Document:

ASSET PURCHASE AGREEMENT

     This  ASSET  PURCHASE  AGREEMENT  dated  as  of  February  16,  2005  (the
"Agreement")  is  entered  into  by  and  between  POWER2SHIP,  INC.,  a  Nevada
corporation ("P2S"); POWER2SHIP, INC., a Delaware corporation and a wholly owned
subsidiary  of  P2S  that  is  in the process of changing its name to Power2Ship
Intermodal,  Inc.  ("Buyer");  G.F.C.,  INC.,  a  South  Carolina  corporation
("Seller");  and,  MICHAEL  ALLORA,  an  individual resident in the State of New
Jersey  ("Allora").

     PREAMBLE

     WHEREAS,  Seller  engages in the business of intermodal transportation (the
"Business");

     WHEREAS, Seller, in connection with its operation of the Business, owns and
lawfully  uses  certain  assets  (as  more fully described below and referred to
hereafter  as  the  "Assets");

     WHEREAS,  Allora  (sometimes referred to hereafter as the "Principal") is a
principal  shareholder  of  Seller  and  the  principal person in control of the
operations  of  the  Business;

     WHEREAS, Seller desires to convey, sell and assign to Buyer all of Seller's
right,  title  and  interest in and to the Assets, upon the terms and conditions
contained  in  this  Agreement;  and

     WHEREAS, Buyer desires to purchase the Assets upon the terms and conditions
contained  in  this  Agreement.

     NOW  THEREFORE,  in consideration of the mutual promises and other good and
valuable  consideration,  the  sufficiency  of which is hereby acknowledged, the
parties  agree  as  follows:

1.          Sale  and  Purchase  of  Assets.
           --------------------------------

     1.1    Sale  and  Purchase of Assets.  Subject to the terms and conditions
            ------------------------------
of this Agreement, at the closing described in Section 6 (the "Closing"), Seller
shall  sell  to  Buyer,  and  Buyer  shall purchase from Seller, those assets of
Seller  identified  on  Schedule  1.1  (the  "Assets").

     1.2    Liabilities  Assumed  and  Excluded.  In  connection  with  Buyer's
            ------------------------------------
purchase  of  the  Assets,  Buyer  shall  assume  and become responsible for the
payment  of only those liabilities of Seller that are identified on Schedule 1.2
(the  "Liabilities").  Buyer shall assume no other liabilities or obligations of
Seller.

     1.3    Insurance  Deposits.  At  the Closing, Buyer shall reimburse Seller
            -------------------
for  those insurance deposits as are mutually agreed upon by Seller and Buyer at
the  time  of  Closing.

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2.          Purchase  Price;  Payment;  Allocation.
                 --------------------------------------

     2.1     Purchase  Price.  The  purchase price for the Assets (the "Purchase
             ---------------
Price")  shall  be (a) the sum of $300,000 (the "Cash Purchase Price"), plus (b)
the  issuance to the Seller of warrants to purchase 200,000 shares of the common
stock  of  P2S  (the  "Warrants)  in  the  form  attached hereto as Exhibit 2.1.

     2.2     Cash  Purchase  Price.  The  Cash  Purchase  Price shall be paid as
             ---------------------
follows:

     (a)  $100,000  shall  be  paid  at  Closing  by P2S's delivery to Seller of
Seller's  $100,000  secured  promissory  note  dated November 10, 2004 issued by
Seller  in  favor  of  P2S  (the  "Note")  marked  'PAID  IN  FULL";  and

     (b)  $200,000  shall  be  paid  by Buyer, in twenty-four equal, consecutive
monthly installments of $8,333.33, without interest. The first installment shall
be  paid  on  the  first monthly anniversary of the Closing Date, and succeeding
installments  shall  be  paid  on  or  before  the  same  day  of each of the 23
consecutive  months  thereafter.  The foregoing to the contrary notwithstanding:

          (i)  In  the  event  that  the gross freight revenues of Buyer for the
     first full calendar month commencing one year following the Closing, equals
     or  exceeds  $667,000, then, within 30 days from such date, Buyer shall pay
     to  Seller  the  sum of $50,000, and Buyer shall thereafter make six equal,
     consecutive  monthly installments of $8,333.33, without interest, until the
     entire  $200,000  described  in  paragraph (b) of this Section 2.2 has been
     paid  in  full;  and

          (ii)  In  the  event  that the gross freight revenues of Buyer for the
     first full calendar month commencing one year following the Closing, equals
     or  exceeds  $834,000, then, within 30 days from such date, Buyer shall pay
     to  Seller  the  sum  of  $100,000,  which  payment  shall  constitute full
     satisfaction  of  Buyer's  $200,000  obligation described in paragraph (b);
     provided  that  Buyer  has  made  all  required  payments  pursuant to this
     paragraph  (b).

At  and  subject  to Closing, P2S shall waive accrued but unpaid interest on the
Note.  P2S  hereby  unconditionally  guarantees the payment obligations of Buyer
under  this  Section  2.2(b).  In the event that Buyer fails to make one or more
required  payments  under  this Section 2.2(b) as and when due, and such failure
continues  for a period of 90 days from the due date thereof, Seller may declare
all  unpaid  amounts under this Section 2.2(b) to be immediately due and payable
upon  written  notice  to  Buyer  and  P2S.

     2.3     The  Warrants.  Each  of  the  Warrants  shall  entitle  Seller  to
             -------------
purchase  one  share  of  common  stock  of  P2S  during  the  three year period
commencing  on  the  Closing Date, at an exercise price equal to the closing bid
price  for  the  P2S  common  stock on the trading day immediately preceding the
Closing  Date.  The Warrants shall vest and become exercisable 100,000 shares on
the  Closing  Date and 100,000 shares on the one-year anniversary of the Closing
Date.  Neither  the  Warrants  nor  the shares of P2S common stock issuable upon
exercise  of  the Warrants (the "Warrant Shares") have been registered under the
Securities Act of 1933, as amended (the "Act"), and neither the Warrants nor the
Warrant Shares may be sold, assigned, pledged, transferred or otherwise disposed
of  absent  registration  under  the  Act  or  the  availability of an available
exemption from such registration requirements.  Neither P2S nor Buyer has agreed
to  register  the  Warrants  or  the  Warrant  Shares  under  the  Act.

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<PAGE>

3.          Representations  and  Warranties  of  Seller  and  the  Principal.
            -----------------------------------------------------------------
Except  as  otherwise  set forth in a disclosure schedule delivered by Seller at
the  time  this  Agreement  is  executed  and  delivered (the "Seller Disclosure
Schedule"),  the  Principal  and  Seller, jointly and severally, hereby make the
following representation and warranties to Buyer as of the date hereof and as of
the  Closing  Date.

     3.1          Organization and Good Standing.  Seller is a  corporation duly
                  ---------------------------------
incorporated,  validly  existing  and  in  good  standing  under the laws of its
jurisdiction of formation, with full corporate power and authority to own, lease
and  operate  its business and properties and to carry on business in the places
and  in the manner as presently conducted or proposed to be conducted. Seller is
in  good  standing  as  a  foreign corporation in each jurisdiction in which the
properties  owned, leased or operated, or the business conducted, by it requires
such  qualification  except  where  the  failure  to so qualify would not have a
material  adverse  effect  on  the  Assets  or  consummation of the transactions
contemplated  hereby  (a  "Seller  Material  Adverse  Effect").

     3.2          Authority and Enforcement.  Seller has all requisite corporate
                  -------------------------
power and authority to execute and deliver this Agreement, and to consummate the
transactions  contemplated  hereby.  Seller  has  taken  all  corporate  action
necessary  for the execution and delivery of this Agreement and the consummation
of  the  transactions  contemplated  hereby,  and this Agreement constitutes the
valid and binding obligation of Seller, enforceable against Seller in accordance
with  its  terms, except as may be affected by bankruptcy, insolvency, moratoria
or  other  similar laws affecting the enforcement of creditors' rights generally
and  subject to the qualification that the availability of equitable remedies is
subject  to the discretion of the court before which any proceeding therefor may
be  brought.

     3.3          No  Conflicts or Defaults.  The execution and delivery of this
                  -------------------------
Agreement by Seller and the consummation of the transactions contemplated hereby
do not and shall not (a) contravene the Certificate or Articles of Incorporation
or  Bylaws  of Seller or (b) with or without the giving of notice or the passage
of  time  (i)  violate,  conflict  with, or result in a material breach of, or a
material  default  or  loss  of rights under, any covenant, agreement, mortgage,
indenture, lease, instrument, permit or license to which Seller is a party or by
which  Seller  is  bound,  or any judgment, order or decree, or any law, rule or
regulation  to  which Seller is subject, (ii) result in the creation of, or give
any  party the right to create, any lien, charge, encumbrance or any other right
or  adverse  interest  ("Liens") upon any of the Assets, (iii) terminate or give
any  party  the  right  to  terminate,  amend, abandon or refuse to perform, any
material  agreement,  arrangement  or commitment relating to the Assets, or (iv)
result  in  a  Seller  Material  Adverse  Effect.

     3.4     Consents of Third Parties.  The execution, delivery and performance
             -------------------------
of  this  Agreement and the consummation of the transactions contemplated hereby
by  Seller  does  not  require the consent of any person, or such consent has or
will  be  obtained  in  writing,  prior  to  the  Closing.

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<PAGE>

     3.5     Actions  Pending. There is no action, suit, claim, investigation or
             ----------------
proceeding  pending  or, to the knowledge of Seller or the Principal, threatened
against  Seller or the Principal, which questions the validity of this Agreement
or  the  transactions  contemplated  hereby  or  any action taken or to be taken
pursuant  hereto  or  thereto. There is no action, suit, claim, investigation or
proceeding  pending  or, to the knowledge of Seller or the Principal, threatened
against  or  involving  Seller  or  any of the Assets, other than claims against
Seller  that  are  covered  by  insurance  and  that will not result in a Seller
Material  Adverse  Effect.  There  are  no  outstanding  orders,  judgments,
injunctions,  awards  or  decrees  of  any  court, arbitrator or governmental or
regulatory  body  against  Seller  or  affecting  the  Assets.

     3.6     Title  to  Assets.  Seller has either good and marketable title to,
             -----------------
or valid and enforceable leasehold interest in the Assets, free and clear of all
Liens,  other  than  those  disclosed  in  the  Seller  Financial Statements (as
hereafter  defined).  No person or entity has any right or option to acquire any
of the Assets. Seller has the right to use the Assets as presently being used in
the  conduct  of  its  Business,  and its use of the Assets does not violate the
material  provisions  of  (a)  any agreement to which Seller is a party, (b) the
requirements  of  applicable laws, rules or regulations, and/or (c) any order of
any  court  or  regulatory  body  of  competent  jurisdiction that is binding on
Seller,  the  Business  or  any  of  the  Assets.

     3.7     Financial  Statements.  Seller  has  delivered  or  prior  to  the
             ---------------------
Closing,  will deliver to Buyer the internally prepared balance sheets of Seller
as  at  December  31,  2004  and  January  31,  2005  (the  "Seller  Financial
Statements").

     3.8     No  Undisclosed  Liabilities.  Seller  has  and  will  have  no
             ----------------------------
liabilities,  obligations, claims or losses (whether liquidated or unliquidated,
secured  or unsecured, absolute, accrued, contingent or otherwise) that would be
required  to  be  disclosed  on  a  balance sheet of Seller (including the notes
thereto)  in  conformity  with generally accepted accounting principles ("GAAP")
which  are  not  disclosed  in the Seller Financial Statements, other than those
incurred  in  the  ordinary  course  of  Seller's business since the date of the
Seller  Financial Statements, which, individually or in the aggregate, do not or
would  not  result  in  a  Seller  Material  Adverse  Effect.

     3.9     Books  and  Records.  The  books,  records  and documents of Seller
             -------------------
accurately  Reflect,  in  all material respects, the information relating to the
business  of Seller, the location and collection of their assets, and the nature
of  all  transactions  giving  rise to the obligations or accounts receivable of
Seller.

     3.10     Absence  of  Contracts  and Liabilities.  Seller is not a party to
              ---------------------------------------
any  written  or  oral  agreement or understanding that could result in a Seller
Material  Adverse  Effect.

     3.11     Contracts.  The  Seller  Disclosure  Schedule  identifies  each
              ----------
material  agreement  to  which Seller is a party and to which Buyer will succeed
following the Closing (each, a "Continuing Contract").  Each Continuing Contract
is  in  full  force  and  effect, no party thereto is in default of any material
obligation  thereunder  and  Seller has received no notice of the termination of
any  such  Continuing Contract.  To the knowledge of the Principal, no event has
occurred  or  circumstance exists that (with or without notice or lapse of time)
may  contravene,  conflict  with, or result in a violation or breach of, or give
Seller  or  other  person  the right to declare a default or exercise any remedy
under, or to accelerate the maturity or performance of, or to cancel, terminate,
or  modify,  any Continuing Contract.  Seller has not given to nor received from
any  other  person,  any notice or other communication (whether oral or written)
regarding any actual, alleged, possible, or potential violation or breach of, or
default  under,  any  Continuing  Contract.

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<PAGE>

     3.12     Insurance.   Seller  owns  and  is the beneficiary under valid and
              ----------
enforceable  insurance  policies  (a)  issued  by an insurer that is financially
sound  and  reputable  (b)  providing  adequate insurance coverage for all risks
normally  insured  against  by an owner of assets similar to the Assets, (c) are
sufficient  for  compliance with all legal requirements and Continuing Contracts
to  which  Seller is a party or by which any of the Assets is bound and (d) that
will  continue  in  full  force  and  effect  following  the consummation of the
transactions  contemplated  hereby.  Seller  has  paid all premiums due, and has
otherwise  performed  all of its obligations, under each policy to which it is a
party  or  that  provides  coverage  to  it.  To the knowledge of the Principal,
Seller  has  given  notice  to  the  insurer  of  all claims that may be insured
thereby.

     3.13     Compliance  with  Laws.
              ----------------------

     (a)     Seller  is  and  at all times has been, in material compliance with
each law, rule and/or regulation ("Legal Requirement") that is or was applicable
to  it or to the conduct or operation of its Business or the ownership or use of
any  of  the  Assets.

     (b)     No  event has occurred or circumstance exists that (with or without
notice or lapse of time) (i) may constitute or result in a material violation by
Seller  of,  or  a  failure  on  the  part  of  Seller to comply with, any Legal
Requirement,  or  (ii)  may give rise to any obligation on the part of Seller to
undertake,  or to bear all or any portion of the cost of, any remedial action of
any  nature;  and

     (c)     Seller  has not received any notice or other communication (whether
oral  or  written)  from  any governmental or regulatory authority ("Authority")
having  or  purporting  to  have  jurisdiction  over Seller or any of its assets
regarding  (i)  any  actual,  alleged,  possible,  or potential violation of, or
failure  to  comply  with,  any  Legal Requirement, or (ii) any actual, alleged,
possible, or potential obligation on the part of Seller to undertake, or to bear
all  or  any  portion  of  the  cost  of,  any  remedial  action  of any nature.

     (d)     Seller  is,  and at all times has been, in material compliance with
all  of  the terms and requirements of each license, permit and/or authorization
issued by any Authority ("Governmental Authorization") that is held by Seller or
that  otherwise  relates  to  the  Business.

     (e)      Each Governmental Authorization is  valid  and  in full  force and
effect.

     (f)      No  event  has  occurred  and  no  circumstance  exists  that  may
(with  or  without notice or lapse of time) (i) constitute or result directly or
indirectly  in  a material violation of or a material failure to comply with any
term  or  requirement  of  any  such  Governmental Authorization, or (ii) result
directly  or indirectly in the revocation, withdrawal, suspension, cancellation,
or  termination of, or any modification to, any such Governmental Authorization.

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<PAGE>

     (g)      All  Governmental  Authorizations  collectively  constitute all of
the  governmental  Authorizations necessary to permit Seller to lawfully conduct
and  operate  the  Business  and  to  permit  Seller  to own and use the Assets.

     3.14     Tax  Matters.  Seller has filed or caused to be filed (on a timely
              ------------
basis since inception) all federal, state and local tax returns that are or were
required  to  be  filed  by  or  with respect to it pursuant to applicable Legal
Requirements  ("Tax  Returns").  Seller  has paid, made provision for payment or
has  included  on its most recent balance sheet included in the Seller Financial
Statements,  all  taxes  that  have or may have become due pursuant to those Tax
Returns  or  otherwise, or pursuant to any assessment received by Seller, except
such  taxes,  if  any,  as  are  being  contested  in good faith and as to which
adequate  reserves  have  been provided in the Seller Financial Statements.  All
such  tax  returns are true, complete and accurate.  No tax return of Seller has
been  audited  or is currently under audit, nor has Seller or any Principal been
notified  that  any  such  audit  will  or  may  take  place.

     3.15     Employees.  Seller  is  not  a  party to any collective bargaining
              ---------
arrangements or agreements covering any of its employees nor is Seller in breach
of  any  employment  contract,  agreement  regarding  proprietary  information,
noncompetition  agreement, nonsolicitation agreement, confidentiality agreement,
or  any other similar contract or restrictive covenant, relating to the right of
any  officer,  employee  or  consultant to be employed or engaged by Seller.  No
officer,  consultant  or  key  employee  of  Seller  whose  termination,  either
individually  or  in the aggregate, would have a Seller Material Adverse Effect,
has terminated or, to the knowledge of Seller and the Principal, has any present
intention  of  terminating  his  or  her  employment  or engagement with Seller.

     3.16     Employee  Benefits.  Seller  has  not  contributed to any pension,
              -------------------
profit  sharing,  option or other incentive plan or any other type of employment
benefit plan or maintains, or is or was a party to, or otherwise participates or
participated  in,  on  its  own  behalf or on behalf of any former employee, any
pension,  profit  sharing,  option or other incentive plan, or any other type of
employee benefit plan.  Seller has no obligation to, or arrangement with, former
employees  for  bonuses,  incentive  compensation, vacation, severance pay, sick
pay,  sick  leave,  insurance  service  awards,  relocation, disability or other
benefits  whether  written  or  oral.

     3.17     Absence  of  Certain  Developments.   Since  the  date of the most
              -----------------------------------
recent balance sheet included in the Seller Financial Statements, Seller has not
suffered  a  Seller  Material  Adverse  Effect  or entered into any agreement or
engaged  in  any  conduct that could result in a Seller Material Adverse Effect.

     3.18     Spousal Consent.  No consent of the spouse of the Principal or the
              ---------------
spouse  of  any other person is required in order to consummate the transactions
contemplated by this Agreement, or to transfer to Buyer at the Closing, good and
marketable  title  to  the  Assets.

     3.19     Acknowledgment.  The Warrants, and, to the extent the Warrants are
              --------------
exercised,  the  Warrant  Shares,  are  being  acquired by Seller for investment
purposes  only  and  not  with a view to their distribution or resale, except in
compliance  with  applicable  securities  laws.  Seller  and  the  Principal
acknowledge  and understand that (a) neither the Warrants nor the Warrant Shares
have  been  registered under the Act, (b) there is no market for the Warrants or
the  Warrant  Shares, (c) following exercise of the Warrants, the Warrant Shares
may  have  to  be  held for at least one year prior to their being available for
public  resale,  and  (d)  the Warrants and the Warrant Shares are a speculative
investment  and  there  is  no assurance that either the Warrants or the Warrant
Shares  can  be  sold  at  a  profit,  or  at  all.

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<PAGE>

     3.20     Disclosure.  The  representations,  warranties and acknowledgments
              ----------
of  Seller  set  forth  herein  are  true, complete and accurate in all material
respects,  do not omit to state any material fact, or omit any fact necessary to
make  such  representations,  warranties  and  acknowledgments,  in light of the
circumstances  under  which  they  are  made,  not  misleading.

4.     Representations  and  Warranties  of  Buyer  and  P2S.  Except  as
       -----------------------------------------------------
otherwise set forth in a disclosure schedule delivered by Buyer at the time this
Agreement  is  executed  (the "Buyer Disclosure Schedule"), Buyer and P2S hereby
make  the  following representations and warranties to Seller and the Principal,
as  of  the  date  hereof  and  as  of  the  Closing  Date.

     4.1     Organization  and  Good  Standing.  Buyer  and  P2S  is  each  a
             ---------------------------------
corporation  duly  incorporated, validly existing and in good standing under the
laws  of  its jurisdiction of formation, with full corporate power and authority
to  own,  lease  and  operate  its  business  and properties and to carry on its
business  in  the places and in the manner as presently conducted or proposed to
be  conducted.  Buyer  and P2S is each in good standing as a foreign corporation
in  each  jurisdiction in which the properties owned, leased or operated, or the
business  conducted, by it requires such qualification, except where the failure
to  so qualify would not have a material adverse effect on the business of Buyer
and  P2S,  taken  as  a  whole, or consummation of the transactions contemplated
hereby  (a  "Buyer  Material  Adverse  Effect").

     4.2     Authority  and  Enforcement.   Buyer and P2S each has all requisite
             ---------------------------
corporate  power  and  authority  to  execute and deliver this Agreement, and to
consummate  the  transactions contemplated hereby.  Buyer and P2S has each taken
all  corporate action necessary for the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby, and this Agreement
constitutes  the  valid  and  binding  obligation  of Buyer and P2S, enforceable
against  each  in  accordance  with  its  terms,  except  as  may be affected by
bankruptcy,  insolvency,  moratorium  or  other  similar  laws  affecting  the
enforcement of creditors' rights generally and subject to the qualification that
the availability of equitable remedies is subject to the discretion of the court
before  which  any  proceeding  therefor  may  be  brought.

     4.1     No  Conflicts  or  Defaults.  The  execution  and  delivery of this
             ---------------------------
Agreement by Buyer and P2S and the consummation of the transactions contemplated
hereby  do  not  and  shall  not  (a)  contravene the Certificate or Articles of
Incorporation  or  Bylaws  of  Buyer or P2S or (b) with or without the giving of
notice  or  the  passage  of  time  (i)  violate,  conflict with, or result in a
material breach of, or a material default or loss of rights under, any covenant,
agreement,  mortgage,  indenture,  lease, instrument, permit or license to which
Buyer  or  P2S  is  a  party or by which Buyer or P2S is bound, or any judgment,
order  or  decree,  or  any  law,  rule  or  regulation to which Buyer or P2S is
subject,  (ii) result in the creation of, or give any party the right to create,
any  Lien upon any assets or properties of Buyer or P2S, (iii) terminate or give
any  party  the  right  to  terminate,  amend, abandon or refuse to perform, any
material  agreement, arrangement or commitment relating to which Buyer or P2S is
a  party,  or  (iv)  result  in  a  Buyer  Material  Adverse  Effect.

