Document:

Unassociated Document

    EXECUTION
      COPY

     

      
        

        

      

       

    

    STOCK
      PURCHASE AGREEMENT

    

    by
      and between

    

    MOTORSPORTS
      & ENTERTAINMENT OF TENNESSEE,
      INC.,

    a
      Nevada corporation

    

    AND

    

    LJ&J
      ENTERPRISES OF TENNESSEE, INC.,

    a
      Tennessee corporation

    

    Dated:
      November 21, 2006

     

    
      

      

    

    
       

       

      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

    
      

        
          	 	 	
                  Page

                
	
                  1.

                	
                  TERMS
                    OF ACQUISITION

                	
                  1

                
	 	
                  1.1

                	
                  Stock
                    Purchase

                	
                  1

                
	 	
                  1.2

                	
                  Purchase
                    Price

                	
                  2

                
	 	
                  1.3

                	
                  Closing

                	
                  2

                
	 	 	
                  (a)

                	
                  Closings

                	
                  2

                
	 	 	
                  (b)

                	
                  The
                    Company’s Deliveries Upon Execution of the Agreement

                	
                  2

                
	 	 	
                  (c)

                	
                  The
                    Purchaser’s Deliveries Upon Execution of the Agreement

                	
                  3

                
	 	 	
                  (d)

                	
                  Deliveries
                    At the First Closing

                	
                  3

                
	 	 	
                  (e)

                	
                  The
                    Company’s Deliveries At the Final Closing

                	
                  3

                
	 	 	
                  (f)

                	
                  The
                    Purchaser’s
                    Deliveries At the Final Closing

                	
                  3

                
	 	 	 
	
                  2.

                	
                  ADDITIONAL
                    AGREEMENTS

                	
                  3

                
	 	
                  2.1

                	
                  Audits

                	
                  3

                
	 	
                  2.2

                	
                  Best
                    Efforts

                	
                  3

                
	 	
                  2.3

                	
                  Further
                    Assurances

                	
                  4

                
	 	 	 	 
	
                  3.

                	
                  REPRESENTATIONS
                    AND WARRANTIES.

                	
                  4

                
	 	
                  3.1

                	
                  Representations
                    and Warranties as to the Company

                	
                  4

                
	 	 	
                  (a)

                	
                  Capitalization

                	
                  4

                
	 	 	
                  (b)

                	
                  Organization;
                    Good Standing; Power

                	
                  4

                
	 	 	
                  (c)

                	
                  Authority;
                    Validity; No Conflicts

                	
                  4

                
	 	 	
                  (d)

                	
                  Governmental
                    Authorizations; Third-Party Consents

                	
                  5

                
	 	 	
                  (e)

                	
                  Financial
                    Statements

                	
                  5

                
	 	 	
                  (f)

                	
                  Interests
                    in Other Entities

                	
                  5

                
	 	 	
                  (g)

                	
                  Title
                    to Properties; Leases

                	
                  5

                
	 	 	
                  (h)

                	
                  Absence
                    of Undisclosed Liabilities

                	
                  6

                
	 	 	
                  (i)

                	
                  Litigation

                	
                  6

                
	 	 	
                  (j)

                	
                  Material
                    Contracts

                	
                  6

                
	 	 	
                  (k)

                	
                  Employee
                    Arrangements

                	
                  6

                
	 	 	
                  (l)

                	
                  Tax
                    Matters

                	
                  6

                
	 	 	
                  (m)

                	
                  Compliance
                    with Applicable Laws

                	
                  7

                
	 	 	
                  (n)

                	
                  Regulatory
                    Permits

                	
                  7

                
	 	 	
                  (o)

                	
                  Environmental
                    Matters

                	
                  7

                
	 	 	
                  (p)

                	
                  Absence
                    of Certain Changes

                	
                  7

                
	 	 	
                  (q)

                	
                  Brokers

                	
                  7

                
	 	 	
                  (r)

                	
                  Disclosure

                	
                  7

                
	 	 	
                  (s)

                	
                  Affiliated
                    Transactions

                	
                  8

                
	 	 	
                  (t)

                	
                  Disclosure
                    Schedules

                	
                  8

                
	 	
                  3.2

                	
                  Representations
                    and Warranties of Purchaser

                	
                  8

                
	 	 	
                  (a)

                	
                  Organization
                    and Power

                	
                  8

                
	 	 	
                  (b)

                	
                  Authority;
                    Validity; No Conflicts

                	
                  8

                
	 	 	
                  (c)

                	
                  Compliance
                    with Law

                	
                  8

                
	 	 	
                  (d)

                	
                  Capitalization

                	
                  8

                
	 	 	
                  (e)

                	
                  Investment
                    Intent

                	
                  9

                

        

      

       

      
         

        
          
            
            

          

          
            i

            
              

            

          

          
            
            

          

        

      

      
        
           

          TABLE
            OF CONTENTS

           

          (continued)

        

      

      

        
          	
                  4.

                	
                  CONDITIONS
                    TO CLOSING.

                	
                  9

                
	 	
                  4.1

                	
                  Conditions
                    to Purchaser’s Obligation to Close

                	
                  9

                
	 	 	
                  (a)

                	
                  Agreements
                    and Conditions

                	
                  9

                
	 	 	
                  (b)

                	
                  Representations
                    and Warranties

                	
                  9

                
	 	 	
                  (c)

                	
                  No
                    Legal Proceedings

                	
                  9

                
	 	 	
                  (d)

                	
                  Board
                    Approval

                	
                  9

                
	 	 	
                  (e)

                	
                  Officer’s
                    Certificate

                	
                  9

                
	 	 	
                  (f)

                	
                  Absence
                    of Material Changes

                	
                  9

                
	 	 	
                  (g)

                	
                  Consents

                	
                  10

                
	 	 	
                  (h)

                	
                  Stock
                    Certificate

                	
                  10

                
	 	 	
                  (i)

                	
                  Secretary’s
                    Certificate

                	
                  10

                
	 	 	
                  (j)

                	
                  Company
                    Capitalization

                	
                  10

                
	 	 	
                  (k)

                	
                  Second
                    Closing Certificate

                	
                  10

                
	 	 	
                  (l)

                	
                  Other
                    Closing Deliveries

                	
                  10

                
	 	
                  4.2

                	
                  Conditions
                    to Company’s Obligations to Close

                	
                  10

                
	 	 	
                  (a)

                	
                  Agreements
                    and Conditions

                	
                  10

                
	 	 	
                  (b)

                	
                  Representations
                    and Warranties

                	
                  10

                
	 	 	
                  (c)

                	
                  No
                    Legal Proceedings

                	
                  10

                
	 	 	
                  (d)

                	
                  Purchase
                    Price

                	
                  11

                
	 	 	
                  (e)

                	
                  Shareholders’
                    Agreement

                	
                  11

                
	 	 	 
	
                  5.

                	
                  CERTAIN
                    TAX MATTERS.

                	
                  11

                
	 	
                  5.1

                	
                  Tax
                    Indemnification

                	
                  11

                
	 	
                  5.2

                	
                  Cooperation
                    on Tax Matters

                	
                  11

                
	 	
                  5.3

                	
                  Certain
                    Taxes

                	
                  11

                
	 	 	 
	
                  6.

                	
                  SURVIVAL;
                    INDEMNIFICATION.

                	
                  12

                
	 	
                  6.1

                	
                  Survival
                    of Representations

                	
                  12

                
	 	
                  6.2

                	
                  Indemnities
                    of the Company

                	
                  12

                
	 	
                  6.3

                	
                  Indemnity
                    of Purchaser

                	
                  12

                
	 	
                  6.4

                	
                  Limitations
                    on Indemnification

                	
                  12

                
	 	 	 
	
                  7.

                	
                  CONFIDENTIALITY.

                	
                  13

                
	 	
                  7.1

                	
                  Confidentiality

                	
                  13

                
	 	
                  7.2

                	
                  Remedies
                    upon Breach

                	
                  13

                
	 	 	 
	
                  8.

                	
                  MISCELLANEOUS
                    PROVISIONS.

                	
                  13

                
	 	
                  8.1

                	
                  Counterparts;
                    Interpretation

                	
                  13

                
	 	
                  8.2

                	
                  Governing
                    Laws

                	
                  13

                
	 	
                  8.3

                	
                  Partial
                    Invalidity and Severability

                	
                  13

                
	 	
                  8.4

                	
                  Waiver

                	
                  14

                
	 	
                  8.5

                	
                  Acceptance
                    by Fax

                	
                  14

                
	 	
                  8.6

                	
                  Fees
                    and Disbursements

                	
                  14

                
	 	
                  8.7

                	
                  Attorneys’
                    Fees

                	
                  14

                
	 	
                  8.8

                	
                  Further
                    Assurances

                	
                  14

                
	 	
                  8.9

                	
                  Notice

                	
                  14

                
	 	
                  8.10

                	
                  Termination

                	
                  15

                
	 	
                  8.11

                	
                  Effects
                    of Termination

                	
                  15

                

        

         

         

        
          
            
            

          

          
            ii

            
              

            

          

          
            
            

          

        

         

        
          TABLE
            OF CONTENTS

           

          (continued)

        

         

        
          	 	
                  8.12

                	
                  Assignment

                	
                  16

                
	 	
                  8.13

                	
                  Binding
                    Effect; Benefits

                	
                  16

                
	 	
                  8.14

                	
                  Rules
                    of Construction

                	
                  16

                
	 	
                  8.15

                	
                  Waiver
                    of Jury Trial

                	
                  17

                

        

      

       

    

    SCHEDULES

    

      
        	
                Schedule
                  3.1(a)

              	
                Capitalization

              
	
                Schedule
                  3.1(b)

              	
                Organization;
                  Good Standing; Power

              
	
                Schedule
                  3.1(c)

              	
                Authority;
                  Validity; No Conflicts

              
	
                Schedule
                  3.1(d)

              	
                Governmental
                  Authorizations; Third-Party Consents

              
	
                Schedule
                  3.1(e)

              	
                Financial
                  Statements

              
	
                Schedule
                  3.1(g)

              	
                Title
                  to Properties; Leases

              
	
                Schedule
                  3.1(h)

              	
                Absence
                  of Undisclosed Liabilities

              
	
                Schedule
                  3.1(i)

              	
                Litigation

              
	
                Schedule
                  3.1(j)

              	
                Material
                  Contracts

              
	
                Schedule
                  3.1(l)

              	
                Tax
                  Matters

              
	
                Schedule
                  3.1(p)

              	
                Absence
                  of Certain Changes

              
	
                Schedule
                  3.1(q)

              	
                Brokers

              
	
                Schedule
                  3.1(s)

              	
                Affiliated
                  Transactions

              

      

    

    

    EXHIBITA

    

      
        	
                EXHIBIT
                  A

              	
                Shareholders’
                  Agreement

              
	
                EXHIBIT
                  B

              	
                Escrow
                  Agreement

              

      

    

    

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

     

    STOCK
      PURCHASE AGREEMENT

     

    This
      STOCK
      PURCHASE AGREEMENT (this
      “Agreement”)
      is
      made this 21st day of November, 2006, by and between Motorsports
      & Entertainment of Tennessee, Inc.,
      a Nevada
      corporation (“Purchaser”),
      LJ&J Enterprises of Tennessee, Inc.,
      a
      Tennessee corporation (the “Company”)
      (each,
      a “Party”
and
      collectively, the “Parties”).
      

     

    RECITALS

     

    WHEREAS,
      the
      Company is principally engaged in the business of motorsports development and
      racetrack management, acquisition and design (the “Business”);
      

     

    WHEREAS,
      the
      Company and Purchaser have agreed to enter into certain transactions pursuant
      to
      this Agreement whereby the Company shall issue, transfer and deliver to
      Purchaser, and Purchaser shall purchase from the Company shares of common stock,
      $1.00 par value per share, of the Company (the “Company
      Common Stock”),
      so
      that effectively as of the Final Closing Date, upon payment of the final tranche
      of the Purchase Price by Purchaser to the Company, the Purchaser shall have
      purchased from the Company eighty percent (80%) of all of the issued and
      outstanding of the Company Common Stock as of the Final Closing Date, in the
      manner and subject to the terms and conditions hereinafter set
      forth.

     

    NOW,
      THEREFORE,
      in
      consideration of the premises and the mutual representations, warranties,
      covenants and agreements herein contained, and of the certain good and valuable
      consideration, the receipt and sufficiency is hereby acknowledged, the parties
      hereby agree as follows:

     

    1.  Terms
      of Acquisition.

     

    1.1  Stock
      Purchase.
      

     

    (a)  Subject
      to the terms and conditions of this Agreement, the Company shall issue,
      transfer, convey and deliver to Purchaser, and the Purchaser shall purchase,
      acquire and accept from the
      Company, all right, title and interest, legal and equitable, beneficial and
      of
      record, in an amount of shares of the Company Common Stock (the “Purchased
      Shares”), so that effectively as of the First Closing, the Purchaser shall
      be the owner of Purchased Shares representing forty percent (40%) of the Company
      Common Stock as of the First Closing Date, and as of the Final Closing, the
      Purchaser shall be the owner of Purchased Shares representing eighty
      percent (80%) of the Company Common Stock as of the Final Closing
      Date. 

     

    (b)  The
      Parties hereby agree that the stock purchase transactions shall occur as
      follows: (i) upon execution of this Agreement, the Purchaser, or its assigns,
      will pay and deliver to the Company a sum of Two Hundred and Fifty Thousand
      Dollars ($250,000.00), and the Company shall issue, sell, transfer, convey
      and
      deliver to the Escrow Agent an original stock certificate representing forty
      percent (40%) of all of the outstanding shares of Company Common Stock (the
“First Closing Certificate”), which shall be effective as of the
      1st
      day of
      January, 2007 (the “First Closing”); and (ii) the Purchaser will use its
      best efforts to pay and deliver to the Company the Final Payment, as defined
      below, by March 1, 2007, or within three (3) business days after the
      effectiveness of ARC’s Registration Statement on Form SB-2, filed or to be filed
      by American Racing Capital, Inc., a Nevada corporation (“ARC”) with the
      U.S. Securities and Exchange Commission (the “SEC”) in connection with
      those certain financing transactions with New Millennium Capital Partners II
      LLC, AJW Qualified Partners LLC, New Millennium Capital, AJW Offshore Ltd.
      and
      AJW Partners LLC (the “Investors”) (the “Final Closing”). On the
      Final Closing Date, Purchaser, or its assigns, will pay and deliver to the
      Company the Final Payment, and the Company shall issue, sell, transfer, convey
      and deliver to Purchaser an original stock certificate (the “Final Closing
      Certificate”), such that the Purchased Shares issued by the Company to
      Purchaser at the Final Closing, plus the Purchased Shares issued by the Company
      to the Purchaser at the First Closing shall represent in aggregate eighty
      percent (80%) of all of the outstanding shares of Company Common Stock as
      of the Final Closing Date. The originally issued certificates evidencing the
      Company Common Stock shall be delivered at each Closing by Company to Purchaser,
      free and clear of all Liens, accompanied by duly executed stock
      powers (endorsed in blank) and with any necessary stock transfer tax stamps
      affixed thereto.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (c)  Upon
      execution of the Agreement, the Company shall deliver and transfer to the Escrow
      Agent the First Closing Certificate to be held in escrow pursuant to that
      certain Escrow Agreement. On the First Closing Date, the Escrow Agent shall
      deliver and transfer the First Closing Certificate to the Purchase. On the
      Final
      Closing Date, the Company shall deliver and the Final Closing Certificate to
      the
      Purchaser.

     

    1.2  Purchase
      Price.
      The
      Parties agree that the Purchase Price shall be Seven Hundred Thousand
      Dollars ($700,000.00) (the “Purchase
      Price”)
      to the
      Company. On July 24, 2006, ARC, on behalf of the Purchaser, paid an amount
      of
      Two Hundred Thousand Dollars ($200,000) (the “Option
      Payment”)
      to the
      Company in the form of an option payment towards the payment of the Purchase
      Price, as memorialized under that certain Agreement dated July 24, 2006, by
      and
      between ARC and the Company. At the First Closing, the Company shall be entitled
      the sum of Four Hundred and Fifty Thousand Dollars ($450,000) (the “First
      Closing Payment”),
      which
      shall be paid as such: (i) the Option Payment shall be credited against the
      First Closing Payment; and (ii) the sum of Two Hundred and Fifty Thousand
      Dollars ($250,000.00) shall be delivered to the Company by Purchaser upon
      execution of the Agreement by the Parties. At the First Closing, the Company
      shall issue and deliver the First Closing Certificate subject to Section 1.3.
      At
      the Final Closing, the Purchaser shall deliver to the Company the sum of Two
      Hundred and Fifty Thousand Dollars ($250,000.00) (the “Final
      Payment”)
      and
      the Company shall issue and deliver to the Purchaser the Final Closing
      Certificate.

     

    1.3  Closing.

     

    (a)  Closings.
      The
      First Closing and the Final Closing shall take place at the offices of
      Purchaser’s counsel, Kirkpatrick & Lockhart Nicholson Graham, LLP, located
      at Miami Center, 20th Floor, 201 S. Biscayne Blvd., Miami, FL 33131; provided,
      that all conditions precedent set forth in Sections 4.1 and 4.2 hereof shall
      have been satisfied or waived in writing. 

     

    (b)  The
      Company’s Deliveries Upon Execution of the Agreement.
      Subject
      to the terms and conditions of this Agreement, the Company shall deliver the
      following:

     

    (i)
      An
      original stock certificate evidencing an amount of Purchased Shares which
      represent forty percent (40%) of all of the issued and outstanding shares of
      Company Common Stock as of the First Closing Date, accompanied by stock
      powers (endorsed in blank) duly executed by an officer of Company and any
      necessary stock transfer tax affixed thereto. This First Closing Certificate
      shall be delivered to the Escrow Agent to be held in escrow until the First
      Closing Date; 

     

    (i)
       the
      Shareholders’ Agreement, in the form attached hereto as Exhibit
      A.

     

    (ii) the
      Escrow Agreement, in the form attached hereto as Exhibit
      B.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (c)  The
      Purchaser’s Deliveries Upon Execution of the Agreement.
      Subject
      to the terms and conditions of this Agreement, Purchaser shall deliver to the
      Company the following:

     

    (i) the
      Shareholders’ Agreement, in the form attached hereto as Exhibit
      A.

     

    (ii) the
      Escrow Agreement, in the form attached hereto as Exhibit
      B.

     

    (d)  Deliveries
      At the First Closing.
      Subject
      to the terms and conditions of this Agreement, the following duly executed
      documents shall be delivered at the First Closing:

     

    (i) the
      Company shall deliver to Purchaser the Consents set forth on Schedule
      3.1(d); and

     

    (ii)
      the
      Company shall deliver to Purchaser the Officer’s Certificate set forth
in
      Section 4.1(e); and

     

    (iii) the
      Company shall deliver to Purchaser the Secretary’s Certificate required
      by Section 4.1(i); and

     

    (iv) the
      Escrow Agent shall release the First Closing Certificate to
      Purchaser.

     

    (e)  The
      Company’s Deliveries At the Final Closing.
      Subject
      to the terms and conditions of this Agreement, Company shall deliver the
      following duly executed documents:

     

    (i)
      An
      original stock certificate evidencing an amount of Purchased Shares, such that
      the Purchased Shares evidenced by the First Closing Certificate, plus the
      Purchased Shares issued by the Company to the Purchaser at the Final Closing,
      represent in aggregate eighty percent (80%) of all of the issued and
      outstanding shares of Company Common Stock as of the Final Closing Date. The
      Final Closing Certificate shall be accompanied by stock powers (endorsed in
      blank) duly executed by an officer of the Company and any necessary stock
      transfer tax affixed thereto; 

     

    (ii) the
      Consents set forth on Schedule 3.1(d);

     

    (iii) the
      Officer’s Certificate set forth in Section 4.1(e); and

     

    (iv) the
      Secretary’s Certificate required by Section 4.1(i).

     

    (f)  Purchaser’s
      Deliveries At the Final Closing.
      Subject
      to the terms and conditions of this Agreement, Purchaser shall pay and deliver
      to Company the Final Payment.

     

    2.  Additional
      Agreements.
      

     

    2.1  Audits.
       The
      Company hereby agrees that its financial statements shall be subject to an
      independent audit (each an “Audit”)
      for
      the period of Fiscal Year 2004 and Fiscal Year 2005 (each an “Audited
      Period”).
      Purchaser shall utilize an independent certified public accountant qualified
      to
      practice before the SEC to complete such audit, and shall bear the costs for
      such audit only insofar as such audit covers the Audited Period. 

     

    2.2  Best
      Efforts.
      Subject
      to the terms and conditions provided in this Agreement, each of the parties
      shall use its best efforts in good faith to take or cause to be taken as
      promptly as practicable all reasonable actions that are within its power to
      cause to be fulfilled those conditions precedent to its obligations or the
      obligations of the other party to consummate the transactions contemplated
      by
      this Agreement that are dependent upon its actions.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    2.3  Further
      Assurances.
      Each
      party shall deliver any and all other instruments or documents required to
      be
      delivered pursuant to, or necessary or proper in order to give effect to, the
      provisions of this Agreement, including, without limitation, all necessary
      stock
      powers and such other instruments of transfer as may be necessary or desirable
      to consummate the transactions contemplated by this Agreement.

     

    3.  Representations
      and Warranties. 

     

    3.1  Representations
      and Warranties as to the Company.
      As of
      each Closing, the Company hereby, represents and warrants to Purchaser as
      follows:

     

    (a)  Capitalization.
      (i) As
      of November 1, 2006, the authorized capital stock of the Company consists solely
      of One Thousand (1000) shares of common stock, $1.00 par value per share,
      of which One Thousand (1000) shares are issued and outstanding. Prior or on
      the
      date of each Closing, the Company shall have increased its authorized common
      stock as set forth in Schedule 3.1(a) in order to effectuate the transactions
      contemplated by this Agreement. As of each Closing Date, all shares of Company
      Common Stock have been duly authorized and validly issued and are fully paid
      and
      non-assessable. 

     

    (ii)
      All
      prior
      offerings and issuances of Company Common Stock have been made in accordance
      with applicable federal and state securities Laws. Except as disclosed in
      Schedule 3.1(a), and (i) no shares of the Company’s capital stock are
      subject to rights of first refusal, preemptive rights or any other similar
      rights or any liens or encumbrances suffered or permitted by the
      Company, (ii) there are no outstanding debt securities, (iii) there
      are no outstanding options, warrants, scrip, rights to subscribe to, calls
      or
      commitments of any character whatsoever relating to, or securities or rights
      convertible into, any shares of capital stock of the Company, or contracts,
      commitments, understandings or arrangements by which the Company is or may
      become bound to issue additional shares of capital stock of the Company or
      options, warrants, scrip, rights to subscribe to, calls or commitments of any
      character whatsoever relating to, or securities or rights convertible into,
      any
      shares of capital stock of the Company, (iv) there are no outstanding
      securities or instruments of the Company which contain any redemption or similar
      provisions, and there are no contracts, commitments, understandings or
      arrangements by which the Company is or may become bound to redeem a security
      of
      the Company, (v) there are no securities or instruments containing
      anti-dilution or similar provisions that will be triggered by the sale of the
      common shares of Company Common Stock as described in this Agreement
      and (vi) the Company does not have any stock appreciation rights or
“phantom stock” plans or agreements or any similar plan or agreement.

     

    (b)  Organization;
      Good Standing; Power. The
      Company is a corporation duly
      organized, validly existing and in good standing under the Laws of the State
      of
      Tennessee, and has full corporate power and authority to own, lease and operate
      its assets and properties and to carry on its Business as presently conducted
      by
      it. Schedule 3.1(b) hereto sets forth a true and complete list of all states
      and
      other jurisdictions in which the Company is duly qualified and in good standing
      to transact business as a foreign corporation. Except for those states and
      jurisdictions set forth on Schedule 3.1(b), there are no other states or
      jurisdictions in which the character and location of the properties owned or
      leased by the Company and the conduct of its Business make any such
      qualification necessary, except any where the failure to be so qualified would
      not have a Material Adverse Effect.

     

    (c)  Authority;
      Validity; No Conflicts.
      The
      execution and delivery by the Company of this Agreement, the performance by
      the
      Company of its obligations hereunder, and the consummation of the transactions
      contemplated thereby, have been duly authorized by all necessary corporate
      action on the part of the Company, and the Company has all necessary corporate
      power with respect thereto. This Agreement is the valid and binding obligation
      of the Company, enforceable against it in accordance with its terms, except
      to
      the extent that enforceability thereof may be limited by general equitable
      principles or the operation of bankruptcy, insolvency, reorganization,
      moratorium or similar Laws. Except as set forth on Schedule 3.1(c), neither
      the
      execution and delivery by the Company of this Agreement, nor the consummation
      of
      the transactions contemplated hereby, nor the performance by the Company of
      its
      obligations hereunder, shall (or, with the giving of notice or the lapse of
      time or both, would) (i) conflict with or violate any provision of the
      Charter or By-Laws of the Company, as amended; (ii) give rise to a
      conflict, breach or default, or any right of termination, cancellation or
      acceleration of remedies or rights, or otherwise result in a loss of benefits
      to
      the Company, under the provisions of any note, bond, mortgage, indenture,
      license, agreement or other instrument or obligation to which the Company is
      a
      party or by which it or any of its properties or assets is otherwise
      bound; (iii) violate any Law applicable to the Company or any of its
      properties or assets; (iv) result in the creation or imposition of any Lien
      upon any of the properties or assets of the Company or cause Purchaser or the
      Company to be subject to any Tax; (v) interfere with or otherwise adversely
      affect the ability of the Company to carry on the business as presently
      conducted; or (vi) contravene, conflict with, or result in a violation of
      any of the terms or requirements of, or give rise to any right to revoke,
      suspend, terminate or modify any Permit.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (d)  Governmental
      Authorizations; Third-Party Consents.
      Except
      as set forth on Schedule 3.1(d) hereto, no approval, consent, waiver, exemption,
      order, authorization or other action by, or notice to or filing with, any
      governmental authority or any Person, and no lapse of a waiting period, is
      required to be obtained by the Company in connection with (or in order to
      permit) the execution, delivery or performance by any of them of this Agreement
      or the consummation of the transactions contemplated hereby or
      thereby (collectively, the “Consents”).

