Document:

SECURITIES
PURCHASE AGREEMENT

 

Dated as
of January 3, 2005

 

among

 

C3
CAPITAL PARTNERS, L.P.

 

as
Purchaser

 

and

 

RAYBOR
MANAGEMENT, INC. 

 

IC
MARKETING, INC. 

 

AMERICAN
CONSUMER PUBLISHING ASSOCIATION, INC. 

 

BACK
2 BACK’S, INC. 

 

as
Issuers

 

 

 

TABLE
OF CONTENTS

	 	
       
	 	 	
      Page 

	 Section
      1.	
      Definitions
      and Related Matters
	
      1

	 	
      1.1
	 	
      Definitions
	
      1

	 	
      1.2
	 	
      Accounting
      Principles
	
      14

	 	
      1.3
	 	
      Other
      Interpretive Matters
	
      14

	 Section
      2.	
      Authorization,
      Issuance and Closing
	
      15

	 	
      2.1
	 	
      Authorization
      of the Securities
	
      15

	 	
      2.2
	 	
      Purchase
      and Sale of the Securities at the Initial Closing
	
      15

	 	
      2.3
	 	
      Purchase
      and Sales of Additional Securities
	
      15

	 	
      2.4
	 	
      Purchase
      and Sale of Additional Warrant
	
      16

	 	
      2.5
	 	
      Adjustment
	
      16

	 	
      2.6
	 	
      The
      Closing
	
      16

	 Section
      3.	
      Conditions
      of Purchaser’s Obligation at the Closing
	
      16

	 	
      3.1
	 	
      Representations,
      Warranties and Covenants; No Event of Default
	
      16

	 	
      3.2
	 	
      Governing
      Documents
	
      17

	 	
      3.3
	 	
      Freedom
      Financial Guaranty and Security Agreement
	
      17

	 	
      3.4
	 	
      Security
      Documents; Stock Pledge Agreements; Shareholder Agreement
	
      17

	 	
      3.5
	 	
      Sale
      of Securities to the Purchaser
	
      17

	 	
      3.6
	 	
      Securities
      Law Compliance
	
      17

	 	
      3.7
	 	
      Closing
      Fees and Expenses
	
      17

	 	
      3.8
	 	
      Noncompete
      Agreements
	
      17

	 	
      3.9
	 	
      Intercreditor
      Agreement
	
      17

	 	
      3.10
	 	
      Insurance
	
      17

	 	
      3.11
	 	
      Opinion
      of Issuers’ Counsel
	
      18

	 	
      3.12
	 	
      Proceedings
	
      18

	 	
      3.13
	 	
      Closing
      Documents
	
      18

	 	
      3.14
	 	
      Other
      Items
	
      19

	 	
      3.15
	 	
      Waiver
	
      19

	 	
      3.16
	 	
      Additional
      Conditions of Purchase Obligations after the Closing
	
      19

	 Section
      4.	
      Covenants
	
      19

	 	
      4.1
	 	
      Financial
      Statements and Other Information
	
      19

	 	
      4.2
	 	
      Attendance
      at Board Meetings; Board Seat; Management Fees
	
      22

	 	
      4.3
	 	
      Affirmative
      Covenants
	
      23

	 	
      4.4
	 	
      Negative
      Covenants
	
      28

	 	
      4.5
	 	
      Financial
      Covenants
	
      31

	 	
      4.6
	 	
      Use
      of Proceeds
	
      32

	 	
      4.7
	 	
      Compliance
      with Securities Laws
	
      32

	 	
      4.8
	 	
      Public
      Disclosures
	
      32

	 	
      4.9
	 	
      Further
      Assurances
	
      32

	 	
      4.10
	 	
      Put
      Provisions
	
      32

	 	
      4.11
	 	
      Call
      Provisions
	
      33

	 	
      4.12
	 	
      SBIC
      Regulatory Provisions
	
      34

 

i

 

	 Section
      5.	
      Registration
      Rights
	
      35

	 Section
      6.	
      Representations
      and Warranties of the Issuers
	
      35

	 	
      6.1
	 	
      Organization,
      Corporate Power and Licenses
	
      35

	 	
      6.2
	 	
      Capitalization
      and Related Matters
	
      36

	 	
      6.3
	 	
      [Reserved].
	
      36

	 	
      6.4
	 	
      Authorization;
      No Breach
	
      36

	 	
      6.5
	 	
      Projections
      and Pro Forma Financial Statements
	
      37

	 	
      6.6
	 	
      Absence
      of Undisclosed Liabilities
	
      37

	 	
      6.7
	 	
      No
      Material Adverse Change
	
      37

	 	
      6.8
	 	
      Assets
	
      37

	 	
      6.9
	 	
      Tax
      Matters
	
      38

	 	
      6.10
	 	
      Contracts
      and Commitments
	
      38

	 	
      6.11
	 	
      Intellectual
      Property Rights
	
      39

	 	
      6.12
	 	
      Litigation,
      etc
	
      39

	 	
      6.13
	 	
      Brokerage
	
      39

	 	
      6.14
	 	
      Governmental
      Consent, etc.
	
      39

	 	
      6.15
	 	
      Insurance
	
      39

	 	
      6.16
	 	
      Employees
	
      39

	 	
      6.17
	 	
      ERISA
	
      40

	 	
      6.18
	 	
      Compliance
      with Laws
	
      40

	 	
      6.19
	 	
      Small
      Business Matters
	
      40

	 	
      6.20
	 	
      Affiliated
      Transactions
	
      40

	 	
      6.21
	 	
      Investment
      Company
	
      41

	 	
      6.22
	 	
      Margin
      Regulations
	
      41

	 	
      6.23
	 	
      Public
      Utility Holding Company Act
	
      41

	 	
      6.24
	 	
      Customers
      and Suppliers
	
      41

	 	
      6.25
	 	
      Disclosure
	
      41

	 	
      6.26
	 	
      Closing
      Date
	
      42

	 Section
      7.	
      Events
      of Default
	
      42

	 	
      7.1
	 	
      Definition
	
      42

	 	
      7.2
	 	
      Consequences
      of Events of Default
	
      45

	 Section
      8.	
      Miscellaneous
	
      46

	 	
      8.1
	 	
      Expenses
	
      46

	 	
      8.2
	 	
      Remedies
	
      47

	 	
      8.3
	 	
      Usury
	
      47

	 	
      8.4
	 	
      Purchaser’s
      Investment Representations
	
      47

	 	
      8.5
	 	
      Amendments
      and Waivers
	
      49

	 	
      8.6
	 	
      Survival
      of Agreement
	
      50

	 	
      8.7
	 	
      No
      Setoffs, etc.
	
      50

	 	
      8.8
	 	
      Successors
      and Assigns
	
      50

	 	
      8.9
	 	
      Aggregation
	
      50

	 	
      8.10
	 	
      Severability
	
      51

 

ii

 

	 	
      8.11
	 	
      Counterparts
	
      51

	 	
      8.12
	 	
      Descriptive
      Headings
	
      51

	 	
      8.13
	 	
      Governing
      Law
	
      51

	 	
      8.14
	 	
      Notices
	
      51

	 	
      8.15
	 	
      Construction
	
      53

	 	
      8.16
	 	
      Complete
      Agreement; No Modifications; Missouri Statutory Provision
	
      53

	 	
      8.17
	 	
      Indemnification
	
      54

	 	
      8.18
	 	
      Payment
      Set Aside
	
      54

	 	
      8.19
	 	
      Jurisdiction
      and Venue
	
      55

	 	
      8.20
	 	
      Waiver
      of Right to Jury Trial
	
      55

	 	
      8.21
	 	
      Certain
      Waivers
	
      56

	 	
      8.22
	 	
      Joint
      and Several Liability of the Issuers
	
      56

	 	
      8.23
	 	
      Transfer
      of Notes; Several Liability of Purchaser
	
      57

	 	
      8.24
	 	
      Confidentiality
	
      57

	 	
      8.25
	 	
      Sale
      of B2B
	
      57

	 	
      8.26
	 	
      Sole
      and Absolute Discretion of Purchaser
	
      58

 

iii

SECURITIES
PURCHASE AGREEMENT

 

THIS
SECURITIES PURCHASE AGREEMENT
(“Agreement”) is
made as of January 3, 2005, among IC
MARKETING, INC., a
Nevada corporation (“ICM”),
AMERICAN
CONSUMER PUBLISHING ASSOCIATION, INC., an
Oregon corporation (“ACPA”),
RAYBOR
MANAGEMENT, INC., a
Delaware corporation (“RMI”), and
BACK 2
BACK’S, INC., an
Oregon corporation (“B2B” and
together with ICM, ACPA, RMI, and B2B are sometimes collectively referred to in
this Agreement as the “Issuers”), and
C3 CAPITAL
PARTNERS, L.P., a
Delaware limited partnership, its successors and assigns (together with its
successors and assigns “Purchaser”). The
Issuers and the Purchaser hereby agree as follows:

 

Section
1. Definitions
and Related Matters

 

1.1 Definitions

 

When used
in this Agreement the following terms shall have the following meanings (terms
defined in the singular to have the same meaning when used in the plural and
vice versa):

 

“Affiliate” means,
with respect to any Person, any other Person that directly or indirectly
controlling, controlled by, or under direct or indirect common control with such
specified Person and, if such Person is an individual, any member of the
immediate family (including parents, spouse, children and siblings) of such
individual and any trust whose principal beneficiary is such individual or one
or more members of such immediate family and any Person who is controlled by any
such member or trust. For the purposes of this definition, “control” when used
with respect to any specified Person, means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the
foregoing.

 

“Affiliated
Group” means
any affiliated group as defined in Code §1504 that has filed a consolidated
return for federal income tax purposes (or any similar group under state, local
or foreign law, statute, rule or regulation) for a period during which any
Issuer was a member.

“Annual
Budget” has the
meaning set forth in Section
4.1(l) of this
Agreement. 

“Business
Day” means
any day other than a Saturday, Sunday or public holiday under the laws of the
State of Missouri or other day on which banking institutions are authorized or
obligated to close in Kansas City, Missouri.

“C3” means
C3 Capital, LLC, a Missouri limited liability company, its successors and
assigns.

“Capital
Expenditures” means
all expenditures which, in accordance with GAAP, would be required to be
capitalized and shown on the consolidated balance sheet of the Issuers but
excluding expenditures made in connection with the replacement, substitution or
restoration of assets to the extent financed: (a) from insurance proceeds (or
similar recoveries) paid on account of the loss of or damage to the assets being
replaced or restored; (b) with awards of compensation arising from the taking by
eminent domain or condemnation of the assets being replaced; or (c)
substantially concurrently with the proceeds from the sale of similar
assets.

 

“Capitalized
Lease” means a
lease under which the obligations of the lessee should, in accordance with GAAP,
be included in determining total liabilities as shown on the liability side of a
balance sheet of the lessee.

“Capitalized
Lease Obligations” means
the amount of the liability reflecting the aggregate discounted amount of future
payments under all Capitalized Leases calculated in accordance with GAAP and
Statement of Financial Accounting Standards No. 13.

“Change
in Control” means:
(a) any sale, transfer or issuance or series of sales or issuances of any
Issuer’s Equity Interests by any Issuer or any holder or holders thereof, or any
merger, consolidation or other transaction involving any Issuer, immediately
after which (i) the holder or holders of such Issuer’s Equity Interests
immediately prior to such transaction or transactions no longer possess the
voting power to elect a majority of such Issuer’s board of directors (or similar
governing body) or (ii) the holder or holders of such Issuer’s Equity Interests
immediately prior to such transaction or transactions no longer hold record and
beneficial ownership of at least 50% of such Issuer’s voting Equity Interests;
(b) any sale, transfer or issuance or series of sales or issuances of Equity
Interests of any Subsidiary of an Issuer by such Subsidiary or any holder or
holders thereof, or any merger, consolidation or other transaction involving
such Subsidiary, immediately after which such Issuer no longer holds record and
beneficial ownership of 100% of such Subsidiary’s outstanding Equity Interests;
(c) any sale of all or substantially all of the Issuers’ assets on a
consolidated basis; or (d) after the Closing, any Person or group of Persons
(within the meaning of Section 13 or 14 of the Securities Exchange Act that did
not hold any of an Issuer’s Equity Interests at Closing (other than the
Purchaser and its Affiliates and transferees) shall acquire beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act)
of more than 50% of the Issuer’s Equity Interests (on a fully diluted basis and
taking into account any Equity Interests of the Issuer having voting rights in
the election of members of the board of directors (or similar governing body)
under normal circumstances.

“Closing” has the
meaning set forth in Section
2.6 of this
Agreement.

“Closing
Date” has the
meaning set forth in Section
2.6 of this
Agreement.

“Code” means
the Internal Revenue Code of 1986, as amended, modified, supplemented, or
replaced from time to time, and any reference to any particular Code section
shall be interpreted to include any revision of or successor to that section
regardless of how numbered or classified.

“Collateral” means
all personal and real property with respect to which a Lien has been granted, or
subsequently is granted, to or for the benefit of the Purchaser pursuant to any
of the Security Documents or other Investment Documents, or which otherwise
secures the payment or performance of any of the Obligations, including pursuant
to the Security Documents.

2

 

“Consolidated
Total Assets” means,
on any date, the net book value of all assets of the Issuers on that date,
determined on a consolidated basis which, in accordance with GAAP, should be
classified on the Issuers’ consolidated balance sheet as assets.

“Convertible
Securities” of a
Person means any securities (directly or indirectly) convertible into or
exchangeable for any Equity Interest of such Person, including, without
limitation, all warrants, options and other rights to acquire any Equity
Interests of such Person.

“Dividend” means
any distribution by a Person with respect to its ownership interests whether in
cash, securities (including common and preferred equity) or other property,
including, without limitation, distributions upon any liquidation, dissolution
or winding up of such Person.

“EBITDA” means,
for each quarter calculated at the end of such quarter, an amount, for any
Person, equal to: (1) net income (determined in accordance with GAAP) from
operations for such period; plus (2)
amounts deducted in the computation thereof for (a) Interest Expense, (b)
federal, state and local income taxes, and (c) depreciation and amortization;
plus
or minus, as the
case may be, (3) gains or losses from the sale of assets outside the ordinary
course of such Person’s business; plus
or minus, as the
case may be, (4) other non-recurring or extraordinary gains or losses for such
period.

“Environmental
and Safety Requirements” means
all federal, state, local and foreign statutes, regulations, ordinances and
similar provisions having the force or effect of law, all judicial and
administrative orders and determinations, all contractual obligations and all
common law, in each case concerning public health and safety, worker health and
safety and pollution or protection of the environment (including, without
limitation, all those relating to the presence, use, production, generation,
handling, transportation, treatment, storage, disposal, distribution, labeling,
testing, processing, discharge, Release, threatened Release, control or cleanup
of any hazardous or otherwise regulated materials, substances or wastes,
chemical substances or mixtures, pesticides, pollutants, contaminants, toxic
chemicals, petroleum products or byproducts, asbestos, polychlorinated
biphenyls, noise or radiation), each as amended, modified, supplemented, or
replaced from time to time and as now or hereafter in effect.

“Equity
Interests” means
all of the equity or other ownership interests in a Person (including, without
limitation, Convertible Securities and other rights containing phantom or other
equity participation features).

“Equity
Purchase” means
any redemption, acquisition, purchase or other retirement of any Equity Interest
of any Issuer or any of their respective Affiliates or Subsidiaries, other than
upon any conversion thereof into or exchange thereof for other Equity Interests
of such Person.

“ERISA” means
the Employee Retirement Income Security Act of 1974 (or any successor
legislation thereto), as amended, modified, supplemented, or replaced from time
to time, or any similar federal law then in force.

“ERISA
Affiliate” means,
with respect to an Issuer, any trade or business (whether or not incorporated)
under common control with such Person within the meaning of §414(b) or (c) of
the Code (or §414(m) or (o) of the Code for purposes of provisions relating to
§412 of the Code).

3

 

“ERISA
Event” means,
as to an Issuer or any ERISA Affiliate: (a) a Reportable Event as defined in
§4043 of ERISA and the regulations issued thereunder (other than a Reportable
Event for which notice has been waived by regulation); (b) the withdrawal of an
Issuer, any Subsidiary thereof or any ERISA Affiliate from a Pension Plan in
which it was a “substantial employer” as defined in §4001(a)(2) of ERISA or was
deemed a “substantial employer” under §4062(e) of ERISA; (c) the termination of
a Pension Plan, the filing of notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under §4041 of ERISA;
(d) the institution of proceedings to terminate a Pension Plan by the PBGC; (e)
the partial or complete withdrawal of any Issuer or any ERISA Affiliate from a
Multiemployer Plan, (f) the imposition of a lien on any Issuer or any ERISA
Affiliate pursuant to §412 of the Code or Section 302 of ERISA; (g) any event or
condition which results in the reorganization or insolvency of a Multiemployer
Plan to which any Issuer or any ERISA Affiliate has any liability under §4241 or
§4245 of ERISA, respectively; and (h) any event or condition which results in
the termination of a Multiemployer Plan, or the institution by the PBGC of
proceedings to terminate a Multiemployer Plan to which any Issuer or any ERISA
Affiliate has any liability under §4041A of ERISA or §4042 of ERISA,
respectively.

“Fair
Market Value” for any
Put Equity under Section
4.10 means
(a) the fair market value of all Equity Interests in RMI that are the subject of
the Put Notice as determined by RMI and the Purchaser, multiplied by (b) a
fraction, the numerator of which is 1 and the denominator of which is the number
of all outstanding Equity Interests in RMI. Fair Market Value will be determined
without giving effect to any minority interest discount. RMI and the Purchaser
shall spend 15 days negotiating such value in connection with the put process
contemplated in Section
4.10. If
after the initial 15-day period RMI and the Purchaser are unable to agree on
such value, then the parties shall submit such determination to a mutually
agreeable appraiser reasonably skilled in valuing securities of this type. The
written evaluation of such appraiser will be binding on all interested parties.
If the parties are unable to agree on a single appraiser within 15 days of the
expiration of the first 15-day negotiating period, then the Issuers and the
Purchasers shall ask the American Arbitration Association to provide a list of
five (5) qualified appraisers. The Issuers and the Purchaser shall, within three
days, strike two of the five appraisers, and the appraiser remaining after each
of the Issuers and the Purchaser have stricken two (2) names shall be the
appraiser who shall determine Fair Market Value for the purposes of the put
provisions in Section
4.10. The
fees and expenses of the appraiser that determines Fair Market Value shall be
borne by RMI.

“Federal
Bankruptcy Code” means
Title 11 of the United States Code, as amended, modified, supplemented, or
replaced from time to time.

“Financing” means
the purchase of the Securities by the SBIC Holder hereunder.

“Fixed
Charges” means,
for any period, the sum of: (1) accrued interest and other finance charges with
respect to Indebtedness during such period, including the accrued interest
component of any Capitalized Lease Obligation; (2) scheduled principal due
during such period with respect to Indebtedness, including the principal
component of any Capitalized Lease Obligation; and (3) the amount of cash
Dividends and other cash distributions (including in connection with the
repurchase of Equity Interests) paid by the Issuers during such period to any of
their respective equity holders.

4

 

“Freedom
Financial” means
Freedom Financial, Inc., an Oregon corporation.

“GAAP” means
generally accepted accounting principles as promulgated by the Financial
Accounting Standards Board or any other governing body or boards having
jurisdiction, authority or responsibility for promulgating accounting standards,
as in effect from time to time. Except as otherwise expressly stated herein, all
references to GAAP shall be deemed to mean GAAP as consistently
applied.

“Governing
Documents” of a
Person means such Person’s (a) certificate or articles of incorporation,
formation or organization and operating agreements or bylaws, (b) any documents
comparable to those described in preceding clause (a) as may be applicable
pursuant to any Law, and (c) any amendment or modification to any of the
foregoing.

“Governmental
Body” means
any federal, state, local, foreign or other government or quasi-governmental
authority or any department, agency, subdivision, court or other tribunal of any
of the foregoing.

“Guaranty” means
any guarantee, including the Guaranty and Security Agreement, of the payment or
performance of any Indebtedness or other obligation and any other arrangement
whereby credit is extended (or continued) to one obligor on the basis of any
promise of another Person, whether that promise is expressed in terms of an
obligation to: (a) pay the Indebtedness or other liabilities of such obligor;
(b) purchase an obligation owed by such obligor; (c) purchase goods and services
from such obligor pursuant to a take-or-pay contract; (d) maintain the capital,
working capital, solvency or general financial condition of such obligor; or (e)
otherwise assure any creditor of such obligor against loss (including by way of
an agreement to repurchase or reimburse), whether or not any such arrangement is
listed on the balance sheet of such other Person or referred to in a footnote
thereto, but shall not include endorsements of items for collection in the
ordinary course of business. The amount of any Guaranty shall be equal to the
amount of the obligation so guaranteed or otherwise supported, or, if not a
fixed or determined amount, the maximum amount guaranteed or
supported.

“Guaranty
and Security Agreement” has the
meaning set forth in Section
3.3 of this
Agreement.

“Hazardous
Material” means
any substance, product, waste, pollutant, material, chemical contaminant,
constituent, or other material which is or becomes listed, regulated, or
addressed under any Environmental and Safety Regulations. “Hazardous Materials”
shall not include commercially reasonable amounts of such materials used in the
ordinary course of operation of an Issuer’s property that are used and stored in
accordance with all applicable Environmental and Safety
Requirements.

5

 

“Indebtedness” means
at a particular time, without duplication: (a) any indebtedness for borrowed
money or issued in substitution for or exchange of indebtedness for borrowed
money; (b) any indebtedness evidenced by any note, bond, debenture or other debt
instrument; (c) any indebtedness for the deferred purchase price of property or
services with respect to which a Person is liable, contingently or otherwise, as
obligor or otherwise (other than trade payables and other current liabilities
incurred in the ordinary course of business, consistent with past practice
unless the same are being contested in good faith by appropriate proceedings and
with respect to which a Person has set aside adequate reserves therefor in
accordance with GAAP); (d) any commitment by which a Person assures a creditor
against loss (including, without limitation, contingent reimbursement
obligations with respect to letters of credit); (e) any obligations for which a
Person is obligated pursuant to a Guaranty; (f) any obligations under
Capitalized Leases with respect to which a Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or with respect to which
obligations a Person assures a creditor against loss; (g) any indebtedness
secured by a Lien on a Person’s assets; (h) any unsatisfied obligation for
Withdrawal Liability to a Multiemployer Plan; (i) all indebtedness of any
partnership of which such Person is a general partner or in which such Person
may incur liability as if such Person was a general partner; and (j) all
indebtedness of a Person for which such Person may become liable as a fiduciary
or otherwise.

“Intellectual
Property Rights” means
all: (a) patents, patent applications, patent disclosures and inventions; (b)
trademarks, service marks, trade dress, trade names, internet domain names,
logos and corporate names and registrations and applications for registration
thereof, together with all of the goodwill associated therewith; (c) copyrights
(registered or unregistered) and copyrightable works and registrations and
applications for registration thereof; (d) mask works and registrations and
applications for registration thereof; (e) computer software, data, data bases
and documentation thereof; (f) trade secrets and other confidential information
(including, without limitation, ideas, formulas, compositions, inventions
(whether patentable or unpatentable and whether or not reduced to practice),
know-how, manufacturing and production processes and techniques, research and
development information, drawings, specifications, designs, plans, proposals,
technical data, copyrightable works, financial and marketing plans and customer
and supplier lists and information); (g) other intellectual property rights; and
(h) copies and tangible embodiments thereof (in whatever form or
medium).

“Intercreditor
Agreement” has the
meaning set forth in Section
3.9 of this
Agreement.

“Interest
Expense” means,
for any period, an amount equal to all interest in respect of Indebtedness
accrued or capitalized during such period (whether or not actually paid during
such period).

“Investment” as
applied to any Person means: (a) any direct or indirect purchase or other
acquisition by such Person of any notes, obligations, instruments, Equity
Interests and other securities of any other Person; and (b) any capital
contribution by such Person to any other Person.

“Investment
Documents” means
this Agreement, the agreements and instruments evidencing the Securities and any
Equity Interests for which Securities are exchanged or converted (including the
Warrants), the Security Documents, the Intercreditor Agreement, the Noncompete
Agreements, and each of the other agreements, documents and instruments
expressly contemplated hereby and thereby, other than the Guaranty and Security
Agreement.

6

 

“IRR” means
the computation of internal rate of return in accordance with the Microsoft
Excel 2000 XIRR function.

“IRS” means
the United States Internal Revenue Service.

