Exhibit 10.1

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CREDIT AND SECURITY AGREEMENT

 
DATED AS OF MARCH 5, 2010

 
BETWEEN

 
COLE TAYLOR BANK

 
THE LENDER,

 
AND

 
CLARK HOLDINGS INC., THE CLARK GROUP, INC., CLARK DISTRIBUTION
SYSTEMS, INC., HIGHWAY DISTRIBUTIONS SYSTEMS, INC., CLARK
WORLDWIDE TRANSPORTATION, INC. AND EVERGREEN EXPRESS LINES, INC.
 
INDIVIDUALLY A BORROWER AND COLLECTIVELY, THE BORROWERS

 
 

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TABLE OF CONTENTS
 

   
Page
     
1.
DEFINITIONS
1
 
1.01
Certain Defined Terms
1
 
1.02
Other Definitional Terms; Rules of Interpretation
13
2.
LOANS
14
 
2.01
Revolving Loans
14
 
2.02
Requests for Revolving Loans
14
 
2.03
Intentionally Omitted
14
 
2.04
Intentionally Omitted
14
 
2.05
Intentionally Omitted
15
 
2.06
Intentionally Omitted
15
 
2.07
Repayments
15
 
2.08
Notes
15
 
2.09
Bank Products
15
3.
LETTERS OF CREDIT
16
 
3.01
General Terms
16
 
3.02
Requests for Letters of Credit
16
 
3.03
Obligations Absolute
17
 
3.04
Expiration Dates of Letters of Credit
17
4.
INTEREST, FEES AND CHARGES
17
 
4.01
Interest Rate
17
 
4.02
Default Interest Rate
17
 
4.03
Interest Payments
18
 
4.04
Other LIBOR Provisions
18
 
4.05
Fees And Charges
19
 
4.06
Maximum Interest
21
 
4.07 
Authorization to Make Revolving Loans
21
 
4.08 
Computation of Interest and Fees
21
 
4.09 
Taxes
21

 
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5.
COLLATERAL
22
 
5.01
Grant of Security Interest to Lender
22
 
5.02
Other Security
23
 
5.03
Possessory Collateral
23
 
5.04
Electronic Chattel Paper
23
 
5.05
Possession of Collateral
23
 
5.06
Pledged Collateral
24
 
5.07
Assignment of Insurance
24
 
5.08
Preservation of Collateral and Perfection of Security Interests
25
6.
COLLECTIONS
26
 
6.01
Lockbox and Blocked Account
26
 
6.02
Collection of Accounts
26
 
6.03
Application of Collected Funds
27
 
6.04
Account Statements
27
7.
COLLATERAL, AVAILABILITY AND FINANCIAL REPORTS AND SCHEDULES
27
 
7.01
Weekly Reports
27
 
7.02
Monthly Reports
28
 
7.03
Financial Statements
28
 
7.04
Annual Projections
28
 
7.05
Explanation of Budgets and Projections
28
 
7.06
Public Reporting
29
 
7.07
Other Information
29
8.
TERMINATION; AUTOMATIC RENEWAL
29
 
8.01
Original Term
29
 
8.02
Intentionally Omitted
29
 
8.03
Termination of Agreement
29
9.
REPRESENTATIONS AND WARRANTIES
30
 
9.01
Financial Statements and Other Information
30
 
9.02
Locations
30
 
9.03
Loans by Borrowers
30
 
9.04
Accounts
30
 
9.05
Liens
30

 
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9.06
Organization, Authority and No Conflict
31
 
9.07
Litigation
31
 
9.08
Compliance with Laws and Maintenance of Permits
31
 
9.09
Affiliate Transactions
31
 
9.10
Names and Trade Names
32
 
9.11
Equipment
32
 
9.12
Enforceability
32
 
9.13
Solvency
32
 
9.14
Indebtedness
32
 
9.15
Margin Security and Use of Proceeds
32
 
9.16
Parent, Subsidiaries and Affiliates
33
 
9.17
No Defaults
33
 
9.18
Employee Matters
33
 
9.19
Intellectual Property
33
 
9.20
Environmental Matters
34
 
9.21
ERISA Matters
34
 
9.22
Intentionally Omitted
34
10.
AFFIRMATIVE COVENANTS
35
 
10.01
Maintenance of Records
35
 
10.02
Notices
35
 
10.03
Compliance with Laws and Maintenance of Permits
36
 
10.04
Inspection and Audits
37
 
10.05
Insurance
37
 
10.06
Collateral
38
 
10.07
Use of Proceeds
38
 
10.08
Taxes
38
 
10.09
Intellectual Property
39
 
10.10
Checking Accounts and Cash Management Services
39
 
10.11
Patriot Act, Bank Secrecy Act and Office of Foreign Assets Control
39
11.
NEGATIVE COVENANTS
39
 
11.01
Guaranties
40
 
11.02
Indebtedness
40

 
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11.03
Liens
40
 
11.04
Mergers, Sales, Acquisitions, Subsidiaries and Other Transactions Outside the
Ordinary Course of Business
40
 
11.05
Dividends and Distributions
41
 
11.06
Investments; Loans
41
 
11.07
Fundamental Changes, Line of Business
41
 
11.08
Equipment
41
 
11.09
Affiliate Transactions
41
 
11.10
Settling of Accounts
41
 
11.11
Intentionally Omitted
42
 
11.12
ERISA
42
 
11.13
Subordinated Debt
42
12.
FINANCIAL COVENANTS
42
 
12.01
Intentionally Omitted
42
 
12.02
Fixed Charge Coverage
42
 
12.03
Intentionally Omitted
42
 
12.04
Intentionally Omitted
42
 
12.05
Intentionally Omitted
43
 
12.06
Intentionally Omitted
43
13.
DEFAULT AND REMEDIES
43
 
13.01
Events of Default
43
 
13.02
Remedies
45
14.
CONDITIONS PRECEDENT
46
 
14.01
Conditions Precedent to Initial Loans
46
 
14.02
Conditions Precedent to All Loans
47
15.
GENERAL PROVISIONS
47
 
15.01
Indemnification
47
 
15.02
Notice
48
 
15.03
Governing Law; Construction; Forum Selection
48
 
15.04
Modification and Benefit of Agreement
49
 
15.05
Headings of Subdivisions
49
 
15.06
Power of Attorney
49

 
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15.07
Confidentiality
49
 
15.08
Counterparts
49
 
15.09
WAIVER OF JURY TRIAL; OTHER WAIVERS
50
16.
JOINT AND SEVERAL LIABILITY
51

 
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EXHIBITS

A
 
ADVANCE REQUEST FORM
B
 
FORM OF COMPLIANCE CERTIFICATE
C
 
FORM OF GRANT OF SECURITY INTEREST IN TRADEMARKS AND PATENTS
D
 
FORM OF GRANT OF SECURITY INTEREST IN COPYRIGHTS

 
SCHEDULES
 
1.01-A
 
APPLICABLE MARGINS
1.01-B
 
ACCOUNT CONCENTRATION EXCEPTIONS
1.01-C
 
EXISTING LIENS
5.01
 
COMMERCIAL TORT CLAIMS
9.02
 
LOCATIONS; BANK ACCOUNTS
9.06
 
ORGANIZATION INFORMATION
9.07
 
LITIGATION
9.09
 
AFFILIATE TRANSACTIONS
9.10
 
NAMES & TRADE NAMES
9.14
 
EXISTING INDEBTEDNESS
9.16
 
PARENT, SUBSIDIARIES & AFFILIATES
9.19
 
INTELLECTUAL PROPERTY
14.01-A
 
CLOSING DELIVERY LIST
14.01-B
 
SOURCES AND USES
15.02
 
CERTAIN ADDRESSES FOR NOTICES

 
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CREDIT AND SECURITY AGREEMENT
 
THIS CREDIT AND SECURITY AGREEMENT (as amended, modified or supplemented from
time to time, this “Agreement”) made this 5th day of March 2010, by and between
COLE TAYLOR BANK, an Illinois banking corporation (“Lender”), and CLARK HOLDINGS
INC., a Delaware Corporation, THE CLARK GROUP, INC., a Delaware Corporation,
CLARK DISTRIBUTION SYSTEMS, INC., a Delaware Corporation, HIGHWAY DISTRIBUTION
SYSTEMS, INC., a Delaware Corporation, CLARK WORLDWIDE TRANSPORTATION, INC., a
Pennsylvania Corporation and EVERGREEN EXPRESS LINES, INC., a Pennsylvania
Corporation (individually a “Borrower” and collectively (the “Borrowers”).
 
WITNESSETH:
 
(A)          Borrowers may, from time to time, request Loans from Lender, and
the parties wish to provide for the terms and conditions upon which such Loans
or other financial accommodations, if made by Lender, shall be made;
 
(B)           In consideration of any Loan (including any Loan by renewal or
extension) hereafter made to any of the Borrowers by Lender, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by Borrowers, the parties agree as follows:
 
1.
DEFINITIONS

 
1.01        Certain Defined Terms.  Except as otherwise expressly provided in
this Agreement, the following terms shall have the meanings given them in this
Section 1.01:
 
“Account”, “Account Debtor”, “Chattel Paper”, “Commercial Tort Claims”, “Deposit
Accounts”, “Documents”, “Electronic Chattel Paper”, “Equipment”, “Fixtures”,
“General Intangibles”, “Goods”, “Instruments”, “Inventory”, “Investment
Property”, “Letter-of-Credit Right”, “Proceeds” and “Tangible Chattel Paper”
shall have the respective meanings assigned to such terms in the Uniform
Commercial Code.
 
“Affiliate” means any Person (a) which directly or indirectly through one or
more intermediaries controls, is controlled by, or is under common control with,
a Borrower, (b) which beneficially owns or holds five percent (5%) or more of
the voting control or equity interests of a Borrower, or (c) five percent (5%)
or more of the voting control or equity interests of which is beneficially owned
or held by a Borrower.
 
“Applicable Margin” means, at any time, the applicable percentage per annum
(expressed in basis points) set forth on Schedule 1.01-A.
 
“Availability” means, at any time, the amount, if any, by which the Borrowing
Base exceeds the sum of (a) the outstanding principal balance of the Revolving
Loans; plus (b) the Letter of Credit Obligations.

 
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“Availability Reserve” means, as of any date of determination, an amount or a
percent of a specified category or item that Lender, in its sole discretion
consistently applied, establishes from time to time to reduce availability under
the Borrowing Base (a) to reflect events, conditions, contingencies or risks
which affect the assets, business or prospects of Borrowers, or the Collateral
or its value, or the enforceability, perfection or priority of Lender’s Lien in
the Collateral, (b) to reflect Lender’s judgment that any collateral report or
financial information relating to Borrowers and furnished to Lender may be
incomplete, inaccurate or misleading in any material respect, or (c) in respect
of any state of facts which does or would with notice or passage of time or
both, constitute an Event of Default.
 
“Bank Products” means any service or facility extended to Borrowers by Lender or
any affiliate of Lender including:  (a) credit cards, (b) credit card processing
services, (c) debit cards, (d) purchase cards, (e) ACH transactions, (f) cash
management, including controlled disbursement, accounts or services, (g) letters
of credit, or (h) Hedging Agreements.
 
“Blocked Account” means an account established by Borrowers in Lender’s name
maintained with Lender.
 
“Borrower” means, individually, Clark Holdings Inc., The Clark Group, Inc.,
Clark Distribution Systems, Inc., Highway Distribution Systems, Inc., Clark
Worldwide Transportation, Inc. and Evergreen Express Lines, Inc.
 
“Borrowers” means, collectively, Clark Holdings Inc., The Clark Group, Inc.,
Clark Distribution Systems, Inc., Highway Distribution Systems, Inc., Clark
Worldwide Transportation, Inc. and Evergreen Express Lines, Inc.
 
“Borrowing Base” means, at any time, the lesser of:
 
(a)           The Maximum Revolving Loan Limit; or
 
(b)           Subject to change from time to time in the Lender’s sole
discretion consistently applied, the sum of:
 
(i)           Eighty-Five percent (85%) of the Borrowers’ Eligible Accounts
provided if Dilution exceeds five percent (5%), such advance rate shall be
reduced by one (1) percentage point for each whole or partial percentage point
by which Dilution exceeds five percent (5%); plus
 
(ii)          seventy percent (70%) of the Borrowers’ Eligible Unbilled
Accounts, not to exceed One Million and No/100 Dollars ($1,000,000.00) in the
aggregate; less
 
(iii)         the Hedging Obligation Reserve; less
 
(iv)         the Availability Reserve; less
 
(v)          the Carrier Reserve; less

 
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(vi)        a reserve in the amount of Fifty Thousand and No/100 Dollars
($50,000.00) until a release of lien is received by the Lender from the Internal
Revenue Service relating to the federal tax lien set forth on Schedule 1.01-C.
 
“Borrowing Base Certificate” means a certificate, in form and substance
acceptable to Lender, setting forth the Borrowing Base and the component
calculations thereof.
 
“Business Day” means any day other than a Saturday, a Sunday or (a) with respect
to all matters, determinations, fundings and payments in connection with LIBOR
Rate Loans, any day on which banks in London, England or Chicago, Illinois are
required or permitted to close, and (b) with respect to all other matters, any
day that banks in Chicago, Illinois are required or permitted to close.
 
“Capital Expenditures” means with respect to any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including
expenditures for capitalized lease obligations) by Borrowers and their
respective Subsidiaries during such period that are required by generally
accepted accounting principles, consistently applied, to be included in or
reflected by the property, plant and equipment or similar fixed asset accounts
(or intangible accounts subject to amortization) on the balance sheets of
Borrowers and its Subsidiaries.
 
“Carrier Reserve” means in the aggregate of those amounts due by any of the
Borrowers to any and all transportation companies utilized by such Borrower for
the transportation or delivery of any goods on behalf of such Borrower for which
such goods have not been delivered.
 
“Change of Control” means any Person or “group” (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) who is not an
Owner on the date of this Agreement is or becomes the “beneficial owner” (as
defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934,
except that a Person will be deemed to have “beneficial ownership” of all
securities that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than fifty percent (50%) of the voting power of all classes
of Owners of any of the Borrowers.
 
“Code” means the Internal Revenue Code of 1986, as amended, and the rules and
regulations thereunder, all as in effect from time to time.
 
“Collateral” means all of the property of Borrowers described in Section 5
hereof, together with all other real or personal property of Borrowers or any
other Person now or hereafter pledged to Lender to secure, either directly or
indirectly, repayment of any of the Obligations.
 
“Controlled Group” means a controlled group of corporations as defined in 26
U.S.C. § 1563.
 
“Default Rate” means an interest rate equal to two percent (2.0%) per annum in
excess of the interest rate otherwise payable hereunder.

 
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“Dilution” means, with respect to any period, the percentage obtained by
dividing (a) the sum of non-cash credits against Accounts (including, but not
limited to returns, adjustments  and rebates) of Borrowers for such period, plus
pending or probable, but not yet applied, non-cash credits against Accounts of
Borrowers for such period, as determined by Lender in its reasonable discretion
by (b) gross invoiced sales of Borrowers for such period.
 
“EBITDA” means, for any period, the sum of Borrowers’ and their Subsidiaries’:
(a) net income after taxes for such period (excluding extraordinary gains or
losses); plus (b) Interest Expense for such period; plus (c) income tax expense
for such period; plus (d) depreciation and amortization for such period; plus or
minus (e) any other non-cash charges or gains which have been subtracted or
added in calculating net income after taxes for such period, all on a
consolidated basis.
 
“Eligible Account” means all Accounts owing to Borrowers which are acceptable to
Lender, in its sole discretion, for lending purposes, net of any discounts,
credits, or allowances, but excluding any Account having any of the following
characteristics:
 
(a)           Accounts which remain unpaid for more than ninety (90) days after
their invoice date;
 
(b)           Accounts owing by a single Account Debtor, including a currently
scheduled Account, if twenty-five percent (25%) of the balance owing by said
Account Debtor is ineligible as a result of clause (a) above;
 
(c)           Accounts which are not due and payable within seventy-five (75)
days after their invoice dates;
 
(d)           Accounts with respect to which the Account Debtor is a director,
officer, employee or agent of a Borrower or is a Parent, a Subsidiary or an
Affiliate of a Borrower;
 
(e)           Accounts with respect to which payment by the Account Debtor is or
becomes conditional upon the Account Debtor’s approval of the Goods or services,
or is otherwise subject to any repurchase obligation or return right, as with
sales made on a bill-and-hold (unless the Account Debtor has executed a setoff
waiver in form and substance acceptable to Lender), guaranteed sale, sale on
approval, sale or return or consignment basis;
 
(f)           Accounts which are owed by an Account Debtor which (1) does not
maintain its chief executive office in the United States of America or in
Canada, or (2) is not organized under applicable law of the United States of
America, any state of the United States of America, Canada or any province of
Canada, unless, in either case, such Account is either backed by a letter of
credit acceptable to Lender which is in the possession of, has been assigned to
and is directly drawable by Lender, or insured pursuant to a credit insurance
policy acceptable to Lender and such insurance has been assigned to Lender;
 
(g)           Accounts with respect to which the Account Debtor is (1) the
United States of America or any department, agency or instrumentality thereof,
unless a Borrower assigns its right to payment of such Accounts to Lender in
accordance with the Assignment of Claims Act of 1940, as amended, or (2) any
country other than the United States of America or any department, agency or
instrumentality thereof;

 
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(h)           The face amount of any Accounts with respect to which Borrowers
are or may become liable to the Account Debtor for Goods sold or services
rendered by such Account Debtor to Borrowers, but only to the extent of the
maximum aggregate amount of Borrowers’ liability to such Account Debtor;
 
(i)            Accounts with respect to which (1) the Goods giving rise thereto
have not been shipped and delivered to and accepted as satisfactory by the
Account Debtor, or (2) the services performed have not been completed and
accepted as satisfactory by the Account Debtor;
 
(j)            Accounts which have not been invoiced, dated and sent to an
Account Debtor after the acceptance of  the performance of the services giving
rise thereto;
 
(k)           Accounts with respect to which possession or control of the goods
sold is held, maintained or retained by Borrowers, or by any agent or custodian
of Borrowers, for the account of or subject to further or future direction from
the Account Debtor;
 
(l)            Accounts which are owing by any Account Debtor involved as a
debtor in any bankruptcy or other state or federal insolvency proceeding,
whether voluntary or involuntary;
 
(m)          Accounts which arise in any manner other than the sale of inventory
or services in the ordinary course of Borrowers’ business;
 
(n)           Accounts with respect to which the Account Debtor is located in a
state which requires a Borrower, as a precondition to commencing or maintaining
an action in the courts of that state, either to (i) receive a certificate of
authority to do business and be in good standing in such state, or (ii) file a
notice of business activities report or similar report with such state’ s taxing
authority, unless (A) such Borrower has taken one of the actions described in
clauses (i) or (ii), (B) the failure to take one of the actions described in
either clause (i) or (ii) may be cured retroactively by Borrower at its
election, or (C) such Borrower has proven, to Lender’s satisfaction, that it is
exempt from any such requirements under any such state’s laws;
 
(o)           All or any portion of an Account to the extent there exists or the
Account Debtor has asserted a counterclaim or dispute or is otherwise subject to
a contra claim; provided, however, if the amount of such counterclaim, dispute
or such contra claim is equal to or greater than ten percent (10%) of the total
Account owing from such Account Debtor to Borrowers, then the full amount of
such Account shall be deemed an ineligible Account;
 
(p)           Accounts for any Account Debtor which exceed a credit limit
established by Lender for such Account Debtor, but only to the extent of such
excess;

 
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(q)           Accounts as to which any covenant, representation or warranty with
respect to such Account has been breached;
 
(r)            Accounts which are not subject to a first priority lien in favor
of Lender;
 
(s)           Accounts  for which the Account Debtor has paid a deposit to
Lender, but only to the extent of such deposit;
 
(t)            Accounts for which Borrowers have failed to deliver to Lender
such documents as Lender may have requested pursuant to Section 7.01 hereof;
 
(u)           Accounts which, when added to a particular Account Debtor’s other
indebtedness to Borrowers, exceeds twenty percent (20%), or the applicable limit
set forth on Schedule 1.01-B, of all Accounts of Borrowers (except that Accounts
excluded from Eligible Accounts solely by reason of this clause (u) shall be
Eligible Accounts to the extent of such credit limit); and
 
(v)           Accounts as to which Lender, at any time or times hereafter,
determines in good faith that the prospect of payment or performance by the
Account Debtor is or will be impaired.
 
