exv10w1






Exhibit 10.1



 





CREDIT AGREEMENT




between



SWISHER INTERNATIONAL, INC.

 and



WACHOVIA BANK, NATIONAL ASSOCIATION



$5,000,000 Revolving Line of Credit



November 14,
2005


 










 









 











INDEX




	 	 	 	 	 
	Item	 	Tab
	Credit Agreement
	 	 	1	 
	Exhibits to Credit Agreement
	 	 	2	 
	Schedules to Credit Agreement
	 	 	3	 
	Revolving Note
	 	 	4	 
	Subsidiary Guaranty
	 	 	5	 
	Security Agreement
	 	 	6	 
	A. UCC-1 Financing Statements
	 	 	 	 
	B. USPTO Security Interest Filings
	 	 	 	 
	Funds Flow Memo
	 	 	7	 
	Closing Certificate
	 	 	8	 
	Secretary’s Certificate of Swisher International, Inc.
	 	 	9	 
	Secretary’s Certificate of Swisher Hygiene Franchise Corp.
	 	 	10	 
	Secretary’s Certificate of SHFC Buffalo, LLC
	 	 	11	 
	Secretary’s Certificate of SHFC Minneapolis, LLC
	 	 	12	 
	Secretary’s Certificate of SHFC Oklahoma, LLC
	 	 	13	 
	Secretary’s Certificate of SHFC Operations, LLC
	 	 	14	 
	Secretary’s Certificate of Swisher Pest Control Corp.
	 	 	15	 
	Secretary’s Certificate of Swisher Maids, Inc.
	 	 	16	 
	Good Standing Certificates
	 	 	17	 
	Opinion of Counsel to Swisher International, Inc.
	 	 	18	 
	Bank of America Payoff Letter
	 	 	19	 
	A. UCC Termination Statements
	 	 	 	 






 









 





 





CREDIT AGREEMENT




between



SWISHER INTERNATIONAL, INC. 

and



WACHOVIA BANK, NATIONAL ASSOCIATION



$5,000,000 Revolving Line of Credit



November 14, 2005


 









 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE I
	 	 	 	 
	 
	 	 	 	 
	DEFINITIONS
	 	 	 	 
	 
	 	 	 	 
	1.1 Defined Terms
	 	 	1	 
	1.2 Accounting Terms
	 	 	12	 
	1.3 Singular/Plural
	 	 	12	 
	1.4 Other Terms
	 	 	12	 
	 
	 	 	 	 
	ARTICLE II
	 	 	 	 
	 
	 	 	 	 
	AMOUNTS AND TERMS OF THE LOANS
	 	 	 	 
	 
	 	 	 	 
	2.1 Commitments
	 	 	12	 
	2.2 Note
	 	 	12	 
	2.3 Principal Payments; Maturity of Loans
	 	 	13	 
	2.4 Interest
	 	 	13	 
	2.5 Fees
	 	 	15	 
	2.6 Termination or Reduction of Commitments
	 	 	15	 
	2.7 General Provisions as to Payments
	 	 	15	 
	2.8 Disbursement of Loan Proceeds
	 	 	15	 
	2.9 Use of Proceeds
	 	 	15	 
	2.10 Taxes
	 	 	15	 
	2.11 Illegality
	 	 	16	 
	 
	 	 	 	 
	ARTICLE III
	 	 	 	 
	 
	 	 	 	 
	CLOSING; CONDITIONS OF CLOSING AND BORROWING
	 	 	 	 
	 
	 	 	 	 
	3.1 Conditions of Initial Loans and Advances
	 	 	16	 
	3.2 Conditions to all Loans
	 	 	19	 
	3.3 Waiver of Conditions Precedent
	 	 	19	 
	 
	 	 	 	 
	ARTICLE IV
	 	 	 	 
	 
	 	 	 	 
	REPRESENTATIONS AND WARRANTIES
	 	 	 	 
	 
	 	 	 	 
	4.1 Corporate Organization and Power
	 	 	19	 
	4.2 Corporate Authority: No Conflict With Other Instruments or Law
	 	 	20	 
	4.3 Due Execution and Delivery
	 	 	20	 
	4.4 Enforceability
	 	 	20	 
	4.5 Governmental Approval
	 	 	20	 
	4.6 Margin Stock
	 	 	20	 
	4.7 Investment Company
	 	 	20	 






i









 






	 	 	 	 	 
	 	 	Page
	4.8 Taxes
	 	 	21	 
	4.9 Litigation
	 	 	21	 
	4.10 Financial Statements; Solvency
	 	 	21	 
	4.11 No Material Adverse Change
	 	 	21	 
	4.12 Compliance with Laws
	 	 	22	 
	4.13 Environmental Compliance 
	 	 	22	 
	4.14 Ownership of Properties
	 	 	23	 
	4.15 Intellectual Property
	 	 	23	 
	4.16 Insurance
	 	 	23	 
	4.17 ERISA
	 	 	24	 
	4.18 Full Disclosure
	 	 	24	 
	4.19 No Default
	 	 	24	 
	4.20 Subsidiaries
	 	 	24	 
	4.21 First Priority Liens
	 	 	24	 
	4.22 Labor Relations
	 	 	24	 
	4.23 OFAC; Anti-Terrorism Laws
	 	 	25	 
	 
	 	 	 	 
	ARTICLE V
	 	 	 	 
	 
	 	 	 	 
	AFFIRMATIVE COVENANTS
	 	 	 	 
	 
	 	 	 	 
	5.1 Financial and Business Information
	 	 	25	 
	5.2 Notice of Certain Events
	 	 	26	 
	5.3 Existence; Franchises; Maintenance of Properties
	 	 	27	 
	5.4 Compliance with Law
	 	 	28	 
	5.5 Payment of Obligations
	 	 	28	 
	5.6 Maintenance of Books and Records; Inspection
	 	 	28	 
	5.7 Maintenance of Insurance
	 	 	28	 
	5.8 Compliance with ERISA
	 	 	28	 
	5.9 Name Change
	 	 	29	 
	5.10 Creation of Subsidiaries
	 	 	29	 
	5.11 OFAC, PATRIOT Act Compliance
	 	 	30	 
	5.12 Banking Relationship
	 	 	30	 
	5.13 Further Assurances
	 	 	30	 
	 
	 	 	 	 
	ARTICLE VI
	 	 	 	 
	 
	 	 	 	 
	FINANCIAL COVENANTS
	 	 	 	 
	 
	 	 	 	 
	6.1 Fixed Charge Coverage Ratio
	 	 	30	 
	6.2 Minimum Tangible Net Worth
	 	 	30	 
	6.3 Funded Debt to EBITDA Ratio
	 	 	30	 
	 
	 	 	 	 
	ARTICLE VII
	 	 	 	 
	 
	 	 	 	 
	NEGATIVE COVENANTS
	 	 	 	 
	 
	 	 	 	 
	7.1 Mergers; Consolidations
	 	 	31	 






ii









 






	 	 	 	 	 
	 	 	Page
	7.2 Indebtedness
	 	 	31	 
	7.3 Liens and Encumbrances
	 	 	31	 
	7.4 Disposition of Assets
	 	 	32	 
	7.5 Restricted Investments
	 	 	33	 
	7.6 Restricted Payments
	 	 	34	 
	7.7 Transactions With Related Persons
	 	 	34	 
	7.8 Sale-Leaseback Transactions
	 	 	34	 
	7.9 Certain Amendments
	 	 	35	 
	7.10 Limitation on Certain Restrictions
	 	 	35	 
	7.11 No Other Negative Pledges
	 	 	35	 
	7.12 Subsidiaries or Partnerships
	 	 	35	 
	7.13 Lines of Business
	 	 	36	 
	7.14 Fiscal Year
	 	 	36	 
	7.15 Accounting Changes
	 	 	36	 
	 
	 	 	 	 
	ARTICLE VIII
	 	 	 	 
	 
	 	 	 	 
	EVENTS OF DEFAULT; REMEDIES
	 	 	 	 
	 
	 	 	 	 
	8.1 Events of Default
	 	 	36	 
	8.2 Remedies
	 	 	38	 
	 
	 	 	 	 
	ARTICLE IX
	 	 	 	 
	 
	 	 	 	 
	MISCELLANEOUS
	 	 	 	 
	 
	 	 	 	 
	9.1 Costs, Expenses and Taxes
	 	 	39	 
	9.2 Indemnification
	 	 	39	 
	9.3 Arbitration; Preservation and Limitation of Remedies
	 	 	40	 
	9.4 Waiver of Automatic or Supplemental Stay
	 	 	41	 
	9.5 Notices
	 	 	42	 
	9.6 Continuing Obligations
	 	 	42	 
	9.7 Controlling Law
	 	 	42	 
	9.8 Successors and Assigns
	 	 	42	 
	9.9 Assignment and Sale
	 	 	43	 
	9.10 Entire Agreement
	 	 	43	 
	9.11 Amendment
	 	 	43	 
	9.12 Severability
	 	 	43	 
	9.13 Confidentiality
	 	 	43	 
	9.14 Counterparts
	 	 	44	 
	9.15 Captions
	 	 	44	 
	 
	 	 	 	 
	Exhibit A   Form of Revolving Note
	 	 	 	 
	Exhibit B   Form of Guaranty
	 	 	 	 
	Exhibit C   Form of Compliance Certificate
	 	 	 	 
	Exhibit D   Form of Notice of Borrowing
	 	 	 	 






iii









 






	 	 	 	 	 
	 	 	 
	Schedule 4.10(b) Solvency
	 	 	 	 
	Schedule 4.10(c) Note Receivables
	 	 	 	 
	Schedule 4.13 Environmental Compliance
	 	 	 	 
	Schedule 4.14 Realty; Registry
	 	 	 	 
	Schedule 4.15 Intellectual Property
	 	 	 	 
	Schedule 4.16 Insurance
	 	 	 	 
	Schedule 4.20 Subsidiaries
	 	 	 	 
	Schedule 7.3(viii) Liens for Terminating Indebtedness
	 	 	 	 
	Schedule 7.7 Affiliate Transactions
	 	 	 	 






iv









 






CREDIT AGREEMENT




     THIS CREDIT AGREEMENT, dated as of November 14, 2005, is made and entered into by and between
SWISHER INTERNATIONAL, INC., a Nevada corporation, (the “Borrower”), and WACHOVIA BANK,
NATIONAL ASSOCIATION, a national banking association (the “Bank”).



BACKGROUND STATEMENT




     A. The Borrower has requested that the Bank extend a $5,000,000 revolving line of
credit to the Borrower, to be advanced by the Bank pursuant to the terms and conditions
hereof.



     B. The Bank is willing to extend the revolving line of credit described above upon
the terms and subject to the conditions set forth in this Credit Agreement.



AGREEMENT




     NOW, THEREFORE, in consideration of the premises, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce
the Bank to make the loans described herein, the parties hereto hereby agree as follows:



ARTICLE I




DEFINITIONS



     1.1 Defined Terms. In addition to the words and terms defined elsewhere in this
Agreement, the following terms when used herein shall have the following respective meanings:



     “AAA” shall mean the American Arbitration Association.



     “Adjusted LIBOR Rate” shall mean, for any day, a rate equal to the sum of (i) the
LIBOR Market Index Rate for such day, and (ii) the Applicable Margin in effect at such time with
respect to such Loan.



     “Affiliate” shall mean, as to any Person, (i) any other Person which directly, or
indirectly through one or more intermediaries, controls such Person, (ii) any other Person which
directly, or indirectly through one or more intermediaries, is controlled by or is under common
control with such Person, or (iii) any other Person of which such Person owns, directly or
indirectly, ten percent (10%) or more of the common stock or equivalent equity interests. As used
herein, the term “control” means possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether through the ownership of
voting securities or otherwise.



     “Affiliate Note Receivables” shall mean those accounts receivable payable to the
Borrower or a Subsidiary pursuant to notes or other debt instruments evidencing debt owed by an
employee, officer, director or Affiliate of the Borrower or a Subsidiary other than Former
Franchisee Receivables.



 









 





     “Agreement” or “this Agreement” or “Credit Agreement” shall mean this
Credit Agreement and all schedules and exhibits hereto, together with any amendments,
modifications, replacements and supplements hereto, any substitutes herefor, and any replacements,
renewals or extensions hereof, in whole or in part, and shall refer to this Agreement as the same
may be in effect at the time such reference becomes operative.



     “Applicable Margin” shall have the meaning set forth in Section 2.4(b).



     “Arbitration Rules” shall mean the Commercial Financial Disputes Arbitration Rules
of
the AAA.



     “Bank” shall mean Wachovia Bank, National Association, a national banking association
and its successors and assigns.



     “Bankruptcy Code” shall mean Title 11 of the United States Code, as amended, and any
successor statute or statutes having substantially the same function.



     “Borrower” shall mean Swisher International, Inc., a Nevada corporation, and all of
its permitted successors and assigns.



     “Borrowing” means any borrowing hereunder consisting of Revolving Loans made to the
Borrower pursuant to Article II.



     “Business Day” shall mean any day of the year on which banks are open for business in
Charlotte, North Carolina and, in respect of any determination relevant to the determination or
payment of interest determined based on LIBOR, any such day that is also a day on which dealings in
Dollar deposits are carried out in the London interbank market.



     “Capitalized Lease” shall mean any lease or similar arrangement which is of a nature
that payment obligations of the lessee or obligor thereunder at the time are or should be
capitalized and shown as liabilities (other than current liabilities) upon a balance sheet of such
lessee or obligor prepared in accordance with GAAP.



     “Capitalized Lease Obligations” shall mean, with respect to any Capital Lease, the
amount of the obligation of the lessee thereunder that would, in accordance with GAAP, appear on a
balance sheet of such lessee with respect to such Capital Lease.



     “Capital Expenditures” shall mean, during any period, the sum of all amounts paid
during such period that would, in accordance with GAAP, be included on the consolidated statement
of cash flows of the Borrower and its Subsidiaries as an acquisition of fixed assets or
improvements, replacements, substitutions or additions thereto.



     “Capital Stock” shall mean (i) with respect to any Person that is a corporation, any
and all shares, interests or equivalents in capital stock (whether voting or nonvoting, and whether
common or preferred) of such corporation, and (ii) with respect to any Person that is not a
corporation, any and all partnership, membership, limited liability company or other equity
interests of such Person; and in each case, any and all warrants, rights or options to purchase any
of the foregoing.



2









 





     “Cash Equivalents” shall mean (i) securities issued or unconditionally guaranteed or
insured by the United States of America or any agency or instrumentality thereof, backed by the
full faith and credit of the United States of America and maturing within one year from the date of
acquisition, (ii) commercial paper issued by any Person organized under the laws of the United
States of America, maturing within 180 days from the date of acquisition and, at the time of
acquisition, having a rating of at least A-1 or the equivalent thereof by Standard & Poor’s Ratings
Services or at least P-1 or the equivalent thereof by Moody’s Investors Service, Inc., (iii) time
deposits and certificates of deposit maturing within 180 days from the date of issuance and issued
by a bank or trust company organized under the laws of the United States of America or any state
thereof (y) that has combined capital and surplus of at least $500,000,000 or (z) that has (or is a
subsidiary of a bank holding company that has) a long-term unsecured debt rating of at least A or
the equivalent thereof by Standard & Poor’s Ratings Services or at least A2 or the equivalent
thereof by Moody’s Investors Service, Inc., (iv) repurchase obligations with a term not exceeding
thirty (30) days with respect to underlying securities of the types described in clause (i) above
entered into with any bank or trust company meeting the qualifications specified in clause (iii)
above, and (v) money market funds at least ninety-five percent (95%) of the assets of which are
continuously invested in securities of the foregoing types.



     “Casualty Event” shall mean, with respect to any Collateral of the Borrower or any of
its Subsidiaries, any loss of, damage to, or Condemnation or other taking of, such property for
which the Borrower or such Subsidiary receives insurance proceeds, proceeds of a Condemnation award
or other compensation.



     “Change of Law” shall mean the adoption of any applicable law, rule or regulation, or
any change therein or any existing or future law, rule or regulation, or any change in the
interpretation or administration thereof, by any Governmental Authority, or compliance by the Bank
(or its Lending Office) with any request or directive (whether or not having the force of law) of
any Governmental Authority.



     “Closing Date” shall mean the date upon which the initial extensions of credit are
made pursuant to this Agreement, which shall be the date upon which each of the conditions set
forth in Sections 3.1 and 3.2 shall have been satisfied or waived in accordance with the terms of
this Agreement.



     “Code” shall mean the Internal Revenue Code of 1986, as amended, or any successor
federal tax code. Any reference to any provision of the Code shall also include the income tax
regulations promulgated thereunder, whether final, temporary or proposed.



     “Compliance Certificate” shall mean a fully completed and duly executed certificate
in the form of Exhibit C, together with a Covenant Compliance Worksheet.



     “Condemnation” shall mean any taking of title, of use, or of any other property
interest under the exercise of the power of eminent domain, whether temporarily or permanently, by
any governmental authority or by any Person acting under governmental authority.



3









 





     “Consolidated EBITDA” shall mean, for any Person for any period, the aggregate of
(i) Consolidated Net Income of such Person for such period plus (ii) the sum of
depreciation, amortization of intangible assets, interest expense, and income tax expense for
such period.



     “Consolidated Fixed Charges” shall mean, for any Person for any period of four
consecutive Fiscal Quarters, the aggregate (without duplication) of (i) Consolidated Interest
Expense during such period, (ii) the aggregate (without duplication) of all scheduled payments of
principal on Funded Debt required to have been made by such Person and its Subsidiaries during such
period (whether or not such payments are actually made), (iii) aggregate expense for federal state,
local and other income taxes for such period, and (iv) all payments required to be made by the
Borrower pursuant to leases of real and personal property during such period (whether or not such
payments are actually made).



     “Consolidated Interest Expense” shall mean, for any Person for any period, the
aggregate (without duplication) of (i) total interest expense of such Person and its Subsidiaries
for such period in respect of Funded Debt of such Person and its Subsidiaries (including all such
interest expense accrued or capitalized during such period, whether or not actually paid during
such period), and (ii) all net amounts payable under or in respect of Hedge Agreements, to the
extent paid or accrued by such Person and its Subsidiaries during such period.



     “Consolidated Net Income” shall mean, for any Person for any period, the net income
(or loss) of such Person and its Subsidiaries, as determined on consolidated basis in accordance
with GAAP, but excluding extraordinary gains and losses and any other non-operating gains and
losses.



     “Consolidated Tangible Net Worth” shall mean, as of any date of determination, the (i)
total assets of the Borrower and its Subsidiaries as of such date, other than assets which would be
treated as intangible assets for balance sheet presentation purposes under GAAP (including without
limitation intellectual property and goodwill) and Affiliate Note Receivables, minus (ii)
total liabilities of the Borrower and its Subsidiaries as of such date, in each case as determined
on a consolidated basis in accordance with GAAP.



     “Controlled Group” shall mean all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under common control which, together with
the Borrower, are treated as a single employer under Section 414 of the Code.



     “Costs” shall have the meaning set forth in Section 9.2.



     “Covenant Compliance Worksheet” shall mean a fully completed worksheet in the form of
Attachment A to Exhibit C.



     “Credit Documents” shall mean and collectively refer to this Agreement, the Note, the
Security Documents and any and all other agreements, instruments and documents, including, without
limitation, notes, guaranties, mortgages, deeds to secure debt, deeds of trust, chattel mortgages,
pledges, powers of attorney, consents, assignments, contracts, notices, security agreements, trust
account agreements and all other written matters whether heretofore, now or hereafter executed by
or on behalf of the Borrower or delivered to the Bank with respect to this Agreement or with
respect to the transactions contemplated by this Agreement, and in each case,



4









 




together with any amendments, modifications and supplements thereto, any replacements, renewals,
extensions and restatements thereof, and any substitutes therefor, in whole or in part.




     “Default” shall mean any event which with the giving of notice, lapse of time, or
both, would become an Event of Default.



     “Default Rate” shall mean an interest rate equal to the Adjusted LIBOR Rate
plus two percent (2.0%) per annum.



     “Disputes” shall have the meaning set forth in Section 9.3(a).



     “Dollar” or “$” shall mean dollars in lawful currency of the United States of
America.



     “Environmental Law” shall mean any federal, state or local law, statute, ordinance,
rule, regulation, permit, license, approval, interpretation, order, guidance or other legal
requirement (including without limitation any subsequent enactment, amendment or modification)
relating to the protection of human health or the environment, including, but not limited to, any
requirement pertaining to the manufacture, processing, distribution, use, treatment, storage,
disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation
of materials that are or may constitute a threat to human health or the environment.



     “Environmental Liability” shall mean any liability, whether accrued, contingent
or otherwise, arising from or in any way associated with any Environmental Law.



     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time
to time, and all rules and regulations from time to time promulgated thereunder.



     “ERISA Affiliate” shall mean any Person (including any trade or business, whether or
not incorporated) that would be deemed to be under “common control” with, or a member of the same
Controlled Group as, the Borrower or any of its Subsidiaries, within the meaning of Sections
414(b), (c), (m) or (o) of the Internal Revenue Code or Section 4001 of ERISA.



     “ERISA Event” shall mean any of the following with respect to a Plan or Multiemployer
Plan, as applicable: (i) a Reportable Event with respect to a Plan or a Multiemployer Plan, (ii) a
complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan
that results in liability under Section 4201 or 4204 of ERISA, or the receipt by the Borrower or
any ERISA Affiliate of notice from a Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated under
Section 4041A of ERISA, (iii) the distribution by the Borrower or any ERISA Affiliate under Section
4041 or 4041A of ERISA of a notice of intent to terminate any Plan or the taking of any action to
terminate any Plan, (iv) the commencement of proceedings by the PBGC under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by
the Borrower or any ERISA Affiliate of a notice from any Multiemployer Plan that such action has
been taken by the PBGC with respect to such Multiemployer Plan, (v) the institution of a proceeding
by any fiduciary of any Multiemployer Plan against the Borrower or any ERISA Affiliate to enforce
Section 515 of ERISA, which is not dismissed within thirty (30) days, (vi) the imposition upon the
Borrower or any ERISA Affiliate of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent



5









 




under Section 4007 of ERISA, or the imposition or threatened imposition of any Lien upon any
assets of the Borrower or any ERISA Affiliate as a result of any alleged failure to comply with the
Internal Revenue Code or ERISA in respect of any Plan, (vii) the engaging in or otherwise becoming
liable for a nonexempt Prohibited Transaction by the Borrower or any ERISA Affiliate, (viii) a
violation of the applicable requirements of Section 404 or 405 of ERISA or the exclusive benefit
rule under Section 401(a) of the Internal Revenue Code by any fiduciary of any Plan for which the
Borrower or any of its ERISA Affiliates may be directly or indirectly liable or (ix) the adoption
of an amendment to any Plan that, pursuant to Section 401(a)(29) of the Internal Revenue Code or
Section 307 of ERISA, would result in the loss of tax-exempt status of the trust of which such Plan
is a part if the Borrower or an ERISA Affiliate fails to timely provide security to such Plan in
accordance with the provisions of such sections.




     “Event of Default” shall have the meaning specified in Article VIII hereof.



     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to
time, and any successor statute, and all rules and regulations from time to time promulgated
thereunder.



     “Fiscal Quarter” or “FQ” shall mean a fiscal quarter of the Borrower and its
Subsidiaries.



     “Fiscal Year” or “FY” shall mean a fiscal year of the Borrower and its Subsidiaries.



     “Fixed Charge Coverage Ratio” shall mean, as of the last day of any period of four
consecutive Fiscal Quarters, the ratio of: (i)(A) Consolidated EBITDA of the Borrower for such
period minus (B) all dividends and distributions paid in cash by the Borrower to its
shareholders during such period plus (C) all payments required to be made by the Borrower
pursuant to leases of real and personal property during such period (whether or not such payments
are actually made), to (ii) Consolidated Fixed Charges for such period.



     “Former Franchisee Receivable” shall mean a receivable payable to the Borrower or a
Subsidiary pursuant to notes or other debt instruments evidencing debt owed by an Affiliate of the
Borrower or a Subsidiary, which debt was incurred by a unaffiliated Franchisee prior to its
acquisition by such Affiliate



     “Franchisee” shall mean any Person with whom the Borrower or any of its Affiliates has
entered a franchise agreement.



     “Funded Debt” shall mean all Indebtedness of the Borrower and its Subsidiaries (other
than Indebtedness of the types referred to in clause (xi) of the definition of “Indebtedness”).



     “Funded Debt to EBITDA Ratio” shall mean, as of the last day of any Fiscal Quarter,
the ratio of Funded Debt as of such day to Consolidated EBITDA for the period of the four
consecutive Fiscal Quarters ending on such day.



     “GAAP” shall mean generally accepted accounting principles, as recognized by the American
Institute of Certified Public Accountants, consistently applied and maintained on a consistent
basis for the Borrower and its Subsidiaries on a consolidated basis throughout the



6









 





period indicated and consistent with the financial practice of the Borrower and its Subsidiaries
after the date hereof.



     “Governmental Authority” shall mean any nation or government, any state, department,
agency or other political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to any government, and any
corporation or other entity owned or controlled (through stock or capital ownership or otherwise)
by any of the foregoing.



     “Guaranty” shall mean a guaranty agreement, dated as of the date hereof, made by the
Subsidiary Guarantors in favor of the Bank in the form of Exhibit D attached hereto, as amended,
modified, restated or supplemented from time to time.



