Loan Agreement

LOAN AGREEMENT

between

, LENDER

and

, COMPANY

DATED , 20__

LOAN AGREEMENT

This loan agreement is made and entered into on this the day of , 20__, between , hereinafter “Lender”, a banking corporation with its principal offices located at and , , , corporation, hereinafter “Company”.

WITNESSETH

WHEREAS, Company is in the business of leasing equipment, supplies and accessories to persons, partnerships, corporations, the State of and political subdivisions thereof and the United States of America and desires to assign leases to Lender in exchange for loans; and

WHEREAS, Lender is in the business of loaning funds as requested by Company within the State of ; and

WHEREAS, Lender and Company have been doing business together as Lender and Company since , 20____ and presently are doing business together; and

WHEREAS, there presently exists between Lender and Company certain security agreements, financing statements, guaranty agreements and assignment of life insurance policies as evidenced by the attached Exhibit “A”; and

WHEREAS, there also exists between Lender and Company dated prior to the date of this agreement certain assignment of leases to Lender by Company and certain security agreements and notes executed by Company to Lender; and

WHEREAS, Lender and Company desire that all said security agreements, financing statements, guaranty agreements, assignment of life insurance policies, promissory notes and assignments of leases shall remain in full force and effect except as hereinafter stated, and all said agreements are hereby ratified, approved and continued by Lender and Company; and

WHEREAS, all future assignment of leases, promissory notes, financing statements and loans by and between Lender and Company shall be made in reference to this agreement and no additional financing will be made on the previous agreements executed prior to the date hereof except that said agreements shall continue to secure and provide the payment of the assignment of leases and promissory notes presently existing between Lender and Company; and

WHEREAS, any loan agreement amount provided for herein will be decreased by the amount of the outstanding loan balance to Company under the previous agreements until such time as the outstanding loan balance under the previous agreement is reduced, in which event the loan amount pursuant to this agreement shall be automatically increased by the reduction to the present outstanding loan balance; and

WHEREAS, Lender desires to agree to loan up to an aggregate and maximum total of ($ ) to Company consistent with the terms of this agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, the parties hereto covenant, contract and agree as follows:

1. Amount and Terms of Loan: Lender agrees, subject to the terms and conditions in this loan agreement, to lend to Company up to an aggregate maximum of ($ ), as evidenced by promissory notes executed from time to time by Company to Lender at different intervals of time upon receipt by Lender of assignment of leases, each such promissory note to bear interest at not more than % above the New York Prime Rate as published in the Wall Street Journal, each such promissory note to be paid in accordance with the terms thereof.

2. Prepayment: Company shall have the right to prepay at any time before maturity of any note or notes in the inverse order of maturity, provided each note having a later maturity date has been paid in full, together with interest thereon, without prepayment penalty.

3. Conditions Precedent: Lender shall not be obligated to lend any monies until it has received the following:

(a) An opinion of counsel of Company, satisfactory in form and substance to Lender and its counsel, as to the validity of the organization of Company, its authority to execute and deliver this agreement, and all agreements, notes and other documents referred to herein.

(b) A copy of the certificate of incorporation of Company including all former names and name changes of Company, certified by the Secretary of State of the State of , including all amendments thereto.

(c) A certified copy of the by-laws of Company presently in force.

(d) A certified copy of the resolution of the Board of Directors of Company authorizing the execution of this agreement and all other agreements, notes and documents referred to herein.

(e) A certified copy of audited financial statements of Company for the last fiscal year of the Company.

4. Loan Procedures: Lender and Company shall abide by the following loan procedures:

(a) From time to time Company shall assign leases unto Bank as security for the payment of any promissory notes executed by Company to Lender, said assignment of leases to be in a form satisfactory to Lender. Company leases its equipment for intervals of 12, 24 and 36 months. The 12 month leases shall be placed in one category of security and the 24 and 36 month leases shall be placed in a second category of security. One promissory note may be executed for any number of 12 month leases or 24 and 36 month leases. 12 month leases and 24/36 month leases will not be combined in one promissory note.

(b) Lender will review the credit worthiness of each Lessee in the leases proposed to be assigned to Lender by Company and may reject any lease which Lender determines, in its sole discretion, is unsuitable to stand as security for a loan to Company. Lender will notify Company within 10 days of receipt of any lease whether or not the lease is acceptable.

