TERM LOAN AGREEMENT AMONG CRAFTMADE INTERNATIONAL, INC., WOODARD?CM, LLC AND THE FROST NATIONAL BANK July 8, 2009

Exhibit 10.2

TERM LOAN AGREEMENT

AMONG

CRAFTMADE INTERNATIONAL, INC.,
WOODARD—CM, LLC

AND

THE FROST NATIONAL BANK

July 8, 2009

TABLE OF CONTENTS

EXHIBITS

TERM LOAN AGREEMENT

THIS TERM LOAN AGREEMENT is dated as of July 8, 2009 (this agreement, together with all amendments and restatements, this “ Agreement ”), among WOODARD—CM, LLC, a Delaware limited liability company (“ Borrower ”), CRAFTMADE INTERNATIONAL, INC., a Delaware corporation (“ Parent ”), and THE FROST NATIONAL BANK (“ Lender ”).

BACKGROUND

Borrower has requested Lender to make a term credit facility available to Borrower. Lender has agreed to do so, subject to the terms and conditions of this Agreement.

AGREEMENT

In consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, receipt of which is acknowledged by the parties hereto, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

1.1 Definitions . For purposes of this Agreement:

“ Affiliate ” means any Person that directly, or indirectly, through one or more intermediaries, Controls or is Controlled By or is Under Common Control with any other Person.

“ Agreement Date ” means the date of this Agreement.

“ Applicable Law ” means (a) in respect of any Person, all provisions of Laws and orders of Governmental Authorities applicable to such Person and its properties, including, without limiting the foregoing, all orders and decrees of all Governmental Authorities and arbitrators in proceedings or actions to which the Person in question is a party, and (b) in respect of contracts relating to interest or finance charges that are made or performed in the State of Texas, “Applicable Law” means the Laws of the United States of America, including without limitation 12 U.S.C. §§85 and 86, and any other statute of the United States of America now or at any time hereafter prescribing the maximum rates of interest on loans and extensions of credit, and the Laws of the State of Texas, and any other Laws of the State of Texas now or at any time hereafter prescribing maximum rates of interest on loans and extensions of credit.

“ Attorney Costs ” means and includes all fees, expenses and disbursements of any law firm or other external counsel and, without duplication, the allocated cost of internal legal services and all expenses and disbursements of internal counsel.

“ Auditors ” means independent certified public accountants selected by Parent and reasonably acceptable to Lender.

“ Authorized Signatory ” means such senior personnel of Borrower, any Subsidiary of Borrower or an Obligor as may be duly authorized and designated in writing by Borrower, such Subsidiary or such Obligor to execute documents, agreements and instruments on behalf of Borrower, such Subsidiary or such Obligor.

“ Bank Liens ” means Liens in favor of Lender securing all or any of the Obligations, arising pursuant to the Mortgage, as amended, modified, restated, and/or replaced from time to time.

“ Business Day ” means any day other than a Saturday, Sunday, or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where Lender’s office is located.

“ Capital Leases ” means capital leases and subleases, as defined in the Financial Accounting Standards Board Statement of Financial Accounting Standards No. 13, dated November 1976, as amended.

“ CM Real Estate ” means CM Real Estate, LLC, a Texas limited liability company, and wholly-owned direct Subsidiary of Borrower.

“ Code ” means the Uniform Commercial Code as in effect in Texas or such other state where any Collateral is located, as the case may be.

“ Collateral ” means any assets of any Person in which at any time Lender shall be granted a Bank Lien to secure the Obligations.

“ Compliance Certificate ” means a compliance certificate pursuant to Section 5.2(c) of this Agreement.

