POST-PETITION LOAN AND SECURITY AGREEMENT

Exhibit 10.1

POST-PETITION LOAN AND SECURITY AGREEMENT

By and Among

LUMINENT MORTGAGE CAPITAL, INC.,
MAIA MORTGAGE FINANCE STATUTORY
TRUST, MERCURY MORTGAGE FINANCE
STATUTORY TRUST, PROSERPINE, LLC,
SATURN PORTFOLIO MANAGEMENT,
INC., LUMINENT CAPITAL MANAGEMENT,
INC., PANTHEON HOLDING COMPANY,
INC., MINERVA MORTGAGE FINANCE
CORP., MINERVA CDO DELAWARE SPV,
INC., AND OT REALTY TRUST
As Borrowers

-And-

ARCO CAPITAL CORPORATION, LTD.

As Lender

SEPTEMBER 5, 2008

1

ARTICLE I General Definitions

Section 1.1. Definitions

Section 1.2. Interpretive Provision

ARTICLE II Credit Facilities

Section 2.1. Commitment to Provide Loans

Section 2.2. Method of Borrowing

Section 2.3. Interest Rate

Section 2.4. Computation of Interest

Section 2.5. Maturity; Payments

Section 2.6. Reduction of Commitments

Section 2.7. Use of Proceeds

Section 2.8. Evidence of Debt

ARTICLE III Conditions to the Agreement and Loans

Section 3.1. Conditions to the Effectiveness of the Agreement

Section 3.2. Conditions Precedent to Funding

ARTICLE IV Security Interests and Priority Claims

Section 4.1. Security Interests.

Section 4.2. Continuing Liability of the Debtors

Section 4.3. Collections

ARTICLE V Representations and Warranties

Section 5.1. Corporate Existence and Power

Section 5.2. Corporate and Governmental Authorization; Contravention

Section 5.3. Binding Effect

Section 5.4. Ownership and Liens

Section 5.5. Filings

Section 5.6. Litigation

Section 5.7. Regulation U

Section 5.8. Financing Orders.

ARTICLE VI Covenants

Section 6.1. Conduct of Business and Maintenance of Existence

Section 6.2. Compliance with Laws

Section 6.3. Accounting; Inspection of Property, Books and Records

Section 6.4. Maintenance of Security Interests

Section 6.5. Debt

Section 6.6. Restriction on Liens

Section 6.7. Notices

Section 6.8. Transactions with Other Persons

Section 6.9. Use of Proceeds

Section 6.10. Budget Reconciliation

Section 6.11. Plan Support Agreement and Pleadings

Section 6.12. Independence of Covenants

ARTICLE VII Event of Default/Remedies

Section 7.1. Events of Default

Section 7.2. Remedies.

Section 7.3. Payments on Collateral

Section 7.4. Remedies Not Exclusive

Section 7.5. Application of Proceeds

ARTICLE VIII Miscellaneous

Section 8.1. Notices

Section 8.2. No Waivers

Section 8.3. Expenses.

Section 8.4. Amendments and Waivers

Section 8.5. Successors and Assigns; Survival

Section 8.6. New York Law

Section 8.7. Counterparts; Effectiveness

Section 8.8. Waiver of Jury Trial; Submission to Jurisdiction

Section 8.9. Severability

Section 8.10. Entire Agreement; Conflicts

EXHIBITS

2

POST-PETITION LOAN AND SECURITY AGREEMENT

This POST-PETITION LOAN AND SECURITY AGREEMENT (as amended, supplemented or modified from time to time, this “Agreement”), dated as of September 5, 2008, by and among Luminent Mortgage Capital, Inc., a Maryland corporation (“Luminent”), Maia Mortgage Finance Statutory Trust, a Maryland Business Trust (“Maia”), Mercury Mortgage Finance Statutory Trust, a Maryland Business Trust (“Mercury”), Proserpine, LLC, a Pennsylvania limited liability company (“Proserpine”), Saturn Portfolio Management, Inc. (“Saturn”), Luminent Capital Management, Inc. (“Luminent Capital”), Pantheon Holding Company, Inc., a Delaware corporation (“Pantheon”), Minerva Mortgage Finance Corp., a Maryland corporation (“Minerva”), Minerva CDO Delaware SPV, Inc., a Delaware corporation (“Minerva CDO”), and OT Realty Trust, a Maryland real estate investment trust (“OT”, together with Luminent, MAIA, Mercury, Proserpine, Saturn, Luminent Capital, Pantheon, Minerva, and Minerva CDO, the “Borrowers” or the “Debtors”), and Arco Capital Corporation Ltd. (the “Lender”).