(c) On 12 month leases which are accepted by Lender, Lender agrees to loan unto Company up to a maximum of % of the lease value. On 24 and 36 month leases accepted by Lender, Lender agrees to loan unto Company up to a maximum of % of the lease value. Lease value is the total of payments to made under the terms of any one lease.

(d) At each loan transaction, Company agrees to furnish Lender with a UCC Financing Statement executed by Lessee and Company showing as assignee of Company, the original lease agreement, simple interest note disclosure, and security agreement, extension of master security agreement and assignment of lease.

(e) Company may continue to collect all rental payments on any lease assigned to Lender until such time as Lender revokes their authority to do so by written notice.

(f) Upon receipt of the assignment of any lease, Lender will notify the Lessee that the lease has been assigned to Lender and request that Lessee acknowledge receipt of the assignment and return same to Lender. Lessee will be notified that it may continue to make payments unto Company until such time as it is notified otherwise to make payments directly to Lender.

(g) On each installment due date in any promissory note executed by Company to Bank, Company's account number at Bank shall be debited for the amount due. Company will at all times maintain a sufficient balance in said account to cover any debits made to said account by Lender. In the event that the funds presently deposited in said account are insufficient on the date of the debit to the account, Company will be immediately notified and given 24 hours to deposit an amount of funds sufficient to cover said debit.

(h) In the event that the Lessee defaults in payment to Company or Lender, Company agrees to continue making payments unto Lender in accordance with the promissory note executed with the assignment of said lease. In the event that Lessor desires to withdraw any lease previously assigned to Lender, Company may do so upon payment unto Lender of the accelerated payments due under any such lease.

(i) Upon full payment of any promissory note of which leases are assigned, the original leases will be returned and reassigned to Company.

5. Security Agreement. Company agrees to execute and deliver unto Lender a security agreement, of financing statements, Commercial Code in form and substance satisfactory to Lender and its counsel, covering all of Company's inventory, equipment, chattel paper, contract rights and accounts receivable as a master security agreement to secure the payment of any loans from Lender unto Company up to the aggregate maximum of ($ ).

6. Additional Security. If at any time or times, in the opinion of Lender, or counsel, the prospect of payment or performance hereunder is impaired, Company shall furnish unto Lender within ten days of Lender's demand therefore, such further security as may be satisfactory to Lender and shall duly execute and deliver all such instruments and documents as in the opinion of Lender are necessary and desirable in connection therewith.

7. Guaranties. Company shall cause to be duly executed and delivered unto Lender guaranties of the Company's indebtedness to Lender of ($ ), said guaranties to be executed by , , and . Each guaranty shall be in form and substance satisfactory to Lender and delivered on the date this agreement is executed.

8. Assignment of Life Insurance. To further secure the payment of the indebtedness herein, Company shall cause to be assigned unto Lender, life insurance policies on the lives of and in the amount of ($ ) each with as beneficiary of each such life insurance policy.

In the event that either assignor of life insurance policy shall die, the full ($ ) proceeds shall be paid unto by the insurer and shall dispose of or maintain said funds in either of the following options:

(a) Lender will, upon receipt of the insurance proceeds, pay $ unto the spouse of the deceased and place the remainder in an interest bearing escrow account until such time as two audited financial statements of Company are received by Lender, one for the year in which the deceased died and one for the next fiscal year of Company. Upon receiving the audited financial statement for said two years, Lender will determine, in its discretion, whether or not to apply the life insurance proceeds to the outstanding debt of Company and refund the remainder, or refund the entire insurance proceeds plus accrued interest.

OR

(b) Lender will apply the life insurance proceeds to the then existing accelerated outstanding debt of Company to Lender and pay the remainder, if any, to Company. In the event that this option is chosen by Lender, this agreement may be continued in full force and effect after the application of said life insurance proceeds as provided herein, provided that Lender and Company execute an agreement agreeing to extend this agreement further.

9. Use of Proceeds. Company agrees that the proceeds of any loan to Company by Lender shall be used for general working capital of Company and for no other purposes.

10. Affirmative Covenants. Company covenants and agrees that until all notes with interest and all other indebtedness to Lender under this Agreement are fully paid unless specifically waived by Lender in writing to:

(a) As soon as practical and in any event within forty-five (45) days after the close of the fiscal year of Company, to provide Lender with audited consolidated and consolidating sheets and financial statements of Company, including a consolidated and consolidating statement of the income and surplus account of Company, a consolidated and consolidating statement of changes in financial position of Company as compared to the last fiscal year, all in reasonable detail and certified by a certified public accountant to be true and correct.