     “Hazardous Material” shall mean any substance or material meeting any one or more of
the following criteria: (i) it is or contains a substance designated as a hazardous waste,
hazardous substance, pollutant, contaminant or toxic substance under any Environmental Law; (ii) it
is toxic, explosive, corrosive, ignitable, infectious, radioactive, mutagenic or otherwise
hazardous, (iii) its presence requires investigation or remediation under an Environmental Law or
common law; (iv) it constitutes a danger, nuisance, trespass or health or safety hazard to persons
or property; and/or (v) it is or contains, without limiting the foregoing, petroleum hydrocarbons.



     “Hedge Agreement” shall mean any interest or foreign currency rate swap, cap, collar,
option, hedge, forward rate or other similar agreement or arrangement designed to protect against
fluctuations in interest rates or currency exchange rates.



     “Indebtedness” shall mean, for any Person, without duplication (i) obligations of such
Person for borrowed money; (ii) obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments; (iii) obligations of such Person in respect of the deferred purchase
price of property or services (other than trade payables incurred in the ordinary course of
business on terms customary in the trade); (iv) obligations of such Person under any conditional
sale or other title retention agreement(s) relating to property acquired by such Person; (v)
Capitalized Lease Obligations of such Person; (vi) obligations, contingent or otherwise, of such
Person in respect of letters of credit, acceptances or similar extensions of credit (whether or not
drawn upon and in the stated amount thereof); (vii) guaranties by such Person of the type of
indebtedness described in clauses (i) through (vi) above; (viii) all indebtedness of a third party
secured by any Lien on property owned by such Person, whether or not such indebtedness has been
assumed by such Person; (ix) all obligations of such Person, contingent or otherwise, to purchase,
redeem, retire or otherwise acquire for value any common stock of such Person; (x) off-balance
sheet liability retained in connection with asset securitization programs, synthetic leases, sale
and leaseback transactions or other similar obligations arising with respect to any other
transaction which is the functional equivalent of or takes the place of borrowing but which does
not constitute a liability on the consolidated balance sheet of such Person and its Subsidiaries;
and (xi) obligations under any Hedge Agreement.



     “Intellectual Property” shall mean (i) all inventions (whether or not patentable
and whether or not reduced to practice), all improvements thereto, and all patents, patent







7









 







applications, and patent disclosures, together with all reissues, continuations,
continuations-in-part, divisions, revisions, extensions, and reexaminations thereof, (ii) all
trademarks, service marks, trade dress, logos, trade names, and corporate names, together with all
goodwill associated therewith, and all applications, registrations, and renewals in connection
therewith, (iii) all copyrightable works and all copyrights (registered and unregistered), (iv) all
trade secrets and confidential information (including, without limitation, financial, business and
marketing plans and customer and supplier lists and related information), (v) all computer software
and software systems (including, without limitation, data, databases and related documentation),
(vi) all Internet web sites and domain names, (vii) all technology, know-how, processes and other
proprietary rights, and (viii) all licenses or other agreements to or from third parties regarding
any of the foregoing.




     “Investments” shall have the meaning set forth in Section 7.5.



     “Lending Office” shall mean, as to the Bank, any of its offices located in Charlotte,
North Carolina, or such other office as the Bank may hereafter designate as its Lending Office by
notice to the Borrower.



     “LIBOR Market Index Rate” shall mean, for any day, the rate for one month U.S. dollar
deposits as reported on Telerate page 3750 as of 11:00 a.m. London time, on such day, or if such
day is not a London business day, then the immediately preceding London business day (or if not so
reported, then as determined by the Bank from another recognized source or interbank quotation).



     “Lien” shall mean any interest in property securing an obligation owed to, or claim
by, a Person other than the owner of such property, whether such interest arises by virtue of
contract, statute or common law, including but not limited to the lien or security interest arising
from a mortgage, security agreement, pledge, lease, conditional sale, consignment or bailment for
security purposes or from attachment, judgment or execution. The term “Lien” shall include
any easements, covenants, restrictions, conditions, encroachments, reservations, rights-of-way,
leases and other title exceptions and encumbrances affecting real property. For the purpose of this
Agreement, the Borrower shall be deemed to own, subject to a Lien, any proceeds of a sale with
recourse of accounts receivable, any asset leased under any “sale and lease back” or
similar arrangement and any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, financing lease or other title retention
agreement relating to such asset.



     “Loans” shall mean the Revolving Loans.



     “Material Adverse Effect” or “Material Adverse Change” shall mean a material
adverse effect upon, or a material adverse change in, any of (i) the financial condition,
operations, business, properties or prospects of the Borrower and its Subsidiaries, taken as a
whole; (ii) the ability of the Borrower or any Subsidiary to perform under this Agreement or any
other Credit Document in any material respect or any other material contract in any material
respect to which any one or more of them is a party; (iii) the legality, validity or enforceability
of this Agreement or any other Credit Document; or (iv) the perfection or priority of the Liens of
the Bank granted under this Agreement or any other Credit Document or the rights and remedies of
the Bank under



8









 




this Agreement or any other Credit Document (other than a change resulting from any act
or omission by the Bank).




     “Multiemployer Plan” shall mean any “multiemployer plan” within the
meaning of Section 4001(a)(3) of ERISA.



     “Net Tangible Assets” shall mean, as of any date of determination, (i) total assets of
the Borrower and its Subsidiaries as of such date other than assets, which would be treated as
intangible assets for balance sheet presentation purposes under GAAP (including, without
limitation, intellectual property and goodwill), as determined on a consolidated basis in
accordance with GAAP, minus (ii) Restricted Cash and Affiliate Note Receivables.



     “Note” shall mean the Revolving Note.



     “Notice of Borrowing” shall have the meaning set forth in Section 3.2(a).



     “Obligations” shall mean and include (i) the Loans and all other loans, advances,
indebtedness, liabilities, obligations, covenants and duties owing, arising, due or payable from
the Borrower to the Bank of any kind or nature, present or future, arising under this Agreement,
the Note or the other Credit Documents or any Hedge Agreement, whether direct or indirect
(including those acquired by assignment), absolute or contingent, primary or secondary, due or to
become due, now existing or hereafter arising and however acquired; and (ii) all interest
(including to the extent permitted by law, all post-petition interest), charges, expenses, fees,
attorneys’ fees and any other sums payable by the Borrower to the Bank under this Agreement or any
of the other Credit Documents.



     “OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets Control,
and any successor thereto.



     “PATRIOT Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act of 2001), as
amended from time to time, and any successor statute, and all rules and regulations from time to
time promulgated thereunder.



     “PBGC” shall mean the Pension Benefit Guaranty Corporation and any successor thereto.



     “Performance Pricing Determination Date” shall have the meaning set forth in Section
2.4(b).



     “Permitted Liens” shall have the meaning set forth in Section 7.3.



     “Person” shall mean an individual, a corporation, a partnership, a limited liability
company, an association, a trust or any other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.



     “Plan” shall mean, at any time, an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and is
either (i) maintained by a member of the Controlled Group for employees of any member







9









 







of the Controlled Group, or (ii) maintained pursuant to a collective bargaining agreement or any
other arrangement under which more than one employer makes contributions and to which a member of
the Controlled Group is then making or accruing an obligation to make contributions or has within
the preceding five plan years made contributions.




     “Realty” shall mean the real property owned by the Borrower and set forth
on Schedule 4.14.



     “Registry” shall mean the office of the Register of Deeds (or comparable Governmental
Authority) for each of piece of Realty as set forth on Schedule 4.14.



     “Requirement of Law” shall mean, with respect to any Person, the charter, articles or
certificate of organization or incorporation and bylaws or other organizational or governing
documents of such Person, and any statute, law, treaty, rule, regulation, order, decree, writ,
injunction or determination of any arbitrator or court or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its property or to which such Person or
any of its property is subject or otherwise pertaining to any or all of the transactions
contemplated by this Agreement and the other Credit Documents.



     “Responsible Officer” shall mean, with respect to the Borrower, the chairman of the
board of directors, the president, the chief executive officer, the chief financial officer, any
executive officer, controller or treasurer of the Borrower, and any other officer or similar
official thereof responsible for the administration of the obligations of the Borrower in respect
of this Agreement.



     “Restricted Cash” shall mean cash or Cash Equivalents held by the Borrower or
its Subsidiaries that is subject to a Lien other than a Permitted Lien.



     “Revolving Credit Commitment” shall have the meaning set forth in Section 2.1(a).



     “Revolving Credit Termination Date” shall mean the date of the earliest to occur of
the following: (i) November 14, 2008; (ii) the date on which the Bank makes demand for payment of
the Revolving Loans; (iii) such date of termination as is mutually agreed upon by the Bank and the
Borrower; and (iv) the date after all Obligations have been paid in full and the Bank is no longer
obligated to make Revolving Loans hereunder.



     “Revolving Loans” shall have the meaning set forth in Section 2.1(a)



     “Revolving Note” shall mean the promissory note of the Borrower dated the date hereof
in the form of Exhibit A attached hereto, executed and delivered to the Bank pursuant to Article II
hereof, evidencing the obligation of the Borrower to repay the Revolving Loans, together with any
amendments, modifications and supplements thereto, any replacements, restatements, renewals and
extensions thereof, and any substitutes therefor, in whole or in part.



     “Sanctioned Country” shall mean a country subject to a sanctions program identified on
the list maintained by OFAC and available at
http://www.treas.gov/offices/eotffc/ofac/sanctions/index/html, or as otherwise published
from time to time.



10









 





     “Sanctioned Person” shall mean (i) a Person named on the list of Specially
Designated Nationals or Blocked Persons maintained by OFAC available at


http://www.treas.gov/offices/eotffc/ofac/sdn/index/html, or as otherwise published from
time to time, or (ii) (A) an agency of the government of a Sanctioned Country, (B) an organization
controlled by a Sanctioned Country, or (C) a Person resident in a Sanctioned Country, to the extent
subject to a sanctions program administered by OFAC.



     “Security Agreement” shall mean the Security Agreement, dated as of the date
hereof, between the Borrower, each of the Borrower’s Subsidiaries and the Bank, as the same may
be amended, modified, supplemented or restated from time to time.



     “Security Documents” shall mean the Security Agreement, the Guaranty and all other
pledge or security agreements, mortgages, deeds of trust, assignments or other similar agreements
or instruments executed and delivered by the Borrower or any of its Subsidiaries pursuant to the
terms of this Agreement or otherwise in connection with the transactions contemplated hereby, in
each case as amended, modified or supplemented from time to time.



     “Solvent” shall mean as to any Person on any particular date, that such Person (i)
does not have unreasonably small capital to carry on its business as now conducted and as presently
proposed to be conducted, (ii) is able to pay its debts as they become due in the ordinary course
of business, and (iii) has assets with a present fair saleable value greater than its total stated
liabilities and identified contingent liabilities, including any amounts necessary to satisfy
preferential rights of shareholders.



     “Subsidiary” shall mean any corporation, partnership, limited liability company,
association or other business entity of which the Borrower owns, directly or indirectly, more than
fifty percent (50%) of the voting securities thereof.



     “Subsidiary Guarantor” shall mean any Subsidiary of the Borrower that is a guarantor
of the Obligations under the Guaranty (or under another guaranty agreement in form and substance
satisfactory to the Bank) and has granted to the Bank a Lien upon and security interest in its
personal property assets pursuant to the Security Agreement.



     “Terminating Indebtedness” shall have the meaning set forth in Section 3.1(j).



     “Threshold Amount” shall mean, as of any day, an amount equal to the Revolving Credit
Commitment, provided that the conditions set forth below are satisfied as of the most
recent Fiscal Quarter for which the Bank has received the financial statements required by Sections
5.1(a) or 5.1(b) (starting with the Fiscal Quarter ending December 31, 2005); otherwise the
Threshold Amount shall be equal to $3,500,000:



     (i) the Funded Debt to EBITDA Ratio shall be no greater that 2.0 to 1.0;



     (ii) the Net Tangible Assets shall be greater than or equal to $7,500,000; and



     (iii) the Borrower’s Unrestricted Cash shall be greater than or equal to $500,000.



11









 





     “Unrestricted Cash” shall mean cash or Cash Equivalents held by the Borrower or its
Subsidiaries, free and clear of any Liens other than Permitted Liens.



     “Wholly Owned” shall mean, with respect to any Subsidiary of any Person, that 100% of
the outstanding Capital Stock of such Subsidiary is owned, directly or indirectly, by such Person.



     1.2 Accounting Terms. Except as specifically provided otherwise in this Agreement, all
accounting terms used herein that are not specifically defined shall have the meanings customarily
given them in accordance with GAAP. Notwithstanding anything to the contrary in this Agreement, for
purposes of calculation of the financial covenants set forth in Article VI, all accounting
determinations and computations hereunder shall be made in accordance with GAAP as in effect as of
the date of this Agreement applied on a basis consistent with the application used in preparing the
most recent financial statements of the Borrower referred to in Section 4.10. In the event that any
changes in GAAP after such date are required to be applied to the Borrower and would affect the
computation of the financial covenants contained in Article VI, such changes shall be followed only
from and after the date this Agreement shall have been amended to take into account any such
changes.



     1.3 Singular/Plural. Unless the context otherwise requires, words in the
singular include the plural and words in the plural include the singular.



     1.4 Other Terms. All other terms contained in this Agreement shall, when the context
so indicates, have the meanings provided for by the Uniform Commercial Code of the State of North
Carolina to the extent the same are used or defined therein.



ARTICLE II




AMOUNTS AND TERMS OF THE LOANS



     2.1 Commitments.



     (a) The Bank agrees, on the terms and conditions set forth herein, to make loans (each, a
“Revolving Loan,” and collectively, the “Revolving Loans”) to the Borrower, from
time to time before the Revolving Credit Termination Date; provided that, immediately after
each Revolving Loan is made, the aggregate outstanding principal amount of the Revolving Loans by
the Bank shall not exceed the lesser of (x) $5,000,000 (as such figure may be reduced from time to
time as provided in this Agreement, the “Revolving Credit Commitment”) and (y) the
Threshold Amount. So long as no Default or Event of Default has occurred and is continuing, and
subject to the limits set forth in this Section 2.1(a), the Borrower may borrow under this Section
2.1(a), repay or prepay Revolving Loans and reborrow under this Section 2.1(a) at any time before
the Revolving Credit Termination Date.



     (b) Subject to the Bank’s right to cease making Revolving Loans upon the occurrence of a
Default or an Event of Default, the Revolving Credit Commitment and the Bank’s obligation to make
Revolving Loans thereunder shall continue until the Revolving Credit Termination Date.



     2.2 Note. The Revolving Loans made by the Bank shall be evidenced by a single


Revolving Note payable to the order of the Bank for the account of its Lending Office in an







12









 







amount equal to the original principal amount of the Revolving Credit Commitment. The Borrower and
the Bank hereby agree that the terms of this Agreement shall be incorporated by reference into the
Note as if set forth therein and, in the event of any conflict between the terms of this Agreement
and the Note, the terms of this Agreement shall control.




     2.3 Principal Payments; Maturity of Loans.



     (a) The Borrower shall repay the Revolving Note:




     (i) In full, on the Revolving Credit Termination Date;




     (ii) In full, upon the occurrence of any Event of Default and acceleration of the
Obligations by the Bank pursuant to Article VIII hereof; and




     (iii) In part, immediately in the event that the total principal amount outstanding
at any time under the Revolving Note exceeds the lesser of (x) the Revolving Credit
Commitment or (y) the Threshold Amount, in the amount of such excess.



     2.4 Interest.



     (a) Subject to the terms and conditions of this Agreement, each Loan shall bear, and the
Borrower shall pay, interest from the Closing Date on the unpaid principal balance thereof at the
Adjusted LIBOR Rate.



     (b) For purposes of calculating the Adjusted LIBOR Rate, “Applicable Margin” shall
mean, in respect of each Loan, (i) for the period commencing on the Closing Date to and including
the first Performance Pricing Determination Date, 1.75%, and (ii) from and after the first
Performance Pricing Determination Date, the percentage determined on each Performance Pricing
Determination Date by reference to the table set forth below as to the Funded Debt to EBITDA Ratio
for the quarterly or annual period ending immediately prior to such Performance Pricing
Determination Date.



	 	 	 	 	 
	Funded Debt to EBITDA Ratio	 	Applicable Margin
	Greater than 2.25 to 1.0, but less than or equal to 3.0 to 1.0
	 	 	2.75	%
	 
	Greater than or equal to 1.75 to 1.0, but less than or equal
to 2.25 to 1.0
	 	 	2.25	%
	 
	Less than 1.75 to 1.0
	 	 	1.75	%






In determining interest for purposes of this Section 2.4, the Borrower and the Bank shall refer to
the Borrower’s most recent consolidated quarterly and annual (as the case may be) financial
statements delivered pursuant to Section 5.1(a) or 5.1(b), as the case may be. If such financial
statements require a change in interest pursuant to this Section 2.4, the Borrower shall deliver to




13











 




the Bank, along with such financial statements, a notice to that effect, which notice shall
set forth in reasonable detail the calculations supporting the required change. The
“Performance Pricing Determination Date” is each of the dates which is 45 days after the
end of each of the first three Fiscal Quarters in any Fiscal Year and 120 days after the end of
each Fiscal Year. Any such required change in interest and fees shall become effective on such
Performance Pricing Determination Date, and shall be in effect until the next Performance Pricing
Determination Date, provided that no interest shall be decreased pursuant to this Section
2.4 if a Default is in existence on the Performance Pricing Determination Date.



Notwithstanding the foregoing or anything else herein to the contrary, (i) if at any time the
Borrowers shall have failed to deliver the financial statements as required by Section 5.1(a) or
5.1(b), as the case may be, and the certificate required by Section 5.1(c), or if at any time a
Default or Event of Default shall have occurred and be continuing, then at the election of the
Bank, at all times from and including the date on which such financial statements and certificate
are required to have been delivered (or the date of occurrence of such Default or Event of Default,
as the case may be) to the date on which the same shall have been delivered (or such Default or
Event of Default cured or waived, as the case may be), the Applicable Margin shall be determined as
if the Funded Debt to EBITDA Ratio for the Borrower was greater than 2.25 to 1.0, but less than or
equal to 3.0 to 1.0 (notwithstanding the actual Funded Debt to EBITDA Ratio for the Borrower), and
(ii) from the Closing Date until the Performance Pricing Determination Date for the Fiscal Quarter
ending March 31, 2006, the Applicable Margin shall be determined as if the Funded Debt to EBITDA
Ratio for the Borrower was less than 1.75 to 1.0 (notwithstanding the actual Funded Debt to EBITDA
Ratio).




     (c) Accrued (and theretofore unpaid) interest on the outstanding principal balance of each
Loan shall be due and payable (i) in arrears on the last Business Day of each calendar month,
beginning with the first such day to occur after the Closing Date and (ii) on each date when all or
any amount of the unpaid principal balance of each such Loan shall be due (whether at maturity, by
acceleration or otherwise), but only to the extent accrued.



     (d) Interest on the Loans and fees shall be computed on the basis of a 360-day year and the
actual number of days elapsed.



     (e) Nothing contained in this Agreement or the Note shall be deemed to establish or require
the payment of interest to the Bank at a rate in excess of the maximum rate permitted by governing
law. In the event that the rate of interest required to be paid under this Agreement or the Note
exceeds the maximum rate permitted by governing law, the rate of interest required to be paid
hereunder and under the Note shall be automatically reduced to the maximum rate permitted by
governing law and any amounts collected in excess of the permissible amount shall be deemed a
prepayment of principal on the Note.



     (f) Notwithstanding any other provision of this Agreement to the contrary, upon and during the
continuance of any Event of Default under this Agreement, at the option of the Bank without any
required notice to the Borrower, the outstanding principal amount of each of the Loans, and to the
full extent permitted by law, all interest accrued on each of the Loans, shall bear interest at the
Default Rate, and such default interest shall be payable on demand.








14









 











     2.5 Fees.



     (a) The Borrower agrees to pay to the Bank a Revolving Credit Commitment fee, in an aggregate
amount equal to $5,000.00, due and payable in full on the Closing Date.



     (b) The Borrower agrees to pay to the Bank an availability fee on the last Business Day of
each calendar year and on the Revolving Credit Termination Date at a per annum rate of 0.125% of
the excess of $3,500,000 over the average daily outstanding principal balance of Revolving Loans
for such calendar year or portion thereof. Such facility fees shall accrue from and including the
Closing Date to (but excluding) the Revolving Credit Termination Date.



     2.6 Termination or Reduction of Commitments. The Borrower may, upon at least three (3)
Business Days’ written notice to the Bank, terminate at any time, or proportionately reduce the
unused portion of the Revolving Credit Commitment from time to time by an aggregate amount of at
least $500,000 or any larger integral multiple of $100,000. If the Revolving Credit Commitment is
terminated in its entirety, all accrued fees (as provided under Section 2.5) shall be due and
payable on the effective date of such termination.



     2.7 General Provisions as to Payments. All payments (including prepayments) by the
Borrower on account of principal, interest and fees on the Loan shall be made in immediately
available funds to the Bank at its offices at 301 South Tryon Street, 28th Floor,
Charlotte, North Carolina, prior to 2:00 p.m., Eastern Standard Time, on the date payment is due,
or at such other place as is designated in writing by the Bank.



     2.8 Disbursement of Loan Proceeds. The Borrower hereby authorizes and directs the Bank
to disburse, for and on behalf of the Borrower and for the Borrower’s account, the proceeds of the
Loans made by the Bank pursuant to this Agreement (i) to such Person or Persons as the Borrower
shall direct in a writing signed by two individuals named as authorized individuals by the Borrower
and delivered to the Bank via facsimile; (ii) to pay the Bank any interest, fees, costs and
expenses payable pursuant to Section 9.1 hereof, and (iii) to the Borrower’s depository accounts
with the Bank in an amount equal to the sum necessary to cover checks or other items of payment
drawn by the Borrower upon such accounts and presented for payment.



     2.9 Use of Proceeds. The proceeds of the Revolving Loans shall be used by the Borrower
solely (i) to refinance the Terminating Indebtedness; (ii) to provide working capital for the
Borrower; (iii) to finance future acquisitions; and (iv) to pay fees and expenses in connection
with the transactions contemplated by this Agreement.



     2.10 Taxes. All payments of principal, interest and fees and all other amounts to be
made by the Borrower pursuant to this Agreement with respect to the Loans or fees relating thereto
shall be paid without deduction for, and free from, any tax, imposts, levies, duties, deductions,
or withholdings of any nature now or at any time hereafter imposed on or measured by any
governmental authority or by any taxing authority thereof, or therein, excluding (i) taxes imposed
on or measured by the Bank’s net income, (ii) franchise taxes imposed on the Bank by the
jurisdiction under the laws of which the Bank is organized or any political subdivision thereof,
and (iii) taxes imposed on the Bank’s income, and franchise taxes imposed on it, by the
jurisdiction of the Bank’s Lending Office or any political subdivision thereof. In the event that



15









 




the Borrower is required by applicable law to make any such withholding or deduction of taxes with
respect to the Loans or fee or other amount, the Borrower shall pay such deduction or withholding
to the applicable taxing authority, shall promptly furnish to the Bank all receipts and other
additional amounts as may be necessary in order that the amount received by the Bank after the
required withholding or other payment shall equal the amount the Bank would have received had no
such withholding or other payment been made.




     2.11 Illegality. If, after the date hereof, any Change of Law, or any change in
interpretation or administration thereof by any Governmental Authority, or compliance by the Bank
(or its Lending Office) with any request or directive (whether or not having the force of law) by
any Governmental Authority, shall make it unlawful or impossible for the Bank (or its Lending
Office) to make, maintain or fund Loans, then the Bank shall so notify the Borrower, whereupon
until the Bank notifies the Borrower that the circumstances giving rise to such suspension no
longer exist, the obligation of the Bank to fund Loans shall be suspended. Before giving any notice
to the Borrower pursuant to this Section, the Bank shall designate a different Lending Office if
such designation will avoid the need for giving such notice and will not, in the judgment of the
Bank, be otherwise disadvantageous to the Bank. If the Bank shall determine that it may not
lawfully continue to maintain and fund Loans to maturity and shall so specify in such notice, the
Borrower shall prepay in full the then outstanding principal amount of the Loans, together with
accrued interest thereon, no later than thirty (30) days after the Bank shall have given such
notice.



ARTICLE III




CLOSING; CONDITIONS OF CLOSING AND BORROWING



     3.1 Conditions of Initial Loans and Advances. The obligation of the Bank to make
Loans in connection with the initial Borrowing hereunder is subject to the satisfaction of the
following conditions precedent:



     (a) Credit Documents. The Bank shall have received the following, each dated as
of the Closing Date (unless otherwise specified) and in such number of copies as the Bank shall
have requested:




     (i) from each of the parties hereto, a duly executed counterpart of this
Agreement signed by such party;




     (ii) a duly executed Revolving Note for the account of the Bank;




     (iii) the Guaranty, duly completed and executed by each Subsidiary of the
Borrower (other than foreign Subsidiaries), in form and substance satisfactory to the
Bank;




     (iv) the Security Agreement, duly completed and executed by the Borrower and each
of its Subsidiaries (other than foreign Subsidiaries), in form and substance satisfactory to
the Bank; and



16









 






     (v) an opinion of counsel to the Borrower dated as of the Closing Date and
addressed to the Bank, in form and substance satisfactory to the Bank.



