exv10w7






Exhibit 10.7



First Amended and Restated Loan Agreement




     This First Amended and Restated Loan Agreement (“Agreement”) dated as of March 5, 2008, is
between The F&M Bank & Trust Company (“Lender”), American Locker Group, Incorporated, a Delaware
corporation (“Borrower”), and Altreco, Incorporated, a Delaware corporation (the “Guarantor”).



Recitals




     A. On or about March 5, 2007, at the request of Borrower and Guarantor, Lender extended to
Borrower a revolving line of credit loan (the “Loan”) in the principal amount of up to Seven
Hundred Fifty Thousand and No/100 Dollars ($750,000.00).



     B. The Loan has matured, and Borrower and Guarantor have requested Lender to renew, modify,
and extend the Loan for one additional year.



     C. As an accommodation to Borrower and Guarantor, Lender has agreed to renew, modify, and
extend the Loan for one additional year, subject to the following terms and conditions.



Agreements




     Now, Therefore, in consideration of the premises and the mutual covenants herein contained,
the parties hereto agree as follows:



1. Article

Definitions




     .1. Definitions. As used in this Agreement, the following terms have the following
meanings:



     (1) “Account Receivable” or “Accounts Receivable” means all of Borrower’s now owned and
hereafter acquired, accounts, accounts receivable (whether or not earned by performance), right to
payment of any kind, proceeds of any letters of credit naming Borrower as beneficiary, contract
rights, chattel paper, instruments, documents and all other forms of obligations at any time owing
to Borrower, all guaranties and other security therefor, whether secured or unsecured, all
merchandise returned to or repossessed by Borrower, and all rights of stoppage in transit and all
other rights or remedies of an unpaid vendor, lienor or secured party. Accounts Receivable include
all now owned or hereafter acquired accounts, instruments and general intangibles, all rights,
remedies, guaranties, security interests and liens, all records and other property evidencing any
and all proceeds which relating to or are associated with such Accounts Receivable.



     (2) “Affiliate” means any Person directly or indirectly controlling, controlled by, or under
common control with Borrower.



f&m bank 1\119la

First Amended and Restated Loan Agreement — Page 1




 









 








     (3) “Borrowing Base” means the sum of eighty percent (80%) of the aggregate amount of
Eligible Accounts Receivable, plus fifty percent (50%) of the book value of Inventory as
determined by GAAP.



     (4) “Borrowing Base Certificate” means the Borrowing Base Certificate shown on Exhibit “A”
attached hereto.



     (5) “Business Day” means a day when Lender is open for business.



     (6) “Collateral” has the meaning specified in Section 4.1.



     (7) “Debt” means for any Person: (i) all indebtedness, whether or not represented by bonds,
debentures, notes or other evidences of indebtedness, for the repayment of money borrowed; (ii) all
indebtedness representing deferred payment of the purchase price of property or assets; (iii) all
indebtedness under any lease which, in conformity with GAAP, is required to be capitalized for
balance sheet purposes; (iv) all indebtedness under guaranties, endorsements, assumptions or other
contingent obligations, in respect of, or to purchase or otherwise acquire, indebtedness to others;
and (v) all indebtedness secured by a Lien existing on property owned, subject to such Lien,
whether or not the indebtedness secured thereby shall have been assumed by the owner thereof.



     (8) “Deed of Trust” means the Deed of Trust, Security Agreement and Assignment of Rents,
Leases, Incomes and Agreements (Second Lien) executed by Guarantor and Borrower to J. Schaad Titus,
Trustee, for the benefit of Lender and encumbering, among other things, the certain real property
owned by Guarantor and situated in the City of Grapevine, Tarrant County, Texas, as more
particularly described on Exhibit “A” attached to said Deed of Trust, as the same may be amended,
supplemented or modified from time to time.



     (9) “Eligible Accounts Receivable” means Accounts Receivable arising in the ordinary course of
Borrower’s business from the sale of goods or rendition of services, which Lender, in its Permitted
Discretion, shall deem eligible based on such considerations as Lender may from time to time deem
appropriate. Without limiting the foregoing, an Account Receivable shall not be deemed to
be an Eligible Accounts Receivable if (i) the account debtor has failed to pay the Account
Receivable within a period of ninety (90) days after invoice date, to the extent of any amount
remaining unpaid after such period; (ii) the account debtor has failed to pay more than 25% of all
outstanding Accounts Receivable owed by it to Borrower within ninety (90) days after invoice date;
(iii) the account debtor is an Affiliate of Borrower; (iv) the goods relating thereto are placed on
consignment, guaranteed sale, “bill and hold,” “COD” or other terms pursuant to which payment by
the account debtor may be conditional; (v) the account debtor is not located in the United States
or Canada, unless the Account Receivable is supported by a letter of credit or other form of
guaranty or security, in each case in form and substance satisfactory to Lender; (vi) Borrower is
or may become liable to the account debtor for goods sold or services rendered by the account
debtor to Borrower; (vii) the account debtor’s total obligations to Borrower exceed 25% of all
Eligible Accounts Receivable, to the extent of such excess;
(vii) the account debtor disputes liability or makes any claim with respect thereto (up to the
amount of such liability or claim), or is subject to any insolvency or bankruptcy proceeding, or
becomes insolvent, fails or goes out of a material portion of its business; (ix) the amount thereof
consists of late charges or finance charges; (x) the amount thereof consists of a credit balance
more than ninety (90) days past due; ((xi) the invoice constitutes a progress billing on a project
not yet completed, except that the final billing at such time as



First Amended and Restated Loan Agreement — Page 2




 









 







the matter has been completed and delivered to the customer may be deemed an Eligible Accounts Receivable; (xii) the amount thereof
is not yet represented by an invoice or bill issued in the name of the applicable account debtor;
(xiii the amount thereof is denominated in or payable with any currency other than U.S. Dollars; or
(xiv) such Account Receivable is not at all times subject to Lender’s duly perfected first priority
security interest.




     (10) “EBITDA” means the earnings before interest expense, taxes, depreciation and
amortization, plus non-recurring professional fees and other non-recurring adjustments as
determined by Lender in its sole discretion.



     (11) “Equipment” means any tangible assets used in Borrower’s business including, but not
limited to equipment, machinery, electronics and tools.



     (12) “Event of Default” has the meaning specified in Section 9.1.



     (13) “Guaranty” means the Guaranty Agreement executed by Guarantor in favor of Lender,
executed in connection with the Loan, as the same may be amended, supplemented, or modified from
time to time.



     (14) “Inventory” means all of Borrower’s now owned and hereafter acquired goods, merchandise
or other personal property, wherever located, to be furnished under any contract of service or held
for sale or lease, all raw materials, work in process, finished goods and materials and supplies of
any kind, nature or description which are or might be used or consumed in Borrower’s business or
used in connection with the manufacture, packing, shipping, advertising, selling or finishing of
such goods, merchandise or other personal property, and all documents of title or other documents
representing them.



     (15) “Lien” means any lien, mortgage, security interest, tax lien, pledge, encumbrance, or
conditional sale or title retention agreement, or any other interest in property designed to secure
the repayment of Debt or any other obligation, whether arising by agreement, operation of law, or
otherwise.