(b) To provide Lender promptly upon receipt thereof, of copies of all financial reports, if any, submitted to Company in connection with each annual or interim audit of their respective books by its auditors.

(c) Promptly upon receipt thereof, provide Lender with copies of all reports to or from the Securities and Exchange Commission or any other governmental agency or any Securities Exchange, and all reports, notices or statements sent to its stockholders.

(d) Promptly upon the commencement thereof, provide Lender with written notice of any litigation, including arbitrations, and of any proceedings before any governmental agency, where the amount involved exceeds $10,000.00 whether or not same is covered by insurance.

(e) With reasonable promptness provide Lender with such other information respecting the business, operations and financial condition of Company as Lender may from time to time request. Lender is hereby authorized to deliver a copy of any financial statement or any other information relating to the business, operation or financial condition of Company which may be furnished to it or come to its attention pursuant to this agreement or otherwise, to any regulatory body or agency having jurisdiction over Lender or to any person which shall, or shall have any right or obligation to, succeed to all or any part of the Lender's interest in the notes or to its counsel or accountants.

11. Taxes and Claims. Company shall duly pay and discharge (a) all taxes, assessments and governmental charges upon or against Company or its respective properties or assets prior to the date on which penalties attach thereto, unless and to the extent that such taxes are being diligently contested in good faith and by appropriate proceedings and appropriate services therefore have been established and (b) all lawful claims, whether for tort damages, labor, materials, supplies, services, repairs, wages or otherwise, which might or could, if unpaid, become a lien or charge upon the properties or assets of the Company, unless and to the extent only that same are being diligently contested in good faith and by appropriate proceedings and appropriate reserves therefore have been established.

12. Document Retention. (a) The Company shall (i) keep all of its proper copy of any financial statement or any other information relating to the business, operation or financial condition of Company which may be furnished to it or come to its attention pursuant to this agreement or otherwise, to any regulatory body or agency having jurisdiction over Lender or to any person which shall, or shall have any right or obligation to, succeed to all or any part of the Lender's interest in the notes or to its counsel or accountants.

13. Insurance. (a) The Company shall (i) keep all of its properties adequately insured at all times and with responsible insurance carriers qualified to do business under the laws of the State of against loss or damage by fire or other hazards, (ii) maintain adequate insurance at all times with responsible insurance carriers qualified to do business in the State of against liability on account of damage to person or property and under all applicable workmen's compensation laws and (iii) maintain adequate insurance covering such other risks as Lender may reasonable request.

For purpose of this section, insurance shall be deemed adequate if same is not less extensive in coverage and amount as is customarily maintained by other persons engaged in the same or similar business similarly situated. All insurance covering tangible personal property subject to a lien or security interest in favor of Lender granted pursuant to this agreement or under any other instrument or document given as security pursuant hereto shall provide that, in the case of each separate loss in excess of $2,000.00, the full amount of insurance proceeds with respect thereto shall be payable to Lender as mortgagee, said insurance proceeds to be applied by Lender to Company's debt on the insured loss.

(1) Company shall from time to time upon request of Lender promptly furnish and cause to be furnished to Lender evidence, in form and substance satisfactory to, of the maintenance of all insurance as required by this section, including, but not limited to such originals or copies as Lender may request of policies, certificates of insurance, riders and endorsements relating to such insurance and proof of premium payments.

14. Books and Reserves: Company shall maintain, at all times, true and complete books, records, and accounts in which true and correct entries shall be made of its transactions in accordance with generally accepted accounting principals consistently applied and consistent with those applied in the preparation of the financial statements as referred to above, and by means of appropriate quarterly entries, in its account and in all financial statements proper liabilities in reserves for all taxes and proper reserves for depreciation, renewals and replacements, obsolescence, and amortization of its properties and bad debts, all in accordance with generally accepted accounting principals consistently applied.

15. Properties in Good Condition. Company shall keep and cause its lessees to keep, their respective properties in good repair, working order and condition and, from time to time, make a needful and proper repair, renewals, replacements, additions, and improvements thereto, so that the business carried on may be properly and advantageously conducted at all times in accordance with prudent business management.

