LOAN AND SECURITY AGREEMENT

             (a)          " Affiliate " means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

             (b)          " Change of Control " means the occurrence of any of: (i) an acquisition after the date hereof by an individual or legal entity or "group" (as described in Rule 13d-5(b)(1) promulgated under the Securities Exchange Act of 1934, as amended) of effective

control (whether through legal or beneficial ownership of capital stock of Maker, by contract or otherwise) of in excess of 40% of the voting securities of Maker, (ii) a replacement at one time or over time of more than one-half of the members of Maker’s board of directors which is not approved by a majority of those individuals who are members of the board of directors on the date hereof (or by those individuals who are serving as members of the board of directors on any date whose nomination to the board of directors was approved by a majority of the members of the board of directors who are members on the date hereof), (iii) the merger of Maker with or into another entity that is not wholly-owned by Maker or the consolidation or sale of 40% or more of the assets of Maker in one or a series of related transactions, or (iv) the execution by Maker of an agreement to which Maker is a party or by which it is bound, providing for any of the events set forth above in (i), (ii) or (iii).

          (c)          " Sale of Securities Proceeds " means the sale or a series of sales of any debt (not including any lines of credit) or Common Stock or Common Stock Equivalents of the Maker so long as such sale results in aggregate gross proceeds to the Maker of $5,000,000 or more.

          (d)          " Collateral " means the collateral in which the Secured Parties are granted a security interest which may be subject to and limited by other pre-existing and superior in right or security interest by this Agreement and which shall include the following personal property of the Debtors, whether presently owned or existing or hereafter acquired or coming into existence, wherever situated, and all additions and accessions thereto and all substitutions and replacements thereof, and all proceeds, products and accounts thereof, including, without limitation, all proceeds from the sale or transfer of the Collateral and of insurance covering the same and of any tort claims in connection therewith, and all dividends, interest, cash, notes, securities, equity interest or other property at any time and from time to time acquired, receivable or otherwise distributed in respect of, or in exchange for, any or all of the Pledged Securities (as defined below):

               (i)          Except for such Collateral that is obtained in the ordinary course of business and is in the ordinary course, subject to third party liens and security agreements ("Permitted Liens"), all goods, including, without limitation, (A) all machinery, equipment, computers, motor vehicles, trucks, tanks, boats, ships, appliances, furniture, special and general tools, fixtures, test and quality control devices and other equipment of every kind and nature and wherever situated, together with all documents of title and documents representing the same, all additions and accessions thereto, replacements therefor, all parts therefor, and all substitutes for any of the foregoing and all other items used and useful in connection with any Debtor’s businesses and all improvements thereto; and (B) all inventory;

               (ii)          All contract rights and other general intangibles, including, without limitation, all Intellectual Property, partnership interests, membership interests, stock or other securities, rights under any of the Organizational Documents, agreements related to the Pledged Securities, licenses, distribution and other

agreements, computer software (whether "off-the-shelf", licensed from any third party or developed by any Debtor), computer software development rights, leases, franchises, customer lists, quality control procedures, grants and rights, goodwill and income tax refunds;

             (iii)         All accounts, together with all instruments, all documents of title representing any of the foregoing, all rights in any merchandising, goods, equipment, motor vehicles and trucks which any of the same may represent, and all right, title, security and guaranties with respect to each account, including any right of stoppage in transit;

             (iv)         All documents, letter-of-credit rights, instruments and chattel paper;

             (v)          All commercial tort claims;

             (vi)         All deposit accounts and all cash (whether or not deposited in such deposit accounts);

             (vii)        All investment property;

             (viii)       All supporting obligations;

             (ix)         All files, records, books of account, business papers, and computer programs; and

             (x)          the products and proceeds of all of the foregoing Collateral set forth in clauses (i)-(ix) above.

Without limiting the generality of the foregoing, the " Collateral " shall also include all investment property and general intangibles respecting ownership and/or other equity interests of the Company in each Guarantor, including, without limitation, the shares of capital stock and the other equity interests listed in the Subsidiary Guarantee (as the same may be modified from time to time pursuant to the terms hereof), and any other shares of capital stock and/or other equity interests of any other direct or indirect subsidiary of any Debtor obtained in the future, and, in each case, all certificates representing such shares and/or equity interests and, in each case, all rights, options, warrants, stock, other securities and/or equity interests that may hereafter be received, receivable or distributed in respect of, or exchanged for, any of the foregoing (all of the foregoing being referred to herein as the " Pledged Securities ") and all rights arising under or in connection with the Pledged Securities, including, but not limited to, all dividends, interest and cash.