“ Contingent Debt ” means, for any Person:

(a) guarantees, endorsements (other than endorsements of negotiable instruments for collection in the ordinary course of business) and other contingent liabilities (whether direct or indirect) in connection with the obligations of any other Person;

(b) obligations under any contract providing for the making of loans, advances or capital contributions to any other Person, or for the purchase of any property from any other Person, in each case in order to enable such other Person primarily to maintain working capital, net worth or any other balance sheet condition or to pay Debts, Dividends or expenses;

(c) obligations under any contract to rent or lease (as lessee) any real or personal property (other than operating leases) if such contract (or any related document) provides that the obligation to make payments thereunder is absolute and unconditional under conditions not customarily found in commercial leases then in general use or requires that the lessee purchase or otherwise acquire securities or obligations of the lessor;

(d) obligations in respect of letters of credit; and

(e) obligations under any other contract which, in economic effect, is substantially equivalent to a guaranty, including but not limited to “keep well” or “capital maintenance” agreements.

“ Control ” or “ Controlled By ” or “ Under Common Control ” means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of voting securities, by contract or otherwise); provided that, in any event any Person which beneficially owns, directly or indirectly, 10% or more (in number of votes) of the securities having ordinary voting power for the election of directors of a corporation or managers of a limited liability company or other governance board of an entity shall be conclusively presumed to control such corporation or limited liability company.

“ Debt ” means, at any time, for any Person, (a) Capital Leases, (b) Contingent Debt, (c) debt created, issued, incurred or assumed for money borrowed or for the deferred purchase price of property purchased, (d) all debt, obligations and liabilities secured by any Lien upon any property owned by such Person, even though it has not assumed or become liable for the payment of same, and (e) liabilities in respect of unfunded vested benefits under any Plans.

“ Debtor Relief Laws ” means any applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, insolvency, fraudulent conveyance, reorganization or similar debtor relief Laws affecting the rights of creditors generally from time to time in effect.

“ Default ” means any of the events specified in Section 8.1 that would, with the giving of notice or the passage of time, become an Event of Default.

“ Disposition ” and “ Dispose ” mean any sale, lease, abandonment, transfer, disposal, exchange or other transfer of any ownership or leasehold interest in or control of any asset.

“ Dividends ” means, with respect to any Person, any dividend on any class of its capital stock or other equity interest now or hereafter outstanding, any distribution of cash or property to owners of any shares of such stock or other equity interest.

“ Dollars ” and the sign “ $ ” mean lawful money of the United States of America.

“ Eligible Replacement Lender ” means any bank or financial institution with assets in excess of $50,000,000,000 and which is regulated by the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, or the Office of Thrift Supervision.

“ Elitex ” means the Elitex Development, Ltd., a Hong Kong company, and wholly-owned direct Subsidiary of Trade Source International, Inc.

“ Environment ” means ambient air, surface water and groundwater (including potable water, navigable water and wetlands), the land surface or subsurface strata, real property improvements or as otherwise defined in any Environmental Law.

“ Environmental Claim ” means any written accusation, allegation, notice of violation, claim, demand, order, directive, consent decree, cost recovery action or other cause of action by, or on behalf of, any Governmental Authority or any Person for damages, injunctive or equitable relief, personal injury (including sickness, disease or death), Remedial Action costs, property damage, natural resource damages, nuisance, pollution, any adverse effect on the Environment caused by any Hazardous Material, or for fines, penalties or restrictions, resulting from or based upon: (a) the existence, or the continuation of the existence, of a Release; (b) exposure to any Hazardous Material; (c) the presence, use, handling, transportation, storage, treatment or disposal of any Hazardous Material; or (d) the violation or alleged violation of any Environmental Law or Environmental Permit.

“ Environmental Law ” means any and all applicable domestic Laws, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the Environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters, including the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq. (collectively “ CERCLA ”), the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq. , the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq. , the Clean Air Act of 1970, 42 U.S.C. §§ 7401 et seq. , as amended, the Toxic Substances Control Act of 1976, 15 U.S.C. §§ 2601 et seq. , the Occupational Safety and Health Act of 1970, as amended by 29 U.S.C. §§ 651 et seq. , the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq. , the Safe Drinking Water Act of 1974, as amended by 42 U.S.C. §§ 300(f) et seq. , the Hazardous Materials Transportation Act, 49 U.S.C. §§ 5101 et seq. , and any similar or implementing Law.