16. Inspection by Lender. Company shall allow and shall cause its lessees to allow, any representative of Lender to visit and inspect any of the properties of Company its lessees, to examine the books of account and other records and files of the Company and Lessees and to discuss affairs, business, finances, and accounts of Company and each of its subsidiaries with their respective officers and employees, all at such reasonable times and as often as Lender may request.

17. Pay Indebtedness to Lender and Perform Other Covenants. Company shall (a) make full and timely payment of all principal and interest on the note or notes executed in connection herewith and all other indebtedness of Company to Lender, whether now existing or hereafter arising (b) duly comply with all terms and covenants contained in each instrument and document given to Lender in connection with and pursuant to this agreement, all at the times and places and in the manner set forth therein, and (c) at all times maintain the liens and security interest provided for under or pursuant to as valid and perfected liens and security interest on the property intended to be covered thereby. Company further agrees to duly execute and deliver to Lender such further instruments as may be necessary to execute in order to further secure Lender and to do and cause to be done such further acts as may be necessary or proper in the opinion of Lender to carry out more effectively the provisions and purposes of this agreement.

18. Negative Covenants. Company covenants and agrees that until the note or notes together with all interest and all other indebtedness to Lender under this agreement are paid in full, Company shall not, without prior written consent of Bank:

(a) permit working capital at any time to be less than $ .

(b) make or be committed to make, or permit any subsidiary to make or be committed to make, directly or indirectly, expenditures for fixed or capital assets amounting in the aggregate for Company for any fiscal year of Company to more than $ .

(c) create, incur, assume, or suffer to exist any mortgage, pledge, security interest, encumbrance, lien, or charge of any kind upon or defect in title to or restriction upon the use of any of Company's assets except the permitted items listed in the agreement.

(d) permit tangible net worth at any time to be less than .

(e) lend or advance money, credit or property to any person, or invest in, by capital contribution or otherwise, guaranty, assume, endorse or otherwise become responsible for the indebtedness, performance, obligations, stock or dividends of any person, except endorsement of negotiable instruments for deposit or collection in the ordinary course of business.

19. Negative Covenants. Company shall not:

(a) Enter into any transaction of merger or consolidation, or transfer, sell, assign, lease, or otherwise dispose of all or a substantial part of its properties or assets, or any of its notes or accounts receivables or any stock or indebtedness of any subsidiary or any assets or properties necessary or desirable for the proper conduct of its business or change the nature of its business, or wind up, liquidate, or dissolve or agree to do any of the foregoing, or permit any subsidiary to do so except as provided in the agreement.

(b) Permit or suffer any subsidiary to acquire, hold or own any shares of stock of the Company or to issue or sell any shares of its own stock of any class to any person except the Company or another subsidiary.

(c) To purchase, redeem or otherwise retire any common or other shares of Company, or apply or set apart any of its assets therefore, or make any other substantial change in the now existing structure of Company.

(d) Declare or pay any dividends on any shares of stock of any class of Company other than dividends as have customarily been paid in previous years during Company's business.

20. Events of Default. If any one or more of the following events, hereinafter "Events of Default", shall occur for any reason whatsoever, whether voluntary or involuntary or by operation of law, Company shall be in default:

(a) Company fails to make punctual payments on the promissory note or note executed in accordance herewith when and as the same become due and payable, whether at maturity or at a date fixed for prepayment or by acceleration or otherwise.

(b) Company fails in the performance or observance of any covenant, agreement, or other provision of this agreement or in any instrument or document delivered to Lender in connection with or pursuant to this agreement, or if any such instrument or document shall terminate or become void or unenforceable without written consent of Lender.

(c) A representation or warranty or any other statement of fact herein or in any writing, certificate report, or statement at any time furnished to Lender pursuant to or in connection with this agreement, or otherwise, shall be false or misleading in any material respect;

(d) The Company shall admit in writing its inability to pay its debts generally as they become due, file a petition in bankruptcy or a petition to take advantage of any insolvency act; make an assignment for the benefit of its creditors; commence a proceeding for the appointment of a receiver, trustee, liquidator or conservator of itself or of a whole or any substantial part of its property; file a petition or answer seeking reorganization or arrangement or similarly relief under the federal bankruptcy laws or any other applicable law or statute of the United States or any other state.

