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# LOANANDSECURITYAGREEMENT

**by and between**

 

**AUTOINFO, INC.**

**SUNTECK TRANSPORT CO., INC.**

**ELEETS LOGISTICS, INC.**

**SUNTECK TRANSPORT CARRIERS, INC.,**

**SUNTECK GOVERNMENT LOGISTICS, INC.,**

**SUNTECK TRANSPORT GROUP, INC.**

**RAILPORT SERVICES, INC.,**

 

***and***

 

**AMERICAN SHIPPERS DISPATCH, INC.**

 

**as the “Borrowers”**

 

***and***

 

**REGIONS BANK**

**as the “Lender”**

 

**February 17, 2009**

 

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**TABLE OF CONTENTS**
|          |                                        |                                                          | Page |
|----------|---------------------------------------------|----------------------------------------------------------|------|
||
|     |                                        |                                                     |
| 1.  | DEFINITIONS;RELATED TERMS                   | 1                                                        |
|     | 1.1                                         | Certain UCC Terms                                        | 1    |
|     | 1.2                                         | Defined Terms                                            | 1    |
|     | 1.3                                         | Financial Terms                                          | 10   |
|     |
| 2.       | THECREDIT FACILITY                          | 10                                                       |
|     | 2.1                                         | The Commitments                                          | 10   |
|     | 2.2                                         | The Notes                                                | 10   |
|     | 2.3                                         | Interest                                                 | 10   |
|     | 2.4                                         | Requesting New Loans                                     | 11   |
|     | 2.5                                         | Requests for Borrowings                                  | 12   |
|     | 2.6                                         | Excess Outstandings                                      | 12   |
|     | 2.7                                         | Repayment of Loans                                       | 12   |
|     | 2.8                                         | Additional Payment Provisions                            | 13   |
|     | 2.9                                         | Lockboxes; Collections Accounts                          | 13   |
|     | 2.10                                        | Letters of Credit                                        | 14   |
|     | 2.11                                        | Fees                                                     | 14   |
|     | 2.12                                        | Statement of Account                                     | 15   |
|     | 2.13                                        | Termination                                              | 15   |
|     | 2.14                                        | USA Patriot Act Notice                                   | 15   |
|     |
| 3.       | SECURITYAGREEMENT                           | 15                                                       |
|     | 3.1                                         | Security Interest                                        | 15   |
|     | 3.2                                         | Financing Statements; Fixture Filings; Power of Attorney | 16   |
|     | 3.3                                         | Entry                                                    | 16   |
|     | 3.4                                         | Other Rights                                             | 16   |
|     | 3.5                                         | Accounts                                                 | 16   |
|     | 3.6                                         | Waiver of Marshaling                                     | 17   |
|     | 3.7                                         | Control; Further Assurances                              | 17   |
|     | 3.8                                         | Pledge of Equity Interests                               | 17   |
|     |
| 4.       | CONDITIONSPRECEDENT TO EXTENSIONS OF CREDIT | 17                                                       |
|     | 4.1                                         | Conditions Precedent to each Initial Loan                | 17   |
|     | 4.2                                         | Conditions Precedent to Each Loan                        | 18   |
|     |
| 5.       | REPRESENTATIONSAND WARRANTIES               | 19                                                       |
|     | 5.1                                         | Valid Existence and Power                                | 19   |
|     | 5.2                                         | Authority                                                | 19   |
|     | 5.3                                         | Financial Condition                                      | 19   |
|     | 5.4                                         | Litigation                                               | 19   |
|     | 5.5                                         | Agreements, Etc                                          | 20   |
|     | 5.6                                         | Authorizations                                           | 20   |
|     | 5.7                                         | Title                                                    | 20   |
|     | 5.8                                         | Collateral                                               | 20   |
|     | 5.9                                         | Jurisdiction of Organization; Location                   | 20   |
|     | 5.10                                        | Taxes                                                    | 20   |
|     | 5.11                                        | Labor Law Matters                                        | 21   |
|     | 5.12                                        | Accounts                                                 | 21   |
|     | 5.13                                        | Judgment Liens                                           | 21   |
|     | 5.14                                        | Structure                                                | 21   |
|     | 5.15                                        | Deposit Accounts                                         | 21   |
|     | 5.16                                        | Environmental                                            | 21   |

i

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**TABLE OF CONTENTS**            (continued)

**Page**
|        |                      |                                                                                                              |    |
|--------|----------------------|--------------------------------------------------------------------------------------------------------------|----|
|   | 5.17                 | ERISA                                                                                                        | 22 |
|   | 5.18                 | Investment Company Act                                                                                       | 22 |
|   | 5.19                 | Insider                                                                                                      | 22 |
|   | 5.20                 | Sanctioned Persons; Sanctioned Countries                                                                     | 22 |
|   | 5.21                 | Compliance with Covenants; No Default                                                                        | 22 |
|   | 5.22                 | Full Disclosure                                                                                              | 22 |
|   | 5.23                 | Collateral Disclosure Certificates                                                                           | 22 |
|   | 5.24                 | Operating and Capital Leases                                                                                 | 22 |
|   |
| 6.     | AFFIRMATIVECOVENANTS | 22                                                                                                           |
|   | 6.1                  | Use of Loan Proceeds                                                                                         | 22 |
|   | 6.2                  | Maintenance of Business and Properties                                                                       | 22 |
|   | 6.3                  | Insurance                                                                                                    | 23 |
|   | 6.4                  | Certain Notices                                                                                              | 23 |
|   | 6.5                  | Inspections of Books and Records and Field Examinations; Appraisals;                    Physical Inventories | 23 |
|   | 6.6                  | Financial Information                                                                                        | 24 |
|   | 6.7                  | Maintenance of Existence and Rights                                                                          | 25 |
|   | 6.8                  | Payment of Taxes, Etc                                                                                        | 25 |
|   | 6.9                  | Subordination                                                                                                | 25 |
|   | 6.10                 | Compliance; Hazardous Materials                                                                              | 25 |
|   | 6.11                 | Further Assurances                                                                                           | 26 |
|   | 6.12                 | Covenants Regarding Collateral                                                                               | 26 |
|   |
| 7.     | NEGATIVECOVENANTS    | 26                                                                                                           |
|   | 7.1                  | Debt                                                                                                         | 26 |
|   | 7.2                  | Liens                                                                                                        | 27 |
|   | 7.3                  | Restricted Payments                                                                                          | 27 |
|   | 7.4                  | Loans and Other Investments                                                                                  | 27 |
|   | 7.5                  | Change in Business; Activities Covered by Insurance, Etc                                                     | 28 |
|   | 7.6                  | Accounts                                                                                                     | 28 |
|   | 7.7                  | Transactions with Affiliates                                                                                 | 28 |
|   | 7.8                  | No Change in Name, Offices, or Jurisdiction of Organization; Removal of                    Collateral        | 28 |
|   | 7.9                  | No Sale, Leaseback                                                                                           | 28 |
|   | 7.10                 | Margin Stock                                                                                                 | 29 |
|   | 7.11                 | Tangible Collateral                                                                                          | 29 |
|   | 7.12                 | Subsidiaries                                                                                                 | 29 |
|   | 7.13                 | Liquidation, Mergers, Consolidations, and Dispositions of Assets;                    Name and Good Standing  | 29 |
|   | 7.14                 | Change of Fiscal Year or Accounting Methods                                                                  | 29 |
|   | 7.15                 | Deposit Accounts; Exclusive Control                                                                          | 29 |
|   |
| 8.     | FINANCIALCOVENANTS   | 29                                                                                                           |
|   | 8.1                  | Definitions                                                                                                  | 29 |
|   | 8.2                  | Financial Covenants                                                                                          | 30 |
|   |
| 9.     | DEFAULT         | 30                                                                                                           |
|   | 9.1                  | Events of Default                                                                                            | 30 |
|   | 9.2                  | Remedies                                                                                                     | 32 |
|   | 9.3                  | Receiver                                                                                                     | 32 |
|   | 9.4                  | Deposits; Insurance                                                                                          | 32 |
|   |

ii

 

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**TABLE OF CONTENTS**            (continued)

**Page**
|        |                     |                                                     |    |
|--------|---------------------|-----------------------------------------------------|----|
| 10.    | MISCELLANEOUS  | 32                                                  |
|   | 10.1                | No Waiver, Remedies Cumulative                      | 32 |
|   | 10.2                | Survival of Representations                         | 32 |
|   | 10.3                | Indemnity By Borrowers; Expenses                    | 33 |
|   | 10.4                | Notices                                             | 33 |
|   | 10.5                | GOVERNING LAW                                       | 34 |
|   | 10.6                | Successors and Assigns                              | 34 |
|   | 10.7                | Counterparts; Telecopied Signatures                 | 34 |
|   | 10.8                | No Usury                                            | 34 |
|   | 10.9                | Powers                                              | 34 |
|   | 10.10               | Approvals; Amendments                               | 34 |
|   | 10.11               | Participations and Assignments                      | 34 |
|   | 10.12               | Dealings with Multiple Borrowers                    | 34 |
|   | 10.14               | Additional Provisions                               | 35 |
|   | 10.15               | Integration; Final Agreement                        | 35 |
|   | 10.16               | LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES | 35 |
|   | 10.17               | WAIVER OF JURY TRIAL                                | 35 |
|   | 10.18               | Submission to Jurisdiction; Venue                   | 36 |
|   | 10.19               | Credit Inquiries                                    | 36 |
|   | 10.20               | Information                                         | 36 |
|   | 10.21               | No Tax Advice                                       | 36 |
|   |

iii

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**EXHIBITS AND SCHEDULES**

EXHIBITS:

 

| Exhibit A | - | Form of Revolving Note |
|-----------|---|------------------------|

| Exhibit B | - | Form of Notice of Borrowing |
|-----------|---|-----------------------------|

| Exhibit C | - | Form of Collateral Disclosure Certificate |
|-----------|---|-------------------------------------------|

| Exhibit T | - | Form of Telephone Instruction Letter |
|-----------|---|--------------------------------------|

| Exhibit 4.1 | - | Form of Borrower’s Counsel’s Opinion |
|-------------|---|--------------------------------------------------|

| Exhibit 6.6(a) | - | Form of Borrowing Base Certificate |
|----------------|---|------------------------------------|

| Exhibit 6.6(d) | - | Form of Compliance and No Default Certificate |
|----------------|---|-----------------------------------------------|

 

 

**SCHEDULES:**

 

| Schedule 5.3 | - | Direct or Contingent Obligations and Liabilities |
|--------------|---|--------------------------------------------------|

| Schedule 5.4 | - | Pending or Threatened Litigation |
|--------------|---|----------------------------------|

| Schedule 5.8(b) | - | Insurance Policies |
|-----------------|---|--------------------|

| Schedule 5.9 | - | Locations of Collateral |
|--------------|---|-------------------------|

| Schedule 5.14 | - | Corporate Structure |
|---------------|---|---------------------|

| Schedule 5.15 | - | Deposit Accounts |
|---------------|---|------------------|

| Schedule 5.16 | - | Environmental |
|---------------|---|---------------|

| Schedule 5.17 | - | ERISA |
|---------------|---|-------|

| Schedule 5.24 | - | Operating and Capital Leases |
|---------------|---|------------------------------|

| Schedule 7.1 | - | Scheduled Permitted Debt |
|--------------|---|--------------------------|

| Schedule 7.2 | - | Scheduled Permitted Liens |
|--------------|---|---------------------------|

| Schedule 7.7 | - | Transactions with Affiliates |
|--------------|---|------------------------------|

 

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**LOAN AND SECURITY AGREEMENT**

THIS LOAN AND SECURITY AGREEMENT (the “Agreement”), dated as of February 17, 2009, by and between AUTOINFO, INC., a Delaware corporation (“Parent Company”) and its direct and indirect Subsidiaries, namely, SUNTECK TRANSPORT CO., INC.,            (“Sunteck”), ELEETS LOGISTICS, INC. (“ELEETS”), SUNTECK TRANSPORT CARRIERS, INC. (“STC”), SUNTECK GOVERNMENT LOGISTICS, INC. (“SGL”), SUNTECK TRANSPORT GROUP, INC., a Florida corporation            (“STG”), RAILPORT SERVICES, INC., a Florida corporation (“RSI”) and AMERICAN SHIPPERS DISPATCH, INC. (“ASD”), all of which are Florida corporations (Parent Company, together with Sunteck, ELEETS, STC, SGL, RSI and ASD, herein called, collectively, the            “Borrowers” and, individually, a “Borrower”), and REGIONS BANK, an Alabama bank (together with its successors and assigns, “Lender”).

**W I T N E S S E T H :**

The Borrowers are engaged in a common business enterprise and, in connection therewith, have applied jointly to Lender for credit pursuant hereto. In consideration of the premises and of the mutual covenants herein contained and to induce Lender to extend credit to Borrowers, the parties agree as follows:

|   | **1.** | **DEFINITIONS; RELATED TERMS****.** |
|--------|--------|-------------------------------------|

1.1       Certain UCC Terms. Any term used in this Agreement or in any financing statement filed in connection herewith which is defined in the UCC and not otherwise defined in this Agreement or in any other Loan Document shall have the meaning given to the term in the UCC, including, without            limitation, Accession, Account Debtor, Chattel Paper, Account, Commercial Tort Claim, Deposit Account, Document, Electronic Chattel Paper, Equipment, Fixture, Instrument, Inventory, Investment Property, Letter-of-Credit Right, Proceeds, Supporting Obligation, and Tangible Chattel Paper.