“Issuer
Call Option” has the
meaning set forth in Section
4.11 of this
Agreement.

“Issuer
Obligations” has the
meaning set forth in Section
8.24 of this
Agreement.

“Issuers” has the
meaning set forth in the preamble of this Agreement.

“Knowledge” or
“Aware” means
and includes for each Issuer (a) the actual knowledge or awareness of the
Designated Persons and (b) the knowledge or awareness of the Designated Persons
that a prudent business person would have obtained in the conduct of his
business after making reasonable inquiry and reasonable diligence with respect
to the particular matter in question. In particular, and not in limitation of
the foregoing, the knowledge or awareness of one Issuer shall be imputed to each
other Issuer. For the purposes of this definition, the term “Designated
Person” means
and includes, for each Issuer, Jeffrey Hoyal, Dennis Simpson, and the chief
financial officer of RMI and, if a different person, the chief financial officer
of the applicable Issuer.

“Law” means
any federal, state, local, foreign or other law, statute, ordinance, regulation,
rule, regulatory or administrative guidance, order, constitution, treaty,
principle of common law or other restriction of any Governmental
Body.

“Lien” means
any mortgage, pledge, security interest, encumbrance, lien, charge or other
restriction of any kind whatsoever (including any conditional sale or other
title retention agreement or lease in the nature thereof), any sale of
receivables with recourse against any Issuer or Affiliate of such Issuer, any
filing or agreement to file a financing statement as debtor under the Uniform
Commercial Code or any similar statute other than to reflect ownership by a
third party of property leased to any Issuer under a lease which is not in the
nature of a conditional sale or title retention agreement.

“Material” means
any matter that, in the aggregate with all other matters, has resulted or has a
reasonable likelihood of resulting in costs, liabilities, expenses, damages or
prospects of or to, or claims by or against any Issuer involving $150,000.00 or
more.

“Material
Adverse Effect” means
any matter or matters which would, alone or in the aggregate, have a materially
adverse effect on: (a) the operating results, prospects, assets, properties,
liabilities, operations, condition (financial or otherwise) or business of any
Issuer taken as a whole; (b) the ability of the Issuers collectively to repay
the Notes; or (c) the ability of any of the Issuers taken as a whole to perform
any of their obligations under the Securities or any of the Investment
Documents. Notwithstanding the foregoing, for purposes of this Agreement,
“Material Adverse Effect” shall not include any change or effect if it is a
result of transaction expenses actually incurred by any Issuer in connection
with the transactions contemplated hereby.

7

 

“Mortgage” means
the mortgage, deed of trust, or deed to secure debt executed by any Issuer or
other Person in favor of the Purchaser (which shall be in form and substance
mutually acceptable to the parties thereto and delivered to the Purchaser in
accordance with Section
4.3(n) of this
Agreement), together with any amendments, restatements, replacements,
consolidations or other modifications thereof from time to time.

“Multiemployer
Plan” shall
mean a “multiemployer plan” as defined in §4001(a)(3) of ERISA, and to which any
Issuer or any ERISA Affiliate makes, is making, or is obligated to make
contributions on behalf of participants who are or were employed by any of them
or to which such person has any current or potential liability.

“Net
Worth” means,
at any date of determination, the excess of a Person’s assets over its
liabilities at such time, as determined in accordance with GAAP.

“Noncompete
Agreements” has the
meaning set forth in Section
3.8 of this
Agreement.

“Notes” has the
meaning set forth in Section
2.1 of this
Agreement.

“Obligations” means
all advances, debts, liabilities, obligations, covenants and duties owing,
arising, due or payable from any Issuer, or any Subsidiary of any Issuer, to the
Purchaser of any kind or nature, existing or future, whether or not evidenced by
any note, letter of credit, reimbursement agreement, or other instrument or
document, whether arising under this Agreement or any of the other Investment
Documents or otherwise and whether direct or indirect (including those acquired
by assignment), absolute or contingent, primary or secondary, due or to become
due, existing on or after the Closing Date and however acquired, and all
amendments, renewals, restatements, replacements, consolidations or other
modifications of the foregoing from time to time. The term includes all
principal, interest, fees, expenses and any other sums chargeable to any Issuer
under any of the Investment Documents but does not include any obligations of
the Issuers under the Warrants.

“Officer’s
Certificate” means a
certificate signed by the chief executive officer of each Issuer (or any of
them) on behalf of each such Issuer, stating that: (a) the officer signing such
certificate has made or has caused to be made such investigations as are
necessary in order to permit him to verify the accuracy of the information set
forth in such certificate; and (b) such certificate does not misstate any
Material fact and does not omit to state any fact necessary to make the
certificate not misleading.

“Operating
Lease” means
for any Person any lease of property which would not be classified as a
Capitalized Lease under GAAP, other than a lease under which such Person is the
lessor.

8

 

“PBGC” shall
mean the Pension Benefit Guaranty Corporation or any successor
thereto.

“Pension
Plan” means a
“pension plan”, as such term is defined in Section 3(2) of ERISA, which is
subject to Title IV of ERISA (other than a multiemployer plan as defined in
§4001(a)(3) of ERISA), and to which any Issuer or any ERISA Affiliate may have
liability, including any liability by reason of having been a substantial
employer within the meaning of §4063 of ERISA at any time during the preceding 5
years, or by reason of being deemed to be a contributing sponsor under §4069 of
ERISA.

“Permitted
Acquisitions” means
any acquisition by an Issuer of any Person or the assets of any Person if (1)
the Person is in the same line of business as the Issuer, (2) at least 10 days
prior to the date of consummation of such acquisition the Issuer provides the
Purchaser with pro forma financial statements giving effect to the acquisition,
which sufficiently evidence to the Purchaser the Issuer’s continued ability to
comply with the terms and provisions of this Agreement, (3) in the event of a
merger or consolidation the Issuer or a Subsidiary of the Issuer is the
surviving entity, and (4) the acquisition would not otherwise result in an Event
of Default under this Agreement.

“Permitted
Indebtedness” means
(a) any Indebtedness incurred pursuant to the terms of the Investment Documents;
(b) Indebtedness secured by Liens permitted by clause (c) of the definition of
Permitted Liens, provided, that
the aggregate amount of all such Indebtedness at any time outstanding shall not
exceed in the aggregate for all Issuers the amount provided for in the then
current Annual Budget; (c) Indebtedness to Washington Mutual Bank pursuant to
that certain Business Loan Agreement among Washington Mutual Bank, Issuers and
Freedom Financial, dated June 28, 2004, and certain other loan documents related
thereto, including two separate Deeds of Trust, each dated June 28, 2004,
pursuant to which Bank made a loan to Issuers in the original principal amount
of $1,373,000.00, which shall not at any time exceed $1,373,000.00 in the
aggregate and which shall remain at all times during the term of this Agreement
subject to the Intercreditor Agreement; (d) Indebtedness to Washington Mutual
Bank pursuant to that certain Business Loan Agreement among Washington Mutual
Bank, Issuers and Freedom Financial, dated June 28, 2004, and certain other loan
documents related thereto, including two separate Deeds of Trust, each dated
June 28, 2004, pursuant to which Bank extended a revolving credit facility to
Issuers in the original principal amount of $750,000.00, which shall not at any
time exceed $500,000.00 in the aggregate and which shall remain at all times
during the term of this Agreement subject to the Intercreditor Agreement; and
(e) Indebtedness included in the then current Annual Budget that does not cause
or result in a breach of any of the financial covenants set forth in
Section
4.5 or any
Event of Default.

“Permitted
Liens” means
(a) Liens for Taxes or other governmental charges not yet due and payable or
which are being contested in good faith by appropriate proceedings and for which
adequate reserves have been established in accordance with GAAP; (b) Liens
arising in the ordinary course of business (such as (i) Liens of carriers,
warehousemen, mechanics and materialmen and other similar Liens imposed by law
and (ii) Liens incurred in connection with worker’s compensation, unemployment
compensation and other types of social security (excluding Liens arising under
ERISA) or in connection with surety bonds, bids, performance bonds and similar
obligations) for sums not overdue or being contested in good faith by
appropriate proceedings and not involving any deposits or advances or borrowed
money or the deferred purchase price of property or services and, in each case,
for which it maintains adequate reserves; (c) Liens arising in connection with
Capitalized Lease Obligations (and attaching only to the property being leased),
Liens existing on property at the time of the acquisition thereof by any Issuer,
and Liens that constitute purchase money security interests on any property
securing Indebtedness incurred for the purpose of financing all or any part of
the cost of acquiring such property; provided, that
any such Lien attaches to such property within 60 days of the acquisition
thereof and attaches solely to the property so acquired; (d) attachments, appeal
bonds, judgments and other similar Liens, for sums not exceeding $150,000.00 in
the aggregate for the Issuers, arising in connection with court proceedings;
provided, that
the execution or other enforcement of such Liens is effectively stayed and the
claims secured thereby are being actively contested in good faith and by
appropriate proceedings; (e) easements, rights-of-way, restrictions minor
defects or irregularities in title and other similar Liens not interfering in
any Material respect with the ordinary conduct of the business of the Issuers;
(f) Liens securing the payment and performance of the Obligations; (g) Liens
securing the Indebtedness to Washington Mutual Bank described in clauses (c) and
(d) of the definition of Permitted Indebtedness, provided that
such Indebtedness remains subject to the Intercreditor Agreement; and (h) Liens
which are described on the Liens
Schedule.

9

 

“Person” means
an individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, a Governmental Body.

“Plan” shall
mean as required by the context at any time, an employee benefit plan, as
defined in §3(3) of ERISA, which any Issuer or any ERISA Affiliate maintains,
contributes to or has an obligation to contribute to on behalf of participants
who are or were employed by any of them.

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

“Prime
Rate” means
the “prime rate” published in the “Money Rates” section of The Wall Street
Journal, as such “prime rate” may change from time to time. If The Wall Street
Journal ceases to publish the “prime rate”, then the Purchaser, in its sole
discretion, shall select an equivalent publication that publishes such “prime
rate”; and if such “prime rate” is no longer generally published or is limited,
regulated or administered by a Governmental Body, then the Purchaser shall
select a comparable interest rate index. In either case, such selection shall be
made by the Purchaser in its reasonable discretion.

“Prohibited
Transaction” means
any transaction set forth in Section 406 of ERISA or Section 4975 of the
Code.

“Purchaser” has the
meaning set forth in the preamble of this Agreement.

“Put
Closing” has the
meaning set forth in Section
4.10 of this
Agreement.

10

 

“Put
Equity” has the
meaning set forth in Section
4.10 of this
Agreement.

“Put
Notice” has the
meaning set forth in Section
4.10 of this
Agreement.

“Put
Price” has the
meaning set forth in Section
4.10 of this
Agreement.

“Qualified
Plan” means
an employee pension benefit plan, as defined in §3(2) of ERISA, which is
intended to be tax-qualified under §401(a) or §403(a) of the Code, and which an
Issuer or any ERISA Affiliate maintains, contributes to or has an obligation to
contribute to on behalf of participants who are or were employed by any of
them.

“Regulatory
Problem” means
any transaction, circumstance or situation whereby: (a) an SBIC Holder and such
Person’s Affiliates would own, control or have power over a quantity of
securities of any kind issued by any Issuer or any other entity greater than is
permitted under any requirement of any Governmental Body; or (b) it has been
asserted by any Governmental Body, or such SBIC Holder believes, that such
Person and its Affiliates are not entitled to hold, or exercise any significant
right under or with respect to, the Securities or any Equity Interests for which
Securities are exchanged or converted, held by such Person.

“Regulatory
Violation” means,
with respect to any SBIC Holder providing Financing under this Agreement: (a) a
diversion of the proceeds of such Financing from the use reported thereof on the
SBA Form 1031 delivered at the Closing, if such diversion was effected without
obtaining the prior written consent of the SBIC Holders (which may be withheld
in their sole discretion); or (b) a change in the principal business activity of
any Issuer and its Subsidiaries to an ineligible business activity (within the
meaning of the SBIC Regulations) if such change occurs within 1 year after the
date of the initial Financing hereunder.

“Release” has the
meaning set forth in CERCLA.

“Reportable
Event” means
any of the events listed in §4043(c)(1), (2), (3), (5), (6), (8) or (9) of
ERISA.

“Restricted
Securities” means
the Securities issued hereunder and any securities issued with respect to the
Securities by way of a Dividend or split or in connection with a combination of
Equity Interests, recapitalization, merger, consolidation or other
reorganization. As to any particular Restricted Securities, such securities
shall cease to be Restricted Securities when they have (a) been effectively
registered, under the Securities Act and disposed of in accordance with the
registration statement covering them, (b) become eligible for sale pursuant to
Rule 144(k) (or any similar provision then in force) under the Securities Act,
(c) become eligible to be sold to the public through a broker, dealer or market
maker in any 90-day period pursuant to Rule 144 of the Securities Act without
volume restrictions limiting the sale of such Securities (or any successor
provision then in effect) under the Securities Act, or (d) been otherwise
transferred and new certificates for them not bearing any legend regarding the
Securities Act have been delivered pursuant to the Issuers’ Governing Documents.
Whenever any particular securities cease to be Restricted Securities, the holder
thereof (except for clause (c) above whereby the holder must be the transferee)
shall be entitled to receive from the Issuer, without expense, new securities of
like tenor not bearing a Securities Act legend.

11

 

“SBA” means
the United States Small Business Administration.

“SBIC” means a
small business investment company licensed under the SBIC Act.

“SBIC
Act” means
the Small Business Investment Act of 1958, as amended, modified, supplemented,
or replaced from time to time, or any similar federal law then in
force.

“SBIC
Holder” means
any holder of Securities or any Equity Interests for which Securities are
exchanged or converted which is an SBIC.

“SBIC
Regulations” means
the Small Business Investment Company Act of 1958, as amended, modified,
supplemented, or replaced from time to time, and the regulations issued by the
Small Business Administration thereunder, codified at Title 13 of the Code of
Federal Regulations (“13
CFR”), 107
and 121, as amended, modified, supplemented, or replaced from time to
time.

“Securities” has the
meaning set forth in Section
2.1 of this
Agreement.

“Securities
Act” means
the Securities Act of 1933, as amended, modified, supplemented, or replaced from
time to time, or any similar federal law then in force.

“Securities
and Exchange Commission”
includes any Governmental Body succeeding to the functions thereof.

“Securities
Exchange Act” means
the Securities Exchange Act of 1934, as amended, modified, supplemented, or
replaced from time to time, or any similar federal law then in
force.

“Security
Agreement” means
the Security Agreement executed by the Issuers in favor of the Purchaser dated
on or about the Closing Date, together with any amendments, restatements,
replacements, consolidations or other modifications thereof from time to
time.

“Security
Document” means
the Security Agreement, the Mortgage, the Stock Pledge Agreements, and every
other security agreement, document, financing statement and instrument necessary
to grant a valid and perfected security interest in the Collateral from time to
time.

“Shareholder
Agreement” has the
meaning set forth in Section
3.4 of this
Agreement.

“Stock
Pledge Agreements” has the
meaning set forth in Section
3.4 of this
Agreement.

“Subsidiary” means,
with respect to any Person, any corporation, limited liability company,
partnership, association or other business entity of which: (a) if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof; or (b) if a limited liability company,
partnership, association or other business entity, a majority of the partnership
or other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by any Person or one or more Subsidiaries of that Person
or a combination thereof. For purposes hereof, a Person or Persons shall be
deemed to have a majority ownership interest in a limited liability company,
partnership, association or other business entity if such Person or Persons
shall be allocated a majority of limited liability company, partnership,
association or other business entity gains or losses or shall be or control (or
have the power to be or control) a managing director, manager or general partner
of such limited liability company, partnership, association or other business
entity.

12

 

“Tax” means
any federal, state, county, local, foreign or other income, gross receipts, ad
valorem, franchise, profits, sales or use, transfer, registration, excise,
utility, environmental, communications, real or personal property, capital
stock, license, payroll, wage or other withholding, employment, social security,
severance, stamp, occupation, alternative or add-on minimum, estimated and other
taxes of any kind whatsoever (including deficiencies, penalties, additions to
tax, and interest attributable thereto) whether disputed or not.

“Tax
Return” means
any return, information report or filing with respect to Taxes, including any
schedules attached thereto and including any amendment thereof.

“Title
IV Plan” means a
Pension Plan which is covered by Title IV of ERISA.

“Total
Funded Debt” means,
at any time, an amount equal to the sum of (1) the aggregate amount of all
principal, interest and other amounts payable with respect to Indebtedness at
such time (including, without duplication, Capital Lease Obligations), whether
such Indebtedness is due the Purchaser or any other Person, plus (2)
without duplication, the face amount of all letters of credit issued by any
Person for the account of or at the request of any Issuer and, in each case,
then outstanding (whether or not any such letters of credit have been drawn
upon).

“Uniform
Commercial Code” means
the Uniform Commercial Code as in effect in the State of Missouri or such other
state as is applicable to the parties to this Agreement or the Collateral from
time to time, as the same may be amended, modified, supplemented, or replaced
from time to time.

“Warrant” means
each warrant issued pursuant to Section
2.1 of this
Agreement and in the form of, and containing the terms and conditions, set forth
in, Exhibit
B attached
hereto.

“Weighted
Average EBITDA” means
the weighted average of the Issuers’ EBITDA for the thirty-six (36) months prior
to the month in which the Issuer Call Option or Purchaser put option pursuant to
Section
4.10 is
exercised (the “Month
of Exercise”)
calculated as (A) the sum of (x) three (3) times the Issuers’ EBITDA for months
twenty-five-thirty-six (25-36) preceding the Month of Exercise, plus (y) four
(4) times the Issuers’ EBITDA for months thirteen-twenty-four (13-24) preceding
the Month of Exercise, plus five (5) times the Issuers’ EBITDA for months
one-twelve (1-12) preceding the Month of Exercise, divided by (B) twelve (12).

13

 

“Withdrawal
Liability” means,
at any time, the aggregate amount of the liabilities, if any, pursuant to §4201
of ERISA, and any increase in contributions pursuant to §4243 of ERISA with
respect to all Multiemployer Plans.

“Working
Capital” for any
Issuer is current assets, including cash, receivables, and inventory less
current liabilities of such Issuer (excluding the current portion of third party
debt), including payables and accruals. 

1.2 Accounting
Principles   The
classification, character and amount of all assets, liabilities, capital
accounts and reserves and of all items of income and expense to be determined,
and any consolidation or other accounting computation to be made, and the
interpretation of any definition containing any financial term, pursuant to this
Agreement shall be determined and made in accordance with GAAP.

 

1.3 Other
Interpretive Matters   In each of
the Investment Documents, unless a clear contrary intention appears: (a) the
singular number includes the plural number and vice versa; (b) reference to any
Person includes such Person’s successors and assigns but, if applicable, only if
such successors and assigns are permitted by such Investment Document, and
reference to a Person in a particular capacity excludes such Person in any other
capacity or individually; (c) reference to any gender includes each other
gender; (d) reference to any agreement (including this Agreement and the
Schedules and Exhibits and the Appendices hereto), document or instrument means
such agreement, document or instrument as amended, modified, supplemented, or
replaced from time to time in accordance with the terms thereof and, if
applicable, the terms hereof (and without giving effect to any amendment or
modification that would not be permitted in accordance with the terms hereof);
(e) reference to any applicable law, statute, rule or regulation means such
applicable law, statute, rule or regulation as amended, modified, codified or
reenacted, in whole or in part, and in effect from time to time, including rules
and regulations promulgated thereunder and reference to any particular provision
of any applicable law, statute, rule or regulation shall be interpreted to
include any revision of or successor to that provision regardless of how
numbered or classified; (f) reference to any Article, Section, Schedule, Exhibit
or Appendix means such Article or Section hereof or such Schedule, Exhibit or
Appendix hereto; (g) “hereunder,” “hereof,” “hereto” and words of similar import
shall be deemed references to this Agreement as a whole and not to any
particular Section or other provision hereof; (h) the terms “include”,
“including” and similar terms shall be construed as if followed by the phrase
“without being limited to”; (i) the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or”; (j)
relative to the determining of any period of time, “from” means “from and
including” and “to” and “through” mean “to and including”; (k) “or”, “either”
and “any” are not exclusive; and (l) references to any Subsidiary of a Person
shall be given effect only at such times as such Person has one or more
Subsidiaries. An Event of Default shall “continue” or be “continuing” until such
Event of Default has been fully cured or waived in writing by the
Purchaser.

 

14

Section
2. 

 

Authorization,
Issuance and Closing

 

2.1 Authorization
of the Securities . The
Issuers shall authorize the issuance and sale to the Purchaser of an initial 12%
Secured Note in the principal amount of $1,500,000.00 and within 12 months from
the Closing Date may authorize the issuance and sale to the Purchaser of one or
two additional 12% Secured Notes in the aggregate principal amount not to exceed
$3,000,000.00, with each such 12% Secured Note containing the terms and
conditions and in the form set forth in Exhibit
A attached
hereto and with all such 12% Secured Notes not to exceed a total aggregate
principal amount of $4,500,000.00 (each a “Note” and
collectively, together with any notes issued by any Person with respect to the
purchase of Securities, the “Notes”). RMI
shall (a) in connection with the authorization and sale of the initial Note,
authorize the issuance and sale to the Purchaser of an initial Warrant to
acquire 1,272,227 shares of common stock of RMI, subject to adjustment, and (b)
in connection with the sale of additional Notes as contemplated by the preceding
sentence, authorize the issuance and sale to the Purchaser of one or two
additional Warrants to acquire additional shares of common stock of RMI in the
amount or amounts determined by Section
2.3 hereof.
The initial Warrant and each additional Warrant (each a “Warrant” and
collectively the “Warrants”) shall
be evidenced by a certificate substantially in the form of the certificate set
forth in Exhibit B. The aggregate number of shares of RMI that may be purchased
pursuant to all of the Warrants shall not exceed 10% of the fully diluted
outstanding stock of the RMI, as of the Closing Date. The aggregate purchase
price of the Warrants shall be $100.00 and the exercise price for the common
stock of RMI covered by the Warrants shall be $.0001 per share of common stock,
subject to adjustment. The Warrants shall be exercisable at the discretion of
the Purchaser in whole or in part at any time before the later of the tenth
(10th) anniversary of the issuance of the Warrants or the date on which all
principal and interest on the Notes have been indefeasibly paid in full, as such
exercise period may be earlier termination pursuant to the terms of the
Warrants. The Notes and Warrants are sometimes collectively referred to herein
as the “Securities.”

 

2.2 Purchase
and Sale of the Securities at the Initial Closing At the
Closing specified in Section
2.5, the
Issuers shall issue and sell to Purchaser and, subject to the terms and
conditions set forth in this Agreement, Purchaser shall purchase from the
Issuers the initial Note at a price equal to $1,500,000.00. At the same time,
the RMI shall issue and sell to Purchaser and, subject to the terms and
conditions set forth in this Agreement, Purchaser shall purchase from RMI the
initial Warrant at a price equal to $33.00. The initial Warrant shall entitle
the holder to acquire 1,272,227 shares of common stock of RMI, subject to
adjustment. Purchaser and the Issuers acknowledge and agree that the fair market
value of the initial Note issued at Closing is $1,450,000.00 and the fair market
value of the initial Warrant issued at Closing is $50,000.00.

 

2.3 Purchase
and Sales of Additional Securities Within 12
months of the Closing Date, the Issuers may issue and sell to Purchaser, and,
subject to the terms and conditions set forth in this Agreement, Purchaser shall
purchase from the Issuers one or two, but no more than two, Notes in principal
amounts not to exceed $3,000,000.00 in the aggregate and for a par or discounted
purchase price determined by parties at such time. In connection with each such
additional Note purchase, RMI shall also issue and sell and Purchaser shall also
purchase from RMI an additional Warrant for such portion of the aggregate
Warrant purchase price as the parties shall determine. The amount of RMI common
stock underlying each additional Warrant so acquired by Purchaser shall equal
the product obtained by multiplying 3,816,682 shares by a fraction, the
numerator of which shall be the principal amount of the additional Note then
being purchased in the corresponding transaction and the denominator of which
shall be $4,500,000, subject to adjustment as provided in the Warrant. Each such
additional Warrant shall be deemed to have a Date of Issuance (as defined in the
Warrant) as that of the initial Warrant.