(e) The Company shall be adjudged a bankrupt; or a court of competent jurisdiction shall enter into an order, judgment, or decree appointing a receiver, trustee, liquidator, or conservator of Company or of the whole or any substantial part of its properties or approve a petition filed against Company seeking reorganization or similar relief under the federal bankruptcy law or any other applicable law or statute of the United States or any other state, or if, under the provisions of any other law for the relief or aid of debtors, a court of competent jurisdiction shall assume custody or control of Company or of the whole or any substantial part of its properties; or if there is commenced against the Company any proceeding or any of the foregoing relief or if a petition in bankruptcy is filed against the Company in any such proceeding or petition remains undismissed for a period of ten days; or if the Company by any act indicates its consent to, approval of or acquiescence in any such proceeding or petition.

(f) Any judgment against Company or any attachment or execution against any of its property for any amount in excess of $ remains unpaid, unstayed, or undismissed for a period of more than ten days.

(g) Lender shall consider the indebtedness of Company to Lender insecure or any part of any collateral therefore unsafe, insecure, or insufficient, and Company shall not on demand furnish other collateral or make payment on account satisfactory to Lender.

In the event of default, and at any time thereafter, Lender may, at its option, declare all notes to be due and payable whereupon the maturity of the unpaid balance of the note or notes shall be accelerated and the same, and all interest accrued thereon, shall forthwith become due and payable without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived, anything contained herein or in any note or notes to the contrary notwithstanding.

21. Suits for Enforcement. In case any one or more of the events of default shall occur and be continuing, Lender may proceed to protest and enforce its rights or remedies either by suit in equity or by action at law, or both, whether for the specific performance of any covenant, agreement or other provision contained herein, in the security agreement, promissory note or notes, or any other document or instrument delivered in connection with or pursuant to this agreement, or to enforce the payment of any such note or notes or any other legal or equitable right or remedy.

22. Non-Exclusive Remedy. No right or remedy herein conferred upon Lender is intended to be exclusive of any other right or remedy contained herein, in the security agreement or in the note or notes or any instrument or document delivered in connection with or pursuant to this Agreement, and every such right or remedy shall be cumulative and shall be in addition to every other such right or remedy contained herein and thereafter or now or hereafter existing at law or in equity or by statute, or by otherwise.

23. Rights and Remedies not Waived. No course of dealing between Lender and Company or any failure or delay on the part of Lender in exercising any rights or remedies hereunder shall operate as a waiver of any rights or remedies of Lender and no single or partial exercise of any rights or remedies hereunder shall operate as a waiver or preclude the exercise of any other rights or remedies.

24. Representations and Warranties. In order to induce Lender to enter into this agreement and to make the loans as herein provided for, Company makes the following representations and warranties which shall survive the execution and delivery of this agreement and the security agreement, assignments and note or notes, and any inspection or examination at any time may be made on behalf of Bank:

(a) Corporate status. Company is a duly organized corporation in good standing of the laws of the State of with perpetual corporate existence, and has the corporate power and authority to own its properties and to transact the business in which it is engaged and presently proposes to engage.

(b) Corporate Power and Authority. Company has the corporate power to borrow and to execute, deliver and carry out the terms and provisions of this agreement, the notes and all instruments and documents delivered by it pursuant to this agreement, and Company has taken or caused to be taken all necessary corporate action to authorize the execution, delivery, and performance of this agreement, the borrowing hereunder, the making and delivery of the note, and the execution, delivery and performance of the instruments and documents delivered by it pursuant to this agreement.

(c) No violation of agreements. Company is not in default under any indenture, mortgage, deed of trust, agreement, or other instrument to which it is a party or by which it may be bound. Neither the execution and delivery of this agreement, the note or notes or any other instrument or documents to be delivered pursuant to this agreement, nor the consummation of the transaction herein and herein contemplated, nor compliance with the provisions hereof or thereof will violate any law or regulation, or any order or decree of any court of any governmental instrumentality, or will conflict with, or result in the breach of, or constitute a default under, any indenture, mortgage, deed of trust, agreement or other instrument to which the Company is a party or by which it may be bound or result in the creation or imposition of any lien, charge, or encumbrance upon any of the property of Company, or violate any provision of the articles or certificate of incorporation or by-laws of the Company.

(d) No burdensome agreement. Company is not a party to any agreement or instrument or subject to any corporate restriction materially or adversely affecting its operations, business, properties or financial condition.

