Document:

Exhibit
      10.1

    

    SOUTHERN
      COMMUNITY FINANCIAL CORPORATION

    RESTRICTED
      STOCK PLAN

    

    Southern
      Community Financial Corporation, a North Carolina corporation (the
“Corporation”), does herein set forth the terms of its Restricted Stock Plan
      (the “Plan”), which was adopted by the Corporation’s Board of Directors (the
“Board”).

    

    1. Purpose
      of the Plan.
      The
      purpose of this Plan is to provide for the grant of authorized but unissued
      shares of its common stock, no par value (“Common Stock”), subject to certain
      restrictions ("Restricted Stock") to eligible directors, officers and employees
      of the Corporation. The Corporation believes that participation in the ownership
      of the Corporation by such individuals will be to the mutual benefit of the
      Corporation and the Grantees. The existence of this Plan will make it possible
      for the Corporation and any of its subsidiaries to attract and retain capable
      individuals to participate in the success of the Corporation.

    

    2. Administration
      of the Plan.
      (a)
      This Plan shall be administered by the Compensation Committee of the Board
      (the
      "Committee"). 

    

    (b)
      The
      Committee shall decide to whom Restricted Stock shall be granted under this
      Plan
      (“Grantee”), the number of shares of Restricted Stock to be granted to each
      Grantee, the vesting period and other conditions to which the shares of
      Restricted Stock shall be subject, and such additional terms and conditions
      for
      such Restricted Stock as the Committee deems appropriate. The Committee shall
      interpret the Plan and prescribe, amend and rescind any rules and regulations
      regarding the Plan. All interpretations and constructions of the Plan by the
      Committee shall be final and conclusive. 

    

    (c)
      A
      majority of the Committee shall constitute a quorum and the acts of a majority
      of the members present at any meeting at which a quorum is present, or acts
      approved unanimously in writing by the Committee, shall be considered as valid
      actions by the Committee.

    

    (d)
      The
      Committee may designate any officers or employees of the Corporation to assist
      in the administration of this Plan. The Committee may authorize such individuals
      to execute documents on its behalf and may delegate to them such other
      ministerial and limited discretionary duties as the Committee may deem
      fit.

    

    3. Shares
      of Common Stock Subject to the Plan.
      The
      number of shares of Common Stock that shall be available initially for grants
      of
      Restricted Stock under this Plan is Three hundred thousand (300,000), subject
      to
      adjustment as provided in Paragraph 14 hereof. Any shares of Restricted Stock
      which are forfeited by a Grantee shall be made available for future grants
      of
      Restricted Stock under this Plan.

    

    4. Eligibility.
      Restricted Stock under this Plan may be granted to any Grantee determined by
      the
      Committee. An individual may hold more than one grant of Restricted Stock under
      this or other plans adopted by the Corporation.

    

    5. Grant
      of Restricted Stock.
      (a) The
      Committee may authorize the grant of Restricted Stock to certain current
      directors, officers and employees of the Corporation. Such Restricted Stock
      shall be granted based upon the past service and the continued participation
      of
      those individuals in the management and operation of the Corporation and its
      subsidiaries.

    

    (b) Restricted
      Stock will be deemed issued only upon (i) authorization by the Committee, and
      (ii) the execution and delivery of a Restricted Stock Agreement by the Grantee
      and a duly authorized officer of the Company.

    

    (c) Shares
      of
      Restricted Stock shall be subject to such restrictions, terms and conditions,
      including forfeitures, if any, as may be determined by the Committee
      (“Forfeiture Provisions”), which may include, without limitation, the rendition
      of services to the Corporation or its subsidiaries for a specified time or
      the
      achievement of specific goals, and to the further restriction that no shares
      of
      Restricted Stock may be sold, assigned, transferred, discounted, exchanged,
      pledged or otherwise encumbered or disposed of until the Forfeiture Provisions
      set by the Committee at the time of the award of the Restricted Stock have
      been
      satisfied. 

    

    (d)
      Upon
      the forfeiture of Restricted Stock for whatever reason prior to the expiration
      of the Forfeiture Provisions, the shares of Common Stock covered by forfeited
      shares of Restricted Stock shall be available for the granting of additional
      shares of Restricted Stock to other Grantees during the remaining term of this
      Plan upon such terms and conditions as may be determined by the Committee.
      

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    6. Transfer
      Restrictions.
      (a)
      The
      Restricted Stock may not be transferred, assigned or made subject to any
      encumbrance, pledge or charge until such Restricted Stock has vested and any
      Forfeiture Provision or other restriction or condition on such Restricted Stock
      is removed, satisfied or has expired. All transfers of Restricted Stock not
      meeting the conditions set forth in this Paragraph 6 are expressly
      prohibited.

    

    (b) Any
      prohibited transfer of Restricted Stock is void and of no effect. Should such
      a
      transfer purport to occur, the Corporation may set aside the transfer, enforce
      any undertaking or right under this Paragraph 6, and/or exercise any other
      legal
      or equitable remedy. The Corporation shall not be required: (i) to transfer
      on
      its books any shares of Restricted Stock that have been sold or otherwise
      transferred in violation of any of the provisions of this Paragraph 6; or (ii)
      to treat as owner of such shares of Restricted Stock or to accord the right
      to
      vote or pay dividends to any transferee to whom such shares of Restricted Stock
      shall have been purported to have been transferred.

    

    (c) The
      Committee may permit a transfer of Restricted Stock if the transferee executes
      such documents as the Committee may reasonably require to protect the
      Corporation’s rights under the Restricted Stock Agreement and this Plan are
      adequately protected with respect to the shares of Restricted Stock so
      transferred. Such documents may include, without limitation, an agreement by
      the
      transferee to be bound by all of the terms of this Plan applicable to the
      Restricted Stock and of the applicable Restricted Stock Agreement as if the
      transferee were the original Grantee of such Restricted Stock.

    

    (d) To
      facilitate the enforcement of the restrictions on transfer set forth in this
      Paragraph 6, the Committee may, at its discretion, require the Grantee of shares
      of Restricted Stock to deliver any certificate(s) for such shares and/or a
      stock
      power executed in blank by the Grantee and the Grantee’s spouse, to the
      Secretary of the Corporation or his or her designee. The Corporation may hold
      said certificate(s) and/or stock power(s) in escrow and take all such actions
      as
      are necessary to insure that all transfers and/or releases are made in
      accordance with the terms of this Plan. The certificates and/or stock power
      may
      be held in escrow so long as the shares of Restricted Stock are subject to
      any
      Forfeiture Provisions under a Restricted Stock Agreement. Each Grantee
      acknowledges that the Secretary of the Corporation (or his or her designee)
      is
      so appointed as the escrow agent with the foregoing authorities as a material
      inducement to the issuance of shares of Restricted Stock under this Plan, that
      the appointment is coupled with an interest, and that it accordingly will be
      irrevocable. The escrow agent will not be liable to any party to a Restricted
      Stock Agreement (or to any other party) for any actions or omissions unless
      the
      escrow agent is grossly negligent relative thereto. The escrow agent may rely
      upon any letter, notice or other document executed by any signature purported
      to
      be genuine.

    

    7. Stock
      Certificates.  (a) Any
      certificate or certificates representing shares of Restricted Stock shall bear
      a
      legend similar to the following:

    

     “The
      shares represented by this certificate have been issued pursuant to the terms
      of
      the Southern Community Financial Corporation Restricted Stock Plan and may
      not
      be sold, assigned, transferred, discounted, exchanged, pledged or otherwise
      encumbered or disposed of in any manner except as set forth in the terms of
      the
      agreement embodying the award of such shares.”

    

    (b) The
      Corporation may place a "stop transfer" order against shares of Restricted
      Stock
      until all Forfeiture Provisions set forth in the applicable Restricted Stock
      Agreement have been satisfied.

    

    (c) After
      the
      satisfaction of the Forfeiture Provisions set by the Committee, a certificate,
      without the legend set forth above, for the number of shares of Common Stock
      that are no longer subject to such Forfeiture Provisions shall be delivered
      to
      the Grantee.

    

    8. Restricted
      Stock Agreement.
       Each
      issuance of Restricted Stock pursuant to this Plan shall be evidenced by a
      written Restricted Stock Agreement between the Corporation and the Grantee.
      The
      Restricted Stock Agreement shall be in such form as the Committee shall adopt
      and may contain such terms and conditions, including the Forfeiture Provisions,
      as the Committee may determine. 

    

    9. Market
      Standoff.
      To the
      extent requested by the Corporation and any underwriter of securities of the
      Corporation in connection with a firm commitment underwriting, no holder of
      any
      shares of Restricted Stock will transfer any such shares not included in such
      underwriting, or not previously registered in a registration, during the one
      hundred twenty (120) day period following the effective date of the registration
      statement filed with the SEC under the Securities Act of 1933, as amended,
      with
      respect to such offering.

    

    10. Shareholder
      Rights. Except
      as
      otherwise provided in the Plan, the Grantee shall have all voting, dividend
      and
      other rights of a shareholder with respect to the shares of Restricted Stock,
      whether or not escrowed as provided herein, once the issuance of the Restricted
      Stock has been reflected on the stock transfer or similar records of the
      Corporation. The Grantee and his or her legal representatives shall not be
      deemed to be the holder of any Restricted Stock and shall not have any rights
      of
      a shareholder until the issuance of the Restricted Stock has been reflected
      on
      the stock transfer or similar records of the Corporation.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    11. Effect
      of Enforceability of Forfeiture, Termination of Employment, Retirement,
      Disability or Death.

    

    (a) Upon
      the
      enforceability of any Forfeiture Provision or in the event of the termination
      of
      employment of a Grantee for any reason other than retirement, death or
      disability, Grantee shall, for no consideration, forfeit to the Corporation
      all
      shares of Restricted Stock to the extent then subject to the Forfeiture
      Provisions. The Forfeiture Provisions shall be binding upon and enforceable
      against any transferee of Restricted Stock. 

    

    (b) In
      the
      event of the termination of employment of an Grantee as a result of such
      Grantee's retirement, notwithstanding any other provision contained herein
      or in
      any Restricted Stock Agreement, upon retirement, any Forfeiture Provisions
      with
      respect to such Restricted Stock then held by a Grantee shall become immediately
      void and unenforceable. For purposes of this Plan, the term "retirement" shall
      mean (i) termination of a Grantee's employment under conditions which would
      constitute retirement under any tax qualified retirement plan maintained by
      the
      Corporation, or (ii) attaining age 65.

    

    (c) In
      the
      event of the termination of employment of a Grantee by reason of such Grantee's
      disability, notwithstanding any other provision contained herein or in any
      Restricted Stock Agreement, upon such disability, any Forfeiture Provisions with
      respect to such Restricted Stock then held by a Grantee shall become immediately
      void and unenforceable. For purposes of this Plan, the term "disability" shall
      be defined in the same manner as such term is defined in Section 22(e) (3)
      of
      the Internal Revenue Code of 1986, as amended.

    

    (d) In
      the
      event that an Optionee should die while employed by the Corporation,
      notwithstanding any other provision contained herein or in any Restricted Stock
      Agreement, upon the date of death of the Optionee, any Forfeiture Provisions
      with respect to such Restricted Stock then held by a Grantee shall become
      immediately void and unenforceable. If a Grantee dies after satisfaction of
      the
      Forfeiture Provisions for all or a portion of the award but prior to the actual
      payment of all or such portion thereof, such payment shall be made to the
      Grantee's beneficiary or beneficiaries at the time and in the same manner that
      such payment would have been made to the Grantee.

    

    12. Effect
      of Plan on Employment.
      (a) The
      fact
      that the Committee has granted shares of Restricted Stock to a Grantee under
      this Plan shall not confer on such Grantee any right to employment with the
      Corporation, or to a position as a director, officer or an employee of the
      Corporation, nor shall it limit the right of the Corporation to remove such
      Grantee from any position held by the Grantee or to terminate the Grantee's
      employment at any time.

    

    (b) The
      value
      of the Restricted Stock granted pursuant to this Plan shall not be included
      as
      compensation, earnings, salaries, or other similar terms used when calculating
      the benefits under any employee benefit plan sponsored by the Corporation except
      as such employee benefit plan otherwise expressly provides.

    

    13. Adjustment
      Upon Changes in Capitalization; Dissolution, Liquidation or
      Merger.

    

    (a) In
      the
      event of a change in the number of shares of the Common Stock outstanding by
      reason of a stock dividend, stock split, recapitalization, reorganization,
      merger, exchange of shares, or other similar capital adjustment, prior to the
      termination of a Grantee's rights under this Plan, equitable proportionate
      adjustments shall be made by the Committee in (i) the number and kind of shares
      which remain available under this Plan, and (ii) the number and kind of shares
      subject to the Restricted Stock granted under this Plan. The adjustments to
      be
      made shall be determined by the Committee and shall be consistent with such
      change or changes in the Corporation's total number of outstanding
      shares.

    

    (b) The
      grant
      of Restricted Stock under this Plan shall not affect in any way the right or
      power of the Corporation or its shareholders to make or authorize any
      adjustment, recapitalization, reorganization, or other change in the
      Corporation's capital structure or its business, or any merger of the
      Corporation, or to issue bonds, debentures, preferred or other preference stock
      ahead of or affecting the Common Stock or the rights thereof, or the dissolution
      or liquidation of the Corporation, or any sale or transfer of all or any part
      of
      the Corporation's assets or business.

    

    (c) Upon
      the
      effective date of the dissolution or liquidation of the Corporation, or of
      a
      reorganization or merger of the Corporation with one or more other corporations
      in which the Corporation is not the surviving corporation, or the transfer
      of
      all or substantially all of the assets or shares of the Corporation to another
      person or entity, or a tender offer approved by the Board (any such transaction
      being hereinafter referred to as an "Acceleration Event"), any Forfeiture
      Provisions with respect to outstanding shares of Restricted Stock granted
      hereunder shall terminate unless provision is made in writing in connection
      with
      such Acceleration Event for the assumption of the Restricted Stock granted
      hereunder, or the substitution for such Restricted Stock of new Restricted
      Stock
      for the shares of the successor corporation, or a parent or a subsidiary
      thereof, with such appropriate adjustments, as may be determined or approved
      by
      the Committee or the successor to the Corporation, to the number and kind of
      shares subject to such substituted Restricted Stock in which event the
      Restricted Stock granted hereunder, or the new Restricted Stock substituted
      therefore, shall continue in the manner and under the terms so provided.
      Termination of any Forfeiture Provisions shall be contingent upon the
      consummation of the Acceleration Event.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    14. Tax
      Withholding.
      At the
      discretion of the Committee, the Grantee, as a condition to such issuance,
      may
      be required to pay to the Corporation in cash, or in such other form as the
      Committee may determine in its discretion, the amount of the Corporation's
      tax
      withholding liability required in connection with such issuance.

    

    15. Listing
      and Registration.
      Notwithstanding any other provision of this Plan, shares of Restricted Stock
      may
      be issued pursuant to this Plan only after there has been compliance with all
      applicable federal and state securities laws, and such issuance will be subject
      to this overriding condition. The Corporation may include shares of Restricted
      Stock in a registration, but will not be required to register or qualify
      Restricted Stock with the SEC or any state agency.

    

    16. Exculpation
      and Indemnification.
      In
      connection with this Plan, no member of the Committee shall be personally liable
      for any act or omission to act in such person's capacity as a member of the
      Committee, nor for any mistake in judgment made in good faith, unless arising
      out of, or resulting from, such person's own bad faith, gross negligence,
      willful misconduct, or criminal acts. To the extent permitted by applicable
      law
      and regulation, the Corporation shall indemnify and hold harmless the members
      of
      the Committee, and each other officer of employee of the Corporation to whom
      any
      duty or power relating to the administration or interpretation of this Plan
      may
      be assigned or delegated, from and against any and all liabilities (including
      any amount paid in settlement of a claim with approval of the Board) and any
      costs or expense (including reasonable counsel fees) incurred by such person
      arising out of, or as a result of, such person's duties, responsibilities,
      and
      obligations under this Plan, other than such liabilities, costs, and expenses
      as
      may arise out of, or result from, the bad faith, gross negligence, willful
      misconduct, or criminal acts of such persons.

    

    17. Amendment
      and Modification of the Plan.
      The
      Board may at any time and from time to time amend or modify this Plan in any
      respect. Any amendment or modification of this Plan shall not materially reduce
      the rights of any Grantee under a Restricted Stock Agreement without the consent
      of such Grantee or the permitted transferee thereof.

    

    18. Termination
      and Expiration of the Plan.
      This
      Plan may be abandoned, suspended, or terminated at any time by the Board;
provided,
      however,
      that
      abandonment, suspension, or termination of this Plan shall not affect any
      Restricted Stock then outstanding under this Plan. 

    

    19. Captions
      and Headings; Gender and Number.
      Captions and paragraph headings used herein are for convenience only, do not
      modify or affect the meaning of any provision herein, are not a part hereof,
      and
      shall not serve as a basis for interpretation or in construction of this Plan.
      As used herein, the masculine gender shall include the feminine and neuter,
      the
      singular number the plural, and vice versa, whenever such meanings are
      appropriate.

    

    20. Expenses
      of Administration of the Plan.
      All
      costs and expenses incurred in the operation and administration of this Plan
      shall be borne by the Corporation.

    

    21. Governing
      Law.
      Without
      regard to the principles of conflicts of laws, the laws of the State of North
      Carolina shall govern and control the validity, interpretation, performance,
      and
      enforcement of this Plan.

    

    22. Inspection
      of Plan.
      A copy
      of this Plan, and any amendments thereto or modification thereof, shall be
      maintained by the Secretary of the Corporation and shall be shown to any proper
      person making inquiry about it.Unassociated Document

    FINANCING
      AGREEMENT

    

    Financing
      Agreement, dated as of May 5, 2008, by and among COMPOSITE TECHNOLOGY
      CORPORATION, a Nevada corporation (the “Borrower”),
      each
      subsidiary of Borrower listed as a “Guarantor”
on
      the
      signature pages hereto (together with each other Person that executes a joinder
      agreement and becomes a “Guarantor”
      hereunder or otherwise guaranties all or any part of the Obligations, each
      a
“Guarantor”
and
      collectively, the “Guarantors”),
      the
      lenders from time to time party hereto (each a “Lender”
and
      collectively, the “Lenders”)
      and
      ACF CTC, L.L.C., a Delaware limited liability company, as agent for the Lenders
      (in such capacity, together with any successor in such capacity,
      the “Agent”).

    

    RECITALS

    

    The
      Borrower has asked the Lenders to extend credit to the Borrower on an expedited
      basis consisting of a term loan in the aggregate principal amount of $5,000,000.
      The proceeds of the term loan shall be used (a) for general working capital
      purposes of the Borrower as set forth in the Cash Forecast, and (b) to pay
      fees
      and expenses related to this Agreement. The Lenders are severally, and not
      jointly, willing to extend such credit to the Borrower subject to the terms
      and
      conditions hereinafter set forth.

    

    The
      Loan
      Parties have requested that the Lenders consummate this transaction and make
      the
      Loan on an expedited basis and before the Lenders and Agent are able to complete
      appropriate due diligence. Accordingly, the Loan Parties recognize in particular
      that the Agent and the Lenders will be relying extensively upon the
      representations and warranties of the Loan Parties as set forth in the Loan
      Documents in lieu of certain customary due diligence.

    

    In
      consideration of the premises and the covenants and agreements contained herein,
      the parties hereto agree as follows:

    

    ARTICLE
      I

    

    DEFINITIONS;
      CERTAIN TERMS

     

    Section
      1.01 Definitions.
      As used
      in this Agreement, the following terms shall have the respective meanings
      indicated below, such meanings to be applicable equally to both the singular
      and
      plural forms of such terms:

    

    “Account
      Debtor”
means
      each debtor, customer or obligor in any way obligated on or in connection with
      any Account Receivable.

    

    “Account
      Receivable”
means,
      with respect to any Person, any and all rights of such Person to payment for
      goods sold, leased, licensed, assigned or otherwise deposed of and/or services
      rendered or to be rendered, including accounts (as defined in the Uniform
      Commercial Code), general intangibles and any and all such rights evidenced
      by
      chattel paper, instruments or documents, whether due or to become due and
      whether or not earned by performance, and whether now or hereafter acquired
      or
      arising in the future, and any supporting obligations in respect of the
      foregoing and any proceeds arising from or relating to the
      foregoing.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Action”
has
      the
      meaning specified therefor in Section
      12.12.

    

    “Affiliate”
means,
      with respect to any Person, any other Person that directly or indirectly through
      one or more intermediaries, controls, is controlled by, or is under common
      control with, such Person. For purposes of this definition, “control” of a
      Person means the power, directly or indirectly, either to (i) vote 10% or more
      of the Capital Stock having ordinary voting power for the election of directors
      of such Person or (ii) direct or cause the direction of the management and
      policies of such Person whether by contract or otherwise. 

    

    “Agent”
has
      the
      meaning specified therefor in the preamble hereto.

    

    “Agent
      Advances”
has
      the
      meaning specified therefor in Section
      10.08(a).

    

    “Agent’s
      Account”
means
      an account at a bank designated by the Agent from time to time as the account
      into which the Loan Parties shall make all payments to the Agent for the benefit
      of the Agent and the Lenders under this Agreement and the other Loan
      Documents.

    

    “Agreement”
means
      this Financing Agreement, including all amendments, modifications and
      supplements and any exhibits or schedules to any of the foregoing, and shall
      refer to the Agreement as the same may be in effect at the time such reference
      becomes operative.

    

    “Assignment
      and Acceptance”
means
      an assignment and acceptance entered into by an assigning Lender and an
      assignee, and accepted by the Agent, in accordance with Section
      12.07
      hereof
      and substantially in the form of Exhibit F hereto or such other form acceptable
      to the Agent.

    

    “Authorized
      Officer”
means,
      with respect to any Person, the chief executive officer, chief financial
      officer, president or executive vice president of such Person.

    

    “Bankruptcy
      Code”
means
      the
      United States Bankruptcy Code (11 U.S.C. § 101, et seq.),
      as
      amended, and any successor statute.

    

    “Board”
means
      the Board of Governors of the Federal Reserve System of the United
      States.

    

    “Board
      of Directors”
means,
      with respect to any Person, the board of directors (or comparable managers)
      of
      such Person or any committee thereof duly authorized to act on behalf of the
      board.

    

    “Borrower”
has
      the
      meaning specified therefor in the preamble hereto.

    

    “Business
      Day”
means
      any day other than a Saturday, Sunday or other day on which commercial banks
      in
      New York City are authorized or required to close.

    

    “Cable
      Critical Vendors”
means
      the vendors identified on Schedule 1.01(B).

    

    “Capital
      Expenditures”
means,
      with respect to any Person for any period, the sum of (i) the aggregate of
      all expenditures by such Person and its Subsidiaries during such period that
      in
      accordance with GAAP are or should be included in “property, plant and
      equipment” or in a similar fixed asset account on its balance sheet, whether
      such expenditures are paid in cash or financed and including all Capitalized
      Lease Obligations paid or payable during such period, and (ii) to the
      extent not covered by clause (i) above, the aggregate of all expenditures by
      such Person and its Subsidiaries during such period to acquire by purchase
      or
      otherwise the business or fixed assets of, or the Capital Stock of, any other
      Person.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Capital
      Stock”
means
      (i) with respect to any Person that is a corporation, any and all shares,
      interests, participations or other equivalents (however designated and whether
      or not voting) of corporate stock, and (ii) with respect to any Person that
      is
      not a corporation, any and all partnership, membership or other equity interests
      of such Person.

    

    “Capitalized
      Lease”
means,
      with respect to any Person, any lease of real or personal property by such
      Person as lessee which is (i) required under GAAP to be capitalized on the
      balance sheet of such Person or (ii) a transaction of a type commonly known
      as a
“synthetic lease” (i.e., a lease transaction that is treated as an operating
      lease for accounting purposes but with respect to which payments of rent are
      intended to be treated as payments of principal and interest on a loan for
      Federal income tax purposes).

    

    “Capitalized
      Lease Obligations”
means,
      with respect to any Person, obligations of such Person and its Subsidiaries
      under Capitalized Leases, and, for purposes hereof, the amount of any such
      obligation shall be the capitalized amount thereof determined in accordance
      with
      GAAP.

    

    “Cash
      Forecast”
means
      a
      forecast of the sources and uses of cash by the Loan Parties on a weekly basis
      for the succeeding 13 calendar weeks, in form and substance reasonably
      satisfactory to the Agent. The initial Cash Forecast is attached hereto as
      Exhibit
      I.

    

    “Change
      in Law”
has
      the
      meaning specified therefor in Section
      4.05(a).

    

    “Closing
      Fee”
has
      the
      meaning specified therefor in Section 2.06.

    

    “Change
      of Control”
means
      each occurrence of any of the following:

    

    (a) the
      acquisition, directly or indirectly, by any person or group (within the meaning
      of Section 13(d)(3) of the Exchange Act) of beneficial ownership of more
      than 30% of the aggregate outstanding voting power of the Capital Stock of
      the
      Parent;

    

    (b) the
      Borrower shall cease to have beneficial ownership (as defined in Rule 13d-3
      under the Exchange Act) of 100% of the aggregate voting power of the Capital
      Stock of each of its Subsidiaries, free and clear of all Liens (other than
      Permitted Liens); or

    

    (c) (i)  Borrower
      or any of its Subsidiaries consolidates or amalgamates with or merges into
      another entity or conveys, transfers or leases all or substantially all of
      its
      property and assets to another Person, or (ii) any entity consolidates or
      amalgamates with or merges into any of Borrower or any of its Subsidiaries
      in a
      transaction pursuant to which the outstanding voting Capital Stock of such
      entity is reclassified or changed into or exchanged for cash, securities or
      other property, other than any such transaction described in this
      clause (ii) in which either (A) in the case of any such transaction
      involving Borrower, no person or group (within the meaning of Section 13(d)(3)
      of the Exchange Act) other than a Permitted Holder has, directly or indirectly,
      acquired beneficial ownership of more than 25% of the aggregate outstanding
      voting Capital Stock of the Borrower or (B) in the case of any such
      transaction involving a Subsidiary of Borrower, the Borrower has beneficial
      ownership of 100% of the aggregate voting power of all Capital Stock of the
      resulting, surviving or transferee entity. Notwithstanding the foregoing, no
      (i)
      insolvency or winding up proceeding involving any of the Foreign Subsidiaries,
      or (ii) any transaction expressly permitted by Section 7.02(c)(ii) shall be
      deemed a Change of Control.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Collateral”
means
      all of the property and assets and all interests therein and proceeds thereof
      now owned or hereafter acquired by any Person upon which a Lien is granted
      or
      purported to be granted by such Person as security for all or any part of the
      Obligations.

    

    “Collection
      Account”
and
      “Collection
      Accounts”
have
      the meanings specified therefor in Section
      8.01(a).

    

    “Commitment”
means,
      with respect to each Lender, the commitment of such Lender to make the Loan
      to
      the Borrower in the amount set forth in Schedule 1.01(A) hereto, as the same
      may
      be terminated or reduced from time to time in accordance with the terms of
      this
      Agreement.

    

    “Contingent
      Obligation”
means,
      with respect to any Person, any obligation of such Person guaranteeing or
      intended to guarantee any Indebtedness, leases, dividends or other obligations
      (“primary obligations”) of any other Person (the “primary obligor”) in any
      manner, whether directly or indirectly, including, without limitation, (i)
      the
      direct or indirect guaranty, endorsement (other than for collection or deposit
      in the ordinary course of business), co-making, discounting with recourse or
      sale with recourse by such Person of the obligation of a primary obligor,
      (ii) the obligation to make take-or-pay or similar payments, if required,
      regardless of nonperformance by any other party or parties to an agreement,
      (iii) any obligation of such Person, whether or not contingent, (A) to purchase
      any such primary obligation or any property constituting direct or indirect
      security therefor, (B) to advance or supply funds (1) for the purchase or
      payment of any such primary obligation or (2) to maintain working capital
      or equity capital of the primary obligor or otherwise to maintain the net worth
      or solvency of the primary obligor, (C) to purchase property, assets,
      securities or services primarily for the purpose of assuring the owner of any
      such primary obligation of the ability of the primary obligor to make payment
      of
      such primary obligation or (D) otherwise to assure or hold harmless the
      holder of such primary obligation against loss in respect thereof; provided,
      however,
      that
      the term “Contingent Obligation” shall not include any product warranties
      extended in the ordinary course of business or unsecured guarantees of any
      trade
      payables (other than trade payables owed to Cable Critical Vendors identified
      on
      Schedule 1.01(B), outstanding for more than the time periods described in the
      definition of Indebtedness). The amount of any Contingent Obligation shall
      be
      deemed to be an amount equal to the stated or determinable amount of the primary
      obligation with respect to which such Contingent Obligation is made (or, if
      less, the maximum amount of such primary obligation for which such Person may
      be
      liable pursuant to the terms of the instrument evidencing such Contingent
      Obligation) or, if not stated or determinable, the maximum reasonably
      anticipated liability with respect thereto (assuming such Person is required
      to
      perform thereunder), as determined by such Person in good faith.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Contribution
      Agreement”
means
      the Contribution Agreement dated as of the date hereof, among the Loan Parties,
      substantially in the form of Exhibit G.

    

    “Copyright
      Office”
means
      the United States Register of Copyrights, Library of Congress.

    

    “Copyrights”
has
      the
      meaning specified therefor in the Security Agreement.

    

    “Control
      Agreement”
means
      a
      control agreement, in form and substance satisfactory to the Agent, executed
      and
      delivered by the applicable Loan Party, the Agent and the applicable bank (with
      respect to a deposit account) or securities intermediary (with respect to a
      securities account). 

    

    “D&O
      Insurance”
means
      a
      policy or policies of insurance protecting directors and officers of a juridical
      entity from liability arising from actions connected to their corporate
      positions.

    

    “Default”
means
      an event which, with the lapse of time, would constitute an Event of
      Default.

    

    “Disposition”
means
      any transaction, or series of related transactions, pursuant to which any Person
      or any of its Subsidiaries sells, assigns, transfers or otherwise disposes
      of
      any property or assets (whether now owned or hereafter acquired) to any other
      Person, in each case, whether or not the consideration therefor consists of
      cash, securities or other assets owned by the acquiring Person, excluding
      any (i)
      sales of Inventory in the ordinary course of business on ordinary business
      terms, (ii) licenses of general intangibles by any of the Foreign Subsidiaries
      in the ordinary course of such Foreign Subsidiary’s business on ordinary
      business terms, (iii) sales or other dispositions by a Foreign Subsidiary of
      obsolescent items of equipment in the ordinary course of business consistent
      with such Foreign Subsidiary’s past practices, (iv) the sale of the Cuxhaven
      Turbine owned by DeWind Turbines Limited, and (v) any transfer among the Foreign
      Subsidiaries of assets related to any insolvency or winding up of any of the
      Foreign Subsidiaries.

    

    “Dollar,”
      “Dollars”
and
      the
      symbol “$”
each
      means lawful money of the United States of America.

    

    “Domestic
      Subsidiaries”
means
      the Subsidiaries of the Borrower incorporated under the laws of any jurisdiction
      in the United States. As of the date hereof, the Domestic Subsidiaries are
      CTC
      Cable Corporation, a Nevada corporation, CTC Towers & Poles, a Nevada
      corporation, Transmission Technology Corporation, a Nevada corporation, and
      DeWind Inc., a Nevada corporation.

    

    “Effective
      Date”
means
      the date, on or before April __, 2008, on which all of the conditions precedent
      set forth in Section
      5.01
      are
      satisfied or waived and the Loan is made.

    

    “Employee
      Plan”
means
      an employee benefit plan (other than a Multiemployer Plan) covered by Title
      IV
      of ERISA and maintained (or that was maintained at any time during the six
      (6)
      calendar years preceding the date of any borrowing hereunder) for employees
      of
      Borrower, any of its Subsidiaries, or any of its ERISA Affiliates.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    “Environmental
      Actions”
means
      any complaint, summons, citation, notice, directive, order, claim, litigation,
      investigation, judicial or administrative proceeding, or judgment from any
      Person or Governmental Authority involving violations of Environmental Laws
      or
      Releases of Hazardous Materials (i) from any assets, properties or businesses
      owned or operated by Borrower or any of its Subsidiaries or any predecessor
      in
      interest; (ii) from adjoining properties or businesses; or (iii) onto any
      facilities which received Hazardous Materials generated by Borrower or any
      of
      its Subsidiaries or any predecessor in interest. 

    

    “Environmental
      Laws”
means
      the Comprehensive Environmental Response, Compensation and Liability Act (42
      U.S.C. § 9601, et seq.),
      the
      Hazardous Materials Transportation Act (49 U.S.C. § 1801, et seq.),
      the
      Resource Conservation and Recovery Act (42 U.S.C. § 6901, et seq.),
      the
      Federal Clean Water Act (33 U.S.C. § 1251 et seq.),
      the
      Clean Air Act (42 U.S.C. § 7401 et seq.),
      the
      Toxic Substances Control Act (15 U.S.C. § 2601 et seq.)
      and
      the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.),
      as
      such laws may be amended or otherwise modified from time to time, and any other
      present or future federal, state, local or foreign statute, ordinance, rule,
      regulation, order, judgment, decree, permit, license or other binding
      determination of any Governmental Authority imposing liability or establishing
      standards of conduct for protection of the environment or other government
      restrictions relating to the protection of the environment or the Release,
      deposit or migration of any Hazardous Materials into the
      environment.

    

    “Environmental
      Liabilities and Costs”
means
      all liabilities, monetary obligations, Remedial Actions, losses, damages,
      punitive damages, consequential damages, treble damages, costs and expenses
      (including all reasonable fees, disbursements and expenses of counsel, experts
      and consultants and costs of investigations and feasibility studies), fines,
      penalties, sanctions and interest incurred as a result of any claim or demand
      by
      any Governmental Authority or any third party, and which relate to any
      environmental condition or a Release of Hazardous Materials from or onto
      (i) any property presently or formerly owned by Borrower or any of its
      Subsidiaries or (ii) any facility which received Hazardous Materials
      generated by Borrower or any of its Subsidiaries.

    

    “Environmental
      Lien”
means
      any Lien in favor of any Governmental Authority for Environmental Liabilities
      and Costs.

    

    “Equipment”
means
      “equipment” (as that term is defined in the Uniform Commercial
      Code).

    

    “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended, and any
      successor statute of similar import, and regulations thereunder, in each case,
      as in effect from time to time. References to sections of ERISA shall be
      construed also to refer to any successor sections.

    

    “ERISA
      Affiliate”
means,
      with respect to any Person, any trade or business (whether or not incorporated)
      which is a member of a group of which such Person is a member and which would
      be
      deemed to be a “controlled group” within the meaning of Sections 414(b), (c),
      (m) and (o) of the Internal Revenue Code.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “Event
      of Default”
means
      any of the events set forth in Section
      9.01.

    

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

    

    “Excluded
      Issuance”
means
      (A) shares of Common Stock issued or deemed issued to employees, consultants,
      attorneys, officers or directors (if in transactions with primarily
      non-financing purposes) of the Borrower directly or pursuant to a stock plan
      approved by the majority of the disinterested members of the Borrower’s Board of
      Directors; and (B) shares of Common Stock issued pursuant to the conversion
      or
      exercise of convertible or exercisable securities outstanding as of the date
      hereof.

    

    “Extraordinary
      Receipts”
means
      any cash received by the Borrower or any of its Subsidiaries not in the ordinary
      course of business (and not consisting of proceeds described in Section
      2.05(c)
      (ii) or
      (iii) hereof), including, without limitation, (i) foreign, United States,
      state or local tax refunds other than refunds in an amount less than $1,000
      in
      each instance of sales or use taxes or VAT refunds, (ii) pension plan
      reversions, (iii) proceeds of insurance, (iv) judgments, proceeds of
      settlements or other consideration of any kind in connection with any cause
      of
      action, (v) condemnation awards (and payments in lieu thereof),
      (vi) indemnity payments and (vii) any purchase price adjustment
      received in connection with any purchase agreement; provided that “Extraordinary
      Receipts” excludes any purchase price adjustment related to additional receipts
      due under a Turbine Supply Agreement for additional consideration caused by
      a
      change in Foreign Exchange Rate adjustments or commodity price
      increases.