“ Environmental Permit ” means any permit, approval, authorization, certificate, license, variance, filing or permission required by or from any Governmental Authority pursuant to any Environmental Law.

“ ERISA ” means the Employee Retirement Income Security Act of 1974.

“ Event of Default ” means any of the events specified in Section 8.1 , provided there has been satisfied any requirement in connection with such event for the giving of notice, or the lapse of time, or the happening of any further specified condition, event or act.

“ Existing Credit Agreement ” means that certain Third Amended and Restated Loan Agreement, dated as of December 31, 2007, among the Parent, the lenders party thereto and Frost, as administrative agent, as amended, modified or supplemented from time to time.

“ Existing Debt ” means the Debt of Parent and its Subsidiaries existing on the Agreement Date, which is described on Schedule 6.5 , including renewals (but not increases) thereof.

“ Existing Investments ” means the Investments of Parent and its Subsidiaries existing on the Agreement Date, which are described on Schedule 6.11 .

“ Existing Liens ” means Liens against assets of Parent and its Subsidiaries existing on the Agreement Date, which are described on Schedule 6.4 .

“ Existing Litigation ” means the Litigation involving or otherwise affecting Parent and its Subsidiaries existing on the Agreement Date, which is described on Schedule 7.4 .

“ Financial Statements ” includes, but is not limited to, balance sheets, profit and loss statements, reconciliations of capital and surplus and/or partnership capital accounts, as appropriate, and statements of changes in financial position or cash flow, prepared in comparative form with respect to the corresponding period of the preceding fiscal year and prepared in accordance with GAAP.

“ Foreign Subsidiary ” means Elitex, TSI Prime Asia and any other direct or indirect Subsidiary of Parent that is not organized under the laws of any political subdivision of the United States.

“ Frost ” means The Frost National Bank and its successors.

“ GAAP ” means generally accepted accounting principles applied on a consistent basis, set forth in the Opinions of the Accounting Principles Board of the American Institute of Certified Public Accountants and/or in statements of the Financial Accounting Standards Board, which are applicable in the circumstances as of the date in question, and the requisite that such principles be applied on a consistent basis shall mean that the accounting principles observed in a current period are comparable in all material respects to those applied in a preceding period.

“ Governmental Authority ” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative Governmental Authority, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“ Guarantor ” means (a) Parent, (b) each Subsidiary (whether now or hereafter existing) of Parent other than Borrower, any Foreign Subsidiary, and CM Real Estate (so long as (i) CM Real Estate engages in no business or activity other than the ownership, operation, leasing and maintenance of the real property located at 650 South Royal Lane, Coppell, Texas and activities related thereto and (ii) Parent remains its sole member).

“ Guaranty ” means a Guaranty Agreement, substantially in the form of Exhibit E , duly executed by each Guarantor.

“ Hazardous Materials ” means all explosive or radioactive substances or wastes, hazardous or toxic substances or wastes, pollutants, solid, liquid or gaseous wastes, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls (“ PCBs ”) or PCB-containing materials or equipment, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“ Highest Lawful Rate ” means at the particular time in question the maximum rate of interest which, under Applicable Law, any Lender is then permitted to charge on the Obligations. If the maximum rate of interest which, under Applicable Law, any Lender is permitted to charge on the Obligations shall change after the date hereof, the Highest Lawful Rate shall be automatically increased or decreased, as the case may be, from time to time as of the effective time of each change in the Highest Lawful Rate without notice to Borrower. For purposes of determining the Highest Lawful Rate under Applicable Law, the indicated rate ceiling shall be the lesser of (a)(i) the “ weekly ceiling ”, as that expression is defined in Section 303.003 of the Texas Finance Code, as amended, or (ii) if available in accordance with the terms thereof and at Lender’s option after notice to Borrower and otherwise in accordance with the terms of Section 303.103 of the Texas Finance Code, as amended, the “ annualized ceiling ” and (b)(i) if the amount outstanding under this Agreement is less than $250,000, 24% per annum, or (ii) if the amount under this Agreement is equal to or greater than $250,000, 28% per annum.