1.2       Defined Terms. Capitalized terms that are not otherwise defined herein shall have the meanings set forth in thisSection 1.2. Certain terms relating to financial covenants are set forth inSection            8.

“Accounts Payable Report” has the meaning given such term inSection 6.6(a).

“Accounts Receivable Report” has the meaning given such term inSection 6.6(a).

“Affiliate” means, with respect to any Person, (a) any other Person directly or indirectly owning five percent (5%) or more of the Equity Interests of such Person or of which such Person owns five percent (5%) or more of such Equity Interests; (b) any other Person controlling, controlled by, or under common control            with such Person; (c) any officer, director, or employee of such Person or any Affiliate of such Person; and (d) any family member or Affiliate of such Person. Without limitation of the foregoing, each Borrower is an Affiliate of each other Borrower.

“Applicable Margin” means, as to any Revolving Loan, one and 50/100ths of one percent (1.50%) per annum, so long as such Loan is a LIR Loan, and one and 50/100ths of one percent (1.50%) per annum if, pursuant toSection 2.3(f), such Loan is made as, or converted to, a            Base Rate Loan.

“Base Rate” means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the greatest of (a) the Federal Funds Rate in effect on such dayplus1⁄2 of 1% or (b) the Prime Rate in effect on such day.            If for any reason Lender shall have determined (which determination shall be conclusive absent manifest error) that it is unable, after due inquiry, to ascertain the Federal Funds Rate for any reason, including the inability or failure of Lender to obtain sufficient quotations in accordance with the terms hereof, the Base Rate shall be determined without regard to clause (a) of the first sentence of this definition until the circumstances giving rise to such inability no longer            exist. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be effective on the effective date of such change in the Prime Rate or the Federal Funds Rate, respectively.

 

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“Base Rate Loan” means a Loan, or portion thereof, during any period in which it bears interest at a rate based on the Base Rate pursuant toSection 2.3(f).

“Borrower” or “Borrowers” shall have the meanings given to such terms in the preamble to this Agreement.

“Borrower Agent” shall have the meaning set forth inSection 10.12.

“Borrowing Base” means, on any date of determination, an amount equal to:

(a)        up to eighty-five percent (85%) (or such lesser percentage as Lender may determine from time to time in its Permitted Discretion) of the total amount of Eligible Billed Accounts,plus

(b)        thelesserof (i) up to seventy-five percent (75%) (or such lesser percentage as Lender may determine from time to time in its Permitted Discretion) of the total amount of Eligible Unbilled Accounts or (ii) Twelve Million Dollars ($12,000,000),less

|   | (c) | any Reserves. |
|--------|-----|---------------|

“Borrowing Base Certificate” has the meaning set forth inSection 6.6(a).

“Business Day” means (a) any week day on which Lender is open for business in Birmingham, Alabama, and Atlanta, Georgia, and (b) with respect to all matters relating to the determination of the LIBOR Index Rate, any day that is also a day for trading by and between banks in U.S. dollar deposits in the London interbank            market.

“Capital Expenditures” means, for any period, the aggregate cost of all capital assets acquired by a Borrower and its Subsidiaries during such period (including gross leases to be capitalized under GAAP and leasehold improvements), as determined in accordance with GAAP.

“Closing Date” means the earliest date on which all of the conditions precedent inSection 4of this Agreement are satisfied and the initial extensions of credit are made under this Agreement.

“Collateral” means all property of each Borrower, wherever located and whether now owned by each Borrower or hereafter acquired, including but not limited to, for each Borrower, (a) all Inventory; (b) all General Intangibles; (c) all Accounts; (d) all Chattel Paper; (e) all Instruments and Documents and any other            instrument or intangible representing payment for goods or services; (f) all Equipment; (g) all Investment Property; (h) all Commercial Tort Claims; (i) all Letter-of-Credit Rights; (j) all Deposit Accounts and funds on deposit therein, including but not limited to any Funding Account, Collections Account, and funds otherwise on deposit with or under the Control of Lender or its agents or correspondents; (k) all Fixtures and (l) all parts, replacements, substitutions, profits,            products, Accessions, cash and non-cash Proceeds, and Supporting Obligations of any of the foregoing (including, but not limited to, insurance proceeds) in any form and wherever located. Collateral also includes, for each Borrower, (i) all written or electronically recorded books and records relating to any such Collateral and other rights relating thereto and (ii) any other real or personal property as to which Lender, at any time of determination, has a Lien to secure the            Obligations. The term “Collateral” expressly includes all issued and outstanding Equity Interests of each Borrower which is a Subsidiary of Parent Company or another Borrower now or hereafter owned by the Parent Company or such Borrower, including all such Equity Interests so listed and described onSchedule 5.14.

“Collateral Disclosure Certificate” means each certificate, to be substantially in the form ofExhibit Cattached hereto and made a part hereof, executed and delivered by a Credit Party to Lender on or before the Closing Date.

“Collections Account” means any Deposit Account maintained by a Borrower with Lender to which collections, deposits, and other payments on or with respect to Collateral may be made pursuant to the terms hereof and to which only Lender shall have access to withdraw or otherwise direct the disposition of funds on deposit            therein.

 

|   | 2 |
|--------|---|

 

 

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“Commitment(s)” shall mean the Revolving Loan Commitment.

“Control” means, with respect to any asset, right, or property with respect to which a security interest therein is perfected by a secured party’s having “control” thereof (whether pursuant to the terms of an agreement or through the existence of certain facts and circumstances), that Lender has            “control” of such asset, right, or property in accordance with the terms of Article 9 of the UCC.

“Credit Party” means each Borrower, each Guarantor (other than an individual Guarantor), and each other Person obligated to Lender under any Loan Document.

“Debt” means all liabilities of a Person as determined under GAAP and all obligations which such Person has guaranteed or endorsed or is otherwise secondarily or jointly liable for, and shall include, without limitation, (a) all obligations for borrowed money or purchased assets; (b) obligations secured by assets            whether or not any personal liability exists; (c) the capitalized amount of any capital or finance lease obligations; (d) the unfunded portion of pension or benefit plans or other similar liabilities; (e) obligations as a general partner; (f) contingent obligations pursuant to guaranties, endorsements, letters of credit and other secondary liabilities; (g) obligations for deposits; and (h) obligations under Hedge Agreements.

“Default” means any event or circumstance which, upon satisfaction of any requirement for the giving of notice or the lapse of time, or the happening of any further condition, event, or act, would constitute an Event of Default.

“Default Rate” means, as of any date, a rate per annum that is equal to (a) in the case of each Loan outstanding on such date, two percent (2.00%) in excess of the rate otherwise applicable to such Loan on such date; (b) in the case of fees payable with respect to Letters of Credit, two percent (2.00%) in excess of the            fees otherwise applicable to Letters of Credit; and (c) in the case of any other Obligations outstanding on such date, two percent (2.00%) in excess of the LIBOR Index Rate in effect on such date;provided,however, that Obligations arising under any Hedge Agreement shall bear interest at the rate and, if applicable, the default rate set forth in such Hedge Agreement.

“EBITDA” has the meaning given such term inSection 8.1.

“Eligible Accounts” means all of each Borrower’s Accounts (valued at the face amount of such invoice,minusthe maximum discounts, credits, and allowances which may be taken by Account Debtors on such Accounts, and net of any sales tax, finance charges, or late            payment charges included in the amount invoiced) created or acquired by such Borrower and arising from the rendering of services in such Borrower’s ordinary course of business, butexcluding(without duplication), Accounts:

|   | (a) | which are not denominated in U.S. dollars; |
|--------|-----|--------------------------------------------|

(b)        over which Lender does not have a duly perfected, first-priority (and only) Lien or which, by contract, subrogation, mechanics’ lien laws, or otherwise, are subject to claims by a Borrower’s creditors or other third parties or which are owed by Account Debtors as to whom any creditor of Borrower (including any bonding            company) has lien or retainage rights;

(c)        as to which any representation, warranty, or covenant herein relating thereto shall be untrue, misleading, or in default in any material respect;

(d)        outstanding for longer than (i) ninety (90) days from original invoice date or sixty (60) days from the original due date, whichever is the shorter time, in the case of Eligible Billed Accounts, and (ii) thirty (30) days from delivery date in the case of Eligible Unbilled Accounts;

(e)        owed by any Account Debtor if more than twenty-five (25%) of the Accounts owed by such Account Debtor to a Borrower, or to Borrowers generally, are deemed ineligible pursuant toclause (d)above;

|   | (f) | owed by any of such Borrower’s Affiliates; |
|--------|-----|--------------------------------------------------|

(g)        owed by any of such Borrower’s creditors, but only to the extent of Borrower’s Debt to such creditors;

 

|   | 3 |
|--------|---|

 

 

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(h)        as to which the Account Debtor disputes liability or are otherwise in dispute or are subject to any counterclaim, contra-account, volume rebate, cooperative advertising accrual, deposit, or offset, but only to the extent thereof;

(i)        owing by any Account Debtor (and such Account Debtor’s Affiliates) whose aggregate Accounts exceed ten percent (10%) of the total of Borrowers’ total Eligible Accounts, but only in each case to the extent of such excess;

(j)        owing by any Account Debtor which is not Solvent or which is subject to any proceeding of the types described inSection 9.1(g)orSection 9.1(h);

(k)        arising from a sale on a bill-and-hold, progress billing, guaranteed sale, sale-or-return, sale-on-approval, consignment, or similar basis;

(l)        owed by an Account Debtor which (i) is a Sanctioned Person or (ii) is located outside of the United States of America or Canada (subject, in the case of Canada, to an aggregate dollar limit determined from time to time by Lender, in its Permitted Discretion) unless Lender, in its Permitted Discretion, agrees to allow such Account            to be an Eligible Account on terms and conditions satisfactory to Lender in its Permitted Discretion;

(m)       owed by the United States of America or any other governmental or quasi-governmental unit, agency, or subdivision unless such Borrower shall have complied with all applicable Federal and state assignment of claims laws as required by;

(n)        (i) as to which the goods or services giving rise to such Account (A) have not been delivered or provided to, and accepted by, the Account Debtor, (B) are subject to repurchase, return, rejection, repossession, loss, or damage, or (C) have not been completely performed, as applicable, or (ii) which do not represent a final            sale;

(o)        evidenced by a note or other Instrument or Chattel Paper or which have been reduced to judgment;

(p)        as to which such Borrower or Lender, in its Permitted Discretion, shall have determined the validity, collectibility, or amount thereof to be doubtful;

(q)        owed by an Account Debtor which is located in a jurisdiction where such Borrower is required to qualify to transact business or to file reports, unless such Borrower has so qualified or filed; and

|   | (r) | which Lender otherwise determines, in its Permitted Discretion, to be ineligible. |
|--------|-----|-----------------------------------------------------------------------------------|

To the extent applicable, “Eligible Accounts” shall not include aged credit balances outstanding for longer than ninety (90) days.

“Eligible Billed Accounts” shall mean Eligible Accounts as to which the service corresponding thereto has been completed and a paper invoice or an electronic equivalent acceptable to Lender has been issued to the applicable Account Debtors.

“Eligible Unbilled Accounts” shall mean Eligible Accounts as to which the service corresponding thereto has been completed but no paper invoice or electronic equivalent acceptable to Lender has been issued to the applicable Account Debtors but which will be issued as soon as practicable in the ordinary course of a            Borrower’s business.

“Environmental Laws” means, collectively, the Comprehensive Environmental Response, Compensation and Liability Act of 1980; the Superfund Amendments and Reauthorization Act of 1986; the Resource Conservation and Recovery Act; the Toxic Substances Act; the Clean Water Act; the Clean Air Act; the Oil Pollution and            Hazardous Substances Control Act of 1978; and any other “Superfund” or “Superlien” law or any other Federal, state, or local statute, law, ordinance, code, rule, regulation, order, or decree relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic or dangerous waste, substance, or material, as now or at any time hereafter in effect, in each case, as the same may be amended from time to time.

“Equity Interest” means, with respect to any Person, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interest in (however designated) equity of such Person, including, without limitation, any common stock, preferred stock, limited or general partnership            interests, and limited liability company membership interests, whether voting or non-voting.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

|   | 4 |
|--------|---|

 

 

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“Event of Default” has the meaning given such term inSection 9.1.

“Excess Availability” means, at any time of determination, the amount by which (a) thelesserof (i) the Borrowing Base and (ii) the Revolving Loan Commitment, exceeds (b) the Working Capital Obligations.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal, for each day during such period, to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day            is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations at approximately 10:00 a.m. (Birmingham, Alabama, time) for such day on such transactions received by Lender from 3 Federal Funds brokers of recognized standing selected by it in its discretion.

“Fiscal Month,” “Fiscal Quarter,” and “Fiscal Year” means each of Borrower’s fiscal months, quarters, or years, as applicable.

“Fixed Charge Coverage Ratio” has the meaning given such term inSection 8.1.

“Flat Rate” shall mean a simple interest rate of three percent (3.0%) per annum.

“Funded Debt” has the meaning given such term inSection 8.1.