     (16) “Loan” means the loan in the original principal amount of up to Seven Hundred Fifty
Thousand and No/100 Dollars ($750,000.00), or so much thereof as may be advanced and outstanding
and unpaid, to be made by Lender to Borrower pursuant to Article 2.



     (17) “Loan Agreement Rider” means the Loan Agreement Rider executed by Borrower, Guarantor and
Lender executed in connection with the Loan, as the same may be amended, supplemented or modified
from time to time.



     (18) “Loan Documents” means this Agreement, the Note, the Guaranty, the Security Agreement,
the UCC-1 Financing Statement, the Deed of Trust, the Loan Agreement Rider, and all other
promissory notes, pledge agreements, guaranties, deeds of trust, security agreements, and other
instruments, documents and agreements executed and delivered by Borrower or Guarantor pursuant to
or in connection with this Agreement and any future amendments hereto or thereto. All such Loan
Documents shall be in form, substance and content in all respects satisfactory to Lender.



     (19) “Lockbox Account” means the bank account established under the Lockbox Agreement.



First Amended and Restated Loan Agreement — Page 3





 









 








     (20) “Lockbox Agreement” means an agreement between Lender and Borrower governing the
Lockbox Account with Lender titled in the name of Borrower which shall provide Lender with a
security interest in and exclusive domain and control over such lockbox (and/or any related
depository account) and all cash and other items received or deposited therein.



     (21) “Note” means the Revolving Line of Credit Promissory Note (Renewal) of even date
herewith, executed or to be executed by Borrower, payable to the order of Lender in the principal
amount of the Loan and all extensions, renewals and modifications thereof.



     (22) “Obligated Party” means Borrower, Guarantor and any Person who is or becomes party to any
agreement that guarantees or secures payment and performance of the Obligations or any part
thereof.



     (23) “Obligations” means all obligations, indebtedness and liabilities of any Obligated Party
to Lender, now existing or hereafter created, acquired or incurred, whether direct, indirect,
primary or secondary, related, unrelated, fixed, contingent, liquidated, unliquidated, joint,
several, or joint and several, regardless of whether such present or future indebtedness,
obligations and liabilities may, prior to their acquisition by any Obligated Party, be or have been
in favor of some other person or have been acquired by Obligated Party in a transaction with one or
more borrowers, together with any and all renewals and extensions of such indebtedness, obligations
and liabilities, including, without limitation, the obligations, indebtedness and liabilities of
Borrower and/or Guarantor under this Agreement, the Note, the Term Note, and the other Loan
Documents, and all interest accruing thereon and all attorneys’ fees and other expenses incurred in
the enforcement or collection thereof.



     (24) “Permitted Discretion” means Lender’s judgment exercised in good faith based
upon its
consideration of any factor which Lender believes in good faith: (i) will or could materially
adversely affect the value of any Collateral, the enforceability or priority of Lender’s liens
thereon or the amount which Lender would be likely to receive (after giving consideration to delays
in payment and costs of enforcement) in the liquidation of such Collateral; (ii) suggests that any
collateral report or financial information delivered to Lender by any Person on behalf of the
Borrower is incomplete, inaccurate or misleading in any material respect; (iii) materially
increases the likelihood of a bankruptcy,
reorganization or other insolvency proceeding involving the Borrower, any Guarantor or any of the
Collateral, or (iv) creates or reasonably could be expected to create an Event of Default. In
exercising such judgment, Lender may consider such factors already included in or tested by the
definition of Eligible Account Receivables or Eligible Inventory, as well as any of the following:
(i) the financial and business climate of the Borrower’s industry and general macroeconomic
conditions, (ii) changes in collection history and dilution with respect to the Accounts
Receivable, (iii) changes in demand for, and pricing of, Inventory, (iv) changes in any
concentration of risk with respect to Receivables and/or Inventory, and (v) any other factors that
change the credit risk of lending to the Borrower on the security of the Receivables and Inventory.
The burden of establishing lack of good faith hereunder shall be on the Borrower



     (25) “Permitted Liens” means (i) security interests securing purchase money debt for the
acquisition or lease of equipment used in the ordinary course of Borrower’s business, not to exceed
$100,000.00 in the aggregate, and which do not affect any part of the real estate securing the
payment



First Amended and Restated Loan Agreement — Page 4




 









 







and performance of the Obligations, and (ii) liens or security interests arising for
non-delinquent taxes not yet due and payable.




     (26) “Person” means any individual, corporation, business trust, association, company,
partnership, joint venture or other entity.



     (27) “Reserves” means as of any date of determination, such amounts as Lender may from time
to time establish and revise in its Permitted Discretion reducing the loan limits which would
otherwise be available to Borrower: (a) to reflect events, conditions, contingencies or risks
which, as determined by Lender in good faith, do or may materially affect either (i) the Collateral
or any other property which is security for the Obligations or its value, (ii) the assets, business
or prospects of Borrower or any Guarantor or (iii) the security interests and other rights of
Lender in the Collateral (including the enforceability, perfection and priority thereof) or (b) to
reflect Lender’s good faith belief that any collateral report or financial information furnished by
or on behalf of Borrower or any Guarantor to Lender is or may have been materially incomplete,
inaccurate or misleading in any material respect or (c) in respect of any state of facts which
Lender determines in good faith constitutes an Event of Default or may, with notice or passage of
time or both, constitute an Event of Default.



     (28) “Security Agreement” means the Security Agreement executed by the Borrower in favor of
Lender in connection with the Loan, as the same may be amended, supplemented or modified from time
to time.



     (29) “Subsidiary” or “Subsidiaries” means any corporation, general partnership or limited
partnership of which more than fifty percent (50%) of the issued and outstanding securities or
partnership interests, as the case may be, having ordinary voting power for the election of a
majority of directors or managing partners, as the case may be, is owned or controlled, directly or
indirectly, by Borrower, Borrower and one or more other Subsidiaries, or by one or more other
Subsidiaries.



     (30) “Term Loan Agreement” means the Loan Agreement Note dated March 7, 2007, by and between
Borrower, Guarantor and Lender executed in connection with and pertaining to the Term Note.



     (31) “Term Note” means the Promissory Note dated March 7, 2007, executed by Borrower, payable
to the order of Lender in the principal amount of $2,200,000.00, and all extensions, renewals and
modifications thereof.



     1..2. Other Definitional Provisions. All definitions contained in this
Agreement are equally applicable to the singular and plural forms of the terms defined. The words
“hereof,” “herein” and “hereunder” and words of similar import referring to this Agreement refer to
this Agreement as a whole and not to any particular provision of this Agreement. Unless otherwise
specified, all article and section references pertain to this Agreement. All accounting terms not
specifically defined herein shall be construed in accordance with and determined by generally
accepted accounting principles (“GAAP”).



Article 2.