    

    “Final
      Maturity Date”
means
      the earliest of (i) November 3, 2008, (ii) the date on which the Loan shall
      become due and payable in accordance with the terms of this Agreement, or
      (iii) the payment in full of all Obligations and the termination
      of all Commitments.

    

    “Financial
      Statements”
means
      (i) the audited consolidated balance sheet of the Borrower and its Subsidiaries
      for the Fiscal Year ended September 30, 2007, and the related consolidated
      statement of operations, shareholders’ equity and cash flows for the Fiscal Year
      then ended, and (ii) the unaudited consolidated balance sheet of the
      Borrower and its Subsidiaries for the three (3) months ended December 31, 2007,
      and the related consolidated statement of operations, statement of cash flows
      for the three (3) months then ended.

    

    “Fiscal
      Year”
means
      the fiscal year of the Borrower and its Subsidiaries ending on September 30
      of
      each year.

    

    “Foreign
      Subsidiaries”
means
      the Subsidiaries of the Borrower incorporated under the laws of any foreign
      jurisdiction. As of the date hereof, the Foreign Subsidiaries are DeWind
      Turbines, Limited, DeWind Holding Limited, DeWind GmbH, DeWind Ltd., EU Energy
      Windpower, EU Energy North America, Inc., EU Energy, Inc., and E Energy
      Service.

    

    “GAAP”
means
      generally accepted accounting principles in effect from time to time in the
      United States, applied on a consistent basis. 

    

    “Governmental
      Authority”
means
      any nation or government, any Federal, state, city, town, municipality, county,
      local or other political subdivision thereof or thereto and any department,
      commission, board, bureau, instrumentality, agency or other entity exercising
      executive, legislative, judicial, taxing, regulatory or administrative powers
      or
      functions of or pertaining to government.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    “Gross
      Turbine Sales Proceeds”
means
      the total contracted sales price for a D8.2 turbine (and any blade sets or
      towers included therewith but excluding the Sweetwater Transaction, subject
      to
      the satisfaction of the conditions set forth in the definition of Net Cash
      Proceeds) but, so long as entered into in good faith at arm’s length and in the
      ordinary course of business, excluding any funds designated for turbine service
      contracts or for warranty periods greater than 2 years.

    

    “Guaranteed
      Obligations”
has
      the
      meaning specified therefor in Section 11.01.

    

    “Guarantor”
means
      (i) each Subsidiary of the Parent listed as a “Guarantor” on the signature pages
      hereto, and each other Person that executes a Joinder Agreement and becomes
      a
“Guarantor” hereunder, and (ii) each other Person that guarantees, pursuant to
      Section 7.01(b) or otherwise, all or any part of the Obligations.

    

    “Guaranty”
means
      (i) the secured guaranty of each Guarantor party hereto contained in ARTICLE
      XI
      hereof, and (ii) any other guaranty, in form and substance satisfactory to
      the
      Agent, made by any Person in favor of the Agent and the Lenders, guaranteeing
      all or any part of the Obligations.

    

    “Hazardous
      Material”
means
      (a) any element, compound or chemical that is defined, listed or otherwise
      classified as a contaminant, pollutant, toxic pollutant, toxic or hazardous
      substance, extremely hazardous substance or chemical, hazardous waste, special
      waste, or solid waste under Environmental Laws which is present in the
      environment in such quantity or state that it contravenes or requires reporting
      to any Governmental Authority or any response action pursuant to any
      Environmental Law; (b) petroleum and its refined products;
      (c) polychlorinated biphenyls; (d) any substance exhibiting a
      hazardous waste characteristic, including, without limitation, corrosivity,
      ignitability, toxicity or reactivity as well as any radioactive or explosive
      materials; and (e) any raw materials, building components (including,
      without limitation, asbestos-containing materials) and manufactured products
      containing hazardous substances listed or classified as such under Environmental
      Laws.

    

    “Hedging
      Agreement”
means
      any interest rate, foreign currency, commodity or equity swap, collar, cap,
      floor or forward rate agreement, or other agreement or arrangement designed
      to
      protect against fluctuations in interest rates or currency, commodity or equity
      values (including, without limitation, any option with respect to any of the
      foregoing and any combination of the foregoing agreements or arrangements),
      and
      any confirmation executed in connection with any such agreement or
      arrangement.

    

    “Highest
      Lawful Rate”
means,
      with respect to the Agent or any Lender, the maximum non-usurious interest
      rate,
      if any, that at any time or from time to time may be contracted for, taken,
      reserved, charged or received on the Obligations under laws applicable to the
      Agent or such Lender which are currently in effect or, to the extent allowed
      by
      law, under such applicable laws which may hereafter be in effect and which
      allow
      a higher maximum non-usurious interest rate than applicable laws now
      allow.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    “Indebtedness”
means,
      with respect to any Person, without duplication, (i) all indebtedness of such
      Person for borrowed money; (ii) all obligations of such Person for the
      deferred purchase price of property or services (other than trade payables
      or
      other unsecured accounts payable incurred in the ordinary course of such
      Person’s business and not, with respect to trade payables owed to Cable Critical
      Vendors identified on Schedule 1.01(B), outstanding for more than 10 days after
      the date such payable was due and payable in accordance with the customary
      trade
      terms afforded such Person by such vendor); (iii) all obligations of such
      Person evidenced by bonds, debentures, notes or other similar instruments or
      upon which interest payments are customarily made; (iv) all reimbursement,
      payment or other obligations and liabilities of such Person created or arising
      under any conditional sales or other title retention agreement with respect
      to
      property used and/or acquired by such Person, even though the rights and
      remedies of the lessor, seller and/or lender thereunder may be limited to
      repossession or sale of such property; (v) all Capitalized Lease Obligations
      of
      such Person; (vi) all obligations and liabilities, contingent or otherwise,
      of such Person, in respect of letters of credit, acceptances and similar
      facilities; (vii) all obligations and liabilities, calculated on a basis
      satisfactory to the Agent and in accordance with accepted practice, of such
      Person under Hedging Agreements; (viii) all monetary obligations under any
      receivables factoring, receivable sales or similar transactions and all monetary
      obligations under any synthetic lease, tax ownership/operating lease,
      off-balance sheet financing or similar financing; (ix) all Contingent
      Obligations; and (x) all obligations referred to in clauses
      (i) through (ix) of this definition of another Person secured by (or for
      which the holder of such Indebtedness has an existing right, contingent or
      otherwise, to be secured by) a Lien upon property owned by such Person, even
      though such Person has not assumed or become liable for the payment of such
      Indebtedness. The Indebtedness of any Person shall include the Indebtedness
      of
      any partnership of or joint venture in which such Person is a general partner
      or
      a joint venturer.

    

    “Indemnified
      Matters”
has
      the
      meaning specified therefor in Section
      12.15.

    

    “Indemnitees”
has
      the
      meaning specified therefor in Section
      12.15.

    

    “Initial
      Tranche”
has
      the
      meaning specified therefor in Section
      2.02(b).

    

    “Insolvency
      Proceeding”
means
      any proceeding commenced by or against any Person under any provision of the
      Bankruptcy Code or under any other bankruptcy or insolvency law, assignments
      for
      the benefit of creditors, formal or informal moratoria, compositions, or
      extensions generally with creditors, or proceedings seeking reorganization,
      arrangement, or other similar relief.

    

    “Inspections”
has
      the
      meaning specified therefor in Section
      4.01.

    

    “Intercompany
      Subordination Agreement”
means
      an Intercompany Subordination Agreement, in form and substance satisfactory
      to
      the Agent, made by each Borrower in favor of the Agent, for the benefit of
      the
      Agent and the Lenders.

    

    “Interest
      Payment Date”
has
      the
      meaning specified therefor in Section
      2.04(c).

    

    “Interest
      Yield Protection Amount”
means,
      as of any date of determination, the difference between (i) the aggregate cash
      interest and PIK Amount which would have accrued and been due and payable on
      the
      aggregate outstanding principal amount of the Loan prepaid on such date over
      the
      six (6) month term of the Loan and (ii) the aggregate cash interest and PIK
      Amount actually paid prior to such date by Borrower on the aggregate outstanding
      principal amount of the Loan prepaid on such date (excluding any amounts paid
      by
      Borrower at the Post-Default Rate).

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    “Internal
      Revenue Code”
means
      the Internal Revenue Code of 1986, as amended (or any successor statute thereto)
      and the regulations thereunder.

    

    “Inventory”
means,
      with respect to any Person, all goods and merchandise of such Person, including,
      without limitation, all raw materials, work-in-process, packaging, supplies,
      materials and finished goods of every nature used or usable in connection with
      the shipping, storing, advertising or sale of such goods and merchandise,
      whether now owned or hereafter acquired, and all such other property the sale
      or
      other disposition of which would give rise to an Account Receivable or
      cash.

    

    “Joinder
      Agreement”
means
      a
      Joinder Agreement, substantially in the form of Exhibit C, duly executed by
      a Subsidiary of the Borrower made a party hereto pursuant to Section
      7.01(b).

    

    “Lease”
means
      any lease of real property to which the Borrower or any of its Subsidiaries
      is a
      party as lessor or lessee.

    

    “Lender”
has
      the
      meaning specified therefor in the preamble hereto.

    

    “Lien”
means
      any mortgage, deed of trust, pledge, lien (statutory or otherwise), security
      interest, charge or other encumbrance or security or preferential arrangement
      of
      any nature, including, without limitation, any conditional sale or title
      retention arrangement, any Capitalized Lease and any assignment, deposit
      arrangement or financing lease intended as, or having the effect of,
      security.

    

    “Loan”
means,
      collectively, the loans made by the Lenders to the Borrower on the Effective
      Date pursuant to Section 2.01.

    

    “Loan
      Account”
means
      an account maintained hereunder by the Agent on its books of account at the
      Payment Office and, with respect to the Borrower, in which the Borrower will
      be
      charged with the Loan made to, and all other Obligations incurred by, the
      Borrower.

    

    “Loan
      Document”
means
      this Agreement, any Guaranty, any Security Agreement, any Pledge Agreement,
      any
      UCC Filing Authorization Letter, any Joinder Agreement, the Intercompany
      Subordination Agreement, and any other agreement, instrument, certificate,
      report and other document executed and delivered pursuant hereto or thereto
      or
      otherwise evidencing or securing the Loan or any other Obligation.

    

    “Loan
      Party”
means
      the Borrower and any Guarantor.

    

    “Lockbox
      Bank”
has
      the
      meaning specified therefor in Section 8.01(a).

    

    “Lockboxes”
has
      the
      meaning specified therefor in Section 8.01(a).

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    “Material
      Adverse Effect”
means
      a
      material adverse effect on any of (i) the operations, business, assets,
      properties or condition (financial or otherwise) of the Loan Parties taken
      as a
      whole, (ii) the ability of the Loan Parties, taken as a whole, to perform
      any of their obligations under any Loan Document, (iii) the legality,
      validity or enforceability of this Agreement or any other Loan Document,
      (iv) the rights and remedies of the Agent or any Lender under any Loan
      Document, or (v) the validity, perfection or priority of a Lien in favor of
      the Agent for the benefit of the Agent and the Lenders on any of the
      Collateral.

    

    “Material
      Contract”
means,
      with respect to any Person, (i) each contract or agreement in effect from time
      to time to which such Person or any of its Subsidiaries is a party involving
      aggregate consideration payable to or by such Person or such Subsidiary of
      $250,000 or more in any Fiscal Year (other than purchase orders in the ordinary
      course of the business of such Person or such Subsidiary and other than
      contracts that by their terms may be terminated by such Person or Subsidiary
      in
      the ordinary course of its business upon less than 60 days’ notice without
      penalty or premium) and (ii)  all other contracts or agreements in effect
      from time to time that are material to the business, operations, condition
      (financial or otherwise), performance, or properties of such Person and its
      Subsidiaries taken as a whole.

    

    “Moody’s”
means
      Moody’s Investors Service, Inc. and any successor thereto.

    

    “Multiemployer
      Plan”
means
      a
“multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which
      Borrower, any of its Subsidiaries, or any of its ERISA Affiliates has
      contributed to, or has been obligated to contribute, at any time during the
      preceding six (6) years.

    

    “Net
      Cash Proceeds”
means,
      (i) with respect to any Disposition by any Person or any of its
      Subsidiaries, the aggregate amount of cash received (directly or indirectly)
      from time to time (whether as initial consideration or through the payment
      or
      disposition of deferred consideration) by or on behalf of such Person or such
      Subsidiary, in connection therewith after deducting therefrom only (A) the
      amount of any Indebtedness secured by any Lien permitted by Section
      7.02(a)
      on any
      asset (other than Indebtedness assumed by the purchaser of such asset) which
      is
      required to be, and is, repaid in connection with such Disposition (other than
      Indebtedness under this Agreement), (B) expenses related thereto incurred
      by such Person or such Subsidiary in connection therewith, (C) transfer
      taxes paid or payable to any taxing authorities by such Person or such
      Subsidiary in connection therewith, and (D) net income taxes to be paid in
      connection with such Disposition (after taking into account any tax credits
      or
      deductions and any tax sharing arrangements) and (ii) with respect to the
      issuance or incurrence of any Indebtedness by any Person or any of its
      Subsidiaries, or the sale or issuance by any Person or any of its Subsidiaries
      of any shares of its Capital Stock, the aggregate amount of cash received
      (directly or indirectly) from time to time (whether as initial consideration
      or
      through the payment or disposition of deferred consideration) by or on behalf
      of
      such Person or such Subsidiary in connection therewith, after deducting
      therefrom only (A) reasonable expenses related thereto incurred by such
      Person or such Subsidiary in connection therewith, (B) transfer taxes paid
      or
      payable by such Person or such Subsidiary in connection therewith and (C) net
      income taxes to be paid in connection therewith (after taking into account
      any
      tax credits or deductions and any tax sharing arrangements); in each case of
      clause (i) and (ii) to the extent, but only to the extent, that the amounts
      so
      deducted are (x) actually paid or payable to a Person that, except in the
      case of out-of-pocket expenses, is not an Affiliate of such Person or any of
      its
      Subsidiaries and (y) properly attributable to such transaction or to the asset
      that is the subject thereof. Notwithstanding the foregoing, any cash received
      by
      a Loan Party in respect of the Sweetwater Transaction shall not constitute
      Net
      Cash Proceeds as long as (i) the aggregate cash proceeds thereof exceed
      $1,000,000 and (ii) such proceeds are received within 90 days following the
      Effective Date. If such conditions are not met, the Loan Parties shall effect
      prepayment of the Loan with the Net Turbine Nacelle Sales Proceeds from the
      Sweetwater Transaction in accordance with Section 2.05(c)(v).

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    “Net
      Turbine Nacelle Sales Proceeds”
means
      the Gross Turbine Sales Proceeds reduced by (i) any contractually required
      cash
      warranty reserves, (ii) any reasonable sales expenses or commissions for the
      sale of the turbine, (iii) $450,000 if the Loan Party sells a D8.2 blade set
      with the nacelle unit, and (iv) $300,000 plus shipping charges if the Loan
      Party
      sells a D8.2 turbine tower with the D8.2 turbine nacelle unit.

    

    “New
      Lending Office”
has
      the
      meaning specified therefor in Section
      2.08(d).

    

    “Non-Consenting
      Lender”
has
      the
      meaning specified therefor in Section
      12.07(j).

    

    “Non-U.S.
      Lender”
has
      the
      meaning specified therefor in Section
      2.08(d).

    

    “Obligations”
means
      all present and future indebtedness, obligations, and liabilities of each Loan
      Party to the Agent and the Lenders arising under or in connection with this
      Agreement or any other Loan Document, whether or not the right of payment in
      respect of such claim is reduced to judgment, liquidated, unliquidated, fixed,
      contingent, matured, disputed, undisputed, legal, equitable, secured, unsecured,
      and whether or not such claim is discharged, stayed or otherwise affected by
      any
      proceeding referred to in Section
      9.01.
      Without
      limiting the generality of the foregoing, the Obligations of each Loan Party
      under the Loan Documents include (a) the obligation (irrespective of
      whether a claim therefor is allowed in an Insolvency Proceeding) to pay
      principal, interest, charges, expenses, fees, attorneys’ fees and disbursements,
      indemnities and other amounts payable by such Person under the Loan Documents,
      and (b) the obligation of such Person to reimburse any amount in respect of
      any of the foregoing that the Agent or any Lender (in its sole discretion)
      may
      elect to pay or advance on behalf of such Person.

    

    “Operating
      Lease Obligations”
means
      all obligations for the payment of rent for any real or personal property under
      leases or agreements to lease, other than Capitalized Lease
      Obligations.

    

    “Other
      Taxes”
has
      the
      meaning specified therefor in Section
      2.08(b).

    

    “Participant
      Register”
has
      the
      meaning specified therefor in Section
      12.07(g).

    

    “Payment
      Office”
means
      the Agent’s office located at 570 Lexington Avenue, 40th
      Floor,
      New York, New York 10022, Attention: Gurdev Dillon, or at such other office
      or offices of the Agent as may be designated in writing from time to time by
      the
      Agent to the Borrower.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

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

    

    “Permitted
      Indebtedness”
      means:

     

    (a) any
      Indebtedness owing to the Agent or any Lender under this Agreement and the
      other
      Loan Documents;

     

    (b) any
      other
      Indebtedness listed on Schedule 7.02(b),
      and the
      extension of maturity, refinancing or modification of the terms thereof;
provided,
      however,
      that
      (i) such extension, refinancing or modification is pursuant to terms that are
      not less favorable to the Loan Parties and the Lenders than the terms of the
      Indebtedness being extended, refinanced or modified and (ii) after giving effect
      to such extension, refinancing or modification, the amount of such Indebtedness
      is not greater than the amount of Indebtedness outstanding immediately prior
      to
      such extension, refinancing or modification; and

     

    (c) Indebtedness
      evidenced by Capitalized Lease Obligations entered into by a Loan Party in
      order
      to finance Capital Expenditures made by the Loan Parties for additional
      Equipment subsequent to the Effective Date (but not for replacement or
      maintenance Capital Expenditures), which Indebtedness does not exceed $3,000,000
      at any time outstanding.

    

    “Permitted
      Investments”
means
      (i) marketable direct obligations issued or unconditionally guaranteed by
      the United States Government or issued by any agency thereof and backed by
      the
      full faith and credit of the United States, in each case, maturing within one
      year from the date of acquisition thereof; (ii) commercial paper, maturing
      not more than 270 days after the date of issue rated P-1 by Moody’s or A-1
      by Standard & Poor’s; (iii) certificates of deposit maturing not more
      than 270 days after the date of issue, issued by commercial banking
      institutions and money market or demand deposit accounts maintained at
      commercial banking institutions, each of which is a member of the Federal
      Reserve System and has a combined capital and surplus and undivided profits
      of
      not less than $500,000,000; (iv) repurchase agreements having maturities of
      not more than 90 days from the date of acquisition which are entered into
      with major money center banks included in the commercial banking institutions
      described in clause (iii) above and which are secured by readily marketable
      direct obligations of the United States Government or any agency thereof,
      (v) money market accounts maintained with mutual funds having assets in
      excess of $2,500,000,000; and (vi) tax exempt securities rated A or higher
      by Moody’s or A+ or higher by Standard & Poor’s.

    

    “Permitted
      Liens”
      means:

    

    (a) Liens
      securing the Obligations;

    

    (b) Liens
      for
      taxes, assessments and governmental charges the payment of which is not required
      under Section 7.01(c); 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (c) Liens
      imposed by law, such as carriers’, warehousemen’s, mechanics’, materialmen’s and
      other similar Liens arising in the ordinary course of business and securing
      obligations (not in excess of $250,000 at any time and other than Indebtedness
      for borrowed money) that are not overdue by more than 30 days or are being
      contested in good faith and by appropriate proceedings promptly initiated and
      diligently conducted, and a reserve or other appropriate provision, if any,
      as
      shall be required by GAAP shall have been made therefor;

    

    (d) Liens
      described on Schedule 7.02(a);
      provided,
      that
      (i) no such Lien shall at any time be extended to cover any additional
      property not subject thereto on the Effective Date and (ii) the principal
      amount of the Indebtedness secured by such Liens shall not be extended, renewed,
      refunded or refinanced other than in accordance with clause (b) of the
      definition of Permitted Indebtedness;

    

    (e) deposits
      and pledges of cash securing (i) obligations incurred in respect of workers’
compensation, unemployment insurance or other forms of governmental insurance
      or
      benefits, (ii) the performance of bids, tenders, leases, contracts (other
      than for the payment of money) and statutory obligations or (iii) obligations
      on
      surety or appeal bonds, but only to the extent such deposits or pledges are
      made
      or otherwise arise in the ordinary course of business and secure obligations
      not
      past due;

    

    (f) easements,
      zoning restrictions and similar encumbrances on real property and minor
      irregularities in the title thereto that do not (i) secure obligations for
      the
      payment of money or (ii) materially impair the value of such property or its
      use
      by Borrower or any of its Subsidiaries in the normal conduct of such Person’s
      business; 

    

    (g) Liens
      on
      real property or Equipment securing Indebtedness permitted by subsection (c)
      of
      the definition of Permitted Indebtedness; 

    

    (h) Liens
      resulting from any judgment, order or award that does not give rise to an Event
      of Default under Section
      9.01(j);

    

    (i) Liens
      in
      favor of customs and revenue authorities arising as a matter of law to secure
      payments of custom duties in connection with the importation of goods;
      and

    

    (j) Liens
      on
      specified items of Inventory purchased after the Effective Date with the
      proceeds of a customer deposit and under construction and being sold to such
      customer; provided that the amount of Indebtedness secured by such Lien shall
      not exceed the amount of customer deposit received from the purchaser benefited
      by such Lien.

    

    “Person”
means
      an individual, corporation, limited liability company, partnership, association,
      joint-stock company, trust, unincorporated organization, joint venture or other
      enterprise or entity or Governmental Authority.

    

    “PIK
      Amount”
has
      the
      meaning specified therefore in Section 2.04(c).

    

    “Plan”
means
      any Employee Plan or Multiemployer Plan.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    “Pledge
      Agreement”
means
      a
      Pledge and Security Agreement made by a Loan Party in favor of the Agent for
      the
      benefit of the Agent and the Lenders, substantially in the form of Exhibit
      B,
      securing the Obligations and delivered to the Agent.

    

    “Post-Default
      Rate”
means
      a
      rate of interest per annum equal to the rate of interest otherwise in effect
      from time to time pursuant to the terms of this Agreement plus
      5.0%.

    

    “Pro
      Rata Share”
means
      the percentage obtained by dividing (i) such Lender’s Commitment, by
      (ii) the Total Commitment, provided
      that if
      the Total Commitment has been reduced to zero, the numerator shall be the
      aggregate unpaid principal amount of such Lender’s portion of the Loan and the
      denominator shall be the aggregate unpaid principal amount of the Loan.

    

    “Register”
has
      the
      meaning specified therefor in Section
      12.07(d).

    

    “Registered
      Loan”
has
      the
      meaning specified therefor in Section
      12.07(d).

    

    “Regulation
      T”,
      “Regulation
      U”
and
      “Regulation
      X”
mean,
      respectively, Regulations T, U and X of the Board or any successor, as the
      same
      may be amended or supplemented from time to time.

    

    “Related
      Fund”
means,
      with respect to any Person, an Affiliate of such Person, or a fund or account
      managed by such Person or an Affiliate of such Person.

    

    “Release”
means
      any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
      injecting, escaping, leaching, seeping, migrating, dumping or disposing of
      any
      Hazardous Material (including the abandonment or discarding of barrels,
      containers and other closed receptacles containing any Hazardous Material)
      into
      the indoor or outdoor environment, including, without limitation, the movement
      of Hazardous Materials through or in the ambient air, soil, surface or ground
      water, or property.

    

    “Remedial
      Action”
means
      all actions taken to (i) clean up, remove, remediate, contain, treat, monitor,
      assess, evaluate or in any other way address Hazardous Materials in the indoor
      or outdoor environment; (ii) prevent or minimize a Release or threatened Release
      of Hazardous Materials so they do not migrate or endanger or threaten to
      endanger public health or welfare or the indoor or outdoor environment; or
      (iii)
      perform pre-remedial studies and investigations and post-remedial operation
      and
      maintenance activities. 

    

    “Reportable
      Event”
means
      an event described in Section 4043 of ERISA (other than an event not subject
      to
      the provision for 30-day notice to the PBGC under the regulations promulgated
      under such Section).

    

    “Required
      Lenders”
means
      Lenders whose Pro Rata Shares aggregate at least 50.1%.

    

    “Responsible
      Officer”
means
      the chief executive officer, chief financial officer, chief operating officer,
      controller, treasurer, vice president, division manager, or any other Person
      performing comparable duties generally associated with any of the foregoing
      titles, of the Borrower or any of its Subsidiaries.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    “SEC”
means
      the Securities and Exchange Commission or any other similar or successor agency
      of the Federal government administering the Securities Act.

    

    “Second
      Tranche”
has
      the
      meaning specified therefor in Section
      2.02(b).

    

    “Securities
      Act”
means
      the Securities Act of 1933, as amended, or any similar Federal statute, and
      the
      rules and regulations of the SEC thereunder, all as the same shall be in effect
      from time to time.

    

    “Security
      Agreement”
means
      a
      Security Agreement made by a Loan Party in favor of the Agent for the benefit
      of
      the Agent and the Lenders, substantially in the form of Exhibit A, securing
      the Obligations and delivered to the Agent.

    

    “Software”
means
      any computer programs and computer systems (including
      all databases, compilations, tool sets, compilers, higher level or proprietary
      languages, related documentation and materials, whether in source code, object
      code or human readable form)
      sold,
      marketed, distributed, licensed or maintained by the Borrower or any of its
      Subsidiaries, and any computer programs necessary for the conduct of the
      Borrower’s and its Subsidiaries’ business as currently conducted.

    

    “Solvent”
means,
      with respect to any Person on a particular date, that on such date (i) the
      fair value of the property of such Person is not less than the total amount
      of
      the liabilities of such Person, (ii) the present fair salable value of the
      assets of such Person is not less than the amount that will be required to
      pay
      the probable liability of such Person on its existing debts as they become
      absolute and matured, (iii) such Person is able to realize upon its assets
      and pay its debts and other liabilities, contingent obligations and other
      commitments as they mature in the normal course of business, (iv) such
      Person does not intend to, and does not believe that it will, incur debts or
      liabilities beyond such Person’s ability to pay as such debts and liabilities
      mature, and (v) such Person is not engaged in business or a transaction,
      and is not about to engage in business or a transaction, for which such Person’s
      property would constitute unreasonably small capital.

    

    “Standard
      & Poor’s”
means
      Standard & Poor’s Ratings Services, a division of The McGraw-Hill
      Companies, Inc. and any successor thereto.

    

    “Subordinated
      Indebtedness”
means
      Indebtedness of Borrower or any of its Subsidiaries the terms of which are
      satisfactory to the Agent and the Required Lenders and which has been expressly
      subordinated in right of payment to all Indebtedness of such entity under the
      Loan Documents (i) by the execution and delivery of a subordination
      agreement, in form and substance satisfactory to the Agent and the Required
      Lenders, or (ii) otherwise on terms and conditions (including, without
      limitation, subordination provisions, payment terms, interest rates, covenants,
      remedies, defaults and other material terms) satisfactory to the Agent and
      the
      Required Lenders. 

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    “Subsidiary”
means,
      with respect to any Person at any date, any corporation, limited or general
      partnership, limited liability company, trust, estate, association, joint
      venture or other business entity (i) the accounts of which would be
      consolidated with those of such Person in such Person’s consolidated financial
      statements if such financial statements were prepared in accordance with GAAP
      or
      (ii) of which more than 50% of (A) the outstanding Capital Stock
      having (in the absence of contingencies) ordinary voting power to elect a
      majority of the Board of Directors of such Person, (B) in the case of a
      partnership or limited liability company, the interest in the capital or profits
      of such partnership or limited liability company or (C) in the case of a
      trust, estate, association, joint venture or other entity, the beneficial
      interest in such trust, estate, association or other entity business is, at
      the
      time of determination, owned or controlled directly or indirectly through one
      or
      more intermediaries, by such Person.

    

    “Sweetwater
      Transaction”
has
      the
      meaning specified therefor in Section 5.01(d).

    

    “Taxes”
has
      the
      meaning specified therefor in Section
      2.08(a).

    

    “Termination
      Event”
means
      (i) a Reportable Event with respect to any Employee Plan, (ii) any event that
      causes Borrower or any of its ERISA Affiliates to incur liability under Section
      409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA
      or
      Section 4971 or 4975 of the Internal Revenue Code with respect to any Plan,
      (iii) the filing of a notice of intent to terminate an Employee Plan or the
      treatment of an Employee Plan amendment as a termination under Section 4041
      of ERISA, (iv) the institution of proceedings by the PBGC to terminate an
      Employee Plan, or (v) any other event or condition which might constitute
      grounds under Section 4042 of ERISA for the termination of, or the appointment
      of a trustee to administer, any Employee Plan.

    

    “Total
      Commitment”
means
      the sum of the amounts of the Lenders’ Commitments.

    

    “Transactions”
means
      the transactions contemplated by the Loan Documents.

    

    “Transferee”
has
      the
      meaning specified therefor in Section
      2.08(a).

    

    “Transfer
      Pricing Policy”
has
      the
      meaning specified therefor in Section
      6.01(jj).

    

    “UCC
      Filing Authorization Letter”
means
      a
      letter duly executed by Borrower authorizing the Agent to file appropriate
      financing statements on Form UCC-1 without the signature of Borrower in such
      office or offices as may be necessary or, in the opinion of the Agent, desirable
      to perfect the security interests purported to be created by the Security
      Agreement, and the Pledge Agreement.

    

    “Uniform
      Commercial Code”
has
      the
      meaning specified therefor in Section
      1.03.

    

    “WARN”
has
      the
      meaning specified therefor in Section
      6.01(z).

     

    “Warrants”
has
      the
      meaning specified therefor in Section 5.01(d)(xxiii).

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    Section
      1.02 Terms
      Generally.
      The
      definitions of terms herein shall apply equally to the singular and plural
      forms
      of the terms defined. Whenever the context may require, any pronoun shall
      include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the
      phrase “without limitation”. The word “will” shall be construed to have the same
      meaning and effect as the word “shall”. Unless the context requires otherwise,
      (a) any definition of or reference to any agreement, instrument or other
      document herein shall be construed as referring to such agreement, instrument
      or
      other document as from time to time amended, supplemented or otherwise modified
      (subject to any restrictions on such amendments, supplements or modifications
      set forth herein), (b) any reference herein to any Person shall be construed
      to
      include such Person’s successors and assigns, (c) the words “herein”, “hereof”
and “hereunder”, and words of similar import, shall be construed to refer to
      this Agreement in its entirety and not to any particular provision hereof,
      (d)
      all references herein to Articles, Sections, Exhibits and Schedules shall be
      construed to refer to Articles and Sections of, and Exhibits and Schedules
      to,
      this Agreement and (e) the words “asset” and “property” shall be construed to
      have the same meaning and effect and to refer to any right or interest in or
      to
      assets and properties of any kind whatsoever, whether real, personal or mixed
      and whether tangible or intangible. References in this Agreement to
“determination” by the Agent include good faith estimates by the Agent (in the
      case of quantitative determinations) and good faith beliefs by the Agent (in
      the
      case of qualitative determinations).

     

    Section
      1.03 Accounting
      and Other Terms.
      Unless
      otherwise expressly provided herein, each accounting term used herein shall
      have
      the meaning given it under GAAP applied on a basis consistent with those used
      in
      preparing the Financial Statements. All terms used in this Agreement which
      are
      defined in Article 8 or Article 9 of the Uniform Commercial Code as in effect
      from time to time in the State of New York (the “Uniform
      Commercial Code”)
      and
      which are not otherwise defined herein shall have the same meanings herein
      as
      set forth therein, provided that terms used herein which are defined in the
      Uniform Commercial Code as in effect in the State of New York on the date hereof
      shall continue to have the same meaning notwithstanding any replacement or
      amendment of such statute except as the Agent may otherwise
      determine.

     

    Section
      1.04 Time
      References.
      Unless
      otherwise indicated herein, all references to time of day refer to Eastern
      Standard Time or Eastern daylight saving time, as in effect in New York City
      on
      such day. For purposes of the computation of a period of time from a specified
      date to a later specified date, the word “from” means “from and including” and
      the words “to” and “until” each means “to but excluding”; provided,
      however,
      that
      with respect to a computation of fees or interest payable to the Agent or any
      Lender, such period shall in any event consist of at least one full
      day.

    

    ARTICLE
      II

    

    THE
      LOAN

     

    Section
      2.01 Commitments.
      Subject
      to the terms and conditions and relying upon the representations and warranties
      herein set forth,
      each
      Lender severally agrees to make the Loan to the Borrower on the Effective Date,
      in an aggregate principal amount not to exceed the amount of such Lender’s
      Commitment.
      Any
      principal amount of the Loan which is repaid or prepaid may not be
      reborrowed.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    Section
      2.02 Making
      the Loan.
      i)
      The
Loan
      under this Agreement shall be made by the Lenders simultaneously and
      proportionately to their Pro Rata Shares of the Total Commitment, it being
      understood that no Lender shall be responsible for any default by any other
      Lender in that other Lender’s obligations to make the Loan requested hereunder,
      nor shall the Commitment of any Lender be increased or decreased as a result
      of
      the default by any other Lender in that other Lender’s obligation to make the
      Loan requested hereunder, and each Lender shall be obligated to make the Loan
      required to be made by it by the terms of this Agreement regardless of the
      failure by any other Lender.

     

    (b) In
      the
      event Borrower shall not have satisfied all conditions precedent to
      effectiveness as set forth in Section
      5.01,
      Agent
      shall effect the disbursement of the proceeds of the Loan in two tranches.
      The
      first tranche shall be in the amount of $2,500,001 (the “Initial
      Tranche”)
      and
      the second tranche shall be in the amount of $2,499,999 (the “Second
      Tranche”).
      Provided that no Default or Event of Default shall have occurred, Borrower
      may
      request disbursement of and Agent will disburse the Second Tranche upon
      satisfaction of the conditions subsequent set forth in Section
      5.02
      (except
      for such conditions specifically identified to the contrary in Section 5.02
      or
      the letter identified in Section 5.02(d)). Funding of the Initial Tranche and
      the Second Tranche by the Lenders shall be based on the Lenders’ Pro Rata Shares
      thereof.

    

    (c) At
      Agent’s request, in the event Borrower intends to distribute any proceeds of the
      Loan to any Subsidiary, Borrower shall so advise Agent and instruct Agent to
      remit such funds directly to such Subsidiary.

     

    Section
      2.03 Repayment
      of Loan; Evidence of Debt.
      

    

    (a) The
      outstanding principal of the Loan shall be due and payable on the Final Maturity
      Date. 

    

    (b) Each
      Lender shall maintain in accordance with its usual practice an account or
      accounts evidencing the Indebtedness of the Borrower to such Lender resulting
      from the Loan made by such Lender, including the amounts of principal and
      interest payable and paid to such Lender from time to time
      hereunder.

    

    (c) The
      Agent
      shall maintain accounts in which it shall record (i) the amount of the Loan
      made
      hereunder, (ii) the amount of any principal or interest due and payable or
      to
      become due and payable from the Borrower to each Lender hereunder and (iii)
      the
      amount of any sum received by the Agent hereunder for the account of the Lenders
      and each Lender’s share thereof.