                                        7
<PAGE>

     4.2     Consents of Third Parties.  The execution, delivery and performance
             -------------------------
of  this  Agreement and the consummation of the transactions contemplated hereby
by  Buyer or P2S does not require the consent of any person, or such consent has
been  or  will  be  obtained  in  writing  prior  to  the  Closing.

     4.3     Actions Pending.  There is no action, suit, claim, investigation or
             ----------------
proceeding  pending  or,  to  the  knowledge of Buyer or P2S, threatened against
Buyer  or P2S which questions the validity of this Agreement or the transactions
contemplated  hereby  or  any  action  taken  or  to be taken pursuant hereto or
thereto.  There  is  no action, suit, claim, investigation or proceeding pending
or,  to  the knowledge of Buyer or P2S, threatened against or involving Buyer or
P2S  or  any of their respective properties or assets.  There are no outstanding
orders,  judgments,  injunctions,  awards or decrees of any court, arbitrator or
governmental  or  regulatory  body  against  Buyer  or  P2S  or  affecting their
respective  assets.

     4.4     Disclosure.  The representations, warranties and acknowledgments of
             ----------
Buyer  and  P2S set forth herein are true, complete and accurate in all material
respects  and  do  not  omit  any  fact  necessary to make such representations,
warranties  and  acknowledgments  not  misleading.

5.     Conditions  to  Closing.
       -----------------------

     5.1     Conditions  Precedent  to P2S and Buyer's Obligation to Close.  The
             -------------------------------------------------------------
obligation  of Buyer and P2S to consummate the transactions contemplated by this
Agreement  is subject to satisfaction of the following conditions on or prior to
the  Closing  Date:

     (a)  The  representations  and  warranties  of Seller and the Principal set
forth  in  Section 3 above shall be true and correct in all material respects at
and  as  of  the  Closing  Date.

     (b)  Seller and the Principal shall have performed and complied with all of
their  respective  covenants  hereunder  in  all  material  respects through the
Closing  Date.

     (c)  No  action,  suit, or proceeding shall be pending or threatened before
any  court  or  quasi-judicial  or  administrative agency of any federal, state,
local,  or  foreign jurisdiction or before any arbitrator wherein an unfavorable
injunction,  judgment,  order,  decree,  ruling,  or charge would (i) prevent or
adversely  affect  Buyer's  or  P2S's  consummation  of  any of the transactions
contemplated  by  this  Agreement  or  (ii)  cause  any  of  the  transactions
contemplated  by  this  Agreement to be rescinded following consummation; and no
such  injunction, judgment, order, decree, ruling, or charge shall be in effect.

     (d)  No  material adverse change shall have taken place with respect to the
assets,  and no event shall have occurred that could result in a Seller Material
Adverse  Effect.

                                        8
<PAGE>

     (e) Seller shall have held a duly convened meeting of its shareholders upon
such notice and otherwise as required by the laws of the State of South Carolina
(the  "Shareholders  Meeting").  At  least  ten  days  prior to the Shareholders
Meeting,  Seller  shall have delivered to each of Seller's shareholders entitled
to  notice  of  and  to  vote  at  the  Shareholders  Meeting (i) a copy of this
Agreement,  (ii)  the  Schedules  and  Exhibits  hereto  and (iii) a copy of the
dissenter's  rights  statute  of  the  State  of South Carolina in a manner that
complies  with  the corporate laws of the State of South Carolina. The foregoing
documents  and  information shall also be delivered to each member of a class or
group  entitled under the laws of the State of South Carolina to vote as a class
or  group in connection with the transactions contemplated by this Agreement. At
the  Shareholders  Meeting,  this  Agreement  and  the transactions contemplated
hereby  shall  be approved by holders of the outstanding capital stock of Seller
entitled  to vote at the Shareholders Meeting in an amount sufficient to satisfy
the  requirements  of  the  laws  of  the  State  of  South  Carolina.

     (f)  No  shares  entitled  to  vote  at the Shareholders Meeting shall have
exercised  dissenter's  rights.

     (g)  Seller shall have delivered to Buyer and P2S a certificate executed by
a  duly  authorized  executive  officer of Seller, and by the Principal, stating
that  all  of  the  conditions specified above in Section 5.1(a) - (f) have been
complied  with;

     (h)  Buyer  shall  be  reasonably  satisfied  with  the  results of its due
diligence  review  of  Seller,  the  Business  and  the  Assets;

     (i)     Seller  shall  have  executed  and  delivered to Buyer a Consulting
Agreement  in  form and substance mutually acceptable to Buyer and the Principal
(the  "Consulting  Agreement");

     (j)     Buyer  and  P2S  shall receive confirmation from their professional
financial  advisers,  in  form  and substance satisfactory to them in their sole
reasonable  discretion,  that  the books and records of Seller are sufficient to
permit audited financial statements of Seller to be prepared for the years ended
December  31,  2204  and  December 31, 2003,or such shorter period as Seller has
been  in  existence in accordance with GAAP and the rules and regulations of the
Securities  and  Exchange  Commission;

     (k)     Buyer  and  Seller  shall have mutually agreed upon those insurance
deposits  to  be  reimbursed  to  Seller  at  the  time  of  Closing;  and

     (l)     All actions to be taken by Seller in connection with consummation
of  the  transactions  contemplated  hereby  and  all  certificates,  opinions,
instruments,  and  other  documents  required  to  effect  the  transactions
contemplated hereby will be reasonably satisfactory in form and substance to the
Buyer  and  P2S.

     5.2     Conditions  Precedent to Seller's and the Principal's Obligation to
             -------------------------------------------------------------------
Close.  The  obligation  of  Seller  and  the  Principal  to  consummate  the
-----
transactions  contemplated  hereby  is  subject to satisfaction of the following
conditions  on  or  prior  to  the  Closing  Date:

                                        9
<PAGE>

     (a)     The  representations  and  warranties of Buyer and P2S set forth in
Section  4 above shall be true and correct in all material respects at and as of
the  Closing  Date.

     (b)     Buyer  and  P2S  shall each have performed and complied with all of
their  respective  covenants  hereunder  in  all  material  respects through the
Closing  Date.

     (c)     No  action,  suit,  or  proceeding  shall  be pending or threatened
before  any  court  or  quasi-judicial  or administrative agency of any federal,
state,  local,  or  foreign  jurisdiction  or  before  any arbitrator wherein an
unfavorable  injunction,  judgment,  order,  decree, ruling, or charge would (i)
prevent  or  adversely  affect  Buyer's  consummation of any of the transactions
contemplated  by  this  Agreement  or  (ii)  cause  any  of  the  transactions
contemplated  by  this  Agreement to be rescinded following consummation; and no
such  injunction, judgment, order, decree, ruling, or charge shall be in effect;

     (d)     No  material  adverse change shall have taken place with respect to
Buyer  or P2S, and no event shall have occurred that results in a Buyer Material
Adverse  Effect.

     (e)     Buyer and P2S shall each have delivered to the Seller a certificate
to  the  effect that each of the conditions specified above in Sections 5.2(a) -
(d)  has  been  complied  with  in  all  respects;

     (f)     Seller  shall  be  satisfied  with the results of its due diligence
review  of  Buyer;  and  P2S;

     (g)     Buyer shall have executed and delivered to Principal the Consulting
Agreement;

     (h)     Buyer  and  Seller  shall have mutually agreed upon those insurance
deposits  to  be  reimbursed  to  Seller  at  the  time  of  Closing;  and

     (i)     All  actions  to  be  taken  by  Buyer  and  P2S in connection with
consummation  of  the  transactions  contemplated  hereby  and all certificates,
opinions,  instruments,  and other documents required to effect the transactions
contemplated  hereby  will  be  reasonably satisfactory in form and substance to
Seller  and  the  Principal.

6.     Closing;  Closing  Date.  A closing of the transactions contemplated
       -----------------------
hereby  the  "Closing")  will take place at such time, not later than  March 15,
2005,  at  the  offices  of  Buyer's  counsel, that is agreed upon by Seller and
Buyer.  The  date  on which the Closing is held is referred to in this Agreement
as  the  "Closing  Date."

7.     Documents  to  be  Delivered  at  the  Closing.
       ----------------------------------------------

     7.1     Documents  to  be  Delivered  by  Seller  or the Principal.  At the
             ----------------------------------------------------------
Closing,  Seller  and/or  the  Principal,  as the case may be, shall deliver, or
cause  to  be  delivered,  to  Buyer  the  following:

     (a)     a  duly executed bill of sale, dated the Closing Date, transferring
to Buyer all of Seller's right, title and interest in and to the Assets together
with  possession  of  the  Assets;

                                       10
<PAGE>

     (b)     a  duly  executed assignment, transferring to Buyer all of Seller's
right,  title  and interest in and to the contracts, agreements, contract rights
and Intellectual Property included in the Assets, accompanied by any third party
consents  contemplated  by  Section  3.4;

     (c)     the  certificate  required  by  Section  5.1(g),  above;

     (d)     a copy of resolutions of the board of directors and shareholders of
Seller,  certified by an executive officer of Seller, authorizing the execution,
delivery  and  performance  of  this  Agreement  by  Seller;  and

     (e)     the  Consulting  Agreement  executed  by  Principal;  and

     (e)     such  other certificates, documents and instruments as Buyer or P2S
may  have  reasonably  requested in connection with the transaction contemplated
hereby.

     7.2     Documents  to  be  Delivered by Buyer.  At the Closing, Buyer shall
             -------------------------------------
deliver or cause to be delivered to Seller and/or the Principal, as the case may
be,  the  following:

     (a)     the  certificate  required  by  Section  5.2(e);

     (b)     a  copy  of resolutions of the board of directors and shareholders,
if  required,  of Buyer and P2S, each certified by an executive officer of Buyer
and P2S, as the case may be, authorizing the execution, delivery and performance
of  this  Agreement  by  Buyer  and  P2S;

     (c)     certificates  evidencing  the  P2S  Warrants;

     (d)     the  Consulting  Agreement  executed  by  Buyer;  and

     (e)     such  other  certificates,  documents  and  instruments  as  Seller
may  have  reasonably  requested in connection with the transaction contemplated
hereby.

8.     Additional  Covenants.
       ---------------------

     8.1     Access  to  Books  and  Records.  During  the  course  of  this
             -------------------------------
transaction,  from  the  date  hereof through Closing, each party agrees to make
available  for inspection all corporate books, records and assets, and otherwise
afford  to each other and their respective representatives, reasonable access to
all  documentation  ad  other information concerning the business, financial and
legal  conditions  of  each  other for the purpose of conducting a due diligence
investigation  thereof.  Such  due  diligence  investigation  shall  be  for the
purpose  of  satisfying  each  party  as  to  the  business, financial and legal
condition  of  each  other  for  the  purpose of determining the desirability of
consummating  the  proposed  transaction.  The  parties  further  agree  to keep
confidential  and  not use for their own benefit, except in accordance with this
Agreement  any information or documentation obtained in connection with any such
investigation.

                                       11
<PAGE>

     8.2     Further Assurances.  If, at any time after the Closing, the parties
             ------------------
shall  consider  or be advised that any further deeds, assignments or assurances
in  law  or that any other things are necessary, desirable or proper to complete
the  transactions  contemplated  hereby  in  accordance  with  the terms of this
agreement  or  to vest, perfect or confirm, of record or otherwise, the title to
any  property  or  rights  of  the  parties hereto, the parties agree that their
proper  officers  and directors shall execute and deliver all such proper deeds,
assignments  and  assurances  in  law  and do all things necessary, desirable or
proper  to  vest,  perfect  or  confirm  title  to  such  property or rights and
otherwise  to  carry  out  the  purpose  of  this Agreement, and that the proper
officers and directors the parties are fully authorized to take any and all such
action.

     8.3     No  Public  Disclosure.  Without  the  prior written consent of the
             ----------------------
other, which written consent will not be unreasonably withheld, no party to this
Agreement  will,  and  will  each cause their respective representatives not to,
make  any release to the press or other public disclosure with respect to either
the  fact  that  discussions  or  negotiations  have  taken place concerning the
transactions  contemplated  by this Agreement, the existence or contents of this
Agreement or any prior correspondence relating to this transactions contemplated
by this Agreement, except for such public disclosure as may be necessary, in the
written  opinion  of  outside  counsel  (reasonably  satisfactory  to  the other
parties)  for  the party proposing to make the disclosure not to be in violation
of  or  default  under any applicable law, regulation or governmental order.  If
either  party  proposes  to make any disclosure based upon such an opinion, that
party  will deliver a copy of such opinion to the other party, together with the
text  of  the  proposed  disclosure,  as  far in advance of its disclosure as is
practicable, and will in good faith consult with and consider the suggestions of
the  other  party concerning the nature and scope of the information it proposes
to  disclose.

     8.4     Right  to Rescind.  The parties to this Agreement agree and confirm
             -----------------
that  P2S  shall  have  the right to rescind this Agreement and the transactions
contemplated  hereby,  and  cause  the  parties  to  be restored to their status
immediately  prior  to  the  Closing,  in  the  event that the audited financial
statements  of  Seller  described  in the last sentence of Section 3.9 cannot be
prepared  and  timely  filed  with  the  Securities  and  Exchange  Commission.

9.     Indemnification  and  Related  Matters.
       --------------------------------------

     9.1     Indemnification  by  Seller  and  the  Principals.  Seller  and the
             -------------------------------------------------
Principal,  jointly  and severally, hereby indemnify and hold Buyer and P2S, and
their  respective  officers,  directors,  affiliates,  successors  and  assigns,
harmless from and against any and all damages, losses, liabilities, obligations,
costs or expenses incurred by Buyer and P2S and arising out of the breach of any
representation  or  warranty  of  Seller  and/or the Principal hereunder, and/or
Seller's  and/or  the  Principal's failure to perform any covenant or obligation
required  to  be  performed  by  it  hereunder.

     9.2     Indemnification  by  Buyer  and  P2S.   Buyer  and P2S, jointly and
             ------------------------------------
severally,  hereby indemnify and hold Seller and Principal, and their respective
officers,  directors, affiliates, successors, legal representatives and assigns,
harmless from and against any and all damages, losses, liabilities, obligations,
costs  or  expenses  incurred  by Seller and/or Principal and arising out of the
breach  of  any  representation  or  warranty  of Buyer or P2S hereunder, and/or
Buyer's  and/or  P2S's failure to perform any covenant or obligation required to
be  performed  by  either  of  them  hereunder.

                                       12
<PAGE>

     9.3     Procedure  for  Indemnification.  Any  party  entitled  to
             -------------------------------
indemnification  under this Article 9 (an "Indemnified Party") will give written
notice  to  the  indemnifying  party  of  any matters giving rise to a claim for
indemnification;  provided,  that  the  failure  of  any  party  entitled  to
indemnification  hereunder  to  give notice as provided herein shall not relieve
the  indemnifying  party  of  its obligations under this Article 9 except to the
extent  that  the  indemnifying  party is actually prejudiced by such failure to
give  notice.  In  case  any  action,  proceeding or claim is brought against an
Indemnified  Party  in respect of which indemnification is sought hereunder, the
indemnifying  party  shall  be  entitled  to  participate  in and, unless in the
reasonable  judgment  of counsel to the Indemnified Party a conflict of interest
between  it  and  the  indemnifying party may exist with respect of such action,
proceeding  or  claim,  to  assume  the  defense thereof with counsel reasonably
satisfactory  to the Indemnified Party. In the event that the indemnifying party
advises  an  Indemnified  Party  that  it  will  not  contest  such  a claim for
indemnification  hereunder,  or  fails,  within  30  days  of  receipt  of  any
indemnification  notice  to  notify,  in writing, such person of its election to
defend,  settle  or  compromise,  at  its  sole  cost  and  expense, any action,
proceeding  or claim (or discontinues its defense at any time after it commences
such  defense), then the Indemnified Party may, at its option, defend, settle or
otherwise compromise or pay such action or claim. In any event, unless and until
the  indemnifying  party  elects  in  writing  to  assume and does so assume the
defense  of  any such claim, proceeding or action, the Indemnified Party's costs
and  expenses  arising  out of the defense, settlement or compromise of any such
action,  claim  or  proceeding  shall  be  losses  subject  to  indemnification
hereunder.  The  Indemnified  Party  shall cooperate fully with the indemnifying
party  in  connection  with  any  settlement negotiations or defense of any such
action  or claim by the indemnifying party and shall furnish to the indemnifying
party  all  information  reasonably  available  to  the Indemnified Party, which
relates  to  such  action  or  claim.  The  indemnifying  party  shall  keep the
Indemnified Party fully apprised at all times as to the status of the defense or
any  settlement  negotiations  with  respect  thereto. If the indemnifying party
elects  to  defend any such action or claim, then the Indemnified Party shall be
entitled  to  participate in such defense with counsel of its choice at its sole
cost  and expense. The indemnifying party shall not be liable for any settlement
of  any  action, claim or proceeding affected without its prior written consent.
Notwithstanding  anything  in  this  Article 9 to the contrary, the indemnifying
party  shall  not, without the Indemnified Party's prior written consent, settle
or  compromise  any claim or consent to entry of any judgment in respect thereof
which  imposes  any future obligation on the Indemnified Party or which does not
include,  as  an  unconditional  term thereof, the giving by the claimant or the
plaintiff to the Indemnified Party of a release from all liability in respect of
such  claim.  The  indemnity agreements contained herein shall be in addition to
(a)  any  cause of action or similar rights of the Indemnified Party against the
indemnifying party or others, and (b) any liabilities the indemnifying party may
be  subject  to.

     9.4     Basket.  Notwithstanding any conflicting or inconsistent provisions
             ------
hereof,  Seller  and  the Principal shall not be liable in damages, indemnity or
otherwise  to  Buyer  or  P2S  in  respect  of  the  inaccuracy or breach of any
representations,  warranties,  covenants  or  agreements  herein,  except to the
extent  that  the  damages  to Buyer and/or P2S, singularly or in the aggregate,
exceed  the  sum  of  $10,000;  provided  that  Seller's and Principal's maximum
obligation  under  this  sentence  shall not exceed $1,000,000 in the aggregate.
Notwithstanding any conflicting or inconsistent provisions hereof, Buyer and P2S
shall  not be liable in damages, indemnity or otherwise to Seller, the Principal
(or any designee) in respect to the inaccuracy or breach of any representations,
warranties,  covenants or agreements herein except to the extent that damages to
Seller  exceed,  individually  or in the aggregate, the sum of $10,000; provided
that  Buyer's  and P2S's maximum obligation under this sentence shall not exceed
$1,000,000  in  the  aggregate.

                                       13
<PAGE>

10.     Termination.
        -----------

     10.1     Termination  by  Mutual Consent.  This Agreement may be terminated
              -------------------------------
by  mutual  consent  of  the  parties, in writing, signed by each of the parties
hereto.

     10.2     Termination by Buyer and P2S.  This Agreement may be terminated by
              ----------------------------
Buyer and/or P2S, by written notice to Seller, (a) if the Closing does not occur
prior  to  March  31,  2005,  (b)  in  the  event  of  a  material breach of any
representation  or  warranty of Seller and/or the Principal hereunder, or (c) in
the  event  Seller  and/or  Principal  hereunder  fail  to  perform any material
covenant or obligation required to be performed by it hereunder and such failure
remains  uncured  for  ten  days  following  such  written  notice.

     10.3     Termination  by  Seller  and the Principal.  This Agreement may be
              ------------------------------------------
terminated  by Seller or the Principal, by written notice to Buyer, in the event
of  a  material  breach  of  any  representation  or  warranty  of  Buyer or P2S
hereunder,  or  in the event Buyer or P2S fails to perform any material covenant
or  obligation required to be performed by it hereunder and such failure remains
uncured  for  ten  days  following  such  written  notice.

     10.4     Effect  of  Termination.  Termination  of  this  Agreement  under
              -----------------------
Section  10.02  or 10.03 hereof shall not preclude the parties from pursuing all
remedies  available  to  them  under  applicable  law  arising by reason of such
termination.  In  the  event of termination of this Agreement, the Note [as such
term  is  defined  in  Section  2.2(a)]  shall  be  immediately due and payable.

11.     Miscellaneous.
        -------------

     11.1     Finders.  Buyer  and  P2S,  on  the  one  hand, and Seller and the
              -------
Principal,  on the other hand, represent and warrant that they have not employed
or  utilized  the  services  of  any  broker  or  finder in connection with this
Agreement  or  the  transactions  contemplated  by it.  Seller and the Principal
jointly  and severally, shall indemnify and hold Buyer and P2S harmless from and
against  any  and  all  claims  for  brokers' commissions made by any party as a
result  of  this  Agreement and transaction contemplated hereunder to the extent
that  any  such  commission  was incurred, or alleged to have been incurred, by,
through  or  under  Seller.  Buyer and P2S jointly and severally shall indemnify
and  hold  Seller and the Principal harmless from and against any and all claims
for  brokers'  commissions  made  by any party as a result of this Agreement and
transaction  contemplated  hereunder  to the extent that any such commission was
incurred,  or  alleged to have been incurred, by, through or under Buyer or P2S.

     11.2     Expenses.  Except  as  otherwise  specifically  provided  in  this
              --------
Agreement,  Buyer, P2S, the Principal and Seller shall bear their own respective
expenses  incurred  in connection with this Agreement and in connection with all
obligations  required  to  be  performed  by  each of them under this Agreement.

                                       14
<PAGE>

     11.3     Entire  Agreement;  No  Waiver.  This Agreement, the Schedules and
              ------------------------------
any  instruments  and agreements to be executed pursuant to this Agreement, sets
forth the entire understanding of the parties hereto with respect to its subject
matter,  merges and supersedes all prior and contemporaneous understandings with
respect  to its subject matter and may not be waived or modified, in whole or in
part,  except  by  a writing signed by each of the parties hereto.  No waiver of
any  provision  of this Agreement in any instance shall be deemed to be a waiver
of  the same or any other provision in any other instance.  Failure of any party
to enforce any provision of this Agreement shall not be construed as a waiver of
its  rights  under  such provision.  Without limiting the foregoing, the parties
hereby  agree and acknowledge that the version of this Agreement dated "February
  ,  2005"  and signed by the parties shall be superceded by this Agreement, and
--
upon  execution  of  this Agreement, such other agreement shall be of no further
force  or  effect.