     

    (e)  Financial
      Statements.
      Within
      sixty (60) days of the Final Closing, the Company will deliver to Purchaser
      true and complete copies of its (i) audited balance sheet as of December
      31, 2004 and the related audited statements of income (loss), retained
      earnings and cash flow for the fiscal year then ended (the “2004
      Financial Statements”)
      and (ii) audited balance sheet as of December 31, 2005 and the related
      unaudited statements of income (loss), retained earnings and cash flow for
      the fiscal year then ended (the “2005
      Financial Statements”) and
      will
      deliver to Purchaser a true and complete copy of the Estimated 2006 Balance
      Sheet and Estimated 2006 Income Statement. The Financial Statements upon
      completion will be attached hereto as Schedule 3.1(e). 

     

    (f)  Interests
      in Other Entities.
      The
      Company does not, directly or indirectly, (i) own, of record or
      beneficially, any shares of voting stock or any other equity securities of
      any
      Person; (ii) have any other ownership or equity or debt interest, of record
      or beneficially, in any Person; or (iii) have any obligation or right,
      fixed or contingent, to purchase or subscribe for any interest in, advance
      or
      loan monies to, or in any way make an investment in, any Person or to share
      any
      profits or capital investments in other Person.

     

    (g)  Title
      to Properties; Leases.
      Except
      as set forth on Schedule 3.1(g), the Company has good and marketable title
      to
      all of its properties and assets, real and personal, including, but not limited
      to, those reflected in the audited balance sheet contained in the 2005 Financial
      Statements (except as since sold or otherwise disposed of in the ordinary
      course of business, or as expressly provided for in this Agreement), free and
      clear of all encumbrances, liens or charges of any kind or character except:
      (a) those securing liabilities of the Company incurred in the ordinary
      course (with respect to which no default exists); (b) liens of
      real estate and personal property taxes; and (c) imperfections of
      title and encumbrances, if any, which, in the aggregate (i) are not
      substantial in amount; (ii) do not detract from the value of the
      property subject thereto or impair the operations of the Company;
      and (iii) do not have a Material Adverse Effect on the business,
      properties or assets of the Company. 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (h)  Absence
      of Undisclosed Liabilities.
      The
      Company does not have any Liabilities, including guarantees and indemnities
      by
      the Company of Liabilities of any other Person, except (i) Liabilities as
      and to the extent reflected on the Estimated 2006 Balance Sheet; (ii)
      Liabilities incurred by it in the ordinary course of business and consistent
      with past practice since the date of the 2005 Financial Statement (none of
      which is a material Liability for breach of contract, breach of warranty, tort,
      infringement, claim, lawsuit or other proceeding) and adequately reflected
      on
      the books and records of the Company; (iii) obligations not in default
      under contracts entered into by it in the ordinary course of business;
      and (iv) the Liabilities set forth on Schedule 3.1(h) hereto.

     

    (i)  Litigation.
      Except
      as set forth on Schedule 3.1(i) hereto, there are no claims, suits or actions,
      administrative, arbitration or other proceedings, or governmental investigations
      pending or threatened against or affecting, or reasonably likely to adversely
      affect, the Company or any of its properties, assets or business or the
      transactions contemplated hereby. No event has occurred and no circumstance
      exists that may give rise to or serve as a reasonable basis for any claim,
      suit,
      action or other proceeding to be brought or threatened against the Company.
      There are no outstanding judgments, orders, stipulations, injunctions, decrees
      or awards against the Company that have not been fully satisfied.

     

    (j)  Material
      Contracts.
      Schedule 3.1(j) hereto sets forth a true and complete list, and brief
      description, of each Material Contract. True and complete copies of all Material
      Contracts required to be set forth on Schedule 3.1(j) have been furnished to
      Purchaser and, except as set forth on Schedule 3.1(j), each of them is in full
      force and effect. Except as set forth on Schedule 3.1(j), neither the Company
      nor any other Person that is a party to a Material Contract or is otherwise
      bound thereby is in default thereunder, and no event, occurrence, condition
      or
      act exists that, with the giving of notice or the lapse of time or both, would
      give rise to any default or right of cancellation thereunder. There have been
      no
      threatened cancellations of any of the Material Contracts and there are no
      outstanding disputes thereunder. There are no agreements, understandings or
      arrangements with any other Person in respect of the Material Contracts
      that (i) give any Person the right to renegotiate or require a
      reduction in the price paid to the Company or the repayment of any amount
      previously paid, (ii) provide for the sharing of any revenues or
      profits by or with the Company or (iii) provide for discounts,
      allowances or extended payment terms.

     

    (k)  Employee
      Arrangements.
      The
      Company does not have any employee benefit plans.

     

    (l)  Tax
      Matters.
      Except
      as set forth on Schedule 3.1(l) hereto: 

     

    (i) the
      Company has filed (on a timely basis) with the appropriate governmental
      agencies any federal, state, local and foreign Tax Returns required to be filed
      by it and has timely paid in full all Taxes due. All such Tax Returns were
      true
      and complete in all respects.

     

    (ii) there
      are
      no filed Tax liens, and no contemplated Tax liens upon any properties or assets
      of the Company other than any statutory liens for Taxes not yet due and
      payable;

     

    (iii) the
      Company has not waived any statute of limitations in respect of Taxes or
      executed or filed with any governmental authority any agreement extending the
      period for the assessment or collection of any Taxes, and it is not a party
      to
      any pending or threatened suit, action or proceeding by any governmental
      authority for the assessment or collection of Taxes;

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (iv) there
      is
      no unresolved claim by a governmental authority in any jurisdiction where the
      Company does not file Tax Returns that the Company is or may be subject to
      taxation by such jurisdiction;

     

    (v) the
      Company has timely withheld and paid all Taxes required to have been withheld
      and paid in connection with amounts paid or owing to any employee, independent
      contractor, creditor, or other Person;

     

    (vi) the
      unpaid Taxes of the Company (A) did not, as of the date of the Estimated
      2006 Balance Sheet, exceed the reserve for Tax Liabilities (other than any
      reserve for deferred Taxes established to reflect timing differences between
      book and Tax income) set forth on the face of the Estimated 2006 Balance Sheet
      and (B) will not exceed that reserve, as adjusted for the passage of time
      through the Closing Date in accordance with the past custom and practice of
      the
      Company in filing its Tax Returns;

     

    (vii) since
      the
      date of its incorporation, the Company has always been a Subchapter S
      Corporation within the meaning of Section 1361(a)(1) of the Code.

     

    (m)  Compliance
      with Applicable Laws.
      The
      Company is and has been in compliance with all Laws applicable to the Company
      or
      to the conduct of its business or operations or to the use of its properties
      or
      assets, including, without limitation, all Tax, ERISA, privacy, employment,
      environment and human rights Laws. The Company has not received written notice
      of any violation or alleged violation of any Law by the Company. To the
      knowledge of the Company, there is no pending or proposed legislation applicable
      to the Company or to the conduct of its business or operations that, if enacted,
      could reasonably be expected to have a Material Adverse Effect. No event has
      occurred and no circumstance exists that could reasonably be expected to
      constitute or result in (with or without notice or lapse of time or both) a
      violation of or failure to comply with (i) a material requirement of any
      Law by the Company or (ii) an order of any court with respect to which the
      Company or any of its assets or properties is subject. 

     

    (n)  Regulatory
      Permits.
      The
      Company possesses all material certificates, authorizations and permits issued
      by the appropriate federal, state or foreign regulatory authorities necessary
      to
      conduct their respective businesses, and Company has not received any notice
      of
      proceedings relating to the revocation or modification of any such certificate,
      authorization or permit.

     

    (o)  Environmental
      Matters.
      To the
      Company’s knowledge, the Company is not in violation of any Environmental Law,
      and, to its knowledge, no material expenditures are or will be required in
      order
      to comply with any Environmental Law.

     

    (p)  Absence
      of Certain Changes.
      Except
      as and to the extent set forth on Schedule 3.1(p) hereto, since October 30,
      2006, the Company has not had any material adverse change in the
      business.

     

    (q)  Brokers.
      Except
      as set forth on Schedule 3.1(q) hereto, no agent, broker, firm or other Person
      acting on behalf of the Company, or under the authority of any of the foregoing,
      is or shall be entitled to a brokerage commission, finder’s fee or similar
      payment in connection with any of the transactions contemplated hereby from
      the
      Company or Purchaser.

     

    (r)  Disclosure.
      No
      representation or warranty made by the Company herein contains or will contain
      any untrue statement of a material fact or omits or will omit to state a
      material fact necessary in order to make the statements herein or therein not
      misleading.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (s)  Affiliated
      Transactions.
      Except
      as set forth on Schedule 3.1(s) hereto, no director or officer of the
      Company (or any of their respective Affiliates or Associates) (i) is a
      party to or otherwise a beneficiary of any agreement, transaction or
      arrangement (oral or written) with or involving the Company or any
      Affiliate or Associate of the Company or (ii) has any claim, monetary or
      otherwise, against the Company. 

     

    (t)  Disclosure
      Schedules.
      The
      Schedules are integral parts of this Agreement. Nothing in a schedule shall
      be
      deemed adequate to disclose an exception to a representation or warranty made
      herein, unless the schedule identifies the exception with reasonable
      particularity and describes the relevant facts in reasonable detail, including
      by explicit cross-reference to another schedule to this Agreement. Without
      limiting the generality of the foregoing, the mere listing, or inclusion of
      a
      copy, of a document or other item shall not be deemed adequate to disclose
      an
      exception to a representation or warranty made herein, unless the representation
      or warranty is being made as to the existence of the document or other item
      itself. The Company is responsible for preparing and arranging the Schedules
      corresponding to the lettered and numbered sections contained herein. Disclosure
      made in a specific schedule shall be deemed not to have been disclosed with
      respect to any other schedule unless an explicit cross-reference is
      appropriately made.

     

    3.2  Representations
      and Warranties of Purchaser.
      As of
      each Closing, Purchaser hereby represents and warrants to the Company as
      follows:

     

    (a)  Organization
      and Power.
      Purchaser is a corporation duly organized, validly existing and in good standing
      under the Laws of the State of Nevada, and has full corporate power and
      authority to own, lease and operate its assets and properties and to carry
      on
      its business as presently conducted by it. 

     

    (b)  Authority;
      Validity; No Conflicts.
      The
      execution and delivery by Purchaser of this Agreement, the performance by
      Purchaser of its obligations under this Agreement and the consummation of the
      transactions contemplated hereby and thereby, have been duly authorized by
      all
      necessary corporate action on the part of Purchaser, and Purchaser has all
      necessary corporate power with respect thereto. This Agreement shall be the
      valid and binding obligations of Purchaser, enforceable against it in accordance
      with their respective terms, except to the extent that enforceability thereof
      may be limited by general equitable principles or the operation of bankruptcy,
      insolvency, fraudulent transfer, reorganization, moratorium or similar Laws.
      Neither the execution and delivery by Purchaser of this Agreement nor the
      consummation of the transactions contemplated hereby or thereby, nor the
      performance by Purchaser of its obligations hereunder or thereunder,
      shall (or, with the giving of notice or the lapse of time or both,
      would) (i) conflict with or violate any provision of the Certificate of
      Incorporation or By-Laws of Purchaser; (ii) violate any Law applicable to
      Purchaser or any of its properties or assets; or (iii) conflict with or
      cause a default under any material contract or agreement to which Purchaser
      is a
      party.

     

    (c)  Compliance
      with Law.
      Purchaser is in compliance with all applicable Laws, except for any
      non-compliance as would not have a Material Adverse Effect on the financial
      condition, business or assets of Purchaser and its subsidiaries, taken as a
      whole.

     

    (d)  Capitalization.

     

    (i) The
      authorized capital stock of the Purchaser consists of (i) Fifty Five
      Million (55,000,000) shares of common stock, $0.01 par value per share, of
      which One Thousand (1,000) shares are issued and outstanding. All outstanding
      shares of Purchaser capital stock have been duly authorized and validly issued
      and are fully paid and non-assessable. All prior offerings and issuances of
      Purchaser capital stock have been made in accordance with applicable federal
      and
      state securities Laws. There are no outstanding options, warrants, scrip, rights
      to subscribe to, calls or commitments of any character whatsoever relating
      to,
      or securities or rights convertible into, any shares of capital stock of the
      Purchaser, or contracts, commitments, understandings or arrangements by which
      the Purchaser is or may become bound to issue additional shares of capital
      stock
      of the Purchaser or options, warrants, scrip, rights to subscribe to, calls
      or
      commitments of any character whatsoever relating to, or securities or rights
      convertible into, any shares of capital stock of the Purchaser. The Purchaser
      does not have any stock appreciation rights or “phantom stock” plans or
      agreements or any similar plan or agreement. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (e)  Investment
      Intent.
      Purchaser
      is acquiring the Purchased Shares as principal for its own account for
      investment purposes only and not with a view to or for distributing or reselling
      such Purchased Shares or any part thereof, without prejudice, however, to such
      holder’s right, at all times to sell or otherwise dispose of all or any part of
      such Purchased Shares in compliance with applicable federal and state securities
      laws.  Subject to the immediately preceding sentence, nothing contained
      herein shall be deemed a representation or warranty by such Purchaser to hold
      the Purchased Shares for any period of time. Such Purchaser is acquiring the
      Purchased Shares hereunder in the ordinary course of its business. Such
      Purchaser does not have any agreement or understanding, directly or indirectly,
      with any Person to distribute any of the Purchased Shares.
      

     

    4.  Conditions
      to Closing. 

     

    4.1  Conditions
      to Purchaser’s Obligation to Close.
      The
      obligation of Purchaser to close the transactions contemplated by this Agreement
      is subject to the satisfaction of each of the following conditions, any one
      or
      more of which may be waived by Purchaser in writing at or prior to each
      Closing:

     

    (a)  Agreements
      and Conditions.
      On or
      before each Closing Date, the Company shall have complied with and duly
      performed all agreements, covenants and conditions on their part to be complied
      with and performed pursuant to or in connection with this Agreement on or before
      the Closing Date.

     

    (b)  Representations
      and Warranties.
      The
      representations and warranties of the Company contained in this Agreement shall
      be true and complete on and as of each Closing.

     

    (c)  No
      Legal Proceedings.
      No
      court or governmental suit, action or proceeding shall have been each instituted
      or overtly threatened to restrain or prohibit the transactions contemplated
      hereby, and, as of each Closing Date, there will be no court or governmental
      action or proceeding pending or threatened against or affecting the Company
      that
      involves a demand for any judgment or liability, whether or not covered by
      insurance, that could reasonably be expected to have a Material Adverse
      Effect.

     

    (d)  Board
      Approval.
      The
      transactions as set forth in this Agreement were approved by the Board of
      Directors of the Company.

     

    (e)  Officer’s
      Certificate.
      At each
      Closing, Purchaser shall have received a certificate dated the date of Closing,
      and executed by an authorized executive officer of the Company to the effect
      that the conditions set forth in Sections 4.1(a), 4.1(b) and 4.1(g)
      hereof shall have been satisfied.

     

    (f)  Absence
      of Material Changes.
      The
      Company shall have not experienced any material adverse change in its business,
      operations, customers, suppliers, assets, liabilities, prospects or
      condition (financial or otherwise) since October 30, 2006.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (g)  Consents.
       All
      Consents required to be set forth on Schedule 3.1(d) hereto shall have been
      obtained and delivered to Purchaser.

     

    (h)  Stock
      Certificate.
      On each
      Closing Date, Purchaser shall have received an originally issued stock
      certificate evidencing all of the Company Common Stock, as described in Section
      1.1, with duly executed stock powers attached, in proper form for
      transfer.

     

    (i)  Secretary’s
      Certificate.
      At each
      Closing, Purchaser shall have received a certificate, dated the date of Closing,
      and executed by the Secretary of the Company, certifying the incumbency and
      signatures of the officers of the Company authorized to act on behalf of the
      Company in connection with the transactions contemplated hereby and attaching
      and certifying as true and complete copies of (i) the resolutions duly
      adopted by the Board of Directors of the Company authorizing and approving
      the
      execution and delivery of this Agreement and the consummation of the
      transactions contemplated hereby and (ii) the Charter and By-Laws of the
      Company, each as may have been amended up through the Closing Date.

     

    (j)  Company
      Capitalization.
      Prior
      or on the date of each Closing, the Company shall have increased its authorized
      common stock as set forth in Schedule 3.1(a) in order to effectuate the
      transactions contemplated by this Agreement. If the Company effectuates an
      increase in the Company’s capitalization that does not adhere to Schedule
      3.1(a), the Company shall notify the Purchaser immediately following such
      increase. 

     

    (k)  First
      Closing Certificate.
      At the
      Final Closing, the Company shall issue and transfer to the Purchaser the First
      Closing Certificate, such that the Purchased Shares represent forty
      percent (40%) of all of the issued and outstanding shares of Company Common
      Stock as of the First Closing Date. 

     

    (l)  Second
      Closing Certificate.
      At the
      Final Closing, the Company shall issue and transfer to the Purchaser the Second
      Closing Certificate, such that the Purchased Shares evidenced by the Second
      Closing Certificate, plus the Purchased Shares evidenced by First Closing
      Certificate, represent eighty percent (80%) of all of the issued and
      outstanding shares of Company Common Stock as of the Final Closing Date.

     

    (m)  Other
      Closing Deliveries.
      Purchaser shall have received at or prior to the Final Closing such other
      documents, instruments and certificates as Purchaser may reasonably request
      in
      order to effectuate the transactions contemplated hereby.

     

    4.2  Conditions
      to Company’s Obligations to Close.
      The
      obligations of to close the transactions contemplated by this Agreement are
      subject to the satisfaction of each of the following conditions, any one or
      more
      of which may be waived by the Company in writing at or prior to the First
      Closing and the Final Closing:

     

    (a)  Agreements
      and Conditions.
      As of
      each Closing, Purchaser shall have complied with and duly performed all
      agreements, covenants and conditions on its part to be complied with and
      performed pursuant to or in connection with this Agreement.

     

    (b)  Representations
      and Warranties.
      The
      representations and warranties of Purchaser contained in this Agreement shall
      be
      true and complete on and as of each Closing Date.

     

    (c)  No
      Legal Proceedings.
      No
      court or governmental suit, action or proceeding shall have been instituted
      or
      overtly threatened to restrain or prohibit the transactions contemplated
      hereby.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (d)  Purchase
      Price.
      Purchaser shall have delivered the Purchase Price in accordance with
      Section 1.2 hereof.

    

    (e)  Shareholders’
      Agreement.
      Upon
      execution of the Agreement, ARC and LJ&J Enterprises, Inc., a Pennsylvania
      corporation, shall simultaneously enter into that certain Shareholders Agreement
      which governs the relationships between the Shareholders of Purchaser and the
      ownership and management of Purchaser, substantially in the same form and
      content as attached hereto on Exhibit
      A.
      

     

    5.  Certain
      Tax Matters.

     

    5.1  Tax
      Indemnification.
      The
      Company shall defend, indemnify and hold harmless the Purchaser and its
      directors, officers, stockholders, agents, Affiliates and Associates, successors
      and permitted assigns from and against, and shall pay and reimburse the
      foregoing persons for, any and all losses, Liabilities, claims, obligations,
      penalties, damages, costs and expenses (including all reasonable attorneys’
fees and disbursements and other costs incurred or sustained by an Indemnitee
      in
      connection with the investigation, defense or prosecution of any such claim
      or
      any action or proceeding between the Indemnitee and the Indemnifying Party 
or between the Indemnitee and any third party or otherwise), whether or not
      involving a third-party claim (collectively, “Losses”),
      relating to or arising out of (i) all Taxes or the non-payment thereof
      of the Company for all taxable periods ending on or prior to December 31, 2006
       (the “Pre-Closing
      Tax Period”); (ii) all
      Taxes of any member of an affiliated, consolidated, combined or unitary group
      of
      which the Company (or any predecessor of the Company) is or was a member on
      or prior to December 31, 2006, including pursuant to Treasury Regulations
      Section 1.1502-6 or any analogous or similar Law; and (iii) all
      Taxes of any Person (other than the Company) imposed on the Company as a
      transferee or successor, by contract or pursuant to Law; provided, however,
      that
      the Company shall be liable only to the extent that the aggregate amount of
      such
      Taxes shall exceed the amount, if any, expressly and properly reserved for
      such
      Taxes (excluding any reserve for deferred Taxes established to reflect
      timing differences between book and tax income) on the Estimated 2006 Balance
      Sheet.

     

    5.2  Cooperation
      on Tax Matters.
      

     

    (a) Purchaser
      and the Company shall cooperate fully, as and to the extent reasonably requested
      by any other party, in connection with the filing of Tax Returns and any audit,
      litigation or other proceeding with respect to Taxes pursuant to this
      Section 5. Such cooperation shall include the retention and (upon the
      other party’s request) the provision of records and information that are
      reasonably relevant to any such audit, litigation or other proceeding and making
      employees or representatives available on a mutually convenient basis to provide
      additional information and explanation of any materials provided hereunder.
      The
      Company (after the Closing) shall (i) retain all books and records
      with respect to Tax matters pertinent to the Company relating to any taxable
      period beginning before the Closing Date until the expiration of the applicable
      statute of limitations for the respective taxable periods, and to abide by
      all
      record retention agreements entered into with any taxing authority.

     

    (b) Each
      of
      Purchaser and the Company shall, upon request from the other party, use
      reasonable best efforts to obtain any certificate or other document from any
      governmental authority or other Person as may be necessary to mitigate, reduce,
      defer or eliminate any Tax that could be imposed (including, but not
      limited to, any with respect to the transactions contemplated
      hereby).

     

    5.3  Certain
      Taxes.
      All
      transfer (including real property), documentary, sales, stamp, registration
      and other similar Taxes and fees (including any penalties and interest)
      incurred in connection with this Agreement (including any corporate-level
      gains Tax triggered by the sale of the Company Common Stock and any similar
      Tax
      or other Tax imposed by States or subdivisions) shall be paid by the Company
      when due, and the Company will file all necessary Tax Returns and other
      documentation with respect to all such transfer, documentary, sales, stamp,
      registration and other similar Taxes and fees. If required by applicable Law,
      Purchaser will, and will cause its Affiliates to, join in the execution of
      any
      such Tax Returns and other documentation.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    6.  Survival;
      Indemnification.

     

    6.1  Survival
      of Representations.
      Notwithstanding any right of Purchaser to investigate the business and condition
      of the Company, Purchaser shall be entitled to rely upon the representations,
      warranties, covenants and agreements of the Company. All representations,
      warranties and agreements contained in this Agreement (including the
      Schedules hereto) and in all certificates required hereby to be delivered with
      respect hereto shall be deemed to be representations, warranties and agreements
      hereunder and shall survive the Final Closing Date (or, if there is no
      Closing, the date hereof) for a period of twelve (12) months; provided, however,
      that (i) any such representations, warranties and agreements shall survive
      the time(s) that they would otherwise terminate with respect to claims of which
      notice has been given as provided in this Agreement prior to such termination;
      and (ii) such time limitation shall not apply to the representations,
      warranties and agreements contained in (A) Sections 3.1 (h), (l), (m)
      (n) (o) and (p) hereof, which shall survive until thirty (30) days
      following the expiration of the applicable statute of
      limitations (including any extension(s) thereof), and (B) Sections
      3.1(a), (c), and (r), 3.2(a) and (b) hereof, which shall survive
      indefinitely. Any limitation or qualification set forth in any one
      representation and warranty contained in Section 3 hereof shall not limit
      or qualify any other representation and warranty contained in such Section.
      Each
      representation and warranty included in Section 3 is independent and shall
      be interpreted without regard to any other representation or warranty contained
      in Section 3 (including any more inclusive representation or
      warranty). The waiver by any party of any condition at the Closing or the breach
      or inaccuracy of any representation or warranty, or the breach of or
      non-compliance with any covenant or obligation, shall not affect the right
      of
      such party to the indemnification, payment or reimbursement of Losses or any
      other remedy based on such breach, inaccuracy or non-compliance.

     

    6.2  Indemnities
      of the Company.
      The
      Company shall indemnify, defend and hold harmless Purchaser, its Affiliates
      and
      Associates and their respective directors, officers, stockholders, agents,
      successors and permitted assigns from and against, and shall pay and reimburse
      the foregoing Persons for, any and all Losses relating to or arising out of
      the
      breach (or alleged breach if asserted by a third party) of any
      representation, warranty, covenant or agreement of the Company contained in
      this
      Agreement. 

     

    6.3  Indemnity
      of Purchaser.
      Purchaser shall indemnify, defend and hold harmless the Company and its
      permitted assigns from and against, and shall pay and reimburse the foregoing
      Persons for, any and all Losses relating to or arising out of the
      breach (or alleged breach if asserted by a third party) of any
      representation, warranty, covenant or agreement of Purchaser contained in this
      Agreement.

