which were expensed during the
periods set forth on Exhibit “A” attached hereto, in each case incurred during such period, plus
(3) the cash equity contribution provided by United American Healthcare to Borrower during such
period in the amount of Seven Hundred Fifty Thousand and no/l00 Dollars ($750,000.00) as required
pursuant to the terms of the Second Amendment to Loan Agreement, plus (4) non-recurring expenses
incurred in connection with the Securities Purchase Agreement and the Second Amendment to Loan
Agreement which are borne by Borrower in an aggregate amount not to exceed $200,000 for all
periods; all as determined for Borrower and its Subsidiaries on a consolidated basis in accordance
with GAAP.

     “Fixed Charges”: for any period, shall mean the sum of, without duplication, (1) cash
payments in satisfaction of Interest Expense, plus (2) scheduled or required payments of principal
on Indebtedness other than payments required by Section 3.1(C) below, plus (3) scheduled principal
payments on Capital Leases, each as paid or payable for such period and all as determined for
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP, excluding, however,
payments made pursuant to the Redemption Agreement. Notwithstanding the foregoing, for the purpose
of calculating Fixed Charges, the following assumption shall be made with respect to the test
periods identified below: for each test period from September 30, 2009, through June 30, 2010,
Borrower’s total scheduled or required payments of principal on Indebtedness related to Term Loan A
under subsection (2) above shall be deemed to be Two Hundred Sixty-Five Thousand Six Hundred
Twenty-Five and no/100 Dollars ($265,625.00).

     “Maximum Revolving Loan”: shall mean an amount equal to One Million and no/l00 Dollars
($1,000,000).

     “Revolving Loan Termination Date”: shall mean June 30, 2011.

     “Revolving Note”: shall mean that certain Revolving Note dated as of June 18, 2010, executed
and delivered by Borrower to Lender in a maximum aggregate principal amount not to exceed One
Million and no/100 Dollars ($1,000,000.00), as amended, renewed, restated or replaced from time to
time.

     “Term Note A”: shall mean that certain Term Note A dated as of June 18, 2010, executed and
delivered by Borrower to Lender in the principal amount of Five Million and no/100 Dollars
($5,000,000.00), as amended, renewed or restated from time to time.”

- 2 -

 

     C. Amended Definition. Effective as of the date of this Second Amendment, the definition of
“Permitted Indebtedness” is amended to delete “and” before subsection (8) and add in after
subsection (8) the following: “, and (9) obligations under the Redemption Agreement.”

     D. New Definitions. Effective as of the date of this Second Amendment, Section 1 of the
Loan Agreement is hereby amended by adding the following new definition thereto in the appropriate
alphabetical order:

     “New Management Agreement”: shall mean a management agreement to be entered into between
Borrower and United American Healthcare.

     “Redemption Agreement”: shall mean that certain Redemption Agreement dated as of June 7,
2010 between Borrower and Pulse Systems Corporation.

     “Redemption Subordination Agreement”: shall mean that certain Subordination Agreement of
even date herewith by and between Lender and Pulse Systems Corporation.

     “Second Amendment to Loan Agreement”shall mean that certain Second Amendment to Loan and
Security Agreement dated as of June ___, 2010, by and between Lender and Borrower.

     “Securities Purchase Agreement”: shall mean that certain Securities Purchase Agreement
dated as of June ___, 2010, by and among certain members of Borrower and United American Healthcare,
a true, correct and complete copy of which has been delivered to Lender.

     “United American Healthcare”: shall mean United American Healthcare Corporation, a Michigan
corporation.

II. Amendments. Effective as of the date of this Second Amendment, Section 9.4 of the Loan
Agreement is hereby amended by deleting Section 9.4 in its entirety and substituting therefor the
following:

     A.  Sale of Equity. Section 9.3(J) of the Loan Agreement is hereby amended by deleting Section
9.3(J) in its entirety and substituting therefor the following:

     “(J) Sale of Equity Interests. Sell or issue any Equity Interests of Borrower except (i)
sales of Equity Interests to existing holders of Equity Interests, (ii) the issuance of Equity
Interests to employees or consultants in an aggregate amount not to exceed 5% of Borrower’s total
Equity Interests on a fully-diluted basis, and (iii) if no Event of Default then exists, sale of
Equity Interests to John Fife or an entity controlled by John Fife for the purpose of funding the
redemption of Borrower’s preferred units pursuant to the Redemption Agreement.”

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     B. Restricted Payments. Section 9.3(L) of the Loan Agreement is hereby amended by deleting Section
9.3(L) in its entirety and substituting therefor the following:

     “(L) Restricted Payments. Make any Restricted Payments, other than, provided an Unmatured
Event of Default or Event of Default does not then exist or would not be created thereby, (a) if
Borrower continues to be a pass-through entity for income tax purposes, dividend and distribution
payments to Borrower’s Equity Interest holders in an aggregate amount not greater than the state
and United States federal income tax liabilities in respect of the Consolidated Net Income earned
by Borrower determined based upon the highest marginal state and United States federal income tax
rates, (b) management fee payments in amounts not exceeding those permitted under the New
Management Agreement, provided such management fee payments do not exceed $150,000 in the aggregate
for any fiscal year, and (c) redemption of Borrower’s preferred Equity Interests pursuant to the
Redemption Agreement provided United American Healthcare makes additional cash equity contributions
to Borrower in an amount necessary to fully fund each such redemption and each such redemption is
otherwise permitted pursuant to the terms of the Redemption Subordination Agreement.”