     11.4     Jurisdiction  and Governing Law.  This Agreement shall be governed
              -------------------------------
by  and  interpreted in accordance with the laws of the state of Florida without
regard  to  the principles of conflict of laws.  Each of the parties irrevocably
and unconditionally agrees that any suit, action or legal proceeding arising out
of  or  relating  to  this  Agreement  shall  be  settled by binding arbitration
conducted in accordance with the Commercial Rules of Arbitration of the American
Arbitration  Association ("AAA"). The arbitration shall take place in Palm Beach
County,  Florida,  and  shall  be heard by one arbitrator selected in accordance
with  AAA  Rules  of  Commercial  Arbitration.  The  arbitrator  shall  render a
reasoned  award  and  such award shall be signed and dated.  The decision of the
arbitrator  shall  be  final  and  binding upon the parties, and the arbitration
award  may  be  entered  in  any court of competent jurisdiction.  Pending final
determination  by  the arbitrator, each of the parties shall pay one-half of the
fees  of  the AAA (other than filing fees), including without limitation hearing
and  arbitrator's  fees,  and  the  parties'  obligation  to  pay  such  fees in
accordance  with  AAA  rules  shall  be  enforceable  in  any court of competent
jurisdiction.  The  parties  to  any  arbitration  hereunder agree to submit for
determination  by  the  arbitrator,  the  amount of fees and expenses, including
reasonable  attorney's  fees,  to  be  borne  by  each  party.

     11.5     Construction.  Headings  contained  in  this  Agreement  are  for
              ------------
convenience  only and shall not be used in the interpretation of this Agreement.
References  herein  to  Articles,  Sections  and  Exhibits  are to the articles,
sections  and  exhibits, respectively, of this Agreement.  The Seller Disclosure
Schedule  is  hereby  incorporated  herein  by reference and made a part of this
Agreement.  As used herein, the singular includes the plural, and the masculine,
feminine  and  neuter  gender  each  includes  the  others  where the context so
indicates.

     11.6     Notices.  All  notices  and  other  communications  under  this
              -------
Agreement  shall  be  in  writing  and  shall  be  deemed  given  when delivered
personally (including by confirmed legible telecopier transmission) or mailed by
certified  mail,  return  receipt  requested,  or  by  overnight  mail  properly
receipted  to  the  parties  at the following addresses (or to such address as a
party  may  have  specified  by notice given to the other party pursuant to this
provision):

                                       15
<PAGE>

                         If  to  Seller  or  the  Principal:

                         Michael  Allora
                         G.  F.  C.,  Inc.
                         136  Freeway  Drive  East
                         East  Orange,  New  Jersey  07018
                         Telephone  No.:(973)  266-7020
                         Telecopy  No.:  (973)  266-7083

                         With  a  copy  (which  shall not constitute notice) to:

                         Stephen  E.  Lampf,  Esq.
                         Lampf,  Lipkind,  Prupis  &  Petigrow,  P.A.
                         80  Main  Street
                         West  Orange,  New  Jersey  07052-5482

                         If  to  P2S,  to:

                         Power2Ship,  Inc.
                         903  Clint  Moore  Road
                         Boca  Raton,  FL  33431
                         Attn:  Richard  Hersh,  President
                         Telephone  No.:  (561)  998-7557
                         Telecopy  No.:  (561)  998-7821

                         If  to  Buyer,  to:

                         Power2Ship,  Inc.
                         903  Clint  Moore  Road
                         Boca  Raton,  FL  33431
                         Attn:  Richard  Hersh,  President
                         Telephone  No.:  (561)  998-7557
                         Telecopy  No.:  (561)  998-7821

     11.7     Severability.  In the event that any provision hereof would, under
              ------------
applicable  law,  be invalid or enforceable in any respect, such provision shall
be  construed  by  modifying or limiting it so as to be valid and enforceable to
the  maximum extent compatible with, and permissible under, applicable law.  The
invalidity  or  unenforceability  of  any  provision of this Agreement shall not
affect  the validity or enforceability of any other provision of this Agreement,
which  shall  remain  in  full  force  and  effect.

     11.8     Binding  Effect; Assignment.  This Agreement shall be binding upon
              ---------------------------
and  inure  to  the  benefit  of the parties and their respective successors and
permitted  assigns.  Nothing  in  this  Agreement  shall  create or be deemed to
create any third party beneficiary rights in any person or entity not a party to
this  Agreement.  No assignment of this Agreement or of any rights or obligation
hereunder may be made by either party (by operation of law or otherwise) without
the  prior written consent of the other and any attempted assignment without the
required  consent  shall  be  void.

                                       16
<PAGE>

     11.9     Counterparts.  This  Agreement  may  be  executed in counterparts,
              ------------
each  of which shall be an original, but which together shall constitute one and
the  same  Agreement.

                                       17
<PAGE>

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

                                   POWER2SHIP,  INC.,  A  NEVADA  CORPORATION

                                   By:  /s/ Richard Hersh
                                       -----------------------
                                   Richard  Hersh,  President

                                   POWER2SHIP  ,  INC.,  A  DELAWARE CORPORATION

                                   By:  /s/ Richard Hersh
                                        ----------------------
                                   Richard  Hersh,  President

                                   G.F.C.,  INC.

                                   By: /s/ Michael Allora
                                        ----------------------
                                   Michael  Allora,  President

                                   THE  PRINCIPAL

                                   /s/ Michael Allora
                                   -----------------------------
                                   Michael  Allora

                                       18
<PAGE>

                                  SCHEDULE 1.1
                                     ASSETS
                                     ------

     (a)  Thos trucking and brokerage authority permits identified (by attaching
          copies  or  otherwise)  on  Annex  1.1(a).
     (b)  Those  contracts  with  shipping  customers  that  are  identified (by
          attaching  copies  or  otherwise)  on  Annex  1.1(b).
     (c)  Those  contracts  with agents that are identified (by attaching copies
          or  otherwise)  on  Annex  1.1(c).
     (d)  Those  lease  contracts  with  owner-operators  as  are identified (by
          attaching  copies  or  otherwise)  on  Annex  1.1(d).
     (e)  All  of  Buyer's  right,  title and interest in and to escrow deposits
          from  those  owner-operators  and  agents  as  are identified on Annex
          1.1(e).
     (f)  All  of  Buyer's  right,  title  and  interest in and to the telephone
          number(s)  used  by  Buyer  in  the  conduct  of  its  business.

                                       19
<PAGE>

                                  SCHEDULE 1.2
                                   LIABILITIES
                                   -----------

     (a)  Obligations  corresponding  to  the  owner-operator  and  agent escrow
          deposits  identified  on  Annex  1.1(e).

                                       20
<PAGE>REVOLVING CREDIT AND TERM LOAN AGREEMENT

                                THIS
AGREEMENT, dated as of February 18, 2005, entered into by and among INTERNATIONAL PLASTICS AND EQUIPMENT
CORP., a Pennsylvania corporation (“Borrower”)

AND

CITIZENS BANK OF PENNSYLVANIA, a Pennsylvania banking organization (the “Bank”);

RECITALS:

                                WHEREAS,
the Borrower has requested, and the Bank has agreed, subject to the terms and conditions contained
herein, to extend to the Borrower a facility for the making of revolving credit loans in the maximum
principal amount of $3,500,000, a term loan in the original principal amount of $1,500,000, a multi-draw
term loan in the maximum principal amount of $1,000,000, and a letter of credit facility in the maximum
principal amount of $1,800,000.

                                NOW,
THEREFORE, in consideration of the premises and of the mutual covenants contained in this Agreement,
and of the loans and extensions of credit now or after the date of this Agreement made to or for
the benefit of the Borrower by the Bank, and intending to be legally bound hereby, the parties agree
as follows:

ARTICLE I

DEFINITIONS

                                1.01 Certain Definitions . In addition to other words and terms defined elsewhere in this Agreement, the following words and
terms have the following meanings, respectively, unless the context otherwise clearly requires: 

                                “Adjusted
EBITDA” means, as of the date of determination for any period, Consolidated EBITDA for such
period, less (i) non-financed Capital Expenditures during such period, plus (ii) Lease Obligations,
less (iii) distributions, dividends and advances to shareholders or Affiliates that are paid in cash,
less (iv) taxes actually paid during such period, all as determined in accordance with GAAP. 

                                “Affiliate”
means any person or entity which directly or indirectly controls, or is controlled by, or is under
common control with, a Borrower. For each individual who is an Affiliate within the meaning of the
foregoing, the term “Affiliate” shall include any other individual related to such Affiliate
by consanguinity within the third degree or in a step or adoptive relationship within such third
degree or related by affinity with such Affiliate or any such individual, and any person directly
or indirectly controlled by any of the foregoing. The term “control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the management or policies
of a person or entity, whether through the ownership of voting securities, by contract or otherwise.

                                “Agreement”
means this Revolving Credit and Term Loan Agreement as the same may be amended, modified, restated
or supplemented from time to time.

                                “Anti-Terrorism
Laws” shall mean any Laws relating to terrorism or money laundering, including Executive Order
No. 13224, the USA Patriot Act, the Laws comprising or implementing the Bank Secrecy Act, and the
Laws administered by the United States Treasury Department’s Office of Foreign Asset Control
(as any of the foregoing Laws may from time to time be amended, renewed, extended, or replaced). 

                                “Bank”
means Citizens Bank of Pennsylvania, with an office at 525 William Penn Place, 29th Floor, Pittsburgh, Pennsylvania 15219.

                                “Bank
Debt” means (i) all indebtedness, both principal and interest, of the Borrower to the Bank now
or after the date of this Agreement evidenced by any Notes, including the Revolving Credit Note and
the Term Notes executed and delivered by the Borrower in connection with this Agreement, (ii) all
other debts, liabilities, duties and obligations of the Borrower to the Bank now existing and contracted
or incurred after the date of this Agreement, whether arising under or in connection with the Loan
Documents or arising under any other agreement, instrument or undertaking made by or for the benefit
of the Borrower to or for the benefit of the Bank and whether direct or contingent, including, without
limitation, all reimbursement and other obligations arising under or with respect to the Letter of
Credit Facility, Hedging Contracts, Hedging Obligations, Interest Rate Protection Agreements, Capitalized
Lease Obligations and letters of credit, (iii) all costs and expenses incurred by the Bank in the
collection of any of the indebtedness described in this paragraph or in connection with the enforcement
of any of the duties and obligations of the Borrower to the Bank described in this paragraph, including
reasonable attorneys’ fees and legal expenses, and (iv) all future advances made by the Bank
for the maintenance, protection, preservation or enforcement of, or realization upon, the Collateral
or any portion thereof, including advances for storage, transportation charges, taxes, insurance, repairs and the like.

                                “Bankruptcy
Code” means 11 U.S.C. §101 et. seq. as the same may be modified or amended from time to time.

2

                                “Base
Rate” means, for any day, with respect to Loans, a fluctuating rate of interest per annum equal
to the higher of (i) the Federal Funds Rate for such day plus one half of one percent (0.5%), or
(ii) the rate which is publicly announced from time to time by the Bank as being its so-called “prime
rate”; with each change in the Base Rate automatically, immediately, and without notice changing
the rate applicable to the Loan which is calculated based upon the Base Rate. The Base Rate is not
necessarily the lowest rate of interest then available from the Bank on fluctuating rate loans. Each
change in any interest rate provided for herein based upon the Base Rate resulting from a change
in the Federal Funds Rate or the “prime rate” announced by the Bank shall take effect at
the time of such change in the Federal Funds Rate or the “prime rate” announced by the Bank.

                                “Base
Rate Loans” means Loans that bear interest at or based upon the Base Rate.

                                “ Base Rate Portion” means at any time the part, including the whole, of the unpaid principal amount of the Loans bearing
interest at such time under the Base Rate Option as provided in Section 2.04(a) of this Agreement.

                                “Borrower”
means International Plastics and Equipment Corp., a Pennsylvania corporation, with an address at
185 Northgate Circle, New Castle, Pennsylvania 16105.

                                “Borrowing
Base” shall have the meaning given to that term in Section 2.01(a) of this Agreement.

                                “Borrowing
Base Certificate” shall have the meaning given to that term in Section 5.01(f) of this Agreement.

                                “Business
Day” means any day other than a Saturday, Sunday, public holiday under the laws of the Commonwealth
of Pennsylvania or other day on which the Bank is not open for business in Pittsburgh, Pennsylvania.

                                “Capital
Expenditure” means any expenditure made or liability incurred which is, in accordance with GAAP,
treated as a capital expenditure and not as an expense item for the year in which it was made or
incurred, as the case may be.

                                “Capitalized
Lease Obligations” means any amount payable with respect to any lease of any tangible or intangible
property (whether real, personal or mixed), however denoted, which either (1) is required by GAAP
to be reflected as a liability on the face of the balance sheet of the lessee, or (2) based on actual
circumstances existing and ascertainable either at the commencement of the term of such lease or
at any subsequent time at which any property becomes subject thereto, can reasonably be anticipated
to impose on such lessee substantially the same economic risks and burdens, having regard to such
lessee’s obligations and the lessor’s rights under the lease both during and at the termination
of the lease, as would be imposed on the lessee by any lease which is required to be so reflected
on the balance sheet of the lessee or by the ownership of the leased property.

                                “Cash
Management Agreement” means any Cash Management Master Agreement and Cash Sweep Terms and Conditions
entered into whether prior to or after the date of this Agreement by and between the Bank, as lender
and as a depository bank, and the Borrower, as borrower and beneficial owner of certain depository
accounts, as the same may be amended, restated, supplemented or modified from time to time.

3

                                “Closing
Date” means February 18, 2005, or such other date upon which the parties may agree.

                                “Code”
means the Uniform Commercial Code as in effect on the date of this Agreement and as amended from
time to time, of the state or states having jurisdiction with respect to all or any portion of the
collateral granted or assigned to the Bank from time to time under or in connection with this Agreement.

                                “Consolidated
EBITDA” means, as of the date of determination, Consolidated Net Income for such period, (i)
plus interest expense and all provisions for taxes of the Borrower and the Guarantor, (ii) plus provisions
for depreciation and amortization that were deducted from Consolidated Net Income, (iii) plus (or
less) non-cash debits (or credits) to Consolidated Net Income if any, (iv) plus (or less) gain (or
loss) on sales of assets other than sales of inventory in the ordinary course of business of the
Borrower and the Guarantor, all as consolidated and determined in accordance with GAAP. 

                                “Consolidated
Fixed Charges” means, as of the date of determination, for any period, the sum of (i) Interest
Expense and taxes actually paid during such period, plus (ii) scheduled principal payments on, and
fees paid pursuant to, Debt which constitutes long term indebtedness during such period, plus (iii)
Lease Obligations, all as consolidated and determined in accordance with GAAP.

                                “Consolidated
Fixed Charge Coverage Ratio” means for any period as of the date of determination, the ratio
of (a) Adjusted EBITDA for such period to (b) Consolidated Fixed Charges for such period, as calculated
on a rolling four quarter basis and as determined in accordance with GAAP.

                                “Consolidated
Net Income” for any period, with respect to the Borrower and the Guarantor shall mean the net
earnings (or loss) after taxes of the Guarantor, the Borrower and their consolidated Subsidiaries
for such period determined on a consolidated basis in accordance with GAAP.

                                “Consolidated
Tangible Net Worth” means, as of the date of determination, the tangible net worth of the Borrower
and the Guarantor, as consolidated and determined in accordance with GAAP; provided, however, that
in any event, goodwill, notes and accounts receivable from officers, directors, shareholders and
Affiliates and any other items deemed by the Bank to be intangible in its sole discretion shall be
excluded.

4

                                “Debt”
means (i) indebtedness or liability for borrowed money, or for the deferred purchase price of property
or services (including trade obligations) whether such indebtedness or liability is matured or unmatured,
liquidated or unliquidated, direct or contingent, and joint or several; (ii) Capitalized Lease Obligations;
(iii) current liabilities in respect of unfunded vested benefits under any Plan; (iv) obligations
under letters of credit; (v) all guaranties, endorsements (other than for collection or deposit in
the ordinary course of business), and other contingent obligations to purchase, to provide funds
for payment, to supply funds to invest in any person or entity, or otherwise to assure a creditor
against loss; and (vi) obligations secured by any lien on property owned by such person or entity,
whether or not the obligations have been assumed, provided, that in no event shall “Debt”
include the value of property that is located at a facility of the Borrower but that is owned by a third party.

                                “ERISA”
means the Employee Retirement Income Security Act of 1974 as in effect as of the date of this Agreement
and as amended from time to time in the future.

                                “Event
of Default” means any of the Events of Default described in Section 7.01 of this Agreement.

                                “ Executive Order No. 13224” shall mean the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as
the same has been, or shall hereafter be, renewed, extended, amended or replaced.

                                “Expiration
Date” means February 16, 2006, unless extended in writing by the Bank in its sole and absolute
discretion.

                                “Federal
Funds Rate” means, for any day, the rate per annum (rounding upwards, if necessary, to
the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published
by the Federal Reserve Bank of Cleveland on the Business Day next succeeding such day, provided that (a) if the day for which such rate is to be determined is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day and (b) if such rate is not so published for any Business
Day, the Federal Funds Rate for such Business Day shall be the average rate on such transactions
as determined by the Bank.

                                “GAAP”
means generally accepted accounting principles (as such principles may change from time to time)
applied on a consistent basis (except for changes in application in which the Borrower’s independent
certified public accountants concur).

                                “Guaranty”
means the Guaranty and Suretyship Agreement executed and delivered by the Guarantor to the Bank on
the Closing Date, as the same may be amended, modified or supplemented from time to time.

                                “Guarantor”
means IPEC Holdings, Inc., a Nevada corporation, with an address of 185 Northgate Circle, New Castle,
Pennsylvania 16105.

                                “ Hedging Contracts” means interest rate swap agreements, interest rate cap agreements and interest rate collar agreements,
currency exchange agreements or any other agreements or arrangements entered into between the Borrower
and the Bank and designed to protect the Borrower against fluctuations in interest rates or currency
exchange rates.

5

                                “ Hedging Obligations” means, with respect to the Borrower, all liabilities of the Borrower to the Bank under Hedging Contracts.

                                “Interest
Expense” means, as of the date of determination, interest expense of the Borrower and the Guarantor
for such period, as consolidated and determined in accordance with GAAP.

                                “Interest
Payment Date” means (i) relative to any LIBOR Rate Loan, the last Business Day of a Rate Period,
provided, however, that if a Rate Period is longer than three (3) months, on the last day of the
third month of such Rate Period and, thereafter, on the last day of such Rate Period, and, (ii) relative
to any Base Rate Loan or Libor Advantage Rate Loan, the last Business Day of each month, in arrears.

                                “Interest Rate Protection Agreement” shall mean, for any Person, an interest rate swap, cap or collar agreement or similar arrangement
between such Person and one or more financial institutions providing for the transfer or mitigation
of interest risks either generally or under specific contingencies.

                                “Landlord’s
Waivers” means Landlord’s Waivers in form and substance satisfactory to the Bank that are
executed and delivered by the owners of the New Castle, Pennsylvania and Brewton, Alabama facilities
leased by the Borrower and at which the Borrower maintains inventory and/or equipment.

                                “Law”
means any law (including common law), constitution, statute, treaty, regulation, rule, ordinance,
order, injunction, writ, decree or award of any Official Body.

                                “Lease
Obligation” means an obligation of a lessee under a lease of any tangible or intangible property
(whether real, personal or mixed), including without limitation, with respect to any period under
any such lease, the aggregate amounts payable by such lessee to or on behalf of the lessor for such
period, including, without limitation, property taxes, insurance, interest and amortized charges
which such lessee is required to pay pursuant to such lease. Whenever it is necessary to determine
the amount of Lease Obligations for any period with respect to which any of the rentals under the
relevant lease are not definitely determinable by the terms of the lease, all such rentals will be
estimated in a reasonable amount for such period.

                                “Lessor”
means CRICIPECAL LLC, a Delaware limited liability company, the lessor of Borrower’s facilities
located in Brewton, Alabama and CRICIPECPA, L.P., a Delaware limited partnership, the lessor of Borrower’s
facilities located in New Castle, Pennsylvania.

                                “Letter
of Credit” has the meaning assigned to that term in Section 2.22 of this Agreement.

6

                                “Libor
Advantage Rate” for any day means the one (1) month Libor Rate selected by the Bank, in its
sole discretion, on the first London Banking Day of each calendar month to be in effect for such
calendar month as its one-month Libor Advantage Rate product.

                                “ Libor Advantage Rate Loan”  means any loan or advance the rate of interest applicable to which is based upon the LIBOR Advantage
Rate.

                                “Libor
Advantage Rate Portion” means at any time the part, including the whole, of the unpaid principal
amount of the Loans bearing interest at such time under the LIBOR Advantage Rate Option as provided
in Section 2.04(a) of this Agreement.

                                “LIBOR Lending Rate” means, relative to any LIBOR Rate Loan to be made, continued or maintained
as, or converted into, a LIBOR Rate Loan for any Rate Period, a rate per annum determined pursuant
to the following formula:

	 	LIBOR Lending Rate	=	LIBOR Rate	 
	 	 	(1.0	– LIBOR Reserve Percentage)	 

                                “LIBOR Rate” means relative to any Rate Period for LIBOR Rate Loans, the offered rate
for deposits of U.S. Dollars in an amount approximately equal to the amount of the requested LIBOR
Rate Loan for a term coextensive with the designated Rate Period which the British Bankers’ Association fixes as its LIBOR rate and which appears on Dow Jones Market Service (formerly known
as Telerate) display page 3750 as of 11:00 a.m. London time on the day which is two London Banking
Days prior to the beginning of such Rate Period.

                                “ LIBOR Rate Loan”  means any loan or advance the rate of interest applicable to which is based upon the LIBOR Rate.

                                “ LIBOR Rate Loan Prepayment Fee” shall have the meaning ascribed to such term in Section 2.15(b) hereof.

                                “ LIBOR Rate Portion” means at any time the part, including the whole, of the unpaid principal amount of the Loans bearing
interest at such time under the LIBOR Rate Option as provided in Section 2.04(a) of this Agreement.

                                “ LIBOR Reserve Percentage”  means, relative to any day of any Rate Period for LIBOR Rate Loans, the maximum aggregate (without
duplication) of the rates (expressed as a decimal fraction) of reserve requirements (including all
basic, emergency, supplemental, marginal and other reserves and taking into account any transitional
adjustments or other scheduled changes in reserve requirements) under any regulations of the Board
of Governors of the Federal Reserve System (the “Board”) or other governmental authority
having jurisdiction with respect thereto as issued from time to time and then applicable to assets
or liabilities consisting of “Eurocurrency Liabilities”, as currently defined in Regulation
D of the Board, having a term approximately equal or comparable to such Rate Period.

                                “Lien”
means any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or
security arrangement of any nature, including, but not limited to, any conditional sale or title
retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the
effect of, security.

7

                                “Loan
Document” or “Loan Documents” means, singularly or collectively as the context may
require, (i) this Agreement, (ii) the Revolving Credit Note, (iii) the Term Loan Notes, (iv) the
Security Agreement, (v) the Guaranty, (vi) the UCC-1 financing statements filed in accordance with
the Security Agreement, (vii) the Landlord’s Waivers, and any and all other documents, instruments,
certificates and agreements executed and delivered in connection with this Agreement, as any of them
may be amended, modified, extended or supplemented from time to time.