    

    (d) The
      entries made in the accounts maintained pursuant to paragraph (b) or (c) of
      this
      Section shall be prima facie
      evidence
      of the existence and amounts of the obligations recorded therein; provided
      that the
      failure of any Lender or the Agent to maintain such accounts or any error
      therein shall not in any manner affect the obligation of the Borrower to repay
      the Loan in accordance with the terms of this Agreement.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    
 

    (e) The
      Loan
      made by each Lender shall be evidenced by a promissory note in substantially
      the
      form of Exhibit
      H.
      The
      Borrower shall execute and deliver to each Lender a promissory note payable
      to
      the order of such Lender (or, if requested by such Lender, to such Lender and
      its registered assigns).

     

    Section
      2.04 Interest.
      

    

    (a) Loan.
      The
      Loan shall bear interest on the principal amount thereof from time to time
      outstanding, from the date of the Loan until such principal amount becomes
      due,
      at a rate per annum equal to
      17%.

    

    (b) Default
      Interest.
      To the
      extent permitted by law, upon the occurrence and during the continuance of
      an
      Event of Default, the principal of, and all accrued and unpaid interest on,
      the
      Loan, fees, indemnities or any other Obligations of the Borrower and its
      Subsidiaries under this Agreement and the other Loan Documents, shall bear
      interest, from the date such Event of Default occurred until the date such
      Event
      of Default is cured or waived in writing in accordance herewith, at a rate
      per
      annum equal at all times to the Post-Default Rate, all of which shall be payable
      in cash. The application of the Post-Default Rate shall relate back to the
      date
      the underlying Default first occurred.

     

    (c) Interest
      Payment.
      Interest on the Loan at a per annum rate equal to 17% shall be payable in cash
      (except as set forth below), monthly, in arrears, on the first day of each
      month
      (each an “Interest
      Payment Date”),
      commencing on the first day of the month following the month in which the Loan
      is made and at maturity (whether upon demand, by acceleration or otherwise).
      Interest at the Post-Default Rate shall be payable on demand. At the Borrower’s
      option, Borrower may cause a portion of the cash interest otherwise payable
      in
      respect of the Loan to be capitalized and added to the principal amount of
      the
      Loan. Such option may be exercised by Borrower only at such times as no Event
      of
      Default shall have occurred and be continuing. Upon the proper exercise of
      such
      option, interest on the Loan at a per annum rate equal to 12% shall be payable
      in cash and interest on the Loan at a per annum rate equal to 5% shall be
      capitalized and added as of each Interest Payment Date to the principal amount
      of the Loan (the “PIK
      Amount”).
      Such
      PIK Amount shall bear interest from the applicable Interest Payment Date at
      the
      same rate per annum and be payable in the same manner as in the case of the
      original principal amount of the Loan and shall otherwise be treated as
      principal for all purposes. From and after each Interest Payment Date, the
      principal amount of the Loan shall, without further action on the part of
      Borrower, Agent, or any Lender, be deemed to be increased by the PIK Amount
      so
      capitalized and added to principal in accordance with the provisions
      hereof.

    

    (d) General.
      All
      interest on the Loan shall be computed on the basis of a year of 360 days for
      the actual number of days, including the first day but excluding the last day,
      elapsed.

     

    
      
        
        

      

      
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    Section
      2.05 Reduction
      of Commitment; Prepayment of Loan. 

    

    (a) The
      Total
      Commitment shall terminate at 5:00 p.m. (New York City time) on the
      Effective Date (subject to Section
      2.02(b)).

     

    (b) Optional
      Prepayment.
      The
      Borrower may, upon at least 3 Business Days’ prior written notice to the Agent,
      prepay, the principal of the Loan, in whole or in part. Each prepayment made
      pursuant to this Section
      2.05(b)
      shall be
      accompanied by the payment of accrued interest to the date of such payment
      on
      the amount prepaid together with Interest Yield Protection Amount (to be
      allocated among the Lenders in accordance with their Pro Rata Share of the
      outstanding principal amount of the Loan that is prepaid).

     

    (c) Mandatory
      Prepayment.

     

    (i) Immediately
      upon any Disposition by Borrower or its Subsidiaries pursuant to Section
      7.02(c),
      the
      Borrower shall prepay the outstanding principal amount of the Loan in an amount
      equal to 100% of the Net Cash Proceeds received by such Person in connection
      with such Disposition. Nothing contained in this subsection (i) shall permit
      Borrower or any of its Subsidiaries to make a Disposition of any property other
      than in accordance with Section
      7.02(c).

     

    (ii) Upon
      the
      sale or issuance by Borrower or any of its Subsidiaries of any shares of its
      Capital Stock other than the Excluded Issuances, the Borrower shall prepay
      the
      outstanding amount of the Loan in an amount equal to 100% of the Net Cash
      Proceeds received by such Person in connection therewith. The provisions of
      this
      subsection (ii) shall not be deemed to be implied consent to any such issuance,
      incurrence or sale otherwise prohibited by the terms and conditions of this
      Agreement.

     

    (iii) Upon
      the
      receipt by Borrower or any of its Subsidiaries of any Extraordinary Receipts,
      the Borrower shall prepay the outstanding principal of the Loan in an amount
      equal to 100% of such Extraordinary Receipts, net of any reasonable expenses
      incurred in collecting such Extraordinary Receipts. 

     

    (iv) Notwithstanding
      the foregoing, in connection with a receipt by Borrower or any of its
      Subsidiaries of insurance proceeds constituting Extraordinary Receipts pursuant
      to Section 2.05(c)(iii), up to $2,500,000, in the aggregate in any Fiscal Year,
      in each case, such proceeds shall not be required to be applied to the
      prepayment of the Loan on such date to the extent such proceeds are used to
      replace, repair or restore the properties or assets subject to the casualty
      event; provided
      that (x)
      no Default or Event of Default has occurred and is continuing on the date such
      Person receives such proceeds or on the date such proceeds are to be released
      to
      the Loan Parties pursuant to this paragraph, (y) the Borrower delivers a
      certificate to the Agent within 30 days after the date of such loss, destruction
      or taking, stating that such proceeds shall be used to replace, repair or
      restore any such properties or assets subject to the casualty event, within
      a
      period specified in such certificate not to exceed 120 days after the receipt
      of
      such proceeds (which certificate shall set forth estimates of the proceeds
      to be
      so expended), and (z) the Agent is notified in writing that such proceeds
      will be delivered to the Agent and such proceeds are deposited in an account
      subject to the sole dominion of the Agent until such time as such proceeds
      are
      used to replace, repair or restore the properties or assets subject to the
      casualty event. If all or any portion of such proceeds not so applied to the
      prepayment of the Loan are not used in accordance with the preceding sentence
      within the period specified in the relevant certificate furnished pursuant
      hereto, such remaining portion shall be applied to the Loan in accordance with
      Section
      2.05(c)(iii),
      on the
      last day of such specified period.

     

    
      
        
        

      

      
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    (v) Immediately
      upon the sale by Borrower or any of its Subsidiaries of any DeWind D8.2 wind
      turbine nacelles, the Borrower shall prepay the outstanding principal amount
      of
      the Loan as follows: (A) if the Net Turbine Nacelle Sales Proceeds are less
      than
      or equal to $1,000,000 per unit, such prepayment shall be in an amount equal
      to
      100% of the Net Turbine Nacelle Sales Proceeds received by such Person in
      connection with such Disposition; or (B) if the Net Turbine Nacelle Sales
      Proceeds are greater than $1,000,000 per unit, such prepayment shall be in
      an
      amount equal to 25% of the Net Turbine Nacelle Sales Proceeds received by such
      Person in connection with such Disposition in excess of $1,000,000 per unit.
      The
      Borrower’s prepayment obligation under this Section 2.05(c)(v) shall be due and
      payable on a pro rata basis relative to the amount of the proceeds actually
      received by a Loan Party relative to the projected receipts from such sale
      transaction. The Loan Parties shall not ship any DeWind D8.2 wind turbine
      nacelles or related D8.2 turbine towers or blade sets without having received
      at
      least 90% of the aggregate purchase price therefor already paid in cash.

    

    (d) Interest
      and Fees.
      Any
      prepayment made pursuant to this Section
      2.05
      shall be
      applied first to accrued interest on the principal amount being prepaid to
      the
      date of prepayment, and thereafter to the principal being prepaid and the
      Interest Yield Protection Amount.

     

    Section
      2.06 Closing
      Fee. On
      or
      prior to the Effective Date, the Borrower shall pay to the Agent for the account
      of the Lenders, in accordance with their Pro Rata Shares, a non-refundable
      closing fee (the “Closing
      Fee”)
      equal
      to $150,000, which fee shall be deemed fully earned when paid.
      The
      Agent acknowledges receipt of a non-refundable work fee in the amount of
      $100,000, which will be credited towards fees, expenses and interest due in
      respect of the Loan.

     

    Section
      2.07 Intentionally
      Omitted.
      

     

    Section
      2.08 Taxes.
      ii)
      Any and
      all payments by any Loan Party hereunder or under any other Loan Document shall
      be made free and clear of and without deduction for any and all present or
      future taxes, levies, imposts, deductions, charges or withholdings, and all
      liabilities with respect thereto, excluding
      taxes
      imposed on the net income of the Agent or any Lender (or any transferee or
      assignee thereof, including a participation holder (any such entity, a
“Transferee”)
      by the
      jurisdiction in which such Person is organized or has its principal lending
      office (all such nonexcluded taxes, levies, imposts, deductions, charges
      withholdings and liabilities, collectively or individually, “Taxes”).
      If
      any Loan Party shall be required to deduct any Taxes from or in respect of
      any
      sum payable hereunder to the Agent or any Lender (or any Transferee), (i) the
      sum payable shall be increased by the amount (an “additional amount”) necessary
      so that after making all required deductions (including deductions applicable
      to
      additional sums payable under this Section
      2.08)
      the
      Agent or such Lender (or such Transferee) shall receive an amount equal to
      the
      sum it would have received had no such deductions been made, (ii) such Loan
      Party shall make such deductions and (iii) such Loan Party shall pay the full
      amount deducted to the relevant Governmental Authority in accordance with
      applicable law.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    (b) In
      addition, each Loan Party agrees to pay to the relevant Governmental Authority
      in accordance with applicable law any present or future stamp or documentary
      taxes or any other excise or property taxes, charges or similar levies that
      arise from any payment made hereunder or from the execution, delivery or
      registration of, or otherwise with respect to, this Agreement (“Other
      Taxes”).
      Each
      Loan Party shall deliver to the Agent and each Lender official receipts in
      respect of any Taxes or Other Taxes payable hereunder promptly after payment
      of
      such Taxes or Other Taxes. 

    

    (c) The
      Loan
      Parties hereby jointly and severally indemnify and agree to hold each Agent
      and
      each Lender harmless from and against Taxes and Other Taxes (including, without
      limitation, Taxes and Other Taxes imposed on any amounts payable under this
      Section
      2.08)
      paid by
      such Person, whether or not such Taxes or Other Taxes were correctly or legally
      asserted. Such indemnification shall be paid within 10 days from the date on
      which any such Person makes written demand therefore specifying in reasonable
      detail the nature and amount of such Taxes or Other Taxes.

     

    (d) Each
      Lender (or Transferee) that is organized under the laws of a jurisdiction other
      than the United States, any State thereof or the District of Columbia (a
“Non-U.S.
      Lender”)
      shall
      deliver to the Agent and the Borrower two properly completed and duly executed
      copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI,
      or,
      in the case of a Non-U.S. Lender claiming exemption from U.S. Federal
      withholding tax under Section 871(h) or 881(c) of the Code with respect to
      payments of “portfolio interest”, a Form W-8BEN, or any subsequent versions
      thereof or successors thereto (and, if such Non-U.S. Lender delivers a Form
      W-8,
      a certificate representing that such Non-U.S. Lender is not a bank for purposes
      of Section 881(c) of the Internal Revenue Code, is not a 10-percent shareholder
      (within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of
      the
      Parent and is not a controlled foreign corporation related to the Parent (within
      the meaning of Section 864(d)(4) of the Internal Revenue Code)), in each case
      claiming complete exemption from U.S. Federal withholding tax on payments by
      the
      Loan Parties under this Agreement. Such forms shall be delivered by each
      Non-U.S. Lender on or before the date it becomes a party to this Agreement
      (or,
      in the case of a Transferee that is a participation holder, on or before the
      date such participation holder becomes a Transferee hereunder) and on or before
      the date, if any, such Non-U.S. Lender changes its applicable lending office
      by
      designating a different lending office (a “New
      Lending Office”).
      In
      addition, each Non-U.S. Lender shall deliver such forms or any other forms
      required under applicable law within 20 days after receipt of a written request
      therefor from the Borrower or the Agent. Notwithstanding any other provision
      of
      this Section
      2.08,
      a
      Non-U.S. Lender shall not be required to deliver after the date hereof any
      form
      pursuant to this Section
      2.08
      that
      such Non-U.S. Lender is not legally able to deliver.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (e) The
      Loan
      Parties shall not be required to indemnify any Non-U.S. Lender, or pay any
      additional amounts to any Non-U.S. Lender, in respect of United States Federal
      withholding tax pursuant to this Agreement to the extent that (i) the obligation
      to withhold amounts with respect to United States Federal withholding tax
      existed on the date such Non-U.S. Lender became a party to this Agreement (or,
      in the case of a Transferee that is a participation holder, on the date such
      participation holder became a Transferee hereunder) or, with respect to payments
      to a New Lending Office, the date such Non-U.S. Lender designated such New
      Lending Office with respect to the Loan; provided,
      however,
      that
      this clause (i) shall not apply to the extent the indemnity payment or
      additional amounts any Transferee, or Lender (or Transferee) through a New
      Lending Office, would be entitled to receive (without regard to this clause
      (i))
      do not exceed the indemnity payment or additional amounts that the person making
      the assignment, participation or transfer to such Transferee, or Lender (or
      Transferee) making the designation of such New Lending Office, would have been
      entitled to receive in the absence of such assignment, participation, transfer
      or designation, or (ii) the obligation to pay such additional amounts would
      not
      have arisen but for a failure by such Non-U.S. Lender to comply with the
      provisions of clause (d) above.

    

    (f) The
      Agent
      or any Lender (or Transferee) claiming any indemnity payment or additional
      payment amounts payable pursuant to this Section
      2.08
      shall
      use reasonable efforts (consistent with legal and regulatory restrictions)
      to
      file any certificate or document reasonably requested in writing by the Borrower
      or to change the jurisdiction of its applicable lending office if the making
      of
      such a filing or change would avoid the need for or reduce the amount of any
      such indemnity payment or additional amount which may thereafter accrue, would
      not require the Agent or such Lender (or Transferee) to disclose any information
      the Agent or such Lender (or Transferee) deems confidential and would not,
      in
      the sole determination of the Agent or such Lender (or Transferee), be otherwise
      disadvantageous to the Agent or such Lender (or Transferee).

    

    (g) The
      obligations of the Loan Parties under this Section
      2.08
      shall
      survive the termination of this Agreement and the payment of the Loan and all
      other amounts payable hereunder.

    

    ARTICLE
      III

    

    TERM;
      TERMINATION

     

    Section
      3.01 Term.
      This
      Agreement shall become effective on the Effective Date and shall continue in
      full force and effect for a term ending on the Final Maturity Date. The
      foregoing notwithstanding, the Agent and the Lenders shall have the right to
      terminate their obligations under this Agreement in accordance with ARTICLE
      IX.

     

    Section
      3.02 Effect
      of Termination.
      On the
      date of termination of this Agreement, all Obligations immediately shall become
      due and payable without notice or demand. No termination of this Agreement,
      however, shall relieve or discharge any of the Loan Parties of their duties,
      Obligations, or covenants hereunder and the Agent’s Liens in the Collateral
      shall remain in effect until all Obligations have been fully and finally
      discharged (which for clarification purposes in this instance only, shall not
      include indemnification obligations as to which Agent or a Lender has not made
      a
      claim against a Loan Party) and the obligations of the Agent and the Lenders
      to
      provide additional credit hereunder have been terminated. When this Agreement
      has been terminated and all of the Obligations have been fully and finally
      discharged and the obligations of the Agent and the Lenders to provide
      additional credit under the Loan Documents have been terminated irrevocably,
      the
      Agent will, at the Borrower’s sole expense, execute and deliver any UCC
      termination statements, lien releases, mortgage releases, re-assignments of
      intellectual property, discharges of security interests, and other similar
      discharge or release documents (and, if applicable, in recordable form) as
      are
      necessary or reasonably advisable to release, as of record, the Agent’s Liens
      and all notices of security interests and liens previously filed by the Agent
      with respect to the Obligations. 

     

    
      
        
        

      

      
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    Section
      3.03 Early
      Termination by Borrower.
      The
      Borrower has the option, at any time upon 3 Business Days’ prior written notice
      by the Borrower to the Agent, to terminate this Agreement by paying to the
      Agent
      in cash, the Obligations, in full, together with the Interest Yield Protection
      Amount (to be allocated among the Lenders in accordance with their Pro Rata
      Shares). If the Borrower has sent a notice of termination pursuant to the
      provisions of this Section, then the obligations of the Agent and the Lenders
      to
      provide credit hereunder shall terminate and the Borrower shall be obligated
      to
      repay the Obligations, in full, together with the Interest Yield Protection
      Amount (to be allocated among the Lenders in accordance with their Pro Rata
      Shares) on the date set forth as the date of termination of this Agreement
      in
      such notice.

    

    ARTICLE
      IV

    

    FEES,
      PAYMENTS AND OTHER COMPENSATION

     

    Section
      4.01 Audit
      and Collateral Monitoring Fees.
      The
      Borrower acknowledges that pursuant to Section
      7.01(f),
      representatives of the Agent may visit any or all of the Loan Parties and/or
      conduct audits, inspections, appraisals, valuations and/or field examinations
      of
      any or all of the Loan Parties or any of the Collateral (all such audits,
      inspections, appraisals, valuations and/or field examinations are hereinafter
      referred to collectively as “Inspections”).
      The
      Borrower agrees to pay out of pocket costs and reasonable expenses incurred
      in
      connection with all such Inspections and the actual cost of all Inspections
      conducted by a third party on behalf of the Agent.

     

    Section
      4.02 Payments
      and Computations.
      The
      Borrower will make each payment under this Agreement not later than 3:15 p.m.
      (New York City time) on the day when due, in lawful money of the United States
      of America and in immediately available funds, to the Agent’s Account. All
      payments received by the Agent after 3:15 p.m. (New York City time) on any
      Business Day will be credited to the Loan Account on the next succeeding
      Business Day. All payments shall be made by the Borrower without set-off,
      counterclaim, deduction or other defense to the Agent and the Lenders. Except
      as
      provided in Section
      2.02
      and
Section
      4.04,
      after
      receipt, the Agent will promptly thereafter cause to be distributed like funds
      relating to the payment of principal ratably to the Lenders in accordance with
      their Pro Rata Shares and like funds relating to the payment of any other amount
      payable to the Agent or any Lender to the Agent or such Lender, in each case
      to
      be applied in accordance with the terms of this Agreement, provided that the
      Agent will cause to be distributed all interest and fees received from or for
      the account of the Borrower not less than once each month and in any event
      promptly after receipt thereof. Whenever any payment to be made under any such
      Loan Document shall be stated to be due on a day other than a Business Day,
      such
      payment shall be made on the next succeeding Business Day and such extension
      of
      time shall in such case be included in the computation of interest or fees,
      as
      the case may be. All computations of fees shall be made by the Agent on the
      basis of a year of 360 days for the actual number of days (including the
      first day but excluding the last day) occurring in the period for which such
      fees are payable. Each determination by the Agent of an interest rate or fees
      hereunder shall be conclusive and binding for all purposes in the absence of
      manifest error.

     

    
      
        
        

      

      
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    Section
      4.03 Sharing
      of Payments, Etc.
      Except
      as provided in Section
      2.02
      hereof,
      if any Lender shall obtain any payment (whether voluntary, involuntary, through
      the exercise of any right of set-off, or otherwise) on account of any Obligation
      in excess of its ratable share of payments on account of similar obligations
      obtained by all the Lenders, such Lender shall forthwith purchase from the
      other
      Lenders such participations in such similar obligations held by them as shall
      be
      necessary to cause such purchasing Lender to share the excess payment ratably
      with each of them; provided,
      however,
      that if
      all or any portion of such excess payment is thereafter recovered from such
      purchasing Lender, such purchase from each Lender shall be rescinded and such
      Lender shall repay to the purchasing Lender the purchase price to the extent
      of
      such recovery together with an amount equal to such Lender’s ratable share
      (according to the proportion of (i) the amount of such Lender’s required
      repayment to (ii) the total amount so recovered from the purchasing Lender
      of
      any interest or other amount paid by the purchasing Lender in respect of the
      total amount so recovered). The Borrower agrees that any Lender so purchasing
      a
      participation from another Lender pursuant to this Section
      4.03
      may, to
      the fullest extent permitted by law, exercise all of its rights (including
      the
      Lender’s right of set-off) with respect to such participation as fully as if
      such Lender were the direct creditor of the Borrower in the amount of such
      participation.

     

    Section
      4.04 Apportionment
      of Payments.  Subject
      to Section
      2.02
      hereof
      and to any written agreements among the Agent and/or the Lenders:

    

    (a) all
      payments of principal and interest in respect of the outstanding Loan, all
      payments of fees (other than the fees set forth in Section
      2.06
      hereof
      to the extent set forth in any written agreements among the Agent and the
      Lenders and the audit and collateral monitoring fee provided for in Section
      4.01)
      and all
      other payments in respect of any other Obligations, shall be allocated by the
      Agent among such of the Lenders as are entitled thereto, in proportion to their
      respective Pro Rata Shares or otherwise as provided herein or, in respect of
      payments not made on account of the Loan, as designated by the Person making
      payment when the payment is made.

     

    (b) After
      the
      occurrence and during the continuance of an Event of Default, the Agent may,
      and
      upon the direction of the Required Lenders shall, apply all payments in respect
      of any Obligations and all proceeds of the Collateral, subject to the provisions
      of this Agreement, (i) first,
      ratably
      to pay the Obligations in respect of any fees, expense reimbursements,
      indemnities and other amounts then due and payable to the Agent until paid
      in
      full; (ii) second,
      ratably
      to pay the Obligations in respect of any fees and indemnities then due and
      payable to the Lenders until paid in full; (iii) third,
      ratably
      to pay interest then due and payable in respect of the Loan until paid in full;
      (iv) fourth,
      ratably
      to pay principal of the Loan until paid in full; and (v) fifth,
      to the
      ratable payment of all other Obligations then due and payable.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    (c) In
      each
      instance, so long as no Event of Default has occurred and is continuing,
Section
      4.04(b)
      shall
      not be deemed to apply to any payment by the Borrower specified by the Borrower
      to the Agent to be for the payment of any Obligations then due and payable
      under
      any provision of this Agreement.

    

    (d) For
      purposes of Section
      4.04(b),
“paid
      in full” means payment of all amounts owing under the Loan Documents according
      to the terms thereof, including loan fees, service fees, professional fees,
      interest (and specifically including interest accrued after the commencement
      of
      any Insolvency Proceeding), default interest, interest on interest, and expense
      reimbursements, in each case, whether or not the same would be or is allowed
      or
      disallowed in whole or in part in any Insolvency Proceeding.

    

    (e) In
      the
      event of a direct conflict between the priority provisions of this Section
      4.04
      and
      other provisions contained in any other Loan Document, it is the intention
      of
      the parties hereto that both such priority provisions in such documents shall
      be
      read together and construed, to the fullest extent possible, to be in concert
      with each other. In the event of any actual, irreconcilable conflict that cannot
      be resolved as aforesaid, the terms and provisions of this Section
      4.04
      shall
      control and govern.

     

    Section
      4.05 Increased
      Costs and Reduced Return.  iii)  If
      any Lender or the Agent shall have determined that the adoption or
      implementation of, or any change in, any law, rule, treaty or regulation, or
      any
      policy, guideline or directive of, or any change in, the interpretation or
      administration thereof by, any court, central bank or other administrative
      or
      Governmental Authority, or compliance by any Lender or the Agent or any Person
      controlling any such Lender or the Agent with any directive of, or guideline
      from, any central bank or other Governmental Authority or the introduction
      of,
      or change in, any accounting principles applicable to any Lender or the Agent
      or
      any Person controlling any such Lender or the Agent (in each case, whether
      or
      not having the force of law) (each, a “Change
      in Law”),
      shall
      (i) subject such Lender or the Agent, or any Person controlling such Lender
      or the Agent to any tax, duty or other charge with respect to this Agreement
      or
      the Loan made by such Lender or the Agent, or change the basis of taxation
      of
      payments to such Lender or the Agent or any Person controlling such Lender
      or
      the Agent of any amounts payable hereunder (except for taxes on the overall
      net
      income of such Lender or the Agent or any Person controlling such Lender or
      the
      Agent), (ii) impose, modify or deem applicable any reserve, special deposit
      or similar requirement against the Loan or against assets of or held by, or
      deposits with or for the account of, or credit extended by, such Lender or
      the
      Agent or any Person controlling such Lender or the Agent or (iii) impose on
      such Lender or the Agent or any Person controlling such Lender or the Agent
      any
      other condition regarding this Agreement or the Loan, and the result of any
      event referred to in clauses (i), (ii) or (iii) above shall be to increase
      the
      cost to such Lender or the Agent of making or agreeing to make the Loan, or
      to
      reduce any amount received or receivable by such Lender or the Agent hereunder,
      then, within 10 days of demand by any such Lender or the Agent, the Borrower
      shall pay to such Lender or the Agent such additional amounts as will compensate
      such Lender or the Agent for such increased costs or reductions in
      amount.

     

    
      
        
        

      

      
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    (b) If
      any
      Lender or the Agent shall have determined that any Change in Law, either
      (i) affects or would affect the amount of capital required or expected to
      be maintained by such Lender or the Agent or any Person controlling such Lender
      or the Agent, and such Lender or the Agent determines that the amount of such
      capital is increased as a direct or indirect consequence of the Loan made or
      maintained, such Lender’s or the Agent’s or such other controlling Person’s
      other obligations hereunder, or (ii) has or would have the effect of
      reducing the rate of return on such Lender’s or the Agent’s or such other
      controlling Person’s capital to a level below that which such Lender or the
      Agent or such controlling Person could have achieved but for such circumstances
      as a consequence of the Loan made or maintained, or any agreement to make the
      Loan, or such Lender’s or the Agent’s or such other controlling Person’s other
      obligations hereunder (in each case, taking into consideration, such Lender’s or
      the Agent’s or such other controlling Person’s policies with respect to capital
      adequacy), then, within 10 days of demand by such Lender or the Agent, the
      Borrower shall pay to such Lender or the Agent from time to time such additional
      amounts as will compensate such Lender or the Agent for such cost of maintaining
      such increased capital or such reduction in the rate of return on such Lender’s
      or the Agent’s or such other controlling Person’s capital.

     

    (c) All
      amounts payable under this Section
      4.05
      shall
      bear interest from the date that is 10 days after the date of demand by any
      Lender or the Agent until payment in full to such Lender or the Agent at the
      per
      annum rate of seventeen percent (17%). A certificate of such Lender or the
      Agent
      claiming compensation under this Section
      4.05,
      specifying the event herein above described and the nature of such event shall
      be submitted by such Lender or the Agent to the Borrower, setting forth the
      additional amount due and an explanation of the calculation thereof, and such
      Lender’s or the Agent’s reasons for invoking the provisions of this Section
      4.05,
      and
      shall be final and conclusive absent manifest error.

    

    ARTICLE
      V

    

    CONDITIONS
      TO LOAN

     

    Section
      5.01 Conditions
      Precedent to Effectiveness.
      This
      Agreement shall become effective as of the Business Day (the “Effective
      Date”)
      when
      each of the following conditions precedent shall have been satisfied in a manner
      satisfactory to the Agent:

    

    (a) Payment
      of Fees, Etc.
      The
      Borrower shall have paid on or before the date of this Agreement all fees,
      costs, expenses and taxes then payable pursuant to Section
      2.06
      and
Section
      12.04.

     

    (b) Representations
      and Warranties; No Event of Default.
      The
      following statements shall be true and correct: (i) the representations and
      warranties contained in ARTICLE
      VI
      and in
      each other Loan Document, certificate or other writing delivered to the Agent
      or
      any Lender pursuant hereto or thereto on or prior to the Effective Date are
      true
      and correct on and as of the Effective Date in all material respects as though
      made on and as of such date, except to the extent that any such representation
      or warranty expressly relates solely to an earlier date (in which case such
      representation or warranty shall be true and correct in all material respects
      on
      and as of such earlier date) and (ii) no Default or Event of Default shall
      have occurred and be continuing on the Effective Date or would result from
      this
      Agreement or the other Loan Documents becoming effective in accordance with
      its
      or their respective terms.

     

    
      
        
        

      

      
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    (c) Legality.
      The
      making of the Loan shall not contravene any law, rule or regulation applicable
      to the Agent or any Lender.

     

    (d) Delivery
      of Documents.
      The
      Agent shall have received on or before the Effective Date the following, each
      in
      form and substance satisfactory to the Agent and, unless indicated otherwise,
      dated the Effective Date:

    

    (i) a
      Security Agreement, duly executed by each Loan Party;

    

    (ii) a
      Pledge
      Agreement, duly executed by each Loan Party, together with the original stock
      certificates representing all of the common stock of such Loan Party’s
      subsidiaries and all intercompany promissory notes of such Loan Parties,
      accompanied by undated stock powers executed in blank and other proper
      instruments of transfer;

    

    (iii) the
      Intercompany Subordination Agreement, duly executed by each Loan Party and
      the
      Agent;

     

    (iv) a
      UCC
      Filing Authorization Letter, duly executed by each Loan Party, together with
      (A)
      appropriate financing statements on Form UCC-1 duly filed in such office or
      offices as may be necessary or, in the reasonable opinion of the Agent,
      desirable to perfect the security interests purported to be created by the
      Security Agreement and the Pledge Agreement and (B) evidence satisfactory to
      the
      Agent of the filing of such UCC-1 financing statements;

    

    (v) certified
      copies of request for copies of information on Form UCC-11, listing all
      effective financing statements which name as debtor any Loan Party and which
      are
      filed in the offices referred to in paragraph (iv) above, together with
      copies of such financing statements, none of which, except as otherwise agreed
      in writing by the Agent, shall cover any of the Collateral and the results
      of
      searches for any tax Lien and judgment Lien filed against such Person or its
      property, which results, except as otherwise agreed in writing by the Agent,
      shall not show any such Liens;

    

    (vi) a
      copy of
      the resolutions of each Loan Party, certified as of the Effective Date by an
      Authorized Officer thereof, authorizing (A) the borrowings hereunder and
      the transactions contemplated by the Loan Documents to which such Loan Party
      is
      or will be a party, and (B) the execution, delivery and performance by such
      Loan Party of each Loan Document to which such Loan Party is or will be a party
      and the execution and delivery of the other documents to be delivered by such
      Person in connection herewith and therewith;

    

    (vii) a
      certificate of an Authorized Officer of each Loan Party, certifying the names
      and true signatures of the representatives of such Loan Party authorized to
      sign
      each Loan Document to which such Loan Party is or will be a party and the other
      documents to be executed and delivered by such Loan Party in connection herewith
      and therewith, together with evidence of the incumbency of such authorized
      officers;

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    (viii) a
      certificate of the appropriate official(s) of the jurisdiction of organization
      and each jurisdiction of foreign qualification of each Loan Party certifying
      as
      of a recent date not more than 30 days prior to the Effective Date as to the
      subsistence in good standing of, and the payment of taxes by, such Loan Party
      in
      such states;

    

    (ix) a
      true
      and complete copy of the charter, certificate of formation, certificate of
      limited partnership or other publicly filed organizational document of each
      Loan
      Party certified as of a recent date not more than 30 days prior to the Effective
      Date by an appropriate official of the jurisdiction of organization of such
      Loan
      Party which shall set forth the same complete name of such Loan Party as is
      set
      forth herein and the organizational number of such Loan Party, if an organized
      number is issued in such jurisdiction;

    

    (x) a
      copy of
      the charter and by-laws, limited liability company agreement, operating
      agreement, agreement of limited partnership or other organizational document
      of
      each Loan Party, together with all amendments thereto, certified as of the
      Effective Date by an Authorized Officer of such Loan Party;

    

    (xi) an
      opinion of Richardson Patel, LLP, counsel to the Loan Parties, substantially
      in
      the form of Exhibit E;

    

    (xii) a
      certificate of an Authorized Officer of each Loan Party, certifying as to the
      matters set forth in subsection (b)
      of this
Section
      5.01;

    

    (xiii) a
      copy of
      (A) the Financial Statements and (B) the financial projections described in
      Section
      6.01(g)(ii)
      hereof,
      certified as of the Effective Date by an Authorized Officer of Borrower as
      complying with the representations and warranties set forth in Section
      6.01(g)(ii);

    

    (xiv) a
      certificate of the chief financial officer of each Loan Party, certifying as
      to
      the solvency of such Loan Party after giving effect to the Loan, which
      certificate shall be satisfactory in form and substance to the
      Agent;

    

    (xv) evidence
      of the insurance coverage required by Section
      7.01
      and the
      terms of the Security Agreement in each case, where requested by the Agent,
      with
      such endorsements as to the named insureds or loss payees thereunder as the
      Agent may request and providing that such policy may be terminated or canceled
      (by the insurer or the insured thereunder) only upon 30 days’ prior written
      notice to the Agent and each such named insured or loss payee, together with
      evidence of the payment of all premiums due in respect thereof for such period
      as the Agent may request;

    

    (xvi) a
      certificate of an Authorized Officer of the Borrower, certifying the names
      and
      true signatures of the persons that are authorized to provide all notices under
      this Agreement and the other Loan Documents;

    

    (xvii) a
      landlord waiver, in form and substance satisfactory to the Agent and which
      may
      be included as a provision contained in the relevant Lease, executed by each
      landlord with respect to each of the Leases set forth on Schedule
      6.01(o);

    

    (xviii) copies
      of
      the Material Contracts as in effect on the Effective Date, certified as true
      and
      correct copies thereof by an Authorized Officer of the Borrower, together with
      a
      certificate of an Authorized Officer of the Borrower stating that, as of the
      Effective Date, such agreements remain in full force and effect and that none
      of
      the Loan Parties has breached or defaulted in any of its obligations under
      such
      agreements; 

     

    
      
        
        

      

      
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    (xix) such
      depository account, blocked account, lockbox account and similar agreements
      and
      other documents, each in form and substance satisfactory to the Agent, as the
      Agent may request with respect to the Loan Parties’ management system;

    

    (xx) the
      Contribution Agreement duly executed by each Loan Party; 

    

    (xxi) information
      regarding proceeds from the sale and installation of the Sweetwater prototype
      at
      Texas State Technical College (the “Sweetwater
      Transaction”),
      including, without limitation, the nature and amount of all Indebtedness or
      other obligations secured by Liens on such assets and all benchmark dates for
      installation, testing, approval and payment with respect thereto;

    

    (xxii) a
      bailee
      letter, in form and substance satisfactory to the Agent, executed by TECO
      Westinghouse Motor Company; 

     

    (xxiii) warrants
      for 2,250,000 shares of the Borrower’s common stock (the “Warrants”),
      which
      Warrants shall have a term of three (3) years and be exercisable at a 5% premium
      to the 20-day trailing volume weighted price as of the Effective Date (in the
      event Lenders fund the Loan in two tranches, warrants for 1,125,000 shares
      shall
      be issued upon funding of the Initial Tranche); and

    

    (xxiv) such
      other agreements, instruments, approvals, opinions and other documents, each
      satisfactory to the Agent in form and substance, as the Agent may
      request.

    

    (e) Material
      Adverse Effect.
      The
      Agent shall have determined, in its sole judgment, that no event or development
      shall have occurred since December 31, 2007, which could have a Material Adverse
      Effect.