Loan




First Amended and Restated Loan Agreement — Page 5




 









 








     2..1. Advance Limit and Borrowing Base. Subject to the terms and conditions of this
Agreement Lender agrees to extend the Loan to Borrower in one or more advances from time to time
from the date hereof. Borrower must comply with all of the provisions in this Agreement,
including, without limitation, the provisions of Article 4. prior to Lender making an advance in
conjunction with the Loan. The outstanding principal balance of the Loan shall not exceed the
lesser of (i) the Borrowing Base or (ii) $750,000.00, subject to any Reserves. In the event
the outstanding principal balance of the Loan shall at any one time exceed the lesser of the
$750,000.00, or the Borrowing Base, in either case, after accounting for Reserves, Borrower agrees
to forthwith reduce the outstanding principal amount of the Note, within five (5) days after demand
is made by Lender, to bring such outstanding balance into compliance with the lesser of
$750,000.00, or the Borrowing Base. With each draw request Borrower shall execute and deliver
to Lender a Borrowing Base Certificate. Notwithstanding the forgoing to the contrary, Lender has
the right, but not the obligation, to make advances of principal under the Loan in excess of the
limits described above to pay any portion of the Obligations that may be due and owing at any time
under the Note or the Term Note.



     2..2. Repayment of Note. The obligation of Borrower to repay the Loan shall be
evidenced by the Note executed by Borrower, payable to the order of Lender, in the principal amount
of the Loan and dated the date of the making of the Loan.



     2..3. Revolving Indebtedness. It is contemplated that the Loan shall be revolving in
nature, in that principal amounts may be advanced thereunder, repaid and readvanced from time to
time during the term of the Loan. It is further contemplated by the parties that disbursements
will be made for working capital purposes of Borrower, repaid partially and readvanced as deposits
are made under the Lockbox Agreement and readvanced under the terms of the Agreement. It is the
intent of the parties that this Agreement and the other Loan Documents shall remain in full force
and effect and shall govern the agreements of the parties notwithstanding the fact that the Loan
may be paid down to a zero principal balance. It is understood and agreed that notwithstanding
such release, substitution and replacement of collateral, the Loan Documents shall remain in full
force and effect and unchanged.



     2..4. Use of Proceeds of Loan. The proceeds of the Loan shall be used by Borrower as
working capital for the Borrower’s business.



Article 3.

Payments




     3..1. Principal Payments. Except where evidenced by notes or other instruments issued
or made by Borrower to Lender specifically containing payment provisions which are in conflict with
this Section 3..1 (in which event the conflicting provisions of said notes or other instruments
shall govern and control), that portion of the Obligations consisting of principal payable on
account of the Loan shall be payable by Borrower to Lender immediately upon the earliest of (i) the
receipt by Lender or Borrower of any proceeds of or income from any of the Collateral, to the
extent of said proceeds, (ii) the occurrence of an Event of Default in consequence of which Lender
elects to accelerate the maturity and payment of such loans, (iii) any termination of this
Agreement; provided, however, that any overadvance or overline shall be payable on demand pursuant
to the provisions of Section 2..1. hereof., or (iv) when called for in the Loan Documents.



First Amended and Restated Loan Agreement — Page 6





 









 








     3..2. Interest Payments. Accrued but unpaid interest shall be due and payable as set
forth in the Note.



     3..3. Collections. Until Lender notifies Borrower in writing to the contrary, Borrower
may collect all Account Receivables directly from all account debtors. If Lender notifies Borrower
in writing that Lender requires all Account Receivables to be deposited directly into the LockBox
Account, Borrower shall then direct all of its account debtors, payors and other third parties to
remit all payments owing to Borrower directly to the Lockbox Account. In the event Borrower shall
nevertheless directly receive any payments or other financial proceeds of any Collateral after such
written notice from Lender, Borrower shall receive all payments in trust for Lender and immediately
deliver all payments to Lender in their original form as set forth below, duly endorsed in blank or
cause the same to be deposited into the Lockbox Account. Lender or its designee may, at any time,
notify account debtors that the Accounts Receivable have been assigned to Lender and of Lender’s
security interest therein, and may collect the Accounts Receivable directly and charge the
collection costs and expenses to Borrower’s loan account. Borrower agrees that, in computing the
charges under this Agreement, all items of payment shall be deemed applied by Lender on account of
the Obligations one (1) Business Day after receipt by Lender of good funds which have been finally
credited to Lender’s account, whether such funds are received directly from Borrower or from the
Lockbox Account, and this provision shall apply regardless of the amount of the Obligations
outstanding or whether any Obligations are outstanding; provided, that if any such good funds are
received after 12:00 p.m. noon ine(Dallas time) on any Business Day or at any time on any day not
constituting a Business Day, such funds shall be deemed received on the immediately following
Business Day. Lender is not, however, required to credit Borrower’s account for the amount of any
item of payment which is unsatisfactory to Lender in its Permitted Discretion and Lender may charge
Borrower’s loan account for the amount of any item of payment which is returned to Lender unpaid.



Article 4.

Collateral




     4..1. Collateral. To secure full and complete payment and performance of the
Obligations of Borrower, Borrower and Guarantor have executed or shall execute and deliver or cause
to be executed and delivered the Security Agreement covering the property and collateral described
in this Section 4.1. (which, together with any other property and collateral which may now or
hereafter secure the Obligations of Borrower or any part thereof, is sometimes herein called the
“Collateral”):




     a. All of the Borrower’s right, title and interest in and to all of the Borrower’s
Inventory, Equipment, materials, supplies, goods, general intangibles, money, instruments,
accounts, chattel paper, contract rights, accounts, Accounts Receivable, purchase orders received
and rights to payment of any kind (including, without limitation, such rights of payment arising
out of a sale, lease or other disposition of goods by the Borrower, out of a rendering of services
by the Borrower, out of a loan by the Borrower, whether such right to payment is or is not already
earned by performance, and howsoever such right to payment may be evidenced, together with all of
the rights and interest (including all liens and security interests) which the Borrower may at any
time have by law or agreement against any account debtor or other obligor obligate to make any such
payment or against any of the property of such account debtor



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or other obligor contract rights,
whether now owned or acquired later; all accessions, additions, replacements and substitutions or
any of the foregoing; all records of any kind relating to any of the foregoing; and all proceeds
(including insurance and accounts proceeds) and all products and proceeds of any of the foregoing,
and wherever located;



     4..2. Setoff. Upon the occurrence of an Event of Default, Lender shall have the
right to set off and apply against the Obligations in such manner as Lender may determine, without
notice to Borrower, any and all deposits (general or special, time or demand, provisional or final)
or other sums at any time credited by or owing from Lender to Borrower. As further security for
the Obligations of Borrower, Borrower hereby grants to Lender a security interest in all money,
instruments and other property of Borrower now or hereafter held by Lender, including, without
limitation, property held in safekeeping. In addition to Lender’s right of setoff and as further
security for the Obligations of Borrower, Borrower hereby grants to Lender a security interest in
all deposits (general or special, time or demand, provisional or final) and other accounts of
Borrower now or hereafter on deposit with or held by Lender and all other sums at any time credited
by or owing from Lender to Borrower. The rights and remedies of Lender hereunder are in addition
to other rights and remedies (including, without limitation, other rights of setoff) which Lender
may have.