     (b) Closing Certificate. The Bank shall have received a certificate, signed by the
president, the chief executive officer or the chief financial officer of the Borrower, dated as of
the Closing Date and in form and substance reasonably satisfactory to the Bank, certifying that (i)
all representations and warranties of the Borrower and its Subsidiaries contained in this Agreement
and the other Credit Documents are true, correct and complete as of the Closing Date, both
immediately before and after giving effect to the making of the initial Loans and the application
of the proceeds thereof (except to the extent any such representation or warranty is expressly
stated to have been made as of a specific date, in which case such representation or warranty shall
be true and correct as of such date), (ii) no Default or Event of Default has occurred and is
continuing, both immediately before and after giving effect to the making of the initial Loans and
the application of the proceeds thereof, (iii) both immediately before and after giving effect to
the making of the initial Loans and the application of the proceeds thereof, no Material Adverse
Effect has occurred since December 31, 2004, and there exists no event, condition or state of facts
that could reasonably be expected to result in a Material Adverse Effect, and (iv) all conditions
to the initial extensions of credit hereunder set forth in this Section 3.1 and in Section 3.2 have
been satisfied or waived as required hereunder.



     (c) Secretary’s Certificate. The Bank shall have received a certificate of the
secretary or an assistant secretary of the Borrower and each of its Subsidiaries as of the Closing
Date, dated as of the Closing Date and in form and substance reasonably satisfactory to the Bank,
certifying (i) that attached thereto is a true and complete copy of the articles or certificate of
incorporation, certificate of formation or other organizational document and all amendments thereto
of such party, certified as of a recent date by the Secretary of State (or comparable Governmental
Authority) of its jurisdiction of organization, and that the same has not been amended since the
date of such certification, (ii) that attached thereto is a true and complete copy of the bylaws,
operating agreement or similar governing document of such party, as then in effect and as in effect
at all times from the date on which the resolutions referred to in clause (iii) below were adopted
to and including the date of such certificate, (iii) that attached thereto is a true and complete
copy of resolutions adopted by the board of directors (or similar governing body) of such party,
authorizing the execution, delivery and performance of this Agreement and the other Credit
Documents to which it is a party, and (iv) as to the incumbency and genuineness of the signature of
each officer of such party executing this Agreement or any of such other Credit Documents, and
attaching all such copies of the documents described above.



     (d) Good Standings. The Bank shall have received a certificate as of a recent date of
the good standing or existence of the Borrower and each of its Subsidiaries under the laws of its
jurisdiction of organization, from the Secretary of State (or comparable Governmental Authority) of
such jurisdiction.



     (e) Consents; Approvals. All approvals, permits and consents of any Governmental
Authorities or other Persons required in connection with the execution and delivery of this
Agreement or the other Credit Documents shall have been obtained, without the imposition of
conditions that are not acceptable to the Bank, and all related filings, if any, shall have been



17









 




made, and all such approvals, permits, consents and filings shall be in full force and effect and
the Bank shall have received such copies thereof as it shall have reasonably requested.




     (f) Lien Searches. The Bank shall have received certified reports from an independent
search service satisfactory to it listing any judgment or tax lien filing or Uniform Commercial
Code financing statement that names the Borrower, or any of the Borrower’s Subsidiaries as debtor,
and the results thereof shall be reasonably satisfactory to the Bank.



     (g) Recording and Filing. The Bank shall have received evidence that UCC-1 Financing
Statements naming the Borrower as debtor and the Bank as secured party and describing the
collateral encumbered by the Security Documents have been duly filed in each jurisdiction necessary
to perfect the Liens created by the Security Documents and that all other filings and action needed
to provide the Bank with a perfected, first priority security interest in the collateral described
in the Security Documents have occurred.



     (h) Insurance. The Bank shall have received certificates of insurance evidencing
the insurance coverages described on Schedule 4.16 and all other or additional coverages required
under the Security Documents and naming the Bank as loss payee or additional insured, as its
interests may appear.



     (i) No Litigation. No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any court or other
governmental authority to enjoin, restrain or prohibit, or to obtain substantial damages in respect
of, or that is related to or arises from, the making of the Loans.



     (j) Payoff Letters. Concurrently with the making of the initial Loans hereunder,
(i) all other Indebtedness of the Borrower or any of its Subsidiaries other than Indebtedness
permitted under Section 7.2 (collectively, the “Terminating Indebtedness”), shall be repaid and
satisfied in full and all guaranties related thereto extinguished, (ii) all commitments to extend
credit under any Terminating Indebtedness shall be terminated, (iii) any Liens securing any
Terminating Indebtedness shall be released and any related filings (including UCC filings,
mortgages, and intellectual property filings) terminated of record (or arrangements satisfactory to
the Bank made therefor), and (iv) any letters of credit outstanding under any Terminating
Indebtedness for which the Borrower or any of its Subsidiaries is obligated shall have been
terminated, canceled or replaced; and the Bank shall have received evidence of the foregoing
satisfactory to it, including a payoff letter executed by the lenders or the agent under the
Terminating Indebtedness.



     (k) Fees; Expenses. The Borrower shall have paid (i) to the Bank, the fees
required to be paid to them on the Closing Date, and (ii) all other fees and reasonable expenses
required hereunder or under any other Credit Document to be paid on or prior to the Closing Date
(including reasonable fees and expenses of counsel) in connection with this Agreement and the other
Credit Documents.



     (1) No Material Adverse Change. Since December 31, 2004, both immediately
before and after giving effect to the consummation of this Agreement, there shall not have



18









 




occurred (i) a Material Adverse Effect or (ii) any event, condition or state of facts that
could reasonably be expected to have a Material Adverse Effect.




     (m) Other Documents. The Bank shall have received such other documents,
certificates, opinions, instruments and other evidence as the Bank may reasonably request, all in
form and substance satisfactory to the Bank and its counsel.



     3.2 Conditions to all Loans . The obligation of the Bank to make any Loan hereunder
(including any Loans made on or after the Closing Date), is subject to the continued validity of
all Credit Documents and the satisfaction of the following conditions:



     (a) The Bank shall have received a notice of borrowing (each a “Notice of Borrowing”), in the
form of Exhibit D, specifying (i) the aggregate principal amount of the requested Loan to be made
pursuant to such Borrowing, and (ii) the requested date of such Borrowing, which shall be a
Business Day. Each such Notice of Borrowing shall be irrevocable.



     (b) Each of the representations and warranties made by the Borrower in Article IV shall be
true and correct on and as of such date with the same effect as if made on and as of such date
(except to the extent any such representation or warranty related to a specific date, in which case
such representation or warranty shall be true and correct as of such date); and



     (c) No Default or Event of Default shall have occurred and be continuing on such date or after
giving effect to the portion of the Loan to be made on such date.



     3.3 Waiver of Conditions Precedent. If the Bank funds any portion of the Loans
hereunder prior to the fulfillment of any of the conditions precedent set forth in this Article
III, the making of such Loan shall constitute only an extension of time for the fulfillment of such
condition and not a waiver thereof, and the Borrower shall thereafter use its best efforts to
fulfill each such condition within thirty (30) days after the date of such funding.



ARTICLE IV




REPRESENTATIONS AND WARRANTIES



     Each of the Borrower and its Subsidiaries represents and warrants to the Bank as follows:



     4.1 Corporate Organization and Power. Each of the Borrower and its Subsidiaries
(a) is a corporation or a limited liability company duly organized or formed, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or formation, as the case
may be; (b) is duly qualified or licensed to do business and is in good standing in every other
jurisdiction where the nature of its business or its properties makes such qualification or
licensing necessary (except where the failure to be so qualified or licensed would not have a
Material Adverse Effect); (c) has full corporate or limited liability company power and authority
to execute, deliver and perform the Credit Documents to which it is or will be a party, to own and
hold its property and to engage in its business as presently conducted, and (d) has all
governmental licenses, permits, franchises, certificates, inspections, authorizations, consents and
approvals required to carry on its business as it is now being conducted (except where the failure
to have such governmental authorization would not have a Material Adverse Effect).



19









 





     4.2 Corporate Authority; No Conflict With Other Instruments or Law. The execution,
delivery and performance of this Agreement and the other Credit Documents and the consummation of
the transactions contemplated hereby and thereby (a) are within the corporate or limited liability
company power and authority of the Borrower and each of its Subsidiaries, (b) have been duly
authorized by all necessary corporate or limited liability company action on the part of the
Borrower and each of its Subsidiaries, (c) do not and will not conflict with, contravene or violate
any provision of, or result in a breach of or default under, or require the waiver (not already
obtained) of any provision of or the consent (not already given) of any Person under the terms of
the Borrower’s or any of its Subsidiaries’ articles or certificate of incorporation or formation,
its bylaws or operating agreement, or other applicable formation or organizational documents, or
any indenture, mortgage, deed of trust, loan or credit agreement or other agreement or instrument
to which the Borrower or any of its Subsidiaries is a party or by which it is bound or to which any
of its properties are subject, (d) will not violate, conflict with, give rise to any liability
under, or constitute a default under any Requirement of Law, and
(e) will not result in the creation, imposition, or acceleration of any indebtedness or tax or any
Lien that is not a Permitted Lien of any nature upon, or with respect to, the Borrower or any of
its Subsidiaries or any of their properties.



     4.3 Due Execution and Delivery. This Agreement and the other Credit Documents to which
the Borrower and each of its Subsidiaries is a party have been duly executed and delivered to the
Bank by an officer of the Borrower who has been duly authorized to perform such acts.



     4.4 Enforceability. This Agreement and the other Credit Documents to which the
Borrower and each of its Subsidiaries is a party constitute the legal, valid and binding
obligations of the Borrower and each of its Subsidiaries enforceable against the Borrower and each
of its Subsidiaries in accordance with their terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws, statutes or rules of
general application affecting the enforcement of creditor’s rights or general principles of equity.



     4.5 Governmental Approval. The execution, delivery and performance of this Agreement
and the other Credit Documents to which the Borrower and each of its Subsidiaries is a party and
the transactions contemplated hereby and thereby do not require any authorization, exemption,
consent or approval of, notice to, or declaration or filing with, any Governmental Authority other
than those obtained on or before the Closing Date.



     4.6 Margin Stock. None of the Borrower or its Subsidiaries is 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 Regulation T, U or X of the Board of
Governors of the Federal Reserve System). The execution, delivery and performance of this Agreement
and the use of the proceeds of the Loan or any extension of credit hereunder, do not and will not
constitute a violation of such Regulations.



     4.7 Investment Company. None of the Borrower or its Subsidiaries is an “investment
company” or a company “controlled” by an “investment company”, within the meaning of the
Investment Company Act of 1940, as amended.



20









 





     4.8 Taxes. None of the Borrower or its Subsidiaries is delinquent in the payment
of any taxes that have been levied or assessed by any Governmental Authority against it or its
assets unless such tax is being contested in good faith by proper proceedings and adequate reserves
satisfactory to the Bank have been established and maintained with respect thereto. The Borrower
and each of its Subsidiaries has timely filed all tax returns that are required by law to be filed,
and has paid all taxes shown on said returns to be payable by the Borrower and each of its
Subsidiaries and all other assessments or fees levied upon it or upon its properties to the extent
that such taxes, assessments or fees have become due, and if not due, such taxes have been
adequately provided for and sufficient reserves therefor established on its books of account. No
material controversy in respect of the Borrower’s or any of its Subsidiaries’ income taxes is
pending or, to the knowledge of the Borrower or any of its Subsidiaries, threatened.



     4.9 Litigation. There is no judgment, injunction or similar order or decree which, and
no action, suit, claim, investigation or proceeding pending or, to the knowledge of the Borrower or
any of its Subsidiaries, threatened against or affecting the Borrower or any of its Subsidiaries,
before any court, commission, panel, board, bureau, arbitrator or any Governmental Authority which
(in any one case or in the aggregate, if determined adversely to the interests of the Borrower or
any of its Subsidiaries), (a) is reasonably likely to have a Material Adverse Effect, or (b)
affects the validity or enforceability of this Agreement or any of the other Credit Documents.





     4.10 Financial Statements; Solvency.



     (a) The Borrower has delivered to the Bank (i) the audited consolidated balance sheets of the
Borrower and its Subsidiaries as of October 31, 2002, 2003 and 2004, in each case with the related
statements of income, cash flows and stockholders’ equity for the Fiscal Years then ended, together
with the opinion of Sharf Pera & Co., PLLC thereon, (ii) the unaudited consolidated balance sheet
of the Borrower and its Subsidiaries as of June 30, 2005, with the related statements of income,
cash flows and stockholders’ equity for the six-month period then ended, respectively. Such
financial statements contain no material misstatement or omission and fairly present the financial
position, assets and liabilities of the Borrower and each of its Subsidiaries for the respective
periods then ended.



     (b) Except as set forth on Schedule 4.10(b), each of the Borrower and its Subsidiaries is
Solvent.



     (c) Set forth on Schedule 4.10(c) is a list of all note receivables of the Borrower and its
Subsidiaries, including all notes from Franchisees and Former Franchisee Receivables (each
indicated as such), outstanding as of the Closing Date, and including the outstanding balance of
each such note receiveable.



     4.11 No Material Adverse Change. Since December 31, 2004, (a) there has been no
Material Adverse Change, nor to the knowledge of the Borrower or any of its Subsidiaries, is any
Material Adverse Change threatened or reasonably likely to occur, and (b) neither the Borrower nor
any of its Subsidiaries has incurred any obligation or liability that would be reasonably likely to
have a Material Adverse Effect or entered into any material contracts not specifically







21









 







contemplated by this Agreement or the other Credit Documents or not in the ordinary course of
business consistent with past practice.




     4.12 Compliance with Laws. To the best knowledge of the Borrower and its Subsidiaries,
each of the Borrower and its Subsidiaries has timely filed all material reports, documents and
other materials required to be filed by it under all applicable Requirements of Law with any
Governmental Authority, has retained all material records and documents required to be retained by
it under all applicable Requirements of Law, and is otherwise in compliance with all applicable
Requirements of Law in respect of the conduct of its business and the ownership and operation of
its properties, except in each case to the extent that the failure to comply therewith,
individually or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.



     4.13 Environmental Compliance. Except as set forth on Schedule 4.13, to the best
knowledge of the Borrower and its Subsidiaries,



     (a) (i) no Hazardous Material is or has been generated, used, released, treated, disposed of
or stored, or otherwise located, in, on or under any property owned, leased or operated by the
Borrower or any of its Subsidiaries or any portion thereof, and no part of the property owned,
leased or operated by the Borrower or any of its Subsidiaries (now or in the past), including
without limitation the soil and groundwater located thereon and thereunder, has been contaminated
by any Hazardous Material; (ii) no improvements on the property owned, leased or operated by the
Borrower or any of its Subsidiaries contain any asbestos or substances containing asbestos; (iii)
none of the property owned, leased or operated by the Borrower or any of its Subsidiaries has been
the subject of an environmental audit or assessment, or remedial action; and (iv) the foregoing
statements are true and correct with respect to all of the real property adjoining any of the
property owned, leased or operated by the Borrower or any of its Subsidiaries.



     (b) None of the property owned, leased or operated by the Borrower or any of its Subsidiaries
(now or in the past) has, pursuant to any Environmental Law, been placed on the “National
Priorities List” or “CERCLIS List” (or any similar federal, state or local list) of sites
subject to possible environmental problems.



     (c) There are no underground storage tanks situated on the property owned, leased or operated
by the Borrower or any of its Subsidiaries and no underground storage tanks have ever been situated
on the property owned, leased or operated by the Borrower or any of its Subsidiaries.



     (d) All activities and operations of each of the Borrower and its Subsidiaries meet all
requirements of all applicable Environmental Laws, none of the Borrower or its Subsidiaries has
violated any Environmental Law in the past, and none of the property owned, leased or operated by
the Borrower and its Subsidiaries has ever been the site of a violation of any Environmental Law.



     (e) None of the Borrower or its Subsidiaries has sent a Hazardous Material to a site which,
pursuant to any Environmental Law, (i) has been placed on the “National Priorities List”



22









 




or “CERCLIS List” (or any similar federal, state or local list) of sites subject to possible
environmental problems, or (ii) is subject to, or the source of, a claim, an administrative order
or other request to take “response,” “removal,” “corrective” or “remedial” action, as defined in
any Environmental Law, or to pay for or contribute to the costs of cleaning up the site.




     (f) None of the Borrower or its Subsidiaries is involved in any suit or proceeding and has not
received any notice from any Governmental Authority or other third party with respect to a release
or threat of release of any Hazardous Material, or violation or alleged violation of any
Environmental Law, and has not received notice of any claim from any person or entity relating to
property damage or to personal injuries from exposure to any Hazardous Material.



     (g) Each of the Borrower and its Subsidiaries has timely filed all reports required to be
filed, has acquired all necessary certificates, approvals and permits, and has generated and
maintained all required data, documentation and records required under all Environmental Laws.



     4.14 Ownership of Properties. Each of the Borrower and its Subsidiaries (i) has good
and marketable title to all real property owned respectively by it, (ii) holds interests as lessee
under valid leases in full force and effect with respect to all material leased real and personal
property used in connection with its business, and (iii) has good title to all of its other
material properties and assets reflected in the financial statements referred to in Section 4.10
(except as sold or otherwise disposed of since the date thereof in the ordinary course of
business), in each case free and clear of all Liens other than Permitted Liens. Schedule 4.14
lists, as of the Closing Date, all Realty of the Borrower and each of its Subsidiaries, indicating
in each case the identity of the owner, the address of the property, the nature of the use of the
premises and whether such interest is a leasehold or fee ownership interest.



     4.15 Intellectual Property. Each of the Borrower and its Subsidiaries owns, or has the
legal right to use, all Intellectual Property necessary for it to conduct its business as currently
conducted. Schedule 4.15 lists, as of the Closing Date, all registered Intellectual Property owned
by the Borrower or any of its Subsidiaries. No claim has been asserted or is pending by any Person
challenging or questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Borrower know of any such claim, and
to the knowledge of the Borrower, the use of such Intellectual Property by the Borrower does not
infringe on the known rights of any Person.



     4.16 Insurance. Schedule 4.16 sets forth, as of the Closing Date, an accurate and
complete list and a brief description (including the insurer, policy number, type of insurance,
coverage limits, deductibles, expiration dates and any special cancellation conditions) of all
policies of property and casualty, liability (including, but not limited to, product liability),
business interruption, workers’ compensation, keyman life insurance, and other forms of insurance
owned or held by the Borrower or any of its Subsidiaries or pursuant to which any of their
respective assets are insured. The assets, properties and business of the Borrower and its
Subsidiaries are insured against such hazards and liabilities, under such coverages and in such
amounts, as are customarily maintained by prudent companies similarly situated and under policies
issued by insurers of recognized responsibility.



23









 





     4.17 ERISA.



     (a) The Borrower and each member of the Controlled Group have fulfilled their obligations
under the minimum funding standards of ERISA and the Code with respect to each Plan. The Borrower
and each member of the Controlled Group are in compliance in all material respects with the
presently applicable provisions of ERISA and the Code, and have not incurred any liability to the
PBGC or a Plan under Title IV of ERISA.



     (b) Neither the Borrower nor any member of the Controlled Group has incurred any withdrawal
liability with respect to any Multiemployer Plan under Title IV of ERISA, and no such liability is
expected to be incurred.



     (c) Neither the Borrower nor any member of the Controlled Group has participated in a
prohibited transaction, as defined in Section 406 of ERISA or Section 4975(c) of the Code, which
could subject either the Borrower or a member of the Controlled Group to any material civil penalty
under ERISA or material tax under the Code.



     4.18 Full Disclosure. All information heretofore furnished to the Bank by each of the
Borrower and its Subsidiaries for purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all such information hereafter furnished to the Bank by
each of the Borrower and its Subsidiaries will be, true, accurate and complete in every material
respect or based on reasonable estimates on the date as of which such information is stated or
certified. Each of the Borrower and its Subsidiaries has disclosed to the Bank in writing any and
all facts which materially and adversely affect or may affect (to the extent the Borrower or any of
its Subsidiaries can now reasonably foresee), the business, operations, prospects or condition,
financial or otherwise, of each of the Borrower and its Subsidiaries, or the ability of the
Borrower or any of its Subsidiaries to perform its obligations under this Agreement or any of the
other Credit Documents.



     4.19 No Default. No Default or Event of Default under this Agreement has occurred and
is continuing.



     4.20 Subsidiaries. Except as set forth on Schedule 4.20, the Borrower has no
Subsidiaries. Except as indicated on Schedule 4.20, none of the Subsidiaries are foreign
Subsidiaries.



     4.21 First Priority Liens. Except for Permitted Liens, this Agreement, together with
the Security Documents and the actions described in clauses (i), (ii) and (iii) of Section 3.2 of
the Security Agreement, will create valid, perfected, first-priority security interests in the
collateral described in the Security Documents, in each case enforceable against the Borrower and
each of its Subsidiaries and securing the payment of all obligations purported to be secured
thereby.



     4.22 Labor Relations. None of the Borrower or its Subsidiaries is engaged in any
unfair labor practice within the meaning of the National Labor Relations Act of 1947, as amended.
As of the Closing Date, there is (i) no unfair labor practice complaint before the National Labor
Relations Board, or grievance or arbitration proceeding arising out of or under any collective
bargaining agreement, pending or, to the knowledge of the Borrower, threatened, against the
Borrower or any of its Subsidiaries, (ii) no strike, lock-out, slowdown, stoppage,







24









 







walkout or other labor dispute pending or, to the knowledge of the Borrower, threatened, against
the Borrower or any of its Subsidiaries, and (iii) to the knowledge of the Borrower, no petition
for certification or union election or union organizing activities taking place with respect to the
Borrower or any of its Subsidiaries. As of the Closing Date, there are no collective bargaining
agreements or Multiemployer Plans covering the employees of the Borrower or any of its
Subsidiaries.




     4.23 OFAC; Anti-Terrorism Laws.



     (a) None of the Borrower or its Subsidiaries is a Sanctioned Person or does business in a
Sanctioned Country or with a Sanctioned Person in violation of the economic sanctions of the United
States administered by OFAC.



     (b) The Borrower and its Subsidiaries are in compliance in all material respects with the
PATRIOT Act. No part of the proceeds of the Loans hereunder will be used, directly or indirectly,
for any payments to any governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended.



ARTICLE V




AFFIRMATIVE COVENANTS



     Until payment in full of all Obligations of the Borrower to the Bank, the Borrower will,
and will cause its Subsidiaries to:



     5.1 Financial and Business Information. Deliver to the Bank:



     (a) Within forty-five (45) days after the close of each of the first three Fiscal Quarters of
each Fiscal Year of the Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries
as of the close of such Fiscal Quarter and consolidated statements of income and cash flows for the
Borrower and its Subsidiaries for the Fiscal Quarter then ended and for that portion of the Fiscal
Year then ended, all in reasonable detail setting forth in comparative form the corresponding
figures for the preceding Fiscal Year, all prepared in accordance with GAAP applied on a basis
consistent with that of the preceding period or containing disclosure of the effect on the
financial position or results of operation of any change in the application of accounting
principles and practices during the period, subject only to audit and year-end adjustments, and
certified by the Borrower’s president or chief financial officer to be true and accurate;



     (b) Within one hundred twenty (120) days after the close of the Fiscal Year of the Borrower,
an audited consolidated balance sheet of the Borrower and its Subsidiaries as of the close of such
Fiscal Year and audited consolidated statements of income and cash flows for the Borrower and its
Subsidiaries for the Fiscal Year then ended, including the notes to each, all in reasonable detail
setting forth in comparative form the corresponding figures for the preceding Fiscal Year, prepared
by an independent certified public accountant reasonably acceptable to the Bank, in accordance with
GAAP applied on a basis consistent with that of the preceding year or







25









 







containing disclosure of the effect on the financial position or results of operation of any change
in the application of accounting principles and practices during the year, and accompanied by a
report thereon by such certified public accountant containing an opinion that is not qualified with
respect to scope limitations imposed by the Borrower or its Subsidiaries or with respect to
accounting principles followed by the Borrower or its Subsidiaries not in accordance with GAAP;




     (c) Concurrently with the delivery of the financial statements described in subsection (b)
above, a certificate addressed to the Bank from the independent certified public accountant that in
making its audit of the financial statements of the Borrower and its Subsidiaries, it obtained no
knowledge of the occurrence or existence of any Default or Event of Default under this Agreement,
or specifying the nature and period of existence of any such Default or Event of Default;
provided, however, that such accountant shall not be liable to anyone by reason of its
failure to obtain knowledge of any such Default or Event of Default that would not be disclosed in
the course of an audit conducted in accordance with generally accepted auditing standards;



     (d) Concurrently with the delivery of the financial statements described in subsections (a)
and (b) above, a Compliance Certificate with respect to the period covered by the financial
statements being delivered thereunder, executed by the president or chief financial officer of the
Borrower, together with a Covenant Compliance Worksheet reflecting the computation of the financial
covenants set forth in Article VI as of the last day of the period covered by such financial
statements;



     (e) On or before the earlier of (i) thirty (30) days after of the Closing Date and
(ii) November 30, 2005, a consolidated balance sheet of the Borrower and its Subsidiaries as of
December 31, 2004 and consolidated statements of income and cash flows for the Borrower and its
Subsidiaries for the two-month period then ended, all prepared in accordance with GAAP, and
certified by the Borrower’s president or chief financial officer to be true and accurate;



     (f) Prompt notice of any Material Adverse Change; and



     (g) Within a reasonable time, upon the Bank’s request, such other information about the
property, financial condition and operations of the Borrower and its Subsidiaries as the Bank may
from time to time reasonably request.