                                “Loan”
or “Loans” means the Revolving Credit Loans, the Term Loan, the Multi-Draw Term Loan and
any other loan or loans made by the Bank to the Borrower under this Agreement.

                                “London
Banking Day” means a day for dealing in deposits in United States dollars by and among banks
in the London interbank market.

                                “Multi-Draw
Term Loan” has the meaning assigned to that term in Section 2.03(a) of this Agreement.

                                “Multi-Draw
Term Note” means the revolving credit note of the Borrower executed and delivered pursuant to
Section 2.03(b) of this Agreement, together with all extensions, renewals, refinancings or refundings
in whole or in part.

                                “Note”
or “Notes” means the Revolving Credit Note, the Term Loan Notes and any other note or notes
of the Borrower executed and delivered pursuant to this Agreement, together with all extensions,
renewals, refinancings or refundings in whole or in part.

                                “Notice
of Borrowing” has the meaning set forth in Section 2.01(c) of this Agreement.

                                “Office”,
when used in connection with the Bank, means its office located at 525 William Penn Place, 29th Floor, Pittsburgh, Pennsylvania 15219 or such other office of the Bank as the Bank may designate in
writing from time to time.

                                “Official
Body” means any government or political subdivision or any agency, authority, bureau, central
bank, commission, department or instrumentality of either, or any court, tribunal, grand jury or
arbitrator, in each case whether foreign or domestic.

                                “Plan”
means any deferred compensation program, including both single and multi-employer plans, subject
to Title IV of ERISA and established and maintained for employees of any of the Guarantor, the Borrower
or any Subsidiary or any controlled group of trades or businesses under common control as defined
respectively in Sections 1563 and 414(c) of the Internal Revenue Code of 1986, as amended, of which
any of the Guarantor, the Borrower or any Subsidiary is or becomes a part.

8

                                “ Portion” means a Base Rate Portion, a LIBOR Rate Portion or a Libor Advantage Rate Portion, as the case may
be.

                                “Potential
Default” means any event or condition which with notice or the passage of time would constitute
an Event of Default.

                                “Qualified
Accounts” means an account receivable, net of any prepayments, progress payments, deposits and
retentions, owing to the Borrower which met the specifications established from time to time by the
Bank, in its sole discretion, at the time it came into existence and continues to meet such specifications
until it is collected in full. As of the date of this Agreement, an account receivable, to be a Qualified
Account, must meet the following specifications at the time it comes into existence and continue
to meet such specifications until it is collected in full:

                                                (a)          The
account is not more than the sooner of (i) ninety (90) days from the date of the invoice thereof,
or (ii) sixty (60) days from the due date thereof, unless otherwise agreed to in writing by the Bank;

                                                (b)          The
account arose from the performance of services or an outright sale of goods by the Borrower in the
ordinary course of the Borrower’s business and such goods have been shipped, or services provided,
to the account debtor and the Borrower has possession of, or has delivered to the Bank, in the case
of goods, shipping and delivery receipts evidencing such shipment and, in the case of services, receipts
or other evidence satisfactory to the Bank that such services have been provided;

                                                (c)          The
account is not subject to any prior assignment, claim, lien, or security interest, and the Borrower
will not make any further assignment of the account or create any further security interest in the
account, nor permit its rights in the account to be reached by attachment, levy, garnishment or other
judicial process;

                                                (d)          The
account is not subject to set-off, credit, allowance or adjustment by the account debtor, except
discounts allowed for prompt payment, and the account debtor has not complained as to his liability
on the account and has not returned, or retained the right to return, any of the goods from the sale
of which the account arose;

                                                (e)          The
account does not arise from a sale of goods to a federal, state or local governmental authority or
from a sale of goods that are delivered or to be delivered outside the United States of America or
Canada or from a sale of goods to an account debtor domiciled outside of the United States of America
or Canada unless the Borrower has arranged letter of credit facilities, credit insurance or other
payment support satisfactory to the Bank, in its sole discretion;

9

                                                (f)           (1)
The account arose in the ordinary course of the Borrower’s business and did not arise from the
performance of services or a sale of goods to a supplier, an employee or an Affiliate of the Borrower,
and (2) the account does not constitute a progress billing which, when taken together with all other
progress billings that are included in Qualified Accounts, exceeds $25,000 in the aggregate;

                                                (g)          The
account does not constitute a finance charge, a service charge or lease receivable;

                                                (h)          No
notice of bankruptcy, insolvency or material adverse change of the account debtor has been received
by or is known to the Borrower; 

                                                (i)          The
Bank has not notified the Borrower that the Bank has determined that, in its reasonable discretion,
the account or account debtor is unsatisfactory;

                                                (j)          The
account is not payable by an account debtor more than 50% of whose accounts have remained unpaid
for more than ninety (90) days from the invoice date;

                                                (k)          Except
as provided in subpart (l) below, the account is not payable by an account debtor whose accounts
are greater than 25% of the aggregate of all Qualified Accounts; and

                                                (l)          With
respect to accounts owing from Dean Foods and its Affiliates (“Dean Foods Account Debtors”),
“Qualified Accounts” shall exclude all accounts owing from the Dean Foods Account Debtors
that are in excess of 50% of the aggregate of all Qualified Accounts.

                                “Qualified
Inventory” means inventory which is owned by the Borrower and held for sale; all of which is
subject to the Bank’s perfected first priority lien and security interest as provided in the
Security Agreement and which is not subject to a prior security interest held by a third party and
which is not any of the Borrower’s (i) inventory-in-transit or inventories not otherwise in
the Borrower’s possession at one of the locations listed on Schedule 5(d) of the Security Agreement and as to which the Borrower has delivered to the Bank a Landlord’s
Waiver or, with respect to inventory located at any other location within the United States, Borrower
has provided evidence satisfactory to the Bank that such inventory is covered by insurance required
by the terms of this Agreement; (ii) inventory consisting of parts and supplies; (iii) inventory
consisting of custom packaging, shipping materials or supplies; (iv) inventory determined by the
Bank or the Borrower to be not in good condition, slow-moving, obsolete or not currently usable or
salable in the ordinary course of the Borrower’s business; (v) inventory consisting of finished
goods which do not meet the specifications of the purchase order for which such inventory was produced;
(vi) inventory consisting of finished goods held pursuant to a consignment arrangement; (vii) inventory
with respect to which the Bank does not have a first and valid fully perfected security interest;
(viii) inventory produced in violation of the Fair Labor Standards Act and subject to the “hot
goods” provision contained in Title 29 U.S.C. Section 215(a)(1); (ix) inventory not in compliance
with any warranty made in this Agreement, or (x) work in process as indentified as such on Borrower’s
financial statements and in accordance with GAAP. Qualified Inventory shall be valued, for purposes
of this Agreement, at the lower of cost or market value.

10

                                “Rate Option”, “Rate Options”, “Rate” or “Rates” shall have the meaning ascribed to such terms in Section 2.04(a) hereof.

                                “Rate Period” means relative to any LIBOR Rate Loans:

		(i)	initially, the period beginning on (and including) the date on which such LIBOR Rate Loan is made or
continued as, or converted into, a LIBOR Rate Loan pursuant to Section 2.01(c) or 2.04 and ending on (but excluding) the day which numerically corresponds to such date one month thereafter
(or, if such month has no numerically corresponding day, on the last Business Day of such month),
in each case as the Borrower may select in its notice pursuant to Section 2.01(c) or 2.04; and
			 
		(ii)	thereafter, each period commencing on the last day of the next preceding Rate Period applicable to
such LIBOR Rate Loan and ending one month thereafter; provided, however, that:
			 

		(a)	the Borrower shall not be permitted to select Rate Periods to be in effect at any one time which have
expiration dates occurring on more than three (3) different dates;
			 
		(b)	Rate Periods commencing on the same date for LIBOR Rate Loans comprising part of the same advance under
this agreement shall be of the same duration;
			 
		(c)	if such Rate Period would otherwise end on a day which is not a Business Day, such Rate Period shall
end on the next following Business Day unless such day falls in the next calendar month, in which
case such Rate Period shall end on the first preceding Business Day; and
			 
		(a)	no Rate Period may end later than the termination of this Agreement.

                                “Rate
Segment” of the LIBOR Rate Portion at any time shall be the entire principal amount of such
Portion to which at such time there is applicable a particular Rate Period beginning on a particular
day and ending on another particular day. (By definition, each Portion is at all times composed of
an integral number of discrete Rate Segments, each corresponding to a particular Rate Period, and
the sum of the principal amounts of all Rate Segments of a particular portion at any time equals
the principal amount of such Portion at such time.)

11

                                “Responsible
Officer” means the Chief Executive Officer, President, any Vice President, Chief Financial Officer,
Treasurer or Secretary of the Borrower or any other officer of the Borrower designated to be a Responsible
Officer by any of the foregoing corporate officers.

                                “Revolving
Credit Commitment” has the meaning assigned to that term in Section 2.01(a) of this Agreement.

                                “Revolving
Credit Loans” has the meaning assigned to that term in Section 2.01(a) of this Agreement.

                                “Revolving
Credit Note” means the revolving credit note of the Borrower executed and delivered pursuant
to Section 2.01(b) of this Agreement, together with all extensions, renewals, refinancings or refundings
in whole or in part.

                                “Security
Agreement” means that certain Security Agreement dated as of the date of this Agreement executed
and delivered by the Borrower to the Bank, as the same may be amended, modified or supplemented from
time to time.

                                “Standard
Notice” means an irrevocable notice provided to the Bank on a Business Day which is:

	 	                                                (i)
on the same Business Day in the case of selection of, conversion to or renewal of the Base Rate Option
or the Libor Advantage Rate Option or prepayment of any Base Rate Portion or Libor Advantage Rate
Portion; and
		 
	 	                                                (ii)
at least two London Business Days in advance in the case of selection of, conversion to or renewal
of the LIBOR Rate Option or prepayment of any Libor Portion.

Standard Notice must be provided no later than 11:00 a.m., Pittsburgh time, on the last day permitted
for such notice.

                                “Subsidiary”
of a Borrower at any time means any corporation of which a majority of the outstanding capital stock
entitled to vote for the election of directors is at such time owned by the Borrower and/or one or
more Subsidiaries.

                                “Term
Loan” has the meaning assigned to that term in Section 2.02(a) of this Agreement.

                                “Term
Loan Notes” means the Term Note and the Multi-Draw Term Note.

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                                “Term
Note” means the revolving credit note of the Borrower executed and delivered pursuant to Section
2.03(b) of this Agreement, together with all extensions, renewals, refinancings or refundings in
whole or in part.

                                “USA
Patriot Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been,
or shall hereafter be, renewed, extended, amended or replaced.

ARTICLE II

THE CREDITS

                2.01  Revolving Credit Loans .

                                (a)          Revolving Credit Loans.  Subject to the terms and conditions and relying upon the representations and warranties set forth
in this Agreement, the Security Agreement and the other Loan Documents, the Bank agrees (such agreement
is sometimes referred to in this Agreement as the “Revolving Credit Commitment”) to make
loans (the “Revolving Credit Loans”) to the Borrower at any time or from time to time on
or after the Closing Date and to and including the day immediately preceding the Expiration Date
in an aggregate principal amount not exceeding at any one time outstanding the lesser of (i) $3,500,000,
or (ii) the sum equal to (x) eighty-five percent (85%) of the aggregate gross amount of Qualified
Accounts, plus (y) fifty percent (50%) of the aggregate gross amount of Qualified Inventory (the
aggregate amount of the sum determined by adding subpart (x) and (y) together shall be referred to
as the “Borrowing Base”). If at any time the sum of all Revolving Credit Loans outstanding
exceeds the Borrowing Base, the Borrower shall immediately repay to the Bank, in funds immediately
available, the amount of such excess together with all accrued interest on the amount of such repayment.
Within the limits of time and amount set forth in this Section 2.01, and subject to the provisions
of this Agreement, including, without limitation, the Bank’s right to demand repayment of the
Revolving Credit Loans upon the occurrence of an Event of Default, the Borrower may borrow, repay
and reborrow under this Section 2.01. The Borrower shall use the proceeds of the Revolving Credit
Loans for general working capital and general corporate purposes. 

                                (b)          Revolving Credit Note .  The obligations of the Borrower to repay the unpaid principal amount of the Revolving Credit Loans
made to the Borrower by the Bank and to pay interest on the unpaid principal amount will be evidenced
in part by the Revolving Credit Note of the Borrower dated the date of this Agreement in substantially
the form attached as Exhibit “A” to this Agreement, with the blanks appropriately filled. The executed Revolving Credit Note will be
delivered by the Borrower to the Bank on the Closing Date. 

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                                (c)          Making of Revolving Credit Loans.  On any Business Day when the Borrower desires that the Bank make a Revolving Credit Loan other than
pursuant to a Cash Management Agreement, if any, the Borrower shall provide to the Bank, at its Office,
irrevocable notice of the requested Revolving Credit Loan. Each notice (a “Notice of Borrowing”) required pursuant to this Section may be given in writing or by telephonic request and shall be given
no later than 2:00 p.m., prevailing Pittsburgh time, on the day such Loan is to be made, and if in
writing, shall be signed by a Responsible Officer or other officer or employee of the Borrower which
has been designated by a Responsible Officer as having the authority to deliver a Notice of Borrowing,
and, in any event, shall include: (i) the date (which shall be a Business Day) on which the
Revolving Credit Loan is to be made; (ii) the principal amount of the Revolving Credit Loan; and
(iii), if then due, the Borrowing Base Certificate required pursuant to Section 5.01(f) of this Agreement.
Each Notice of Borrowing shall be irrevocable and shall be sent to the Bank by (1) facsimile (which
shall be effective when received), or by (2) telephone (which shall be effective when telephoned),
or by (3) hand delivery, first class or first class express mail (which shall be effective when received),
in all cases with charges prepaid. Subject to the terms and conditions of this Agreement, upon the
Bank’s review, approval and processing of the required Notice of Borrowing and any other information
requested by the Bank, the Bank shall make the proceeds of the Revolving Credit Loan available to
the Borrower at the Bank’s Office on the date specified in the Notice of Borrowing, in funds
immediately available at the Office. Notwithstanding the foregoing, any Revolving Credit Loan made
by the Bank in good faith reliance upon a telephonic request shall be a Revolving Credit Loan under
this Agreement upon disbursement, provided that the Bank shall have the right to request that the
Borrower confirm any telephonic request for a Revolving Credit Loan in writing. The Borrower and
the Bank may enter into a Cash Management Agreement. If the Borrower and the Bank enter into a Cash
Management Agreement, such Cash Management Agreement may provide that all cash receipts of the Borrower
are to be deposited into a single deposit account and are to be applied to checks and other amounts
presented for payment against certain of the Borrower’s checking and disbursement accounts maintained
with the Bank and, to the extent of any excess funds, the outstanding principal balance of the Revolving
Credit Loans on a daily basis, as more particularly described in any such Cash Management Agreement.
In addition, a Cash Management Agreement may provide that to the extent that cash receipts in such
accounts of the Borrower with the Bank are less than amounts presented for payment against such accounts
of the Borrower with the Bank, Revolving Credit Loans shall be made to fund any such shortfall on
a daily basis. The Borrower and the Bank agree that any loans, advances and fundings made by the
Bank under a Cash Management Agreement, if any, shall be Revolving Credit Loans under this Section
2.01 and that fundings, notices of advances, payments and prepayments of Revolving Credit Loans made
pursuant to the Cash Management Agreement shall be controlled by such Cash Management Agreement.
In addition, notwithstanding anything to the contrary contained herein or in any Cash Management
Agreement, Revolving Credit Loans made pursuant to a Cash Management Agreement shall bear interest
at the Rates applicable to Revolving Credit Loans set forth in Section 2.04 of this Agreement. Nothing
contained herein or in any Cash Management Agreement shall permit the Borrower to request or obligate
the Bank to make any Revolving Credit Loans in an amount in excess of the then available Revolving Credit Commitment. 

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                2.02        
Term Loan.

                                (a)          The Term Loan. Subject to the terms and conditions and relying upon the representations and warranties set forth
in this Agreement, the Security Agreement and the other Loan Documents, the Bank agrees to make a
term loan (the “Term Loan”) to Borrower on or as of the Closing Date in a principal amount
of One Million Five Hundred Thousand Dollars ($1,500,000) (such agreement to make the Term Loan shall
sometimes be referred to in this Agreement as the “Term Loan Commitment”). The proceeds
of the Term Loan shall be used by Borrower to refinance existing Debt of the Borrower payable to
Sky Bank. 

                                (b)          Term Note. The obligations of Borrower to repay the unpaid principal amount of the Term Loan made to Borrower
by the Bank and to pay interest on the unpaid principal amount shall be evidenced in part by the
Term Note of Borrower dated the Closing Date in substantially the form attached as Exhibit “B” to this Agreement, with the blanks appropriately filled. The executed Term Note shall be delivered
by Borrower to the Bank on the Closing Date.

                                (c)          Payments of Principal and Maturity. Commencing on March 31, 2005 and continuing on the last day of each month thereafter for fifty-nine
(59) consecutive months, through and including January 31, 2010, Borrower shall make equal consecutive
monthly payments of principal, each in the amount equal to Twenty-Five Thousand Dollars ($25,000.00),
together with interest on the outstanding principal balance of the Term Loan at the rate or rates
of interest then in effect and applicable to the Term Loan pursuant to Section 2.04 of this Agreement. If not sooner paid, all unpaid principal, accrued interest and all other sums and
costs incurred by the Bank in connection with the Term Loan, the Term Note or the making of the Term
Loan, shall be due and payable on February 28, 2010, without notice, presentment or demand.

                2.03        
Multi-Draw Term Loan.

                                (a)          The Multi-Draw Term Loan. Subject to the terms and conditions and relying upon the representations and warranties set forth
in this Agreement, the Security Agreement and the other Loan Documents, the Bank agrees to make a
multi-draw term loan (the “Multi-Draw Term Loan”) to the Borrower in a maximum principal
amount of One Million Dollars ($1,000,000) (such agreement to make the Multi-Draw Term Loan shall
sometimes be referred to in this Agreement as the “Multi-Draw Term Loan Commitment”). The
proceeds of the Multi-Draw Term Loan shall be used by the Borrower to purchase equipment for use
in the business of the Borrower. The amount of each advance of proceeds of the Multi-Draw Term Loan
shall not exceed 100% of the invoiced cost of equipment that is the subject of the advance of proceeds
of the Multi-Draw Term Loan. The Multi-Draw Term Loan is a non-revolving loan and once borrowed and
repaid, it may not be reborrowed. 

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                                (b)          Multi-Draw Term Note. The obligations of the Borrower to repay the unpaid principal amount of the Multi-Draw Term Loan
made to Borrowers by the Bank and to pay interest on the unpaid principal amount shall be evidenced
in part by the Multi-Draw Term Note of the Borrower dated the Closing Date in substantially the form
attached as Exhibit “C” to this Agreement, with the blanks appropriately filled. The executed Multi-Draw Term Note shall be
delivered by the Borrower to the Bank on the Closing Date.

                                (c)          Making of Advances of Proceeds of the Multi-Draw Term Loan. Advances of proceeds of the Multi-Draw Term Loan may only be made until February 28, 2006 (the “Draw
Down Period”). Thereafter, the Bank shall have no obligation to advance any proceeds of the
Multi-Draw Term Loan, regardless of whether the Borrower complies with all other conditions to an
advance of proceeds of the Multi-Draw Term Loan. At least three (3) Business Days prior to the date
upon which the Borrower desires that the Bank make an advance of proceeds of the Multi-Draw Term
Loan during the Draw Down Period, the Borrower shall provide to the Bank, at its Office, irrevocable
notice of the requested advance of proceeds of the Multi-Draw Term Loan (a “Request for Term
Loan Advance”). Each Request for Term Loan Advance shall be given in writing and shall be given
no later than 11:00 a.m., Pittsburgh time on the day that is at least three (3) Business Days prior
to the date upon which such advance of proceeds of the Multi-Draw Term Loan is to be made and shall
be signed by a Responsible Officer or other officer or employee of the Borrower that has been designated
by a Responsible Officer as having the authority to deliver a Request for Term Loan Advance and,
in any event, shall include: (i) the date (which shall be a Business Day) on which the Multi-Draw
Term Loan advance is to be made; (ii) the principal amount of the Multi-Draw Term Loan advance requested,
which shall not be in excess of 100% of the cost of the equipment that is the subject of the Request
for Term Loan Advance; (iii) invoices and receipts supporting costs of equipment that has been
purchased by the Borrower for use in its business and that have not been the subject of a previous
Request for Term Loan Advance. Each Request for Term Loan Advance shall be irrevocable and shall
be sent to the Bank by (1) facsimile (which shall be effective when received), or by (2) hand delivery,
first class or first class express mail (which shall be effective when received). Subject to the
terms and conditions of this Agreement, upon the Bank’s review, approval and processing of the
required Request for Term Loan Advance and supporting information and any other information requested
by the Bank, the Bank shall make the proceeds of the Multi-Draw Term Loan available to the Borrower
at the Bank’s Office, in immediately available funds. In no event shall the Borrower submit
a Request for Term Loan Advance more frequently than once each calendar month or after the expiration of the Draw Down Period.

                                (d)         Payments of Principal and Maturity. Commencing on March 31, 2005 and on the last day of each month thereafter through and including February
28, 2006, the Borrower shall make monthly payments of interest only on the outstanding principal
balance of the Multi-Draw Term Loan at the rate or rates of interest then in effect and applicable
to the Multi-Draw Term Loan pursuant to Section 2.04 of this Agreement. Commencing on March 31, 2006 and continuing on the last day of each month thereafter
for fifty-nine (59) consecutive months through and including January 31, 2011, the Borrower shall
make equal consecutive monthly payments of principal, each in the amount equal to one/sixtieth (1/60th) of the principal amount of the Multi-Draw Term Loan that is outstanding on March 1, 2006, together
with interest on the outstanding principal balance of the Multi-Draw Term Loan at the rate or rates
of interest then in effect and applicable to the Multi-Draw Term Loan pursuant to Section 2.04 of this Agreement. Notwithstanding anything to the contrary contained herein, if not sooner paid,
all unpaid principal, accrued interest and all other sums and costs incurred by the Bank pursuant
to the Multi-Draw Term Loan, the Multi-Draw Term Note or the making of the Multi-Draw Term Loan,
shall be due and payable on February 28, 2011, without notice, presentment or demand.

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                2.04        
Interest Rates.