RECITALS

A. The Debtors have determined that it is in the best interests of their creditors and other stakeholders that they seek protection under the Bankruptcy Code, 11 U.S.C. §§ 101 et. seq. (the “Bankruptcy Code”).

B. In connection with the Debtors determination that a reorganization pursuant to Chapter 11 of the Bankruptcy Code is in the best interest of the Debtors, their creditors and estates, the Debtors prior to the date hereof entered into that certain Plan Support Agreement which sets forth the principal terms of a plan of reorganization that the Debtors major creditor constituencies agreed to support.

C. Consistent with the terms of the Plan Support Agreement, on September 5, the Debtors commenced these bankruptcy proceedings by filing voluntary petitions for relief pursuant to 11 U.S.C. 301.

D. The Debtors have requested that the Lender make Loans available to the Debtors to fund the Debtors post-petition operations and for certain reorganization expenses.

E. To provide security for the repayment of the Loans made available pursuant hereto and payment of the other obligations of the Debtors under this Agreement, the Debtors have agreed to provide the Lender with the following:

(a) an allowed administrative expense claim in each of the Bankruptcy Cases (as defined herein) pursuant to Section 364(c)(1) of the Bankruptcy Code having priority over all administrative expenses of the kind specified in or arising under any sections of the Bankruptcy Code (including, without limitation, Sections 105, 326, 328, 330, 331, 364, 503(b), 507(a), 507(b), 546(c) or 726 thereof);

(b) a perfected first priority Lien, pursuant to Section 364(c)(2) of the Bankruptcy Code, on all property of the Debtors which was unencumbered by any Lien as of the Petition Date; and

(c) a perfected Lien, pursuant to Section 364(c)(3) of the Bankruptcy Code, upon all property of the Debtors, junior to existing valid, perfected, enforceable and unavoidable Liens on such property;

F. The Lender has agreed to make Loans available to the Debtors upon the terms and conditions set forth in this Agreement.

NOW, THEREFORE, for and in consideration of the above premises and the mutual covenants and agreements contained herein, the Lender and the Debtors hereby agree as follows:

ARTICLE I

General Definitions

Section 1.1. Definitions . The following terms, as used herein, have the following meanings:

“Account Debtor” means, with respect to any Receivable or General Intangible, any Person obligated to make payment thereunder, including without limitation any account debtor thereon.

“Accounts” means any “Account,” as such term is defined in Section 9-102 of the UCC, now owned or hereafter acquired by the Debtors, and any right of the Debtors to payment for goods sold or leased or for services rendered which the Debtors may now have or hereafter acquire, whether or not such right has been earned by performance.

“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified. As used herein, the term “control” means possession, directly or indirectly, of the power or authority to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract, or otherwise. Controlling and controlled have meanings correlative thereto.

“Bankruptcy Cases” means the legal proceedings commenced by the Debtors in the Bankruptcy Court seeking to reorganize the Debtors’ businesses pursuant to Chapter 11 of the Bankruptcy Code.

“Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. §§ 101 et seq ., as heretofore and hereafter amended.

“Bankruptcy Court” means the United States Bankruptcy Court for the District of Maryland or such other court exercising jurisdiction over the Bankruptcy Cases.

“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure and Official Forms that govern procedure in cases under the Bankruptcy Code, as heretofore and hereafter amended.

“Budget” shall have the meaning ascribed to that term in Section 3.1(f) of this Agreement.

“Budget Period” means each period ending on the date specified in a column heading in the Budget.

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York, NY are authorized by law to close.

“Carve-Out” shall mean a carve-out from the proceeds of any liquidation of the Collateral, which shall be available to pay (i) all fees required to be paid to the Clerk of the Bankruptcy Court and to the Office of the United States Trustee under section 1930(a) of title 28 of the United States Code, (ii) the allowed professional fees and disbursements expenses incurred by any statutory committees appointed in the Bankruptcy Cases (each, a “Committee”) in an amount not to exceed $50,000 and (iii) after the occurrence and during the continuance of an Event of Default, an amount not to exceed $25,000 to pay allowed professional fees and disbursements of counsel to the Debtors ; provided , that no portion of the Carve-Out shall be utilized for the payment of any fees and expenses incurred in connection with (x) any challenge to the amount, extent, priority, validity, perfection or enforcement of indebtedness of the Debtors owing to the Lender, the Pre-Petition Lender, the Repo Counterparty, or any affiliate thereof, or (y) any investigation of or challenge to the collateral securing the Pre-Petition Loan or the perfection, priority or validity of the liens granted in favor of the Pre-Petition Lender with respect to the Pre-Petition Loan, or (z) any investigation, assertion, initiation or prosecutions of any claim, causes of action, adversary proceedings or other litigation against the Lender, the Pre-Petition Lender, the Repo Counterparty or their Affiliates.