     C. Adjusted EBITDA. Section 9.4(A) of the Loan Agreement is hereby amended by deleting
Section 9.4(A) in its entirety and substituting therefor the following:

     “(A) Adjusted EBITDA. Borrower’s Adjusted EBITDA, calculated on a trailing twelve (12)
month basis as of the last day of each calendar quarter beginning with the calendar quarter ending
June 30, 2010, shall not be less than $3,100,000.00.”

     D. Other Payment Default. Section 11.1(L) of the Loan Agreement is hereby amended by
deleting Section 11.1(L) in its entirety and substituting therefor the following:

     “(L) Borrower defaults in the payment of any of its other obligations or liabilities which are in
excess of $25,000.00, and such default is not cured within the time, if any, specified therefor or
United American Healthcare defaults in the payment of any of its obligations or liabilities which
are in excess of $100,000.00, and such default is not cured within the time, if any, specified
therefor;”

     E. Other
Event of Defaults. Sections 11.1(O), 11.1(P) and 11.1(Q) of the Loan Agreement
are hereby amended by deleting Sections 11.1(O)11.1(P), 11.1(Q) and 11.1(R) in their entirety and
substituting therefor the following:

     “(O) There shall be entered against Borrower or United American Healthcare one or more judgments or
decrees in excess of Twenty-Five Thousand and no/100 Dollars ($25,000.00) in the aggregate at any
one time outstanding for Borrower or One Hundred Thousand and no/100 Dollars ($100,000.00) in the
aggregate at any one time outstanding for United American Healthcare, excluding those judgments or
decrees (i) that shall have been stayed, vacated or bonded, (ii) that shall have been outstanding
less than 30 days from the entry thereof, or (iii) for and to the extent to which Borrower or

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United American Healthcare is insured and with respect to which the insurer specifically has
assumed responsibility in writing;

     (P) The failure of United American Healthcare to own and have voting control of more than fifty-one
percent (51%) of the outstanding Equity Interests of Borrower determined on a fully diluted basis;

     (Q) The failure of United American Healthcare to be actively and consistently involved in the
management of Borrower;

     (R) Any change in the Borrower’s senior management from the senior management in place as of June 18,
2010, other than changes in senior management acceptable to Lender in its reasonable discretion;

     (S) a breach, default or event of default occurs under the Membership Interest Pledge Agreement of
even date herewith executed and delivered by United American Healthcare to Lender; or

     (T) Lender, in good faith, believes its prospect of payment or performance of the Liabilities or
the Covenants is impaired.”

     F. Consent to Acquisition and Redemption. Notwithstanding any provision in the Loan
Agreement to the contrary but subject to Section V of this Second Amendment, provided United
American Healthcare contributes additional cash equity to Borrower in the amount of Seven Hundred
Fifty Thousand and no/100 Dollars ($750,000.00) on or before June 18, 2010, which cash shall be
immediately paid to Lender to reduce the outstanding principal balance of Term Note A, Lender
hereby consents to the acquisition by United American Healthcare of certain Equity Interests of
Borrower pursuant to and in accordance with the terms and provisions set forth in the Securities
Purchase Agreement and of the initial redemption of preferred units pursuant to the Redemption
Agreement, subject to the restrictions set forth in the Redemption Subordination Agreement.

     G. Schedule 9.1(Q). Schedule 9.1(Q) attached to the Loan Agreement is hereby amended by
deleting Schedule 9.1(Q) in its entirety and substituting therefor Schedule 9.1(Q) attached hereto
which reflects the consummation of the transactions pursuant to Section II.E.

III. Conditions Precedent. Lender’s obligation to provide the Additional Financial
Accommodations to Borrower is subject to the full and timely performance of the conditions set
forth in Section V and the following covenants prior to or contemporaneously with the making of the
initial loan pursuant to this Second Amendment:

     A. Borrower executing and delivering, or causing to be executed and delivered to Lender, the
following documents, each of which shall be in form and substance acceptable to Lender:

(i) a Revolving Note in a maximum aggregate principal amount not to exceed $1,000,000.00 executed
and delivered by Borrower to Lender;

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(ii) a Term Note A in the principal amount of $5,000,000.00 executed and delivered by Borrower
to Lender;

(iii) a Company General Certificate executed by the Secretary or Assistant Secretary of Borrower to
Lender;

(iv) a Membership Interest Pledge Agreement executed and delivered by United American Healthcare to
Lender;

(v) a Membership Stock Power executed and delivered by United American
Healthcare to Lender, together with the original membership
certificates evidencing United American Healthcare’s ownership of Borrower;

(vi) a Company General Certificate executed by the Secretary or Assistant Secretary of United
American Healthcare to Lender;

(vii) a fully executed subordination agreement from Pulse Sellers, LLC, and the fully executed
Redemption Subordination Agreement; and

(viii) such other agreements, documents and instruments as Lender may reasonably request.