                                (a)          Interest Rates. The unpaid principal amount of the Loans shall bear interest for each day until due at a fluctuating
rate per year (computed for the actual number of days elapsed on the basis of a year of 360 days)
equal to one or more bases selected by Borrower from among the interest rate options set forth below
(collectively, the “Rate” or “Rates” or “Interest Rate Option” or “Interest
Rate Options”).

                               
Available Interest Rate Options

	 	Base Rate Option: The Base Rate Portion of the Loans shall bear interest at a rate per annum for each day equal to the Base Rate for such day less 50 basis points, such interest rate to change automatically from time to time effective as of the effective date of each change in the Prime Rate and/or the Federal Funds Rate. The Base Rate Option shall be available with respect to all of the Loans.
		 
	 	Libor Advantage Rate Option: The Libor Advantage Rate Portion of the Revolving Credit Loans and the Multi-Draw Term Loan during the Draw Down Period and all Revolving Credit Loans which are made pursuant to a Cash Management Agreement shall bear interest for each day equal to the Libor Advantage Rate for such day plus 150 basis points. The Libor Advantage Rate shall be available only with respect to the Revolving Credit Loans and the Multi-Draw Term Loan during the Draw Down Period.
		 
	 	LIBOR Rate Option:  Each Rate Segment of the LIBOR Rate Portion of the Loans shall bear interest for each day equal to the LIBOR Lending Rate for such Rate Segment for such day plus 150 basis points. The LIBOR Rate Option shall be available with respect to all of the Loans.

Notwithstanding anything contained in this Agreement to the contrary, prepayment of any Portion bearing
interest at the LIBOR Rate Option shall not be permitted during a Rate Period or shall be subject
to payment of a prepayment fee as set forth in Section 2.15 hereof.

                                (b)          Interest After Maturity. After the principal amount of any part of the Loans shall have become due (at maturity, by acceleration
after the occurrence of an Event of Default or otherwise), as compensation to the Bank for the increased
cost of administering the Loans, the Loans will bear interest for each day until paid (before and
after judgment) at a rate per year (computed for the actual number of days elapsed on the basis of
a year of 360 days) which will be two percent (2%) above the then current Rate which is in effect,
such interest rate to change automatically from time to time effective as of the effective date of
each change in the Rate which is in effect.

17

                                (c)          Usury. In the event the rates of interest provided for in subsections (a) and (b) above or either of them
are finally determined by any Official Body to exceed the maximum rate of interest permitted by applicable
usury or similar Laws, their or its application will be suspended and there will be charged instead
the maximum rate of interest permitted by such Laws. Any interest which has been collected by the
Bank in excess of the maximum rate of interest permitted by applicable usury or similar Laws prior
to the suspension of such Rates shall be applied to the principal balance of the Loans.

                                (d)          Computation of Interest. In computing interest on any Loan, the date of the making of the Loan or the first day of a Rate
Period, as the case may be, shall be included and the date of payment or the expiration date of a
Rate Period, as the case may be, shall be excluded; provided, that if a Loan is repaid on the same day on which it is made, one day’s interest shall be paid
on that Loan.

                2.05         Amounts. Every selection of, conversion to or renewal of a Portion as to which the LIBOR Rate Option is applicable
shall be in an aggregate minimum principal amount of $500,000 and integral multiples of $100,000.

                2.06         Selection, Conversion or Renewal of Rate Options.

                                                (a)          Selection of Interest Rate Option. Subject to the other provisions hereof, the Borrower may select any Interest Rate Option to apply
to the Loans if the Interest Rate Option is available for the Loan, as provided in Section 2.04 of
this Agreement. Subject to the other provisions hereof, the Borrower may convert any part of the
unpaid principal amount of the Loans from any Interest Rate Option to any other Interest Rate Option
and may renew the LIBOR Rate Option as to any Rate Segment: (a) at any time with respect to conversion
from the Base Rate Option or Libor Advantage Rate Option to any other Interest Rate Option and (b)
at the expiration of any Rate Period with respect to conversion from or renewals of the LIBOR Rate
Option as to the Rate Segment corresponding to such expiring Rate Period. Whenever the Borrower desires
to select, convert or renew the LIBOR Rate Option, the Borrower shall give the Bank Standard Notice
thereof (which shall be irrevocable, except as provided in Section 2.06 of this Agreement), specifying
the date, amount and type of the proposed new Interest Rate Option. If such notice has been duly
given, on and after the date specified in such notice, interest shall be calculated upon the unpaid
principal amount of the Loan or Loans in question taking into account such selection, conversion
or renewal. Notwithstanding anything to the contrary contained in this Agreement, no Portion of the
outstanding principal amount of any Revolving Credit Loans may be converted to, or continued as,
LIBOR Rate Loans (i) when any default or Event of Default has occurred and is continuing or (ii)
if the last date of such LIBOR Rate Loan Rate Period is after the Expiration Date. The Bank’s
right to payment of principal and interest under the Loans and the Notes shall in no way be affected
by the fact that one or more Rate Periods may be in effect. In the absence of delivery of a continuation/conversion
notice with respect to any LIBOR Rate Loan at least three (3) Business Days before the last day of
the then current Rate Period with respect thereto, such LIBOR Rate Loan shall, on such last day,
automatically convert to a Base Rate Loan.

18

                                (b)          Maximum Number of LIBOR Rate Periods. Notwithstanding any other provisions in this Agreement to the contrary, at no time shall more than
three (3) different Rate Periods be in existence at any time during the term of this Agreement. If
Borrower attempts to give notice of selection of a LIBOR Rate Loan when three (3) or more Rate Periods
are in existence, such notification shall be deemed to request the making of Base Rate Loans instead
of the LIBOR Rate Loans, unless Borrower promptly elects to cancel the notice to make such new Loans
by giving notice of cancellation to the Bank.

                2.07         Base Rate Fallback. If any Rate Period expires, any Loan corresponding to such Rate Period which has not been converted
or renewed in accordance with Section 2.04 hereof automatically shall be converted to a Base Rate
Loan. If Borrower fails to select, or if Bank fails to offer, as provided in Section 2.06 of this
Agreement, an Interest Rate Option to apply to any Loans made under the Notes, such borrowings shall
be deemed to be Base Rate Loans. 

                 2.08        LIBOR Rate Lending Unlawful. If the Bank shall determine (which determination shall, upon notice thereof to the Borrower be conclusive
and binding on the Borrower) that the introduction of or any change in or in the interpretation of
any law, rule, regulation or guideline, (whether or not having the force of law) makes it unlawful,
or any central bank or other governmental authority asserts that it is unlawful, for the Bank to
make, continue or maintain any LIBOR Rate Loan or Libor Advantage Rate Loan as, or to convert
any loan into, a LIBOR Rate Loan of a certain duration, the obligations of the Bank to make, continue,
maintain or convert into any such LIBOR Rate Loans or Libor Advantage Rate Loans shall, upon such
determination, forthwith be suspended until the Bank shall notify the Borrower that the circumstances
causing such suspension no longer exist, and all LIBOR Rate Loans and Libor Advantage Rate Loans
of such type shall automatically convert into Base Rate Loans at the end of the then current Rate
Periods with respect thereto or sooner, if required by such law or assertion.

                2.09         Substitute Rate.  If the Bank shall have determined that:

		(a)	US dollar deposits in the relevant amount and for the relevant Rate Period are not available to the
Bank in the London interbank market; 
			 
		(b)	by reason of circumstances affecting the Bank in the London interbank, adequate means do not exist
for ascertaining the LIBOR Rate applicable hereunder to LIBOR Rate Loans of any duration; or
			 
		(c)	LIBOR no longer adequately reflects the Bank’s cost of funding loans

then, upon notice from the Bank to the Borrower, the obligations of the Bank under this Article II
to make or continue any Loans as, or to convert any Loans into, LIBOR Rate Loans of such duration
shall forthwith be suspended until the Bank shall notify the Borrower that the circumstances causing
such suspension no longer exist.

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                2.10         Funding by Branch, Subsidiary or Affiliate.

                                                                                (a)          Notional Funding. The Bank shall have the right from time to time, prospectively or retrospectively, without notice
to the Borrower, to deem any branch, subsidiary or affiliate of the Bank to have made, maintained
or funded any part of the LIBOR Rate Portion or LIBOR Advantage Rate Portion of the Loans at any
time. Any branch, subsidiary or affiliate so deemed shall be known as a “Notional LIBOR Funding
Office”. The Bank shall deem any part of the LIBOR Rate Portion or Libor Advantage Rate Portion
of the Loans or the funding therefore to have been transferred to a different Notional LIBOR Funding
Office if such transfer would avoid or cure a situation in which the Bank declines to permit the
Borrower to select the LIBOR Rate Option or the Libor Advantage Rate Option because it is unascertainable
or impracticable for the Bank to provide same or would lessen any compensation or indemnity payable
to the Bank under this Agreement, and if the Bank determines in its sole discretion that such transfer
would be practicable and would not have a material adverse effect on such part of the Loans, the
Bank or any Notional LIBOR Funding Office (it being assumed for purposes of such determination that
each part of the LIBOR Rate Portion or Libor Advantage Rate Portion of the Loans is actually made
or maintained by or funded through the corresponding Notional LIBOR Funding Office). Notional LIBOR
Funding Offices may be selected by the Bank without regard to the Bank’s actual methods of making,
maintaining or funding the Loans or any sources of funding actually used by or available to the Bank.

                                                                                (b)          Actual Funding. The Bank shall have the right from time to time to make or maintain any part of the LIBOR Rate Portion
or Libor Advantage Rate Portion of the Loans by arranging for a branch, subsidiary or affiliate of
the Bank to make or maintain such part of the LIBOR Rate Portion or the Libor Advantage Rate Portion
of the Loans. The Bank shall have the right to (i) hold any applicable Note payable to its order
for the benefit and account of such branch, subsidiary or affiliate or (ii) request the Borrower
to issue one or more promissory notes in the principal amount of such part of the LIBOR Rate Portion
or Libor Advantage Rate Portion of the Loans payable to such branch, subsidiary or affiliate and
with appropriate changes reflecting that the holder thereof is not obligated to make any additional
Loans to the Borrower. The Borrower agrees to comply promptly with any request under clause (ii)
of this Section 2.10(b). If the Bank causes a branch, subsidiary or affiliate to make or maintain
any part of the Loans hereunder, all terms and conditions of this Agreement shall, except where the
context clearly requires otherwise, be applicable to such part of the Loans and to any note payable
to the order of such part of the LIBOR Rate Portion or Libor Advantage Rate Portion of the Loans
as if the Loans were made or maintained by the Bank and such note were a Note payable to the Bank’s order.

                2.11         Indemnities. In addition to the LIBOR Rate Loan Prepayment Fee, the Borrower agrees to reimburse the Bank (without
duplication) for any increase in the cost to the Bank, or reduction in the amount of any sum receivable
by the Bank, in respect, or as a result of:

		(a)	any conversion or repayment or prepayment of the principal amount of any LIBOR Rate Loans on a date
other than the scheduled last day of the Rate Period applicable thereto, whether pursuant to Section 2.04 or otherwise;

20

		(b)	any Loans not being made as LIBOR Rate Loans in accordance with the borrowing request thereof, other
than solely as a result of the Bank’s determination not to make a LIBOR Rate Loan; or 
			 
		(c)	any LIBOR Rate Loans not being continued as, or converted into, LIBOR Rate Loans in accordance with
the continuation/conversion notice thereof, other than solely as a result of the Bank’s determination
not to make a LIBOR Rate Loan.

The Bank shall promptly notify the Borrower in writing of the occurrence of any such event, such notice
to state, in reasonable detail, the reasons therefore and the additional amount required fully to
compensate the Bank for such increased cost or reduced amount. Such additional amounts shall be payable
by the Borrower to the Bank within fifteen (15) days of its receipt of such notice, and such notice
shall, in the absence of manifest error, be conclusive and binding on the Borrower. Any amount payable
to the Bank under this Section 2.11 will bear interest at the Base Rate Option from the due date
until paid (before and after judgment). The Borrower understands, agrees and acknowledges the following:
(i) the Bank does not have any obligation to purchase, sell and/or match funds in connection with
the use of the LIBOR Rate as a basis for calculating the rate of interest on a LIBOR Rate Loan, (ii)
the LIBOR Rate may be used merely as a reference in determining such rate, and (iii) the Borrower
has accepted the LIBOR Rate as a reasonable and fair basis for calculating such rate, the LIBOR Rate
Prepayment Fee, and other funding losses incurred by the Bank. Borrower further agrees to pay the
LIBOR Rate Prepayment Fee and other funding losses, if any, whether or not the Bank elects to purchase,
sell and/or match funds.

                2.12         Increased Costs. If on or after the date hereof the adoption of any applicable law, rule or regulation or guideline
(whether or not having the force of law), or any change therein, or any change in the interpretation
or administration thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by the Bank with any request or
directive (whether or not having the force of law) of any such authority, central bank or comparable
agency:

		(a)	shall subject the Bank to any tax, duty or other charge with respect to its LIBOR Rate Loans or its
obligation to make LIBOR Rate Loans, or shall change the basis of taxation of payments to the Bank
of the principal of or interest on its LIBOR Rate Loans or any other amounts due under this agreement
in respect of its LIBOR Rate Loans or its obligation to make LIBOR Rate Loans (except for the introduction
of, or change in the rate of, tax on the overall net income of the Bank or franchise taxes, imposed
by the jurisdiction (or any political subdivision or taxing authority thereof) under the laws of
the Commonwealth of Pennsylvania); or

21

		(b)	shall impose, modify or deem applicable any reserve, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve
System of the United States) against assets of, deposits with or for the account of, or credit extended
by, the Bank or shall impose on the Bank or on the London interbank market any other condition affecting
its LIBOR Rate Loans or its obligation to make LIBOR Rate Loans;

and the result of any of the foregoing is to increase the cost to the Bank of making or maintaining
any LIBOR Rate Loan, or to reduce the amount of any sum received or receivable by the Bank under
this Agreement with respect thereto, by an amount deemed by the Bank to be material, then, within
15 days after demand by the Bank, the Borrower shall pay to the Bank such additional amount or amounts
as will compensate the Bank for such increased cost or reduction.

Any amount payable to the Bank under this Section 2.12 will bear interest at the Base Rate Option from
the due date until paid (before and after judgment).

                 2.13         Increased Capital Costs. If any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation
or phase-in of, any law or regulation, directive, guideline, decision or request (whether or not
having the force of law) of any court, central bank, regulator or other governmental authority affects
or would affect the amount of capital required or expected to be maintained by the Bank, or person
controlling the Bank, and the Bank determines (in its sole and absolute discretion) that the rate
of return on its or such controlling person’s capital as a consequence of its commitments or
the loans made by the Bank is reduced to a level below that which the Bank or such controlling person
could have achieved but for the occurrence of any such circumstance, then, in any such case upon
notice from time to time by the Bank to the Borrower, the Borrower shall immediately pay directly
to the Bank additional amounts sufficient to compensate the Bank or such controlling person for such
reduction in rate of return. A statement of the Bank as to any such additional amount or amounts
(including calculations thereof in reasonable detail) shall, in the absence of manifest error, be
conclusive and binding on the Borrower. In determining such amount, the Bank may use any method of
averaging and attribution that it (in its sole and absolute discretion) shall deem applicable.

                 2.14         Taxes. All payments by the Borrower of principal of, and interest on, the LIBOR Rate Loans and all other
amounts payable hereunder shall be made free and clear of and without deduction for any present or
future income, excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or other
charges of any nature whatsoever imposed by any taxing authority, but excluding franchise taxes and
taxes imposed on or measured by the Bank’s net income or receipts (such non-excluded items being
called “Taxes”). In the event that any withholding or deduction from any payment to be
made by the Borrower hereunder is required in respect of any Taxes pursuant to any applicable law,
rule or regulation, then the Borrower will

		(a)	pay directly to the relevant authority the full amount required to be so withheld or deducted;
			 
		(b)	promptly forward to the Bank an official receipt or other documentation satisfactory to the Bank evidencing
such payment to such authority; and
			 
		(c)	pay to the Bank such additional amount or amounts as is necessary to ensure that the net amount actually
received by the Bank will equal the full amount the Bank would have received had no such withholding
or deduction been required.

22

Moreover, if any Taxes are directly asserted against the Bank with respect to any payment received
by the Bank hereunder, the Bank may pay such Taxes and the Borrower will promptly pay such additional
amount (including any penalties, interest or expenses) as is necessary in order that the net amount
received by the Bank after the payment of such Taxes (including any Taxes on such additional amount)
shall equal the amount the Bank would have received had not such Taxes been asserted.

                 If the Borrower fails to pay any Taxes when due to the appropriate taxing authority or fail to remit
to the Bank the required receipts or other required documentary evidence, the Borrower shall indemnify
the Bank for any incremental Taxes, interest or penalties that may become payable by the Bank as
a result of any such failure. 

                2.15        
Prepayments. 

                                (a)             Base Rate Loans and Libor Advantage Rate Loans. Borrower shall have the right at its option at any time and from time to time to prepay without premium
or penalty the Base Rate Portion and the Libor Advantage Rate Portion of the Loans in whole or in
part. 

                                (b)             LIBOR Rate Loans. LIBOR Rate Loans may be prepaid upon the terms and conditions set forth herein. For LIBOR Rate Loans
in connection with which the Borrower has or may incur Hedging Obligations, additional obligations
may be associated with prepayment, in accordance with the terms and conditions of the applicable
Hedging Contracts. The Borrower shall give the Bank, no later than 11:00 a.m., Pittsburgh time, at
least three (3) Business Days notice of any proposed prepayment of any LIBOR Rate Loans, specifying
the proposed date of payment of such LIBOR Rate Loans, and the principal amount to be paid. Each
partial prepayment of the principal amount of LIBOR Rate Loans shall be in the minimum principal
amount of $100,000 and integral multiples of $100,000 and accompanied by the payment of all charges
outstanding on such LIBOR Rate Loans and of all accrued interest on the principal repaid to the date
of payment. Borrower acknowledges that prepayment or acceleration of a LIBOR Rate Loan during a Rate
Period shall result in the Bank incurring additional costs, expenses and/or liabilities and that
it is extremely difficult and impractical to ascertain the extent of such costs, expenses and/or
liabilities. Therefore, all full or partial prepayments of LIBOR Rate Loans shall be accompanied
by, and the Borrower hereby promises to pay, on each date a LIBOR Rate Loan is prepaid or the date
all sums payable hereunder become due and payable, by acceleration or otherwise, in addition to all
other sums then owing, an amount (“LIBOR Rate Loan Prepayment Fee”) determined by the Bank
pursuant to the following formula:

		(i)	the then current rate for United States Treasury securities (bills on a discounted basis shall be converted
to a bond equivalent) with a maturity date closest to the end of the Rate Period as to which prepayment
is made, subtracted from 
			 
		(ii)	the LIBOR Lending Rate plus 150 basis points 

If the result of this calculation is zero or a negative number, then there shall be no LIBOR Rate Loan
Prepayment Fee. If the result of this calculation is a positive number, then the resulting percentage
shall be multiplied by:

		(iii)	the amount of the LIBOR Rate Loan being prepaid.

the resulting amount shall be divided by:

		(iv)	360

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and multiplied by:

		(v)	the number of days remaining in the Rate Period as to which the prepayment is being made.

Said amount shall be reduced to present value calculated by using the referenced United States Treasury
securities rate and the number of days remaining on the Rate Period for the LIBOR Rate Loan being
prepaid.

The resulting amount of these calculations shall be the LIBOR Rate Loan Prepayment Fee.

                                (c)           Application of Prepayments. Prepayments of the Revolving Credit Loans shall be applied by the Bank first to unpaid accrued interest
and other charges which are due and owing and then to the principal of the Base Rate Portion and
the Libor Advantage Rate Portion of the Revolving Credit Loans, unless otherwise directed by the
Borrower at the end of an Rate Period.

                2.16         Notices.  All notices under Sections 2.01(c), 2.04 or 2.15 hereof shall be Standard Notices and shall
be in writing. Section 8.05 hereof shall govern the method and effective dates of such notices. Written
notices by the Borrower shall not be deemed records of the Bank within the meaning of Section 2.19
hereof whether or not received by the Bank. The Bank may conclusively rely without inquiry on any
notice purporting to be from an officer of the Borrower.

                2.17         Interest Payment Dates . Accrued interest on the Loans will be due and payable on each Interest Payment Date. After maturity
of any part of the Loans (at maturity, by acceleration or otherwise), interest on such part of the
Loans will be due and payable on demand.

                2.18         Payments; Application of Payments. (a) All payments to be made in respect of principal, interest, fees or other amounts due from
the Borrower under this Agreement or under the Note are payable at 2:00 p.m., Pittsburgh time, on
the day when due, without presentment, demand, protest or notice of any kind, all of which are expressly
waived, and an action for the payments will accrue immediately. All such payments must be made to
the Bank at its Office in U.S. dollars and in funds immediately available at such Office, without
setoff, counterclaim or other deduction of any nature. All such payments shall be applied at the
option of the Bank to accrued and unpaid interest, outstanding principal and other sums due under
this Agreement in such order as the Bank, in its sole discretion, shall elect. On the day when any
such payment shall be due, the Bank shall deduct the amount of such payment from any deposit account
maintained by the Borrower with the Bank, or, if borrowing availability exists under Section 2.01
of this Agreement and sufficient funds are not available in any deposit accounts maintained by the
Borrower with the Bank, advance to the Borrower the amount of such payment, with such amount to be
immediately repaid by the Borrower to the Bank, for the account of the Bank, and, until paid, added
to the outstanding principal of the Loans. In addition, the Borrower and the Bank acknowledge that
payments and borrowings of the Revolving Credit Loans may be made on a daily basis pursuant to the
Cash Management Agreement.

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                (b)           Prior
to the occurrence of an Event of Default, except as otherwise provided herein, payments shall be
applied by the Bank as directed by the Borrower, provided that such direction could not reasonably
be expected to result in the occurrence of an Event of Default. In the absence of any direction by
the Borrower, prior to the occurrence of an Event of Default, payments shall be applied by the Bank
as follows: (i) first, to outstanding fees and expenses owing pursuant to the terms of this
Agreement, (ii) second, to accrued and unpaid interest, and (iii) third, to the outstanding principal
amount of the Loans in such order and in proportions as the Bank may elect, with any such principal
payments being applied in a manner to avoid any LIBOR Rate Loan Prepayment Fee to the extent possible.
After the occurrence of an Event of Default, all such payments shall be applied at the option of
the Bank to outstanding fees and expenses owing pursuant to the terms of this Agreement, accrued
and unpaid interest, outstanding principal and other sums due under this Agreement in such order
as the Bank, in its sole discretion, shall elect.