     

    6.4  Limitations
      on Indemnification.
      Notwithstanding any provision contained in this Section 6 to the contrary,
      no Indemnitee shall be entitled to assert any claim for indemnification in
      respect of breach(es) of representations and warranties under Sections 6.2
      or
      6.3 hereof until such time as all claims for indemnification (including
      those under Section 6 hereof) by such Person hereunder shall exceed
      $25,000 (the “Basket”),
      such
      Basket being deducted from any claim for indemnification; provided, however,
      that the aggregate dollar amount of Purchaser’s and the Company’s
      indemnification obligations hereunder may not exceed the Purchase Price (the
      “Claims
      Limitation”),
      minus
      the non-refundable portion of the Purchase Price, except (i) if the
      indemnifying party shall have provided information to Purchaser or to the
      Company, as the case may be, in connection herewith or made any representation
      or warranty contained herein that, in either case, was fraudulent or made in
      bad
      faith in which event neither the Basket nor the Claims Limitation shall
      apply.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    7.  Confidentiality.

     

    7.1  Confidentiality.
      From
      and after the Closing Date, the Company and the Company’s officers and
      representatives shall not at any time, directly or indirectly, use, exploit,
      communicate, disclose or disseminate any Confidential Information (as
      defined below) in any manner whatsoever (except disclosure to their
      personal financial or legal advisors and as may be required under legal process
      by subpoena or other court order; provided, that the Company will take
      reasonable steps to provide Purchaser with sufficient prior written notice
      in
      order to contest such requirement or order). Notwithstanding the foregoing,
      the
      Company (and each representative or other agent of each Company) may disclose
      to
      any and all Persons the tax treatment and tax structure of the transaction
      contemplated hereby; provided, however, that neither the Company nor any
      representative or agent thereof may disclose any information that is not
      necessary to understanding the tax treatment and tax structure of the
      transactions (including the identity of a party and any information that
      could lead another to determine the identity of a party) or any other
      information to the extent that such disclosure could result in a violation
      of
      any federal or state securities Laws. 

     

    7.2  Remedies
      upon Breach. The
      Company acknowledges and agrees that: (i) Purchaser (and the Company)
      would be irreparably injured in the event of a breach by the Company of any
      of
      the obligations under this Section 7; (ii) monetary damages would
      not be an adequate remedy for such breach; (iii) Purchaser (and
      the Company) shall be entitled to injunctive relief, without the necessity
      of
      the posting of a bond, in addition to any other remedy that they may have,
      in
      the event of any such breach; and (iv) the existence of any claims
      that the Company may have against Purchaser (and the Company), whether
      under this Agreement or otherwise, shall not be a defense to (or reason for
      the delay of) the enforcement by Purchaser of any of their rights or remedies
      under this Agreement.

     

    8.  Miscellaneous
      Provisions. 

     

    8.1  Counterparts;
      Interpretation.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed an original, and all of which shall constitute one and the same
      instrument. This Agreement supersedes all prior discussions and agreements
      between the parties with respect to the subject matter hereof, and this
      Agreement contains the sole and entire agreement among the parties with respect
      to the matters covered hereby. This Agreement shall not be altered or amended
      except by an instrument in writing signed by or on behalf of all of the parties
      hereto. No ambiguity in any provision hereof shall be construed against a party
      by reason of the fact it was drafted by such party or its counsel. References
      to
“including” means including without limiting the generality of any description
      preceding such term. Nothing expressed or implied in this Agreement is intended,
      or shall be construed, to confer upon or give any Person other than a party
      any
      rights or remedies under or by reason of this Agreement.

     

    8.2  Governing
      Laws.
      The
      validity and effect of this Agreement shall be governed by and construed and
      enforced in accordance with the laws of Nevada without regard to principles
      of
      conflicts of laws thereof. Any dispute, controversy or question of
      interpretation arising under, out of, in connection with or in relation to
      this
      Agreement or any amendments hereof, or any breach or default hereunder, shall
      be
      litigated exclusively in the state or federal courts of competent jurisdiction
      located in Nevada. Each of the parties hereby irrevocably submits to the
      jurisdiction of any court of competent jurisdiction located in Nevada. Each
      party hereby irrevocably waives, to the fullest extent it may effectively do
      so,
      the defense of an inconvenient forum to the maintenance of any such action
      in
      Nevada. 

     

    8.3  Partial
      Invalidity and Severability.
      All
      rights and restrictions contained herein may be exercised and shall be
      applicable and binding only to the extent that they do not violate any
      applicable laws and are intended to be limited to the extent necessary to render
      this Agreement legal, valid and enforceable. If any terms of this Agreement
      not
      essential to the commercial purpose of this Agreement shall be held to be
      illegal, invalid or unenforceable by a court of competent jurisdiction, it
      is
      the intention of the parties that the remaining terms hereof shall constitute
      their agreement with respect to the subject matter hereof and all such remaining
      terms shall remain in full force and effect. To the extent legally permissible,
      any illegal, invalid or unenforceable provision of this Agreement shall be
      replaced by a valid provision which will implement the commercial purpose of
      the
      illegal, invalid or unenforceable provision.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    8.4  Waiver.
      Any
      term or condition of this Agreement may be waived at any time by the party
      which
      is entitled to the benefit thereof, but only if such waiver is evidenced by
      a
      writing signed by such party. No failure on the part of a party to exercise,
      and
      no delay in exercising, any right, power or remedy created hereunder, shall
      operate as a waiver thereof, nor shall any single or partial exercise of any
      right, power or remedy by any such party preclude any other future exercise
      thereof or the exercise of any other right, power or remedy. No waiver by any
      party to any breach of or default in any term or condition of this Agreement
      shall constitute a waiver of or assent to any succeeding breach of or default
      in
      the same or any other term or condition hereof.

     

    8.5  Acceptance
      by Fax.
      This
      Agreement shall be accepted, effective and binding, for all purposes, when
      the
      parties have signed and transmitted to each other, by telecopier or otherwise,
      copies of the signature pages hereto.

     

    8.6  Fees
      and Disbursements.
      Each
      Party shall, respectively pay their own expenses incurred by each. including,
      but not limited to all costs and expenses, including the fees and disbursements
      of any counsel and accountants retained by them, incurred by them in connection
      with the preparation, execution, delivery and performance of this Agreement
      and
      the transactions contemplated hereby, whether or not the transactions
      contemplated hereby are consummated.

     

    8.7  Attorneys’
      Fees.
      In the
      event of any litigation arising under the terms of this Agreement, the
      prevailing party shall be entitled to recover its or their reasonable attorneys’
fees and court costs from the other party, including trial and appellate
      proceedings, as well as the costs of collecting any judgment.

     

    8.8  Further
      Assurances.
      Each
      party shall from time to time do and perform such additional acts and execute
      and deliver such additional documents and instruments as may be required or
      reasonably requested by any party to establish, maintain or protect its rights
      and remedies or to effect the purposes of this Agreement. 

     

    8.9  Notice.
      All
      notices and other communications hereunder shall be in writing and shall be
      deemed to have been given: (i) when delivered by hand or by confirmed facsimile
      transmission; (ii) one (1) day after delivery by internationally
      recognized express courier (i.e., Federal Express, DHL); or (iii)
      three (3) days after delivery by certified mail, postage prepaid, to a
      party at the following addresses (or at such other address for a party as
      shall be specified by like notice):

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	 	
              If
                to Company:

            	
              LJ&J
                Enterprises of Tennessee, Inc.

            
	 	 	
              P.O.
                Box 378

            
	 	 	
              Long
                Pond, PA 18334

            
	 	 	
              Attn: Joseph
                R. Mattiolli, III

            
	 	 	
              Telephone: (570)
                646-0898

            
	 	 	 
	 	 	 
	 	
              With
                a copy to:

            	
              Schulman,
                Treem, Kaminkow, Gilden & Ravenell, P.A. 

            
	 	 	
              1800
                World Trade Center

            
	 	 	
              410
                East Pratt Street

            
	 	 	
              Baltimore,
                MD 21202

            
	 	 	
              Attn: Robert
                B. Schulman

            
	 	 	
              Telephone: (410)
                332-0850

            
	 	 	
              Facsimile: (410)
                332-0866

            
	 	 	 
	 	 	 
	 	
              If
                to Purchaser:

            	
              Motorsports
                & Entertainment of Tennessee, Inc.,

            
	 	 	
              Route
                940, Pocono Lake Office Complex

            
	 	 	
              Pocono
                Lake, PA 18347

            
	 	 	
              Attn: A.
                Robert Koveleski

            
	 	 	
              Telephone: (858)
                558-0568

            
	 	 	
              Attn:
                Joseph R. Mattiolli, III

            
	 	 	
              Telephone:
                (570) 646-0808

            
	 	 	 
	 	 	 
	 	
              With
                a copy to:

            	
              Kirkpatrick
                & Lockhart Nicholson Graham LLP

            
	 	 	
              201
                South Biscayne Blvd.- Suite 2000

            
	 	 	
              Miami,
                FL 33131

            
	 	 	
              Attn: Clayton
                Parker, Esq.

            
	 	 	
              Telephone: (305)
                539-3375

            
	 	 	
              Facsimile: (305)
                358-7095

            
	 	 	 

    

    8.10  Termination.
      Subject
      to the provisions of Section 8.11 hereof, this Agreement may be terminated
      at any time prior to the Final Closing Date by any of the
      following:

     

    (a) By
      the
      mutual written agreement of Purchaser, and the Company;

     

    (b) By
      either
      Purchaser or the Company, if the Final Closing shall not have occurred by March
      31, 2007 upon written notice by such terminating party; provided that at the
      time such notice is given, a material breach of this Agreement by such
      terminating party shall not be the principal reason for the failure of the
      Final
      Closing to occur;

     

    (c) By
      Purchaser, by written notice to the Company, if (i) Purchaser, in its sole
      discretion, is unable to secure adequate financing on satisfactory terms; or
      (ii) there has been a material violation or breach of the Company’s
      covenants or agreements made herein or if any representation or warranty of
      the
      Company contained herein is materially inaccurate or misleading; or

     

    (d) By
      the
      Company, by written notice to Purchaser, if there has been a material violation
      or breach of any of Purchaser’s covenants or agreements made herein or if any
      representation or warranty of Purchaser contained herein is materially
      inaccurate or misleading.

     

    8.11  Effects
      of Termination.
      (a) If
      this Agreement shall be terminated as provided in Section 8.10 hereof, then
      this Agreement shall forthwith become void and there shall be no liability
      or
      obligation on the part of the parties hereto (or any of their respective
      stockholders, officers, directors, employees, legal beneficiaries, successors,
      Affiliates or Associates); provided, however, that (i) no party shall be
      relieved of any Losses occurring or sustained as a result of a breach of any
      of
      such party’s representations, warranties, covenants or agreements contained
      herein and (ii) if the Purchaser terminates this Agreement pursuant to
      Section 8.10(c)(ii), and the Company hereby agree to pay to the Purchaser
      Fifty Thousand Dollars ($50,000) in the aggregate for costs, fees and
      expenses of the Purchaser in connection with this transaction. Notwithstanding
      any termination of this Agreement, the provisions of
      Section 4.1 and
      this
      Section 8 shall survive.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    8.12  Assignment.
      This
      Agreement may not be assigned by the Company without the prior written consent
      of Purchaser; provided, however, that (i) Purchaser may assign or delegate
      any or all rights or obligations hereunder, to an Affiliate prior to Final
      Closing if necessary in connection with its financing or Tax planning
      and (ii) Purchaser may assign any and all of its rights hereunder to any
      lenders that provide financing to it in connection with the transactions
      contemplated hereby and in any related transactions; provided, further, that
      Purchaser may assign or delegate any or all of its rights or obligations
      hereunder, including its rights under Sections 6 and 7 hereof, to any subsequent
      purchaser of the Business, the Company, Purchaser or all or substantially all
      of
      Purchaser’s or the Company’s assets.

     

    8.13  Binding
      Effect; Benefits.
      This
      Agreement shall inure to the benefit of, and be binding upon, the parties hereto
      and their respective heirs, legal representatives, successors and permitted
      assigns. Nothing in this Agreement, express or implied, is intended to or shall
      confer upon any person other than the parties hereto, and their respective
      heirs, legal representatives, successors and permitted assigns, any rights,
      remedies, obligations or liabilities under, in connection with or by reason
      of
      this Agreement.

     

    8.14  Rules
      of Construction.

     

    Words
      used herein, regardless of the number and gender used, shall be deemed and
      construed to include any other number, singular or plural, and any other gender,
      masculine, feminine or neuter, as the context requires; as used herein, unless
      the context clearly requires otherwise, the words “hereof,” “herein,”
“hereinafter” and “hereunder” and words of similar import shall refer to this
      Agreement as a whole and not to any particular provision of this
      Agreement.

     

    A
      reference to any statute or statutory provision shall be construed as a
      reference to the same as it may have been, or as it may from time to time be,
      amended, modified or re-enacted.

     

    The
      terms
“dollars” and “$” mean United States dollars.

     

    All
      references to any Person shall mean and include the successors and permitted
      assigns of such Person, and all references to “including” and “include” shall be
      understood to mean “including, without limitation.”

     

    The
      table
      of contents, lists of annexes, schedules and exhibits and section headings
      used
      in this Agreement are for convenience of reference only and shall not affect
      the
      interpretation of this Agreement.

     

    This
      Agreement is between financially sophisticated and knowledgeable parties and
      is
      entered into by such party in reliance upon the economic and legal bargains
      contained herein, the language used in this Agreement has been negotiated by
      the
      parties hereto and shall be interpreted and construed in a fair and impartial
      manner without regard to such factors as the party who prepared, or caused
      the
      preparation of, this Agreement or the relative bargaining power of a
      party.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    8.15  Waiver
      of Jury Trial.
      THE
      PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY
      OF
      THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON
      OR
      ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY DOCUMENT
      CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT,
      COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
      OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR A PARTY’S ACCEPTANCE
      OF THIS AGREEMENT.

     

    [SIGNATURES
      APPEAR ON THE FOLLOWING PAGE]

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Stock Purchase Agreement the day and year
      first above written. 

     

    
      	 	
              COMPANY:

            
	 	 
	 	
              LJ&J
                ENTERPRISES OF TENNESSEE, INC.,

              a
                Tennessee corporation

            
	 	 
	 	
              By: 

            	 /s/
              Joseph R. Mattiolli, III  
	 	
              Name: 

            	Joseph
              R. Mattiolli, III  
	 	
              Title: 

            	 President

    

    
      	 	
               

            	    
	 	 
	 	
              PURCHASER:

            
	 	 
	 	
              MOTORSPORTS
                & ENTERTAINMENT OF 

              TENNESSEE,
                INC.,

              a
                Nevada corporation

            
	 	 
	 	
              By: 

            	 /s/
              A. Robert Koveleski   
	 	
              Name: 

            	A.
              Robert Koveleski 
	 	
              Title: 

            	 Secretary    
	 	 

    

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    ANNEX
      A

    

      TO
        STOCK
        PURCHASE
        AGREEMENT

    

    

      DEFINITIONS

    

    

    “Agreement”
      has
      the
      meaning given to such term in the Preamble to this Stock Purchase
      Agreement.

     

    “Affiliate”
      means,
      with respect to any Person, a Person that directly, or indirectly through one
      or
      more intermediaries, controls or is controlled by, or is under the common
      control with, the Person specified (as set forth in Rule 405 promulgated
      under the Securities Act of 1933).

     

    “Associate”
      means,
      when used to indicate a relationship with any Person, (1) a corporation or
      organization of which such Person is an officer or partner or is, directly
      or
      indirectly, the beneficial owner of 10 percent or more of any class of equity
      securities, (2) any trust or other estate in which such Person has a
      substantial beneficial interest or as to which such Person serves as trustee
      or
      in a similar capacity, and (3) any relative or spouse of such Person, or
      any relative of such spouse, who has the same home as such Person or who is
      a
      director or officer of the Person or any of its parents or subsidiaries (as
      set forth in Rule 405 promulgated under the Securities Act of
      1933).

     

    “Audit”
has
      the
      meaning given to such term in Section 2.1.

     

    “Audited
      Period”
has
      the
      meaning given to such term in Section 2.1.

     

    “Basket”
      has
      the
      meaning given to such term in Section 6.4.

     

    “Business”
      has
      the
      meaning given to such term in the Recitals to this Agreement.

     

    “Claims
      Limitation” has
      the
      meaning given to such term in Section 6.4.

     

    “Closing”
      means
      either the First Closing or the Final Closing, as described in
      Section 1.3(a).

     

    “Closing
      Date” means
      either the First Closing Date or the Final Closing Date.

     

    “Code”
      means
      the
      Internal Revenue Code of 1986, as amended (together with the rules and
      regulations thereunder).

     

    “Company”
      has
      the
      meaning given to such term in the Preamble to this Agreement.

     

    “Company
      Common Stock” has
      the
      meaning given to such term in the Recitals to this Agreement.

     

    “Confidential
      Information”
      means
      any and all information (oral or written) relating to the Company and/or
      Purchaser and its Affiliates or any of their operations or activities,
      including, but not limited to, the terms of this Agreement, information relating
      to trade secrets, plans, promotion and pricing techniques, procurement and
      sales
      activities and procedures, proprietary information, business methods and
      strategies (including acquisition strategies), software, software codes,
      advertising, sales, marketing and other materials, customers and supplier lists,
      data processing reports, customer sales analyses, invoice, price lists or
      information, and information pertaining to any lawsuits or governmental
      investigation, except such information that is in the public domain (such
      information not being deemed to be in the public domain merely because it is
      embraced by more general information that is in the public domain), other than
      as a result of a breach of any of the provisions hereof.

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    “Environmental
      Law”
means
      any applicable federal, state and local law, ordinance, rule or regulation
      that
      regulates, fixes liability for, or otherwise relates to, the handling,
      use (including use in industrial processes, in construction, as building
      materials, or otherwise), treatment, storage and disposal of hazardous and
      toxic
      wastes and substances, and to the discharge, leakage, presence, migration,
      actual release (whether by disposal, a discharge into any water source or
      system or into the air, or otherwise) of any pollutant or effluent.

     

    “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended, and all
      regulations promulgated thereunder.

     

    “Escrow
      Agreement” means
      Kirkpatrick & Lockhart Nicholson Graham, LLP.

     

    “Escrow
      Agreement” means
      that certain Escrow Agreement, dated November 21, 2006, by and between
      Purchaser, Company and Kirkpatrick & Lockhart Nicholson Graham, LLP, as
      Escrow Agent.

     

    “Estimated
      2006 Income Statement”
means
      unaudited income statement of the Company for the period ended September 30,
      2006.

     

    “Estimated
      2006 Balance Sheet”
means
      the unaudited balance sheets of the Company for the period ended September
      30,
      2006.

     

    “Final
      Closing Date”
      means a
      date within three (3) business days after the effectiveness of ARC’s
      Registration Statement on Form SB-2 in connection with those certain financing
      transactions with the Investors.

     

    “Financial
      Statements” mean
      2004
      Financial Statements, the 2005 Financial Statements, the Estimated 2006 Income
      Statement and the Estimated 2006 Balance Sheet, collectively.

     

    “Final
      Closing”
has
      the
      meaning given to such term in Section 1.1.

     

    “Final
      Closing Certificate”
has
      the
      meaning given to such term in Section 1.1.

     

    “Final
      Closing Date”
means
      the date when the Final Closing shall take place.

     

    “Final
      Payment”
      has the
      meaning given to such term in Section 1.2.

     

    “First
      Closing”
has
      the
      meaning given to such term in Section 1.1.

     

    “First
      Closing Certificate”
has
      the
      meaning given to such term in Section 1.1.

     

    “First
      Closing Date”
means
      January 1, 2007, when the First Closing shall take place.

     

    “Fiscal
      Year” means
      the
      fiscal year of the Company ending on December 31.

     

    “GAAP”
      means
      United States generally accepted accounting principles.

     

    “Indemnitee”
means
      any party which incurs Losses or receives notice of any claim or the
      commencement of any action or proceeding with respect to which the other party
      (or a party) is obligated to provide indemnification.

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

     

    “Indemnifying
      Party”
means
      any party which is obligated to provide indemnification to the Indemnitee in
      connection the Losses pursuant to the terms of this Agreement.

     

    “IRS”
      means
      the
      Internal Revenue Service.

     

    “Laws”
      mean
      material federal, state, local and foreign laws, statutes, ordinances, rules
      or
      regulations, orders and administrative rulings promulgated by any governmental
      or regulatory authority.

     

    “Liabilities”
      mean
      debts, liabilities, commitments or obligations, whether absolute or contingent,
      asserted or unasserted, known or unknown, liquidated or unliquidated, due or
      to
      become due, or fixed or unfixed.

     

    “Liens”
      mean
      all
      liens, mortgages, pledges, charges, claims, security interests or encumbrances
      of any nature whatsoever.

     

    “Losses”
      has
      the
      meaning given to such term in Section 5.1.

     

    “Material
      Adverse Effect” means
      an
      effect that is more than a minor, de minimis or minimal effect on the Business,
      operations, condition (financial or other) or prospects of the Company or
      the value of its properties or assets. 

     

    “Material
      Contract” means
      any
      contract, purchase order, agreement, mortgage, note, commitment, obligation
      and
      undertaking to which the Company is a party or by which it is otherwise bound
      that involves in excess of Twenty-Five Thousand
      Dollars ($25,000).

     

    “Permits”
      mean
      governmental permits, approvals, licenses, certificates, franchises,
      authorizations, consents and orders necessary for the operation of the Business
      in the manner that it is presently conducted. 

     

    “Person”
      or “Persons” means
      any
      stockholder, officer, employee or director of the Company, or any other natural
      person, corporation, partnership, limited liability company or other
      entity.

     

    “Pre-Closing
      Tax Period” has
      the
      meaning given to such term in Section 5.1.

     

    “Purchase
      Price”
      has the
      meaning given to such term in Section 1.2.

     

    “Purchaser”
      has
      the
      meaning given to such term in the Preamble to this Agreement.

     

    “Records”
      mean
      all
      original agreements, documents, books, stock ledgers, minutes, correspondence,
      and corporate and other records and files, including records and files stored
      on
      computer disks or tapes or any other storage medium.

     

    “Second
      Payment”
      has the
      meaning given to such term in Section 1.2.

     

    “Schedule”
      means all
      schedules to this Agreement.

     

    “Shareholders’
      Agreement” means
      that certain Shareholders’ Agreement, dated November 21, 2006, by and among the
      Purchaser, American Racing Capital, Inc., a Nevada corporation and LJ&J
      Enterprises, Inc., a Pennsylvania corporation.

     

    “Tax”
      means
      any federal, state, local or foreign income, gross receipts, license, payroll,
      employment, excise, severance, stamp, occupation, premium, windfall profits,
      environmental (including taxes under Section 59A of the Code),
      customs, duties, capital stock, franchise, profits, withholding, social
      security (or similar), unemployment, disability, real property, personal
      property, sales, use, transfer, registration, value added, alternative or add-on
      minimum, estimated or other tax, of any kind, whatsoever, including any
      interest, penalty or addition thereto, whether disputed or not and including
      any
      obligations to indemnify or otherwise assume or succeed to the Tax liability
      of
      any other Person.

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

     

    “Tax
      Return”
means
      any return, declaration, report, claim for refund, or information return or
      statement relating to Taxes, including any schedule or attachment thereto,
      and
      any amendment(s) thereof.

     

    “2004
      Financial Statements”
has
      the
      meaning given to such term in Section 3.1(e).

     

    “2005
      Financial Statements” has
      the
      meaning given to such term in Section 3.1(e).

     

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      3.1(a)

     

    Company
      Capitalization Table

    

    As
      of the First Closing Date
      - Company shall increase its authorized Common Stock to 9,000 shares, as
      follows:

    

    
      	
              Total
                Number of Authorized Company Common Stock as of First Closing
                Date

            	 	
              Break-Down
                of Shareholders After Issuance of Shares, as of First Closing
                Date

            
	
              9,000
                shares

            	 	
              M&ET
                - 3,600 shares (40%)

            
	 	 	
              Other
                shareholders - 5,400 (60%)

            
	 	 	 

    

    

    As
      of the Final Closing Date
      - Company shall increase its authorized Common Stock to 60,000 shares, as
      follows:

    

    
      	
              Total
                Number of Authorized Company Common Stock as of Final Closing
                Date

            	
              Break-Down
                of Shareholders After Issuance of Shares, as of Final Closing
                Date

            
	
              60,000
                shares

            	
              M&ET
                - 48,000 shares (80%)

            
	 	
              Other
                shareholders - 12,000 (20%)EXHIBIT
      10.1

    

    REVOLVING
      CREDIT AGREEMENT

    

    This
      Revolving Credit Agreement is dated effective as of December 1, 2006, between
      CHATSWORTH
      DATA CORPORATION,
      a
      California corporation ("Borrower"), and BANK
      OF OKLAHOMA, N.A.,
      a
      national banking association ("Bank").

    

    RECITALS

    

    A.  Bank
      hereby establishes a $3,000,000 revolving line of credit in favor of Borrower,
      pursuant to the terms and conditions set forth below.

    

    AGREEMENT

    

    For
      valuable consideration received, it is agreed as follows:

    

    1. DEFINED
      TERMS.
      As used
      in this Agreement, the following terms have the following meanings (terms
      defined in the singular to have the same meaning when used in the plural and
      vice versa).

    

    1.1. Accounting
      Terms.
      All
      accounting terms not specifically defined herein shall be construed in
      accordance with GAAP consistently applied.