“Eligible Unbilled Account” means on any date of determination, each Account
that is unbilled and (a) has been unbilled for a period not greater that ten
(10) days from the date the services giving rise to such Account were performed;
and (b) otherwise constitutes an “Eligible Account” hereunder except for the
fact that such Account is unbilled.
 
“Enforcement Costs” means all expenses, charges, costs and fees whatsoever
(including, without limitation, reasonable outside and allocated in-house
counsel attorney’s fees and expenses and the fees, costs and expenses described
in Section 4.05(d) (Costs and Expenses)) of any nature whatsoever paid or
incurred by or on behalf of Lender in connection with (a) any or all of the
Obligations, this Agreement and/or any of the other Loan Documents, (b) the
creation, perfection, collection, maintenance, preservation, defense,
protection, realization upon, disposition, sale or enforcement of all or any
part of the Collateral, this Agreement or any of the other Loan Documents,
including, without limitation, those costs and expenses more specifically
enumerated in this Agreement and the other Loan Documents, and further
including, without limitation, amounts paid to lessors, processors, bailees,
warehousemen, sureties, judgment creditors and others in possession of or with a
Lien against or claimed against the Collateral, and (c) the monitoring,
administration, processing and/or servicing of any or all of the Obligations,
the Loan Documents, and/or the Collateral.
 
“Environmental Laws” means all federal, state, district, local and foreign laws,
rules, regulations, ordinances, and consent decrees relating to health, safety,
hazardous substances, pollution and environmental matters, as now or at any time
hereafter in effect, applicable to Borrowers’ business or facilities owned or
operated by Borrowers, including laws relating to emissions, discharges,
releases or threatened releases of pollutants, contamination, chemicals, or
hazardous, toxic or dangerous substances, materials or wastes into the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata) or otherwise relating to the
generation, manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials.

 
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“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.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
modified or restated from time to time.
 
“ERISA Affiliate” means any Person who for purposes of Title IV of ERISA is a
member of the Borrowers’ Controlled Group, or under common control with the
Borrowers, within the meaning of Section 414 of the Code.
 
“Event of Default” shall have the meaning specified in Section 13.01 hereof.
 
“Excess Availability” means, as of any date of determination by Lender, the sum
of (a) the Borrowing Base, less (b) the outstanding Revolving Loans as of the
close of business on such date.  For purposes of calculating Excess Availability
for Section 14.01(d) only, all accounts payable which remain unpaid more than
thirty (30) days after the due dates thereof as the date of this Agreement will
be treated as additional Revolving Loans outstanding on such date.
 
“Excluded Taxes” means, with respect to Lender or any other recipient of any
payment to be made by or on account of any obligation of Borrowers hereunder or
under any other Loan Document, any taxes on or measured by overall net income
(however denominated), franchise taxes (in lieu of net income taxes) and branch
profits taxes, in each case imposed on it by the jurisdiction (or any political
subdivision thereof) under the laws of which such recipient is organized or in
which its principal office is located or, in the case of Lender, in which its
applicable Lending Office is located.
 
“Facility Amount” means, at any time, the Maximum Revolving Loan Limit.
 
“Fiscal Year” means each twelve (12) month accounting period of Borrowers, which
ends on the Saturday closest to December 31st of each year.
 
“Fixed Charge Coverage” means, as of any date of determination, the ratio of:
(a) the sum for such period of (without duplication): (i) EBITDA; minus (ii)
Capital Expenditures not financed made by Borrowers and their Subsidiaries;
minus (iii) all payments in cash for taxes made by Borrowers and their
Subsidiaries; minus (iv) cash dividends paid or accrued and cash withdrawals
paid or accrued to Owners or other Affiliates by Borrowers and their
Subsidiaries; minus (v) cash payments paid by Borrowers and their Subsidiaries
for any non-competition agreements or severance agreements to (b) Fixed Charges
for such period.

 
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“Fixed Charges” means, for any period, current principal maturities of long term
debt and capitalized leases paid or scheduled to be paid during such period,
plus any prepayments on indebtedness owed to any Person (except trade payables
and Revolving Loans) and paid during such period, plus interest expense paid or
scheduled to be paid during such period, all on a consolidated basis as to
Borrowers and their Subsidiaries.  The one-time payment of the obligation to
Bank of America, N.A., as administrative agent, and lender utilizing Loan
proceeds for such payment shall not be included.
 
“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.
 
“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 (including any
supra-national bodies such as the European Union or the European Central Bank).
 
“Hazardous Materials” means any hazardous, toxic or dangerous substance,
materials and wastes, including, without limitation, hydrocarbons (including
naturally occurring or man-made petroleum and hydrocarbons), flammable
explosives, asbestos, urea formaldehyde insulation, radioactive materials,
biological substances, polychlorinated biphenyls, pesticides, herbicides and any
other kind and/or type of pollutants or contaminants (including, without
limitation, materials which include hazardous constituents), sewage, sludge,
industrial slag, solvents and/or any other similar substances, materials, or
wastes and including any other substances, materials or wastes that are or
become regulated under any Environmental Law (including, without limitation any
that are or become classified as hazardous or toxic under any Environmental
Law).
 
“Hedging Agreement” means any interest rate, currency or commodity swap
agreement, cap agreement or collar agreement, and any other agreement or
arrangement designed to protect a Person against fluctuations in interest rate,
currency exchange rates or commodity prices.
 
“Hedging Obligation” means, with respect to any Person, any liability of such
Person under any Hedging Agreement.  The amount of any Person’s obligations in
respect of any Hedging Obligation shall be deemed to be the incremental
obligations that would be reflected in the financial statements of such Person
in accordance with GAAP.
 
“Hedging Obligation Reserve” means, as of any date of determination, such
amounts as the Lender may from time to time establish and adjust to reduce
availability under the Borrowing Base to reflect Borrowers’ Hedging Obligations.

 
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“Indebtedness” of a Person means at any time the sum at such time of (a)
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, (b) any obligations of such Person in respect of
letters of credit, banker’s or other acceptances or similar obligations issued
or created for the account of such Person, (c) lease indebtedness, liabilities
and other obligations of such Person with respect to capital leases, (d) all
liabilities secured by any Lien on any property owned by such Person, to the
extent attached to such Person’s interest in such property, even though such
Person has not assumed or become personally liable for the payment thereof, (e)
obligations of third parties which are being guarantied or indemnified against
by such Person or which are secured by the property of such Person; (f) any
obligation of such Person under an employee stock ownership plan or other
similar employee benefit plan; (g) any obligation of such Person or a commonly
controlled entity to a multi-employer plan; and (h) any obligations, liabilities
or indebtedness, contingent or otherwise, under or in connection with,
transactions, agreements or documents now existing or hereafter entered into,
which provides for an interest rate, credit, commodity or equity swap, cap,
floor, collar, forward foreign exchange transaction, currency swap, cross
currency rate swap, currency option, or any combination of, or option with
respect to, these or similar transactions, for the purpose of hedging
fluctuations in interest or exchange rates, loan, credit exchange, security or
currency valuations or commodity prices; but excluding trade and other accounts
payable in the ordinary course of business in accordance with customary trade
terms and which are not overdue (as determined in accordance with customary
trade practices) or which are being disputed in good faith by such Person and
for which adequate reserves are being provided on the books of such Person in
accordance with GAAP consistently applied.
 
“Indemnified Party” shall have the meaning specified in Section 15.01 hereof.
 
“Indemnified Taxes” means Taxes other than Excluded Taxes.
 
“Interest Expense” means, for any period, for Borrowers and their Subsidiaries,
the sum of (a) all interest, premium payments, debt discount, fees, charges and
related expenses in connection with borrowed money (including capitalized
interest) or in connection with the deferred purchase price of assets during
such period, plus (b) all payments made under interest rate Hedging Agreements
during such period to the extent not included in clause (a) of this definition,
minus (c) all payments received under interest rate Hedging Agreements during
such period, plus (d) the portion of rent expense with respect to such period
under capital leases that is treated as interest in accordance with GAAP.
 
“Interest Period” means any continuous period of one (1), two (2) or three (3)
months, as selected from time to time by Borrowers by irrevocable notice (in
writing, by telecopy, telex, electronic mail or cable) given to Lender not less
than three (3) Business Days prior to the first day of each respective Interest
Period; provided that:  (A) each such period occurring after such initial period
shall commence on the day on which the immediately preceding period expires; (B)
the final Interest Period shall be such that its expiration occurs on or before
the Maturity Date; and (C) if for any reason Borrowers shall fail to timely
select a period, then such Loans shall continue as, or revert to, Prime Rate
Loans.
 
“Laws” means all ordinances, statutes, rules, regulations, orders, injunctions,
writs, or decrees of any Governmental Authority.

 
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“Lending Office” means the office or offices of Lender described on Schedule
15.02, or such other office or offices as Lender may from time to time notify
Borrowers.
 
“Letter of Credit” means any Letter of Credit issued on behalf of a Borrower in
accordance with this Agreement.
 
“Letter of Credit Fee Amount” means four and one-half percent (4.5%) per annum
on the aggregate undrawn face amount of all Letters of Credit outstanding.
 
“Letter of Credit Obligations” means, as of any date of determination, the sum
of (a) the aggregate undrawn face amount of all Letters of Credit, plus (b) the
aggregate unreimbursed amount of all drawn Letters of Credit not already
converted to Loans hereunder.
 
“Letter of Credit Sublimit” means One Million and No/100 Dollars
($1,000,000.00).
 
“LIBOR Rate” means, with respect to any LIBOR Rate Loan for any Interest Period,
a rate per annum equal to (a) the offered rate for deposits in United States
dollars for a period equal to such Interest Period as displayed in the Bloomberg
Financial Markets system (or such other authoritative source as selected by
Lender in its sole discretion) as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period divided by (b) a number equal to
1.0 minus the maximum reserve percentages (expressed as a decimal fraction)
including, without limitation, basic supplemental, marginal and emergency
reserves under any regulations of the Board of Governors of the Federal Reserve
System or other governmental authority having jurisdiction with respect thereto,
as now and from time to time in effect, for Eurocurrency funding (currently
referred to as “Eurocurrency Liabilities” in Regulation D of such Board) which
are required to be maintained by Lender by the Board of Governors of the Federal
Reserve System.  The LIBOR Rate shall be adjusted automatically on and as of the
effective date of any change in such reserve percentage.
 
“LIBOR Rate Loans” means the Loans bearing interest with reference to the LIBOR
Rate.
 
“Lien” means any security interest, mortgage, deed of trust, pledge, lien,
charge, judgment lien, assignment, financing statement, encumbrance, title
retention agreement or analogous instrument or device, including the interest of
each lessor under any capitalized lease and the interest of any bondsman under
any payment or performance bond, in, of or on any assets or properties of a
Person, whether now owned or subsequently acquired and whether arising by
agreement or operation of law, all whether perfected or unperfected.
 
“Loan Documents” means this Agreement and all other agreements, instruments and
documents including, without limitation, guaranties, mortgages, trust deeds,
pledges, powers of attorney, consents, assignments, contracts, notices, security
agreements, leases, financing statements, Hedging Agreements, and all other
writings heretofore, now or from time to time hereafter executed by or on behalf
of a Borrower or any other Person and delivered to Lender or to any parent,
affiliate or subsidiary of Lender in connection with the Obligations or the
transactions contemplated hereby, as each of the same may be amended, modified
or supplemented from time to time.

 
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“Loans” means all loans and advances made by Lender to or on behalf of a
Borrower hereunder.
 
“Lock Box” means a post office box maintained with Lender.
 
“Material Adverse Effect” means any of the following:  (a) a material adverse
change in, or material adverse effect upon, the business, condition (financial
or otherwise), operations, performance, or properties of Borrowers, considered
as a whole; (b) a material impairment of the ability of Borrowers to perform
their obligations under the Loan Documents; or (c) a material adverse effect
upon:  (i) the legality, validity, binding effect or enforceability of any Loan
Document to which any Borrower is a party; or (ii) the rights and remedies of
Lender under or in respect of any Loan Document.
 
“Maturity Date” means March 5, 2013.
 
“Maximum Revolving Loan Limit” means Six Million and No/100 Dollars
($6,000,000.00).
 
“Multiemployer Plan” means a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) to which the a Borrower or any ERISA Affiliate contributes
or is obligated to contribute.
 
“Obligations” means any and all obligations, liabilities and indebtedness of any
of the Borrowers to Lender or to any parent, affiliate or subsidiary of Lender
of any and every kind and nature, howsoever created, arising or evidenced and
howsoever owned, held or acquired, whether now or hereafter existing or
contemplated, whether now due or to become due, whether primary, secondary,
direct, indirect, absolute, contingent or otherwise (including, without
limitation, obligations of performance and obligations, liabilities and
indebtedness with respect to Hedging Obligations), whether several, joint or
joint and several, and whether arising or existing under written or oral
agreement or by operation of law and, without implying any limitation on the
foregoing,  including, without limitation, all Loans, Bank Products, and
Enforcement Costs.
 
“OFAC” means the Office of Foreign Assets Control.
 
“Other Taxes” means all present or future stamp, intangible or documentary taxes
or any other excise or property taxes, charges or similar levies arising from
any payment made hereunder or under any other Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, this
Agreement or any other Loan Document.
 
“Owner” means with respect to a Borrower, each Person having legal or beneficial
title to an ownership interest in a Borrower or a right to acquire such an
interest.
 
“Parent” means any Person now or at any time or times hereafter owning or
controlling (alone or with any other Person) at least a majority of the issued
and outstanding equity of a Borrower and, if Borrower is a partnership, the
general partner of a Borrower.
 
“PBGC” means the Pension Benefit Guaranty Corporation.

 
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“Pension Plan” means a pension plan (as defined in Section 3(2) of ERISA)
maintained for employees of a Borrower or any ERISA Affiliate and covered by
Title IV of ERISA.
 
“Permitted Liens” means: (a) statutory liens of landlords, carriers,
warehousemen, processors, mechanics, materialmen or suppliers incurred in the
ordinary course of business and securing amounts not yet due or declared to be
due by the claimant thereunder or amounts which are being contested in good
faith and by appropriate proceedings and for which the Borrowers have maintained
adequate reserves; (b) liens or security interests in favor of Lender; (c)
zoning restrictions and easements, licenses, covenants and other restrictions
affecting the use of real property that do not individually or in the aggregate
have a Material Adverse Effect; (d) liens in connection with purchase money
indebtedness with respect to Equipment and capitalized leases otherwise
permitted pursuant to this Agreement, provided, that such liens attach only to
the assets the purchase of which was financed by such purchase money
indebtedness or which is the subject of such capitalized leases; (e) liens set
forth on Schedule 1.01-C; (f) liens specifically permitted by Lender in writing;
and (g) involuntary liens securing amounts less than One Hundred Thousand and
No/100 Dollars ($100,000.00) and which are released or for which a bond
acceptable to Lender, in its reasonable discretion, has been posted within ten
(10) days of its creation.
 
“Person” means any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, entity, party or foreign or United States government
(whether federal, state, county, city, municipal or otherwise), including,
without limitation, any instrumentality, division, agency, body or department
thereof.
 
“Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA)
maintained for employees of a Borrower or any ERISA Affiliate.
 
“Pledged Collateral” means, collectively, Pledged Debt and Pledged Equity
Interests.
 
“Pledged Debt” means all debt owed or owing to a Borrower or any Subsidiary by a
Borrower or any of a Borrower’s subsidiaries, all Instruments, Chattel Paper or
other documents, if any, representing or evidencing such debt.
 
“Pledged Equity Interests” means all Equity Interests owned or held by or on
behalf of  a Borrower in any Subsidiary, and all Security Certificates,
Instruments and other documents, if any, representing or evidencing such Equity
Interests.
 
“Prime Rate” means the prime rate as published in the “Money Rates” Section of
the Wall Street Journal as of the applicable determination date.
 
“Prime Rate Loans” means the Loans bearing interest with reference to the Prime
Rate.
 
“Regulatory Change” shall have the meaning specified in Section 4.04(c) hereof.
 
“Reportable Event” means a reportable event (as defined in Section 4043 of
ERISA), other than an event for which the 30-day notice requirement under ERISA
has been waived in regulations issued by the PBGC.

 
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“Revolving Loans” shall have the meaning specified in Section 2.01 hereof.
 
“Subsidiary” means any corporation of which more than fifty percent (50%) of the
outstanding capital stock having ordinary voting power to elect a majority of
the board of directors of such corporation (irrespective of whether at the time
stock of any other class of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time, directly or
indirectly, owned by a Borrower, or any partnership, joint venture or limited
liability company of which more than fifty percent (50%) of the outstanding
equity interests are at the time, directly or indirectly, owned by a Borrower or
any partnership of which a Borrower is a general partner.
 
“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.
 
“Termination Date” means the earliest of (a) the Maturity Date, (b) the date the
Borrowers terminate this Agreement, or (c) the date the Lender accelerates
payment of the Obligations pursuant to Section 13.02 hereof.
 
“Uniform Commercial Code” means the Uniform Commercial Code as in effect in the
State of Illinois.
 
 
1.02
Other Definitional Terms; Rules of Interpretation.

 
The words “hereof”, “herein” and “hereunder” and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.  All accounting terms not otherwise
defined herein have the meanings assigned to them in accordance with GAAP.  All
terms defined in the UCC and not otherwise defined herein have the meanings
assigned to them in the UCC.  References to Articles, Sections, subsections,
Exhibits, Schedules and the like, are to Articles, Sections and subsections of,
or Exhibits or Schedules attached to, this Agreement unless otherwise expressly
provided.  The words “include”, “includes” and “including” shall be deemed to be
followed by the phrase “without limitation”.  Unless the context in which used
herein otherwise clearly requires, “or” has the inclusive meaning represented by
the phrase “and/or”.  Defined terms include in the singular number the plural
and in the plural number the singular.  Reference to any agreement (including
the Loan Documents), document or instrument means such agreement, document or
instrument as amended or modified and in effect from time to time in accordance
with the terms thereof (and, if applicable, in accordance with the terms hereof
and the other Loan Documents), except where otherwise explicitly provided, and
reference to any promissory note includes any promissory note which is an
extension or renewal thereof or a substitute or replacement therefor.  Reference
to any law, rule, regulation, order, decree, requirement, policy, guideline,
directive or interpretation means as amended, modified, codified, replaced or
reenacted, in whole or in part, and in effect on the determination date,
including rules and regulations promulgated thereunder.

 
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2.
LOANS.

 
 
2.01
Revolving Loans.

 
(a)           Subject to the terms and conditions of the Loan Documents, from
time to time prior to the Termination Date, Lender shall make revolving loans
and advances (the “Revolving Loans”) in an amount not in excess of Availability.
 