“ Investment ” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or acquisition of all or substantially all of the assets of any Person, (b) any direct or indirect purchase or other acquisition of, or a beneficial interest in, any equity interest or other securities of any other Person, or (c) any direct or indirect loan, advance, or capital contribution to or investment in any other Person, including without limitation the incurrence or sufferance of Debt or accounts receivable of any other Person that are not current assets or do not arise from Dispositions to that other Person in the ordinary course of business.

“ Investment Grade Securities ” means and includes (a) securities that are direct obligations of the United States of America, the payment of which is backed by the full faith and credit of the United States of America, (b) debt securities or debt instruments with a rating of A or higher by S&P, A2 or higher by Moody’s, Class (1) or higher by NAIC or the equivalent of such rating by S&P, Moody’s or NAIC, or if none of S&P, Moody’s and NAIC shall then exist, the equivalent of such rating by any other nationally recognized securities rating agency, but excluding any debt securities or instruments constituting loans or advances among Parent and its wholly-owned Subsidiaries, and (c) any fund investing exclusively in investments of the type described in clauses (a) and (b) , which funds may also hold immaterial amounts of cash pending investment and/or distribution.

“ Laws ” means, collectively, all international, foreign, Federal, state and local constitutions, statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“ Lender’s Office ” means Lender’s address and, as appropriate, account as set forth on Schedule 9.1 , or such other address or account as Lender may from time to time notify Borrower.

“ Lien ” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any agreement to give or not to give any of the foregoing), any conditional sale or other title retention agreement, any financing or other lease in the nature thereof, and the filing of or agreement to give any financing statement or other similar form of public notice under the Laws of any jurisdiction.

“ Litigation ” means any proceeding, claim, lawsuit and/or investigation conducted or threatened by or before any Governmental Authority, including, but not limited to, proceedings, claims, lawsuits, and/or investigations under or pursuant to any environmental, occupational, safety and health, antitrust, unfair competition, securities, Tax, or other Law, or under or pursuant to any contract, agreement or other instrument.

“ Loan Documents ” means this Agreement, the Term Loan Notes, the Security Documents, the Guaranties, and all other documents and instruments executed and delivered to Lender by any Obligor or any other Person in connection with this Agreement.

“ Material Adverse Change or Effect ” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent), or financial condition of Parent and its Subsidiaries taken as a whole; (b) a material impairment of the ability of the Obligors, taken as a whole to perform any obligations under any Loan Documents, including repayment of the Obligations, or (c) an adverse effect on any Lien granted pursuant to a Security Document.

“ Maximum Amount ” means the maximum amount of interest which, under Applicable Law, any Lender is permitted to charge on the Obligations.

“ Moody’s ” means Moody’s Investors Service, Inc.

“ Mortgage ” means the Mortgage executed by Borrower, substantially in the form of Exhibit B .

“ Mortgaged Property ” means the Property as that term is defined in the Mortgage.

“ Net Proceeds ” means, with respect to any event (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any non-cash proceeds, but only as and when received, (ii) in the case of an insured loss, casualty insurance proceeds, and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees, commissions and out-of-pocket expenses paid by any Obligor to third parties (other than Affiliates) in connection with such event (including reasonable attorneys fees and expenses), (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made by any Obligor as a result of such event to repay Debt (other than the Term Loan) secured by such asset or otherwise subject to mandatory prepayment as a result of such event, and (iii) the amount of all taxes paid (or reasonably estimated to be payable) by any Obligor (as determined reasonably and in good faith by the chief financial officer of Borrower).

“ Notice of Final Agreement ” means the Arbitration and Notice of Final Agreement, substantially in the form of Exhibit D .