    

    1.2. "Affiliate
      means
      any Person: (i) which directly or indirectly controls, or is controlled by,
      or
      is under common control with, Borrower; (ii) which directly or indirectly
      beneficially owns or holds five percent (5%) or more of any class of voting
      stock of either Borrower; or (iii) five percent (5%) or more of the voting
      stock
      of which is directly or indirectly beneficially owned or held by either
      Borrower. The term "control" means the possession, directly or indirectly,
      of
      the power to direct or cause the direction of the management and policies of
      a
      Person, whether through the ownership of voting securities, by contract, or
      otherwise.

    

    1.3. "Agreement"
      means
      this Revolving Credit Agreement, as amended, supplemented, or modified from
      time
      to time.

    

    1.4 "AML"
      means
      Adera Mines Limited, a Nevada corporation.

    

    1.5 "AML
      Authority Documents"
      shall
      mean the following (i) a Certificate of Good Standing from AML's state of
      incorporation and such other states in which AML does business and is required
      to domesticate or otherwise register; (ii) a copy of AML's articles of
      incorporation; (iii) a copy of AML's bylaws; and (iv) a Secretary Certificate,
      in form and content as set forth on Schedule
      "1.5"
      hereto,
      authorizing AML to execute the Guaranty.

    

    1.6. "Borrowing
      Base”
      means,
      at any date of determination thereof, the sum of eighty-five percent (85%)
      of
      Borrower's Qualified Receivables at such date, plus
      sixty
      percent (60%) of Borrower's Qualified Inventory at such date, as determined
      by
      Bank based upon the most recent information relating thereto provided to Bank;
      provided,
      that
      advances based upon Qualified Inventory shall not exceed fifty percent (50%)
      of
      the Borrowing Base.

    

    1.7. "Borrowing
      Base Certificate"
      means
      each certificate from Borrower to Bank relating to the Borrowing Base,
      substantially in the form of Schedule
      "1.7"
      hereto.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    1.8. "Borrower’s
      Authority Documents"
      shall
      mean the following: (i) a Certificate of Good Standing from Borrower’s state of
      incorporation and such other states in which Borrower does business and is
      required to domesticate or otherwise register; (ii) a copy of Borrower’s
      Articles of Incorporation; (iii) a copy of Borrower’s bylaws; and (iv) a
      certificate of the secretary of Borrower, in form and content set forth on
      Schedule
      “1.8”
      hereto,
      certifying authority for Borrower to enter into the Loan.

    

    1.9. "Business
      Day"
      means
      any day other than a Saturday, Sunday, or other day on which commercial banks
      in
      Oklahoma are authorized or required to close under the laws of the State of
      Oklahoma.

    

    1.10. "Certificate
      of Good Standing"
      means a
      Certificate of Good Standing issued by the Secretary of State of incorporation
      and such other states in which business is conducted and where it is required
      to
      domesticate or otherwise register, indicating good standing with the laws of
      such state(s).

    

    1.11. (Intentionally
      Omitted)

    

    1.12. "Code"
      means
      the Internal Revenue Code of 1986, as amended from time to time, and the
      regulations and published interpretations thereof.

    

    1.13. "Commitment"
      means
      the Bank's obligation to make loans to the Borrower or advances under any
      Standby Letters of Credit pursuant to this Agreement.

    

    1.14. “Commitment
      Fee”
means
      a
      fee in the amount of $5,000, payable by Borrower to Lender at
      closing.

    

    1.15. “Compliance
      Certificate”
means
      a
      quarterly compliance certificate from the Borrower with respect to the terms
      and
      conditions of this Agreement, in form and content as set forth on Schedule
      "1.15"
      hereto.

    

    1.16. "Debt"
      means,
      including but not limited to: (i) indebtedness or liability for borrowed money;
      (ii) obligations evidenced by bonds, debentures, notes, or other similar
      instruments; (iii) obligations for the deferred purchase price of property
      or
      services (including trade obligations); (iv) obligations under letters of
      credit; (v) obligations under acceptance facilities; (vi) all
      guaranties, endorsements (other than for collection or deposit in the ordinary
      course of business), and other contingent obligations to purchase, to provide
      funds for payment, to supply funds to invest in any Person or entity, or
      otherwise to assure a creditor against loss; and (vii) obligations secured
      by any Liens, whether or not the obligations have been assumed.

    

    1.17. "ERISA"
      means
      the Employee Retirement Income Security Act of 1974, as amended from time to
      time, and the regulations and published interpretations thereof.

    

    1.18. "GAAP"
      means
      generally accepted accounting principles in the United States, applied on a
      consistent basis.

    

    1.19. “Guarantor”
means
      AML.

    

    1.20. “Guaranty
      Agreement”
means
      the Guaranty Agreement executed by the Guarantor, in form and content as set
      forth on Schedule
      "1.20"
      hereto.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    1.21. "Initial
      Default"
      means
      any of the events specified in Section 9, whether or not any requirement for
      the
      giving of notice, the lapse of time, or both, or any other condition has been
      satisfied.

    

    1.22. "Lien"
      means
      any mortgage, pledge, hypothecation, assignment, deposit arrangement,
      encumbrance, lien (statutory or other), or preference, priority or other
      security agreement or preferential arrangement of any kind or nature whatsoever
      (including, without limitation, any conditional sale or other title retention
      agreement, any financing lease having substantially the same economic effect
      as
      any of the foregoing, and the filing of any financing statement under the
      Uniform Commercial Code or comparable law of any jurisdiction in respect of
      any
      of the foregoing.)

    

    1.23. "Loan"
      means,
      separately and collectively, advances under the $3,000,000 Revolving
      Line.

    

    1.24. "Loan
      Documents"
      means
      this Agreement, the Note, the Security Agreement, the UCC-1 Financing Statement
      and all other instruments, documents or agreements required under this
      Agreement.

    

    1.25. "Matured
      Default"
      means
      any of the events specified in Section 9, provided that any requirement for
      the
      giving of notice, the lapse of time, or both, or any other condition has been
      satisfied.

    

    1.26. "Multiemployer
      Plan"
      means a
      Plan described in Section 4001(a)(3) of ERISA.

    

    1.27. (Intentionally
      Omitted)

    

    1.28. "Obligations"
      means
      the Obligations defined in Section 3.

    

    1.29. "PBGC"
      means
      the Pension Benefit Guaranty Corporation or any entity succeeding to any or
      all
      of its functions under ERISA.

    

    1.30. "Plan"
      means
      any pension plan which is covered by Title IV of ERISA and in respect of which
      the Borrower or a Commonly Controlled Entity is an "employer" as defined in
      Section 3(5) of ERISA.

    

    1.31. "Principal
      Office"
      means
      the Bank's main office located at Seven East Second Street, One Williams Center,
      Tulsa, Oklahoma, 74172.

    

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

    

    1.33. "Qualified
      Inventory"
      means
      the value (i.e., the lower of Borrower's direct cost of acquiring the goods
      or
      the current wholesale market value of the goods) of Borrower's inventory which,
      in Bank's determination: (i) is readily marketable (i.e., finished goods
      and raw materials [e.g., bulk resin] constituting readily marketable commodity
      goods); (ii) is not perishable or subject to rapid physical deterioration
      over time; (iii) is not subject to high seasonability or subject to decline
      in value due to a change in style or change in design forced by competitive
      products; and (iv) is not work in process.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    1.34. "Qualified
      Receivables"
      means
      and includes only accounts receivable of Borrower which meet the following
      specifications at the time they came into existence and continue to meet the
      same until collected in full.

    

    1.34.1. The
      account is owned by and payable to the Borrower and represents a sum of money
      (exclusive of interest, late charges or carrying charges) unconditionally due
      and owing from the due date from an account debtor for services rendered or
      goods sold by Borrower to the account debtor pursuant to a specific project
      contract, on a written job order basis; the final payment date under the
      applicable invoice is less than one hundred twenty (120)
      days
      from the applicable invoice date; and no payment under the applicable invoice
      is
      more than sixty (60) days past due.

    

    1.34.2. The
      account arose from a bona fide outright sale of goods previously made or from
      the performance of services, but not from leasing, and Borrower has possession
      of or has delivered to Bank shipping and delivery receipts evidencing shipment
      of the goods or, if representing services, the services have been fully
      performed for the respective account debtor. Progress billings and retainages
      are ineligible.

    

    1.34.3. The
      account is not subject to any assignment, claim, lien or security interest
      of
      any character or subject to any attachment, levy, garnishment or other judicial
      process, except the security interest of Bank.

    

    1.34.4. The
      account is not subject to any claim for credit, setoff, allowance, adjustment
      by
      the account debtor or counterclaim.

    

    1.34.5. The
      account arose in the ordinary course of Borrower's business and no notice of
      the
      bankruptcy, insolvency or adverse change in the financial condition of the
      account debtor has been received by Borrower or Bank.

    

    1.34.6. The
      account debtor has not returned any of the goods from the sale of which the
      account arose, nor has any partial payment been made thereon.

    

    1.34.7. Bank
      has
      not previously notified Borrower that the account or the account debtor is
      or
      has become unsatisfactory, based upon reasonable credit standards.

    

    1.34.8. The
      account is not evidenced by a judgment, an instrument or chattel
      paper.

    

    1.34.9. The
      account debtor is not a governmental entity or a foreign (i.e., residing or
      incorporated in or organized under a jurisdiction outside the United States)
      person or company and is not a parent, subsidiary, officer, employee, director,
      agent or Affiliate of any Borrower, and the account debtor and any Borrower
      do
      not have common shareholders, officers or directors; provided that Bank
      specifically excludes any Bank Approved Account Debtor (defined below) from
      this
      subsection.

    

    1.34.10.
      All receivables of one account debtor shall become ineligible if more than
      5%
      (20% as to Bank Approved Account Debtors) of such receivables are over ninety
      (90) days past due from the invoice due date or over two contractual payments
      are past due.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    1.34.11.
      The account debtor cannot exceed 10% (or 20% as to a Bank Approved Account
      Debtor) of the total accounts receivable, and any amounts over 10% (or 20%
      as to
      a Bank Approved Account Debtor) will be excluded from the Borrowing Base unless
      specifically waived in writing in each instance by Bank in its sole
      discretion.

    

    1.34.12.
      The "Bank Approved Account Debtors" are
      _____________________________.

    

    1.35. "Reportable
      Event"
      means
      any of the events set forth in Section 4043 of ERISA.

    

    1.36. "Security
      Agreement"
      means
      the Security Agreement and other Collateral documents described in Section
      3.

    

    1.37. "Standby
      Letter of Credit"
      or
      "Letter
      of Credit"
      or
“Facility
      LC”
means
      any standby letter of credit issued pursuant to Section 2.1, for which, when
      issued, a Standby Letter of Credit Fee shall be paid.

     

    1.38. "Standby
      Letter of Credit Fee"
      means a
      fee equal to 2.00% of the face amount of any Standby Letter of Credit issued
      or
      renewed after the date hereof.

    

    1.39. "Termination
      Date"
      means
      November 30, 2007.

    

    1.40. "$3,000,000
      Line Note
      or
      "Note"
      shall
      mean the $3,000,000 Promissory Note in form and content as set forth on
Schedule
      "1.40"
      attached
      hereto.

    

    1.41. "UCC"
      shall
      mean the Uniform Commercial Code of the State of Oklahoma.

    

    1.42. "UCC-1
      Search"
      means a
      UCC Information and/or Copy Request as to Borrower from the appropriate office
      in California, and from any other office deemed necessary or advisable by Bank,
      which searches must evidence no conflicting security interests, except the
      Permitted Liens.

    

    1.43. "UCC-1
      Financing Statement"
      means a
      financing statement in form and content acceptable to Lender, which will be
      filed with the appropriate filing office and shall evidence perfection of a
      first and prior security interest in the Collateral in favor of
      Lender.

    

    2. AMOUNT
      AND TERMS OF THE LOANS.

    

    2.1. $3,000,000
      Revolving Line.
      Subject
      to the terms and conditions of this Agreement, and so long as no Initial Default
      or Matured Default has occurred, Bank agrees to loan to Borrower (and/or issue
      Standby Letters of Credit subject to Section 2.6) such amounts up to $3,000,000
      as Borrower may request from time to time on or before the Termination Date,
      provided
      that the
      aggregate outstanding principal amount of advances and Standby Letters of Credit
      at any time outstanding shall not exceed the lesser of (a) $3,000,000, or (b)
      the Borrowing Base. Such Borrowing Base shall be computed on a monthly basis,
      and Borrower agrees to provide Bank at closing and on the 10th day of each
      month
      with regard to the immediately preceding monthly period with all information
      requested in connection therewith, including without limitation a Borrowing
      Base
      Certificate. In the event outstanding advances with respect to Qualified
      Receivables or Qualified Inventory fail to comply with such formula, by reason
      of any accounts receivable or inventory ceasing to be so qualified, for whatever
      reason, then Borrower shall immediately notify Bank of such situation and shall,
      within five (5) Business Days of the imbalance, either (i) reduce the amount
      of
      the outstanding balances to bring such amounts within the formulas prescribed,
      or (ii) provide additional Qualified Receivable or Qualified Inventory, without
      any additional advance being made by Bank with respect thereto, necessary to
      comply with the formulas required herein. Within the limits set forth in this
      Section 2.1, Borrower may borrow, repay and reborrow at any one time and from
      time to time. Notwithstanding
      the foregoing,
      in the
      event AML fails to comply with the Fixed Charge Coverage Ratio in Section 8.2.,
      Bank may reserve from the Line (“Line Adjustment”) an amount necessary to cause,
      to the extent unused availability under the Line exists, compliance to occur,
      as
      determined by Bank in its sole discretion, which shall be adjusted further
      based
      upon the next quarterly calculations of the Fixed Charge Coverage Ratio. The
      Bank reserves the right to conduct a field audit of all accounts receivable
      and
      inventory prior to any advance, at Borrower’s cost and expense. Additionally,
      accounts receivable shall be collected through a lock box arrangement
      established with Bank, and Borrower agrees to execute Bank’s customary
      agreements in connection therewith and to pay Bank its customary fees relating
      thereto.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    2.2. Notice
      and Manner of Borrowing.
      The
      Borrower shall give the Bank written notice of any Loans under this Agreement,
      specifying the date and amount thereof. Such notice shall be in writing, via
      telefax or via telephone (with voice verification by the appropriate officer),
      no later than 12:00 noon (Tulsa time) on the date of such Loan and upon
      fulfillment of the applicable conditions, the Bank will make such Loan available
      to the Borrower in immediately available funds by crediting the amount thereof
      to Borrower's operating account with Bank.

    

    2.3. Letters
      of Credit.
      

    

    2.3.1. Issuance.
      The
      Bank hereby agrees, on the terms and conditions set forth in this Agreement,
      to
      issue standby letters of credit (each, a "Facility LC") and to renew, extend,
      increase, decrease or otherwise modify each Facility LC ("Modify," and each
      such
      action a "Modification"), from time to time from and including the date of
      this
      Agreement and prior to the Termination Date upon the request of the Borrower;
      provided
      that
      immediately after each such Facility LC is issued or Modified, the aggregate
      amount of the outstanding Facility LC and advances shall not exceed the
      aggregate outstanding credit exposure under Section 2.1. No Facility LC shall
      have an expiry date later than the earlier of (x) the fifth Business Day prior
      to the Termination Date and (y) one year after its issuance, provided that
      letter of credit with a one (1) year expiration date may include renewals for
      additional one year periods, so long as it does not extend beyond
      (x).

    

    2.3.2 LC
      Fees.
      The
      Borrower shall pay to the Bank, with respect to each Facility LC, a Standby
      Letter of Credit Fee. The Borrower shall also pay to Bank documentary and
      processing charges in connection with the issuance or Modification of and draws
      under Facility LCs in accordance with the LC Issuer's standard schedule for
      such
      charges as in effect from time to time.

    

    2.3.3 Reimbursement
      by Borrower.
      The
      Borrower shall be irrevocably and unconditionally obligated to reimburse Bank
      on
      demand for any amounts to be paid by Bank upon any drawing under any Facility
      LC, without presentment, demand, protest or other formalities of any
      kind.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    2.3.4 Obligations
      Absolute. The Borrower's obligations under this Section 2.3 shall be absolute
      and unconditional under any and all circumstances and irrespective of any
      setoff, counterclaim or defense to payment which the Borrower may have or have
      had against Bank. The Bank shall not be liable for any error, omission,
      interruption or delay in transmission, dispatch or delivery of any message
      or
      advice, however transmitted, in connection with any Facility LC. The Borrower
      agrees that any action taken or omitted by Bank under or in connection with
      each
      Facility LC and the related drafts and documents, if done without gross
      negligence or willful misconduct, shall be binding upon the Borrower and shall
      not put the Bank under any liability to the Borrower.

    

    2.3.5 Indemnification.
      The Borrower hereby agrees to indemnify and hold harmless Bank, and its
      directors, officers, agents and employees from and against any and all claims
      and damages, losses, liabilities, costs or expenses which Bank may incur (or
      which may be claimed against Bank by any person whatsoever) by reason of or
      in
      connection with the issuance, execution and delivery or transfer of or payment
      or failure to pay under any Facility LC or any actual or proposed use of any
      Facility LC.

    

    3. SECURITY.
      As
      security for any and all indebtedness, obligations or liabilities of every
      kind
      and description of Borrower to Bank, including, without limitation, all advances
      and Loans evidenced by the Notes, and any other advances or loans made pursuant
      to this Agreement or any other instrument, document, agreement executed and/or
      delivered by Borrower to Bank in connection herewith, including any extensions,
      renewals or changes in form of any of the Notes, and any other obligations
      or
      liabilities now existing or hereafter arising, direct or indirect, absolute
      or
      contingent, joint and/or several, howsoever created or obtained (separately
      and
      collectively, the "Obligations"), Borrower grants to Bank the following liens
      and security interests and also agrees as follows:

    

    3.1. A
      first
      and prior security interest in all accounts and inventory of Borrower, whether
      now owned or hereafter acquired, howsoever arising or wheresoever located,
      all
      as evidenced by the Security Agreement set forth on Schedule
      "3.1"
      attached
      hereto.

    

    3.2. All
      proceeds and products of the foregoing.

    

    3.3. Borrower
      also agrees to execute and deliver all financing statements or other
      instruments, documents or agreements required by Bank in order to effectuate
      the
      intent of the parties in connection herewith, including without limitation
      documents necessary for proper perfection as deemed necessary and/or advisable
      by Bank and legal counsel.

    

    4. CONDITIONS
      PRECEDENT.

    

    4.1. Closing.
      The
      closing shall occur when all conditions described in this Section 4.1 have
      been
      satisfied.

    

    4.1.1. Borrower
      shall execute and /or deliver to Bank the following:

    

    A.  This
      Agreement;

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    B.  Borrower’s
      Authority Documents;

    

    C.  $3,000,000
      Line Note;

    

    D.  Security
      Agreement;

    

    E.  Guaranty
      Agreement;

    

    F.  Guarantor
      Authority Documents;

    

    G.  UCC-1
      Search;

    

    H.  Financing
      Statement;

    

    I.  $5,000
      fee;

    

    J.  completion
      of all schedules to this Agreement;

    

    K.  Any
      other
      instruments, documents or agreements reasonably requested by Bank in connection
      herewith.

    

    4.1.2. The
      following statements shall be true and correct.

    

    A. The
      representations and warranties contained in this Agreement and the other Loan
      Documents shall be true and correct; and

    

    B. No
      Initial Default or Matured Default has occurred and is continuing or will occur
      as a result of the execution, delivery and/or performance by Borrower under
      any
      of the Loan Documents.

    

    4.1.3. The
      Bank
      shall have received such other approvals, opinions, instruments, documents
      and/or agreements which it may reasonably request.

    

    5. REPRESENTATIONS
      AND WARRANTIES.
      The
      Borrower represents and warrants to the Bank that:

    

    5.1. Organization,
      Good Standing, and Due Qualification.
      Borrower is a corporation duly organized, validly existing, and in good standing
      under the laws of the State in which it was organized; has the power and
      authority to own its assets and to transact the business in which it is now
      engaged or proposed to be engaged; and is duly qualified as a foreign entity
      and
      in good standing under the laws of each other jurisdiction in which such
      qualification is required.

    

    5.2. Power
      and Authority.
      The
      execution, delivery, and performance by Borrower of the Loan Documents have
      been
      duly authorized by all necessary action and do not and will not (1) require
      any
      consent or approval of the shareholders which has not been given; (2) contravene
      Borrower's articles and bylaws; (3) violate any provision of any law, rule,
      regulation (including, without limitation, Regulations U and X of the Board
      of
      Governors of the Federal Reserve System), order, writ, judgment, injunction,
      decree, determination, or award presently in effect having applicability to
      Borrower; (4) result in a breach of or constitute a default under any indenture
      or loan or credit agreement or any other agreement, lease, or instrument to
      which Borrower is a party or by which it or its properties may be bound or
      affected; (5) result in, or require, the creation or imposition of any lien,
      upon or with respect to any of the properties now owned or hereafter acquired
      by
      Borrower other than in favor of Bank; or (6) cause Borrower to be in
      default under any such law, rule, regulation, order, writ, judgment, injunction,
      decree, determination, or award or any such indenture, agreement, lease, or
      instrument.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    5.3. Legally
      Enforceable Agreement.
      This
      Agreement is, and each of the other Loan documents when delivered under this
      Agreement will be, legal, valid, and binding obligations of Borrower,
      enforceable against Borrower in accordance with their respective terms, except
      to the extent that such enforcement may be limited by applicable bankruptcy,
      insolvency, and other similar laws affecting creditors' rights
      generally.

    

    5.4. Financial
      Statements.
      The
      consolidated balance sheet of AML as of July 31, 2006 and the related statements
      of income and retained earnings of AML for the twelve (12) months then ended,
      are complete and correct and fairly present the financial condition of AML
      at
      such dates and the results of the operations of Borrower for the periods covered
      by such statements, all in accordance with GAAP consistently applied (subject
      to
      year-end adjustments in the case of the interim financial statements), and
      since
      July 31, 2006 there has been no material adverse change in the condition
      (financial or otherwise), business or operations of AML. There are no
      liabilities of AML, fixed or contingent, which are material but not reflected
      in
      such financial statements or in the notes thereto, other than liabilities
      arising in the ordinary course of business since July 31, 2006. No information,
      exhibit, or report furnished by the Borrower to the Bank in connection with
      the
      negotiation of this Agreement contains any material misstatement of fact or
      omits to state a material fact or any fact necessary to make the statement
      contained therein not materially misleading.

    

    5.5. Labor
      Disputes and Acts of God.
      Neither
      the business nor the properties of Borrower is affected by any fire, explosion,
      accident, strike, lockout or other labor dispute, drought, storm, hail,
      earthquake, embargo, act of God or other casualty (whether or not covered by
      insurance), materially adversely affecting such business or the operation of
      Borrower.

    

    5.6. Other
      Agreements.
      Borrower is not a party to any indenture, loan, or credit agreement, or to
      any
      lease or other agreement or instrument, or subject to any charter or corporate
      restriction, which could have a material adverse effect on the business,
      properties, assets, operations, or condition, financial or otherwise, of
      Borrower or the ability of Borrower to carry out its obligations under the
      Loan
      Documents. Borrower is not in material default in any respect in the
      performance, observance, or fulfillment of any of the obligations, covenants,
      or
      conditions contained in any agreement or instrument material to its business
      to
      which it is a party.

    

    5.7. Litigation.
      There
      is no pending or threatened action or proceeding against or affecting Borrower
      before any court, governmental agency or arbitrator, which may, in any one
      case
      or in the aggregate, materially adversely affect the financial condition,
      operations, properties, or business of Borrower or the ability of Borrower
      to
      perform its obligations under the Loan Documents.

    

    5.8. ERISA.
      Borrower is in compliance in all material respects with all applicable
      provisions of ERISA.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    5.9. Operation
      of Business.
      Borrower possesses all licenses, permits, franchises, patents, copyrights,
      trademarks, and trade names, or rights thereto, to conduct its business
      substantially as now conducted and as presently proposed to be conducted, and
      Borrower is not in violation of any valid rights of others with respect to
      any
      of the foregoing.

    

    5.10. Taxes.
      Borrower has filed all tax returns (federal, state and local) required to be
      filed and have paid all taxes, assessments, and governmental charges and levies
      thereon to be due, including interest and penalties.

    

    5.11. Debt.
      Schedule
      "5.11"
      is a
      complete and correct list of all credit agreements, indentures, purchase
      agreements, guaranties, capital leases, and other investments, agreements,
      and
      arrangements presently in effect providing for or relating to extensions of
      credit (including agreements and arrangements for the issuance of letters of
      credit or for acceptance financing) in respect of which Borrower is in any
      manner directly or contingently obligated; and the maximum principal or face
      amounts of the debt in question, which are outstanding and which can be
      outstanding, are correctly stated, and all liens of any nature given or agreed
      to be given as security therefor are correctly described or indicated in such
      Schedule. With regard to any guaranty or other contingent obligation of
      Borrower, Borrower shall promptly notify Bank in the event any such obligation
      becomes non-contingent.

    

    5.12. Environment.
      Borrower has duly complied with, and its business, operations, assets,
      equipment, property, leaseholds, or other facilities are in compliance with,
      the
      provisions of all federal, state, and local environmental, health and safety
      laws, codes and ordinances, and all rules and regulations promulgated
      thereunder.