 
2.02
Requests for Revolving Loans.

 
(a)           A request for a Revolving Loan shall be made or shall be deemed to
be made, each in the following manner:  Borrowers shall give Lender same day
notice, no later than 12:00 P.M. (Chicago, Illinois local time) for such day, of
its request for a Revolving Loan as a Prime Rate Loan, and at least three (3)
Business Days prior notice of its request for a Revolving Loan as a LIBOR Rate
Loan, in which notice Borrowers shall specify the amount of the proposed
borrowing and the proposed borrowing date; provided, however, that no such
request may be made at a time when there exists an Event of Default or an event
which, with the passage of time or giving of notice, will become an Event of
Default.  In the event that Borrowers maintain a controlled disbursement account
at Lender, each check presented for payment against such controlled disbursement
account and any other charge or request for payment against such controlled
disbursement account shall constitute a request for a Revolving Loan as a Prime
Rate Loan.  As an accommodation to Borrowers, Lender may permit telephone
requests for Revolving Loans and electronic transmittal of instructions,
authorizations, agreements or reports to Lender by Borrowers.  Unless Borrowers
specifically direct Lender in writing not to accept or act upon telephonic or
electronic communications from Borrowers, Lender shall have no liability to
Borrowers for any loss or damage suffered by Borrowers as a result of Lender’s
honoring of any requests, execution of any instructions, authorizations or
agreements or reliance on any reports communicated to it telephonically or
electronically and purporting to have been sent to Lender by Borrowers and
Lender shall have no duty to verify the origin of any such communication or the
authority of the Person sending it.
 
(b)           Each Borrower hereby irrevocably authorizes Lender to disburse the
proceeds of each Revolving Loan requested by such Borrower, or deemed to be
requested by such Borrower, as follows: (i) the proceeds of each Revolving Loan
requested under Section 2.02(a) shall be disbursed by Lender in lawful money of
the United States of America in immediately available funds, (ii) in the case of
the initial borrowing, in accordance with the terms of the written disbursement
letter from a Borrower, and (iii) in the case of each subsequent borrowing, by
wire transfer or Automated Clearing House (ACH) transfer to such bank account as
may be agreed upon by a Borrower and Lender from time to time, or elsewhere if
pursuant to a written direction from a Borrower.
 
 
2.03
Intentionally Omitted.

 
 
2.04
Intentionally Omitted.

 
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2.05
Intentionally Omitted.

 
 
2.06
Intentionally Omitted.

 
 
2.07
Repayments.

 
The Obligations shall be repaid as follows:
 
(a)           Repayment of Revolving Loans.  The Revolving Loans and all other
Obligations shall be repaid on the Termination Date.  Borrowers may from time to
time voluntarily prepay the Revolving Loans in whole or in part subject to the
terms and conditions of this Agreement.  If any such payment due date is not a
Business Day, then such payment may be made on the next succeeding Business Day
and such extension of time shall be included in the computation of the amount of
interest and fees due hereunder.
 
(b)           Mandatory Prepayments.
 
(i)           Overadvances.  If at any time Availability is less than $0.00, or
any portion of the Revolving Loans exceeds any applicable sublimit within the
Borrowing Base shall immediately, and without the necessity of demand by Lender,
pay to Lender such amount as may be necessary to eliminate such excess and
Lender shall apply such payment to the Revolving Loans to eliminate such excess.
 
(ii)          Sales of Assets.  Upon receipt of the proceeds of the sale or
other disposition of any Equipment or real property of a Borrower which is
subject to a mortgage in favor of Lender, or if any of the Equipment or real
property subject to such mortgage is damaged, destroyed or taken by condemnation
in whole or in part, the proceeds thereof shall be paid by such Borrower to
Lender as a mandatory prepayment of the Obligations, as determined by Lender, in
its sole discretion.
 
 
2.08
Notes.

 
The Loans shall, in Lender’s sole discretion, be evidenced by one or more
promissory notes in form and substance satisfactory to Lender.  However, if such
Loans are not so evidenced, such Loans may be evidenced solely by entries upon
the books and records maintained by Lender.
 
 
2.09
Bank Products.

 
Borrowers may request, and Lender or its affiliates may, in their sole and
absolute discretion, provide, Bank Products although Borrowers are not required
to do so.  In the event Borrowers request Lender and/or its affiliates to
procure or provide Bank Products, then Borrowers agree with Lender and/or such
affiliates, as applicable, to pay when due all indebtedness, liabilities and
obligations with respect to Bank Products and further agree to indemnify and
hold Lender and/or such affiliates harmless from any and all indebtedness,
liabilities, obligations, losses, costs and expenses (including, without
limitation,  reasonable attorneys fees) now or hereafter owing to or incurred by
Lender (including, without limitation, those under agreements of
indemnifications or assurances provided by Lender to its affiliates) and/or its
affiliates with respect to Bank Products, all as the same may arise.  In the
event Borrowers shall not have paid to Lender and/or its affiliates such
amounts, Lender may cover such amounts by an advance under the Revolving Loan,
which advance shall be deemed to have been requested by Borrowers.  Borrowers
acknowledge and agree that (a) all indebtedness, liabilities and obligations
with respect to Bank Products provided by Lender or its affiliates, and all of
its agreements under this Section, are part of the Obligations secured by the
Collateral, and (b) the obtaining of Bank Products from Lender or its affiliates
(i) is in the sole and absolute discretion of Lender or its affiliates and (ii)
is subject to all rules and regulations of Lender or its affiliates.

 
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3.
LETTERS OF CREDIT.

 
 
3.01
General Terms.

 
Subject to the terms and conditions of the Loan Documents, prior to the
Termination Date, Lender shall, from time to time cause to be issued and co-sign
for or otherwise guarantee, upon Borrowers’ request, commercial and/or standby
Letters of Credit; provided, that the aggregate undrawn face amount of all such
Letters of Credit shall at no time exceed the Letter of Credit
Sublimit.  Payments made by the issuer of a Letter of Credit to any Person on
account of any Letter of Credit shall be immediately payable by Borrowers
without notice, presentment or demand and Borrowers agree that each payment made
by the issuer of a Letter of Credit in respect of a Letter of Credit shall
constitute a request by Borrowers for a Loan to reimburse such issuer.  In the
event such Loan is not advanced by Lender for any reason, such reimbursement
obligations (whether owing to the issuer of the Letter of Credit or Lender if
Lender is not the issuer) shall become part of the Obligations hereunder and
shall bear interest at the rate then applicable to Revolving Loans constituting
Prime Rate Loans until repaid.  Borrowers shall remit to Lender a Letter of
Credit fee equal to the Letter of Credit Fee Amount, which fee shall be payable
monthly in arrears on the last Business Day of each month for commercial Letters
of Credit and payable at the beginning of each year in advance for standby
Letters of Credit.  Said fee shall be calculated on the basis of a three hundred
sixty (360) day year.  Borrowers shall also pay on demand the normal and
customary administrative charges of the issuer of the Letter of Credit for
issuance, amendment, negotiation, renewal or extension of any Letter of Credit.
 
 
3.02
Requests for Letters of Credit.

 
Borrowers shall make requests for Letters of Credit in writing at least two (2)
Business Days prior to the date such Letter of Credit is to be issued.  Each
such request shall specify the date such Letter of Credit is to be issued, the
amount thereof, the name and address of the beneficiary thereof and a
description of the transaction to be supported thereby.  Any such notice shall
be accompanied by the form of Letter of Credit requested and any application or
reimbursement agreement required by the issuer of such Letter of Credit.  If any
term of such application or reimbursement agreement is inconsistent with this
Agreement, then the provisions of this Agreement shall control to the extent of
such inconsistency.

 
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3.03
Obligations Absolute.

 
Borrowers shall be obligated to reimburse the issuer of any Letter of Credit, or
Lender if Lender has reimbursed such issuer on Borrowers’ behalf, for any
payments made in respect of any Letter of Credit, which obligation shall be
unconditional and irrevocable and shall be paid regardless of:  (a) any lack of
validity or enforceability of any Letter of Credit, (b) any amendment or waiver
of or consent or departure from all or any provisions of any Letter of Credit,
this Agreement or any other Loan Document, (c) the existence of any claim, set
off, defense or other right which Borrowers or any other Person may have against
any beneficiary of any Letter of Credit, Lender or the issuer of the Letter of
Credit, (d) any draft or other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid, or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect, (e) any payment
under any Letter of Credit against presentation of a draft or other document
that does not comply with the terms of such Letter of Credit, and (f) any other
act or omission to act or delay of any kind of the issuer of such Letter of
Credit, the Lender or any other Person or any other event or circumstance that
might otherwise constitute a legal or equitable discharge of Borrowers’
obligations hereunder.  It is understood and agreed by Borrowers that the issuer
of any Letter of Credit may accept documents that appear on their face to be in
order without further investigation or inquiry, regardless of any notice or
information to the contrary.
 
 
3.04
Expiration Dates of Letters of Credit.

 
The expiration date of each Letter of Credit shall be no later than the earlier
of (a) one (1) year from the date of issuance and (b) the thirtieth (30th) day
prior to the Maturity Date.  Notwithstanding the foregoing, a Letter of Credit
may provide for automatic extensions of its expiration date for one or more one
(1) year periods, so long as the issuer thereof has the right to terminate the
Letter of Credit at the end of each one (1) year period and no extension period
extends past the thirtieth (30th) day prior to the Maturity Date.
 
4.
INTEREST, FEES AND CHARGES.

 
 
4.01
Interest Rate.

 
Each Prime Rate Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the
Prime Rate plus the Applicable Margin.  Each LIBOR Rate Loan shall bear interest
on the outstanding principal amount thereof for each Interest Period at a rate
per annum equal to the LIBOR Rate for such Interest Period plus the Applicable
Margin.  Notwithstanding the foregoing, in no event shall the interest rate
applicable to any Loan be less than six percent (6.0%) per annum.
 
 
4.02
Default Interest Rate.

 
Upon the occurrence of an Event of Default and during the continuance thereof,
at Lender’s option, each Loan shall bear interest at the Default Rate, effective
as of the first day of the month in which the Event of Default occurs, which
interest shall be payable on demand.  The decision of Lender to not impose the
Default Rate shall be made by the Lender, in its sole discretion, and shall not
be a waiver of any of its other rights and remedies.

 
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4.03
Interest Payments.

 
Interest on Prime Rate Loans shall be due and payable on the first day of each
month in arrears and on the Termination Date, or if any such day is not a
Business Day, on the next succeeding Business Day.  Whenever any payment to be
made hereunder shall be stated to be due on a day which is not a Business Day,
such payment may be made on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of interest on the
Loans or the fees hereunder, as the case may be.  Interest accruing on each
LIBOR Rate Loan shall be due and payable on the last day of the applicable
Interest Period; provided, however, for Interest Periods longer than one month,
interest shall be due and payable monthly in arrears on the first day of each
month and on the last day of the applicable Interest Period.
 
 
4.04
Other LIBOR Provisions.

 
(a)           Subject to the provisions of this Agreement, Borrowers shall have
the option (i) as of any date, to convert all or any part of the Prime Rate
Loans to, or request that new Loans be made as, LIBOR Rate Loans of various
Interest Periods, (ii) as of the last day of any Interest Period, to continue
all or any portion of the relevant LIBOR Rate Loans as LIBOR Rate Loans; (iii)
as of the last day of any Interest Period, to convert all or any portion of the
LIBOR Rate Loans to Prime Rate Loans; and (iv) at any time, to request new Loans
as Prime Rate Loans; provided, that Loans may not be continued as or converted
to LIBOR Rate Loans, if the continuation or conversion thereof would violate the
provisions of Sections 4.04(b) or 4.04(c) of this Agreement or if an Event of
Default has occurred and is continuing.
 
(b)           Lender’s determination of the LIBOR Rate as provided above shall
be conclusive, absent manifest error.  Furthermore, if Lender determines, in
good faith (which determination shall be conclusive, absent manifest error),
prior to the commencement of any Interest Period that (i) U.S. Dollar deposits
of sufficient amount and maturity for funding the Loans are not available to
Lender in the London Interbank Eurodollar market in the ordinary course of
business, or (ii) by reason of circumstances affecting the London Interbank
Eurodollar market, adequate and fair means do not exist for ascertaining the
rate of interest to be applicable to the Loans requested by Borrowers to be
LIBOR Rate Loans shall not represent the effective pricing to Lender for U.S.
Dollar deposits of a comparable amount for the relevant period (such as for
example, but not limited to, official reserve requirements required by
Regulation D to the extent not given effect in determining the rate), Lender
shall promptly notify Borrowers and (A) all existing LIBOR Rate Loans shall
convert to Prime Rate Loans upon the end of the applicable Interest Period, and
(B) no additional LIBOR Rate Loans shall be made until such circumstances cease
to exist.
 
(c)           If, after the date hereof, the introduction of, or any change in
any applicable law, treaty, rule, regulation or guideline or in the
interpretation or administration thereof by any governmental authority or any
central bank or other fiscal, monetary or other authority having jurisdiction
over Lender or its lending offices (a “Regulatory Change”), shall, in the
opinion of counsel to Lender, make it unlawful for Lender to make or maintain
LIBOR Rate Loans, then Lender shall promptly notify Borrowers and (i) the LIBOR
Rate Loans shall immediately convert to Prime Rate Loans on the last Business
Day of the then existing Interest Period or on such earlier date as required by
law and (ii) no additional LIBOR Rate Loans shall be made until such
circumstance ceases to exist.

 
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(d)           If, for any reason, a LIBOR Rate Loan is paid prior to the last
Business Day of any Interest Period or if a LIBOR Rate Loan does not occur on a
date specified by Borrowers in their request (other than as a result of a
default by Lender), Borrowers agree to indemnify Lender against any loss
(including any loss on redeployment of the deposits or other funds acquired by
Lender to fund or maintain such LIBOR Rate Loan) cost or expense incurred by
Lender as a result of such prepayment or failure to occur.
 
(e)           If any Regulatory Change (whether or not having the force of law)
shall (i) impose, modify or deem applicable any assessment, reserve, special
deposit or similar requirement against assets held by, or deposits in or for the
account of or loans by, or any other acquisition of funds or disbursements by,
Lender; (ii) subject Lender or the LIBOR Rate Loans to any Tax or change the
basis of taxation of payments to Lender of principal or interest due from
Borrowers to Lender hereunder (other than a change in the taxation of the
overall net income of Lender); or (iii) impose on Lender any other condition
regarding the LIBOR Rate Loans or Lender’s funding thereof, and Lender shall
determine (which determination shall be conclusive, absent any manifest error)
that the result of the foregoing is to increase the cost to Lender of making or
maintaining the LIBOR Rate Loans or to reduce the amount of principal or
interest received by Lender hereunder, then Borrowers shall pay to Lender, on
demand, such additional amounts as Lender shall, from time to time, determine
are sufficient to compensate and indemnify Lender from such increased cost or
reduced amount.
 
(f)           Each request for LIBOR Rate Loans shall be in an amount not less
than Three Hundred Thousand and No/100 Dollars ($300,000.00), and in integral
multiples of, $100,000.00.
 
(g)           Unless otherwise specified by Borrowers, all Loans shall be Prime
Rate Loans.
 
(h)           No more than three (3) Interest Periods may be in effect with
respect to outstanding LIBOR Rate Loans at any one time.
 
 
4.05
Fees And Charges.

 
(a)           Closing Fee:  Borrowers shall pay to Lender a closing fee of
Ninety Thousand and No/100 Dollars ($90,000.00), which fee shall be fully earned
and payable on the date of disbursement of the initial Loans hereunder.  The
Forty-Five Thousand and No/100 Dollar ($45,000) “break-up” fee previously paid
to Lender by Borrowers shall be applied against such fee.
 
(b)           Unused Line Fee:  Borrowers shall pay to Lender an unused line fee
of one-half of one percent (0.50%) of the difference between (i) the Maximum
Revolving Loan Limit and (ii) the sum of (A) the average daily balance of the
Revolving Loans plus (B) the Letter of Credit Obligations for each month, which
fee shall be fully earned by Lender and payable monthly in arrears on the first
Business Day of each month.  Said fee shall be calculated on the basis of a 360
day year.
 
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(c)           Termination Fee:  If, during the term of this Agreement, Borrowers
prepay all of the Obligations and this Agreement is terminated, Borrowers agree
to pay to Lender as a prepayment fee, in addition to the payment of all other
Obligations, an amount equal to (i) two percent (2%) of the Facility Amount if
such prepayment occurs two (2) years or more prior to the Maturity Date, (ii)
one percent (1%) of the Facility Amount if such prepayment occurs less than two
(2) years, but at least one (1) year prior to the Maturity Date, or (iii) zero
percent (0%) of the Facility Amount if such prepayment occurs less than one (1)
year prior to the Maturity Date.
 
(d)           Costs and Expenses:  Borrowers shall reimburse Lender for all
costs and expenses, including, without limitation, expenses and fees of
third-party service providers, legal expenses and reasonable attorneys’ fees
(whether for internal or outside counsel), incurred by Lender in connection with
the (i) documentation and consummation of this transaction and any other
transactions between Borrowers and Lender, including, without limitation,
Uniform Commercial Code and other public record searches and filings, overnight
courier or other express or messenger delivery, appraisal costs, surveys, title
insurance and environmental audit or review costs; (ii) collection, protection
or enforcement of any rights in or to the Collateral; (iii) collection of any
Obligations; (iv) administration of the Loans and the Collateral; and (v)
enforcement of any of Lender’s rights under this Agreement or any other Loan
Document (including, without limitation, any costs and expenses of any third
party provider engaged by Lender for such purposes).  Borrowers shall also pay
all normal service charges with respect to all accounts maintained by Borrowers
with Lender and any additional services requested by Borrowers from Lender.
 
(e)           Capital Adequacy Charge.  If Lender shall have determined that the
adoption of any law, rule or regulation regarding capital adequacy, or any
change therein or in the interpretation or application thereof, or compliance by
Lender with any request or directive regarding capital adequacy (whether or not
having the force of law) from any central bank or governmental authority enacted
after the date hereof, does or shall have the effect of reducing the rate of
return on such party’s capital as a consequence of its obligations hereunder to
a level below that which Lender could have achieved but for such adoption,
change or compliance (taking into consideration Lender’s policies with respect
to capital adequacy) by a material amount, then from time to time, after
submission by Lender to Borrowers of a written demand therefor together with the
certificate described below, Borrowers shall pay to Lender such additional
amount or amounts as will compensate Lender for such reduction, such written
demand to be made with reasonable promptness following such determination.  A
certificate of Lender claiming entitlement to payment as set forth above shall
be conclusive in the absence of manifest error.  Such certificate shall set
forth the nature of the occurrence giving rise to such reduction, the amount of
the additional amount or amounts to be paid to Lender, and the method by which
such amount was determined.  In determining such amount, Lender may use any
reasonable averaging and attribution method, applied on a non-discriminatory
basis.

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4.06
Maximum Interest.

 
It is the intent of the parties that the rate of interest and other charges to
Borrowers under the Loan Documents shall be lawful; therefore, if for any reason
the interest or other charges payable under this Agreement are found by a court
of competent jurisdiction, in a final determination, to exceed the limit which
Lender may lawfully charge Borrowers, then the obligation to pay interest and
other charges shall automatically be reduced to such limit and, if any amount in
excess of such limit shall have been paid, then such amount shall be refunded to
Borrowers.
 
