Common use of Conditions Precedent to the Initial Revolving Advance Clause in Contracts

Conditions Precedent to the Initial Revolving Advance. The Lender’s obligation to make the initial Revolving Advance hereunder shall be subject to the condition precedent that the Lender shall have received all of the following, each in form and substance satisfactory to the Lender: 13 (a) This Agreement, properly executed by the Borrower. (b) The Note, properly executed by the Borrower. (c) A true and correct copy of any and all leases pursuant to which the Borrower is leasing the Premises, together with a landlord’s disclaimer and consent with respect to each such lease. (d) A true and correct copy of any and all mortgages pursuant to which the Borrower has mortgaged the Premises, together with a mortgagee’s disclaimer and consent with respect to each such mortgage. (e) A true and correct copy of any and all agreements pursuant to which the Borrower’s property is in the possession of any Person other than the Borrower, together with, in the case of any goods held by such Person for resale, (i) a consignee’s acknowledgment and waiver of liens, (ii) UCC financing statements sufficient to protect the Borrower’s and the Lender’s interests in such goods, and (iii) UCC searches showing that no other secured party has filed a financing statement against such Person and covering property similar to the Borrower’s other than the Borrower, or if there exists any such secured party, evidence that each such secured party has received notice from the Borrower and the Lender sufficient to protect the Borrower’s and the Lender’s interests in the Borrower’s goods from any claim by such secured party. (f) An acknowledgment and waiver of liens from each warehouse in which the Borrower is storing Inventory. (g) A true and correct copy of any and all agreements pursuant to which the Borrower’s property is in the possession of any Person other than the Borrower, together with, (i) an acknowledgment and waiver of liens from each subcontractor who has possession of the Borrower’s goods from time to time, (ii) UCC financing statements sufficient to protect the Borrower’s and the Lender’s interests in such goods, and (iii) UCC searches showing that no other secured party has filed a financing statement covering such Person’s property other than the Borrower, or if there exists any such secured party, evidence that each such secured party has received notice from the Borrower and the Lender sufficient to protect the Borrower’s and the Lender’s interests in the Borrower’s goods from any claim by such secured party. (h) The Lockbox Agreement, properly executed by the Borrower, Regulus West, LLC and Xxxxx Fargo. (i) Current searches of appropriate filing offices showing that (i) no state or federal tax liens have been filed and remain in effect against the Borrower, (ii) no financing statements or assignments of patents, trademarks or copyrights have been filed and remain in effect against the Borrower except those financing statements and assignments of patents, trademarks or copyrights relating to Permitted Liens or to liens held by Persons who have agreed in writing that upon receipt of proceeds of the Advances, they will deliver UCC releases and/or terminations and releases of such assignments of patents, trademarks or copyrights satisfactory to the Lender, and (iii) the Lender has duly filed all financing statements necessary to perfect the Security Interest, to the extent the Security Interest is capable of being perfected by filing. 14 (j) A certificate of the Borrower’s Secretary or Assistant Secretary certifying as to (i) the resolutions of the Borrower’s directors and, if required, shareholders, authorizing the execution, delivery and performance of the Loan Documents, (ii) the Borrower’s articles of incorporation and bylaws, and (iii) the signatures of the Borrower’s officers or agents authorized to execute and deliver the Loan Documents and other instruments, agreements and certificates, including Advance requests, on the Borrower’s behalf. (k) A current certificate issued by the Colorado Secretary of State, certifying that the Borrower is in compliance with all applicable organizational requirements of the State of Colorado. (l) Evidence that the Borrower is duly licensed or qualified to transact business in all jurisdictions where the character of the property owned or leased or the nature of the business transacted by it makes such licensing or qualification necessary. (m) A certificate of an officer of the Borrower confirming, in his personal capacity, the representations and warranties set forth in Article V. (n) An opinion of counsel to the Borrower, addressed to the Lender. (o) Certificates of the insurance required hereunder, with all hazard insurance containing a lender‘s loss payable endorsement in the Lender‘s favor and with all liability insurance naming the Lender as an additional insured. (p) A guaranty, properly executed by the Guarantor, pursuant to which the Guarantor unconditionally guarantees the full and prompt payment of all Obligations. (q) An opinion of counsel to the Guarantor, addressed to the Lender. (r) Availability plus cash and cash equivalents held in a deposit account maintained with Xxxxx Fargo shall be equal to or greater than $750,000 immediately after the initial Advance which shall be used to pay in full all of the Borrower’s accounts payable over 45 days past due and all of the fees and commission set forth in Section 4.1(t) below. (s) Evidence that the Guarantor has received an equity infusion of at least $800,000. (t) Payment of the fees and commissions due through the date of the initial Advance under Section 2.3 and expenses incurred by the Lender through such date and required to be paid by the Borrower under Section 9.6, including all legal expenses incurred through the date of this Agreement. (u) Evidence that the promissory notes, issued pursuant to the Private Placement Memorandum dated March 15, 2001, as amended, by SAN Holdings, Inc., have been converted into units consisting of common stock and warrants and all such issued and outstanding notes have been cancelled. 15 (v) Evidence that all taxes have been paid and are current, and that all use and sales tax liens have been released. (w) Such other documents and conditions as the Lender in its sole discretion may require, including a satisfactory collateral audit of the Borrower by the Lender.