“Funding Account” means any Deposit Account maintained by a Borrower or Borrower Agent with Lender for the purpose of depositing the proceeds of Loans.

“GAAP” means generally accepted accounting principles as in effect in the United States from time to time.

“General Intangibles” has the meaning set forth in the UCC, and includes, without limitation, general intangibles of each Borrower, whether now owned or hereafter created or acquired by each Borrower, including all choses in action, causes of action, company or other business records, inventions, blueprints, designs,            patents, patent applications, trademarks, trademark applications, trade names, trade secrets, service marks, goodwill, brand names, copyrights, registrations, licenses, franchises, customer lists, permits, tax refund claims, computer programs, operational manuals, internet addresses and domain names, insurance refunds and premium rebates, all claims under guaranties, security interests or other security held by or granted to such Borrower to secure payment of any of any of such            Borrower’s Accounts by an Account Debtor, all rights to indemnification and all other intangible property of such Borrower of every kind and nature (other than Accounts).

“Governmental Entity” means any (a) court (whether in law or at equity or trial or appellate), tribunal, or arbitrator or arbitration proceeding and (b) any local, city, state, Federal, municipal or quasi-municipal, foreign, or international government or any subdivision, agency, authority, commission, bureau, branch,            regulatory body, or other body thereof.

“Guarantor” means any Person now or hereafter guaranteeing, endorsing, acting as surety of, or otherwise becoming liable for any Obligations.

“Guaranty” means any guaranty of all or any Obligations now or hereafter executed and delivered by any Guarantor to Lender, as the same may be amended, restated, supplemented, or otherwise modified from time to time.

“Hedge Agreement” has the meaning for swap agreement as defined in 11 U.S.C. § 101, as in effect from time to time, or any successor statute, and includes, without limitation, any rate swap agreement, forward rate agreement, commodity swap, commodity option, interest rate option, forward foreign exchange            agreement, spot foreign exchange agreement, rate cap agreement, rate floor agreement, rate collar agreement, currency swap agreement, cross-currency rate swap agreement, currency option and any other similar agreement.

 

|   | 5 |
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“Item” means any “item” as defined in Section 4-104 of the UCC, and shall also mean and include checks, drafts, money orders or other media of payment.

“Jurisdiction” means the State of Georgia.

“LC Obligations” means, at any time of determination, the aggregate undrawn and unreimbursed amounts under all Letters of Credit.

“Letter of Credit” means a letter of credit issued by Lender for the account of a Borrower, or Borrowers jointly, as provided inSection 2.1(a)andSection 2.10.

“Lien” means any lien (statutory or otherwise), mortgage, deed of trust, deed to secure debt, pledge, hypothecation, security interest, trust arrangement, security deed, financing lease, collateral assignment, encumbrance, conditional sale or title retention agreement, or any other interest in property designed to            secure the repayment or performance of any obligation, whether arising by agreement or under any statute or law or otherwise.

“LIBOR” means a per annum rate equal to the rate per annum offered by prime banks in the London interbank eurodollar market for deposits in United States dollars in an amount comparable to the Loan for which such rate is being determined and for a period equal to the interest period applicable thereto, all as            determined by Lender with reference to the financial information reporting service used by Lender at the time of such determination. Each calculation by Lender of LIBOR shall be conclusive and binding for all purposes, absent manifest error.

“LIBOR Index Rate” means, for any LIR Loan and at any time of determination, a per annum rate equal to LIBOR determined with respect to an interest period of one (1) month. At Borrowers’ election (or, if Borrowers make no election or while any Event of Default exists, then, at Lender’s election): (i) the            LIBOR Index Rate shall be determined daily on each Business Day and shall be increased or decreased, as applicable, automatically and without notice to any Person on the date of each such determination, or (ii) the LIBOR Index Rate shall be determined monthly on the first Business Day of each calendar month and shall be increased or decreased, as applicable, automatically and without notice to any Person on the date of each such determination. Upon Borrowers’ request from time            to time, Lender will quote the then current LIBOR Index Rate to Borrowers.

“LIBOR Reserve Requirements” means the maximum reserves (whether basic, supplemental, marginal, emergency, or otherwise) prescribed from time to time by the Board of Governors of the Federal Reserve System (or any successor) with respect to liabilities or assets consisting of or including “Eurocurrency            liabilities” (as defined in Regulation D of the Board of Governors of the Federal Reserve System).

“LIR Loan” means a Loan, or portion thereof, during any period in which it bears interest at a rate based on the LIBOR Index Rate.

“Loans” means the Revolving Loans .

“Loan Documents” means this Agreement and each other now existing or hereafter arising document, agreement, or instrument evidencing, describing, guaranteeing, or securing the Obligations or delivered in connection with this Agreement (but excluding any Hedge Agreement), including, without limitation, each Security            Agreement, Note, Guaranty, Notice of Borrowing, Collateral Disclosure Certificate, Borrowing Base Certificate, and UCC financing statement, as the same may be amended, restated, supplemented, or otherwise modified from time to time.

“Loss” has the meaning given such term inSection 6.3.

“Material Adverse Effect” means any (a) material adverse effect upon the validity, performance, or enforceability of any of the Loan Documents or any of the transactions contemplated hereby or thereby; (b) material adverse effect upon the properties, business, prospects, or condition (financial or otherwise) of any            Credit Party; (c)

 

|   | 6 |
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material adverse effect upon the ability of any Credit Party to fulfill any obligation under any of the Loan Documents; or (d) material adverse effect on the Collateral.

“Material Agreement” means an agreement to which any Credit Party is a party (other than the Loan Documents) evidencing or pertaining to (A) any Funded Debt, (B) capitalized leases or (C) operating leases with aggregate annual rentals exceeding One Hundred Thousand Dollars ($100,000) or, if otherwise, for which breach,            termination, cancellation, nonperformance, or failure to renew could reasonably be expected to have a Material Adverse Effect.

“Net Proceeds” means, with respect to the disposition of any property, (a) the proceeds (including cash receivable (when received) by way of deferred payment) received by a Borrower in cash from the sale, lease, transfer, or other disposition of such property, including insurance proceeds and awards of compensation            received with respect to any Loss affecting all or part of such property,minus(b) (i) the reasonable and customary costs and expenses of such sale, lease, transfer, or other disposition (including legal fees and sales commissions) and (ii) amounts applied to repayment of Debt for borrowed money (other than the Obligations) secured by a Permitted Lien on such property which is senior to Lender’s Liens; and (iii) in connection            with any sale of such property, a reasonable reserve (not to exceed five percent (5%) of the total purchase price) for post-closing adjustments to the purchase price (providedthat upon the expiration of ninety (90) days after the sale, any remaining reserve balance shall constitute Net Proceeds).

“Notes” shall mean the Revolving Note and any other promissory note now or hereafter evidencing any Obligations, as the same may be amended, restated, supplemented, or otherwise modified from time to time.

“Notice of Borrowing” means each written request for a Revolving Loan substantially in the form ofExhibit B, attached hereto and made a part hereof.

“OFAC” means the United States Department of the Treasury’s Office of Foreign Assets Control or any successor thereto.

“Obligations” means all obligations and covenants now or hereafter owed to Lender or any Affiliate of Lender by each Borrower, or Borrowers jointly, whether related or unrelated to the Loans, this Agreement, or the Loan Documents, including, without limitation or duplication, (a) amounts owed or to be owed under the            terms of this Agreement and the other Loan Documents, or arising out of the transactions described herein or therein, (b) the Loans, (c) amounts paid by Lender under, and other obligations of each Borrower or Borrowers jointly arising under, Letters of Credit, letters of credit, bankers acceptances, or drafts accepted or issued by Lender for the account of a Borrower or Borrowers jointly, the LC Obligations, and commissions and fees incurred by a Borrower in connection with            Lender’s issuance, amendment, renewal or extension of Letters of Credit, letters of credit, bankers acceptances, or Items, (d) any Debt arising out of or relating to any Deposit Accounts of a Borrower, or Borrowers jointly, with Lender or any Affiliate of Lender or any cash management services or other products or services, including merchant card and ACH transfer services, (e) all existing and future obligations under any Hedge Agreements between Lender or any Affiliate of            Lender and a Borrower, or Borrowers jointly, whenever executed (including obligations under Hedge Agreements entered into prior to any transfer or sale of Lender’s interests hereunder if Lender ceases to be a party hereto), and (f) all fees, all costs of collection, attorneys’ fees and expenses of, or advances by, Lender which Lender pays or incurs (i) in discharge of obligations of any Credit Party, (ii) to inspect, repossess, remove, transport, deliver, protect,            preserve, complete, store, sell or otherwise dispose of any Collateral, or (iii) in connection with the appointment and administration of any receiver, together, in each of the foregoing cases in this definition, all interest accruing thereon, including any interest on pre-petition Debt accruing after bankruptcy (whether or not allowable in such bankruptcy), and whether any of the foregoing amounts are now due or hereafter become due, are direct or indirect, or are certain or            contingent, and whether such amounts due are from time to time reduced or entirely extinguished and thereafter re-incurred.

“Parent Company” shall have the meaning given to such term in the preamble to this Agreement.

“Permitted Debt” has the meaning set forth inSection 7.1hereof.

 

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“Permitted Discretion” shall mean the discretion of Lender exercised by it solely but in good faith and from the standpoint of an asset-based lender.

“Permitted Liens” has the meaning set forth inSection 7.2hereof.

“Permitted Location” means (a) any location of each Borrower within the continental United States of America described in the Collateral Disclosure Certificate and (b) any other location within the continental United States of America as to which each Borrower shall have provided written notice to Lender and Lender            shall have consented in writing to such location’s being a “Permitted Location.”

“Permitted Purposes”, in reference to the use(s) of the proceeds of the Loans, (i) to pay existing Debt being refinanced pursuant hereto, (ii) for each Borrower’s working capital and (iii) for other purposes in the ordinary course of each Borrower’s business as conducted on the Closing Date to the extent            not in contravention of any terms or conditions of this Agreement.

“Person” means any natural person, corporation, unincorporated organization, trust, joint-stock company, joint venture, association, company, limited or general partnership, limited liability company, any government or any agency or political subdivision of any government, or any other entity or            organization.

“Prime Rate” means that rate announced by Lender from time to time as its prime rate and is one of several interest rate bases used by Lender. Lender lends at rates both above and below its prime rate, and Borrower acknowledge that Lender’s prime rate is not represented or intended to be the lowest or most            favorable rate of interest offered by Lender.

“Projections” means, for any period and as to such period, each Borrower’s, or Borrowers’ jointly and its (or their) Subsidiaries’ forecasted consolidated and consolidating (a) balance sheets, (b) profit and loss statements, (c) cash flow statements, and (d) Borrowing Base availability calculations,            all prepared on a quarterly basis and on a basis consistent with each Borrower’s, or Borrowers’ jointly, and its (or their) Subsidiaries’ historical financial statements, together with appropriate supporting details and a statement of underlying assumptions.

“Properly Contested” means, in the case of any Debt of any Credit Party (including any taxes) which is not paid when due or payable by reason of such Credit Party’s bona fide dispute over its liability therefor or the amount thereof, (a) such Debt is being properly contested in good faith by appropriate            proceedings promptly instituted and diligently conducted; (b) such Credit Party has established appropriate reserves in accordance with GAAP; (c) the non-payment of such Debt will not have a Material Adverse Effect and will not result in a forfeiture or sale of any of such Credit Party’s assets; (d) no Lien is imposed upon any of such Credit Party’s assets with respect to such Debt unless such Lien is at all times subordinate in priority to the Liens in favor of Lender            (except only with respect to property taxes that have priority as a matter of applicable law) and enforcement of such Lien is stayed pending the final resolution or disposition of such dispute; (e) if the Debt results from, or is determined by the entry, rendition, or issuance against such Credit Party or any of its assets of a judgment, writ, order, or decree, enforcement of such judgment, writ, order, or decree is stayed pending a timely appeal or other judicial review; and (f) if            such contest is abandoned, settled, or determined adversely (in whole or in part) to such Credit Party, such Credit Party forthwith pays such Debt and all penalties, interest, and other amounts due in connection therewith. Only that portion of the Debt which is in dispute may be Properly Contested.

“Qualified Appraisal” means an appraisal conducted in a manner and with such scope and using such methods as are acceptable to Lender by an appraiser selected by, or acceptable to, Lender, the results of which are acceptable to Lender in all respects.

“Regulated Materials” means any hazardous, toxic, or dangerous waste, substance, or material, the generation, handling, storage, disposal, treatment, or emission of which is subject to any Environmental Law.

“Reserves” means the such amounts, including but not limited to reserves for obligations under Hedge Agreements, as may be required by Lender to be imposed against borrowing availability at any time and from time to time in Lender’s Permitted Discretion.

 

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“Restricted Payment” means (a) any cash dividend or other cash distribution, direct or indirect, on account of any Equity Interests issued by a Borrower or any of its Subsidiaries, as the case may be, now or hereafter outstanding, (b) any redemption, retirement, sinking fund or similar cash payment, purchase or other            acquisition for value, direct or indirect, of any Equity Interests issued by a Borrower or any of its Subsidiaries now or hereafter outstanding by a Borrower or any of its Subsidiaries, as the case may be, except for any redemption, retirement, sinking funds or similar payment payable solely in such other shares or units of the same class of Equity Interests or any class of Equity Interests which are junior to that class of Equity Interests, (c) any cash payment made to redeem,            purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire any Equity Interests issued by a Borrower or any of its Subsidiaries now or hereafter outstanding, or (d) the payment by a Borrower or any of its Subsidiaries of any Subordinated Debt.