 
4.07
Authorization to Make Revolving Loans.

 
Borrowers hereby authorize Lender, in its sole discretion, to charge any of
Borrowers’ accounts or advance Revolving Loans to make any payments of
principal, interest, fees, costs or expenses required to be made under the Loan
Documents.
 
 
4.08
Computation of Interest and Fees.

 
All interest accruing on the outstanding principal amount of the Loans and fees
hereunder outstanding from time to time shall be calculated on the basis of
actual number of days elapsed in a 360-day year.
 
 
4.09
Taxes.

 
(a)           Any and all payments by Borrowers to or on account of any
obligation of any of the Borrowers hereunder or under any other Loan Document
shall be made free and clear of and without reduction or withholding for any
Indemnified Taxes or Other Taxes, provided that, if Borrowers shall be required
by any applicable law to deduct any Indemnified Taxes (including any Other
Taxes) from such payments, then:  (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 4.09(a)), Lender
receives an amount equal to the sum it would have received had no such
deductions been made; (ii) Borrowers shall make such deductions; and
(iii) Borrowers shall timely pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
 
(b)           Without limiting the provisions of Section 4.09(a), Borrowers
shall timely pay any Other Taxes to the relevant Governmental Authority in
accordance with applicable law.
 
(c)           Borrowers shall indemnify Lender, within ten days after written
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Taxes imposed or asserted on or attributable to amounts payable under
this Section 4.09) paid by Lender and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority.  A certificate as to the amount of such
payment or liability delivered to Borrowers by Lender shall be conclusive absent
manifest error.
 
(d)           If requested in writing by Lender, Borrowers shall deliver to
Lender, as soon as practicable after any payment of Indemnified Taxes or Other
Taxes by Borrowers to a Governmental Authority, the original or a certified copy
of a receipt issued by such Governmental Authority evidencing such payment, a
copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to Lender.
 
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(e)           If Lender receives a refund of any Taxes or Other Taxes as to
which it has been indemnified by Borrowers or with respect to which Borrowers
have paid additional amounts pursuant to this Section 4.09, it shall pay to
Borrowers an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by Borrowers under this Section 4.09
with respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of Lender and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund);
provided that Borrowers, upon the request of Lender, agrees to repay the amount
paid over to Borrowers (plus any penalties, interest or other charges imposed by
the relevant Governmental Authority) to Lender in the event Lender is required
to repay such refund to such Governmental Authority.  This subsection (e) shall
not be construed to require Lender to make available its tax returns (or any
other information relating to its taxes that it deems confidential) to Borrowers
or any other Person.
 
5.
COLLATERAL.

 
 
5.01
Grant of Security Interest to Lender.

 
As security for the payment of all Loans now or in the future made by Lender to
any of the Borrowers hereunder and for the payment or other satisfaction of all
other Obligations, each Borrower hereby assigns to Lender and grants to Lender a
continuing security interest in the following property of such Borrower, whether
now or hereafter owned, existing, acquired or arising and wherever now or
hereafter located:  (a) all Accounts (whether or not Eligible Accounts) and all
Goods whose sale, lease or other disposition by a Borrower has given rise to
Accounts and have been returned to, or repossessed or stopped in transit by such
Borrower; (b) all Chattel Paper, Instruments, Documents and General Intangibles
(including, without limitation, all patents, patent applications, trademarks,
trademark applications, trade names, trade secrets, goodwill, copyrights,
copyright applications, registrations, licenses, software, franchises, customer
lists, tax refund claims, claims against carriers and shippers, guarantee
claims, contract rights, payment intangibles, security interests, security
deposits and rights to indemnification); (c) all Inventory; (d) all Goods (other
than Inventory), including, without limitation, Equipment, vehicles and
Fixtures; (e) all Investment Property; (f) all Deposit Accounts, bank accounts,
deposits and cash; (g)  all Letter-of-Credit Rights; (h)  Commercial Tort Claims
listed on Schedule 5.01 hereto; (i) any other property of the Borrower now or
hereafter in the possession, custody or control of Lender or any agent or any
parent, affiliate or subsidiary of Lender or any participant with Lender in the
Loans, for any purpose (whether for safekeeping, deposit, collection, custody,
pledge, transmission or otherwise); and (j) all additions and accessions to,
substitutions for, and replacements, products and Proceeds of the foregoing
property, including, without limitation, proceeds of all insurance policies
insuring the foregoing property, and all of the Borrower’s books and records
relating to any of the foregoing and to the Borrower’s business.

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5.02
Other Security.

 
Lender, in its sole discretion, without waiving or releasing any obligation,
liability or duty of Borrowers under the Loan Documents or any Event of Default,
may at any time or times hereafter, but shall not be obligated to, pay, acquire
or accept an assignment of any security interest, lien, encumbrance or claim
asserted by any Person in, upon or against the Collateral, provided, that Lender
may take such actions with respect to Permitted Liens only after the occurrence
and during the continuance of an Event of Default.  All sums paid by Lender in
respect thereof and all costs, fees and expenses including, without limitation,
reasonable attorney fees, all court costs and all other charges relating thereto
incurred by Lender shall constitute Obligations, payable by Borrowers to Lender
on demand and, until paid, shall bear interest at the highest rate then
applicable to Loans hereunder.
 
 
5.03
Possessory Collateral.

 
Immediately upon Borrowers’ receipt of any portion of the Collateral evidenced
by an agreement, Instrument or Document, including, without limitation, any
Tangible Chattel Paper and any Investment Property consisting of certificated
securities, Borrowers shall deliver the original thereof to Lender together with
an appropriate endorsement or other specific evidence of assignment thereof to
Lender (in form and substance acceptable to Lender).  If an endorsement or
assignment of any such items shall not be made for any reason, Lender is hereby
irrevocably authorized, as Borrowers’ attorney and agent-in-fact, to endorse or
assign the same on Borrowers’ behalf.
 
 
5.04
Electronic Chattel Paper.

 
To the extent that Borrowers obtain or maintain any Electronic Chattel Paper,
Borrowers shall create, store and assign the record or records comprising the
Electronic Chattel Paper in such a manner that (a) a single authoritative copy
of the record or records exists which is unique, identifiable and except as
otherwise provided in clauses (d), (e) and (f) below, unalterable, (b) the
authoritative copy identifies Lender as the assignee of the record or records,
(c) the authoritative copy is communicated to and maintained by the Lender or
its designated custodian, (d) copies or revisions that add or change an
identified assignee of the authoritative copy can only be made with the
participation of Lender, (e) each copy of the authoritative copy and any copy of
a copy is readily identifiable as a copy that is not the authoritative copy and
(f) any revision of the authoritative copy is readily identifiable as an
authorized or unauthorized revision.
 
 
5.05
Possession of Collateral.

 
Until otherwise notified by Lender following the occurrence of an Event of
Default, Borrowers shall have the right, except as otherwise provided in this
Agreement, in the ordinary course of Borrowers’ business, to (a) sell, lease or
furnish under contracts of service any of Borrowers’ Inventory normally held by
Borrowers for any such purpose; (b) use and consume any raw materials, work in
process or other materials normally held by Borrowers for such purpose; and (c)
dispose of obsolete or unuseful Equipment so long as all of the proceeds thereof
are paid to Lender for application to the Obligations (except for such proceeds
which are  required to be delivered to the holder of a Permitted Lien which is
prior in right of payment); provided, however, that a sale in the ordinary
course of business shall not include any transfer or sale in satisfaction,
partial or complete, of a debt owed by Borrowers.
 
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5.06
Pledged Collateral.

 
(a)           Registration in Nominee Name; Denominations.  Each Borrower hereby
agrees that without limiting Article 5, Lender shall have the right (in its sole
and absolute discretion) to hold, where applicable, Pledged Collateral in the
Lender’s own name as pledgee, the name of its nominee (as pledgee or as
sub-agent) or the name of such Borrower, endorsed or assigned, where applicable,
in blank or in favor of Lender.
 
(b)           Distributions. Upon the occurrence and during the continuance of
an Event of Default, Lender shall have the right to receive (for application to
the Obligations) all dividends, interest or principal in respect of Pledged
Collateral and to the extent that any thereof is received by or on behalf of
Borrowers, it shall be held in trust for the benefit of Lender, shall be
segregated from other property or funds of Borrowers and shall be forthwith
delivered to Lender upon demand in the same form as so received (with any
necessary endorsement).  Any and all money and other property paid over to or
received by Lender pursuant to this clause shall be retained by Lender in
an account to be established in the name of Lender, under its sole dominion and
control and shall be applied to the Obligations as determined by Lender.
 
(c)           Voting Rights.  Upon the occurrence and during the continuance of
an Event of Default, Lender shall be vested with all rights of each of the
Borrowers to exercise the voting and consensual rights and powers with respect
to Pledged Collateral.
 
(d)           Control.  If at any time any Pledged Equity Interests do not
constitute Securities or if any Pledged Equity Interests constituting Securities
are not evidenced by a Security Certificate, Borrowers shall take such actions
and execute such documents, at Borrowers’ expense, as is necessary to establish
Lender’s control thereof or otherwise perfect the security interest therein.
 
 
5.07
Assignment of Insurance.

 
As additional security for the payment and performance of the Obligations, each
of the Borrowers hereby assigns to the Lender any and all monies (including
proceeds of insurance and refunds of unearned premiums) due or to become due
under, and all other rights of the Borrowers with respect to, any and all
policies of insurance now or at any time hereafter covering the Collateral or
any evidence thereof or any business records or valuable papers pertaining
thereto, and each of the Borrowers hereby directs the issuer of any such policy
to pay all such monies directly to the Lender.  At any time, whether or not an
Event of Default then exists, the Lender may (but need not), in the Lender’s
name or in such Borrower’s name, execute and deliver proof of claim, receive all
such monies, endorse checks and other instruments representing payment of such
monies, and adjust, litigate, compromise or release any claim against the issuer
of any such policy.  Any monies received as payment for any loss under any
insurance policy mentioned above (other than liability insurance policies) or as
payment of any award or compensation for condemnation or taking by eminent
domain, shall be paid over to the Lender to be applied, at the option of the
Lender, either to the prepayment of the Obligations or shall be disbursed to the
Borrowers under staged payment terms reasonably satisfactory to the Lender for
application to the cost of repairs, replacements, or restorations.  Any such
repairs, replacements, or restorations shall be effected with reasonable
promptness and shall be of a value at least equal to the value of the items or
property destroyed prior to such damage or destruction.
 
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5.08
Preservation of Collateral and Perfection of Security Interests.

 
Borrowers shall, at Lender’s request, at any time and from time to time,
authenticate, execute and deliver to Lender such financing statements, documents
and other agreements and instruments (and pay the cost of filing or recording
the same in all public offices deemed necessary or desirable by Lender) and do
such other acts and things or cause third parties to do such other acts and
things as Lender may deem necessary or desirable, in its sole discretion, in
order to establish and maintain a valid, attached and perfected security
interest in the Collateral in favor of Lender (free and clear of all other
liens, claims, encumbrances and rights of third parties whatsoever, whether
voluntarily or involuntarily created, except Permitted Liens) to secure payment
of the Obligations, and in order to facilitate the collection of the
Collateral.  Borrowers irrevocably hereby make, constitute and appoint Lender
(and all Persons designated by Lender for that purpose) as Borrowers’ true and
lawful attorney and agent-in-fact to execute and file such financing statements,
documents and other agreements and instruments and do such other acts and things
as may be necessary to preserve and perfect Lender’s security interest in the
Collateral.  Borrowers further agree that a carbon, photographic, photostatic or
other reproduction of this Agreement or of a financing statement shall be
sufficient as a financing statement.  Borrowers further ratify and confirm the
prior filing by Lender of any and all financing statements which identify the
Borrowers as debtor, Lender as secured party and any or all Collateral as
collateral.  Upon the request of Lender, Borrowers agree to execute and deliver
to Lender Grants of Security Interest in Trademarks and Patents and Grants of
Security Interest in Copyrights in the forms of Exhibits C and D respectively.
 
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6.
COLLECTIONS.

 
 
6.01
Lockbox and Blocked Account.

 
Borrowers shall direct all of their Account Debtors to make all payments on the
Accounts directly to the Lock Box.  Borrowers shall establish a Blocked Account,
into which all payments received in the Lock Box shall be deposited, and into
which Borrowers will immediately deposit all payments received by Borrowers on
Accounts in the identical form in which such payments were received, whether by
cash or check.  If Borrowers, any Affiliate or Subsidiary, any shareholder,
officer, director, employee or agent of Borrowers or any Affiliate or
Subsidiary, or any other Person acting for or in concert with Borrowers shall
receive any monies, checks, notes, drafts or other payments relating to or as
Proceeds of Accounts or other Collateral, Borrowers and each such Person shall
receive all such items in trust for, and as the sole and exclusive property of,
Lender and, immediately upon receipt thereof, shall remit the same (or cause the
same to be remitted) in kind to the Blocked Account.  The financial institution
with which the Blocked Account is established, if other than Lender, shall
acknowledge and agree, in a manner satisfactory to Lender, that the amounts on
deposit in such Lock Box and Blocked Account are the sole and exclusive property
of Lender, that such financial institution will follow the instructions of
Lender with respect to disposition of funds in the Lock Box and Blocked Account
without further consent from Borrowers, that such financial institution has no
right to setoff against the Lock Box or Blocked Account or against any other
account maintained by such financial institution into which the contents of the
Lock Box or Blocked Account are transferred, and that such financial institution
shall wire, or otherwise transfer in immediately available funds to Lender in a
manner satisfactory to Lender, funds deposited in the Blocked Account on a daily
basis as such funds are collected.  Borrowers agree that all payments made to
such Blocked Account or otherwise received by Lender, whether in respect of the
Accounts or as Proceeds of other Collateral or otherwise (except for proceeds of
Collateral which are required to be delivered to the holder of a Permitted Lien
which is prior in right of payment), will be applied on account of the
Obligations in accordance with the terms of this Agreement; provided, that so
long as no Event of Default has occurred, payments received by Lender shall not
be applied to the unmatured portion of the LIBOR Rate Loans, but shall be held
in a cash collateral account maintained by Lender, until the earlier of (a) the
last Business Day of the Interest Period applicable to such LIBOR Rate Loan and
(b) the occurrence of an Event of Default; provided further, that so long as no
Event of Default has occurred, the immediately available funds in such cash
collateral account may be disbursed, at Borrowers’ discretion, to Borrowers so
long as after giving effect to such disbursement, Borrowers’ Availability,
equals or exceeds the outstanding Revolving Loans at such time.  Borrowers agree
to pay all customary fees, costs and expenses in connection with opening and
maintaining the Lock Box and Blocked Account.  All of such fees, costs and
expenses if not paid by Borrowers, may be paid by Lender and in such event all
amounts paid by Lender shall constitute Obligations hereunder, shall be payable
to Lender by Borrowers upon demand, and, until paid, shall bear interest at the
highest rate then applicable to Loans hereunder.  All checks, drafts,
instruments and other items of payment or Proceeds of Collateral shall be
endorsed by Borrowers to Lender, and, if that endorsement of any such item shall
not be made for any reason, Lender is hereby irrevocably authorized to endorse
the same on Borrowers’ behalf.  For the purpose of this section, Borrowers
irrevocably hereby make, constitute and appoint Lender (and all Persons
designated by Lender for that purpose) as Borrowers’ true and lawful attorney
and agent-in-fact (i) to endorse such Borrower’s name upon said items of payment
and/or Proceeds of Collateral and upon any Chattel Paper, Document, Instrument,
invoice or similar document or agreement relating to any Account of such
Borrower or Goods pertaining thereto; (ii) to take control in any manner of any
item of payment or Proceeds thereof and (iii) to have access to any lock box or
postal box into which any of Borrowers’ mail is deposited, and open and process
all mail addressed to Borrowers and deposited therein.
 
 
6.02
Collection of Accounts.

 
Lender may, at any time and from time to time after the occurrence and during
the continuance of an Event of Default, whether before or after notification to
any Account Debtor and whether before or after the maturity of any of the
Obligations, (a) enforce collection of any of Borrowers’ Accounts or other
amounts owed to Borrowers by suit or otherwise; (b) exercise all of Borrowers’
rights and remedies with respect to proceedings brought to collect any Accounts
or other amounts owed to Borrowers; (c) surrender, release or exchange all or
any part of any Accounts or other amounts owed to any of the Borrowers, or
compromise or extend or renew for any period (whether or not longer than the
original period) any indebtedness thereunder; (d) sell or assign any Account of
a Borrower or other amount owed to a Borrower upon such terms, for such amount
and at such time or times as Lender deems advisable; (e) prepare, file and sign
a Borrower’s name on any proof of claim in bankruptcy or other similar document
against any Account Debtor or other Person obligated to such Borrower; and (f)
do all other acts and things which are necessary, in Lender’s reasonable
discretion, to fulfill any of the Borrowers’ obligations under the Loan
Documents and to allow Lender to collect the Accounts or other amounts owed to
Borrowers.  In addition to any other provision hereof, Lender may at any time,
after the occurrence and during the continuance of an Event of Default, at
Borrowers’ expense, notify any parties obligated on any of the Accounts to make
payment directly to Lender of any amounts due or to become due thereunder.
 
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6.03
Application of Collected Funds.

 
(a)           For purposes of determining the amount of Loans available for
borrowing purposes, the balance in the Blocked Account as of the end of a
Business Day, shall, without duplication, be applied against the Obligations at
the beginning of the next Business Day in such order as Lender shall determine
in its sole discretion.
 
(b)           For purposes of calculating interest and fees, Lender shall apply
all collected and available funds one (1) Business Day after application of the
proceeds set forth in Section 6.03(a).
 
 
6.04
Account Statements.

 
On a monthly basis, Lender shall deliver to Borrowers an account statement
showing all Loans, charges and payments, which shall be deemed final, binding
and conclusive upon Borrowers unless Borrowers notify Lender in writing,
specifying any error therein, within thirty (30) days of the date such account
statement is sent to Borrowers and any such notice shall only constitute an
objection to the items specifically identified.
 
7.
COLLATERAL, AVAILABILITY AND FINANCIAL REPORTS AND SCHEDULES

 
 
7.01
Weekly Reports.

 
At least once each week, Borrowers shall deliver to Lender an executed Borrowing
Base Certificate which shall be accompanied by copies of Borrowers’ sales
journals, cash receipts journals and credit memo journals for the relevant
period.  Such Borrowing Base Certificate shall reflect the activity of Borrowers
with respect to Accounts for the immediately preceding week, and shall be in a
form and with such specificity as is satisfactory to Lender and shall contain
such additional information concerning Accounts as may be requested by Lender
including, without limitation, but only if specifically requested by Lender,
copies of all invoices prepared in connection with such Accounts.  Borrowers
shall also deliver to Lender, in Lender’s then current form, on each day on
which Borrowers request a Revolving Loan, an Advance Request Form in the form
attached hereto as Exhibit A.

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7.02
Monthly Reports.

 
Borrowers shall deliver to Lender, in addition to any other reports, as soon as
practicable and in any event: within fifteen (15) days after the end of each
calendar month, (a) a detailed trial balance of Borrowers’ Accounts aged per
invoice date, in form and substance reasonably satisfactory to Lender including,
without limitation, the names and addresses of all Account Debtors of Borrowers,
(b) a summary and detail of accounts payable (such Accounts and accounts payable
divided into such time intervals as Lender may require in its reasonable
discretion), including a listing of any held checks, and (c) the general ledger
inventory account balance, a perpetual inventory report and Lender’s standard
form of Inventory report then in effect or the form most recently requested from
Borrowers by Lender, for Borrowers by each category of Inventory, together with
a description of the monthly change in each category of Inventory.
 