     4..3. Guaranty of the Obligations. Contemporaneously with the making of the Loan,
Guarantor shall guarantee payment of the Obligations of Borrower by execution and delivery of the
Guaranty.



Article 5.

Conditions Precedent



     5..1. Loan. The obligation of Lender to make the Loan is subject to Lender’s receipt or
written waiver, on or before the day of the making of the Loan, of each of the following, each
dated (unless otherwise indicated) the day of the making of the Loan, in form and substance
satisfactory to Lender:






     a. The Certificate of Incorporation of Borrower.




     b. Certificates of the appropriate government officials of the state of formation of the
Borrower as to the existence of the Borrower.




     c. The Note executed by Borrower.




     d. The Guaranty executed by Guarantor.




     e. The Security Agreement executed by Borrower.




     f. UCC-1 Financing Statement covering the Collateral executed by Borrower.




     g. The Deed of Trust executed by Guarantor and Borrower.




     h. The Certificate of Secretary of certifying that the Board of Directors of Borrower has
passed a resolution, which (i) authorizes the execution, delivery and performance by Borrower of
this Agreement and/or the other Loan Documents to which



First Amended and Restated Loan Agreement — Page 8





 









 









Borrower is or will be a party hereunder
and (ii) sets forth the name of the officers of Borrower authorized to sign this Agreement and/or
each of the other Loan Documents to which Borrower is or will be a party (including the
certificates contemplated herein).




     i.. The Certificate of Secretary of Guarantor certifying that the Board of Directors of
Guarantor has passed a resolution, which (i) authorizes the execution, delivery and performance by
Guarantor of this Agreement, the Guaranty and/or the other Loan Documents to which the Borrower are
or will be a party hereunder and (ii) sets forth the name of the officers of Guarantor authorized
to sign this Agreement and/or each of the other Loan Documents to which Guarantor is or will be a
party (including the certificates contemplated herein).




     j. The Loan Agreement Rider executed by the Borrower and Guarantor.




     k. A UCC search report from the Secretary of States of Texas and Delaware revealing no
conflicting security interests in the Collateral other than as expressly permitted by Lender in its
sole and absolute discretion.




     l. All necessary authorizations, consents, approvals, licenses, filings and registrations with
governmental or regulatory authorities or in connection with the execution, delivery or performance
by Borrower or Guarantor of this Agreement, the Note and other Loan Documents to which Borrower and
Guarantor are a party.




     m. Such documents, instruments, and information as Lender may reasonably request.




     n. Borrower and Guarantor have delivered to Lender its audited financial statements.




     o. All corporate proceedings taken in connection with the transactions contemplated by this
Agreement and all documents, instruments and other legal matters incident thereto shall be
satisfactory to Lender.



Article 6.

Representations and Warranties




     To induce Lender to enter into this Agreement, Borrower and Guarantor represent and warrant to
Lender that:



     6..1. Existence and Authority. The Borrower (a) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware; (b) has all
requisite power to own assets and carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business in all jurisdictions in which the nature of its
business makes such qualification necessary and where failure to so qualify would have a material
adverse effect on its business, financial condition, or operations. The Borrower has the power and
authority to execute, deliver and perform its obligations under this Agreement and the other Loan
Documents to which it is or may become a party.



First Amended and Restated Loan Agreement — Page 9





 









 








     6..2. Financial Statements. Borrower has delivered to Lender consolidated financial
statements of Borrower and Guarantor, setting forth all financial information regarding the
Borrower, all as at and for the last fiscal year of Borrower. The financial statements prepared at
the end of the fiscal year of Borrower and, along with the other financial statements referred to
above or delivered in connection herewith, are true and correct, and fairly present, on a
consolidated basis, if applicable, the financial condition of the Borrower as of the respective
dates indicated therein and the results of operations for the respective periods indicated therein.
Borrower has no material contingent liabilities, liabilities for taxes, material forward or
long-term commitments, or unrealized or anticipated losses from any unfavorable commitments not
reflected in such financial statements. There has been no material adverse change in the
condition, financial or otherwise, or operations of the Borrower since the effective date of the
most recent financial statements referred to in this Section 6.2.



     6..3. Default. Neither Borrower nor Guarantor are in default in any material respect
under any loan agreement, indenture, mortgage, pledge agreement or other material agreement or
obligation to which it is a party or by which any of their properties may be bound.



     6..4. Authorization and Compliance with Laws and Material Agreements. The execution,
delivery and performance by Borrower and Guarantor of this Agreement and the other Loan Documents
to which Borrower and Guarantor are or may become parties have been duly authorized by all
requisite action on the part of Borrower and Guarantor and do not and will not violate the
Certificates of Incorporation of Borrower and Guarantor, or any law or any order of any court,
governmental authority or arbitrator, and do not and will not conflict with, result in a breach of,
or constitute a default under, or result in the imposition of any Lien (except as provided in
Article 4.) upon any assets of Borrower and Guarantor pursuant to the provisions of any indenture,
mortgage, deed of trust, pledge agreement, franchise, permit, license or other instrument or
agreement by which Borrower or Guarantor or their respective properties is bound.



     6..5. Litigation and Judgments. Except as disclosed under the caption “Legal
Proceedings” in the Borrower’s Annual Report on Form 10-K for the fiscal year ended December 31,
2006, there is no action, suit or proceeding before any court, governmental authority or arbitrator
pending, or to the knowledge of Borrower or Guarantor, threatened against or affecting Borrower or
Guarantor that would, if adversely determined, have a material adverse effect on the financial
condition or operations of Borrower or Guarantor or the ability of Borrower or Guarantor to pay and
perform the Obligations. There are no outstanding judgments against Borrower or Guarantor.



     6..6. Rights in Properties; Liens. Borrower and Guarantor have good and indefeasible
title or valid leasehold interests in their respective properties and assets, real and personal,
reflected in the financial statements described in Section 6.2., and none of the properties, assets
or leasehold interests of Borrower or Guarantor is subject to any Lien, except as permitted by
Section 8.2.



     6..7. Title to Collateral. Borrower and Guarantor own, and with respect to Collateral
acquired after the date hereof, Borrower and Guarantor will own, legally and beneficially, the
Collateral free of any Lien or any right or option on the part of any third person to purchase or
otherwise acquire the Collateral or any part thereof, except for the Lien granted pursuant to the
Security Agreement executed by the Borrower and the Permitted Liens. Borrower and Guarantor have
the unrestricted right to grant a security interest in the Collateral as contemplated hereby. The
Collateral is not subject to any restriction on



First Amended and Restated Loan Agreement — Page 10




 









 







transfer or assignment except for compliance with
applicable federal and state laws and regulations promulgated thereunder.




     6..8. Enforceability. This Agreement constitutes, and the other Loan Documents to
which Borrower and Guarantor are parties, when delivered, shall constitute legal, valid and binding
obligations of Borrower and Guarantor, enforceable against Borrower and Guarantor in accordance
with their respective terms, except as limited by bankruptcy, insolvency, or other laws of general
application relating to the enforcement of creditors’ rights.