 

15

 

2.4 Purchase
and Sale of Additional Warrant If on the
anniversary of the Closing Date the Issuers have not sold to Purchaser Notes
with aggregate original principal amounts of at least $2,250,000.00, RMI shall
issue and sell and Purchaser shall purchase an additional Warrant for nominal
consideration. The amount of RMI common stock underlying this additional Warrant
shall equal that amount that would entitle holder upon its exercise and upon the
exercise of all previously-issued Warrants to acquire that amount of RMI common
stock equal to at least 5% of the then outstanding fully diluted common stock of
RMI, as of the Closing Date, subject to adjustment as contemplated in the
Warrant. This additional Warrant shall be deemed to have a Date of Issuance (as
defined in the Warrant) as that of the initial Warrant.

 

2.5 Adjustment If within
12 months of the Closing Date, Purchaser has purchased Notes in principal
amounts in excess of $2,250,000.00 but less than $4,500,000.00, the parties
agree to make any necessary adjustment in the aggregate number of shares of
common stock underlying the Warrants issued to the Purchaser, based on a formula
to be agreed to in advance by the parties, consistent with the formula/approach
for determining the aggregate number of shares underlying the additional
Warrants identified in Section 2.4
above.

 

2.6 The
Closing The
closing of the purchase and sale of the Securities (the “Closing”) shall
take place at the offices of Polsinelli Shalton Welte Suelthaus PC in Kansas
City, Missouri at 10:00 a.m. Central Standard Time on January 6, 2005 or at such
other place or on such other date as may be mutually agreeable to the Issuers
and Purchaser (the “Closing
Date”). At
the Closing, (a) the Issuers shall deliver to Purchaser instruments evidencing
the Securities, issued in the name of Purchaser or its nominee, and (b)
Purchaser will pay the purchase price thereof by a cashier’s or certified check
or by wire transfer of immediately available funds to an account specified by
Issuers in the aggregate amount of $1,500,033.00. Notwithstanding the fact that
this Agreement and the other Investment Documents are dated on or as of January
3, 2005, the effective date of this Agreement and all of the other Investment
Documents shall be the Closing Date.

 

Section
3. Conditions
of Purchaser’s Obligation at the Closing The
obligation of Purchaser to purchase and pay for the Securities at the Closing is
subject to the fulfillment as of the Closing Date of the following conditions to
Purchaser’s satisfaction in its sole discretion:

 

3.1 Representations,
Warranties and Covenants; No Event of Default The
representations and warranties contained in Section
6 of this
Agreement shall be true, complete and correct at and as of the Closing Date
(both immediately prior to and immediately after giving effect to the
transactions contemplated by the Investment Documents) as though then made and
each Issuer shall have performed all of the covenants required to be performed
by it under the Investment Documents that are to be complied with or performed
by such Issuer on or prior to the Closing Date (unless that same shall have been
waived by Purchaser), and there shall not exist any Event of Default or
Potential Event of Default.

 

16

 

3.2 Governing
Documents The
Governing Documents (and all amendments thereto) of each of the Issuers shall
each be in form and substance satisfactory to Purchaser and shall each be in
full force and effect as of the Closing Date.

 

3.3 Freedom
Financial Guaranty and Security Agreement Freedom
Financial shall have duly authorized, executed and delivered a guaranty and a
security agreement in the forms attached hereto together as Exhibit
C
(collectively, the “Guaranty
and Security Agreement”), and
the Guaranty and Security Agreement shall be in full force and effect as of the
Closing Date.

 

3.4 Security
Documents; Stock Pledge Agreements; Shareholder Agreement The
Issuers shall have entered into the Security Documents, and the Security
Documents shall be in full force and effect as of the Closing Date; provided,
however, that
the Mortgage shall be delivered to the Purchaser in accordance with Section
4.3(n) of this
Agreement. The Issuers shall have caused their respective shareholders to
authorize, execute and deliver a stock pledge agreement with respect to the
issued and outstanding stock of each of the Issuers, each in the form of
Exhibit
D attached
hereto (the “Stock
Pledge Agreements”) and a
shareholder agreement in the form of Exhibit
E attached
hereto (the “Shareholder
Agreement”), and
each of the Stock Pledge Agreements and the Shareholder Agreement shall be in
full force and effect as of the Closing Date. 

 

3.5 Sale
of Securities to the Purchaser The
Issuers shall have sold to Purchaser all of the Securities to be purchased
hereunder at the Closing.

 

3.6 Securities
Law Compliance The
Issuers shall have made all filings under all applicable federal and state
securities laws necessary to consummate the issuance of the Securities pursuant
to this Agreement in compliance with such laws.

 

3.7 Closing
Fees and Expenses The
Issuers shall have: (a) paid to C3 a
closing fee in the aggregate amount of $78,750.00; and (b) reimbursed
C3 for the
fees and expenses as provided in Section
8.1 of this
Agreement.

 

3.8 Noncompete
Agreements The
Issuers shall have entered into noncompete agreements with each of Dennis
Simpson and Jeffrey Hoyal in the form of Exhibit
F attached
hereto (the “Noncompete
Agreements”) and
such Noncompete Agreements shall be in full force and effect as of the Closing
Date.

 

3.9 Intercreditor
Agreement .
Washington Mutual Bank, the Issuers, Freedom Financial and the Purchaser shall
have executed and delivered to Purchaser the Intercreditor Agreement in the form
of Exhibit
G attached
hereto (the “Intercreditor
Agreement”) and
the Intercreditor Agreement shall be in full force and effect, and the terms and
conditions therein shall be satisfied to the satisfaction of Purchaser, as of
the Closing Date.

 

3.10 Insurance An
application for life insurance policies on the lives of each of Dennis Simpson
and Jeffrey Hoyal, in each case in the face amount of $3,500,000.00, shall have
been submitted to a qualified insurance broker or agent and each of Dennis
Simpson and Jeffrey Hoyal shall have undergone a physical or other medical
examination required by the underwriter of the applicable insurance policy prior
to the Closing Date. Within 60 days following the Closing Date, each such
insurance policy shall be in full force and effect and shall name the Issuers as
beneficiary and the Issuers shall make a collateral assignment of $3,500,000.00
of such policy to Purchaser, the documentation of which shall be in form and
substance satisfactory to Purchaser and which collateral assignment shall be in
full force and effect as of the date that is 60 days following the Closing
Date.

 

17

 

3.11 Opinion
of Issuers’ Counsel Purchaser
shall have received from Reed Smith, LLP, counsel for the Issuers, an opinion
with respect to the matters set forth in Exhibit
H attached
hereto, which shall be addressed to Purchaser, dated the date of the Closing
Date. 

 

3.12 Proceedings All
proceedings required to be taken by each Issuer in connection with the
transactions contemplated hereby shall have been taken.

 

3.13 Closing
Documents Each
Issuer, as applicable, shall have delivered to Purchaser all of the following
documents:

 

(a) the
initial Note in the principal amount of $1,500,000.00, duly authorized, executed
and delivered jointly and severally by the Issuers;

 

(b) certificates
evidencing the initial Warrants, duly authorized, executed and delivered by the
applicable Issuers;

 

(c) an
Officer’s Certificate of each Issuer in the form of Exhibit
I attached
hereto dated as of the Closing Date;

 

(d) certified
copies of the resolutions duly adopted by the board of directors (or similar
governing body) of each Issuer and Freedom Financial, authorizing the execution,
delivery and performance of each of the Investment Documents to which it is a
party, the issuance and sale of the Securities and the consummation of all other
transactions contemplated by the Investment Documents;

 

(e) certificates
of the secretaries of each Issuer in the form of Exhibit
J attached
hereto dated as of the Closing Date;

 

(f) certified
copies of each Issuer’s Governing Documents, each as in effect at the
Closing;

 

(g) certificates
of good standing, dated not more than 15 days prior to the date of the Closing,
of each Issuer issued by its jurisdiction of incorporation, formation or
organization (as applicable) and from each jurisdiction in which it is qualified
to conduct business;

 

(h) copies of
all third party and governmental consents, approvals and filings required in
connection with the consummation of the transactions under the Investment
Documents (including all blue sky law filings and waivers of all preemptive
rights, rights of first refusal and all other similar rights);

 

(i) duly
completed and executed SBA Forms 480, 652 and 1031 from the
Issuers;

 

18

 

(j) a 1-year
business plan showing the Issuers’ consolidated financial projections (including
balance sheets and income and cash flow statements) for such 1-year
period;

 

(k) [Reserved.]

 

(l) a
Use
of Proceeds Schedule from the
Issuers regarding the intended use of proceeds from the Financing and the sale
of all Equity Interests; and

 

(m) a
solvency certificate executed by the chief executive officer of each of the RMI,
ICM, and ACPA in the form of Exhibit
K attached
hereto dated as of the Closing Date. 

 

3.14 Other
Items Such
other agreements, documents, certificates, verifications, and assurances as the
Purchaser may request in connection with the transactions described in or
contemplated by the Investment Documents.

 

3.15 Waiver Any
condition specified in this Section may only be waived in writing by
Purchaser.

 

3.16 Additional
Conditions of Purchase Obligations after the Closing Any
obligation of the Purchaser to purchase from the Issuers any Securities within
12 months after the Closing Date pursuant to Section
2.3 of this
Agreement shall be further subject to the fulfillment as of the date of such
purchase of the following conditions to the Purchaser’s satisfaction in its sole
discretion:

 

(a)
 The
representations and warranties of the Issuers and other Persons contained in the
Investment Documents (including those contained in Section
6 of this
Agreement) shall be true and correct as though made on and as of the date of
such purchase; 

 

(b)
 No Event
of Default or Potential Event of Default exists, nor would any Event of Default
or Potential Event of Default result from such purchase; and

 

(c)
 The
Issuers shall have satisfied the post-Closing obligations set forth in
Section
4.3(n) of this
Agreement (without regard to any cure period applicable thereto).

 

Section
4. Covenants .

 

4.1 Financial
Statements and Other Information . So long
as any of the Notes or any notes issued in exchange for any Securities remain
outstanding and prior to the indefeasible payment in full of all amounts due and
owing thereunder and, solely with respect to Sections 4.1(a), 4.1(b), 4.1(c) and
4.1(l) below, so long as the Purchaser no longer owns any Warrants or any Equity
Interests in any of the Issuers, the Issuers shall deliver to Purchaser, subject
to the confidentiality provisions set forth in Section
8.24:

 

(a) Annual
Financial Statements. As soon
as available, and in any event within 120 days after the end of each fiscal year
of RMI beginning with the fiscal year ending December 31, 2004, (i) a copy of
the annual financial statements of RMI for such fiscal year containing, on a
consolidated and consolidating basis, balance sheets and statements of income,
retained earnings, and cash flow at the end of such fiscal year and for the
12-month period then ended, in each case setting forth in comparative form the
figures for the preceding fiscal year, all in reasonable detail and audited and
certified by independent certified public accountants of recognized standing
acceptable to Purchaser, to the effect that such report has been prepared in
accordance with GAAP and containing no material qualifications or limitations on
scope; (ii) a copy of the annual financial statements of RMI for such fiscal
year containing, on a consolidated and consolidating basis, balance sheets and
statements of income, retained earnings, and cash flow as at the end of such
fiscal year and for the 12-month period then ended, in each case setting forth
in comparative form the figures for the preceding fiscal year, all in reasonable
detail and prepared in accordance with GAAP and certified by the chief executive
officer, chief financial officer or president of RMI to have been prepared in
accordance with GAAP; and (iii) comparisons of the consolidated portions of such
statements with the then current Annual Budget;

 

19

 

(b) Quarterly
Financial Statements.
Concurrent with the filing of RMI’s 10-K, and in any event within 45 days after
the end of each fiscal quarter of RMI beginning with the fiscal quarter ending
December 31, 2004, (i) a copy of the quarterly financial statements of RMI for
such fiscal quarter containing, on a consolidated and consolidating basis,
balance sheets and statements of income, retained earnings, and cash flow at the
end of such fiscal quarter and for the 3-month period then ended, all in
reasonable detail and audited and certified by independent certified public
accountants of recognized standing acceptable to Purchaser, to the effect that
such report has been prepared in accordance with GAAP and containing no material
qualifications or limitations on scope; (ii) a copy of the quarterly financial
statements of RMI for such fiscal quarter containing, on a consolidated and
consolidating basis, balance sheets and statements of income, retained earnings,
and cash flow as at the end of such fiscal quarter, in each case setting forth
in comparative form the figures for the preceding fiscal quarter, all in
reasonable detail and prepared in accordance with GAAP and certified by the
chief executive officer, chief financial officer or president of RMI to have
been prepared in accordance with GAAP; and (iii) comparisons of the consolidated
portions of such statements with the then current Annual Budget;

 

(c) Monthly
Financial Statements. As soon
as available and in any event within 30 days after the end of each month,
beginning with the month ending December 31, 2004, a copy of unaudited internal
financial statements of each of the Issuers as of the end of such month and for
the portion of the fiscal year then ended, containing consolidated and
consolidating basis, balance sheets and statements of income, retained earnings,
and cash flow, setting forth in each case (i) comparisons to the then current
Annual Budget and to the corresponding period in the preceding fiscal year and
(ii) a discussion of key developments in the business of the applicable Issuer,
and (iii) an explanation of all material deviations from the then current Annual
Budget, all in reasonable detail certified by the chairman or chief executive
officer of the Issuers to fairly and accurately present (subject to year audit
adjustments) the financial condition and results of operations of Issuers on a
consolidated and consolidating basis, at the date and for the periods indicated
therein;

 

(d) Compliance
Certificate.
Concurrently with the delivery of each of the financial statements referred to
in subsections
(a) and
(b), a duly
completed Officer’s Certificate in the form of Exhibit
L attached
hereto, with appropriate insertions, dated the date of such financial statements
and signed by RMI’s chief executive officer containing a computation of each of
the financial ratios and restrictions set forth in Section
4.5 and to
the effect that such officer has not become Aware of any Event of Default or
Potential Event of Default that has occurred and is continuing or, if there is
any such event, describing it and the steps, if any, being taken or proposed to
be taken to cure it;

 

20

 

(e) Notice
of Litigation.
Promptly after receipt of service of process and in any event within 10 Business
Days after receipt of service of process, notice of all actions, suits, and
proceedings before any governmental authority or arbitrator affecting any Issuer
which, if determined adversely to any Issuer, has had or could reasonably be
expected to have a Material Adverse Effect;

 

(f) Notice
of Default. As soon
as possible (but in any event within 10 days) after (i) the discovery or receipt
of notice of any Event of Default or Potential Event of Default, (ii) any
default under any Investment Document or any other Material agreement to which
any Issuer is a party, (iii) any Material investigation, notice, proceeding or
adverse determination from any governmental or regulatory authority or agency,
or (iv) immediately (notwithstanding the reference to 10 days stated above)
after the receipt of notice (or written) of the acceleration of any Material
Indebtedness, an Officer’s Certificate specifying the nature and period of
existence thereof and what actions each Issuer has taken and propose to take
with respect thereto;

 

(g) ERISA
Reports. As soon
as possible and in any event within 5 days after any Issuer knows or has reason
to know that any ERISA Event or Prohibited Transaction has occurred with respect
to any Pension Plan or that the PBGC or any Issuer has instituted or will
institute proceedings under Title IV of ERISA to terminate any Pension Plan, a
certificate of the chief financial officer of General Partner setting forth the
details as to such ERISA Event or Prohibited Transaction or Pension Plan
termination and the action that Issuers propose to take with respect
thereto;

 

(h) Reports
to Other Creditors.
Promptly after the furnishing thereof, copies of any statement or report
furnished to any other party pursuant to the terms of any indenture, loan or
credit or similar agreement and not otherwise required to be furnished to
Purchaser pursuant to this Section;

 

(i) Notice
of Material Adverse Change. As soon
as possible and in any event within 5 Business Days after the occurrence
thereof, written notice of (i) any matter that has had, or could reasonably be
expected to have, a Material Adverse Effect, or (ii) any condition or event that
has resulted in or could reasonably be expected to result in any Material
liability under any Environmental and Safety Requirements;

 

(j) Management
Letters.
Promptly upon receipt thereof, a copy of any management letter or written report
submitted to any Issuer by independent certified public accountants with respect
to the business, condition (financial or otherwise), operations, prospects, or
properties of any Issuer;

 

(k) General
Information.
Promptly, such other information concerning any Issuer as Purchaser may from
time to time reasonably request;

 

21

 

(l) Annual
Budget. (i) At
least 45 days but not more than 90 days prior to the beginning of each calendar
year, an annual budget of the income, expenses, and capital costs for review or,
if following an Event of Default and for so long as such Event of Default is
continuing, for approval by Purchaser prepared on a monthly basis for the
Issuers for such calendar year (displaying anticipated statements of income and
cash flows and balance sheets) (the “Annual
Budget”), and
(ii) promptly upon preparation thereof any other significant budgets prepared by
the Issuers and any revisions of such annual or other budgets;

 

(m) Securities
Communications. As soon
as possible after transmission or occurrence (but in any event within 10 days),
any communications with securities holders generally or the financial community,
any reports filed by the Issuers, or any of their respective officers,
directors, managers, partners, employees or agents, with any securities exchange
or the Securities and Exchange Commission; 

 

(n) Insurance
Reports. As soon
as possible (but in any event within 10 days) after becoming Aware of any
cancellation or Material change in any insurance maintained by any Issuer,
written notice thereof which describes the same and the intended course of
action of each Issuer with respect thereto; and

 

(o) Acceleration
of Indebtedness.
Immediately after the notice (oral or written) of the acceleration of any
Material Indebtedness.

 

Each of
the financial statements referred to in Sections
4.1(a), (b) and (c) shall
present fairly in all material respects as of the dates and for the periods
stated therein, the financial condition and results of operations of each Issuer
and any Subsidiaries thereof, subject in the case of the unaudited financial
statements to changes resulting from normal year-end adjustments for recurring
accruals (none of which could, alone or in the aggregate, could reasonably be
expected to have a Material Adverse Effect). For the purposes of this Agreement,
Purchaser acknowledges and agrees that the independent certified public
accountant providing services to RMI as of the date of this Agreement is
acceptable to Purchaser.

 

4.2 Attendance
at Board Meetings; Board Seat; Management Fees So long
as any of the Notes or any notes issued in exchange for any Securities remain
outstanding and prior to the indefeasible payment in full of all amounts due and
owing thereunder, each Issuer shall give Purchaser written notice of each
meeting, whether in person, telephonic, or by video transmission, of its board
of directors and each committee thereof at the same time notice is delivered to
each such director or committee member in accordance with each Issuer’s
respective Governing Documents, but in no event later than 2 Business Days prior
to the date of each such meeting, and each Issuer shall permit at least 2
representatives of Purchaser to attend as observers all meetings of its board of
directors and all committees thereof; provided, that
each such observer shall be deemed subject to the confidentiality provisions set
forth in Section
8.24 and may
be excluded only from any portion of any meeting where counsel for such Issuer
is present and such exclusion is necessary, despite the application of the
confidentiality provisions set forth in this Agreement, to preserve any
attorney-client privilege with respect to the communications during such portion
of the meeting. In the case of telephonic meetings conducted in accordance with
an Issuer’s Governing Documents Purchaser’s representatives shall be given the
opportunity to listen to such telephonic meetings. Purchaser shall be entitled
to receive all written materials and other information (including, without
limitation, copies of meeting minutes) given to directors in connection with
such meetings at the same time such materials and information are given to the
directors. If an Issuer proposes to take any action by written consent in lieu
of a meeting of its board of directors or of any committee thereof, the Issuer
shall give written notice thereof to Purchaser prior to the effective date of
such consent describing in reasonable detail the nature and substance of such
action. The Issuers shall pay the reasonable out-of-pocket expenses of the
representatives of Purchaser incurred in connection with attending all such
meetings. Immediately upon any Event of Default, and for so long as such Event
of Default is continuing, Purchaser shall have the right to designate one Person
to be a member on each of the Issuers’ boards of directors. Each such Issuer
shall promptly do all things required to effect the placement of such designated
Person on its board of directors including, without limitation, requiring all
holders of voting Equity Interests to vote for such Person, expanding the size
of its board of directors or requiring a member of its board of directors to
resign. 

 

22

 

For
services to be provided in the administration of the Financing contemplated by
this Agreement and advisory and other services to be provided by C3 to the
Issuers from time to time during the term of this Agreement, including making
Steve Swartzman and Pat Healy available to the Issuers telephonically on an
“as-needed” basis and in person, no less than 2 times each year, the Issuers
shall pay C3 an
annual fee in the amount of $20,000.00 per year during the 5-year term of this
Agreement, with an initial such payment on the Closing Date, a second such
payment on January 1, 2006, and continuing on the 1st day of
each January thereafter, to and including January 1, 2009. 

 

4.3 Affirmative
Covenants . So long
as any of the Notes or any notes issued in exchange for any Securities remain
outstanding and prior to the indefeasible payment in full of all amounts due and
owing thereunder, the Issuers shall comply with each of the following
covenants:

 

(a) Maintenance
of Existence; Conduct of Business. Each
Issuer shall preserve and maintain its existence and all of its leases,
privileges, licenses, permits, franchises, qualifications, and rights that are
necessary or desirable in the ordinary conduct of its business. Each Issuer will
conduct its business in an orderly and efficient manner in accordance with good
business practices. Without limitation, each Issuer will not make any material
change in its credit collection policies if such change would materially impair
the collectibility of any material account owing to such Issuer, nor will it
rescind, cancel or modify any material account owing to such Issuer except in
the ordinary course of business;

 

(b) Maintenance
of Properties and Intellectual Property Rights Each
Issuer shall (i) maintain, keep, and preserve all of its properties (real,
personal, tangible and intangible) necessary or useful in the proper conduct of
its business in good working order and condition, and (ii) possess and maintain
all Material Intellectual Property Rights necessary to the conduct of their
respective businesses and own all right, title and interest in and to, or have a
valid license for, all such Intellectual Property Rights;

 

(c) Taxes
and Claims. Each
Issuer shall pay or discharge at or before maturity or before becoming
delinquent (i) all taxes, levies, assessments, and governmental charges imposed
on it or its income or profits or any of its property, and (ii) all lawful
claims for labor, material, and supplies, which, if unpaid, might become a Lien
upon any of its property; provided,
however, that no
Issuer shall be required to pay or discharge any tax, levy, assessment, or
governmental charge which is being contested in good faith by appropriate
proceedings diligently pursued, and for which adequate reserves have been
established;

 

23

 

(d) Insurance. Each
Issuer shall maintain insurance with financially sound and reputable insurance
companies in such amounts and covering such risks as is usually carried by
corporations engaged in similar businesses and owning similar properties in the
same general areas in which the Issuers operate, provided that in
any event each Issuer shall maintain workmen’s compensation insurance, property
insurance, hazard insurance, and comprehensive general liability insurance,
reasonably satisfactory to Purchaser. Each insurance policy covering Collateral
shall name Purchaser as loss payee and shall provide that such policy will not
be cancelled or reduced without 30 days prior written notice to Purchaser. In
the event of failure by Issuers to provide and maintain insurance as herein
provided, Purchaser may, at its option, provide such insurance and charge the
amount thereof to Issuers. Issuers shall furnish Purchaser with certificates of
insurance and policies evidencing compliance with the foregoing insurance
provision;

 

(e) Inspection
Rights. At any
reasonable time and from time to time, each Issuer shall permit representatives
of Purchaser, subject to the confidentiality provisions set forth in
Section
8.24, to
examine the Collateral and conduct Collateral audits, to examine, copy, and make
extracts from its books and records, to visit and inspect its properties, and to
discuss its business, operations, and financial condition with its officers,
employees, and independent certified public accountants;

 

(f) Keeping
Books and Records. Each
Issuer shall maintain proper books of record and account in which full, true,
and correct entries in conformity with GAAP shall be made of all dealings and
transactions in relation to its business and activities;

 

(g) Compliance
with Laws. Each
Issuer shall, and shall cause each Subsidiary thereof to, comply in all material
respects with all applicable laws, rules, regulations, orders, and decrees of
any governmental authority or arbitrator, the failure to comply with which could
reasonably be expected to have a Material Adverse Effect;

 

(h) Compliance
with Agreements. Each
Issuer shall (i) comply in all material respects with all agreements, contracts,
and instruments binding on it or affecting its properties or business where the
failure to comply could reasonably be expected to have a Material Adverse
Effect, and perform and (ii) observe all of its obligations: (A) to each holder
of the Notes and any other notes issued in exchange for any Securities and all
of its obligations to each holder of Warrants and any Equity Interest for which
Securities are converted or exchanged set forth in the Investment Documents and
the Governing Documents with respect to which any such Equity Interest was
issued; and (B) under each of the Investment Documents;

 

24

 

(i) Authorization
to File Financing Statements; Further Assurances; Additional
Subsidiaries. 