                2.19         Loan Account . The Bank will open and maintain on its books a loan account (the “Loan Account”) with
respect to Loans made, repayments, prepayments, the computation and payment of interest and fees
and the computation and final payment of all other amounts due and sums paid to the Bank under this
Agreement. Except in the case of manifest error in computation, the Loan Account will be conclusive
and binding on the Borrower as to the amount at any time due to the Bank from the Borrower under
this Agreement or the Notes.

                2.20         Financing Statements . The Borrower agrees that the Bank is authorized to execute and file all financing statements describing
the property in which the Bank has a security interest under the Security Agreement.

                2.21         Termination.  The revolving credit facility made available to Borrowers under Section 2.01 of this Agreement
is terminable by the Bank at its sole discretion on the Expiration Date or upon the occurrence and
continuance of an Event of Default under this Agreement. 

                2.22         Letters of Credit. Relying on the representations and warranties set forth in this Agreement, and subject to such terms
and conditions as the Bank may from time to time require (including without limitation conditions
analogous to the conditions set forth in Article IV of this Agreement, and the execution and delivery
by the Borrower of the Bank’s standard form of letter of credit application in such form as
shall be acceptable to the Bank), the Bank agrees to issue a standby letter of credit (in such form
as shall be acceptable to the Bank)(the “Letter of Credit”) for the account of the Borrower
and for the benefit of Wells Fargo Bank Northwest, National Association in the face or stated amount
at any time outstanding not exceeding One Million Eight Hundred Thousand Dollars ($1,800,000) in
the form attached hereto as Exhibit “D”. The Bank shall the right, in its sole discretion, to refuse to extend the Letter of Credit (or amendment
thereof) beyond the stated expiration date of the Letter of Credit and to give notice to the Borrower
or any beneficiary of the Letter of Credit of such decision of the Bank. If the Letter of Credit
remains outstanding on the date when the Revolving Credit Loans shall be due and payable (by acceleration
or otherwise), the Borrower shall either (i) deposit funds with the Bank in an amount equal to 105%
of the aggregate face or stated amount of the Letter of Credit at that time outstanding (less any
draws under the Letter of Credit which have been reimbursed by the Borrower), or (ii) arrange for
the issuance of a backing letter of credit in favor of the Bank securing the Bank’s obligations
under any outstanding Letter of Credit, in form and substance reasonably satisfactory to the Bank
and issued by a financial institution reasonably acceptable to the Bank, all to be held by the Bank
as additional collateral to reimburse the Bank for any draws under the Letter of Credit for so long
as and to the extent the Letter of Credit remains outstanding.

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                2.23         Letter of Credit Fees. The Borrowers shall pay to the Bank a fee equal to one hundred basis points (1.00%) per annum (based
on a 360 day year) based on the face amount of the Letter of Credit. The Letter of Credit fee shall
be paid quarterly in arrears on the last day of each calendar quarter. In addition, the Borrower
shall upon the issuance of the Letter of Credit and thereafter pay to the Bank all issuance and amendment
fees and minimum commissions, cable, draw, overnight delivery and other fees as are customarily charged
by the Bank in accordance with the Bank’s standard rate schedules from time to time.

                2.24         Additional Understandings Regarding the Letter of Credit. In order to induce the Bank to issue the Letter of Credit:

                                (a)          Borrower
agrees that the Bank shall not be responsible or liable for, and the obligation of Borrower to reimburse
the Bank for any payment made by the Bank under or in respect of the Letter of Credit shall not be
affected by (A) the validity, enforceability or genuineness of any instrument or document (or any
endorsement thereof) presented under the Letter of Credit which, upon examination by the Bank and
in the absence of gross negligence or willful misconduct, appears on its face to be in accordance
with the terms and conditions of the Letter of Credit, even if such instrument or document (or such
endorsement) is proven to be invalid, unenforceable, fraudulent or forged, or (B) any dispute between
Borrower and the beneficiary or beneficiaries under the Letter of Credit; and

                                (b)          Borrower
agrees that drawings under the Letter of Credit issued hereunder may be made only upon presentation
of an appropriate sight draft accompanied by any certificates required under the Letter of Credit
to be submitted to Bank in connection with a drawing; the Bank shall use its best efforts to provide
Borrower with notice of the presentment of any documents and sight drafts requesting a drawing under
the Letter of Credit promptly after receipt of such documents and sight drafts by the Bank and will
give Borrower notice of any drawings no later than three (3) Business Days following the drawing; and

                                (c)          Borrower
agrees that the Letter of Credit shall not have an expiry date later than the earlier of (i) 364
days from the date such Letter of Credit was issued, or (ii) the Expiration Date.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

                The
Borrower represents and warrants to the Bank that:

                3.01  Organization and Qualification . Each of the Borrower and the Guarantor is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation. Each of the Borrower and the Guarantor
is duly qualified or licensed to do business as a foreign corporation and is in good standing in
all jurisdictions in which the ownership of its properties or the nature of its activities or both
makes such qualification or licensing necessary. Schedule 3.01 to this Agreement states as of the Closing Date the jurisdiction of incorporation of the Borrower
and the Guarantor and each jurisdiction in which the Borrower and the Guarantor are each qualified
to do business as a foreign corporation.

                3.02  Power to Carry on Business; Licenses . Each of the Borrower and the Guarantor has all requisite power and authority to own and operate
its properties and to carry on its business as now conducted and as presently planned to be conducted
in all material respects. Each of the Borrower and the Guarantor has all licenses, permits, consents
and governmental approvals or authorizations necessary to carry on its business as now conducted
in all material respects.

                3.03  Authority and Authorization . The Borrower has corporate power and authority to execute and deliver this Agreement, the Notes,
the Security Agreements and the other Loan Documents, executed by the Borrower, to make the borrowings
provided for in this Agreement, to execute and deliver the Notes in evidence of such borrowings and
to perform its obligations under this Agreement, the Notes, the Security Agreement and the other
Loan Documents. The Guarantor has corporate power and authority to execute and deliver the Guaranty
executed by the Guarantor and to perform its obligations under the Guaranty and the other Loan Documents
to which it is a party. All such action has been duly and validly authorized by all necessary corporate
proceedings on the part of each of the Borrower and the Guarantor.

                3.04  Execution and Binding Effect . This Agreement, the Notes, the Security Agreement and the other Loan Documents have been duly and
validly executed and delivered by the Borrower and each such document or agreement constitutes a
legal, valid and binding obligation of the Borrower enforceable in accordance with its terms. The
Guaranty has been duly and validly executed and delivered by the Guarantor and constitutes a legal,
valid and binding obligation of the Guarantor enforceable in accordance with its terms.

                3.05  Absence of Conflicts . Neither the execution and delivery of this Agreement, the Notes, the Security Agreement or the other
Loan Documents, nor the consummation of the transactions contemplated in any of them, nor the performance
of or compliance with their terms and conditions will (a) violate any Law, (b) conflict with or result
in a breach of or a default under the Articles of incorporation or by-laws of the Borrower or the
Guarantor or any agreement or instrument to which the Borrower or the Guarantor is a party or by
which it or any of its properties may be subject or bound or (c) result in the creation or imposition
of any Lien upon any property of the Borrower or the Guarantor.

27

                3.06  Authorizations and Filings. No authorization, consent, approval, license, exemption or other action by, and no registration,
qualification, designation, declaration or filing with, any Official Body is or will be necessary
or advisable in connection with the execution and delivery of this Agreement, the Notes, the Security
Agreement or the other Loan Documents, the consummation of the transactions contemplated in any of
them, or the performance of or compliance with the terms and conditions of this Agreement, the Notes,
the Security Agreement or the other Loan Documents.

                3.07  Ownership and Control . Schedule 3.07 to this Agreement states as of the Closing Date the authorized capitalization of the Borrower and
the Guarantor (including capital stock of the Borrower and the Guarantor held in Treasury), the number
of shares of each class of capital stock issued and outstanding of the Borrower and Guarantor and
the number and percentage of outstanding shares of each such class of capital stock of the Borrower
and the names of the record and beneficial owners of such shares of the Borrower. The outstanding
shares have been duly authorized and validly issued and are fully paid and non-assessable. Schedule 3.07 to this Agreement describes as of the Closing Date all outstanding options, rights and warrants issued
by either the Borrower or the Guarantor for the acquisition of shares of the capital stock of the
Borrower or the Guarantor, all outstanding securities or obligations convertible into such shares
and all agreements by the Borrower or the Guarantor to issue or sell such shares. Schedule 3.07 to this Agreement describes as of the Closing Date all options, sale agreements, pledges, proxies,
voting trusts, powers of attorney and other agreements or instruments binding upon any of its shareholders
with respect to beneficial or record ownership of or voting rights with respect to shares of the
capital stock of the Borrower.

                3.08  Officers and Directors of the Borrower . Schedule 3.08 to this Agreement states as of the Closing Date the officers and directors of the Borrower and the
Guarantor.

                3.09  Subsidiaries. The Borrower does not have any Subsidiaries. The Guarantor has no Subsidiaries other than the Borrower.

                3.10  Business . Schedule 3.10 to this Agreement describes the business of the Borrower as presently conducted and presently planned
to be conducted.

                3.11  Title to Property . The Borrower has good and marketable title in fee simple to all real property and good and marketable
title to all other property purported to be owned by it, including that reflected in the most recent
balance sheet referred to in Section 3.12 of this Agreement or submitted pursuant to Section 5.01(a)
of this Agreement (except as sold or otherwise disposed of in the ordinary course of business), subject
only to Liens not forbidden by Section 6.01 of this Agreement.

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                3.12 
Financial Statements. 

                                (a)          The
Borrower has delivered to the Bank audited consolidated and consolidating balance sheets and related
statements of income and retained earnings and cash flow of the Borrower and the Guarantor for the
fiscal year ended December 31, 2003, as audited by Beard Miller Company. Such financial statements
(including the notes) present fairly the financial condition of the Borrower and the Guarantor as
of the end of such fiscal periods and the results of its operations and the changes in financial
position for the fiscal periods then ended, all in conformity with GAAP applied on a basis consistent
with that of the preceding fiscal periods. In addition, the Borrower and the Guarantor have provided
interim internally prepared consolidated and consolidating financial statements and a balance sheet
for the period ended September 30, 2004. Such interim financial statements present fairly the financial
condition of the Borrower and of the end of such fiscal period.

                                (b)          The
Borrower and the Guarantor have delivered to the Bank projections (the “Projections”) covering
the fiscal year ending December 31, 2005. The Projections were internally prepared by Borrower and
represent the best available good faith estimate of the Borrower and the Guarantor regarding the
course of the business of the Borrower and the Guarantor for the periods covered by such projections.
The assumptions set forth in the Projections are reasonable and realistic based on current economic
conditions. Neither the Borrower nor the Guarantor knows of any fact, circumstance or condition that
is likely to prevent the Borrower and the Guarantor from achieving the performance levels set forth
in the Projections.

                3.13  Taxes. All tax returns required to be filed by each of the Borrower and the Guarantor have been properly
prepared, executed and filed. All taxes, assessments, fees and other governmental charges upon the
Borrower or upon any of its properties, income, sales or franchises which are due and payable have
been paid. The reserves and provisions for taxes on the books of the Borrower are adequate for all
open years and for its current fiscal period. The Borrower does not know of any proposed additional
assessment or basis for any assessment for additional taxes (whether or not reserved against).

                3.14  Contracts . Except as described in Schedule 3.14 to this Agreement, as of the Closing Date, the Borrower is not a party to any contract, agreement,
lease or instrument which is material to the business, financial condition or operations of the Borrower
and, except as described in Schedule 3.14, as of the Closing Date, the Borrower is not in default in the terms or conditions of any agreement,
lease or instrument of any kind other than agreements, leases or instruments which are terminable
at will by the Borrower without penalty or which are not, singly or in the aggregate, material to
the assets, business, operations or financial condition of the Borrower and Borrower has received
no notice or indication of termination, revocation or forfeiture of any such material agreements
by the other party or parties to any such material agreements.

29

                3.15  Litigation . There is no pending, contemplated or threatened action, suit or proceeding by or before any Official
Body against or affecting the Borrower, at law or equity, which if adversely decided would have a
material adverse effect on the assets, business, operations or financial condition of the Borrower
or on the ability of the Borrower to perform its obligations under this Agreement, the Notes, the
Security Agreement or the other Loan Documents.

                3.16  Compliance with Laws . Neither the Borrower nor the Guarantor is in violation of or subject to any material contingent
liability on account of any Law.

                3.17  Pension Plans . (a) Each Plan has been and will be maintained and funded, in accordance with its terms and with
all provisions of ERISA and other applicable laws; (b) no Reportable Event as defined in ERISA has
occurred and is continuing with respect to any Plan; (c) no liability to the Pension Benefit Guaranty
Corporation (the “PBGC”) has been incurred with respect to any Plan, other than for premiums
due and payable; (d) no Plan has been terminated, no proceedings have been instituted to terminate
any Plan, and there exists no intent to terminate or institute proceedings to terminate any Plan;
(e) no withdrawal, either complete or partial, has occurred or commenced with respect to any multi-employer
Plan, and there exists no intent to withdraw either completely or partially from any multi-employer
Plan; and (f) there has been no cessation of, and there is no intent to cease, operations at a facility
or facilities where such cessation could reasonably be expected to result in a separation from employment
of more than 20% of the total number of employees who are participants under a Plan.

                3.18  Patents, Licenses, Franchises . The Borrower owns or possesses all of the patents, trademarks, service marks, trade names, copyrights,
licenses, franchises and permits and rights with respect to the foregoing necessary to own and operate
the Borrower’ properties and to carry on their business as presently conducted and presently
planned to be conducted without conflict with the rights of others. Except as set forth on Schedule 3.18 to this Agreement, no patent, trademark, service mark, trade name, copyright, license, franchise or
permit or right with respect to the foregoing is of material importance to the business of the Borrower,
and there is no reason to anticipate any material liability to the Borrower in respect of any claim
of infringement of any kind. Notwithstanding the foregoing, the Bank acknowledges that the Borrower
has not filed for federal tradename or trademark protection of the Borrower’s name.

                3.19 
Environmental Matters . 

                                (a)          To
the best of the Borrower’s knowledge, after due inquiry, neither the Borrower nor any of its
Affiliates is in violation of The Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (“CERCLA”), the Superfund Amendments and Reauthorization Act of 1986, The Resource
Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of
1984, The Clean Water Act, The Toxic Substances Control Act and The Clean Air Act or any rule or
regulation promulgated pursuant to any of the foregoing statutes, or any other federal, state or
local environmental law, statute, rule, regulation or ordinance applicable to the Borrower or its
properties (all of the foregoing are sometimes collectively referred to in this Section 3.19 as the
“Environmental Laws”);

30

                                (b)          To
the best of Borrower’s knowledge, after due inquiry, neither the Borrower nor any of its Affiliates,
directors, officers, employees, agents or independent contractors has arranged, by contract, agreement
or otherwise, (i) for the disposal or treatment of, or (ii) with a transporter for the transport
for disposal or treatment of, any hazardous substance (as defined by CERCLA, as amended), owned,
used or possessed by the Borrower, identified by the EPA on the National Priorities List, 40 C.F.R.
Part 300, (or proposed by the EPA in the Federal Register for listing on such National Priorities
List) or identified under any corresponding state statute or regulation concerning cleanup of waste
disposal sites (a “State Superfund Law”), at any location;

                                (c)          To
the best knowledge of the Borrower after due inquiry, no predecessor (as defined by CERCLA, as amended)
has arranged by contract, agreement or otherwise, (i) for the disposal or treatment of, or (ii) with
a transporter for transport for the disposal or treatment of, any hazardous substance (as defined
by CERCLA, as amended), owned, used or possessed by any Predecessor at any location;

                                (d)          Neither
the Borrower nor any of its Affiliates “owned” or “operated” any “facility”
(within the meaning of CERCLA, as amended, or any State Superfund Law) at the time any hazardous
substances were disposed of in violation of any Environmental Law.

                3.20  Margin Stock . The Borrower will not make any borrowing under this Agreement for the purpose of buying or carrying
any “margin stock”, as such term is used in Regulation U and related regulations of the
Board of Governors of the Federal Reserve System, as amended from time to time. The Borrower does
not own any “margin stock”. The Borrower is not engaged in the business of extending credit
to others for such purpose, and no part of the proceeds of any borrowing under this Agreement will
be used to purchase or carry any “margin stock” or to extend credit to others for the purpose
of purchasing or carrying any “margin stock”.

                3.21  No Event of Default; Compliance with Agreements . No event has occurred and is continuing and no condition exists which constitutes an Event of Default
or Potential Default. The Borrower is not in violation of any term of any charter instrument or bylaw.

                3.22  No Material Adverse Change . Since December 31, 2003, there has been no material adverse change in the assets, business, operations
or financial condition of the Borrower or the Guarantor.

                3.23  Accurate and Complete Disclosure . No representation or warranty made by the Borrower under this Agreement, the Notes, the Security
Agreement or the other Loan Documents and no statement made by the Borrower in any financial statement
(furnished pursuant to Sections 3.12 or 5.01 or otherwise), certificate, report, exhibit or document
furnished by the Borrower to the Bank pursuant to or in connection with this Agreement is false or
misleading in any material respect (including by omission of material information necessary to make
such representation, warranty or statement not misleading). The Borrower has disclosed to the Bank
in writing every material fact known to the Borrower which is peculiar to the Borrower and materially
and adversely affects, and would materially and adversely affect, the assets, business, operations
or financial condition of the Borrower or the ability of the Borrower to perform its obligations
under this Agreement, the Notes, the Security Agreement and the other Loan Documents.

31

                3.24  Security Interest . The security interest in the collateral granted to the Bank pursuant to the Security Agreement (i)
except as provided in Schedule 3.24 to this Agreement, constitutes and (subject to the Continuation Actions, as described below) will
continue to constitute a perfected security interest under the Code entitled to all of the rights,
benefits and priorities provided by the Code and (ii) except as otherwise permitted under Section
6.01 of this Agreement, is and will continue to be superior and prior to the rights of all third
parties existing on the date of this Agreement or arising after the date of this Agreement whether
by lien or otherwise, to the full extent provided by Law. All such action as is necessary or advisable
to establish such rights of the Bank has been taken or will be taken at or prior to the time required
for such purpose and there will be upon execution and delivery of the Loan Documents no necessity
of any further action in order to preserve, protect and continue such rights except the filing of
continuation statements with respect to such financing statements within six months prior to each
five year anniversary of the filing of such financing statements and continued possession by the
Bank of the collateral delivered to it (such actions shall sometimes be referred to herein as the
“Continuation Actions”). All filing fees and other expenses in connection with each such
action shall be paid by the Borrower and the Bank shall be reimbursed by the Borrower for any such
fees and expenses incurred by the Bank.

                3.25  Qualified Accounts. With respect to all accounts from time to time scheduled, listed or referred to in any certificate,
statement or report delivered to the Bank and purported to be Qualified Accounts by the Borrower,
Borrower warrants and represents to the Bank that (a) the accounts are genuine, are in all respects
what they purport to be, and are not evidenced by a note, instrument or judgment; (b) the accounts
represent undisputed, bona fide transactions completed in accordance with the terms and provisions
contained in the documents delivered to the Bank with respect to the accounts; (c) no payments have
been or will be made on the accounts except payments immediately delivered to the Bank pursuant to
this Agreement; (d) there are no material setoffs, counterclaims or disputes existing or asserted
with respect to the accounts and the Borrower has not made any agreement with any account debtor
for any deduction from any account; (e) there are no facts, events or occurrences which in any way
impair the validity or enforcement of any account or tend to reduce the amount payable under any
account as shown on the respective certificates and statements, any books and records and all invoices
and statements delivered to the Bank with respect to any account; (f) all account debtors have the
capacity to contract and, to the best of the Borrower’s knowledge, are solvent; (g) the services
furnished and/or goods sold giving rise to any account are not subject to any lien, claim, encumbrance
or security interest except that of the Bank; (h) to the best of the Borrower’s knowledge, there
are no proceedings or actions which are threatened or pending against any account debtor which might
result in any material adverse change in such account debtor’s financial condition; (i) the
account is not an account with respect to which the account debtor is an Affiliate or a director,
officer or employee of either of the Borrower or an Affiliate; (j) the account does not arise with
respect to goods which have not been shipped or arise with respect to services which have not been
fully performed and accepted as satisfactory by the account debtor; (k) the account is not an account
with respect to which the account debtor’s obligation to pay the account is conditional upon
the account debtor’s approval or is otherwise subject to any repurchase obligation or return
right, as with sales made on a bill-and-hold, guaranteed sale, sale-and-return, or sale on approval
basis; and (l) the amounts shown on the applicable certificates, statements, books and records and
all invoices and statements which may be delivered to the Bank with respect to such accounts are
actually and absolutely owing to the Borrower and are not in any way contingent. The Borrower shall
immediately notify the Bank in the event that any such account ceases to satisfy the above representations and warranties. 

32

                3.26  Inventory Warranties. With respect to inventory scheduled, listed or referred to in any certificate, statement or report
of any Borrower delivered to the Bank, the Borrower warrants and represents that (a) such inventory
is located on the premises listed on Schedule A to the Security Agreement as to which the Borrower has obtained Landlord’s Waivers and is not
in transit; (b) the Borrower has good, indefeasible and merchantable title to such inventory and
such inventory is not subject to any lien or security interest whatsoever except for the security
interest granted to the Bank; (c) such inventory is of good merchantable quality, free from any defects
or obsolescence; (d) such inventory is not subject to any licensing, patent, royalty, trademark,
trade name or copyright agreements with any third parties; and (e) the completion of manufacture
and sale or other disposition of such inventory by the Bank following an Event of Default shall not
require the consent of any person and shall not constitute a breach or default under any contract
or agreement to which the Borrower is a party or to which the inventory is subject. The Borrower
shall immediately notify the Bank in the event that any such inventory ceases to satisfy the above
representations and warranties.

                3.27  Solvency. After the making of the Loans, the Borrower (a) will be able to pay its debts as they become due,
(b) will have funds and capital sufficient to carry on its business and all businesses in which it
is about to engage, and (c) will own property having a value both at fair valuation and at fair saleable
value in the ordinary course of the Borrower’s respective business greater than the amount required
to pay its debts as they become due. The Borrower will not be rendered insolvent by the execution
and delivery of this Agreement, the borrowing hereunder and/or the consummation of any transactions
contemplated herein.

                3.28 Anti-Terrorism Laws. (a) None of the Borrower, the Guarantor, nor any of their Subsidiaries or Affiliates is in violation
of any Anti-Terrorism Law or engages in or conspires to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions
set forth in any Anti-Terrorism Law.