Conditions Precedent to the Initial Revolving Advance. The ----------------------------------------------------- Lender’s 's obligation to make the initial Revolving Advance Advances hereunder shall be subject to the condition precedent that the Borrower shall have satisfied and/or the Lender shall have received all of the following, each in form and substance satisfactory to the Lender: 13: (a) This Agreement, properly executed by the Borrower. (b) The Revolving Note, properly executed by the Borrower. (c) A true and correct copy of any and all leases pursuant to which the Borrower is leasing the Premises, together with a landlord’s 's disclaimer and consent with respect to each such lease. (d) A true and correct copy of any and all mortgages pursuant to which The Patent Security Agreement, properly executed by the Borrower has mortgaged the Premises, together with a mortgagee’s disclaimer and consent with respect to each such mortgageBorrower. (e) A true and correct copy of any and all agreements pursuant to which The Guaranty, properly executed by the Borrower’s property is in the possession of any Person other than the Borrower, together with, in the case of any goods held by such Person for resale, (i) a consignee’s acknowledgment and waiver of liens, (ii) UCC financing statements sufficient to protect the Borrower’s and the Lender’s interests in such goods, and (iii) UCC searches showing that no other secured party has filed a financing statement against such Person and covering property similar to the Borrower’s other than the Borrower, or if there exists any such secured party, evidence that each such secured party has received notice from the Borrower and the Lender sufficient to protect the Borrower’s and the Lender’s interests in the Borrower’s goods from any claim by such secured partyGuarantor. (f) An acknowledgment A properly completed and waiver executed Borrowing Base Certificate as of liens from each warehouse in which a date not more than 5 Banking Days before the Borrower is storing Inventorydate of this Agreement. (g) A true and correct copy of any The Borrower has simultaneously entered into the WFBCI Credit Agreement and all agreements pursuant conditions precedent to which the Borrower’s property is in the possession of any Person other than the Borrower, together with, (i) an acknowledgment and waiver of liens from each subcontractor who has possession of the Borrower’s goods from time to time, (ii) UCC financing statements sufficient to protect the Borrower’s and the Lender’s interests in such goods, and (iii) UCC searches showing that no other secured party has filed a financing statement covering such Person’s property other than the Borrower, initial Advance set forth therein have been satisfied or if there exists any such secured party, evidence that each such secured party has received notice from the Borrower and the Lender sufficient to protect the Borrower’s and the Lender’s interests in the Borrower’s goods from any claim waived by such secured partyWFBCI. (h) An Exceptions Approval Letter, properly signed by Eximbank. (i) The Lockbox Agreement, properly executed by the Borrower, Regulus West, West LLC and Xxxxx FargoFargo Bank Texas, N.A. (j) The Borrower Agreement, properly executed by the Borrower. (ik) The SBA/Eximbank Joint Application, properly completed and executed by the Borrower. (l) Current searches of appropriate filing offices showing that (i) no state or federal tax liens have been filed and remain in effect against the Borrower, (ii) no financing statements or assignments of patents, trademarks or copyrights have been filed and remain in effect against the Borrower except those financing statements and assignments of patents, trademarks or copyrights relating to Permitted Liens or to liens held by Persons who have agreed in writing that upon receipt of proceeds of the Revolving Advances, they will deliver UCC releases and/or terminations and releases of such assignments of patents, trademarks or copyrights satisfactory to the Lender, and (iii) the Lender has duly filed all financing statements necessary to perfect the Security InterestInterest as first in priority to all other perfected security interests, to the extent the Security Interest is capable of being perfected by filing. 14Within 90 days of the Funding Date the Borrower shall provide searches of appropriate filing offices showing that no assignments of patents, trademarks or copyrights have been filed and remain in effect against the Borrower. (jm) A certificate of the Borrower’s 's Secretary or Assistant Secretary certifying as to (i) the resolutions of the Borrower’s 's directors and, if required, shareholders, authorizing the execution, delivery and performance of the Loan Documents, (ii) the Borrower’s 's articles of incorporation and bylaws, and (iii) the signatures of the Borrower’s 's officers or agents authorized to execute and deliver the Loan Documents and other instruments, agreements and certificates, including Revolving Advance requests, on the Borrower’s 's behalf. (kn) A current certificate issued by the Colorado Secretary of StateState of Delaware, certifying that the Borrower is in compliance with all applicable organizational requirements of the State of ColoradoDelaware and is in existence in good standing. (lo) Evidence A current certificate issued by the Secretary of State of Texas, certifying that the Borrower is duly licensed or and qualified to transact business in all jurisdictions where the character State of the property owned or leased or the nature of the business transacted by it makes such licensing or qualification necessaryTexas. (m) A certificate of an officer of the Borrower confirming, in his personal capacity, the representations and warranties set forth in Article V. (np) An opinion of counsel to the Borrower, addressed to the Lender, and in form and substance reasonably acceptable to the Lender. (oq) Evidence that the net proceeds from the Borrower's issuance of equity securities pursuant to a Unit Subscription Agreement between the Borrower and certain investors in the amount of at least $1,550,000 have been deposited into the Borrower's demand deposit account with Xxxxx Fargo Bank Texas, N.A. (r) Certificates of the insurance required hereunder, with all hazard insurance and the foreign credit insurance containing a lender‘s lender's loss payable endorsement in the Lender‘s Lender's favor and with all liability insurance naming the Lender as an additional insured. (p) A guaranty, properly executed by the Guarantor, pursuant to which the Guarantor unconditionally guarantees the full and prompt payment of all Obligations. (q) An opinion of counsel to the Guarantor, addressed to the Lender. (r) Availability plus cash and cash equivalents held in a deposit account maintained with Xxxxx Fargo shall be equal to or greater than $750,000 immediately after the initial Advance which shall be used to pay in full all of the Borrower’s accounts payable over 45 days past due and all of the fees and commission set forth in Section 4.1(t) below. (s) Evidence that the Guarantor has received an equity infusion of at least $800,000. (t) Payment of the fees and commissions due through the date of the initial Revolving Advance under Section 2.3 and expenses incurred by the Lender through such date and required to be paid by the Borrower under Section 9.6, including all legal expenses incurred through the date of this Agreement. (u) Evidence that the promissory notes, issued pursuant to the Private Placement Memorandum dated March 15, 2001, as amended, by SAN Holdings, Inc., have been converted into units consisting of common stock and warrants and all such issued and outstanding notes have been cancelled. 15 (vt) Evidence that all taxes indebtedness and lease obligations of the Borrower to Bank One, Texas, NA and its affiliates have been paid and are current, and that all use and sales tax liens have been releasedin full or will be paid out of the proceeds of the initial Advances. (wu) Such other documents and conditions as the Lender in its sole discretion may reasonably require, including a satisfactory collateral audit of the Borrower by the Lender.