 

(i) Each
Issuer, with respect to any Collateral in which it has an interest, hereby
irrevocably authorizes the Purchaser at any time and from time to time to file
in any jurisdiction any initial financing statements and amendments thereto that
(A) indicate the Collateral as the collateral covered thereby, regardless of
whether any particular asset comprised in the Collateral falls within the scope
of Article 9 of the Uniform Commercial Code of the applicable jurisdiction, and
(B) contain any other information required by Part 5 of Article 9 of the
applicable Uniform Commercial Code for the sufficiency or filing office
acceptance of any financing statement or amendment, including (I) whether the
Issuer is an organization, the type of organization and any organization
identification number issued to the Issuer and, (II) in the case of a financing
statement filed as a fixture filing, a sufficient description of real property
to which the Collateral relates. Each Issuer agrees to furnish any such
information to the Purchaser promptly upon request. Each Issuer also ratifies
its authorization for the Purchaser to have filed in any jurisdiction any like
initial financing statements or amendments thereto if filed prior to the date of
this Agreement to the extent such financing statements are consistent with this
Agreement; and

 

(ii) Each
Issuer shall execute and deliver such further agreements and instruments and
take such further action as may be reasonably requested by Purchaser to carry
out the provisions and purposes of this Agreement and the other Investment
Documents and to create, preserve, and perfect the Liens of Purchaser in the
Collateral, and (ii) with respect to any new Subsidiary of any Issuer
established with the consent of Purchaser after the Closing Date, the Issuers
shall promptly cause such new Subsidiary: (A) to become a party to this
Agreement and the Note; (B) to deliver to the Purchaser the same documents
required to be delivered by the Issuers pursuant to Section
3 for such
new Subsidiary; and (C) to take such other actions and execute and deliver such
other agreements and instruments as the Purchaser may determine are reasonably
necessary or appropriate; 

 

(j) Other
Actions. Further
to insure the attachment, perfection and priority of the Purchaser’s security
interest in the Collateral (subject to all Permitted Liens), each Issuer agrees,
at the applicable Issuer’s own expense, to take the following actions with
respect to the following Collateral:

 

(i) Promissory
Notes and Tangible Chattel Paper. If any Issuer shall at any time hold or
acquire any promissory notes or tangible chattel paper, such Person shall
forthwith endorse, assign and deliver the same to the Purchaser, accompanied by
such instruments of transfer or assignment duly executed in blank as the
Purchaser may from time to time reasonably specify;

 

(ii) Deposit
Accounts. All of the deposit accounts currently maintained by each Issuer are
identified on the Deposit
Accounts Schedule to this
Agreement. No Issuer will open or maintain any other deposit account subsequent
to the date of this Agreement without the prior written consent of Purchaser,
which consent shall not be unreasonably withheld. For each deposit account that
any Issuer at any time opens or maintains, such Issuer shall, at Purchaser’s
request and option, obtain from the depository bank a deposit account control
agreement in form and substance satisfactory to Purchaser, which will recognize
Purchaser’s rights in such deposit accounts and will permit Purchaser to
foreclose on such deposit accounts upon the occurrence of an Event of Default
and for so long as such Event of Default is continuing. The provisions of this
paragraph shall not apply to (i) any deposit account for which such Issuer, the
depositary bank and Purchaser have entered into a cash collateral agreement
specially negotiated among such Issuer, the depositary bank and Purchaser for
the specific purpose set forth therein, and (ii) deposit accounts specially and
exclusively used for payroll, payroll taxes and other employee wage and benefit
payments to or for the benefit of such Issuer’s employees;

 

25

 

(iii) Investment
Property. If any Issuer shall at any time hold or acquire any certificated or
uncertificated securities, securities entitlements, financial assets or other
investment property (collectively “Securities
Collateral”), such
Issuer shall, at Purchaser’s request and option, pursuant to an agreement in
form and substance satisfactory to Purchaser cause the Securities Collateral to
be held by a “Securities
Intermediary” (as
defined in the Uniform Commercial Code) reasonably acceptable to Purchaser and
shall cause such Securities Intermediary to execute a securities account control
agreement in form and substance reasonably acceptable to Purchaser that will
recognize Purchaser’s rights in such Securities and will permit Purchaser to
foreclose on such Securities upon the occurrence of an Event of Default and for
so long as such Event of Default is continuing and the delivery of entitlement
orders or other instructions from Purchaser to such Securities Intermediary as
to such Securities Collateral, or (as the case may be) to apply any value
distributed on account of such Securities Collateral without further consent of
such Issuer; 

 

(iv) Collateral
in the Possession of a Bailee. If any Collateral is at any time in the
possession of a bailee, Issuers shall promptly notify Purchaser thereof and, at
Purchaser’s request and option, shall promptly obtain an acknowledgement from
the bailee, in form and .substance reasonably satisfactory to Purchaser, that
the bailee shall recognize the lien of Purchaser in such assets, and that such
bailee agrees to comply, without further consent of Issuers, with instructions
from Purchaser as to such Collateral upon the occurrence of an Event of Default
and for so long as an Event of Default is continuing;

 

(iv) Electronic
Chattel Paper and Transferable Records. If any Issuer at any time holds or
acquires an interest in any electronic chattel paper or any “transferable
record,” as that term is defined in Section 201 of the federal Electronic
Signatures in Global and National Commerce Act, or in Section 16 of the Uniform
Electronic Transactions Act as in effect in any relevant jurisdiction, such
Issuer shall promptly notify Purchaser thereof. At the request and option of
Purchaser, the relevant Issuer shall take such action as Purchaser may
reasonably request to provide Purchaser with control, under Section 9-105 of the
Uniform Commercial Code, of such electronic chattel paper or control under
Section 201 of the federal Electronic Signatures in Global and National Commerce
Act or, as the case may be, Section 16 of the Uniform Electronic Transactions
Act (as so in effect in such jurisdiction) of such transferable record such that
upon the occurrence of an Event of Default and for so long as such Event of
Default is continuing Purchaser may foreclose upon such assets. However prior to
the occurrence of an Event of Default, the relevant Issuer shall be permitted to
exercise control over the specified assets;

 

26

 

(v) Letter-of-Credit
Rights. If any Issuer is at any time a beneficiary under a letter of credit now
or hereafter issued in favor of such Person, such Issuer, as applicable, shall
promptly notify the Purchaser thereof and, at the request and option of the
Purchaser, such Person shall, pursuant to an agreement in form and substance
reasonably satisfactory to the Purchaser, either (i) promptly arrange for the
issuer and any confirmer of such letter of credit to consent to an assignment to
the Purchaser of the proceeds of any drawing under the letter of credit or (ii)
arrange for the Purchaser to become the transferee beneficiary of the letter of
credit;

 

(vi) Commercial
Tort Claims. If any Issuer shall at any time hold or acquire a commercial tort
claim, such Issuer shall immediately notify Purchaser in a writing signed by
such Issuer of the particulars thereof and grant to Purchaser in such writing a
security interest therein and in the proceeds thereof, such that upon the
occurrence of an Event of Default hereunder Purchaser may foreclose upon such
assets. Such writing shall be in form and substance reasonably satisfactory to
Purchaser. All commercial tort claims held by the Issuers as of the Closing Date
are listed in Commercial
Tort Claims Schedule and each
of the Issuers hereby grants the Purchaser a security interest therein and
agrees that such claims shall be Collateral under this Agreement and such
Person’s respective Security Agreement;

 

(k) ERISA. Each
Issuer shall comply with all minimum funding requirements, and all other
material requirements, of ERISA, if applicable, so as not to give rise to any
liability thereunder;

 

(l) Key
Man Life Insurance. Issuers
shall maintain the key-man life insurance policies referred to in Section
3.10;

 

(m) Annual
Budget Approval. Issuers
will not submit any budget to its board of directors (or similar governing body)
for approval or implement any Annual Budget unless such budget is first
presented to Purchaser for review or, if following an Event of Default and for
so long as such Event of Default is continuing, for approval, as set forth in
Section
4.1(l). If
there shall be an Event of Default in existence and continuing as of the
commencement of any fiscal year, Purchaser will have absolute approval rights
with respect to such upcoming Annual Budget and Issuers will not submit any
budget to its board of directors (or similar governing body) for approval or
implement any Annual Budget unless Purchaser has approved said budget in
writing; and

 

(n) Post-Closing
Obligations. Issuers
shall, on or before January 31, 2005, deliver or cause to be delivered to
Purchaser (i) a duly authorized and executed Mortgage and (ii) certificates of
insurance and policies evidencing, to Purchaser’s reasonable satisfaction,
Issuers’ compliance with the insurance obligations set forth in Section
4.3(d) of this
Agreement.

 

27

 

4.4 Negative
Covenants . So long
as any of the Notes or any notes issued in exchange for any Securities remain
outstanding and prior to the indefeasible payment in full of all amounts due and
owing thereunder, without the prior written consent of Purchaser (which consent
shall not be unreasonably withheld), the Issuers shall comply with each of the
following covenants and shall not:

 

(a) Additional
Indebtedness. Create,
incur, assume or suffer to exist any Indebtedness other than Permitted
Indebtedness or any Liens other than Permitted Liens, or amend, extend, change,
modify, or reborrow pursuant to, any provisions of any Indebtedness permitted
hereunder;

 

(b) Merger
or Consolidation. Other
than in connection with a Permitted Acquisition, become a party to a merger or
consolidation, or purchase or otherwise acquire all or any part of the assets of
any Person engaged in any line of business other than the lines of business of
the Issuers as of the Closing Date or any shares or other evidence of beneficial
ownership of any Person engaged in any line of business other than the lines of
business of the Issuers as of the Closing Date, or wind-up, dissolve, or
liquidate; provided,
however, that
RMI may sell, by initial public offering or otherwise, all of its stock in B2B
in accordance with the terms and conditions set forth in Section
8.25;

 

(c) Dividends
or Distributions. Declare
or pay any Dividends or make any other payment or distribution (in cash,
property, or obligations) on account of their Equity Interests, or redeem,
purchase, retire, or otherwise acquire any Equity Interests, or permit any of
their Subsidiaries to purchase or otherwise acquire any Equity Interest of any
other Issuer, or set apart any money for a sinking or other analogous fund for
any Dividend or other distribution on their Equity Interests or for any
redemption, purchase, retirement, or other acquisition of any of their Equity
Interests without Purchaser’s prior written consent, except that, so long as no
Event of Default exists or would result therefrom, Issuers may make Tax
Distributions and repurchase equity from non-Affiliates at the original purchase
price upon termination of employment of such non-Affiliate;

 

(d) Advances
and Loans. Make
any loans or advances to, guarantys for the benefit of, or Investments in, any
Person except for (i) reasonable advances to employees in the ordinary course of
business, (ii) Investments having a stated maturity no greater than 1 year from
the date such Investment is made in (A) obligations of the United States
government or any agency thereof or obligations guaranteed by the United States
government, (B) certificates of deposit of commercial banks having combined
capital and surplus of at least $50 million or (C) commercial paper with a
rating of at least “Prime-1” by Moody’s Investors Service, Inc., (iii)
intercompany loans or advances to or guarantees by any Issuer for the benefit of
another of any Issuer in the ordinary course of business, consistent with past
practice, (iv) securities of account debtors received pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such
account debtors, (v) contributions by an Issuer to the capital of any other
Issuer, (vi) bank deposits in the ordinary course of business, consistent with
past practice, and (vii) the Guaranty and Security Agreement;

 

(e) Affiliated
Transactions. Enter
into any transaction, including, without limitation, the purchase, sale, or
exchange of property or the rendering of any service, with any Affiliate of any
Issuer, except in the ordinary course of and pursuant to the reasonable
requirements of such Issuer’s business and upon fair and reasonable terms no
less favorable to such Issuer than would be obtained in a comparable
arm’s-length transaction with a Person not an Affiliate of such
Issuer;

 

28

 

(f) Transfer
of Assets. No
Issuer nor any Subsidiaries or Guarantors thereof shall sell, exchange or
permanently dispose of any of its Intellectual Property Rights or sell, lease or
otherwise transfer all or any part of its other properties other than (1) the
sale of inventory in the ordinary course of such Person’s business, consistent
with past practice, (2) transfers of assets to other Issuers in the ordinary
course of business, and (3) the disposition of obsolete equipment or
unprofitable assets;

 

(g) [Reserved].

 

(h) Prepayment
of Indebtedness. Prepay,
redeem, purchase, defeat or otherwise satisfy in any manner any principal or
interest on any Indebtedness other than the Notes and any notes issued in
exchange for any Securities, unless such prepayment, redemption, or purchase
does not cause or is not likely to cause an Event of Default;

 

(i) Other
Business Ventures. Enter
into the ownership, active management or operation of any business other than
the businesses in which the Issuers are presently engaged;

 

(j) Hazardous
Materials. Use (or
permit any tenant to use) any of their respective properties or assets for the
handling, processing, storage, transportation, or disposal of any Hazardous
Material, generate any Hazardous Material, conduct any activity that is likely
to cause a Release or threatened Release of any Hazardous Material, or otherwise
conduct any activity or use any of their respective properties or assets in any
manner that is likely to violate any Environmental and Safety Requirements for
which any Issuer or any Subsidiaries thereof would be responsible;

 

(k) Accounting
Changes. Make
any change (i) in accounting treatment or reporting practices, except as
required by GAAP and disclosed to Purchaser, or (ii) in tax reporting treatment,
except as required by law and disclosed to Purchaser;

 

(l) Certain
Security Matters. Enter
into or permit to exist any arrangement or agreement, other than pursuant to
this Agreement or any Investment Document, which directly or indirectly
prohibits any Issuer from creating or incurring a Lien on any of its assets
other than assets that are subject to a purchase money security interest or an
Operating Lease as contemplated by this Agreement;

 

(m) Phantom
Equity Plans. Other
than the redemption of the common stock of the Issuers owned by Jeffrey Hoyal
and Dennis Simpson as of the Closing Date that is identified as callable common
stock on the Capitalization
Schedule,
directly or indirectly redeem, purchase or make, or to redeem, purchase or make
any payments with respect to any equity appreciation rights, phantom equity
plans, profits interest plans or similar rights or plans to the extent any such
actions, together with any of the actions contemplated under Section
4.4(s) with
respect to employee equity plans, dilute by more than 5% in the aggregate all
the Equity Interests of any Issuer issued and outstanding as of the Closing
Date;

 

29

 

(n) Business
Organization. Convert
to any other type of business entity;

 

(o) Joint
Ventures. Enter
into any joint venture (i) with one or more Persons in the same line of business
of any of the Issuers involving an aggregate consideration (including the
assumption of liabilities whether direct or indirect) in any calendar year
exceeding $500,000.00 on a consolidated basis with all such transactions being
aggregated to such limit or (ii) with any Person that is not in the same line of
business of any of the Issuers;

 

(p) Additional
Agreements. Enter
into, become subject to, amend, modify or waive any agreement or instrument
which by its terms would (under any circumstances) restrict (i) the right of any
Issuer to make loans or advances or pay or make Dividends to, transfer property
to, or repay any Indebtedness owed to, any Issuer or (ii) any Issuer’s right to
perform any of the provisions of any of the Investment Documents or the Loan
Agreement and all agreements and instruments entered into in connection with the
same or otherwise evidencing the Note or its Governing Documents (including
provisions relating to the exercise of any of the Warrants, the exercise of the
put provisions of any of the Warrants and the payment of principal and interest
on the Notes or any other notes issued in exchange for any Securities), except
in any such case for amending, modifying or supplementing such agreement in
accordance with its terms;

 

(q) Compensation.
Increase any compensation (including salary, bonuses and other forms of current
and deferred compensation) payable, directly or indirectly, to any of its
Affiliates in excess of 5% per year;

 

(r) Additional
Subsidiaries.
Establish or acquire any Subsidiaries not owned as of the Closing Date unless
such Subsidiary executes and delivers a guaranty and a security agreement in
form and substance satisfactory to Purchaser and operates in the same line of
business as one of the Issuers;

 

(s) Equity
Incentive Plans. Amend
or modify any equity incentive plan or employee equity ownership plan as in
existence as of the Closing Date or adopt any new equity incentive plan or
employee equity ownership plan or issue any of its Equity Interests to its
employees or its Subsidiaries’ employees other than pursuant to the existing
equity incentive plans and employee equity ownership plans or (ii) to the extent
any such actions, together with any of the actions contemplated under
Section
4.4(m) with
respect to phantom equity plans, do not dilute by more than 5% in the aggregate
all the Equity Interests of any Issuer issued and outstanding as of the Closing
Date;

 

(t) Life
Insurance. Borrow
against, pledge, assign, modify, cancel or surrender any key-man life insurance
policy required to be obtained under Section
3.9;

 

(u) Use of
Proceeds. Use the
proceeds from the Financing and the sale of all Equity Interests other than as
set forth on the Use
of Proceeds Schedule;

 

(v) Amendment
to Governing Documents. Make
any amendment to its Governing Documents, directly or indirectly, whether by
merger, conversion, operation of law or otherwise, or file any resolution of its
board of managers (or similar governing body) with its jurisdiction of
incorporation, formation or organization (as applicable);

 

30

 

(w) Material
Agreements. Amend,
modify or waive any provision of the Noncompete Agreements, or fail to enforce
the material provisions of the Noncompete Agreements;

 

(x) Separateness
from Affiliates.
Commingle the funds and other assets of any Issuer with those of Freedom
Financial or any other Affiliate that is not an Issuer or any other Person, keep
the Issuers’ funds in bank accounts that are separate and apart from those of
Freedom Financial and any of other Affiliates that are not Issuers or other
Persons, and keep the Issuers’ other assets separately identifiable and
distinguishable from assets of any Affiliates that are not Issuers or any other
Persons; and

 

(y) Take
or Pay Contracts. Enter
into or be a party to any contract or agreement for the purchase of materials,
supplies or other property or services if such contract or agreement requires
that a payment be made by an Issuer regardless of whether delivery is ever made
of such materials, supplies or other property or services.

 

4.5 Financial
Covenants So long
as any of the Notes or any notes issued in exchange for any Securities remain
outstanding and prior to the indefeasible payment in full of all amounts due and
owing thereunder, the Issuers (on a consolidated basis with all Subsidiaries)
covenant to Purchaser as follows: 

 

(a) Net
Worth. The
Issuers shall maintain Net Worth as of the last day of each fiscal quarter in an
amount not less than (1) for each fiscal quarter during the 2005 fiscal year,
$2,500,000.00 and (2) for each fiscal quarter during the 2006 fiscal year and
during each fiscal year thereafter, $2,500,000.00 plus 50% of
annual net income for the immediately preceding fiscal year.

 

(b) Total
Funded Debt to EBITDA. The
Issuers shall maintain, as of the last day of each fiscal quarter, a ratio of
(1) Total Funded Debt at such time to (2) EBITDA for the four fiscal quarters
then most recently ended* of not more than: a) 3.00 to 1.00 from Closing until
the quarter ending June 30, 2005; b) 2.50 to 1.00 for the quarter ending
September 30, 2005; and c) 2.00 to 1.00 for all periods thereafter.

 

*For
purposes of calculating EBITDA for this covenant, EBITDA shall be $999,947 for
the fiscal quarter ended March 31, 2004, $1,759,378 for the fiscal quarter ended
June 30, 2004, and $1,234,602 for the fiscal quarter ended September 30, 2004.

 

(c) Fixed
Charge Coverage Ratio. The
Issuers shall maintain a ratio, as of the last day of each fiscal quarter
(calculated on a rolling four fiscal quarter basis as of the end of each fiscal
quarter*), of (1) EBITDA minus (i) taxes for such period only to the extent
deducted in determining net income and (ii) amounts expended by the Issuers to
purchase fixed assets to (2) Fixed Charges of not less than 1.20 to 1.00.

 

*For
purposes of calculating EBITDA for this covenant, EBITDA shall be $999,947 for
the fiscal quarter ended March 31, 2004, $1,759,378 for the fiscal quarter ended
June 30, 2004, and $1,234,602 for the fiscal quarter ended September 30, 2004.
For purposes of calculating Fixed Charges for this covenant, Fixed Charges shall
be $95,094 for the fiscal quarter ended March 31, 2004, $299,904 for the fiscal
quarter ended June 30, 2004, and $365,201 for the fiscal quarter ended September
30, 2004.

 

31

 

(d) Maximum
Capital Expenditures. The
Issuers shall not make Capital Expenditures during any fiscal year in an
aggregate amount for all Issuers in excess of $1,500,000.00.

 

4.6 Use of
Proceeds The
Issuers shall not use any proceeds from the sale of the Securities hereunder,
directly or indirectly, for the purposes of purchasing or carrying any “margin
securities” within the meaning of Regulation U promulgated by the Board of
Governors of the Federal Reserve Board or for the purpose of arranging for the
extension of credit secured, directly or indirectly, in whole or in part by
collateral that includes any “margin securities.”

 

4.7 Compliance
with Securities Laws Issuers
shall at all times comply with all applicable provisions of the Securities Act,
the Securities Exchange Act, and all applicable rules and regulations of the
Securities Exchange Commission.

 

4.8 Public
Disclosures The
Issuers shall not disclose Purchaser’s name or identity as an investor in the
Issuers in any press release or other public announcement or in any document or
material filed with any governmental entity, without the prior written consent,
of such Purchaser unless such disclosure is required by law, statute, rule or
regulation or by order of a court of competent jurisdiction, in which case prior
to making such disclosure the Issuers shall give written notice to such
Purchaser describing in reasonable detail the proposed content of such
disclosure and shall permit the Purchaser to review and comment upon the form
and substance of such disclosure.

 

4.9 Further
Assurances At any
time and from time to time, upon the request of the Purchaser, the Issuers
shall, and shall cause each other Issuer to execute, deliver and acknowledge or
cause to be executed, delivered and acknowledged, such further documents and
instruments and do such other acts and things as so requested in order to fully
effect the purposes of this Agreement, the other Investment Documents and any
other agreements, instruments and documents delivered pursuant hereto or in
connection with the Securities and any notes issued in exchange for any
Securities. In addition, if requested by the Purchaser, each Issuer shall, and
shall cause each other Issuer to, obtain and promptly furnish to the Purchaser
evidence of all governmental approvals as may be required to enable each Issuer
comply with its respective Obligations under the Investment Documents and to
continue in business as conducted on the date hereof without Material
interruption or interference.

 

4.10 Put
Provisions .

 

(a) At any
time during the period commencing on the earlier to occur of (i) the fifth
anniversary of the date of Closing, (ii) the indefeasible payment in full of all
principal, interest, premiums (if any) and other amounts due in respect of the
Notes and any notes issued in exchange for any Securities, or (iii) the
occurrence of an Event of Default and for so long as such Event of Default is
continuing, Purchaser shall have the right by delivering a written notice (the
“Put
Notice”) to RMI
to put at any time or times all or a portion (not less than one-third) of the
Equity Interests of RMI then held by Purchaser (“Put
Equity”) at a
price (the “Put
Price”) equal
to Purchaser’s pro rata portion of the greater of (x) the Fair Market Value of
RMI, and (y) (5) times RMI’s Weighted Average EBITDA, less
Indebtedness,
plus cash and
marketable securities. 

 

32

 

(b) In no
event shall the Put Notice be delivered prior to the first anniversary of the
date of this Agreement. Upon the delivery of any Put Notice, RMI and Purchaser
shall promptly (and in any event within 10 Business Days
after the Delivery Date) meet for the purpose of determining the Put Price. RMI
shall purchase all Put Equity requested to be repurchased in the Put Notice, at
a mutually agreeable time and place, which will in no event be later than 90
days after the date of the delivery of the Put Notice (the “Put
Closing”).