    

    6. AFFIRMATIVE
      COVENANTS.
      So long
      as the Note shall remain unpaid or the Bank shall have any Commitment under
      this
      Agreement, Borrower will comply with the following:

    

    6.1. Maintenance
      of Existence.
      Preserve and maintain its existence and good standing in the states in which
      it
      does business, and qualify and remain qualified as a foreign entity in each
      jurisdiction in which such qualification is required.

    

    6.2. Maintenance
      of Records.
      Keep
      adequate records and books of account, in which complete entries will be made
      in
      accordance with GAAP consistently applied, reflecting all financial
      transactions.

    

    6.3. Maintenance
      of Properties.
      Maintain, keep, and preserve all of its properties (tangible and intangible)
      necessary or useful in the proper conduct of its business in good working order
      and condition, ordinary wear and tear excepted.

    

    6.4. Maintenance
      of Insurance.
      Borrower will keep or cause to be kept adequately insured by financially sound
      and reputable insurers its plant, equipment, motor vehicles, and all other
      property of a character usually insured by businesses engaged in the same or
      similar businesses. The Borrower shall at all times maintain adequate insurance
      against damage to persons or property, which insurance shall be by financially
      sound and reputable insurers. Bank shall be added as a loss payee to the
      insurance covering the inventory.

    

    6.5. Compliance
      with Laws.
      Comply
      in all material respects with all applicable laws, rules, regulations, and
      orders, such compliance to include, without limitation, paying before the same
      become delinquent all taxes, assessments, and governmental charges imposed
      upon
      it or upon its property.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    6.6. Right
      of Inspection.
      At any
      reasonable time and from time to time, and following twenty-four (24) hours
      prior written notice, permit the Bank or any agent or representative thereof,
      to
      reasonably examine and make copies of and abstracts from the records and books
      of account of, and visit the properties of Borrower and to discuss the affairs,
      finances, and accounts of Borrower with any of its officers and directors and
      Borrower's independent accountants. Borrower shall not be required to pay for
      any costs or expenses incurred by Lender prior to an Event of Default, but
      shall
      be required to pay the reasonable costs, expenses and fees incurred by Lender
      for any third party inspector not more often than annually.

    

    6.7. Reporting
      Requirements.
      Furnish
      to Bank based upon a consolidated and consolidating basis at the AML
      level:

    

    6.7.1. Quarterly
      Financial Statements.
      As soon
      as available and in any event within forty-five (45) days after the end of
      each
      fiscal quarter of AML, Borrower shall deliver to Bank a Compliance Certificate,
      interim balance sheets of AML as of the end of such quarter, statements of
      income and retained earnings of AML for the period commencing at the end of
      the
      previous fiscal year and ending with the end of such quarter, and statements
      of
      cash flow of AML for the portion of the fiscal year ended with the last day
      of
      such quarter, all in sufficient detail and stating in comparative form the
      respective figures for the corresponding date and period in the previous fiscal
      year all prepared in accordance with GAAP consistently applied and certified
      by
      the chief financial officer of AML (subject to normal year end audit
      adjustments).

    

    6.7.2. Audited
      Annual Financial Statements.
      As soon
      as available and in any event within one hundred twenty (120) days after the
      end
      of each fiscal year of AML, commencing with the fiscal year ending January
      31,
      2007, determined upon a consolidated and consolidating basis at the AML level,
      a
      Compliance Certificate, balance sheets as of the end of such fiscal year,
      statements of income and retained earnings for such fiscal year, and statements
      of cash flow for such fiscal year, with explanatory footnotes in sufficient
      detail acceptable to the Bank, and stating in comparative form the respective
      figures for the corresponding date and period in the prior fiscal year and
      all
      prepared in accordance with GAAP consistently applied and as to the statements
      accompanied by an unqualified opinion thereon acceptable to the Bank by
      independent accountants selected by AML and acceptable to the Bank.

    

    6.7.3. Management
      Letters.
      Promptly upon receipt thereof, copies of any reports submitted to Borrower
      or
      AML by independent certified public accountants in connection with examination
      of the financial statements of Borrower made by such accountants;

    

    6.7.4. Certificate
      of No Default.
      Within
      twenty (20) days after the end of each of the quarters of each fiscal year
      of
      Borrower a certificate of the chief financial officer of Borrower certifying
      computations demonstrating compliance with the covenants contained in Section
      8;

    

    6.7.5. Notice
      of Litigation.
      Promptly after the commencement thereof, notice of all actions, suits, and
      proceedings before any court or governmental department, commission, board,
      bureau, agency, or instrumentality, domestic or foreign, affecting Borrower,
      which, if determined adversely to Borrower, could have a material adverse effect
      on the financial condition, properties, or operations of Borrower;

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    6.7.6. Notice
      of Initial Defaults and Matured Defaults.
      As soon
      as possible and in any event within five (5) days after the occurrence of each
      Initial Default or Matured Default, a written notice setting forth the details
      of such Initial Default or Matured Default and the action which is proposed
      to
      be taken by the Borrower with respect thereto;

    

    6.7.7. ERISA
      Reports.
      As soon
      as possible, and in any event within thirty (30) days after Borrower knows
      or
      has reason to know that any circumstances exist that constitute grounds
      entitling the PBGC to institute proceedings to terminate a Plan subject to
      ERISA
      with respect to Borrower or any commonly controlled Entity, and promptly upon
      receipt by the Borrower or any Commonly Controlled Entity of notice that the
      PBGC intends to terminate a Plan or appoint a trustee to administer the same,
      and promptly upon receipt of notice concerning the imposition of withdrawal
      liability with respect to Borrower or any Commonly Controlled Entity, the
      Borrower will deliver to the Bank a certificate of the chief financial officer
      of the Borrower setting forth all relevant details and the action which the
      Borrower proposes to take with respect thereto;

    

    6.7.8. Reports
      to Other Creditors.
      Promptly after the furnishing thereof, copies of any statement or report
      furnished to any other party pursuant to the terms of any indenture, loan,
      credit, or similar agreement and not otherwise required to be furnished to
      the
      Bank pursuant to any other clause of this Section 6.;

    

    6.7.9. General
      Information.
      Such
      other information respecting the condition or operations, financial or
      otherwise, of Borrower as the Bank may from time to time reasonably
      request.

    

    6.8. Environment.
      Be and
      remain in material compliance with the provisions of all federal, state, and
      local environmental, health and safety laws, codes and ordinances, and all
      rules
      and regulations issued thereunder; notify the Bank immediately of any notice
      of
      a hazardous discharge or environmental complaint received from any governmental
      agency or any other party; notify the Bank immediately of any hazardous
      discharge from or affecting its premises; promptly contain and remove the same,
      in compliance with all applicable laws.

    

    6.9. Operating
      Accounts.
      Maintain its primary operating accounts at Bank.

    

    7. NEGATIVE
      COVENANTS.
      So long
      as the Note shall remain unpaid or the Bank shall have any Commitment under
      this
      Agreement, Borrower will not:

    

    7.1  Negative
      Pledge.
      Create,
      incur, permit to suffer or exist any liens upon any of its assets except in
      favor of Bank and liens relating to permitted purchase money debt.

    

    7.2 Debt. Create,
      incur, assume or suffer to exist any Debt, except:

    

    
      	(1)  	
              Indebtedness
                existing out of this Agreement.

            

    

    

    
      	(2)  	
              Purchase
                money indebtedness not to exceed $500,000 in the aggregate for any
                given
                fiscal year.

            

    

     

     

    
      
        
        

      

      
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      	(3)  	
              Current
                liabilities for taxes incurred in the ordinary course of
                business.

            

    

    

    
      	(4)  	
              Accounts
                payable incurred in the ordinary course of
                business.

            

    

    

    7.3 Mergers,
      etc.
      Wind up,
      liquidate or dissolve itself, reorganize, merge or consolidate with or into,
      or
      convey, sell, assign, transfer, lease, or otherwise dispose of (whether in
      one
      transaction or in a series of transactions) all or substantially all of its
      assets (whether now owned or hereafter acquired) to any Person.

    

    7.4. Leases.
      Without
      Bank's prior written consent, create, incur, assume, or suffer to exist, any
      obligation as lessee for the rental or hire of any real or personal property,
      except (1) leases existing on the date of this Agreement and any extensions
      or
      renewals thereof and (2) leases which do not in the aggregate require Borrower
      to make payments (including taxes, insurance, maintenance, and similar expenses
      which the Borrower is required to pay under the terms of any lease) in any
      fiscal year of Borrower in excess of One Million and no/100ths Dollars
      ($1,000,000). Bank agrees not to unreasonably withhold its consent and will
      endeavor to respond within ten (10) days to Borrower's request
      therefor.

    

    7.5. Guaranties,
      etc.
      Assume,
      guaranty, endorse, or otherwise be or become directly or contingently
      responsible or liable (including, but not limited to, an agreement to purchase
      any obligation, stock, assets, goods, or services, or to supply or advance
      any
      funds, assets, goods, or services, or otherwise to assure the creditors of
      any
      Person against loss), for obligations of any Person, except guaranties by
      endorsement of negotiable instruments for deposits or collection or similar
      transactions in the ordinary course of business.

    

    7.6 Transactions
      with Affiliates.
      Enter
      into any transaction, including, without limitation, loans and the purchase,
      sale, or exchange of property or the rendering of any service, with any
      Affiliate, except in the ordinary course of and pursuant to the reasonable
      requirements of each Borrower's business and upon fair and reasonable terms
      no
      less favorable to the Borrower than would obtain in a comparable arm's-length
      transaction with a Person not an Affiliate.

    

    7.7.  Change
      of Control/ownership.
      No
      ownership change shall occur without the prior written consent of Bank, which
      shall not be withheld unreasonably.

    

    8. FINANCIAL
      COVENANTS.
      So long
      as the Note shall remain unpaid or the Bank shall have any Commitment under
      this
      Agreement, Borrower shall comply with the following, calculated quarterly based
      upon the financial statements delivered under Section 6.7.1 and
      6.7.2:

    

    8.1. Funded
      Debt to EBITDA.
      Maintain at all times a ratio of (i) Funded Debt at any quarter end to (ii)
      EBITDA for the preceding four quarter period, of not more than 4.00 to 1.00.
      For
      purposes of calculating Funded Debt to EBITDA: (i) “Funded Debt” shall
      mean any interest bearing debt, and (ii)“EBITDA”
      shall mean net income plus
      interest, taxes depreciation and amortization plus/minus extraordinary
      gains/losses for the preceding four quarter period.

    

    8.2. Fixed
      Charge Coverage Ratio.
      Maintain at all times a ratio of (1)
      (a)
      EBITDA (defined in Section 8.1) plus
      (b)
      any
      Line Adjustment, to (2) Total Fixed Charges (defined as the sum of consolidated
      cash interest, cash taxes, scheduled principal payments and capital lease
      payments, cash dividends and other distributions, and maintenance capital
      expenditures), of not less than 1.20 to 1.00. 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    9. EVENTS
      OF DEFAULT.

    

    9.1. Events
      of Default.
      If any
      of the following events shall occur:

    

    (1) Borrower
      should fail to pay the principal of, or interest on, the Note, or any amount
      of
      a commitment or other fee within five (5) days as and when due and
      payable;

    

    (2) Any
      representation or warranty made or deemed made by Borrower in this Agreement
      or
      the Security Agreement or which is contained in any certificate, document,
      opinion, or financial or other statement furnished at any time under or in
      connection with any Loan Document shall prove to have been incorrect,
      incomplete, or misleading in any material respect on or as of the date made
      or
      deemed made;

    

    (3) Borrower
      shall fail to perform or observe any term, covenant, or agreement contained
      in
      this Agreement or any Loan Documents;

    

    (4) Borrower
      shall (a) fail to pay any indebtedness for borrowed money (other than the Note)
      or any interest or premium thereon, when due (whether by scheduled maturity,
      required prepayment, acceleration, demand, or otherwise); or (b) fail to perform
      or observe any term, covenant, or condition on its part required to be performed
      or observed under any agreement or instrument relating to any such indebtedness,
      when required to be performed or observed, if the effect of such failure to
      perform or observe is to accelerate, or to permit the acceleration of, after
      the
      giving of any applicable notice or passage of time, or both, the maturity of
      such indebtedness, whether or not such failure to perform or observe shall
      be
      waived by the holder 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), prior to the stated maturity
      thereof;

    

    (5) Borrower
      or Guarantor (a) shall generally not pay, or shall be unable to pay, or shall
      admit in writing its inability to pay its debts as such debts become due; or
      (b)
      shall make an assignment for the benefit of creditors, or petition or apply
      to
      any tribunal for the appointment of a custodian, receiver, or trustee for it
      or
      a substantial part of its assets; or (c) shall commence any proceeding under
      any
      bankruptcy, reorganization, arrangement, readjustment of debt, dissolution,
      or
      liquidation law or statute of any jurisdiction, whether now or hereafter in
      effect; or (d) shall have had any such petition or application filed or any
      such
      proceeding commenced against it in which an order for relief is entered or
      an
      adjudication or appointment is made, and which remains undismissed for a period
      of thirty (30) days or more; or (e) shall take any corporate action indicating
      its consent to, approval of, or acquiescence in any such petition, application,
      proceeding, or order for relief or the appointment of a custodian, receiver,
      or
      trustee for all or any substantial part of its properties; or (f) shall suffer
      such custodianship, receivership, or trusteeship to continue undischarged for
      a
      period of thirty (30) days or more.

    

    (6) One
      or
      more judgments, decrees, or orders for the payment of money in excess of Five
      Hundred Thousand and no/100ths Dollars ($500,000.00) in the aggregate shall
      be
      rendered against Borrower, and such judgments, decrees, or order shall continue
      unsatisfied and in effect for a period of twenty (20) consecutive days without
      being vacated, discharged, satisfied, or stayed or bonded pending
      appeal.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

    (7) The
      collateral documents executed in connection herewith shall at any time after
      their execution and delivery and for any reason cease (a) to create a valid
      and
      perfected first priority security interest in and to the property purported
      to
      be subject to such collateral documents; (b) to be in full force and effect
      or
      shall be declared null and void, or the validity or enforceability thereof
      shall
      be contested by Borrower, (c) the Bank's security interest becomes subject
      to a conflicting interest or claim; or (d) Borrower shall deny it has any
      further liability or obligation under the collateral documents, or Borrower
      shall fail to perform any of its obligations under the collateral
      documents.

    

    (8) Any
      of
      the following events shall occur or exist with respect to any Borrower and
      any
      commonly Controlled Entity under ERISA: any Reportable Event shall occur;
      complete or partial withdrawal from any Multiemployer Plans shall occur; any
      Prohibited Transaction shall occur; a notice of intent to terminate a Plan
      shall
      be filed, or a Plan shall be terminated; or circumstances shall exist which
      constitute grounds entitling the PBGC to institute proceedings to terminate
      a
      Plan, or the PBGC shall institute such proceedings; and in each case above,
      such
      event or condition, together with all other events or conditions, if any, could
      subject Borrower to any tax, penalty, or other liability which in the aggregate
      may exceed Five Hundred Thousand and no/100ths Dollars
      ($500,000.00).

    

    (9) Any
      event(s) occurs as to the Borrower which in Bank's reasonable determination
      materially adversely affects Borrower's financial condition and/or ability
      to
      perform its obligations under this Agreement and the other loan documents
      executed in connection herewith.

    

    (10)  Any
      default (and the passage of any applicable notice and cure period) occurs under
      the documents evidencing other financing transactions of Borrower.

    

    (11)  Any
      change in the ownership of the Borrower occurs.

    

    In
      any
      such event, the Bank may, following a ten (10) day written notice and cure
      period as to monetary defaults other than Note payments and a twenty (20) day
      written notice and cure period for non-monetary defaults ("Notice and Cure"),
      (a) declare its obligation to make loans to be terminated, whereupon the same
      shall forthwith terminate; and/or (b) declare the outstanding Notes, all
      interest thereon, and all other amounts payable under this Agreement to be
      forthwith due and payable, whereupon the Notes, all such interest, and all
      such
      amounts shall become and be forthwith due and payable, without presentment,
      demand, protest, or further notice of any kind, all of which are hereby
      expressly waived by the Borrower. Additionally, the Bank is hereby authorized
      at
      any time and from time to time, without further notice to Borrower (any such
      notice being expressly waived by the Borrower), to 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 Bank to or for the credit
      or the account of the Borrower against any and all of the obligations of the
      Borrower now or hereafter existing under this Agreement or the Notes or other
      Loan Documents, irrespective of whether or not the Bank shall have made any
      demand under this Agreement or the Notes or such other Loan document and
      although such obligations may be unmatured. The rights of the Bank under this
      Section are in addition to other rights and remedies (including, without
      limitation, other rights of setoff) which the Bank may have, in this Agreement,
      any other loan document or at law or equity, including without limitation the
      right to accelerate the Notes upon the occurrence of a Matured
      Default.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    

    10. MISCELLANEOUS.

    

    10.1. Amendments,
      etc.
      No
      amendment, modification, termination, or waiver of any provision of any Loan
      Document to which the Borrower is a party, nor consent to any departure by
      the
      Borrower from any Loan Document to which it is a party, shall in any event
      be
      effective unless the same shall be in writing and signed by the Bank, and then
      such waiver or consent shall be effective only in the specific instance and
      for
      the specific purpose for which given.

    

    10.2. Notices,
      etc.
      All
      notices, consents, waivers, and other communications under this Agreement must
      be in writing and will be deemed to have been duly given when (a) delivered
      by hand (with written confirmation of receipt), (b) sent by telecopier
      (with written confirmation of receipt), provided that a copy is mailed by
      registered mail, return receipt requested, or (c) when received by the
      addressee, if sent by a nationally recognized overnight delivery service
      (receipt requested), in each case to the appropriate addresses and telecopier
      numbers set forth below (or to such other addresses and telecopier numbers
      as a
      party may designate by notice to the other parties):

    

    If
      to the
      Borrower:

    

    CHATSWORTH
      DATA CORPORATION

    20710
      Lassen Street

    Chatsworth,
      CA 91311

    Attn:
      J.
      Stewart Asbury, III, President

    Facsimile
      No.: (818) 341-3002

    

    If
      to
      Bank:

    

    BANK
      OF OKLAHOMA, N.A.

    P.O.
      Box
      2300

    Tulsa,
      Oklahoma 74192

    Attn:
      Matt C. Crew, Assistant Vice President

    Facsimile
      No.: (918) 295-0400

    

    or
      at
      such other address as shall be designated by such party in a written notice
      to
      the other party complying as to delivery with the terms of this Section 10.2.
      Except as is otherwise provided in this Agreement, all such notices and
      communications shall be effective when deposited in the mails addressed as
      aforesaid, except that notices for advances to the Bank pursuant to the
      provisions of §2.4 shall not be effective until received by the
      Bank.

    

    10.3. No
      Waiver.
      No
      failure or delay on the part of the Bank in exercising any right, power or
      remedy hereunder shall operate as a waiver thereof, nor shall any single or
      partial exercise of any such right, power, or remedy preclude any other or
      further exercise thereof or the exercise of any other right, power, or remedy
      hereunder. The rights and remedies provided herein are cumulative, and are
      not
      exclusive of any other rights, powers, privileges, or remedies, now or hereafter
      existing, at law or in equity or otherwise.

     

    
      
        
        

      

      
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    10.4. Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the Borrower and
      the
      Bank and their respective successors and assigns, except that the Borrower
      may
      not assign or transfer any of its rights under any Loan Document to which the
      Borrower is a party without the prior written consent of the Bank.

    

    10.5. Costs,
      Expenses and Taxes.
      The
      Borrower agrees to pay on demand all costs and expenses incurred by the Bank
      in
      connection with the preparation, execution, delivery, filing, and initial
      administration of the Loan Documents, including without limitation the fees
      of
      Riggs, Abney, Neal, Turpen, Orbison & Lewis, and of any amendment,
      modification, or supplement to the Loan Documents, including, without
      limitation, the fees and out-of-pocket expenses of counsel for the Bank,
      incurred in connection with advising the Bank as to its rights and
      responsibilities hereunder. The Borrower also agrees to pay all such costs,
      expenses and fees, including court costs, incurred in connection with
      enforcement of the Loan Documents, or any amendment, modification, or supplement
      thereto, whether by negotiation, legal proceedings, or otherwise. In addition,
      the Borrower shall pay any and all stamp and other taxes (but not mortgage
      registration taxes where local law prohibits Borrower from doing so) and fees
      payable or determined to be payable in connection with the execution, delivery,
      filing, and recording of any of the Loan Documents and the other documents
      to be
      delivered under any such Loan Documents, and agrees to hold the Bank harmless
      from and against any and all liabilities with respect to or resulting from
      any
      delay in paying or omission to pay such taxes and fees. This provision shall
      survive termination of this Agreement.

    

    10.6. Integration.
      This
      Agreement and the Loan Documents contain the entire agreement between the
      parties relating to the subject matter hereof and supersede all prior and
      contemporaneous oral statements and writings with respect thereto.

    

    10.7. Indemnity.
      The
      Borrower hereby agrees to defend, indemnify, and hold the Bank harmless from
      and
      against any and all claims, damages, judgments, penalties, costs, and expenses
      (including attorney fees and court costs now or hereafter arising from the
      aforesaid enforcement of this clause) arising directly or indirectly from the
      activities of the Borrower, its predecessors in interest, or third parties
      with
      whom they have a contractual relationship, or arising directly or indirectly
      from the violation of any environmental protection, health or safety law,
      whether such claims are asserted by any governmental agency or any other Person.
      This indemnity shall survive termination of this Agreement.

    

    10.8. Governing
      Law.
      This
      Agreement and the Notes shall be governed by, and construed in accordance with,
      the laws of the State of Oklahoma.

    

    10.9. USA
      Patriot Act Notification.
      IMPORTANT
      INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government
      fight the funding of terrorism and money laundering activities, Federal law
      requires all financial institutions to obtain, verify, and record information
      that identifies each person or entity that opens an account, including any
      deposit account, treasury management account, loan, other extension of credit,
      or other financial services product. What this means for Borrower: When Borrower
      opens an account, if Borrower is an individual, Lender will ask for Borrower's
      name, taxpayer identification number, residential address, date of birth, and
      other information that will allow Lender to identify Borrower, and, if Borrower
      is not an individual, Lender will ask for Borrower's name, taxpayer
      identification number, business address, and other information that will allow
      Lender to identify Borrower. Lender may also ask, if Borrower is an individual,
      to see Borrower's driver’s license or other identifying documents, and, if
      Borrower is not an individual, to see Borrower's legal organizational documents
      or other identifying documents.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    

    10.10. Severability
      of Provisions.
      Any
      provision of any Loan Documents 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
      provisions of such Loan Document or affecting the validity or enforceability
      of
      such provision in any other jurisdiction.

    

    10.11. Headings.
      Article
      and Section headings in the Loan Documents are included in such Loan Documents
      for the convenience of reference only and shall not constitute a part of the
      applicable Loan Documents for any other purpose.

    

    10.12. Conflicts.
      To the
      extent any conflict exists under any of the Loan Documents, this Credit
      Agreement shall be controlling.

    

    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.

    

    [Signature
      page follows.]

    
      
        
        

      

      
        18

        
          

        

      

       

    

    
      	 	 	 
	 	
              "Borrower"

            
	 	 
	 	
              CHATSWORTH
                DATA CORPORATION,

              a
                California corporation

            
	 
 	 
 	 
 
	
            	By  	/s/ J. Stewart Asbury, III 
	 	
              

              J.
                Stewart Asbury, III, President

            

    

     

    
      	 	 	 
	 	
              "Bank"

            
	 	 
	 	
              BANK
                OF OKLAHOMA, N.A.

            
	 
 	 
 	 
 
	
            	By  	/s/ Matt C. Crew
	 	
              

              Matt
                C. Crew, Assistant Vice President

            

    

    

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    Schedule
      “1.7”

    

    (Borrowing
      Base Certificate)

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    BORROWING
      BASE CERTIFICATE

    

    As
      inducement for Bank of Oklahoma, NA ("Bank") to advance funds under the
      Revolving Credit Agreement ("Credit Agreement") dated December 1, 2006, between
      Bank and ("Borrower"), Borrower hereby certifies to Bank, as
      follows:

    

    1.
      No
      Default.
      No
      default exists under the Credit Agreement.

    

    2.
      Representations
      and Warranties.
      All
      representations and warranties under the Credit Agreement and all related loan
      documents executed by Borrower remain true and correct as of the date
      hereof.

    

    3.
      Borrowing
      Base.

    

      
        	
                3.1.1
                  Qualified Receivables

              	 	 	 	
                $________
                  x 85% 

              	 	
                $________

              
	 	 	 	 	 	 	 
	
                3.1.2
                  Qualified Inventory

              	 	 	 	
                $________
                  x 60% 

              	 	
                $________

              
	 	 	 	 	 	 	 
	
                3.1.3
                  Availability

              	 	 	 	 	 	
                $________

              
	 	 	 	 	 	 	 
	 	 	
                a.
                  Outstanding Loan Balance

              	 	 	 	
                $________

              
	 	 	 	 	 	 	 
	 	 	
                b.
                  Current Borrowing Base

              	 	 	 	
                $________

              
	 	 	 	 	 	 	 
	 	 	
                c.
                  If (b) exceeds (a), the amount available (b-a, less the amount
                  3.1.2
                  exceeds 50% of advances)

              	 	 	 	
                $________

              
	 	 	 	 	 	 	 
	 	 	
                d.
                  If (a) exceeds (b), the amount payable

              	 	 	 	
                $________

              

      

    

    
       

    

    Dated
      effective the ____ day of ____________,
      2006.