     5.2 Notice of Certain Events. Give written notice to the Bank of the following:



     (a) promptly after a Responsible Officer’s learning thereof, (i) the commencement of any
material litigation affecting the Borrower or any of its Subsidiaries or any of their respective
assets, whether or not the claim is considered by the Borrower to be covered by insurance, and (ii)
the institution of any material administrative proceeding, that in the case of either clause (i) or
(ii), would be reasonably likely to have a Material Adverse Effect if decided adversely to the
Borrower or its Subsidiaries;



     (b) immediately after a Responsible Officer’s learning thereof, the occurrence of any Casualty
Event;



26









 





     (c) at least 10 days prior thereto, the opening of any new office or place of business of
the Borrower or any of its Subsidiaries;



     (d) as soon as reasonably practicable, but in any event at least five Business Days prior
thereto, the closing of any existing office or place of business of the Borrower or any of its
Subsidiaries;



     (e) promptly after a Responsible Officer’s learning thereof, any labor dispute to which the
Borrower or any of its Subsidiaries may become a party, or any strike or walkout relating to any of
their plants or other facilities, in either case that is reasonably likely to have a Material
Adverse Effect, and the expiration of any labor contract to which the Borrower or any of its
Subsidiaries is a party or by which any of them is bound;



     (f) promptly after the occurrence thereof, any default by any obligor under any note or other
evidence of Indebtedness payable to the Borrower or any of its Subsidiaries exceeding $300,000;



     (g) promptly after the rendition thereof, any judgment in an amount exceeding $300,000
rendered against the Borrower or any of its Subsidiaries;



     (h) promptly after a Responsible Officer’s learning thereof, any material (i)
Environmental Liability, (ii) pending, threatened or anticipated judicial or administrative
proceeding arising from or in any way associated with any Environmental Law, (iii) notice from any
Governmental Authority, or by any other Person, of possible or alleged noncompliance with or
liability under any Environmental Law and any investigations concerning any violation of any
Environmental Law, (iv) judgment, decree, order or written agreement with a Governmental Authority
or other entity arising from or in any way associated with any Environmental Law, in each case at,
on, in, under or in any way affecting the Realty or any adjacent property, and all facts, events,
or conditions that could lead to any of the foregoing;



     (i) if and when any member of the Controlled Group (i) gives or is required to give
notice to the PBGC of any Reportable Event with respect to any Plan which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan administrator of any
Plan has given or is required to give notice of any such Reportable Event; (ii) receives notice of
complete or partial withdrawal liability under Title IV of ERISA; or (iii) receives notice from the
PBGC under Title IV of ERISA of an intent to terminate or appoint a trustee to administer any Plan,
and provide the Bank with a copy of such notice; and



     (j) promptly, but in any event within five Business Days after the Borrower becomes
aware of the occurrence of any Default or Event of Default.



     5.3 Existence; Franchises; Maintenance of Properties. (a) Maintain and preserve
in full force and effect its legal existence, its good standing under the laws of the jurisdiction
of its incorporation or formation, as the case may be, and its qualification to do business in
every other jurisdiction where the nature of its business or its properties makes such
qualification necessary (except where the failure to be so qualified or licensed would not have a
Material Adverse Effect), (b) obtain, maintain and preserve in full force and effect its
Intellectual Property and all other rights, franchises, licenses, permits, certifications,
approvals and authorizations required by







27









 







Governmental Authorities and necessary to the ownership, occupation or use of its properties
or the conduct of its business, except to the extent the failure to do so could not reasonably be
expected to have a Material Adverse Effect, and (c) keep all material properties in good working
order and condition (normal wear and tear and damage by casualty excepted) and from time to time
make all necessary repairs to and renewals and replacements of such properties, except to the
extent that any of such properties are obsolete or are being replaced or, in the good faith
judgment of the Borrower, are no longer useful or desirable in the conduct of the business.




     5.4 Compliance with Law. Comply in all respects with all Requirements of Law
applicable in respect of the conduct of its business and the ownership and operation of its
properties, except to the extent the failure to so comply could not reasonably be expected to have
a Material Adverse Effect.



     5.5 Payment of Obligations. (a) Pay, discharge or otherwise satisfy at or before
maturity all liabilities and obligations as and when due (subject to any applicable subordination,
grace and notice provisions), except to the extent failure to do so could not reasonably be
expected to have a Material Adverse Effect, and (b) pay and discharge all taxes, assessments and
governmental charges or levies imposed upon it, upon its income or profits or upon any of its
properties, prior to the date on which penalties would attach thereto, and all lawful claims that,
if unpaid, would become a Lien (other than a Permitted Lien) upon any of the properties of the
Borrower or any of its Subsidiaries; provided, however, that the Borrower and its
Subsidiaries shall not be required to pay any such liability, obligation, tax, assessment, charge,
levy or claim that is being contested in good faith and by proper proceedings and as to which such
party is maintaining adequate reserves with respect thereto in accordance with GAAP.



     5.6 Maintenance of Books and Records; Inspection. Maintain adequate books, accounts
and records, and prepare all financial statements required under this Agreement in accordance with
GAAP and in compliance with the regulations of any Governmental Authority having jurisdiction over
it. The Borrower shall permit any employee or representative of the Bank to visit and inspect any
of its properties, to examine and audit its books of account, records, reports and other papers, to
make copies and extracts therefrom, and to discuss its affairs, finances and accounts with its
officers and, upon prior notice to the Borrower, its independent public accountants (and by this
provision the Borrower authorizes said accountants to discuss its finances and affairs with the
Bank and to provide the Bank with access to such accountants’ work papers), all upon reasonable
notice during business hours and as often as may be reasonably requested.



     5.7 Maintenance of Insurance. Maintain and pay for insurance upon the Borrower and its
property, wherever located, covering casualty, hazard, public liability, product liability,
business interruption, boiler, fidelity and such other risks, casualties and contingencies as is
customary in the business in which the Borrower is engaged, all in such amounts and with such
insurance companies as shall be reasonably satisfactory to the Bank.



     5.8 Compliance with ERISA.



     (a) The Borrower will, and will cause each of its Subsidiaries and each member of the
Controlled Group to, comply in all material respects with ERISA and the Code and the



28









 




regulations and requirements of the PBGC, except where the necessity of such compliance is being
contested in good faith through appropriate proceedings.




     (b) The Borrower and each member of the Controlled Group will make timely payment of
contributions required to meet the minimum funding standards set forth in ERIS A and the Code with
respect to any Plan, and will not take any action or fail to take action the result of which action
or inaction could be a material liability for the Borrower or a member of the Controlled Group to
the PBGC or a Multiemployer Plan. Neither the Borrower nor a member of the Controlled Group will
participate in a prohibited transaction, as defined in Section 406 of ERIS A or Section 4975(c) of
the Code, which could subject either the Borrower or a member of the Controlled Group to any
material civil penalty under ERISA or material tax under the Code.



     5.9 Name Change. Notify the Bank at least thirty (30) days prior to the effective date
of any change of its name, and prior to such effective date the Borrower shall have executed any
required amended or new UCC financing statements and other documents necessary to maintain and
continue the perfected security interests of the Bank in all of its collateral and shall have taken
such other actions and executed such documents as the Bank shall reasonably require.



     5.10 Creation of Subsidiaries. Subject to the provisions of Section 7.12, the Borrower
may from time to time create new Wholly Owned Subsidiaries and the Wholly Owned Subsidiaries of the
Borrower may create new Wholly Owned Subsidiaries, provided that concurrently with (and in
any event within ten (10) Business Days after) the creation thereof:



     (a) Each such new Subsidiary will execute and deliver to the Bank (i) a joinder to the
Guaranty, pursuant to which such new Subsidiary shall become a Subsidiary Guarantor thereunder and
shall guarantee the payment in full of the Obligations of the Borrower under this Agreement and the
other Credit Documents, and (ii) a joinder to the Security Agreement, pursuant to which such new
Subsidiary shall become a party thereto and shall grant to the Bank a first priority Lien upon and
security interest in its accounts receivable, inventory, equipment, general intangibles and other
personal property as collateral for its obligations under the Guaranty, subject only to Permitted
Liens; and



     (b) The Borrower will deliver to the Bank a certificate of the secretary or an assistant
secretary of such Subsidiary, in form and substance reasonably satisfactory to the Bank, certifying
(i) that attached thereto is a true and complete copy of the articles or certificate of
incorporation, certificate of formation or other organizational document and all amendments thereto
of such Subsidiary, certified as of a recent date by the Secretary of State (or comparable
Governmental Authority) of its jurisdiction of organization, and that the same has not been amended
since the date of such certification, (ii) that attached thereto is a true and complete copy of the
bylaws, operating agreement or similar governing document of such Subsidiary, as then in effect and
as in effect at all times from the date on which the resolutions referred to in clause (iii) below
were adopted to and including the date of such certificate, (iii) that attached thereto is a true
and complete copy of resolutions adopted by the board of directors (or similar governing body) of
such Subsidiary, authorizing the execution, delivery and performance of the Credit Documents to
which it is a party, and (iv) as to the incumbency and genuineness of the signature of each officer
of such Subsidiary executing such Credit Documents, and attaching all such copies of the documents
described above;



29









 




provided, however, that the provisions of this Section 5.10 shall not be required with
respect to foreign Subsidiaries.




     5.11 OFAC, PATRIOT Act Compliance. (a) Refrain from doing business in a Sanctioned
Country or with a Sanctioned Person in violation of the economic sanctions of the United States
administered by OFAC, and (b) provide, to the extent commercially reasonable, such information and
take such actions as are reasonably requested by the Bank in order to assist the Bank in
maintaining compliance with the PATRIOT Act.



     5.12 Banking Relationship. The Borrower shall maintain a significant operating
relationship with the Bank during the period for which any Loans or the Revolving Credit Commitment
is outstanding, including without limitation, maintaining its primary depository account, cash
management and lockbox services with the Bank.



     5.13 Further Assurances. Make, execute, endorse, acknowledge and deliver to the Bank
any amendments, restatements, modifications or supplements hereto and any other agreements,
instruments or documents, and take any and all such other actions, as may from time to time be
reasonably requested by the Bank to effect, confirm or further assure or protect and preserve the
interests, rights and remedies of the Bank under this Agreement and the other Credit Documents.



ARTICLE VI




FINANCIAL COVENANTS



     The Borrower covenant and agrees that, until payment in full of all Obligations of the
Borrower to the Bank the Borrower will not:



     6.1 Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio as of the last
day of any Fiscal Quarter to be less than 1.25:1.00.



     6.2 Minimum Tangible Net Worth. Permit the Consolidated Tangible Net Worth to be less
than (i) $3,000,000 for the Fiscal Year ending on December 31, 2005 or (ii)(x) $3,000,000
plus (y) 75% of Consolidated Net Income for the Borrower for each Fiscal Year ending on or
after December 31, 2006 (provided that Consolidated Net Income for any such Fiscal Year
shall be taken into account for purposes of this calculation only if positive) plus(z) 50%
of the aggregate amount of all increases in the stated capital and additional paid-in capital
accounts of the Borrower, as determined on a consolidated basis in accordance with GAAP, resulting
from the issuance of equity securities (including pursuant to the exercise of options, rights or
warrants or pursuant to the conversion of convertible securities) or other Capital Stock after the
Closing Date.



     6.3 Funded Debt to EBITDA Ratio. Permit the Funded Debt to EBITDA Ratio as of the last
day of any Fiscal Quarter to be greater than 3.00:1:00.







30









 








ARTICLE VII




NEGATIVE COVENANTS



     Until payment in full of all Obligations of the Borrower to the Bank, the Borrower will
not, and will not permit its Subsidiaries to, without the express prior written approval of the
Bank:



     7.1 Mergers; Consolidations. Merge or consolidate with or into any other Person,
liquidate, wind up or dissolve; provided, however, that any Wholly Owned Subsidiary of the
Borrower may merge or consolidate with, or be liquidated into, (i) the Borrower (so long as the
Borrower is the surviving or continuing entity) or (ii) any other Wholly Owned Subsidiary (so long
as the surviving or continuing entity is a Subsidiary Guarantor), and in each case so long as no
Default or Event of Default has occurred and is continuing or would result therefrom.



     7.2 Indebtedness. Directly or indirectly issue, assume, create, incur or suffer to
exist any Indebtedness except for:




     (i) Indebtedness of the Borrower and its Subsidiaries in favor of the Bank
incurred under this Agreement and the other Credit Documents;




     (ii) Indebtedness secured by Permitted Liens;




     (iii) Indebtedness of the Borrower under Hedge Agreements entered into in
connection with this Agreement or in the ordinary course of business to manage existing or
anticipated interest rate or foreign currency risks and not for speculative purposes;




     (iv) purchase money Indebtedness of the Borrower and its Subsidiaries incurred
solely to finance the acquisition, construction or improvement of any equipment, real
property or other fixed assets in the ordinary course of business, including Indebtedness in
respect of Capitalized Lease Obligations, provided that all such Indebtedness shall
not exceed $750,000 in aggregate principal amount outstanding at any time;




     (v) notwithstanding subsection (iv) above, purchase money Indebtedness of the
Borrower incurred pursuant to an agreement to be entered into with Microsoft Corp. for the
purchase of software and accompanying licenses for a purchase price not to exceed
$1,500,000; and




     (vi) other Indebtedness of the Borrower and its Subsidiaries not exceeding $300,000
in aggregate principal amount outstanding at any time.



     7.3 Liens and Encumbrances. Create, assume or suffer to exist any Lien in or on any of
its property, real or personal, whether now owned or hereafter acquired, except for (collectively,
the “Permitted Liens”):




     (i) Liens in favor of the Bank created by or otherwise existing under or in
connection with this Agreement and the other Credit Documents;



31









 






     (ii) Liens imposed by mandatory provisions of law of carriers,
warehousemen, mechanics and materialmen incurred in the ordinary course of business for sums
not yet due and payable;




     (iii) Liens incurred in the ordinary course of business in connection with worker’s
compensation, unemployment insurance or other forms of governmental insurance or benefits,
or to secure the performance of letters of credit, bids, tenders, statutory obligations,
leases and contracts (other than for borrowed money) entered into in the ordinary course of
business, provided that all such liens in the aggregate have no reasonable likelihood of
causing a Material Adverse Effect;




     (iv) Liens for current taxes, assessments or other governmental charges that are
not delinquent or remain payable without any penalty or that are being contested in good
faith and with due diligence by appropriate proceedings, provided that all such liens in the
aggregate have no reasonable likelihood of causing a Material Adverse Effect and, if
requested by the Bank, the Borrower or such Subsidiary has established reserves satisfactory
to the Bank with respect thereto;




     (v) Liens of judgments, execution, attachment or similar process which will not
result or have not yet resulted in the occurrence of an Event of Default as set forth in
Sections 8.1(k) or (1) hereof;




     (vi) Liens with respect to any Realty occupied by the Borrower or any of its
Subsidiaries, (a) all easements, rights of way, reservations, licenses, encroachments,
variations and similar restrictions, charges and encumbrances on title that do not secure
monetary obligations and do not materially impair the use of such property for its intended
purposes or the value thereof, and (b) any other Lien or exception to coverage described in
mortgagee policies of title insurance issued in favor of and accepted by the Bank;




     (vii) Liens securing the purchase money Indebtedness permitted under Section
7.2(iv), provided that (x) any such Lien shall attach to the property being
acquired, constructed or improved with such Indebtedness concurrently with or within ninety
(90) days after the acquisition (or completion of construction or improvement) by the
Borrower or such Subsidiary, (y) the amount of the Indebtedness secured by such Lien shall
not exceed the cost to the Borrower or such Subsidiary of acquiring, constructing or
improving the property and any other assets then being financed solely by the same financing
source, and (z) any such Lien shall not encumber any other property of the Borrower or any
of its Subsidiaries except assets then being financed solely by the same financing source;
and




     (viii) Liens securing the Terminating Indebtedness as set forth on Schedule
7.3(viii); provided that such Liens shall be released and any related filings
terminated of record as required under Section 3.1(j).



     7.4 Disposition of Assets. Sell, lease, transfer, convey or otherwise dispose of
any of its assets or property, other than:



32









 






     (i) the sale or other disposition of inventory or Cash Equivalents in the
ordinary course of business, the sale or write-off of past due or impaired accounts
receivable for collection purposes (but not for factoring, securitization or other financing
purposes), and the termination or unwinding of Hedge Agreements permitted hereunder;




     (ii) the sale, exchange or other disposition in the ordinary course of business
of equipment or other assets that are obsolete or no longer necessary for the operations of
the Borrower and its Subsidiaries with an aggregate value on the Borrower’s balance sheet of
no more than $100,000 in the aggregate; and




     (iii) dividends permitted under Section 7.6.



     7.5 Restricted Investments. Purchase, own, invest in or otherwise acquire,
directly or indirectly, any stock, evidence of indebtedness, or other obligation or security or any
interest whatsoever in any other Person, or make or permit to exist any loans, advances or
extensions of credit to, or any investment in cash or by delivery of property in, any Person
(collectively, “Investments”), except for:




     (i) Investments consisting of Cash Equivalents;




     (ii) Investments consisting of the extension of trade credit, the creation of
prepaid expenses, and the purchase of inventory, supplies, equipment and other assets, in
each case by the Borrower and its Subsidiaries in the ordinary course of business;




     (iii) Investments (including equity securities and debt obligations) of the
Borrower and its Subsidiaries received in connection with the bankruptcy or reorganization
of suppliers and customers and in good faith settlement of delinquent obligations of, and
other disputes with, customers and suppliers arising in the ordinary course of business;




     (iv) without duplication, Investments with related Persons expressly permitted
under Section 7.7;




     (v) Investments of the Borrower under Hedge Agreements entered into in connection
with this Agreement or in the ordinary course of business to manage existing or anticipated
interest rate or foreign currency risks and not for speculative purposes;




     (vi) Investments in connection with the creation (but not acquisition) of new
Wholly Owned Subsidiaries organized under the laws of one of the United States, provided the
Borrower complies with the terms of Section 5.10;




     (vii) Investments in connection with the creation (but not acquisition) of new
Wholly Owned Subsidiaries organized under the laws of a jurisdiction outside of the United
States, provided that in no event shall such investments exceed an aggregate amount
of $100,000 per foreign Subsidiary;




     (viii) Investments consisting of the acquisition of capital stock or substantially
all the assets of Franchisees, provided that immediately after giving pro forma
effect to



33









 




such acquisition (and the incurrence of any Indebtedness in connection therewith), the
Borrower is in compliance with the financial covenants set forth in Article VI for the
Fiscal Quarter most recently ended for which financial statements are required to have been
delivered under Section 5.1(a) or 5.1(b); and




     (ix) other Investments of the Borrower and its Subsidiaries not otherwise
permitted under this Section 7.5 (including joint ventures, but excluding Investments in
Subsidiaries organized under the laws of a foreign jurisdiction) in an aggregate amount not
exceeding $100,000 at any time outstanding for all such Investments.



     7.6 Restricted Payments. Directly or indirectly, declare or make any dividend payment,
or make any other distribution of cash, property or assets, in respect of any of its Capital Stock,
or purchase, redeem, retire or otherwise acquire for value any shares of its Capital Stock, or set
aside funds for any of the foregoing, except that:




     (i) the Borrower and any of its Subsidiaries may declare and make dividend
payments or other distributions payable solely in its Capital Stock, in each case to the
extent not prohibited under applicable Requirements of Law;




     (ii) each Wholly Owned Subsidiary of the Borrower may declare and make dividend
payments or other distributions to the Borrower or to another Subsidiary of the Borrower, in
each case to the extent not prohibited under applicable Requirements of Law; and




     (iii) the Borrower may declare and make dividend payments and other
distributions in cash if no Default or Event of Default shall have occurred and be
continuing or would result therefrom.




     7.7 Transactions With Related Persons. Except as otherwise permitted by Sections 7.2
and 7.6, directly or indirectly make any loan or advance to, or purchase, assume or guarantee any
indebtedness to or from, any of its officers, directors, stockholders, Franchisees or Affiliates,
or to or from any member of the immediate family of any of its officers, directors, stockholders,
Franchisees or Affiliates, or subcontract any operations to any Affiliate, except for travel or
other reasonable expense advances to employees in the ordinary course of business; or enter into
any transaction with any Affiliate, except (i) with respect to the transactions described on
Schedule 7.7 hereto and (ii) pursuant to the reasonable requirements of the business of such
Affiliate and on terms substantially no more favorable to such Affiliate than those that such
Affiliate would obtain in a comparable arms-length transaction with a Person not an Affiliate of
the Borrower.



     7.8 Sale-Leaseback Transactions. Directly or indirectly, become or remain liable as
lessee or as guarantor or other surety with respect to any lease, whether an operating lease or a
Capital Lease, of any property (whether real, personal or mixed, and whether now owned or hereafter
acquired) (i) that the Borrower or any of its Subsidiaries has sold or transferred (or is to sell
or transfer) to a Person that is not a party to this Agreement or any of the Credit Documents or
(ii) that Borrower or any of its Subsidiaries intends to use for substantially the same purpose as
any other property that, in connection with such lease, has been sold or transferred (or is to be



34









 




sold or transferred) by the Borrower or any of its Subsidiaries to another Person that
is not a party to this Agreement or any of the Credit Documents, in each case except for
transactions otherwise expressly permitted under this Agreement.




     7.9 Certain Amendments. (a) Amend, modify or waive, or permit the amendment,
modification or waiver of, any provision of material contract; or (b) amend, modify or change any
provision of its articles or certificate of incorporation or formation, bylaws, operating agreement
or other applicable formation or organizational documents, as applicable, the terms of any class or
series of its Capital Stock, or any agreement among the holders of its Capital Stock or any of
them; in each case other than in a manner that could not reasonably be expected to adversely affect
the Bank in any material respect (provided that the Borrower shall give the Bank notice of
any such amendment, modification or change covered by subsection (b) above, together with certified
copies thereof).



     7.10 Limitation on Certain Restrictions. Directly or indirectly, create or otherwise
cause or suffer to exist or become effective any restriction or encumbrance on (a) the ability of
the Borrower or any of its Subsidiaries to perform and comply with their respective obligations
under the Credit Documents or (b) the ability of any Subsidiary of the Borrower to make any
dividend payment or other distribution in respect of its Capital Stock, to repay Indebtedness owed
to the Borrower or any other Subsidiary, to make loans or advances to the Borrower or any other
Subsidiary, or to transfer any of its assets or properties to the Borrower or any other Subsidiary,
except (in the case of clause (b) above only) for such restrictions or encumbrances existing under
or by reason of (i) this Agreement and the other Credit Documents, (ii) applicable Requirements of
Law, (iii) customary non-assignment provisions in leases and licenses of real or personal property
entered into by the Borrower or any Subsidiary as lessee or licensee in the ordinary course of
business, restricting the assignment or transfer thereof or of property that is the subject
thereof, and (iv) customary restrictions and conditions contained in any agreement relating to the
sale of assets (including Capital Stock of a Subsidiary) pending such sale, provided that
such restrictions and conditions apply only to the assets being sold and such sale is permitted
under this Agreement.



     7.11 No Other Negative Pledges. Enter into or suffer to exist any agreement or
restriction that, directly or indirectly, prohibits or conditions the creation, incurrence or
assumption of any Lien upon or with respect to any part of its property or assets, whether now
owned or hereafter acquired, or agree to do any of the foregoing, except for such agreements or
restrictions existing under or by reason of (i) this Agreement and the other Credit Documents, (ii)
applicable Requirements of Law, (iii) any agreement or instrument creating a Permitted Lien (but
only to the extent such agreement or restriction applies to the assets subject to such Permitted
Lien), (iv) customary provisions in leases and licenses of real or personal property entered into
by the Borrower or any Subsidiary as lessee or licensee in the ordinary course of business,
restricting the granting of Liens therein or in property that is the subject thereof, and (v)
customary restrictions and conditions contained in any agreement relating to the sale of assets
(including Capital Stock of a Subsidiary) pending such sale, provided that such
restrictions and conditions apply only to the assets being sold and such sale is permitted under
this Agreement.



     7.12 Subsidiaries or Partnerships. (a) Become a partner or joint venturer in any
partnership or joint venture, unless the Borrower shall give the Bank at least thirty (30) days’








35









 










prior written notice thereof, or (b) acquire or create any Subsidiary or divest itself of any
material assets by transferring them to any Subsidiary, unless (i) in the case of a domestic
Subsidiary, the Borrower shall give the Bank notice thereof at least thirty (30) days’ prior or as
soon thereafter as reasonably practicable, (ii) in the case of a foreign Subsidiary, the Borrower
shall give the Bank notice thereof at least thirty (30) days’ prior, and (iii) whether such
Subsidiary is a domestic Subsidiary or a foreign Subsidiary, such Subsidiary shall comply with all
of the conditions and requirements set forth in Section 5.10.




     7.13 Lines of Business. Engage in any business other than the business in which it is
currently engaged or a business reasonably related thereto, or make any material change in its
business objectives.



     7.14 Fiscal Year. Change its Fiscal Year or its method of determining Fiscal
Quarters.



     7.15 Accounting Changes. Other than as permitted pursuant to Section 1.2, make or
permit any material change in its accounting policies or reporting practices, except as may be
required by GAAP.