 

(c) At any
Put Closing, Purchaser shall deliver RMI certificates representing the Put
Equity held Purchaser and RMI shall deliver to Purchaser the product of (i) the
Put Price multiplied by (ii) the number of units of Put Equity owned by
Purchaser by cashier’s or certified check or wire transfer of immediately
available funds payable to Purchaser. RMI will undertake reasonable efforts (as
defined below) during the 90-day period immediately following the Delivery Date
of the Put Notice to finance the payment of the Put Price in accordance with
this Section so that the Put Price may be paid in full in cash, but only to the
extent such financing can be obtained on commercially reasonable terms. Such
reasonable efforts shall include, but shall not be limited to, pursuing private
offerings of equity or debt securities, restructuring of RMI’s debt and other
recapitalizations. If, notwithstanding such reasonable efforts, RMI is unable to
purchase all of the Put Equity at a Put Closing in cash within such 90-day
period, RMI will at such Put Closing pay the maximum portion of the Put Price
which they are legally able to pay in cash and pay the remaining portion of the
Put Price that they are not able to pay in cash by issuing to the holders of Put
Equity promissory notes (the “Put
Notes”) with a
term to maturity not to exceed two years and accruing interest at an annual rate
equal to (i) for the first twelve months of the term of the applicable Put Note,
Prime Rate plus 6.00% per annum, and (ii) for the second twelve months of the
term of the applicable Put Note, Prime Rate plus 7.00% per annum, in each case
fully amortizing and payable in equal monthly payments of principal and
interest. After a Put Closing, RMI will, and will cause each of its Affiliates
to, continuously undertake reasonable efforts to arrange debt or equity
financing in order to retire Put Notes for cash and will provide to the holders
of such Put Notes any information regarding RMI’s efforts to obtain such
financing as is reasonably requested by any such holder of Put Notes. For the
avoidance of doubt, Put Notes shall be deemed to be “notes issued in exchange
for Securities” and as a result the provisions of this Agreement applicable to
the same shall apply in all circumstances to all Put Notes.

 

(d) Notwithstanding
anything contained herein to the contrary, if RMI is not able to pay the Put
Price in full in cash within 90 days after the delivery of a Put Notice,
Purchaser may rescind the exercise of the put option at Purchaser’s sole
election by delivering written notice to RMI within 30 days after RMI notifies
Purchaser that it will be unable to pay the Put Price in full in cash. If RMI
fails to satisfy its obligations pursuant to this Section
4.10
Purchaser may pursue any and all rights and remedies at law or in
equity.

 

4.11 Call
Provisions Until the
third anniversary of the Closing Date, RMI shall have the right (“Issuer
Call Option”) to
cause the Purchaser to sell to RMI any Warrants or Securities acquired in the
exercise of the applicable Warrants representing in excess of 5% of the stock of
RMI at a purchase price equal to an amount, after payment of the pro rata
principal (up to 50%) of the Note, that would permit the Purchaser to earn an
IRR on the Purchaser’s investment of 24%, if exercised on or before the third
anniversary of the Closing Date.

 

33

 

4.12 SBIC
Regulatory Provisions .

 

(a) Equity
holders. As long
as any SBIC Holder holds any Securities or any securities issued by the Issuers
with respect thereto, the Issuers, as applicable, shall notify such SBIC Holder
(i) at least 15 days prior to taking any action after which the number of record
holders of the applicable Issuer’s voting securities would be increased from
fewer than 50 to 50 or more and (ii) of any other action or occurrence after
which the number of record holders of the Issuer’s voting securities was
increased (or would increase) from fewer than 50 to 50 or more, as soon as
practicable after the Issuers, as applicable, becomes Aware that such other
action or occurrence has occurred or is proposed to occur. 

 

(b)
 Use of
Proceeds. On the
Closing Date and at such times as any SBIC Holder requests upon the express
requirement of the SBA, the Issuers shall deliver to each SBIC Holder a written
statement on behalf of each of the Issuers, certified by the respective chief
executive officer of the Issuers describing in reasonable detail the use of the
proceeds of the Financing hereunder by the Issuers. In addition to any other
rights granted hereunder, subject to the confidentiality provisions in
Section
8.24 the
Issuers shall, and shall cause each of its Subsidiaries to, grant such SBIC
Holder and the SBA access during normal business hours to their books, and
records for the purpose of verifying the use of such proceeds and verifying the
certifications made by the Issuers in SBA Forms 480, 652 and 1031 delivered
pursuant to Section
3.13 and for
the purpose of determining whether the principal business activity of the
Issuers continues to constitute an eligible business activity (within the
meaning of the SBIC Regulations). 

 

(c)
 Regulatory
Violation. Upon
the occurrence of a Regulatory Violation or if any SBIC Holder determines in its
good faith judgment that a Regulatory Violation has occurred, in addition to any
other rights and remedies to which it may be entitled as a holder of the
Securities, any notes issued in exchange for any Securities or any other Equity
Interests of the Issuers (whether under the Investment Documents, any Issuer’s
Governing Documents or otherwise), each SBIC Holder shall have the right to the
extent required under the SBIC Regulations to demand, upon 30 days prior written
notice to the Issuers (during which 30-day time period Issuers may attempt to
cure the applicable Regulatory Violation), the immediate purchase of all (or any
portion) of the outstanding Securities, notes issued in exchange for any
Securities any other Equity Interests of any Issuer owned by such SBIC Holder at
a price equal to the purchase price paid, directly or indirectly, for such
Securities, notes issued in exchange for any Securities, and any other Equity
Interests of any Issuer, plus all accrued interest on the Notes and any notes
issued in exchange for the Securities, by delivering written notice of such
demand to the Issuer. Each such Issuer shall be obligated to pay the purchase
price for these items by a cashier’s or certified check or by wire transfer of
immediately available funds to each SBIC Holder demanding purchase within 30
days after any Issuer’s receipt of the demand notice, and upon such payment,
each such SBIC Holder shall deliver the certificates evidencing the items to be
purchased duly endorsed for transfer or accompanied by duly executed forms of
assignment. 

 

34

 

(d)
 Regulatory
Compliance Cooperation. If any
SBIC Holder believes that it has a Regulatory Problem, such SBIC Holder shall
have the right to transfer its Securities, any notes issued in exchange for any
Securities and any other Equity Interests of any Issuer without regard to any
restrictions on transfer set forth in the Investment Documents, but otherwise in
accordance with applicable securities law (provided that the
transferee agrees to become a party to the applicable Investment Documents), and
each Issuer shall take all such actions as are reasonably requested by such SBIC
Holder in order to (i) effectuate and facilitate any transfer by such SBIC
Holder of such items then held by such SBIC Holder to any Person designated by
such SBIC Holder, (ii) permit such SBIC Holder (or any of its Affiliates) to
exchange all or any portion of the Securities or any other Equity Interests of
any Issuer that are voting securities then held by it on a unit-for-unit basis
for units of a class of nonvoting equity securities of any Issuer, which
nonvoting equity securities shall be identical in all respects to such exchanged
equity securities, except that such equity securities shall be nonvoting and
(iii) amend this Agreement and the Governing Documents of such Issuer and
related agreements and instruments to effectuate and reflect the foregoing.

 

(e)
 Economic
Impact Information.
Promptly after the end of each calendar year (but in any event prior to February
28 of each year), the Issuers shall deliver to each SBIC Holder a written
assessment of the economic impact of each SBIC Holder’s investment in the
Issuers, specifying the full-time equivalent jobs created or retained in
connection with the investment, the impact of the Investment on the businesses
of the Issuers and on taxes paid by the Issuers and their employees.

 

Section
5. Registration
Rights The
Purchaser shall be entitled to the registration rights contained in Appendix
1 to this
Agreement, the terms of which are incorporated herein by reference.

 

Section
6. Representations
and Warranties of the Issuers As a
material inducement to Purchaser to enter into this Agreement and purchase the
Securities hereunder, the Issuers each, jointly and severally, hereby represent
and warrant to Purchaser as follows, except as set forth on the R&W
Exception Schedule to this
Agreement: 

 

6.1 Organization,
Corporate Power and Licenses Each
Issuer is a corporation, duly incorporated, validly existing and in good
standing under the laws of the state of its incorporation, and is qualified to
do business in every jurisdiction in which its ownership of property or conduct
of business requires it to qualify. Each Issuer possesses all requisite company
power and authority and all licenses, permits and authorizations necessary to
own and operate its properties, to carry on its businesses as now conducted and
presently proposed to be conducted and to carry out the transactions
contemplated by the Investment Documents where the failure to possess such
licenses, permits, or authorizations could reasonably be expected to have a
Material Adverse Effect. The copies of each Issuer’s Governing Documents which
have been furnished to Purchaser reflect all amendments made thereto at any time
prior to the date of this Agreement and are correct and complete. The exact
state organizational number of each Issuer is set forth on the Organization
Schedule. Each
Issuer has delivered to the Purchaser true and complete copies of its
certificate of incorporation and bylaws, as the case may be and will promptly
notify the Purchaser of any amendment or changes thereto. The exact name of
Purchaser is set forth in the preamble of this Agreement. No Issuer has been
known by any other corporate, limited liability company or partnership name in
the past five (5) years except as set forth on Organization
Schedule, nor has
any Issuer been the surviving corporation of a merger or consolidation or
acquired all or substantially all of the assets of any Person during the
preceding five (5) years except as set forth on the Organization
Schedule.

 

35

 

6.2 Capitalization
and Related Matters .

 

(a) The
attached Capitalization
Schedule
accurately sets forth the following information with respect to each Issuer’s
capitalization as of the Closing Date and immediately thereafter (i) the
authorized Equity Interests of each Issuer, (ii) the number of shares of each
class of Equity Interests or each Issuer issued and outstanding, (iii) the
number of shares of each class of Equity Interests of each Issuer reserved for
issuance upon exercise of any Convertible Securities and (iv) the name of each
holder of Equity Interests in each Issuer and the number of shares owned by each
such holder of such Equity Interests. As of the Closing Date, the Issuers do not
have outstanding any of its Equity Interests, except for the Securities and
except as set forth on the Capitalization
Schedule. As of
the Closing Date, no Issuer is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any of their Equity
Interests, except as set forth on the Capitalization
Schedule and
except pursuant to the terms of the Securities. As of the Closing Date, all of
the outstanding Equity Interests of the Issuers shall be validly issued, fully
paid and nonassessable.

 

(b) There are
no statutory or, to any Issuer’s Knowledge, contractual equity holders’
preemptive rights or rights of refusal with respect to the issuance of the
Securities hereunder. The Issuers have not violated and will not violate any
applicable federal or state securities laws in connection with the offer, sale
or issuance of any of its Equity Interests, and the offer, sale and issuance of
the Securities hereunder does not require registration under the Securities Act
or any applicable state securities laws. To the Issuers’ Knowledge, there are no
agreements between the holders of any Issuer’s Equity Interests with respect to
the voting, transfer or other control of the Issuers’ Equity Interests.

 

6.3 [Reserved]. 

 

 6.4 Authorization;
No Breach The
execution, delivery and performance of each of the Investment Documents and all
other agreements and instruments contemplated hereby and thereby to which each
Issuer is a party have been duly authorized by such Issuer. Each of the
Investment Documents, each Issuer’s Governing Documents and all other agreements
and instruments contemplated hereby and thereby to which an Issuer is a party
each constitutes a valid and binding obligation of such Issuer, enforceable in
accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, receivership,
moratorium and other similar laws relating to or affecting the rights and
remedies of creditors generally and by general principles of equity. Except as
set forth on the attached Restrictions
Schedule, the
execution and delivery by each Issuer of each of the Investment Documents and
all other agreements and instruments contemplated hereby and thereby to which it
is a party, the offering, sale and issuance of the Securities hereunder and the
fulfillment of and compliance with the respective terms hereof and thereof by
such Issuer, do not and shall not: (a) conflict with or result in a breach of
the terms, conditions or provisions of; (b) constitute a default under; (c)
result in the creation of any Lien upon such Issuer’s Equity Interests or assets
pursuant to; (d) give any third party the right to modify, terminate or
accelerate any obligation under; (e) result in a violation of; or (f) require
any authorization, consent, approval, exemption or other action by or notice or
declaration to, or filing with, any court or administrative or governmental body
or agency pursuant to, the Governing Documents of such Issuer, or any law,
statute, rule or regulation to which such Issuer is subject (including any usury
laws applicable to the Notes), or any agreement, instrument, order, judgment or
decree to which such Issuer is subject. Except as set forth on the Restrictions
Schedule, none of
the Issuers are subject to any restrictions upon making loans or advances or
paying Dividends to, transferring property to, or repaying any Indebtedness owed
to, any other Issuer.

 

36

 

6.5 Projections
and Pro Forma Financial Statements .

 

(a) Attached
hereto as Exhibit
M is a
correct and complete copy of the latest projections of the consolidated income
and cash flows of the Issuers for the 12 months following Closing. Such
projections are based on underlying assumptions of the Issuers that the Issuers
reasonably believe provide a reasonable basis for the projections contained
therein. Such projections have been prepared on the basis of the assumptions set
forth therein, which the Issuers reasonably believe are fair and reasonable in
light of the historical financial performance of the Issuers and of current and
reasonably foreseeable business conditions and reflect the reasonable estimate
of the Issuers of the results of operations and other information projected
therein.

 

(b) The pro
forma consolidated balance sheet of the Issuers as of a date within 30 days of
the Closing Date (the “Pro
Forma Balance Sheet”),
attached hereto as Exhibit
N, is
complete and correct in all material respects and presents fairly in all
material respects the consolidated financial condition of the Issuers as of such
date as if the transactions contemplated by the Investment Documents had
occurred immediately prior to such date, and such balance sheet contains all pro
forma adjustments necessary in order to fairly reflect such assumption.

 

6.6 Absence
of Undisclosed Liabilities To the
Issuers’ Knowledge, no Issuer has any obligation or liability (whether accrued,
absolute, contingent, unliquidated or otherwise, whether or not known to any
Issuer, whether due or to become due and regardless of when asserted) arising
out of transactions entered into at or prior to the Closing, or any action or
inaction at or prior to the Closing, or any state of facts existing at or prior
to the Closing other than: (a) liabilities set forth on the Pro Forma Balance
Sheet (including any notes thereto); and (b3) other liabilities and obligations
expressly disclosed on the attached Liabilities
Schedule.

 

6.7 No
Material Adverse Change Since the
date of the Latest Balance Sheet, there has been no change in the operating
results, assets, liabilities, operations, prospects, business, condition
(financial or otherwise), employee relations, customer relations or supplier
relations of any Issuer, taken as a whole, which has had or could reasonably be
expected to have, a Material Adverse Effect.

 

6.8 Assets Except as
set forth on the attached Assets
Schedule, upon
Closing each Issuer will have good and marketable title to, or a valid leasehold
interest in the material properties and assets located on their premises or
shown on the Pro Forma Balance Sheet, free and clear of all Liens, except for
Permitted Liens. Except as described on the Assets
Schedule, upon
Closing each Issuer’s buildings, equipment and other tangible assets will be in
good operating condition (ordinary wear and tear excepted) and are fit for use
in the ordinary course of business. Upon the Closing, each Issuer will own, or
have a valid leasehold interest in, all assets necessary for the conduct of its
business conducted as of the Closing Date.

 

37

 

6.9 Tax
Matters Except as
set forth on the attached Taxes
Schedule:

 

(a) Each
Issuer has filed all federal and other Material Tax Returns which they are
required to file under applicable laws and regulations; all such Tax Returns are
complete and correct in all Material respects and to the Knowledge of the
Issuers have been prepared in compliance with all applicable laws and
regulations in all Material respects.

 

(b) None of
the Issuers have made an election under §341(f) of the Code. None of the Issuers
are liable for the Taxes of another Person that is not another Issuer (i) other
than as set forth on the Taxes
Schedule under
Treas. Reg. § 1.1502-6 (or comparable provisions of state, local or foreign law,
statute, rule or regulation), (ii) as a transferee or successor or (iii) by
contract, indemnity or otherwise. None of the Issuers are a party to any tax
sharing agreement. The Issuers and each Affiliated Group have disclosed on their
federal income Tax Returns any position taken for which substantial authority
(within the meaning of Code §6662(d)(2)(B)(i)) did not exist at the time the
return was filed. None of the Issuers have made any payments, is obligated to
make payments or is a party to an agreement that could obligate it to make any
payments that would not be deductible under Code §280G.

 

(c) No Issuer
has been a member of an Affiliated Group other than as set forth on the
Taxes
Schedule, or
filed or been included in a combined, consolidated or unitary income Tax Return,
other than as set forth on the Taxes
Schedule.

 

6.10 Contracts
and Commitments .

 

(a) Except
for documents and agreements described on the Contracts Schedule, no
Issuer is: (a) a party to any contract or agreement, or subject to any corporate
or other restriction, that could reasonably be expected to have a Material
Adverse Effect, (b) a party to any material contract or agreement that restricts
the right or ability of such Issuer to incur Indebtedness, other than this
Agreement, and except for the Liens granted to the Lender, no Issuer has agreed
or consented to cause or permit in the future (upon the happening of a
contingency or otherwise) any Lien upon any Property of an Issuer, whether now
owned or hereafter acquired.

 

(b) No Issuer
will be in default under or in breach of nor in receipt of any claim of default
or breach under any contract, agreement or instrument to which such Issuer is
subject where such default or breach could reasonably be expected to have a
Material Adverse Effect.

 

(c) Purchaser
has been supplied with a correct and complete copy of each of the written
contracts, agreements and instruments and other items and an accurate
description of each of the oral contracts and agreements which are referred to
on the Contracts
Schedule to this
Agreement, together with all amendments, waivers or other changes
thereto.

 

38

 

6.11 Intellectual
Property Rights The
attached Intellectual
Property Schedule contains
a complete and accurate list of all material (i) patented or registered
Intellectual Property Rights owned or used by any Issuer, (ii) pending patent
applications and applications for registrations of other Intellectual Property
Rights filed by any Issuer, (iii) unregistered trade names and corporate names
used by any Issuer and (iv) unregistered trademarks, service marks, internet
domain names, copyrights, mask works and computer software owned or used by any
Issuer.

 

6.12 Litigation,
etc Except as
set forth on the Litigation
Schedule, there
are no actions, suits, proceedings, orders, investigations or claims pending or,
to the Issuers’ Knowledge, threatened against or affecting any Issuer (or to any
Issuer’s Knowledge, pending or threatened against or affecting any of the
officers, directors or employees of any Issuer with respect to their businesses
or proposed business activities), or pending or threatened by any Issuer against
any third party, at law or in equity, or before or by any governmental
department, commission, board, bureau, agency or instrumentality (including,
without limitation, any actions, suit, proceedings or investigations with
respect to the transactions contemplated by this Agreement), which have had or
could reasonably be expected to have a Material Adverse Effect.

 

6.13 Brokerage Other
than as set forth in the Broker
Schedule, there
are no claims for brokerage commissions, finders’ fees or similar compensation
in connection with the transactions contemplated by the Investment Documents
based on any arrangement or agreement binding upon any Issuer. Each Issuer shall
pay, and hold Purchaser harmless against, any liability, loss or expense
(including reasonable attorneys’ fees and out-of-pocket expenses) arising in
connection with any such claim.

 

6.14 Governmental
Consent, etc. Except
for the filings and recordings in connection with the Investment Documents, no
permit, consent, approval or authorization of, or declaration to or filing with,
any governmental authority is required in connection with the execution,
delivery and performance by each Issuer of the Investment Documents and the
other agreements contemplated hereby and thereby, except for state and federal
securities law filings that in any event need not be filed prior to
Closing.

 

6.15 Insurance Effective
as of the Closing Date, the insurance coverage of the Issuers will be customary
for prudent companies of similar size engaged in similar lines of
business.

 

6.16 Employees No Issuer
is Aware that any executive or key employee of any Issuer or any group of
employees of any Issuer has any plans to terminate employment with any Issuer.
The Issuers have complied in all material respects with all laws, statutes,
rules and regulations relating to the employment of labor (including provisions
thereof relating to wages, hours, equal opportunity, collective bargaining and
the payment of social security and other taxes), and Issuers are not Aware that
any Issuer has any material labor relations problems (including any union
organization activities, threatened or actual strikes or work stoppages or
material grievances). To the Issuers’ Knowledge, no Issuer or any of their
employees is subject to any noncompete, nondisclosure, confidentiality,
employment, consulting or similar agreements relating to, affecting or in
conflict with the present or proposed business activities of any Issuer, except
for agreements between any Issuer and their respective present and former
employees.

 

39

 

6.17 ERISA .

 

(a) No Issuer
has any obligation to contribute to (or any other liability, including current
or potential withdrawal liability with respect to) any “multiemployer plan” (as
defined in §3(37) of ERISA.

 

(b) No Issuer
has any obligation to contribute to (or any other liability with respect to) any
plan or arrangement whether or not terminated, which provides medical, health,
life insurance or other welfare-type benefits for current or future retired or
terminated employees (except for limited continued medical benefit coverage
required to be provided under Section 4980B of the Code or as required under
applicable state law).

 

(c) No Issuer
maintains, contributes to or has any liability under (or with respect to), any
employee plan which is a tax-qualified “defined benefit plan” (as defined in
§3(35) of ERISA), whether or not terminated.

 

(d) No Issuer
maintains, contributes to or has any liability under (or with respect to) any
employee plan which is a tax-qualified “defined contribution plan” (as defined
in §3(34) of ERISA), whether or not terminated.

 

(e) No Issuer
maintains, contributes to, or has any liability under (or with respect to) any
plan or arrangement providing benefits to current or former employees, including
any bonus plan, plan for deferred compensation, employee health or other welfare
benefit plan or other arrangement, whether or not terminated.

 

(f) For
purposes of this Section, the term “Issuers” includes all organizations
constituting an ERISA Affiliate of any Issuer. 

 

6.18 Compliance
with Laws To the
Issuers’ Knowledge, no Issuer has violated any law, statute, rule or regulation
which violation has had or could reasonably be expected to have a Material
Adverse Effect, and no Issuer has received written notice of any such
violation.

 

6.19 Small
Business Matters Each
Issuer acknowledges that Purchaser is a federally licensed SBIC under the SBIC
Act. Each Issuer, together with its “affiliates” (as that term is defined in 13
CFR §121.103), is a “small business concern” within the meaning of the SBIC
Regulations, including 13 CFR §121.103. The Issuers will have 500 or fewer
full-time equivalent employees. The information regarding the Issuers and
affiliates (as defined above) set forth in the Small Business Administration
Form 480, Form 652 and Form 1031 delivered at the Closing is accurate and
complete. Copies of such forms have been completed and executed by each Issuer
and delivered to Purchaser at the Closing together with a written statement of
each Issuer regarding the planned use of the proceeds from the sale of the
Securities. No Issuer presently engages in, and the Issuers shall ensure that no
Issuer hereafter engages in, any activities, or uses, directly or indirectly,
the proceeds of the sale of the Securities for any purpose, for which an SBIC is
prohibited from providing funds by the SBIC Regulations (including 13 CFR
§107.720).

 

6.20 Affiliated
Transactions Except as
set forth on the attached Affiliated
Transactions Schedule, no
officer, manager, director, employee, member, stockholder, partner, limited
partner, owner, principal or Affiliate of any Issuer or any Person related, by
blood, marriage or adoption to any such Person in which any such Person owns any
beneficial interest, is a party to any agreement, contract, commitment,
transaction or arrangement with any Issuer or has any Material interest in any
Material property used by any Issuer, except for employment arrangements and
compensation in the ordinary course of business, consistent with past
practice.

 

40

 

6.21 Investment
Company No Issuer
is an “investment company” or an “affiliated person” of, or “promoter” or
“principal underwriter” for, an “investment company,” as such terms are defined
in the Investment Company Act of 1940, as amended, modified, supplemented, or
replaced from time to time, or is any Issuer, directly or indirectly, controlled
by or acting on behalf of any Person which is an “investment company” within the
meaning of such act. The purchase of the Securities, the application of the
proceeds and repayment thereof by each Issuer and the consummation of the
transactions contemplated by the Investment Documents will not violate any
provision of such act or any rule, regulation or order issued by the Securities
and Exchange Commission.

 

6.22 Margin
Regulations No Issuer
owns any “margin stock,” as the term is defined in Regulation U of the Federal
Reserve Board, and the proceeds of the sale of the Securities will be used only
for the purposes contemplated hereunder. None of the proceeds of the sale of the
Securities will be used, directly or indirectly, for the purpose of purchasing
or carrying any margin security, for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry any margin
security or for any other purpose which might cause the loans hereunder to be
considered “purpose credit” within the meaning of Regulations U or X of the
Federal Reserve Board. The purchase of the Securities will not constitute a
violation of such Regulations U or X.

 

6.23 Public
Utility Holding Company Act No Issuer
is a “holding company,” or a “subsidiary company” of a “holding company,” or an
“affiliate” of a “holding company,” or an “affiliate” of a “subsidiary company”
of a “holding company,” within the meaning of the Public Utility Holding Company
Act of 1935, as amended, modified, supplemented, or replaced from time to
time.

 

6.24 Customers
and Suppliers .

 

(a) The
attached Vendor
Schedule lists
the 10 largest clearinghouses and magazine publications of the Issuers since
January 1, 2003 and sets forth opposite the name of each such supplier the
percentage of consolidated net purchases related to such supplier.