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                (b)          None of the Borrower, the Guarantor,
nor any of their Subsidiaries or Affiliates or their respective agents acting or
benefiting in any capacity in connection with this Agreement or other transactions hereunder,
is any of the following (each a “Blocked Person”): (i) a Person that is listed in
the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224; (ii) a
Person owned or controlled by, or acting for or on behalf of, any Person that
is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No.
13224; (iii) a Person or entity with which the Bank is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law; (iv) a Person or entity that commits, threatens
or conspires to commit or supports “terrorism” as defined in the Executive Order No. 13224;
(v) a Person or entity that is named as a “specially designated national”
on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control
at its official website or any replacement website or other replacement official publication
of such list, or (vi) a person or entity who is affiliated or associated with a person or entity
listed above. None of the Borrower, the Guarantor, nor any of their Subsidiaries or any of their
Affiliates acting in any capacity in connection with this Agreement or any other transaction hereunder
(i) conducts any business or engages in making or receiving any contribution of funds, goods or services
to or for the benefit of any Blocked Person, or (ii) deals in, or otherwise engages in any transaction
relating to, any property or interests in property blocked pursuant to the Executive Order No. 13224.

ARTICLE IV

CONDITIONS OF LENDING

                The
obligation of the Bank to make any Loan is subject to the accuracy as of the Closing Date of the
representations and warranties contained in this Agreement and the other Loan Documents, to the performance
by the Borrower of its obligations to be performed under this Agreement and under the other Loan
Documents on or before the date of such Loan and to the satisfaction of the following further conditions:

                4.01  Representations and Warranties; Events of Default and Potential Defaults . The representations and warranties contained in Article III shall be true and correct on and as
of the date of the Revolving Credit Loans and the Closing Date, with the same effect as though made
on and as of each such date. On the Closing Date, the Borrower shall have delivered a Certificate
to that effect signed by the President of the Borrower. On the date of the Revolving Credit Loans
and each of the Term Loans, no Event of Default and no Potential Default shall have occurred and
be continuing or exist or shall occur or exist after giving effect to the Loan to be made on such
date. On the Closing Date, the Borrower shall have delivered a Certificate to that effect signed
by the President of the Borrower.

                4.02  Proceedings and Incumbency . On the Closing Date, each of the Borrower and the Guarantor shall have delivered to the Bank a certificate,
in form and substance satisfactory to the Bank, dated the Closing Date and signed on behalf of each
of the Borrower and the Guarantor by the Secretary or Assistant Secretary of the Borrower and the
Guarantor, as the case may be, certifying as to (a) true copies of the Articles of Incorporation
and bylaws of the Borrower or the Guarantor all as in effect on such date, (b) true copies of all
corporate action taken by the Borrower or the Guarantor relative to this Agreement, the Notes, the
Security Agreement and the other Loan Documents, including but not limited to that described in Section
3.03 of this Agreement, and (c) the names, true signatures and incumbency of the officers of the
Borrower or the Guarantor authorized to execute and deliver this Agreement, the Notes, the Security
Agreement and the other Loan Documents. The Bank may conclusively rely on each such certificate unless
and until a later certificate revising the prior certificate has been received by the Bank.

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                4.03  Opinion of Counsel . On the Closing Date, there shall have been delivered to the Bank a written opinion, dated the Closing
Date, of Eckert Seamans Cherin & Mellott, LLC, counsel for the Borrower and the Guarantor, satisfactory
in terms, form and substance to the Bank and its counsel.

                4.04  Agreement and Notes . On the Closing Date, this Agreement and the Notes executed by the Borrower, all satisfactory in
terms, form and substance to the Bank, shall have been delivered to the Bank.

                4.05  Security Agreement . On the Closing Date, the Security Agreement, satisfactory in terms, form and substance to the Bank,
shall have been executed and delivered by the Borrower to the Bank and shall be in effect and all
filings contemplated by the Security Agreement shall have been made. 

                4.06  UCC Financing Statements . On or before the Closing Date, all UCC-1 financing statements to be filed pursuant to the Loan Agreement
or the Security Agreement and the other Loan Documents shall have been duly filed and shall be in
effect.

                4.07 Borrowing Base Certificate. On the Closing Date, the Borrower shall have executed and delivered a completed Borrowing Base Certificate
in the form attached hereto as Exhibit “E”.

                4.08 Landlord’s Waivers. On or before the Closing Date, the Borrower shall have delivered to the Bank Landlord’s Waivers
from the Lessor covering the Borrower’s locations in New Castle, Pennsylvania and Brewton, Alabama,
all in form and substance satisfactory to the Bank.

                4.09 Guaranty. On or before the Closing Date, the Guaranty, satisfactory in terms, form and substance to the Bank,
shall have been executed and delivered by the Guarantor to the Bank. 

                4.10 Deposit Accounts. On or before the Closing Date, Borrower shall have opened and shall be maintaining its primary deposit
and operating accounts with the Bank.

                4.11.
Lien Searches. On or before the Closing Date, Borrower shall have delivered to the Bank UCC lien, judgment, bankruptcy
and litigation searches covering the Borrower in the Commonwealth of Pennsylvania evidencing no Liens
that are unsatisfactory to the Bank, all in form and substance satisfactory to the Bank.

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                4.12  Other Documents and Conditions . On or before the Closing Date, the following documents and conditions shall have been delivered
or satisfied by or on behalf of the Borrower to the Bank: 

                                (a)          Good Standing and Tax Lien Certificates. Good Standing Certificate of the Department of State of Pennsylvania and the Department of State
of Nevada certifying to the good standing and corporate status of the Borrower and the Guarantor,
respectively.

                                (b)          Financial Statements. Financial statements in form and substance satisfactory to the Bank, as described in Section 3.12
of this Agreement.

                                (c)          Insurance. Evidence, in form and substance satisfactory to the Bank, that the business and all assets of the
Borrower and the corporate sureties are adequately insured and that the Bank has been named as lender’s
loss payee and additional insured on all policies of insurance covering Collateral (as defined in
the Security Agreement).

                                (d)          No Material Adverse Change. Evidence satisfactory to the Bank that no material adverse change has occurred with respect to the
Borrower and the Guarantor since December 31, 2003.

                                (e)          Other Documents and Conditions. Such other documents and conditions as may be required to be submitted to the Bank by the terms of
this Agreement or of any Loan Document.

                4.13  Details, Proceedings and Documents. All legal details and proceedings in connection with the transactions contemplated by this Agreement
shall be satisfactory to the Bank and the Bank shall have received all such counterpart originals
or certified or other copies of such documents and proceedings in connection with such transactions,
in form and substance satisfactory to the Bank, as the Bank may from time to time request.

                4.14  Fees and Expenses. The Borrower shall have paid all fees and charges as required for the Closing and relating to the
Closing, including legal fees, closing costs, filing and notary fees, and any other similar matters
pertinent to the closing.

ARTICLE V

AFFIRMATIVE COVENANTS

                The Borrower
covenants to the Bank as follows: 

                5.01 
Reporting and Information Requirements. 

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                                (a)          Annual Reviewed Reports. As soon as practicable, and in any event within 90 days after the close of each fiscal year of the
Borrower and the Guarantor, the Borrower will furnish to the Bank audited consolidated and consolidating
statements of income, retained earnings and cash flow of the Borrower and the Guarantor for such
fiscal year and an audited consolidated and consolidating balance sheet of the Borrower and the Guarantor
as of the close of such fiscal year, and notes to each, all in reasonable detail, setting forth in
comparative form the corresponding figures for the preceding fiscal year, with such statements and
balance sheet to be certified by Beard Miller Company LLP or other independent certified public accountants
of recognized standing selected by the Borrower and satisfactory to the Bank. The certificate or
report of such accountants shall be free of exception or qualifications not acceptable to the Bank
and shall in any event contain a written statement of such accountants substantially to the effect
that such accountants reviewed such statements and balance sheet in accordance with GAAP applied
on a basis consistent with that of the preceding fiscal year (except for changes in application in
which such accountants concur). Together with delivery of such statements, the Borrower will provide
to the Bank a copy of any management letters delivered by such accountants to the management of Borrower.

                                (b)          Quarterly Reports. As soon as practicable, and in any event within 45 days after the close of each fiscal quarter of
the Borrower during the term of this Agreement, the Borrower will furnish to the Bank internally
prepared consolidated and consolidating statements of income for the Borrower and the Guarantor for
such fiscal period and for the portion of the fiscal year to the end of such fiscal period and a
consolidated and consolidating balance sheet of the Borrower and the Guarantor as of the close of
such fiscal period, all in reasonable detail. All such income statements and balance sheets shall
be prepared by the Borrower and certified by the President, Treasurer or chief financial officer
of the Borrower as presenting fairly the financial position of the Borrower and the Guarantor as
of the end of such quarter and the results of their operations for such periods subject to year end
adjustment, in conformity with GAAP applied in a manner consistent with that of the most recent audited
financial statements furnished to the Bank.

                                (c)          Compliance Certificate. Within 45 days after the end of each fiscal year of the Borrower and within 45 days after the end
of each fiscal quarter, the Borrower will deliver to the Bank a certificate, in the form attached
to this Agreement as Exhibit “F“, dated as of the end of such fiscal year or quarter, as the case may be, signed on behalf of
the Borrower by its President, Treasurer or chief financial officer stating that, as of the date
of the certificate, no Event of Default or Potential Default has occurred and is continuing or exists,
or if an Event of Default or Potential Default has occurred and is continuing or exists, specifying
in detail the nature and period of existence of the Event of Default or Potential Default and any
action taken or contemplated to be taken by the Borrower.

                                (d)          Accountants’ Certificates. Each set of statements and balance sheet delivered pursuant to Section 5.01(a) of this Agreement
shall be accompanied by a certificate or report dated the date of such statements and balance sheet
by the accountants who prepared such statements and balance sheet stating in substance that they
have reviewed this Agreement and that in making the examination necessary for their audit of such
statements and balance sheet they did not become aware of any Event of Default or Potential Default,
or if they did become so aware, such certificate or report shall state the nature and period of existence
of the Event of Default or Potential Default.

37

                                (e)          Accounts Receivable and Accounts Payable Statements; Inventory Reports. Within twenty (20) days after the end of each calendar month, the Borrower will deliver to the Bank
a schedule of its accounts receivable, accounts payable and inventory, such report to include a listing
of all Qualified Accounts, Qualified Inventory and the aging thereof by open invoice of each customer
owed to or by the Borrower, all certified as to accuracy by the President, Treasurer or chief financial
officer of the Borrower. The Borrower shall also provide the Bank with all information requested
by Bank with respect to any account debtor.

                                (f)          Borrowing Base Certificates. As often as the Bank shall from time to time request and in any event within twenty (20) days after
the end of each calendar month, the Borrower will deliver to the Bank a Borrowing Base Certificate
reflecting the Borrower’s Qualified Accounts, Qualified Inventory and other matters as of the
close of business of the last day of the calendar month immediately preceding the date of delivery
of the Borrowing Base Certificate, on the Bank’s standard forms as delivered to the Borrower,
with all blanks completed, in form and substance satisfactory to the Bank.

                                (g)          Visitation. After reasonable notice and at reasonable times, the Borrower will permit such persons as the Bank
may designate to visit and inspect any of the properties of the Borrower, to examine, and to make
copies and extracts from, the books and records of either of the Borrower and to discuss its affairs
with its officers, employees and independent accountants at such times and as often as the Bank may
request. The Borrower authorizes its officers, employees and independent accountants to discuss with
the Bank the affairs of the Borrower.

                                In
addition to the foregoing, the Borrower agrees that the Bank may, at its discretion, and at the cost
of the Borrower, conduct field audits of the Borrower’s inventory, accounts receivable and other
assets and book and records at least twice during each calendar year and, after reasonable notice
and at reasonable times, the Borrower hereby authorizes the employees and agents of the Bank who
are to conduct such audits to visit the locations of Borrower, have access to the books and records
of the Borrower. The Borrower further authorizes the employees and management of the Borrower to
discuss the affairs of the Borrower with the employees and agents of the Bank in order that the Bank
may conduct such field audits in a manner that is satisfactory to the Bank.

                                (h)          Notice of Event of Default. Promptly upon becoming aware of an Event of Default or Potential Default, the Borrower will give
the Bank notice of the Event of Default or Potential Default, together with a written statement of
the President, Treasurer or chief financial officer of the Borrower setting forth the details of
the Event of Default or Potential Default and any action taken or contemplated to be taken by the
Borrower.

                                (i)          Notice of Material Adverse Change. Promptly upon becoming aware thereof, the Borrower will give the Bank telephonic or telegraphic notice
(with written confirmation set on the same or next Business Day) about any material adverse change
in the assets, business, operations or financial condition of the Borrower or any development or
occurrence which would materially and adversely affect the ability of the Borrower to perform its
obligations under this Agreement.

38

                                (j)          Reports to Governmental Agencies and Other Creditors. With reasonable promptness, the Borrower will deliver to the Bank upon written request copies of
all such financial reports, statements and returns which the Borrower shall file with any federal
or state department, commission, board, bureau, agency or instrumentality and any report, statement
or return delivered by the Borrower to any supplier or other creditor.

                                (k)          Notice of Proceedings. Promptly upon becoming aware thereof, the Borrower will give the Bank notice of the commencement,
existence or threat of all proceedings by or before any Official Body against or affecting either
of the Borrower which, if adversely decided, would have a material adverse effect on the assets,
business, operations or financial condition of either of the Borrower.

                                (l)          Further Information. The Borrower will promptly furnish to the Bank such other information, and in such form, as the Bank
may reasonably request from time to time.

                5.02  Preservation of Existence and Franchises . Each of the Borrower and the Guarantor will maintain its corporate existence, rights and franchises
in full force and effect in its jurisdiction of incorporation. Each of the Borrower and the Guarantor
will qualify and remain qualified as a foreign corporation in each jurisdiction in which failure
to receive or retain qualification would have a material adverse effect on the assets, business,
operations or financial condition of the Borrower or the Guarantor.

                5.03  Insurance . The Borrower will maintain with financially sound and reputable insurers insurance with respect
to its properties and business and against such liabilities, casualties and contingencies and of
such types and in such amounts as is satisfactory to the Bank and as is customary in the case of
corporations or other entities engaged in the same or similar business or having similar properties
similarly situated. The Borrower will add the Bank as additional insured and lender’s loss payee
to all policies of insurance which insure against loss of or damage to the Collateral (as defined
in the Security Agreement) and will add the Bank as additional insured, loss payee to all policies
of insurance covering property subject to the Security Agreement and to provide the Bank with thirty
(30) days advance notice of the termination of any such policy of insurance.

                5.04  Maintenance of Properties . The Borrower will maintain or cause to be maintained in good repair, working order and condition,
the properties now or in the future owned, leased or otherwise possessed by the Borrower, or either
of them, and shall make or cause to be made all needful and proper repairs, renewals, replacements
and improvements to the properties so that the business carried on in connection with the properties
may be properly and advantageously conducted at all times. The Borrower shall notify the Bank prior
to any change in the location of any of its properties or businesses.

39

                5.05  Payment of Liabilities . The Borrower will pay or discharge:

                                (a)          on
or prior to the date on which penalties attach, all taxes, assessments and other governmental charges
or levies imposed upon it or any of its properties or income except taxes, assessments or charges
subject to good faith dispute for which the Borrower has created adequate reserves on its books;

                                (b)          on
or prior to the date when due, all lawful claims of materialmen, mechanics, carriers, warehousemen,
landlords and other like persons which, if unpaid, might result in the creation of a Lien upon any
of its property, except such claims which are subject to good faith dispute and as to which the Borrower
has created adequate reserves on its books;

                                (c)          on
or prior to the date when due, all other lawful claims which, if unpaid, might result in the creation
of a Lien upon any of its property, except such claims which are subject to good faith dispute and
as to which the Borrower has created adequate reserves on its books; and 

                                (d)          all
other current liabilities so that none is due more than ninety (90) days after the due date for each
liability, except current liabilities which are subject to good faith dispute and as to which the
Borrower has created adequate reserves on its books.

                5.06  Financial Accounting Practices . The Borrower will make and keep books, records and accounts which, in reasonable detail, accurately
and fairly reflect their transactions and dispositions of their assets and maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (a) transactions are executed
in accordance with management’s general or specific authorization, (b) transactions are recorded
as necessary (i) to permit preparation of financial statements in conformity with GAAP and (ii) to
maintain accountability for assets, (c) access to assets is permitted only in accordance with management’s
general or specific authorization and (d) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

                5.07  Compliance with Laws . The Borrower shall comply with all applicable Laws in all material respects.

                5.08  Pension Plans . The Borrower shall (a) keep in full force and effect any and all Plans which are presently in existence
or may, from time to time, come into existence under ERISA, unless such Plans can be terminated without
material liability to the Borrower in connection with such termination; (b) make contributions to
all of the Borrower’s Plans in a timely manner and in a sufficient amount to comply with the
requirements of ERISA; (c) comply with all material requirements of ERISA which relate to such Plans
so as to preclude the occurrence of any Reportable Event, Prohibited Transaction (other than a Prohibited
Transaction subject to an exemption under ERISA) or material “accumulated funding deficiency”
as such term is defined in ERISA; and (d) notify the Bank immediately upon receipt by the Borrower
of any notice of the institution of any proceeding or other action which may result in the termination
of any Plan. The Borrower shall deliver to the Bank, promptly after written request by the Bank,
copies of all reports or notices which the Borrower files or receives under ERISA with or from the
Internal Revenue Service, the Pension Benefit Guaranty Corporation, or the U.S. Department of Labor.

40

                5.09  Continuation of and Change in Business . The Borrower will continue to engage in the businesses and activities substantially as described
in Schedule 3.10 to this Agreement and the Borrower will not engage in any other businesses or activities without prior
written consent of the Bank.

                5.10  Use of Proceeds. The Borrower will use the proceeds of the Revolving Credit Loans for general working capital and
general corporate purposes, the proceeds of the Term Loan for the refinance of Debt owing to Sky
Bank, and the Multi-Draw Term Loan for equipment to be used in the Borrower’s business generally.

                5.11  Lien Searches . The Bank may, but shall not be obligated to, conduct lien searches of the Borrower and its assets
and properties on an annual basis and at such other times as the Bank, in its reasonable discretion,
may determine to be necessary. The Borrower shall reimburse the Bank for the Bank’s reasonable
out-of-pocket costs in connection with such lien searches.

                5.12  Management; Ownership and Control of Guarantor. The Borrower will maintain Joseph Giordano, Charles J. Long, Jr. and Shawn C. Fabry in senior management
positions of the Borrower at all times during the term of this Agreement or provide evidence to the
Bank of alternative senior management for the Borrower that is satisfactory to the Borrower in its
reasonable discretion. Joseph Giordano and Charles J. Long, Jr. shall at all times own and control
at least a majority of the voting and non-voting capital stock of the Guarantor, provided that the
failure of Joseph Giordano and Charles J. Long, Jr. to own and control a majority of the voting and
non-voting capital stock of the Guarantor by reason of the death of either or both of Joseph Giordano
and/or Charles J. Long, Jr. shall not constitute an Event of Default under this Agreement for a period
of one hundred eighty (180) consecutive days after such failure provided that the Borrower at all
times maintains at least $2,500,000 of key-man life insurance in favor of the Borrower as the beneficiary
covering the lives of each of Joseph Giordano and Charles J. Long, Jr.

                5.13  Further Assurances . The Borrower, at its own cost and expense, will cause to be promptly and duly taken, executed, acknowledged
and delivered all such further acts, documents and assurances as the Bank may from time to time request
in order more effectively to carry out the intent and purposes of this Agreement and the transactions
contemplated by this Agreement and to cause the security interest or interests, the liens, or conveyance
granted under the Security Agreement or any other Loan Documents to be, at all times, valid, perfected
and enforceable against the Borrower and all third parties. All expenses of such filings, and recordings,
and refilings, and rerecordings, shall be borne by the Borrower.

41

ARTICLE VI

NEGATIVE COVENANTS

                The Borrower
covenants to the Bank as follows:

                6.01  Liens . Neither the Borrower nor the Guarantor shall at any time create, incur, assume or suffer to exist
any Lien on any of its property or assets, tangible or intangible, now owned or acquired in the future,
or agree to become liable to do so, except:

                                (a)          Liens
existing on the Closing Date and described in Schedule 6.01 to this Agreement, Liens in favor of the Bank and Liens securing Debt permitted under Section 6.02
of this Agreement;

                                (b)          Liens
arising from taxes, assessments, charges, levies or claims described in Section 5.05(a) of this Agreement
that are not yet due or that remain payable without penalty or to the extent permitted to remain
unpaid under the proviso to Section 5.05(a) of this Agreement;

                                (c)          Deposits
or pledges to secure workmen’s compensation, unemployment insurance, old age benefits or other
social security obligations, or in connection with or to secure the performance of bids, tenders,
trade contracts or leases, or to secure statutory obligations, or stay, surety or appeal bonds, or
other pledges or deposits of like nature and all in the ordinary course of business;

                                (d)          Mechanics’,
carriers’, workmen’s, repairmen’s or similar liens arising in the ordinary course
of business in respect of obligations which are not overdue, or deposits made to obtain the release
of such mechanics’, carriers’, workmen’s, repairmen’s or similar liens which
are being contested in good faith by appropriate proceedings and with respect to which the Borrower
has created reserves which are determined to be adequate by the application of GAAP consistently
applied; and

                                (e)          Zoning
restrictions, easements, minor restrictions on the use of real property, minor irregularities in
title to real property and other minor Liens that do not secure the payment of money or the performance
of an obligation and that do not in the aggregate materially detract from the value of a property
or asset to, or materially impair its use in the business of, the Borrower.

                6.02  Debt . Neither the Borrower nor the Guarantor will at any time create, incur, assume or suffer to exist
any Debt, except:

                                (a)          Debt
under this Agreement, the Notes, the other Loan Documents or under any other document, instrument
or agreement between the Borrower and the Bank;

42

                                (b)          Debt
existing on the Closing Date and described in Schedule 6.02 to this Agreement; provided, however, that none of such indebtedness shall be extended, renewed or
refinanced without the prior written consent of the Bank;

                                (c)          Current
accounts payable, accrued expenses and other current items arising out of transactions (other than
borrowings) in the ordinary course of business; and

                                (d)          Debt
and Capitalized Lease Obligations for the purchase or lease of property useful in the business of
the Borrower or the Guarantor that is not described in subparts (a) or (b) above in this Section
6.02, not to exceed $250,000 in the aggregate at any time, provided that any Lien securing such Debt
is limited to the property that is purchased or leased with the proceeds of such Debt and identifiable
proceeds of such property.

                6.03  Guarantees and Contingent Liabilities . Neither the Borrower nor the Guarantor will at any time directly or indirectly assume, guarantee,
endorse or otherwise agree, become or remain directly or contingently liable upon or with respect
to any obligation or liability of any other person, firm or entity, except as described in this Agreement.