ARTICLE VIII




EVENTS OF DEFAULT; REMEDIES



     8.1 Events of Default. The occurrence of any one or more of the following
events shall constitute an Event of Default hereunder:



     (a) The Borrower shall fail to pay when due any principal amount or any interest, fees or
other charges payable under this Agreement, the Note or under any other Credit Document;



     (b) The Borrower shall fail to observe or perform any covenant, restriction or agreement
contained in Sections 5.1, 5.2 and 5.3 or Articles VI or VII of this Agreement;



     (c) The Borrower shall fail to observe or perform any covenant, restriction or agreement
contained in this Agreement and not described in Sections 8.1(a) or (b) above for fifteen (15) days
after the earlier of a Responsible Officer (i) obtaining knowledge of such failure, or (ii)
receiving written notice of such failure from the Bank;



     (d) Any representation, warranty, certification or statement made or deemed made by the
Borrower in Article IV of this Agreement, in any other Credit Document or in any certificate,
financial statement or other document delivered pursuant to this Agreement or any other Credit
Document shall prove to have been incorrect in any material respect when made or deemed made;



     (e) The occurrence and continuance of any default or event of default on the part of the
Borrower (including specifically, but without limitation, defaults due to non-payment) under the
terms of any agreement, document or instrument pursuant to which the Borrower has incurred any
Indebtedness for money borrowed in excess of $100,000, which default would permit acceleration of
such indebtedness;



36









 





     (f) The occurrence and continuance of any default or event of default under any
of the other Credit Documents or under any other agreement between the Borrower and the Bank;



     (g) Any Security Document to which the Borrower or any of its Subsidiaries is now or
hereafter a party shall for any reason cease to be in full force and effect or cease to be
effective to give the Bank a valid and perfected security interest in and Lien upon the collateral
purported to be covered thereby, subject to no Liens other than Permitted Liens, in each case
unless any such cessation occurs in accordance with the terms thereof or is due to any act or
failure to act on the part of the Bank; or the Borrower or any such Subsidiary shall assert any of
the foregoing; or any Subsidiary of the Borrower or any Person acting on behalf of any such
Subsidiary shall deny or disaffirm such Subsidiary’s obligations under the Guaranty or such;



     (h) The Borrower or any Subsidiary (i) files a petition for relief under the Bankruptcy
Code or any other insolvency law or seeking to adjudicate it bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors or fails to file an answer or other pleading denying the material allegations of any such
proceeding filed against it, (ii) takes any corporate action to authorize or effect any of the
foregoing actions, (iii) generally fails to pay, or admits in writing its inability to pay, its
debts as such debts become due; (iv) shall apply for, seek or consent to, or acquiesce in, the
appointment of a custodian, receiver, trustee, examiner, liquidator or similar official for it or
for any material portion of its assets; (v) benefits from or is subject to the entry of an order
for relief under any bankruptcy or insolvency law; or (vi) makes an assignment for the benefit of
creditors;



     (i) Failure of the Borrower or any Subsidiary within thirty (30) days after the
commencement of any proceeding against it seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or future statute, law
or regulation, to have such proceeding dismissed, or to have all orders or proceedings thereunder
affecting the operations or the business of the Borrower or such Subsidiary stayed, or failure of
the Borrower or such Subsidiary within thirty (30) days after the appointment, without its consent
or acquiescence, of any custodian, receiver trustee, examiner, liquidator or similar official for
it or for any material portion of its assets, to have such appointment vacated;



     (j) The Borrower ceases to be Solvent, or ceases to conduct its business substantially
as now conducted or is enjoined, restrained or in any way prevented by court order from conducting
all or any material part of its business affairs;



     (k) The entry of one or more judgments or orders for the payment of money in excess of
$100,000 in the aggregate against the Borrower or any of its Subsidiaries and such judgment(s) or
order(s) shall continue unsatisfied and unstayed for a period of thirty (30) days;



     (l) The issuance of a writ of execution, attachment or similar process against the
Borrower or any of its Subsidiaries which shall not be dismissed, stayed, discharged or bonded
within thirty (30) days after a Responsible Officer acquires knowledge thereof;



     (m) A notice of lien, levy or assessment in excess of $100,000 is filed of record with
respect to all or any portion of the assets of the Borrower or any of its Subsidiaries by the
United







37









 







States, or any department, agency or instrumentality thereof, or by any other Governmental
Authority, including, without limitation, the PBGC, or if any taxes or debts in excess of
$100,000 owing at any time or times hereafter to any one of them becomes a lien or
encumbrance upon any assets of the Borrower in each case and the same is not satisfied,
released, discharged or bonded within thirty (30) days after the same becomes a lien or
encumbrance or, in the case of ad valorem taxes, prior to the last day when payment may be
made without material penalty;




     (n) Any ERISA Event or any other event or condition shall occur or exist with respect to
any Plan or Multiemployer Plan and, as a result thereof, together with all other ERISA Events and
other events or conditions then existing, the Borrower and its ERISA Affiliates have incurred or
would be reasonably likely to incur liability to any one or more Plans or Multiemployer Plans or to
the PBGC (or to any combination thereof) in excess of $100,000;



     (o) Any one or more licenses, permits, accreditations or authorizations of the Borrower
or any of its Subsidiaries shall be suspended, limited or terminated or shall not be renewed, or
any other action shall be taken, by any Governmental Authority in response to any alleged failure
by the Borrower or any of its Subsidiaries to be in compliance with applicable Requirements of Law,
and such action, individually or in the aggregate, if the event giving rise to such action is not
remediated within thirty (30) days of notice of any of the foregoing events, would be reasonably
likely to have a Material Adverse Effect; or



     (p) Steve Berrard and Wayne Huizenga cease collectively to own, either directly or
indirectly through their company, HB Fairview Holdings, LLC, a Delaware limited liability company,
on a fully diluted basis (x) a majority of the Capital Stock entitled to vote in the election of
directors of the Borrower, or (y) a majority of Capital Stock entitled to share in the profits of
the Borrower generally.



     8.2 Remedies. Upon the occurrence and during the continuance of any Event
of Default:



     (a) Termination of Revolving Credit Commitment; Acceleration of Indebtedness.The Bank
may, in its sole discretion, (i) terminate the Revolving Credit Commitment, which shall thereupon
terminate; (ii) declare all or any part of the Obligations immediately due and payable, whereupon
such Obligations shall become immediately due and payable without presentment, demand, protest,
notice or legal process of any kind, all of which are hereby expressly waived by the Borrower;
provided, however, that all Obligations shall automatically become due and payable upon the
occurrence of an Event of Default under Sections 8.1(g) or (i); and (iii) pursue all other remedies
available to it by contract, at law or in equity, including but not limited to its rights under the
Security Documents.



     (b) Right of Set-off. The Bank may, and is hereby authorized by the Borrower, at any
time and from time to time, to the fullest extent permitted by applicable laws, without advance
notice to the Borrower (any such notice being expressly waived by the Borrower), set off and apply
any and all deposits (general or special, time or demand, provisional or final) at any time held
and any other indebtedness at any time owing by the Bank or any of its Affiliates to or for the
credit or the account of the Borrower against any or all of the Obligations of the Borrower




38











 




under this Agreement or the other Credit Documents now or hereafter existing, whether or not
such obligations have matured. The Bank agrees promptly to notify the Borrower after any such
set-off or application; provided, however, that the failure to give such notice shall not affect
the validity of such set-off and application.




     (c) Rights and Remedies Cumulative; Non-Waiver; etc. The enumeration of the Bank’s rights and
remedies set forth in this Agreement is not intended to be exhaustive and the exercise by the Bank
of any right or remedy shall not preclude the exercise of any other rights or remedies, all of
which shall be cumulative, and shall be in addition to any other right or remedy given hereunder,
under the other Credit Documents or under any other agreement between the Borrower and the Bank or
that may now or hereafter exist in law or in equity or by suit or otherwise. No delay or failure
to take action on the part of the Bank in exercising any right, power or privilege shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege
preclude other or further exercise thereof or the exercise of any other right, power or privilege
or shall be construed to be a waiver of any Event of Default. No course of dealing between the
Borrower and the Bank or their agents or employees shall be effective to change, modify or
discharge any provision of this Agreement or any of the other Credit Documents or to constitute a
waiver of any Event of Default.



ARTICLE IX




MISCELLANEOUS



     9.1 Costs, Expenses and Taxes. The Borrower agrees to pay on demand all reasonable
out-of-pocket expenses of the Bank, including reasonable fees and disbursements of counsel, in
connection with: (i) the preparation, execution and delivery of this Agreement and the other
Credit Documents, such fees not to exceed $15,000, plus reasonable disbursements, (ii) any
amendments, supplements, consents or waivers hereto or to the Credit Documents, an d (iii) the
administration or enforcement of this Agreement and the other Credit Documents. In addition, the
Borrower shall pay any and all stamp and other taxes and fees payable or determined to be payable
in connection with the execution, delivery, filing and recording of this Agreement and the other
Credit Documents and agrees to save the Bank harmless from an d against any and all liabilities
with respect to or resulting from any delay in paying or omission to pay such taxes and fees. It
is the intention of the parties hereto that the Borrower shall pay amounts referred to in this
Section directly. In the event the Bank pays any of the amount s referred to in this Section
directly, the Borrower will reimburse the Bank for such advances and interest on such advance shall
accrue until reimbursed at the Default Rate.



     9.2 Indemnification. From and at all times after the date of this Credit Agreement, and in
addition to all of the Bank’s other rights and remedies against the Borrower, the Borrower agrees
to indemnify, defend and hold harmless the Bank and its directors, officers, employees, agents,
successors, assigns and affiliates from and against the following (collectively “Costs”): any and
all claims (whether valid or not), losses, damages, actions, suits, inquiries, investigations,
administrative proceedings, judgments, liens, liabilities, penalties, fines, amount s paid in
settlement, requirements of Governmental Authorities, punitive damages, interest, damages to
natural resources and other costs and expenses of any kind or nature whatsoever (including without
limitation reasonable attorneys’ fees and expenses, court costs and fees, and



39









 




consultant and expert witness fees and expenses) arising in any manner, directly or indirectly, out
of or by reason of (a) the negotiation, preparation, execution or performance of this Agreement or
the other Credit Documents, or any transaction contemplated herein or therein, whether or not the
Bank or any other party protected under this Section is a party to any action, proceeding or suit
in question, or the target of any inquiry or investigation in question; provided, however, that no
indemnified party shall have the right to be indemnified hereunder for any liability resulting from
the willful misconduct or gross negligence of such indemnified party (as finally determined by a
court of competent jurisdiction), (b) any breach of any of the covenants, warranties or
representations of the Borrower hereunder or under any other Credit Document, (c) any lien or
charge upon amounts payable hereunder by the Borrower to the Bank or any taxes, assessments,
impositions and other charges in respect of the collateral secured by the Security Documents, (d)
damage to property or any injury to or death of any person that may be occasioned by any cause
whatsoever pertaining to any such collateral or the use thereof, (e) any violation or alleged
violation of any Environmental Law, federal or state securities law, common law, equitable
requirement or other legal requirement by the Borrower or with respect to any property owned,
leased or operated by the Borrower (in the past, currently or in the future), or (f) any presence,
generation, treatment, storage, disposal, transport, movement, release, suspected release or
threatened release of any Hazardous Material on, in, to or from any property (or any part thereof
including without limitation the soil and groundwater thereon and thereunder) owned, leased or
operated by the Borrower (in the past, currently or in the future).




     All Costs shall be additional Obligations of the Borrower under this Credit Agreement, shall
be payable on demand to the party to be indemnified, and shall be secured by the lien of the
Security Documents.



     Without limiting the foregoing, the Borrower shall be obligated to pay, on demand, the costs
of any investigation, monitoring, assessment, enforcement, removal, remediation, restoration or
other response or corrective action undertaken by the Bank or any other indemnified party, or their
respective agents, with respect to any property owned, leased or operated by the Borrower.



     It is expressly understood and agreed that the obligations of the Borrower under this Section
shall not be limited to any extent by payment of the Obligations and termination of this Agreement
and shall remain in full force and effect until expressly terminated by the Bank in writing.



     9.3 Arbitration; Preservation and Limitation of Remedies.



     (a) Upon demand of any party hereto, whether made before or after institution of any judicial
proceeding, any dispute, claim or controversy arising out of, connected with or relating to this
Agreement or any other Credit Document (“Disputes”) between the Borrower and the Bank shall be
resolved by binding arbitration as provided herein. Institution of a judicial proceeding by a party
does not waive the right of that party to demand arbitration hereunder. Disputes may include,
without limitation, tort claims, counterclaims, claims brought as class actions, claims arising
from documents executed in the future, disputes as to whether a matter is subject to arbitration,
or claims arising out of or connected with the transactions contemplated by this Agreement and the
other Credit Documents. Arbitration shall be conducted under and



40









 







governed by the Commercial Financial Disputes Arbitration Rules (the “Arbitration Rules”) of
the American Arbitration Association (the “AAA”), as in effect from time to time, and the Federal
Arbitration Act, Title 9 of the U.S. Code, as amended. All arbitration hearings shall be
conducted in the city in which the principal demand for arbitration and all hearings shall be
concluded within 120 days of demand for arbitration. These time limitations may not be extended
unless a party shows cause for extension and then for no more than a total of sixty (60) days.
The expedited procedures set forth in Rule 51 et seq. of the Arbitration Rules shall be applicable
to claims of less than $1,000,000. All applicable statutes of limitation shall apply to any
Dispute. A judgment upon the award may be entered in any court having jurisdiction. The panel from
which all arbitrators are selected shall be comprised of licensed attorneys selected from the
Commercial Financial Dispute Arbitration panel of the AAA. The single arbitrator selected for
expedited procedure shall be a retired judge from the highest court of general jurisdiction, state
or federal, of the state where the hearing will be conducted. Notwithstanding the foregoing, this
arbitration provision does not apply to Disputes under or related to any Hedge Agreement. The
parties do not waive applicable federal or state substantive law except a s provided herein.



     (b) Notwithstanding the preceding binding arbitration provisions, the parties hereto agree to
preserve, without diminution, certain remedies that any party hereto may employ or exercise
freely, either alone, in conjunction with or during a Dispute. Any party hereto shall have the
right to proceed in any court of proper jurisdiction or by self-help to exercise or prosecute the
following remedies, as applicable: (i) all rights to foreclose against any Collateral by exercising
a power of sale granted pursuant to any of the Credit Documents or under applicable law or by
judicial foreclosure and sale, including a proceeding to confirm the sale ; (ii) all rights of
self-help, including peaceful occupation of real property and collection of rents, set-off, and
peaceful possession of personal property; (iii) obtaining provisional or ancillary remedies,
including injunctive relief, sequestration, garnishment, attachment, appointment of a receiver and
filing an involuntary bankruptcy proceeding ; and (iv) when applicable, a judgment by confession of
judgment. Any claim or controversy with regard to any party’s entitlement to such remedies is a
Dispute. Preservation of these remedies does not limit the power of a n arbitrator to grant similar
remedies that may be requested by a party in a Dispute. The parties hereto agree that no party
shall have a remedy of punitive or exemplary damages against any other party in any Dispute, and
each party hereby waives any right or claim to punitive or exemplary damages that it has now or
that may arise in the future in connection with any Dispute, whether such Dispute is resolved by
arbitration or judicially. The parties acknowledge that by agreeing to binding arbitration they
have irrevocably waived any right they may have to a jury trial with regard to a Dispute. The
Borrower agrees to pay the reasonable fees and expense s of counsel to the Bank in connection with
any Dispute subject to arbitration as provided herein.



     9.4 Waiver of Automatic or Supplemental Stay. In the event that a petition for relief under
any chapter of the Bankruptcy Code is filed by or against the Borrower, the Borrower promises and
covenants that it will not seek a supplemental stay pursuant to Bankruptcy Code §§ 105 or 362 or
any other relief pursuant to Bankruptcy Code § 105 or any other provision of the Bankruptcy Code,
whether injunctive or otherwise, which would stay, interdict, condition, reduce or inhibit the
Bank’s ability to enforce any rights it has, at law or in equity, to collect the Obligations from
any Person other than the Borrower.



41









 





     9.5 Notices. All demands, notices, approvals, consents, requests, and other communications
hereunder shall be in writing and shall be deemed to have been given when the writing is delivered,
if given or delivered by hand, overnight delivery service or facsimile transmitter (with confirmed
receipt), or five (5) days after being mailed, if mailed, by first class, registered or certified
mail, postage prepaid, to the address or telecopy number set forth below:



	 	 	 	 	 
	 	Party	 	Address	 
	 
	 	Borrower

	 	Swisher International, Inc.	 
	 	 

	 	6849 Fairview Road	 
	 	 

	 	Charlotte, North Carolina 28210	 
	 	 

	 	Attention: Hugh H. Cooper	 
	 	 

	 	Telephone: (704) 602-7160	 
	 	 

	 	Fax: (704) 602-7983	 
	 	 
	 	 	 
	 	Bank

	 	Wachovia Bank, National Association	 
	 	 

	 	301 South Tryon Street, 28th Floor	 
	 	 

	 	Charlotte, North Carolina 28288-0334	 
	 	 

	 	Attention: Cavan Harris	 
	 	 

	 	Telephone : (704) 383-6423	 
	 	 

	 	Telecopy: (704) 374-6483	 





The Borrower or the Bank may, by notice given hereunder, designate any further or different
addresses or telecopy numbers to which subsequent demands, notices, approvals, consents, requests
or other communications shall be sent or persons to whose attention the same shall be directed.




     9 .6 Continuing Obligations. All agreements, representations and warranties contained herein
or made in writing by or on behalf of the Borrower in connection with the transactions contemplated
hereby shall survive the execution and delivery of this Agreement an d the other Credit Documents.
The Borrower further agrees that to the extent the Borrower makes a payment to the Bank, which
payment or any part thereof is subsequently invalidated, declare d to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any other party under
any bankruptcy, insolvency or other similar state or federal statute, or principle of equity, then,
to the extent of such repayment by the Bank, the Obligation or part thereof intended to be
satisfied by such payment shall be revived and continued in full force and effect as if such
payment had not been received by the Bank.



     9.7 Controlling Law. This Agreement has been executed, delivered and accepted at, and shall
be deemed to have been made in, North Carolina and shall be interpreted in accordance with the
internal laws (as opposed to conflicts of laws provisions) of the State of North Carolina.



     9.8 Successors and Assigns. This Agreement shall be binding upon the Borrower and its
successors and assigns and all rights against the Borrower arising under this Agreement shall be
for the sole benefit of the Bank.



42









 





     9.9 Assignment and Sale. The Borrower may not sell, assign or transfer this Agreement or any
of the other Credit Documents or any portion hereof or thereof, including without limitation the
Borrower’s rights, title, interests, remedies, powers, and duties hereunder or thereunder. The Bank
may assign or sell a participation interest in all or any portion of the Loans to one or more other
financial institutions.



     9.10 Entire Agreement. THIS AGREEMENT AND THE DOCUMENTS AND INSTRUMENTS EXECUTED AND
DELIVERED CONTEMPORANEOUSLY HEREWITH EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE
PARTIES HERETO AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS OF SUCH PERSONS, VERBAL OR
WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF. THIS AGREEMENT AND THE
DOCUMENTS AND INSTRUMENTS EXECUTED IN CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NO T BE CONTRADICTED BY PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.



     9.11 Amendment. Any provision of this Agreement or any other Credit Document to which the
Borrower is a party may be amended if such amendment is in writing and is signed by the Borrower
and the Bank. In connection with any amendment entered into in accordance with this Section at the
request of the Borrower or upon an Event of Default, the Borrower shall pay to the Bank a fee to
be negotiated between the Borrower and the Bank. Payment of such fee by the Borrower to the Bank
shall be a condition precedent to the effectiveness of such amendment and shall be due on the date
such amendment is signed by the Bank. No such fee shall be due in connection with any amendment
entered into at the request of the Bank; provided, that no Event of Default shall have occurred
and be continuing.



     9.12 Severability. In the event that any provision of this Agreement shall be
determined to be invalid or unenforceable by any court of competent jurisdiction, such
determination shall not invalidate or render unenforceable any other provision hereof.



     9.13 Confidentiality. The Bank agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to its Affiliates
an d to its and its Affiliates’ respective partners, directors, officers, employees, agents,
advisors an d other representatives (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory authority purporting to
have jurisdiction over it, (c) to the extent required by applicable Requirements of Law or by any
subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Credit Document or any Hedge Agreement or any
action or proceeding relating to this Agreement or any other Credit Document or any Hedge Agreement
or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing
provisions
substantially the same as those of this Section, to (i) any assignee or prospective assignee
of any of its rights or obligations under this Agreement, or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and
its obligations, (g) with the consent of the Borrower or (h) to the



43









 







extent such Information (x)
becomes publicly available other than as a result of a breach of this Section or (y) becomes
available to the Bank or any of its Affiliates on a nonconfidential basis from a source other than
the Borrower or any of its Subsidiaries or Affiliates.



     For purposes of this Section, “Information” means all information received from the Borrower
relating to any of the Borrower and its Subsidiaries or any of their respective businesses, other
than any such information that is available to the Bank on a nonconfidential basis prior to
disclosure by the Borrower or its Subsidiaries, provided that, in the case of information received
from any of the Borrower or its Subsidiaries after the date hereof, such information is clearly
identified at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own confidential information.



     9.14 Counterparts. This Agreement may be executed in several counterparts, each of which
shall be an original and all of which, together shall constitute but one and the same instrument.



     9.15 Captions. The captions to the various sections and subsections of this Agreement have
been inserted for convenience only and shall not limit or affect any of the terms hereof.



[The remainder of this page is left blank intentionally.]








44









 








     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their respective duly authorized officers as of the date first above written.



	 	 	 	 	 	 	 

	 	 	SWISHER INTERNATIONAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Hugh H. Cooper	 	 
	 

	 	Name:

Title:
	 	 

Hugh H. Cooper
 

Sr. Vice President
 

	 	   
	 
	 	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Cavan J. Harris	 	 
	 

	 	Name:

Title:
	 	 

Cavan J. Harris
 

Vice President
 

	 	   










 









 








Exhibit A




REVOLVING NOTE




			
	 	 	 
	$5,000,000
	 	November 14, 2005     
	 
	 	Charlotte, North Carolina






     FOR VALUE RECEIVED, SWISHER INTERNATIONAL, INC. (the “Borrower”), hereby
promises, jointly and severally, to pay to the order of



     WACHOVIA BANK, NATIONAL ASSOCIATION (the “Bank”), located at One Wachovia Center, 301 South
College Street, Charlotte, North Carolina (or at such other place or places as the Bank may
designate), at the times and in the manner provided in the Credit Agreement, dated as of November
14, 2005 (as amended, modified, restated or supplemented from time to time, the “Credit Agreement”), between the Borrower and the Bank, the principal sum of



     FIVE MILLION DOLLARS ($5,000,000), or such lesser amount as may constitute the unpaid
principal amount of the Revolving Loans made by the Bank, under the terms and conditions of this
promissory note (this “Revolving Note”) and the Credit Agreement. The defined terms in the Credit
Agreement are used herein with the same meaning. The Borrower also promises to pay interest on the
aggregate unpaid principal amount of this Revolving Note at the rates applicable thereto from time
to time as provided in the Credit Agreement.



     This Revolving Note is issued to evidence the Revolving Loans made by the Bank pursuant to
the Credit Agreement. All of the terms, conditions and covenants of the Credit Agreement are
expressly made a part of this Revolving Note by reference in the same manner and with the same
effect as if set forth herein at length, and any holder of this Revolving Note is entitled to the
benefits of and remedies provided in the Credit Agreement and the other Credit Documents. Reference
is made to the Credit Agreement for provisions relating to the interest rate, maturity, payment,
prepayment and acceleration of this Revolving Note.



     In the event of an acceleration of the maturity of this Revolving Note, this Revolving Note
shall become immediately due and payable, without presentation, demand, protestor notice of any
kind, all of which are hereby waived by the Borrower.



     In the event this Revolving Note is not paid when due at any stated or accelerate d maturity,
the Borrower agrees to pay, in addition to the principal and interest, all reasonable and
documented out-of-pocket costs of collection, including reasonable attorneys’ fees.



     This Revolving Note shall be governed by and construed in accordance with the internal laws
and judicial decisions of the State of North Carolina. The Borrower hereby submits to the
nonexclusive jurisdiction and venue of the federal and state courts located in Mecklenburg County,
North Carolina, although the Bank shall not be limited to bringing a n action in such courts.



 









 





     IN WITNESS WHEREOF, the Borrower has caused this Revolving Note to be executed by its duly
authorized corporate officer as of the day and year first above written.



	 	 	 	 	 	 	 

	 	 	SWISHER INTERNATIONAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	

Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 






Signature Page to Revolving Note









 









 











Exhibit B




SUBSIDIARY GUARANTY




     THIS GUARANTY, dated as of November 14, 2005 (as amended, supplemented or modified from time
to time, this “Guaranty”), is made by each of the undersigned Subsidiaries of SWISHER
INTERNATIONAL, INC., a Nevada corporation (the “Borrower”), and each other Subsidiary of the
Borrower that, after the date hereof, executes an instrument of accession hereto substantially in
the form of Exhibit A (a “Guarantor Accession”; the undersigned and such other Subsidiaries of the
Borrower, collectively, the “Subsidiary Guarantors”), in favor of the Bank. Capitalized terms used
herein without definition shall have the meanings given to them in the Credit Agreement referred to
below.



BACKGROUND STATEMENT




     A. The Borrower and the Bank are parties to a Credit Agreement, dated as of eve n date
herewith (as amended, modified or supplemented from time to time, the “Credit Agreement”),
providing for the availability of a $5,000,000 revolving credit facility (the “Loan” ) to the
Borrower upon the terms and conditions set forth therein.



     B. As a condition to making the Loan to the Borrower, each Subsidiary Guarantor has agreed, by
executing and delivering this Guaranty, to guarantee to the Lender the payment i n full of the
Guaranteed Obligations (as hereinafter defined). The Bank is relying on this Guaranty in its
decision to make the Loan to the Borrower, and would not enter into the Credit Agreement without
this Guaranty.



     C. Each Subsidiary Guarantor will obtain benefits as a result of the Loan, which benefits are
hereby acknowledged, and, accordingly, desires to execute and deliver this Guaranty.