     B. No Event of Default or Unmatured Event of Default exists under the Loan Agreement, as amended by
this Second Amendment, or the Other Agreements, other than the “Existing Defaults” (hereinafter
defined);

     C. No claims, litigation, arbitration proceedings or governmental proceedings not disclosed in
writing to Lender prior to the date hereof shall be pending or known to be threatened against
Borrower and no known material development not so disclosed shall have occurred in any claims,
litigation, arbitration proceedings or governmental proceedings so disclosed which in the opinion
of Lender is likely to materially or adversely affect the financial position or business of
Borrower or the capability of Borrower to pay its obligations and liabilities to Lender; and

     D. There shall have been no material or adverse change in the business, financial condition or
results of operations since the date of Borrower’s most recently delivered financial statements to
Lender.

IV. Waiver of Defaults. Borrower hereby acknowledges and agrees that Borrower is in default under
the Loan Agreement as a result of the following (collectively, the “Existing Defaults”): (a)
Borrower failed to satisfy the Adjusted EBITDA covenant set forth in Section 9.4(A) of the Loan
Agreement as of December 31, 2009, and March 31, 2010, (b) Borrower failed to satisfy the Funded
Debt to Adjusted EBITDA covenant set forth in Section 9.4(B) of the Loan Agreement as of March 31,
2010, (c) Borrower failed to satisfy the Fixed Charge Coverage Ratio covenant set forth in Section
9.4(C) of the Loan Agreement as of December 31, 2009, and March 31, 2010, and (d) Borrower failed

- 6 -

 

to deliver audited financial statements for the fiscal year ended December 31, 2009 as required by
Section 9.5(a) of the Loan Agreement. Borrower hereby represents and warrants to Lender that no
Unmatured Event of Default or Event of Default exists as of the date of this Second Amendment,
other than the Existing Defaults. Provided Borrower satisfies all of the conditions precedent set
forth in Section III above, Lender hereby waives the Existing Defaults; provided that such waiver
shall not be or be deemed to be a waiver by Lender of any other Events of Default, whether now
existing or hereafter arising or occurring, including, without limitation, any other Events of
Default arising under Section 9.4 of the Loan Agreement after March 31, 2010. Furthermore, Borrower
hereby covenants and agrees to deliver to Lender its December 31, 2009 audited financial statements
by July 15, 2010.

V. Close of Sale. Notwithstanding anything herein to the contrary, this Second Amendment and
Lender’s obligation to provide the Additional Financial Accommodations to Borrower pursuant to this
Second Amendment are conditioned upon the successful completion and closing of the transaction
contemplated by and in accordance with the provisions of the Securities Agreement on or before June
22, 2010 at 4:00 p.m. Chicago time (the “Closing Deadline”). If the parties to the Securities
Purchase Agreement are unable to complete and close the transaction in accordance with the
provisions of the Securities Purchase Agreement by the Closing Deadline then this Second Amendment
and the terms and provisions set forth herein shall be null and void, ab initio.

VI. Conflict. If, and to the extent, the terms and provisions of this Second Amendment contradict
or conflict with the terms and provisions of the Loan Agreement, the terms and provisions of this
Second Amendment shall govern and control; provided, however, to the extent the terms and
provisions of this Second Amendment do not contradict or conflict with the terms and provisions of
the Loan Agreement, the Loan Agreement, as amended by this Second Amendment, shall remain in and
have its intended full force and effect, and Lender and Borrower hereby affirm, confirm and ratify’
the same.

VII. Severability. Wherever possible, each provision of this Second Amendment shall be interpreted
in such manner as to be valid and enforceable under applicable law, but if any provision of this
Second Amendment is held to be invalid or unenforceable by a court of competent jurisdiction, such
provision shall be severed herefrom and such invalidity or unenforceability shall not affect any
other provision of this Second Amendment, the balance of which shall remain in and have its
intended full force and effect. Provided, however, if such provision may be modified so as to be
valid and enforceable as a matter of law, such provision shall be deemed to be modified so as to be
valid and enforceable to the maximum extent permitted by law.

VIII. Reaffirmation. Borrower hereby reaffirms and remakes all of its representations, warranties,
covenants, duties, obligations and liabilities contained in the Loan Agreement, as amended hereby.

IX. Fees, Costs and Expenses.

     A. Contemporaneously herewith, Borrower shall pay to Lender a fully-earned non-refundable (i) loan
renewal fee in the amount of $5,000, and (ii) covenant waiver fee in the amount of $20,000.

- 7 -

 

     B. Borrower agrees to pay, upon demand, all fees, costs and expenses of Lender, including, but not
limited to, reasonable attorneys’ fees, in connection with the preparation, execution, delivery and
administration of this Second Amendment and the other agreements, documents and instruments
executed and delivered in connection herewith or pursuant hereto.

X. Counterpart. This Second Amendment may be executed in two or more counterparts, each of which
will be deemed an original, but all of which together will constitute one and the same instrument.
A facsimile or email transmitted executed counterpart to this Second Amendment and the other
agreements, documents and instruments executed in connection herewith will be deemed an acceptable
original for purposes of consummating this Second Amendment and such other agreements, documents
and instruments; provided, however, Borrower shall be required to deliver to Lender original
executed signature pages in substitution for said facsimile or email transmitted signature pages
upon Lender’s request therefor.

XI. Choice of Law. This Second Amendment has been delivered and accepted in Chicago, Illinois, and
shall be governed by and construed in accordance with the laws of the State of Illinois, regardless
of the laws that might otherwise govern under applicable principles of conflicts of law as to all
matters, including matters of validity, construction, effect, performance and remedies.

[signature page follows]

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In Witness
Whereof, Lender and Borrower have caused this Second Amendment to be executed and
delivered by their duly authorized officers as of the date first set forth above.