    

    (f) Approvals.
      All
      consents, authorizations and approvals of, and filings and registrations with,
      and all other actions in respect of, any Governmental Authority or other Person
      required in connection with the making of the Loan or the conduct of the Loan
      Parties’ business shall have been obtained and shall be in full force and
      effect.

    

    (g) Proceedings;
      Receipt of Documents.
      All
      proceedings in connection with the Transactions and the making of the Loan
      and
      the other transactions contemplated by this Agreement and the other Loan
      Documents, and all documents incidental hereto and thereto, shall be
      satisfactory to the Agent and its counsel, and the Agent and such counsel shall
      have received all such information and such counterpart originals or certified
      or other copies of such documents as the Agent or such counsel may reasonably
      request.

    

    (h) Management
      Reference Checks.
      The
      Agent shall have received reference checks reasonably satisfactory to Agent
      (and
      all necessary consents with respect thereto) for, and shall have had an
      opportunity to meet with, key management of each Loan Party. 

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    (i) Due
      Diligence.
      The
      Agent shall have completed its business, legal and collateral due diligence
      with
      respect to Borrower and any of its Subsidiaries, and the Collateral and the
      results thereof shall be acceptable to the Agent, in its sole and absolute
      discretion. Without limiting the foregoing, the Agent shall have received a
      quality of earnings analysis of the Loan Parties and such quality of earnings
      analysis and the results thereof shall be acceptable to the Agent, in its sole
      and absolute discretion.

    

    (j) Financial
      Condition.
      After
      giving effect to the Loan to be made on the Effective Date, all material
      liabilities of CTC Cable Corporation shall be current. The Borrower shall
      deliver to the Agent a certificate of the chief financial officer of the
      Borrower certifying as to the matters set forth above.

     

    Section
      5.02 Conditions
      Subsequent to Effectiveness.
      The
      Loan Parties shall exercise good faith efforts to satisfy each condition
      subsequent set forth below within the applicable time frame therefor. The
      obligation of the Agent or any Lender to maintain the Loan after the Effective
      Date is subject to the fulfillment, on or before the date applicable thereto,
      of
      each condition subsequent set forth below (it being understood that (i) the
      failure by the Borrower to perform or cause to be performed any such condition
      subsequent on or before the date applicable thereto shall constitute an Event
      of
      Default and (ii) to the extent that the existence of any such condition
      subsequent would otherwise cause any representation, warranty or covenant in
      this Agreement or any other Loan Document to be breached, the Required Lenders
      hereby waive such breach for the period from the Effective Date until the date
      on which such condition subsequent is required to be fulfilled pursuant to
      this
Section
      5.02):

    

    (a) The
      Borrower will use its reasonable best efforts to add, within 45 days of the
      Effective Date, and thereafter to retain, a third independent member to its
      board of directors, the selection of whom shall be satisfactory to the Agent
      and
      which director shall qualify as an “independent director” as defined by NASDAQ
      Marketplace Rule 4350. This condition subsequent shall not be a condition to
      the
      disbursement of the Second Tranche; 

    

    (b) Concurrent
      with the earlier to occur of (i) the disbursement of the Second Tranche, if
      applicable, and (ii) the last day for satisfaction of the conditions to
      disbursement of the Second Tranche set forth in the side letter referenced
      in
      (d) below, Borrower shall issue the warrants for 1,125,000 shares of common
      stock of the Borrower on the terms described in Section 5.01(d)(xxiii);

    

    (c) Within
      10
      days following the Effective Date, the Loan Parties shall establish the
      Lockboxes and Collection Accounts required under Section 8.01(a);
      and

    

    (d) Such
      other conditions subsequent as may be set forth in a side letter among the
      Agent, the Lenders and the Loan Parties, of even date herewith.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      VI

    

    REPRESENTATIONS
      AND WARRANTIES

     

    Section
      6.01 Loan
      Party Representations and Warranties.
      Each
      Loan Party hereby represents and warrants to the Agent and each Lender as
      follows:

    

    (a) Organization,
      Good Standing, Etc. Each
      Loan
      Party (i) is a corporation, limited liability company or limited partnership
      duly organized, validly existing and in good standing under the laws of the
      state or jurisdiction of its organization, (ii) has all requisite power and
      authority to conduct its business as now conducted and as presently contemplated
      and, in the case of the Borrower, to make the borrowings hereunder, and to
      execute and deliver each Loan Document to which it is a party, and to consummate
      the transactions contemplated thereby, and (iii) is duly qualified to do
      business and is in good standing in each jurisdiction in which the character
      of
      the properties owned or leased by it or in which the transaction of its business
      makes such qualification necessary except where the failure to be so qualified
      could not reasonably be expected to have a Material Adverse Effect.

    

    (b) Authorization,
      Etc.
      The
      execution, delivery and performance by each Loan Party of each Loan Document
      to
      which it is or will be a party, (i) have been duly authorized by all necessary
      action, (ii) do not and will not contravene its charter or by-laws, its limited
      liability company or operating agreement or its certificate of partnership
      or
      partnership agreement, as applicable, any applicable law, or any Material
      Contract, (iii) do not and will not result in or require the creation of any
      Lien (other than pursuant to any Loan Document) upon or with respect to any
      of
      its properties, and (iv) do not and will not result in any default,
      noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal
      of
      any material permit, license, authorization or approval applicable to its
      operations or any of its properties.

    

    (c) Governmental
      Approvals.
      No
      authorization or approval or other action by, and no notice to or filing with,
      any Governmental Authority is required (other than those already obtained)
      in
      connection with the due execution, delivery and performance by any Loan Party
      of
      any Loan Document to which it is or will be a party.

    

    (d) Enforceability
      of Loan Documents.
      This
      Agreement is, and each other Loan Document and other Transaction Document to
      which any Loan Party is or will be a party, when delivered hereunder, will
      be, a
      legal, valid and binding obligation of such Person, enforceable against such
      Person in accordance with its terms, except as enforceability may be limited
      by
      applicable bankruptcy, insolvency, reorganization, moratorium or other similar
      laws affecting creditors’ rights generally and by general equitable
      principles.

     

    (e) Capitalization;
      Subsidiaries. 

     

    (i) On
      the
      Effective Date, the authorized Capital Stock of the Borrower and the issued
      and
      outstanding Capital Stock of the Borrower are as set forth on Schedule
6.01(e).
      

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    (ii) Schedule
      6.01(e) is
      a
      complete and correct description of the name, jurisdiction of incorporation
      and
      ownership of the outstanding Capital Stock of such Subsidiaries of the
Borrower
      in
      existence as of the Effective Date. All
      of
      the issued and outstanding shares of Capital Stock of such
      Subsidiaries
      have
      been validly issued and are fully paid and nonassessable, and the holders
      thereof are not entitled to any preemptive, first refusal or other similar
      rights. Except as indicated on such Schedule, all
      such
      Capital Stock is owned by the Borrower
      or one
      or more of its wholly-owned Subsidiaries, free and clear of all Liens other
      than
      Liens in favor of the Agent for the benefit of the Lenders. There are no
      outstanding debt or equity securities of the Borrower
      or any
      of its Subsidiaries, and no outstanding obligations of the Borrower
      or any
      of its Subsidiaries, convertible into or exchangeable for, or warrants, options
      or other rights for the purchase or acquisition from the Borrower
      or any
      of its Subsidiaries, or other obligations of any Subsidiary to issue, directly
      or indirectly, any shares of Capital Stock of any Subsidiary of the Borrower.

     

    (f) Litigation;
      Commercial Tort Claims.
      Except
      as set forth in Schedule 6.01(f),
      (i) there is no pending or, to the best knowledge of any Loan Party,
      threatened action, suit or proceeding affecting any Loan Party or any their
      properties or any of their directors or officers before any court or other
      Governmental Authority or any arbitrator that (A) if adversely determined,
      could reasonably be expected to have a Material Adverse Effect or
      (B) relates to this Agreement or any other Loan Document and (ii) as
      of the Effective Date, none of the Loan Parties holds any commercial tort claims
      in respect of which a claim has been filed in a court of law or a written notice
      by an attorney has been given to a potential defendant.

     

    (g) Financial
      Condition.

    

    (i) The
      Financial Statements, copies of which have been delivered to the Agent and
      each
      Lender, fairly present the consolidated financial condition of the Borrower
      and
      its
      Subsidiaries as at the respective dates thereof and the consolidated results
      of
      operations of the Borrower
      and
      its
      Subsidiaries for the fiscal periods ended on such respective dates, all in
      accordance with GAAP, and since December 31, 2007, no event or development
      has
      occurred that has had or could reasonably be expected to have a Material Adverse
      Effect.

     

    (ii) Borrower
      has heretofore furnished to the Agent and each Lender projected quarterly
      balance sheets, income statements and statements of cash flows of the Parent
      and
      its Subsidiaries for the fiscal period from the Effective Date through December
      31, 2008, which projected financial statements shall be updated from time to
      time pursuant to Section 7.01(a)(vi). Such projections, as so updated, shall
      be
      believed by the Borrower at the time furnished to be reasonable, shall have
      been
      prepared on a reasonable basis and in good faith by the Borrower, and shall
      have
      been based on assumptions believed by the Borrower to be reasonable at the
      time
      made and upon the best information then reasonably available to the Borrower,
      and the Borrower
      shall
      not be aware
      of
      any facts or information that would lead it to believe that such projections,
      as
      so updated, are incorrect or misleading in any material respect. 

    

    (h) Compliance
      with Law, Etc.
      No Loan
      Party is in violation of its organizational documents, or in violation in any
      material respect with (i) any material law, rule, regulation, judgment or order
      of any Governmental Authority applicable to it or any of its property or assets,
      or (ii) any other Material Contract, and no Default or Event of Default has
      occurred and is continuing.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    (i) ERISA.
      Except
      as set forth on Schedule 6.01(i),
      (i)
      each Employee Plan is in substantial compliance with ERISA and the Internal
      Revenue Code, (ii) no Termination Event has occurred nor is reasonably
      expected to occur with respect to any Employee Plan, (iii) the most recent
      annual report (Form 5500 Series) with respect to each Employee Plan, including
      any required Schedule B (Actuarial Information) thereto, copies of which
      have been filed with the Internal Revenue Service and delivered to the Agent,
      is
      complete and correct and fairly presents the funding status of such Employee
      Plan, and since the date of such report there has been no material adverse
      change in such funding status, (iv) copies of each agreement entered into
      with the PBGC, the U.S. Department of Labor or the Internal Revenue Service
      with
      respect to any Employee Plan have been delivered to the Agent, (v) no
      Employee Plan had an accumulated or waived funding deficiency or permitted
      decrease which would create a deficiency in its funding standard account or
      has
      applied for an extension of any amortization period within the meaning of
      Section 412 of the Internal Revenue Code at any time during the previous
      60 months, and (vi) no Lien imposed under the Internal Revenue Code or
      ERISA exists or is likely to arise on account of any Employee Plan within the
      meaning of Section 412 of the Internal Revenue Code. Except as set forth on
      Schedule 6.01(i),
      no Loan
      Party or any of its ERISA Affiliates has incurred any withdrawal liability
      under
      ERISA with respect to any Multiemployer Plan, or is aware of any facts
      indicating that it or any of its ERISA Affiliates may in the future incur any
      such withdrawal liability. No Loan Party or any of its ERISA Affiliates nor
      any
      fiduciary of any Employee Plan has, with respect to any Employee Plan, (i)
      engaged in a nonexempt prohibited transaction described in Sections 406 of
      ERISA
      or 4975 of the Internal Revenue Code, (ii) failed to pay any required
      installment or other payment required under Section 412 of the Internal Revenue
      Code on or before the due date for such required installment or payment, (iii)
      engaged in a transaction within the meaning of Section 4069 of ERISA or
      (iv) incurred any liability to the PBGC which remains outstanding other
      than the payment of premiums, and there are no premium payments which have
      become due which are unpaid. There are no pending or, to the best knowledge
      of
      any Loan Party, threatened claims, actions, proceedings or lawsuits (other
      than
      claims for benefits in the normal course) asserted or instituted against (i)
      any
      Employee Plan or its assets, (ii) any fiduciary with respect to any Employee
      Plan, or (iii) any Loan Party or any of its ERISA Affiliates with respect to
      any
      Employee Plan. Except as required by Section 4980B of the Internal Revenue
      Code,
      no Loan Party or any of its ERISA Affiliates maintains an employee welfare
      benefit plan (as defined in Section 3(1) of ERISA) which provides health or
      welfare benefits (through the purchase of insurance or otherwise) for any
      retired or former employee of any Loan Party or any of its ERISA Affiliates
      or
      coverage after a participant’s termination of employment.

    

    (j) Taxes,
      Etc.
      All
      Federal, state and local tax returns and other reports required by applicable
      law to be filed by any Loan Party have been filed, or extensions have been
      obtained, and all taxes, assessments and other governmental charges imposed
      upon
      any Loan Party or any property of any Loan Party and which have become due
      and
      payable on or prior to the date hereof have been paid, except to the extent
      contested in good faith by proper proceedings which stay the imposition of
      any
      penalty, fine or Lien resulting from the non-payment thereof and with respect
      to
      which adequate reserves have been set aside for the payment thereof on the
      Financial Statements in accordance with GAAP.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    (k) Regulations
      T, U and X.
      No Loan
      Party is or will be engaged in the business of extending credit for the purpose
      of purchasing or carrying margin stock (within the meaning of Regulation T,
      U or
      X), and no proceeds of any Loan will be used to purchase or carry any margin
      stock or to extend credit to others for the purpose of purchasing or carrying
      any margin stock. 

     

    (l) Nature
      of Business.
      No Loan
      Party is engaged in any business other than as a manufacturer and vendor of
      electrical transmission cable conductors and wind turbines.

    

    (m) Adverse
      Agreements, Etc.
      No Loan
      Party is a party to any agreement or instrument, or subject to any charter,
      limited liability company agreement, partnership agreement or other corporate,
      partnership or limited liability company restriction or any judgment, order,
      regulation, ruling or other requirement of a court or other Governmental
      Authority, which has, or has a substantial likelihood of having, a Material
      Adverse Effect.

    

    (n) Permits,
      Etc.
      Each
      Loan Party has, and is in compliance with, all permits, licenses,
      authorizations, approvals, entitlements and accreditations required for such
      Person lawfully to own, lease, manage or operate, or to acquire, each business
      currently owned, leased, managed or operated, or to be acquired, by such Person,
      except for such non-compliance and such permits, licenses, authorizations,
      approvals, entitlements and accelerations, as to which (individually or in
      the
      aggregate) a Loan Party or its Subsidiaries’ failure to maintain or so comply
      could not reasonably be expected to have, either individually or in the
      aggregate, a Material Adverse Effect. No condition exists or event has occurred
      which, in itself or with the giving of notice or lapse of time or both, would
      result in the suspension, revocation, impairment, forfeiture or non-renewal
      of
      any such permit, license, authorization, approval, entitlement or accreditation,
      and there is no claim that any thereof is not in full force and
      effect.

     

    (o) Properties.  

     

    (i)  Each
      Loan Party has good and marketable title to, valid leasehold interests in,
      or
      valid licenses to use, all property and assets material to its business, free
      and clear of all Liens, except Permitted Liens. All such properties and assets
      are in good working order and condition, ordinary wear and tear
      excepted.

    

    (ii) Schedule
      6.01(o)
      sets
      forth a complete and accurate list, as of the Effective Date, of the location,
      by state and street address, of all real property owned or leased by each Loan
      Party and identifies the interest (fee or leasehold) of such Loan Party therein.
      As of the Effective Date, each Loan Party has valid leasehold interests in
      the
      Leases described on Schedule 6.01(o)
      to which
      it is a party. True, complete and correct copies of each such Lease have been
      delivered to the Agent prior to the Effective Date. Schedule 6.01(o)
      sets
      forth with respect to each such Lease, the commencement date, termination date,
      renewal options (if any) and annual base rents. Each such Lease is valid and
      enforceable in accordance with its terms in all material respects and is in
      full
      force and effect. No consent or approval of any landlord or other third party
      in
      connection with any such Lease is necessary for any Loan Party to enter into
      and
      execute the Loan Documents to which it is a party, except as set forth on
      Schedule 6.01(o).
      To the
      best knowledge of any Loan Party, no other party to any such Lease is in default
      of its obligations thereunder, and no Loan Party (or any other party to any
      such
      Lease) has at any time delivered or received any notice of default which remains
      uncured under any such Lease and, as of the Effective Date, no event has
      occurred which, with the giving of notice or the passage of time or both, would
      constitute a default under any such Lease.

     

    
      
        
        

      

      
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    (p) Full
      Disclosure.
      Each
      Loan
      Party
      has
      disclosed to the Agent all agreements, instruments and corporate or other
      material restrictions to which it is subject, and all other matters known to
      it,
      that, individually or in the aggregate, could reasonably be expected to result
      in a Material Adverse Effect. None
      of
      the reports, financial statements, certificates or other information furnished
      by or on behalf of any Loan Party to the Agent in connection with the
      negotiation of this Agreement or delivered hereunder (as modified or
      supplemented by other information so furnished) contains any material
      misstatement of fact or omits to state any material fact necessary to make
      the
      statements therein, in the light of the circumstances under which it was made,
      not misleading; provided
      that,
      with respect to projected financial information, each Loan Party represents
      only that such information was prepared in good faith based upon assumptions
      believed to be reasonable at the time prepared. There
      is
      no contingent liability or fact that may have a Material Adverse Effect which
      has not been set forth in a footnote included in the Financial Statements or
      a
      Schedule hereto.

     

    (q) Operating
      Lease Obligations.
      On the
      Effective Date, none of the Loan Parties has any Operating Lease Obligations
      other than the Operating Lease Obligations set forth on Schedule 6.01(q).

     

    (r) Environmental
      Matters.
      Except
      as set forth on Schedule 6.01(r),
      (i) the operations of each Loan Party are in compliance in all material
      respects with all Environmental Laws; (ii) there has been no Release at any
      of
      the properties owned or operated by any Loan Party or a predecessor in interest,
      or at any disposal or treatment facility which received Hazardous Materials
      generated by any Loan Party or any predecessor in interest which could
      reasonably be expected to have a Material Adverse Effect; (iii) no Environmental
      Action has been asserted against any Loan Party or any predecessor in interest
      nor does any Loan Party have knowledge or notice of any threatened or pending
      Environmental Action against any Loan Party or any predecessor in interest
      which
      could reasonably be expected to have a Material Adverse Effect; (iv) no
      Environmental Actions have been asserted against any facilities that may have
      received Hazardous Materials generated by any Loan Party or any predecessor
      in
      interest which could reasonably be expected to have a Material Adverse Effect;
      (v) no
      property now or formerly owned or operated by a Loan Party has been used as
      a
      treatment or disposal site for any Hazardous Material other than in compliance
      in all material respects with Environmental Laws; (vi) no Loan Party has
      failed to report to the proper Governmental Authority any Release which is
      required to be so reported by any Environmental Laws which could reasonably
      be expected to have
      a
      Material Adverse Effect; (vii) each Loan Party holds all licenses, permits
      and approvals required under any Environmental Laws in connection with the
      operation of the business carried on by it, except for such licenses, permits
      and approvals as to which a Loan Party’s failure to maintain or comply with
      could not reasonably
      be expected to have
      a
      Material Adverse Effect; and (viii) no Loan Party has received any notification
      pursuant to any Environmental Laws that (A) any work, repairs, construction
      or
      Capital Expenditures are required to be made in respect as a condition of
      continued compliance with any Environmental Laws, or any license, permit or
      approval issued pursuant thereto or (B) any license, permit or approval
      referred to above is about to be reviewed, made, subject to limitations or
      conditions, revoked, withdrawn or terminated, in each case, except as could
      not
reasonably
      be expected to have
      a
      Material Adverse Effect.

     

    
      
        
        

      

      
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    (s) Insurance.
      Each
      Loan Party keeps its property adequately insured and maintains (i) products
      liability insurance in an amount not less than $12,000,000, (ii) insurance
      to
      such extent and against such risks, including fire, as is customary with
      companies in the same or similar businesses, (iii) workmen’s compensation
      insurance in the amount required by applicable law, (iv) public liability
      insurance, which shall include product liability insurance, in the amount
      customary with companies in the same or similar business against claims for
      personal injury or death on properties owned, occupied or controlled by it,
      (v)
      D&O Insurance in an amount not less than $10,000,000, and (vi) such other
      insurance as may be required by law or as may be reasonably required by the
      Agent (including, without limitation, against larceny, embezzlement or other
      criminal misappropriation). Schedule 6.01(s)
      sets
      forth a list of all insurance maintained by each Loan Party on the Effective
      Date.

    

    (t) Use
      of
      Proceeds.
      The
      proceeds of the Loan shall be used to (i) pay fees and expenses in connection
      with this Agreement and (ii) fund working capital of the Borrower in
      accordance with the sources and uses described in the Cash
      Forecast.

    

    (u) Solvency.
      Before
      and after giving effect to the Loan, each of Borrower, CTC Cable Corporation,
      and CTC Towers & Pole Corporation, is, and on a consolidated basis are,
      Solvent.

     

    (v) Location
      of Bank Accounts.
      Schedule 6.01(v)
      sets
      forth a complete and accurate list as of the Effective Date of all deposit,
      checking and other bank accounts, all securities and other accounts maintained
      with any broker dealer and all other similar accounts maintained by each Loan
      Party, together with a description thereof (i.e.,
      the
      bank or broker dealer at which such deposit or other account is maintained
      and
      the account number and the purpose thereof).

     

    (w) Intellectual
      Property;.

    

    (i) Set
      forth
      on Schedule 6.01(w)
      is a
      complete and accurate list as of the Effective Date of all material licenses,
      permits, patents, patent applications, trademarks, trademark applications,
      trademark registrations, service marks, tradenames, copyrights, copyright
      applications, franchises, authorizations, non-governmental licenses and permits
      and other intellectual property rights of each Loan Party.

    

    (ii) Except
      as
      set forth on Schedule 6.01(w):

    

    (A) Each
      Loan
      Party owns or licenses or otherwise has the right to use all licenses, permits,
      patents, patent applications, trademarks, trademark applications, service marks,
      tradenames, copyrights, copyright applications, franchises, authorizations,
      non-governmental licenses and permits and, other intellectual property rights
      that are necessary for the operation of its business without infringement upon
      or conflict with the rights of any other Person with respect thereto, except
      for
      such infringements and conflicts which, individually or in the aggregate, could
      not reasonably be expected to have a Material Adverse Effect.

     

    
      
        
        

      

      
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    (B) No
      slogan
      or other advertising device, product, process, method, substance, part or other
      material, or, to the best knowledge of each Loan Party, patent, now employed,
      or
      now contemplated to be employed, by any Loan Party infringes upon or conflicts
      with any rights owned by any other Person, and no claim or litigation regarding
      any of the foregoing is pending or threatened, except for such infringements
      and
      conflicts which could not reasonably be expected to have, individually or in
      the
      aggregate, a Material Adverse Effect.

    

    (C) All
      Software sold or licensed by a Loan Party to customers (1) was authored by
      regular employees of such Loan Party within the scope of their employment and
      such Loan Party was thus the original author pursuant to the work made for
      hire
      doctrine, (2) is Software that a Loan Party licenses from providers thereof
      with appropriate rights to resell or sublicense to third parties, or (3) was
      authored by third party contractors who have agreed in writing to assign all
      of
      their rights in such Software to such Loan Party.

    

    (D) Each
      Loan
      Party has taken reasonable measures to protect the secrecy, confidentiality
      and
      value of all its material proprietary information, trade secrets and know-how
      (including, without limitation, entering into appropriate confidentiality
      agreements with all officers, directors, employees, and other Persons with
      access thereto), and none of such material proprietary information, trade
      secrets and know-how has been disclosed to any Persons other than employees
      or
      contractors of the Loan Parties who had a need to know and use such material
      proprietary information, trade secrets and know-how in the ordinary course
      of
      employment or contract performance and who executed appropriate confidentiality
      agreements prohibiting unauthorized disclosure thereof.

     

    (x) Material
      Contracts.
      Set
      forth on Schedule 6.01(x)
      is a
      complete and accurate list as of the Effective Date of all Material Contracts
      of
      each Loan Party, showing the parties and subject matter thereof and amendments
      and modifications thereto. Each such Material Contract (i) is in full force
      and effect and is binding upon and enforceable against each Loan Party that
      is a
      party thereto and, to the knowledge of such Loan Party, all other parties
      thereto in accordance with its terms, (ii) has not been otherwise amended
      or modified (other than in accordance with Section
      7.02(r)),
      and
      (iii) is not in default in any material respect due to the action of any Loan
      Party or, to the knowledge of any Loan Party, any other party
      thereto.

    

    (y) Holding
      Company and Investment Company Acts.
      None of
      the Loan Parties is
      (i) a “holding company” or a “subsidiary company” of a “holding company” or
      an “affiliate” of a “holding company”, as such terms are defined in the Public
      Utility Holding Company Act of 1935, as amended, or (ii) an “investment
      company” or an “affiliated person” or “promoter” of, or “principal underwriter”
of or for, an “investment company”, as such terms are defined in the Investment
      Company Act of 1940, as amended.

     

    (z) Employee
      and Labor Matters.
      There
      is
      (i) no unfair labor practice complaint pending or, to the best knowledge of
      any
Loan
      Party,
      threatened against any Loan
      Party
      before
      any Governmental Authority and no grievance or arbitration proceeding pending
      or
      threatened against any Loan
      Party
      which
      arises out of or under any collective bargaining agreement, (ii) no strike,
      labor dispute, slowdown, stoppage or similar action or grievance pending or
      threatened against any Loan
      Party
      or (iii)
      to the knowledge of each Loan
      Party,
      no
      union representation question existing with respect to the employees of any
      Loan
      Party and
      no
      union organizing activity taking place with respect to any of the employees
      of
      any Loan Party. No Loan Party or any of its ERISA Affiliates has incurred any
      liability or obligation under the Worker Adjustment and Retraining Notification
      Act (“WARN”)
      or
      similar state law, which remains unpaid or unsatisfied. The hours worked and
      payments made to employees of any Loan Party have not been in violation of
      the
      Fair Labor Standards Act or any other applicable legal requirements. All
      material payments due from any Loan Party on account of wages and employee
      health and welfare insurance and other benefits have been paid or accrued as
      a
      liability on the books of such Loan Party.

     

    
      
        
        

      

      
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    (aa) Customers
      and Suppliers.
      

    

    (i) There
      exists no actual or threatened termination, cancellation or limitation of,
      or
      modification to or change in, the business relationship between (A) CTC Cable
      Corporation, on the one hand, and any customer or any group thereof, on the
      other hand, whose agreements with CTC Cable Corporation are individually or
      in
      the aggregate material to the business or operations of CTC Cable Corporation,
      or (B) CTC Cable Corporation, on the one hand, and any supplier or any
      group thereof, on the other hand, whose agreements with CTC Cable Corporation
      are individually or in the aggregate material to the business or operations
      of
      CTC Cable Corporation; and there exists no present state of facts or
      circumstances that could reasonably give rise to or result in any such
      termination, cancellation, limitation, modification or change.

    

    (ii) Except
      as
      disclosed to Agent in a letter of even date herewith, there exists no actual
      or,
      to the knowledge of any Loan Party, threatened termination, cancellation or
      limitation of, or modification to or change in, the business relationship
      between (A) any Loan Party other than CTC Cable Corporation, on the one hand,
      and any customer or any group thereof, on the other hand, whose agreements
      with
      such Loan Party are individually or in the aggregate material to the business
      or
      operations of such Loan Party, or (B) any Loan Party other than CTC Cable
      Corporation, on the one hand, and any supplier or any group thereof, on the
      other hand, whose agreements with such Loan Party are individually or in the
      aggregate material to the business or operations of such Loan Party; and there
      exists no present state of facts or circumstances that could reasonably give
      rise to or result in any such termination, cancellation, limitation,
      modification or change.

     

    (bb) Name;
      Jurisdiction of Organization; Organizational ID Number; Chief Place of Business;
      Chief Executive Office; FEIN.
      Schedule 6.01(bb)
      sets
      forth a complete and accurate list as of the date hereof of (i) the exact
      legal name of each Loan Party, (ii) the jurisdiction of organization of
      each Loan Party, (iii) the organizational identification number of each
      Loan Party (or indicates that such Loan Party has no organizational
      identification number), (iv) each place of business of each Loan
      Party,
      (v) the chief executive office of each Loan
      Party and (vi) the federal employer identification number of each Loan
      Party.

     

    (cc) Tradenames.
      Schedule 6.01(cc)
      hereto
      sets forth a complete and accurate list as of the Effective Date of all
      tradenames, business
      names or similar appellations used by each Loan Party, or any of its divisions
      or other business units during the past 5 years.

     

    
      
        
        

      

      
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    (dd) Locations
      of Collateral.
      There
      is
      no location at which any Loan Party has any Collateral with a fair market value
      in excess of $100,000 (except for Inventory in transit) other than (i) those
      locations listed on Schedule 6.01(dd) and
      (ii) any other locations in the continental United States for which such
      Loan Party has provided notice to the Agent in accordance with Section
      7.01(l)
      and, if
      necessary, a written subordination or waiver or collateral access agreement
      in
      accordance with Section
      7.01(m).
      Schedule 6.01(dd)
      hereto
      contains a true, correct and complete list, as of the Effective Date, of the
      legal names and addresses of each warehouse at which Collateral of each
Loan
      Party
      is
      stored. None of the receipts received by any Loan
      Party
      from any
      warehouse states that the goods covered thereby are to be delivered to bearer
      or
      to the order of a named Person or to a named Person and such named Person’s
      assigns.

    

    (ee) Security
      Interests.
      The
      Security Agreement creates in favor of the Agent, for the benefit of the Agent
      and the Lenders, a legal, valid and enforceable security interest in the
      Collateral secured thereby. Upon the Effective Date the filing of the UCC-1
      financing statements described in Section
      5.01(d)(iv)
      and the
      recording of the Collateral Assignments for Security referred to in the Security
      Agreement in the United States Patent and Trademark Office and the United States
      Copyright Office, as applicable, such security interests in and Liens on the
      Collateral granted thereby shall be perfected, first priority security interests
      (subject only to Liens [in favor of Hilltop and Seawind as described on Schedule
      7.02(a) and] Liens described in clause (j) of the definition of Permitted Liens,
      and no further recordings or filings are or will be required in connection
      with
      the creation, perfection or enforcement of such security interests and Liens,
      other than (i) the filing of continuation statements in accordance with
      applicable law, and (ii) the recording of the Collateral Assignments for
      Security pursuant to the Security Agreement in the United States Patent and
      Trademark Office and the United States Copyright Office, as applicable, with
      respect to after-acquired U.S. patent and trademark applications and
      registrations and U.S. copyrights.

     

    (ff)
      Schedules.
      All of
      the information which is required to be scheduled to this Agreement is set
      forth
      on the Schedules attached hereto, is correct and accurate and does not omit
      to
      state any information material thereto.

    

    (gg) Representations
      and Warranties in Documents; No Default.
      All
      representations and warranties of the Loan Parties, for themselves or any of
      their Subsidiaries, set forth in this Agreement and the other Loan Documents
      are
      true and correct in all respects at the time as of which such representations
      were made and on the Effective Date except to the extent that any such
      representation or warranty expressly relates solely to an earlier date (in
      which
      case such representation or warranty shall be true and correct on and as of
      such
      earlier date in all material respects). No Event of Default has occurred and
      is
      continuing and no condition exists which constitutes a Default or an Event
      of
      Default.

    

    (hh) Directors
      and Officers.
      None of
      the directors or officers of any Loan Party or any of their Subsidiaries:
      (i) is currently or has been the subject of an investigation by the SEC or
      any other Governmental Authority; (ii) has been charged with a felony of
      any kind or nature whatsoever; or (iii) has filed, or commenced any action
      in respect of a possible filing, for relief from creditors under the United
      States Bankruptcy Code or any other insolvency, bankruptcy or reorganization
      act.

     

    
      
        
        

      

      
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    (ii) Inventory.
      With
      respect to any of the Inventory of the Borrower or any of its Subsidiaries:
      (i)
      the Borrower or such Subsidiary has good, indefeasible and merchantable title
      to
      such Inventory; (ii) such Inventory is of good and merchantable quality, free
      from any defects that could materially adversely affect the market value of
      such
      Inventory (in the aggregate); (iii) such Inventory is not subject to any
      licensing, patent, royalty, trademark, trade name or copyright agreements with
      any third parties which would require any consent of any third party upon sale
      or disposition of that Inventory or the payment of any monies to any third
      party
      upon such sale or other disposition, and (iv) the completion of manufacture,
      sale or other disposition of such Inventory by Agent following an Event of
      Default shall not require the consent of any Person and shall not constitute
      a
      breach or default under any contract or agreement to which Borrower or any
      of
      its Subsidiaries is a party or to which such property is subject.

     

    (jj) Transfer
      Pricing.
      The
      Borrower’s policy on transfers of assets among itself and its Subsidiaries is
      attached as Schedule 6.01(jj) (the “Transfer
      Pricing Policy”).

    

    (kk) Inactive
      Subsidiaries.
      Transmission Technology Corporation, CTC Towers and Poles Corporation, EU
      Energy, Inc., and EU Energy North America, Inc. are all inactive corporations,
      and as such do not conduct any operations or business activity and have less
      than $100,000 in assets in the aggregate.

    

    (ll) Patriot
      Act.
      To the
      extent applicable, each Loan Party is in compliance, in all material respects,
      with the (i) Trading with the Enemy Act, as amended, and each of the foreign
      assets control regulations of the United States Treasury Department (31 CFR,
      Subtitle B, Chapter V, as amended) and any other enabling legislation or
      executive order relating thereto, and (ii) Uniting and Strengthening America
      by
      Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
      Patriot Act of 2001). No part of the proceeds of the Loan will be used, directly
      or indirectly, for any payments to any governmental official or employee,
      political party, official of a political party, candidate for political office,
      or anyone else acting in an official capacity, in order to obtain, retain or
      direct business or obtain any improper advantage, in violation of the United
      States Foreign Corrupt Practices Act of 1977, as amended.

     

    Section
      6.02 Agent
      and Lender Representations and Warranties.
      Agent
      and each Lender hereby represent and warrant to Borrower as
      follows:

    

    (a) Authorization.
      The
      execution, delivery and performance by Agent and each Lender of each Loan
      Document to which it is or will be a party, (i) have been duly authorized by
      all
      necessary action, and (ii) do not and will not contravene its charter or
      by-laws, its limited liability company or operating agreement or its certificate
      of partnership or partnership agreement, as applicable, any applicable
      law.

    

    (b) Enforcement.
      This
      Agreement is, and each other Loan Document and other Transaction Document to
      which Agent and each Lender is or will be a party, when delivered hereunder,
      will be, a legal, valid and binding obligation of such Person, enforceable
      against such Person in accordance with its terms, except as enforceability
      may
      be limited by applicable bankruptcy, insolvency, reorganization, moratorium
      or
      other similar laws affecting creditors’ rights generally and by general
      equitable principles.

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    (c) Organization.
      Agent
      and each Lender (i) is a corporation, limited liability company or limited
      partnership duly organized, validly existing and in good standing under the
      laws
      of the state or jurisdiction of its organization, (ii) has all requisite power
      and authority to conduct its business as now conducted and as presently
      contemplated, and (iii) has the power and authority to make the investments
      contemplated by this Agreement.

    

    (d) No
      General Solicitation.
      Neither
      Agent nor any Lender learned of the investment in the Warrants as a result
      of
      any “general advertising” or “general solicitation” as those terms are
      contemplated in Regulation D, as amended, under the Securities Act.