Conditions Precedent to the Initial Revolving Advance. The Lender’s 's obligation to make the initial Revolving Advance hereunder shall be subject to the condition precedent that the Lender shall have received all of the following, each in form and substance satisfactory to the Lender: 13: (a) This Agreement, properly executed by the Borrower. (b) The Note, properly executed by the Borrower. (c) A true and correct copy of any and all leases pursuant to which the Borrower is leasing the Premises, together with a landlord’s 's disclaimer and consent with respect to each such lease. (d) A true and correct copy of any and all mortgages pursuant to which the Borrower has mortgaged the Premises, together with a mortgagee’s 's disclaimer and consent with respect to each such mortgage. (e) A true and correct copy of any and all agreements pursuant to which the Borrower’s 's property is in the possession of any Person other than the Borrower, together with, in the case of any goods held by such Person for resale, (i) a consignee’s 's acknowledgment and waiver of liens, (ii) UCC financing statements sufficient to protect the Borrower’s 's and the Lender’s 's interests in such goods, and (iii) UCC searches showing that no other secured party has filed a financing statement against such Person and covering property similar to the Borrower’s 's other than the Borrower, or if there exists any such secured party, evidence that each such secured party has received notice from the Borrower and the Lender sufficient to protect the Borrower’s 's and the Lender’s 's interests in the Borrower’s 's goods from any claim by such secured party. (f) An acknowledgment and waiver of liens from each warehouse in which the Borrower is storing Inventory. (g) A true and correct copy of any and all agreements pursuant to which the Borrower’s 's property is in the possession of any Person other than the Borrower, together with, (i) an acknowledgment and waiver of liens from each subcontractor who has possession of the Borrower’s 's goods from time to time, (ii) UCC financing statements sufficient to protect the Borrower’s 's and the Lender’s 's interests in such goods, and (iii) UCC searches showing that no other secured party has filed a financing statement covering such Person’s 's property other than the Borrower, or if there exists any such secured party, evidence that each such secured party has received notice from the Borrower and the Lender sufficient to protect the Borrower’s 's and the Lender’s 's interests in the Borrower’s 's goods from any claim by such secured party. (h) The Lockbox Agreement, properly executed by the Borrower, Xxxxx Fargo Bank, National Association and Regulus West, LLC and Xxxxx FargoWest LLC. (i) Trademark Security Agreement, properly executed by the Borrower. (j) The Subordination Agreements properly executed by the Subordinated Creditors and acknowledged by Borrower. (k) Current searches of appropriate filing offices showing that (i) no state or federal tax liens have been filed and remain in effect against the Borrower, (ii) no financing statements or assignments of patents, trademarks or copyrights have been filed and remain in effect against the Borrower except those financing statements and assignments of patents, trademarks or copyrights relating to Permitted Liens or to liens held by Persons who have agreed in writing that upon receipt of proceeds of the Advances, they will deliver UCC releases and/or terminations and releases of such assignments of patents, trademarks or copyrights satisfactory to the Lender, and (iii) the Lender has duly filed all financing statements necessary to perfect the Security Interest, to the extent the Security Interest is capable of being perfected by filing. 14. (jl) A certificate of the Borrower’s 's Secretary or Assistant Secretary certifying as to (i) the resolutions of the Borrower’s 's directors and, if required, shareholders, authorizing the execution, delivery and performance of the Loan Documents, (ii) the Borrower’s 's articles of incorporation and bylaws, and (iii) the signatures of the Borrower’s 's officers or agents authorized to execute and deliver the Loan Documents and other instruments, agreements and certificates, including Advance requests, on the Borrower’s 's behalf. (km) A current certificate issued by the Colorado Secretary of StateState of Delaware, certifying that the Borrower is in compliance with all applicable organizational requirements of the State of ColoradoDelaware. (ln) Evidence that the Borrower is duly licensed or qualified to transact business in all jurisdictions where the character of the property owned or leased or the nature of the business transacted by it makes such licensing or qualification necessarynecessary (except in those jurisdictions where the failure to so qualify will not have a materially adverse effect on the Borrower, its financial condition, or ability to repay the Obligations under this Agreement). (mo) A certificate of an officer of the Borrower confirming, in his personal capacity, the representations and warranties set forth in Article V. (np) Receipt of background checks on Borrower's principals satisfactory to Lender at its sole discretion. (q) An opinion of counsel to the Borrower, addressed to the Lender. (or) Certificates of the insurance required hereunder, with all hazard insurance containing a lender‘s lender's loss payable endorsement in the Lender‘s Lender's favor and with all liability insurance naming the Lender as an additional insured. (p) A guaranty, properly executed by the Guarantor, pursuant to which the Guarantor unconditionally guarantees the full and prompt payment of all Obligations. (q) An opinion of counsel to the Guarantor, addressed to the Lender. (r) Availability plus cash and cash equivalents held in a deposit account maintained with Xxxxx Fargo shall