STATEMENT OF AGREEMENT




     NOW, THEREFORE, in consideration of the foregoing premises, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, each Subsidiary
Guarantor does hereby covenant and agree with the Bank as follows:



     1. Guaranty.



     (a) Each Subsidiary Guarantor hereby unconditionally and absolutely guarantees to the Bank,
the full and prompt payment and performance when due, whether at stated maturity, acceleration or
otherwise, of (i)(A) the Loan by the Borrower under the Credit Agreement an d pursuant to the Note
and the other Credit Documents, including, without limitation, all principal of and interest on the
Loan, all fees, expenses, indemnities and other amounts payable by the Borrower under the Credit
Agreement or any other Credit Document (including interest accruing after the filing of a petition
or commencement of a case by or with respect to the Borrower seeking relief under any applicable
federal and state laws pertaining to bankruptcy, reorganization, arrangement, moratorium,
readjustment of debts, dissolution, liquidation or other



 









 




debtor relief, specifically including, without limitation, the Bankruptcy Code and any fraudulent
transfer and fraudulent conveyance laws, whether or not the claim for such interest is allowed in
such proceeding), and (B) all obligations of the Borrower to the Bank under any swap agreements (as
defined in 11 U .S .C. § 101, as in effect from time to time), and (ii) all reasonable costs and
expenses (including, without limitation, reasonable attorneys’ fees and expenses ) incurred or paid
by the Bank in connection with any suit, action or proceeding to enforce or protect any of its
rights hereunder (collectively, “Guaranteed Obligations”).




     (b) Notwithstanding the provisions of subsection (a) above and notwithstanding any other
provisions contained herein or in any other Credit Document:




     (i) no provision of this Guaranty shall require or permit the collection from any
Subsidiary Guarantor of interest in excess of the maximum rate or amount that such
Subsidiary Guarantor may be required or permitted to pay pursuant to applicable law; and




     (ii) the liability of each Subsidiary Guarantor under this Guaranty as of any date
shall be limited to a maximum aggregate amount (the “Maximum Guaranteed Amount”) equal to
the greatest amount that would not render such Subsidiary Guarantor’s obligations under this
Guaranty subject to avoidance, discharge or reduction as of such date as a fraudulent
transfer or conveyance under applicable federal and state laws pertaining to bankruptcy,
reorganization, arrangement, moratorium, readjustment of debts, dissolution, liquidation or
other debtor relief, specifically including, without limitation, the Bankruptcy Code and any
fraudulent transfer and fraudulent conveyance laws (collectively, “Insolvency Laws”), in
each instance after giving effect to all other liabilities of such Subsidiary Guarantor,
contingent or otherwise, that are relevant under applicable Insolvency Laws (specifically
excluding, however, any liabilities of such Subsidiary Guarantor in respect of intercompany
indebtedness to the Borrower or any of its Affiliates to the extent that such indebtedness
would be discharged in an amount equal to the amount paid by such Subsidiary Guarantor
hereunder, and after giving effect as assets to the value (as determined under applicable
Insolvency Laws) of any rights to subrogation, contribution, reimbursement, indemnity or
similar rights of such Subsidiary Guarantor pursuant to (y) applicable law or (z) any
agreement (including this Guaranty) providing for an equitable allocation among such
Subsidiary Guarantor and other Affiliates of the Borrower of obligations arising under
guaranties by such parties).



     (c) The Subsidiary Guarantors desire to allocate among themselves, in a fair an d equitable
manner, their obligations arising under this Guaranty . Accordingly, in the event any payment or
distribution is made hereunder on any date by a Subsidiary Guarantor (a “Funding Guarantor”) that
exceeds its Fair Share (as hereinafter defined) as of such date, that Funding Guarantor shall be
entitled to a contribution from each of the other Subsidiary Guarantors in the amount of such other
Subsidiary Guarantor’s Fair Share Shortfall (as hereinafter defined) as of such date, with the
result that all such contributions will cause each Subsidiary Guarantor’s Aggregate Payments (as
hereinafter defined) to equal its Fair Share as of such date. “Fair Share” means, with respect to
a Subsidiary Guarantor as of any date of determination, an amount equal to (i) the ratio of (x) the
Adjusted Maximum Guaranteed Amount (as hereinafter defined) with respect to such Subsidiary
Guarantor to (y) the
aggregate of the Adjusted Maximum Guarantee d Amounts with respect to all Subsidiary
Guarantors, multiplied by (ii) the aggregate amount paid



2









 







or distributed on or before such date by all Funding Guarantors hereunder in respect of the
obligations guarantied . “Fair Share Shortfall” means, with respect to a Subsidiary Guarantor a s
of any date of determination, the excess, if any, of the Fair Share of such Subsidiary Guarantor
over the Aggregate Payments of such Subsidiary Guarantor. “Adjusted Maximum Guaranteed Amount”
means, with respect to a Subsidiary Guarantor as of any date of determination, the Maximum
Guaranteed Amount of such Subsidiary Guarantor, determined in accordance with the provisions of
subsection (b) above; provided that, solely for purposes of calculating the
“Adjusted Maximum Guaranteed Amount” with respect to any Subsidiary Guarantor for purposes of this subsection (c),
any assets or liabilities arising by virtue of any rights to subrogation, reimbursement or
indemnity or any rights to or obligations of contribution hereunder shall not be considered as
assets or liabilities of such Subsidiary Guarantor.
“Aggregate Payments” means, with respect to a Subsidiary Guarantor as of any date of
determination, the aggregate amount of all payments and distributions made on or before such date
by such Subsidiary Guarantor in respect of this Guaranty (including, without limitation, in respect
of this subsection (c)). The amounts payable as contributions hereunder shall be determined as of
the date on which the related payment or distribution is made by the applicable Funding Guarantor.
Each Funding Guarantor’s right of contribution under this subsection (c ) shall be subject to the
provisions of Section 6. The allocation among Subsidiary Guarantors of their obligations as set
forth in this subsection (c) shall not be construed in any way to limit the liability of any
Subsidiary Guarantor hereunder to the Bank.



     (d) The guaranty of each Subsidiary Guarantor set forth in this Section is a guaranty of
payment as a primary obligor, and not a guaranty of collection. Each Subsidiary Guarantor hereby
acknowledges and agrees that the Guaranteed Obligations, at any time and from time to time, may
exceed the Maximum Guaranteed Amount of such Subsidiary Guarantor and ma y exceed the aggregate of
the Maximum Guaranteed Amounts of all Subsidiary Guarantors, in each case without discharging,
limiting or otherwise affecting the obligations of any Subsidiary Guarantor hereunder or the
rights, powers and remedies of the Bank hereunder or under any other Credit Document.



     2. Guaranty Unconditional. The obligations of each Subsidiary Guarantor hereunder shall arise
absolutely and unconditionally when the Loan has been made by the Bank to the Borrower. This
Guaranty shall be a continuing, absolute and unconditional guaranty and shall remain in full force
and effect until all of the Guaranteed Obligations shall have been paid in full and the period
during which any payment of the Guaranteed Obligations to the Bank could be recovered as an
avoidable preference under 11 U.S.C. § 547, or any successor provision thereof, has expired. Each
Subsidiary Guarantor agrees that to the extent all or part of any payment of the Guaranteed
Obligations is subsequently invalidated, declared to be fraudulent or preferential, set aside or
required to be repaid to a trustee, receiver or any other party, then, to the extent of such
repayment, this Guaranty shall continue in full force and effect or be revived and reinstated, as
the case may be, as to the Guaranteed Obligations intended to be satisfied, as if such payment had
not been received.



     3. Absolute and Primary Liability. Each Subsidiary Guarantor agrees that its obligations
hereunder are irrevocable, absolute and unconditional, are independent of the Guaranteed
Obligations, and shall not be discharged, released, limited, deferred, reduced or otherwise
affected to any extent by reason of any of the following, whether or not such



3









 




Subsidiary Guarantor has notice or knowledge thereof: (a) the invalidity or unenforceability of
the Credit Documents; (b) any bankruptcy, reorganization, arrangement, liquidation or insolvency
of, or dissolution, termination, reorganization or other change in the structure or existence of,
the Borrower, whether or not resulting in a discharge, reduction or restructuring of the
Guaranteed Obligations; or (c) the application of any statute, regulation, order, rule, decree or
other determination of any court or other governmental authority, the effect of which is to extend
the term or time for payment of the Guaranteed Obligations.




     4. Releases, Extensions, Modifications, etc. Each Subsidiary Guarantor agrees that the Bank
may at any time and from time to time, upon or without any terms or conditions and in whole or in
part: (a) change the manner, place or terms of payment of, change or extend the time for payment
of, or renew, accelerate or otherwise alter, the Guaranteed Obligations; (b) sell, exchange,
release, substitute, compromise, realize upon or otherwise deal with in any manner and in any
order, or fail to create, protect, perfect, secure, insure, continue or maintain any lien s in, any
collateral or other security for the Guaranteed Obligations; (c) settle, compromise, release or
discharge, or accept or refuse any offer of performance with respect to or substitutions for, the
Guaranteed Obligations; (d) make or permit any amendment, modification or supplement to or
restatement of, or consent to any rescission or waiver of or departure from, any provisions
(including provisions relating to events of default) of the Credit Documents; and (e) exercise or
refrain from exercising (whether voluntarily or involuntarily as a result of court order, operation
of law or otherwise) any rights and remedies available under the Credit Documents, including,
without limitation, foreclosing on any security held by the Bank in any order and by any manner of
sale permitted under the Credit Documents and applicable law, whether or not every aspect of such
sale is commercially reasonable. The Bank may act or fail to act in the foregoing manner without
notice to or further assent by the Subsidiary Guarantors, whose obligations hereunder shall not be
discharged, released, limited, deferred, reduced or otherwise affected in any manner or to any
extent by reason of any of the foregoing, notwithstanding that any such action or failure to act
may impair or extinguish any right of indemnification, contribution, reimbursement or subrogation
or other right or remedy of each Subsidiary Guarantor against the Borrower or any collateral or
other security for the Guaranteed Obligations.



     5. Waiver of Certain Rights; Subordination. Each Subsidiary Guarantor hereby knowingly,
voluntarily and expressly waives all presentments, demands for payment, demand s for performance,
protests and notices, including, without limitation, notices of nonpayment or other
nonperformance, protest, dishonor, acceptance hereof, and of any of the matters referred to in
Sections 3 and 4 and of any rights to consent thereto.



     6. No Subrogation; Subordination. Each Subsidiary Guarantor hereby agrees that, until all of
the Guaranteed Obligations shall have been paid in full, it will not exercise or seek to exercise
any claim or right that it may have against the Borrower or any other Subsidiary Guarantor at any
time as a result of any payment made under or in connection with this Guaranty or the performance
or enforcement hereof, including any right of subrogation to the rights of any of the Bank against
the Borrower or any other Subsidiary Guarantor, any right of indemnity, contribution or
reimbursement against the Borrower or any other Subsidiary Guarantor (including rights of
contribution as set forth in Section 1(c)), any right to enforce any remedies of the Bank against
the Borrower or any other Subsidiary
Guarantor, or any benefit of, or any right to participate in, any security held by the Bank
to secure payment of the Guaranteed



4









 




Obligations, in each case whether such claims or rights arise by contract, statute (including
without limitation the Bankruptcy Code), common law or otherwise. Each Subsidiary Guarantor
further agrees that all indebtedness and other obligations, whether now or hereafter existing, of
the Borrower or any other Subsidiary of the Borrower to such Subsidiary Guarantor, including,
without limitation, any such indebtedness in any proceeding under the Bankruptcy Code and any
intercompany receivables, together with any interest thereon, shall be, and hereby are,
subordinated and made junior in right of payment to the Guaranteed Obligations. Each Subsidiary
Guarantor further agrees that if any amount shall be paid to or any distribution received by any
Subsidiary Guarantor (i) on account of any such indebtedness at any time after the occurrence and
during the continuance of an Event of Default, or (ii) on account of any such rights of
subrogation, indemnity, contribution or reimbursement at any time prior to the repayment of the
Guaranteed Obligation in full, such amount or distribution shall be deemed to have been received
and to be held in trust for the benefit of the Bank, and shall forthwith be delivered to the Bank
in the form received (with any necessary endorsements in the case of written instruments), to be
applied against the Guaranteed Obligations, whether or not matured, in accordance with the terms
of the applicable Credit Documents and without in any way discharging, limiting or otherwise
affecting the liability of such Subsidiary Guarantor under any other provision of this Guaranty.
Additionally, in the event the Borrower or any Subsidiary of the Borrower becomes a “debtor”
within the meaning of the Bankruptcy Code or any successor statute, the Bank shall be entitled, at
its option, and is hereby authorized and appointed by each Subsidiary Guarantor, to file proofs of
claim on behalf of each relevant Subsidiary Guarantor and vote the rights of each such Subsidiary
Guarantor in any plan of reorganization, and to demand, sue for, collect and receive every payment
and distribution on any indebtedness of the Borrower or such Subsidiary to any Subsidiary Guarantor
in any such proceeding, each Subsidiary Guarantor hereby assigning to the Bank all of its rights in
respect of any such claim, including the right to receive payments and distributions in respect
thereof.




     7. Representations and Warranties. In order to induce the Bank to accept this Guaranty and
to enter into the Credit Agreement, each Subsidiary Guarantor represents and warrants to the Bank
(which representations and warranties shall survive the execution and delivery of this Guaranty)
that:



     (a) Such Subsidiary Guarantor is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation.



     (b) The execution, delivery and performance of this Guaranty (i) are within the corporate
power and authority of such Subsidiary Guarantor, and (ii) have been duly authorized by all
necessary corporate action on the part of such Subsidiary Guarantor.



     (c) This Guaranty has been duly executed and delivered to the Bank by an officer of the
Subsidiary Guarantor who has been duly authorized to perform such acts.



     (d) This Guaranty constitutes the legal, valid and binding obligation of such Subsidiary
Guarantor enforceable against such Subsidiary Guarantor in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws, statutes or rules of general application affecting the
enforcement of creditors’ rights or general principles of equity.



5









 





     (e) The execution and delivery by such Subsidiary Guarantor of this Guaranty and the
performance by such Subsidiary Guarantor of its obligations hereunder (i) do not violate provisions
of statutory laws or regulations applicable to it, (ii) do not violate its articles of
incorporation or bylaws, (iii) do not breach or result in a default under any other agreement to
which it is a party, and (iv) do not violate the terms of any judicial or administrative judgment,
order, decree or arbitral decision that names such Subsidiary Guarantor and is specifically
directed to it or its properties.



     (f) There is no action, suit, proceeding, inquiry or investigation at law or in equity or
before or by any court, public board or body pending, or, to the best knowledge of such Subsidiary
Guarantor, threatened against or affecting such Subsidiary Guarantor wherein a n unfavorable
decision, ruling or finding would have a material adverse effect on the financial condition of such
Subsidiary Guarantor or would adversely affect the transactions contemplate d by, or the validity
or enforceability of, this Guaranty.



     (g) All information heretofore furnished by such Subsidiary Guarantor to the Bank, financial
or otherwise, for purposes of or in connection with this Guaranty or any transaction contemplated
hereby is true, accurate and complete in every material respect or based on reasonable estimates
on the date as of which such information is stated or certified. Such Subsidiary Guarantor has
disclosed to the Bank in writing any and all facts which materially and adversely affect or may
affect (to the extent such Subsidiary Guarantor can now reasonably foresee), the business,
operations, prospects or condition, financial or otherwise, of such Subsidiary Guarantor, or the
ability of such Subsidiary Guarantor to perform its obligation s under this Guaranty.



     8. Financial Condition of Borrower. Each Subsidiary Guarantor represents that it has knowledge
of the Borrower’s financial condition and affairs and that it has adequate means to obtain from
the Borrower on an ongoing basis information relating thereto and to the Borrower’s ability to pay
and perform the Guaranteed Obligations, and agrees to assume the responsibility for keeping, and to
keep, so informed for so long as this Guaranty is in effect with respect to such Subsidiary
Guarantor. Each Subsidiary Guarantor agrees that the Bank shall have no obligation to investigate
the financial condition or affairs of the Borrower for the benefit of any Subsidiary Guarantor nor
to advise any Subsidiary Guarantor of any fact respecting, or any change in, the financial
condition or affairs of the Borrower that might become known to any Bank at any time, whether or
not the Bank knows or believes or has reason to know or believe that any such fact or change is
unknown to any Subsidiary Guarantor, or might (or does ) materially increase the risk of any
Subsidiary Guarantor as guarantor, or might (or would) affect the willingness of any Subsidiary
Guarantor to continue as a guarantor of the Guaranteed Obligations.



     9. Payments; Application: Set-Off.



     (a) Each Subsidiary Guarantor agrees that, upon the failure of the Borrower to pay any
Guaranteed Obligations when and as the same shall become due (whether at the stated maturity, by
acceleration or otherwise), and without limitation of any other right or remedy that the Bank may
have at law, in equity or otherwise against such Subsidiary Guarantor, such Subsidiary Guarantor
will, subject to the provisions of Section 1(b), forthwith pay or cause to be




6












 





paid to the Bank, an amount equal to
the amount of the Guaranteed Obligations then due and owing as aforesaid.




     (b) All payments made hereunder shall be applied upon receipt as follows:




     (i) first, to the payment of all reasonable costs and expenses owing to the Bank
pursuant to Section 1(a)(ii);




     (ii) second, after payment in full of the amounts specified in clause (i) above, to
the payment of the other Guaranteed Obligations owing to the Bank Section 1(a)(i); and




     (iii) third, after payment in full of the amounts specified in clauses (i) and (ii )
above, and following the termination of this Guaranty, to the Subsidiary Guarantors or any
other Person lawfully entitled to receive such surplus.



     (c) The Subsidiary Guarantors shall remain jointly and severally liable to the extent of any
deficiency between the amount of all payments made hereunder and the aggregate amount of the sums
referred to in clauses (i) and (ii) of subsection (b) above.



     (d) In addition to all other rights and remedies available under the Credit Documents or
applicable law or otherwise, upon and at any time after the occurrence and during the continuance
of any Event of Default, the Bank may, and is hereby authorized by each Subsidiary Guarantor, at
any such time and from time to time, to the fullest extent permitted by applicable law, without
presentment, demand, protest or other notice of any kind, all of which are hereby knowingly and
expressly waived by each Subsidiary Guarantor, to set off and to apply any an d all deposits
(general or special, time or demand, provisional or final) and any other property at any time held
(including at any branches or agencies, wherever located), and any other indebtedness at any time
owing, by the Bank to or for the credit or the account of such Subsidiary Guarantor against any or
all of the obligations of such Subsidiary Guarantor to the Bank hereunder now or hereafter
existing, whether or not such obligations may be contingent or unmatured, each Subsidiary
Guarantor hereby granting to the Bank a continuing security interest in and Lien upon all such
deposits and other property as security for such obligations. The Bank agrees to notify any
affected Subsidiary Guarantor promptly after any such set-off and application; provided, however,
that the failure to give such notice shall not affect the validity of such set-off and
application.



     10. No Waiver. The rights and remedies of the Bank expressly set forth in this Guaranty and
the other Credit Documents are cumulative and in addition to, and not exclusive of, all other
rights and remedies available at law, in equity or otherwise. No failure or delay on the part of
the Bank in exercising any right, power or privilege shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, power or privilege or be construed to be a
waiver of any Default or Event of Default. No course of dealing between any of the Subsidiary
Guarantors and the Bank or its agents or employees shall be effective to amend , modify or
discharge any provision of this Guaranty or any other Credit Document or to constitute a waiver of
any Default or Event of Default. No notice to or demand upon any



7









 





Subsidiary Guarantor in any case shall entitle such Subsidiary Guarantor or any other Subsidiary
Guarantor to any other or further notice or demand in similar or other circumstances or constitute
a waiver of the right of the Bank to exercise any right or remedy or take any other or further
action in any circumstances without notice or demand.




     11. Addition, Release of Subsidiary Guarantors. Each Subsidiary Guarantor recognizes that the
provisions of the Credit Agreement require Persons that become Subsidiaries of the Borrower and
that are not already parties hereto to become Subsidiary Guarantor s hereunder by executing a
Subsidiary Guarantor Accession, and agrees that its obligation s hereunder shall not be discharged,
limited or otherwise affected by reason of the same, or by reason of the Bank’s actions in
effecting the same or in releasing any Subsidiary Guarantor hereunder, in each case without the
necessity of giving notice to or obtaining the consent of any other Subsidiary Guarantor.



     12. Arbitration; Preservation and Limitation of Remedies



     (a) Upon demand of any party hereto, whether made before or after institution of an y judicial
proceeding, any dispute, claim or controversy arising out of, connected with or relating to this
Guaranty or any other Credit Document (“Disputes”) between any Subsidiary Guarantor and the Bank
shall be resolved by binding arbitration as provided herein. Institution of a judicial proceeding
by a party does not waive the right of that party to demand arbitration hereunder. Disputes may
include, without limitation, tort claims, counterclaims, claims brought as class actions, claims
arising from documents executed in the future, disputes as to whether a matter is subject to
arbitration, or claims arising out of or connected with the transactions contemplated by this
Guaranty and the other Credit Documents. Arbitration shall be conducted under an d governed by the
Commercial Financial Disputes Arbitration Rules (the “Arbitration Rules”) of the American
Arbitration Association (the “AAA”), as in effect from time to time, and the Federal Arbitration
Act, Title 9 of the U.S. Code, as amended. All arbitration hearings shall be conducted in the
city in which the principal demand for arbitration and all hearings shall be concluded within 120
days of demand for arbitration. These time limitations may not be extended unless a party shows
cause for extension and then for no more than a total of sixty (60 ) days. The expedited procedures
set forth in Rule 51 et seq. of the Arbitration Rules shall be applicable to claims of less than
$1,000,000. All applicable statutes of limitation shall apply to any Dispute. A judgment upon the
award may be entered in any court having jurisdiction. The panel from which all arbitrators are
selected shall be comprised of licensed attorneys selected from the Commercial Financial Dispute
Arbitration panel of the AAA. The single arbitrator selected for expedited procedure shall be a
retired judge from the highest court of general jurisdiction, state or federal, of the state where
the hearing will be conducted. Notwithstanding the foregoing, this arbitration provision does not
apply to Disputes under or related to any Hedge Agreement. The parties do not waive applicable
federal or state substantive law except a s provided herein.



     (b) Notwithstanding the preceding binding arbitration provisions, the parties here to agree to
preserve, without diminution, certain remedies that any party hereto may employ or exercise
freely, either alone, in conjunction with or during a Dispute. Any party hereto shall have the
right to proceed in any court of proper jurisdiction or by self-help to exercise or prosecute the
following remedies, as applicable: (i) all rights to foreclose against any Collateral



8









 





by exercising a power of sale granted pursuant to any of the Credit Documents or under
applicable law or by judicial foreclosure and sale, including a proceeding to confirm the sale;
(ii) all rights of self-help, including peaceful occupation of real property and collection of
rents , set-off, and peaceful possession of personal property; (iii) obtaining provisional or
ancillary remedies, including injunctive relief, sequestration, garnishment, attachment,
appointment of a receiver and filing an involuntary bankruptcy proceeding; and (iv) when
applicable, a judgment by confession of judgment. Any claim or controversy with regard to any
party’s entitlement to such remedies is a Dispute. Preservation of these remedies does not limit
the power of an arbitrator to grant similar remedies that may be requested by a party in a Dispute. The parties hereto agree
 that no party shall have a remedy of punitive or exemplary damages
against any other party in any Dispute, and each party hereby waives any right or claim to
punitive or exemplary damages that it has now or that may arise in the future in connection with
an y Dispute, whether such Dispute is resolved by arbitration or judicially. The parties
acknowledge that by agreeing to binding arbitration they have irrevocably waived any right they may
have to a jury trial with regard to a Dispute. The Subsidiary Guarantors agree to pay the
reasonable fees and expenses of counsel to the Bank in connection with any Dispute subject to
arbitration as provided herein.




     13. Waiver of Automatic or Supplemental Stay. IN THE EVENT THAT A PETITION FOR RELIEF UNDER
ANY CHAPTER OF THE BANKRUPTCY CODE IS FILED BY OR AGAINST THE BORROWER, EACH SUBSIDIARY GUARANTOR
PROMISES AND COVENANTS THAT IT WILL NOT SEEK, OR CAUSE OR PERMIT THE COMPANY TO SEEK, A
SUPPLEMENTAL STAY PURSUANT TO
BANKRUPTCY CODE §§ 105 OR 362 OR ANY OTHER RELIEF PURSUANT TO BANKRUPTCY CODE § 105 OR ANY OTHER
PROVISION OF THE BANKRUPTCY CODE, WHETHER INJUNCTIVE OR OTHERWISE, WHICH WOULD STAY, INTERDICT,
CONDITION, REDUCE OR INHIBIT THE BANK’S ABILITY TO ENFORCE ANY RIGHTS IT HAS UNDER THIS AGREEMENT,
OR AT LAW OR IN EQUITY, OR ANY OTHER RIGHTS THE BANK HAS, WHETHER NOW OR HEREAFTER ACQUIRED,
AGAINST ANY SUBSIDIARY GUARANTOR.



     14. Notices. All demands, notices, approvals, consents, requests, and other communications
hereunder shall be in writing and shall be deemed to have been given when the writing is delivered
if given or delivered by hand, overnight delivery service or facsimile transmitter (with confirmed
receipt) or five (5) days after being mailed, if mailed, by first class, registered or certified
mail, postage prepaid, addressed (a) if to any Subsidiary Guarantor, in care of the Borrower and
at Borrower’s address for notices set forth in the Credit Agreement and (b) if to the Bank, at its
address for notices set forth in the Credit Agreement; or to such other address as any of the
Persons listed above may designate for itself by like notice to the other Persons listed above; and
in each case, with copies to such other Persons as may be specified under the provisions of the
Credit Agreement.