“ Obligations ” means all obligations, indebtedness and liabilities under the Loan Documents now or hereafter owing by Borrower or any other Person to or for the benefit of Lender, whether joint or several, fixed or contingent, including principal, interest, expenses of collection and foreclosure and attorneys’ fees that Borrower is responsible for pursuant to Section 9.2 . Without limiting the generality of the foregoing, “ Obligations ” includes interest, fees and other amounts that would accrue after the commencement by or against Borrower, any Affiliate thereof or any other Person (other than Lender or any Participant) of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest, fees and other amounts are allowed claims in such proceeding.

“ Obligor ” means Borrower, each Guarantor and each other Person liable for performance of any of the Obligations or the property of which secures the performance of any of the Obligations.

“ Off-Balance Sheet Liabilities ” means, with respect to any Person as of any date of determination thereof, without duplication and to the extent not included as a liability on the consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP: (a) with respect to any asset securitization transaction (including any accounts receivable purchase facility) (i) the unrecovered investment of purchasers or transferees of assets so transferred and (ii) any other payment, recourse, repurchase, hold harmless, indemnity or similar obligation of such Person or any of its Subsidiaries in respect of assets transferred or payments made in respect thereof, other than limited recourse provisions that are customary for transactions of such type and that neither (x) have the effect of limiting the loss or credit risk of such purchasers or transferees with respect to payment or performance by the obligors of the assets so transferred nor (y) impair the characterization of the transaction as a true sale under applicable Laws (including Debtor Relief Laws); (b) the monetary obligations under any financing lease or so-called “synthetic,” tax retention or off-balance sheet lease transaction which, upon the application of any Debtor Relief Law to such Person or any of its Subsidiaries, would be characterized as indebtedness; (c) the monetary obligations under any sale and leaseback transaction which does not create a liability on the consolidated balance sheet of such Person and its Subsidiaries; or (d) any other monetary obligation arising with respect to any other transaction which (i) upon the application of any Debtor Relief Law to such Person or any of its Subsidiaries, would be characterized as indebtedness or (ii) is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the consolidated balance sheet of such Person and its Subsidiaries (for purposes of this clause (d) , any transaction structured to provide tax deductibility as interest expense of any Dividend, coupon or other periodic payment will be deemed to be the functional equivalent of a borrowing).

“ Parent Credit Agreement ” means that certain Credit Agreement, dated as of July 8, 2009, between the Parent and Bank of America, N.A., as amended, modified or supplemented from time to time, and including any renewals, refinancings, replacements and extensions of the Debt evidenced thereby, so long as the lender is Parent Lender.

“ Parent Lender ” means Bank of America, N.A. or any Eligible Replacement Lender.

“ Parent Credit Agreement Satisfaction Conditions ” means the satisfaction of all of the following conditions: (a) the obligations under the Parent Credit Agreement have been paid in full, provided , however , with respect to any contingent or unliquidated obligations owing to Parent Lender, adequate provision (satisfactory to the Parent Lender or as a court of competent jurisdiction may otherwise determine in a final non-appealable judgment) has been made, (b) all commitments to extend credit under the Parent Credit Agreement have been terminated, and (c) there are no outstanding letters of credit or other instruments issued under or in connection with the Parent Credit Agreement.

“ Parent Credit Agreement Satisfaction Date ” means the earlier of (i) the first date on which (a) all of the Parent Credit Agreement Satisfaction Conditions have been satisfied, and (b) Parent Lender shall have given the Parent Credit Agreement Satisfaction Notice; and (ii) such time as Parent Lender is no longer the lead lender under the Parent Credit Agreement.

“ Parent Credit Agreement Satisfaction Notice” means a written notice from Parent Lender which states that the Parent Credit Agreement Satisfaction Conditions have occurred. Following the satisfaction of the Parent Credit Agreement Satisfaction Conditions, Parent shall request that Parent Lender deliver to Lender the Parent Credit Agreement Satisfaction Notice within 15 days after request therefor from either Lender or Parent, provided, however, that if the Parent Credit Agreement Satisfaction Conditions have not been satisfied, Parent shall request that Parent Lender deliver to Lender a statement setting forth which Parent Credit Agreement Satisfaction Conditions have not been satisfied and what obligations remain outstanding under the Parent Credit Agreement.