 
7.03
Financial Statements.

 
Borrowers shall deliver to Lender the following financial information, all of
which shall be prepared in accordance with GAAP, and shall be accompanied by a
compliance certificate in the form of Exhibit B hereto, which compliance
certificate shall include a calculation of all financial covenants contained in
this Agreement:  (a) no later than thirty (30) days after each calendar month,
copies of internally prepared financial statements, including, without
limitation, balance sheets and statements of income, retained earnings and cash
flow of Borrowers, certified by the Chief Financial Officer of Borrowers
together with a memorandum comparing variances of each of the foregoing against
projections provided to Lender hereunder and an explanation of such variances
with such backup documentation as may be required by Lender; and (b) no later
than ninety (90) days after the end of each of Borrowers’ Fiscal Years, audited
annual financial statements with an unqualified opinion by independent certified
public accountants selected by Borrowers and reasonably satisfactory to Lender,
which financial statements shall be accompanied by (i) a letter from such
accountants acknowledging that they are aware that a primary intent of Borrowers
in obtaining such financial statements is to influence Lender and that Lender is
relying upon such financial statements in connection with the exercise of its
rights hereunder, provided, that Borrowers shall only be required to use its
reasonable efforts exercised in good faith to obtain such letter; and (ii)
copies of any management letters sent to the Borrowers by such accountants.
 
 
7.04
Annual Projections.

 
As soon as practicable and in any event prior to the beginning of each Fiscal
Year, Borrowers shall deliver to Lender projected balance sheets, statements of
income and cash flow for Borrowers, for each of the twelve (12) months during
such Fiscal Year, which shall include the assumptions used therein, together
with appropriate supporting details as reasonably requested by Lender.
 
 
7.05
Explanation of Budgets and Projections.

 
In conjunction with the delivery of the annual presentation of projections or
budgets referred to in Section 7.04 above, Borrowers shall deliver a letter
signed by the President or a Vice President of each of the Borrowers and by the
Treasurer or Chief Financial Officer of each of the Borrowers, describing,
comparing and analyzing, in detail, all changes and developments between the
anticipated financial results included in such projections or budgets and the
historical financial statements of Borrowers.
 
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7.06
Public Reporting.

 
Promptly upon the filing thereof, Borrowers shall deliver to Lender copies of
all registration statements and annual, quarterly, monthly or other regular
reports which Borrowers or any of their Subsidiaries file with the Securities
and Exchange Commission, as well as promptly providing to Lender copies of any
reports and proxy statements delivered to its shareholders.
 
 
7.07
Other Information.

 
Promptly following request therefor by Lender, such other business or financial
data, reports, appraisals and projections as Lender may reasonably request.
 
8.
TERMINATION; AUTOMATIC RENEWAL.

 
 
8.01
Original Term.

 
This Agreement shall be in effect from the date hereof until the Termination
Date.  Subject to the payment of the termination fee set forth in Section
4.05(f), if any, Borrowers may terminate this Agreement upon ten (10) days’
prior written notice and payment in full of the Obligations.
 
 
8.02
Intentionally Omitted.

 
 
8.03
Termination of Agreement.

 
Lender shall not make any additional Loans on or after the Termination Date and
this Agreement shall terminate on the date thereafter that the Obligations are
paid in full.  The termination of this Agreement shall not affect Lender’s or
any Borrower’s rights, or any of the Obligations having their inception prior to
the effective date of such termination, and the provisions hereof shall continue
to be fully operative until all transactions entered into, rights or interests
created or Obligations have been fully and indefeasibly paid, disposed of,
concluded or liquidated.  The security interests, Liens, and rights granted to
Lender herein shall continue in full force and effect until all of the
Obligations have been indefeasibly paid and performed in full.  All
representations, warranties, covenants, waivers, and agreements contained herein
shall survive termination of this Agreement until all Obligations are
indefeasibly paid and performed in full.  At such time as Borrowers have repaid
all of the Obligations and this Agreement has terminated, Borrowers shall
deliver to Lender a release, in form and substance satisfactory to Lender, of
all obligations and liabilities of Lender and its officers, directors,
employees, agents, parents, subsidiaries and affiliates to Borrowers, and if any
of the Borrowers is obtaining new financing from another lender, Borrowers shall
deliver such lender’s indemnification of Lender, in form and substance
satisfactory to Lender, for checks which Lender has credited to Borrowers’
account, but which subsequently are dishonored for any reason or for automatic
clearinghouse or wire transfers not yet posted to Borrowers’ account.
 
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9.
REPRESENTATIONS AND WARRANTIES.

 
Each of the Borrowers represents and warrants to Lender as follows:
 
 
9.01
Financial Statements and Other Information.

 
The financial statements and other information delivered or to be delivered by
Borrowers to Lender at or prior to the date of this Agreement fairly present in
all material respects the financial condition of Borrowers, and there has been
no Material Adverse Effect with respect to the Borrowers since the date of the
financial statements delivered to Lender most recently prior to the date of this
Agreement.  All written information now or heretofore furnished by Borrowers to
Lender is true and correct as of the date with respect to which such information
was furnished.
 
 
9.02
Locations.

 
The office where Borrowers keeps their books, records and accounts (or copies
thereof) concerning the Collateral, Borrowers’ principal place of business and
all of Borrowers’ other places of business, locations of Collateral and post
office boxes and locations of bank accounts are as set forth on Schedule 9.02
and at other locations within the continental United States of which Lender has
been advised by Borrowers in accordance with Section 10.02(a).  The Collateral,
including, without limitation, the Equipment (except any part thereof which
Borrowers shall have advised Lender in writing consists of Collateral normally
used in more than one state) is kept, or, in the case of vehicles, based, only
at the addresses set forth on Schedule 9.02, and at other locations within the
continental United States of which Lender has been advised by Borrowers in
writing in accordance with Section 10.02(a) hereof.
 
 
9.03
Loans by Borrowers.

 
Borrowers have not made any loans or advances to any Affiliate or other Person
except for advances authorized hereunder to employees, officers and directors of
Borrowers for travel and other expenses arising in the ordinary course of
Borrowers’ business and loans permitted pursuant to Section 11.06 hereof.
 
 
9.04
Accounts.

 
Each Account which Borrowers shall, expressly or by implication, request Lender
to classify as an Eligible Account, shall, as of the time when such request is
made, conform in all respects to the requirements of such classification as set
forth in the respective definition of “Eligible Account” as set forth herein and
as otherwise established by Lender from time to time.
 
 
9.05
Liens.

 
Borrowers are the lawful owners of all Collateral now purportedly owned by
Borrowers, free from all liens, claims, security interests and encumbrances
whatsoever, whether voluntarily or involuntarily created and whether or not
perfected, other than the Permitted Liens.
 
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9.06
Organization, Authority and No Conflict.

 
Each Borrower is an entity of the type set forth on Schedule 9.06, duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, organization or formation.  Each Borrower’s
jurisdiction of incorporation, organization or formation, federal employer
identification number and organization identification number are correctly set
forth on Schedule 9.06.  Except as set forth on Schedule 9.06, each Borrower is
duly qualified and in good standing in all states where the nature and extent of
the business transacted by it or the ownership of its assets makes such
qualification necessary or, if such Borrower is not so qualified, Borrower may
cure any such failure without losing any of its rights, incurring any liens or
material penalties, or otherwise affecting Lender’s rights.  Each Borrower has
the right and power and is duly authorized and empowered to enter into, execute
and deliver the Loan Documents and perform its obligations hereunder and
thereunder. Each Borrower’s execution, delivery and performance of the Loan
Documents does not conflict with the provisions of the organizational documents
of such Borrower, any statute, regulation, ordinance or rule of law, or any
agreement, contract or other document binding on such Borrower, except for
conflicts with agreements, contracts or other documents which would not have a
Material Adverse Effect, and such Borrower’s execution, delivery and performance
of the Loan Documents shall not result in the imposition of any lien or other
encumbrance upon any of Borrower’s property (other than Permitted Liens) under
any existing indenture, mortgage, deed of trust, loan or credit agreement or
other agreement or instrument by which such Borrower or any of its property may
be bound or affected.  If a Borrower is a partnership or limited liability
company, Borrower has not expressly elected to have its equity interests treated
as “Securities” under and as defined in Article 8 of the Uniform Commercial
Code.
 
 
9.07
Litigation.

 
Except as disclosed to Lender on Schedule 9.07 hereto, there are no actions or
proceedings which are pending or, to the best of Borrowers’ knowledge,
threatened against Borrowers which is reasonably likely to have a Material
Adverse Effect.  Borrowers have no Commercial Tort Claims pending other than
those set forth on Schedule 5.01 and those of which Lender has been advised by
Borrowers in writing in accordance with Section 10.02(c) hereof.
 
 
9.08
Compliance with Laws and Maintenance of Permits.

 
Borrowers have obtained all governmental consents, franchises, certificates,
licenses, authorizations, approvals and permits, the lack of which would have a
Material Adverse Effect.  Borrowers are in compliance in all material respects
with all applicable federal, state, local and foreign statutes, orders,
regulations, rules and ordinances (including, without limitation, Environmental
Laws and statutes, orders, regulations, rules and ordinances relating to taxes,
employer and employee contributions and similar items, securities, ERISA or
employee health and safety) the failure to comply with which would have a
Material Adverse Effect.
 
 
9.09
Affiliate Transactions.

 
Except as set forth on Schedule 9.09 hereto, Borrowers are not conducting,
permitting or suffering to be conducted, transactions with any Affiliate other
than transactions with Affiliates for the purchase or sale of Inventory or
services in the ordinary course of business pursuant to terms that are no less
favorable to Borrowers than the terms upon which such transactions would have
been made had they been made to or with a Person that is not an Affiliate.
 
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9.10
Names and Trade Names.

 
Each Borrower’s name has always been as set forth on the first page of this
Agreement and Borrowers use no trade names, assumed names, fictitious names or
division names in the operation of their business, except as set forth on
Schedule 9.10 hereto.
 
 
9.11
Equipment.

 
Except for Permitted Liens, Borrowers have good and merchantable title to and
ownership of all Equipment.  No Equipment is a Fixture to real estate unless
such real estate is owned by Borrowers and is subject to a mortgage in favor of
Lender, or if such real estate is leased, is subject to a landlord’s agreement
in favor of Lender on terms acceptable to Lender, or an accession to other
personal property unless such personal property is subject to a first priority
lien in favor of Lender.
 
 
9.12
Enforceability.

 
The Loan Documents to which Borrowers are a party are the legal, valid and
binding obligations of Borrower and are enforceable against Borrowers in
accordance with their respective terms.
 
 
9.13
Solvency.

 
Borrowers are, after giving effect to the transactions contemplated hereby,
solvent, able to pay its debts as they become due, has capital sufficient to
carry on its business, now owns property having a value both at fair valuation
and at present fair saleable value greater than the amount required to pay its
debts, and will not be rendered insolvent by the execution and delivery of the
Loan Documents or by completion of the transactions contemplated hereunder or
thereunder.
 
 
9.14
Indebtedness.

 
Except as set forth on Schedule 9.14 hereto and as permitted by Section 11.02,
Borrowers are not obligated (directly or indirectly), for any loans or other
Indebtedness other than the Loans.
 
 
9.15
Margin Security and Use of Proceeds.

 
Borrowers do not own any margin securities, and none of the proceeds of the
Loans hereunder shall be used for the purpose of purchasing or carrying any
margin securities or for the purpose of reducing or retiring any indebtedness
which was originally incurred to purchase any margin securities or for any other
purpose not permitted by Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
 
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9.16
Parent, Subsidiaries and Affiliates.

 
Except as set forth on Schedule 9.16 hereto, Borrowers have no Parents,
Subsidiaries or other Affiliates or divisions, nor are Borrowers engaged in any
joint venture or partnership with any other Person.
 
 
9.17
No Defaults.

 
No Borrower is in default under any material contract, lease or commitment to
which it is a party or by which it is bound.  Borrowers do not know of any
dispute regarding any contract, lease or commitment which would have a Material
Adverse Effect.
 
 
9.18
Employee Matters.

 
There are no controversies pending or threatened between any Borrower and any of
its employees, agents or independent contractors other than employee grievances
arising in the ordinary course of business which would not, in the aggregate,
have a Material Adverse Effect, and each Borrower is in compliance with all
federal and state laws respecting employment and employment terms, conditions
and practices except for such non-compliance which would not have a Material
Adverse Effect.
 
 
9.19
Intellectual Property.

 
(a)           Intellectual Property Rights.  Set forth on Schedule 9.19 is a
complete list of all patents, applications for patents, registered trademarks,
applications to register trademarks, service marks, applications to register
service marks, mask works, trade dress and copyrights for which any Borrower is
the owner of record (the “Intellectual Property”).  Except as disclosed on
Schedule 9.19, (i) Borrowers own the Intellectual Property free and clear of all
restrictions (including covenants not to sue a third party), court orders,
injunctions, decrees, writs or Liens, whether by written agreement or otherwise,
(ii) no Person other than the Borrowers own or have been granted any right in
the Intellectual Property, (iii) all Intellectual Property is valid, subsisting
and enforceable and (iv) Borrowers have taken all commercially reasonable action
necessary to maintain and protect the Intellectual Property.  The use of such
Intellectual Property by Borrowers and the operation of its businesses does not
infringe any valid and enforceable intellectual property rights of any other
Person, except to the extent any such infringement could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.  No
slogan or other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by Borrowers
infringes upon any rights held by any other Person, except to the extent any
such infringement could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.  Except as specifically disclosed on
Schedule 9.19, no claim or litigation regarding any of the foregoing is pending
or, to Borrowers’ knowledge, threatened, and no patent, invention, device,
application, principle or any statute, law, rule, regulation, standard or code
is pending or, to Borrowers’ knowledge, proposed, which could, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
 
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(b)           Licensed Intellectual Property.  Borrowers do not possess any
licenses other than (i) as set forth on Schedule 9.19, and (ii) readily
available, non-negotiated licenses of computer software and other intellectual
property used solely for performing accounting, word processing and similar
administrative tasks.
 
 
9.20
Environmental Matters.

 
Borrowers have not generated, used, stored, treated, transported, manufactured,
handled, produced or disposed of any Hazardous Materials, on or off its premises
(whether or not owned by it) in any manner which at any time violates in any
material respect any Environmental Law or any license, permit, certificate,
approval or similar authorization thereunder and the operations of the Borrowers
comply in all material respects with all Environmental Laws and all licenses,
permits, certificates, approvals and similar authorizations thereunder.  There
has been no investigation, proceeding, complaint, order, directive, claim,
citation or notice by any governmental authority or any other Person, nor is any
pending or to the best of the Borrowers’ knowledge threatened with respect to
any non-compliance with or violation of the requirements of any Environmental
Law by the Borrowers or the release, spill or discharge, threatened or actual,
of any Hazardous Materials or the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any Hazardous
Materials or any other environmental, health or safety matter, which affects the
Borrowers or their business, operations or assets or any properties at which the
Borrowers have transported, stored or disposed of any Hazardous
Materials.  Borrowers have no material liability (contingent or otherwise) in
connection with a release, spill or discharge, threatened or actual, of any
Hazardous Materials or the generation, use, storage, treatment, transportation,
manufacture, handling, production or disposal of any Hazardous Materials.
 
 
9.21
ERISA Matters.

 
Except as disclosed to the Lender in writing prior to the date hereof, neither
the Borrowers nor any ERISA Affiliate (a) maintains or has maintained any
Pension Plan, (b) contributes or has contributed to any Multiemployer Plan or
(c) provides or has provided post-retirement medical or insurance benefits with
respect to employees or former employees (other than benefits required under
Section 601 of ERISA, Section 4980B of the IRC or applicable state
law).  Neither the Borrowers nor any ERISA Affiliate has received any notice or
has any knowledge to the effect that it is not in full compliance with any of
the requirements of ERISA, the IRC or applicable state law with respect to any
Plan.  No Reportable Event exists in connection with any Pension Plan.  Each
Plan which is intended to qualify under the IRC is so qualified, and no fact or
circumstance exists which may have an adverse effect on the Plan’s tax qualified
status.  Neither the Borrowers nor any ERISA Affiliate has (i) any accumulated
funding deficiency (as defined in Section 302 of ERISA and Section 412 of the
IRC) under any Plan, whether or not waived, (ii) any liability under Section
4201 or 4243 of ERISA for any withdrawal, partial withdrawal, reorganization or
other event under any Multiemployer Plan or (iii) any liability or knowledge of
any facts or circumstances which could result in any liability to the PBGC, the
Internal Revenue Service, the Department of Labor or any participant in
connection with any Plan (other than routine claims for benefits under the
Plan).
 
 
9.22
Intentionally Omitted.

 
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10.
AFFIRMATIVE COVENANTS.

 
Until payment and satisfaction in full of all Obligations and termination of
this Agreement, each of the Borrowers covenant and agree as follows:
 
10.01
Maintenance of Records.

 
Borrowers shall at all times keep accurate and complete books, records and
accounts with respect to all of Borrowers’ business activities, in accordance
with GAAP, and shall keep such books, records and accounts, and any copies
thereof, only at the addresses indicated for such purpose on Schedule 9.02.
 
10.02
Notices.

 
Borrowers shall provide written notice to Lender of the following:
 
(a)           Locations.  Promptly upon becoming aware of (but in no event less
than ten (10) days prior to the occurrence thereof) the proposed opening of any
new place of business or new location of Collateral, the closing of any existing
place of business or location of Collateral, any change of in the location of
Borrowers’ books, records and accounts (or copies thereof), the opening or
closing of any post office box, the opening or closing of any bank account or,
if any of the Collateral consists of Goods of a type normally used in more than
one state, the use of any such Goods in any state other than a state in which
Borrower has previously advised Lender that such Goods will be used.
 
(b)           Eligible Accounts.  Promptly upon becoming aware thereof, if any
Account identified by Borrowers to Lender as an Eligible Account becomes
ineligible for any reason.
 
(c)           Litigation and Proceedings.  Promptly upon becoming aware thereof,
(i) of any litigation, arbitration, governmental investigation or other actions
or proceedings which are pending or threatened against Borrowers or any
Subsidiary or to which any of the properties of any thereof is subject which
might have a Material Adverse Effect, and (ii) of any Commercial Tort Claims of
Borrowers which may arise.
 
(d)           Names and Trade Names.  Within ten (10) days of the change of any
of Borrowers’ names or the use of any trade name, assumed name, fictitious name
or division name not previously disclosed to Lender in writing.
 
(e)           ERISA Matters.  Promptly upon (i) the occurrence of any Reportable
Event which might result in the termination by the PBGC of any Plan covering any
officers or employees of any of the Borrowers, any benefits of which are, or are
required to be, guaranteed by the PBGC, (ii) receipt of any notice from the PBGC
of its intention to seek termination of any Plan or appointment of a trustee
therefore, (iii) its intention to terminate or withdraw from any Plan, (iv) the
institution of any steps by any member of the Controlled Group or any other
Person to terminate any Pension Plan, (v) the failure of any of the Borrowers or
any ERISA Affiliate of any member of the Controlled Group or any other Person to
make a required contribution to any Pension Plan (if such failure is sufficient
to give rise to a Lien under Section 302(f) of ERISA) or to any Multiemployer
Plan, (vi) the taking of any action with respect to a Pension Plan which could
result in the requirements that any of the Borrowers furnish a bond or other
security to the PBGC or such Pension Plan, (vii) the occurrence of any event
with respect to any Pension Plan or Multiemployer Plan which could result in the
incurrence by any ERISA Affiliate or any member of the Controlled Group of any
material liability, fine or penalty (including any claim or demand for
withdrawal liability or partial withdrawal from any Multiemployer Plan), (viii)
any material increase in the contingent liability of any of the Borrowers with
respect to any post-retirement welfare plan benefit, or (ix) any notice that any
Multiemployer Plan is in reorganization, that increased contributions may be
required to avoid a reduction in plan benefits or the imposition of an excise
tax, that any such plan is or has been funded at a rate less than that required
under Section 412 of the Code, that any such plan is or may be terminated, or
that any such plan is or may become insolvent.
 