“Revolving Loan Commitment” means the commitment of Lender, subject to the terms and conditions herein, to make Revolving Loans and issue Letters of Credit in accordance with the provisions ofSection 2in an aggregate amount not to exceed Thirty Million Dollars            ($30,000,000) at any one time.

“Revolving Loan” means a loan made by Lender pursuant toSection 2.1(a).

“Revolving Note” has the meaning set forth inSection 2.2(a).

“Sanctioned Country” means a country subject to the sanctions program identified on the list maintained by OFAC and available at the following website or as otherwise published from time to time:http://www.treas.gov/offices/enforcement/ofac/programs/.

“Sanctioned Person” means (a) any Person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available athttp://www.treas.gov/offices/eotffc/ofac/sdn/index.htmlor as otherwise published from time to time, (b) any agency,            authority, or subdivision of the government of a Sanctioned Country, (c) any Person or organization controlled by a Sanctioned Country, or (d) any Person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC.

“Security Agreement” means this Agreement as it relates to a security interest in the Collateral, and any other mortgage instrument, deed of trust, pledge agreement, life insurance assignment, security agreement, or similar agreement or instrument now or hereafter executed by any Credit Party or other Person granting            Lender a Lien in any property to secure the Obligations.

“Senior Officer” means, as to any Credit Party, the chairman of the board of directors, the chief executive officer, chief operating officer, chief financial officer, chief legal officer, manager (with respect to any manager-managed limited liability company), or president of such Credit Party.

“Solvent” means, as to any Person, that such Person has capital sufficient to carry on its business and transactions in which it is currently engaged and all business and transactions in which it is about to engage, is able to pay its Debts as they mature, and has assets having a value greater than its liabilities, at            fair valuation.

“Subordinated Debt” means any Debt (other than trade Debt incurred in the ordinary course of business) payable by a Borrower or a Subsidiary which is subordinate in right of payment and Lien priority to the Obligations and Lender’s Lien on the Collateral pursuant to a subordination agreement in form and substance            satisfactory to Lender.

“Subsidiary” means, as to any Person, any other Person of which more than fifty percent (50%) of the Equity Interests issued by such other Person are directly or indirectly owned or effectively controlled by such Person. Any unqualified reference herein or in any Loan Document to “Subsidiary” shall be            deemed a reference to a Borrower’s or the Borrowers’ Subsidiaries (if any), unless the context requires otherwise.

“Telephone Instruction Letter” means a telephone instruction letter substantially in the form ofExhibit T, attached hereto and made a part hereof.

 

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“Term” means the period from and including the Closing Date to but not including the Termination Date.

“Termination Date” means theearliestto occur of (a) the third (3rd) anniversary of the Closing Date; (b) the date on which Borrowers terminate this Agreement and the Commitments pursuant toSection 2.13;            and (c) the date on which Lender terminates the Commitments pursuant toSection 9.2(a)hereof.

“Third Party” means (a) any lessor, mortgagee, mechanic or repairman, warehouse operator, processor, packager, or other third party which may have possession of any Collateral or lienholders’ enforcement rights against any Collateral or (b) any licensor whose rights in or with respect to any intellectual            property or Collateral limit or restrict or may, in Lender’s determination, limit or restrict a Borrower’s or Lender’s right to sell or otherwise dispose of such Collateral.

“Third Party Agreement” means an agreement in form and substance satisfactory to Lender pursuant to which a Third Party, as applicable and as required by Lender, waives or subordinates in favor of Lender such Third Party’s lienholders’ enforcement rights against any Collateral, grants Lender access to the            Collateral for purposes of allowing Lender to exercise its rights hereunder and under the other Loan Documents, or authorizes Lender to dispose of Collateral bearing or consisting of, in whole or in part, such Third Party’s intellectual property.

“Type” means, with respect to a Loan, whether such Loan is a Base Rate Loan or a LIR Loan.

“UCC” means the Uniform Commercial Code (or any successor statute), as adopted and in force in the Jurisdiction or, when the laws of any other state govern the method or manner of the perfection or enforcement of any Lien in any of the Collateral, the Uniform Commercial Code (or any successor statute) of such other            state.

“U.S.” means the United States of America.

“USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, as the same may be amended, restated, supplemented, or otherwise modified from time to time.

“Working Capital Obligations” means the sum of (a) the aggregate principal amount of all outstanding Revolving Loansplus(b) all outstanding LC Obligations.

1.3       Financial Terms. All financial terms used herein shall have the meanings assigned to them under GAAP unless another meaning shall be specified.

|   | **2.** | **THE CREDIT FACILITY****.** |
|--------|--------|------------------------------|

2.1       The Commitments. Subject to the terms and conditions of this Agreement, Lender agrees to make Revolving Loans to Borrowers and issue Letters of Credit for Borrowers’ account from time to time during the Term. Lender shall have no obligation to make any Revolving Loan or issue any            Letter of Credit if doing so would, after giving effect thereto, cause the Working Capital Obligations to exceed thelesserof (i) the Revolving Loan Commitment or (ii) the Borrowing Base. Within the foregoing limit and subject to the terms and conditions of this Agreement, Borrowers may borrow, repay, and reborrow the principal amount of the Revolving Loans at any time during the Term. Borrowers shall use the proceeds of the            Revolving Loans only for Permitted Purposes.

2.2       The Notes. On the Closing Date, Borrowers shall execute and deliver to Lender a promissory note in the form ofExhibit A, attached hereto and made a part hereof (the “Revolving            Note”), which Revolving Note, together with Lender’s records, shall evidence the Revolving Loans and interest accruing thereon.

|   | 2.3 | Interest. |
|--------|-----|-----------|

|   | (a) | Types of Loans. Subject toSection 2.3(f), all Loans shall be made as LIR Loans. |
|--------|-----|---------------------------------------------------------------------------------|

 

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(b)        Agreement to Pay Interest. Borrowers agree to pay interest on all unpaid principal amounts of the Loans from the respective date each such Loan is made until such Loan is paid (whether at stated maturity, upon acceleration, or otherwise) at the rates of interest and at the times            set forth in this Agreement.

(c)        Interest Rate. All LIR Loans shall bear interest at a rate per annum equal to thegreaterof (i) the LIBOR Index Rateplusthe Applicable Margin or (ii) the Flat Rate. Any Base            Rate Loans shall bear interest at a rate per annum equal to thegreaterof (i) the Base Rateplusthe Applicable Margin or (ii) the Flat Rate. All interest on any Loan and on all other Obligations shall be calculated on the presumed basis of a year of 360 days, for the actual number of days elapsed.

(d)        Adjustment of Interest Rate. The rate of interest on any LIR Loan shall be adjusted as provided in the definition of “LIBOR Index Rate,” subject toSection 2.3(f). The rate of interest on any Base Rate Loan made            pursuant toSection 2.3(f)shall be adjusted automatically and without notice on and as of the date of any change in the Base Rate.

(e)        Default Rate. At Lender’s option, during the existence of any Event of Default, the principal amount of all Obligations (other than Obligations arising under Hedge Agreements between a Borrower, or Borrowers jointly, and Lender or its Affiliates) shall bear interest at the            Default Rate. In any event, the Default Rate shall automatically and without notice apply from the time Lender accelerates or is deemed to have accelerated the Obligations pursuant toSection 9.2until such Obligations or any judgment thereon is paid in full.

(f)         Conversion to Base Rate. Any provision of this Agreement to the contrary notwithstanding, if Lender should at any time, in good faith, determine that (i) it is not reasonably possible to determine the LIBOR Index Rate, (ii) the LIBOR Index Rate is no longer available, (iii)            it is no longer lawful for Lender to make Loans at a rate based on the LIBOR Index Rate, or (iv) a Default or Event of Default exists and Lender shall so elect; then, in each case, all affected LIR Loans shall automatically and without notice be converted into Base Rate Loans and any Loans made thereafter shall be made as Base Rate Loans until such time as Lender shall have determined that such illegality has been reversed, such condition has ceased to exist, or such Event of            Default shall have been waived, as applicable.

(g)        Opening LIBOR Index Rate. The LIBOR Index Rate on the date hereof is _______ percent (____%) per annum and, therefore, the rate of interest in effect hereunder on the date hereof, expressed in simple interest terms (but on a 360-day basis), is _______ percent (____%) per annum            with respect to any portion of the Revolving Loans bearing interest as a LIR Loan.

|   | 2.4 | Requesting New Loans. |
|--------|-----|-----------------------|

(a)        Revolving Loans. Revolving Loans shall be deemed requested pursuant to the followingclauses (i)and(ii)or requested pursuant to the followingclause            (iii).

(i)        Subject toSection 2.4(b), the becoming due of any Obligation (whether as principal, accrued interest, fees, or other charges owed to Lender or any Affiliate of Lender) shall in all respects constitute Borrowers’ irrevocable request for a Revolving Loan in an amount equal to            such Obligations, and Lender may make such Revolving Loan and apply the proceeds thereof to the payment of such Obligations.

(ii)        Subject toSection 2.4(b), the presentment for payment of any instrument drawn on, or request for any wire or other transfer from, a Funding Account at a time when there are insufficient funds in such account to cover such instrument shall in all respects constitute            Borrowers’ irrevocable request for a Revolving Loan in an amount equal to the amount payable on such instrument to be made by Lender, and Lender may make such Revolving Loan and apply the proceeds thereof to such Funding Account for payment of such instrument or transfer.

(iii)       For all other Revolving Loans, Borrowers shall provide Lender a request in accordance withSection 2.5.

 

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(b)        Provisions Regarding Deemed Requests for Revolving Loans. Lender shall have no obligation to honor any deemed request for a Revolving Loan underSections 2.4(a)(i)or(ii), if (i)            such request is deemed made after the Termination Date, (ii) doing so would cause the Working Capital Obligations to exceed thelesserof (A) the Revolving Loan Commitment or (B) the Borrowing Base, or (iii) Lender determines that any condition precedent inSection 4.2hereof or any other condition precedent to the making of such Loan is not then satisfied or will not be satisfied            when such Loan is to be made;provided, Lender may make such Revolving Loan in its sole and absolute discretion and without regard to the existence of, and without being deemed to have waived, any Default or Event of Default which may then exist or arise from the making of such Revolving Loan. Lender may make Revolving Loans underSections 2.4(a)(i)and(ii)without Borrowers’ having submitted a request (whether telephonic or in writing) therefor.

|   | 2.5 | Requests for Borrowings. |
|--------|-----|--------------------------|

(a)        Making Requests for New Loans. Each request for the making of a new Revolving Loan, may be made telephonically;provided,however, that Lender, in its sole discretion, may from            time to time require each such request to be in writing. If Lender requires Borrowers to make a request for a new Revolving Loan in writing, Borrowers shall submit a Notice of Borrowing therefor. Each request (whether telephonic or in writing) shall specify (i) the date for the making of the applicable Loan, which date must be a Business Day; (ii) the principal amount of the applicable Loan to be made; (iii) for any new Loan, instructions for the disbursement of the proceeds of such            Loan for Permitted Purposes (providedthat, if such instructions are not included, the proceeds will be deposited into a Funding Account); (iv) for any new Revolving Loan, if requested by Lender, a written calculation of the Borrowing Base and a reconciliation of such Borrowing Base to the previous Borrowing Base or request for a Revolving Loan; and (v) such other information Lender may require from time to time.

(b)        Timing and Acceptance of Requests. Requests made under thisSection 2.5(whether telephonic or in writing) are irrevocable. Requests under thisSection 2.5which Lender receives            after 11:00 a.m. (Birmingham, Alabama, time) shall be deemed received on the next Business Day. Lender’s acceptance of a request for the making of a new Loan under thisSection 2.5shall be indicated by its making the Loan requested.

2.6        Excess Outstandings. Any provision of this Agreement to the contrary notwithstanding, Lender may, in its sole and absolute discretion, make or permit to remain outstanding Revolving Loans which are causing or would cause the Working Capital Obligations to exceed the Revolving Loan            Commitment or the Borrowing Base, and all such excess amounts shall (i) be part of the Obligations evidenced by the Revolving Note, (ii) bear interest as provided herein, (iii) be payable on demand, (iv) be secured by the Collateral, and (v) be entitled to all rights and security as provided under the Loan Documents.

|   | 2.7 | Repayment of Loans. |
|--------|-----|---------------------|

(a)        Repayment of Obligations Generally. Borrowers shall pay all outstanding principal amounts and accrued interest under Note in accordance with the terms of such Note and this Agreement.

|   | (b) | Repayment of Revolving Loans. |
|--------|-----|-------------------------------|

(i)        Borrowers shall immediately repay the principal amount of the Revolving Loans with the proceeds of any Collateral of the type included in the Borrowing Base;provided,however, that, to the extent Lender receives and applies such            proceeds in the manner described in, and in accordance with,Section 2.9, Borrowers’ payment obligation under thisSection 2.7(b)(i)shall be satisfied with respect to such proceeds. All payments made pursuant to this subsection shall be applied in the manner set forth inSection 2.9. All outstanding principal of the Revolving            Loans shall be due and payable on the Termination Date.