    

    ARTICLE
      VII

    

    COVENANTS
      OF THE LOAN
      PARTIES

     

    Section
      7.01 Affirmative
      Covenants.
      So long
      as any principal of or interest on the Loan or any other Obligation (whether
      or
      not due) shall remain unpaid or any Lender shall have any Commitment hereunder,
      Borrower
      and each of its Subsidiaries
      will,
      unless the Required Lenders shall otherwise consent in writing:

     

    (a) Reporting
      Requirements.
      Furnish
      to the Agent and each Lender:

     

    (i) as
      soon
      as available and in any event within 30 days after the end of each fiscal
      quarter of Borrower
      and its
      Subsidiaries commencing with the first fiscal quarter of Borrower
      and its
      Subsidiaries ending after the Effective Date, consolidated and consolidating
      balance sheets, consolidated and consolidating statements of operations and
      retained earnings and consolidated and consolidating statements of cash flows
      of
Borrower
      and its
      Subsidiaries as at the end of such quarter, and for the period commencing at
      the
      end of the immediately preceding Fiscal Year and ending with the end of such
      quarter, setting forth in each case in comparative form the figures for the
      corresponding date or period set forth in (x) the financial statements for
      the
      immediately preceding Fiscal Year and (y) the projections delivered pursuant
      to
      clause (ix)
      of this
Section
      7.01(a),
      all in
      reasonable detail and certified by an Authorized Officer of Borrower
      as
      fairly presenting, in all material respects, the financial position of
Borrower
      and its
      Subsidiaries as of the end of such quarter and the results of operations and
      cash flows of Borrower
      and its
      Subsidiaries for such quarter, in accordance with GAAP applied in a manner
      consistent with that of the most recent audited financial statements of
Borrower
      and its
      Subsidiaries furnished to the Agent and the Lenders, subject to the absence
      of
      footnotes and normal year-end adjustments;

     

    (ii) as
      soon
      as available, and in any event within 45 days after the end of each Fiscal
      Year
      of Borrower
      and its
      Subsidiaries, consolidated and consolidating balance sheets, consolidated and
      consolidating statements of operations and retained earnings and consolidated
      and consolidating statements of cash flows of Borrower
      and its
      Subsidiaries as at the end of such Fiscal Year, setting forth in each case
      in
      comparative form the figures for the corresponding date or period set forth
      in
      the financial statements for the immediately preceding Fiscal Year, all in
      reasonable detail and prepared in accordance with GAAP, and accompanied by
      a
      report and an unqualified opinion, prepared in accordance with generally
      accepted auditing standards, of independent certified public accountants of
      recognized standing selected by Borrower
      and
      satisfactory to the Agent (which opinion shall be without (A) a “going
      concern” or like qualification or exception, (B) any qualification or
      exception as to the scope of such audit, or (C) any qualification which
      relates to the treatment or classification of any item and which, as a condition
      to the removal of such qualification, would require an adjustment to such item,
      the effect of which would be to cause any noncompliance with the provisions
      of
      Section 7.03), together with a written statement of such accountants (1) to
      the effect that, in making the examination necessary for their certification
      of
      such financial statements, they have not obtained any knowledge of the existence
      of an Event of Default or a Default and (2) if such accountants shall have
      obtained any knowledge of the existence of an Event of Default or such Default,
      describing the nature thereof;

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

       

    

    (iii) as
      soon
      as available, and in any event within 20 days after the end of each fiscal
      month
      of Borrower
      and its Domestic Subsidiaries
      and 25
      days after the end of each fiscal month of its Foreign Subsidiaries commencing
      with the first fiscal month of Borrower
      and its
      Subsidiaries ending after the Effective Date, internally prepared consolidated
      and consolidating balance sheets and consolidated and consolidating statements
      of operations and retained earnings and consolidated and consolidating
      statements of cash flows as at the end of such fiscal month, and for the period
      commencing at the end of the immediately preceding Fiscal Year and ending with
      the end of such fiscal month, all in reasonable detail and certified by an
      Authorized Officer of Borrower
      as
      fairly presenting, in all material respects, the financial position of
Borrower
      and its
      Subsidiaries as at the end of such fiscal month and the results of operations,
      retained earnings and cash flows of Borrower
      and its
      Subsidiaries for such fiscal month, in accordance with GAAP applied in a manner
      consistent with that of the most recent audited financial statements furnished
      to the Agent and the Lenders, subject to normal year-end
      adjustments;

    

    (iv) as
      soon
      as available, and in any event: (i) within 15 days after the end of each fiscal
      month of Borrower and its Domestic Subsidiaries and within 20 days after the
      end
      of each fiscal month of its Foreign Subsidiaries commencing with the first
      fiscal month of Borrower and its Subsidiaries ending after the Effective Date,
      (A) a detailed trial balance of each Loan Party’s Accounts Receivable aged per
      invoice date, in form and substance reasonably satisfactory to Agent including,
      without limitation, the names and addresses of all Account Debtors of each
      Loan
      Party, and (B) a summary and detail of accounts payable (such Accounts
      Receivable and accounts payable divided into such time intervals as Agent may
      request), including a listing of any held checks; (ii) within 15 days after
      the
      end of each calendar month, the general ledger inventory account balance, a
      perpetual inventory report in form and substance reasonably satisfactory to
      Agent for each Loan Party (except DeWind, Inc.), and within 20 days for DeWind,
      Inc. by each category of Inventory, together with a description of the monthly
      change in each category of Inventory; and (iii) at Agent’s request, a report
      detailing all affiliate and shareholders balances arising from affiliate and
      shareholder transactions that occurred in the prior month’s period including,
      without limitation, all intercompany loans, loans to other Affiliates, employees
      and other Persons and sales and purchases to and from any
      Affiliate;

     

    
      
        
        

      

      
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    (v) simultaneously
      with the delivery of the financial statements of Borrower
      and its
      Subsidiaries required by clauses (i),
      (ii)
      and
(iii)
      of this
Section
      7.01(a),
      a
      certificate of an Authorized Officer of Borrower
      in substantially the form of Exhibit J
      stating
      that such Authorized Officer has reviewed the provisions of this Agreement
      and
      the other Loan Documents and has made or caused to be made under his or her
      supervision a review of the condition and operations of Borrower
      and its
      Subsidiaries during the period covered by such financial statements with a
      view
      to determining whether Borrower
      and its
      Subsidiaries were in compliance with all of the provisions of this Agreement
      and
      such Loan Documents at the times such compliance is required hereby and thereby,
      and that such review has not disclosed, and such Authorized Officer has no
      knowledge of, the existence during such period of an Event of Default or Default
      or, if an Event of Default or Default existed, describing the nature and period
      of existence thereof and the action which Borrower
      and its
      Subsidiaries propose to take or have taken with respect thereto;

     

    (vi) as
      soon
      as available and in any event within 30 days after the end of each fiscal
      quarter of Borrower
      and its
      Subsidiaries commencing with the first fiscal quarter of Borrower
      and its
      Subsidiaries ending after the Effective Date, reports in form and detail
      reasonably satisfactory to the Agent and certified by an Authorized Officer
      of
      the Borrower as being accurate and complete (A) listing all Accounts Receivable
      of Borrower
      and its
      Subsidiaries as of such day, which shall include the amount and age of each
      such
      Account Receivable, showing separately those which are more than 30, 60, 90
      and
      120 days old and a description of all Liens, set-offs, defenses and
      counterclaims with respect thereto, and such other information as the Agent
      may
      request, and (B) listing all accounts payable of Borrower
      and its
      Subsidiaries as of each such day which shall include the amount and age of
      each
      such account payable, and such other information as the Agent may
      request;

    

    (vii) promptly
      after submission to any Governmental Authority, all documents and information
      furnished to such Governmental Authority in connection with any investigation
      of
Borrower
      or any
      of its Subsidiaries or any of their officers or directors other than routine
      inquiries by such Governmental Authority;

    

    (viii) as
      soon
      as possible, and in any event within 2 Business Days after any Responsible
      Officer of any
      Loan
      Party
      has
      knowledge of the occurrence of an Event of Default or Default or the occurrence
      of any event or development that could reasonably be expected to have a Material
      Adverse Effect, the written statement of an Authorized Officer of such
      Loan
      Party
      setting
      forth the details of such Event of Default or Default or other event or
      development having a Material Adverse Effect and the action which the
      affected Loan Party
      proposes
      to take with respect thereto;

     

    (ix) (A)
      as
      soon as possible and in any event within 2 Business Days after any Loan Party
      or
      any ERISA Affiliate thereof knows or has reason to know that (1) any Reportable
      Event with respect to any Employee Plan has occurred, (2) any other Termination
      Event with respect to any Employee Plan has occurred, or (3) an accumulated
      funding deficiency has been incurred or an application has been made to the
      Secretary of the Treasury for a waiver or modification of the minimum funding
      standard (including installment payments) or an extension of any amortization
      period under Section 412 of the Internal Revenue Code with respect to an
      Employee Plan, a statement of an Authorized Officer of the Borrower setting
      forth the details of such occurrence and the action, if any, which Borrower
      or
      such ERISA Affiliate proposes to take with respect thereto, (B) promptly and
      in
      any event within 2 Business Days after receipt thereof by Borrower or any ERISA
      Affiliate thereof from the PBGC, copies of each notice received by Borrower
      or
      any ERISA Affiliate thereof of the PBGC’s intention to terminate any Plan or to
      have a trustee appointed to administer any Plan, (C) promptly and in any event
      within 2 Business Days after the filing thereof with the Internal Revenue
      Service if requested by the Agent, copies of each Schedule B (Actuarial
      Information) to the annual report (Form 5500 Series) with respect to each
      Employee Plan and Multiemployer Plan, (D) promptly and in any event within
      2
      Business Days after Borrower or any ERISA Affiliate thereof knows or has reason
      to know that a required installment within the meaning of Section 412 of the
      Internal Revenue Code has not been made when due with respect to an Employee
      Plan, (E) promptly and in any event within 2 Business Days after receipt thereof
      by Borrower or any ERISA Affiliate thereof from a sponsor of a Multiemployer
      Plan or from the PBGC, a copy of each notice received by Borrower or any ERISA
      Affiliate thereof concerning the imposition or amount of withdrawal liability
      under Section 4202 of ERISA or indicating that such Multiemployer Plan may
      enter
      reorganization status under Section 4241 of ERISA, and (F) promptly and in
      any
      event within 2 Business Days after Borrower or any ERISA Affiliate thereof
      sends
      notice of a plant closing or mass layoff (as defined in WARN) to employees,
      copies of each such notice sent by Borrower or such ERISA Affiliate
      thereof;

     

    
      
        
        

      

      
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    (x) promptly
      after the commencement thereof but in any event not later than 2 Business Days
      after service of process with respect thereto on, or the obtaining of knowledge
      thereof by, Borrower or any of its Subsidiaries, notice of each action, suit
      or
      proceeding by or against Borrower or any of its Subsidiaries or any of their
      officers or directors before any court or other Governmental Authority or other
      regulatory body or any arbitrator which, if adversely determined, could
      reasonably be expected to have a Material Adverse Effect;

    

    (xi) as
      soon
      as possible and in any event within 2 Business Days after execution, receipt
      or
      delivery thereof, a copy of any notice that Borrower or any of its Subsidiaries
      executes or receives in connection with any Material Contract regarding the
      occurrence of any event or development with respect to such Material Contract
      that could reasonably be expected to have a Material Adverse
      Effect;

    

    (xii) as
      soon
      as possible and in any event within 2 Business Days after execution, receipt
      or
      delivery thereof, copies of any material notices that Borrower or any of its
      Subsidiaries executes or receives in connection with the sale or other
      Disposition of the Capital Stock of, or all or substantially all of the assets
      of, Borrower or any of its Subsidiaries;

    

    (xiii) promptly
      after the sending or filing thereof, copies of all statements, reports and
      other
      information Borrower or any of its Subsidiaries sends to any holders of its
      Indebtedness or its securities or files with the SEC or any national (domestic
      or foreign) securities exchange;

    

    (xiv) promptly
      upon receipt thereof, copies of all financial reports (including, without
      limitation, management letters), if any, submitted to Borrower or any of its
      Subsidiaries by its auditors in connection with any annual or interim audit
      of
      the books thereof;

    

    (xv) commencing
      on second Business Day of the first calendar week after the Effective Date,
      and
      on the second Business Day of each week thereafter, an update of the Cash
      Forecast in form and substance reasonably satisfactory to the Agent by no later
      than 5:00 p.m. New York time on such date; 

     

    
      
        
        

      

      
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    (xvi) as
      soon
      as possible and in any event within 5 Business Days of a Loan Parties’
acquisition of any item of Inventory encumbered by a Lien permitted under clause
      (j) of the definition of Permitted Liens, a written statement of an Authorized
      Officer of such Loan Party setting forth a description of such Inventory, which
      description shall include the location of such Inventory, applicable serial
      or
      stock keeping unit numbers and such other information as shall be reasonably
      necessary to enable Agent to identify such Inventory; and

    

    (xvii) promptly
      upon request, such other information concerning the condition or operations,
      financial or otherwise, of Borrower or any of its Subsidiaries as the Agent
      may
      from time to time may request.

     

    (b) Additional
      Collateral Security.
      Cause:

    

    (i) each
      Domestic Subsidiary of any Loan Party not in existence on the Effective Date,
      to
      execute and deliver to the Agent promptly and in any event within 3 days
      after the formation or acquisition thereof (A) a Joinder Agreement, pursuant
      to
      which such Subsidiary shall be made a party to this Agreement as a Guarantor,
      (B) a Security Agreement, (C) if such Subsidiary has any Subsidiaries, a Pledge
      Agreement
      together with (x) certificates evidencing all of the Capital Stock of any Person
      owned by such Subsidiary, (y) undated stock powers executed in blank with
      signature guaranteed, and (z) such opinion of counsel and such approving
      certificate of such Subsidiary as the Agent may reasonably request in respect
      of
      complying with any legend on any such certificate or any other matter relating
      to such shares, and
      (D) such other agreements, instruments, approvals, legal opinions or other
      documents reasonably requested by the Agent in order to create, perfect,
      establish the first priority of or otherwise protect any Lien purported to
      be
      covered by any such Security Agreement, Pledge Agreement or otherwise to effect
      the intent that such Subsidiary shall become bound by all of the terms,
      covenants and agreements contained in the Loan Documents and that all property
      and assets of such Subsidiary shall become Collateral for the Obligations;
      and

    

    (ii) each
      owner of the Capital Stock of any Subsidiary of Borrower not in existence as
      of
      the Effective Date to execute and deliver promptly and in any event within
      3
      days after the formation or acquisition of such Subsidiary a Pledge Agreement,
      together with (A) certificates
      evidencing all of the Capital Stock of such Subsidiary, (B) undated stock
      powers or other appropriate instruments of assignment executed in blank
with
      signature guaranteed, (C) such opinion of counsel and such approving
      certificate of such Subsidiary as the Agent may reasonably request in respect
      of
      complying with any legend on any such certificate or any other matter relating
      to such shares and (D) such other agreements, instruments, approvals, legal
      opinions or other documents requested by the Agent.

     

    (c) Compliance
      with Laws, Etc.
      Comply,
      and cause each of its Subsidiaries to comply in all material respects, with
      all
      applicable laws, rules, regulations, orders (including, without limitation,
      all
      Environmental Laws), judgments and awards (including any settlement of any
      claim
      that, if breached, could give rise to any of the foregoing), such compliance
      to
      include, without limitation, (i) paying before the same become delinquent all
      taxes, assessments and governmental charges or levies imposed upon it or upon
      its income or profits or upon any of its properties, and (ii) paying all
      lawful claims which if unpaid might become a Lien or charge upon any of its
      properties, except, in each case, to the extent contested in good faith by
      proper proceedings which stay the imposition of any penalty, fine or Lien
      resulting from the non-payment thereof and with respect to which adequate
      reserves have been set aside for the payment thereof in accordance with
      GAAP.

     

    
      
        
        

      

      
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    (d) Preservation
      of Existence, Etc.
      Maintain
      and preserve, and cause each of its Subsidiaries to maintain and preserve,
      its
      existence, rights and privileges, and become or remain, and cause each of its
      Subsidiaries to become or remain, duly qualified and in good standing in each
      jurisdiction in which the character of the properties owned or leased by it
      or
      in which the transaction of its business makes such qualification necessary,
      except where the failure to be so qualified could not reasonably be expected
      to
      result in a Material Adverse Effect.

     

    (e) Keeping
      of Records and Books of Account.
      Keep,
      and cause each of its Subsidiaries to keep, adequate records and books of
      account, with complete entries made to permit the preparation of financial
      statements in accordance with GAAP.

     

    (f) Inspection
      Rights.
      Subject
      to the limitations set forth in Section 4.01, permit, and cause each of its
      Subsidiaries to permit, the agents and representatives of the Agent at any
      time
      and from time to time during normal business hours and subject to the
      confidentiality requirements of Section 12.19, and, so long as no Default or
      Event of Default shall have occurred and be continuing, upon reasonable prior
      notice, to examine and make copies of and abstracts from its records and books
      of account, to visit and inspect its properties, to verify materials, leases,
      notes, accounts receivable, deposit accounts and its other assets, to conduct
      audits, physical counts, valuations, appraisals, Phase I Environmental Site
      Assessments (and, if requested by the Agent based upon the results of any such
      Phase I Environmental Site Assessment, a Phase II Environmental Site
      Assessment) or examinations and to discuss its affairs, finances and accounts
      with any of its directors, officers, managerial employees, independent
      accountants or any of its other representatives. In furtherance of the
      foregoing, Borrower, for itself and its Subsidiaries, hereby authorizes its
      independent accountants, and the independent accountants of each of its
      Subsidiaries, to discuss the affairs, finances and accounts of such Person
      (independently or together with representatives of such Person) with the agents
      and representatives of the Agent in accordance with this Section
      7.01(f).
      Notwithstanding the foregoing, provided no Default or Event of Default shall
      have occurred and be continuing, Agent shall only exercise the inspection rights
      set forth in this Section 7.01(f) with reasonable frequency; provided this
      sentence shall not limit the frequency with which Agent may discuss the affairs,
      finances and accounts of any such Person with any of its directors, officers,
      managerial employees, independent accountants or any of its other
      representatives.

     

    (g) Maintenance
      of Properties, Etc.
      Maintain
      and preserve, and cause each of its Subsidiaries to maintain and preserve,
      all
      of its properties which are necessary or useful in the proper conduct of its
      business in good working order and condition, ordinary wear and tear excepted,
      and comply, and cause each of its Subsidiaries to comply, at all times with
      the
      provisions of all leases to which it is a party as lessee or under which it
      occupies property, so as to prevent any loss or forfeiture thereof or
      thereunder.
      The Loan
      Parties shall not commingle any Inventory encumbered by a Lien permitted under
      clause (j) of the definition of Permitted Liens with any other Inventory of
      the
      Loan Parties and shall segregate any Inventory so encumbered from other
      Inventory of the Loan Parties such that Agent may readily identify
      same.

     

    
      
        
        

      

      
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    (h) Maintenance
      of Insurance.
      Maintain, and cause each of its Subsidiaries to maintain, (i) products
      liability insurance in an amount not less than $12,000,000, (ii) D&O
      Insurance in an amount not less than $10,000,000, and (iii)
      insurance with responsible and reputable insurance companies or associations
      (including, without limitation, comprehensive general liability, hazard, rent
      and business interruption insurance) with respect to its properties (including
      all real properties leased or owned by it) and business, in such amounts and
      covering such risks as is required by any Governmental Authority having
      jurisdiction with respect thereto or as is carried generally in accordance
      with
      sound business practice by companies in similar businesses similarly situated
      and in any event in amount, adequacy and scope reasonably satisfactory to the
      Agent. All policies covering the Collateral are to be made payable to the Agent
      for the benefit of the Agent and the Lenders, as its interests may appear,
      in
      case of loss, under a standard non-contributory “lender” or “secured party”
clause and are to contain such other provisions as the Agent may require to
      fully protect the Lenders’ interest in the Collateral and to any payments to be
      made under such policies. All certificates of insurance are to be delivered
      to
      the Agent and the policies are to be premium prepaid, with the loss payable
      and
      additional insured endorsement in favor of the Agent and such other Persons
      as
      the Agent may designate from time to time, and shall provide for not less than
      30 days’ prior written notice to the Agent of the exercise of any right of
      cancellation. If Borrower or any of its Subsidiaries fails to maintain such
      insurance, the Agent may arrange for such insurance, but at the Borrower’s
      expense and without any responsibility on the Agent’s part for obtaining the
      insurance, the solvency of the insurance companies, the adequacy of the
      coverage, or the collection of claims. Upon the occurrence and during the
      continuance of an Event of Default, the Agent shall have the sole right, in
      the
      name of the Lenders, Borrower and its Subsidiaries, to file claims under any
      insurance policies, to receive, receipt and give acquittance for any payments
      that may be payable thereunder, and to execute any and all endorsements,
      receipts, releases, assignments, reassignments or other documents that may
      be
      necessary to effect the collection, compromise or settlement of any claims
      under
      any such insurance policies.

     

    (i) Obtaining
      of Permits, Etc.
      Obtain,
      maintain and preserve, and cause each of its Subsidiaries to obtain, maintain
      and preserve, and take all necessary action to timely renew, all permits,
      licenses, authorizations, approvals, entitlements and accreditations which
      are
      necessary or useful in the proper conduct of its business.

     

    (j) Environmental.
      (i)  Keep any property either owned or operated by it or any of its
      Subsidiaries free of any Environmental Liens; (ii) comply, and cause each
      of its Subsidiaries to comply, with all Environmental Laws and provide to the
      Agent any documentation of such compliance which the Agent may reasonably
      request; (iii) provide the Agent written notice within 10 days of any
      Release of a Hazardous Material in excess of any reportable quantity from or
      onto property at any time owned or operated by it or any of its Subsidiaries
      and
      take any Remedial Actions required by applicable Environmental Laws to abate
      said Release; (iv) provide the Agent with written notice within 10 days of
      the receipt of any of the following: (A) notice that an Environmental Lien
      has been filed against any property of Borrower or any of its Subsidiaries;
      (B) commencement of any Environmental Action or notice that an
      Environmental Action will be filed against Borrower or any of its Subsidiaries;
      and (C) notice of a violation, citation or other administrative order which
      could not reasonably be expected to have a Material Adverse Effect.

     

    
      
        
        

      

      
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    (k) Further
      Assurances.
      Take
      such action and execute, acknowledge and deliver, and cause each of its
      Subsidiaries to take such action and execute, acknowledge and deliver, at its
      sole cost and expense, such agreements, instruments or other documents as are
      necessary, or as the Agent may reasonably request, from time to time in order
      (i) to carry out more effectively the purposes of this Agreement and the
      other Loan Documents, (ii) to subject to valid and perfected first priority
      Liens (subject only to Permitted Liens) any of the Collateral or any other
      property of Borrower and its Subsidiaries, (iii) to establish and maintain
      the validity and effectiveness of any of the Loan Documents and the validity,
      perfection and priority of the Liens intended to be created thereby, and
      (iv) to better assure, convey, grant, assign, transfer and confirm unto the
      Agent and each Lender the rights now or hereafter intended to be granted to
      it
      under this Agreement or any other Loan Document. In furtherance of the
      foregoing, to the maximum extent permitted by applicable law, Borrower, for
      itself and its Subsidiaries, (i) authorizes the Agent to execute any such
      agreements, instruments or other documents in such Person’s name upon the
      failure by such Person to execute the same promptly after the reasonable request
      of the Agent and to file such agreements, instruments or other documents in
      any
      appropriate filing office, (ii) authorizes the Agent to file any financing
      statement required hereunder or under any other Loan Document, and any
      continuation statement or amendment with respect thereto, in any appropriate
      filing office without the signature of such Person, and (iii) ratifies the
      filing of any financing statement, and any continuation statement or amendment
      with respect thereto, filed without the signature of such Person prior to the
      date hereof.

     

    (l) Change
      in Collateral; Collateral Records.
      (i)
      Give the Agent not less than 30 days’ prior written notice of any change in
      the location of any Collateral, other than to locations set forth on Schedule
      6.01(dd)
      and with
      respect to which the Agent has filed financing statements and otherwise fully
      perfected its Liens thereon, (ii) advise the Agent promptly, in sufficient
      detail, of any material adverse change relating to the type, quantity or quality
      of the Collateral or the Lien granted thereon and (iii) execute and
      deliver, and cause each of its Subsidiaries to execute and deliver, to the
      Agent
      for the benefit of the Agent and the Lenders from time to time, solely for
      the
      Agent’s convenience in maintaining a record of Collateral, such written
      statements and schedules as the Agent may reasonably require, designating,
      identifying or describing the Collateral. 

     

    (m) Landlord
      Waivers; Collateral Access Agreements.
      (2)
      At any
      time any Collateral with a book value in excess of $25,000 (when aggregated
      with
      all other Collateral at the same location) is located on any real property
      of
      Borrower or any of its Subsidiaries (whether such real property is now existing
      or acquired after the Effective Date) which is not owned by Borrower or any
      of
      its Subsidiaries, obtain written subordinations or waivers, in form and
      substance reasonably satisfactory to the Agent, of all present and future Liens
      to which the owner or lessor of such premises may be entitled to assert against
      the Collateral; and 

    

    (ii) At
      any
      time any Collateral with a book value in excess of $25,000 (when aggregated
      with
      all other Collateral at the same location) is stored on the premises of a
      bailee, warehouseman, or similar party, obtain written access agreements, in
      form and substance reasonably satisfactory to the Agent, providing for access
      to
      Collateral located on such premises in order to remove such Collateral from
      such
      premises during an Event of Default.

     

    
      
        
        

      

      
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    (n) Subordination.
      Cause
      all Indebtedness and other obligations now or hereafter owed by it to any of
      its
      Affiliates, to be subordinated in right of payment and security to the
      Indebtedness and other Obligations owing to the Agent and the Lenders in
      accordance with a subordination agreement in form and substance satisfactory
      to
      the Agent.

     

    (o) Fiscal
      Year.
      Cause
      the Fiscal Year of Borrower and its Subsidiaries to end on September 30 of
      each
      calendar year unless the Agent consents to a change in such Fiscal Year (and
      appropriate related changes to this Agreement).

    

    (p) Control
      Agreements, Etc.
      Take all
      reasonable steps in order for the Collateral Agent or the Administrative Agent
      to obtain control in accordance with Sections 8-106, 9-104, 9-105, 9-106, and
      9-107 of the Uniform Commercial Code with respect to all of its securities
      accounts, deposit accounts, electronic chattel paper, investment property,
      and
      letter of credit rights, except as otherwise provided in Section
      8.01(a).

     

    Section
      7.02 Negative
      Covenants.
      So long
      as any principal of or interest on the Loan or any other Obligation (whether
      or
      not due) shall remain unpaid or any Lender shall have any Commitment hereunder,
      each Loan Party shall not, unless the Required Lenders shall otherwise consent
      in writing:

     

    (a) Liens,
      Etc.
      Create,
      incur, assume or suffer to exist, or permit any of its Subsidiaries to create,
      incur, assume or suffer to exist, any Lien upon or with respect to any of its
      properties, whether now owned or hereafter acquired; file or suffer to exist
      under the Uniform Commercial Code or any similar law or statute of any
      jurisdiction, a financing statement (or the equivalent thereof) that names
      it or
      any of its Subsidiaries as debtor; sign or suffer to exist any security
      agreement authorizing any secured party thereunder to file such financing
      statement (or the equivalent thereof); sell any of its property or assets
      subject to an understanding or agreement, contingent or otherwise, to repurchase
      such property or assets (including sales of accounts receivable) with recourse
      to it or any of its Subsidiaries or assign or otherwise transfer, or permit
      any
      of its Subsidiaries to assign or otherwise transfer, any account or other right
      to receive income; other than, as to all of the above, Permitted
      Liens.

     

    (b) Indebtedness.
      (i) Create, incur, assume, guarantee or suffer to exist, or otherwise
      become or remain liable with respect to, or permit any of its Subsidiaries
      to
      create, incur, assume, guarantee or suffer to exist or otherwise become or
      remain liable with respect to, any Indebtedness other than Permitted
      Indebtedness, or (ii) redeem or otherwise make any cash payments of any kind
      in
      respect of the Borrower’s Senior Convertible 8% Notes due January 2010, other
      than, prior to the occurrence of an Event of Default, scheduled payments of
      interest on such notes.

     

    (c) Fundamental
      Changes; Dispositions.
      Wind-up, liquidate or dissolve, or merge, consolidate or amalgamate with any
      Person, or convey, sell, lease or sublease, transfer or otherwise dispose of,
      whether in one transaction or a series of related transactions, all or any
      part
      of its business, property or assets, whether now owned or hereafter acquired
      (or
      agree to do any of the foregoing), or purchase or otherwise acquire, whether
      in
      one transaction or a series of related transactions, all or substantially all
      of
      the assets of any Person (or any division thereof) (or agree to do any of the
      foregoing), or permit any of its Subsidiaries to do any of the foregoing;
provided,
      however,
      that

     

    
      
        
        

      

      
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    (i) Borrower
      and its Subsidiaries may (A) sell Inventory in the ordinary course of
      business, (B) dispose of obsolete or worn-out Equipment in the ordinary course
      of business, and (C) sell or otherwise dispose of other property or assets
      for
      cash in an aggregate amount not less than the fair market value of such property
      or assets, provided
      that the
      Net Cash Proceeds of such Dispositions (x) in the case of clauses (B) and (C)
      above, do not exceed $100,000 in the aggregate and (y) in all cases, are paid
      to
      the Agent for the benefit of the Agent and the Lenders pursuant to the terms
      of
      Section
      2.05(c)(ii); and

    

    (ii) DeWind
      Purchasing GmbH or any wholly-owned Subsidiary of DeWind Turbines, Limited
      may
      be merged into DeWind Turbines, Limited or another wholly-owned Subsidiary
      of
      DeWind Turbines, Limited, or may consolidate with another wholly-owned
      Subsidiary of DeWind, Inc., so long as (A) no other provision of this Agreement
      would be violated thereby, (B) Borrower gives the Agent at least 45 days’ prior
      written notice of such merger or consolidation, (C) no Default or Event of
      Default shall have occurred and be continuing either before or after giving
      effect to such transaction, (D) the Lenders’ rights in any Collateral,
      including, without limitation, the existence, perfection and priority of any
      Lien thereon, are not adversely affected by such merger or consolidation, and
      (E) the Capital Stock of which Subsidiary is the subject of a Pledge Agreement,
      in each case, which is in full force and effect on the date of and immediately
      after giving effect to such merger or consolidation.

    

    (d) Change
      in Nature of Business.
      Make,
      or permit any of its Subsidiaries to make, any change in the nature of its
      business as described in Section
      6.01(l)
      or its
      manner of operations as described in its annual report on Form 10-K for the
      fiscal year ended September 30, 2007 as filed with the SEC, or make any material
      change in how it finances or structures its operations.

     

    (e) Loans,
      Advances, Investments, Etc.
      Make or
      commit or agree to make any loan, advance guarantee of obligations, other
      extension of credit or capital contributions to, or hold or invest in or commit
      or agree to hold or invest in, or purchase or otherwise acquire or commit or
      agree to purchase or otherwise acquire any shares of the Capital Stock, bonds,
      notes, debentures or other securities of, or make or commit or agree to make
      any
      other investment in, any other Person, or purchase or own any futures contract
      or otherwise become liable for the purchase or sale of currency or other
      commodities at a future date in the nature of a futures contract, or permit
      any
      of its Subsidiaries to do any of the foregoing, except for: (i) investments
      existing on the date hereof, as set forth on Schedule 7.02(e)
      hereto,
      but not any increase in the amount thereof as set forth in such Schedule or
      any
      other modification of the terms thereof, (ii) loans and advances by it to
      its Domestic Subsidiaries and by such Domestic Subsidiaries to it, made in
      the
      ordinary course of business and unsecured guarantees of the obligations thereof
      in the ordinary course of business, (iii) loan and advances by it to its Foreign
      Subsidiaries and by such Foreign Subsidiaries to it, made in the ordinary course
      of business and not exceeding in the aggregate for Borrower and its Subsidiaries
      at any one time outstanding $2,000,000 plus current intercompany balances at
      the
      Effective Date, and (iv) Permitted Investments.

     

    
      
        
        

      

      
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    (f) Lease
      Obligations.
      Create,
      incur or suffer to exist, or permit any of its Subsidiaries to create, incur
      or
      suffer to exist, any obligations as lessee (i) for the payment of rent for
      any real or personal property in connection with any sale and leaseback
      transaction, or (ii) for the payment of rent for any real or personal
      property under leases or agreements to lease other than (A) Capitalized
      Lease Obligations which would not cause the aggregate amount of all obligations
      under Capitalized Leases entered into after the Effective Date owing by Borrower
      and its Subsidiaries in any Fiscal Year to exceed $3,000,000, and
      (B) Operating Lease Obligations which would not cause the aggregate amount
      of all Operating Lease Obligations owing by Borrower and its Subsidiaries at
      any
      one time outstanding to exceed $50,000.

     

    (g) Restricted
      Payments.  (i)  Declare
      or pay any dividend or other distribution, direct or indirect, on account of
      any
      Capital Stock of any Loan Party or any of its Subsidiaries, now or hereafter
      outstanding, (ii) make any repurchase, redemption, retirement, defeasance,
      sinking fund or similar payment, purchase or other acquisition for value, direct
      or indirect, of any Capital Stock of any Loan Party or any direct or indirect
      parent of any Loan Party, now or hereafter outstanding, (iii) make any payment
      to retire, or to obtain the surrender of, any outstanding warrants, options
      or
      other rights for the purchase or acquisition of shares of any class of Capital
      Stock of any Loan Party, now or hereafter outstanding, (iv) return any Capital
      Stock to any shareholders or other equity holders of any Loan Party, or make
      any
      other distribution of property, assets, shares of Capital Stock, warrants,
      rights, options, obligations or securities thereto as such or (v) pay any
      management or consulting fees or any other fees or expenses (including the
      reimbursement thereof by Borrower or any of its Subsidiaries) pursuant to any
      management, consulting or other services agreement to any of the shareholders
      or
      other equityholders of Borrower or any of its Subsidiaries or other Affiliates
      holding more than 1.0% of the outstanding Capital Stock of such Person, or
      to
      any other Subsidiaries or Affiliates of Borrower except, as long as no Default
      or Event of Default shall have occurred, to the extent required under the
      agreements identified on Schedule 7.02(g); provided,
      however,
      any
      Subsidiary of the Borrower may pay dividends to the Borrower. 

    

    (h) Federal
      Reserve Regulations.
      Permit
      any Loan or the proceeds of any Loan under this Agreement to be used for any
      purpose that would cause such Loan to be a margin loan under the provisions
      of
      Regulation T, U or X of the Board.

    

    (i) Transactions
      with Affiliates.
      Enter
      into, renew, extend or be a party to, or permit any of its Subsidiaries to
      enter
      into, renew, extend or be a party to, any transaction or series of related
      transactions (including, without limitation, the purchase, sale, lease, transfer
      or exchange of property or assets of any kind or the rendering of services
      of
      any kind) with any Affiliate, except (i) in the ordinary course of business
      in a manner and to an extent consistent with past practice and necessary or
      desirable for the prudent operation of its business, for fair consideration
      and
      on terms no less favorable to it or its Subsidiaries than would be obtainable
      in
      a comparable arm’s length transaction with a Person that is not an Affiliate
      thereof, and (ii)  transactions permitted by Section
      7.02(e)
      and
7.02(g).