     

    
      	 	 	 
	 	
              CHATSWORTH
                DATA CORPORATION

            
	 
 	 
 	 
 
	
            	By  	
            
	 	
              

              J.
                Stewart Asbury, III, President

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      "1.5"

    

    (AML
      Authority Documents)

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Schedule
      "1.7"

    

    (Borrowing
      Base Certificate)

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Schedule
      "1.8"

    

    (Borrower's
      Authority Documents)

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Schedule
      “1.15”

    

    (Compliance
      Certificate)

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    Schedule
      "1.20"

    

    (GUARANTY
      AGREEMENT)

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    GUARANTY
      AGREEMENT

    

    This
      Guaranty Agreement (this “Guaranty”) is made effective December 1, 2006, by
ADERA
      MINES LIMITED,
      a
      Nevada corporation (the “Guarantor”), in favor of BANK
      OF OKLAHOMA, N.A.
      (the
“Lender”).

    

    Recitals

    

    A. CHATSWORTH
      DATA CORPORATION,
      a
      California corporation, (the “Borrower”) has applied to Lender for a loan in the
      aggregate principal amount of $3,000,000 (the “Loan”).

    

    B. Lender
      is
      willing to make the Loan to be evidenced by the $3,000,000 Promissory Note
      of
      even date herewith (the "Note") provided, among other things, that the repayment
      of the Loan is secured on terms and conditions acceptable to
      Lender.

    

    C. Guarantor
      has requested Lender to provide the Loan to Borrower, and Lender has agreed
      to
      provide the Loan to Borrower, but only if Guarantor gives the guaranty provided
      in this Guaranty.

    

    D. Guarantor
      will receive direct and indirect benefits if Lender makes the Loan to Borrower.
      Guarantor has determined that it is in Guarantor’s business interest to execute
      this Guaranty in order to induce Lender to make the Loan to
      Borrower.

    

    Agreement

    

    NOW,
      THEREFORE, in consideration of the premises and for other good, valuable and
      legal consideration, the receipt and adequacy of which are hereby acknowledged,
      Guarantor, intending to be legally bound, hereby agrees as follows:

    

    1.  Construction
      of Guaranty and Definitions.
      Unless
      varied by this Guaranty, all of the terms used herein without definition which
      are defined by the Oklahoma Uniform Commercial Code shall have the meanings
      assigned to them by the Oklahoma Uniform Commercial Code as in effect on the
      date hereof. Whenever used herein, the words “Borrower,” “Guarantor,” “Lender”
and “Obligor” shall be deemed to include their respective heirs, legal
      representatives, successors and assigns. All words used herein shall be deemed
      to refer to the singular, plural, masculine, feminine or neuter as the identity
      of the person or entity or the context may require.

    

    The
      following terms shall have the following meanings when used herein:

    

    “Loan
      Documents”
      shall
      mean this Guaranty, the Note, any other note, any loan commitment, letter
      agreement, line of credit agreement, commercial financing agreement, security
      agreement, guaranty of payment, mortgage, deed of trust, pledge agreement,
      loan
      agreement, loan and security agreement, hypothecation agreement, indemnity
      agreement, letter of credit application and agreement, assignment or any other
      document or agreement previously, simultaneously or hereafter executed and
      delivered by Borrower, by Guarantor and/or by any other Obligor, singly or
      jointly with another person or persons, to Lender in connection with the Loan,
      as the same may from time to time be amended.

    

    “Borrower’s
      Obligations”
      shall
      mean the full and punctual observance and performance of all present and future
      duties, covenants and responsibilities due to Lender by Borrower of any nature
      whatsoever, including, but not limited to, the prompt, punctual and full payment
      when due (whether by demand, stated maturity, acceleration or otherwise but
      after the expiration of any applicable grace period), of all indebtedness,
      liabilities and obligations of Borrower to Lender under the Note and Loan
      Documents (extending to all principal, interest, fees, expense payments,
      liquidation costs and attorneys’ fees and expenses), whether similar or
      dissimilar, related or unrelated, matured or unmatured, direct or indirect,
      contingent or noncontingent, primary or secondary, alone or jointly with others,
      now due or to become due, now existing or hereafter created, and whether or
      not
      now contemplated, but not including any new loans to Borrower without
      Guarantor’s written consent.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    “Guarantor’s
      Obligations”
      shall
      mean the full and punctual observance and performance of all present and future
      duties, covenants and responsibilities due to Lender by Guarantor as a result
      of
      or in connection with this Guaranty or any of the other Loan
      Documents.

    

    “Obligor”
      shall
      mean, individually and collectively, Guarantor, each other person who is
      primarily or secondarily liable for the repayment of the Note or any portion
      thereof, including Borrower, and each person who has granted security for the
      repayment of the Note, together with such person’s heirs, personal
      representatives, successors and assigns.

    

    “Person”
      shall
      include an individual, a corporation, an association, a partnership, a limited
      liability company, a trust, a government (or subdivision, agency or department
      thereof) and any other entity of any kind. The words “hereof,”
      “herein,” “hereunder”
      and
      words of similar import, when used in this Guaranty, shall refer to this
      Guaranty as a whole and not to any particular provision hereof.

    

    2.  Guaranty.
      Guarantor hereby unconditionally, directly and absolutely guarantees to Lender
      the payment and performance of Borrower’s Obligations. Guarantor also agrees to
      defend, save harmless and indemnify Lender from and against all obligations,
      demands, loss or liability, by whomever asserted, suffered, incurred or paid
      arising out of or with respect to Borrower’s Obligations, including the amount
      of any preference liability together with the cost of defending any such
      preference suit.

    

    3.  Nature
      of Guaranty.
      This
      Guaranty is an absolute, unconditional, continuing, direct and immediate
      guaranty of payment and not just of collection and is no way conditioned upon
      or
      limited by or in any other way affected by:

    

    (a) any
      attempt by Lender to pursue Lender’s rights against Borrower or any
      Obligor;

    

    (b) any
      attempt by Lender to pursue Lender’s rights against any of Borrower’s real or
      personal property or any other Obligor’s real or personal property;

    

    (c) any
      recourse against or foreclosure of any security or collateral now or hereafter
      pledged, assigned or granted to Lender under the provisions of any of the Loan
      Documents;

    

    (d) any
      action taken or not taken by Lender;

    

    (e) the
      partial or complete unenforceability or invalidity of any other guaranty or
      surety agreement, pledge, assignment or other security for any of Borrower’s
      Obligations;

    

    (f) the
      invalidity or unenforceability of any provision of the Loan Documents;
      or

    

    (g) any
      defense asserted or claimed by Borrower with respect to Borrower’s Obligations
      including, but not limited to, failure or lack of consideration, breach of
      warranty, fraud, payment, accord and satisfaction, strict foreclosure, statute
      of frauds, bankruptcy, insolvency, infancy, incompetency, statute of
      limitations, lender liability and usury. Anything in this Guaranty to the
      contrary notwithstanding, Guarantor is not primarily liable for the indebtedness
      of Borrower. The obligations of Guarantor under this Guaranty shall not be
      subject to any counterclaim, recoupment, setoff, reduction or defense based
      upon
      any claim that Guarantor may have against Borrower or Lender, are independent
      of
      any other guaranty or guaranties at any time in effect with respect to any
      of
      Borrower’s Obligations, and may be enforced regardless of the existence of such
      other guaranty or guaranties.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    4.  Representations
      of Guarantor.
      To
      induce Lender to accept this Guaranty for the purposes for which it is given,
      Guarantor represents and warrants to Lender and, as applicable, agrees as
      follows:

    

    (a) Guarantor
      is a corporation duly organized and validly existing in good standing under
      the
      laws of the State of Nevada, has the corporate power to own its property and
      conduct its business as now conducted and is qualified to transact business
      in
      each state in which the character of the properties owned by it therein or
      in
      which its transaction of business makes such qualification
      necessary;

    

    (b) The
      July
      31, 2006 financial statements submitted by Guarantor to Lender, including any
      schedules and notes pertaining thereto, are true and complete, have been
      prepared in accordance with generally accepted accounting principles
      consistently applied, and fully and fairly present the financial condition
      of
      Guarantor at the date thereof and the results of operations for the period
      covered thereby, and there have been no material adverse changes in the
      financial condition or business of Guarantor from the date thereof to the date
      hereof which have not been disclosed to Lender;

    

    (c) Guarantor
      is not in default under or in material violation of any agreement, contract,
      instrument, order, judgment, decree, statute, law, rule, or regulation to which
      it is subject or by which it is bound, and the execution and delivery of, and
      the performance of the obligations under, this Guaranty will not immediately
      or
      with the passage of time, the giving of notice or both:

    

    (1) violate
      the charter or by-laws of Guarantor, or violate any statutes, laws, rules or
      regulations to which Guarantor is subject or result in a default under any
      contract, agreement, instrument, order, judgment or decree to which Guarantor
      is
      a party or by which Guarantor or its property is bound; or

    

    (2) result
      in
      the creation or imposition of any security interest in, or lien or encumbrance
      upon, any of the assets of Guarantor except in favor of Lender;

    

    (d) Guarantor
      has full power and authority to enter into this Guaranty, to execute and deliver
      this Guaranty and any of the other Loan Documents to which it is a party and
      to
      incur and perform the obligations provided for herein, all of which have been
      duly authorized by all necessary and proper corporate and other action and
      no
      consent or approval of any person, including without limitation, the
      stockholders of Guarantor and any public authority or regulatory body, which
      has
      not been obtained is required as a condition to the validity or enforceability
      hereof or any of the other Loan Documents or to the performance by Guarantor
      of
      Guarantor’s Obligations;

    

    (e) Guarantor
      has examined or has had an opportunity to examine each of the Loan Documents
      prior to the date hereof;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (f) This
      Guaranty and each of the other Loan Documents to which Guarantor is a party
      has
      been duly executed and delivered by Guarantor, constitutes the valid and legally
      binding obligation of Guarantor, and is fully enforceable against Guarantor
      in
      accordance with its terms subject only to laws affecting the rights of creditors
      generally and application of general principles of equity;

    

    (g) Guarantor
      will obtain substantial direct and indirect benefits arising from its execution
      and delivery of this Guaranty;

    

    (h) There
      are
      no judgments, injunctions or similar orders or decrees outstanding against
      Guarantor and there are no claims, actions, suits or proceedings pending or,
      to
      Guarantor’s knowledge and belief, threatened against Guarantor, or any of
      Guarantor’s property, at law or in equity, by or before any court or
      governmental authority which if determined adversely to Guarantor would result
      in any material adverse change in the financial condition, assets or business
      prospects of Guarantor;

    

    (i) Guarantor
      has filed all federal, State, local and foreign tax returns which are required
      to be filed by Guarantor, and Guarantor has paid all federal, State, local
      and
      foreign taxes shown to be due on such tax returns or which have been assessed
      against Guarantor;

    

    (j) Guarantor
      is not in violation of, or to Guarantor’s knowledge and belief, under
      investigation with respect to or threatened to be charged with or given notice
      of a violation of, any law, rule, regulation or order;

    

    (k) Guarantor
      is not, and has not been, the subject of any bankruptcy, reorganization,
      insolvency, readjustment of debt, trusteeship, receivership, dissolution or
      liquidation proceeding;

    

    (l) Guarantor
      has good and marketable title to all of Guarantor’s properties and assets, free
      and clear of all liens and security interests except for those which have been
      disclosed to Lender in writing by Guarantor in its financial statements;
      and

    

    (m) Until
      Borrower’s Obligations have been satisfied in full, Guarantor shall not, to the
      extent the following shall cause a material reduction of the value of the
      Guarantor to occur, transfer or permit to be transferred in any manner to any
      party (except for transfers for fair consideration, at arm’s length) (i) any
      property or any interest in any property, real or personal, in which Guarantor
      has an ownership interest as of the date hereof, or (ii) any property or
      interest in any property owned by any corporation, partnership, limited
      liability corporation or other entity in which Guarantor has the sole or
      controlling interest as of the date hereof.

    

    Guarantor
      warrants and represents that all of Guarantor’s warranties and representations
      herein are true, correct, complete and not misleading in any respect and
      Guarantor agrees to indemnify Lender from any loss, cost or expense as a result
      of any representation or statement of Guarantor, or any agent of Guarantor,
      being false, incorrect, incomplete or misleading in any material
      respect.

    

    5.  Financial
      Information and Condition.
      Guarantor shall furnish to Lender within 120 days following each fiscal year
      end, its annual financial statement, including a balance sheet, income statement
      and retained earnings for the period then ending and a statement of changes
      in
      the financial position, all in reasonable detail, and a copy of its federal
      and
      state tax returns (including all schedules and K-1’s), and such other
      information concerning the financial condition of Guarantor as Lender may
      reasonably require from time to time. In the event Guarantor files for an
      extension in filing its tax return, Guarantor shall provide evidence to Lender
      of such extension request and deliver to Lender a copy of its tax returns within
      10 days after filing.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    6.  Lender’s
      Rights to Deal with Borrower and Obligors.
      Guarantor hereby consents to any and all agreements between Lender and Borrower
      or between Lender and any Obligor, whether presently existing or hereafter
      made
      and whether oral or in writing. Lender, without compromising, impairing,
      modifying, diminishing or in any way releasing or discharging Guarantor from
      Guarantor’s Obligations and without notifying or obtaining the prior approval of
      Guarantor, and at any time or from time to time, may:

    

    (a) At
      the
      request of Borrower, waive or excuse a default or defaults by Borrower or any
      Obligor or delay in the exercise by Lender of any of Lender’s rights and
      remedies with respect to such default or defaults;

    

    (b) At
      the
      request of Borrower, grant extensions of time for the payment or performance
      by
      Borrower or any Obligor;

    

    (c) At
      the
      request of Borrower, release, substitute, exchange, impair, surrender, dispose
      of or add collateral in whole or in part of Borrower or of any Obligor or waive,
      release, modify or subordinate, in whole or in part, any lien or security
      interest held by Lender on any real or personal property securing payment or
      performance, in whole or in part, of Borrower Obligations;

    

    (d) At
      the
      request of Borrower, release in whole or in part Borrower or any
      Obligor;

    

    (e) Apply
      payments made by Borrower or by any Obligor to any of Borrower’s Obligations, in
      any order or manner or to any specific account or accounts as Lender may
      elect;

    

    (f) At
      the
      request of Borrower, modify, change, renew, extend or amend, in any respect,
      the
      Loan Documents; and

    

    (g) Engage
      in
      any other act or permit any other circumstance or condition which might
      otherwise constitute a legal or equitable discharge of a surety or
      guarantor.

    

    7.  Waivers
      by Guarantor.
      Guarantor unconditionally waives:

    

    (a) Any
      and
      all notices whatsoever with respect to this Guaranty or with respect to any
      of
      Borrower’s Obligations, including, but not limited to, notice of Lender’s
      acceptance of this Guaranty, the present existence or future incurring of any
      of
      Borrower’s Obligations or any terms or amounts thereof or any change therein, or
      notice of the obtaining or release of any guaranty, surety agreement, pledge,
      assignment or other security for any of Borrower’s Obligations;

    

    (b) Presentment,
      demand for payment of any sum due from Borrower or any Obligor, notice of
      dishonor, protest, protest and demand, notice of protest, notice of nonpayment,
      notice of default by Borrower or any Obligor and demand for performance by
      Borrower or any Obligor;

    

    (c) So
      long
      as any obligations remain unpaid by Borrower to Lender, any right to
      subrogation, contribution, reimbursement and indemnity against Borrower or
      any
      Obligor or against any property or other security serving at any time as
      collateral for any or all of Borrower Obligations;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (d) Any
      damages which Guarantor may incur as a result of any intentional or
      unintentional or negligent action or inaction by Lender impairing, diminishing
      or destroying any of Guarantor’s rights of subrogation which Guarantor may have
      upon payment of any of Borrower’s Obligations;

    

    (f) All
      rights of redemption of Guarantor with respect to any property directly or
      indirectly securing any of Borrower’s Obligations or this Guaranty;
      and

    

    (g) All
      rights of Guarantor to have marshaled any property directly or indirectly
      securing any of Borrower’s Obligations or this Guaranty.

    

    8.  Effect
      of Lender’s Security Interest.
      In the
      event that Lender shall be granted a security interest in or lien upon any
      real
      or personal property in respect of or as security for any of Borrower’s
      Obligations (“Collateral”), the same shall be for the sole and exclusive benefit
      of Lender, and not for the benefit, whether direct or indirect, by subrogation
      or otherwise, of Guarantor unless Lender shall expressly and in writing grant
      subrogation or other rights to Guarantor.

    

    Borrower
      shall have all risk of loss of the Collateral. Lender shall have no liability
      or
      duty, either before or after the occurrence of an Event of Default, on account
      of loss of or damage to the Collateral, to collect or enforce any of its rights
      against the Collateral, to collect any income accruing on the Collateral or
      to
      preserve rights against account debtors or other parties with prior interests
      in
      the Collateral. If Lender actually receives any notices requiring action with
      respect to Collateral in Lender’s possession, Lender shall take reasonable steps
      to forward such notices to Borrower. Borrower is responsible for responding
      to
      notices concerning the Collateral, voting the Collateral, and exercising rights
      and options, calls and conversions of the Collateral. Lender’s sole
      responsibility is to take such action as is reasonably requested by Borrower
      in
      writing, however, Lender is not responsible to take any action that, in Lender’s
      sole judgment, would adversely affect the value of the Collateral as security
      for the Obligations.

    

    Lender’s
      collection and enforcement of Collateral against account debtors and other
      persons obligated thereon shall be deemed to be commercially reasonable if
      Lender exercises the care and follows the procedures that Lender generally
      applies to the collection of obligations owed directly to Lender. Lender may
      apply all Collateral and proceeds of Collateral coming into Lender’s possession
      and all payments made by any Obligor to any of the Borrower’s Obligations,
      whether matured or unmatured, as Lender shall determine in its sole but
      reasonable discretion. Lender may defer the application of non-cash proceeds
      of
      Collateral, including, but not limited to, non-cash proceeds collected from
      account debtors and other persons obligated on Collateral, to the Obligations
      until cash proceeds are actually received by Lender.

    

    It
      is
      mutually agreed that commercial reasonableness and good faith require Lender
      to
      give Guarantor no more than 5 days prior written notice of the time and place
      of
      any public disposition of Collateral or of the time after which any private
      disposition or other intended disposition is to be made of collection and
      enforcement. It is mutually agreed that it is commercially reasonable for Lender
      to disclaim all warranties which arise with respect to the disposition of the
      Collateral.

    

    9.  Commercial
      Transaction.
      Neither
      the Loan nor the Guaranty is a “consumer transaction” as defined in the Uniform
      Commercial Code and none of the Collateral was or will be purchased primarily
      for personal, family or household purposes.

    

    10.  Independent
      Investigation.
      Guarantor’s execution and delivery to Lender of this Guaranty is based solely
      upon Guarantor’s independent investigation of Borrower’s financial condition and
      not upon any written or oral representation of Lender in any
      manner.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    11.  Events
      of Default.
      The
      occurrence of any one or more of the following events shall constitute an “Event
      of Default” under this Guaranty:

    

    (a) the
      failure of Guarantor to pay any of Guarantor’s Obligations when such payment is
      first due and payable (whether by demand, stated maturity, acceleration or
      otherwise);

    

    (b) the
      failure of Guarantor or any Obligor to perform, observe or comply with any
      agreement, covenant or promise made under this Guaranty or under any of the
      Loan
      Documents, subject to any applicable cure periods;

    

    (c) if
      any
      representation or warranty made herein or if any information contained in any
      financial statement, application, schedule, report or any other document given
      by Guarantor or any Obligor in connection with this Guaranty, with the Note
      or
      with any of the Loan Documents is not in all respects true and accurate, or
      if
      Guarantor or such Obligor omitted to state any material fact or any fact
      necessary to make such information not misleading;

    

    (d) the
      occurrence of an Event of Default or other default under the Note or any of
      the
      other Loan Documents and the expiration of any applicable grace
      period;

    

    (e) the
      occurrence of any default with respect to any indebtedness of Guarantor or
      any
      Obligor to any person or with respect to any agreement securing any indebtedness
      of Guarantor or any Obligor to any person after expiration of any applicable
      grace period but whether or not any required notice has been given;

    

    (f) Guarantor
      or any Obligor shall be or become insolvent (as defined in Section 101 of the
      United States Bankruptcy Code) or unable to pay their debts as they become
      due,
      or admit in writing to such insolvency or to such inability to pay their debts
      as they become due;

    

    (g) there
      shall be filed against Guarantor or any Obligor an involuntary petition or
      other
      pleading seeking the entry of a decree or order for relief under the United
      States Bankruptcy Code or any similar federal or state insolvency or similar
      laws ordering: (i) the liquidation of Guarantor or such Obligor, or (ii) a
      reorganization of Guarantor or such Obligor or the business and affairs of
      Guarantor or such Obligor, or (iii) the appointment of a receiver, liquidator,
      assignee, custodian, trustee or similar official for Guarantor or such Obligor
      of the property of Guarantor or such Obligor and the failure to have such
      petition or other pleading denied or dismissed within 45 calendar days from
      the
      date of filing;

    

    (h) the
      commencement by Guarantor or any Obligor of a voluntary case under the federal
      bankruptcy laws or any federal or state insolvency or similar laws or the
      consent by Guarantor or any Obligor to the appointment of or taking possession
      by a receiver, liquidator, assignee, trustee, custodian or similar official
      for
      Guarantor or such Obligor of any of the property of Guarantor or such Obligor,
      or the making by Guarantor or any Obligor of an assignment for the benefit
      of
      creditors, or the failure by Guarantor or any Obligor generally to pay the
      debts
      of Guarantor or such Obligor as the debts become due;

    

    (i) the
      dissolution or the entry of any order, judgment or decree for the dissolution
      of
      Guarantor or any Obligor that is not a natural person;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (j) the
      entry
      of any final judgment, order, award or decree against Guarantor or any Obligor
      and a determination by Lender, in good faith but in its sole discretion, that
      the same, when aggregated with all other judgments, orders, awards and decrees
      outstanding against Guarantor or any Obligor, could have a material adverse
      effect on the prospect for Lender to fully and punctually realize the full
      benefits conferred on Lender by this Guaranty;

    

    (k) the
      injunction or restraint of Guarantor or any Obligor in any manner from
      conducting its business in whole or in part and a determination by Lender,
      in
      good faith but in its sole discretion, that the same could have a material
      adverse effect on the prospect for Lender to fully and punctually realize the
      full benefits conferred on Lender by this Guaranty;

    

    (l) any
      assets of Guarantor or any Obligor shall be attached, levied upon, seized or
      repossessed, or come into the possession of a trustee, receiver or other
      custodian and a determination by Lender, in good faith but in its sole
      discretion, that the same could have a material adverse effect on the prospect
      for Lender to fully and punctually realize the full benefits conferred on Lender
      by this Guaranty;

    

    (m) the
      determination in good faith by Lender that a material adverse change has
      occurred in the financial condition of Guarantor from the condition set forth
      in
      the most recent financial statement heretofore furnished to Lender, or from
      the
      financial condition as heretofore most recently disclosed to Lender in any
      other
      manner;

    

    (n) the
      determination in good faith by Lender that any security for Borrower’s
      Obligations is inadequate; or

    

    (o) the
      determination in good faith by Lender that the prospect of payment of any of
      Guarantor’s Obligations is impaired for any reason.

    

    12.  Rights
      and Remedies upon Default.
      In the
      event of an Event of Default hereunder, Lender may, at its option, and without
      notice to Guarantor: (a) declare an amount equal to any or all of the
      outstanding balance of Guarantor’s Obligations to be immediately due and payable
      by Guarantor without presentment, demand or notice, which are hereby expressly
      waived, whether or not Lender has accelerated and called due any or all sums
      due
      from Borrower, and Guarantor shall immediately pay the same to Lender in
      immediately available funds in lawful money of the United States of America
      which shall be legal tender in payment of all dues and debts; (b) exercise
      its
      right of setoff against any money, funds, credits or other property of any
      nature whatsoever of Guarantor now or at any time hereafter in the possession
      of, in transit to or from, under the control or custody of or on deposit with,
      Lender or any affiliate of Lender in any capacity whatsoever, including, without
      limitation, any balance of any deposit account and any credits with Lender
      or
      any affiliate of Lender; (c) terminate any outstanding commitments of Lender to
      Guarantor; and (d) exercise any or all rights, powers and remedies provided
      for
      in any Loan Documents or now or hereafter existing at law or in equity or by
      statute or otherwise.

    

    13.  Collection
      Expenses.
      If this
      Guaranty is placed in the hands of an attorney for collection following the
      occurrence of an Event of Default hereunder, Guarantor agrees to pay to Lender
      upon demand all costs and expenses, including, without limitation, all
      attorneys’ fees and court costs incurred by Lender in connection with the
      enforcement or collection of all sums due under this Guaranty (whether or not
      any action has been commenced by Lender to enforce or collect such sums as
      are
      due under this Guaranty) or in successfully defending any counterclaim or other
      legal proceeding brought by Guarantor contesting Lender’s right to collect the
      sums due under this Guaranty. The obligation of Guarantor to pay all such costs
      and expenses shall not be merged into any judgment by confession against
      Guarantor but any amounts actually collected by Lender from the judgment by
      confession shall be applied by Lender to such costs and expenses. All of such
      costs and expenses shall bear interest at the judgment rate of interest as
      set
      forth under the laws of the Sate of Oklahoma from the date of payment by Lender
      until repaid in full.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    14.  Insolvency;
      Indemnification.
      Any
      modification, limitation or discharge of all or any part of Borrower’s
      Obligations arising out of or by virtue of any bankruptcy, arrangement,
      reorganization or similar proceeding for relief of debtors under Federal or
      State law initiated by or against Borrower and/or any other Obligor shall not
      modify, limit, lessen, reduce, impair, discharge or otherwise affect Guarantor’s
      Obligations hereunder in any manner whatsoever. If at any time any payment
      or
      portion thereof of Borrower’s Obligations, whether or not made by or for the
      account of Guarantor, is set aside by any court or trustee having jurisdiction
      as a voidable preference or fraudulent conveyance or must otherwise be restored
      or returned by Lender to Borrower under any insolvency, bankruptcy or other
      federal and/or state laws, rules or regulations or as a result of any
      dissolution, liquidation or reorganization of Borrower or upon or as a result
      of
      the appointment of any receiver, intervenor or conservator of, or trustee or
      similar officer of Borrower or any substantial part of Borrower’s properties or
      assets, or in connection with any compromise or settlement relating to any
      of
      the above, Guarantor hereby agrees that this Guaranty shall continue and remain
      in full force and effect or be reinstated, as the case may be, all as though
      such payment(s) had not been made.