(ii)        Interest accrued on the Revolving Loans shall be due and payable, in arrears, on (A) the first day of each month (for the immediately preceding month), computed through the last calendar day of the preceding month; and (B) on the Termination Date.

 

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|   | 2.8 | Additional Payment Provisions. |
|--------|-----|--------------------------------|

(a)        Payment of Other Obligations. Borrowers shall pay Lender the balance of the Obligations under the Loan Documents requiring the payment of money on the terms set forth in the Loan Documents, or, if no date of payment is otherwise specified in the Loan Documents, on            demand.

(b)        Authorization to Debit. In addition to Lender’s right to make a deemed Revolving Loan underSection 2.4(a), Lender may, without notice to, or the consent of, Borrowers, debit any Funding Account, Collections Account, other            Deposit Account, or other account over which Lender has Control and apply such amounts to the payment of Obligations which are then due and payable.

(c)        Time and Location of Payment. Except for payments made pursuant toSection 2.9andSection 2.4(a)(i), Borrowers shall make each payment of principal of and interest and other            Obligations which are due and payable not later than 12:00 noon (Birmingham, Alabama, time) on the date due, without set-off, counterclaim, or other deduction, in immediately available funds to Lender at its address referred to inSection 10.4. If any payment of any Obligations shall be due on a day which is not a Business Day, such payment shall be due and payable the next Business Day, and interest shall accrue during such            time.

(d)        Excess Over Borrowing Base. At any time the Working Capital Obligations exceed the Borrowing Base, Borrowers shall immediately pay the amount of such excess to Lender.

(e)        Hedge Agreements Are Independent. Prepayment of any Loans shall not affect any Borrower’s obligation to continue making payments under any Hedge Agreement, which shall remain in full force and effect notwithstanding such prepayment, subject to the terms of such Hedge            Agreement.

(f)        Capital Requirements; Increased Costs. If (i) the introduction of, or any change in, or in the interpretation of, any applicable law or (ii) compliance with any guideline or request from any central bank or comparable agency or other governmental authority (whether or not having            the force of law), has or would have the effect of reducing the rate of return on the capital of, or has affected or would affect the amount of capital required to be maintained by Lender or any Person controlling Lender as a consequence of, or with reference to, the Commitments and other commitments of this type, below the rate which Lender or such other Person could have achieved but for such introduction, change, or compliance, then within five (5) Business Days after            Lender’s written demand therefor, Borrowers shall pay Lender from time to time as specified by Lender additional amounts sufficient to compensate Lender or such other Person for such reduction. Lender’s accounting of such amounts submitted in writing to Borrower shall be presumed conclusive absent manifest error. If there is any change in the LIBOR Reserve Requirements, then Borrowers shall, from time to time upon demand by Lender, pay to Lender such additional amounts            as Lender may deem necessary to compensate Lender for any increased costs resulting from such change. Borrowers agree that Lender’s determination of such additional amounts and increased costs will be made in Lender’s sole discretion and shall be conclusive absent manifest error.

|   | 2.9 | Lockboxes; Collections Accounts. |
|--------|-----|----------------------------------|

(a)        Establishment of Lockboxes. Borrowers shall, on or before the Closing Date, (i) establish and thereafter maintain one or more lockboxes under Lender’s control and (ii) contemporaneously therewith, direct all of its Account Debtors to make payments to such lockboxes (or, if            made by wire or other transfer, to a Collections Account).

(b)        Collections Accounts. To the extent not delivered directly to a lockbox, all Items or funds received by each Borrower in respect of Accounts or the sale of Inventory or as Net Proceeds of other Collateral shall be held by such Borrower in trust for Lender, shall not be commingled            with such Borrower’s funds, and shall be deposited promptly by such Borrower into a Collections Account or forwarded to Lender in the form received. All such Items and funds shall be the exclusive property of Lender upon the earlier of the receipt thereof by Lender or by Borrower. Subject toSection 2.9(c), Lender shall apply available balances from any Item or funds deposited into a Collections Account to the payment of            Obligations in whatever order Lender shall determine.

 

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(c)        Chargebacks. No payment item received by Lender shall constitute payment to Lender until such item is actually collected by Lender and credited to the Collections Account;provided,however, that Lender shall have the right to charge back to the Collections Account (or any other account of Borrower maintained with Lender) an Item which is returned for inability to collect,plusaccrued interest during the period of Lender’s provisional credit for such item prior to receiving notice of dishonor.

(d)        Power of Attorney; Security Interest; Applicable Fees. Borrowers hereby irrevocably appoint Lender (and any Person designated by Lender) as each Borrower’s attorney-in-fact to indorse each Borrower’s name on any Items which come into Lender’s possession or            control, this power being coupled with an interest is irrevocable so long as any of the Obligations remain outstanding. Such indorsement by Lender under such power of attorney shall, for all purposes, be deemed to have been made by the affected Borrower (prior to any subsequent indorsement by Lender) in negotiation of the Item. In addition to the security interest granted Lender inSection 3, each Borrower hereby grants Lender a            security interest in and to all Items, funds, and balances held in any lockbox, any Funding Account, and any Collections Account, in each case as Collateral for the Obligations. Each Borrower shall pay all of Lender’s standard fees and charges in connection with any lockboxes, Funding Accounts, and Collections Accounts and the processing of Items and other transactions relating thereto, as such fees and charges may change from time to time.

|   | 2.10 | Letters of Credit. |
|--------|------|--------------------|

(a)        Issuance of Letters of Credit. Subject to the terms and conditions of this Agreement, Lender shall from time to time issue, extend, or renew Letters of Credit for the account of Borrowers jointly,providedthat (i) Borrowers shall            have given Lender not less than five (5) Business Days’ written notice thereof; (ii) Lender shall have no obligation to issue any Letter of Credit, if (A) doing so would cause (1) the Working Capital Obligations to exceed thelesserof (a) the Borrowing Base or (b) the Revolving Loan Commitment or (2) the LC Obligations to exceed Three Million Dollars ($3,000,000) or (B) the expiration date of such requested Letter of Credit            would occur after the date specified in clause (a) of the definition of Termination Date; and (iii) all other conditions precedent to the issuance of each such Letter or Credit set forth in this Agreement shall have been satisfied or waived in writing by Lender. All payments made by Lender under any Letter of Credit (whether or not a Borrower is the account party) and all fees, commissions, discounts, and other amounts owed or to be owed to Lender in connection therewith, shall be            paid on demand, unless (x) Borrowers instruct Lender to make a Revolving Loan to pay such amount, (y) Lender agrees to do so, and (z) sufficient Excess Availability exists to make such Revolving Loan. All LC Obligations shall be secured by the Collateral. Borrowers shall complete and sign such applications and supplemental agreements and provide such other documentation as Lender may require in respect to the issuance and administration of the Letters of Credit. The form and            substance of all Letters of Credit shall be subject to Lender’s approval. Lender may charge certain fees or commissions for the issuance, handling, renewal or extension of a Letter of Credit, in addition to the fees payable pursuant toSection 2.11. Borrowers unconditionally guarantee the payment and performance of all obligations of any Subsidiary with respect to Letters of Credit issued for the account of such Subsidiary.            Upon Lender’s request during the existence of an Event of Default, Borrowers shall immediately deliver to Lender immediately available funds in an amount equal to one hundred five percent (105%) of the LC Obligations, which Lender shall hold as cash collateral for the payment of Obligations related to the Letters of Credit.

(b)        Law Governing Letter of Credit. Each Letter of Credit issued hereunder shall be governed, as applicable, by (i) the Uniform Customs and Practice for Documentary Credits International Chamber of Commerce (“ICC”), Publication 500, or any subsequent revision or            restatement thereof adopted by the ICC and in use by Lender or (ii) the International Standby Practices, ICC Publication No. 590, or any subsequent revision or restatement thereof adopted by the ICC and in use by Lender, except to the extent that the terms of such publication would limit or diminish rights granted to Lender hereunder or in any other Loan Document.

|   | 2.11 | Fees. |
|--------|------|-------|

|   | (a) | Closing Fee. [NONE]. |
|--------|-----|----------------------|

(b)        Unused Line Fee. Borrowers shall pay Lender a fee for each day of the Term equal to (A) the Unused Line Fee Ratedivided by(B) 360,times(C) the amount by which the Revolving            Loan Commitment

 

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exceeded the Working Capital Obligations on such day. Borrowers shall pay this fee on the first day of each calendar month, for each day in the preceding calendar month, and on the Termination Date. As used herein, “Unused Line Fee Rate” shall mean, (i) 25/100ths of one percent (.25%), if Working Capital Obligations (determined on a daily            average basis for the calendar month, or portion thereof, for which such fee is being charged) are equal to or greater than Fifteen Million Dollars ($15,000,000), or (ii) 37.5/100th of one percent (.375%), until May 31, 2009, and, thereafter, 50/100th of one percent (.50%), if Working Capital Obligations, as so determined for the same such period, are less than Fifteen Million Dollars ($15,000,000).

(c)        Letter of Credit Fees. Borrowers shall pay to Lender, at such times as Lender shall require, Lender’s standard fees in connection with Letters of Credit, as in effect from time to time, and with respect to standby and commercial Letters of Credit, at the time of issuance of            each Letter of Credit, a fee equal to the Applicable Margin for LIR Loans on the face amount of the Letter of Credit for the period of time the Letter of Credit will be outstanding.

(d)        Field Examinations. Borrowers shall pay for all field examinations to the extent required bySection 6.5.

(e)        Appraisals. Borrowers shall pay all costs and expenses relating to any appraisals conducted in contemplation of this Agreement and for any other appraisals conducted from time to time to the extent required by this Agreement or the other Loan Documents.

(f)        Method of Calculation. Unless otherwise expressly provided, all fees payable hereunder or with respect to any Obligations shall be calculated on the presumed basis of a year of 360 days, for the actual number of days elapsed.

2.12      Statement of Account. If Lender provides Borrowers with a statement of account on a periodic basis, each such statement will be binding on Borrowers unless, within forty-five (45) days of its receipt, Borrowers object in writing and with specificity to such statement.

2.13      Termination. Borrowers may terminate this Agreement and the Commitments before the Termination Date, in whole but not in part, by giving Lender thirty (30) days prior written notice;provided,however, no termination by Borrowers shall be effective until (a) Lender shall have received cash collateral or an irrevocable direct-pay letter of credit naming Lender as beneficiary, which letter of credit shall be in form and substance satisfactory to Lender, be issued by a bank other than Lender but satisfactory to Lender, and be in an original face amount equal to one hundred five percent (105%) of all Obligations which remain            contingent (e.g., LC Obligations and pending indemnification payments) and (b) all other Obligations have been fully and finally paid and performed. Any notice of termination shall be irrevocable. Lender may terminate this Agreement and the Commitments at any time, without notice, during the existence of an Event of Default.

2.14      USA Patriot Act Notice. To help fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each Person who opens an account. For purposes of this section, account shall be            understood to include loan accounts.

|   | **3.** | **SECURITY AGREEMENT****.** |
|--------|--------|-----------------------------|

|   | 3.1 | Security Interest. |
|--------|-----|--------------------|

(a)        As security for the full and final payment and performance of the Obligations, each Borrower hereby grants to Lender (for itself and its Affiliates) a continuing security interest in and to all right, title, and interest of each Borrower in and to the Collateral of such Borrower, whether now owned or hereafter acquired by such            Borrower.

(b)        Except as expressly required by the Security Agreements or applicable law, Lender shall have no obligation to (i) exercise any degree of care in connection with any Collateral in its possession or (ii) take any steps necessary to preserve any rights in the Collateral or to preserve any rights in the Collateral against senior or            prior

 

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parties (which steps Borrowers agree to take). In any case, Lender shall be deemed to have exercised reasonable care of the Collateral if Lender takes such steps for the care and preservation of the Collateral or rights therein as Borrowers reasonably request Lender to take;providedthat Lender’s omission to take any action not requested by            Borrowers shall not be deemed a failure to exercise reasonable care. Lender’s segregation or specific allocation of specified items of Collateral against any of Borrowers’ liabilities shall not waive or affect any Lien against other items of Collateral or any of Lender’s options, powers, or rights under this Agreement or otherwise arising.

(c)        Lender may at any time and from time to time, with or without notice to Borrowers, (i) transfer any of the Collateral into the name of Lender or the name of Lender’s nominee, (ii) notify any Account Debtor or other obligor with respect to any of the Collateral to make payment of any amounts due or to become due thereon            directly to Lender, and (iii) receive and direct the disposition of any proceeds of any Collateral.

(d)        Notwithstanding the foregoing, (i) no Account, Instrument, Chattel Paper, or other obligation or property of any kind due from, owed by, or belonging to, a Sanctioned Person or (ii) any lease under which the lessee is a Sanctioned Person shall be Collateral or shall be credited toward the payment of the Obligations.