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(f)           Environmental Matters.  Immediately upon becoming aware of any
investigation, proceeding, complaint, order, directive, claim, citation or
notice with respect to any non-compliance with or violation of the requirements
of any Environmental Law by any of the Borrowers or the generation, use,
storage, treatment, transportation, manufacture handling, production or disposal
of any Hazardous Materials or any other environmental, health or safety matter
which affects any of the Borrowers or its business operations or assets or any
properties at which any of the Borrowers has transported, stored or disposed of
any Hazardous Materials unless the foregoing could not reasonably be expected to
have a Material Adverse Effect.
 
(g)           Default; Material Adverse Change.  Promptly of (i) any Material
Adverse Effect, (ii) the occurrence of any Event of Default hereunder, or (iii)
the occurrence of any event which, if uncured, will become an Event of Default
after notice or lapse of time (or both).
 
All of the foregoing notices shall be provided by Borrowers to Lender in writing
and shall describe the steps being taken by Borrowers or any Subsidiary affected
thereby with respect thereto.
 
10.03
Compliance with Laws and Maintenance of Permits.

 
Borrowers shall maintain all governmental consents, franchises, certificates,
licenses, authorizations, approvals and permits, the lack of which would have a
Material Adverse Effect and Borrowers shall remain in compliance with all
applicable federal, state, local and foreign statutes, orders, regulations,
rules and ordinances (including, without limitation, Environmental Laws and
statutes, orders, regulations, rules and ordinances relating to taxes, employer
and employee contributions and similar items, securities, ERISA or employee
health and safety) the failure with which to comply would have a Material
Adverse Effect.  Following any determination by Lender that there is
non-compliance, or any condition which requires any action by or on behalf of
any of the Borrowers in order to avoid non-compliance, with any Environmental
Law, at Borrowers’ expense cause an independent environmental engineer
acceptable to Lender to conduct such tests of the relevant site(s) as are
appropriate and prepare and deliver a report setting forth the results of such
tests, a proposed plan for remediation and an estimate of the costs thereof.
 
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10.04
Inspection and Audits.

 
Borrowers shall permit Lender, or any Persons designated by it, to call at
Borrowers’ places of business at any reasonable times and with reasonable notice
provided no Event of Default has occurred and is continuing, and, without
hindrance or delay, to inspect the Collateral and to inspect, audit, check and
make extracts from Borrowers’ books, records, journals, orders, receipts and any
correspondence and other data relating to Borrowers’ business, the Collateral or
any transactions between the parties hereto, and shall have the right to make
such verification concerning Borrowers’ business as Lender may consider
reasonable under the circumstances.  Borrowers shall furnish to Lender such
information relevant to Lender’s rights under the Loan Documents as Lender shall
at any time and from time to time request.  Lender, through its officers,
employees or agents shall have the right, at any time and from time to time, in
Lender’s name, to verify the validity, amount or any other matter relating to
any of Borrowers’ Accounts, by mail, telephone, telecopy, electronic mail, or
otherwise, provided that prior to the occurrence of an Event of Default, Lender
shall conduct such verification in the name of a nominee of Lender or in a
Borrower’s name.  Borrowers authorizes Lender to discuss the affairs, finances
and business of Borrowers with any officers, employees or directors of Borrowers
or with its Parent or any Affiliate or the officers, employees or directors of
its Parent or any Affiliate, and to discuss the financial condition of Borrowers
with Borrowers’ independent public accountants.  Any such discussions shall be
without liability to Lender or to Borrowers’ independent public
accountants.  For each inspection or audit conducted by Lender hereunder,
Borrowers shall pay to Lender (a) fees at Lender’s then-current per diem rate
(such rate being Nine Hundred and No/100 Dollars ($900.00) as of the date of
this Agreement), plus (b) all reasonable costs and out-of-pocket expenses
incurred by Lender, provided that, so long as no Event of Default exists,
Borrowers shall not be required to pay to Lender such fees and/or expenses more
frequently than three (3) times each Fiscal Year.  All such fees, costs and
expenses shall constitute Obligations hereunder, shall be payable on demand and,
until paid, shall bear interest at the highest rate then applicable to Loans
hereunder.
 
10.05
Insurance.

 
(a)           Borrowers will obtain and at all times maintain insurance with
insurers reasonably acceptable to the Lender, in such amounts, on such terms
(including any deductibles) and against such risks as may from time to time be
required by the Lender, but in all events in such amounts and against such risks
as is usually carried by companies engaged in similar business and owning
similar properties in the same general areas in which the Borrowers
operate.  Without limiting the generality of the foregoing, the Borrowers will
at all times maintain liability insurance, business interruption insurance
including coverage for force majeure and keep all tangible Collateral insured
against risks of fire (including so-called extended coverage), theft, collision
(for Collateral consisting of motor vehicles) and such other risks and in such
amounts as the Lender may reasonably request, with any loss payable to the
Lender to the extent of its interest, and all policies of such insurance shall
contain a lender’s loss payable endorsement for the Lender’s benefit or an
endorsement showing Lender as additional insured.
 
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(b)           If Borrowers at any time or times hereafter shall fail to obtain
or maintain any of the policies of insurance required above or to pay any
premium relating thereto, then Lender, without waiving or releasing any
obligation or default by Borrowers hereunder, may (but shall be under no
obligation to) obtain and maintain such policies of insurance and pay such
premiums and take such other actions with respect thereto as Lender deems
advisable upon notice to Borrowers.  Such insurance, if obtained by Lender, may,
but need not, protect Borrower’s interests or pay any claim made by or against
Borrowers with respect to the Collateral.  Such insurance may be more expensive
than the cost of insurance Borrowers may be able to obtain on its own and may be
cancelled only upon Borrowers providing evidence that it has obtained the
insurance as required above.  All sums disbursed by Lender in connection with
any such actions, including, without limitation, court costs, expenses, other
charges relating thereto and reasonable attorneys’ fees, shall constitute Loans
hereunder, shall be payable on demand by Borrowers to Lender and, until paid,
shall bear interest at the highest rate then applicable to Loans hereunder.
 
10.06
Collateral.

 
Borrowers shall keep the Collateral in good condition, repair and order and
shall make all necessary repairs to the Equipment and replacements thereof so
that the operating efficiency and the value thereof shall at all times be
preserved and maintained in all material respects.  Borrowers shall permit
Lender to examine any of the Collateral at any time and wherever the Collateral
may be located and, Borrowers shall, immediately upon request therefor by
Lender, deliver to Lender any and all evidence of ownership of any of the
Equipment including, without limitation, certificates of title and applications
of title.  Borrowers shall, at the request of Lender, indicate on its records
concerning the Collateral a notation, in form satisfactory to Lender, of the
security interest of Lender hereunder.
 
10.07
Use of Proceeds.

 
All monies and other property obtained by Borrowers from Lender pursuant to this
Agreement shall be used solely for business purposes of Borrowers.
 
10.08
Taxes.

 
Borrowers shall file all required tax returns and pay all of its taxes when due,
subject to any extensions granted by the applicable taxing authority, including,
without limitation, taxes imposed by federal, state or municipal agencies, and
shall cause any liens for taxes to be promptly released; provided, that
Borrowers shall have the right to contest the payment of such taxes in good
faith by appropriate proceedings so long as (a) the amount so contested is shown
on Borrowers’ financial statements; (b) the contesting of any such payment does
not give rise to a lien for taxes; (c) Borrowers keep on deposit with Lender
(such deposit to be held without interest) or a reserve is maintained against
Borrowers’ availability to borrow money under Section 2.01, in either case, in
an amount of money which, in the sole judgment of Lender, is sufficient to pay
such taxes and any interest or penalties that may accrue thereon; and (d) if
Borrowers fail to prosecute such contest with reasonable diligence, Lender may
apply the money so deposited in payment of such taxes.  If Borrowers fail to pay
any such taxes and in the absence of any such contest by Borrowers, Lender may
(but shall be under no obligation to) advance and pay any sums required to pay
any such taxes and/or to secure the release of any lien therefor, and any sums
so advanced by Lender shall constitute Loans hereunder, shall be payable by
Borrowers to Lender on demand, and, until paid, shall bear interest at the
highest rate then applicable to Loans hereunder.
 
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10.09
Intellectual Property.

 
Borrowers shall maintain adequate licenses, patents, patent applications,
copyrights, service marks, trademarks, trademark applications, tradestyles and
trade names to continue its business as heretofore conducted by it or as
hereafter conducted by it unless the failure to maintain any of the foregoing
could not reasonably be expected to have a Material Adverse Effect.
 
10.10
Checking Accounts and Cash Management Services.

 
Borrowers shall maintain its general checking/controlled disbursement account
with Lender or another bank acceptable to Lender.  If Borrowers maintain its
general checking/controlled disbursement account with Lender, (a) normal charges
shall be assessed thereon, (b) although no compensating balance is required,
Borrowers must keep monthly balances in order to merit earnings credits which
will cover Lender’s service charges for demand deposit account activities, and
(c) Borrowers shall enter into agreements with Lender for standard cash
management services.  Borrowers shall be responsible for all normal charges
assessed thereon.  All of Borrowers’ bank accounts are set forth on Schedule
9.02, and such funds in such bank accounts will be transferred to Lender and
such bank accounts closed within sixty (60) days of the date of this
Agreement.  Borrowers will not open any other bank account unless (i) Borrowers
provide written notice to Lender at least thirty (30) days prior to opening such
account and (ii) the bank at which such account is located executes such
documents as are necessary to give Lender a first priority, perfected security
interest in such account.
 
10.11
Patriot Act, Bank Secrecy Act and Office of Foreign Assets Control.

 
As required by federal law and the Lender’s policies and practices, Lender may
need to obtain, verify and record certain customer identification information
and documentation in connection with opening or maintaining accounts, or
establishing or continuing to provide services and Borrowers agree to provide
such information.  In addition, and without limiting the foregoing sentence, the
Borrowers shall (a) ensure, and cause each Subsidiary to ensure, that no Person
who owns a controlling interest in or otherwise controls the Borrowers or any
Subsidiary is or shall be listed on the Specially Designated Nationals and
Blocked Person List or other similar lists maintained by OFAC, the Department of
the Treasury or included in any Executive Orders, (b) not use or permit the use
of the proceeds of the Loans to violate any of the foreign asset control
regulations of OFAC or any enabling statute or Executive Order relating thereto,
and (c) comply, and cause each Subsidiary to comply, with all applicable Bank
Secrecy Act laws and regulations, as amended.
 
11.
NEGATIVE COVENANTS.

 
Until payment and satisfaction in full of all Obligations and termination of
this Agreement, unless Borrowers obtain Lender’s prior written consent waiving
or modifying any of Borrower’s covenants hereunder in any specific instance,
each of the Borrowers agrees as follows:
 
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11.01
Guaranties.

 
Borrowers shall not assume, guarantee or endorse, or otherwise become liable in
connection with, the obligations of any Person, except by endorsement of
instruments for deposit or collection or similar transactions in the ordinary
course of business.
 
11.02
Indebtedness.

 
Borrowers shall not create, incur, assume or become obligated (directly or
indirectly), for any loans or other Indebtedness other than the Loans, except
that Borrowers may (a) borrow money from a Person other than Lender on an
unsecured and subordinated basis so long as a subordination agreement in favor
of Lender and in form and substance satisfactory to Lender is executed and
delivered to Lender prior to any borrowing of money by the Borrowers; (b) incur
Hedging Obligations in favor of Lender (c) maintain its present Indebtedness
listed on Schedule 9.14 hereto; (d) incur unsecured indebtedness to trade
creditors in the ordinary course of business; (e) incur purchase money
indebtedness or capitalized lease obligations; (f) incur operating lease
obligations; and (g) incur obligations under an employee stock ownership plan or
other similar employee benefit plan.
 
11.03
Liens.

 
Borrowers shall not grant or permit to exist (voluntarily or involuntarily) any
lien, claim, security interest or other encumbrance whatsoever on any of its
assets, other than Permitted Liens.
 
11.04
Mergers, Sales, Acquisitions, Subsidiaries and Other Transactions Outside the
Ordinary Course of Business.

 
Borrowers shall not (a) enter into any merger or consolidation; (b) change the
state of any Borrower’s organization or enter into any transaction which has the
effect of changing a Borrower’s state of organization; (c) sell, lease or
otherwise dispose of any of its assets other than in the ordinary course of
business; (d) purchase the stock, other equity interests or all or a material
portion of the assets of any Person or division of such Person, except other
than as set forth in subsection (e) herein; or (d) enter into any other
transaction outside the ordinary course of Borrowers’ business; or (e) enter
into, any purchase, redemption or retirement of any shares of any class of
Borrowers’ stock or any other equity interest, and any issuance of any shares
of, or warrants or other rights to receive or purchase any shares of, any class
of Borrowers’ stock or any other equity interest unless after giving effect to
such transaction, Borrowers have Excess Availability of not less than Six
Hundred Thousand and No/100 Dollars ($600,000.00), provided that, this
subsection (e) shall not apply to Clark Holdings Inc. solely as to the issuance
of equity awards pursuant to equity-based compensation plans adopted by Clark
Holdings Inc.  Borrowers shall not form any Subsidiaries or enter into any joint
ventures or partnerships with any other Person.
 
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11.05
Dividends and Distributions.

 
Borrowers shall not declare or pay any dividend or other distribution (whether
in cash or in kind) on any class of its stock unless after giving effect to such
transaction, Borrowers have Excess Availability of not less than Six Hundred
Thousand and No/100 Dollars ($600,000.00).
 
11.06
Investments; Loans.

 
Borrowers shall not purchase or otherwise acquire, or contract to purchase or
otherwise acquire, the obligations or stock of any Person, other than (a) direct
obligations of the United States and (b) Hedging Agreements with Lender, and (c)
obligations insured by the Federal Deposit Insurance Corporation and obligations
unconditionally guaranteed by the United States; nor shall Borrowers lend or
otherwise advance funds to any Person except for advances made to employees,
officers and directors for travel and other expenses arising in the ordinary
course of business.
 
11.07
Fundamental Changes, Line of Business.

 
Borrowers shall not amend its organizational documents or change its Fiscal Year
or enter into a new line of business materially different from Borrowers’
current business unless (a) such actions would not have a Material Adverse
Effect; (b) such actions would not affect the obligations of Borrowers to
Lender; (c) such actions would not affect the interpretation of any of the terms
of the Loan Documents and (d) Lender has received ten (10) days prior written
notice of such amendment or change.
 
11.08
Equipment.

 
Borrowers shall not (a) permit any Equipment to become a Fixture to real
property unless such real property is owned by Borrowers and is subject to a
mortgage in favor of Lender, or if such real estate is leased, is subject to a
landlord’s agreement in favor of Lender on terms acceptable to Lender, or (b)
permit any Equipment to become an accession to any other personal property
unless such personal property is subject to a first priority lien in favor of
Lender.
 
11.09
Affiliate Transactions.

 
Except as set forth on Schedule 9.09 hereto, Borrowers shall not conduct, permit
or suffer to be conducted, transactions with Affiliates other than transactions
for the purchase or sale of Inventory or services in the ordinary course of
business pursuant to terms that are no less favorable to Borrowers than the
terms upon which such transactions would have been made had they been made to or
with a Person that is not an Affiliate.
 
11.10
Settling of Accounts.

 
Borrowers shall not settle or adjust any Account identified by Borrowers as an
Eligible Account or with respect to which the Account Debtor is an Affiliate
without the consent of Lender, provided, that following the occurrence and
during the continuance of an Event of Default, Borrowers shall not settle or
adjust any Account without the consent of Lender.
 
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11.11
Intentionally Omitted.

 
11.12
ERISA.

 
Except as disclosed to the Lender in writing prior to the date hereof, neither
the Borrowers nor any ERISA Affiliate will (a) adopt, create, assume or become a
party to any Pension Plan, (b) incur any obligation to contribute to any
Multiemployer Plan, (c) incur any obligation to provide post-retirement medical
or insurance benefits with respect to employees or former employees (other than
benefits required by law) or (d) amend any Plan in a manner that would
materially increase its funding obligations.
 
11.13
Subordinated Debt.

 
Borrowers shall not, and shall not permit any Subsidiary to make: (i) any
payment of principal of, or interest on, any of the Subordinated Debt, if a
Default or an Event of Default then exists hereunder or would result from such
payment; (ii) any payment of the principal or interest due on the Subordinated
Debt as a result of acceleration thereunder or a mandatory prepayment
thereunder; (iii) any amendment or modification of or supplement to the
documents evidencing or securing the Subordinated Debt; or (iv) payment of
principal or interest on the Subordinated Debt other than when due (without
giving effect to any acceleration of maturity or mandatory prepayment) and
expressly permitted under the terms of the Subordination Agreement.
 
12.
FINANCIAL COVENANTS.

 
Borrowers shall maintain and keep in full force and effect each of the financial
covenants set forth below:
 
12.01
Intentionally Omitted.

 
12.02
Fixed Charge Coverage.

 
Borrowers shall not permit Fixed Charge Coverage as of each date set forth below
to be less than the corresponding ratio for such date set forth below:
 
Date
 
Ratio
     
thirteen (13) week period ending April 3, 2010
twenty-six (26) week period ending July 3, 2010
thirty-nine (39) week period ending October 2, 2010
fifty-two (52) week period ending January 1, 2011
and each thirteen (13) week quarter end thereafter on a rolling twelve (12)
month basis.
 
1.05 to 1.0

 
12.03
Intentionally Omitted.

 
12.04
Intentionally Omitted.

 
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12.05
Intentionally Omitted.