“Causes of Action” means any and all claims, causes of action, and rights to sue now owned or hereafter acquired.

“Claim” shall have the meaning ascribed to that term in Bankruptcy Code § 101(5).

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” means all of the Debtors’ now existing or after acquired real and personal property that is not Junior Collateral, including, but not limited to, (i) all Receivables; (ii) all General Intangibles; (iii) all Investment Property; (iv) all Inventory; (v) all Equipment; (vi) all Equity Interests; (vii) to the extent not included in the foregoing, all contracts, any right to payment under a repurchase agreement, securities, chattel paper, owned real estate, real property leaseholds, fixtures, machinery, equipment, deposit discounts and the proceeds of any avoidance actions arising under chapter 5 of the Bankruptcy Code; (viii) to the extent not included in the foregoing, all other personal property, whether tangible or intangible and wherever located, including, but not limited to, the balance of every deposit account now or hereafter existing of the Debtors with any bank and all monies of the Debtors and all rights to payment of money of the Debtors; and (ix) to the extent not otherwise included, all cash and noncash Proceeds and products of any or all of the foregoing, whether existing on the date hereof or arising hereafter.

“Commitment” means the commitment to make Loans up to an aggregate amount as set forth in Section 2.1 and as such amount may be adjusted from time to time in accordance with this Agreement.

“Copyrights” means all right, title and interest the Debtors now own or hereafter acquire in and to all statutory or common law copyrights, whether or not registered with the United States Copyright Office, and all registrations and recordings thereof and all applications in connection therewith, including without limitation all such registrations, recordings, and applications in the U.S. Copyright Office or in any similar office or agency of the United States, any State thereof or any other country or political subdivision thereof and all reissues, extensions, and renewals thereof.

“Credit Period” means the period from the Effective Date to the Maturity Date.

“Debt” means (i) all indebtedness or other obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar agreements or under leases which would, in accordance with GAAP, be capitalized on the balance sheet of such Person, (ii) all obligations of such Person to pay the deferred purchase price of property or services (including indebtedness created under or arising out of any conditional sale or other title retention agreement), (iii) all obligations of such Person (contingent or otherwise) under reimbursement or similar agreements with respect to the issuance of letters of credit, (iv) all indebtedness or other obligations of such Person under or with respect to any MRA, swap, cap, collar or other financial or commodity hedging arrangement, (v) all indebtedness or other obligations of any other Person of the type specified in clause (i), (ii), (iii) or (iv) above, the payment or collection of which such Person has guaranteed (except by reason of endorsement for collection in the ordinary course of business) or in respect of which such Person is liable, contingently or otherwise, including liable by way of agreement to purchase products or securities, to provide funds for payment, to maintain working capital or other balance sheet conditions or otherwise to assure a creditor against loss, and (vi) all indebtedness or other obligations of any other Person of the type specified in clause (i), (ii), (iii), (iv) or (v) above secured by (or for which the holder of such indebtedness has an existing right contingent or otherwise, to be secured by) any Lien, upon or in property (including accounts and contract rights) owned by such Person, whether or not such Person has assumed or becomes liable for the payment of such indebtedness or obligations.

“Debtors” shall have the meaning set forth in the preamble.

“Disclosure Statement” shall have the meaning ascribed to that term in the Plan Support Agreement.

“Effective Date” means the date on which each of the conditions set forth in Section 3.1(a) shall have been satisfied.

“Equipment” means all equipment now owned or hereafter acquired by the Debtors, including all items of machinery, equipment, computer hardware and related items, furnishings and fixtures of every kind, whether affixed to real property or not, as well as all automobiles, trucks and vehicles of every description, equipment, all additions to, substitutions for, replacements of or accessions to any of the foregoing, all attachments, components, parts (including spare parts) and accessories whether installed thereon or affixed thereto and all fuel for any thereof.

“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

“Event of Default” shall have the meaning ascribed to that phrase in Section 7.1.

“Federal Tax Claims” means all federal tax claims of the Internal Revenue Service against the Debtors entitled to priority under section 507(a)(8) of the Bankruptcy Code.

“Final DIP Order” means the order entered by the Bankruptcy Court approving this Agreement and authorizing the financing contemplated by this Agreement, including the grant of security interests in and Liens on the Collateral and the grant of a Superpriority Claim for all Obligations, which order shall be in form and substance reasonably acceptable to the Lender and the Debtors.

“Financing Orders” means the Interim DIP Order and the Final DIP Order.