	 	 	 	 	 	 	 	 	 	 	 	 
	

Fifth Third Bank, 

an Ohio banking corporation,

successor by merger to Fifth Third Bank,

a Michigan banking corporation	 	
Pulse Systems, LLC,

a Delaware limited liability company	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ JEREMY F. STUMP	 	By:	 	/s/ HERBERT J. BELLUCCI
	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	JEREMY F. STUMP
	 	 	 	Name:  	HERBERT J. BELLUCCI	 	 
	 

	 	Title:
	 	VP
	 	 	 	Title:	President & CEO	 	 

[Signature
page to Second Amendment to Loan and Security Agreement]exv4w2

Exhibit 4.2

Membership Interest Pledge Agreement

     This Membership Interest Pledge Agreement (this “Pledge Agreement”) dated as of June 18, 2010, is
executed and delivered by United American Healthcare Corporation, a Michigan corporation
(“Pledgor”), to Fifth Third Bank, an Ohio banking corporation, successor by merger to Fifth Third
Bank, a Michigan banking corporation (“Lender”), with its principal office located at 222 South
Riverside Plaza, 30th Floor, Chicago, Illinois 60606.

RECITALS

     A. Contemporaneously herewith, Lender is providing certain loans, extensions of credit and
other financial accommodations (collectively the “Financial Accommodations”) to Pulse Systems, LLC,
a Delaware limited liability company (“Borrower”), evidenced by, among other things, (a) that
certain Loan and Security Agreement dated as of March 31, 2009, as amended by that certain First
Amendment to Laon and Security Agreement dated as of September 23, 2009, and that certain Second
Amendment to Loan and Security Agreement of even date herewith, each by and between Borrower and
Lender (as further amended or restated from time to time, the “Loan Agreement”); (b) that certain
Revolving Note of even date herewith executed and delivered by Borrower to Lender in a maximum
aggregate principal amount not to exceed One Million and no/100 Dollars ($1,000,000.00), (c) that
certain Term Note A of even date herewith executed and delivered by Borrower to Lender in the
principal amount of Five Million and no/100 Dollars ($5,000,000.00), and (d) the other documents,
agreements and instruments referenced in any of the foregoing or otherwise executed and delivered
by Borrower or any other Person to Lender in connection therewith.

     B. Pledgor acknowledges and agrees that (i) Pledgor owns 100% (or 5,044,922 common units) of
the currently issued and outstanding common Equity Interests of Borrower (collectively the
“Membership Interests”), and Pledgor is, thus, benefited by the Financial Accommodations made by
Lender to Borrower, (ii) Pledgor’s execution and delivery of this Pledge Agreement is a material
inducement to Lender providing the Financial Accommodations to Borrower, and (iii) without this
Pledge Agreement, Lender would not have provided the Financial Accommodations to Borrower.

     C. As a condition to Lender providing the Financial Accommodations to Borrower, Lender has
required that Pledgor execute and deliver this Pledge Agreement in order to secure, among other
things, Borrower’s obligations to Lender under the Loan Documents.

     D. In consideration of the foregoing, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged by Pledgor, Pledgor hereby covenants unto and
agrees with Lender as set forth in this Pledge Agreement.

1. Recitals. The foregoing Recitals are hereby incorporated by this reference, and are
deemed to be a part of this Pledge Agreement.

2. Defined Terms. Except as expressly set forth in this Pledge Agreement, all terms which
have an initial capital letter where not required by the rules of grammar are defined in the Loan
Agreement.

1

 

3. Pledge. Pledgor hereby pledges to Lender and grants to Lender a first priority security
interest and lien in and to the following (collectively the “Pledged Collateral”):

     (a) the Membership Interests;

     (b) any other authorized, issued or outstanding units or other ownership interests of
Borrower together with any other securities, warrants, rights and options issued to or for
the benefit of the Pledgor received or receivable by or distributed or distributable to
Pledgor from Borrower as a dividend or distribution on or in exchange or substitution for
any or all of the Membership Interests (collectively, the “Additional Membership
Securities”);

     (c) all money and other property, at any time received or receivable by or distributed
or distributable to Pledgor from Borrower as a dividend or distribution, except as a
dividend for the purpose of paying taxes arising solely from Pledgor’s ownership of
Borrower, or otherwise in respect of any or all of the Membership Interests or Additional
Membership Securities; and

     (d) All “Proceeds” (as defined in the Illinois Uniform Commercial Code) of any of the
foregoing, including, but not limited to, (i) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to the Pledgor from time to time with respect to
any of the foregoing; (ii) any and all payments of any form whatsoever made or due and
payable to the Pledgor from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the foregoing by any governmental
authority, or any person acting under color of a governmental authority; and (iii) any and
all other amounts from time to time paid or payable under or in connection with any of the
foregoing.

     Notwithstanding the foregoing, if any of the Membership Interests are returned to the members
(the “Sellers”) of Pulse Sellers, LLC, a Utah limited liability company (“Pulse Sellers”) pursuant
to Section 1.3(d) of that certain Securities Purchase Agreement
dated as of June 18, 2010, by and
among Pulse Sellers, Borrower and Pledgor, then Lender shall release its security interest in such
Membership Interests, provided each such Seller executes and delivers to Lender a pledge agreement,
substantially in the form of this Pledge Agreement, with such modifications as may be approved by
Lender, which grants to Lender a first position security interest in such Membership Interests as
collateral for the Liabilities, together with such other agreements, documents, instruments and
certificates as Lender may reasonably request to effectuate such pledge agreement, including all
original membership certificates and membership powers executed in blank.