3.2       Financing Statements; Fixture Filings; Power of Attorney. Each Borrower authorizes Lender to file any financing statements (and other similar filings or public records or notices relating to the perfection of Liens), fixture filings, and amendments thereto relating to the Collateral            which Lender deems appropriate, in form and substance required by Lender, and to (a) describe the Collateral thereon (i) as “all personal property of the debtor,” “all assets,” or words of similar effect, if appropriate and permitted by applicable law, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC or any other applicable law, or (ii) by specific collateral category and (b) include therein            all other information which is required by Article 9 of the UCC or other applicable law with respect to the preparation or filing of a financing statement (or other similar filings or public records or notices relating to the perfection of Liens), fixture filing, or amendment. Each Borrower appoints Lender as its attorney-in-fact to perform all acts which Lender deems appropriate to perfect and to continue perfection of the Lien granted to Lender under any Security Agreement,            including, without limitation, (x) the filing of financing statements (and other similar filings or public records or notices relating to the perfection of Liens), fixture filings, and amendments, (y) the execution in such Borrower’s name of any agreements providing for Control over any applicable Collateral, and (z) the indorsement, presentation, and collection on behalf of such Borrower and in such Borrower’s name of any Items or other documents necessary or desirable            to collect any amounts which such Borrower may be owed, such power of attorney being coupled with an interest and is therefore irrevocable. Borrower grants Lender a license or other right to use, without charge, such Borrower’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks and advertising matter, and any Property of a similar nature, as it pertains to the Collateral, in advertising for sale and selling any Collateral, and such            Borrower’s rights under all licenses and all franchise agreements shall inure to Lender’s benefit. Each Borrower shall be liable for any and all expense incurred in connection with Lender’s exercising its rights under thisSection 3.2.

3.3       Entry. Each Borrower (for itself and on behalf of its Subsidiaries) irrevocably consents to any act by Lender or its agents in entering upon any premises for the purposes of either (a) inspecting any Collateral or (b) taking possession of any Collateral. Borrower waives, as to Lender            and its agents, any now existing or hereafter arising claim based upon trespass or any similar cause of action for entering upon any premises where Collateral may be located.

3.4       Other Rights. Without limiting any Credit Party’s obligations under the Loan Documents, each Borrower authorizes Lender from time to time (a) to (i) take from any party and hold additional Collateral or Guaranty for the payment of the Obligations or any part thereof, (ii)            exchange, enforce, or release such Collateral or Guaranty or any part thereof, and (iii) release or substitute any indorser or Guarantor or any party who has granted Lender any security interest in any property as security for the payment of the Obligations or any part thereof or any party in any way obligated to pay the Obligations or any part thereof, and (b) during the existence of any Event of Default, to direct the manner of the disposition of the Collateral and the enforcement            of any indorsements, guaranties, letters of credit, or other security or Supporting Obligations relating to the Obligations or any part thereof as Lender in its sole discretion may determine.

3.5       Accounts. Before or after any Event of Default, Lender may contact any Account Debtor (a) to ensure such Account Debtor is directing payments on Borrower’s Accounts to a lockbox or a Collections Account

 

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(as applicable), (b) to direct such Account Debtor to make payment directly to Lender, a lockbox, or a Collections Account, and (c) to notify such Account Debtor of the existence of Lender’s Liens under the Security Agreements.

3.6       Waiver of Marshaling. Each Borrower hereby waives any right it may have to require marshaling of its assets.

3.7       Control; Further Assurances. Each Borrower will, at its expense, cooperate with Lender in (a) obtaining Control of, or Control agreements with respect to, Collateral for which Control or a Control agreement is required for perfection of Lender’s security interest under the UCC and            (b) perfecting Lender’s Lien in the Collateral.

3.8       Pledge of Equity Interests. Each Borrower will cause all certificates representing its ownership of Equity Interests in each other Borrower constituting Collateral hereunder to be physically delivered to Lender, in pledge, on the Closing Date (or, as to any such certificates issued            subsequent to the Closing Date, promptly upon their issuance) together with stock powers (assignments) executed “in blank” in respect thereof.

|   | **4.** | **CONDITIONS PRECEDENT TO EXTENSIONS OF CREDIT****.** |
|--------|--------|-------------------------------------------------------|

4.1       Conditions Precedent to each Initial Loan. In addition to any other requirement set forth in this Agreement, Lender shall not be required to fund any Loan or make any other extensions of credit hereunder unless and until the following conditions shall have been satisfied, in the sole            opinion of Lender and its counsel:

(a)        Loan Documents. Each Borrower and each other Credit Party shall have executed and delivered this Agreement, each Note, and all other required Loan Documents, all in form and substance satisfactory to Lender.

(b)        Supporting Documents and Other Conditions. Borrowers shall cause to be delivered to Lender the following documents (each of which must be in form and substance satisfactory to Lender) and shall satisfy the following conditions:

(i)        A copy of the governing instruments of each Borrower and each Subsidiary, and good standing certificates of each Borrower and each Subsidiary, certified by the appropriate official of their respective states of incorporation and each state in which each Borrower or such Subsidiary is qualified to do business;

(ii)        Incumbency certificate and certified resolutions of the board of directors (or other appropriate governing body) of each Borrower and each other Credit Party executing any Loan Documents (other than Lender), signed by the secretary or another authorized officer of each Borrower or such other Credit Party, authorizing the execution,            delivery, and performance of the Loan Documents;

(iii)       The legal opinion of each Credit Party’s legal counsel addressed to Lender regarding the matters set forth inExhibit 4.1, attached hereto and made a part hereof, and such other matters as Lender and its counsel may request;

(iv)       A Borrowing Base Certificate duly completed by Borrowers, together with all supporting statements, schedules, and reconciliations as required by Lender;

(v)        UCC searches and other Lien searches showing no existing security interests in or Liens on the Collateral (other than Permitted Liens acceptable to Lender);

|   | (vi) | A Collateral Disclosure Certificate duly completed by Borrowers; |
|--------|------|------------------------------------------------------------------|

(vii)      Satisfactory evidence of insurance meeting the requirements ofSections 5.8(b)and6.3;

(viii)     UCC financing statements (and other similar filings or public records or notices relating to the perfection of Liens) and, if applicable, certificates of title covering the Collateral shall duly have been recorded or filed in the manner and places required by law to establish, preserve, protect, and perfect the interests

 

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and rights created or intended to be created by the Security Agreements, and all taxes, fees, and other charges in connection with the execution, delivery, and filing of the Security Agreements and the financing statements (and any other similar filings or public records or notices relating to the perfection of Liens) shall have been paid;

|   | (ix) | Subordination agreements as may be required bySection 6.9; |
|--------|------|------------------------------------------------------------|

|   | (x) | Third Party Agreements as required bySection 6.12; |
|--------|-----|----------------------------------------------------|

(xi)       A complete and final payoff letter from any lender whose outstanding Debt is to be paid in full with the proceeds of the initial Loans;

(xii)      A fully executed deposit account control agreement respecting each Borrower’s Deposit Accounts, providing for Lender’s exclusive control thereof, in form and substance satisfactory to Lender;

|   | (xiii) | All collateral and field exams required by Lender shall have been completed; |
|--------|--------|------------------------------------------------------------------------------|

(xiv)     All additional opinions, documents, certificates, and other assurances that Lender or its counsel may require;

(xv)      Satisfactory evidence of payment of all fees due and reimbursement of all costs incurred by Lender, and evidence of payment to other parties of all fees or costs which Borrowers are required under the Loan Documents to pay by the date of the initial Loan;

(xvi)     There shall be no litigation in which any Credit Party or Subsidiary is a party defendant, which Lender determines may have a Material Adverse Effect;

(xvii)    Lender shall have received Borrowers’ and their Subsidiaries’ financial statements for their most recently concluded Fiscal Year and Fiscal Month and such other financial reports and information concerning such Persons as Lender shall request; and

(xviii)   Lender shall have determined that after the making of the initial Loans to be made on the Closing Date, the issuance of any Letters of Credit to be issued on the Closing Date, and the payment of all fees and closing costs incurred on or prior to the Closing Date, Excess Availability shall not be less than an amount equal to (A) Three Million Five Hundred            Thousand Dollars ($3,500,000)plus(B) the aggregate amount of all of Borrowers’ accounts payable which are more than thirty (30) days past due; and

(xix)     Lender shall have received Projections for the current Fiscal Year prepared on a quarterly basis and Projections for the next two (2) Fiscal Years, prepared on an annual basis.

4.2       Conditions Precedent to Each Loan. In addition to any other requirements set forth in this Agreement, Lender shall not be required to fund any Loan or issue any Letter of Credit unless and until each of the following conditions shall have been satisfied, in Lender’s sole opinion,            and each request for a Loan (whether or not a written Notice of Borrowing is required) or issuance of a Letter of Credit shall be deemed to be a representation that all such conditions have been satisfied:

(a)        Notice of Borrowing. If required by this Agreement or by Lender, Borrowers shall have delivered to Lender a Notice of Borrowing and such other information as Lender may request;

(b)        No Default. No Default shall have occurred and be continuing or would result from the making or issuance of the requested Loan or Letter of Credit;

(c)        Correctness of Representations. All representations and warranties made to Lender by any Credit Party in any Loan Document or otherwise in writing shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on            and as of date of the requested Loan or Letter of Credit;

 

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(d)        No Material Adverse Effect. There shall have been no change which could have a Material Adverse Effect on any Credit Party or Subsidiary of any Borrower since the date of the most recent financial statements of such Person delivered to Lender from time to time;

(e)        Limitations Not Exceeded. Any making or issuance of any requested Revolving Loan or Letter of Credit would not cause the Working Capital Obligations to exceed thelesserof (i) the Revolving Loan Commitment or (ii) the Borrowing            Base; and

(f)        Further Assurances. Each Credit Party shall have delivered such further documentation or assurances as Lender may require, in its Permitted Discretion.

|   | **5.** | **REPRESENTATIONS AND WARRANTIES**. |
|--------|--------|-------------------------------------|

To induce Lender to enter into this Agreement and to make the Loans or extend credit as provided for herein, each Borrower makes the following representations and warranties, all of which shall survive the execution and delivery of the Loan Documents. Unless otherwise specified, such representations and warranties shall be deemed made as of the date hereof and as of the date of            each request for a Loan or extension of credit hereunder:

5.1       Valid Existence and Power. Each Borrower and each Subsidiary is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization and is duly qualified or licensed to transact business in all places where the failure to be so qualified could            reasonably be likely to have a Material Adverse Effect. Each of Borrower and each other Credit Party has the power to make and perform the Loan Documents executed by it and all Loan Documents will constitute the legal, valid, and binding obligations of such Person, enforceable in accordance with their respective terms, subject only to bankruptcy and similar laws affecting creditors’ rights generally. Each Borrower is organized under the laws of the State (or other            jurisdiction) first inscribed hereinabove, and has not changed the jurisdiction of its organization within the five (5) years preceding the Closing Date.

5.2       Authority. The execution, delivery, and performance thereof by each Borrower and each other Credit Party executing any Loan Document have been duly authorized by all necessary actions of such Person, and do not and will not violate any provision of law or regulation, or any writ, order,            or decree of any Governmental Entity or any provision of the governing instruments of such Person, and do not and will not, with the passage of time or the giving of notice, result in a breach of, or constitute a default or require any consent under, or result in the creation of any Lien upon any property or assets of such Person pursuant to, any law, regulation, instrument, or agreement to which any such Person is a party or by which any such Person or its respective properties may            be subject, bound, or affected.

5.3       Financial Condition. Other than as disclosed in financial statements delivered to Lender on or before the Closing Date or as may be onSchedule 5.3, attached hereto and made a part hereof, none of any Borrower, any Subsidiary, or (to            the knowledge of any Borrower) any Guarantor has any material direct or contingent obligations or liabilities or any material unrealized or anticipated losses from any commitments of such Person. As of the Closing Date, all operating and capital leases under which any Borrower, any Subsidiary, or (to the knowledge of Borrower) any Guarantor is lessee are disclosed in the financial statements delivered to Lender on or before the Closing Date or onSchedule            5.3. All financial statements from time to time delivered to Lender by Borrowers shall have been prepared in accordance with GAAP and fairly present the financial condition of such Person as of the date thereof. Borrowers are not aware of any material adverse fact (other than facts which are generally available to the public and not particular to any Borrower, such as general economic trends) concerning the condition (financial or otherwise) or future            prospects of Borrower or any Subsidiary or any Guarantor which has not been fully disclosed to Lender, including any adverse change in the operations or financial condition of such Person since the date of the most recent financial statements delivered to Lender. Each Credit Party is Solvent and, after consummation of the transactions set forth in this Agreement and the other Loan Documents, will be Solvent.

5.4       Litigation. Except as may be disclosed onSchedule 5.4, attached hereto and made a part hereof, there are no suits or proceedings pending or, to any Borrower’s knowledge, threatened by or before any Governmental Entity against or            affecting any Borrower, any Subsidiary or (to any Borrower’s knowledge) any

 

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Guarantor, or their respective assets, which if adversely determined could reasonably be expected to have a Material Adverse Effect.

5.5       Agreements, Etc. Neither any Borrower nor any Subsidiary is a party to any agreement or instrument or subject to any order or decree of any Governmental Entity or any charter or other corporate restriction, adversely affecting its business, assets, operations, or condition (financial or            otherwise), nor is any such Person in default in the performance, observance, or fulfillment of any of the obligations, covenants, or conditions contained in any agreement or instrument to which it is a party, or any law, regulation, decree, order, or the like to which it is subject.