     

    
      
        
        

      

      
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    (j) Limitations
      on Dividends and Other Payment Restrictions Affecting
      Subsidiaries.
      Create
      or otherwise cause, incur, assume, suffer or permit to exist or become effective
      any consensual encumbrance or restriction of any kind on the ability of any
      Subsidiary of Borrower (i) to pay dividends or to make any other
      distribution on any shares of Capital Stock of such Subsidiary owned by Borrower
      or any of its Subsidiaries, (ii) to pay or prepay or to subordinate any
      Indebtedness owed Borrower or any of its Subsidiaries, (iii) to make loans
      or advances to Borrower or any of its Subsidiaries or (iv) to transfer any
      of its property or assets to Borrower or any of its Subsidiaries, or permit
      any
      of its Subsidiaries to do any of the foregoing; provided, however, that
      nothing in any of the foregoing clauses (i) through (iv) of this Section
      7.02(j)
      shall
      prohibit or restrict compliance with:

    

    (A) this
      Agreement and the other Loan Documents;

    

    (B) any
      agreements in effect on the date of this Agreement and described on Schedule
      7.02(j);

    

    (C) any
      applicable law, rule or regulation (including, without limitation, applicable
      currency control laws and applicable state corporate statutes restricting the
      payment of dividends in certain circumstances);

    

    (D) in
      the
      case of clause (iv) any agreement setting forth customary restrictions on the
      subletting, assignment or transfer of any property or asset that is a lease,
      license, conveyance or contract of similar property or assets; or

    

    (E) in
      the
      case of clause (iv) any agreement, instrument or other document evidencing
      a
      Permitted Lien (or the Indebtedness secured thereby) from restricting on
      customary terms the transfer of any property or assets subject
      thereto.

    

    (k) Limitation
      on Issuance of Capital Stock.
      Permit
      any of its Subsidiaries to issue or sell or enter into any agreement or
      arrangement for the issuance and sale of, any shares of its Capital Stock,
      any
      securities convertible into or exchangeable for its Capital Stock or any
      warrants.

    

    (l) Modifications
      of Indebtedness, Organizational Documents and Certain Other Agreements;
      Etc.

    

    (i) Amend,
      modify or otherwise change (or permit the amendment, modification or other
      change in any manner of) any of the provisions of any of its or its
      Subsidiaries’ Indebtedness or of any instrument or agreement (including, without
      limitation, any purchase agreement, indenture, loan agreement or security
      agreement) relating to any such Indebtedness if such amendment, modification
      or
      change would shorten the final maturity or average life to maturity of, or
      require any payment to be made earlier than the date originally scheduled on,
      such Indebtedness, would increase the interest rate applicable to such
      Indebtedness, would change the subordination provisions, if any, of such
      Indebtedness in a manner adverse to the Lenders, or would otherwise be adverse
      to the Lenders or the issuer of such Indebtedness in any respect;

     

    
      
        
        

      

      
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    (ii) except
      for the Obligations, make any voluntary or optional payment, prepayment,
      redemption, defeasance, sinking fund payment or other acquisition for value
      of
      any of its or its Subsidiaries’ Indebtedness (including, without limitation, by
      way of depositing money or securities with the trustee therefor before the
      date
      required for the purpose of paying any portion of such Indebtedness when due),
      or refund, refinance, replace or exchange any other Indebtedness for any such
      Indebtedness (except, in the case of any refund, refinance, replacement or
      exchange, to the extent such Indebtedness is otherwise expressly permitted
      by
      the definition of “Permitted Indebtedness”), make any payment, prepayment,
      redemption, defeasance, sinking fund payment or repurchase of any Subordinated
      Indebtedness in violation of the subordination provisions thereof or any
      subordination agreement with respect thereto, or make any payment, prepayment,
      redemption, defeasance, sinking fund payment or repurchase of any Indebtedness
      as a result of any asset sale, change of control, issuance and sale of debt
      or
      equity securities or similar event, or give any notice with respect to any
      of
      the foregoing;

    

    (iii) make
      any
      payment of interest in respect of any other Indebtedness in cash that, at the
      option of the issuer, may be paid in cash or in-kind, provided,
      however,
      that
      the Borrower may make cash interest payments on its Senior Convertible 8% Notes
      due January 2010 as long as no Default or Event of Default shall have
      occurred;

    

    (iv) amend,
      modify or otherwise change its name, jurisdiction of organization,
      organizational identification number or FEIN, except that a Loan Party may
      (A) change its name, jurisdiction of organization, organizational
      identification number or FEIN in connection with a transaction permitted by
      Section
      7.02(c)
      and (B)
      change its name upon at least 30 days prior written notice by the Borrower
      to
      the Agent of such change and so long as, at the time of such written
      notification, such Person provides any financing statements or fixture filings
      necessary to perfect and continue perfected the Agent’s Liens;

     

    (v) amend,
      modify or otherwise change its certificate of incorporation or bylaws (or other
      similar organizational documents), including, without limitation, by the filing
      or modification of any certificate of designation, or any agreement or
      arrangement entered into by it, with respect to any of its Capital Stock
      (including any shareholders’ agreement), or enter into any new agreement with
      respect to any of its Capital Stock, except any such amendments, modifications
      or changes or any such new agreements or arrangements pursuant to this
      clause (v)
      that
      either individually or in the aggregate, could not reasonably be expected to
      have a Material Adverse Effect;
      or

    

    (vi) amend,
      modify or otherwise change its Transfer Pricing Policy.

    

    (m) Investment
      Company Act of 1940.
      Engage
      in any business, enter into any transaction, use any securities or take any
      other action or permit any of its Subsidiaries to do any of the foregoing,
      that
      would cause it or any of its Subsidiaries to become subject to the registration
      requirements of the Investment Company Act of 1940, as amended, by virtue of
      being an “investment company” or a company “controlled” by an “investment
      company” not entitled to an exemption within the meaning of such
      Act.

     

    
      
        
        

      

      
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    (n) Compromise
      of Accounts Receivable.
      Compromise or adjust any Account Receivable (or extend the time of payment
      thereof) or grant any discounts, allowances or credits or permit any of its
      Subsidiaries to do so other than, provided no Default or Event of Default has
      occurred and is continuing, in the ordinary course of its business and
      consistent with past practice.

    

    (o) Properties.
      Permit
      any property to become a fixture with respect to real property or to become
      an
      accession with respect to other personal property with respect to which real
      or
      personal property the Agent does not have a valid and perfected first priority
      Lien or has not received a written subordination or waiver in accordance with
      Section
      7.01(m)(i).
      

    

    (p) ERISA.
      (i)
      Engage, or permit any ERISA Affiliate to engage, in any transaction described
      in
      Section 4069 of ERISA; (ii) engage, or permit any ERISA Affiliate to
      engage, in any prohibited transaction described in Section 406 of ERISA or
      4975
      of the Internal Revenue Code for which a statutory or class exemption is not
      available or a private exemption has not previously been obtained from the
      U.S.
      Department of Labor; (iii) adopt or permit any ERISA Affiliate to adopt any
      employee welfare benefit plan within the meaning of Section 3(1) of ERISA which
      provides benefits to employees after termination of employment other than as
      required by Section 601 of ERISA or applicable law; (iv) fail to make any
      contribution or payment to any Multiemployer Plan which it or any ERISA
      Affiliate may be required to make under any agreement relating to such
      Multiemployer Plan, or any law pertaining thereto; or (v) fail, or permit any
      ERISA Affiliate to fail, to pay any required installment or any other payment
      required under Section 412 of the Internal Revenue Code on or before the due
      date for such installment or other payment.

    

    (q) Environmental.
      Permit
      the use, handling, generation, storage, treatment, Release or disposal of
      Hazardous Materials at any property owned or leased by it or any of its
      Subsidiaries, except in compliance with Environmental Laws and so long as such
      use, handling, generation, storage, treatment, Release or disposal of Hazardous
      Materials does not result in a Material Adverse Effect.

     

    (r) Certain
      Agreements.
      Agree
      to
      any amendment or other change to or waiver of any of its rights under any
      Material Contract that could reasonably be expected to have a Material Adverse
      Effect.

    

    (s) Inactive
      Subsidiaries.
      

    

    (i) No
      Loan
      Party or any of its Subsidiaries shall effect any transfer of assets to
      Transmission Technology Corporation, CTC Towers and Poles Corporation, EU
      Energy, Inc., or EU Energy North America, Inc.

    

    (ii) 
      Transmission Technology Corporation, CTC Towers and Poles Corporation, EU
      Energy, Inc., and EU Energy North America, Inc. shall not commence any
      operations or business activity other than as necessary to wind up the affairs
      thereof in compliance with applicable law.

     

    
      
        
        

      

      
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    ARTICLE
      VIII

    

    MANAGEMENT,
      COLLECTION AND STATUS OF

    ACCOUNTS
      RECEIVABLE AND OTHER COLLATERAL

     

    Section
      8.01 Collection
      of Accounts Receivable; Management of Collateral.  iv)  On
      or prior to the Effective Date, the Loan Parties shall assist the Agent in
      (i) establishing, and, during the term of this Agreement, maintaining one
      or more lockboxes in the name of the Agent and identified on Schedule
8.01
      hereto
      (collectively, the “Lockboxes”)
      with
      the financial institutions set forth on Schedule 8.01
      hereto
      or such other financial institutions selected by the Loan Parties and acceptable
      to the Agent in its sole discretion (each being referred to as a “Lockbox
      Bank”),
      and
      (ii) establishing, and during the term of this Agreement, maintaining an
      account (a “Collection
      Account”
and,
      collectively, the “Collection
      Accounts”)
      in the
      name of the Agent with each Lockbox Bank. The Loan Parties shall irrevocably
      instruct their Account Debtors, with respect to Accounts Receivable of the
      Loan
      Parties, to remit all payments to be made by checks or other drafts to the
      Lockboxes and to remit all payments to be made by wire transfer or by Automated
      Clearing House, Inc. payment as directed by the Agent and shall instruct each
      Lockbox Bank to deposit all amounts received in its Lockbox to the Collection
      Account at such Lockbox Bank on the day received or, if such day is not a
      Business Day, on the next succeeding Business Day. Until the Agent has advised
      the Loan Parties to the contrary after the occurrence and during the continuance
      of an Event of Default, the Loan Parties may and will enforce, collect and
      receive all amounts owing on the Accounts Receivable of the Loan Parties for
      the
      Agent’s benefit and on the Agent’s behalf, but at the Loan Parties’ expense;
      such privilege shall terminate, at the election of the Agent, upon the
      occurrence and during the continuance of an Event of Default. All checks,
      drafts, notes, money orders, acceptances, cash and other evidences of
      Indebtedness received directly by the Loan Parties from any of their Account
      Debtors, as proceeds from Accounts Receivable of the Loan Parties, or as
      proceeds of any other Collateral, shall be held by the Loan Parties in trust
      for
      the Agent and the Lenders and upon receipt be deposited by the Loan Parties
      in
      original form and no later than the next Business Day after receipt thereof
      into
      a Collection Account. The Loan Parties shall not commingle such collections
      with
      the Loan Parties’ own funds or the funds of any of their Subsidiaries or
      Affiliates or with the proceeds of any assets not included in the Collateral.
      Prior to the occurrence of an Event of Default, all funds received in the
      Collection Accounts shall be processed by the respective Lockbox Banks in
      accordance with the instructions of officers or agents of the Borrower. After
      the occurrence and during the continuance of an Event of Default, the Agent
      may
      give notice to the respective Lockbox Banks that all funds received in the
      Collection Account shall be sent by wire transfer or Automated Clearing House,
      Inc. payment to the Agent’s Account for application at the end of each Business
      Day to reduce the then outstanding Obligations, conditional upon final payment
      to the Agent. No checks, drafts or other instruments received by the Agent
      shall
      constitute final payment to the Agent unless and until such checks, drafts
      or
      instruments have actually been collected.

    

    (b) After
      the
      occurrence and during the continuance of an Event of Default, the Agent
      or its
      designee may send a notice of assignment and/or notice of the Lenders’ security
      interest to any and all Account Debtors or third parties holding or otherwise
      concerned with any of the Collateral, and thereafter the Agent
      or its
      designee shall have the sole right to collect the Accounts Receivable and/or
      take possession of the Collateral and the books and records relating thereto.
      The Loan Parties shall not, without prior written consent of the Agent,
      grant
      any extension of time of payment of any Account Receivable, compromise or settle
      any Account Receivable for less than the full amount thereof, release, in whole
      or in part, any Person or property liable for the payment thereof, or allow
      any
      credit or discount whatsoever thereon, except, in the absence of a continuing
      Event of Default, as permitted by Section
      7.02(n).

     

    
      
        
        

      

      
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    (c) Each
      Loan
      Party hereby appoints the Agent or its designee on behalf of the Agent as the
      Loan Parties’ attorney-in-fact with power exercisable during the continuance of
      an Event of Default to endorse any Loan Party’s name upon any notes,
      acceptances, checks, drafts, money orders or other evidences of payment relating
      to the Accounts Receivable, to sign any Loan Party’s name on any invoice or bill
      of lading relating to any of the Accounts Receivable, drafts against Account
      Debtors with respect to Accounts Receivable, assignments and verifications
      of
      Accounts Receivable and notices to Account Debtors with respect to Accounts
      Receivable, to send verification of Accounts Receivable, and to notify the
      Postal Service authorities to change the address for delivery of mail addressed
      to any Loan Party to such address as the Agent or such designee may designate
      and to do all other acts and things necessary to carry out this Agreement.
      All
      acts of said attorney or designee are hereby ratified and approved, and said
      attorney or designee shall not be liable for any acts of omission or commission
      (other than acts of omission or commission constituting gross negligence or
      willful misconduct as determined by a final judgment of a court of competent
      jurisdiction), or for any error of judgment or mistake of fact or law; this
      power being coupled with an interest is irrevocable until the Loan and all
      other
      Obligations under the Loan Documents are paid in full and all of the Loan
      Documents are terminated.

    

    (d) Nothing
      herein contained shall be construed to constitute the Agent as agent of any
      Loan
      Party for any purpose whatsoever, and the Agent shall not be responsible or
      liable for any shortage, discrepancy, damage, loss or destruction of any part
      of
      the Collateral wherever the same may be located and regardless of the cause
      thereof (other than from acts of omission or commission constituting gross
      negligence or willful misconduct as determined by a final judgment of a court
      of
      competent jurisdiction). The Agent shall not, under any circumstance or in
      any
      event whatsoever, have any liability for any error or omission or delay of
      any
      kind occurring in the settlement, collection or payment of any of the Accounts
      Receivable or any instrument received in payment thereof or for any damage
      resulting therefrom (other than acts of omission or commission constituting
      gross negligence or willful misconduct as determined by a final judgment of
      a
      court of competent jurisdiction). The Agent, by anything herein or in any
      assignment or otherwise, does not assume any of the obligations under any
      contract or agreement assigned to the Agent and shall not be responsible in
      any
      way for the performance by any Loan Party of any of the terms and conditions
      thereof.

    

    (e) If
      any
      Account Receivable includes a charge for any tax payable to any Governmental
      Authority, the Agent is hereby authorized (but in no event obligated) in its
      discretion to pay the amount thereof to the proper taxing authority for the
      Loan
      Parties’ account and to charge the Loan Parties therefor. The Loan Parties shall
      notify the Agent if any Account Receivable includes any taxes due to any such
      Governmental Authority and, in the absence of such notice, the Agent shall
      have
      the right to retain the full proceeds of such Account Receivable and shall
      not
      be liable for any taxes that may be due by reason of the sale and delivery
      creating such Account Receivable.

     

    
      
        
        

      

      
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    (f) Notwithstanding
      any other terms set forth in the Loan Documents, the rights and remedies of
      the
      Agent and the Lenders herein provided, and the obligations of the Loan Parties
      set forth herein, are cumulative of, may be exercised singly or concurrently
      with, and are not exclusive of, any other rights, remedies or obligations set
      forth in any other Loan Document or as provided by law.

     

    Section
      8.02 Accounts
      Receivable Documentation.
      The
      Loan Parties will at such intervals as the Agent may reasonably request, execute
      and deliver confirmatory written assignments of the Accounts Receivable to
      the
      Agent and furnish such further schedules and/or information as the Agent may
      require relating to the Accounts Receivable, including, without limitation,
      sales invoices or the equivalent, credit memos issued, remittance advices,
      reports and copies of deposit slips and copies of original shipping or delivery
      receipts for all merchandise sold. In addition, the Loan Parties shall notify
      the Agent of any non-compliance in respect of the representations, warranties
      and covenants contained in Section
      8.03.
      The
      items to be provided under this Section
      8.02
      are to
      be in form reasonably satisfactory to the Agent and are to be executed and
      delivered to the Agent from time to time solely for its convenience in
      maintaining records of the Collateral. The Loan Parties’ failure to give any of
      such items to the Agent shall not affect, terminate, modify or otherwise limit
      the Agent’s Lien on the Collateral. The Loan Parties shall not re-date any
      invoice or sale or make sales on extended dating beyond that customary in the
      Loan Parties’ industry and consistent with the Loan Parties’ past practices, and
      shall not re-bill any Accounts Receivable without promptly disclosing the same
      to the Agent and providing the Agent with a copy of such re-billing, identifying
      the same as such. If the Loan Parties become aware of anything materially
      detrimental to the credit of any material customer of the Loan Parties’, the
      Loan Parties will promptly advise the Agent thereof.

     

    Section
      8.03 Status
      of Accounts Receivable and Other Collateral.
      With
      respect to Collateral of any Loan Party at the time the Collateral becomes
      subject to the Agent’s Lien, each Loan Party covenants, represents and warrants:
      (a) such Loan Party shall be the sole owner, free and clear of all Liens (except
      for Permitted Liens), and shall be fully authorized to sell, transfer, pledge
      and/or grant a security interest in each and every item of said Collateral;
      (b)
      to the best knowledge of any Loan Party, each Account Receivable shall be a
      good
      and valid account representing a bona fide indebtedness incurred or an amount
      owed by the Account Debtor therein named; (c) none of the transactions
      underlying or giving rise to any Account Receivable shall violate any applicable
      state or federal laws or regulations, and all documents relating thereto shall
      be legally sufficient under such laws or regulations and shall be legally
      enforceable in accordance with their terms; (d) no agreement under which any
      deduction or offset of any kind, other than normal trade discounts, may be
      granted or shall have been made by such Loan Party at or before the time such
      Account Receivable is created; (e) all agreements, instruments and other
      documents relating to any Account Receivable shall be true and correct and
      in
      all material respects what they purport to be; (f) such Loan Party shall
      maintain books and records pertaining to said Collateral in such detail, form
      and scope as the Agent shall reasonably require; (g) such Loan Party shall
      immediately notify the Agent if any Account Receivable with an invoice amount
      in
      excess of $25,000 arises out of contracts with any Governmental Authority,
      and
      will execute any instruments and take any steps required by the Agent in order
      that all monies due or to become due under any such contract shall be assigned
      to the Agent and notice thereof given to such Governmental Authority under
      the
      Federal Assignment of Claims Act or any similar state or local law; (h) such
      Loan Party will, immediately upon learning thereof, report to the Agents any
      material loss or destruction of, or substantial damage to, any of the
      Collateral, and any other matters affecting the value, enforceability or
      collectibility of any of the Collateral with a value in excess of $50,000;
      (i)
      if any amount payable under or in connection with any Account Receivable is
      evidenced by a promissory note or other instrument, such promissory note or
      instrument shall be immediately pledged, endorsed, assigned and delivered to
      the
      Agent for the benefit of the Agent and the Lenders as additional Collateral;
      (j)
      such Loan Party shall conduct a physical count of its Inventory at such
      intervals as the Agent reasonably may request and such Loan Party shall promptly
      supply the Agent with a copy of such count accompanied by a report of the value
      (based on the lower of cost (on a first in first out basis) and market value)
      of
      such Inventory; and (k) such Loan Party is not and shall not be entitled to
      pledge the Agent’s or any Lender’s credit on any purchases or for any purpose
      whatsoever.

     

    
      
        
        

      

      
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    Section
      8.04 Collateral
      Custodian.
      Upon
      the occurrence and during the continuance of any Event of Default, the Agent
      or
      its designee may at any time and from time to time employ and maintain on the
      premises of any Loan Party a custodian selected by the Agent or its designee
      who
      shall have full authority to do all acts necessary to protect the Agent’s and
      the Lenders’ interests. Each Loan Party hereby agrees to, and to cause its
      Subsidiaries to, cooperate with any such custodian and to do whatever the Agent
      or its designee may reasonably request to preserve the Collateral. All costs
      and
      expenses incurred by the Agent or its designee by reason of the employment
      of
      the custodian shall be the responsibility of the Borrower and charged to the
      Loan Account.

    

    ARTICLE
      IX

    

    EVENTS
      OF DEFAULT

     

    Section
      9.01 Events
      of Default.
      If any
      of the following Events of Default shall occur and be continuing:

     

    (a) the
      Borrower shall (i) fail to pay any principal of the Loan or any Agent Advance
      when due (whether by scheduled maturity, required prepayment, acceleration,
      demand or otherwise) or (ii) fail to pay any interest on any Loan or any Agent
      Advance, or any fee, indemnity or other amount payable under this Agreement
      or
      any other Loan Document when due (whether by scheduled maturity, required
      prepayment, acceleration, demand or otherwise); 

     

    (b) any
      representation or warranty made or deemed made by or on behalf of any Loan
      Party
      or by any officer of the foregoing under or in connection with any Loan Document
      or under or in connection with any report, certificate, or other document
      delivered to the Agent or any Lender pursuant to any Loan Document shall have
      been incorrect in any material respect when made or deemed made that is adverse
      to Agent or Lender;

     

    (c) Borrower
      or any of its Subsidiaries shall fail to perform or comply with any covenant
      or
      agreement contained in Section
      5.02,
      Section
      7.01(a),
      (c),(d),(f),(h),(i),(j),(n),
      Section
      7.02
      or
ARTICLE
      VIII,
      or
      Borrower or any of its Subsidiaries shall fail to perform or comply with any
      covenant or agreement contained in any Security Agreement to which it is a
      party, any Pledge Agreement to which it is a party or
      (ii)
      Borrower or any of its Subsidiaries shall fail to perform or comply with any
      other covenant or agreement contained in Section
      7.01,(b),(e),(g),(k),(l),
      or
(m),
      and
      such failure, if capable of being remedied, shall remain unremedied for a period
      of 10 Business Days;

     

    
      
        
        

      

      
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    (d) Borrower
      or any of its Subsidiaries shall fail to perform or comply with any other term,
      covenant or agreement contained in any Loan Document to be performed or observed
      by it and, except as set forth in subsections (a),
      (b)
      and
(c)
      of this
Section
      9.01,
      such
      failure, if capable of being remedied, shall remain unremedied for 15 days
      after
      the date a Responsible Officer of any Loan Party becomes aware of such
      failure;

    

    (e) Borrower
      or any of its Domestic Subsidiaries shall fail to pay any of its Indebtedness
      (excluding Indebtedness evidenced by this Agreement) in excess of $100,000,
      or
      any payment of principal, interest or premium thereon, when due (whether by
      scheduled maturity, required prepayment, acceleration, demand or otherwise)
      and
      such failure shall continue after the applicable grace period, if any, specified
      in the agreement or instrument relating to such Indebtedness, or any other
      default under any agreement or instrument relating to any such Indebtedness,
      or
      any other event, shall occur and shall continue after the applicable grace
      period, if any, specified in such agreement or instrument, if the effect of
      such
      default or event is to accelerate, or to permit the acceleration of, the
      maturity of such Indebtedness; or any such Indebtedness shall be declared to
      be
      due and payable, or required to be prepaid (other than by a regularly scheduled
      required prepayment), redeemed, purchased or defeased or an offer to prepay,
      redeem, purchase or defease such Indebtedness shall be required to be made,
      in
      each case, prior to the stated maturity thereof;

     

    (f) Borrower
      or any of its Domestic Subsidiaries (i) shall institute any proceeding or
      voluntary case seeking to adjudicate it a bankrupt or insolvent, or seeking
      dissolution, liquidation, winding up, reorganization, arrangement, adjustment,
      protection, relief or composition of it or its debts under any law relating
      to
      bankruptcy, insolvency, reorganization or relief of debtors, or seeking the
      entry of an order for relief or the appointment of a receiver, trustee,
      custodian or other similar official for any such Person or for any substantial
      part of its property, (ii) shall be generally not paying its debts as such
      debts
      become due or shall admit in writing its inability to pay its debts generally,
      (iii) shall make a general assignment for the benefit of creditors, or (iv)
      shall take any action to authorize or effect any of the actions set forth above
      in this subsection (f);

     

    (g) any
      proceeding shall be instituted against Borrower or any of its Domestic
      Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
      dissolution, liquidation, winding up, reorganization, arrangement, adjustment,
      protection, relief of debtors, or seeking the entry of an order for relief
      or
      the appointment of a receiver, trustee, custodian or other similar official
      for
      any such Person or for any substantial part of its property, and either such
      proceeding shall remain undismissed or unstayed for a period of 45 days or
      any
      of the actions sought in such proceeding (including, without limitation, the
      entry of an order for relief against any such Person or the appointment of
      a
      receiver, trustee, custodian or other similar official for it or for any
      substantial part of its property) shall occur;

     

    
      
        
        

      

      
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    (h) any
      provision of any Loan Document shall at any time for any reason (other than
      pursuant to the express terms thereof) cease to be valid and binding on or
      enforceable against any Loan Party intended to be a party thereto, or the
      validity or enforceability thereof shall be contested by any party thereto,
      or a
      proceeding shall be commenced by Borrower or any of its Subsidiaries or any
      Governmental Authority having jurisdiction over any of them, seeking to
      establish the invalidity or unenforceability thereof, or Borrower or any of
      its
      Subsidiaries shall deny in writing that it has any liability or obligation
      purported to be created under any Loan Document;

    

    (i) the
      Security Agreement, any Pledge Agreement, or any other security document, after
      delivery thereof pursuant hereto, shall for any reason fail or cease to create
      a
      valid and perfected and, except to the extent permitted by the terms hereof
      or
      thereof, first priority Lien in favor of the Agent for the benefit of the Agent
      and the Lenders on any Collateral purported to be covered thereby;

     

    (j) one
      or
      more judgments, orders or awards (or any settlement of any claim that, if
      breached, could result in a judgment, order or award) for the payment of money
      exceeding $250,000 in the aggregate shall be rendered against Borrower or any
      of
      its Domestic Subsidiaries and remain unsatisfied and either (i) enforcement
      proceedings shall have been commenced by any creditor upon any such judgment,
      order, award or settlement, or (ii) there shall be a period of 15
      consecutive days after entry thereof during which a stay of enforcement of
      any
      such judgment, order, award or settlement, by reason of a pending appeal or
      otherwise, shall not be in effect; provided,
      however,
      that
      any such judgment, order, award or settlement shall not give rise to an Event
      of
      Default under this subsection (j) if and for so long as (A) the amount of such
      judgment, order, award or settlement is covered by a valid and binding policy
      of
      insurance between the defendant and the insurer covering full payment thereof
      and (B) such insurer has been notified, and has not disputed the claim made
      for payment, of the amount of such judgment, order, award or
      settlement;

    

    (k) any
      cessation of a substantial part of the business of Borrower or any of its
      Domestic Subsidiaries for a period which materially and adversely affects the
      ability of such Person to continue its business;

    

    (l) the
      loss,
      suspension or revocation of, or failure to renew, any license or permit now
      held
      or hereafter acquired by Borrower or any of its Subsidiaries, if such loss,
      suspension, revocation or failure to renew could reasonably be expected to
      have
      a Material Adverse Effect;

    

    (m) 
      the
      indictment of Borrower or any of its Subsidiaries or any of their officers
      or
      directors under any criminal statute, or commencement of criminal or civil
      proceedings against Borrower or any of its Subsidiaries or any of their officers
      or directors, pursuant to which statute or proceedings the penalties or remedies
      sought or available include forfeiture to any Governmental Authority of any
      portion of the property of such Person in excess of $50,000 and, solely with
      respect to indictments or proceedings against an officer or director, pertains
      to a crime of moral turpitude;

     

    
      
        
        

      

      
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    (n) Borrower
      or any of its Subsidiaries or any of their ERISA Affiliates shall have made
      a
      complete or partial withdrawal from a Multiemployer Plan, and, as a result
      of
      such complete or partial withdrawal, Borrower, any of its Subsidiaries, or
      any
      of their ERISA Affiliates incurs a withdrawal liability in an annual amount
      exceeding $100,000; or a Multiemployer Plan enters reorganization status under
      Section 4241 of ERISA, and, as a result thereof Borrower or any of its
      Subsidiaries or any of their ERISA Affiliates’ annual contribution requirements
      with respect to such Multiemployer Plan increases in an annual amount exceeding
      $100,000;

    

    (o) any
      Termination Event with respect to any Employee Plan shall have occurred, and,
      30
      days after notice thereof shall have been given to Borrower by the Agent, (i)
      such Termination Event (if correctable) shall not have been corrected, and
      (ii)
      the then current value of such Employee Plan’s vested benefits exceeds the then
      current value of assets allocable to such benefits in such Employee Plan by
      more
      than $100,000 (or, in the case of a Termination Event involving liability under
      Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212
      of
      ERISA or Section 4971 or 4975 of the Internal Revenue Code, the liability is
      in
      excess of such amount); 

    

    (p) a
      Change
      of Control shall have occurred; 

    

    (q) purchases,
      sales or other transactions in respect of the Borrower’s common stock shall be
      suspended or otherwise limited by the action of any Governmental Authority
      or
      self-regulatory organization; or

    

    (r) any
      of
      the independent members of the Borrower’s board of directors shall resign,
      withdraw, be removed from or otherwise not continue as a member of the
      Borrower’s board of directors and shall not have been replaced with a new
      independent member of the Borrowers board of directors who is satisfactory
      to
      the Agent in its sole and absolute discretion within 45 days of the date of
      such
      resignation, withdrawal, removal or discontinuance;

    

    then,
      and
      in any such event, the Agent may, and shall at the request of the Required
      Lenders, by notice to the Borrower, (i) terminate or reduce all Commitments,
      whereupon all Commitments shall immediately be so terminated or reduced, (ii)
      declare all or any portion of the Loan and other Obligations then outstanding
      to
      be due and payable, whereupon all or such portion of the aggregate principal
      of
      the Loan and other Obligations, all accrued and unpaid interest thereon, all
      fees and all other amounts payable under this Agreement and the other Loan
      Documents shall become due and payable immediately, without presentment, demand,
      protest or further notice of any kind, all of which are hereby expressly waived
      by each Loan Party and (iii) exercise any and all of its other rights and
      remedies under applicable law, hereunder and under the other Loan Documents;
      provided,
      however,
      that
      upon the occurrence of any Event of Default described in subsection (f)
      or
(g)
      of this
Section
      9.01
      with
      respect to any Loan Party, without any notice to any Loan Party or any other
      Person or any act by the Agent or any Lender, all Commitments shall
      automatically terminate and the Loan and other Obligations then outstanding,
      together with all accrued and unpaid interest thereon, all fees and all other
      amounts due under this Agreement and the other Loan Documents shall become
      due
      and payable automatically and immediately, without presentment, demand, protest
      or notice of any kind, all of which are expressly waived by Borrower. Without
      limiting the foregoing, in the event any of the foregoing Events of Default
      shall occur and be continuing, all (i) PIK Amounts shall be immediately due
      and
      payable in cash; and (ii) all interest that would otherwise be payable as PIK
      Amounts pursuant to Section 2.04(c) shall be paid in cash.

     

    
      
        
        

      

      
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    ARTICLE
      X

    

    AGENT

     

    Section
      10.01 Appointment.
      Each
      Lender (and each subsequent maker of any Loan by its making thereof) hereby
      irrevocably appoints and authorizes the Agent to perform the duties of the
      Agent
      as set forth in this Agreement including: (i) to receive on behalf of each
      Lender any payment of principal of or interest on the Loan outstanding hereunder
      and all other amounts accrued hereunder for the account of the Lenders and
      paid
      to the Agent, and, subject to Section
      2.02
      of this
      Agreement, to distribute promptly to each Lender its Pro Rata Share of all
      payments so received; (ii) to distribute to each Lender copies of all
      material notices and agreements received by the Agent and not required to be
      delivered to each Lender pursuant to the terms of this Agreement, provided
      that
      the Agent shall not have any liability to the Lenders for the Agent’s
      inadvertent failure to distribute any such notices or agreements to the Lenders;
      (iii) to maintain, in accordance with its customary business practices,
      ledgers and records reflecting the status of the Obligations, the Loan, and
      related matters and to maintain, in accordance with its customary business
      practices, ledgers and records reflecting the status of the Collateral and
      related matters; (iv) to execute or file any and all financing or similar
      statements or notices, amendments, renewals, supplements, documents,
      instruments, proofs of claim, notices and other written agreements with respect
      to this Agreement or any other Loan Document; (v) to make the Loan and
      Agent Advances, for the Agent or on behalf of the applicable Lenders as provided
      in this Agreement or any other Loan Document; (vi) to perform, exercise,
      and enforce any and all other rights and remedies of the Lenders with respect
      to
      the Loan Parties, the Obligations, or otherwise related to any of same to the
      extent reasonably incidental to the exercise by the Agent of the rights and
      remedies specifically authorized to be exercised by the Agent by the terms
      of
      this Agreement or any other Loan Document; (vii)  to incur and pay such
      fees necessary or appropriate for the performance and fulfillment of its
      functions and powers pursuant to this Agreement or any other Loan
      Document;
      and
      (viii) subject to Section
      10.03
      of this
      Agreement, to take such action as the Agent deems appropriate on its behalf
      to
      administer the Loan and the Loan Documents and to exercise such other powers
      delegated to the Agent by the terms hereof or the other Loan Documents
      (including, without limitation, the power to give or to refuse to give notices,
      waivers, consents, approvals and instructions and the power to make or to refuse
      to make determinations and calculations) together with such powers as are
      reasonably incidental thereto to carry out the purposes hereof and thereof.
      As
      to any matters not expressly provided for by this Agreement and the other Loan
      Documents (including, without limitation, enforcement or collection of the
      Loan), the Agent shall not be required to exercise any discretion or take any
      action, but shall be required to act or to refrain from acting (and shall be
      fully protected in so acting or refraining from acting) upon the instructions
      of
      the Required Lenders, and such instructions of the Required Lenders shall be
      binding upon all Lenders and all makers of the Loan; provided,
      however,
      that
      the Agent shall not be required to take any action which, in the reasonable
      opinion of the Agent, exposes the Agent to liability or which is contrary to
      this Agreement or any other Loan Document or applicable law.

     

    
      
        
        

      

      
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    Section
      10.02 Nature
      of Duties.
      The
      Agent shall have no duties or responsibilities except those expressly set forth
      in this Agreement or in the other Loan Documents. The duties of the Agent shall
      be mechanical and administrative in nature. The Agent shall not have by reason
      of this Agreement or any other Loan Document a fiduciary relationship in respect
      of any Lender. Nothing in this Agreement or any other Loan Document, express
      or
      implied, is intended to or shall be construed to impose upon the Agent any
      obligations in respect of this Agreement or any other Loan Document except
      as
      expressly set forth herein or therein. Each Lender shall make its own
      independent investigation of the financial condition and affairs of the Loan
      Parties in connection with the making and the continuance of the Loan hereunder
      and shall make its own appraisal of the creditworthiness of the Loan Parties
      and
      the value of the Collateral, and the Agent shall have no duty or responsibility,
      either initially or on a continuing basis, to provide any Lender with any credit
      or other information with respect thereto, whether coming into its possession
      before the initial Loan hereunder or at any time or times thereafter, provided
      that, upon the reasonable request of a Lender, the Agent shall provide to such
      Lender any documents or reports delivered to the Agent by the Loan Parties
      pursuant to the terms of this Agreement or any other Loan Document. If the
      Agent
      seeks the consent or approval of the Required Lenders to the taking or
      refraining from taking any action hereunder, the Agent shall send notice thereof
      to each Lender. The Agent shall promptly notify each Lender any time that the
      Required Lenders have instructed the Agent to act or refrain from acting
      pursuant hereto.