 

(b) Since the
date of the Latest Balance Sheet, no Material supplier of the Issuers has
indicated that it shall stop, or materially decrease the rate of, supplying
materials, products or services to such company, and no publisher or
clearinghouse listed on the Vendor
Schedule has
indicated that it shall stop, or materially decrease the rate of, supplying
materials, products or services to the Issuers once the transactions
contemplated by the Investment Documents occur.

 

6.25 Disclosure Neither
this Agreement nor any of the schedules, attachments, written statements,
documents, certificates or other items prepared or supplied to Purchaser by or
on behalf of each Issuer with respect to the transactions contemplated hereby
contain any untrue statement of a Material fact or omit a Material fact
necessary to make each statement contained herein or therein not misleading.
There is no fact that any Issuer has disclosed to Purchaser in writing and of
which it is Aware (other than general economic conditions) which, taken as a
whole, has had or could reasonably be expected to have a Material Adverse
Effect.

 

41

 

6.26 Closing
Date The
representations and warranties of each Issuer contained in this Agreement and
elsewhere in the Investment Documents and all information contained in any
exhibit, schedule or attachment hereto or thereto or in any certificate or other
writing delivered by, or on behalf of, each Issuer to Purchaser is and shall be
complete and correct as of the Closing Date (both immediately prior to and
immediately after giving effect to the transactions contemplated by the
Investment Documents).

 

Section
7. Events
of Default .

 

7.1 Definition An
“Event
of Default” shall
be deemed to have occurred if:

 

(a) Failure
to Make Payments. Any
Issuer fails to pay when due and payable (whether at maturity or otherwise),
after giving effect to all applicable notice and grace periods and, if no such
grace periods are provided, a grace period of 5 Business Days (without notice),
the full amount of interest then accrued on any Notes or any notes issued in
exchange for any Securities, or the full amount of any principal payment
(together with any applicable premium) on any Notes or any notes issued in
exchange for any Securities or any other amounts payable under the Securities or
the Investment Documents;

 

(b) Failure
to Observe Covenants. Any
Issuer:

 

(i) breaches,
fails to perform or observe any of the covenants contained in Sections
4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.10, 4.11, or
4.12 (and
such failure continues uncured for 10 Business Days); or

 

(ii) breaches,
fails to perform or observe any other provision contained in the Investment
Documents and (A) if such failure has had or could reasonably be expected to
have a Material Adverse Effect and such failure continues uncured for 15 days or
(B) if such failure has not had and could not reasonably expected to have a
Material Adverse Effect and such failure continues uncured for 30 days or the
Issuers are not proceeding diligently to cure such failure;

 

(c) Representations. Any
representation, warranty or information contained herein or required to be
furnished to any holder of the Securities pursuant to the Investment Documents,
or any writing furnished by any Issuer to any holder of the Notes, is false or
misleading in any material respect on the date made, repeated or
furnished;

 

(d) Insolvency. Any
Issuer makes an assignment for the benefit of creditors or admits in writing its
inability to pay its debts generally as they become due, or an order, judgment,
decree or injunction is entered adjudicating such Issuer bankrupt or insolvent
or requiring the dissolution or split up of such Issuer or preventing such
Issuer from conducting all or any part of its business; or any order for relief
with respect to any Issuer is entered under the Federal Bankruptcy Code; or any
Issuer petitions or applies to any tribunal for the appointment of a custodian,
trustee, receiver or liquidator of such Issuer, or of any substantial part of
the assets of such Issuer, or commences any proceeding (other than a proceeding
for the voluntary liquidation and dissolution of any of its Subsidiaries)
relating to such Issuer under any bankruptcy reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar laws of
any jurisdiction now or hereafter in effect; or any such petition or application
is filed, or any such proceeding is commenced, against such Issuer and either
(i) such Issuer by any act indicates its approval thereof, consent thereto or
acquiescence therein or (ii) such petition, application or proceeding is not
dismissed within 60 days;

 

42

 

(e) Payments
on Indebtedness. Any
Issuer shall fail to pay when due any principal of or interest on any
Indebtedness (other than the Indebtedness owing to Purchaser), which failure
could reasonably be expected to have a Material Adverse Effect, or the maturity
of any such Indebtedness shall have been accelerated, or any such Indebtedness
shall have been required to be prepaid prior to the stated maturity thereof and
such prepayment would have a Material Adverse Effect;

 

(f) Impairment
of Security. This
Agreement or any other Investment Documents shall cease to be in full force and
effect or shall be declared null and void or the validity or enforceability
thereof shall be contested or challenged by any Issuer, Jeffrey Hoyal, or Dennis
Simpson, or any Issuer shall deny that it has any further liability or
obligation under any of the Investment Documents, or any Lien created by the
Investment Documents in favor of Purchaser shall for any reason cease to be a
valid, first or second priority (as applicable based on the priority intended to
be provided to Purchaser under the Investment Documents) perfected security
interest in and Lien upon any of the Collateral purported to be covered
thereby;

 

(g) ERISA
Matters. (i)
With respect to any Pension Plan, a prohibited transaction within the meaning of
§4975 of the Code or §406 of ERISA occurs which in the reasonable determination
of Purchaser could result in liability to the Issuers, (ii) with respect to any
Title IV Plan, the filing of a notice to voluntarily terminate any such plan in
a distress termination, (iii) with respect to any Multiemployer Plan, the
Issuers or any ERISA Affiliate shall incur any Withdrawal Liability, (iv) with
respect to any Qualified Plan, the Issuers or any ERISA Affiliate shall incur an
accumulated funding deficiency or request a funding waiver from the IRS, or (v)
with respect to any Title IV Plan or Multiemployer Plan which has an ERISA Event
not described in clauses (ii) through (iv) hereof, in the reasonable
determination of Purchaser there is a reasonable likelihood for termination of
any such plan by the PBGC; provided, that
the events listed in clauses (i) through (v) hereof shall constitute Events of
Default only if the liability, deficiency or waiver request of the Issuers or
any ERISA Affiliate, whether or not assessed, could, in the opinion of
Purchaser, reasonably be expected to have a Material Adverse
Effect;

 

(h) Seizure
of Assets. Any
Issuer or any of their properties, revenues, or assets in an aggregate amount in
excess of $150,000.00, shall become subject to an order of forfeiture, seizure,
or divestiture (whether under RICO or otherwise) and the same shall not have
been discharged within 30 days from the date of entry thereof;

 

43

 

(i) Attachment
of Assets. Any
Issuer shall fail to discharge within a period of thirty 30 days after the
commencement thereof any attachment, sequestration, or similar proceeding or
proceedings involving an aggregate amount in excess of $150,000.00 against any
of its assets or properties;

 

(j) Change
in Management. Any
change in the chairman, chief executive officer, or president of RMI shall
occur, or Jeffrey Hoyal or Dennis Simpson are no longer engaged in the
management of the Issuers, in each case when compared to the management as of
the date of this Agreement, and a suitable replacement for any such Person
reasonably acceptable to Purchaser is not made within 60 days.

 

(k) Entry
of Judgment. A final
judgment or judgments for the payment of money in excess of $150,000.00 in the
aggregate shall be rendered by a court or courts against any Issuer and the same
shall not be discharged (or provision shall not be made for such discharge), or
a stay of execution thereof shall not be procured, within 45 days from the date
of entry thereof and any Issuer shall not, within said period of 45 days, or
such longer period during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be stayed during such
appeal.

 

(l) Termination
of Pension Plan. The
institution of any steps by any Issuer or any ERISA Affiliate or any other
Person to terminate a Pension Plan if, as a result of such termination, an
Issuer or any such ERISA Affiliate could be required to make a contribution to
such Pension Plan, or could reasonably expect to incur a liability or obligation
to such Pension Plan, and such contribution, liability or obligation could
reasonably be expected to have a Material Adverse Effect;

 

(m) Failure
to Observe Other Obligations. Any
Issuer defaults (after giving effect to all applicable grace and cure periods)
in the payment when due, or in performance or observance of, any Material
obligation of, or condition agreed to by, any Issuer with respect to any
Material purchase or lease of goods or services, which defaults are not cured
within 5 days after written notice from the Purchaser, where such default,
singly or in the aggregate with all other such defaults, could reasonably be
expected to have a Material Adverse Effect;

 

(n) Receivership. Any
Issuer’s assets are attached, seized, subjected to a writ or distress warrant,
or are levied upon, or come within the possession of any receiver, trustee,
custodian or assignee for the benefit of creditors in connection with any
obligations or liabilities of the Issuers and such Issuer fails to discharge,
release or terminate such attachment, seizure, warrant, levy or possession
within 60 days from the creation or commencement thereof and such attachment,
seizure, warrant, levy or possession could reasonably be expected to have a
Material Adverse Effect;

 

(o) Curtailment
of Business Conduct. The
occurrence of any event that could cause the cessation or substantial
curtailment of the conduct of business by any Issuer, including any Issuer being
enjoined, retrained or prevented by any court or administrative agency from
conducting any material part of its business, which cessation or substantial
curtailment could reasonably be expected to have a Material Adverse
Effect;

 

44

 

(p) Indictment. Any
Issuer or executive officer of any Issuer is indicted for a state or federal
criminal charge related to the business of such Issuer;

 

(q) Change
in Control. A
Change in Control shall occur; or

 

(r) Equity
Agreements. An
Issuer breaches any Material provision under a shareholder or similar equity
agreement to which it is a party and fails to cure such breach within 10 days
after written notice thereof from Purchaser.

 

The
foregoing shall constitute “Events of Default” whatever the reason or cause for
any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.

 

7.2 Consequences
of Events of Default .

 

(a) If any
Event of Default has occurred, then the interest rate on the Notes and any notes
issued in exchange for any Securities shall increase immediately by an increment
of 2 percentage points. If any such Event of Default has occurred and continues
for a period of 360 days thereafter, then the interest rate on the Notes shall
increase by a further increment of 3 percentage points (for a total increase of
5 percentage points). Any increase of the interest rate resulting from the
operation of this Section
7.2(a) shall
terminate as of the close of business on the date on which no Events of Default
exists (subject to subsequent increases pursuant to this Section
7.2(a)).

 

(b) If an
Event of Default of the type described in Section
7.1(d) has
occurred, then the aggregate outstanding principal amount of all of the Notes
and any notes issued in exchange for any Securities (together with all accrued
interest thereon and all other amounts due and payable with respect thereto)
shall become immediately due and payable without any action on the part of the
holders thereof, and the Issuers shall immediately pay to the holders of such
notes all amounts due and payable with respect thereto.

 

(c) If an
Event of Default (other than under Section
7.1(d)) has
occurred and is continuing, then the holder or holders of Notes representing a
majority of the aggregate principal amount of Notes and any notes issued in
exchange for any Securities then outstanding may declare all or any portion of
the outstanding principal amount of the Notes and any notes issued in exchange
for any Securities (together with all accrued interest thereon and all other
amounts due and payable with respect thereto) to be immediately due and payable
and may demand immediate payment of all or any portion of the outstanding
principal amount of the Notes and any notes issued in exchange for any
Securities (together with all such other amounts then due and payable) owned by
such holder or holders. The Issuers shall give prompt written notice of any such
demand to the other holders of Notes and any notes issued in exchange for any
Securities, each of which may demand immediate payment of all or any portion of
such holder’s Note and any notes issued in exchange for any Securities. If any
holder or holders of the Notes and any notes issued in exchange for any
Securities demand immediate payment of all or any portion of the Notes and any
notes issued in exchange for any Securities, the Issuers shall immediately pay
to such holder or holders all amounts due and payable with respect
thereto.

 

45

 

(d) If an
Event of Default of the type described in Section
7.1(a) has
occurred, then the holder or holders of Notes and any notes issued in exchange
for any Securities then outstanding may require the Issuers to defer all
payments, other than salaries provided in the then current budget approved by
Purchaser, to any Person who owns, directly or indirectly, an Equity Interest in
any Issuer.

 

(e) If an
Event of Default has occurred, then the holder or holders of Notes and any notes
issued in exchange for any Securities then outstanding may enforce any and all
other rights granted pursuant to the Investment Documents, including, without
limitation, any proxy, security agreement or pledge agreement.

 

Section
8. Miscellaneous .

 

8.1 Expenses For all
times prior to the issuance of the Notes and so long as the Notes remain
outstanding, the Issuers, jointly and severally, shall pay, and hold the
Purchaser and all holders of Securities and any other Equity Interests for which
Securities are exchanged or converted harmless against liability for the payment
of, and reimburse on demand as and when incurred from and against: (a) all costs
and expenses incurred by each of them in connection with their due diligence
review of each Issuer, the preparation, negotiation, execution and
interpretation of the Investment Documents and the Securities and the agreements
contemplated hereby and thereby, and the consummation of all of the transactions
contemplated hereby and thereby (including all reasonable fees and expenses of
legal counsel, environmental consultants and accountants), which costs and
expenses shall be payable of the Closing or, if the Closing does not occur,
payable upon demand; provided that the
reimbursement obligation hereunder on the Closing Date shall not exceed
$60,000.00, inclusive of any deposits made to Purchaser by the Issuers, (b) all
fees and expenses incurred with respect to any amendments or waivers (whether or
not the same become effective) under or in respect of each of the Investment
Documents, the Governing Documents of each Issuer and the other agreements and
instruments contemplated hereby and thereby; (c) all recording and filing fees,
stamp and other Taxes which may be payable in respect of the execution and
delivery of the Investment Documents or the issuance, delivery or acquisition of
any Securities or any other Equity Interests for which Securities are exchanged
or converted; and (d) the reasonable fees and expenses incurred with respect to
the interpretation and enforcement of the rights granted under the Investment
Documents, the Securities, any other Equity Interests for which Securities are
exchanged or converted, the Governing Documents of each Issuer and the
agreements or instruments contemplated hereby and thereby (including costs of
collection) upon an Event of Default and for so long as such Event of Default is
continuing. If the Issuers fail to pay when due any amounts due the Purchaser or
fail to comply with any obligations pursuant to this Agreement or any other
agreement, document or instrument executed or delivered in connection herewith,
the Issuers shall, upon demand by the Purchaser, pay to the Purchaser such
further amounts as shall be sufficient to cover the cost and expense (including,
but not limited to reasonable attorneys’ fees) incurred by or on behalf of the
Purchaser in collecting all such amounts due or in otherwise enforcing the
Purchaser’s rights and remedies hereunder. The Issuers also agree to pay to the
Purchaser all costs and expenses incurred by them, including reasonable
compensation to their attorneys for all services rendered, in connection with
the investigation of any Event of Default and enforcement of their rights
hereunder or under the other Investment Documents upon an Event of Default and
for so long as such Event of Default is continuing. 

 

46

 

8.2 Remedies Each
holder of Securities and any other Equity Interests for which Securities are
exchanged or converted shall have all rights and remedies set forth in the
Investment Documents and the Governing Documents of each Issuer and all rights
and remedies which such holders have been granted at any time under any other
agreement or contract and all of the rights which such holders have under any
law, statute, rule or regulation. No remedy hereunder or thereunder conferred is
intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or thereunder or now or hereafter existing at law or in equity or by
statute or otherwise. Purchaser having any rights under any provision of the
Investment Documents shall be entitled to enforce such rights specifically
(without posting a bond or other security), to recover damages by reason of any
breach of any provision of the Investment Documents and to exercise all other
rights granted by law, statute, rule or regulation.

 

8.3 Usury . In no
contingency or event whatsoever will the aggregate of all amounts deemed
interest under this Agreement or the Notes and charged or collected pursuant to
the terms of this Agreement or any other Investment Document exceed the highest
rate permissible under any law that a court of competent jurisdiction, in a
final determination, deems applicable. If such a court determines that the
Purchaser has charged or received interest under this Agreement or any other
Investment Documents in excess of the highest applicable rate, then the
Purchaser shall apply such excess to any other indebtedness or obligations then
due and payable, whether for principal, interest, fees or otherwise, and shall
refund the remainder of such excess interest, if any, to the Issuers, and such
rate shall automatically be reduced to the maximum rate permitted by such
law.

 

8.4 Purchaser’s
Investment Representations .
Purchaser hereby represents and warrants that:

 

(a) Authorization. When
executed and delivered by the Purchaser, and assuming execution and delivery by
the Issuers, this Agreement and the Investment Documents constitute its valid
and legally binding obligations, enforceable in accordance with their
terms.

 

(b) Purchase
Entirely for Own Account. This
Agreement is made with Purchaser in reliance upon Purchaser’s representation to
the Issuers, which by Purchaser’s execution of this Agreement Purchaser hereby
confirms, that the Restricted Securities will be acquired for investment for
Purchaser’s own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that Purchaser has no present
intention of selling, granting any participation in, or otherwise distributing
the same. By executing this Agreement, Purchaser further represents that
Purchaser does not have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participation to such person or to any
third person, with respect to any of the Restricted Securities. Each Purchaser
represents that it has full power and authority to enter into this Agreement and
the Investment Documents.

 

(c) Disclosure
of Information.
Purchaser has had an opportunity to discuss the Issuers’ business, management
and financial affairs with its management and to obtain any additional
information which Purchaser has deemed necessary or appropriate for deciding
whether or not to purchase the Restricted Securities, and has had an opportunity
to receive, review and understand the disclosures and information regarding the
Issuers’ financial statements, capitalization and other business information as
set forth in the Issuers’ filings with the Securities and Exchange
Commission.

 

47

 

(d) Investment
Experience.
Purchaser is an “accredited investor” as that term is defined in Rule 501 of
Regulation D promulgated under the Securities Act and has previously invested in
securities of other small businesses and acknowledges that it is able to protect
its interests, and bear the economic risk of its investment and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in the Restricted Securities.
Purchaser also represents it has not been organized for the purpose of acquiring
the Restricted Securities.

 

(e) Restricted
Securities.
Purchaser understands that the Restricted Securities are characterized as
“restricted securities” under the federal securities laws inasmuch as they are
being acquired from the Issuers in a transaction not involving a public offering
and that under such laws and applicable regulations such securities may be
resold without registration under the Securities Act only in certain limited
circumstances. In this connection, Purchaser represents that it is familiar with
Rule 144, as presently in effect, and understands the resale limitations imposed
thereby and by the Act.

 

(f) No
Public Market.
Purchaser understands that no public market now exists for any of the securities
issued by the Issuers and that the Issuers have made no assurances that a public
market will ever exist for the Issuers’ securities.

 

(g) Economic
Risk.
Purchaser understands that the Issuers have limited financial and operating
history and that an investment in the Issuers involves substantial risks.
Purchaser understands all of the risks related to the purchase of the Restricted
Securities. Purchaser further understands that the purchase of the Restricted
Securities will be a highly speculative investment. Purchaser is able, without
impairing the Purchaser’s financial condition, to hold the Restricted Securities
for an indefinite period of time and to suffer a complete loss of the
Purchaser’s investment.

 

(h) Brokers
or Finders. Except
as disclosed in Broker Schedule, the Issuers have not, and will not, incur,
directly or indirectly, as a result of any action taken by Purchaser, any
liability for brokerage or finders’ fees or agents’ commissions or any similar
charges in connection with this Agreement.

 

(i) Tax
Liability.
Purchaser has reviewed with its own tax advisors the federal, state, local and
foreign tax consequences of this investment and the transactions contemplated by
this Agreement. Purchaser has relied solely on such advisors and not on any
statements or representations of the Issuers or any of its agents. It
understands that it (and not the Issuers) shall be responsible for its own tax
liability that may arise as a result of this investment or the transactions
contemplated by this Agreement.

 

(j) Further
Limitations on Disposition. Without
in any way limiting the representations set forth above, Purchaser further
agrees not to make any disposition of all or any portion of the Restricted
Securities unless and until:

 

48

 

(i) There is
then in effect a Registration Statement under the Act covering such proposed
disposition and such disposition is made in accordance with such Registration
Statement; or

 

(ii) (A)
Purchaser shall have notified the Issuers of the proposed disposition and shall
have furnished the Issuers with a statement of the circumstances surrounding the
proposed disposition, and (B) if requested by the Issuers, Purchaser shall have
furnished the Issuers with an opinion of counsel, reasonably satisfactory to the
Issuers, that such disposition will not require registration of such shares
under the Act. 

 

(k) Legends. It is
understood that the certificates evidencing the Restricted Securities may bear
one or all of the following legends:

 

(i) “THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT
OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUERS THAT SUCH REGISTRATION IS
NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.

 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
ON TRANSFER, INCLUDING A “LOCK-UP” PROVISION RESTRICTING THE TRANSFER OF THE
SECURITIES FOR A PERIOD OF TIME NOT TO EXCEED ONE HUNDRED EIGHTY (180) DAYS FROM
THE EFFECTIVE DATE OF THE ISSUERS’ FIRST UNDERWRITTEN PUBLIC
OFFERING.”

 

(ii) Any
legend required by the laws of the Oregon or Missouri or any other applicable
state.

 

8.5 Amendments
and Waivers Except as
otherwise expressly provided herein, the provisions of this Agreement and the
provisions of the Notes may be amended and each Issuer may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if such Issuer has obtained the written consent of Purchaser;
provided, that if
there are no Notes outstanding, the provisions of this Agreement may be amended
or waived by the Issuers and each Issuer may take any action herein prohibited
only if such Issuer has obtained the written consent of the holders of a
majority of the remaining Securities. No other course of dealing between any
Issuer and the holder of any Securities or any other Equity Interest for which
Securities are exchanged or converted or any delay in exercising any rights
hereunder or under the Notes or the Governing Documents of any Issuer shall
operate as waiver of any rights of any such holders. For purposes of this
Agreement, the Securities or any Equity Interests for which Securities are
exchanged or converted which are held by any Issuer shall not be deemed to be
outstanding. If the Issuers pay any consideration to any holder of Securities or
any other Equity Interest for which Securities are exchanged or converted for
such holder’s consent to any amendment, modification or waiver hereunder, such
party shall also pay each other holder granting its consent hereunder equivalent
consideration computed on a pro rata basis.

 

49

 

8.6 Survival
of Agreement .
All
covenants, representations and warranties contained in the Investment Documents
or made in writing by each Issuer in connection herewith or therewith shall
survive the execution and delivery of the Investment Documents and the
consummation of the transactions contemplated hereby and thereby, regardless of
any investigation made by Purchaser or on its behalf. In addition, the
rights
and obligations
of each party to
this Agreement pursuant to Sections
4.1(a),
4.1(b),
4.1(c),
4.1(l) (subject
to the time period set forth in Section
4.1),
4.2 (solely
with respect to the payment of fees to C3 owed during the term of Section
4.2),
4.9,
4.10,
4.11 (subject
to the time periods set forth for exercise of such rights in Sections
4.10 and 4.11),
4.12 (so long
as any SBIC Holder holds any Securities), 5,
8.1,
8.14,
8.17,
8.18,
8.19, and
8.20, and
Section
1 (solely
to the extent necessary to effectuate any of the terms of the sections herein
listed) shall
survive the repayment of all amounts payable pursuant to this Agreement and the
Notes. The Investment Documents, except for the Warrants, the Shareholder
Agreement, and the registration rights contained in Appendix
1 to this
Agreement, shall terminate upon payment in full of all amounts owed under the
Notes. The Warrants, the Shareholder Agreement and the registration rights
contained in Appendix
1 to this
Agreement shall survive the repayment of all amounts payable pursuant to the
Notes.

 

8.7 No
Setoffs, etc.  All
payments hereunder and under the Securities and any notes issued in exchange for
any Securities shall be made by each Issuer without setoff, offset, deduction or
counterclaim, free and clear of all taxes, levies, imports, duties, fees and
charges, and without any withholding, restriction or conditions imposed by any
governmental authority. If any Issuer shall be required by any law, statute,
rule or regulation to deduct, setoff or withhold any amount from or in respect
of any payment to Purchaser hereunder or under the Securities or any notes
issued in exchange for any Securities, then (except as a result of withholding
of local, state or federal income taxes, the amount so payable to such Purchaser
shall be increased as may be necessary so that, after making all required
deductions, setoffs and withholdings, such Purchaser shall receive an amount
equal to the sum they would have received had no such deductions, setoffs or
withholding been made.