 
12.06
Intentionally Omitted.

 
13.
DEFAULT AND REMEDIES.

 
13.01
Events of Default.

 
The occurrence of any one or more of the following events shall constitute an
“Event of Default” by Borrowers hereunder:
 
(a)           Payment.  The failure of Borrowers to pay when due, declared due,
or demanded by Lender, any of the Obligations; or
 
(b)           Breach of Loan Documents.  The failure of any Borrower to perform,
keep or observe any of the covenants, conditions, promises, agreements or
obligations of such Borrower under any of the Loan Documents; provided that any
such failure by Borrowers under Sections 10.02(a), (d), (e), (f), 10.03 and
10.09 of this Agreement shall not constitute an Event of Default hereunder until
the fifteenth (15th) day following the occurrence thereof; or
 
(c)           Breaches of Other Obligations.  The failure of any Borrower to
perform, keep or observe (after any applicable notice and cure period) any of
the covenants, conditions, promises, agreements or obligations of such Borrower
under any other agreement with any Person if such failure might have a Material
Adverse Effect; or
 
(d)           Breach of Representations and Warranties.  The making or
furnishing by any Borrower to Lender of any representation, warranty,
certificate, schedule, report or other communication within or in connection
with the Loan Documents or in connection with any other agreement between such
Borrower and Lender, which is untrue or misleading in any material respect as of
the date made; or
 
(e)           Loss of Collateral.  (i) The uninsured loss, theft, damage or
destruction of any of the Collateral, or (ii) the insured loss, theft, damage or
destruction of any of the Collateral in an amount in excess of One Hundred
Thousand and No/100 Dollars ($100,000.00) in the aggregate for all such events
during any year as determined by Lender in its sole discretion consistently
applied; or
 
(f)           Dispositions of Collateral.  Except as permitted by this
Agreement, the sale, lease, or furnishing under a contract of service of, any of
the Collateral; or
 
(g)           Levy, Seizure or Attachment.  The making or any attempt (which
attempt, as determined by Lender in its reasonable discretion, could have a
Material Adverse Effect) by any Person to make any levy, seizure or attachment
upon any of the Collateral; or
 
(h)           Bankruptcy or Similar Proceedings.  The commencement of any
proceedings in bankruptcy by or against any Borrower or for the liquidation or
reorganization of any Borrower, or alleging that such Borrower is insolvent or
unable to pay its debts as they mature, or for the readjustment or arrangement
of any Borrower’s debts, whether under the United States Bankruptcy Code or
under any other law, whether state or federal, now or hereafter existing, for
the relief of debtors, or the commencement of any analogous statutory or
non-statutory proceedings involving any Borrower and if any such proceeding, if
not commenced by any Borrower, consented to or acquiesced by any Borrower or
results in the entry of any order for relief, is not dismissed within thirty
(30) days of commencement; or

 
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(i)           Appointment of Receiver.  The appointment of a receiver or trustee
for any Borrower, for any of the Collateral or for any substantial part of any
Borrower’s assets or the institution of any proceedings for the dissolution, or
the full or partial liquidation, or the merger or consolidation, of any Borrower
which is a corporation, limited liability company or a partnership and such
receiver, trustee or proceeding shall not be discharged or dismissed within
thirty (30) days of appointment or commencement as applicable; or
 
(j)           Judgment.  The entry of any judgments or orders aggregating in
excess of One Hundred Thousand and No/100 Dollars ($100,000.00) against any
Borrower which remains unsatisfied or undischarged and in effect for thirty (30)
days after such entry without a stay of enforcement or execution; or
 
(k)           Dissolution of Borrower. The dissolution of any Borrower; or
 
(l)           Executive Malfeasance.  (i) The senior executive officer
responsible for day to day business activities of The Clark Group, Inc., either
(A) is or has been indicted for a felony offense under federal or state law
involving fraud, defalcation, corporate malfeasance or moral turpitude or (B)
has participated in the causation of an event of default in a past banking
relationship with a lender or other financial institutions, and (ii) the
Borrowers (A) fail to provide a senior executive officer within ninety (90) days
from the date of receipt of notice from the Lender and (B) thereafter fail to
repay all of the Obligations (other than the termination fee as set forth in
Section 4.05(c) hereof) and terminate this Agreement within ninety (90) days
from the date of receipt of notice from Lender provided however, this Section
13.01(l) shall not apply to all of the existing officers of The Clark Group, Inc
and Clark Holdings Inc. as of the date of this Agreement; or
 
(m)           Criminal Proceedings.  The institution in any court of a criminal
proceeding against any Borrower which would have a Material Adverse Effect; or
 
(n)           Change of Control.  A Change of Control shall occur; or
 
(o)           Material Adverse Change.  A Material Adverse Effect shall occur;
or
 
(p)           Other Indebtedness.  A material Default shall be made by any
Borrower (in its capacity as borrower, guarantor or otherwise) in any material
Indebtedness (other than the Loans), or if such Indebtedness shall be amended,
restated, modified, substituted, extended and renewed without the prior written
consent of Lender in each instance.

 
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13.02
Remedies.

 
(a)           Upon the occurrence and during the continuance of an Event of
Default described in Section 13.01(h) hereof, all of the Obligations shall
immediately and automatically become due and payable, without notice of any
kind.  Upon the occurrence of any other Event of Default, all Obligations may,
at the option of Lender, and without demand, notice or legal process of any
kind, be declared, and immediately shall become, due and payable.
 
(b)           Upon the occurrence and during the continuance of an Event of
Default, Lender may exercise from time to time any rights and remedies available
to it under the Uniform Commercial Code and any other applicable law in addition
to, and not in lieu of, any rights and remedies expressly granted in the Loan
Documents and all of Lender’s rights and remedies shall be cumulative and
non-exclusive to the extent permitted by law.  In particular, but not by way of
limitation of the foregoing, Lender may, without notice, demand or legal process
of any kind, (i) suspend, terminate or limit any further loans or other
extensions of credit under this Agreement and the other Loan Documents, and/or
(ii) take possession of any or all of the Collateral (in addition to Collateral
of which it already has possession), wherever it may be found, and for that
purpose may pursue the same wherever it may be found, and may enter onto any
premises of a Borrower where any of the Collateral may be, and search for, take
possession of, remove, keep and store any of the Collateral until the same shall
be sold or otherwise disposed of, and Lender shall have the right to store the
same at any premises of a Borrower without cost to Lender.  At Lender’s request,
Borrowers shall, at Borrowers’ expense, assemble the Collateral and make it
available to Lender at one or more places to be designated by Lender and
reasonably convenient to Lender and Borrowers.  Borrowers recognize that if
Borrowers fail to perform, observe or discharge any of their Obligations under
the Loan Documents, no remedy at law will provide adequate relief to Lender, and
agree that Lender shall be entitled to temporary and permanent injunctive relief
in any such case without the necessity of proving actual damages.  Any
notification of intended disposition of any of the Collateral required by law
will be deemed to be a reasonable authenticated notification of disposition if
given at least ten (10) days prior to such disposition and such notice shall (i)
describe Lender and Borrowers, (ii) describe the Collateral that is the subject
of the intended disposition, (iii) state the method of the intended disposition,
(iv) state that Borrowers are entitled to an accounting of the Obligations and
state the charge, if any, for an accounting and (v) state the time and place of
any public disposition or the time after which any private sale is to be
made.  Lender may disclaim any warranties that might arise in connection with
the sale, lease or other disposition of the Collateral and has no obligation to
provide any warranties at such time.  Any Proceeds of any disposition by Lender
of any of the Collateral may be applied by Lender to the payment of expenses in
connection with the Collateral, including, without limitation, legal expenses
and reasonable attorneys’ fees, and any balance of such Proceeds may be applied
by Lender toward the payment of such of the Obligations, and in such order of
application, as Lender may from time to time elect.
 
(c)           Without limiting the rights of Lender under applicable law, Lender
has a right of set-off, a lien against and a security interest in all property
of Borrowers now or at any time in Lender’s or any affiliate of Lender’s
possession in any capacity whatsoever, including but not limited to any balance
of any deposit, trust or agency account, or any other bank account, as security
for all Obligations.  At any time and from time to time following the occurrence
of a Default or an Event of Default, or event which, with the passage of time,
the giving of notice or both would become an Event of Default, Lender may
without notice or demand, set-off and apply or cause to be set-off or otherwise
applied any and all deposits at any time held and other indebtedness at any time
owing by Lender or any affiliate of Lender to or for the credit of any one or
more of the Borrowers against the Obligations.

 
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(d)           Lender shall have the right, but not the obligation, to continue
to extend the Revolving Loans during any continuing Event of Default without
waiving such Event of Default or the default remedies of Lender and on such
terms and conditions as Lender elects in its sole and absolute
discretion.  Without limitation to any of its default rights and remedies,
Lender may elect to continue to make the Revolving Loans with such a reduced
Maximum Revolving Loan Limit and with such reductions in the percentages set
forth in the definition of Borrowing Base as Lender determines to be in the
interest of Lender.
 
(e)           In addition to all other rights, options and remedies granted or
available to Lender under this Agreement or the other Loan Documents, or
otherwise available at law or in equity, upon or at any time after the
occurrence and during the continuance of an Event of Default, or any event which
with the giving of notice or the passage of time, or both, would become an Event
of Default, Lender may, in its sole and absolute discretion, (i) withhold or
cease making Loans or issuing Letters of Credit, (ii) commence accruing interest
on the Loans at a rate up to the Default Rate, or (iii) decrease the Maximum
Revolving Loan Limit and/or the rates of advance under the Borrowing Base.
 
14.
CONDITIONS PRECEDENT.

 
14.01
Conditions Precedent to Initial Loans.

 
The Lender’s obligation to fund the initial Loans, and to issue or cause to be
issued the initial Letter of Credit, is subject to the satisfaction or waiver on
or before the date hereof of the following conditions precedent:
 
(a)           Lender shall have received each of the agreements, opinions,
reports, approvals, consents, certificates and other documents set forth on the
closing delivery list attached hereto as Schedule 14.01-A in each case properly
executed by the appropriate party and in form and substance satisfactory to the
Lender;
 
(b)           Since December 31, 2009, no event shall have occurred which has
had or could reasonably be expected to have a Material Adverse Effect, as
determined by Lender in its sole discretion;
 
(c)           Lender shall have received payment in full of all fees and
expenses payable to it by Borrowers or any other Person in connection herewith,
on or before disbursement of the initial Loans hereunder;
 
(d)           As shown on Schedule 14.01-B, Lender shall have determined that
immediately after giving effect to (i) the making of the initial Loans,
including without limitation the Revolving Loans, if any, requested to be made
on the date hereof, (ii) the issuance of the initial Letter of Credit, if any,
requested to be made on such date, (iii) the payment of all fees due upon such
date and (iv) the payment or reimbursement by Borrowers of Lender for all
closing costs and expenses incurred in connection with the transactions
contemplated hereby, Borrowers have Excess Availability as of the date of this
Agreement of not less than Six Hundred Thousand and No/100 Dollars
($600,000.00); and

 
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(e)           The Borrowers shall have executed and delivered to Lender all such
other documents, instruments and agreements which Lender determines are
reasonably necessary to consummate the transactions contemplated hereby.
 
14.02
Conditions Precedent to All Loans.

 
The Lender’s obligation to make each Loan or to cause the issuance of a Letter
of Credit shall be subject to the further conditions precedent that:
 
(a)           the representations and warranties contained in Section 9 are
correct on and as of the date of such Loan or issuance of a Letter of Credit as
though made on and as of such date, except to the extent that such
representations and warranties relate solely to an earlier date; and
 
(b)           no event has occurred and is continuing, or would result from such
Loan or issuance of a Letter of Credit which constitutes an Event of Default.
 
15.
GENERAL PROVISIONS.

 
15.01
Indemnification.

 
Borrowers agree to defend (with counsel satisfactory to Lender), protect,
indemnify and hold harmless Lender, each affiliate or subsidiary of Lender, and
each of their respective shareholders, members, officers, directors, managers,
employees, attorneys and agents (each an “Indemnified Party”) from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or
nature (including, without limitation, the disbursements and the reasonable fees
of counsel for each Indemnified Party in connection with any investigative,
administrative or judicial proceeding, whether or not the Indemnified Party
shall be designated a party thereto), which may be imposed on, incurred by, or
asserted against, any Indemnified Party (whether direct, indirect or
consequential and whether based on any federal, state or local laws or
regulations, including, without limitation, securities laws and regulations,
Environmental Laws and commercial laws and regulations, under common law or in
equity, or based on contract or otherwise) in any manner relating to or arising
out of this Agreement or any other Loan Document, or any act, event or
transaction related or attendant thereto, the making or issuance and the
management of the Loans or any Letters of Credit or the use or intended use of
the proceeds of the Loans or any Letters of Credit; provided, however, that
Borrowers shall not have any obligation hereunder to any Indemnified Party with
respect to matters caused by or resulting from the willful misconduct or gross
negligence of such Indemnified Party. To the extent that the undertaking to
indemnify set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, Borrowers shall satisfy such undertaking
to the maximum extent permitted by applicable law.  Any liability, obligation,
loss, damage, penalty, cost or expense covered by this indemnity shall be paid
to each Indemnified Party on demand, and, failing prompt payment, shall,
together with interest thereon at the highest rate then applicable to Loans
hereunder from the date incurred by each Indemnified Party until paid by
Borrowers, be added to the Obligations of Borrowers and be secured by the
Collateral.  The provisions of this Section 15.01 shall survive the satisfaction
and payment of the other Obligations and the termination of this Agreement.

 
47

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15.02
Notice.

 
All written notices and other written communications with respect to this
Agreement shall be sent by ordinary, certified or overnight mail, by telecopy or
delivered in person, to the address, telefacsimile number, e-mail address or
telephone number specified for Lender or Borrowers, as applicable, on
Schedule 15.02.  Borrowers agree that notices and other communications to it
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by
Lender and such electronic communication shall have the same force and effect
that the same submissions would have had if they had been submitted in any other
applicable form authorized, required or contemplated by the Loan Documents.  All
notices shall be deemed received upon actual receipt thereof or refusal of
delivery.
 
15.03
Governing Law; Construction; Forum Selection.

 
(a)           THE LOAN DOCUMENTS SHALL BE GOVERNED AND CONTROLLED BY THE
INTERNAL LAWS OF THE STATE OF ILLINOIS AS TO INTERPRETATION, ENFORCEMENT,
VALIDITY, CONSTRUCTION, EFFECT, AND IN ALL OTHER RESPECTS, INCLUDING, WITHOUT
LIMITATION, THE LEGALITY OF THE INTEREST RATE AND OTHER CHARGES, EXCEPT FOR
PERFECTION OF THE SECURITY INTERESTS IN COLLATERAL LOCATED OUTSIDE OF THE STATE
OF ILLINOIS, WHICH SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE RELEVANT
JURISDICTION IN WHICH SUCH COLLATERAL IS LOCATED, OR AS OTHERWISE SET FORTH IN
ANY MORTGAGE.  If any provision of this Agreement shall be held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or remaining provisions of this Agreement.
 
(b)           To induce Lender to accept this Agreement, Borrowers irrevocably
agree that, subject to Lender’s sole and absolute election, ALL ACTIONS OR
PROCEEDINGS IN ANY WAY, MANNER OR RESPECT, ARISING OUT OF OR FROM OR RELATED TO
THE LOAN DOCUMENTS OR THE COLLATERAL SHALL BE LITIGATED IN COURTS HAVING SITUS
WITHIN THE CITY OF CHICAGO, STATE OF ILLINOIS.  BORROWER HEREBY CONSENT AND
SUBMIT TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURTS LOCATED WITHIN
SAID CITY AND STATE.  BORROWER HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL
PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON BORROWER BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO BORROWERS
AT THE ADDRESS SET FORTH FOR NOTICE IN THIS AGREEMENT AND SERVICE SO MADE SHALL
BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.  BORROWERS HEREBY
WAIVE ANY RIGHT THEY MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION
BROUGHT AGAINST ANY OF THE BORROWERS BY LENDER IN ACCORDANCE WITH THIS SECTION.

 
48

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15.04
Modification and Benefit of Agreement.

 
The Loan Documents may not be modified, altered or amended except by an
agreement in writing signed by Borrowers or such other Person who is a party to
such Loan Document and Lender.  Borrowers may not sell, assign or transfer the
Loan Documents or any portion thereof, including, without limitation, any of
Borrowers’ rights, titles, interest, remedies, powers or duties hereunder and
thereunder.  Borrowers hereby consent to Lender’s sale, assignment, transfer or
other disposition, at any time and from time to time hereafter, of the Loan
Documents or of any portion thereof, or participations therein, including,
without limitation, Lender’s rights, titles, interest, remedies, powers and/or
duties and agrees that each shall execute and deliver such documents as Lender
may request in connection with any such sale, assignment, transfer or other
disposition.
 
15.05
Headings of Subdivisions.

 
The headings of subdivisions in this Agreement are for convenience of reference
only, and shall not govern the interpretation of any of the provisions of this
Agreement.
 
15.06
Power of Attorney.

 
Each Borrower acknowledges and agrees that its appointment of Lender as its
attorney and agent-in-fact for the purposes specified in this Agreement is an
appointment coupled with an interest and shall be irrevocable until all of the
Obligations are satisfied and paid in full and this Agreement is terminated.
 
15.07
Confidentiality.

 
Lender hereby agrees to use commercially reasonable efforts to assure that any
and all information relating to Borrowers which is (a) furnished by Borrowers to
Lender (or to any affiliate of Lender); and (b) non-public, confidential or
proprietary in nature, shall be kept confidential by Lender or such affiliate in
accordance with applicable law; provided, however, that such information and
other credit information relating to Borrowers may be distributed by Lender or
such affiliate to Lender’s or such affiliate’s directors, managers, officers,
employees, attorneys, affiliates, assignees, participants, auditors, agents and
regulators, and upon the order of a court or other governmental agency having
jurisdiction over Lender or such affiliate, to any other party.  In addition
such information and other credit information may be distributed by Lender to
potential participants or assignees of any portion of the Obligations, provided,
that such potential participant or assignee agrees to follow the confidentiality
requirements set forth herein.  Borrowers and Lender further agree that this
provision shall survive the termination of this Agreement.  Notwithstanding the
foregoing, Borrowers hereby consent to Lender publishing a tombstone or similar
advertising material relating to the financing transaction contemplated by this
Agreement.
 
15.08
Counterparts.

 
The Loan Documents and any amendments, waivers, consents or supplements may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which, when so executed and delivered, shall be
deemed an original, but all of which counterparts together shall constitute but
one agreement.

 
49

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15.09
WAIVER OF JURY TRIAL; OTHER WAIVERS.

 
(a)           BORROWERS AND LENDER EACH HEREBY WAIVES ALL RIGHTS TO TRIAL BY
JURY IN ANY ACTION OR PROCEEDING WHICH PERTAINS DIRECTLY OR INDIRECTLY TO THE
LOAN DOCUMENTS, THE OBLIGATIONS, THE COLLATERAL, ANY ALLEGED TORTIOUS CONDUCT BY
BORROWERS OR LENDER OR WHICH, IN ANY WAY, DIRECTLY OR INDIRECTLY, ARISES OUT OF
OR RELATES TO THE RELATIONSHIP BETWEEN BORROWERS AND LENDER.  IN NO EVENT SHALL
LENDER BE LIABLE FOR LOST PROFITS OR OTHER SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES.
 
(b)           Borrowers hereby waive demand, presentment, protest and notice of
nonpayment, and further waives the benefit of all valuation, appraisal and
exemption laws.
 
(c)           Borrowers hereby waive the benefit of any law that would otherwise
restrict or limit Lender or any affiliate of Lender in the exercise of its
right, which is hereby acknowledged and agreed to, to set-off against the
Obligations, without notice at any time hereafter, any indebtedness, matured or
unmatured, owing by Lender or such affiliate of Lender to Borrowers, including,
without limitation any Deposit Account at Lender or such affiliate.
 
(d)           BORROWERS HEREBY WAIVE ALL RIGHTS TO NOTICE AND HEARING OF ANY
KIND PRIOR TO THE EXERCISE BY LENDER OF ITS RIGHTS TO REPOSSESS THE COLLATERAL
OF BORROWER WITHOUT JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON SUCH
COLLATERAL, PROVIDED THAT IN THE EVENT THAT LENDER SEEKS TO ENFORCE ITS RIGHTS
HEREUNDER BY JUDICIAL PROCESS OR SELF HELP, LENDER SHALL PROVIDE BORROWER WITH
SUCH NOTICES AS ARE REQUIRED BY LAW.
 