     6..9. Approvals. No authorization, approval or consent of, and no filing or
registration with, any court, governmental authority or third party is or will be necessary for the
execution, delivery or performance by Borrower or Guarantor of this Agreement and the other Loan
Documents to which Borrower and Guarantor are or may become a party or the validity or
enforceability thereof.



     6..10. Taxes. Borrower and Guarantor have filed all tax returns (federal, state and
local) required to be filed, including all income, franchise, employment, property and sales taxes.
Except for (a) the existing employment tax dispute with the Internal Revenue Service previously
disclosed to Lender in writing by Borrower, for which Borrower has a maximum potential liability of
no more the $50,000.00 in the aggregate, and (b) certain existing unpaid sales tax obligations in
various states which do not exceed more than $20,000.00 in the aggregate [(a) and (b) being
collectively referred to herein as the “Disclosed Outstanding Tax Issues”], Borrower and Guarantors
have paid all of their respective tax liabilities, and neither Borrower or Guarantor know of any
pending investigation of Borrower or Guarantor by any taxing authority or of any pending but
unassessed tax liability of Borrower or Guarantor.



     6..11. Use of Proceeds; Margin Securities. Borrower is not engaged principally, or as
one of its important activities, in the business of extending credit for the purpose of purchasing
or carrying margin stock (within the meaning of Regulations G, T, U of X of the Board of Governors
of the Federal Reserve System), and no part of the proceeds of any extension of credit under this
Agreement will be used to purchase or carry any such margin stock or to extend credit to others for
the purpose of purchasing or carrying margin stock. Borrower, nor any person acting on Borrower’s
behalf, has taken any action that might cause the transactions contemplated by this Agreement or
the Note, as to violate Regulations G, T, U or X or to violate the Securities Exchange Act of 1934,
as amended.



     6..12. ERISA. The Borrower has complied with all applicable minimum funding
requirements and all other applicable and material requirements, if applicable, of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), and there are no existing conditions
that would give rise to liability thereunder. No Reportable Event (as defined in Section 4043 of
ERISA) has occurred in connection with any employee benefit plan that might constitute grounds for
the termination thereof by the Pension Benefit Guaranty Corporation or for the appointment by the
appropriate United States District Court of a trustee to administer such plan.



     6..13. Disclosure. No representation or warranty made by Borrower and Guarantor in
this Agreement or in any other Loan Documents contains any untrue statement of a material fact or
omits to state any material fact necessary to make the statements herein or therein not misleading.
Except as otherwise disclosed to Lender in writing, there is no fact known to Borrower or
Guarantor which has a material adverse effect, or which could reasonably be expected to have a
material adverse effect, on the business, assets, financial condition, or operations of Borrower or
Guarantor.



First Amended and Restated Loan Agreement — Page 11




 









 








     6..14. Contracts. Neither Borrower nor Guarantor is a party to, or bound by any
agreement, condition, contract or arrangement, which which could reasonably be expected to have a
material adverse effect on the business, operations or financial condition of Borrower or
Guarantor.



     6..15. Compliance with Law. To the best of its knowledge Borrower and Guarantor are
in compliance with all laws, rules, regulations, orders and decrees which are applicable to
Borrower or Guarantor or any of their respective properties.



     6..16. Principal Place of Business. The place where the Borrower keeps its books and
records is located at the address set forth in Article 10.



Article 7.

Positive Covenants




     Borrower and Guarantor covenant and agree that, as long as the Obligations or any part thereof
are outstanding or Lender has any commitment hereunder, Borrower and Guarantor will perform and
observe the following positive covenants, unless Lender shall otherwise consent in writing:



     7..1. Financial Statements. Borrower and Guarantor will furnish to Lender:




     a. As soon as available, and in any event within one hundred thirty five (135) days after
the end of each fiscal year of Borrower and Guarantor, beginning with the fiscal year most recently
ended, a copy of the annual audited consolidated financial report of Borrower and Guarantor for
such fiscal year containing, for each of Borrower and Guarantor, balance sheets, statements of
income, statements of stockholder’ equity and statements of change in financial position as of the
end of such fiscal year and for the 12-month period then ended, in each case setting forth in
comparative form the figures for the preceding fiscal year, all in reasonable detail and certified
by the chief financial officer of the Borrower and Guarantor, prepared in accordance with GAAP.




     b. As soon as available, and in any event within thirty (30) days after the end of each fiscal
quarter of Borrower, commencing at the end of the current fiscal quarter, a copy of the quarterly
operating statements of Borrower for such fiscal quarter containing cash flow statements, balance
sheets, and statements of income, all in reasonable detail and certified to be true and correct in
all material respects by the president or chief financial officer of Borrower.




     c. As soon as available and in any event within ten (10) days after the end of each month of
each fiscal year of Borrower, (i) a copy of the accounts receivable aging and sales journal, all in
reasonable detail and certified by the chief financial officer of Borrower to fairly present the
financial condition and results of operations of Borrower, at the date and for the period indicated
therein, and (ii) a current Borrowing Base Certificate. Lender shall have the right to audit at
Borrower’s expense the accounts receivable aging and sales journals every three (3) months during
the term hereof.



First Amended and Restated Loan Agreement — Page 12





 












 






     d. As soon as available, and in any event within thirty (30) days of filing same with the
Internal Revenue Service of each year, a true and correct copy of the consolidated annual federal
income tax return of Borrower and Guarantor for the immediately preceding year, signed by Borrower
and Guarantor and filed with the Internal Revenue Service.




     e. On or before January 31 of each year, evidence that all ad valorem taxes or other
assessments due and owing against the Property have been paid in full.




     f. Promptly, such additional financial information concerning Borrower and Guarantor as Lender
may request.



     7..2. Certificates; Other Information. Borrower and Guarantor will furnish to
Lender all of the following:






     a. As soon as available, copies of all reports and information made available to directors and
shareholders of the Borrower of a material nature which could impair Lender’s prospect of payment
or performance of the Obligations or any portion thereof.




     b. Promptly, such additional information concerning the Borrower and Guarantor as Lender may
reasonably request.



     7..3. Performance of Obligations. Borrower will duly and punctually pay and
perform the Obligations, including without limitation, its obligations under this Agreement and the
other Loan Documents.




     7..4. Preservation of Existence and Conduct of Business. Borrower will (i) preserve
and maintain its legal existence and all of its leases, privileges, franchises, qualifications and
rights that are necessary or desirable in the ordinary conduct of its business, and (ii) conduct
its business as presently conducted in an orderly and efficient manner in accordance with good
business practices.




     7..5. Maintenance of Properties. Borrower will maintain its respective assets and
properties in good condition and repair.




     7..6. Payment of Taxes and Claims. Borrower and Guarantor will pay or discharge at or
before maturity or before becoming delinquent (i) all taxes, levies, assessments and governmental
charges imposed on them or any of their property, except for the Disclosed Outstanding Tax Issues
which Borrower is contesting or resolving in good faith, and (ii) all lawful claims for labor,
material and supplies, which, if unpaid, might become a Lien upon any of their property; provided,
however, that neither Borrower nor Guarantor shall be required to pay or discharge any tax, levy,
assessment or governmental charge which is being contested in good faith by appropriate proceedings
diligently pursued, and for which adequate reserves have been established.