 

8.8 Successors
and Assigns All
covenants and agreements contained in this Agreement by or on behalf of any of
the parties hereto shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto whether or not so expressed;
provided, that
the Issuers shall not be permitted to assign or delegate, and the Issuers shall
prohibit each other Issuer from assigning or delegating, its rights or
obligations under this Agreement, the Securities or any notes issued in exchange
for any Securities. Except as otherwise expressly provided herein, nothing
expressed in or implied from any Investment Document is intended to give, or
shall be construed to give, any Person, other than the parties hereto and
thereto and their permitted successors and assigns, any benefit or legal or
equitable right, remedy or claim under or by virtue of this Agreement or any
such other document. Any agreement or covenant in any Investment Document
obligating any issuer of an Equity Interest held by a Purchaser or subsequent
holder to take any action or to refrain from taking any action, shall similarly
obligate any other Person into or with which such issuer is merged,
consolidated, combined or reorganized.

 

8.9 Aggregation For
purposes of the Investment Documents, all holdings of Securities and any Equity
Interest for which Securities are exchanged or converted by Persons who are
Affiliates of each other shall be aggregated for purposes of meeting any
threshold tests under the Investment Documents.

 

50

 

8.10 Severability Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement and shall be
reformed and enforced to the maximum extent permitted under applicable
law.

 

8.11 Counterparts For the
purpose of facilitating the execution of this Agreement and for other purposes,
this Agreement may be executed simultaneously in any number of counterparts,
each of which counterparts shall be deemed to be an original, and such
counterparts shall constitute but one and the same instrument. A signature of a
party by facsimile or other electronic transmission shall be deemed to
constitute an original and fully effective signature of such party.

 

8.12 Descriptive
Headings The
descriptive headings of this Agreement and the Securities are inserted for
convenience only and do not constitute a substantive part of this
Agreement.

 

8.13 Governing
Law All other
issues and questions concerning the construction, validity, enforcement and
interpretation of this Agreement and the schedules hereto and (except as
otherwise expressly provided therein) the exhibits hereto shall be governed by,
and construed in accordance with, the laws of the State of Missouri, without
giving effect to any choice of law or conflict of law rules or provisions
(whether of the State of Missouri or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Missouri. In furtherance of the foregoing, the internal law of the State of
Missouri shall control the interpretation and construction of this Agreement
(and all schedules and exhibits hereto), even though under that jurisdiction’s
choice of law or conflict of law analysis, the substantive law of some other
jurisdiction would ordinarily apply.

 

8.14 Notices All
notices, demands or other communications to be given or delivered under or by
reason of the provisions of this Agreement shall be in writing and shall be
deemed to have been given when delivered personally to the recipient, sent to
the recipient by reputable overnight courier service (charges prepaid), mailed
to the recipient by certified or registered mail, return receipt requested and
postage prepaid or sent via facsimile to the number set forth below with a copy
mailed to the recipient as set forth above. Such notices, demands and other
communications shall be sent to the Purchaser and to each Issuer at the
addresses indicated below:

 

51

 

To each
Issuer: 

 

IC
Marketing, Inc.

955 S.
Virginia Street, Suite 116

Reno, NV
89502-0413

Attn:
Dennis Simpson

Facsimile:
541-282-0135

Raybor
Management, Inc.

221 West
10th Street

Medford,
OR 97501

Attn:
Dennis Simpson

Facsimile:
541-282-0135 

American
Consumer Publishing Association, Inc.

355
Industrial Circle

White
City, OR 97503

Attn:
Tracy Friend

Facsimile:
541-826-5347

Back 2
Back’s, Inc.

895
Roberta Lane, Suite 101A

Sparks,
NV 89431 

Attn:
Steve Pugsley

 

Facsimile:
775-358-5570 

 

With a
copy to:

 

Don
Reinke

Reed
Smith, LLP

1999
Harrison Street, Suite 2400

Oakland,
CA 94612-3572

Facsimile:
Reed Smith 510-273-8832

 

To the Purchaser:

 

C3 Capital
Partners, L.P. 

c/o
C3 Capital,
LLC

4520 Main
Street

Suite
1600

Kansas
City, MO 64111

Attn: Steven
Swartzman

Facsimile:
816-756-5552

with a
copy to:

 

Dan
Flanigan

Polsinelli
Shalton Welte Suelthaus PC

700 W.
47th Street,
Suite 1000

Kansas
City, MO 64112

Facsimile:
816-753-1536

or to
such other address or to the attention of such other person as the recipient
party has specified by prior written notice to the sending party.

 

52

 

8.15 Construction . The
parties hereto have participated jointly in the negotiation and drafting of this
Agreement. If an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement. The parties
intend that each representation, warranty and covenant contained herein shall
have independent significance. If any party has breached any representation,
warranty or covenant contained herein in any respect or any Event of Default
shall occur, the fact that there exists another representation, warranty or
covenant or Event of Default relating to the same subject matter (regardless of
the relative levels of specificity) which such party has not breached shall not
detract from or mitigate the fact that such party is in breach of the first
representation, warranty or covenant or that the first Event of Default shall
have occurred.

 

8.16 Complete
Agreement; No Modifications; Missouri Statutory Provision .

 

(a) This
Agreement and the other Investment Documents collectively: (i) constitute the
final expression of the agreement between Issuers and Purchaser; (ii) contain
the entire agreement between Issuers and Purchaser with respect to the matters
set forth herein and in such other Investment Documents; and (iii) may not be
contradicted by evidence of any prior or contemporaneous oral agreements or
understandings between Issuers and Purchaser. Neither this Agreement nor any of
the terms hereof may be terminated, amended, supplemented, waived or modified
orally, except by an agreement or instrument in writing executed by the party
against which enforcement of the termination, amendment, supplement, waiver or
modification is sought. 

 

(b) If there
is a conflict between or among the terms, covenants, conditions or provisions of
this Agreement and the other Investment Documents, then any term, covenant,
condition or provision that Purchaser may elect to enforce from time to time so
as to enlarge the interest of Purchaser in its security for the payment and
performance of the Obligations, afford Purchaser the maximum financial benefits
or security for the Obligations, or provide Purchaser the maximum assurance of
payment and performance of the of the Obligations in full, shall control. EACH
OF THE ISSUERS ACKNOWLEDGES AND AGREES THAT IT HAS BEEN PROVIDED WITH SUFFICIENT
AND NECESSARY TIME AND OPPORTUNITY TO REVIEW THE TERMS OF THIS AGREEMENT AND
EACH OF THE INVESTMENT DOCUMENTS WITH ANY AND ALL COUNSEL IT DEEMS APPROPRIATE,
AND THAT NO INFERENCE IN FAVOR OF, OR AGAINST, PURCHASER OR ISSUERS SHALL BE
DRAWN FROM THE FACT THAT EITHER SUCH PARTY HAS DRAFTED ANY PORTION OF THIS
AGREEMENT OR ANY OF THE INVESTMENT DOCUMENTS. 

 

(c) The
following statement is given pursuant to Mo. Rev. Stat. § 432.045: “ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FOREBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE. TO PROTECT YOU (ISSUERS) AND US (HOLDER) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY IT.” 

 

53

 

8.17 Indemnification In
consideration of Purchaser’s execution and delivery of this Agreement and
purchase of the Securities hereunder and in addition to all of the Issuers’
other obligations under this Agreement and in addition to all other rights and
remedies available at law or in equity, the Issuers shall, and shall cause each
other Issuer to, defend, protect and indemnify Purchaser and each other holder
of Securities, any notes issued in exchange for any Securities or any other
Equity Interests for which Securities are exchanged or converted and all of
their officers, managers, directors, stockholders, members, partners, limited
partners, Affiliates, employees, agents, representatives, successors and assigns
(including those retained in connection with the transactions contemplated by
this Agreement) (collectively, the “Indemnitees”), and
save and hold each of them harmless from and against, and pay on behalf of or
reimburse such part), on demand as and when incurred, any and all actions,
causes of action, suits, claims, losses (including diminutions in value and
consequential damages), costs, penalties, fees, liabilities and damages and
expenses in connection therewith (irrespective of whether any such Indemnitee is
a party to the action for which indemnification hereunder is sought), including
reasonable attorneys’ fees and disbursements, interest and penalties and all
amounts paid in investigation, defense or settlement of any of the foregoing and
claims relating to any of the foregoing (the “Liabilities”),
incurred by the Indemnitees or any of them as a result of, or arising out of, or
relating to: (a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of the issuance of the Securities; (b)
the execution, delivery, performance or enforcement of the Investment Documents,
any Governing Documents of any Issuer and any other instrument, document or
agreement executed pursuant hereto or thereto of any Issuer by any of the
Indemnitees, except to the extent any such Liabilities are caused by the
particular Indemnitee’s gross negligence or willful misconduct; and (c) the
past, present or future environmental condition of any property owned, operated
or used by any Issuer, its predecessors or successors or of any offsite
treatment, storage or disposal location associated therewith, including, without
limitation, the presence on or under, or the escape, seepage, leakage, spillage,
discharge, emission, Release or threatened Release into, onto or from, any such
property or location of any toxic, chemical or hazardous substance, material or
waste (including, without limitation, any losses, liabilities, damages,
injuries, penalties, fees, costs, expenses or claims asserted or arising under
any Environmental and Safety Requirement) regardless of whether caused by, or
within the control of, such Issuer. To the extent that the foregoing undertaking
by each Issuer may be unenforceable for any reason, each Issuer shall make the
maximum contribution to the payment and satisfaction of each of the Liabilities
which is permissible under applicable law.

 

8.18 Payment
Set Aside To the
extent that any payment or payments are made to Purchaser hereunder or under the
Securities, any notes issued in exchange for any Securities or any Equity
Interests for which Securities are exchanged or converted or such Purchaser
enforces its rights or exercises its right of setoff hereunder or thereunder,
and such payment or payments or the proceeds of such enforcement or setoff or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by or are required to be
refunded, repaid or otherwise restored to such payor, a trustee, receiver or any
other Person under any law, statute, rule or regulation (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.

 

54

 

8.19 Jurisdiction
and Venue Each of
the parties: (a) submits to the jurisdiction of any state or federal court
sitting in the Western District of Missouri in any legal suit, action or
proceeding arising out of or relating to this Agreement, the Securities, any
notes issued in exchange for any Securities or any Equity Interests for which
Securities are exchanged or converted; (b) agrees that all claims in respect of
the action or proceeding may be heard or determined in any such court; and (c)
agrees not to bring any action or proceeding arising out of or relating to this
Agreement, the Securities, any notes issued in exchange for any Securities or
any Equity Interests for which Securities are exchanged or converted in any
other court. Each of the parties waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond, surety
or other security that might be required of any other party with respect
thereto. Any party may make service on any other party by sending or delivering
a copy of the process to the party to be served at the address and in the manner
provided for the giving of notices in Section
8.13. Each
party agrees that a final judgment in any action or proceeding so brought shall
be conclusive and may be enforced by suit on the judgment or in any other manner
provided by law. Nothing herein shall affect the right to serve process in any
other manner permitted by law, statute, rule or regulation or shall limit the
right of Purchaser or holders of Equity Interests for which Securities are
exchanged or converted to bring proceedings against any Issuer in the courts of
any other jurisdiction. To the extent provided by any law, statute, rule or
regulation, should any Issuer, after being so served, fail to appear or answer
to any summons, complaint, process or papers so served within the number of days
prescribed by law after the mailing thereof, such Issuer shall be deemed in
default and an order or judgment may be entered by the court against such Issuer
as demanded or prayed for in such summons, complaint, process or papers. The
exclusive choice of forum for each Issuer set forth in this Section
8.19 shall
not be deemed to preclude the enforcement by Purchaser or any holder of
Securities or notes issued in exchange for any Securities or Equity Interests
for which Securities are exchanged or converted of any judgment obtained in any
other forum or the taking by such Purchaser or any holder of Securities or notes
issued in exchange for any Securities or Equity Interests for which Securities
are exchanged or converted of any action to enforce the same in any other
appropriate jurisdiction, and each Issuer hereby waives the right to
collaterally attack any such judgment or action.

 

8.20 Waiver
of Right to Jury Trial EACH OF
THE ISSUERS, ON ITS OWN BEHALF AND ON BEHALF OF EACH OTHER ISSUER, AND THE
PURCHASER, ON ITS OWN AND ON BEHALF OF EACH HOLDER OF SECURITIES AND NOTES
ISSUED IN EXCHANGE FOR ANY SECURITIES AND EQUITY INTERESTS FOR WHICH SECURITIES
ARE EXCHANGED OR CONVERTED, HEREBY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION
WITH, OR ARISING OUT OF THIS AGREEMENT, THE SECURITIES, ANY NOTES ISSUED IN
EXCHANGE FOR ANY SECURITIES OR ANY EQUITY INTERESTS FOR WHICH SECURITIES ARE
EXCHANGED OR CONVERTED, ANY OF THE OTHER INVESTMENT DOCUMENTS, OR THE VALIDITY,
PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF, OR THE
COLLATERAL, THE OBLIGATIONS, OR THE PURCHASER’S CONDUCT WITH RESPECT TO ANY OF
THE FOREGOING. EACH OF THE ISSUERS, ON ITS OWN BEHALF AND ON BEHALF OF EACH
OTHER ISSUER, AGREES THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS
AGREEMENT AND ACKNOWLEDGES THAT PURCHASER WOULD NOT PURCHASE THE SECURITIES
HEREUNDER IF THIS SECTION WERE NOT PART OF THIS AGREEMENT.

 

55

 

8.21 Certain
Waivers Except as
expressly provided in this Agreement, each Issuer hereby waives diligence,
presentment, protest and demand and notice of protest and demand, dishonor and
nonpayment of the Notes and any notes issued in exchange for any Securities, and
expressly agrees that the Notes and any notes issued in exchange for any
Securities, or any payment thereunder, may be extended from time to time and
that the holder thereof may accept security for the Notes and any notes issued
in exchange for any Securities or release security for the Notes and any notes
issued in exchange for any Securities, all without in any way affecting the
liability of the Issuers thereunder.

 

8.22 Joint
and Several Liability of the Issuers Each
Issuer shall be jointly and severally liable hereunder and under each of the
Investment Documents to which it is a party with respect to all Obligations
hereunder and thereunder, regardless of which Issuer actually receives the
proceeds from the issuance of the Securities, or the manner in which the Issuers
or Purchaser account therefor in their respective books and records.
Notwithstanding the foregoing: (a) each Issuer’s obligations and liabilities
with respect to the proceeds from the issuance of the Securities which it
receives, and related fees, costs and expenses; and (b) each Issuer’s
obligations and liabilities arising as a result of the joint and several
liability of an Issuer hereunder with respect to proceeds of the Notes received
by any other Issuer, together with the related fees, costs and expenses, shall
be separate and distinct obligations, both of which are primary obligations of
such Issuer. Neither the joint and several liability of any Issuer shall be
impaired or released by (i) the failure of Purchaser, any successors or assigns
thereof, or any holder of any Securities, any notes issued in exchange for any
Securities or Equity Interests for which Securities are exchanged or converted
or any of the Obligations to assert any claim or demand or to exercise or
enforce any right, power or remedy against any Issuer, any other Person or
otherwise, (ii) any extension or renewal for any period (whether or not longer
than the original period) or exchange of any of the Obligations or the release
or compromise of any obligations of any nature of any Person with respect
thereto, (iii) the surrender, release or exchange of all or any part of any
property securing payment, performance or observance of any of the Obligations
or the compromise or extension or renewal for any period (whether or not longer
than the original period) of any obligations of any nature of any Person with
respect to any such property, (iv) any action or inaction on the part of
Purchaser, or any other event or condition with respect to any other Issuer,
including, without limitation, any such action or inaction or other event or
condition, which might otherwise constitute a defense available to, or a
discharge of, such other Issuer, or a guarantor or surety of or for any or all
of the Obligations or (v) any other act, matter or thing (other than payment or
performance of the Obligations) which would or might, in the absence of this
provision, operate to release, discharge or otherwise prejudicially affect the
obligations of such or any other Issuer.

 

56

 

8.23 Transfer
of Notes; Several Liability of Purchaser . The
Issuers hereby consent to Purchaser’s participation, sale, assignment, transfer
or other disposition, at any time or times on or after the Closing Date, at
Purchaser’s option, of all or any portion of its interest in this Agreement and
any of the other Investment Documents (including Purchaser’s rights, title,
interests, remedies, powers and duties hereunder or thereunder) to a purchaser,
participant, any syndicate, or any other Person (each, a “Note
Purchaser”). In
connection with any such disposition (and thereafter), subject to the Note
Purchaser agreeing to be bound by the same confidentiality terms set forth in
Section
8.24,
Purchaser may disclose any financial information Purchaser may have concerning
the Issuers to any such Note Purchaser or potential Note Purchaser. No Purchaser
shall have any obligation or liability arising under any Investment Document or
otherwise as a result of any other Purchaser’s breach or default hereunder or
thereunder. EACH ISSUER SHALL BE DEEMED TO HAVE WAIVED ANY SUCH ACTION, CLAIM,
RIGHT OR CAUSE OF ACTION ANY SUCH PARTY MAY HAVE AGAINST ANY SUCH
PURCHASER.

 

8.24 Confidentiality 

 

(a) The
Issuers consent to disclosure by the Purchaser of any summary financial or other
information of the Issuers and each of their Subsidiaries of the type which is
customarily disclosed by venture capital companies (other than proprietary trade
secret information related to product offerings) to the stockholders, partners,
board members, advisory board members or legal, accounting, insurance, or
investment banking advisers of the Purchaser, and as and to the extent required
by Law, to any Governmental Body. 

 

(b) Except as
provided in Section
8.24(a),
Purchasers agrees to use reasonable commercial efforts to keep confidential all
information provided to it under the terms and conditions of this Agreement and
which is not in the public domain. No party to this Agreement shall make any
public announcement of the transactions provided for in or contemplated by this
Agreement unless the form and substance of the announcement is mutually agreed
upon by all parties or unless public disclosure is necessary to comply with any
requirements of Law; provided,
however, that
Purchaser may make a tombstone public announcement of its investment in the
Issuers with the prior approval of the Issuers, which approval shall not be
unreasonably conditioned, withheld or delayed and Purchaser shall not be
obligated to keep confidential any information that has been made available
previously on an unrestricted basis or has been filed previously with the
Securities and Exchange Commission. 

 

8.25 Sale
of B2B Issuers
have advised Purchaser that they contemplate a potential sale or other
disposition of the Equity Interests of, or all or substantially all of the
assets of, B2B. Purchaser hereby agrees that as long as the Indebtedness owed
under the Notes and the Investment Documents is reduced in an amount
satisfactory to Purchaser in connection with such sale or disposition, Purchaser
is issued an amount of Securities in B2B subsequent to such sale or disposition
that is proportionate to the percentage of the total amount of Equity Interests
in RMI held by Purchaser at such time (whether in the form of Warrants or other
Securities), and Issuers, B2B and other all other Persons deemed appropriate by
Purchaser at such time execute and deliver all documents and instruments,
including amendments and modifications to the Investment Documents, reasonably
required by Purchaser in connection with such sale or disposition, Purchaser
will consent to a mutual release of B2B from this Agreement and the other
Investment documents.

 

57

 

8.26 Sole
and Absolute Discretion of Purchaser .
Whenever pursuant to this Agreement (a) the Purchaser exercises any right given
to it to consent, approve or disapprove, (b) any arrangement, document, item or
term is to be satisfactory to the Purchaser, or (c) any other decision or
determination is to be made by the Purchaser, the decision of the Purchaser to
consent, approve or disapprove, all decisions that arrangements, documents,
items, or terms are satisfactory or not satisfactory and all other decisions and
determinations made by Purchaser, shall be in the sole and absolute discretion
of the Purchaser and shall be final and conclusive, except as may be otherwise
expressly and specifically provided in this Agreement.

 

[Remainder
of page intentionally left blank; signature page follows.]

 

58

 

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

 

	ISSUERS:	
      IC
      MARKETING, INC.,
      

      a
      Nevada corporation

      

      By:
      _______________________

      Name:
      _____________________

      Title:
      ______________________

       

      AMERICAN
      CONSUMER PUBLISHING ASSOCIATION, INC.,
      

      an
      Oregon corporation

      

      By:
      _______________________

      Name:
      _____________________

      Title:
      ______________________

       

      RAYBOR
      MANAGEMENT, INC.,

      a
      Delaware corporation

      

      By:
      _______________________

      Name:
      _____________________

      Title:
      ______________________

       

      BACK
      2 BACK’S, INC.,

      an
      Oregon corporation

      

      By:
      _______________________

      Name:
      _____________________

      Title:
      ______________________

	 	 
	PURCHASER:	
      C3
      CAPITAL PARTNERS, L.P.,

      a
      Delaware limited partnership

      

      By: C3
      Partners, LLC

      Its: General
      Partner

       

      By:
      _______________________

      Name:
      _____________________

      Title: Manager

 

[SIGNATURE
PAGE TO SECURITIES PURCHASE AGREEMENT]

LIST
OF EXHIBITS AND APPENDICES

 

	
      Appendix
      1
	
      Registration
      Rights

	
      Exhibit
      A
	
      Form
      of Note

	
      Exhibit
      B
	
      Form
      of Warrant

	
      Exhibit
      C
	
      Guaranty
      and Security Agreement

	
      Exhibit
      D
	
      Stock
      Pledge Agreement

	
      Exhibit
      E
	
      Shareholders
      Agreement

	
      Exhibit
      F
	
      Noncompete
      Agreement

	
      Exhibit
      G
	
      Intercreditor
      Agreement

	
      Exhibit
      H
	
      Opinion
      of Counsel

	
      Exhibit
      I
	
      Officer’s
      Certificate

	
      Exhibit
      J
	
      Secretary’s
      Certificate 

	
      Exhibit
      K
	
      Solvency
      Certificate 

	
      Exhibit
      L
	
      Compliance
      Certificate

	
      Exhibit
      M
	
      Projections

	
      Exhibit
      N
	
      Pro
      Forma Balance Sheet

 

LIST
OF DISCLOSURE SCHEDULES

 

	
      Liens
      Schedule

	
      Use
      of Proceeds Schedule

	
      Deposit
      Account Schedule

	
      Commercial
      Tort Claims Schedule

	
      R&W
      Exception Schedule

	
      Organization
      Schedule

	
      Capitalization
      Schedule

	
      Restrictions
      Schedule

	
      Liabilities
      Schedule

	
      Assets
      Schedule

	
      Taxes
      Schedule

	
      Contracts
      Schedule

	
      Intellectual
      Property Schedule

	
      Litigation
      Schedule

	
      Broker
      Schedule

	
      Affiliated
      Transactions Schedule

	
      Vendor
      ScheduleSECURITY
AGREEMENT

 

THIS
SECURITY AGREEMENT (this “Agreement”) is
dated as of January 3, 2005, and is by and among IC
MARKETING, INC., a
Nevada corporation (“ICM”),
AMERICAN
CONSUMER PUBLISHING ASSOCIATION, INC., an
Oregon corporation (“ACPA”),
RAYBOR
MANAGEMENT, INC., a
Delaware corporation (“RMI”), and
BACK 2
BACK’S, INC., an
Oregon corporation (“B2B” and
together with ICM, ACPA, RMI, and B2B are sometimes collectively referred to in
this Agreement as the “Issuers”), and
C3 CAPITAL
PARTNERS, L.P., a
Delaware limited partnership, its successors and assigns (together with its
successors and assigns, “Purchaser”).

 

RECITALS

 

The
following recitals are a material part of this Agreement.

 

A. Issuers
and Purchaser are parties to that certain Securities Purchase Agreement of even
date herewith (as the same may hereafter be modified, amended, restated or
supplemented from time to time, the “Securities
Purchase Agreement”),
pursuant to which, among other things, the Issuers have agreed to issue and
sell, and Purchaser has agreed to purchase from Issuers, an initial 12% Secured
Note in the principal amount of $1,500,000.00 and may issue one or more such 12%
Secured Notes (in an aggregate amount not to exceed $3,000,000.00) during the
term of the Securities Purchase Agreement, as and to the extent contemplated
therein.

 

B. To induce
Purchaser to enter into the Securities Purchase Agreement and to purchase the
Notes as contemplated in the Securities Purchase Agreement, the Issuers have
agreed to grant to the Purchaser a security interest in all of their respective
existing and future property to secure all of their respective existing and
future obligations to the Purchaser, including all of their respective
Obligations under the Securities Purchase Agreement.

 

C. Issuers
are parties to that certain Business Loan Agreement with Washington Mutual Bank
(“WaMu”) dated
June 28, 2004 and certain other loan documents related thereto (collectively,
the “WaMu
Loan Documents”)
pursuant to which WaMu has extended credit to Issuers and has taken a security
interest (the “WaMu
Lien”) in
certain real property assets and all personal property assets of Issuers.