(e) No litigation. That there are no actions, suits, or proceedings pending, or to the knowledge of Company, threatened, against or affecting Company before any court, arbitrator, or governmental or administrative body or agency which may result in any material adverse change in the business, operations, properties or assets or in the condition, financial or otherwise, of Company, except: . Company is not in default in any material respect under any applicable statute, rule, order, decree, or regulation of any court, arbitrator, or governmental body or agency having jurisdiction over Company.

(f) Company has good and marketable title to all their respective properties and assets subject to no liens, mortgages, pledges, security interest, encumbrances, or charges of any kind, except as those permitted to the terms of this agreement.

(g) Financial statements. That the consolidated balance sheets and financial statements of Company for the preceding fiscal year of Company, and the related consolidated statement of income and surplus account of Company, including in such case the related schedules and notes prepared by the independent public accountants reflected therein and certified by the chief accounting officer of Company and heretofore deliver to bank, are all true and correct and present fairly the financial condition of Company and of the state of any such balance sheets, financial statements or statements of income and surplus.

(h) Company possesses all licenses required to conduct its respective business.

(i) Company has filed all tax returns which are required to be filed and have paid all taxes which have become due pursuant to such returns and pursuant to any assessment received by them.

(j) Governmental action - No action of, or filing with, any governmental or public body or authority is required to authorize or is otherwise required in connection with, the execution, delivery, and performance of this agreement, the note or notes, or any of the instruments or documents to be delivered pursuant to this agreement.

(k) Disclosure - neither the financial statements, nor any certificate, statement, report, or other document furnished to Lender by Company in connection herewith, or in connection with any transaction contemplated hereby, nor this agreement contain any untrue statement of any material fact or omit to state any material fact necessary in order to make the statements contained herein not misleading.

25. Definitions. For purposes of this agreement the following definitions shall apply:

"Current Assets" shall be determined in accordance with generally accepted accounting principals on a consolidated basis for Company and shall include only the following items:

(i) Cash in bank, on hand, and in transit;

(ii) Prepaid items (excluding unamortized debt discount and expense);

(iii) Customer accounts, bills, and notes receivable acquired in the ordinary course of business;

(iv) Inventories at not in excess of cost or current market value, whichever is lower;

(v) Readily marketable direct obligations of the United States of America and certificates of deposit, in each case at not in excess of cost or current market value, whichever is lower;

(vi) Cash surrender value of any insurance policies on the lives of the Company's officers, of which the Company is both owner and beneficiary; all after deduction of adequate reserves in each case where reserve is proper in accordance with generally accepted accounting principals; provided, however, that any of such assets which are subject to a pledge, lien, or security interest to secure payments of any indebtedness which is not included in current liabilities shall be excluded from current assets to the extent of such indebtedness.

"Current Liabilities" shall be determined in accordance with generally accepted accounting principals on a consolidated basis for Company and shall include as of the date of determination thereof:

(i) All indebtedness payable on demand or maturing within one year after such date without any option on the part of the obligor to extend or renew beyond such year;

(ii) Final maturity, installments, and pre-payments of indebtedness required to be made within one year after such date; and

(iii) All other items which, in accordance with generally accepted accounting principals, would be included on a balance sheet as current liabilities.

"Indebtedness" shall mean all items which, in accordance with generally accepted accounting principals, would be included in determining total liabilities as shown on the liabilities side of a balance sheet as of the date indebtedness is to be determined and, in any event, shall include all liabilities secured by any mortgage, pledge, lien, or security interest on property owned or acquired, whether or not such liability shall have been assumed, and guaranties, endorsements, and other contingent obligations in respect of the obligations to others.

"Personal" shall include an individual, corporation, association, joint stock company, business trust, partnership, joint venture, unincorporated organization, or government or any agency or political subdivision thereof.

"Tangible Net Worth" shall mean the total of all assets appearing on a balance sheet prepared in accordance with generally accepted accounting principals for Company on a consolidated basis, after deducting therefrom:

(i) Any right-of-set-off in the book carrying value of any asset resulting from a revaluation thereof subsequent to , 20__;

(ii) All reserves, including but not limited to, reserves for liabilities, fixed or contingent, deferred income taxes, obsolescence, depletion, insurance, and inventory valuation, which are not deducted from assets;

(iii) The amount, if any, at which shares of stock of Company appear on the asset side of such balance sheet;

(iv) All indebtedness of Company; and

(v) All goodwill, research and development and other intangible items of any kind appearing on the asset side of such balance sheet.