be equal to or greater than $750,000 immediately after the initial Advance which shall be used to pay in full all of the Borrower’s accounts payable over 45 days past due and all of the fees and commission set forth in Section 4.1(t) below. (s) Evidence that of the Guarantor has received an equity infusion settlement of at least $800,000the action arising under the Performance Nutrition, Inc. bankruptcy on terms and conditions satisfactory to Lender, and completion of payments according to the terms of such settlement. (t) Payment of the fees and commissions due through the date of the initial Advance under Section 2.3 and expenses incurred by the Lender through such date and required to be paid by the Borrower under Section 9.6, including all legal expenses incurred through the date of this Agreement. (u) Evidence that Availability as of the promissory notes, issued pursuant Funding Date is not less than One Million Two Hundred Fifty Thousand Dollars ($1,250,000) after giving effect to the Private Placement Memorandum dated March 15, 2001, as amended, by SAN Holdings, Inc., have been converted into units consisting amount paid or to be paid to Borrower's prior lender to retire Borrower's line of common stock credit with such prior lender and warrants and bringing all such issued and outstanding notes have been cancelled. 15other obligations to a current status satisfactory to Lender. (v) Evidence that At Borrower's cost, an appraisal of all taxes have been paid Inventory, issued by an appraiser acceptable to Lender and are currentin form, substance and that all use and sales tax liens have been releasedreflecting values satisfactory to Lender in its sole discretion. (w) Completion of a field review of the books and records of Borrower and such other information with respect to the Collateral as Lender may require and a review of Borrower's projections, budgets, business plans, cash flows and such other financial information as Lender may require, the results of all of which shall be satisfactory to Lender in its sole discretion. (x) Evidence that there has been no material adverse change, as determined by Lender, in the financial condition or business of Borrower, nor any material decline, as determined by Lender, in the market value of any Collateral or a substantial or material portion of the assets of Borrower since the date of the latest financial statements of Borrower delivered to Lender prior to the Funding Date. (y) Evidence that Borrower has opened bank accounts of a type mutually acceptable to Borrower and Lender, including, without limitation, the Collateral Account and any other account contemplated by the Lockbox Agreement. (z) Such other documents and conditions as the Lender in its sole discretion may require, including a satisfactory collateral audit of the Borrower by the Lender.

Conditions Precedent to the Initial Revolving Advance. The Lender’s 's obligation to make the initial Revolving Advance hereunder shall be subject to the condition precedent that the Lender shall have received all of the following, each in form and substance satisfactory to the Lender: 13Lender in its sole and absolute discretion: (a) This Agreement, properly executed by the Borrower. (b) The Revolving Note, properly executed by the Borrower. (c) The Term Loan Note, properly executed by the Borrower. (d) The Warrant, properly executed by the Borrower. (e) A true and correct copy of any and all leases pursuant to which the Borrower is leasing the Premises, together with a landlord’s disclaimer 's disclaimer, consent and consent subordination with respect to each such lease. (df) A true and correct copy of any and all mortgages pursuant to which the Borrower or any Affiliate has mortgaged the Premises, together with a mortgagee’s 's disclaimer and consent with respect to each such mortgage. (eg) A true and correct copy of any and all agreements pursuant to which the Borrower’s 's property is in the possession of any Person other than the Borrower, together with, in the case of any goods held by such Person for resale, (i) a consignee’s 's acknowledgment and waiver of liens, (ii) UCC financing statements sufficient to protect the Borrower’s 's and the Lender’s 's interests in such goods, and (iii) UCC searches showing that no other secured party has filed a financing statement against such Person and covering property similar to the Borrower’s 's other than the Borrower, or if there exists any such secured party, evidence that each such secured party has received notice from the Borrower and the Lender sufficient to protect the Borrower’s 's and the Lender’s 's interests in the Borrower’s 's goods from any claim by such secured party. (fh) An acknowledgment and waiver of liens from each warehouse in which the Borrower is storing Inventory, if any. (gi) A true and correct copy of any and all agreements pursuant to which the Borrower’s 's property is in the possession of any Person other than the Borrower, together with, (i) an acknowledgment and waiver of liens from each subcontractor who has possession of the Borrower’s 's goods from time to time, (ii) UCC financing statements sufficient to protect the Borrower’s 's and the Lender’s 's interests in such goods, and (iii) UCC searches showing that no other secured party has filed a financing statement covering such Person’s 's property other than the Borrower, or if there exists any such secured party, evidence that each such secured party has received notice from the Borrower and the Lender sufficient to protect the Borrower’s 's and the Lender’s 's interests in the Borrower’s 's goods from any claim by such secured party. (hj) An acknowledgment and agreement from each licensor in favor of the Lender, together with a true, correct and complete copy of all license agreements. (k) The Collateral Account Agreement, properly executed by the