    

    15.  Remedies
      Cumulative.
      Each
      right, power and remedy of Lender hereunder, under the Loan Documents or now
      or
      hereafter existing at law, in equity, by statute or otherwise shall be
      cumulative and concurrent, and the exercise or the beginning of the exercise
      of
      any one or more of them shall not preclude the simultaneous or later exercise
      by
      Lender of any or all such other rights, powers or remedies. No failure or delay
      by Lender to insist upon the strict performance of any one or more provisions
      of
      this Guaranty or of the Loan Documents or to exercise any right, power or remedy
      consequent upon a breach thereof or a default hereunder shall constitute a
      waiver thereof, or preclude Lender from exercising any such right, power or
      remedy. By accepting full or partial payment after the due date of any of
      Guarantor’s Obligations, Lender shall not be deemed to have waived the right
      either to require prompt payment when due of all other sums when due and
      payable, or to declare a default for failure to effect such
      payment.

    

    16.  Choice
      of Law; Forum Selection; Consent to Jurisdiction.
      This
      Guaranty shall be governed by, construed and interpreted in accordance with
      the
      laws of the State of Oklahoma (excluding the choice of law rules thereof).
      Guarantor hereby (a) agrees that all disputes and matters whatsoever arising
      under, in connection with, or incident to this Guaranty shall be litigated,
      if
      at all, in and before a court located in the State of Oklahoma to the exclusion
      of the courts of any other state or country, and (b) irrevocably submits to
      the
      non-exclusive jurisdiction of any Oklahoma court or federal court sitting in
      the
      State of Oklahoma in any action or proceeding arising out of or relating to
      this
      Guaranty, and hereby irrevocably waives any objection to the laying of venue
      of
      any such action or proceeding in any such court and any claim that any such
      action or proceeding has been brought in an inconvenient forum. A final judgment
      in any such action or proceeding shall be conclusive and may be enforced in
      any
      other jurisdiction by suit on the judgment or in any other manner provided
      by
      law.

    

    17.  Service
      of Process.
      Guarantor hereby consents to process being served in any suit, action or
      proceeding instituted in connection with this Guaranty by the mailing of a
      copy
      thereof to Guarantor by certified mail, postage prepaid, return receipt
      requested, delivery restricted to the addressee. Guarantor hereby irrevocably
      agrees that such service shall be deemed to be service of process upon Guarantor
      in any such suit, action or proceeding. Nothing in this Guaranty shall affect
      the right of Lender to serve process in any other manner otherwise permitted
      by
      law, and nothing in this Guaranty will limit the right of Lender otherwise
      to
      bring proceedings against Guarantor in the courts of any other jurisdiction
      or
      jurisdictions.

    

    18.  Invalidity
      of Any Part.
      If any
      provision or part of any provision of this Guaranty shall for any reason be
      held
      invalid, illegal or unenforceable in any respect, such invalidity, illegality
      or
      unenforceability shall not affect any other provision (or any remaining part
      of
      any provision) of this Guaranty, and this Guaranty shall be construed as if
      such
      invalid, illegal or unenforceable provision (or part thereof) had never been
      contained in this Guaranty, but only to the extent of its invalidity, illegality
      or unenforceability.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    19.  Notice.
      Any
      notice, demand, request or other communication which Lender or Guarantor may
      be
      required to give hereunder shall be in writing, shall be effective and deemed
      received the following business day when sent by overnight mail, upon
      transmission if sent by facsimile or e-mail, or the 3rd business day after
      deposit in first class United States mail, postage prepaid, and shall be
      addressed as follows, or to such other addresses as the parties may designate
      by
      like notice:

    

    If
      to
      Guarantor:

    

    ADERA
      MINES LIMITED

    2339
      South Delaware Place

    Tulsa,
      OK
      74114

    Attn:
      J.
      Stewart Asbury, III, President

    Facsimile
      No.: (918) 747-7571

    

    If
      to
      Lender:

    

    BANK
      OF OKLAHOMA, N.A.

    P.O.
      Box
      2300

    Tulsa,
      Oklahoma 74192

    Attn:
      Matt C. Crew, Assistant Vice President

    Facsimile
      No.: (918) 588-6038

    

    Notwithstanding
      anything to the contrary, all notices and demands for payment from Lender
      actually received in writing by Guarantor shall be considered to be effective
      upon the receipt thereof by Guarantor regardless of the procedure or method
      utilized to accomplish delivery thereof to Guarantor.

    

    20.  Assignment.
      If any
      of Borrower’s Obligations should be assigned by Lender, Lender shall have the
      right to assign all or any part of this Guaranty to Lender’s assignee without
      notice to or consent of Guarantor, and this Guaranty will inure to the benefit
      of Lender’s assignee to the extent of such assignment, provided that Lender
      shall continue to have the unimpaired right to enforce this Guaranty as to
      any
      of Borrower’s Obligations not so assigned.

    

    21.  Independence
      and Subordination.
      The
      obligations of Guarantor hereunder are independent of any other guaranty(s)
      at
      any time in effect with respect to all or any part of Borrower’s Obligations and
      Guarantor’s Obligations hereunder may be enforced regardless of the existence of
      any such other guaranty(s). If Guarantor has advanced or shall advance any
      sums
      to Borrower or if Borrower shall hereafter otherwise become indebted to
      Guarantor, such sums and indebtedness and any lien on any property of Borrower
      granted to Guarantor as security therefor shall be subordinated in all respects
      to the amounts then or thereafter due and owing to Lender and to any lien
      granted by Borrower to Lender.

    

    22.  Joint
      and Several Liability.
      Each
      Guarantor shall be jointly and severally liable for payment of Guarantor’s
      Obligations as and when due and payable in accordance with the provisions of
      this Guaranty or any other guaranty executed by such Guarantor. The term
“Guarantor” when used in this Guaranty shall include each Guarantor,
      individually and jointly, whether subject to this Guaranty or a separate
      Guaranty Agreement, and Lender may (without notice to or consent of any or
      all
      of Guarantors and with or without consideration) release, compromise, settle
      with, proceed against any or all of Guarantors without affecting, impairing,
      lessening or releasing the obligations of the other Guarantors.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    23.  Miscellaneous.
      Time is
      of the essence under this Guaranty. The paragraph headings of this Guaranty
      are
      for convenience only, and shall not limit or otherwise affect any of the terms
      hereof. This Guaranty and the Loan Documents, if any, constitute the entire
      agreement between the parties with respect to their subject matter and supersede
      all prior letters, representations or agreements, oral or written, with respect
      thereto. Lender may divulge to any potential assignee, transferee or participant
      all information, reports, financial statements and documents obtained in
      connection with this Guaranty and any other Loan Documents or otherwise. No
      modification, release or waiver of this Guaranty shall be deemed to be made
      by
      Lender unless in writing signed by Lender, and each such waiver, if any, shall
      apply only with respect to the specific instance involved. No course of dealing
      or conduct shall be effective to modify, release or waive any provisions of
      this
      Guaranty or any of the other Loan Documents. This Guaranty shall inure to the
      benefit of and be enforceable by Lender and Lender’s successors and assigns and
      any other person to whom Lender may grant an interest in Borrower’s Obligations
      and shall be binding upon and enforceable against Guarantor and Guarantor’s
      personal representatives, successors, heirs and assigns. Whenever used herein,
      the singular number shall include the plural, the plural the singular, and
      the
      use of the masculine, feminine or neuter gender shall include all genders.
      This
      Guaranty may be executed in any number of counterparts, all of which, when
      taken
      together shall constitute one Guaranty.

    

    IN
      WITNESS WHEREOF, Guarantor has duly executed this Guaranty under seal as of
      the
      day and year first hereinabove set forth.

    

    [Signature
      page follows]

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    
      	 	 	 
	 	
              GUARANTOR

            
	 	 
	 	
              ADERA
                MINES LIMITED,

              a
                Nevada corporation

            
	 
 	 
 	 
 
	
            	By  	/s/ J. Stewart Asbury, III 
	 	
              

              J.
                Stewart Asbury, III, President

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      “1.40”

    

    ($3,000,000
      Line Note)

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      "3.1"

    

    (Security
      Agreement)

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    SECURITY
      AGREEMENT

    

    THIS
      SECURITY AGREEMENT (“Agreement”) is made effective the 1st day of December,
      2006, by and between CHATSWORTH
      DATA CORPORATION,
      a
      California corporation (“Debtor”), in favor of BANK
      OF OKLAHOMA, N.A.
      (“Creditor”).

    

    RECITALS

    

    A. Debtor
      has requested Creditor to extend Debtor loans in the aggregate principal amount
      of $3,000,000 (“Loan”) pursuant to the Credit Agreement between Debtor and
      Creditor of even date herewith (“Credit Agreement”). 

    

    B. In
      order
      to more fully secure Debtor’s obligations under the Note, Creditor has requested
      Debtor to execute this Agreement.

    

    NOW,
      THEREFORE, in consideration of the mutual covenants contained herein, Debtor
      and
      Creditor do hereby agree as follows:

    

    1.  CONSTRUCTION
      AND DEFINITION OF TERMS

    

    All
      terms
      used herein without definition which are defined by the Oklahoma Uniform
      Commercial Code shall have the meanings assigned to them by the Oklahoma Uniform
      Commercial Code, as in effect on the date hereof, unless and to the extent
      varied by this Agreement. All accounting terms used herein without definition
      shall have the meanings assigned to them as determined by generally accepted
      accounting principles. Whenever the phrase “satisfactory to Creditor” is used in
      this Agreement such phrase shall mean “satisfactory to Creditor in its sole
      discretion.” The use of any gender or the neuter herein shall also refer to the
      other gender or the neuter and the use of the plural shall also refer to the
      singular, and vice versa. In addition to the terms defined elsewhere in this
      Agreement, unless the context otherwise requires, when used herein, the
      following terms shall have the following meanings:

    

    1.1.  “Agreement”
      means this Security Agreement and all amendments, modifications and supplements
      hereto.

    

    1.2.  “Banking
      Day” shall mean any day that banks in the State of Oklahoma are not required or
      permitted to be closed.

    

    1.3.  “Bankruptcy
      Code” means the United States Bankruptcy Code, as amended from time to
      time.

    

    1.4.  “Business
      Premises” shall mean Debtor’s chief executive office located at 20710 Lassen
      Street, Chatsworth, California 91211.

    

    1.5.  “Certified”
      shall mean that the information, statement, schedule, report or other document
      required to be “Certified” shall contain a representation of a duly authorized
      officer of Debtor that such information, statement, schedule, report or other
      document is true and complete.

    

    1.6.  “Closing”
      shall mean the date on which this Agreement is executed.

    

    1.7.  “Collateral”
      shall mean all of Debtor’s personal property, both now owned and hereafter
      acquired, including, but not limited to:

    

    1.7.1.  Accounts;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    1.7.2.  As-extracted
      collateral;

    

    1.7.3.  Chattel
      paper;

    

    1.7.4.  Deposit
      accounts;

    

    1.7.5.  Documents;

    

    1.7.6.  Equipment;

    

    1.7.7.  Fixtures;

    

    1.7.8.  General
      intangibles;

    

    1.7.9.  Goods;

    

    1.7.10.  Instruments;

    

    1.7.11.  Inventory;

    

    1.7.12.  Investment
      property;

    

    1.7.13.  Letter-of-credit
      rights; and

    

    1.7.14.  Proceeds
      and products of all of the foregoing.

    

    1.8.  “Event
      of
      Default” shall mean any of the events described in Section
      6
      hereof.

    

    1.9.  “GAAP”
      shall mean generally accepted accounting principles in the United States of
      America in effect from time to time.

    

    1.10.  “Governmental
      Authority” means any nation or government, any state or other political
      subdivision thereof and any entity exercising executive, legislative, judicial,
      regulatory or administrative functions of or pertaining to
      government.

    

    1.11.  “Hazardous
      Materials” means (a) any “hazardous waste” as defined by the Resource
      Conservation and Recovery Act of 1976, as amended from time to time, and
      regulations promulgated thereunder; (b) any “hazardous substance” as defined by
      the Comprehensive Environmental Response, Compensation and Liability Act of
      1980, as amended from time to time, and regulations promulgated thereunder;
      (c)
      any substance the presence of which on any property now or hereafter owned,
      operated or acquired by Debtor is prohibited by any Law similar to those set
      forth in this definition; and (d) any other substance which by Law requires
      special handling in its collection, storage, treatment or disposal.

    

    1.12.  “Hazardous
      Materials Contamination” means the contamination (whether presently existing or
      occurring after the date of this Agreement) by Hazardous Materials on any
      property owned, operated or controlled by Debtor or for which Debtor has
      responsibility, including, without limitation, improvements, facilities, soil,
      ground water, air or other elements on, or of, any property now or hereafter
      owned, operated or acquired by Debtor, and any other contamination by Hazardous
      Materials for which Debtor is, or is claimed to be, responsible.

    

    1.13.  “Indebtedness”
      shall include all items which would properly be included in the liability
      section of a balance sheet or in a footnote to a financial statement in
      accordance with generally accepted accounting principles, and shall also include
      all contingent liabilities.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    1.14.  “Laws”
      shall mean all ordinances, statutes, rules, regulations, orders, injunctions,
      writs or decrees of any Governmental Authority or political subdivision or
      agency thereof, or any court or similar entity established by any
      thereof.

    

    1.15.  “Lien”
      shall mean any statutory or common law consensual or non-consensual mortgage,
      pledge, security interest, encumbrance, lien, right of setoff, claim or charge
      of any kind, including, without limitation, any conditional sale or other title
      retention transaction, any lease transaction in the nature thereof and any
      secured transaction under the Uniform Commercial Code of any
      jurisdiction.

    

    1.16.  “Loan
      Documents” shall mean this Agreement, the Note and any and all other agreements,
      contracts, promissory notes, security agreements, assignments, subordination
      agreements, pledge or hypothecation agreements, mortgages, deeds of trust,
      leases, guaranties, instruments, letters of credit, letter-of-credit agreements
      and documents now and hereafter existing between Creditor and Debtor, executed
      and/or delivered in connection with the Loan or otherwise or guaranteeing,
      securing or in any other manner relating to any of the Obligations, together
      with any other instrument or document executed by Debtor, Creditor or any other
      person in connection with the Loan.

    

    1.17.  “Note”
      shall mean, separately and collectively, the Promissory Notes executed by Debtor
      on even date herewith evidencing the Loan, and all amendments, modifications
      and
      extensions thereto.

    

    1.18.  “Obligations”
      shall include the full and punctual observance and performance of all present
      and future duties, covenants and responsibilities due to Creditor by Debtor
      under this Agreement, the Note, the Loan Documents and otherwise, all present
      and future obligations and liabilities of Debtor to Creditor for the payment
      of
      money under this Agreement, the Note, the Loan Documents and otherwise
      (extending to all principal amounts, interest, late charges, fees and all other
      charges and sums, as well as all costs and expenses payable by Debtor under
      this
      Agreement, the Note, the Loan Documents and otherwise), whether direct or
      indirect, contingent or noncontingent, matured or unmatured, accrued or not
      accrued, related or unrelated to this Agreement, whether or not now
      contemplated, whether or not any instrument or agreement relating thereto
      specifically refers to this Agreement, including, without limitation, overdrafts
      in any checking or other account of Debtor at Creditor and claims against Debtor
      acquired by assignment to Creditor, whether or not secured under any other
      document, or agreement or statutory or common law provision, as well as all
      renewals, refinancings, consolidations, re-castings and extensions of any of
      the
      foregoing, the parties acknowledging that the nature of the relationship created
      hereby contemplates the making of future advances by Creditor to
      Debtor.

    

    1.19.  “Obligor”
      shall mean individually and collectively, Debtor and each endorser, guarantor
      and surety of the Obligations; any person who is primarily or secondarily liable
      for the repayment of the Obligations, or any portion thereof; and any person
      who
      has granted security for the repayment of any of the Obligations.

    

    1.20.  “Permitted
      Liens” shall mean (a) Liens of Creditor, (b) Liens for taxes not delinquent or
      for taxes being diligently contested in good faith by Debtor by appropriate
      proceedings, subject to the conditions set forth in Subsection
      4.2
      hereof,
      (c) mechanic’s, workman’s, materialman’s, landlord’s, carrier’s and other like
      Liens arising in the ordinary course of business with respect to obligations
      which are not due or which are being diligently contested in good faith by
      Debtor by appropriate proceedings, provided such Liens did not arise in
      connection with the borrowing of money or the obtaining of advances or credit
      and do not, in Creditor’s discretion, in the aggregate materially detract from
      the value of Debtor’s assets or materially impair the use thereof, (d) liens
      arising from purchase money financing permitted under the Credit Agreement
      and
      (e) Liens specifically consented to by Creditor in writing.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    1.21.  “Person”
      shall include natural persons, corporations, associations, limited liability
      companies, partnerships, joint ventures, trusts, governments and agencies and
      departments thereof and every other entity of every kind.

    

    1.22.  “Subsidiary”
      shall include any corporation or unincorporated business entity at least a
      majority of the outstanding Voting Stock or interests of which is owned, now
      or
      in the future, by Debtor and/or by one or more Subsidiaries.

    

    1.23.  “Voting
      Stock” shall mean the shares of any class of capital stock of a corporation
      having ordinary voting power to elect the directors, officers or trustees
      thereof, including such shares that shall or might have voting power by reason
      of the occurrence of one or more conditions or contingencies.

    

    2.  SECURITY

    

    2.1.  Security
      Interest.
      As
      security for the payment and performance of all of the Obligations, whether
      or
      not any instrument or agreement relating to any Obligation specifically refers
      to this Agreement or the security interest created hereunder, Debtor hereby
      assigns, pledges and grants to Creditor a continuing security interest in the
      Collateral. Creditor’s security interest shall continually exist until all
      Obligations have been paid in full.

    

    2.2.  Covenants
      and Representations Concerning Collateral.
      With
      respect to all of the Collateral, Debtor covenants, warrants and represents
      that:

    

    2.2.1.  No
      financing statement covering any of the Collateral is on file in any public
      office or land or financing records except for financing statements in favor
      of
      Creditor and Debtor is the legal and beneficial owner of all of the Collateral,
      free and clear of all Liens, except for Permitted Liens.

    

    2.2.2.  The
      security interest granted Creditor hereunder shall constitute a first priority
      Lien upon the Collateral. Debtor shall not, and Creditor does not authorize
      Debtor to, sell, lease, license, or assign any interest in the Collateral nor,
      without Creditor’s prior written consent, permit any other Lien to be created or
      remain thereon except for Permitted Liens.

    

    2.2.3.  Debtor
      will maintain the Collateral in good order and condition, ordinary wear and
      tear
      excepted, and will use, operate and maintain the Collateral in compliance with
      all laws, regulations and ordinances and in compliance with all applicable
      insurance requirements and regulations. Debtor will promptly notify Creditor
      in
      writing of any litigation involving or affecting the Collateral which Debtor
      knows or has reason to believe is pending or threatened. Debtor will promptly
      pay when due all taxes and all transportation, storage, warehousing and other
      such charges and fees affecting or arising out of or relating to the Collateral
      and shall defend the Collateral, at Debtor’s expense, against all claims and
      demands of any persons claiming any interest in the Collateral adverse to Debtor
      or Creditor.

    

    2.2.4.  At
      all
      reasonable times Creditor and its agents and designees may enter the Business
      Premises and any other premises of Debtor and inspect the Collateral and all
      books and records of Debtor (in whatever form), and Debtor shall pay the
      reasonable costs of such inspections.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    2.2.5.  Debtor
      will maintain comprehensive casualty insurance on the Collateral against such
      risks, in such amounts, with such loss deductible amounts and with such
      companies as may be satisfactory to Creditor, and each such policy shall contain
      a clause or endorsement satisfactory to Creditor naming Creditor as loss payee
      and a clause or endorsement satisfactory to Creditor that such policy may not
      be
      cancelled or altered and Creditor may not be removed as loss payee without
      at
      least 30 days prior written notice to Creditor. In all events, the amounts
      of
      such insurance coverages shall conform to prudent business practices and shall
      be in such minimum amounts that Debtor will not be deemed a co-insurer under
      applicable insurance laws, regulations, policies or practices. Debtor hereby
      assigns to Creditor and grants to Creditor a security interest in any and all
      proceeds of such policies and authorizes and empowers Creditor to adjust or
      compromise any loss under such policies and to collect and receive all such
      proceeds. Debtor hereby authorizes and directs each insurance company to pay
      all
      such proceeds directly and solely to Creditor and not to Debtor and Creditor
      jointly. Debtor authorizes and empowers Creditor to execute and endorse in
      Debtor’s name all proofs of loss, drafts, checks and any other documents or
      instruments necessary to accomplish such collection, and any persons making
      payments to Creditor under the terms of this paragraph are hereby relieved
      absolutely from any obligation or responsibility to see to the application
      of
      any sums so paid. After deduction from any such proceeds of all costs and
      expenses (including attorneys’ fees) incurred by Creditor in the collection and
      handling of such proceeds, the net proceeds shall be applied as follows. If
      no
      Event of Default shall have occurred and be continuing, such net proceeds may
      be
      applied, at Debtor’s option, either toward replacing or restoring the
      Collateral, in a manner and on terms satisfactory to Creditor, or as a credit
      against such of the Obligations, whether matured or unmatured, as Creditor
      shall
      determine in Creditor’s sole discretion. In the event that Debtor may and does
      elect to replace or restore as aforesaid, then such net proceeds shall be
      deposited in a segregated account of Debtor at Creditor subject to the sole
      order of Creditor and shall be disbursed therefrom by Creditor in such manner
      and at such times as Creditor deems appropriate to complete such replacement
      or
      restoration; provided, however, that if an Event of Default shall occur at
      any
      time before or after replacement or restoration has commenced, then thereupon
      Creditor shall have the option to apply all remaining net proceeds either toward
      replacing or restoring the Collateral, in a manner and on terms satisfactory
      to
      Creditor, or as a credit against such of the Obligations, whether matured or
      unmatured, as Creditor shall determine in Creditor’s sole discretion. If an
      Event of Default shall have occurred prior to such deposit of the net proceeds,
      then Creditor may, in its sole discretion, apply such net proceeds either toward
      replacing or restoring the Collateral, in a manner and on terms satisfactory
      to
      Creditor, or as a credit against such of the Obligations, whether matured or
      unmatured, as Creditor shall determine in Creditor’s sole
      discretion.

    

    2.2.6.  All
      books
      and records pertaining to the Collateral are located at the Business Premises
      and Debtor will not change the location of such books and records without the
      prior written consent of Creditor, which consent shall not be unreasonably
      withheld.

    

    2.2.7.  Debtor
      shall do, make, execute and deliver all such additional and further acts,
      things, deeds, assurances, instruments and documents as Creditor may request
      to
      vest in and assure to Creditor its rights hereunder or in any of the Collateral,
      including, without limitation, placing legends on Collateral or on books and
      records pertaining to Collateral stating that Creditor has a security interest
      therein.

    

    2.2.8.  Debtor
      shall cooperate with Creditor to obtain and keep in effect one or more control
      agreements in deposit account, electronic chattel paper, investment property
      and
      letter-of-credit rights Collateral.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    2.2.9.  Debtor
      authorizes Creditor to file financing statements covering the Collateral and
      all
      personal property of Debtor and containing such legends as Creditor shall deem
      necessary or desirable to protect Creditor’s interest in the Collateral. Debtor
      agrees to pay all taxes, fees and costs (including attorneys’ fees) paid or
      incurred by Creditor in connection with the preparation, filing or recordation
      therof.

    

    2.2.10.  Whenever
      required by Creditor, Debtor shall promptly deliver to Creditor, with all
      endorsements and/or assignments required by Creditor, all instruments, chattel
      paper, guaranties and the like received by Debtor constituting, evidencing
      or
      relating to any of the Collateral or proceeds of any of the
      Collateral.

    

    2.2.11.  Debtor
      shall not file any amendments, correction statements or termination statements
      concerning the Collateral without the prior written consent of
      Creditor.