     7..7. Insurance. Borrower will maintain with financially sound and reputable
insurance companies workmen’s compensation insurance, liability insurance, and insurance on its
property, assets




First Amended and Restated Loan Agreement — Page 13




 









 







and business at least in such amounts and against such risks as are usually
insured against by Persons engaged in similar businesses and showing Lender as an additional Loss
Payee.




     7..8. Inspection Rights. At any reasonable time and from time to time, Borrower will
permit representatives of Lender to examine and make copies of the books and records of, and visit
and inspect the properties of Borrower, and to discuss the business, operations and financial
condition of Borrower with its officers and employees and with its independent certified public
accountants.




     7..9. Keeping Books and Records. Borrower will maintain proper books of record and
account in which full, true and correct entries in conformity with GAAP shall be made of all
dealings and transactions in relation to its business and activities.




     7..10. Compliance with Laws. Borrower and Guarantor will comply with all applicable
laws, rules, regulations and orders of any court, governmental authority or arbitrator.




     7..11. Compliance with Agreements. Borrower and Guarantor will comply, in all
material respects, with all agreements, indentures, mortgages, security agreements, pledge
agreements, deeds of trust and other documents binding on Borrower or Guarantor or affecting their
respective properties or business.




     7..12. Notices. Borrower and Guarantor will promptly notify Lender of (i) the
occurrence of an Event of Default, or of any event that with notice or lapse of time, or both,
would be an Event of Default, (ii) the commencement of any action, suit or proceeding against
Borrower that might have a material adverse effect on the business, financial condition or
operations of Borrower and (iii) any other matter that might have a material adverse effect on the
business, financial condition or operations of Borrower.




     7..13. Further Assurances. Borrower and Guarantor will execute and deliver such
further instruments as may be deemed necessary or desirable by Lender to carry out the provisions
and purposes of this Agreement and the other Loan Documents and to preserve and perfect the Lien of
Lender in the Collateral.




     7..14. Compliance with ERISA. Borrower will comply with all minimum funding
requirements and all other material requirements of ERISA, if applicable, so as not to give rise to
any liability thereunder. Promptly after the filing thereof, Borrower shall furnish to Lender with
regard to each employee benefit plan of Borrower, copies of each annual report required to be filed
pursuant to Section 103 of ERISA in connection with each such plan for each plan year. Borrower
will notify Lender immediately of any fact, including, but not limited to, any “Reportable Event”
as that term is defined in Section 4043 of ERISA, arising in connection with any such plan which
might constitute grounds for the termination thereof by the Pension Benefit Guaranty Corporation or
for the appointment by the appropriate United States District Court of a trustee to administer such
plan and furnish to Lender, promptly upon its request therefor, such additional information
concerning any such plan as may be reasonably requested.




     7..15. Compliance with Regulations G, T, U and X. Neither Borrower nor any Person
acting on its behalf will take any action which might cause this Agreement or any of the Loan
Documents to violate, and Borrower will take actions necessary to cause compliance with Regulations
G, T, U and X of




First Amended and Restated Loan Agreement — Page 14




 









 







the Board of Governors of the Federal Reserve System and the Securities Exchange
Act of 1934, in each case as now in effect or as the same may hereafter be in effect.




     7..16. Operating Account. Except for Borrower’s payroll account and its Canadian bank
accounts maintained by Borrower’s Canadian Affiliates, Borrower and Guarantor shall maintain all of
its operating accounts with Lender. Transfers of funds between Borrower’s local accounts and the
Canadian bank accounts shall be prohibited, unless such transfers are made in the ordinary course
of business.




     7..17. Financial Covenants. Borrower and Guarantor covenant and agree that, as long as
the Obligations or any part thereof are outstanding or Lender has any commitment hereunder,
Borrower and Guarantor will perform, observe and maintain the following financial covenants, unless
Lender shall otherwise consent in writing:





     a. Current Ratio. Borrower shall maintain a “Current Ratio” of at least 1.25
to 1. “Current Ratio” means [current assets minus prepaid items] divided by [current
liabilities] (as those terms are defined in GAAP).




     b. Debt Service Coverage Ratio. [Intentionally Omitted].




     c. Liabilities to Tangible Net Worth. Borrower shall maintain a maximum ratio of
total liabilities to tangible net worth of 2.5 to 1 (as those terms are defined in GAAP).



     The financial covenants set forth herein shall be tested on a quarterly basis in conjunction
with the delivery of Borrower’s financial statements. If Borrower shall fail to satisfy a
financial covenant, Borrower shall have fifteen (15) days to bring such covenant into compliance
after written notice therefore is sent to Borrower, before Lender may claim an Event of Default
hereunder.




Article 8.

Negative Covenants




     Borrower and Guarantor covenant and agree that, as long as the Obligations or any part thereof
are outstanding or Lender has any commitment hereunder, Borrower and Guarantor will perform and
observe the following negative covenants, unless Lender shall otherwise consent in writing:




     8..1. Limitation on Liens. Borrower will not incur, create, assume or permit to
exist, any Lien upon any of its property, assets or revenues, whether now owned or hereafter
acquired, except Liens in favor of Lender and the Permitted Liens.




     8..2. Mergers, Acquisitions and Dissolutions. Borrower will not, without the prior
written consent of Lender, become a party to a merger or consolidation, or purchase or otherwise
acquire all or a substantial part of the assets of any Person or any shares or other evidence of beneficial
ownership of any Person . Borrower nor any partner of the Borrower shall not dissolve or liquidate.




     8..3. Transactions with Affiliates. Borrower will not enter into any transaction with
any director, officer, employee or shareholder of Borrower or any Affiliate, except upon fair and
reasonable terms.




First Amended and Restated Loan Agreement — Page 15




 









 








     8..4. Debt. Borrower shall not, without the prior written consent of Lender, incur,
create, assume or permit to exist, any Debt, except (i) Debt to Lender; (ii) trade payables
incurred in the ordinary course of business with a due date not greater than sixty (60) days from
date it is incurred; (iii) purchase money debt for the acquisition or lease of equipment used in
the ordinary course of Borrower’s business, not to exceed $100,000.00 in the aggregate.




Article 9.