Borrower and Norwest Bank Arizona. (l) The Lockbox Agreement, properly executed by the Borrower, Regulus West, LLC and Xxxxx Fargo. (i) Current searches of appropriate filing offices showing that (i) no state or federal tax liens have been filed and remain in effect against the Borrower, (ii) no financing statements or assignments of patents, trademarks or copyrights have been filed and remain in effect against the Borrower except those financing statements and assignments of patents, trademarks or copyrights relating to Permitted Liens or to liens held by Persons who have agreed in writing that upon receipt of proceeds of the Advances, they will deliver UCC releases and/or terminations and releases of such assignments of patents, trademarks or copyrights satisfactory to the Lender, and (iii) the Lender has duly filed all financing statements necessary to perfect the Security Interest, to the extent the Security Interest is capable of being perfected by filing. 14 (j) A certificate of the Borrower’s Secretary or Assistant Secretary certifying as to (i) the resolutions of the Borrower’s directors and, if required, shareholders, authorizing the execution, delivery and performance of the Loan Documents, (ii) the Borrower’s articles of incorporation and bylaws, and (iii) the signatures of the Borrower’s officers or agents authorized to execute and deliver the Loan Documents and other instruments, agreements and certificates, including Advance requests, on the Borrower’s behalf. (k) A current certificate issued by the Colorado Secretary of State, certifying that the Borrower is in compliance with all applicable organizational requirements of the State of Colorado. (l) Evidence that the Borrower is duly licensed or qualified to transact business in all jurisdictions where the character of the property owned or leased or the nature of the business transacted by it makes such licensing or qualification necessary. (m) A certificate of an officer of the Borrower confirming, in his personal capacity, the representations and warranties set forth in Article V. (n) An opinion of counsel to the Borrower, addressed to the Lender. (o) Certificates of the insurance required hereunder, with all hazard insurance containing a lender‘s loss payable endorsement in the Lender‘s favor and with all liability insurance naming the Lender as an additional insured. (p) A guaranty, properly executed by the Guarantor, pursuant to which the Guarantor unconditionally guarantees the full and prompt payment of all Obligations. (q) An opinion of counsel to the Guarantor, addressed to the Lender. (r) Availability plus cash and cash equivalents held in a deposit account maintained with Xxxxx Fargo shall be equal to or greater than $750,000 immediately after the initial Advance which shall be used to pay in full all of the Borrower’s accounts payable over 45 days past due and all of the fees and commission set forth in Section 4.1(t) below. (s) Evidence that the Guarantor has received an equity infusion of at least $800,000. (t) Payment of the fees and commissions due through the date of the initial Advance under Section 2.3 and expenses incurred by the Lender through such date and required to be paid by the Borrower under Section 9.6, including all legal expenses incurred through the date of this Agreement. (u) Evidence that the promissory notes, issued pursuant to the Private Placement Memorandum dated March 15, 2001, as amended, by SAN Holdings, Inc., have been converted into units consisting of common stock and warrants and all such issued and outstanding notes have been cancelled. 15 (v) Evidence that all taxes have been paid and are current, and that all use and sales tax liens have been released. (w) Such other documents and conditions as the Lender in its sole discretion may require, including a satisfactory collateral audit of the Borrower by the Lender.

Conditions Precedent to the Initial Revolving Advance. The Lender’s 's obligation to make the initial Revolving Advance hereunder shall be subject to the condition precedent that the Lender shall have received all of the following, each in form and substance satisfactory to the Lender: 13: (a) This Agreement, properly executed by the Borrower. (b) The Note, properly executed by the Borrower. (c) A true and correct copy of any and all leases pursuant to which the Borrower is leasing the Premises, together with a landlord’s 's disclaimer and consent with respect to each such lease. (d) A true and correct copy of any and all mortgages pursuant to which the Borrower has mortgaged the Premises, together with a mortgagee’s 's disclaimer and consent with respect to each such mortgage. (e) A true and correct copy of any and all agreements pursuant to which the Borrower’s 's property is in the possession of any Person other than the Borrower, together with, in the case of any goods held by such Person for resale, (i) a consignee’s 's acknowledgment and waiver of liensLiens, (ii) UCC financing statements sufficient to protect the Borrower’s 's and the Lender’s 's interests in such goods, and (iii) UCC searches showing that no other secured party has filed a financing statement against such Person and covering property similar to the Borrower’s 's other than the Borrower, or if there exists any such secured party, evidence that each such secured party has received notice from the Borrower and the Lender sufficient to protect the Borrower’s 's and the Lender’s 's interests in the Borrower’s 's goods from any claim by such secured party. (f) An acknowledgment and waiver of liens from each warehouse in which the Borrower is storing Inventory.