5.6       Authorizations. All authorizations, consents, approvals, and licenses required under applicable law for the ownership or operation of the property owned or operated by each Borrower or any Subsidiary or for the conduct of any business in which it is engaged have been duly issued and are            in full force and effect, and it is not in default, nor has any event occurred which with the passage of time or the giving of notice, or both, would constitute a default, under any of the terms or provisions of any part thereof, or under any order, decree, ruling, regulation, closing agreement or other decision or instrument of any governmental commission, bureau or other administrative agency or public regulatory body having jurisdiction over such Person, which default would have            a Material Adverse Effect on such Person. Except as noted herein, no approval, consent or authorization of, or filing or registration with, any governmental commission, bureau or other regulatory authority or agency is required with respect to the execution, delivery or performance of any Loan Document.

5.7       Title. Each Borrower and each Subsidiary has good title to all of the assets shown in its financial statements free and clear of all Liens, except Permitted Liens. Each Borrower alone has full ownership rights in all Collateral owned by it.

|   | 5.8 | Collateral. |
|--------|-----|-------------|

(a)        The security interests granted to Lender herein and pursuant to any other Security Agreement (a) constitute and, as to subsequently acquired property included in the Collateral covered by the Security Agreement, will constitute, security interests under the UCC entitled to all of the rights, benefits, and priorities provided by            the UCC and (b) are and, as to such subsequently acquired Collateral, will be fully perfected, superior, and prior to the rights of all third persons, now existing or hereafter arising. All of the Collateral of each Borrower is intended for use solely in such Borrower’s business.

(b)        Schedule 5.8(b)sets forth all of the Credit Parties’ insurance policies in effect as of the Closing Date and sets forth as to each such policy (as applicable) the type of insurance provided by such policy, the underwriter thereof, the maximum coverage provided thereunder,            the deductible applicable thereto, and a brief description of any non-customary term as set forth therein. Each of such policies is currently in effect and all premiums thereon have been paid to date.

5.9       Jurisdiction of Organization; Location. The jurisdiction in which each Borrower and each Subsidiary is organized, the chief executive office of each Borrower and each Subsidiary, the office where each Borrower’s and each Subsidiary’s books and records are located, all of            Borrower’s and each Subsidiary’s other places of business, and any other places where any Collateral (other than Inventory in-transit) is kept, are all correctly and completely indicated inSchedule 5.9. The Collateral (other than Inventory in-transit) is located and shall at all times be kept and maintained only at a Permitted Location. No Collateral is attached or affixed to any real property so as to be classified as            a Fixture unless Lender has otherwise agreed in writing. No Borrower has changed it legal status or the jurisdiction in which it is organized or moved its chief executive office within the five (5) years preceding the Closing Date.

5.10      Taxes. Each Borrower and each Subsidiary have filed all Federal and state income and other tax returns which are required to be filed, and have paid all taxes as shown on said returns and all taxes, including withholding, FICA, andadvaloremtaxes, shown on all assessments received by it to the extent that such taxes have become due. Neither any Borrower nor any Subsidiary is subject to any Federal, state, or local tax Liens nor has such Person received any notice of deficiency or other official notice to pay any taxes. Each Borrower and each Subsidiary have paid all sales and excise taxes payable by it.

 

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5.11      Labor Law Matters. No goods or services have been or will be produced by any Borrower or any Subsidiary in violation of any applicable labor laws or regulations or any collective bargaining agreement or other labor agreements or in violation of any minimum wage, wage-and-hour or other            similar laws or regulations.

5.12      Accounts. Each Account, Instrument, Chattel Paper, and other writing constituting any portion of the Collateral (a) is genuine and enforceable in accordance with its terms except for such limits thereon arising from bankruptcy and similar laws relating to creditors’ rights; (b) is not            subject to any deduction or discount (other than as stated in the invoice and disclosed to Lender in writing), defense, set-off, claim, or counterclaim of a material nature against any Borrower except as to which any Borrower promptly notified Lender in writing; (c) is not subject to any other circumstances that would impair the validity, enforceability or amount of such Collateral except as to which such Borrower promptly notified Lender in writing; (d) arises from a bona fide sale            of goods or delivery of services in the ordinary course and in accordance with the terms and conditions of any applicable purchase order, contract or agreement; (e) is free of all Liens; and (f) is for a liquidated amount maturing as stated in the invoice therefor. That portion of any Account included in any Notice of Borrowing, Borrowing Base Certificate, report, or other document as an Eligible Account meets all the requirements of an Eligible Account set forth herein.

5.13      Judgment Liens. Neither any Borrower nor any Subsidiary, nor any of their respective assets, are subject to any unpaid judgments (whether or not stayed) or any judgment Liens in any jurisdiction, in each case, (a) which were not disclosed to Lender in writing on or before the Closing Date or            (b) of which Borrower has not given notice to Lender in accordance withSection 6.4.

|   | 5.14 | Structure. |
|--------|------|------------|

(a)        As of the date hereof,Schedule 5.14, attached hereto and made a part hereof, sets forth (i) the correct name of each Borrower and each Subsidiary and its jurisdiction of organization; (ii) the name of each of Borrower’s Affiliates (including, without limitation, any joint            ventures) and the nature of the affiliation; (iii) the number, type or class, and name of the holder of all issued and outstanding Equity Interests of each Borrower and each of its Subsidiaries, together with the number and percentage of Equity Interests held by each such holder; and (iv) the number of authorized and issued Equity Interests (and treasury shares) of each Borrower and each Subsidiary, by type or class.

(b)        Each Borrower has good title to all of the Equity Interests it purports to own of each of its Subsidiaries, free and clear in each case of any Lien other than Permitted Liens. All such Equity Interests have been duly issued and are fully paid and non-assessable. Since the date of the last audited financial statements of Borrowers            and their Subsidiaries delivered to Lender, Borrowers have not made, or obligated themselves to make, any Restricted Payment, except as otherwise permitted hereunder. Except as may be set forth onSchedule 5.14, there are no outstanding options to purchase, or any rights or warrants to subscribe for or acquire, or any commitments or agreements to issue or sell, or any Equity Interests or obligations convertible into, or any powers            of attorney relating to, Equity Interests issued by any Borrower or any of its Subsidiaries. Except as may be set forth onSchedule 5.14, there are no outstanding agreements or instruments binding upon the holders of any of the Equity Interests issued by any Borrower or any Subsidiary relating to the ownership of such Equity Interests.

5.15      Deposit Accounts. Borrowers and their Subsidiaries have no Deposit Accounts other than (a) on the Closing Date, those listed onSchedule 5.15, and (b) after the Closing Date, those permitted bySection            7.15.

5.16      Environmental. Except as disclosed onSchedule 5.16, attached hereto and made a part hereof, and except for ordinary and customary amounts of solvents, cleaners and similar materials used in the ordinary course of a Borrower’s or a            Subsidiary’s business and in strict compliance with all Environmental Laws, none of any Borrower, any Subsidiary, or, to any Borrower’s knowledge, any previous owner or operator of any real property currently owned or operated by any Borrower or a Subsidiary, has generated, stored, or disposed of any Regulated Material on any portion of such property, or transferred any Regulated Material from such property to any other location in violation of any applicable            Environmental Laws. Except as may be disclosed onSchedule 5.16, no Person (other than any Borrower or a Subsidiary) has generated, stored or disposed of any Regulated Material on any portion of the real property currently owned or operated by any Borrower or any Subsidiary, and, except for ordinary and customary amounts of solvents, cleaners and similar materials used in the ordinary course of any Borrower’s or a            Subsidiary’s business and in strict compliance with all Environmental Laws, no Regulated Material

 

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is now located on such property. Except as may be disclosed onSchedule 5.16, each Borrower and its Subsidiaries is in full compliance with all applicable Environmental Laws and neither any Borrower nor any Subsidiary has been notified of any action, suit, proceeding, or investigation which calls into question compliance by each Borrower or any            Subsidiary with any Environmental Laws or which seeks to suspend, revoke or terminate any license, permit, or approval necessary for the generation, handling, storage, treatment, or disposal of any Regulated Material.

5.17      ERISA. Except as may be set forth onSchedule 5.17, none of any Borrower or its Subsidiaries has any pension, profit-sharing, or other benefit plan subject to ERISA.

5.18      Investment Company Act. None of any Borrower or its Subsidiaries is an “investment company” as defined in the Investment Company Act of 1940, as amended.

5.19      Insider. Each Borrower is not, and no Person having “control” (as that term is defined in 12 U.S.C. § 375(b)(5) or in regulations promulgated pursuant thereto) of such Borrower is, an “executive officer,” “director,” or “principal            shareholder” (as those terms are defined in 12 U.S.C. § 375(b) or in regulations promulgated pursuant thereto) of Lender, of a bank holding company of which Lender is a subsidiary, or of any subsidiary of a bank holding company of which Lender is a subsidiary.

5.20      Sanctioned Persons; Sanctioned Countries. None of any Borrower, its Subsidiaries, or its Affiliates or any Guarantor (a) is a Sanctioned Person or (b) does business in a Sanctioned Country or with a Sanctioned Person in violation of the economic sanctions of the United States administered by            OFAC. No Borrower will use the proceeds of any extension of credit hereunder to fund any operation in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Country.

5.21      Compliance with Covenants; No Default. Each Borrower is, and upon the making of the initial extensions of credit on the Closing Date will be, in compliance with all of the covenants hereof. No Default is in existence, and the execution, delivery, and performance of the Loan Documents and the            making of the initial extensions of credit on the Closing Date will not cause a Default.

5.22      Full Disclosure. Each Credit Party has disclosed to Lender each fact and circumstance which such Credit Party knows or should know and which, by itself or together with any other fact disclosed or undisclosed, could reasonably be expected to have Material Adverse Effect. No Loan Document or            any other agreement, document, certificate, or statement delivered by a Credit Party or a Subsidiary to Lender contains any untrue statement of a material fact or omits to state any material fact which is known or which should be known by such Person necessary to keep the other statements from being misleading.

5.23      Collateral Disclosure Certificates. All information set forth in each Collateral Disclosure Certificate is true and correct as of the date thereof.

5.24      Operating and Capital Leases.Schedule 5.24, attached hereto and made a part hereof, sets forth (a) each operating and capital lease to which any Borrower or any Subsidiary is a party as a lessee and which, in the case operating leases,            requires aggregate rentals of greater than One Hundred Thousand Dollars ($100,000) per annum; (b) the name of the lessor, (c) a summary of the rental terms thereof, and (d) a brief description of the property leased thereunder.

|   | **6.** | **AFFIRMATIVE COVENANTS**. |
|--------|--------|----------------------------|

Borrowers covenant and agree that from the date hereof until the full and final payment and performance of the Obligations and the termination of this Agreement, each Borrower and each Subsidiary:

 

6.1       Use of Loan Proceeds. Shall use the proceeds of the Loans and any Letters of Credit only in accordance with Permitted Purposes and shall furnish Lender all evidence it may require with respect to such uses.

6.2       Maintenance of Business and Properties. Shall at all times (a) (i) maintain, preserve, and protect all Collateral and the remainder of its property used or useful in the conduct of its business, (ii) keep the same in

 

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good repair, working order, and condition, and (iii) make, or cause to be made, all material needful and proper repairs, renewals, replacements, betterments, and improvements thereto so that the business carried on in connection therewith may be conducted properly and in accordance with standards generally accepted in businesses of a similar type and size and (b) maintain and keep in full force and            effect all licenses and permits necessary to the proper conduct of its business.

|   | 6.3 | Insurance. |
|--------|-----|------------|

(a)        Shall (i) maintain (A) such liability insurance, workers’ compensation insurance, business interruption insurance, and casualty insurance in amounts equal to the greater of (1) such amounts that may be required by law and (2) such amounts that are customary and usual for prudent businesses in its industry and (B) any other            insurance that may be required by Lender in its Permitted Discretion and (ii) insure and keep insured all Collateral and other properties with insurance companies acceptable to Lender. All hazard insurance covering Collateral shall be in amounts acceptable to Lender, shall name and directly insure Lender as secured party and loss payee under a long-form loss payee clause, or its equivalent, acceptable to Lender, and shall not be terminable except upon thirty (30) days’ written            notice to Lender. On or before the Closing Date and thereafter on an annual basis (or at such other more frequent intervals as Lender may request from time to time), Borrowers shall furnish Lender copies of all such policies (or summaries thereof, if requested by Lender) and evidence of insurance in the form of an Acord Form 27 with respect to casualty and property insurance and an Acord Form 25 with respect to liability insurance.

(b)        If any Borrower’s tangible property constituting Collateral suffers a casualty or is condemned by a Governmental Entity (each, a “Loss”), all Net Proceeds of such Loss shall be paid over to Lender for application to the Obligations, unless Lender otherwise agrees            in writing. If Lender does otherwise agree in writing, Borrowers may apply the Net Proceeds of any such casualty or condemnation to the repair, restoration, or replacement of the assets suffering such Loss, so long as (i) such repair, restoration, or replacement is completed within one hundred eighty (180) days after the date of such Loss (or such longer period of time agreed to in writing by Lender), (ii) while such repair, restoration, or replacement is underway, all of such Net            Proceeds are on deposit with Lender in a separate Deposit Account over which Lender has exclusive Control, and (iii) such Loss did not cause an Event of Default. If an Event of Default occurs pursuant to which Lender exercises its rights to accelerate the Obligations as provided inSection 9.2or such repair, restoration, or replacement is not completed within one hundred eighty (180) days of the date of such Loss (or such longer            period of time agreed to in writing by Lender), Lender may immediately and without notice to any Person apply all of such Net Proceeds to the Obligations, regardless of any other prior agreement regarding the disposition of such Net Proceeds.