“ PBGC ” means the Pension Benefit Guaranty Corporation established under ERISA.

“ Permitted Acquisition ” means the acquisition of the assets or equity of another Person, so long as in each case (a) the acquisition is permitted by the terms of the Parent Credit Agreement or any consent of the Parent Lender and (b) each acquired entity executes and delivers, or causes to be executed and delivered, each of the documents described in Section 6.10 .

“ Permitted Debt ” means (a) Existing Debt, (b) the Obligations, (c) trade accounts payable and other similar obligations incurred in the ordinary course of business, (d) purchase money Debt not to exceed $1,500,000 in aggregate amount outstanding at any time, and (e) Debt in respect of the Parent Credit Agreement.

“ Permitted Investments ” means (a) Investment Grade Securities, (b) Existing Investments, (c) travel advances to employees in the ordinary course of business, (d) equity contributions made by Parent or Subsidiaries of Parent in existing Subsidiaries of Parent that are either Guarantors, if such equity contribution results in an increase in shareholders’ or members’ equity of such Subsidiary receiving such equity contribution, and (e) other Investments of Parent and its Subsidiaries that do not, as at any date of determination, exceed in the aggregate $500,000 (the value of each such Investment to be the greater of (1) the then current market value of such Investment, and (2) the purchase price of such Investment).

“ Permitted Liens ” means (a) Bank Liens, (b) pledges or deposits made to secure payment of workmen’s compensation, or to participate in any fund in connection with workmen’s compensation, unemployment insurance, pensions, or other social security programs (excluding any Liens in respect of ERISA), (c) good-faith pledges or deposits made to secure performance of bids, tenders, contracts (other than for the repayment of borrowed money), or leases, or to secure statutory obligations, surety or appeal bonds, or indemnity, performance, or other similar bonds in the ordinary course of business, (d) encumbrances consisting of zoning restrictions, easements, or other restrictions on the use of real property, none of which impair the use of such property by any Obligor or any of its Subsidiaries in the operation of its business in any manner which would have a Material Adverse Effect, (e) the following, if the validity or amount thereof is being contested in good faith and by appropriate and lawful proceedings for which Borrower has established adequate reserves and so long as levy and execution thereon have been stayed and continue to be stayed: claims and Liens for Taxes due and payable; claims and Liens upon, and defects of title to, real or personal property or other legal process prior to adjudication of a dispute on the merits, including mechanic’s and materialmen’s Liens; and adverse judgments on appeal, (f) set-off, charge-back and other rights of depository and collection banks and other financial institutions with respect to money or instruments of Borrower or its Subsidiaries on depository with or in possession of such institutions, (g) Liens arising under Capital Leases and purchase money Debt permitted under this Agreement, (h) Existing Liens and (i) and other Liens permitted by the Parent Credit Agreement or by the prior written consent of Parent Lender.

“ Person ” means and includes an individual, a partnership, a joint venture, a limited liability company, a corporation, a trust, an unincorporated organization, and a government or any department, Governmental Authority, agency or political subdivision thereof.

“ Plan ” means any plan subject to Title IV of ERISA and maintained for employees of any Obligor or any of its Subsidiaries, or of any member of a controlled group of corporations, as the term “controlled group of corporations” is defined in Section 1563 of the Internal Revenue Code of 1986, as amended, of which any Obligor or any of its Subsidiaries is a part.

“ Prepayment Event ” means (a) any sale, transfer, condemnation or other disposition (including pursuant to a sale and leaseback transaction) of Collateral, and (b) the receipt by Borrower or any other Obligor of any insurance or other cash proceeds by reason of theft, loss, physical destruction or damage or any other similar event with respect to any Collateral.