             Notwithstanding the foregoing, nothing herein shall be deemed to constitute an assignment of any asset which, in the event of an assignment, becomes void by operation of applicable law or the assignment of which is

otherwise prohibited by applicable law (in each case to the extent that such applicable law is not overridden by Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law); provided , however , that, to the extent permitted by applicable law, this Agreement shall create a valid security interest in such asset and, to the extent permitted by applicable law, this Agreement shall create a valid security interest in the proceeds of such asset.

           (e)          " Common Stock " means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed into.

           (f)          " Common Stock Equivalents " means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

           (g)          " Exchange Act " means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

           (h)          " Intellectual Property " means the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, (i) all copyrights arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, all registrations, recordings and applications in the United States Copyright Office, (ii) all letters patent of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof, and all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, (iii) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade dress, service marks, logos, domain names and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, and all common law rights related thereto, (iv) all trade secrets arising under the laws of the United States, any other country or any political subdivision thereof, (v) all rights to obtain any reissues, renewals or extensions of the foregoing, (vi) all licenses for any of the foregoing, and (vii) all causes of action for infringement of the foregoing.

           (i)          " Majority in Interest " shall mean, at any time of determination, holders representing more than 50% in principal amount of the Notes (based on then-outstanding principal amounts of Notes at the time of such determination) of the Secured Parties.

          (j)            " Necessary Endorsement " shall mean undated stock powers endorsed in blank or other proper instruments of assignment duly executed and such other instruments or documents as the Agent (as defined below) may reasonably request.

          (k)           " Obligations " means all of the liabilities and obligations (primary, secondary, direct, contingent, sole, joint or several) due or to become due, or that are now or may be hereafter contracted or acquired, or owing to, of any Debtor to the Secured Parties pursuant to any Debtor’s obligations under this Agreement, the Notes, the Guarantee and any other instruments, agreements or other documents executed and/or delivered in connection herewith or therewith, in each case, whether now or hereafter existing, voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly from any of the Secured Parties as a preference, fraudulent transfer or otherwise as such obligations may be amended, supplemented, converted, extended or modified from time to time. Without limiting the generality of the foregoing, the term "Obligations" shall include, without limitation: (i) principal of, and interest on the Notes and the loans extended pursuant thereto; (ii) any and all other fees, indemnities, costs, obligations and liabilities of the Debtors from time to time under or in connection with this Agreement, the Notes, the Guarantee and any other instruments, agreements or other documents executed and/or delivered in connection herewith or therewith; and (iii) all amounts (including but not limited to post-petition interest) in respect of the foregoing that would be payable but for the fact that the obligations to pay such amounts are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving any Debtor.

          (l)           " Organizational Documents " means with respect to any Debtor, the documents by which such Debtor was organized (such as a certificate of incorporation, certificate of limited partnership or articles of organization, and including, without limitation, any certificates of designation for preferred stock or other forms of preferred equity) and which relate to the internal governance of such Debtor (such as bylaws, a partnership agreement or an operating, limited liability or members agreement).

          (m)           " Person " means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

          (n)           " Securities Act " means the Securities Act of 1933, as amended, and the rules and regulations promulgated hereunder.

          (o)           " Security Documents " shall mean any documents and filing required thereunder in order to grant the Secured Parties a first priority security interest in the assets of the Company and the Subsidiaries as provided in this Agreement, including all UCC-1 filing receipts.

          (p)           " Subscription Amount " means, as to each Secured Party, the aggregate amount to be paid for the Notes purchased hereunder as specified below such Secured Party’s name on the signature page of this Agreement and next to the heading "Subscription Amount," in United States dollars and in immediately available funds, and which shall be, in each case, 97% of the face principal amount of such Secured Party’s Note.

          (q)           " Subsidiary " means any subsidiary of the Company.

          (r)           " Subsidiary Guarantee " or " Guarantee " means the Subsidiary Guarantee, dated the date hereof, by each Subsidiary in favor of the Secured Parties, in the form of Exhibit C attached hereto.