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

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

“General Intangibles” means all right, title and interest the Debtors now own or hereafter acquire in or to all Causes of Action, contract rights, documents, books, ledgers, records, money and general intangibles now owned or hereafter acquired by the Debtors including, without limitation, all customer lists, permits, federal and state tax refunds, Patents, Copyrights, Trademarks, Licenses, other rights in intellectual property, and the balance of every deposit account now or hereafter existing of the Debtors with any bank, all monies of the Debtors and all rights to payment of money of the Debtors, and all books, ledgers and records and all computer programs, tapes, discs, punch cards, data processing software, transaction files, master files and related property and rights (including computer and peripheral equipment) necessary or helpful in enforcing, identifying or establishing any item of Collateral.

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

“Indemnitees” has the meaning specified in Section 8.3(b).

“Interest Payment Date” has the meaning specified in Section 2.2.

“Interim Credit Period” means the period from the Effective Date to the earlier of (i) the date of entry by the Bankruptcy Court of the Final DIP Order or (ii) the termination of the Commitment pursuant to Section 7.2 hereof.

“Interim DIP Order” means the order entered by the Bankruptcy Court, in substantially the form annexed hereto as Exhibit B , approving inter alia this Agreement and authorizing the incurrence by the Debtors of post-petition secured indebtedness in accordance with this Agreement, including the grant of security interests in and Liens on the Collateral and the grant of a Superpriority Claim for all of the Obligations.

“Inventory” means all right, title and interest the Debtors now own or hereafter acquire in or to inventory, including without limitation (i) all goods and other personal property held for resale by the Debtors, (ii) all inventory, wherever located, evidenced by negotiable and non-negotiable documents of title, warehouse receipts and bills of lading, (iii) all of the Debtors’ rights in, to and under all purchase orders now owned or hereafter received or acquired by it for goods or services and (iv) all rights of the Debtors as an unpaid seller, including rescission, replevin, reclamation and stopping in transit.

“Investment Property” shall have the meaning ascribed to it in the UCC.

“Junior Collateral” means all of the Debtors’ real and personal property that is in existence and that on the Petition Date is the subject of valid, enforceable, properly perfected Liens, including, but not limited to, (i) all Receivables; (ii) all General Intangibles; (iii) all Investment Property; (iv) all Inventory; (v) all Equipment; (vi) all Equity Interests; (vii) to the extent not included in the foregoing, all contracts, any right to payment under a repurchase agreement, securities, chattel paper, owned real estate, real property leaseholds, fixtures, machinery, equipment, and deposit discounts; (viii) to the extent not included in the foregoing, all other personal property, whether tangible or intangible and wherever located, including, but not limited to, the balance of every deposit account now or hereafter existing of the Debtors with any bank and all monies of the Debtors and all rights to payment of money of the Debtors; and (ix) to the extent not otherwise included, all cash and noncash Proceeds and products of any or all of the foregoing, whether existing on the date hereof or arising hereafter.

“Laws” means, collectively, all international, foreign, federal, state and local 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” shall have the meaning set forth in the preamble.

“LIBOR” means the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR) at approximately 11:00 a.m., London time, two Business Days prior to the Effective Date, and as reset two Business Days prior to each Interest Payment Date.

“License” means any license or other agreement granting a Person the exclusive or non-exclusive right to use and/or license the use of any Patent, Copyright, Trademark or other intellectual property.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

“Loan” shall have the meaning set forth in Section 2.1 hereof.

“Loan Documents” means this Agreement, any Note executed by any Debtor and payable to the Lender, and any other present or future agreements entered into in connection with this Agreement, together with all alterations, amendments, changes, extensions, or modifications to any of the foregoing.

“Mandatory Prepayment” shall have the meaning set forth in Section 2.5 hereof.

“Master Repurchase Agreements” mean (a) that certain Master Repurchase Agreement dated as of August 14, 2007 between Saturn, as seller, and GGRE, as buyer; (b) that certain Master Repurchase Agreement dated as of August 14, 2007 between Mercury, as seller, and GGRE, as buyer; (c) that certain Master Repurchase Agreement dated as of August 14, 2007 between Minerva, as seller, and GGRE, as buyer; and (d) that certain Master Repurchase Agreement dated as of December 6, 2007 between Minerva SPV, as seller, and GGRE, as buyer, in each case with respect to the foregoing (a) through (d), including all confirmations and amendments thereto.

“Material Adverse Effect” means a material adverse effect upon (a) the properties, liabilities (actual or contingent), condition (financial or otherwise) or prospects of any of the Debtors, (b) the ability of each of the Debtors to perform its obligations under any Loan Document to which it is a party, or (c) the legality, validity, binding effect or enforceability against any Debtor of any Loan Document to which it is a party or (d) the value of the Collateral.