Default




     9..1. Event of Default. Each of the following shall be deemed an “Event of Default”:




     a. Any Obligated Party shall fail to pay when due the Obligations or any part thereof and such
default in payment is not cured within five (5) days after written notice of same is sent to
Borrower.




     b. Any representation or warranty made or deemed made by any Obligated Party (or any of their
respective officers) in any Loan Document or in any certificate, report, notice or financial
statement furnished at any time in connection with this Agreement shall be false, misleading or
erroneous in any material respect when made or deemed to have been made.




     c. Any Obligated Party shall fail to perform, observe or comply with any covenant, agreement
or term contained in this Agreement or any other Loan Document (which does not involve the payment
of monetary Obligations covered by Section 9..1a. Above), and such failure to perform, observe or
comply is not fully cured within fifteen (15) days after written notice of same is sent to
Borrower; provided, however, that if the default described within this section 8..1c. is of
such a nature that it cannot possibly be cured by anyone within such fifteen (15) day period, then
such failure shall not constitute an Event of Default hereunder, if Borrower commences the curing
of the failure within such fifteen (15) day period, and thereafter diligently prosecutes the curing
of the same to completion, and provides to the Lender written evidence of such actions,
provided that if such default still remains uncured after thirty (30) days from the date
such original notice from Lender was sent, then such failure shall constitute an Event of Default
hereunder, notwithstanding..




     d. Any Obligated Party shall commence a voluntary proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or a substantial part of its property or
shall consent to any such relief or to the appointment of or taking possession by any such official
in such a proceeding commenced against it or shall make a general assignment for the benefit of
creditors or shall generally fail to pay its debts as they become due or shall take any corporate
action to authorize any of the foregoing.




     e. Any involuntary proceeding shall be commenced against any Obligated Party seeking
liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official for it or a substantial part of its
property, and such involuntary proceeding shall remain undismissed and unstayed for a period of
forty-five (45) days.




First Amended and Restated Loan Agreement — Page 16




 









 








     f. Any Obligated Party shall fail to discharge within a period of forty-five (45) days after
the commencement thereof any attachment, sequestration or similar proceeding against any of its
assets or properties to the extent enforcement would have a material adverse effect on the
financial condition of such Obligated Party.




     g. Any Obligated Party shall fail to satisfy and discharge promptly any judgment against it
after the judgment becomes final to the extent enforcement would have a material adverse effect on
the financial condition of such Obligated Party.




     h. Any Obligated Party shall default in the payment of any of its Debt beyond any applicable
grace period, or shall default in the performance of any other agreement binding upon it or its
property.




     i. This Agreement or any other Loan Document shall cease to be in full force and effect or
shall be declared null and void or the validity or enforceability thereof shall be contested or
challenged by any Obligated Party or any of their respective shareholders, or any Obligated Party
shall deny that it has any further liability or obligation under any of the Loan Documents.




     j. The sale, encumbrance or other unauthorized transfer of the Collateral without Lender’s
prior written consent, that is not made in the ordinary course of business.




     k. Any Obligated Party shall cease to exist.




     l. Borrower shall fail to satisfy any financial covenant as set forth in Section 7..18 hereof
and such failure is not cured within fifteen (15) days after written notice of same is sent to
Borrower.




     m. The occurrence of any Event of Default as that term is defined in the Term Loan Agreement.




     9..2. Remedies Upon Default. Upon the occurrence of an Event of Default, Lender may
without notice terminate its commitment to lend hereunder and declare the Obligations or any part
thereof to be immediately due and payable, and the same shall thereupon become immediately due and
payable, without demand, presentment, notice of dishonor, notice of acceleration, notice of intent
to accelerate, notice of intent to demand, or protest, which are hereby expressly waived; provided,
however, that upon the occurrence of an Event of Default under Section 9.1.d. or Section 9.1.e.,
the commitment of Lender to lend hereunder shall automatically terminate, and the Obligations shall
become immediately due and payable without notice, demand, presentment, notice of dishonor, notice
of acceleration, notice of intent to accelerate, notice of intent to demand, or protest, which are
hereby expressly waived. Upon the occurrence of any Event of Default, Lender may exercise all rights and
remedies available to it in law or in equity, under the Loan Documents or otherwise.




Article 10.

Miscellaneous




     10..1. Expenses of Lender. Borrower agrees to pay on demand all costs and expenses
incurred by Lender in connection with the preparation, negotiation and execution of this Agreement
and the other




First Amended and Restated Loan Agreement — Page 17




 









 







Loan Documents and any and all amendments, modifications and supplements thereto,
including, without limitation, the costs and fees of Lender’s legal counsel, and all costs and
expenses incurred by Lender in connection with the enforcement or preservation of any rights under
this Agreement or any other Loan Document, including, without limitation, the reasonable costs and
fees of Lender’s legal counsel. Lender is and shall be authorized to fund these costs directly out
of the proceeds of the Loan.




     10..2. Restatement. Except as otherwise disclosed in writing by Borrower, the
delivery of each statement, report and certificate to Lender pursuant to this Agreement and the
request by Borrower for an advance hereunder shall by virtue of such delivery or request alone
constitute a restatement of the representations and warranties contained in Article 6. hereof on
and as of the date of delivery or the date requested for the advance, except that the
representations and warranties contained in Section 6.2. shall in each instance be deemed to be
made with respect to the financial statements most recently furnished to Lender pursuant to Section
6.2. or 7.1., as the case may be. Each such delivery or request shall also constitute a
representation and warranty at the time of said delivery or on the date requested for the advance
that no Event of Default has occurred and is continuing and that no event has occurred and is
continuing that, with the giving of notice or lapse of time or both, would be an Event of Default.




     10..3. No Waiver; Cumulative Remedies. No failure on the part of Lender to exercise
and no delay in exercising, and no course of dealing with respect to, any right, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege under this Agreement preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The rights and remedies provided for in
this Agreement and the other Loan Documents are cumulative and not exclusive of any rights and
remedies provided by law.




     10..4. Successors and Assigns. This Agreement is binding upon and shall inure to the
benefit of Lender, Borrower, Guarantor and their respective successors and assigns, except that
Borrower and Guarantor may not, except as expressly provided herein, assign or transfer any of
their rights or obligations under this Agreement without the prior written consent of Lender.




     10..5. Survival of Representations and Warranties. All representations and warranties
made in this Agreement or any other Loan Document or in any document, statement or certificate
furnished in connection with this Agreement shall survive the execution and delivery of this
Agreement and the other Loan Documents, and no investigation by Lender or any closing shall affect
the representations and warranties or the right of Lender to rely upon them.




     10..6. Entire Agreement; Amendment. This Agreement and the other Loan Documents
embody the entire agreement among the parties hereto and supersedes all prior agreements and understandings, if any, relating to the subject matter hereof. The provisions of this Agreement
and the other Loan Documents to which Borrower and Guarantor are a party may be amended or waived
only by an instrument in writing signed by the parties thereto.




     10..7. Maximum Interest Rate. No provision of this Agreement or Note shall require
the payment or the collection of interest in excess of the maximum permitted by applicable law. If
any excess of interest in such respect is hereby provided for, or shall be adjudicated to be so
provided, in Note or otherwise in connection with this loan transaction, the provisions of this
Section 10.7. shall govern and prevail and neither Borrower nor the sureties, Guarantor, successors
or assigns of Borrower shall be obligated to pay the excess amount of such interest or any other
excess sum paid for use,




First Amended and Restated Loan Agreement — Page 18




 









 







forbearance or detention of sums loaned pursuant hereto. In the event
Lender ever receives, collects or applies as interest any such sum, such amount which would be in
excess of the maximum amount permitted by applicable law shall be applied as a payment and
reduction of the principal of the indebtedness evidenced by the Note; and, if the principal of the
Note has been paid in full, any remaining excess shall forthwith be paid to Borrower.