[Deleted] (g) A true and correct copy of any and all agreements pursuant to which the Borrower’s 's property is in the possession of any Person other than the Borrower, together with, (i) an acknowledgment and waiver of liens Liens from each subcontractor who has possession of the Borrower’s 's goods from time to time, (ii) UCC financing statements sufficient to protect the Borrower’s 's and the Lender’s 's interests in such goods, and (iii) UCC searches showing that no other secured party has filed a financing statement covering such Person’s 's property other than the Borrower, or if there exists any such secured party, evidence that each such secured party has received notice from the Borrower and the Lender sufficient to protect the Borrower’s 's and the Lender’s 's interests in the Borrower’s 's goods from any claim by such secured party. (h) The Life Insurance Assignments, properly executed by each beneficiary and owner, and the Life Insurance Policies, together with evidence that the Life Insurance Policies are subject to no assignments or encumbrances other than the Life Insurance Assignments. (i) The Lockbox and Collection Account Agreement, properly executed by the Borrower and Xxxxx Fargo Bank Minnesota. (j) Control agreements, properly executed by the Borrower and each bank at which the Borrower maintains deposit accounts. (k) The Patent and Trademark Security Agreement, properly executed by the Borrower, Regulus West, LLC and Xxxxx Fargo. (il) Agreements with Transamerica and, at the Lender's option, with each other lender providing floor plan financing to the Borrower's dealers, pursuant to which the floor plan lender agrees to remit proceeds of such financing directly to the Lender. (m) Current searches of appropriate filing offices showing that (i) no state or federal tax liens have been filed and remain in effect against the Borrower, (ii) no financing statements or assignments of patents, trademarks or copyrights Liens have been filed and remain in effect against the Borrower except those financing statements and assignments of patents, trademarks or copyrights relating to Permitted Liens or to liens Liens held by Persons who have agreed in writing that upon receipt of proceeds of the initial Advances, they will deliver UCC releases and/or terminations and releases of satisfy, release or terminate such assignments of patents, trademarks or copyrights Liens in a manner satisfactory to the Lender, and (iiiii) the Lender has duly filed all financing statements necessary to perfect the Security Interest, to the extent the Security Interest is capable of being perfected by filing. 14. (jn) A certificate of the Borrower’s 's Secretary or Assistant Secretary certifying as that attached to such certificate are (i) the resolutions of the Borrower’s directors 's Directors and, if required, shareholdersOwners, authorizing the execution, delivery and performance of the Loan Documents, (ii) true, correct and complete copies of the Borrower’s articles of incorporation and bylaws's Constituent Documents, and (iii) examples of the signatures of the Borrower’s officers 's Officers or agents authorized to execute and deliver the Loan Documents and other instruments, agreements and certificates, including Advance requests, on the Borrower’s 's behalf. (ko) A current certificate issued by the Colorado Secretary of StateState of Delaware, certifying that the Borrower is in compliance with all applicable organizational requirements of the State of ColoradoDelaware. (lp) Evidence that the Borrower is duly licensed or qualified to transact business in all jurisdictions where the character of the property owned or leased or the nature of the business transacted by it makes such licensing or qualification necessary. (mq) A certificate of an officer Officer of the Borrower confirming, in his personal capacity, the representations and warranties set forth in Article V.5. (nr) Support Agreements in favor of the Lender, properly executed by Xxxxxxx Xxxxxx and Xxxxx Xxxxx, each in his personal capacity. (s) An opinion of counsel to the Borrower, addressed to the Lender. (ot) Certificates of the insurance required hereunder, with all hazard insurance containing a lender‘s lender's loss payable endorsement in the Lender‘s Lender's favor and with all liability insurance naming the Lender as an additional insured. (p) A guaranty, properly executed by the Guarantor, pursuant to which the Guarantor unconditionally guarantees the full and prompt payment of all Obligations. (q) An opinion of counsel to the Guarantor, addressed to the Lender. (r) Availability plus cash and cash equivalents held in a deposit account maintained with Xxxxx Fargo shall be equal to or greater than $750,000 immediately after the initial Advance which shall be used to pay in full all of the Borrower’s accounts payable over 45 days past due and all of the fees and commission set forth in Section 4.1(t) below. (s) Evidence that the Guarantor has received an equity infusion of at least $800,000. (t) Payment of the fees and commissions due through the date of the initial Advance under Section 2.3 and expenses incurred by the Lender through such date and required to be paid by the Borrower under Section 9.6, including all legal expenses incurred through the date of this Agreement. (u) Evidence that the promissory notes, issued pursuant Borrower's performance and results prior to the Private Placement Memorandum dated March 15, 2001, as amended, by SAN Holdings, Inc., have been converted into units consisting of common stock and warrants and all such issued and outstanding notes have been cancelled. 15Funding Date are consistent with its projections. (v) Evidence that all taxes have been paid and are current, and that all use and sales tax liens have been released. (w) Such other All such documents and conditions information as the Lender in its sole discretion may require, including a satisfactory collateral audit request with respect to the Borrower's dealer arrangements and the third party financing arrangements of the Borrower by the Lendersuch dealers.