“Maturity Date” means the earlier of (i) January 31, 2009, unless the Lender in its sole discretion agrees in writing to extend such date, (ii) the effective date of any confirmed plan of reorganization for the Debtors, and (iii) the termination of the commitment to make Loans by the Lender upon the occurrence of an Event of Default or the acceleration of the Obligations, in each case, pursuant to Section 7.2 hereof.

“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, the Debtors arising under this Agreement or otherwise with respect to any Loan, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue before and after the Effective Date. Any reference in this Agreement to Obligations shall include all or any portion thereof and any extensions, modifications, renewals or alterations thereto.

“OT Put Agreement” means that certain Put Agreement dated as of January 22, 2008, by and among the Lender and Luminent as purchasers, OT as REIT, the preferred shareholders party thereto, REIT Administration, LLC and Charles B. Harrison.

“Outstanding Amount” means on any date, the aggregate outstanding principal amount of Loans thereof after giving effect to any borrowings, occurring on such date.

“Patents” means all right, title and interest the Debtors now own or hereafter acquire in or to all letters patent and the inventions described therein, and all registrations and recordings thereof and all applications in connection therewith, including without limitation all such recordings, registrations and applications in the U.S. Patent and Trademark Office or in any similar office or agency of the United States, any State thereof, or any other country (or political subdivision thereof) and all reissues, extensions, and renewals thereof.

“Permitted Liens” means the Liens referred to in clauses (i) through (ii) of Section 6.6.

“Person” means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Petition Date” shall have the meaning ascribed to that term in the Recitals to this Agreement.

“Plan” shall have the meaning ascribed to that term in the Plan Support Agreement.

“Plan Support Agreement” means that certain Plan Support and Forbearance Agreement dated September 4, 2008 by and among the Debtors, the Lender, GGRE LLC, WAMU Capital Corporation, Wells Fargo Bank, NA, Bear Stearns, JMG Capital Partners, LP, William Stearn, David Eidelman, Watershed Asset Management, LLC, Vicis Capital LLC, Argent Funds Group, Waterstone Capital, Bayerische Hypo-Und Vereinsbank AG, AQR Capital Management, LLC, CNH Partners, LLC, and RREEF Alternative Investments. !

“Pre-Petition Credit Agreement” means that certain Amended and Restated Credit Agreement dated as of September 26, 2007 as amended by the First Amendment to the Amended and Restated Credit Agreement dated as of December 7, 2007, the Second Amendment to the Amended and Restated Credit Agreement dated as of May 9, 2008, the Third Amendment to the Amended and Restated Credit Agreement dated as of June 16, 2008, by and among Luminent as borrower, each of the other Debtors as guarantors, and Arco Capital Corporation Ltd. as the lender, and those certain documents defined in the Credit Agreement as “Related Documents.”

“Pre-Petition Financing Documents” means the Pre-Petition Credit Agreement, the Master Repurchase Agreements and the OT Put Agreement, each as amended, restated or modified from time to time.

“Pre-Petition Lender” means Arco Capital Corporation Ltd., as lender under the Pre-Petition Credit Agreement.

“Proceeds” means all proceeds, including (i) whatever is received upon any collection, exchange, sale or other disposition of any of the Collateral and any property into which any of the Collateral is converted, whether cash or non-cash, (ii) any and all payments or other property (in any form whatsoever) made or due and payable on account of any insurance, indemnity, warranty or guaranty payable to the Debtors with respect to any of the Collateral, (iii) any and all payments (in any form whatsoever) made or due and payable in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any Governmental Authority (or any person, corporation, agency, authority or other entity acting under color of any governmental authority), (iv) any claim of the Debtors against third parties for past, present or future infringement of any Patent or Copyright, for past, present or future infringement or dilution of any Trademark, or for injury to the goodwill associated with any Trademark, Patent or Copyright, or for the breach of any License and (v) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.

“Receivables” means all Accounts now or hereafter owing to the Debtors, and shall also mean all accounts, accounts receivable, contract rights, book debts, instruments and chattel paper, notes, drafts, acceptances, payments under leases of equipment or sale of Inventory and other forms of obligations now or hereafter received by or belonging or owing to the Debtors for goods sold or leased and/or services rendered by them, and all of the Debtors’ rights in, to and under all purchase orders, instruments, and other documents now or hereafter received by them evidencing obligations for and representing payment for goods sold or leased and/or services rendered, and all monies due or to become due to the Debtors under all contracts for the sale or lease of goods and/or the performance of services by them, now in existence or hereafter arising (including without limitation the right to receive the Proceeds of said purchase orders and contracts), together with all Inventory returned by or reclaimed from customers wherever such Inventory is located, and all guaranties, securities and liens held for the payment of any such account, account receivable, contract right, document, instrument or chattel paper.