     10..8. Notices. Any notice, consent or other communication required or permitted to
be given under any of the Loan Documents to Lender, Borrower or Guarantor must be in writing and
delivered in person or mailed by registered or certified mail, return receipt requested, postage
prepaid, as follows:




	 	 	 
	To Borrower:

	 	American Locker Group, Incorporated

815 S. Main Street

Grapevine, Texas 76051
	 
	 	 
	To Guarantor:

	 	Altreco, Incorporated

815 S. Main Street

Grapevine, Texas 76051
	 
	 	 
	In either case, with a copy to:
	 	 
	 
	 	 
	 

	 	Hallett & Perrin, P.C.

2001 Bryan Street, #3900

Dallas, Texas 75201

Attn: Timothy R. Vaughn
	 
	 	 
	To Lender:

	 	The F&M Bank & Trust Company

14185 Dallas Parkway, Suite 140

Dallas, Texas 75254

Attention: David J. Broussard, Senior Vice-President





or such other address as shall be set forth in a notice from the appropriate party given in
compliance with this Section 10.8. Any such notice, consent or other communication shall be
deemed given when delivered in person or, if mailed, when duly deposited in the mails.




     10..9 .Applicable Law. THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS SHALL
BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN DALLAS, DALLAS COUNTY, TEXAS, AND SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF TEXAS.




     10..10 Jurisdiction, Venue.




     ANY SUIT, ACTION OR PROCEEDING AGAINST BORROWER OR GUARANTOR WITH RESPECT TO THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS, OR ANY JUDGMENT ENTERED BY ANY COURT IN RESPECT OF ANY THEREOF
WILL BE BROUGHT IN THE DISTRICT COURTS OF DALLAS COUNTY, TEXAS OR THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS, AS LENDER (IN ITS SOLE DISCRETION) MAY ELECT, AND BORROWER AND
GUARANTOR




First Amended and Restated Loan Agreement — Page 19




 









 







HEREBY ACCEPT THE EXCLUSIVE JURISDICTION OF THOSE COURTS FOR THE PURPOSE OF ANY SUIT,
ACTION OR PROCEEDING.




     IN ADDITION, BORROWER AND GUARANTOR HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE TO THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS BROUGHT IN THE STATE OF TEXAS, AND HEREBY FURTHER IRREVOCABLY
WAIVE ANY CLAIM OF ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE DISTRICT COURTS IN DALLAS COUNTY,
TEXAS THAT MAY HAVE BEEN BROUGHT IN THE INCONVENIENT FORUM. SHOULD ANY SUCH SUIT, ACTION OR
PROCEEDING BE PENDING IN MORE THAN ONE FORUM, LENDER’S CHOICE OF FORUM SHALL BE CONCLUSIVE.




     10..11 WAIVER OF JURY TRIAL. IN THE EVENT LITIGATION SHOULD ARISE OUT OF THE
TRANSACTIONS CONTEMPLATED BY ANY OF THE LOAN DOCUMENTS OR ANY OTHER MATTER RELATED THERETO
WHATSOEVER OR IN CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OR INACTIONS BY LENDER, IT IS HEREBY STIPULATED AND AGREED BY BORROWER AND
GUARANTOR THAT THEY SHALL WAIVE AND DO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ALL
RIGHTS TO DEMAND A TRIAL OF ANY SUCH MATTER BY OR BEFORE A JURY. THIS PROVISION IS A MATERIAL
INDUCEMENT TO LENDER TO COMMIT TO MAKE THE LOAN.




     10..12 RELIEF FROM AUTOMATIC STAY. AS A MATERIAL INDUCEMENT AND AS FURTHER
CONSIDERATION TO INDUCE LENDER TO MAKE THE LOAN, BORROWER AND GUARANTOR HEREBY STIPULATE, AGREE,
CONSENT TO AND ACKNOWLEDGE THAT IN THE EVENT THAT A PROCEEDING UNDER TITLE 11 OF THE U.S. CODE IS
COMMENCED, EITHER VOLUNTARY OR INVOLUNTARY, BY OR AGAINST BORROWER OR GUARANTOR, LENDER IS ENTITLED
TO IMMEDIATE RELIEF FROM ANY AUTOMATIC STAY IMPOSED UNDER SECTION 362 OF TITLE 11 OF THE U.S. CODE,
AS AMENDED, OR OTHERWISE, ON OR AGAINST THE EXERCISE OF THE RIGHTS AND REMEDIES OTHERWISE AVAILABLE
TO LENDER, WITHOUT REQUIRING LENDER TO FILE A MOTION FOR RELIEF FROM THE AUTOMATIC STAY. IN
ADDITION TO THE FOREGOING, BORROWER AND GUARANTOR FURTHER STIPULATE, AGREE AND ACKNOWLEDGE THAT NEITHER BORROWER NOR GUARANTOR WILL OPPOSE OR OBJECT TO
LENDER’S MOTION FOR RELIEF FROM ANY AUTOMATIC STAY OR ANY VALUATION OF THE PROPERTY SUBJECT TO THE
AUTOMATIC STAY CONDUCTED BY LENDER.




     10..13. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument.




     10..14. Severability. Any provision of this Agreement held by a court of competent
jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this
Agreement and the effect thereof shall be confined to the provision held to be invalid or illegal.




First Amended and Restated Loan Agreement — Page 20




 









 








     10..15. Headings. The headings, captions and arrangements used in this Agreement are
for convenience only and shall not affect the interpretation of this Agreement.




     10..16. Participations. Lender shall have the right at any time and from time to time
to grant participations in the Note and any other Loan Documents. Each participant shall be
entitled to receive all information received by Lender regarding the creditworthiness of Borrower
and Guarantor.




     10..17. Controlling Interpretation. The other Loan Documents delivered pursuant to or
in connection with this Agreement shall supplement and be in addition to the terms and provisions
of this Agreement. If an inconsistency of provisions should exist between any of the Loan
Documents, the interpretation of such provision most favorable to Lender shall control, determined
by Lender in its sole discretion.




     10..18. Amendment and Restatement. This Agreement amends and restates that certain
Loan Agreement dated March 5, 2007, by and between Borrower, Guarantor and Lender.




     In Witness Whereof, the parties hereto have duly executed this Agreement as of the day and
year first above written.




	 	 	 	 	 
	 	Borrower:


American Locker Group, Incorporated, a Delaware corporation

 	 
	 	By:  	/S/ PAUL M. ZAIDINS
 	 
	 	 	Paul Zaidins, President 	 
	 	 	 	 
	 
	 	Guarantor:

Altreco, Incorporated, a Delaware corporation

 	 
	 	By:  	/S/ PAUL M. ZAIDINS
 	 
	 	 	Paul Zaidins, President 	 
	 	 	 	 
	 
	 	Lender:


The F&M Bank & Trust Company

 	 
	 	By:  	/S/ DAVID BROUSSARD
 	 
	 	 	(Signature) 	 
	 	 	 	 
	 	  	David Broussard, Sr. Vice President
 	 
	 	 	(Printed Name and Title) 	 
	 	 	 	 
	 



First Amended and Restated Loan Agreement — Page 21