          (s)           " Trading Market " means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the American Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the OTC Bulletin Board.

          (t)           " Transaction Documents " means this Agreement, the Notes and the Subsidiary Guarantee.

          (u)           " UCC " means the Uniform Commercial Code of the applicable jurisdiction and or any other applicable law of any state or states which has jurisdiction with respect to all, or any portion of, the Collateral or this Agreement, from time to time. It is the intent of the parties that defined terms in the UCC should be construed in their broadest sense so that the term "Collateral" will be construed in its broadest sense. Accordingly if there are, from time to time, changes to defined terms in the UCC that broaden the definitions, they are incorporated herein and if existing definitions in the UCC are broader than the amended definitions, the existing ones shall be controlling.

          2.           Loan . Upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Secured Parties, severally and not jointly, agree to advance an aggregate of up to $1,000,000 in principal amount of Notes to the Company subject to certain retained amounts as set forth in the Notes. Each Secured Party shall deliver to the Company, via wire transfer or a certified check, immediately available funds equal to such Secured Party’s Subscription Amount and the Company shall deliver to each Secured Party its respective Note and the Company and each Secured Party shall deliver the other items set forth below. Upon satisfaction of the conditions set forth in this Section 2, the closing (the " Closing ") shall occur on or before July 31, 2008 at the offices of Company Counsel or such other location and time as the parties shall mutually agree.

(a)

Deliveries .

          (i)          On or prior to the Closing, the Company shall deliver or cause to be delivered to each Secured Party the following:

             (A)           this Agreement duly executed by the Company;

             (B)           one or more Notes in favor of the Secured Parties, in the form of Exhibit A attached hereto, with an aggregate principal amount equal to 100.00% of such Secured Party’s Subscription Amount, in the name of such Secured Party and registered as such on the books and records of the Company;

             (C)            the Subsidiary Guarantee duly executed by each of the Subsidiaries;

             (D)           all of the Security Documents duly executed by the parties thereto.

            (ii)         On the Closing Date, each Secured Party shall deliver or cause to be delivered to the Company the following:

             (A)            this Agreement duly executed by such Secured Party; and

             (B)            such Secured Party’s Subscription Amount by wire transfer to the account as specified in writing by the Company.

(b)

Closing Conditions .

           (i)          The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

             (A)            the accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Secured Parties contained herein;

             (B)            all obligations, covenants and agreements of the Secured Parties required to be performed at or prior to the Closing shall have been performed; and

             (C)            the delivery by the Secured Parties of the items set forth in Section 2(a)(ii) of this Agreement.

           (ii)          The respective obligations of the Secured Parties hereunder in connection with the Closing are subject to the following conditions being met:

             (A)            the accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Company contained herein;

             (B)            all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;

             (C)            the delivery by the Company of the items set forth in Section 2(a)(i) of this Agreement.

          3.        Grant of Subordinated Security Interest . As an inducement for the Secured Parties to extend the loans as evidenced by the Notes and to secure the complete and timely

payment, performance and discharge in full, as the case may be, of all of the Obligations, each Debtor hereby unconditionally and irrevocably pledges, grants and hypothecates to the Secured Parties a subordinated security interest in and to, a lien upon and a right of set-off against all of their respective right, title and interest of whatsoever kind and nature in and to, the Collateral (the " Security Interest ").

          4.        Representations, Warranties, Covenants and Agreements of the Debtors . Each Debtor represents and warrants to, and covenants and agrees with, the Secured Parties as follows:

          (a)          Each Debtor has the requisite corporate, partnership, limited liability company or other power and authority to enter into this Agreement and otherwise to carry out its obligations hereunder. The execution, delivery and performance by each Debtor of this Agreement and the filings contemplated therein have been duly authorized by all necessary action on the part of such Debtor and no further action is required by such Debtor. This Agreement has been duly executed by each Debtor. This Agreement constitutes the legal, valid and binding obligation of each Debtor, enforceable against each Debtor in accordance with its terms except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization and similar laws of general application relating to or affecting the rights and remedies of creditors and by general principles of equity. The Notes are duly authorized and, when issued, will be duly and validly issued, fully paid and nonassessable, free and clear of all liens imposed by the Company.