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

“Repo Counterparty” means GGRE as buyer under those certain Master Repurchase Agreements.

“Responsible Officer” means, with respect to any Debtor, the chief executive officer, president, chief financial officer, treasurer or comptroller and any other officer of the Debtor with responsibility for the administration of the relevant portion of the Loan Documents. Any document delivered hereunder that is signed by a Responsible Officer of such Debtor shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of the Debtor and such Responsible Officer shall be conclusively presumed to have acted on behalf of the Debtor.

“Superpriority Claim” means in relation to the Lender, a claim against the Debtors in the Bankruptcy Cases which is an administrative expense claim authorized and established by the Bankruptcy Court pursuant to Sections 364(c) and 507(b) of the Bankruptcy Code and having priority over any and all administrative expenses of the kind specified in Sections 503(b), 507(b) and 546(c) of the Bankruptcy Code.

“Tax” means any fee (including license, filing and registration fee), tax (including any income, gross receipts, franchise, sales, use or real, personal, tangible or intangible property tax), interest equalization or stamp tax, assessment, levy, impost, duty, charge or withholding of any kind or nature whatsoever, imposed or assessed by any Government, together with any penalty, fine or interest thereon.

“Trademarks” means all right, title and interest the Debtors now own or hereafter acquire in or to all trademarks, trade names, corporate names, company name, business names, fictitious business names, trade styles, service marks, logos, other source of business identifiers, print and labels on which any of the foregoing have appeared or appear, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof and all applications in connection therewith, including without limitation all such registrations, recordings and applications 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 political subdivision thereof and all reissues, extensions, and renewals thereof.

“UCC” means at any time the Uniform Commercial Code as the same may from time to time be in effect in the State of New York, provided that, if, by reason of mandatory provisions of law, the validity or perfection of any security interest granted herein is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York then, as to the validity or perfection of such security interest, “UCC” shall mean the Uniform Commercial Code in effect in such other jurisdiction.

Section 1.2. Interpretive Provision . With reference to this Agreement, unless otherwise specified herein: (a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “ include ,” “ includes ” and “ including ” shall be deemed to be followed by the phrase “without limitation.” The word “ will ” shall be construed to have the same meaning and effect as the word “ shall .” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein, (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “ herein ,” “ hereof ” and “ hereunder ,” and words of similar import when used in this Agreement shall be construed to refer to such Agreement in its entirety and not to any particular provision thereof, (iv) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (v) the words “ asset ” and “ property ” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

(b) In the computation of periods of time from a specified date to a later specified date, the word “ from ” means “ from and including ;” the words “ to ” and “ until ” each mean “ to but excluding ;” and the word “ through ” means “ to and including .”

(c) Article, section and subsection headings herein are included for convenience of reference only and shall not affect the interpretation of this Agreement.

ARTICLE II

Credit Facilities

Section 2.1. Commitment to Provide Loans . Subject to the terms and conditions set forth in this Agreement and in the Financing Orders, the Lender agrees to make Loans (each such Loan, a “Loan”) to the Debtors from time to time during the Credit Period in an aggregate principal amount not to exceed the lesser of $3,242,000.00 and the aggregate drawdown amounts set forth in the Budget through the most recent Budget Period (the “Commitment”). The Debtors, jointly and severally, agree to repay all of the Obligations owed to the Lender under the terms of this Section 2.1 and this Agreement.

Section 2.2. Method of Borrowing . The Debtors shall request Loans by submitting a written request to the Lender specifying the principal amount of the Loan requested. The Lender shall honor each loan request by making a wire transfer to the Debtors’ operating account in the amount of the Loan requested, provided that (i) honoring the request would not cause the aggregate amount of outstanding Loans to exceed the Commitment, (ii) such request is in specific accordance with the line items set forth in the Budget for the Budget Period to which such request relates and (iii) an Event of Default has not occurred and is continuing. Each request for a Loan shall constitute a representation by the Debtors that each of the representations and warranties in Article V of this Agreement is true and complete in all material respects as of the date of such request.

Section 2.3. Interest Rate . As provided further below, interest shall accrue on the average daily outstanding balance of the Loans at the rate of LIBOR plus 2% per annum. On each monthly anniversary of the Effective Date and on the effective date of the Plan (each such date, an “Interest Payment Date”), accrued interest shall be paid in kind and shall be added to the outstanding principal amount of the Obligations owing by the Debtors to the Lender pursuant to this Agreement. Any accrued and unpaid interest shall be due and payable on the date that the outstanding principal amount of the Loans is paid or becomes due and payable in full. In the event of an Event of Default, the Loans shall bear interest on the outstanding principal balance thereof at a rate equal to LIBOR plus 4% per annum for each day from the date of the Event of Default until the Loans are paid in full.