4. Security for the Obligations. The Pledged Collateral secures the full and timely payment
and performance of (a) the Liabilities, including, without limitation, all debts, liabilities,
covenants, duties, obligations and agreements of any kind, nature or description whatsoever of
Borrower to Lender, heretofore, now or hereafter made, incurred, evidenced or created, whether
voluntary or involuntary, and however, arising, whether due or not due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, direct or indirect, insured or uninsured,
foreseeable or unforeseeable, including, but not limited to, the indebtedness owed by Borrower to
Lender pursuant to the Loan Agreement and the Other Agreements, and (b) all of Pledgor’s
obligations and liabilities to Lender pursuant to this Pledge Agreement.

2

 

5. Pledgor’s Representations, Warranties and Covenants. Pledgor hereby represents, warrants
and covenants to Lender that:

     (a) contemporaneously herewith, Pledgor shall deliver to Lender any and all
certificates, instruments or documents which evidence all or any portion of the Pledged
Collateral existing as of the date hereof;

     (b) promptly upon Pledgor’s receipt thereof, Pledgor shall deliver to Lender any and
all additional certificates, instruments or documents which evidence all or any portion of
the Pledged Collateral acquired after the date hereof;

     (c) from time to time hereafter, Pledgor shall deliver to Lender such other
agreements, instruments, statements and documents as Lender may request to maintain
Lender’s first position priority security interest and lien in and to the Pledged
Collateral;

     (d) Pledgor has the right, power and authority to execute, deliver and perform this
Pledge Agreement and to pledge, assign, deliver, transfer and grant a security interest in
the Pledged Collateral;

     (e) this Pledge Agreement is a legal, valid and binding obligation of Pledgor,
enforceable in accordance with its terms;

     (f) Pledgor has good title to each item of the Pledged Collateral (and is the legal
record and beneficial owner of each of the Membership Interests and Additional Membership
Securities), free and clear of all encumbrances and liens except (i) Lender’s security
interest hereunder; and (ii) a pledge in favor of Pulse Sellers, LLC, a Utah limited
liability company, provided such pledge is subordinated to the Lender’s lien in the Pledged
Collateral pursuant to a written subordination agreement in form and substance satisfactory
to Lender (the “Subordinate Pledge”);

     (g) each of the Membership Interests and Additional Membership Securities is duly and
validly issued and fully paid and non-assessable;

     (h) there are no restrictions on the transfer of any of the Membership Interests and
Additional Membership Securities other than as may be imposed under applicable law and
except as set forth herein, in the Subordinate Pledge and in the Second Amended and
Restated Limited Liability Company Agreement of Borrower, dated the date hereof, or in the
Investor Rights Agreement, as amended as of the date hereof, among Borrower, its members
and certain other parties; provided, however, such restrictions have either been waived or
do not impair Lender’s rights under this Pledge Agreement;

     (i) Pledgor shall execute and deliver to Lender, at the sole cost and expense of Pledgor, such
further conveyances, agreements, assignments, instruments and other writings, and take such further
action, as Lender may reasonably request in order to obtain the full benefit of this Pledge
Agreement, the Pledged Collateral, and the rights, powers and remedies granted to Lender hereunder;

3

 

     (j) until all of the Liabilities have been satisfied and this Pledge Agreement has
been terminated, Pledgor will not without Lender’s prior written consent, sell, assign,
transfer, exchange or otherwise temporarily or permanently dispose of any item of the
Pledged Collateral, or offer or contract to do so, and will not without such consent
create, incur, assume or permit to exist any security interest, pledge, claim or other
charge or encumbrance on or with respect to any such item other than the security interest
granted to Lender hereunder and the Subordinate Pledge;

     (k) until all of the Liabilities have been satisfied and this Pledge Agreement has
been terminated, Pledgor will not (i) incur any new or additional “Indebtedness” (as such
term is defined in the Loan Agreement), other than “Permitted Debt” (hereinafter defined),
(ii) pay any dividend, distribution or return of capital to any shareholder or other owner
of Pledgor, or any other payment or delivery of property or cash to any of Pledgor’s
shareholders or other owners, or any redemption, retirement, purchase or other acquisition
of all or any portion of the stock or other ownership interests of
Pledgor, or (iii)
pledge, grant a security interest in or otherwise encumber any of its assets, other than
the pledge of the Pledged Collateral as otherwise permitted herein and the pledge of the
Equity Interests in Pledgor’s subsidiaries. Notwithstanding the foregoing, provided no
Event of Default then exists, Pledgor shall be permitted to (A) pay dividends in the form
of additional Equity Interests; (B) issue additional common or preferred Equity Interests;
(C) redeem the Equity Interests issued by Pledgor and owned by St. George Investments LLC,
an Illinois limited liability company (“St. George”), and The Dove Charitable Foundation
Trust, an Illinois Trust (the “Dove Foundation”), in accordance with the put or call
provisions set forth in that certain Voting and Standstill Agreement dated as of March 19,
2010, as amended by that certain Amendment to Voting and Standstill Agreement of even date
herewith, each executed by and between St. George and Pledgor, as amended by that certain
Amendment to Join the Voting and Standstill Agreement of even date herewith, executed by
and among Pledgor, St. George and the Dove Foundation, provided the total aggregate
payments for such redemptions do not exceed $3,600,000; and (D) in addition to the
redemptions permitted pursuant to clause (C) above, redeem additional Equity Interests
issued by Pledgor, and pay cash dividends to Pledgor’s Equity Interest Holders, provided
the total aggregate cash paid or payable by Pledgor under this clause (D) does not exceed
$500,000 for all such transactions from the date of this Pledge Agreement through the date
the Liabilities are paid in full and all commitments by Lender to provide loans and other
financial accommodations to Borrower are terminated. Nothing contained herein shall
restrict Pledgor from executing non-recourse guaranties with respect to the obligations of
its subsidiaries.

