2.2           Section 8 (Definitions).   The following defined terms in Section 8 of the Loan Agreement are either added or amended and restated in their entirety to read as follows:

“ Deferred Revenue ” is all amounts received or invoiced in advance of performance under contracts and not yet recognized as revenue.

“ Formula Loans ” means any Loans made with regards to the Borrowing Base.

“Non-Formula Amount ” means an amount equal to the lesser of (i) $1,500,000 and (ii) the face amount of the Supporting Letter of Credit.

“Non-Formula Loans ” means Loans in excess of the Borrowing Base up to the Non-Formula Amount made without regard to the Borrowing Base.

“ Prime Rate ” is Bank’s most recently announced “prime rate,” even if it is not Bank’s lowest rate.

“ Supporting Letter of Credit ” means that certain irrevocable standby letter of credit issued by the Bank of America on May 29, 2009, or a letter of credit issued by another bank rated A2 or better by Moody’s Investors Service, Inc., for account of the Supporting Letter of Credit Applicants and naming Bank as beneficiary, in the face amount of $1,000,000 (as amended, supplemented, modified or extended from time to time).

“ Supporting Letter of Credit Applicants ” means, collectively, Philip Sassower and Susan Sassower, individuals, as applicants under the Supporting Letter of Credit.

2.3           Schedule Section 1 (CREDIT LIMIT (Section 1.1) ) .  The first three paragraphs and the definitions of Section 1 of the Schedule to the Loan Agreement (up until the definition of “Letter of Credit Sublimit”) are hereby amended and restated to read as follows:

“An amount not to exceed (a) the lesser of (i) $5,000,000 or (ii) the amount available under the Borrowing Base plus the Non-Formula Amount, minus (b) the amount of all outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit), minus (c) any amounts used under the Cash Management Services Sublimit, and minus (d) the outstanding principal balance of any Loans.”

“ Borrowing Base ” is (a) 80% of Eligible Domestic Accounts plus (b) 80% of Eligible Foreign Accounts (not to exceed 35% of all Eligible Accounts) all as determined by Bank from Borrower’s most recent Transaction Report; provided, however, that Bank may decrease the foregoing amounts or percentages in its good faith business judgment based on events, conditions, contingencies, or risks which, as determined by Bank, may adversely affect Collateral.”

“ Eligible Accounts” means Eligible Domestic Accounts and Eligible Foreign Accounts

“ Eligible Domestic Accounts ” means Accounts which (i) arise in the ordinary course of Borrower’s business, (ii) that meet all Borrower’s representations and warranties in Section 4.1, (iii) that are billed and payable inside of the United States and (d) with respect to which, the Account Debtor has its principal place of business in the United States or Canada.  Bank reserves the right upon prior written notice to Borrower at any time after May 29, 2009 to adjust any of the criteria set forth below and to establish new criteria in its good faith business judgment.  Unless Bank otherwise agrees in writing using its good faith business judgment, Eligible Domestic Accounts shall not include:

(a)            Accounts that the Account Debtor has not paid within 90 days of invoice date regardless of invoice payment period terms;

2

(b)            Accounts owing from an Account Debtor, 50% or more of whose Accounts have not been paid within 90 days of invoice date;

(c)            Accounts owing from an Account Debtor which does not have its principal place of business in the United States or Canada ;

(d)            Accounts billed and/or payable outside of the United States;

(e)            Accounts owing from an Account Debtor to the extent that Borrower is indebted or obligated to the Account Debtor (as creditor, lessor, supplier or otherwise - sometimes called “contra” accounts, accounts payable, customer deposits or credit accounts), with the exception of customary credits, adjustments and/or discounts given to an Account Debtor by Borrower in the ordinary course of its business;

(f)             Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee, or agent ;

(g)            Accounts with credit balances over 90 days from invoice date;

(h)            Accounts owing from an Account Debtor, including Affiliates, whose total obligations to Borrower exceed 25% of all Accounts, for the amounts that exceed that percentage, unless Bank approves in writing;

(i)             Accounts owing from an Account Debtor which is a United States government entity or any department, agency, or instrumentality thereof unless Borrower has assigned its payment rights to Bank and the assignment has been acknowledged under the Federal Assignment of Claims Act of 1940, as amended;

(j)             Accounts for demonstration or promotional equipment, or in which goods are consigned, or sold on a “sale guaranteed”, “sale or return”, “sale on approval”, or other terms if Account Debtor’s payment may be conditional;

(k)            Accounts owing from an Account Debtor that has not been invoiced or where goods or services have not yet been rendered to the Account Debtor (sometimes called memo billings or pre-billings);

(l)             Accounts subject to contractual arrangements between Borrower and an Account Debtor where payments shall be scheduled or due according to completion or fulfillment requirements where the Account Debtor has a right of offset for damages suffered as a result of Borrower’s failure to perform in accordance with the contract (sometimes called contracts accounts receivable, progress billings, milestone billings, or fulfillment contracts);

(m)           Accounts owing from an Account Debtor the amount of which may be subject to withholding based on the Account Debtor’s satisfaction of Borrower’s complete performance (but only to the extent of the amount withheld; sometimes called retainage billings);

(n)            Accounts subject to trust provisions, subrogation rights of a bonding company, or a statutory trust;

(o)            Accounts owing from an Account Debtor that has been invoiced for goods that have not been shipped to the Account Debtor unless Bank, Borrower, and the Account Debtor have entered into an agreement acceptable to Bank in its sole discretion wherein the Account Debtor acknowledges that (i) it has title to and has ownership of the goods wherever located, (ii) a bona fide sale of the goods has occurred, and (iii) it owes payment for such goods in accordance with invoices from Borrower (sometimes called “bill and hold” accounts);

3

(p)            Accounts owing from an Account Debtor with respect to which Borrower has rece