Section 2.4. Computation of Interest . Interest hereunder shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day).

Section 2.5. Maturity; Payments . The Loans shall mature, and the principal amount of all outstanding Loans, together with all accrued and unpaid interest thereon and all other Obligations that may be due to the Lender under this Agreement, shall be immediately due and payable by the Debtors to the Lender upon the Maturity Date. The Obligations may be prepaid at any time by the Debtors without penalty. Immediately upon the receipt by the Debtors of any proceeds of any recovery upon any of the Debtors’ litigation claims, the Debtors shall prepay the Loans in an amount equal to the net proceeds of such recovery after taking into account expenses (a “Mandatory Prepayment”). All payments by the Debtors shall be made to the Lender in lawful money of the United States of America and in immediately available funds. Whenever any payment to be made hereunder shall be due on a day that is not a Business Day, such payment shall be made on the first Business Day thereafter, and such extension of time shall in such case be included in the computation of interest hereunder.

Section 2.6. Reduction of Commitments . The Commitment of the Lender shall be permanently reduced by (a) the amount of any Mandatory Prepayment, and (b) an amount equal to all revenues received by the Debtors in a Budget Period net of amounts of up to 20% of such revenues to the extent such amounts are paid to Persons unrelated to the Debtors for commissions and fees in relation to such revenues.

Section 2.7. Use of Proceeds . The proceeds of the Loans shall be used only (i) to pay the Debtors’ obligations to the Lender hereunder, (ii) to pay the costs of the Debtors’ operations in the ordinary course of their businesses and in specific accordance with the line items set forth in the Budget, or (iii) to pay restructuring expenses and fees incurred by the Debtors as set forth in the Budget, and (iv) to pay such other amounts as may be agreed to by the Debtors and the Lender. Notwithstanding anything herein, no proceeds of the Loans shall be utilized for the payment of any fees and expenses incurred in connection with (x) any investigation of or challenge to the amount, extent, priority, validity, perfection or enforcement of indebtedness of the Debtors owing to the Lender, the Pre-Petition Lender, the Repo Counterparty or any Affiliate thereof, or to the collateral securing the Pre-Petition Loan or the perfection, priority or validity of the liens granted in favor of the Pre-Petition Lender with respect to the Pre-Petition Loan, or (y) any investigation, assertion, initiation or prosecutions of any claim, causes of action, adversary proceedings or other litigation against the Lender, the Pre-Petition Lender, Repo Counterparty or their Affiliates.

Section 2.8. Evidence of Debt . The Loans made by the Lender shall be evidenced by one or more accounts or records maintained by such Lender. The accounts or records maintained by the Lender shall be conclusive absent manifest error of the amount of the Loans made by the Lender to the Debtors and the interest and payments thereon. Upon the request of the Lender, the Debtors shall execute and deliver to the Lender a Note, which shall evidence such Lender’s Loans in addition to such accounts or records, however, no such Note will be necessary as evidence of the Loans. The Lender may attach schedules to its Note and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.

ARTICLE III

Conditions to the Agreement and Loans

Section 3.1. Conditions to the Effectiveness of the Agreement . The effectiveness of this Agreement is subject to the satisfaction of the following conditions precedent:

(a) The Lender shall have received executed counterparts of this Agreement;

(b) The Lender shall have received all documents reasonably requested by the Lender relating to the existence of the Debtors and their corporate authority to execute, deliver and perform this Agreement and any other documents to which the Debtors and the Lender are parties and the validity of this Agreement and such other documents and any other matters relevant hereto or thereto, all in form and substance satisfactory to the Lender.

(c) The Lender shall have received such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Debtor as the Lenders may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act in connection with this Agreement or any of the Loan Documents to which such Debtor is a party.

(d) All legal matters incident to this Agreement, and the transactions contemplated hereby and thereby shall be reasonably satisfactory to the Lender.

(e) The Lender shall have received a favorable opinion of counsel to the Debtors as to such matters as the Lender may reasonably request.

(f) The Lender shall have received and approved a budget of sources and uses of cash, substantially in the form annexed hereto as Exhibit A (the “Budget”).

(g) On or prior to the date of such initial Loan, each document (including, without limitation, each UCC financing statement) required by law or reasonably requested by the Lender to be filed, registered or recorded in order to create in favor of the Lender a perfected security interest in and Lien on the Collateral shall have been properly filed, registered or recorded in each jurisdiction in which the filing, registration or recordation thereof is so required or requested, and the Lender shall have received a duly completed and signed perfection certificate together with evidence that all filings, registrations and recordings required by law or reasonably requested by the Lenders to perfect the Liens created hereunder have been or concurrently are being made.