"Working Capital" shall mean the amount by which current assets exceeds current liabilities.

26. Collection Costs. In the event that Lender shall retain or engage an attorney or attorneys to collect, enforce, or protect its interest with respect to this agreement, the note or notes, or any instrument or document delivered pursuant to this agreement, including leases, Company shall pay all costs and expenses of such collection, enforcement, or protection including reasonable attorney's fees and Lender may take judgment for all such amounts, in addition to the unpaid principal balance of the note or notes and accrued interest thereon.

27. Modification/Waiver. No modification or waiver of any provision of the note or notes or of this agreement or any other agreement executed by Company in connection herewith and no consent by Lender to any departure therefrom by Company shall be effective unless such modification or waiver shall be in writing and signed by a duly authorized officer of Lender and same shall then be effective only for the period, on the conditions and for the specific instances and purposes specified in such writing. No notice to or demand on the Company in any case shall entitle the Company to any other or further notice or demand in similar or other circumstances.

28. Applicable Law. The note or notes, this agreement or any other agreements executed in connection herewith shall be construed in accordance and governed by the laws of the State of .

29. Notices. All notices, requests, demands, or other communications provided for herein shall be in writing and shall be deemed to have been given when sent by registered or certified mail, return receipt requested, addressed as the case may be, to Lender at: ; or to Company at: ; or to such other person or address as either party shall designate to the other from time to time in writing forwarding in like manner.

30. Fees and Expenses. Whether or not any loans are made hereunder, Company shall pay all out-of-pocket expenses incurred by Lender in connection with the transaction contemplated hereunder, including but not limited to all filing fees and expenses of counsel for Lender.

31. Waiver of Jury Trial and Setoffs. Company hereby waives trial by jury and any litigation in any court with respect to, in connection with, or arising out of this agreement, or the security agreement, or note or notes, or any other instrument or document delivered pursuant to this agreement, or the validity, protection, interpretation, collection, or enforcement thereof, or any other claim or dispute howsoever arising between Company and Lender; and Company hereby waives the right to interpose any setoff or counterclaim or cross claim in connection with any such litigation, herein respective of the nature of such setoff, counterclaim, or cross claim.

32. Designated Bank. Lender shall be designated and shall continue to be the prime depositary of funds of Company.

33. Captions. The captions of the various sections and paragraphs of this agreement have been inserted only for the purposes of convenience; such captions are not a part of this agreement and shall not be deemed in any manner to modify, explain, enlarge, or restrict any of the provisions of this agreement.

34. Security Acts Status. Company represents and warrants that it has not caused and will not offer to be caused the sell, or conduct any act which would bring the issuance or sell of any note or notes referred to herein or any other provision or document referred herein within the provisions of Section 5 of the Securities Act of 1933, as amended. Lender represents and warrants that it is making or will make, the purchase and sale and the loan herein contemplated for its account; and not with any present intentions of making any public offering or affecting any distribution of the note or notes, but Lender reserves the right to transfer the note or notes, if, at any future date, Lender shall deem it advisable to do so.

35. Benefit of Agreement. This agreement shall be binding upon and inure to the benefit of Company and Lender and their respective successors and assigns. Notwithstanding the foregoing, Company may not assign, pledge, hypothecate, or otherwise transfer its interest herein.

36. Entire Agreement. This agreement constitutes the entire agreement between Company and Lender and no other prior or contemporaneous written or oral agreements shall be binding or effective.

37. Severability. In case any clause, provision or section of this loan agreement, or any covenant, stipulation, obligation, agreement, act, or action, or part thereof, made, assumed, entered into or taken under this loan agreement or any application thereof, is for any reason held to be illegal, invalid or inoperable, such illegality, invalidity or inoperability shall not affect the remainder thereof or any other clause, provision or section or any other covenant, stipulation, obligation, agreement, act or actions or part thereof made, assumed, entered into, or taken thereunder, which shall at the time be construed and enforced as if such illegal or invalid or inoperable portion were not contained therein.

THIS agreement is entered by and between Lender and Company on the day and year above first written. Witness the signatures hereto:

NOTARY ACKNOWLEDGMENTS