     (l) Pledgor will notify Lender at least thirty (30) days prior to changing it’s principal
place of business or legal name.

     “Permitted Debt” shall mean obligations of Pledgor pursuant to (i) that certain Secured Promissory
Note dated June 18, 2010, executed and delivered by Pledgor to Pulse Sellers, LLC, a Utah limited
liability company, in the principal amount of $1,750,000, and (ii) unsecured Indebtedness for
working capital or other general business purposes in an aggregate outstanding amount not to exceed
$1,000,000 at any time.

     The foregoing representations and warranties shall survive the execution and delivery of this
Pledge Agreement.

4

 

6. Names in Which Membership Interests and Additional Membership Securities May Be
Registered. The occurrence of an Event of Default under the Loan Agreement shall be deemed an
Event of Default hereunder. Upon the occurrence of an Event of Default, Lender shall be entitled to
hold any or all of the Membership Interests and Additional Membership Securities in its own name,
the name(s) of one or more of its nominees or the name of Pledgor endorsed or assigned in blank or
in favor of Lender. With respect to any of the Membership Interests and Additional Membership
Securities which Lender wishes to hold in its own name or the name of any nominee, Lender (acting
in its own name and capacity or as Pledgor’s attorney-in-fact pursuant to the power of attorney
granted to Lender in Section 7 hereof) may have such Membership Interests and Additional Membership
Securities registered accordingly on the books of the issuer(s) thereof, and Pledgor shall
cooperate fully with Lender in causing such issuer(s) to effect such transfer and registration.

7.
Voting Rights; Dividends, Etc.

     (a) So long as no Event of Default exists:

     i. Pledgor shall be entitled to exercise any and all voting and consensual rights and powers
accruing to an owner of the Membership Interests and Additional Membership Interests for any
purpose not inconsistent with:

A. the provisions of this Pledge Agreement; and

B. The preservation of the value of and Lender’s security interest in the Pledged Collateral.

     ii. Pledgor shall be entitled to receive and retain cash dividends, interest and other cash
distributions payable in respect of the Pledged Collateral to the extent that such distributions
are charged to, and as of the date of payment thereof do not exceed, the retained earnings of the
issuer or other person making such distribution.

     (b) Upon the occurrence and during the continuance of an Event of Default, all rights of
Pledgor to exercise the voting and consensual rights and powers and to receive the dividends,
interest and other cash distributions as described above shall cease, and all such rights shall
thereupon become vested in Lender.

     (c) Lender, in its own name and capacity, or as Pledgor’s attorney-in-fact may collect,
receive, endorse and deposit for Lender’s own benefit, all Additional Membership Interests, money,
cash proceeds, instruments and any and all other property which is or may at any time become
payable in respect of any or all of the Pledged Collateral and which Lender is entitled to receive
hereunder. All such property so received by Lender may be retained by Lender as additional Pledged
Collateral.

8.
Lender Appointed As Pledgor’s Attorney-in-Fact. After the occurrence and during the
continuance of an Event of Default, Pledgor hereby appoints Lender as Pledgor’s attorney-in-fact
with full power in Pledgor’s place and stead, in Pledgor’s name or its own name and at Pledgor’s
expense, to execute, endorse and deliver any and all agreements, assignments, pledges, instruments
and any other writings, and to take any and all other actions, which Lender may deem reasonably
necessary or desirable to carry out the terms and effect the purposes of this Pledge Agreement and
to exercise fully its rights and

5

 

remedies hereunder. Pledgor hereby ratifies all that Lender and Lender’s representatives shall
lawfully do or cause to be done under this power of attorney, which power is coupled with an
interest and shall be irrevocable until all of the Liabilities have been satisfied and this Pledge
Agreement has been terminated.

9. Reasonable Care of Pledged Collateral. Lender shall be deemed to have used reasonable
care in the custody and preservation of the Pledged Collateral in its possession to the extent it
accords such Pledged Collateral treatment which is substantially equal to that which Lender accords
its own property of like kind; provided, however, that Lender shall have no obligation, regardless
of whether it takes any such action with respect to its own property:

     (a) to ascertain or take action with respect to calls, tenders, conversions, exchanges,
maturities or other matters involving or affecting any item(s) of such Pledged Collateral (whether
or not Lender has actual or constructive knowledge of any such matters), unless reasonably
requested by Pledgor to do so; or

     (b) to take action to preserve rights against prior or other parties.