          (b)          The Debtors have no place of business or offices where their respective books of account and records are kept (other than temporarily at the offices of its attorneys or accountants) or places where Collateral is stored or located, except as set forth on Schedule A attached hereto. The Debtors own no real property. Except as disclosed on Schedule A , none of such Collateral is in the possession of any consignee, bailee, warehouseman, agent or processor.

          (c)          Except as set forth in the definition of Permitted Liens, the Debtors are the sole owners of the Collateral (except for non-exclusive licenses granted by any Debtor in the ordinary course of business), free and clear of any liens, security interests, encumbrances, rights or claims, and are fully authorized to grant the Security Interest. There is not on file in any governmental or regulatory authority, agency or recording office an effective financing statement, security agreement, license or transfer or any notice of any of the foregoing (other than those that will be filed in favor of the Secured Parties pursuant to this Agreement) covering or affecting any of the Collateral other than in respect of Permitted Liens. So long as this Agreement shall be in effect, the Debtors shall not execute and shall not knowingly permit to be on file in any such office or agency any such financing statement or other document or instrument (except to the extent filed or recorded in favor of the Secured Parties pursuant to the terms of this Agreement and except for Permitted Liens or any extension of Permitted Liens).

          (d)          No written claim has been received by Borrower that any Collateral or Debtor’s use of any Collateral violates the rights of any third party. Except as set forth

on Schedule 5(d) attached hereto, there has been no adverse decision to any Debtor’s claim of ownership rights in or exclusive rights to use the Collateral in any jurisdiction or to any Debtor’s right to keep and maintain such Collateral in full force and effect, and there is no proceeding involving said rights pending or, to the best knowledge of any Debtor, threatened before any court, judicial body, administrative or regulatory agency, arbitrator or other governmental authority.

          (e)          Each Debtor shall at all times maintain its books of account and records relating to the Collateral at its principal place of business and its Collateral at the locations set forth on Schedule A attached hereto and may not relocate such books of account and records unless it delivers to the Secured Parties at least 30 days prior to such relocation (i) written notice of such relocation and the new location thereof (which must be within the United States) and (ii) evidence that appropriate financing statements under the UCC and other necessary documents have been filed and recorded and other steps have been taken to perfect the Security Interest to create in favor of the Secured Parties a valid, perfected and continuing perfected first priority lien in the Collateral.

          (f)          This Agreement creates in favor of the Secured Parties a valid, security interest in the Collateral, securing the payment and performance of the Obligations. Upon making the filings described in the immediately following paragraph, all security interests created hereunder in any Collateral which may be perfected by filing UCC financing statements shall have been duly perfected. Except for the filing of the UCC financing statements referred to in the immediately following paragraph, the execution and delivery of deposit account control agreements satisfying the requirements of Section 9-104(a)(2) of the UCC with respect to each deposit account of the Debtors, and the delivery of the certificates, no action is necessary to create, perfect or protect the security interests presently required hereunder. Without limiting the generality of the foregoing, except for the filing of said financing statements, and the execution and delivery of said deposit account control agreements, no consent of any third parties and no authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for (i) the execution, delivery and performance of this Agreement, (ii) the creation or perfection of the Security Interests created hereunder in the Collateral or (iii) the enforcement of the rights of the Secured Parties hereunder.

          (g)          Provided a copy is provided and approved by the Debtors in advance, each Debtor hereby authorizes the Secured Parties, or any of them, to file one or more financing statements under the UCC, with respect to the Security Interest with the proper filing and recording agencies in any jurisdiction deemed reasonably necessary by them.

          (h)          The execution, delivery and performance of this Agreement by the Debtors does not (i) violate any of the provisions of any Organizational Documents of any Debtor or any judgment, decree, order or award of any court, governmental body or arbitrator or any applicable law, rule or regulation applicable to any Debtor or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any

agreement, credit facility, debt or other instrument (evidencing any Debtor’s debt or otherwise) or other understanding to which any Debtor is a party or by which any property or asset of any Debtor is bound or affected. No consent (including, without limitation, from stockholders or creditors of any Debtor) is required for any Debtor to enter into and perform its obligations hereunder.

          (i)          The capital stock and other equity interests listed in the Subsidiary Guaranty hereto represent all of the capital stock an