(e)           Lender’s failure, at any time or times hereafter, to require
strict performance by any or all of the Borrowers of any provision of the Loan
Documents shall not waive, affect or diminish any right of Lender thereafter to
demand strict compliance and performance therewith.  Any suspension or waiver by
Lender of an Event of Default under this Agreement or any default under any of
the other Loan Documents shall not suspend, waive or affect any other Event of
Default under this Agreement or any other default under any of the other Loan
Documents, whether the same is prior or subsequent thereto and whether of the
same or of a different kind or character.  No delay on the part of Lender in the
exercise of any right or remedy under any Loan Document shall preclude other or
further exercise thereof or the exercise of any right or remedy.  None of the
undertakings, agreements, warranties, covenants and representations of Borrowers
contained in the Loan Documents and no Event of Default under this Agreement or
default under any of the other Loan Documents shall be deemed to have been
suspended or waived by Lender unless such suspension or waiver is in writing,
signed by a duly authorized officer of Lender and directed to Borrowers
specifying such suspension or waiver.

 
50

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16.
JOINT AND SEVERAL LIABILITY.

 
(a)           Notwithstanding anything to the contrary contained herein, all
Obligations of each Borrower hereunder shall be joint and several obligations of
Borrowers.
 
(b)           Notwithstanding any provisions of this Agreement to the contrary,
it is intended that the joint and several nature of the Obligations of Borrowers
and the liens and security interests granted by Borrowers to secure the
Obligations, not constitute a “Fraudulent Conveyance” (as defined
below).  Consequently, Lender and Borrowers agree that if the Obligations of a
Borrower, or any liens or security interests granted by such Borrower securing
the Obligations would, but for the application of this sentence, constitute a
Fraudulent Conveyance, the Obligations of such Borrower and the liens and
security interests securing such Obligations shall be valid and enforceable only
to the maximum extent that would not cause such Obligations or such lien or
security interest to constitute a Fraudulent Conveyance, and the Obligations of
such Borrower and this Agreement shall automatically be deemed to have been
amended accordingly.  For purposes hereof, “Fraudulent Conveyance” means a
fraudulent conveyance under Section 548 of Chapter 11 of Title II of the United
States Code (11 U.S.C. § 101, et seq.), as amended (the “Bankruptcy Code”) or a
fraudulent conveyance or fraudulent transfer under the applicable provisions of
any fraudulent conveyance or fraudulent transfer law or similar law of any
state, nation or other governmental unit, as in effect from time to time.
 
(c)           Each Borrower assumes responsibility for keeping itself informed
of the financial condition of the other Borrower, and any and all endorsers
and/or guarantors of any instrument or document evidencing all or any part of
such other Borrower’s Obligations and of all other circumstances bearing upon
the risk of nonpayment by such other Borrowers of their Obligations and each
Borrower agrees that Lender shall not have any duty to advise such Borrower of
information known to Lender regarding such condition or any such circumstances
or to undertake any investigation not a part of its regular business
routine.  If Lender, in its sole discretion, undertakes at any time or from time
to time to provide any such information to a Borrower, Lender shall not be under
any obligation to update any such information or to provide any such information
to such Borrower on any subsequent occasion.
 
(d)           Lender is hereby authorized, without notice or demand and without
affecting the liability of a Borrower hereunder, to, at any time and from time
to time, (i) renew, extend, accelerate or otherwise change the time for payment
of, or other terms relating to another Borrower’s Obligations or otherwise
modify, amend or change the terms of any promissory note or other agreement,
document or instrument now or hereafter executed by a Borrower and delivered to
Lender; (ii) accept partial payments on a Borrower’s Obligations; (iii) take and
hold security or collateral for the payment of another Borrower’s Obligations
hereunder or for the payment of any guaranties of another Borrower’s Obligations
or other liabilities of another Borrower and exchange, enforce, waive and
release any such security or collateral; (iv) apply such security or collateral
and direct the order or manner of sale thereof as Lender, in its sole
discretion, may determine; and (v) settle, release, compromise, collect or
otherwise liquidate a Borrower’s Obligations and any security or collateral
therefor in any manner, without affecting or impairing the obligations of the
other Borrowers.  Lender shall have the exclusive right to determine the time
and manner of application of any payments or credits, whether received from a
Borrower or any other source, and such determination shall be binding on such
Borrower.  All such payments and credits may be applied, reversed and reapplied,
in whole or in part, to any of a Borrower’s Obligations as Lender shall
determine in its sole discretion without affecting the validity or
enforceability of the Obligations of the other Borrowers.

 
51

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(e)           Each Borrower hereby agrees that, except as hereinafter provided,
its obligations hereunder shall be unconditional, irrespective of (i) the
absence of any attempt to collect Borrower’s Obligations from any Borrower or
any guarantor or other action to enforce the same; (ii) the waiver or consent by
Lender with respect to any provision of any instrument evidencing Borrowers’
Obligations, or any part thereof, or any other agreement heretofore, now or
hereafter executed by a Borrower and delivered to Lender; (iii) failure by
Lender to take any steps to perfect and maintain its security interest in, or to
preserve its rights to, any security or collateral for Borrowers’ Obligations;
(iv) the institution of any proceeding under the Bankruptcy Code, or any similar
proceeding, by or against a Borrower or Lender’s election in any such proceeding
of the application of Section 1111(b)(2) of the Bankruptcy Code; (v) any
borrowing or grant of a security interest by any Borrower as
debtor-in-possession, under Section 364 of the Bankruptcy Code; (vi) the
disallowance, under Section 502 of the Bankruptcy Code, of all or any portion of
Lender’s claim(s) for repayment of any of Borrowers’ Obligations; or (vii) any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor.
 
No payment made by or for the account of a Borrower including, without
limitations, (i) a payment made by such Borrower on behalf of another Borrower’s
Obligations or (ii) a payment made by any other person under any guaranty, shall
entitle such Borrower, by subrogation or otherwise, to any payment from such
other Borrower or from or out of such other Borrower’s property and such
Borrower shall not exercise any right or remedy against such other Borrower or
any property of such other Borrower by reason of any performance of such
Borrower of its joint and several obligations hereunder.
 
[signature pages to follow]

 
52

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first written above.
 
BORROWERS:
 
CLARK HOLDINGS INC.,
a Delaware Corporation

By: 
/s/ Stephen M. Spritzer

Name: 
Stephen M. Spritzer

Title: 
VP and Treasurer

THE CLARK GROUP, INC.,
a Delaware Corporation

By: 
/s/ Stephen M. Spritzer

Name: 
Stephen M. Spritzer

Title: 
VP and Treasurer

CLARK DISTRIBUTION SYSTEMS, INC.,
a Delaware Corporation

By: 
/s/ Stephen M. Spritzer

Name: 
Stephen M. Spritzer

Title: 
VP and Treasurer

HIGHWAY DISTRIBUTION SYSTEMS, INC.,
a Delaware Corporation

By: 
/s/ Stephen M. Spritzer

Name: 
Stephen M. Spritzer

Title: 
VP and Treasurer

[signature page to follow]

 
53

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CLARK WORLDWIDE TRANSPORTATION, INC.,
a Pennsylvania Corporation

By: 
/s/ Stephen M. Spritzer

Name: 
Stephen M. Spritzer

Title: 
VP and Treasurer

EVERGREEN EXPRESS LINES, INC.,
a Pennsylvania Corporation

By: 
/s/ Stephen M. Spritzer

Name: 
Stephen M. Spritzer

Title: 
VP and Treasurer

 
LENDER:
 
COLE TAYLOR BANK,
an Illinois banking corporation

By: 
/s/ Jeffrey Seiden

Name: 
Jeffrey Seiden

Title: 
SVP

 
54

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EXHIBIT A
 
ADVANCE REQUEST FORM
 
Cole Taylor Bank
9550 W. Higgins Road
Rosemont, Illinois 60018
Attention:  ___________
 
Ladies and Gentlemen:
 
We refer to the financing arrangements between ____________, a _______
corporation (the “Borrower”) and Cole Taylor Bank (“Lender”) pursuant to various
documents, instruments and agreements (the “Loan Documents”).
 
Borrower hereby gives notice to Lender that on ___________, ____________
Borrower desires to borrow an aggregate principal amount of $_______________ as
revolving loans.  Such revolving loans consist of the following:
 
Checks presented for payment
  $    
Wires
       
Salary Payroll
       
Hourly Payroll
       
Other
       
Other
       
Totals
  $    

 
Such revolving loans shall be placed in our operating account number
_________________ at Lender.  Additionally, Borrower hereby requests that the
following amounts be sent from the operating account by wire transfer to the
accounts set forth below, in the amounts set forth below:
 
Payment Instructions
 
Amount
1.
   
$_________________
                       
2.
   
$_________________
                       

 
Lender has offered and recommended to Borrower, security procedures for Borrower
to follow in connection with originating wire transfers and requesting loans
which Borrower has waived pursuant to a previously executed waiver.

 

--------------------------------------------------------------------------------

 
 
[include if applicable: This notice constitutes a written confirmation of a
telecopy/ electronic mail request made by ________________ to _______________ on
_______________, __________]
 
Sincerely,
           
By
 

Print Name 
 

Title 
 

 

--------------------------------------------------------------------------------

 

EXHIBIT B
 
FORM OF COMPLIANCE CERTIFICATE
 
Compliance Certificate
 
To:
 
Cole Taylor Bank
Date:
 
_____________________, 20___
Subject:
 
[Borrower]

 
Financial Statements
 
In accordance with our Credit and Security Agreement dated as of ________,
20____, as amended, modified, extended, renewed, supplemented or restated (the
“Credit Agreement”), attached are the financial statements of _____________
(“Borrower[s]”) of and for the [month] [fiscal quarter] ended _______________
____, 20____ (the “Reporting Date”) and the year-to-date period then ended (the
“Current Financials”) required to be delivered pursuant to Section 7.03 of the
Credit Agreement.  All terms used in this certificate have the meanings given in
the Credit Agreement.
 
The Borrower[s] certifies that the Current Financials have been prepared in
accordance with GAAP and fairly present in all material respects the
consolidated financial condition of the Borrower as of the date thereof and in a
manner consistent with prior periods.
 
Defaults. (Check one):
 
The Borrower[s] further certifies that:
 
 
·
Except as previously reported in writing to the Lender, there exists no event or
circumstance which is or which with the passage of time, the giving of notice,
or both would constitute an Event of Default, as that term is defined in the
Agreement, or, if such an event of circumstance exists, a writing attached
hereto specifies the nature thereof, the period of existence thereof and the
action that Borrower[s] has taken or proposes to take with respect thereto..

 
 
·
There exists no event or circumstance which is or which with the passage of
time, the giving of notice, or both would constitute an Event of Default, as
that term is defined in the Agreement, or, if such an event of circumstance
exists, a writing attached hereto specifies the nature thereof, the period of
existence thereof and the action that Borrower[s] has taken or proposes to take
with respect thereto.

 
Representations and Warranties:
 
The Borrower[s] further certifies that each of the representations and
warranties made by the Borrower[s], any Subsidiary and/or any Owner of the
Borrower[s] in the Credit Agreement and/or in any other Loan Document are true
and correct in all material respects on and as of the date of this Compliance
Certificate as if made on and as of the date of this Compliance Certificate (and
for purposes of this Compliance Certificate, the representations and warranties
made by the Borrower[s] in Section 9.01 of the Credit Agreement shall be deemed
to refer to the financial statements of the Borrower[s] delivered to the Lender
with this Compliance Certificate).

 

--------------------------------------------------------------------------------

 
 
Financial Covenants. The Borrower further certifies as follows:
 
1.           Minimum Fixed Charge Coverage. Pursuant to Section 12.02 of the
Credit Agreement, as of the Reporting Date, the Borrowers’ Fixed Charge Coverage
was _____ to 1.00 which  satisfies  does not satisfy the requirement that such
ratio be no less than [____ to 1.00 on the Reporting Date.] [_ the applicable
ratio set forth in the table below on the Reporting Date:
 
Period
 
Minimum Fixed Charge
Coverage Ratio
Through
 
_____ to 1.00
Through
 
_____ to 1.00
Through
 
_____ to 1.00
Through
 
_____ to 1.00
 
  
 

 
Attached hereto are all relevant facts in reasonable detail to evidence, and the
computations of the financial covenants referred to above. These computations
were made in accordance with GAAP, subject to normal year-end adjustments and
absence of footnotes.
 

 
 
 , 
a
   

By 
 

Name 
 

Title 
 

 

--------------------------------------------------------------------------------

 

EXHIBIT C
 
FORM OF GRANT OF SECURITY INTEREST IN TRADEMARKS AND PATENTS
 
GRANT OF SECURITY INTEREST IN TRADEMARKS AND PATENTS
 
WHEREAS, ______________________, a ____________ [corporation/ limited liability
company] ("Grantor") owns the trademarks, trademark registrations, trademark
applications, and any and all goodwill associated therewith, and the patents and
patent applications, in each case set forth on Schedule A and Schedule B
attached hereto; and
 
WHEREAS, COLE TAYLOR BANK, an Illinois banking corporation (the “Grantee”),
desires to acquire a security interest in, and lien on, all of Grantor’s right,
title and interest in and to Grantor’s trademarks, trademark registrations,
trademark applications and any and all goodwill associated therewith and patents
and patent applications; and
 
WHEREAS, the Grantor is willing to grant to the Grantee a security interest in
and lien upon the trademarks, trademark registrations, trademark applications
and any and all goodwill associated therewith and patents and patent
applications described above.
 
NOW, THEREFORE, for good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, and subject to the terms and conditions of the
Credit and Security Agreement, dated as of ________________, 20____, between the
Grantor and the Grantee (as amended from time to time, the “Credit Agreement”),
the Grantor hereby grants to the Grantee a security interest in, and a lien
upon, all of Grantor’s right, title and interest in and to (i) the trademarks,
trademark registrations, trademark applications, and any and all goodwill
associated therewith (the “Marks”) set forth on Schedule A attached hereto,
(ii) the patents and patent applications (the “Patents”) set forth on Schedule B
attached hereto, in each case together with (iii) all Proceeds (as such term is
defined in the Credit Agreement) of the Marks, (iv) all of the goodwill of the
businesses with which the Marks are associated, and (v) all causes of action,
past, present and future, for infringement, misappropriation, or dilution of any
of the Marks and/or Patents or unfair competition regarding the same.
 
This GRANT OF SECURITY INTEREST is made to secure the satisfactory performance
and payment of all the Obligations (as such term is defined in the Credit
Agreement) of the Grantor and shall be effective as of the date of the Credit
Agreement.
 
This Grant of Security Interest has been granted in conjunction with the
security interest granted to Grantee under the Credit Agreement.  The rights and
remedies of the Grantee with respect to the security interest granted herein are
without prejudice to, and are in addition to those set forth in the Credit
Agreement, all terms and provisions of which are incorporated herein by
reference.  In the event that any provisions of this Grant of Security Interest
are deemed to conflict with the Credit Agreement, the provisions of the Credit
Agreement shall govern.
 
[signature page to follow]

 

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the undersigned have executed this Grant of Security
Interest as of the ____ day of _____________, 20___.
 
GRANTOR:
 

 
 
 , 
a
   

By 
 

Name 
 

Title 
 

 
GRANTEE:
 
COLE TAYLOR BANK,
an Illinois banking corporation
 
By
   

Print Name
   

Title
   

 
STATE OF
 
   
)
       
)
COUNTY OF
     
)

 
On this ____ day of _______________, 20__, before me personally came
______________, to me known, who, being by me duly sworn did depose and say that
he is the _____________ of ______________________, the company described in and
which executed the foregoing instrument, and that he signed his name thereto by
like order.
 
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal in
the County and State aforesaid, the day and year first above written.
 

   
Notary Public

 
My Commission Expires: ____________________
 
STATE OF
 
   
)
       
)
COUNTY OF
     
)

 
On this ____ day of ______________, 20__, before me personally came
___________________, to me known, who, being by me duly sworn did depose and say
that he is a ______________ of __________________________________, the company
described in and which executed the foregoing instrument and that she signed his
name thereto by like order.
 
 
 

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal in
the County and State aforesaid, the day and year first above written.
 

     
Notary Public

 
My Commission Expires:                                              

 

--------------------------------------------------------------------------------

 

Schedule A - Trademarks
 
Country
 
Trademark
 
Registration #
 
Issue Date
 
Owner
                                   

 

--------------------------------------------------------------------------------

 

Schedule B – Patents
 
Country
 
Patent Title
 
Patent #/
(Application #)
 
Issue Date/
(File Date)
 
Owner
                                   

 

--------------------------------------------------------------------------------

 

EXHIBIT D
 
FORM OF GRANT OF SECURITY INTEREST IN COPYRIGHTS
 
GRANT OF SECURITY INTEREST IN COPYRIGHTS
 
WHEREAS, ______________________, a ____________ [corporation/ limited liability
company] (“Grantor”) owns the copyrights and associated copyright registrations
and pending applications for registration set forth on Schedule A attached
hereto; and
 
WHEREAS, COLE TAYLOR BANK, an Illinois banking corporation (the “Grantee”),
desires to acquire a security interest in, and lien on, all of Grantor’s right,
title and interest in and to Grantor’s copyrights and copyright registrations
and applications therefor; and
 
WHEREAS, the Grantor is willing to grant to the Grantee a security interest in
and lien upon the copyrights and copyright registrations and applications
therefor described above.
 
NOW, THEREFORE, for good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, and subject to the terms and conditions of the
Credit and Security Agreement, dated as of ____________, 20___, between the
Grantor and the Grantee (as amended from time to time, the “Credit Agreement”),
the Grantor hereby grants to the Grantee a security interest in, and a lien
upon, all of Grantor’s right, title and interest in and to Grantor’s copyrights
and copyright registrations and applications more particularly set forth on
Schedule A attached hereto (the “Copyrights”), together with (i) all Proceeds
(as such term is defined in the Credit Agreement referred to below) of the
Copyrights, and (ii) all causes of action, past, present and future, for
infringement of any Copyright.
 
This GRANT OF SECURITY INTEREST is made to secure the satisfactory performance
and payment of all the Obligations (as such term is defined in the Credit
Agreement) of the Grantor and shall be effective as of the date of the Credit
Agreement.
 
This Grant of Security Interest has been granted in conjunction with the
security interest granted to Grantee under the Credit Agreement.  The rights and
remedies of the Grantee with respect to the security interest granted herein are
without prejudice to, and are in addition to those set forth in the Credit
Agreement, all terms and provisions of which are incorporated herein by
reference.  In the event that any provisions of this Grant of Security Interest
are deemed to conflict with the Credit Agreement, the provisions of the Credit
Agreement shall govern.
 
[signature page to follow]

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the undersigned have executed this Grant of Security
Interest as of the ____ day of ____________, 20___.
 
GRANTOR:
 

 
,
a
   

 
By
   
Name
   
Title
   

 
GRANTEE:
 
COLE TAYLOR BANK,
an Illinois banking corporation
 
By
   

Print Name
   

Title
   

 
STATE OF
 
)
   
)
COUNTY OF
 
)
     

On this ____ day of _______________, 20__, before me personally came
______________, to me known, who, being by me duly sworn did depose and say that
he is the _____________ of ______________________, the company described in and
which executed the foregoing instrument, and that he signed his name thereto by
like order.
 
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal in
the County and State aforesaid, the day and year first above written.
 

     
Notary Public

 
My Commission Expires:                                                        
 
STATE OF
 
)
   
)
COUNTY OF
 
)
     

 

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On this ____ day of ______________, 20__, before me personally came
___________________, to me known, who, being by me duly sworn did depose and say
that he is a ______________ of Cole Taylor Bank, the company described in and
which executed the foregoing instrument and that she signed his name thereto by
like order.
 
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal in
the County and State aforesaid, the day and year first above written.
 

     
Notary Public

 
My Commission Expires:                                                          

 

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SCHEDULE A
 
COPYRIGHTS
 
COPYRIGHT
 
REGISTRATION NUMBER
           

 
 

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