10.
Limitation of Lender’s Liability; Reimbursement of Expenses.

     (a) Lender shall have no obligation to take, or refrain from taking, any action with respect
to the Pledged Collateral or Pledgor’s rights and interests therein except with respect to the
preservation and return of the Pledged Collateral in its possession as and to the extent expressly
provided herein. Pledgor further agrees that neither Lender nor any of its representatives shall
have any liability to Pledgor, or to any person claiming rights against Lender by, through or under
Pledgor, in any way arising out of or in connection with Lender’s administration of this Pledge
Agreement or its exercise of any of its rights, power and remedies hereunder except for Lender’s
claims arising from Lender’s gross negligence or willful misconduct.

     (b) Pledgor shall pay or reimburse Lender on demand for all costs and expenses (including
without limitation reasonable attorneys’ fees and legal expenses) paid or incurred by Lender in
connection with the administration of this Pledge Agreement, the custody or preservation of the
Pledged Collateral and any authorized collection from, disposition of or other realization on any
item(s) thereof, or the exercise and enforcement of any of Lender’s rights, powers and remedies
hereunder. Until any reimbursement of costs or expenses required under this Section is received by
Lender in cash or immediately available funds, the amount thereof shall bear interest at the
default interest rate set forth in the Loan Agreement, and such amount and such interest shall
constitute part of the Liabilities secured by the Pledged Collateral.

11. Remedies.

     (a) If an Event of Default has occurred and is continuing, Lender may at any time and from
time to time exercise any and all rights and remedies available to it under this Pledge Agreement
and any other documents between Lender and Pledgor, whether at law, in equity or otherwise.

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     (b) The proceeds of any sale or other disposition of the Pledged Collateral shall be applied
first, to that part of the Liabilities consisting of Lender’s expenses (including reasonable
attorneys’ fees and legal expenses) in preparing for disposition and disposing of the Pledged
Collateral and, to the extent not previously reimbursed by Pledgor, in administering this Pledge
Agreement and exercising and enforcing its rights, powers and remedies thereunder, and second, to
the satisfaction of the then outstanding amount of the Liabilities and of all other liabilities
owed by Pledgor, or Borrower to Lender that then remain unpaid.

12. Amendments, Modifications, Supplementations and Waivers. No provision of this Pledge Agreement
may be amended, modified, supplemented or waived except by a writing duly executed and delivered by
Pledgor and Lender,, and no consent to any departure from this Pledge Agreement by Pledgor may be
given, except by a writing duly executed and delivered by Lender, and any such amendment,
modification, supplementation or waiver shall be effective only as and to the extent provided
therein.

13. Cumulative Remedies; No Waivers by Lender. All rights, powers and remedies of Lender under this
Pledge Agreement and applicable law, are cumulative and except as otherwise provided by law or in
such agreements may be exercised concurrently or in any order of succession. Lender’s failure to
exercise or delay in exercising any of such rights, powers and remedies shall not constitute or
imply a waiver thereof, nor shall Lender’s single or partial exercise of any such right, power or
remedy preclude its other or further exercise thereof, or the exercise of any other right, power or
remedy. Lender’s cure of any Event of Default shall not constitute a waiver thereof, and its waiver
of one Event of Default shall not constitute a waiver of any subsequent Event of Default.

14. Pledgor’s Waivers. Lender’s security interest in the Pledged Collateral shall be absolute and
unconditional regardless of the existence or occurrence of, and Pledgor expressly waives its right
to the return of the Pledged Collateral in the Event of Default hereunder, together with any
defense or discharge which might otherwise arise from, any of the following:

     (a) any lack of validity or enforceability of this Pledge Agreement or any other agreement or
instrument relating hereto or thereto or otherwise relating to the Liabilities;

     (b) any change in the time, manner or place of payment of, or in any other terms of, any or all of
the Liabilities arising out of this Pledge Agreement, or any other amendment or waiver of, or any
consent to departure from, this Pledge Agreement;

  
   (c) any exchange, release or non-perfection of any other collateral, or any release, amendment or
waiver of, or consent to departure from any guaranty, for any or all of the Liabilities;

     (d) Lender’s resort during the continuation of an Event of Default, to any or all of the Pledged
Collateral for payment of all or part of the Liabilities prior to proceeding against any other
collateral or any other party primarily or secondarily liable for payment thereof; or

   
  (e) to the extent permitted by law, any other circumstance which might otherwise constitute a
defense available to Pledgor as of the date hereof, or a discharge of Pledgor in respect of the
Liabilities or this Pledge Agreement.

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15. Termination. This Pledge Agreement and the security interest granted hereunder shall terminate
on the date on which all the Liabilities have been indefeasibly satisfied in full.

16. Notices. Any and all notices, demands, requests, consents, designations, waivers and other
communications required or desired hereunder shall be in writing and shall be deemed effective upon
personal delivery, upon confirmed facsimile transmission, upon receipted delivery by reputable
overnight carrier, or three (3) days after mailing if mailed by registered or certified mail,
return receipt requested, postage prepaid, to Pledgor or Lender at the following addresses or
facsimile numbers or such other addresses and facsimile numbers as Pledgor or Lender may specify in
like manner; provided, however, that notices of a change of address or facsimile number shall be
effective only upon receipt thereof.