“ Prime Rate ” means for any day a per annum rate of interest equal to the “prime rate,” as published in the “Money Rates” column of The Wall Street Journal , from time to time, or if for any reason such rate is no longer available, the rate established by Frost as its prime rate. The Prime Rate shall change effective as of the date of any change as published in The Wall Street Journal , or as established by Frost, as appropriate. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer of any Lender.

“ Principal Office ” means the principal office of a Lender specified on Schedule 9.1 .

“ Release ” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, emanating or migrating of any Hazardous Material in, into, onto or through the Environment.

“ Remedial Action ” means (a) “remedial action” as such term is defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions required by any Governmental Authority or voluntarily undertaken to: (i) cleanup, remove, treat, abate or in any other way address any Hazardous Material in the Environment; (ii) prevent the Release or threat of Release, or minimize the further Release of any Hazardous Material so it does not migrate or endanger or threaten to endanger public health, welfare or the Environment; or (iii) perform studies and investigations in connection with, or as a precondition to, (i) or (ii) above.

“ Reportable Event ” means a reportable event as defined in Section 4043(b) of Title IV of ERISA or PBGC regulations issued thereunder, other than a reportable event not subject to Section 4043’s notification requirements pursuant to PGBC’s regulations.

“ S&P ” means Standard & Poor’s Ratings Group, a division of McGraw-Hill, Inc., a New York corporation.

“ Security Documents ” means, collectively, the Mortgage and any and all other documents, instruments, financing statements, public notices and the like executed and delivered in connection with any of the Bank Liens or the Collateral.

“ Senior Management ” means each of James Ridings, Brad Heimann, and Marcus Scrudder.

“ Solvent ” means, with respect to any Person, that the fair value of the assets of such Person (both at fair valuation and at present fair saleable value) is, on the date of determination, greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person as of such date and that, as of such date, such Person is able to pay all liabilities of such Person as such liabilities mature and such Person does not have unreasonably small capital with which to carry on its business. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities will be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability discounted to present value at rates believed to be reasonable by such Person.

“ Special Counsel ” means the law firm of Winstead PC, or such other legal counsel as Lender may select.

“ Stock Repurchases ” means, with respect to any Person, any retirement, redemption, purchase, repurchase or other acquisition, directly or indirectly, of any shares of any class of its capital stock or other equity interest now or hereafter outstanding.

“ Subordinated Debt ” means any indebtedness of Parent or its Subsidiaries which shall have been and continues to be validly and effectively subordinated to the Obligations pursuant to a written agreement in form and substance acceptable to Lender.

“ Subsidiary ” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise Controlled, directly or indirectly through one or more intermediaries, or both, by such Person.

“ Taxes ” means all taxes, assessments, fees or other charges from time to time or at any time imposed by any Laws or by any Governmental Authority.

“ Term Loan ” has the meaning specified in Section 2.1 .

“ Term Loan Commitment ” means $3,500,000.

“ Term Loan Maturity Date ” means the first to occur of (a) the Termination Date, or (b) the date the Obligations are accelerated.

“ Term Loan Note ” means the promissory note made by Borrower in favor of Lender evidencing the Term Loan made by Lender, substantially in the form of Exhibit A .

“ Termination Date ” means July  _____, 2012.

“ TSI Prime Asia ” means TSI Prime Asia Limited, a wholly-owned direct Subsidiary of Elitex.

1.2 Additional Definitions . The following additional terms have the meaning specified in the indicated Section or other provision of this Agreement:

1.3 Construction . Unless otherwise expressly provided in this Agreement or the context requires otherwise, (a) the singular shall include the plural, and vice versa, (b) words of a gender include the other gender, (c) all accounting and financial terms shall be construed in accordance with GAAP, (d) all references to time are San Antonio time,(e) monetary references are to Dollars, (f) all references to “Articles,” “Sections,” “Exhibits,” and “Schedules” are to the Articles, Sections, Exhibits, and Schedules of and to this Agreement, (g) headings used in this Agreement and each other Loan Document are for convenience only and shall not be used in connection with the interpretation of any provision hereof or thereof, (h) references to any Person include that Person’s heirs, personal representatives, successors, and permitted assigns, that Person as a debtor-in possession, and any receiver, trustee, liquidator, conservator, custodian, or similar party appointed for such Person or all or substantially all of its assets, (i) references to any Law include every amendment or restatement to it, rule and regulation adopted under it, and successor or replacement for it, and (j) references to a particular Loan Document include each amendment, modification, or supplement to or restatement of it made in accordance with this Agreement and such Loan Document.