     15. Controlling Law. This Guaranty has been accepted at, and shall be deemed to have been made
in, North Carolina and shall be interpreted in accordance with the internal law s (as opposed to
conflicts of laws provisions) of the State of North Carolina.



9









 





     16. Successors and Assigns. This Guaranty shall be binding upon each Subsidiary Guarantor,
its successors and assigns and all rights against such Subsidiary Guarantor arising under this
Guaranty shall be for the sole benefit of the Bank.



     17. Amendment. This Guaranty can be amended or modified only by an instrument in writing
signed by the parties hereto.



     18. Entire Agreement. THIS GUARANTY AND THE DOCUMENTS AND INSTRUMENTS EXECUTED AND DELIVERED
CONTEMPORANEOUSLY HEREWITH EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES
HERETO AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS OF SUCH PERSONS, VERBAL OR WRITTEN,
RELATING TO THE SUBJECT MATTER HEREOF. THIS GUARANTY AND THE DOCUMENTS AND INSTRUMENTS EXECUTED
IN CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.



     19. Severability. In the event that any provision of this Guaranty shall be determined to be
invalid or unenforceable by any court of competent jurisdiction, such determination shall not
invalidate or render unenforceable any other provision hereof.



     20. Counterparts. This Guaranty may be executed in several counterparts, each of which shall
be an original and all of which, together shall constitute but one and the same instrument.



[The remainder of this page is left blank intentionally.]




10









 








     IN WITNESS WHEREOF, each Subsidiary Guarantor has caused this Guaranty Agreement to be
executed as of the date first written above.



	 	 	 	 	 	 	 

	 	SUBSIDIARY GUARANTORS:	 	 
	 
	 	 	 	 	 	 
	 	 	SWISHER HYGIENE FRANCHISE CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Hugh H. Cooper
	 	 
	 

	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	SHFC BUFFALO, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Hugh H. Cooper
	 	 
	 

	 	 	 	Manager	 	 
	 
	 	 	 	 	 	 
	 	 	SHFC MINNEAPOLIS, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Hugh H. Cooper
	 	 
	 

	 	 	 	Manager	 	 
	 
	 	 	 	 	 	 
	 	 	SHFC OKLAHOMA, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Hugh H. Cooper
	 	 
	 

	 	 	 	Manager	 	 
	 
	 	 	SHFC OPERATIONS, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Hugh H. Cooper
	 	 
	 

	 	 	 	Manager	 	 






Signature Page to Guaranty




 









 








	 	 	 	 	 	 	 

	 	 	SWISHER PEST CONTROL CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Hugh H. Cooper
	 	 
	 

	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	SWISHER MAIDS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Hugh H. Cooper
	 	 
	 

	 	 	 	Vice President	 	 






ACCEPTED AND AGREED TO AS OF THE DATE FIRST ABOVE WRITTEN :




WACHOVIA BANK, NATIONAL ASSOCIATION




	 	 	 	 	 

	By:
	 	 	 	 
	 

	 	 

	 	 
	Name:
	 	 	 	 
	 

	 	 

	 	 
	Title :
	 	 	 	 
	 

	 	 

	 	 






Signature Page to Guaranty




 









 





EXHIBIT A




GUARANTOR ACCESSION



     THIS GUARANTOR ACCESSION (this “Accession”), dated as of                     , is executed and
delivered by [NAME OF NEW GUARANTOR], a                      corporation (the “Company”), pursuant to
the Guaranty referred to hereinbelow.



     Reference is made to the Credit Agreement, dated as of November 14, 2005, between Swisher
International, Inc. (the “Borrower”) and Wachovia Bank, National Association (the “Bank”) (as
amended, modified or supplemented from time to time, the “Credit Agreement”). In connection with
and as a condition to the initial and continued extensions of credit under the Credit Agreement,
the Borrower and certain of its subsidiaries have executed and delivered a Guaranty, dated as of
November 14, 2005 (as amended, modified or supplemented from time to time, the “Guaranty”),
pursuant to which such subsidiaries have guaranteed the payment in full of the obligations of the
Borrower under the Credit Agreement and the other Credit Documents (as defined in the Credit
Agreement). Capitalized terms used herein without definition shall have the meanings given to them
in the Guaranty.



     The Borrower has agreed under the Credit Agreement to cause each of its future subsidiaries
to become a party to the Guaranty as a guarantor thereunder. The Company is a subsidiary of the
Borrower. The Company will obtain benefits as a result of the continue d extension of credit to
the Borrower under the Credit Agreement, which benefits are hereby acknowledged, and,
accordingly, desire to execute and deliver this Accession. Therefore, in consideration of the
foregoing and other good and valuable consideration, the receipt an d sufficiency of which are
hereby acknowledged, and to induce the Bank to continue to extend credit to the Borrower under
the Credit Agreement, the Company hereby agrees as follows:



     1. The Company hereby joins in and agrees to be bound by each and all of the provisions of the
Guaranty as a Subsidiary Guarantor thereunder. In furtherance (and without limitation) of the
foregoing, pursuant to Section 1 of the Guaranty, the Company hereby irrevocably, absolutely and
unconditionally, and jointly and severally with each other Subsidiary Guarantor, guarantees to the
Bank the full and prompt payment, at any time and from time to time as and when due (whether at
the stated maturity, by acceleration or otherwise), of all of the Guaranteed Obligations, all on
the terms and subject to the conditions set forth in the Guaranty.



     2. The Company hereby represents and warrants that after giving effect to this Accession,
each representation and warranty contained in Section 7 of the Guaranty is true an d correct with
respect to the Company as of the date hereof, as if such representations and warranties were set
forth at length herein.



     3. This Accession shall be a Credit Document (within the meaning of such term under the Credit
Agreement), shall be binding upon and enforceable against the Company and its successors and
assigns, and shall inure to the benefit of and be enforceable by the
Bank and its successors and assigns. This Accession and its attachments are hereby
incorporated into the Guaranty and made a part thereof.



 









 





     IN WITNESS WHEREOF, the Company has caused this Accession to be executed by its duly
authorized officer as of the date first above written.



	 	 	 	 	 	 	 

	 	 	[NAME OF NEW GUARANTOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title :	 	 	 	 
	 

	 	 	 	 

	 	 






2









 






Exhibit C




COMPLIANCE CERTIFICATE




     THIS CERTIFICATE is delivered pursuant to the Credit Agreement, dated as of November 14, 2005
(the “Credit Agreement”), among Swisher International, Inc., a Nevada corporation (the “Borrower”)
and Wachovia Bank, National Association. Capitalized terms use d herein without definition shall
have the meanings given to such terms in the Credit Agreement.



     The undersigned hereby certifies that:



     1. He is the duly elected [President][Chief Financial Officer].



     2. Enclosed with this Certificate are copies of the financial statements of the Borrower and
its Subsidiaries as of
__________, and for the [________-month period] [year] then ended, required
to be delivered under [Section 5.1(a)] [5.1(b)] of the Credit Agreement. Such financial statements
have been prepared in accordance with GAAP [(subject to the absence of notes required by GAAP and
subject to normal year-end adjustments)] ‘ and fairly present the financial condition of the
Borrower and its Subsidiaries on a consolidated basis as of the date indicated and the results of
operation of the Borrower and its Subsidiaries on a consolidated basis for the period covered
thereby.



     3. The undersigned has reviewed the terms of the Credit Agreement and has made , or caused to
be made under the supervision of the undersigned, a review in reasonable detail of the
transactions and condition of the Borrower and its Subsidiaries during the accounting period
covered by such financial statements.



     4. The examination described in paragraph 3 above did not disclose, and the undersigned has
no knowledge of the existence of, any Default or Event of Default during or at the end of the
accounting period covered by such financial statements or as of the date of this Certificate. [,
except as set forth below.



Describe here or in a separate attachment any exceptions to paragraph 4 above by listing, i n
reasonable detail, the nature of the Default or Event of Default, the period during which it
existed and the action that the Borrower and/or Guarantor has taken or proposes to take with
respect thereto.]




     5. Attached to this Certificate as Attachment A is a covenant compliance worksheet reflecting
the computation of the financial covenants set forth in Article VI of the Credit Agreement as of
the last day of and for the period covered by the financial statements enclose d herewith.





 




			
	1	 	Insert in the case of quarterly financial statements.




 









 










     IN WITNESS WHEREOF, the undersigned has executed and delivered this Certificate as of
the ________ day of ____________, ___.



	 	 	 	 	 	 	 

	 	 	SWISHER INTERNATIONAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title :	 	 	 	 
	 

	 	 	 	 

	 	 






2









 






ATTACHMENT A




COVENANT COMPLIANCE WORKSHEET



A. Fixed Charge Coverage Ratio (Section 6.1 of the Credit Agreement)




	 	 	 	 	 	 	 	 	 

	(1) Consolidated EBITDA for the reference period
ending on the date of determination (from Line D(3 )
below)
	 	 	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 
	(a) Aggregate amount of payments on leases of
real or personal property scheduled or required
to have been made during such period
	 	$	                    	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(b) Cash dividends and distributions during such
period
	 	$	                    	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(c) Line A(1)(a) minus Line A(l)(b)
	 	$	                    	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(2) Consolidated EBITDA, as adjusted for purposes of
calculating the Fixed Charge Coverage Ratio:
	 	 	 	 	 	 	 	 
	Add Lines A(l) and A(l)(c)
	 	 	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 
	(3) Fixed Charges:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(a) Cash Consolidated Interest Expense for such
period
	 	$	                    	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(b) Aggregate amount of principal payments on
Funded Debt scheduled or required to have
been made during such period
	 	$	                    	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(c) Tax expense for such period
	 	$	                    	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(d) Aggregate amount of payments on leases of
real or personal property scheduled or required
to have been made during such period
	 	$	                    	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(e) Fixed Charges:
	 	 	 	 	 	 	 	 
	Add Lines A(3)(a) through A(3)(d)
	 	 	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 
	(4) Fixed Charge Coverage Ratio:
	 	 	 	 	 	 	 	 
	Divide Line A(2) by Line A(3)(e)
	 	 	 	 	 	 	                    	 
	 
	 	 	 	 	 	 	 	 
	(5) Minimum Fixed Charge Coverage Ratio as of the
date of determination
	 	 	 	 	 	 	1.25:1.00	 






 









 






B. Consolidated Tangible Net Worth (Section 6.2 of the Credit Agreement)




	 	 	 	 	 	 	 	 	 

	(1) Base for calculating Consolidated Tangible Net
Worth:
	 	 	 	 	 	$	3,310,000	 
	 
	 	 	 	 	 	 	 	 
	(2) (a) Consolidated Net Income for each Fiscal Year
(if positive) ending after Closing Date:
	 	$	                    	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(b) Net income adjustment:
	 	 	 	 	 	 	 	 
	Multiply Line 2(a) by 75%
	 	 	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 
	(3) (a) Aggregate amount of all increases in the stated
capital and additional paid-in capital accounts
of the Borrower and its Subsidiaries resulting
from the issuance of equity securities or other
Capital Stock after Closing Date:
	 	$	                    	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(b) Equity securities adjustment:
	 	 	 	 	 	 	 	 
	Multiply Line 3(a) by 50%
	 	 	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 
	(4) Required Consolidated Tangible Net Worth:
	 	 	 	 	 	 	 	 
	Add Lines B(1), B(2)(b) and B(3)(b)
	 	 	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 
	(5) Actual Consolidated Tangible Net Worth as of
measurement date


(Total assets other than assets which would be treated
as intangible assets for balance sheet presentation
purposes under GAAP and Affiliate Note
Receivables minus total liabilities)
	 	 	 	 	 	$	                    	 






 









 






C. Funded Debt to EBITDA Ratio (Section 6.3 of the Credit Agreement)




	 	 	 	 	 

	(1) Funded Debt as of the date of determination
	 	$	                    	 
	 
	 	 	 	 
	(2) Consolidated EBITDA for the reference
period ending on the date of determination
(from Line D(3) below)
	 	$	                    	 
	 
	 	 	 	 
	(3) Total Funded Debt to EBITDA Ratio:
	 	 	 	 
	Divide Line C(1) by Line C(2)
	 	 	                    	 
	 
	 	 	 	 
	(4) Maximum Funded Debt to EBITDA Ratio as
of the date of determination
	 	 	3.00:1.00	 






D. Consolidated EBITDA




	 	 	 	 	 	 	 	 	 

	(1) Consolidated Net Income for the reference period
ending on the date of determination (from 

Line E(2)
below)
	 	 	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 
	(2) Additions to Consolidated Net Income (to the extent
taken into account in the calculation of
Consolidated Net Income for such period):
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(a) Interest expense for such period
	 	$	                    	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(b) Income taxes for such period
	 	$	                    	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(c) Depreciation and amortization for such
period
	 	$	                    	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(d) Add Lines D(2)(a) through D(2)(c)
	 	$	                    	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(3) Consolidated EBITDA :
	 	 	 	 	 	 	 	 
	Add Lines D(1) and D(2)(d)
	 	 	 	 	 	$	                    	 






 









 






E. Consolidated Net Income




	 	 	 	 	 	 	 	 	 

	(1) Net income or loss of the Borrower and its
Subsidiaries, as determined on a consolidated basis
in accordance with GAAP
	 	 	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 
	(a) Extraordinary losses or charges for such
period (attach itemized schedule)
	 	$	                    	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(b) Extraordinary gains or income for such
period (attach itemized schedule)
	 	$	                    	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(2) Consolidated Net Income (Line E(l) plus Line
E(1)(a) minus Line E(1)(b))
	 	 	 	 	 	$	                    	 






F. Net Tangible Assets




	 	 	 	 	 	 	 	 	 

	(1) Total assets of the Borrower and its Subsidiaries
(other than assets which would be treated a s
intangible assets for balance sheet presentation
purposes under GAAP)
	 	 	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 
	(a) Restricted Cash and Affiliate Note
Receivables
	 	$	                    	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Net Tangible Assets (Line F(1) minus Line F(1)(a)
	 	$	                    	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(2) Minimum Net Tangible Assets required to make
Threshold Amount equal to Revolving Credit
Commitment
	 	 	 	 	 	$	750,000	 
	G. Unrestricted Cash


	 
	(1) Unrestricted Cash of the Borrower
	 	 	 	 	 	$	                    	 
	 
	 	 	 	 	 	 	 	 
	(2) Minimum Unrestricted Cash required to make
Threshold Amount equal to Revolving Credit
Commitment
	 	 	 	 	 	$	500,000	 







 












 





Exhibit D




NOTICE OF BORROWING




November 10, 2005



Wachovia Bank, National Association

Charlotte Plaza Building

201 South College Street, 8th Floor NC 0680

Charlotte, North Carolina 28288

Attention: Syndication Agency Services




Ladies and Gentlemen:




     The undersigned, Swisher International, Inc. (the “Borrower”), refers to the Credit
Agreement, dated as of November 14, 2005, among the Borrower and you (as amended, modified,
restated or supplemented from time to time, the “Credit Agreement,” the terms defined
therein being used herein as therein defined), and, pursuant to Section 3.2(a) of the Credit
Agreement, hereby gives you irrevocable notice that the Borrower requests a Borrowing of Revolving
Loan under the Credit Agreement, and to that end sets forth below the information relating to such
Borrowing (the “Proposed Borrowing”) as required by Section 3.2(a) of the Credit Agreement:




     (i) The aggregate principal amount of the Proposed Borrowing is
$                     .1




     (ii) The Proposed Borrowing is requested to be made on November 14, 2005
(the “Borrowing Date”).



     The Borrower hereby certifies that the following statements are true on and as of the date
hereof and will be true on and as of the Borrowing Date:




     A. Each of the representations and warranties contained in Article IV of the Credit
Agreement and in the other Credit Documents is and will be true and correct on and as of
each such date, with the same effect as if made on and as of each such date, both
immediately before and after giving effect to the Proposed Borrowing and to the application
of the proceeds therefrom (except to the extent any such representation or warranty is
expressly stated to have been made as of a specific date, in which case such representation
or warranty shall be true and correct as of such date);




     B. No Default or Event of Default has occurred and is continuing or would result
from the Proposed Borrowing or from the application of the proceeds therefrom; and





 




			
	1	 	Amount of Proposed Borrowing must comply with Section 2.1 of the Credit Agreement.





 









 





     C. After giving effect to the Proposed Borrowing, the sum of the aggregate
principal amount of Revolving Loans outstanding will not exceed the lesser of the Revolving Credit
Commitment or the Threshold Amount.



	 	 	 	 	 
	 	Very truly yours,



SWISHER INTERNATIONAL, INC.

 	 
	 	By:  	 	 
	 
	 	Name:  	 	 
	 
	 	Title:  	 	 
	 




 









 





Schedule 4.10(b)

Solvency




NONE



 









 





Schedule 4.10(c)

Notes Receivable




Note Schedule




Oct 31, 2005 - unaudited




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Payment	 	 	 
	USD NOTES	 	Name	 	Payment Amount	 	 	Frequency	 	Balance 10/31/05	 
	NR002
	 	Charlotte	 	 	5,510.00	 	 	Monthly	 	 	287,852.99	 
	NR002-1
	 	Charlotte	 	 	1,000.68	 	 	Monthly	 	 	19,642.77	 
	NR002-3
	 	Charlotte	 	 	272.65	 	 	Weekly	 	 	9,565.35	 
	NR075
	 	Knoxville	 	 	292.66	 	 	Weekly	 	 	20,549.19	 
	NR089-4
	 	Tulsa	 	 	1,206.44	 	 	Weekly	 	 	295,852.67	 
	NR165-1
	 	NJ / Philly Metro	 	 	1,406.67	 	 	Monthly	 	 	37,382.18	 
	NR165-2
	 	Delaware	 	 	1,875.36	 	 	Monthly	 	 	104,165.19	 
	NR179
	 	Miami	 	 	1,059.36	 	 	Monthly	 	 	94,817.56	 
	NR199
	 	Reno	 	 	556.96	 	 	Monthly	 	 	19,064.62	 
	NR207-1
	 	Norfolk	 	 	703.73	 	 	Bi-weekly	 	 	17,223.75	 
	NR223
	 	Richmond	 	 	1,753.82	 	 	Monthly	 	 	78,491.08	 
	NR225
	 	Wichita	 	 	570.96	 	 	Monthly	 	 	11,153.83	 
	NR234
	 	Fresno	 	 	1,115.00	 	 	Monthly	 	 	25,875.31	 
	NR238
	 	Northern Virginia	 	 	475.35	 	 	Monthly	 	 	14,636.77	 
	NR242
	 	Staten Island	 	 	495.05	 	 	Monthly	 	 	15,159.16	 
	NR248
	 	Lincoln	 	 	308.63	 	 	Monthly	 	 	3,881.17	 
	NR253
	 	Oklahoma City	 	 	1,111.80	 	 	Monthly	 	 	49,005.80	 
	NR254
	 	Hudson Valley	 	 	924.11	 	 	Monthly	 	 	40,200.25	 
	NR255
	 	Corpus Christi	 	 	496.26	 	 	Monthly	 	 	18,699.97	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Tom Reeder
	 	 	 	 	500.00	 	 	Monthly	 	 	7,538.30	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	CAD NOTES
	 	 	 	 	 	 	 	 	 	 	 	 
	NR149-2
	 	SW Ontario	 	CAD	105.10	 	 	Weekly	 	$	5,277.80	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SHFC KaiVac Leases
	 	 	 	 	 	 	 	 	 	 	 	 
	KV070
	 	Greenville	 	 	324.00	 	 	Monthly	 	 	1,146.14	 
	KV162
	 	 	 	 	324.00	 	 	Monthly	 	 	1,154.49	 
	KV165
	 	 	 	 	324.00	 	 	Monthly	 	 	1,492.29	 
	KV199
	 	 	 	 	324.00	 	 	Monthly	 	 	1,167.03	 
	KV207
	 	 	 	 	324.00	 	 	Monthly	 	 	1,830.41	 
	KV225
	 	 	 	 	324.00	 	 	Monthly	 	 	1,845.79	 
	KV231
	 	 	 	 	363.00	 	 	Monthly	 	 	1,581.04	 
	KV234
	 	 	 	 	324.00	 	 	Monthly	 	 	1,146.14	 
	KV235
	 	 	 	 	363.00	 	 	Monthly	 	 	2,205.73	 
	KV248
	 	 	 	 	324.00	 	 	Monthly	 	 	1,160.36	 
	KV251
	 	 	 	 	324.00	 	 	Monthly	 	 	1,478.36	 
	KV258
	 	 	 	 	363.00	 	 	Monthly	 	 	193.96	 
	KV258-1
	 	 	 	 	363.00	 	 	Monthly	 	 	2,214.72	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	KV149
	 	 	 	CAD	401.49	 	 	Monthly	 	 	1,594.41	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	SHFC Notes
Receivable
	 	 	 	 	 	 	 	 	 	$	1,196,246.58	 
	 
	 	 	 	 	 	 	 	 	 	 	 






 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Payment	 	 	 
	USD NOTES	 	Name	 	Payment Amount	 	 	Frequency	 	Balance 10/31/05	 
	AUD NOTES
	 	 	 	 	 	 	 	 	 	 	 	 
	NR702
	 	Victoria Hygiene	 	 	1,888.05	 	 	Weekly	 	AUD	235,009.20	 
	NR710
	 	Ross Speakman	 	 	 	 	 	Dec 05 Balloon	 	AUD	30,000.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SIANZ Notes Receivable
	 	 	 	 	 	 	 	 	 	AUD	265,009.20	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SII NOTES
	 	 	 	 	 	 	 	 	 	 	 	 
	Tom Busch
	 	Tom Busch	 	 	101.45	 	 	Monthly	 	 	499.26	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SII Notes Receivable
	 	 	 	 	 	 	 	 	 	 	499.26	 
	 
	 	 	 	 	 	 	 	 	 	 	 






 









 





Schedule 4.13

Environmental Compliance




NONE



 









 





Schedule 4.14

Ownership of Properties



Owned Property: None



Leased Property:





	 	1.	 	Corporate Office of Swisher International, Inc. located at:

6849 Fairview Road, Charlotte, NC 28210

Owned by Old Dowd Properties, Edwin R. Moody, III, Gary W. McCoy and H.
Michael McCoy

c/o Mr. Gary McCoy

McCoy Properties

521 Clanton Road, Suite C

Charlotte, NC 28217
	 
	 	2.	 	Corporate Office of Swisher International, Inc. located contiguous to the above at:

6853 Fairview Road, Charlotte, NC 28210

Owned by Old Dowd Properties, Edwin R. Moody, III, Gary W. McCoy and H.
Michael McCoy

c/o Mr. Gary McCoy

McCoy Properties

521 Clanton Road, Suite C

Charlotte, NC 28217
	 
	 	3.	 	Warehouse office of SHFC Minneapolis, LLC, used for storing products and for operation
of the Minneapolis company-owned Swisher Hygiene business located at:
 12211 Woodlake Drive,
Burnsville, MN 55337

Owned by William J. Hargis dba Nicollet Business Center
 c/o
Wellington Management, Inc.
 1625 Energy Park Drive, Suite 100

St. Paul, MN 55108
	 
	 	4.	 	Warehouse office of SHFC Buffalo, LLC, used for storing products and for operation of
the Minneapolis company-owned Swisher Hygiene business located at:

160 Lawrence Bell Drive, Suite 120, Amherst, NY 14221

Owned by The Uniland Partnership of Delaware, L.P.

University Corporate Centre

100 Corporate Parkway, Suite 500

Amherst, NY 14226





 









 





Schedule 4.15

Intellectual Property




See Report Attached



 









 





SWISHER INTERNATIONAL, INC.




INTERNATIONAL AND DOMESTIC TRADEMARKS



TRADEMARK STATUS REPORT

a/o October 21, 2005



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Our	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	File	 	 	 	 	 	 	 	Appln.	 	Appln.	 	Reg.	 	Reg.	 	Renewal	 	 
	 	 	No.	 	Country	 	Status*	 	Mark	 	No.	 	Date	 	No.	 	Date	 	Due	 	Comments
	1
	 	.0609	 	Australia	 	REG	 	SWISHER & Design	 	713983	 	07/30/96	 	713983	 	07/30/96	 	07/30/06	 	 
	2
	 	.0606	 	Canada	 	REG	 	SANISERVICE	 	744,438	 	12/22/93	 	TMA 462,236	 	08/30/96	 	08/30/11	 	 
	3
	 	.0607	 	Canada	 	REG	 	“S” Design	 	744,427	 	12/22/93	 	TMA 471,527	 	02/25/97	 	02/25/12	 	 
	4
	 	.0608	 	Canada	 	REG	 	“S” SWISHER MAIDS & Design	 	755,673	 	05/26/94	 	TMA 471,555	 	02/25/97	 	02/25/12	 	 
	5
	 	N/A	 	Canada	 	ABD	 	SWISHER & Design	 	149,485	 	02/22/93	 	N/A	 	N/A	 	N/A	 	Abandoned on 08/18/94
	6
	 	.0610	 	China	 	REG	 	SWISHER & Design	 	9700106284	 	10/09/97	 	1,219,941	 	10/28/98	 	10/27/08	 	 
	7
	 	.0603	 	CTM	 	REG	 	SWISHER & Design	 	287565	 	07/10/96	 	287565	 	01/26/99	 	07/10/06	 	 
	8
	 	.0620	 	CTM	 	Use-Based	 	SWISHER	 	3920683	 	06/29/04	 	N/A	 	N/A	 	N/A	 	Due to opposition proceedings, Cls. 3 and 5 will be withdrawn; however, the application will proceed for Class 37
	9
	 	.0621	 	CTM	 	ABD	 	SWISHER & Design [WITHDRAWN]	 	3920717	 	06/29/04	 	N/A	 	N/A	 	N/A	 	Application is being withdrawn due to opposition proceeding
	10
	 	.0632	 	CTM	 	Use-Based	 	“S” Design	 	4580437	 	09/09/05	 	N/A	 	N/A	 	N/A	 	Awaiting copy of application.
	11
	 	.0601	 	Ecuador	 	N/A	 	SWISHER	 	N/A	 	N/A	 	N/A	 	N/A	 	N/A	 	Williams Mullen is not the responsible attorney. Assisted with Power of Attorney only
	12
	 	.0602	 	Guatemala	 	REG	 	SWISHER & Design	 	007336-2003	 	10/09/03	 	131162	 	07/29/04	 	07/29/14	 	 
	13
	 	.0613	 	Hong Kong	 	REG	 	SWISHER & Design	 	99/08072	 	06/24/99	 	200006353	 	06/24/99	 	06/23/06	 	 
	14
	 	.0628	 	India	 	REG	 	SWISHER & Design (Cl. 3)	 	950100	 	08/25/00	 	950100	 	08/25/00	 	08/25/10	 	 






1









 





SWISHER INTERNATIONAL, INC.