 

D. Concurrently
with the execution of the Securities Purchase Agreement, Issuers, Freedom
Financial, Inc., Purchaser and WaMu are entering into an Intercreditor Agreement
of even date (the “Intercreditor
Agreement”)
reflecting the relative rights and obligations of the parties thereto with
respect to the obligations owed to WaMu under the WaMu Loan Documents
(collectively the “WaMu
Loan Obligations”), the
Obligations owed to Purchaser under the Investment Documents, and the collateral
provided to WaMu and Purchaser, respectively, to secure their respective
obligations.

 

AGREEMENT

 

NOW,
THEREFORE, to induce the Purchaser to enter into the Securities Purchase
Agreement and to extend the credit reflected in the purchase of the Notes, and
in recognition that the Purchaser would not enter into the Securities Purchase
Agreement or purchase the Notes but for Issuers’ promises and agreements
hereunder, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged by the parties, the Issuers and the
Purchaser agree as follows:

 

 

1. Definitions. All
capitalized terms used in this Agreement without definition have the definitions
given to them in the Securities Purchase Agreement. The term “State,” as
used herein, means the State of Missouri. All terms defined in the Uniform
Commercial Code of the State and used herein shall have the same definitions
herein as specified therein. However, if a term is defined in Article 9 of the
Uniform Commercial Code of the State differently than in another Article of the
Uniform Commercial Code of the State, the term has the meaning specified in
Article 9. “Obligations” means
all of the indebtedness, obligations and liabilities of the Issuers to
Purchaser, individually or collectively, whether direct or indirect, joint or
several, absolute or contingent, due or to become due, now existing or hereafter
arising under or in respect of the Notes, the Warrants, the Securities Purchase
Agreement, the other Investment Documents, any promissory notes or other
instruments or agreements executed and delivered pursuant thereto or in
connection therewith, or any other promissory notes or other instruments or
agreements obligating Issuers to Purchaser. “Event
of Default” means
any failure of any Issuer to pay the Obligations when due or perform as and when
due to be performed any action under the terms of the Securities Purchase
Agreement, the Notes, or the other Investment Documents, after giving effect to
all applicable grace, notice and cure periods.

 

2. Grant
of Security Interest. The
Issuers hereby jointly and severally and collectively grant to Purchaser a
security interest in all of each of the Issuer’s right, title and interest in
all of its property, wherever located, whether such property or right, title or
interest therein or thereto is now owned or existing or hereafter acquired or
arising, including all of the following (collectively, the “Collateral”):

 

(a) All
accounts and accounts receivable, including present and future rights to payment
for goods, merchandise or inventory sold or leased or for services rendered,
including those which are not evidenced by instruments or chattel paper, and
whether or not they have been earned by performance, whether or not the same are
listed on any schedules, reports or assignments furnished to Purchaser from time
to time, whether now existing or created at any time hereafter, accounts,
proceeds of any letters of credit on which Issuer is named as beneficiary,
contract rights, chattel paper, instruments, documents, insurance proceeds, and
all such obligations whatsoever owing to Issuer, together with all instruments
and all documents of title representing any of the foregoing, all rights in any
goods, merchandise or inventory that any of the same may represent, all rights
in any returned or repossessed goods, merchandise and inventory, and supporting
obligations with respect to each of the foregoing, including any right of
stoppage in transit, replevin and reclamation and all other rights and remedies
of an unpaid vendor or lienor, and any liens held by the Issuer as a mechanic,
contractor, subcontractor, processor, materialman, machinist, manufacturer,
artisan or otherwise;

 

(b) All
equipment, machinery, tools, fittings, furniture and fixtures, and all parts and
accessions relating to any of the foregoing;

 

(c) All
inventory, general intangibles relating to or arising out of inventory, goods
manufactured or acquired for sale or lease, and any piece goods, raw materials,
work in process and finished merchandise goods, incidentals, office supplies,
packaging materials, and any and all items, including machinery and equipment
used or consumed in the operation of the business of Issuer and which contribute
to the finished product or to the sale, promotion and shipment thereof, in which
Issuer now or at any time hereafter may have an interest whether or not such
inventory is listed in any agreement with or reports furnished to Purchaser from
time to time; 

 

2

 

(d) All
general intangibles, contract rights, claims and causes of action (including
claims and causes of action arising in tort), tax refunds, insurance proceeds,
rights to receive money or property generally, books, records (in whatever form
maintained by or on behalf of the Issuer), customer and supplier lists, ledgers,
invoices, drawings, copyrights, plans, specifications, trade names, trademarks,
service marks, goodwill, licenses, franchises, trade secrets, computer programs,
object codes, source codes, manuals, know-how, inventions, designs, patents,
patent applications, and all other intellectual property of any nature or
description whatsoever

 

(e) All
investment property, securities (whether certificated or uncertificated),
security entitlements, securities accounts, commodity contracts, commodity
accounts and all other financial assets;

 

(f) All
instruments, including all promissory notes, guarantys, liens, and all writings
which evidence a right to the payment of money;

 

(g) All
chattel paper, including all writings which evidence both a monetary obligation
and a security interest in or a lease of specific goods;

 

(h) All
deposit accounts, including any demand, time or like account with a financial
institution (whether or not maintained with Purchaser) and the balances thereof,
and all certificates of deposit;

 

(i) All
property (other than that described in subsections (a) through (h) above) in
which a security interest may now or hereafter attach or otherwise be created
under the Code or other applicable law; and

 

(j) All
additions and accessions to, replacements and substitutions for, products and
proceeds of, and rents, offspring, revenues, and profits from, the property and
the use or operation of the property described in subsections (a) through (i)
above, whether tangible or intangible, and, to the extent not otherwise
included, all payments under any insurance policy (whether or not Purchaser is
the loss payee thereof) and under any indemnity, warranty or guaranty, payable
by reason of loss or damage to or otherwise with respect to any of the foregoing
Collateral.

 

To the
extent that the Uniform Commercial Code does not apply to any item of the
Collateral, it is the intention of the parties and this Agreement that Purchaser
have a common law pledge and/or collateral assignment of such item of
Collateral.

 

3. Authorization
to File Financing Statements. The
Issuers hereby irrevocably authorize Purchaser at any time and from time to time
to file in any filing office in any Uniform Commercial Code jurisdiction any
initial financing statements and amendments thereto that (a) indicate the
Collateral as all assets of any Issuer or words of similar effect, regardless of
whether any particular asset comprised in the Collateral falls within the scope
of Article 9 of the Uniform Commercial Code of the State or such jurisdiction,
and (b) provide any other information required by part 5 of Article 9 of the
Uniform Commercial Code of the State, or such other jurisdiction, for the
sufficiency or filing office acceptance of any financing statement or amendment,
including (i) whether any Issuer is an organization, the type of organization
and any organizational identification number issued to such Issuer and, (ii) in
the case of a financing statement filed as a fixture filing or indicating
Collateral as as-extracted collateral or timber to be cut, a sufficient
description of real property to which the Collateral relates. The Issuers agree
to furnish any such information to Purchaser promptly following receipt of
Purchaser’s written request. The Issuers also ratify their authorization for
Purchaser to have filed in any Uniform Commercial Code jurisdiction any like
initial financing statements or amendments thereto if filed prior to the date
hereof.

 

3

 

4. Actions
as to Any and All Collateral. Issuers
further agree, at the request and option of Purchaser, to take any and all other
actions Purchaser may determine to be necessary or useful for the attachment,
perfection and first priority of, Purchaser’s security interest in any and all
of the Collateral, including, without limitation, (a) causing Purchaser’s name
to be noted as secured party on any certificate of title for a titled good if
such notation is a condition to attachment, perfection or priority of, or
ability of Purchaser to enforce, Purchaser’s security interest in such
Collateral, (b) complying with any provision of any statute, regulation or
treaty of the United States as to any Collateral if compliance with such
provision is a condition to attachment, perfection or priority of, Purchaser’s
security interest in such Collateral, (c) obtaining governmental and other third
party waivers, consents and approvals in form and substance satisfactory to
Purchaser, including, without limitation, any consent of any licensor, lessor or
other person obligated on Collateral, and (d) obtaining waivers from mortgagees
and landlords in form and substance satisfactory to Purchaser.

 

5. Relation
to Other Security Documents. The
provisions of this Agreement supplement the provisions of any real estate
mortgage or deed of trust granted by Issuers to Purchaser which secures the
payment or performance of any of the Obligations. Nothing contained in any such
real estate mortgage or deed of trust shall derogate from any of the rights or
remedies of Purchaser hereunder.

 

6. Representations
and Warranties Concerning Issuers’ Legal Status. Issuers
have previously delivered to Purchaser a certificate signed by Issuers and
entitled “Perfection Certificate” (the “Perfection
Certificate”).
Issuers represent and warrant to Purchaser as follows: (a) each Issuer’s exact
legal name is that indicated on the Perfection Certificate and on the signature
page hereof, (b) each Issuer is an organization of the type, and is organized in
the jurisdiction set forth in the Perfection Certificate, (c) the Perfection
Certificate accurately sets forth each Issuer’s organizational identification
number or accurately states that each Issuer has none, (d) the Perfection
Certificate accurately sets forth each Issuer’s place of business or, if more
than one, its chief executive office, as well as each Issuer’s mailing address,
if different, (e) all other information set forth on the Perfection Certificate
pertaining to each Issuer is accurate and complete, and (f) that there has been
no change in any information provided in the Perfection Certificate since the
date on which it was executed by Issuers.

 

7. Covenants
Concerning Issuers’ Legal Status. Issuers
covenant with Purchaser as follows: (a) without providing at least 14 days’
prior written notice to Purchaser, no Issuer will change its name, its place of
business or, if more than one, chief executive office, or its mailing address or
organizational identification number if it has one, (b) if a Issuer does not
have an organizational identification number and later obtains one, such Issuer
shall forthwith notify Purchaser of such organizational identification number,
and (c) without providing at least 14 days’ prior written notice to Purchaser,
no Issuer will change its type of organization, jurisdiction of organization or
other legal structure.

 

4

 

8. Representations
and Warranties Concerning Collateral, etc. Issuers
further represent and warrant to Purchaser as follows: (a) Issuers are the owner
of or have other rights in or power to transfer the Collateral, free from any
right or claim or any person or any adverse lien, security interest or other
encumbrance, except for the security interest created by this Agreement and
Permitted Liens (as defined in the Securities Purchase Agreement), (b) none of
the Collateral constitutes, or is the proceeds of, “farm products” as defined in
Section 9-102(a)(34) of the Uniform Commercial Code of the State, (c) none of
the account debtors or other persons obligated on any of the Collateral is a
governmental authority covered by the Federal Assignment of Claims Act or like
federal, state or local statute or rule in respect of such Collateral, (d)
Issuers hold no commercial tort claim except as indicated on the Perfection
Certificate, and (e) each Issuer has at all times operated its business in
compliance with all applicable provisions of the federal Fair Labor Standards
Act, as amended, and with all applicable provisions of federal, state and local
statutes and ordinances dealing with the control, shipment, storage or disposal
of hazardous materials or substances, (f) all other information set forth on the
Perfection Certificate pertaining to the Collateral is accurate and complete,
and (g) that there has been no change in any information provided in the
Perfection Certificate since the date on which it was executed by
Issuers.

 

9. Collateral
Protection Expenses; Preservation of Collateral.

 

9.1. Expenses
Incurred by Purchaser. In
Purchaser’s discretion after written notice to Issuers, if Issuers fail to do
so, Purchaser may discharge taxes and other Liens at any time levied or placed
on any of the Collateral, maintain any of the Collateral, make repairs thereto
and pay any necessary filing fees or insurance premiums provided that the
respective Issuer is not timely taking action in good faith to challenge the
subject taxes or remove the subject Liens. Issuers agree to reimburse Purchaser
on demand for all expenditures so made. Purchaser shall have no obligation to
Issuers to make any such expenditures, nor shall the making thereof be construed
as the waiver or cure of any default or Event of Default.

 

9.2 Issuers’
Obligations and Duties.
Anything herein to the contrary notwithstanding, Issuers shall remain obligated
and liable under each contract or agreement comprised in the Collateral to be
observed or performed by any Issuer thereunder except for contracts that are
terminated or allowed to lapse in the ordinary course of Issuers’ business as
previously conducted. Purchaser shall not have any obligation or liability under
any such contract or agreement by reason of or arising out of this Agreement or
the receipt by Purchaser of any payment relating to any of the Collateral, nor
shall Purchaser be obligated in any manner to perform any of the obligations of
Issuers under or pursuant to any such contract or agreement, to make inquiry as
to the nature or sufficiency of any payment received by Purchaser in respect of
the Collateral or as to the sufficiency of any performance by any party under
any such contract or agreement, to present or file any claim, to take any action
to enforce any performance or to collect the payment of any amounts which may
have been assigned to Purchaser or to which Purchaser may be entitled at any
time or times. Purchaser’s sole duty with respect to the custody, safe keeping
and physical preservation of the Collateral in its possession, under Section
9-207 of the Uniform Commercial Code of the State or otherwise, shall be to deal
with such Collateral in the same manner as Purchaser deals with similar property
for its own account.

 

5

 

10. Securities
and Deposits. Upon
the occurrence and during the continuation of any Event of Default, Purchaser
may (at its option) at any time after written notice to Issuers of its intent to
do so, (i) take action to foreclose upon any Securities Collateral, receive any
income thereon and hold such income as additional Collateral or apply it to the
Obligations, and/or (ii) demand, sue for, collect, or make any settlement or
compromise that it deems desirable with respect to the Collateral.

 

11. Notification
to Account Debtors and Other Persons Obligated on
Collateral. Upon
the occurrence and during the continuation of any Event of Default, Issuers
shall, at the option of Purchaser and after written notice by Purchaser, notify
account debtors and other persons obligated on any of the Collateral of the
security interest of Purchaser in any account, chattel paper, general
intangible, instrument or other Collateral and that payment thereof is to be
made directly to Purchaser or to any financial institution designated by
Purchaser as Purchaser’s agent therefor, and Purchaser may itself, without
notice to or demand upon Issuers, so notify account debtors and other persons
obligated on Collateral. After the making of such a request or the giving of any
such notification, Issuers shall hold any proceeds of collection of accounts,
chattel paper, general intangibles, instruments and other Collateral received by
Issuers as trustee for Purchaser without commingling the same with other funds
of Issuers and shall turn the same over to Purchaser in the identical form
received, together with any necessary endorsements or assignments. 

 

12. Power
of Attorney.

 

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

 

(a) upon the
occurrence and during the continuance of any Event of Default, generally to
sell, transfer, pledge, make any agreement with respect to or otherwise dispose
of or deal with any of the Collateral in such manner as is consistent with the
Uniform Commercial Code of the State, and to do, at Issuers’ expense, at any
time, or from time to time, all acts and things which Purchaser deems necessary
or useful to protect, preserve or realize upon the Collateral and Purchaser’s
security interest therein, in order to effect the intent of this Agreement, all
at least as fully and effectively as Issuers might do, including, without
limitation, (i) the filing and prosecuting of registration and transfer
applications with the appropriate federal, state, local or other agencies or
authorities with respect to trademarks, copyrights and patentable inventions and
processes, (ii) upon written notice to Issuers, the exercise of voting rights
with respect to voting securities, which rights may be exercised, if Purchaser
so elects, with a view to causing the liquidation of assets of the issuer of any
such securities, and (iii) the execution, delivery and recording, in connection
with any sale or other disposition of any Collateral, of the endorsements,
assignments or other instruments of conveyance or transfer with respect to such
Collateral; and

 

6

 

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

 

This
power of attorney is a power coupled with an interest and is
irrevocable.

 

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

 

13. Rights
and Remedies. If an
Event of Default shall have occurred and be continuing, Purchaser, without any
other notice to or demand upon Issuers, shall have in any jurisdiction in which
enforcement hereof is sought, in addition to all other rights and remedies, the
rights and remedies of a secured party under the Uniform Commercial Code of the
State and any additional rights and remedies which may be provided to a secured
party in any jurisdiction in which Collateral is located, including, without
limitation, the right to take possession of the Collateral, and for that purpose
Purchaser may, so far as Issuers can give authority therefor, enter upon any
premises on which the Collateral may be situated and remove the same therefrom.
Purchaser may in its discretion require Issuers to assemble all or any part of
the Collateral at such location or locations within the jurisdiction(s) of each
Issuer’s principal office(s) or at such other locations as Purchaser may
reasonably designate. Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, Purchaser shall give to Issuers at least 10 days’ prior written notice
of the time and place of any public sale of Collateral or of the time after
which any private sale or any other intended disposition is to be made. Issuers
hereby acknowledge that 10 days’ prior written notice of such sale or sales
shall be reasonable notice. In addition, Issuers waive any and all rights that
they may have to a judicial hearing in advance of the enforcement of any of
Purchaser’s rights and remedies hereunder, including, without limitation, its
right following an Event of Default to take immediate possession of the
Collateral and to exercise its rights and remedies with respect thereto.

 

14. Standards
for Exercising Rights and Remedies. To the
extent that applicable law imposes duties on Purchaser to exercise remedies in a
commercially reasonable manner, Issuers acknowledge and ,agree that it is not
commercially unreasonable for Purchaser (a) to fail to incur expenses reasonably
deemed significant by Purchaser to prepare Collateral for disposition or
otherwise to fail to complete raw material or work in process into finished
goods or other finished products for disposition, (b) to fail to obtain third
party consents (which are not reasonably obtainable) for access to Collateral to
be disposed of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (c) to fail to exercise collection
remedies against account debtors or other persons obligated on Collateral or to
fail to remove liens or encumbrances on or any adverse claims against
Collateral, (d) to exercise collection remedies against account debtors and
other persons obligated on Collateral directly or through the use of paid
collection agencies and other collection specialists, (e) to advertise
dispositions of Collateral through publications or media of general circulation,
whether or not the Collateral is of a specialized nature, (f) to contact other
persons, whether or not in the same business as Issuers, for expressions of
interest in acquiring all or any portion of the Collateral, (g) to hire one or
more professional auctioneers to assist in the disposition of Collateral,
whether or not the collateral is of a specialized nature, (h) to dispose of
Collateral by utilizing Internet sites that provide for the auction of assets of
the types included in the Collateral or that have the reasonable capability of
doing so, or that match buyers and sellers of assets, (i) to dispose of assets
in wholesale rather than retail markets, (j) to disclaim disposition warranties,
(k) to purchase insurance or credit enhancements to insure Purchaser against
risks of loss, collection or disposition of Collateral or to provide to
Purchaser a guaranteed return from the collection or disposition of Collateral,
or (1) to the extent deemed appropriate by Purchaser, to obtain the services of
other brokers, investment bankers, consultants and other professionals to assist
Purchaser in the collection or disposition of any of the Collateral. Issuers
acknowledges that the purpose of this Section
14 is to
provide non-exhaustive indications of what actions or omissions by Purchaser
would fulfill Purchaser’s duties under the Uniform Commercial Code or other law
of the State or any other relevant jurisdiction in Purchaser’s exercise of
remedies against the Collateral and that other actions or omissions by Purchaser
shall not be deemed to fail to fulfill such duties solely on account of not
being indicated in this Section
14. Without
limitation upon the foregoing, nothing contained in this Section
14 shall be
construed to grant any rights to Issuers or to impose any duties on Purchaser
that would not have been granted or imposed by this Agreement or by applicable
law in the absence of this Section
14.

 

7

 

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

 

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

 

8

 

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

 

18. Proceeds
of Dispositions; Expenses. Issuers
shall pay to Purchaser on demand any and all expenses, including reasonable
attorneys’ fees and disbursements, incurred or paid by Purchaser in protecting,
preserving or enforcing Purchaser’s rights and remedies under or in respect of
any of the Obligations or any of the Collateral. After deducting all of said
expenses, the residue of any proceeds of collection or sale or other disposition
of the Collateral shall, to the extent actually received in cash, be applied to
the payment of the Obligations in such order or preference as Purchaser may
determine, proper allowance and provision being made for any Obligations not
then due. Upon the final payment and satisfaction in full of all of the
Obligations and after making any payments required by Sections 9-608(a)(1)(C) or
9-615(a)(3) of the Uniform Commercial Code of the State, any excess shall be
returned to Issuers. In the absence of final payment and satisfaction in full of
all of the Obligations, Issuers shall remain liable for any
deficiency.

 

19. Subordination.
Notwithstanding anything to the contrary in this Agreement, the payment of
principal and interest on the Notes, the collection and enforcement of the
Obligations, and the Purchaser’s rights and remedies under this Agreement,
including with respect to the Collateral, and the priority of Purchaser’s Liens
on the Collateral shall be, to the extent set forth in the Intercreditor
Agreement, subordinate and junior in right to the WaMu Loan Documents, the WaMu
Lien and the WaMu Loan Obligations.

 

20. Governing
Law; Consent to Forum. This
Agreement shall be governed by the laws of the State of Missouri without giving
effect to any choice of law rules thereof; provided,
however, that if
any of the Collateral shall be located in any jurisdiction other than Missouri,
the laws of such jurisdiction shall govern the method, manner and procedure for
foreclosure of Purchaser’s security interest, lien or mortgage upon such
collateral and the enforcement of Purchaser’s other remedies in respect of such
Collateral to the extent that the laws of such jurisdiction are different from
or inconsistent with the laws of Missouri. AS PART OF THE CONSIDERATION FOR NEW
VALUE THIS DAY RECEIVED, EACH OF THE ISSUERS HEREBY CONSENTS TO THE JURISDICTION
OF ANY STATE COURT LOCATED WITHIN JACKSON COUNTY, MISSOURI OR FEDERAL COURT IN
THE WESTERN DISTRICT OF MISSOURI, AND WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY
CERTIFIED OR REGISTERED MAIL AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED
UPON ACTUAL RECEIPT THEREOF. EACH OF THE ISSUERS WAIVES ANY OBJECTION TO
JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN
AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE.
ISSUERS FURTHER AGREES NOT TO ASSERT AGAINST HOLDER (EXCEPT BY WAY OF A DEFENSE
OR COUNTERCLAIM IN A PROCEEDING INITIATED BY HOLDER) ANY CLAIM OR OTHER
ASSERTION OF LIABILITY WITH RESPECT TO THIS NOTE, THE OTHER INVESTMENT
DOCUMENTS, HOLDER’S CONDUCT OR OTHERWISE IN ANY JURISDICTION OTHER THAN THE
FOREGOING JURISDICTIONS.

 

9

 

21. WAIVER
OF JURY TRIAL AND COUNTERCLAIMS. TO THE
FULLEST EXTENT PERMITTED BY LAW, AND AS SEPARATELY BARGAINED-FOR CONSIDERATION
TO HOLDER, EACH OF THE ISSUERS HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY (WHICH
PURCHASER ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR IN ANY COUNTERCLAIM OF
ANY KIND ARISING OUT OF OR OTHERWISE RELATING TO THIS AGREEMENT, THE
OBLIGATIONS, THE COLLATERAL, OR THE PURCHASER’S CONDUCT IN RESPECT OF ANY OF THE
FOREGOING.

 

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

 

23. Termination
upon Repayment of Notes. This
Agreement shall terminate upon the Purchaser’s receipt of the final payment of
all amounts due and outstanding under the Notes. Upon such termination,
Purchaser shall take all such action as may be required to release and terminate
the security interests, Liens, transfers, grants of power, and assignments
created, provided or effectuated in this Agreement.

 

[Remainder
of page intentionally left blank; signature page follows.]

 

10

 

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

	ISSUERS:	IC
      MARKETING, INC.,
      
      a
      Nevada corporation

      

      By:
      ____________________________

      Name:
      __________________________

      Title:
      ___________________________

       

      AMERICAN
      CONSUMER PUBLISHING ASSOCIATION, INC.,
      

      an
      Oregon corporation

      

      By:
      ____________________________

      Name:
      __________________________

      Title:
      ___________________________

       

      RAYBOR
      MANAGEMENT, INC.,

      a
      Delaware corporation

      

      By:
      ____________________________

      Name:
      __________________________

      Title:
      ___________________________

       

      BACK
      2 BACK’S, INC.,

      an
      Oregon corporation

      

      By:
      ____________________________

      Name:
      __________________________

      Title:
      ___________________________

	 	 
	PURCHASER:	C3
      CAPITAL PARTNERS, L.P.,
      a
      Delaware limited partnership

      

      By: C3
      Partners, LLC

      Its: General
      Partner

       

      By:
      ____________________________

      Name:
      ____________________________

      Title: Manager

 

[SIGNATURE
PAGE TO SECURITY AGREEMENT]

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