     

    Section
      10.03 Rights,
      Exculpation, Etc.
      The
      Agent and its directors, officers, agents or employees shall not be liable
      for
      any action taken or omitted to be taken by them under or in connection with
      this
      Agreement or the other Loan Documents, except for their own gross negligence
      or
      willful misconduct as determined by a final judgment of a court of competent
      jurisdiction. Without limiting the generality of the foregoing, the Agent
      (i) may treat the payee of any Loan as the owner thereof until the Agent
      receives written notice of the assignment or transfer thereof, pursuant to
      Section
      12.07
      hereof,
      signed by such payee and in form satisfactory to the Agent; (ii) may
      consult with legal counsel (including, without limitation, counsel to the Agent
      or counsel to the Loan Parties), independent public accountants, and other
      experts selected by any of them and shall not be liable for any action taken
      or
      omitted to be taken in good faith by any of them in accordance with the advice
      of such counsel or experts; (iii) make no warranty or representation to any
      Lender and shall not be responsible to any Lender for any statements,
      certificates, warranties or representations made in or in connection with this
      Agreement or the other Loan Documents; (iv) shall not have any duty to
      ascertain or to inquire as to the performance or observance of any of the terms,
      covenants or conditions of this Agreement or the other Loan Documents on the
      part of any Person, the existence or possible existence of any Default or Event
      of Default, or to inspect the Collateral or other property (including, without
      limitation, the books and records) of any Person; (v) shall not be
      responsible to any Lender for the due execution, legality, validity,
      enforceability, genuineness, sufficiency or value of this Agreement or the
      other
      Loan Documents or any other instrument or document furnished pursuant hereto
      or
      thereto; and (vi) shall not be deemed to have made any representation or
      warranty regarding the existence, value or collectibility of the Collateral,
      the
      existence, priority or perfection of the Agent’s Lien thereon, or any
      certificate prepared by Borrower in connection therewith, nor shall the Agent
      be
      responsible or liable to the Lenders for any failure to monitor or maintain
      any
      portion of the Collateral. The Agent shall not be liable for any apportionment
      or distribution of payments made in good faith pursuant to Section
      4.04,
      and if
      any such apportionment or distribution is subsequently determined to have been
      made in error the sole recourse of any Lender to whom payment was due but not
      made, shall be to recover from other Lenders any payment in excess of the amount
      which they are determined to be entitled. The Agent may at any time request
      instructions from the Lenders with respect to any actions or approvals which
      by
      the terms of this Agreement or of any of the other Loan Documents the Agent
      is
      permitted or required to take or to grant, and if such instructions are promptly
      requested, the Agent shall be absolutely entitled to refrain from taking any
      action or to withhold any approval under any of the Loan Documents until it
      shall have received such instructions from the Required Lenders. Without
      limiting the foregoing, no Lender shall have any right of action whatsoever
      against the Agent as a result of the Agent acting or refraining from acting
      under this Agreement or any of the other Loan Documents in accordance with
      the
      instructions of the Required Lenders.

     

    
      
        
        

      

      
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    Section
      10.04 Reliance.
      The
      Agent shall be entitled to rely upon any written notices, statements,
      certificates, orders or other documents or any telephone message believed by
      it
      in good faith to be genuine and correct and to have been signed, sent or made
      by
      the proper Person, and with respect to all matters pertaining to this Agreement
      or any of the other Loan Documents and its duties hereunder or thereunder,
      upon
      advice of counsel selected by it.

     

    Section
      10.05 Indemnification.
      To the
      extent that the Agent is not reimbursed and indemnified by any Loan Party,
      the
      Lenders will reimburse and indemnify the Agent from and against any and all
      liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
      costs, expenses, advances or disbursements of any kind or nature whatsoever
      which may be imposed on, incurred by, or asserted against the Agent in any
      way
      relating to or arising out of this Agreement or any of the other Loan Documents
      or any action taken or omitted by the Agent under this Agreement or any of
      the
      other Loan Documents, in proportion to each Lender’s Pro Rata Share, including,
      without limitation, advances and disbursements made pursuant to Section
      10.08;
      provided,
      however,
      that no
      Lender shall be liable for any portion of such liabilities, obligations, losses,
      damages, penalties, actions, judgments, suits, costs, expenses, advances or
      disbursements for which there has been a final judicial determination that
      such
      liability resulted from the Agent’s gross negligence or willful misconduct, as
      determined by a final judgment of a court of competent jurisdiction. The
      obligations of the Lenders under this Section
      10.05
      shall
      survive the payment in full of the Loan and the termination of this
      Agreement. 

     

    Section
      10.06 Agent
      Individually.
      With
      respect to its Pro Rata Share of the Total Commitment hereunder and the Loan
      made by it, the Agent shall have and may exercise the same rights and powers
      hereunder and is subject to the same obligations and liabilities as and to
      the
      extent set forth herein for any other Lender or maker of the Loan. The terms
      “Lenders” or “Required Lenders” or any similar terms shall, unless the context
      clearly otherwise indicates, include the Agent in its individual capacity as
      a
      Lender or one of the Required Lenders. The Agent and its Affiliates may accept
      deposits from, lend money to, and generally engage in any kind of banking,
      trust
      or other business with the Borrower as if it were not acting as the Agent
      pursuant hereto without any duty to account to the other Lenders.

     

    Section
      10.07 Successor
      Agent.
      v)  The
      Agent may resign from the performance of all its functions and duties hereunder
      and under the other Loan Documents at any time by giving at least 30 Business
      Days’ prior written notice to the Borrower and each Lender. Such resignation
      shall take effect upon the acceptance by a successor Agent of appointment
      pursuant to clauses (b) and (c) below or as otherwise provided
      below.

     

    
      
        
        

      

      
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    (b) Upon
      any
      such notice of resignation, the Required Lenders shall appoint a successor
      Agent. Upon the acceptance of any appointment as Agent hereunder by a successor
      Agent, such successor Agent shall thereupon succeed to and become vested with
      all the rights, powers, privileges and duties of the Agent, and the Agent shall
      be discharged from its duties and obligations under this Agreement and the
      other
      Loan Documents. After the Agent’s resignation hereunder as the Agent, the
      provisions of this ARTICLE
      X
      shall
      inure to its benefit as to any actions taken or omitted to be taken by it while
      it was the Agent under this Agreement and the other Loan Documents.

    

    (c) If
      a
      successor Agent shall not have been so appointed within said 30 Business
      Day period, the Agent shall then appoint a successor Agent who shall serve
      as
      the Agent until such time, if any, as the Required Lenders appoint a successor
      Agent as provided above.

     

    Section
      10.08 Collateral
      Matters.

     

    (a) The
      Agent
      may from time to time make such disbursements and advances (“Agent
      Advances”)
      which
      the Agent, in its sole discretion, deems necessary or desirable to preserve,
      protect, prepare for sale or lease or dispose of the Collateral or any portion
      thereof, to enhance the likelihood or maximize the amount of repayment by the
      Borrower of the Loan and other Obligations or to pay any other amount chargeable
      to the Borrower pursuant to the terms of this Agreement, including, without
      limitation, costs, fees and expenses as described in Section
      12.04.
      The
      Agent Advances shall be repayable on demand and be secured by the Collateral
      and
      shall bear interest at a rate per annum equal to the rate of interest then
      applicable to the Loan. The Agent Advances shall constitute Obligations
      hereunder which may be charged to the Loan Account in accordance with
Section
      4.02.
      The
      Agent shall notify each Lender and the Borrower in writing of each such Agent
      Advance, which notice shall include a description of the purpose of such Agent
      Advance. Without limitation to its obligations pursuant to Section
      10.05,
      each
      Lender agrees that it shall make available to the Agent, upon the Agent’s
      demand, in Dollars in immediately available funds, the amount equal to such
      Lender’s Pro Rata Share of each such Agent Advance. If such funds are not made
      available to the Agent by such Lender, the Agent shall be entitled to recover
      such funds on demand from such Lender, together with interest thereon for each
      day from the date such payment was due until the date such amount is paid to
      the
      Agent at the per annum rate of 17% (or, if then applicable, at the Post-Default
      Rate).

     

    (b) The
      Lenders hereby irrevocably authorize the Agent, at its option and in its
      discretion, to release any Lien granted to or held by the Agent upon any
      Collateral upon termination of the Total Commitment and payment and satisfaction
      of the Loan and all other Obligations which have matured and which the Agent
      has
      been notified in writing are then due and payable; or constituting property
      being sold or disposed of in the ordinary course of Borrower’s or any of its
      Subsidiaries’ business or otherwise in compliance with the terms of this
      Agreement and the other Loan Documents; or constituting property in which
      neither Borrower nor any of its Subsidiaries owned any interest at the time
      the
      Lien was granted or at any time thereafter; or if approved, authorized or
      ratified in writing by the Lenders. Upon request by the Agent at any time,
      the
      Lenders will confirm in writing the Agent’s authority to release particular
      types or items of Collateral pursuant to this Section
      10.08(b).

     

    
      
        
        

      

      
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    (c) Without
      in any manner limiting the Agent’s authority to act without any specific or
      further authorization or consent by the Lenders (as set forth in Section
      10.08(b)),
      each
      Lender agrees to confirm in writing, upon request by the Agent, the authority
      to
      release Collateral conferred upon the Agent under Section
      10.08(b).
      Upon
      receipt by the Agent of confirmation from the Lenders of its authority to
      release any particular item or types of Collateral, and upon prior written
      request by any Loan Party, the Agent shall (and is hereby irrevocably authorized
      by the Lenders to) execute such documents as may be necessary to evidence the
      release of the Liens granted to the Agent for the benefit of the Agent and
      the
      Lenders upon such Collateral; provided,
      however,
      that
      (i) the Agent shall not be required to execute any such document on terms which,
      in the Agent’s opinion, would expose the Agent to liability or create any
      obligations or entail any consequence other than the release of such Liens
      without recourse or warranty, and (ii) such release shall not in any manner
      discharge, affect or impair the Obligations or any Lien upon (or obligations
      of
      any Loan Party in respect of) all interests in the Collateral retained by
      Borrower or any of its Subsidiaries.

    

    (d) The
      Agent
      shall have no obligation whatsoever to any Lender to assure that the Collateral
      exists or is owned by the Loan Parties or is cared for, protected or insured
      or
      has been encumbered or that the Lien granted to the Agent pursuant to this
      Agreement or any other Loan Document has been properly or sufficiently or
      lawfully created, perfected, protected or enforced or is entitled to any
      particular priority, or to exercise at all or in any particular manner or under
      any duty of care, disclosure or fidelity, or to continue exercising, any of
      the
      rights, authorities and powers granted or available to the Agent in this
Section
      10.08
      or in
      any other Loan Document, it being understood and agreed that in respect of
      the
      Collateral, or any act, omission or event related thereto, the Agent may act
      in
      any manner it may deem appropriate, in its sole discretion, given the Agent’s
      own interest in the Collateral as one of the Lenders and that the Agent shall
      have no duty or liability whatsoever to any other Lender, except as otherwise
      provided herein.

     

    Section
      10.09 Agency
      for Perfection.
      Each
      Lender hereby appoints the Agent and each other Lender as agent and bailee
      for
      the purpose of perfecting the security interests in and liens upon the
      Collateral in assets which, in accordance with Article 9 of the Uniform
      Commercial Code, can be perfected only by possession or control (or where the
      security interest of a secured party with possession or control has priority
      over the security interest of another secured party) and the Agent and each
      Lender hereby acknowledges that it holds possession of or otherwise controls
      any
      such Collateral for the benefit of the Agent and the Lenders as secured party.
      Should any Lender obtain possession or control of any such Collateral, such
      Lender shall notify the Agent thereof, and, promptly upon the Agent’s request
      therefor shall deliver such Collateral to the Agent or in accordance with the
      Agent’s instructions. In addition, the Agent shall also have the power and
      authority hereunder to appoint such other sub-agents as may be necessary or
      required under applicable state law or otherwise to perform its duties and
      enforce its rights with respect to the Collateral and under the Loan Documents.
      Borrower by
      its
      execution and delivery of this Agreement hereby consents to the
      foregoing.

     

    
      
        
        

      

      
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    ARTICLE
      XI

    

    SECURED
      GUARANTY

     

    Section
      11.01 Guaranty.
      Each
      Guarantor hereby jointly and severally and unconditionally and irrevocably
      guarantees the punctual payment when due, whether at stated maturity, by
      acceleration or otherwise, of all Obligations of the Borrower now or hereafter
      existing under any Loan Document, whether for principal, interest (including,
      without limitation, all interest that accrues after the commencement of any
      Insolvency Proceeding of the Borrower, whether or not a claim for post-filing
      interest is allowed in such Insolvency Proceeding), fees, commissions, expense
      reimbursements, indemnifications or otherwise (such obligations, to the extent
      not paid by the Borrower, being the “Guaranteed Obligations”), and agrees to pay
      any and all expenses (including reasonable counsel fees and expenses) incurred
      by the Agent and the Lenders in enforcing any rights under the guaranty set
      forth in this ARTICLE XI. Without limiting the generality of the foregoing,
      each
      Guarantor’s liability shall extend to all amounts that constitute part of the
      Guaranteed Obligations and would be owed by the Borrower to the Agent and the
      Lenders under any Loan Document but for the fact that they are unenforceable
      or
      not allowable due to the existence of an Insolvency Proceeding involving
the
      Borrower.
      Each
      Guarantor’s obligations in respect of the Guaranteed Obligations shall be
      secured by Liens on the assets of such Guarantor in accordance with the Loan
      Documents.

     

    Section
      11.02 Guaranty
      Absolute.
      Each
      Guarantor jointly and severally guarantees that the Guaranteed Obligations
      will
      be paid strictly in accordance with the terms of the Loan Documents, regardless
      of any law, regulation or order now or hereafter in effect in any jurisdiction
      affecting any of such terms or the rights of the Agent or the Lenders with
      respect thereto. Each Guarantor agrees that this ARTICLE XI constitutes a
      guaranty of payment when due and not of collection and waives any right to
      require that any resort be made by the Agent or any Lender to any Collateral.
      The obligations of each Guarantor under this ARTICLE XI are independent of
      the
      Guaranteed Obligations, and a separate action or actions may be brought and
      prosecuted against each Guarantor to enforce such obligations, irrespective
      of
      whether any action is brought against any Loan Party or whether any Loan Party
      is joined in any such action or actions. The liability of each Guarantor under
      this ARTICLE XI shall be irrevocable, absolute and unconditional irrespective
      of, and each Guarantor hereby irrevocably waives any defenses it may now or
      hereafter have in any way relating to, any or all of the following:

    

    (a) any
      lack
      of validity or enforceability of any Loan Document or any agreement or
      instrument relating thereto;

    

    (b) any
      change in the time, manner or place of payment of, or in any other term of,
      all
      or any of the Guaranteed Obligations, or any other amendment or waiver of or
      any
      consent to departure from any Loan Document, including, without limitation,
      any
      increase in the Guaranteed Obligations resulting from the extension of
      additional credit to any Loan Party or otherwise;

    

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

     

    
      
        
        

      

      
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    (d) the
      existence of any claim, set-off, defense or other right that any Guarantor
      may
      have at any time against any Person, including, without limitation, the Agent
      or
      any Lender;

    

    (e) any
      change, restructuring or termination of the corporate, limited liability company
      or partnership structure or existence of any Loan Party; or

    

    (f) any
      other
      circumstance (including, without limitation, any statute of limitations) or
      any
      existence of or reliance on any representation by the Agent or any Lender that
      might otherwise constitute a defense available to, or a discharge of, any Loan
      Party or any other guarantor or surety.

    

    This
      ARTICLE XI shall continue to be effective or be reinstated, as the case may
      be,
      if at any time any payment of any of the Guaranteed Obligations is rescinded
      or
      must otherwise be returned by the Agent or any Lender or any other Person upon
      the insolvency, bankruptcy or reorganization of the Borrower or otherwise,
      all
      as though such payment had not been made.

     

    Section
      11.03 Waiver.
      Each
      Guarantor hereby waives (i) promptness and diligence, (ii) notice of
      acceptance and any other notice with respect to any of the Guaranteed
      Obligations and this ARTICLE XI and any requirement that the Agent or any Lender
      exhaust any right or take any action against any Loan Party, any other Person
      or
      any Collateral, (iii) any right to compel or direct the Agent or any Lender
      to seek payment or recovery of any amounts owed under this ARTICLE XI from
      any
      one particular fund or source or to exhaust any right or take any action against
      any other Loan Party, any other Person or any Collateral, (iv) any requirement
      that the Agent or any Lender protect, secure, perfect or insure any security
      interest or Lien on any property subject thereto or exhaust any right to take
      any action against any Loan Party, any other Person or any Collateral, and
      (v)
      any other defense available to any Guarantor. Each Guarantor agrees that the
      Agent and the Lenders shall have no obligation to marshal any assets in favor
      of
      any Guarantor or against, or in payment of, any or all of the Obligations.
      Each
      Guarantor acknowledges that it will receive direct and indirect benefits from
      the financing arrangements contemplated herein and that the waiver set forth
      in
      this Section
      11.03
      is
      knowingly made in contemplation of such benefits. Each Guarantor hereby waives
      any right to revoke this ARTICLE XI, and acknowledges that this ARTICLE XI
      is
      continuing in nature and applies to all Guaranteed Obligations, whether existing
      now or in the future.

     

    Section
      11.04 Continuing
      Guaranty; Assignments.
      This
      ARTICLE XI is a continuing guaranty and shall (a) remain in full force and
      effect until the later of the cash payment in full of the Guaranteed Obligations
      (other than indemnification obligations as to which no claim has been made)
      and
      all other amounts payable under this ARTICLE XI and the Final Maturity Date,
      (b)
      be binding upon each Guarantor, its successors and assigns and (c) inure to
      the
      benefit of and be enforceable by the Agent and the Lenders and their successors,
      pledgees, transferees and assigns. Without limiting the generality of the
      foregoing clause (c), any Lender may pledge, assign or otherwise transfer
      all or any portion of its rights and obligations under this Agreement
      (including, without limitation, all or any portion of its Commitments and the
      Loan) to any other Person, and such other Person shall thereupon become vested
      with all the benefits in respect thereof granted such Lender herein or
      otherwise, in each case as provided in Section
      12.07.

     

    
      
        
        

      

      
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    Section
      11.05 Subrogation.
      No
      Guarantor will exercise any rights that it may now or hereafter acquire against
      any Loan Party or any other guarantor that arise from the existence, payment,
      performance or enforcement of such Guarantor’s obligations under this ARTICLE
      XI, including, without limitation, any right of subrogation, reimbursement,
      exoneration, contribution or indemnification and any right to participate in
      any
      claim or remedy of the Agent or any Lender against any Loan Party or any other
      guarantor or any Collateral, whether or not such claim, remedy or right arises
      in equity or under contract, statute or common law, including, without
      limitation, the right to take or receive from any Loan Party or any other
      guarantor, directly or indirectly, in cash or other property or by set-off
      or in
      any other manner, payment or security solely on account of such claim, remedy
      or
      right, unless and until all of the Guaranteed Obligations and all other amounts
      payable under this ARTICLE XI shall have been paid in full in cash and the
      Final
      Maturity Date shall have occurred. If any amount shall be paid to any Guarantor
      in violation of the immediately preceding sentence at any time prior to the
      later of the payment in full in cash of the Guaranteed Obligations and all
      other
      amounts payable under this ARTICLE XI and the Final Maturity Date, such amount
      shall be held in trust for the benefit of the Agent and the Lenders and shall
      forthwith be paid to the Agent and the Lenders to be credited and applied to
      the
      Guaranteed Obligations and all other amounts payable under this ARTICLE XI,
      whether matured or unmatured, in accordance with the terms of this Agreement,
      or
      to be held as Collateral for any Guaranteed Obligations or other amounts payable
      under this ARTICLE XI thereafter arising. If (i) any Guarantor shall make
      payment to the Agent and the Lenders of all or any part of the Guaranteed
      Obligations, (ii) all of the Guaranteed Obligations and all other amounts
      payable under this ARTICLE XI shall be paid in full in cash and (iii) the
      Final Maturity Date shall have occurred, the Agent and the Lenders will, at
      such
      Guarantor’s request and expense, execute and deliver to such Guarantor
      appropriate documents, without recourse and without representation or warranty,
      necessary to evidence the transfer by subrogation to such Guarantor of an
      interest in the Guaranteed Obligations resulting from such payment by such
      Guarantor.

    

    ARTICLE
      XII

    

    MISCELLANEOUS

     

    Section
      12.01 Notices,
      Etc.
      All
      notices and other communications provided for hereunder shall be in writing
      and
      shall be mailed (certified mail, postage prepaid and return receipt requested),
      telecopied or delivered by hand, Federal Express or other reputable overnight
      courier, if to any Loan Party, at the following address:

    

    Composite
      Technology Corporation

    2026
      McGaw Avenue

    Irvine,
      CA 92614

    Attention:
      Chief Financial Officer

    Telephone:
      949-428-8500

    Telecopier:
      949-428-8515

     

    
      
        
        

      

      
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    with
      a
      copy to:

    

    Richardson
      & Patel LLP

    10900
      Wilshire Boulevard, Suite 500 

    Los
      Angeles, CA 90024 

    Attention:
      Ryan S. Hong, Esq.

    Telephone:
      310-208-1182

    Telecopier:
      310-208-1154

    

    if
      to the
      Agent, to it at the following address:

    

    ACF
      CTC,
      L.L.C.

    570
      Lexington Avenue, 40th
      Floor

    New
      York,
      NY 10022 

    Attention:
      Gary Katz

    Telephone:
      212-319-2775 ext. 31

    Telecopier:
      212-319-1033

    

    with
      copies to:

    

    ACF
      CTC,
      L.L.C.

    570
      Lexington Avenue, 40th
      Floor

    New
      York,
      NY 10022

    Attention:
      Gurdev Dillon

    Telephone:
      212-319-2775

    Telecopier:
      212-319-1033

    

    and
      to:

    

    Bryan
      Cave LLP

    211
      N.
      Broadway, Suite 3600 

    St.
      Louis, MO 63102 

    Attention:
      Harold R. Burroughs

    Telephone:
      314-259-2706

    Telecopier:
      314-552-8706

    

    or,
      as to
      each party, at such other address as shall be designated by such party in a
      written notice to the other parties complying as to delivery with the terms
      of
      this Section
      12.01.
      All
      such notices and other communications shall be effective, (i) if mailed
      (certified mail, postage prepaid and return receipt requested), when received
      or
      3 days after deposited in the mails, whichever occurs first, (ii) if telecopied,
      when transmitted and confirmation received, or (iii) if delivered by hand,
      Federal Express or other reputable overnight courier, upon delivery, except
      that
      notices to the Agent pursuant to ARTICLE
      II
      shall
      not be effective until received by the Agent.

     

    
      
        
        

      

      
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    Section
      12.02 Amendments,
      Etc.
      No
      amendment or waiver of any provision of this Agreement or any other Loan
      Document, and no consent to any departure by any Loan Party therefrom, shall
      in
      any event be effective unless the same shall be in writing and signed by the
      Required Lenders or by the Agent with the consent of the Required Lenders,
      and
      then such waiver or consent shall be effective only in the specific instance
      and
      for the specific purpose for which given, provided,
      however,
      that no
      amendment, waiver or consent shall (i) increase the Commitment of any
      Lender, reduce the principal of, or interest on, the Loan payable to any Lender,
      reduce the amount of any fee payable for the account of any Lender, or postpone
      or extend any date fixed for any payment of principal of, or interest or fees
      on, the Loan payable to any Lender, in each case without the written consent
      of
      any Lender affected thereby, (ii) increase the Total Commitment without the
      written consent of each Lender, (iii) change the percentage of the Commitments
      or of the aggregate unpaid principal amount of the Loan that is required for
      the
      Lenders or any of them to take any action hereunder, (iv) amend the definition
      of “Required Lenders” or “Pro Rata Share”, (v) release all or a substantial
      portion of the Collateral (except as otherwise provided in this Agreement and
      the other Loan Documents) or subordinate any Lien granted in favor of the Agent
      for the benefit of the Lenders (except as otherwise provided in this Agreement
      and the other Loan Documents), or release the Borrower or any Guarantor or
      (vi) amend, modify or waive Section
      4.04
      or this
Section
      12.02
      of this
      Agreement, in each case, without the written consent of each Lender.
      Notwithstanding the foregoing, no amendment, waiver or consent shall, unless
      in
      writing and signed by the Agent, affect the rights or duties of the Agent (but
      not in its capacity as a Lender) under this Agreement or the other Loan
      Documents.

     

    Section
      12.03 No
      Waiver; Remedies, Etc.
      No
      failure on the part of the Agent or any Lender to exercise, and no delay in
      exercising, any right hereunder or under any other Loan Document shall operate
      as a waiver thereof; nor shall any single or partial exercise of any right
      under
      any Loan Document preclude any other or further exercise thereof or the exercise
      of any other right. The rights and remedies of the Agent and the Lenders
      provided herein and in the other Loan Documents are cumulative and are in
      addition to, and not exclusive of, any rights or remedies provided by law.
      The
      rights of the Agent and the Lenders under any Loan Document against any party
      thereto are not conditional or contingent on any attempt by the Agent and the
      Lenders to exercise any of their rights under any other Loan Document against
      such party or against any other Person.

     

    
      
        
        

      

      
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    Section
      12.04 Expenses;
      Taxes; Attorneys’ Fees.
      The
      Borrower will pay on demand, all costs and expenses incurred by or on behalf
      of
      the Agent (and, in the case of clauses (b) through (m) below, each Lender),
      regardless of whether the transactions contemplated hereby are consummated,
      including, without limitation, reasonable fees, costs, client charges and
      expenses of counsel for the Agent, accounting, due diligence, periodic field
      audits, physical counts, valuations, investigations, searches and filings,
      monitoring of assets, appraisals of Collateral, title searches and reviewing
      environmental assessments, miscellaneous disbursements, examination, travel,
      lodging and meals, arising from or relating to: (a) the negotiation,
      preparation, execution, delivery, performance and administration of this
      Agreement and the other Loan Documents (including, without limitation, the
      preparation of any additional Loan Documents pursuant to Section
      7.01(b)
      or the
      review of any of the agreements, instruments and documents referred to in
Section
      7.01(f)),
      (b) any requested amendments, waivers or consents to this Agreement or the
      other Loan Documents whether or not such documents become effective or are
      given, (c) the preservation and protection of the Agent’s or any of the
      Lenders’ rights under this Agreement or the other Loan Documents, (d) the
      defense of any claim or action asserted or brought against the Agent or any
      Lender by any Person that arises from or relates to this Agreement, any other
      Loan Document, the Agent’s or the Lenders’ claims against any Loan Party, or any
      and all matters in connection therewith, (e) the commencement or defense of,
      or
      intervention in, any court proceeding arising from or related to this Agreement
      or any other Loan Document, (f) the filing of any petition, complaint,
      answer, motion or other pleading by the Agent or any Lender, or the taking
      of
      any action in respect of the Collateral or other security, in connection with
      this Agreement or any other Loan Document, (g) the protection, collection,
      lease, sale, taking possession of or liquidation of, any Collateral or other
      security in connection with this Agreement or any other Loan Document, (h)
      any
      attempt to enforce any Lien or security interest in any Collateral or other
      security in connection with this Agreement or any other Loan Document, (i)
      any
      attempt to collect from any Loan Party, (j) all liabilities and costs arising
      from or in connection with the past, present or future operations of any Loan
      Party involving any damage to real or personal property or natural resources
      or
      harm or injury alleged to have resulted from any Release of Hazardous Materials
      on, upon or into such property, (k) any Environmental Liabilities and Costs
      incurred in connection with the investigation, removal, cleanup and/or
      remediation of any Hazardous Materials present or arising out of the operations
      of any facility of any Loan Party, (l) any Environmental Liabilities and Costs
      incurred in connection with any Environmental Lien, or (m) the receipt by the
      Agent or any Lender of any advice from professionals with respect to any of
      the
      foregoing. Without limitation of the foregoing or any other provision of any
      Loan Document: (x) the Borrower agrees to pay all stamp, document, transfer,
      recording or filing taxes or fees and similar impositions now or hereafter
      determined by the Agent or any Lender to be payable in connection with this
      Agreement or any other Loan Document, and the Borrower agrees to save the Agent
      and each Lender harmless from and against any and all present or future claims,
      liabilities or losses with respect to or resulting from any omission to pay
      or
      delay in paying any such taxes, fees or impositions, (y) the Borrower agrees
      to
      pay all broker fees that may become due in connection with the transactions
      contemplated by this Agreement and the other Loan Documents (other than broker
      fees in connection with the exercise of the Warrants), and (z) if the Borrower
      fails to perform any covenant or agreement contained herein or in any other
      Loan
      Document, the Agent may itself perform or cause performance of such covenant
      or
      agreement, and the expenses of the Agent incurred in connection therewith shall
      be reimbursed on demand by the Borrower.
      All fees
      and expenses subject to reimbursement incurred prior to the Effective Date
      shall
      be no greater than $200,000 without Borrower’s written approval.

     

    Section
      12.05 Right
      of Set-off.
      Upon
      the occurrence and during the continuance of any Event of Default, the Agent
      or
      any Lender may, and is hereby authorized to, at any time and from time to time,
      without notice to any Loan Party (any such notice being expressly waived by
      the
      Loan Parties) and to the fullest extent permitted by law, set off and apply
      any
      and all deposits (general or special, time or demand, provisional or final)
      at
      any time held and other Indebtedness at any time owing by the Agent or such
      Lender to or for the credit or the account of any Loan Party against any and
      all
      obligations of the Loan Parties either now or hereafter existing under any
      Loan
      Document, irrespective of whether or not the Agent or such Lender shall have
      made any demand hereunder or thereunder and although such obligations may be
      contingent or unmatured. The Agent and each Lender agrees to notify such Loan
      Party promptly after any such set-off and application made by the Agent or
      such
      Lender provided that the failure to give such notice shall not affect the
      validity of such set-off and application.
      The
      rights of the Agent and the Lenders under this Section
      12.05
      are in
      addition to the other rights and remedies (including other rights of set-off)
      which the Agent and the Lenders may have under this Agreement or any other
      Loan
      Documents of law or otherwise.

     

    
      
        
        

      

      
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    Section
      12.06 Severability.
      Any
      provision of this Agreement which is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining portions
      hereof or affecting the validity or enforceability of such provision in any
      other jurisdiction.

     

    Section
      12.07 Assignments
      and Participations.

    

    (a) This
      Agreement and the other Loan Documents shall be binding upon and inure to the
      benefit of each Loan Party and the Agent and each Lender and their respective
      successors and assigns; provided,
      however,
      that
      none of the Loan parties may assign or transfer any of its rights hereunder
      without the prior written consent of each Lender and any such assignment without
      the Lenders’ prior written consent shall be null and void.

     

    (b) Each
      Lender may assign to one or more other lenders or other entities all or a
      portion of its rights and obligations under this Agreement (including, without
      limitation, all or a portion of its Commitments and the Loan made by it);
provided,
      however,
      that
      (i) such assignment is in an amount which is at least $1,000,000 or a multiple
      of $100,000 in excess thereof (or the remainder of such Lender’s Commitment)
      (except such minimum amount shall not apply to an assignment by a Lender to
      (x) an Affiliate of such Lender or a Related Fund of such Lender or (y) a
      group of new Lenders, each of whom is an Affiliate or Related Fund of each
      other
      to the extent the aggregate amount to be assigned to all such new Lenders is
      at
      least $1,000,000 or a multiple of $100,000 in excess thereof), (ii) the
      parties to each such assignment shall execute and deliver to the Agent, for
      its
      acceptance, an Assignment and Acceptance, and such parties shall deliver to
      the
      Agent a processing and recordation fee of $5,000 (except the payment of such
      fee
      shall not be required in connection with an assignment by a Lender to an
      Affiliate of such Lender or Related Fund of such Lender), and
      (iii) no
      written consent of the Agent shall be required in connection with any assignment
      by a Lender to an Affiliate of such Lender or a Related Fund of such Lender.
      Upon
      such
      execution, delivery and acceptance, from and after the effective date specified
      in each Assignment and Acceptance, which effective date shall be at least 3
      Business Days after the delivery thereof to the Agent (or such shorter period
      as
      shall be agreed to by the Agent and the parties to such assignment), (A) the
      assignee thereunder shall become a “Lender” hereunder and, in addition to the
      rights and obligations hereunder held by it immediately prior to such effective
      date, have the rights and obligations hereunder that have been assigned to
      it
      pursuant to such Assignment and Acceptance and (B) the assigning Lender
      thereunder shall, to the extent that rights and obligations hereunder have
      been
      assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
      and be released from its obligations under this Agreement (and, in the case
      of
      an Assignment and Acceptance covering all or the remaining portion of an
      assigning Lender’s rights and obligations under this Agreement, such Lender
      shall cease to be a party hereto).
      Notwithstanding anything contained to the contrary in this Section
      12.07(b),
      a
      Lender may assign any or all of its rights under the Loan Documents to an
      Affiliate of such Lender or a Related Fund of such Lender without delivering
      an
      Assignment and Acceptance to the Agent; provided, that (x) the Borrower and
      the
      Agent may continue to deal solely and directly with such assigning Lender in
      connection with the interest so assigned until such Lender and its assignee
      shall have executed and delivered an Assignment and Acceptance to the Agent
      for
      recordation and (y) the failure of such assigning Lender to deliver an
      Assignment and Acceptance to the Agent or any other Person shall not affect
      the
      legality, validity or binding effect of such assignment.

     

    
      
        
        

      

      
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    (c) By
      executing and delivering an Assignment and Acceptance, the assigning Lender
      and
      the assignee thereunder confirm to and agree with each other and the other
      parties hereto as follows: (i) other than as provided in such Assignment
      and Acceptance, the assigning Lender makes no representation or warranty and
      assumes no responsibility with respect to any statements, warranties or
      representations made in or in connection with this Agreement or any other Loan
      Document or the execution, legality, validity, enforceability, genuineness,
      sufficiency or value of this Agreement or any other Loan Document furnished
      pursuant hereto; (ii) the assigning Lender makes no representation or
      warranty and assumes no responsibility with respect to the financial condition
      of any Loan Party or any of its Subsidiaries or the performance or observance
      by
      any Loan Party of any of its obligations under this Agreement or any other
      Loan
      Document furnished pursuant hereto; (iii) such assignee confirms that it
      has received a copy of this Agreement and the other Loan Documents, together
      with such other documents and information it has deemed appropriate to make
      its
      own credit analysis and decision to enter into such Assignment and Acceptance;
      (iv) such assignee will, independently and without reliance upon the
      assigning Lender, the Agent or any Lender and based on such documents and
      information as it shall deem appropriate at the time, continue to make its
      own
      credit decisions in taking or not taking action under this Agreement and the
      other Loan Documents; (v) such assignee appoints and authorizes the Agent
      to take such action as agent on its behalf and to exercise such powers under
      this Agreement and the other Loan Documents as are delegated to the Agent by
      the
      terms hereof and thereof, together with such powers as are reasonably incidental
      hereto and thereto; and (vi) such assignee agrees that it will perform in
      accordance with their terms all of the obligations which by the terms of this
      Agreement and the other Loan Documents are required to be performed by it as
      a
      Lender.

     

    (d) The
      Agent
      shall, on behalf of the Borrower, maintain, or cause to be maintained at the
      Payment Office, a copy of each Assignment and Acceptance delivered to and
      accepted by it and a register (the “Register”)
      for
      the recordation of the names and addresses of the Lenders and the Commitments
      of, and principal amount of the Loan (the “Registered
      Loans”)
      owing
      to each Lender from time to time. Other than in connection with an assignment
      by
      a Lender to an Affiliate of such Lender or a Related Fund of such Lender, the
      entries in the Register shall be conclusive and binding for all purposes, absent
      manifest error, and the Borrower, the Agent and the Lenders shall treat each
      Person whose name is recorded in the Register as a Lender hereunder for all
      purposes of this Agreement. The Register shall be available for inspection
      by
      the Borrower and any Lender at any reasonable time and from time to time upon
      reasonable prior notice.
      In the
      case of any assignment by a Lender to an Affiliate of such Lender or a Related
      Fund of such Lender, and which assignment is not recorded in the Register,
      the
      assigning Lender shall maintain a register comparable to the
      Register.