	 	 	 	 	 

	 

	 	If to Pledgor, then to:
	 	If to Lender, then to:
	 
	 	 	 	 
	 

	 	United American Healthcare Corporation
	 	Fifth Third Bank
	 

	 	300 River Place, Suite 4950
	 	222 S. Riverside Plaza, 30th Floor
	 

	 	Detroit, Michigan 48207
	 	Chicago, Illinois 60606
	 

	 	Attention: Mr. William C. Brooks
	 	Attention: Mr. Jeremy F. Stump
	 

	 	Facsimile No.: (313) 393-3394
	 	Facsimile No.: (312) 704-4127
	 
	 	 	 	 
	 

	 	with a copy to:
	 	With a copy to:
	 
	 	 	 	 
	 

	 	Honigman Miller Schwartz and Cohn LLP
	 	Thompson Coburn LLP
	 

	 	130 South First Street
	 	55 East Monroe Street, 37th Floor
	 

	 	4th Floor
	 	Chicago, Illinois 60603
	 

	 	Ann Arbor, MI 48104-1386
	 	Attention: Victor A. Des Laurier, Esq.
	 

	 	Attention: Barbara A. Kaye
	 	Facsimile No.: (312) 782-1746
	 

	 	Facsimile No.: (734) 418-4260	 	 

17. Binding Agreement; Assignment. This Pledge Agreement shall be binding upon and inure to the
benefit of the successors and assigns of Pledgor, and the successors and assigns of Lender;
provided however, that Pledgor shall not assign or otherwise transfer any of its obligations,
rights or interests hereunder without the prior written consent of Lender.

18. Governing Law; Severability. This Pledge Agreement shall be governed by and construed in
accordance with the laws internal of the State of Illinois. Wherever possible each provision of
this Pledge Agreement shall be construed in such manner as to be valid and enforceable under
applicable law, but if any provision hereof shall be deemed invalid or unenforceable to any extent
in any jurisdiction, such provision shall be ineffective only to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remainder of such provision or
any of the other provisions hereof, and any such invalidity or unenforceability in one jurisdiction
shall not render such provision ineffective in any other jurisdiction. PLEDGOR AND LENDER HEREBY
IRREVOCABLY AGREE, CONSENT AND SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE CIRCUIT COURT OF
COOK COUNTY, ILLINOIS, AND THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS,
EASTERN DIVISION, WITH REGARD TO ANY ACTIONS OR PROCEEDINGS ARISING FROM, RELATING TO OR IN
CONNECTION WITH THIS PLEDGE AGREEMENT. PLEDGOR HEREBY WAIVES ANY RIGHT PLEDGOR MAY HAVE TO TRANSFER
OR CHANGE THE VENUE OF ANY LITIGATION FILED IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS, OR THE

8

 

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION. PLEDGOR AND
LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY.

19. Legend. In addition to all other legends which may be found on such certificates, Pledgor
agrees that all certificates representing all Pledged Collateral will have endorsed upon them in
bold-face type a legend in substantially the following form:

“THE UNITS EVIDENCED HEREBY ARE SUBJECT TO THE TERMS OF A MEMBERSHIP INTEREST PLEDGE AGREEMENT IN
FAVOR OF FIFTH THIRD BANK (A COPY OF WHICH MAY BE OBTAINED WITHOUT CHARGE FROM THE COMPANY), AND BY
ACCEPTING ANY INTEREST IN SUCH UNITS THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO
AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SUCH MEMBERSHIP INTEREST PLEDGE AGREEMENT.”

20. Titles; Counterparts. Section titles are for convenience only and shall not define, limit,
amplify, supplement or otherwise modify or affect the substance or intent of this Pledge Agreement
or any provision hereof. This Pledge Agreement may be executed in two or more counterparts, each of
which shall when executed by both parties be deemed to be an original but all of which together
shall constitute one and the same agreement. A facsimile or email transmitted executed counterpart
to this Pledge Agreement and the other agreements, documents and instruments executed in connection
herewith will be deemed an acceptable original for purposes of consummating this Pledge Agreement
and such other agreements, documents and instruments; provided, however, Pledgor shall be required
to deliver to Lender original executed signature pages in substitution for said facsimile or email
transmitted signature pages upon Lender’s request therefore.

[signature page follows]

9

 

     IN WITNESS WHEREOF, each of the parties hereto has caused this Pledge Agreement to be duly executed
as of the date first above written.

	 	 	 	 	 
	 	PLEDGOR:

United American Healthcare Corporation,

a Michigan corporation

 	 
	 	By:  	/s/ William C. Brooks 	 
	 	 	Name:  	WILLIAM C. BROOKS 	 
	 	 	Title:  	President & CEO 	 
	 

	 	 	 	 	 
	 	LENDER:

Fifth Third Bank,

a Michigan banking corporation

 	 
	 	By:  	/s/ Jeremy F. Stump 	 
	 	 	Name:  	JEREMY F. STUMP 	 
	 	 	Title:  	VP	 

 

 

ACKNOWLEDGMENT

     The undersigned hereby acknowledges receipt of a copy of the foregoing Pledge Agreement, agrees
promptly to note on its books the security interests granted under such Pledge Agreement, and
waives any rights or requirement at any time hereafter to receive a copy of such Pledge Agreement
in connection with the registration of any Pledged Collateral in the name of Lender or its nominee
or the exercise of voting rights by Lender.

	 	 	 	 	 
	 	Pulse Systems, LLC

 	 
	 	By:  	/s/ Herbert J. Bellucci 	 
	 	 	Name:  	HERBERT J. BELLUCCI 	 
	 	 	Title:  	PRESIDENT & CEO

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