(h) The Interim DIP Order shall have been entered by the Bankruptcy Court in a form and substance satisfactory to the Lender and shall have been entered on notice to parties in accordance with Bankruptcy Rule 4001, and shall be in full force and effect and shall not have been (x) stayed, vacated, revised or rescinded or (y) amended or modified without the prior written consent of the Lender.

(i) All “First Day Orders” or other orders entered at the time of the Petition Date shall be reasonably satisfactory in form and substance to the Lender in all respects.

Section 3.2. Conditions Precedent to Funding . As a condition precedent to any obligation of the Lender to fund the Loans or to otherwise extend credit to the Debtors, the following conditions must have been satisfied:

(a) The Lender shall have received a loan request in accordance with Section 2.2 and all such other documents the Lender requires in connection with its commitment to make Loans.

(b) No Event of Default shall have occurred and be continuing or would result from making such Loan;

(c) No event of default shall have occurred under the Plan Support Agreement and such agreement shall not have been terminated in accordance with its terms;

(d) The Debtors shall have performed or complied with all agreements and conditions set forth herein to be performed or complied with by them on or prior to the date of such Loan;

(e) The representations and warranties of the Debtors contained in this Agreement or any other Loan Document shall be true and complete in all material respects.

(f) The Interim DIP Order or, following the entry of the Final DIP Order, the Final DIP Order shall be in full force and effect, and shall not have been stayed, vacated, reversed or rescinded, and such order shall not have been amended or modified without the prior written consent of the Lender;

(g) The purpose of the Loan shall be consistent with and for purposes permitted under the Budget and the Debtors shall, at the time of the delivery of any loan request pursuant to Section 2.2 hereof, have used for a purpose set forth in the Budget all cash on hand and any cash collateral; and

(h) Other than the Bankruptcy Cases, there shall exist no claim, action, suit, litigation, proceeding or investigation pending in any court or before any arbitrator or Governmental Authority that relates to the Obligations.

Each Request for a Loan submitted by the Debtors shall be deemed to be a representation and warranty that the conditions specified in this Article III have been satisfied on and as of the date of the applicable Loan.

ARTICLE IV

Security Interests and Priority Claims

Section 4.1. Security Interests .

(a) To secure the prompt and complete payment and performance of the Obligations of the Debtors to the Lender under this Agreement and under the Loan Documents, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now existing or hereafter arising or due or to become due, in accordance with the terms thereof, each of the Debtors hereby grant to the Lender and upon entry of and pursuant to the Interim DIP Order (and when applicable, the Final DIP Order), the Lender shall have (i) pursuant to 11 U.S.C. §364(c)(2), valid and perfected senior continuing first priority security interests in and Liens on the Debtors rights, title and interests to all Collateral; and (ii) pursuant to 11 U.S.C. §364(c)(3), perfected Liens upon all pre- and post petition property of the Debtors that constitutes Junior Collateral, which Liens shall be junior only to such valid and perfected Liens in existence on the Petition Date. The Lender shall have all the rights of a secured party with respect to the Collateral and Junior Collateral under the UCC and the other laws of the State of New York and any other applicable jurisdiction. The Liens granted to the Lender hereunder shall in all respects be senior to any pre-petition lien that is determined to be avoidable pursuant to 11 U.S.C. §544 or otherwise and, the Liens shall not be (i) subject to any lien or security interest which is avoided and preserved for the Borrower’s estate under 11 U.S.C. §551 or (ii) subordinated to or made pari passu with any other lien or security interest under 11 U.S.C. §364(d) or otherwise and shall at all times be senior to the rights of the Debtors and any successor trustee(s) in the Bankruptcy Cases or any subsequent proceedings under the Bankruptcy Code.

(b) Pursuant to the Financing Orders and this Agreement, the Liens granted pursuant to Section 4.1(a) shall constitute valid, enforceable and perfected first priority Liens and security interests in the Collateral and, except as specifically provided for herein, at all times shall be senior to and have priority over any and all other Liens, claims and interests, now existing or hereafter arising, in favor of any other creditor or any Person whatsoever. The Liens granted to the Lender in accordance with Section 4.1(a) with respect to the Junior Collateral shall be valid, enforceable and perfected Liens subject only to valid and perfected Liens in existence on the Petition Date. No claim of any kind or nature shall be assessed against or attributed to the Lender, the Collateral or the Junior Collateral pursuant to 11 U.S.C. § 506(c) or 11 U.S.C. § 552 or otherwise.

(c) Pursuant to the Financing Orders and this Agreement, the Liens granted pursuant to Section 4.1(a) and (b) shall be valid, enforceable and perfected without the necessity that th