    

    (e) Upon
      its
      receipt of an Assignment and Acceptance executed by an assigning Lender and
      an
      assignee, together with any promissory notes subject to such assignment, the
      Agent shall, if the Agent consents to such assignment and if such Assignment
      and
      Acceptance has been completed (i) accept such Assignment and Acceptance and
      (ii) record the information contained therein in the Register.

     

    
      
        
        

      

      
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    (f) A
      Registered Loan (and the registered note, if any, evidencing the same) may
      be
      assigned or sold in whole or in part only by registration of such assignment
      or
      sale on the Register (or in the case of any assignment by a Lender to an
      Affiliate of such Lender or a Related Fund of such Lender, and which assignment
      is not recorded in the Register, a register comparable to the Register) (and
      each registered note shall expressly so provide). Any assignment or sale of
      all
      or part of such Registered Loan (and the registered note, if any, evidencing
      the
      same) may be effected only by registration of such assignment or sale on the
      Register (or in the case of any assignment by a Lender to an Affiliate of such
      Lender or a Related Fund of such Lender, and which assignment is not recorded
      in
      the Register, a register comparable to the Register), together with the
      surrender of the registered note, if any, evidencing the same duly endorsed
      by
      (or accompanied by a written instrument of assignment or sale duly executed
      by)
      the holder of such registered note, whereupon, at the request of the designated
      assignee(s) or transferee(s), one or more new registered notes in the same
      aggregate principal amount shall be issued to the designated assignee(s) or
      transferee(s). Prior to the registration of assignment or sale of any Registered
      Loan (and the registered note, if any, evidencing the same) on the Register,
      the
      Agent shall treat the Person in whose name such Registered Loan (and the
      registered note, if any, evidencing the same) is registered as the owner thereof
      for the purpose of receiving all payments thereon and for all other purposes,
      notwithstanding notice to the contrary.

     

    (g) In
      the
      event that any Lender sells participations in a Registered Loan, such Lender
      shall maintain a register on which it enters the name of all participants in
      the
      Registered Loans held by it (the “Participant
      Register”).
      A
      Registered Loan (and the registered note, if any, evidencing the same) may
      be
      participated in whole or in part only by registration of such participation
      on
      the Participant Register (and each registered note shall expressly so provide).
      Any participation of such Registered Loan (and the registered note, if any,
      evidencing the same) may be effected only by the registration of such
      participation on the Participant Register.

    

    (h) Any
      foreign Person who purchases or is assigned or participates in any portion
      of
      such Registered Loan shall comply with Section 2.08(d). 

    

    (i) Each
      Lender may sell participations to one or more banks or other entities in or
      to
      all or a portion of its rights and obligations under this Agreement and the
      other Loan Documents (including, without limitation, all or a portion of its
      Commitments and the Loans made by it); provided, that (i) such Lender’s
      obligations under this Agreement (including without limitation, its Commitments
      hereunder) and the other Loan Documents shall remain unchanged; (ii) such Lender
      shall remain solely responsible to the other parties hereto for the performance
      of such obligations, and the Borrower, the Agent and the other Lenders shall
      continue to deal solely and directly with such Lender in connection with such
      Lender’s rights and obligations under this Agreement and the other Loan
      Documents; and (iii) a participant shall not be entitled to require such Lender
      to take or omit to take any action hereunder except (A) action directly
      effecting an extension of the maturity dates or decrease in the principal amount
      of the Loan, (B) action directly effecting an extension of the due dates or
      a
      decrease in the rate of interest payable on the Loan or the fees payable under
      this Agreement, or (C) actions directly effecting a release of all or a
      substantial portion of the Collateral or any Loan Party (except as set forth
      in
Section
      10.08
      of this
      Agreement or any other Loan Document). The Loan Parties Agree that each
      participant shall be entitled to the benefits of Section
      2.08
      and
Section
      4.05
      of this
      Agreement with respect to its participation in any portion of the Commitments
      and the Loan as if it was a Lender. 

     

    
      
        
        

      

      
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    (j) In
      the
      event (i) any Lender delivers to the Borrower any notice in accordance with
      Section 2.08(c) or 4.05(b), (ii) any Lender defaults in its obligations to
      fund
      a Revolving Loan pursuant to this Agreement, or (iii) any Lender (a
“Non-Consenting
      Lender”)
      refuses to consent to an amendment, modification or waiver of this Agreement
      that, pursuant to Section 12.02, requires the consent of all of the Lenders
      or
      all of the Lenders directly affected thereby, then, provided that no Default
      or
      Event of Default has occurred and is continuing at such time, the Borrowers
      may,
      at their own expense (such expense to include any transfer fee payable to the
      Agent under Section 12.07(b)), require such Lender to transfer and assign in
      whole or in part, without recourse (in accordance with and subject to the terms
      and conditions of Section 12.07), all or part of its interests, rights and
      obligations under this Agreement to any assignee which shall assume such
      assigned obligations, provided that (A) such assignee shall be acceptable to
      the
      Agent, (B) such assignment shall not conflict with any law, rule or regulation
      or order of any court or other Governmental Authority, (C) the Borrowers or
      such
      assignee shall have paid to the assigning Lender in immediately available funds
      the principal of and interest accrued to the date of such payment on the Loan
      made by it hereunder and all other amounts owed to it hereunder (including,
      without limitation, any amounts owing pursuant to Section 2.08(c) or 4.05(b))
      and (D) in the event such Lender is a Non-Consenting Lender, each assignee
      shall
      consent, at the time of such assignment, to each matter in respect of which
      such
      Lender was a Non-Consenting Lender and the Borrowers also require each other
      Lender that is a Non-Consenting Lender to assign its interests, rights and
      obligations under this Agreement.

     

    Section
      12.08 Counterparts.
      This
      Agreement may be executed in any number of counterparts and by different parties
      hereto in separate counterparts, each of which shall be deemed to be an
      original, but all of which taken together shall constitute one and the same
      agreement.
      Delivery
      of an executed counterpart of this Agreement by telecopier or electronic
      transmission shall be equally as effective as delivery of an original executed
      counterpart of this Agreement. Any party delivering an executed counterpart
      of
      this Agreement by telecopier or electronic transmission also shall deliver
      an
      original executed counterpart of this Agreement but the failure to deliver
      an
      original executed counterpart shall not affect the validity, enforceability,
      and
      binding effect of this Agreement. The foregoing shall apply to each other Loan
      Document mutatis mutandis.

     

    Section
      12.09 GOVERNING
      LAW.
      THIS
      AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE
      CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT) SHALL
      BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
      YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW
      YORK.

     

    
      
        
        

      

      
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    Section
      12.10 CONSENT
      TO JURISDICTION; SERVICE OF PROCESS AND VENUE.
      ANY
      LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
      DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY
      OF
      NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
      NEW
      YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH LOAN PARTY HEREBY
      IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
      THE JURISDICTION OF THE AFORESAID COURTS.
      EACH
      LOAN PARTY HEREBY IRREVOCABLY APPOINTS THE SECRETARY OF STATE OF THE STATE
      OF
      NEW YORK AS ITS AGENT FOR SERVICE OF PROCESS IN RESPECT OF ANY SUCH ACTION
      OR
      PROCEEDING AND FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF
      ANY
      OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
      OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE
      BORROWER AT ITS ADDRESS FOR NOTICES AS SET FORTH IN SECTION 12.01
      AND TO
      THE SECRETARY OF STATE OF THE STATE OF NEW YORK, SUCH SERVICE TO BECOME
      EFFECTIVE 10 DAYS AFTER SUCH MAILING. THE LOAN PARTIES AGREE THAT A FINAL
      JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
      ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
      PROVIDED BY LAW. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT AND THE
      LENDERS TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
      COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY LOAN PARTY IN ANY
      OTHER JURISDICTION. EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES,
      TO
      THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
      HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT
      IN
      ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS
      BEEN
      BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY LOAN PARTY HAS OR
      HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
      LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
      ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
      PROPERTY, EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT
      OF
      ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

     

    Section
      12.11 WAIVER
      OF JURY TRIAL, ETC. EACH
      LOAN
      PARTY,
      THE
      AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
      PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE
      OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT,
      DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED
      IN
      CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN
      CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS
      OR
      COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH
      LOAN
      PARTY
      CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT OR
      ANY
      LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT OR ANY LENDER
      WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO
      ENFORCE THE FOREGOING WAIVERS. EACH
      LOAN
      PARTY
      HEREBY
      ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND
      THE
      LENDERS ENTERING INTO THIS AGREEMENT.

     

    
      
        
        

      

      
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    Section
      12.12 Consent
      by the Agent and Lenders.
      Except
      as otherwise expressly set forth herein or in any other Loan Document to the
      contrary, if the consent, approval, satisfaction, determination, judgment,
      acceptance or similar action (an “Action”)
      of the
      Agent or any Lender shall be permitted or required pursuant to any provision
      hereof or any provision of any other agreement to which any Loan Party is a
      party and to which the Agent or any Lender has succeeded thereto, such Action
      shall be required to be in writing and may be withheld or denied by the Agent
      or
      such Lender, in its sole discretion, with or without any reason, and without
      being subject to question or challenge on the grounds that such Action was
      not
      taken in good faith.

     

    Section
      12.13 No
      Party Deemed Drafter.
      Each of
      the parties hereto agrees that no party hereto shall be deemed to be the drafter
      of this Agreement.

     

    Section
      12.14 Reinstatement;
      Certain Payments.
      If any
      claim is ever made upon the Agent or any Lender for repayment or recovery of
      any
      amount or amounts received by the Agent or such Lender in payment or on account
      of any of the Obligations, the Agent or such Lender shall give prompt notice
      of
      such claim to each other Lender and the Borrower, and if the Agent or such
      Lender repays all or part of such amount by reason of (i) any judgment,
      decree or order of any court or administrative body having jurisdiction over
      the
      Agent or such Lender or any of its property, or (ii) any good faith
      settlement or compromise of any such claim effected by the Agent or such Lender
      with any such claimant, then and in such event each Loan Party agrees that
      (A)
      any such judgment, decree, order, settlement or compromise shall be binding
      upon
      it notwithstanding the cancellation of any Indebtedness hereunder or under
      the
      other Loan Documents or the termination of this Agreement or the other Loan
      Documents, and (B) it shall be and remain liable to the Agent or such
      Lender hereunder for the amount so repaid or recovered to the same extent as
      if
      such amount had never originally been received by the Agent or such
      Lender.

     

    Section
      12.15 Indemnification.

     

    (a) General
      Indemnity.
      In
      addition to each Loan Party’s other Obligations under this Agreement, each Loan
      Party agrees to, jointly and severally, defend, protect, indemnify and hold
      harmless the Agent and each Lender and all of their respective officers,
      directors, employees, attorneys, consultants and agents (collectively called
      the “Indemnitees”)
      from
      and against any and all losses, damages, liabilities, obligations, penalties,
      fees, reasonable costs and expenses (including, without limitation, reasonable
      attorneys’ fees, costs and expenses) incurred by such Indemnitees, whether prior
      to or from and after the Effective Date, whether direct, indirect or
      consequential, as a result of or arising from or relating to or in connection
      with any of the following: (i) the negotiation, preparation, execution or
      performance or enforcement of this Agreement, any other Loan Document or of
      any
      other document executed in connection with the transactions contemplated by
      this
      Agreement, (ii) the Agent’s or any Lender’s furnishing of funds to the
      Borrower under this Agreement or the other Loan Documents, including, without
      limitation, the management of the Loan, (iii) any matter relating to the
      financing transactions contemplated by this Agreement or the other Loan
      Documents or by any document executed in connection with the transactions
      contemplated by this Agreement or the other Loan Documents, or (iv) any
      claim, litigation, investigation or proceeding relating to any of the foregoing,
      whether or not any Indemnitee is a party thereto (collectively,
      the “Indemnified
      Matters”);
      provided,
      however,
      that
      the Loan Parties shall not have any obligation to any Indemnitee under this
      subsection (a) for any Indemnified Matter caused by the gross negligence or
      willful misconduct of such Indemnitee, as determined by a final judgment of a
      court of competent jurisdiction.
      No
      Indemnitee shall have any liability (whether direct or indirect, in contract,
      tort or otherwise) to Borrower, any of its Subsidiaries, or any of their
      respective security holders or creditors, for or in connection with the
      financing transactions contemplated by this Agreement or other Loan Documents,
      except for direct damages (as opposed to special, indirect, consequential or
      punitive damages, including, without limitation, any loss of profits, business
      or anticipated savings) determined in a final non-appealable judgment by a
      court
      of competent jurisdiction to have resulted from such Indemnitee’s willful
      misconduct.

     

    
      
        
        

      

      
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    (b) Promptly
      after receipt by an Indemnitee hereunder of notice of the commencement of any
      action, such indemnified party shall, if a claim in respect thereof is to be
      made against the indemnifying party hereunder, notify the indemnifying party
      in
      writing thereof, but the omission so to notify the indemnifying party shall
      not
      relieve it from any liability which it may have to such indemnified party other
      than under this Section 12.13 and shall only relieve it from any liability
      which
      it may have to such indemnified party under this Section 12.13, except and
      only
      if and to the extent the indemnifying party is prejudiced by such omission.
      In
      case any such action shall be brought against any indemnified party and it
      shall
      notify the indemnifying party of the commencement thereof, the indemnifying
      party shall be entitled to participate in [and, to the extent it shall wish,
      to
      assume and undertake the defense thereof] with counsel satisfactory to such
      indemnified party, and, after notice from the indemnifying party to such
      indemnified party of its election so to assume and undertake the defense
      thereof, the indemnifying party shall not be liable to such indemnified party
      under this Section 12.13 for any legal expenses subsequently incurred by such
      indemnified party in connection with the defense thereof, provided, however,
      that, if the defendants in any such action include both the indemnified party
      and the indemnifying party and counsel reasonably acceptable to the indemnifying
      party shall have reasonably concluded that the interests of the indemnified
      party reasonably may be deemed to conflict with the interests of the
      indemnifying party, the indemnified parties, as a group, shall have the right
      to
      select one separate counsel and to assume such legal defenses and otherwise
      to
      participate in the defense of such action, with the reasonable expenses and
      fees
      of such separate counsel and other expenses related to such participation to
      be
      reimbursed by the indemnifying party as incurred. The indemnifying party shall
      not be liable for any settlement of any action or claim under this Section
      12.13
      without its written consent which shall not be unreasonably withheld or
      delayed.

    

    (c) The
      indemnification for all of the foregoing losses, damages, fees, costs and
      expenses of the Indemnitees are chargeable against the Loan Account. To the
      extent that the undertaking to indemnify, pay and hold harmless set forth in
      this Section
      12.15
      may be
      unenforceable because it is violative of any law or public policy, each Loan
      Party shall, jointly and severally, contribute the maximum portion which it
      is
      permitted to pay and satisfy under applicable law, to the payment and
      satisfaction of all Indemnified Matters incurred by the Indemnitees. The
      indemnities set forth in this Section
      12.15
      shall
      survive the repayment of the Obligations and discharge of any Liens granted
      under the Loan Documents.

     

    
      
        
        

      

      
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    Section
      12.16 Records.
      The
      unpaid principal of and interest on the Loan, the interest rate or rates
      applicable to such unpaid principal and interest, the duration of such
      applicability, the Commitments, and the accrued and unpaid fees payable pursuant
      to Section
      2.06
      hereof,
      including, without limitation, the Closing Fee, and the Interest Yield
      Protection Amount, shall at all times be ascertained from the records of the
      Agent, which shall be conclusive and binding absent manifest error.

     

    Section
      12.17 Binding
      Effect.
      This
      Agreement shall become effective when it shall have been executed by each Loan
      Party, the Agent and each Lender and when the conditions precedent set forth
      in
Section
      5.01
      hereof
      have been satisfied or waived in writing by the Agent, and thereafter shall
      be
      binding upon and inure to the benefit of each Loan Party, the Agent and each
      Lender, and their respective successors and assigns, except that the Loan
      Parties shall not have the right to assign its rights hereunder or any interest
      herein without the prior written consent of the Agent and each Lender, and
      any
      assignment by any Lender shall be governed by Section
      12.07
      hereof.

     

    Section
      12.18 Interest.
      It is
      the intention of the parties hereto that the Agent and each Lender shall conform
      strictly to usury laws applicable to it. Accordingly, if the transactions
      contemplated hereby or by any other Loan Document would be usurious as to the
      Agent or any Lender under laws applicable to it (including the laws of the
      United States of America and the State of New York or any other jurisdiction
      whose laws may be mandatorily applicable to the Agent or such Lender
      notwithstanding the other provisions of this Agreement), then, in that event,
      notwithstanding anything to the contrary in this Agreement or any other Loan
      Document or any agreement entered into in connection with or as security for
      the
      Obligations, it is agreed as follows: (i) the aggregate of all consideration
      which constitutes interest under law applicable to the Agent or any Lender
      that
      is contracted for, taken, reserved, charged or received by the Agent or such
      Lender under this Agreement or any other Loan Document or agreements or
      otherwise in connection with the Obligations shall under no circumstances exceed
      the maximum amount allowed by such applicable law, any excess shall be canceled
      automatically and if theretofore paid shall be credited by the Agent or such
      Lender on the principal amount of the Obligations (or, to the extent that the
      principal amount of the Obligations shall have been or would thereby be paid
      in
      full, refunded by the Agent or such Lender, as applicable, to the Borrower);
      and
      (ii) in the event that the maturity of the Obligations is accelerated by reason
      of any Event of Default under this Agreement or otherwise, or in the event
      of
      any required or permitted prepayment, then such consideration that constitutes
      interest under law applicable to the Agent or any Lender may never include
      more
      than the maximum amount allowed by such applicable law, and excess interest,
      if
      any, provided for in this Agreement or otherwise shall be canceled automatically
      by the Agent or such Lender, as applicable, as of the date of such acceleration
      or prepayment and, if theretofore paid, shall be credited by the Agent or such
      Lender, as applicable, on the principal amount of the Obligations (or, to the
      extent that the principal amount of the Obligations shall have been or would
      thereby be paid in full, refunded by the Agent or such Lender to the Borrower).
      All sums paid or agreed to be paid to the Agent or any Lender for the use,
      forbearance or detention of sums due hereunder shall, to the extent permitted
      by
      law applicable to the Agent or such Lender, be amortized, prorated, allocated
      and spread throughout the full term of the Loan until payment in full so that
      the rate or amount of interest on account of any Loan hereunder does not exceed
      the maximum amount allowed by such applicable law. If at any time and from
      time
      to time (x) the amount of interest payable to the Agent or any Lender on any
      date shall be computed at the Highest Lawful Rate applicable to the Agent or
      such Lender pursuant to this Section
      12.18
      and
      (y) in respect of any subsequent interest computation period the amount of
      interest otherwise payable to the Agent or such Lender would be less than the
      amount of interest payable to the Agent or such Lender computed at the Highest
      Lawful Rate applicable to the Agent or such Lender, then the amount of interest
      payable to the Agent or such Lender in respect of such subsequent interest
      computation period shall continue to be computed at the Highest Lawful Rate
      applicable to the Agent or such Lender until the total amount of interest
      payable to the Agent or such Lender shall equal the total amount of interest
      which would have been payable to the Agent or such Lender if the total amount
      of
      interest had been computed without giving effect to this Section
      12.18.

     

    
      
        
        

      

      
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    For
      purposes of this Section
      12.18,
      the
      term “applicable law” shall mean that law in effect from time to time and
      applicable to the loan transaction between the Borrower, on the one hand, and
      the Agent and the Lenders, on the other, that lawfully permits the charging
      and
      collection of the highest permissible, lawful non-usurious rate of interest
      on
      such loan transaction and this Agreement, including laws of the State of New
      York and, to the extent controlling, laws of the United States of America.
      

    

    The
      right
      to accelerate the maturity of the Obligations does not include the right to
      accelerate any interest that has not accrued as of the date of
      acceleration.

     

    Section
      12.19 Confidentiality.
      The
      Agent and each Lender agrees (on behalf of itself and each of its affiliates,
      directors, officers, employees and representatives) to use reasonable
      precautions to keep confidential, in accordance with its customary procedures
      for handling confidential information of this nature and in accordance with
      safe
      and sound practices of comparable commercial finance companies, any non-public
      information supplied to it by the Loan Parties pursuant to this Agreement or
      the
      other Loan Documents which is identified in writing by the Loan Parties as
      being
      confidential at the time the same is delivered to such Person (and which at
      the
      time is not, and does not thereafter become, publicly available or available
      to
      such Person from another source not known to be subject to a confidentiality
      obligation to such Person not to disclose such information), provided
      that
      nothing herein shall limit the disclosure of any such information (i) to
      the extent required by statute, rule, regulation or judicial process,
      (ii) to counsel for the Agent or any Lender, (iii) in connection with
      any litigation to which the Agent or any Lender is a party or (iv) to any
      assignee or participant (or prospective assignee or participant) so long as
      such
      assignee or participant (or prospective assignee or participant) first agrees,
      in writing, to be bound by confidentiality provisions similar in substance
      to
      this Section
      12.19.
      The
      Agent and each Lender agrees that, upon receipt of a request or identification
      of the requirement for disclosure pursuant to clause (iv) hereof, it will
      make reasonable efforts to keep the Loan Parties informed of such request or
      identification; provided
      that
      each Loan Party acknowledges that the Agent and each Lender may make disclosure
      as required or requested by any Governmental Authority or representative thereof
      and that the Agent and each Lender may be subject to review by regulatory
      agencies and may be required to provide to, or otherwise make available for
      review by, the representatives of such parties or agencies any such non-public
      information.
      Notwithstanding anything to the contrary, this Section 12.19 shall survive
      the
      disclosure of the confidential information described herein for a period of
      one
      year. Neither the Agent, any Lender nor any Affiliate of the Agent or any
      Lender which
      (x)
      had knowledge of the transactions contemplated hereby, (y) has or shares
      discretion relating to Agent or such Lender’s investments or trading or
      information concerning Agent or such Lender’s investments, including in respect
      of the Loan Parties' equity securities, or (z) is subject to Agent or such
      Lender’s review or input concerning such Affiliate’s investments or trading
      (collectively, “Trading
      Affiliates”)
      shall effect or agree to effect any transactions in the equity securities
      of any of the Loan Parties (including, without limitation, any short sales)
      upon
      receipt of material, non-public confidential information of any of the Loan
      Parties in violation of applicable securities laws. 

     

    
      
        
        

      

      
        83

        
          

        

      

      
        
        

      

    

     

    Section
      12.20 Integration.
      This
      Agreement, together with the other Loan Documents, reflects the entire
      understanding of the parties with respect to the transactions contemplated
      hereby and shall not be contradicted or qualified by any other agreement, oral
      or written, before the date hereof.

     

    

    [REMAINDER
      OF THIS PAGE INTENTIONALLY LEFT BLANK]

    

    
      
        
        

      

      
        84

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
      by
      their respective officers thereunto duly authorized, as of the date first above
      written.

     

    

      
        	 	
                BORROWER:

              	 
	 	 	 	 	 	 
	 	
                COMPOSITE
                  TECHNOLOGY CORPORATION

              	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	
                By:
                  

              	  
	 
	 	
                Name:

              	    
	 
	 	
                Title:

              	  
	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	
                GUARANTORS:

              	 
	 	 	 	 	 	 
	 	
                CTC
                  CABLE CORPORATION

              	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	
                By:
                  

              	  
	 
	 	
                Name:
                  

              	   
	 
	 	
                Title:
                  

              	  
	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	
                TRANSMISSION
                  TECHNOLOGY CORPORATION

              	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	
                By:
                  

              	   
	 
	 	
                Name:
                  

              	   
	 
	 	
                Title:
                  

              	    
	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	
                CTC
                  TOWERS & POLES CORPORATION

              	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	
                By:
                  

              	    
	 
	 	
                Name:
                  

              	    
	 
	 	
                Title:
                  

              	    
	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	
                DEWIND,
                  INC.

              	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	
                By:
                  

              	    
	 
	 	
                Name:
                  

              	    
	 
	 	
                Title:
                  

              	     
	 

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	 	
                EU
                  ENERGY INC.

              	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	
                By:
                  

              	 
	 
	 	
                Name:
                  

              	   
	 
	 	
                Title:
                  

              	     
	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	
                EU
                  ENERGY NORTH AMERICA, INC

              	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	
                By:
                  

              	    
	 
	 	
                Name:
                  

              	     
	 
	 	
                Title:
                  

              	    
	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	
                AGENT
                  AND LENDER:

              	 
	 	 	 	 	 	 
	 	
                ACF
                  CTC, L.L.C.

              	 
	 	
                as
                  Agent

              	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	
                By:
                  

              	     
	 
	 	 	 	 	
                Eric
                  Edidin

              	
                 

              
	 	 	 	 	
                Authorized
                  Representative

              	
                 

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    FINANCING
      AGREEMENT

    

    Dated
      as of May 5, 2008

    

    by
      and among

    

    EACH
      SUBSIDIARY OF BORROWER LISTED AS A GUARANTOR ON THE SIGNATURE PAGES
      HERETO,

    as
      Guarantors,

    

    COMPOSITE
      TECHNOLOGY CORPORATION,

    as
      Borrower,

    

    

    THE
      LENDERS FROM TIME TO TIME PARTY HERETO,

    as
      Lenders,

    

    and

    

    ACF
      CTC, L.L.C.,

    as
      Agent

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

     

    

    
      	 	 	 	
              Page

            
	 	 	 	 	 
	ARTICLE
              I DEFINITIONS; CERTAIN TERMS	
              1

            	 
	 	
              Section
                1.01

            	
              Definitions

            	
              1

            	 
	 	
              Section
                1.02

            	
              Terms
                Generally

            	
              18

            	 
	 	
              Section
                1.03

            	
              Accounting
                and Other Terms

            	
              18

            	 
	 	
              Section
                1.04

            	
              Time
                References

            	
              18

            	 
	 	 	 	 	 
	
              ARTICLE
                II THE LOAN

            	
              18

            	 
	 	
              Section
                2.01

            	
              Commitments

            	
              18

            	 
	 	
              Section
                2.02

            	
              Making
                the Loan

            	
              19

            	 
	 	
              Section
                2.03

            	
              Repayment
                of Loan; Evidence of Debt

            	
              19

            	 
	 	
              Section
                2.04

            	
              Interest

            	
              20

            	 
	 	
              Section
                2.05

            	
              Reduction
                of Commitment; Prepayment of Loan

            	
              21

            	 
	 	
              Section
                2.06

            	
              Closing
                Fee

            	
              22

            	 
	 	
              Section
                2.07

            	
              Intentionally
                Omitted

            	
              22

            	 
	 	
              Section
                2.08

            	
              Taxes

            	
              22

            	 
	 	 	 	 	 
	
              ARTICLE
                III TERM; TERMINATION

            	
              24

            	 
	 	
              Section
                3.01

            	
              Term

            	
              24

            	 
	 	
              Section
                3.02

            	
              Effect
                of Termination

            	
              24

            	 
	 	
              Section
                3.03

            	
              Early
                Termination by Borrower

            	
              25

            	 
	 	 	
               

            	 	 
	
              ARTICLE
                IV FEES, PAYMENTS AND OTHER COMPENSATION

            	
              25

            	 
	 	
              Section
                4.01

            	
              Audit
                and Collateral Monitoring Fees

            	
              25

            	 
	 	
              Section
                4.02

            	
              Payments
                and Computations

            	
              25

            	 
	 	
              Section
                4.03

            	
              Sharing
                of Payments, Etc

            	
              26

            	 
	 	
              Section
                4.04

            	
              Apportionment
                of Payments

            	
              26

            	 
	 	
              Section
                4.05

            	
              Increased
                Costs and Reduced Return

            	
              27

            	 
	 	 	 	 	 
	
              ARTICLE
                V CONDITIONS TO LOAN

            	
              28

            	 
	 	
              Section
                5.01

            	
              Conditions
                Precedent to Effectiveness

            	
              28

            	 
	 	
              Section
                5.02

            	
              Conditions
                Subsequent to Effectiveness

            	
              32

            	 
	 	 	 	 	 
	ARTICLE
              VI REPRESENTATIONS AND WARRANTIES	
              33

            	 
	 	
              Section
                6.01

            	
              Loan
                Party Representations and Warranties

            	
              33

            	 
	 	
              Section
                6.02

            	
              Agent
                and Lender Representations and Warranties

            	
              42

            	 
	 	 	
               

            	 	 
	
              ARTICLE
                VII COVENANTS OF THE LOAN PARTIES

            	
              43

            	 
	 	
              Section
                7.01

            	
              Affirmative
                Covenants

            	
              43

            	 
	 	
              Section
                7.02

            	
              Negative
                Covenants

            	
              51

            	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	ARTICLE
              VIII MANAGEMENT, COLLECTION AND STATUS OF ACCOUNTS RECEIVABLE AND OTHER
              COLLATERAL	
              57

            	 
	 	
              Section
                8.01

            	
              Collection
                of Accounts Receivable; Management of Collateral

            	
              57

            	 
	 	
              Section
                8.02

            	
              Accounts
                Receivable Documentation

            	
              59

            	 
	 	
              Section
                8.03

            	
              Status
                of Accounts Receivable and Other Collateral

            	
              59

            	 
	 	
              Section
                8.04

            	
              Collateral
                Custodian

            	
              60

            	 
	 	
               

            	
               

            	 	 
	
              ARTICLE
                IX EVENTS OF DEFAULT

            	
              60

            	 
	 	
              Section
                9.01

            	
              Events
                of Default

            	
              60

            	 
	 	
               

            	 	 	 
	
              ARTICLE
                X AGENT

            	
              64

            	 
	 	
              Section
                10.01

            	
              
                Appointment

              

            	
              64

            	 
	 	
              Section
                10.02

            	
              Nature
                of Duties

            	
              65

            	 
	 	
              Section
                10.03

            	
              Rights,
                Exculpation, Etc

            	
              65

            	 
	 	
              Section
                10.04

            	
              Reliance

            	
              66

            	 
	 	
              Section
                10.05

            	
              Indemnification

            	
              66

            	 
	 	
              Section
                10.06

            	
              Agent
                Individually

            	
              66

            	 
	 	
              Section
                10.07

            	
              Successor
                Agent

            	
              66

            	 
	 	
              Section
                10.08

            	
              Collateral
                Matters

            	
              67

            	 
	 	
              Section
                10.09

            	
              Agency
                for Perfection

            	
              68

            	 
	 	
               

            	
               

            	 	 
	
              ARTICLE
                XI SECURED GUARANTY

            	
              69

            	 
	 	
              Section
                11.01

            	
              Guaranty

            	
              69

            	 
	 	
              Section
                11.02

            	
              Guaranty
                Absolute

            	
              69

            	 
	 	
              Section
                11.03

            	
              Waiver

            	
              70

            	 
	 	
              Section
                11.04

            	
              Continuing
                Guaranty; Assignments

            	
              70

            	 
	 	
              Section
                11.05

            	
              Subrogation

            	
              71

            	 
	 	
               

            	 	 	 
	ARTICLE
              XII MISCELLANEOUS	
              71

            	 
	 	
              Section
                12.01

            	
              Notices,
                Etc

            	
              71

            	 
	 	
              Section
                12.02

            	
              Amendments,
                Etc

            	
              73

            	 
	 	
              Section
                12.03

            	
              No
                Waiver; Remedies, Etc

            	
              73

            	 
	 	
              Section
                12.04

            	
              Expenses;
                Taxes; Attorneys’ Fees

            	
              74

            	 
	 	
              Section
                12.05

            	
              Right
                of Set-off

            	
              74

            	 
	 	
              Section
                12.06

            	
              Severability

            	
              75

            	 
	 	
              Section
                12.07

            	
              Assignments
                and Participations

            	
              75

            	 
	 	
              Section
                12.08

            	
              Counterparts

            	
              78

            	 
	 	
              Section
                12.09

            	
              GOVERNING
                LAW

            	
              78

            	 
	 	
              Section
                12.10

            	
              CONSENT
                TO JURISDICTION; SERVICE OF PROCESS AND VENUE

            	
              79

            	 
	 	
              Section
                12.11

            	
              WAIVER
                OF JURY TRIAL, ETC

            	
              79

            	 
	 	
              Section
                12.12

            	
              Consent
                by the Agent and Lenders

            	
              80

            	 
	 	
              Section
                12.13

            	
              No
                Party Deemed Drafter

            	
              80

            	 
	 	
              Section
                12.14

            	
              Reinstatement;
                Certain Payments

            	
              80

            	 
	 	
              Section
                12.15

            	
              Indemnification

            	
              80

            	 
	 	
              Section
                12.16

            	
              Records

            	
              82

            	 
	 	
              Section
                12.17

            	
              Binding
                Effect

            	
              82

            	 
	 	
              Section
                12.18

            	
              Interest

            	
              82

            	 
	 	
              Section
                12.19

            	
              Confidentiality

            	
              83

            	 
	 	
              Section
                12.20

            	
              Integration

            	
              84

            	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
      AND EXHIBITS

    

    

    
      	
              Schedule
                1.01(A)

            	
              Lenders
                and Lenders’ Commitments

            
	
              Schedule
                1.01(B)

            	
              Cable
                Critical Vendors

            
	
              Schedule
                6.01(e)

            	
              Capitalization;
                Subsidiaries

            
	
              Schedule
                6.01(f)

            	
              Litigation;
                Commercial Tort Claims

            
	
              Schedule
                6.01(i)

            	
              ERISA

            
	
              Schedule
                6.01(o)

            	
              Real
                Property

            
	
              Schedule
                6.01(q)

            	
              Operating
                Lease Obligations

            
	
              Schedule
                6.01(r)

            	
              Environmental
                Matters

            
	
              Schedule
                6.01(s)

            	
              Insurance

            
	
              Schedule
                6.01(v)

            	
              Bank
                Accounts

            
	
              Schedule
                6.01(w)

            	
              Intellectual
                Property

            
	
              Schedule
                6.01(x)

            	
              Material
                Contracts

            
	
              Schedule
                6.01(bb)

            	
              Name;
                Jurisdiction of Organization; Organizational ID Number; Chief Place
                of
                Business; Chief Executive Office; FEIN

            
	
              Schedule
                6.01(cc)

            	
              Tradenames

            
	
              Schedule
                6.01(dd)

            	
              Collateral
                Locations

            
	
              Schedule
                6.01(jj)

            	
              Transfer
                Pricing Policy

            
	
              Schedule
                7.02(a)

            	
              Existing
                Liens

            
	
              Schedule
                7.02(b)

            	
              Existing
                Indebtedness

            
	
              Schedule
                7.02(e)

            	
              Existing
                Investments

            
	
              Schedule
                7.02(g)

            	
              Restricted
                Payments

            
	
              Schedule
                7.02(j)

            	
              Limitations
                on Dividends and Other Payment Restrictions

            
	
              Schedule
                8.01

            	
              Lockbox
                Banks and Lockbox Accounts

            

    

     

    
      
        	
                Exhibit
                  A

              	
                Form
                  of Security Agreement 

              
	
                Exhibit
                  B

              	
                Form
                  of Pledge Agreement

              
	
                Exhibit
                  C

              	
                Form
                  of Joinder Agreement

              
	
                Exhibit
                  D

              	
                Intentionally
                  Omitted

              
	
                Exhibit
                  E

              	
                Form
                  of Opinion of Counsel

              
	
                Exhibit
                  F

              	
                Form
                  of Assignment and Acceptance

              
	
                Exhibit
                  G

              	
                Form
                  of Contribution Agreement

              
	
                Exhibit
                  H

              	
                Form
                  of Note

              
	
                Exhibit
                  I

              	
                Initial
                  Cash Forecast

              
	
                Exhibit
                  J

              	
                Form
                  of Compliance Certificate

              

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Schedule
      1.01(A)

    

    Lenders
      and Lenders’ Commitments

     

     

    
      	
               

              Lender

            	
               

              Commitment

            
	
              ACF
                CTC, L.L.C.

            	
              $5,000,000

            
	
              Total
                Commitment

            	
              $5,000,000

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