ARTICLE II

LOAN

2.1 Term Loan . Subject to the terms and conditions of this Agreement, Lender agrees to make a term loan in the amount of the Term Loan Commitment (the “ Term Loan ”), to Borrower on the Agreement Date.

2.2 Funding . Upon satisfaction of the applicable conditions set forth in Article V , Lender shall make the proceeds of the Term Loan available to Borrower by crediting the account of Borrower on the books of Lender with the amount of such funds.

2.3 Term Loan Note . The Term Loan will be evidenced by the Term Loan Note. Interest on the Term Loan will accrue at the rates set forth in the Term Loan Note. The principal of and interest on the Term Loan will be due and payable in accordance with the terms and conditions set forth in the Term Loan Note and in this Agreement.

2.4 Voluntary Prepayments . Borrower may at any time or from time to time voluntarily prepay the Term Loan in whole or in part without premium or penalty. Each partial prepayment of the Term Loan shall be in an aggregate amount of $100,000 or an integral multiple thereof. Prepayments shall be accompanied by accrued interest on the principal amount prepaid. Such amount prepaid shall be applied to the Term Loan in the inverse order of maturity.

2.5 Mandatory Prepayments . In the event and on each occasion that any Net Proceeds are received by or on behalf of Borrower in respect of any Prepayment Event, Borrower shall, within five days after such Net Proceeds are received, prepay the Term Loan in an aggregate amount equal to:

(a)  Asset Dispositions . In the case of Net Proceeds received in any event described in clause (a) of the definition of Prepayment Event, the total amount of such Net Proceeds; and

(b)  Recovery Events . Subject to Section 2.5(e) , in the case of Net Proceeds received in any event described in clause (b) of the definition of Prepayment Event, the total amount of such Net Proceeds; provided that if (A) no Default or Event of Default exists, (B) Borrower delivers to Lender a written plan describing the proposed use of such Net Proceeds to repair, restore or replace the stolen, lost, destroyed or damaged property or asset, and certifying that no Default or Event of Default exists, and (C) such repair, restoration or replacement has commenced within 60 days after the loss event, then no prepayment shall be required pursuant to this Section 2.5(b) .

(c)  Application . All amounts prepaid pursuant to this Section 2.5 shall be applied to the unpaid principal of the Term Loan in the inverse order of maturity and shall be accompanied by accrued interest on the principal amount prepaid.

(d)  Exception . Notwithstanding Section 2.5(b) , in the event that Borrower has received Net Proceeds (i) in an aggregate amount less than $50,000 from a single event described in Section 2.5(b) , (ii) or in an aggregate amount less than $100,000 from all events and circumstances described in Section 2.5(b) , Borrower shall not be required to comply with the mandatory prepayment requirements of Section 2.5(b) with respect to such amounts received after the Agreement Date.

2.6 Payments Generally . (a) Each payment (including prepayments) by Borrower of the principal of or interest on the Term Loan and any other amount owed under this Agreement or any other Loan Document shall be made not later than 2:00 p.m. on the date specified for payment under this Agreement to Lender at Lender’s Office, in Dollars constituting immediately available funds. All payments received by Lender after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.

(b) If any payment under this Agreement or any other Loan Document shall be specified to be made upon a day which is not a Business Day, it shall be made on the next succeeding day which is a Business Day. Any extension of time shall in such case be included in computing interest and fees, if any, in connection with such payment.

(c) Borrower agrees to pay principal, interest, fees and all