                6.04  Loans and Investments . Neither the Borrower nor the Guarantor will at any time make or suffer to remain outstanding any
loan or advance to, or purchase, acquire or own any stock, bonds, notes or securities of, or any
partnership interest (whether general or limited) in, or any other interest in, or make any capital
contribution to, any other person, including any Subsidiary, or agree, become or remain liable to
do any of the foregoing; except

                                (a)          Trade
credit extended under usual and customary terms in the ordinary course of business;

                                (b)          Advances
to its employees for expenses which are reimbursable by the Borrower in the ordinary course of business;

                                (c)          Investments
made by the Guarantor in the Borrower; and

                                (d)          Loans,
advances and investments which are described on Schedule 6.04 to this Agreement.

                6.05  Dividends and Related Distributions . The Borrower will not declare, make, pay, or agree, become or remain liable to, make or pay, any
dividend or other distribution of any nature (whether in cash, property, securities or otherwise)
on account of or in respect of any shares of the capital stock of the Borrower or on account of the
purchase, redemption, retirement or acquisition of any shares of the capital stock (or warrants,
options or rights for any shares of the capital stock) of the Borrower if an Event of Default or
Potential Default is, or after giving effect to such distribution would be, in existence.

43

                6.06  Leases . The Borrower will not at any time enter into or suffer to remain in effect any agreement to lease,
as lessee, any real or personal property, except:

                                (a)          leases
cancelable by the lessee without penalty on not more than 90 days’ notice; and

                                (b)          leases
described on Schedule 6.06 to this Agreement and leases of equipment, including vehicle leases, (other than Capitalized Lease
Obligations) used in the operation of Borrower’s business in the ordinary course, provided,
however, in no event shall the aggregate Lease Obligations of the Borrower exceed the Lease Obligations
described on Schedule 6.06 to this Agreement plus $50,000 in any fiscal year of the Borrower.

                6.07  Merger; Consolidation; Business Acquisitions . Neither the Borrower nor the Guarantor will merge or will agree to merge with or into or consolidate
with any other person, corporation, firm or other entity. Neither the Borrower nor the Guarantor
will acquire any material portion of the stock or assets or business of any other person, corporation,
firm or other entity.

                6.08  Dispositions of Assets . Neither the Borrower nor the Guarantor will sell, convey, assign, lease, abandon or otherwise transfer
or dispose of, voluntarily or involuntarily (any of the foregoing being referred to in this Section
as a “transaction” and any series of related transactions constituting but a single transaction),
any of its properties or assets, tangible or intangible (including stock of subsidiaries), except
for (a) disposition of equipment no longer useful in their business, in the ordinary course of business
and (b) assets reasonably determined by the Borrower or the Guarantor to be obsolete or of no further
value to or use in the business or operations of the Borrower and the Guarantor.

                6.09  Self-Dealing . Neither the Borrower nor the Guarantor will enter into or carry out any loan, advance or other transaction
(including, without limitation, purchasing property or services or selling property or services)
with any Affiliate except that:

                                (a)          directors,
officers and employees of the Borrower and the Guarantor may render services to the Borrower and
the Guarantor for reasonable compensation; and

                                (b)          the
Borrower and the Guarantor may enter into and carry out other transactions with Affiliates if in
the ordinary course of business, pursuant to the reasonable requirements of the Borrower’s or
the Guarantor’s business upon terms reasonably found by the board of directors of the Borrower
or the Guarantor, as the case may be, after due inquiry to be fair and reasonable and no less favorable
to the Borrower or the Guarantor than would be obtained in a comparable arm’s-length transaction.

                6.10 
Reserved.

                6.11  Margin Stock . The Borrower will not use the proceeds of any Loans directly or indirectly to purchase or carry
any “margin stock” (within the meaning of Regulations U, G, T, or X of the Board of Governors
of the Federal Reserve System) or to extend credit to others for the purpose of purchasing or carrying,
directly or indirectly, any margin stock.

44

                6.12  Consolidated Tax Returns . Neither the Borrower nor the Guarantor will, without prior written consent of the Bank, file, or
consent to the filing of, any consolidated income tax return with any person other than each other
or a Subsidiary.

                6.13  Ownership and Control . The Borrower shall not directly or indirectly, issue, transfer, sell or otherwise dispose of any
interest in the Borrower and the Guarantor shall at all times own and control 100% of each of the
voting and non-voting capital stock of the Borrower. 

                6.14 
Financial Maintenance Covenants . 

                                (a)          The
Borrower shall not permit or suffer the Consolidated Tangible Net Worth to be less than the sum of
(x) $5,049,000 plus (y) 50% of the Consolidated Net Income (excluding net losses) for each completed
fiscal quarter of the Borrower during the period commencing on March 31, 2005 and concluding on the
date of determination. 

                                (b)          The
Borrower shall not permit or suffer the Consolidated Fixed Charge Coverage Ratio, calculated on a
rolling four (4) quarter basis, to be less than 1.10 to 1.00 at the end of any fiscal quarter of
the Borrower.

                6.15  Anti-Terrorism Laws. The Borrower, the Guarantor and their respective Affiliates and
agents shall not (i) conduct any business or engage in any transaction or dealing with any Blocked
Person, including the making or receiving any contribution of funds, goods or services to or for
the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any transaction relating
to, any property or interests in property blocked pursuant to the Executive Order No. 13224; or (iii)
engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading
or avoiding, or attempts to violate, any of the prohibitions set forth in the Executive Order No.
13224, the USA Patriot Act or any other Anti-Terrorism Law. The Borrower shall deliver to the Bank
any certification or other evidence requested from time to time by the Bank in its sole discretion,
confirming Borrowers’ compliance with this Section 6.15.

ARTICLE VII

DEFAULTS

                7.01  Events of Default . An Event of Default means the occurrence or existence of one or more of the following events or
conditions (whatever the reason for such Event of Default and whether voluntary, involuntary or effected
by operation of Law):

                                (a)          (i)
The Borrower shall fail to pay principal on the Revolving Credit Loans when due, or (ii) the Borrower
shall fail to pay principal on the Term Loan or the Multi-Draw Term Loan when due and such failure
shall continue for a period of five (5) consecutive days; or

45

                                (b)          The
Borrower shall fail to pay interest on the Loans or any fees payable pursuant to Article II of this
Agreement when due and such failure shall continue for a period of five (5) consecutive days; or

                                (c)          The
Borrower shall fail to pay any other fee, or other amount payable pursuant to this Agreement, the
Notes, the Security Agreement and the other Loan Documents when due and such failure continues for
a period of five (5) days after receipt of notice from Bank; or

                                (d)          Any
representation or warranty made by the Borrower or the Guarantor under this Agreement, the Notes,
the Security Agreement, the Guaranty or any of the other Loan Documents or any statement made by
the Borrower in any financial statement, certificate, report, exhibit or document furnished by the
Borrower to the Bank pursuant to this Agreement or the other Loan Documents shall prove to have been
false or misleading in any material respect as of the time when made; or

                                (e)          The
Borrower shall have taken any action or failed to take any action, the effect of which is to cause
the Bank’s security interest under the Security Agreement to become unperfected; or

                                (f)          The
Borrower shall be in default in the performance or observance of any covenant, agreement or duty
contained in (1) Section 5.01, 5.02, 5.03, 5.09, 5.10 or Article VI of this Agreement, or (2) any
other provision of this Agreement or the other Loan Documents and such failure shall continue for
a period of thirty (30) consecutive days; or 

                                (g)          The
Borrower or the Guarantor shall (i) default (as principal or guarantor or other surety) in any payment
of principal of or interest on any obligation (or set of related obligations) for borrowed money
in an amount in excess of $100,000, beyond any period of grace with respect to the payment or, if
an obligation (or set of related obligations) in an amount in excess of $100,000, is or are payable
or repayable on demand, fails to pay or repay such obligation or obligations when demanded, or (ii)
default in the observance of any other covenant, term or condition contained in any agreement or
instrument by which an obligation (or set of related obligations) in an amount in excess of $100,000,
is or are created, secured or evidenced if the effect of such default is to cause, or to permit the
holder or holders of such obligation or obligations (or a trustee or agent on behalf of such holder
or holders) to cause, all or part of such obligation or obligations to become due before its or their
otherwise stated maturity; or

                                (h)          One
or more judgments for the payment of money in excess of $100,000 shall have been entered against
the Borrower or the Guarantor, which judgment or judgments shall have remained undischarged or unstayed
or unbonded for a period of thirty (30) days; or

                                (i)          A
writ or warrant of attachment, garnishment, execution, distraint or similar process in excess of
$100,000 shall have been issued against the Borrower or the Guarantor or any of their properties
which shall have remained undischarged, unstayed or unbonded for a period of thirty (30) days; or

46

                                (j)          A
material adverse change shall have occurred with respect to the assets, business, operations or financial
condition of the Borrower or the Guarantor; or

                                (k)          A
proceeding shall be instituted in respect of the Borrower or the Guarantor:

	                                (i)	seeking to have an order for relief entered in respect of the Borrower or the Guarantor, or seeking
a declaration or entailing a finding that the Borrower or the Guarantor is insolvent or a similar
declaration or finding, or seeking dissolution, winding-up, charter revocation or forfeiture, liquidation,
reorganization, arrangement, adjustment, composition or other similar relief with respect to the
Borrower or the Guarantor, their assets or their debts under any law relating to bankruptcy, insolvency,
relief of debtors or protection of creditors, termination of legal entities or any other similar
law now or in the future in effect; or
		 
	                                (ii)	seeking appointment of a receiver, trustee, custodian, liquidator, assignee, sequestrator or other
similar official for the Borrower or the Guarantor or for all or any substantial part of their property;
or

                                (l)          Either
of the Borrower or the Guarantor shall become insolvent, shall become generally unable to pay its
debts as they become due, shall voluntarily suspend transaction of its business, shall make a general
assignment for the benefit of creditors, shall institute a proceeding described in Section 7.01(k)(i)
of this Agreement or shall consent to any order for relief, declaration, finding or relief described
in Section 7.01(k)(i) of this Agreement, shall institute a proceeding described in Section 7.01(k)(ii)
of this Agreement or shall consent to the appointment or to the taking of possession by any such
official of all or any substantial part of its property whether or not any proceeding is instituted,
dissolves, winds-up or liquidates itself or any substantial part of its property, or shall take any
action in furtherance of any of the foregoing.

                                (m)          The
Revolving Credit Commitment is terminated by either the Borrower or the Bank prior to the maturity
date of the Term Loan.

                7.02 
Consequences of an Event of Default .

                                (a)          If
an Event of Default specified in subsections (a) through (j) or (m) of Section 7.01 of this Agreement
occurs and continues or exists, the Bank will be under no further obligation to make Loans and may
demand the unpaid principal amount of the Notes, interest accrued on the unpaid principal amount
and all other amounts owing by the Borrower under this Agreement, the Notes, the Security Agreement
and the other Loan Documents to be immediately due and payable without presentment, demand, protest
or further notice of any kind, all of which are expressly waived, and an action for any amounts due
shall accrue immediately.

47

                                (b)          If
an Event of Default specified in subsections (k) or (l) of Section 7.01 of this Agreement occurs
and continues or exists, the Bank will be under no further obligation to make Loans and the unpaid
principal amount of the Notes, interest accrued on the unpaid principal amount and all other amounts
owing by the Borrower under this Agreement, the Notes, the Security Agreement and the other Loan
Documents shall become immediately due and payable without presentment, demand, protest or notice
of any kind, all of which are expressly waived, and an action for any amounts due shall accrue immediately.

                7.03  Set-Off . If the unpaid principal amount of the Notes, interest accrued on the unpaid principal amount or
other amount owing by the Borrower under this Agreement, the Notes, the Security Agreement or the
other Loan Documents shall have become due and payable (at maturity, by acceleration or otherwise),
the Bank and the holder of any participation in any Loan will each have the right, in addition to
all other rights and remedies available to it, without notice to the Borrower, to set-off against
and to appropriate and apply to such due and payable amounts any debt owing to, and any other funds
held in any manner for the account of, the Borrower by the Bank or by such holder including, without
limitation, all funds in all deposit accounts (whether time or demand, general or special, provisionally
credited or finally credited, or otherwise) now or in the future maintained by the Borrower with
the Bank or such holder. The Borrower consents to and confirms the foregoing arrangements and confirms
the Bank’s rights and such holder’s rights of banker’s lien and set-off. Nothing in
this Agreement will be deemed a waiver or prohibition of or restriction on the Bank’s rights
or any such holder’s rights of banker’s lien or set-off.

ARTICLE VIII

MISCELLANEOUS

                8.01  Holidays . Except as otherwise provided in this Agreement, whenever any payment or action to be made or taken
under this Agreement, or under the Notes or under any of the other Loan Documents is stated to be
due on a day which is not a Business Day, such payment or action will be made or taken on the next
following Business Day and such extension of time will be included in computing interest or fees,
if any, in connection with such payment or action.

                8.02  Records . The unpaid principal amount of the Notes, the unpaid interest accrued thereon, the interest rate
or rates applicable to such unpaid principal amount and the duration of such applicability shall
at all times be ascertained from the records of the Bank, which shall be conclusive absent manifest
error.

48

                8.03  Amendments and Waivers . The Bank and the Borrower may from time to time enter into agreements amending, modifying or supplementing
this Agreement, the Notes or any other Loan Document or changing the rights of the Bank or of the
Borrower under this Agreement, under the Notes or under any other Loan Document and the Bank may
from time to time grant waivers or consents to a departure from the due performance of the obligations
of the Borrower under this Agreement, under the Notes or under any other Loan Document. Any such
agreement, waiver or consent must be in writing and must be signed by the Bank and will be effective
only to the extent specifically set forth in such writing. In the case of any such waiver or consent
relating to any provision of this Agreement, any Event of Default or Potential Default so waived
or consented to will be deemed to be cured and not continuing, but no such waiver or consent will
extend to any other or subsequent Event of Default or Potential Default or impair any right consequent
to any other or subsequent Event of Default or Potential Default.

                8.04  No Implied Waiver; Cumulative Remedies . No course of dealing and no delay or failure of the Bank in exercising any right, power or privilege
under this Agreement, the Notes or any other Loan Document will affect any other or future exercise
of any such right, power or privilege or exercise of any other right, power or privilege except as
and to the extent that the assertion of any such right, power or privilege shall be barred by an
applicable statute of limitations; nor shall any single or partial exercise of any such right, power
or privilege or any abandonment or discontinuance of steps to enforce such a right, power or privilege
preclude any further exercise of such right, power or privilege or of any other right, power or privilege.
The rights and remedies of the Bank under this Agreement, the Notes or any other Loan Document are
cumulative and not exclusive of any rights or remedies which the Bank would otherwise have.

                8.05  Notices . All notices, requests, demands, directions and other communications (collectively “notices”)
under the provisions of this Agreement or the Notes must be in writing (including telexed or telecopied
communication) unless otherwise expressly permitted under this Agreement and must be sent by first-class
or first-class express mail, private overnight or next Business Day courier or by telex or telecopy
with confirmation in writing mailed first class, in all cases with charges prepaid, and any such
properly given notice will be effective when received. All notices will be sent to the applicable
party at the addresses stated below or in accordance with the last unrevoked written direction from
such party to the other parties.

	If to Borrower:	 	International Plastics and Equipment Corp.

185 Northgate Circle

New Castle, Pennsylvania 16105

Attention:   Shawn Fabry, Chief Financial Officer
	 	 	 
	and copy to:	 	Bryan Rosenberger, Esquire

Eckert Seamans Cherin and Mellott, LLC

44th Floor, USX Tower

600 Grant Street

Pittsburgh, PA 15219
	 	 	 
	If to Bank:	 	Citizens Bank of Pennsylvania

29th Floor, 525 William Penn Place

Pittsburgh, PA 15219

Attention:  Daniel T. Kennelly, Vice President

49

	and copy to:	 	Craig S. Heryford, Esquire

Klett Rooney Lieber & Schorling

a Professional Corporation

40th Floor, One Oxford Centre

 Pittsburgh, PA  15219-6498

                                8.06 Expenses; Taxes; Attorneys’ Fees . The Borrower agrees to pay or cause to be paid and to save the Bank harmless against liability for
the payment of all reasonable out-of-pocket expenses, including, but not limited to fees and expenses
of counsel and paralegals for the Bank, incurred by the Bank from time to time (i) arising in connection
with the preparation, execution, delivery and performance of this Agreement, the Notes and the other
Loan Documents, the insurance fees and expenses, real estate appraisal costs and environmental audit
fees and expenses, (ii) relating to any requested amendments, waivers or consents to this Agreement,
the Notes or any of the other Loan Documents, (iii) arising in connection with the Bank’s enforcement
or preservation of rights under this Agreement, the Notes or any of the other Loan Documents, including
but not limited to such expenses as may be incurred by the Bank in the collection of the outstanding
principal amount of the Bank and (iv) arising in connection with any case under the Bankruptcy Code
filed by or against either of the Borrower. The Borrower agrees to pay all stamp, document, transfer,
recording or filing taxes or fees and similar impositions now or in the future determined by the
Bank to be payable in connection with this Agreement, the Notes or any of the other Loan Documents.
The Borrower agrees to save the Bank harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or delay in paying any
such taxes, fees or impositions. In the event of termination adverse to the Borrower of any action
at law or suit in equity in relation to this Agreement, the Notes or any of the other Loan Documents,
the Borrower will pay, in addition to all other sums which the Borrower may be required to pay, a
reasonable sum for attorneys’ and paralegals’ fees incurred by the Bank or the holder of
the Notes in connection with such action or suit. All payments due from the Borrower under this Section
will be added to and become part of the Loans until paid in full.

                                8.07 Severability . The provisions of this Agreement are intended to be severable. If any provision of this Agreement
is held invalid or unenforceable in whole or in part in any jurisdiction, the provision will, as
to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without
in any manner affecting the validity or enforceability of the provision in any other jurisdiction
or the remaining provisions of this Agreement in any jurisdiction.

                                8.08 Governing Law; Consent to Jurisdiction . This Agreement will be deemed to be a contract under the laws of the Commonwealth of Pennsylvania
and for all purposes will be governed by and construed and enforced in accordance with the laws of
said Commonwealth. Each of the Borrower and the Bank consents to the exclusive jurisdiction and venue
of the federal and state courts located in Allegheny County, Pennsylvania, in any action on, relating
to or mentioning this Agreement, the Notes or any of the other Loan Documents.

50

                                8.09 Prior Understandings . This Agreement, the Notes, the Security Agreement and the other Loan Documents supersede all prior
understandings and agreements, whether written or oral, among the parties relating to the transactions
provided for in this Agreement, the Notes, the Security Agreement and the other Loan Documents.

                                8.10 Duration; Survival . All representations and warranties of the Borrower contained in this Agreement or made in connection
with this Agreement or any of the other Loan Documents shall survive the making of and will not be
waived by the execution and delivery of this Agreement, the Notes or the other Loan Documents, by
any investigation by the Bank, or the making of any Loan. Notwithstanding termination of this Agreement
or an Event of Default, all covenants and agreements of the Borrower will continue in full force
and effect from and after the date of this Agreement so long as the Borrower may borrow under this
Agreement and until payment in full of the Notes, interest thereon, and all fees and other obligations
of the Borrower under this Agreement or the Notes. Without limitation, it is understood that all
obligations of the Borrower to make payments to or indemnify the Bank will survive the payment in
full of the Notes and of all other obligations of the Borrower under this Agreement, the Notes, the
Security Agreement and the other Loan Documents.

                                8.11 Term of Agreement . This Agreement will terminate when all indebtedness of the Borrower to the Bank including, without
limitation, the Loans and interest on the Loans is paid in full, and the Borrower has no right to
borrow under this Agreement and the Bank has no obligation to make Loans under this Agreement.

                                8.12 Counterparts . This Agreement may be executed in any number of counterparts and by the different parties to this
Agreement on separate counterparts each of which, when so executed, will be deemed an original, but
all such counterparts will constitute but one and the same instrument.

                                8.13 Successors and Assigns . This Agreement will be binding upon and inure to the benefit of the Bank, the Borrower and their
respective successors and assigns, except that the Borrower may not assign or transfer any of their
rights under this Agreement without the prior written consent of the Bank.

                                8.14 No Third Party Beneficiaries . The rights and benefits of this Agreement and the other Loan Documents are not intended to, and
shall not, inure to the benefit of any third party.

                                8.15 Participation and Holder . The Bank may from time to time sell, assign or grant one or more participations in all or any part
of the Loans made by the Bank or which may be made by the Bank, or its right, title and interest
in the Loans or in or to this Agreement, to another lending officer, lender or financial institution.
In connection with any such sale, assignment or grant of participation, the Bank may make available
to any prospective purchaser, assignee or participant any information relative to the Borrower in
the Bank’s possession. Except to the extent otherwise required by the context of this Agreement,
the word “Bank” where used in this Agreement means and includes any holder of a Note originally
issued to the Bank and each such holder of a Note will be bound by and have the benefits of this
Agreement, the same as if such holder had been a signatory to this Agreement.

51

                                8.16 Exhibits . All exhibits and schedules attached to this Agreement are incorporated and made a part of this Agreement.

                                8.17 Headings . The section headings contained in this Agreement are for convenience only and do not limit or define
or affect the construction or interpretation of this Agreement in any respect.

(Remainder of this page intentionally left blank)

52

	                                8.18 WAIVER OF TRIAL BY JURY . EACH OF THE BORROWER AND THE BANK EXPRESSLY, KNOWINGLY AND VOLUNTARILY WAIVE ALL BENEFIT AND ADVANTAGE OF ANY RIGHT TO A TRIAL BY JURY, AND THEY WILL NOT AT ANY TIME INSIST UPON, OR PLEAD OR IN ANY MANNER WHATSOEVER CLAIM OR TAKE THE BENEFIT OR ADVANTAGE OF A TRIAL BY JURY IN ANY ACTION ARISING IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS.	INITIAL: 

   JG   

   DK   

   SCF    

                                 IN WITNESS WHEREOF, and intending to be legally bound, the parties, by their duly authorized officers, have executed and delivered this Agreement as of the date set forth at the beginning of this Agreement.

	 	 
	ATTEST:	INTERNATIONAL PLASTICS AND EQUIPMENT CORP.
	 	 	 
	 	 	 
	/s/ Shawn C. Fabry   	By:    /s/ Joseph Giordano, Jr. 
	—————————	      ——————————————————
	Secretary	Title:     President 
	 	          ——————————————————
	 	 
	 	 
	 	CITIZENS BANK OF PENNSYLVANIA
	 	      
	 	By:    /s/ Daniel Kennelly
	 	      ——————————————————
	 	Title:    Vice President 
	 	          ——————————————————

53

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