Holocom Networks, Inc. On November 22, 2006, Patriot and Holocom Networks, Inc. (“Holocom”) entered into a Secured Line of Credit Agreement, pursuant to which Patriot agreed that, at its discretion, it would advance up to $700,000 to Holocom. Patriot loaned Holocom $560,000 under this agreement. That loan was secured by substantially all of Holocom’s assets, subject to a senior lien of a factor in Holocom’s receivables and inventory. In early January, Holocom defaulted on the Patriot loan, and Patriot noticed a foreclosure sale of Holocom’s assets. That sale took place on February 2, 2007. Patriot was the successful bidder, bidding in 90% of the debt owed it by Holocom. Thereafter, Patriot owned all of the assets of Holocom in which it previously had a security interest. The receivables and inventory Patriot acquired remained subject to the lien of the factor. Prior to the auction, Patriot, Scripps Secured Data, Inc. (“SSDI”) and a junior secured lender to Holocom entered into an Earnout Agreement, pursuant to which: 1. The junior secured lender agreed that he would not contest the reasonability of the sale and would transfer his Holocom loans (in a principal amount of approximately $24,000,000) to SSDI; 2. SSDI agreed that it would engage in reasonable efforts to sell product based on Holocom’s Secure Communications Raceway technology and that it would pay the junior secured lender 3% of its net sales of such products for 4 years; and 3. Patriot agreed that it would transfer the Holocom assets and $140,000 to Scripps in return for all of the Preferred Stock of SSDI (constituting approximately 45% of the outstanding capitalization of SSDI).