Conditions Precedent to the Initial Revolving Advance. The Lender’s 's obligation to make the initial Revolving Advance hereunder shall be subject to the condition conditions precedent that (i) after giving effect to the initial Revolving Advance there is not less than $1,500,000.00 in excess Availability, and (ii) the Lender shall have received all of the following, each in form and substance satisfactory to the Lender: 13: (a) This Agreement, properly executed by the Borrower. (b) The Note, properly executed by the Borrower. (c) A true and correct copy of any and all leases pursuant to which the Borrower is leasing the Principal Premises, together with a landlord’s 's disclaimer and consent with respect to each such leasethe lease for the principal premises in Phoenix, Arizona. (d) A true and correct copy of any and all mortgages pursuant to which the Borrower has mortgaged the Premises, together with a mortgagee’s disclaimer and consent with respect to each such mortgage. (e) A true and correct copy of any and all agreements pursuant to which the Borrower’s 's property is in the possession of any Person other than the Borrower, together with, in the case of any goods held by such Person for resale, (i) a consignee’s acknowledgment and waiver of liens, (ii) UCC financing statements sufficient to protect the Borrower’s and the Lender’s interests in such goods, and (iii) UCC searches showing that no other secured party has filed a financing statement against such Person and covering property similar to the Borrower’s other than the Borrower, or if there exists any such secured party, evidence that each such secured party has received notice from the Borrower and the Lender sufficient to protect the Borrower’s and the Lender’s interests in the Borrower’s goods from any claim by such secured party. (f) An acknowledgment and waiver of liens from each warehouse in which the Borrower is storing Inventory. (g) A true and correct copy of any and all agreements pursuant to which the Borrower’s property at its Principal Premises is in the possession of any Person other than the Borrower, together with, (i) an acknowledgment and waiver of liens from each subcontractor who has possession of the Borrower’s 's goods from time to time, (ii) UCC financing statements sufficient to protect the Borrower’s 's and the Lender’s 's interests in such goods, and (iii) UCC searches showing that no other secured party has filed a financing statement covering such Person’s 's property other than the Borrower, or if there exists any such secured party, evidence that each such secured party has received notice from the Borrower and the Lender sufficient to protect the Borrower’s 's and the Lender’s 's interests in the Borrower’s 's goods from any claim by such secured party. (h) The Lockbox Agreement, properly executed by the Borrower, Regulus West, LLC and Xxxxx Fargo. (ie) Current searches of appropriate filing offices showing that (i) no state or federal tax liens have been filed and remain in effect against the Borrower, (ii) no financing statements or assignments of patents, trademarks or copyrights have been filed and remain in effect against the Borrower except those financing statements and assignments of patents, trademarks or copyrights relating to Permitted Liens or to liens held by Persons who have agreed in writing that upon receipt of proceeds of the Advances, they will deliver UCC releases and/or terminations and releases of such assignments of patents, trademarks or copyrights satisfactory to the Lender, and (iii) the Lender has duly filed all financing statements necessary to perfect the Security Interest, to the extent the Security Interest is capable of being perfected by filing. 14. (jf) A certificate of the Borrower’s 's Secretary or Assistant Secretary certifying as to (i) the resolutions of the Borrower’s 's directors and, if required, shareholders, authorizing the execution, delivery and performance of the Loan Documents, (ii) the Borrower’s 's articles of incorporation and bylaws, and (iii) the signatures of the Borrower’s 's officers or agents authorized to execute and deliver the Loan Documents and other instruments, agreements and certificates, including Advance requests, on the Borrower’s 's behalf. (kg) A current certificate issued by the Colorado Secretary of StateState of Delaware, certifying that the Borrower is in compliance with all applicable organizational requirements of the State of ColoradoDelaware. (lh) Evidence that the Borrower is duly licensed or qualified to transact business in all jurisdictions where the character of the property owned or leased or the nature of the business transacted by it makes such licensing or qualification necessaryArizona and Ontario, Canada. (mi) A certificate of an officer of the Borrower confirming, in his personal corporate capacity, the representations and warranties set forth in Article V. (nj) An opinion of counsel to the Borrower, addressed to the Lender. (ok) Certificates of the insurance required hereunder, with all hazard insurance containing a lender‘s lender's loss payable endorsement in the Lender‘s Lender's favor and with all liability insurance naming the Lender as an additional insured. (p) A guaranty, properly executed by the Guarantor, pursuant to which the Guarantor unconditionally guarantees the full and prompt payment of all Obligations. (q) An opinion of counsel to the Guarantor, addressed to the Lender. (r) Availability plus cash and cash equivalents held in a deposit account maintained with Xxxxx Fargo shall be equal to or greater than $750,000 immediately after the initial Advance which shall be used to pay in full all of the Borrower’s accounts payable over 45 days past due and all of the fees and commission set forth in Section 4.1(t) below. (s) Evidence that the Guarantor has received an equity infusion of at least $800,000. (tl) Payment of the fees and commissions due through the date of the initial Advance under Section 2.3 and expenses incurred by the Lender through such date and required to be paid by the Borrower under Section 9.6, including all legal expenses incurred through the date of this Agreement. (u) Evidence that the promissory notes, issued pursuant to the Private Placement Memorandum dated March 15, 2001, as amended, by SAN Holdings, Inc., have been converted into units consisting of common stock and warrants and all such issued and outstanding notes have been cancelled. 15 (v) Evidence that all taxes have been paid and are current, and that all use and sales tax liens have been released. (wm) Such other documents and conditions as the Lender in its sole discretion may require, including a satisfactory collateral audit of the Borrower by the Lender.