INTERNATIONAL AND DOMESTIC TRADEMARKS



TRADEMARK STATUS REPORT

a/o October 21, 2005



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Our	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	File	 	 	 	 	 	 	 	Appln.	 	Appln.	 	Reg.	 	Reg.	 	Renewal	 	 
	 	 	No.	 	Country	 	Status*	 	Mark	 	No.	 	Date	 	No.	 	Date	 	Due	 	Comments
	15
	 	.0629	 	India	 	Use-Based	 	SWISHER & Design (Cl. 5)	 	950103	 	08/25/00	 	N/A	 	N/A	 	N/A	 	Application pending before Trade
Mark Office - awaiting response from foreign associate
	16
	 	.0630	 	India	 	REG	 	SWISHER AB CONCENTRATE	 	950102	 	08/25/00	 	950102	 	08/25/00	 	08/25/10	 	 
	17
	 	.0631	 	India	 	Use-Based	 	SWISHER CHROME CLEANER	 	950101	 	08/25/00	 	N/A	 	N/A	 	N/A	 	Application pending before Trade
Mark Office - awaiting response from foreign associate
	18
	 	.0622	 	Indonesia	 	REG	 	SWISHER & Design	 	J96-24802	 	11/08/96	 	402108	 	11/08/96	 	11/08/06 (opens 11/08/05)	 	 
	19
	 	.0614	 	Ireland	 	REG	 	SWISHER & Design	 	99/2377	 	07/14/99	 	214241	 	07/14/99	 	07/14/09	 	 
	20
	 	.0624	 	Japan	 	REG	 	SWISHER & Design	 	89829/96	 	12/05/97	 	4089444	 	12/05/97	 	12/05/07	 	 
	21
	 	.0625	 	Japan	 	REG	 	SWISHER	 	2004-017576	 	02/26/04	 	4808860	 	10/08/04	 	10/08/14	 	 
	22
	 	.0615	 	Korea	 	REG	 	SWISHER & Design	 	97-11601	 	08/16/97	 	49435	 	11/13/98	 	11/13/08	 	 
	23
	 	.0619	 	Macau	 	REG	 	SWISHER & Design	 	N/003045	 	01/21/98	 	N/003045	 	07/03/98	 	1st renewal filed 

2nd renewal 
 due by 
 01/21/12	 	Actual renewal date is January 21, 2012 (prev. information supplied to WM was 07/03/2012)
	24
	 	.0611	 	Malaysia	 	REG	 	SWISHER & Design	 	97/18894	 	12/01/97	 	97/18894	 	12/01/97	 	12/01/07	 	 
	25
	 	.0600	 	Mexico	 	REG	 	SWISHER	 	752320	 	08/29/01	 	752320	 	06/27/02	 	08/29/11	 	 
	26
	 	.0616	 	New Zealand	 	REG	 	SWISHER	 	232932	 	12/17/93	 	232932	 	01/22/97	 	12/17/14	 	 
	27
	 	.0617	 	New Zealand	 	REG	 	SWISHER	 	232933	 	12/17/93	 	232933	 	01/22/97	 	12/17/14	 	 







2











 





SWISHER INTERNATIONAL, INC.




INTERNATIONAL AND DOMESTIC TRADEMARKS



TRADEMARK STATUS REPORT

a/o October 21, 2005



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Our	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	File	 	 	 	 	 	 	 	Appln.	 	Appln.	 	Reg.	 	Reg.	 	Renewal	 	 
	 	 	No.	 	Country	 	Status*	 	Mark	 	No.	 	Date	 	No.	 	Date	 	Due	 	Comments
	 
	 28
	 	.0618	 	Norway	 	REG	 	SWISHER & Design	 	199906182	 	06/24/99	 	199799	 	10/07/99	 	          10/07/09	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 29
	 	.0623	 	Philippines	 	REG	 	SWISHER & Design	 	123789	 	08/20/97	 	41997123799	 	04/04/02	 	04/04/08 – 5th anniversary 04/04/13 – 10th Anniversary 04/04/18 – 15th	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 30
	 	.0612	 	Singapore	 	REG	 	SWISHER & Design	 	8108/96	 	08/03/96	 	8108/96	 	08/03/96	 	08/03/06	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 31
	 	.0626	 	Taiwan	 	REG	 	SWISHER & Design	 	(85)038080	 	08/02/96	 	93545	 	09/01/97	 	08/31/07	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 32
	 	.0627	 	Thailand	 	REG	 	SWISHER & Design	 	314800	 	08/13/96	 	BOR5642	 	09/02/97	 	09/02/07	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 33
	 	.0604	 	Turkey	 	Use-Based	 	SWISHER	 	2004/37716	 	11/19/04	 	N/A	 	N/A	 	N/A	 	Before examining attorney
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 34
	 	.0605	 	Turkey	 	Use-Based	 	SWISHER & Design	 	2004/37717	 	11/19/04	 	N/A	 	N/A	 	N/A	 	Before examining attorney
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 35
	 	.0400	 	U.S.	 	REG	 	SWISHER & Design	 	74250147	 	02/27/92	 	1744818	 	01/05/93	 	01/05/13	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 36
	 	.0401	 	U.S.	 	REG	 	SWISHER	 	74362093	 	02/25/93	 	1818173	 	01/25/94	 	01/25/14	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 37
	 	.0402	 	U.S.	 	REG	 	“S” SWISHER MAIDS & Design	 	74532900	 	06/03/94	 	1904647	 	07/11/95	 	07/11/05	 	Grace period will expire on 01/11/06 – if a renewal
 is not filed the registration will be canceled.






3









 






SWISHER INTERNATIONAL, INC.




INTERNATIONAL AND DOMESTIC TRADEMARKS



TRADEMARK STATUS REPORT

a/o October 21, 2005



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Our	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	File	 	 	 	 	 	 	 	Appln.	 	Appln.	 	Reg.	 	Reg.	 	Renewal	 	 
	 	 	No.	 	Country	 	Status*	 	Mark	 	No.	 	Date	 	No.	 	Date	 	Due	 	Comments
	 
	 38
	 	.0403	 	U.S.	 	Use–Based	 	“S” Design	 	78575314	 	02/25/05	 	N/A	 	N/A	 	N/A	 	Application will be  published on 11/22/05 – awaiting notification from Trademark Office and will forward to client upon receipt
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 39
	 	.0404	 	US	 	REN	 	“S” SWISHER 

HYGIENE & Design (Cls 35 and 36)	 	N/A	 	N/A	 	N/A	 	N/A	 	N/A	 	Awaiting specimens to file as a use – based application or approval to file as an intent-to-use application.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 40
	 	0405	 	US	 	ITU	 	“S” SWISHER HYGIENE & Design (Cls 5 and 37)	 	78677819	 	07/25/05	 	N/A	 	N/A	 	N/A	 	Application will be published on 11/29/05 – awaiting notification from Trademark Office and will forward to client upon receipt
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 41
	 	.0406	 	U.S.	 	ITU	 	“S” SWISHER SERVICES FOR LIFE	 	78678205	 	7/26/05	 	N/A	 	N/A	 	N/A	 	Application will be published on 11/29/05 – awaiting notification from Trademark Office and will forward to client upon receipt
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 42
	 	.0407	 	U.S.	 	ITU	 	“S” SWISHER SERVICES AMERICA TRUSTS	 	78678283	 	07/26/05	 	N/A	 	N/A	 	N/A	 	Application will be published on 11/29/05 – awaiting notification from Trademark Office and will forward to client upon receipt







4











 





SWISHER INTERNATIONAL, INC.




INTERNATIONAL AND DOMESTIC TRADEMARKS



TRADEMARK STATUS REPORT

a/o October 21, 2005



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Our	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	File	 	 	 	 	 	 	 	Appln.	 	Appln.	 	Reg.	 	Reg.	 	Renewal	 	 
	 	 	No.	 	Country	 	Status*	 	Mark	 	No.	 	Date	 	No.	 	Date	 	Due	 	Comments
	 
	43
	 	.0408	 	U.S.	 	ITU	 	“S” SWISHER SERVICES	 	78678233	 	07/26/05	 	N/A	 	N/A	 	N/A	 	Application will be published on 11/29/05 — awaiting notification from Trademark Office and will forward to client upon receipt
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	44
	 	.0409	 	U.S.	 	Use-Based	 	SWISHER TOTAL IMAGE	 	78691594	 	08/12/05	 	N/A	 	N/A	 	N/A	 	Application will be published on 11/22/05 — awaiting notification from Trademark Office and will forward to client upon receipt
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	45
	 	.0410	 	U.S.	 	PEN	 	STI	 	NOT FILED	 	N/A	 	N/A	 	N/A	 	N/A	 	Waiting to near back from client.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	46
	 	.0411	 	U.S.	 	Use-Based	 	SANIGENICS	 	78721268	 	09/27/05	 	N/A	 	N/A	 	N/A	 	New application not yet assigned to examining attorney
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	47
	 	.0412	 	U.S.	 	Use-Based	 	SANIGENICS & Design	 	78721440	 	09/27/05	 	N/A	 	N/A	 	N/A	 	New application not yet assigned to examining attorney






5









 






SWISHER INTERNATIONAL, INC




INTERNATIONAL AND DOMESTIC TRADEMARKS



TRADEMARK STATUS REPORT

a/o October 21, 2005



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Our	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	File	 	 	 	 	 	 	 	Appln.	 	Appln.	 	Reg.	 	Reg.	 	Renewal	 	 
	 	 	No.	 	Country	 	Status*	 	Mark	 	No.	 	Date	 	No.	 	Date	 	Due	 	Comments
	 
	48
	 	.0413	 	U.S.	 	Use-Based	 	A HEALTHY RESPECT FOR HYGIENE	 	78738048	 	10/21/05	 	N/A	 	N/A	 	N/A	 	Newly filed application not yet assigned to examining attorney








 




			
	*	 	REG – Registered; ABD – Abandoned; Use-Based – Use-Based Application is pending; Intent-to-Use –  Intent-to-Use 



Application is pending




6









 










Schedule 4.16

Insurance




See attached.



 









 









	MARSH CERTIFICATE OF INSURANCE CERTI MCAT EA UMBER ATL-001094181-02 —  PRODUCER THIS
CERTIFICAT E181 TEL ED AS A MATTER OF INFORMATION ONLY AND CONFER S Marsh USA inc . NO RIGHT S
UPON THECERTIFICATE MOLDER OTHER THAN T HOSE PROVIDED IN TH E P 0 Box 459010 FOIICY . T HIS
CERTIFICATE 00E8 NOT AMEND, EXTEND OR Ali ER THE COVERAG E Sunrise, FL 33345-9010 AFFOROEDBYT8Emma
ElDESCRIBED HEREIN . COMPANIES AFFORDING COVERAG E CO MP ANY 334186-GL—0405 A HARTFORD FIRE
INSURANCE C O IAEll RED CO IIP ANY SWISHER INTERNATIONAL,IN C 8 HARTFORD CASUALTY INS C O 6849
FARVIEW ROA D CHARLOTTE, NC 2821 0 CO LIP AN Y C TWIN CITY FIRE INSURANCE C O CO NP AN Y 0 C
OVERAGES This certil cats supersedes and replaces any preAioudy Issued certiNcats for the policy
period noted below . 1 THIS S TO CERTIFY THAT POLCIES OF INSURANCE DESCRIBED HEREIN HAVE BEEP
LAVED 10 THE INSURED NAMED HEREIN FOR THE POLICY PERIOD INDICATED . NOTLN ITHSTAN D ING A llY REQ U
[REM ENT, TERN OR CON D TTO N OF A NY CO NTRACT OR O TH ER DOCUMENT WITH RESPECT TO TORCH THE CE
RTLF KATE MAY OE SSU E D OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN S
S U BJ ECT TO ALL THE TERMS, COMMIES AND E)OCL US o NS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY
HAVE BEEN R ED LC ED BY PAID CLAIMS . TYPE OFI N SU RA MCE POLICY EFFECTIVE ROIICY EX RRATION
LIMIT S LTR POLCY NUMBER DAT E(MMIDDIYY) OAT E(MMIDDYY) A GENERAL IIABILITY 20 UUN 1W 7088 K3
12/31104 12131105 2,000,000 GENERAL AGGREGATE $ )( COMMERCIAL GENERAL LABRTTY PRODUCTS-CO MPAP
AGG $2,000,000 CLAIMS MADE El OCCUR PERSONAL&ADV INJURY $1,000,000 OWNER’S& CONTRACTOR’S P ROT
EACH OCCU RRENCE $1,000,000 FIRE DADAG EQtlyole tle) $ 300,000 MED DIP QAly01e pe sob $10,000 A
Am OMOULEmoat IT Y 20 UUN 1W 708813 12731/04 12/31/05 COMBINED SING LE UNIT $ 1,000,000 X . ANV
AUTO ALL OW NE D AUTO S BO OILY INJURY perpen’ ) _ SCHEDULED AUTO S X HIRE DAUTOS X . 80
OILY INJURY eTECCNeI) I IA N-OW N ED A UTDS PROP ERN DAMAG E GARAGE LIABILIT Y AUTO ONLY -
EA ACCIDENT $ ANY A MO OTHER THAN AUTO ONLY: EACH ACCIDENT $ AGGREGATE $ EXCESS IIAMLIT Y 20 RHU
1W6536 12131104 12/31105 EACH OCCURRENCE $10,000,000 UNBRELIA FORM AGGREOATE _ $10000,000 OTHER
THAN UMBRELLA FORM SI $10,000 C WORK ERBCOMPEA BATIONAII D 20WBPH2954 12/31105 ‘TA10- I
IORt-12131104 X I TORYLIMRS ER BAPIOTERB’ LIABILITY EL EACH ACCIDENT $1,000,000 THE
PROP RIEID R! INCL EL’DSEASE-EOLCY LIMIT $1,000,000 PARTNE RSIEXEC UTN E 0 OFF CERS ARE : FXCL El.
DI SEAS LEACH EMPLOYEE $1,000,00 OTHER DEECRIPTIONOF OPERATION SILOCAIIONSNEHICIE818P EOM IT BA
S PROOF OF INSURANCE . CERTIFICATE HOLDER CANCELLATIO N 8110 MD MYOH TM E POLEHAD EEC RD ED
HEREIN 8ECANCELIED 890 REIMEBCPIPAT10N DATE TNEPHDI , THE PAUPER AI FOPDINO COVER/OE WILL ENDEAHOR
TO MAIL , DAYS WPITIEN NOTCE TD TI E SWISHER INTERNATIONAL, INC. C ERTI CATE HOLDER NAMED N EPEIM,
BUT FAILURE TD !NAIL SLOP ‘,slice SMALL MPOEE MD 0I LDATM N 0 R 6849 FARVIEW ROA D CHAR LOTTE,NC
28210 LUA1111YOT ANY KIN D UPON TIEINEURER’AF FORD MO COVERAGE, 1113MPEIT80 A REPR NlATVE3,0R THE
Eel EROF T1 CC E111KATE MARSH USA INC . BY : Cann en Gordo n MM1(3102) VALID AS OF : 0912110 5







 









 












	MARSH EVIDENCE OF PROPERTY INSURANCE I IATL-00109485-01 nATL-IC ,109 185.0 THIS
CERTIFICATE IS ISSUED AS AMATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE
HOLDER OTHER THAN THOSE PROVIDE D IN THE P O LIC Y. T HIS CERTIFICATE DOES NOT AMEND , EXTEND o R
ALTER THE C OVERAG E AFF 0 RD ED B Y T HE POLICIES UST ED HEREIN . PRODUCER COMPAN Y Marsh USA Inc
        . HARTFORD FIRE INSURANCE C O P 0 Box 45901 0 Sunrise, FL 33345-9010 934186—PROP-0405 INSURED LOAN
NUMBER POLICY NUMBE R SWISHER INTERNATIONAL, IN C 20 UUN TW 7088 K3 6849 FAIRVIEW ROAD . UNTI L
CHARLOTTE, NC 2821 0 EFFECTIVE DATE (MMIDDlYY) EXPIRATION DAT E(MMIDDITY) CONT FYI TERMINATED
12/31ID4 12131105 IF CHECK ED THIS REPLACES PROP EAT DEICE DAT ED : PROPERTY INFORMATIO N LOCATION
I DESCRIPTIO N EVIDENCE OF INSURANCE . COVERAGE IN F OR MAT ION This certificaesupersedes
andreplaces elypre>douslyissued catific etOrthepolicyperiodnotedbelow 1 THIS IS TO CERTIFY THAT
THE POLICIES OF INSURANCE LISTED HEREIN HAVE BEEN ISSUED TO THE INSURED NAMED HEREIN FOR THE POLICY
PERIOD INDICATED , NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OFANY CONTRACT OR OTHER
DOCUMENT WITH RESPECT TO WHICH THE CERTIFICATE MAY B E ISSUED OR MAY PERTAIN, THE INSURANCE
AFFORDED BY THE POLICIES LISTED HEREIN IS SUBJECT TO ALL THE TERMS, CONDITIONS AND EXCLUSIONS OF
SUC H POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. COVERAGES/PERILS/FORMS MOUNT
OFINSURANCE (3) DEDUCTIBLE BUSINESS PERSONAL PROPERTY INCL . STOCK — PREMISES #1 912,500 1,00 0
BUSINESS PERSONAL PROPERTY INCL . STOCK — PREMISES #2 912,50 0 BUSINESS PERSONAL PROPERTY INCL .
STOCK — PREMISES #3 25,000 BUSINESS PERSONAL PROPERTY INCL . STOCK — PREMISES #4 25,000 BUSINESS
PERSONAL PROPERTY INCL . STOCK — PREMISES #5 25,000 REMARKS( Including Sped al Conditions )
‘CANCELLATION. SHOULDANY CIF THE POLICIES LISTED HEREIN BE CANCELLED BEFORE THE EXPIRATION DATE
THEREOF, t HE INSURER AFFORDING COVERAGE WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICETO THE
CERTIFICATE HOLDER NAMED HEREIN, BUT FAILURE TO. MAIL SUCH NOTICE SHAL L MPOSENOOBUGATION OR
LIABILITY OF ANY KIND UPON THE INSURER AFFORDING COVERAGE, ITS AGENTS OR REPRESENTATNES, OR THE
ISSUER OF THIS CERTIFICATE. CERTIFICATE HOLDE R NAME AN DAD DREN S NAT URE OF INTERES T SWISHER
INTERNATIONAL, INC . ADOTIOSAL INSURED 6849 FAIRVIEW ROAD MORTGAGEE CHARLOTTE,NC 28210 LOSS PAYEE
(DINER ) MARSH USAI N C BY Carmen Gordo n VALID AS OF : 09/21/05 MM3 (3102)






 











 





Schedule 4.20

Subsidiaries



Swisher Hygiene Franchise Corp., a North Carolina corporation, a wholly owned subsidiary of Swisher
International, Inc.



F.M.S., Inc., a Bahamian corporation, a wholly owned subsidiary of Swisher International, Inc.



SHFC Operations, LLC, a DE limited liability company, a wholly owned subsidiary of Swisher
International, Inc. (Formerly known as SHFC Salt Lake City, LLC)





	 	 	 	SHFC Buffalo, LLC, a DE limited liability company, whose sole member is SHFC Operations,
LLC. Also qualified to do business in New York.
	 
	 	 	 	SHFC Minneapolis, LLC, a DE limited liability company, whose sole member is SHFC Operations,
LLC. Also qualified to do business in Minnesota.
	 
	 	 	 	SHFC Oklahoma, LLC, a DE limited liability company, whose sole member is SHFC Operations,
LLC. Currently not in use.




Swisher Pest Control, Inc., a North Carolina corporation, a wholly owned subsidiary of Swisher
International, Inc.



Swisher Maids, Inc., a North Carolina corporation, a wholly owned subsidiary of Swisher
International, Inc.



Swisher International (Australia New Zealand) Pty Ltd, an Australian corporation, a wholly owned
subsidiary of Swisher International, Inc.




 









 








Schedule 7.3(viii)

Liens Securing the Terminating Indebtedness





	1.	 	Nevada UCC #2005010686-6 filed 04/08/2005, listing Swisher International, Inc., as debtor and
Bank of America, N.A., as secured party.
	 
	2.	 	North Carolina UCC #20050033793C filed 04/08/2005, listing Swisher Hygiene Franchise Corp.,
as debtor and Bank of America, N.A., as secured party.
	 
	3.	 	Nevada UCC #2002016630-9 filed 06/26/2002, listing Swisher International, Inc., as debtor /
CFH Acquisition LLC, as secured party.





 









 










Schedule 7.7

Transactions with Related Persons



For the years ended October 31, 2004, 2003 and 2002, Swisher International, Inc. (hereinafter
“Borrower”) realized revenue from the franchises owned by related parties of $1,770,004,
$1,753,204 and $1,603,085, respectively. Total accounts receivable of the franchises owned by
related parties were $328,484, $279,111 and $362,978 for the years ended October 31, 2004, 2003
and 2002, respectively.



During the nine months ended July 31, 2005 and the year ended October 31, 2004, the Borrower paid
its former President and a corporation in which its former President is a major stockholder
$$62,029 and $103,585, respectively, for the use of an airplane for business and travel. The lease
expires in April, 2006.



During the nine months ended July 31, 2005, an affiliate of HB Fairview Holdings, LLC, a Delaware
limited liability company (the “HB Affiliate”) acquired 16 franchises from unrelated third party
franchisees in Florida, North Carolina, Kentucky, Ohio, Virginia and California. HB Fairview
Holdings, LLC is the majority stockholder of the Borrower.



Between August 1 and October 15, 2005, the HB Affiliate acquired four franchises from unrelated
third party franchisees in South Carolina, North Carolina, Georgia and Tennessee. In connection
with these acquisitions, the HB Affiliate assumed the existing Swisher Hygiene franchise agreements
and businesses, thereby assuming certain indebtedness to the Borrower for accounts receivable for
products, services and fees, and in some transactions, notes payable to the Borrower. In addition,
the HB Affiliate acquired the franchise rights for Birmingham, Alabama and Indianapolis, Indiana
from the Borrower. As a part of the agreement for these two markets, the HB Affiliate granted the
Borrower the option to repurchase the operations for a period of time. HB Affilate will continue to
acquire franchises from unrelated third party franchisees and to acquire franchise rights for other
non-franchisee owned territories.



Following is a list of franchises acquired by the HB Affiliate(s):




	 	 	 	 

	 	Beverly Hills, CA

	 	Service Beverly Hills, LLC
	 	Washington, DC

	 	Service DC, LLC
	 	Gold Coast (Florida)

	 	Service Gold Coast, LLC
	 	Cincinnati, OH

	 	Service Cincinnati, LLC
	 	Central Florida

	 	Service Central FL, LLC
	 	Columbus/Akron, OH

	 	Service Columbus, LLC
	 	Gainesville, FL

	 	Service Gainesville, LLC
	 	Tallahassee, FL

	 	Service Tallahassee, LLC
	 	West Coast (Florida)

	 	Service West Coast, LLC
	 	Service North (Florida)

	 	Service North, LLC
	 	Raleigh, NC

	 	Service Raleigh, LLC
	 	Charlotte, NC

	 	Service Charlotte, LLC
	 	Space Coast, FL

	 	Service DC, LLC
	 	Louisville, KY

	 	Service Space Coast, LLC
	 	Tampa, FL

	 	Service Louisville, LLC
	 	Columbia, SC

	 	Service Tampa, LLC
	 	Greensboro, NC

	 	Service Greensboro, LLC
	 	Myrtle Beach, FL

	 	Service Myrtle Beach, LLC
	 	???

	 	Service FCS, LLC
	 	Columbia, SC

	 	Service Columbia, LLC
	 	Memphis, TN

	 	Service Memphis, LLC
	 	Southern Georgia

	 	Service South GA, LLC





For the nine months ended July 31, 2005 and the year ended October 31, 2004, revenue was earned
from transactions with the HB affiliate and other related parties from product sales, royalties,
marketing and service fees that were charged on the same terms as other franchisees.



 









 






The Borrower pays SGB Management, Inc., an affiliate of HB Fairview, a fee in the sum of
$20,000 per month for the services provided, including product development, marketing and branding
strategy and management advisory assistance.



The Borrower has retained Certilearn, Inc., an affiliate of HB Fairview, to construct an e-learning
training platform and entered into a contract for the development of e-learning courses and access
to an e-learning delivery platform. The remaining committed course development work is expected to
be at competitive prices.