    

    2.2.12.  If
      any
      Collateral arises out of a contract with the United States Government or any
      department, agency or instrumentality thereof, Debtor shall immediately notify
      Creditor thereof and shall execute and deliver to Creditor specific assignments
      of those contracts and the related United States Government accounts of Debtor
      and shall do such other things as may be satisfactory to Creditor in order
      that
      all sums due and to become due to Debtor under such contract shall be duly
      assigned to Creditor in accordance with the Federal Assignment of Claims Act
      (31
      United States Code § 3727; 41 United States Code § 15) as in effect on the date
      hereof and as hereafter amended and/or any other applicable laws and regulations
      relating to the assignment of governmental obligations. Payments on United
      States Government contracts or United States Government accounts which have
      been
      specifically assigned to Creditor by means of a direct assignment, as provided
      herein, shall be made directly to Creditor, for payment to the Obligations.
      The
      separate assignment of specific United States Government contracts to Creditor,
      as contemplated herein, shall not be deemed to limit Creditor’s security
      interest to the payments under those particular United States Government
      contracts and the related United States Government accounts, but rather
      Creditor’s security interest shall extend to any and all United States
      Government contracts and the related United States Government accounts and
      proceeds thereof, now or hereafter owned or acquired by Debtor. During the
      term
      of this Agreement, Debtor agrees and covenants not to make any assignment of
      any
      of the United States Government contracts to any party other than Creditor
      without Creditors prior written consent.

    

    2.3.  Collateral
      Collections.
      After an
      Event of Default shall have occurred, Creditor shall have the right at any
      and
      all times to enforce Debtor’s rights against account debtors and other parties
      obligated on Collateral, including, but not limited to, the right to: (a) notify
      and/or require Debtor to notify any or all account debtors and other parties
      obligated on Collateral to make payments directly to Creditor or in care of
      a
      post office lock box under the sole control of Creditor established at Debtor’s
      expense subject to Creditor’s customary arrangements and charges therefor, and
      to take any or all action with respect to Collateral as Creditor shall determine
      in its sole discretion, including, without limitation, the right to demand,
      collect, sue for and receive any money or property at any time due, payable
      or
      receivable on account thereof, compromise and settle with any person liable
      thereon, and extend the time of payment or otherwise change the terms thereof,
      without incurring liability or responsibility to Debtor; (b) require Debtor
      to
      segregate and hold in trust for Creditor and, on the day of Debtor’s receipt
      thereof, transmit to Creditor in the exact form received by Debtor (except
      for
      such assignments and endorsements as may be required by Creditor), all cash,
      checks, drafts, money orders and other items of payment constituting Collateral
      or proceeds of Collateral; and/or (c) establish and maintain at Creditor a
      “Repayment Account,” which shall be under the exclusive control of and subject
      to the sole order of Creditor and which shall be subject to the imposition
      of
      such customary charges as are imposed by Creditor from time to time upon such
      accounts, for the deposit of cash, checks, drafts, money orders and other items
      of payments constituting Collateral or proceeds of Collateral from which
      Creditor may, in its sole discretion, at any time and from time to time,
      withdraw all or any part. Creditor’s collection and enforcement of Collateral
      against account debtors and other persons obligated thereon shall be deemed
      to
      be commercially reasonable if Creditor exercises the care and follows the
      procedures that Creditor generally applies to the collection of obligations
      owed
      to Creditor. All cash and non-cash proceeds of the Collateral may be applied
      by
      Creditor upon Creditor’s actual receipt of cash proceeds against such of the
      Obligations, matured or unmatured, as Creditor shall determine in Creditor’s
      sole discretion.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    2.4.  Care
      of Collateral.
      Debtor
      shall have all risk of loss of the Collateral. Creditor shall have no liability
      or duty, either before or after the occurrence of an Event of Default, on
      account of loss of or damage to, to collect or enforce any of its rights
      against, the Collateral, to collect any income accruing on the Collateral,
      or to
      preserve rights against account debtors or other parties with prior interests
      in
      the Collateral. If Creditor actually receives any notices requiring action
      with
      respect to Collateral in Creditor’s possession, Creditor shall take reasonable
      steps to forward such notices to Debtor. Debtor is responsible for responding
      to
      notices concerning the Collateral, voting the Collateral, and exercising rights
      and options, calls and conversions of the Collateral. Creditor’s sole
      responsibility is to take such action as is reasonably requested by Debtor
      in
      writing, however, Creditor is not responsible to take any action that, in
      Creditor’s sole judgment, would affect the value of the Collateral as security
      for the Obligations adversely. While Creditor is not required to take certain
      actions, if action is needed, in Creditor’s sole discretion, to preserve and
      maintain the Collateral, Debtor authorizes Creditor to take such actions, but
      Creditor is not obligated to do so.

    

    2.5.  Authorization
      and Power-of-Attorney.
      Debtor
      authorizes Creditor to request other secured parties of Debtor to provide
      accountings, confirmations of Collateral and confirmations of statements of
      account concerning Debtor. Debtor hereby designates and appoints Creditor and
      its designees as attorney-in-fact of Debtor, irrevocably and with power of
      substitution, with authority to endorse Debtor’s name on requests to other
      secured parties of Debtor for accountings, confirmations of collateral and
      confirmations of statements of account.

    

    3.  REPRESENTATIONS
      AND WARRANTIES.
      Debtor
      hereby ratifies and confirms all representations and warranties set forth in
      Section 5 of the Credit Agreement.

    

    4.  AFFIRMATIVE
      COVENANTS.
      Debtor
      hereby ratifies and confirms all affirmative covenants set forth in Section
      6 of
      the Credit Agreement.

    

    5.  NEGATIVE
      COVENANTS.
      Debtor
      hereby ratifies and confirms all negative covenants set forth in Section 7
      of
      the Credit Agreement.

    

    6.  EVENTS
      OF DEFAULT

    

    The
      occurrence of any one or more of the following events shall constitute an “Event
      of Default”:

    

    6.1.  Failure
      to Pay.
      The
      failure of Debtor to pay any of the Obligations as and when due and payable
      (whether by acceleration, declaration, extension or otherwise).

    

    6.2.  Covenants
      and Agreements.
      The
      failure of Debtor to perform, observe or comply with any of the covenants of
      this Agreement or any of the Loan Documents. 

    

    6.3.  Information,
      Representations and Warranties.
      If any
      representation or warranty made herein or if any information contained in any
      financial statement, application, schedule, report or any other document given
      by Debtor in connection with the Obligations, with the Collateral, or with
      any
      of the Loan Documents is not in all respects true and accurate or if Debtor
      omitted to state any material fact or any fact necessary to make such
      information not misleading.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    6.4.  Default
      under Loan Documents.
      The
      occurrence of an Event of Default under any of the Loan Documents.

    

    6.5.  Default
      on Other Obligations.
      The
      occurrence of any default under any other borrowing if the result of such
      default would permit the acceleration of the maturity of any note, loan or
      other
      agreement between Debtor and any person other than Creditor.

    

    6.6.  Insolvency.
      Debtor
      shall be or become insolvent (as defined in Section 101 of the United States
      Bankruptcy Code) or unable to pay its debts as they become due, or admits in
      writing to such insolvency or to such inability to pay its debts as they become
      due.

    

    6.7.  Involuntary
      Bankruptcy.
      There
      shall be filed against Debtor an involuntary petition or other pleading seeking
      the entry of a decree or order for relief under the United States Bankruptcy
      Code or any similar federal or state insolvency or similar laws ordering: (a)
      the liquidation of Debtor or (b) a reorganization of Debtor or the business
      and
      affairs of Debtor or (c) the appointment of a receiver, liquidator, assignee,
      custodian, trustee or similar official for Debtor of the property of Debtor
      and
      the failure to have such petition or other pleading denied or dismissed within
      45 calendar days from the date of filing.

    

    6.8.  Voluntary
      Bankruptcy.
      The
      commencement by Debtor of a voluntary case under the federal bankruptcy laws
      or
      any federal or state insolvency or similar laws or the consent by Debtor to
      the
      appointment of or taking possession by a receiver, liquidator, assignee,
      trustee, custodian or similar official for Debtor of any of the property of
      Debtor or the making by Debtor of an assignment for the benefit of creditors,
      or
      the failure by Debtor generally to pay its debts as the debts become
      due.

    

    6.9.  Judgments,
      Awards.
      The
      entry of any judgment, order, award or decree against Debtor and a determination
      by Creditor, in good faith but in its sole discretion, that the same, when
      aggregated with all other judgments, orders, awards and decrees outstanding
      against Debtor could have a material adverse effect on the prospect for Creditor
      to fully and punctually realize the full benefits conferred on Creditor by
      this
      Agreement.

    

    6.10.  Injunction.
      The
      injunction or restraint of Debtor in any manner from conducting its business
      in
      whole or in part and a determination by Creditor, in good faith but in its
      sole
      discretion, that the same could have a material adverse effect on the prospect
      for Creditor to fully and punctually realize the full benefits conferred on
      Creditor by this Agreement.

    

    6.11.  Attachment
      by Creditors.
      Any
      assets of Debtor shall be attached, levied upon, seized or repossessed, or
      come
      into the possession of a trustee, receiver or other custodian and a
      determination by Creditor, in good faith but in its sole discretion, that the
      same could have a material adverse effect on the prospect for Creditor to fully
      and punctually realize the full benefits conferred on Creditor by this
      Agreement.

    

    6.12.  Dissolution,
      Merger, Consolidation, Reorganization.
      The
      voluntary or involuntary dissolution, merger, consolidation, winding up or
      reorganization of Debtor or the occurrence of any action preparatory
      thereto.

    

    6.13.  Adverse
      Change in Financial Condition.
      The
      determination in good faith by Creditor that material adverse change has
      occurred in the financial condition of Debtor from the conditions set forth
      in
      the most recent financial statement of Debtor heretofore furnished to Creditor
      or from the financial condition of Debtor as heretofore most recently disclosed
      to Creditor in any other manner.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    6.14.  Adverse
      Change in Value of Collateral.
      The
      determination in good faith by Creditor that the security for the Obligations
      is
      or has become inadequate.

    

    6.15.  Prospect
      of Payment or Performance.
      The
      determination in good faith by Creditor that the prospect for payment or
      performance of any of the Obligations is impaired for any reason.

    

    7.  RIGHTS
      AND REMEDIES

    

    7.1.  Rights
      and Remedies of Creditor.
      Upon and
      after the occurrence of an Event of Default, Creditor may, following the Notice
      and Cure (defined in the Credit Agreement), without further notice or demand,
      exercise in any jurisdiction in which enforcement hereof is sought, the
      following rights and remedies, in addition to the rights and remedies available
      to Creditor under the Loan Documents, the rights and remedies of a secured
      party
      under the Uniform Commercial Code and all other rights and remedies available
      to
      Creditor under applicable law, all such rights and remedies being cumulative
      and
      enforceable alternatively, successively or concurrently:

    

    7.1.1.  Declare
      all Obligations to be immediately due and payable and the same shall thereupon
      become immediately due and payable without presentment, demand for payment,
      protest or notice of any kind, all of which are hereby expressly
      waived.

    

    7.1.2.  Institute
      any proceeding or proceedings to enforce the Obligations and any Liens of
      Creditor.

    

    7.1.3.  Take
      possession of the Collateral, and for that purpose, so far as Debtor may give
      authority therefor, enter upon any premises on which the Collateral or any
      part
      thereof may be situated and remove the same therefrom without any liability
      for
      suit, action or other proceeding, Debtor HEREBY WAIVING ANY AND ALL RIGHTS
      TO
      PRIOR NOTICE AND TO JUDICIAL HEARING WITH RESPECT TO REPOSSESSION OF COLLATERAL,
      and require Debtor, at Debtor’s expense, to assemble and deliver the Collateral
      to such place or places as Creditor may designate.

    

    7.1.4.  Operate,
      manage and control the Collateral (including use of the Collateral and any
      other
      property or assets of Debtor in order to continue or complete performance of
      Debtor’s obligations under any contracts of Debtor), or permit the Collateral or
      any portion thereof to remain idle or store the same, and collect all rents
      and
      revenues therefrom and sell or otherwise dispose of any or all of the Collateral
      upon such terms and under such conditions as Creditor, in its sole discretion,
      may determine, and purchase or acquire any of the Collateral at any such sale
      or
      other disposition, all to the extent permitted by applicable law.

    

    7.1.5.  Enforce
      Debtor’s rights against any account debtors and other obligors.

    

    7.2.  Power
      of Attorney.
      Effective upon the occurrence of an Event of Default, Debtor hereby designates
      and appoints Creditor and its designees as attorney-in-fact of Debtor,
      irrevocably and with power of substitution, with authority to endorse Debtor’s
      name on any notes, acceptances, checks, drafts, money orders, instruments or
      other evidences of payment or proceeds of the Collateral that may come into
      Creditor’s possession; to execute proofs of claim and loss; to adjust and
      compromise any claims under insurance policies; and to perform all other acts
      necessary and advisable, in Creditor’s sole discretion, to carry out and enforce
      this Agreement and the Loan Documents. All acts of said attorney or designee are
      hereby ratified and approved by Debtor and said attorney or designee shall
      not
      be liable for any acts of commission or omission nor for any error of judgment
      or mistake of fact or law. This power of attorney is coupled with an interest
      and is irrevocable so long as any of the Obligations remain unpaid or
      unperformed or there exists any commitment by Creditor which could give rise
      to
      any Obligations.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    7.3.  Notice
      of Disposition of Collateral and Disclaimer of Warranties.
      It is
      mutually agreed that commercial reasonableness and good faith require Creditor
      to give Debtor no more than 5 days prior written notice of the time and place
      of
      any public disposition of Collateral or of the time after which any private
      disposition or any other intended disposition is to be made. It is mutually
      agreed that it is commercially reasonable for Creditor to disclaim all
      warranties which arise with respect to the disposition of the
      Collateral.

    

    7.4.  Costs
      and Expenses.
      Debtor
      agrees to pay to Creditor on demand the amount of all expenses paid or incurred
      by Creditor in consulting with counsel concerning any of its rights hereunder,
      under the Loan Documents or under applicable law, all expenses, including
      attorneys’ fees and court costs paid or incurred by Creditor in exercising or
      enforcing any of its rights hereunder, under the Loan Documents or under
      applicable law, together with interest on all such amounts at the highest rate
      and calculated in the manner provided in the Note, and such portion of
      Creditor’s overhead as Creditor shall allocate to collection and enforcement of
      the Obligations in Creditor’s sole but reasonable discretion (the “Enforcement
      Costs”). The provisions of this Subsection shall survive the termination of this
      Agreement and Creditor’s security interest hereunder and the payment of all
      Obligations.

    

    8.  MISCELLANEOUS

    

    8.1.  Performance
      for Debtor.
      Debtor
      agrees and hereby authorizes that Creditor may, in Creditor’s sole discretion,
      but Creditor shall not be obligated to, whether or not an Event of Default
      shall
      have occurred, advance funds on behalf of Debtor, without prior notice to
      Debtor, in order to insure Debtor’s compliance with any covenant, warranty,
      representation or agreement of Debtor made in or pursuant to this Agreement
      or
      any of the Loan Documents, to continue or complete, or cause to be continued
      or
      completed, performance of Debtor’s obligations under any contracts of Debtor, to
      cover overdrafts in any checking or other accounts of Debtor at Creditor or
      to
      preserve or protect any right or interest of Creditor in the Collateral or
      under
      or pursuant to this Agreement or any of the Loan Documents, including, without
      limitation, the payment of any insurance premiums or taxes and the satisfaction
      or discharge of any judgment or any Lien upon the Collateral or other property
      or assets of Debtor; provided, however, that the making of any such advance
      by
      Creditor shall not constitute a waiver by Creditor of any Event of Default
      with
      respect to which such advance is made nor relieve Debtor of any such Event
      of
      Default. Debtor shall pay to Creditor upon demand all such advances made by
      Creditor with interest thereon at the highest rate and calculated in the manner
      provided in the Note. All such advances shall be deemed to be included in the
      Obligations and secured by the security interest granted Creditor hereunder;
      provided, however, that the provisions of this Subsection shall survive the
      termination of this Agreement and Creditor’s security interest hereunder and the
      payment of all other Obligations.

    

    8.2.  Expenses.
      Whether
      or not any of the transactions contemplated hereby shall be consummated, Debtor
      agrees to pay to Creditor on demand the amount of all expenses paid or incurred
      by Creditor (including the fees and expenses of its counsel) in connection
      with
      the preparation of all written commitments of Creditor antedating this
      Agreement, this Agreement and the Loan Documents and all documents and
      instruments referred to herein and all expenses paid or incurred by Creditor
      in
      connection with the filing or recordation of all financing statements and
      instruments as may be required by Creditor at the time of, or subsequent to,
      the
      execution of this Agreement, including, without limitation, all documentary
      stamps, recordation and transfer taxes and other costs and taxes incident to
      recordation of any document or instrument in connection herewith. Debtor shall
      pay Creditor $25.00 for each response to Debtor’s request for an accounting or
      confirmation of a list of Collateral or statement of account exceeding one
      request per 6-month period. Debtor agrees to save harmless and indemnify
      Creditor from and against any liability resulting from the failure to pay any
      required documentary stamps, recordation and transfer taxes, recording costs
      or
      any other expenses incurred by Creditor in connection with this Agreement.
      The
      provisions of this Subsection shall survive the termination of this Agreement
      and Creditor’s security interest hereunder and the payment of all other
      Obligations.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    8.3.  Applications
      of Payments and Collateral.
      Except
      as may be otherwise specifically provided in this Agreement, all Collateral
      and
      proceeds of Collateral coming into Creditor’s possession and all payments made
      by any Obligor may be applied by Creditor to any of the Obligations, whether
      matured or unmatured, as Creditor shall determine in its sole but reasonable
      discretion. Creditor may defer the application of non-cash proceeds of
      Collateral, including, but not limited to, non-cash proceeds collected under
      Subsection 2.3 hereof, to the Obligations until cash proceeds are actually
      received by Creditor.

    

    8.4.  Waivers
      by Debtor.
      Debtor
      hereby waives, to the extent the same may be waived under applicable law: (a)
      notice of acceptance of this Agreement; (b) all claims, causes of action and
      rights of Debtor against Creditor on account of actions taken or not taken
      by
      Creditor in the exercise of Creditor’s rights or remedies hereunder, under the
      Loan Documents or under applicable law; (c) all claims of Debtor for failure
      of
      Creditor to comply with any requirement of applicable law relating to
      enforcement of Creditor’s rights or remedies hereunder, under the Loan Documents
      or under applicable law; (d) all rights of redemption of Debtor with respect
      to
      the Collateral; (e) in the event Creditor seeks to repossess any or all of
      the
      Collateral by judicial proceedings, any bond(s) or demand(s) for possession
      which otherwise may be necessary or required; (f) presentment, demand for
      payment, protest and notice of non-payment and all exemptions; (g) any and
      all
      other notices or demands which by applicable law must be given to or made upon
      Debtor by Creditor; (h) settlement, compromise or release of the obligations
      of
      any person primarily or secondarily liable upon any of the Obligations; (i)
      all
      rights of Debtor to demand that Creditor release account debtors from further
      obligation to Creditor; and (ii) substitution, impairment, exchange or release
      of any Collateral for any of the Obligations. Debtor agrees that Creditor may
      exercise any or all of its rights and/or remedies hereunder, under the Loan
      Documents and under applicable law without resorting to and without regard
      to
      any Collateral or sources of liability with respect to any of the Obligations.
      Upon termination of this Agreement and Creditor’s security interest hereunder
      and payment of all Obligations, within 60 days following Debtor’s request to
      Creditor, Creditor shall release control of any security interest in the
      Collateral perfected by control and Creditor shall send Debtor a statement
      terminating any financing statement filed against the Collateral.

    

    8.5.  Waivers
      by Creditor.
      Neither
      any failure nor any delay on the part of Creditor in exercising any right,
      power
      or remedy hereunder, under any of the Loan Documents or under applicable law
      shall operate as a waiver thereof, nor shall a single or partial exercise
      thereof preclude any other or further exercise thereof or the exercise of any
      other right, power or remedy.

    

    8.6.  Creditor’s
      Setoff.
      Creditor
      shall have the right, in addition to all other rights and remedies available
      to
      it, following an Event of Default, to set off against any Obligations due
      Creditor, any debt owing to Debtor by Creditor, including, without limitation,
      any funds in any checking or other account now or hereafter maintained by Debtor
      at Creditor. Debtor hereby confirms Creditor’s right to banker’s lien and
      setoff, and nothing in this Agreement or any of the Loan Documents shall be
      deemed a waiver or prohibition of Creditor’s right of banker’s lien and
      setoff.

    

    8.7.  Modifications.
      No
      modifications or waiver of any provision of this Agreement or any of the Loan
      Documents, and no consent by Creditor to any departure by Debtor therefrom,
      shall in any event be effective unless the same shall be in writing, and then
      such waiver or consent shall be effective only in the specific instance and
      for
      the purpose for which given. No notice to or demand upon Debtor in any case
      shall entitle Debtor to any other or further notice or demand in the same,
      similar or other circumstances.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    8.8.  Notices.
      Any
      notice, request or other communication in connection with this Agreement, shall
      be in writing and, if sent by registered or certified mail, shall be deemed
      to
      have been given when received by the party to whom directed, or, if sent by
      mail
      but not registered or certified, when deposited in the mail, postage prepaid,
      provided that any such notice or communication shall be addressed to a party
      hereto as provided below (or at such other address as such party shall specify
      in writing to the other parties hereto):

    

    8.8.1.  If
      to
      Debtor:

    

    CHATSWORTH
      DATA CORPORATION

    20710
      Lassen Street

    Chatsworth,
      CA 91211

    Attn:
      J.
      Stewart Asbury, III, President

    Facsimile
      No.: (818) 341-3002

    

    8.8.2.  If
      to
      Creditor:

    

    BANK
      OF OKLAHOMA, N.A.

    P.O.
      Box
      2300

    Tulsa,
      Oklahoma 74192

    Attn:
      Matt C. Crew, Assistant Vice President

    Facsimile
      No.: (918) 295-0400

    

    Notwithstanding
      anything to the contrary, all notices and demands for payment from Creditor
      actually received in writing by Debtor shall be considered to be effective
      upon
      receipt thereof by Debtor regardless of the procedure or method utilized to
      accomplish such delivery thereof to Debtor.

    

    8.9.  Applicable
      Law and Consent to Jurisdiction.
      The
      performance and construction of this Agreement and the Loan Documents shall
      be
      governed by the internal laws of the State of Oklahoma. Debtor agrees that
      any
      suit, action or proceeding instituted against Debtor with respect to any of
      the
      Obligations, the Collateral, this Agreement or any of the Loan Documents may
      be
      brought in any court of competent jurisdiction located in the State of Oklahoma.
      By its execution hereof, Debtor hereby irrevocably waives any objection and
      any
      right of immunity on the ground of venue, the convenience of the forum or the
      jurisdiction of such courts or from the execution of judgments resulting
      therefrom. Debtor hereby irrevocably accepts and submits to the jurisdiction
      of
      the aforesaid courts in any such suit, action or proceeding.

    

    8.10.  Survival:
      Successors and Assigns.
      All
      covenants, agreements, representations and warranties made herein and in the
      Loan Documents shall survive the execution and delivery hereof and thereof,
      shall survive Closing and shall continue in full force and effect until all
      Obligations have been paid in full, there exists no commitment by Creditor
      which
      could give rise to any Obligations and all appropriate termination statements
      have been filed terminating the security interest granted Creditor hereunder.
      Whenever in this Agreement any of the parties hereto is referred to, such
      reference shall be deemed to include the successors and assigns of such party.
      In the event that Creditor assigns the Note, this Agreement and/or its security
      interest in the Collateral, Creditor shall give written notice to Debtor of
      any
      such assignment. All covenants, agreements, representations and warranties
      by or
      on behalf of Debtor which are contained in this Agreement and the Loan Documents
      shall inure to the benefit of Creditor, its successors and assigns. Debtor
      may
      not assign this Agreement or any of its rights hereunder without the prior
      written consent of Creditor.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    8.11.  Severability.
      If any
      term, provision or condition, or any part thereof, of this Agreement or any
      of
      the Loan Documents shall for any reason be found or held invalid or
      unenforceable by any court or governmental agency of competent jurisdiction,
      such invalidity or unenforceability shall not affect the remainder of such
      term,
      provision or condition nor any other term, provision or condition, and this
      Agreement and the Loan Documents shall survive and be construed as if such
      invalid or unenforceable term, provision or condition had not been contained
      therein.

    

    8.12.  Merger
      and Integration.
      This
      Agreement and the attached Schedules (if any) contain the entire agreement
      of
      the parties hereto with respect to the matters covered and the transactions
      contemplated hereby, and no other agreement, statement or promise made by any
      party hereto, or by any employee, officer, agent or attorney of any party
      hereto, which is not contained herein shall be valid or binding.

    

    8.13.  Counterparts.
      This
      Agreement may be executed in any number of counterparts and by different parties
      hereto on separate counterparts, each of which, when so executed and delivered,
      shall be an original, but all such counterparts shall together constitute one
      and the same instrument.

    

    8.14.  Headings.
      The
      headings and sub-headings contained in the titling of this Agreement are
      intended to be used for convenience only and shall not be used or deemed to
      limit or diminish any of the provisions hereof.

    

    8.15.  Recitals.
      The
      Recitals hereto are hereby incorporated into and made a part of this
      Agreement.

    

    IN
      WITNESS WHEREOF, the parties hereto have executed or caused this Agreement
      to be
      executed under seal as of the date first above written.

    
      	 	 	 
	 	
              DEBTOR

            
	 	 
	 	
              CHATSWORTH
                DATA CORPORATION,
                

              a
                California corporation

            
	 
 	 
 	 
 
	
            	By  	/s/ J. Stewart Asbury, III
	 	
              

              J.
                Stewart Asbury, III, President

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      "5.11"

    

    (Debt)

    

    1. Bank
      of
      Oklahoma, N.A. loans.

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