Conditions Precedent to the Initial Revolving Advance. The Lender’s 's obligation to make the initial Revolving Advance hereunder shall be subject to the condition precedent that the Lender shall have received all of the following, each in form and substance satisfactory to the Lender: 13 (a) This Agreement, properly executed by the Borrower. (b) . The Note, properly executed by the Borrower. (c) A true and correct copy of any and all leases pursuant to which the Borrower is leasing the Premises, together with a landlord’s disclaimer and consent with respect to each such lease. (d) . A true and correct copy of any and all mortgages (to the extent such mortgages exist) pursuant to which the Borrower has mortgaged the Premises, together with a mortgagee’s 's disclaimer and consent with respect to each such mortgage. (e) . A true and correct copy of any and all agreements (to the extent such agreements exist) pursuant to which the Borrower’s 's property is in the possession of any Person other than the Borrower, together with, in the case of any goods held by such Person for resale, (i) a consignee’s 's acknowledgment and waiver of liens, (ii) UCC financing statements sufficient to protect the Borrower’s 's and the Lender’s 's interests in such goods, and (iii) UCC searches showing that no other secured party has filed a financing statement against such Person and covering property similar to the Borrower’s 's other than the Borrower, or if there exists any such secured party, evidence that each such secured party has received notice from the Borrower and the Lender sufficient to protect the Borrower’s 's and the Lender’s 's interests in the Borrower’s 's goods from any claim by such secured party. (f) An acknowledgment and waiver of liens from each warehouse in which the Borrower is storing Inventory. (g) . A true and correct copy of any and all agreements pursuant to which the Borrower’s 's property is in the possession of any Person other than the Borrower, together with, (i) an acknowledgment and waiver of liens from each subcontractor who has possession of the Borrower’s 's goods from time to time, (ii) UCC financing statements sufficient to protect the Borrower’s 's and the Lender’s 's interests in such goods, and (iii) UCC searches showing that no other secured party has filed a financing statement covering such Person’s 's property other than the Borrower, or if there exists any such secured party, evidence that each such secured party has received notice from the Borrower and the Lender sufficient to protect the Borrower’s 's and the Lender’s 's interests in the Borrower’s 's goods from any claim by such secured party. (h) . The Collection Account Agreement, properly executed by the Borrower and Xxxxx Fargo Bank, National Association. The Lockbox Agreement, properly executed by the Borrower, Xxxxx Fargo Bank, National Association and Regulus WestWest LLC. The Patent and Trademark Security Agreement, LLC and Xxxxx Fargo. (i) properly executed by the Borrower. Current searches of appropriate filing offices showing that (i) no state or federal tax liens have been filed and remain in effect against the Borrower, (ii) no financing statements or assignments of patents, trademarks or copyrights have been filed and remain in effect against the Borrower except those financing statements and assignments of patents, trademarks or copyrights relating to Permitted Liens or to liens held by Persons who have agreed in writing that upon receipt of proceeds of the Advances, they will deliver UCC releases and/or terminations and releases of such assignments of patents, trademarks or copyrights satisfactory to the Lender, and (iii) the Lender has duly filed all financing statements necessary to perfect the Security Interest, to the extent the Security Interest is capable of being perfected by filing. 14 (j) A certificate of the Borrower’s 's Secretary or Assistant Secretary certifying as to (i) the resolutions of the Borrower’s 's directors and, if required, shareholders, authorizing the execution, delivery and performance of the Loan Documents, (ii) the Borrower’s 's articles of incorporation and bylaws, and (iii) the signatures of the Borrower’s 's officers or agents authorized to execute and deliver the Loan Documents and other instruments, agreements and certificates, including Advance requests, on the Borrower’s 's behalf. (k) . A current certificate issued by the Colorado Secretary of StateState of Delaware, certifying that the Borrower is in compliance with all applicable organizational requirements of the State of Colorado. (l) Delaware. Evidence that the Borrower is duly licensed or qualified to transact business in all jurisdictions where the character of the property owned or leased or the nature of the business transacted by it makes such licensing or qualification necessary. (m) . A certificate of an officer of the Borrower confirming, in his personal capacity, confirming that the representations and warranties set forth in Article V. (n) V are true and correct in all material respects. An opinion of counsel to the Borrower, addressed to the Lender. (o) Lender in the form of Exhibit E. Certificates of the insurance required hereunder, with all hazard insurance containing a lender‘s lender's loss payable endorsement in the Lender‘s Lender's favor and with all liability insurance naming the Lender as an additional insured. (p) A guaranty, properly executed by the Guarantor, pursuant to which the Guarantor unconditionally guarantees the full and prompt payment of all Obligations. (q) An opinion of counsel to the Guarantor, addressed to the Lender. (r) Availability plus cash and cash equivalents held in a deposit account maintained with Xxxxx Fargo shall be equal to or greater than $750,000 immediately after the initial Advance which shall be used to pay in full all of the Borrower’s accounts payable over 45 days past due and all of the fees and commission set forth in Section 4.1(t) below. (s) Evidence that the Guarantor has received an equity infusion of at least $800,000. (t) . Payment of the fees and commissions due through the date of the initial Advance under Section 2.3 and expenses incurred by the Lender through such date and required to be paid by the Borrower under Section 9.6, including all reasonable legal expenses incurred through the date of this Agreement. (u) . Evidence that Availability as of the promissory notes, issued pursuant Funding Date is not less than Two Million Dollars ($2,000,000) after giving effect to the Private Placement Memorandum dated March 15amount paid or to be paid to Borrower's prior lender to retire Borrower's line of credit with such prior lender and bringing all other obligations to a current status satisfactory to Lender. Completion of a field review of the books and records of Borrower and such other information with respect to the Collateral as Lender may require, 2001, as amended, by SAN Holdings, Inc., have been converted into units consisting the results of common stock and warrants and all such issued and outstanding notes have been cancelledwhich shall be reasonably satisfactory to Lender. 15 (v) Evidence that all taxes have been paid Borrower has opened bank accounts of a type mutually acceptable to Borrower and are currentLender, including, without limitation, the Collateral Account and that all use and sales tax liens have been released. (w) any other account contemplated by the Collection Account Agreement or the Lockbox Agreement. Such other documents and conditions as the Lender in its sole discretion may reasonably require, including a satisfactory collateral audit of the Borrower by the Lender.