6.4       Certain Notices. Shall provide Lender immediate notice of (a) the occurrence of a Default and what action (if any) Borrowers are taking to correct the same; (b) any litigation involving an amount at issue in excess of One Hundred Thousand Dollars ($100,000) or material changes in            existing litigation or any judgment against it or its assets in excess of One Hundred Thousand Dollars ($100,000); (c) any damage or loss to property in excess of One Hundred Thousand Dollars ($100,000); (d) any notice from taxing authorities as to claimed deficiencies or any tax lien or any notice relating to alleged ERISA violations; (e) any Reportable Event, as defined in ERISA; (f) any rejection, return, offset, dispute, loss, or other circumstance in an amount equal to or            greater than One Hundred Thousand Dollars ($100,000) or otherwise having a Material Adverse Effect on any Collateral; (g) the cancellation or termination of, or any default under, or any material change in, any Material Agreement; (h) any acceleration of the maturity of any Debt of any Credit Party or the occurrence or existence of any event or circumstances which gives the holder of such Debt the right to accelerate; and (i) any loss or threatened loss of material licenses or            permits.

6.5       Inspections of Books and Records and Field Examinations; Appraisals; Physical Inventories. Shall permit Lender and its agents to conduct inspections, verifications (of accounts and otherwise), appraisals, and field examinations of the Collateral and such Person’s other property            and books and records at such times and with such frequency as Lender may request from time to time, with (a) when no Default or Event of Default is in existence, reasonable notice thereof and (b) when any Default or Event of Default is in existence, no notice thereof. Borrower shall pay the cost of such inspections, verifications, appraisals, and field examinations;provided, the cost of field examinations shall not exceed Eight            Hundred Fifty Dollars ($850) per examiner per day (or whatever higher sum then represents Lender’s standard charge in regard thereto),plusLender’s actual out-of-pocket expenses.

 

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Borrower shall, at its expense, conduct physical inventories of its and its Subsidiaries’ Inventory with such frequency as Lender shall request from time to time and, before conducting any such physical inventory, shall provide reasonable written notice thereof to Lender and allow Lender or its agents to witness such physical inventory.

6.6       Financial Information. Shall maintain books and records in accordance with GAAP and shall furnish to Lender the following periodic financial information:

(a)        Periodic Borrowing Base Information. Within fifteen (15) days of the end of each month (or more frequently if requested by Lender in its Permitted Discretion), a completed Borrowing Base Certificate in the form ofExhibit 6.6(a),            attached hereto and made a part hereof (each, a “Borrowing Base Certificate”). Borrowers shall attach the following to each Borrowing Base Certificate, which shall be certified by a Senior Officer of a Borrower to be accurate and complete and in compliance with the terms of the Loan Documents: (i) a report in form and substance satisfactory to Lender listing (A) all Accounts of Borrower as of the last Business Day of            such month, (B) the amount and age of each Account on an original invoice date aging basis, (C) the name and mailing address of each Account Debtor, (D) all Accounts which do not constitute Eligible Accounts, and (E) such other information as Lender may require (each, an “Accounts Receivables Report”); (ii) a report listing (A) all of each Borrower’s accounts payable, (B) the number of days which have elapsed since            the original date of invoice of such accounts payable, (C) the name and address of each Person to whom such accounts payable are owed, and (D) such other detail Lender may request (each, an “Accounts Payable Report”); and (iii) each other report as Lender may from time to time require in its Permitted Discretion, each prepared with respect to such periods and with respect to such information and reporting as Lender may            request.

(b)        Interim Statements. Within thirty (30) days after each Fiscal Month (except a Fiscal Month which is also a Fiscal Quarter end) and within forty-five (45) days after the end of each Fiscal Quarter, (i) a consolidated and consolidating balance sheet of Borrowers and their            Subsidiaries at the end of that period and a consolidated and consolidating income statement and statement of cash flows for such period (and for the portion of the Fiscal Year ending with such period), together with all supporting schedules, setting forth in comparative form the figures for the same period of the preceding Fiscal Year and (ii) a report reconciling (A) Borrowers’ Accounts and Inventory as set forth in the Accounts Receivable Report and the Inventory Report            attached to the Borrowing Base Certificate to (B) the Borrowers’ aggregate Accounts and Inventory set forth in the financial statements delivered to Lender pursuant hereto (which shall be based upon Borrowers’ general ledger). The foregoing statements and reports shall be certified by a Senior Officer of Parent Company as true and correct and fairly representing the financial condition of Borrower and its Subsidiaries and that such statements are prepared in accordance            with GAAP, except without footnotes and subject to normal year-end audit adjustments.

(c)        Annual Statements. Within ninety (90) days after the end of each Fiscal Year, a detailed audited financial report of Borrowers and their Subsidiaries containing a consolidated and consolidating balance sheet at the end of such period and a consolidated and consolidating income            statement and statement of cash flows for such period, setting forth in comparative form the figures for the preceding Fiscal Year, together with all supporting schedules and footnotes, and containing an unqualified audit opinion of independent certified public accountants acceptable to Lender that the financial statements were prepared in accordance with GAAP.

(d)        Compliance and No Default Certificate. Together with each report required bysubsections (b)and(c), a compliance certificate in the form ofExhibit            6.6(d), attached hereto and made a part hereof, and a certificate of a Senior Officer of Parent Company certifying that no Default then exists or, if a Default exists, the nature and duration thereof and Borrowers’ intention with respect thereto. Each such compliance certificate will be accompanied by a spreadsheet showing Borrowers’ calculations of all financial covenants, which must be of such detail as requested by Lender from time to time.            Borrowers shall also cause Borrowers’ independent auditor (if applicable) to submit to Lender, together with its audit report, a statement that, in the course of conducting such audit, it discovered no circumstances which it believes would result in a Default or, if it discovered any such circumstances, the nature and duration thereof.

(e)        Auditor’s Management Letters. Promptly upon receipt thereof, copies of each report submitted to Borrowers by independent public accountants in connection with any annual, interim, or special audit made by them of the Borrowers’ books including, without limitation, each            report submitted to Borrowers concerning its accounting

 

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practices and systems and any final comment letter submitted by such accountants to management in connection with Borrowers’ annual audit.

(f)        Statements of Guarantors. To the extent that now or hereafter there are any Guarantors, with respect to any Guarantor who is an individual, (i) such Guarantor’s detailed annual financial statement, including a balance sheet (including all contingent liabilities) as of the            end of such annual period and a statement of income for such annual period, all in form and substance satisfactory to Lender and delivered to Lender within thirteen months after the date of the most recent financial statement delivered to Lender and (ii) a copy of such Guarantor’s personal Federal income tax returns, delivered to Lender within fifteen (15) days of the date on which such returns are filed. With respect to any Guarantor which is not an individual, a detailed            audited financial report of Guarantor and its Subsidiaries containing a consolidated and consolidating balance sheet at the end of that period and a consolidated and consolidating income statement and statement of cash flows for that period, setting forth in comparative form the figures for the preceding fiscal year, together with all supporting schedules and footnotes, and containing an unqualified audit opinion of independent certified public accountants acceptable to Lender that            the financial statements were prepared in accordance with GAAP, all delivered to Lender within ninety (90) days after each of such Guarantor’s fiscal years. Each such Guarantor (if any) shall obtain such written acknowledgments from Guarantor’s independent certified public accountants as Lender may request permitting Lender to rely on such annual financial statements.

(g)        Other Information. Such other information requested by Lender, in its Permitted Discretion, from time to time concerning the business, properties, or financial condition of the Credit Parties and their respective Subsidiaries.

(h)        Projections. At least thirty (30) days before the end of each Fiscal Year, Projections for the immediately following Fiscal Year, prepared on a quarterly basis.

(i)        Customer List. Within thirty (30) days following the commencement of each Fiscal Year, or more frequently if requested by Lender, Borrowers shall provide Lender with a listing of all of the Credit Parties’ customers and their names and addresses as of the end of the            immediately preceding Fiscal Year or as of such other date requested by Lender.

(j)        Collateral Disclosure Certificate. Within thirty (30) days following the commencement of each Fiscal Year, Borrowers shall, and shall cause each other Person who has executed and delivered a Collateral Disclosure Certificate to, execute and deliver a Collateral Disclosure            Certificate with then-current information. The proper disclosure of any information in any Collateral Disclosure Certificate shall not, in and of itself, constitute any waiver of any Default or Event of Default which may otherwise exist.

6.7       Maintenance of Existence and Rights. Shall preserve and maintain its legal existence, authorities to transact business, rights and franchises, trade names, patents, trademarks, and permits necessary to the conduct of its business.

6.8       Payment of Taxes, Etc. Shall pay before delinquent all of its Debts and taxes, except to the extent such taxes are being Properly Contested.

6.9       Subordination. Shall cause all (a) Debts and other obligations now or hereafter owed to any Guarantor or Affiliate (other than trade debt incurred in the ordinary course of business in compliance withSection 7.7) to be Subordinated            Debt and (b) all trade debt payable to any Guarantor or Affiliate to be subordinated to the Obligations on terms satisfactory to Lender.

6.10      Compliance; Hazardous Materials. Shall comply with all laws, regulations, ordinances, and other legal requirements, including, without limitation, ERISA, all securities laws, and all laws relating to hazardous materials and the environment. Unless approved in writing by Lender, neither any            Borrower nor any Subsidiary shall engage in the storage, manufacture, disposition, processing, handling, use, or transportation of Regulated Materials, whether or not in compliance with Environmental Laws, except for ordinary and customary amounts of solvents, cleaners and similar materials used in the ordinary course of such Borrower’s or a Subsidiary’s business

 

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and in strict compliance with all Environmental Laws. Borrowers shall promptly report to Lender any notices of any violations of such laws or regulations received from any Governmental Entity, along with Borrower’s proposed corrective action as to such violation.

6.11      Further Assurances. Shall take such further action and provide to Lender such further assurances as may be reasonably requested by Lender, in its Permitted Discretion, to ensure compliance with the intent of this Agreement and the other Loan Documents.

|   | 6.12 | Covenants Regarding Collateral. |
|--------|------|---------------------------------|

(a)        Shall use the Collateral only in the ordinary course of its business and will not permit the Collateral to be used in violation of any applicable law or policy of insurance;

(b)        Shall defend the Collateral against all claims and demands of all Persons, except for Permitted Liens;

(c)        Shall exercise its best efforts to obtain and deliver to Lender such Third Party Agreements as Lender may request from time to time (with it being understood that the failure for whatever reason to obtain any such Third Party Agreements shall not in any way limit Lender’s right to institute Reserves);

(d)        Shall promptly deliver to Lender all Items, Instruments, Chattel Paper, Investment Property in the form of certificated securities, and, if requested by Lender, Documents which constitute Collateral, in each case appropriately indorsed to Lender’s order;

(e)        Shall not create any Electronic Chattel Paper without first granting Lender Control thereof pursuant to such measures as Lender shall request;

(f)        Shall promptly notify Lender of any patents, trademarks, or copyrights to which Borrower or a Subsidiary acquires title or rights after the Closing Date and any license agreements entered into after the Closing Date by Borrower or any Subsidiary authorizing Borrower or such Subsidiary to use any third party’s patents,            trademarks, or copyrights;

(g)        Shall give Lender at least thirty (30) days written notice before using any trade, assumed, or fictitious name not already disclosed in the Collateral Disclosure Certificate and shall use all trade, assumed, or fictitious names in accordance with all applicable laws;

(h)        Shall promptly notify Lender of the existence of any Commercial Tort Claims which arise after the Closing Date and shall provide Lender with such information, and otherwise take such action with respect to such Commercial Tort Claims, as is reasonably necessary for Lender to perfect its security interest thereon;

(i)        Within five (5) Business Days after Lender’s request, shall deliver to Lender the original certificates of title or similar title documents for all of such Person’s owned vehicles and Equipment which are subject to certificate of title or similar statutes (as contemplated in Section 9-311 of the UCC) and take such            further actions from time to time as Lender requests for purposes of perfecting Lender’s security interest in and to such vehicles and Equipment.

|   | **7.** | **NEGATIVE COVENANTS.** |
|--------|--------|-------------------------|

Borrowers covenant and agree that from the date hereof and until the full and final payment and performance of all Obligations and the termination of this Agreement, each Borrower and each Subsidiary:

 

7.1       Debt. Shall not create or permit to exist any Debt, including any guaranties or other contingent obligations, except the following (“Permitted Debt”):

|   | (a) | The Obligations; |
|--------|-----|------------------|

 

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|   | (b) | Endorsement of Items for collection in the ordinary course of business; |
|--------|-----|-------------------------------------------------------------------------|

(c)        Debts which are payable to suppliers and other trade creditors and were incurred in the ordinary course of business, on ordinary and customary trade terms, and which are not more than sixty (60) days past due (unless Properly Contested);

(d)        Purchase money Debt incurred to purchase Equipment;providedthat the amount of such Debt shall not at any time (i) exceed the purchase price of the Equipment purchased or (ii) exceed in aggregate principal amount at any time outstanding for Borrowers and their Subsidiaries, One            Hundred Thousand Dollars ($100,000);

|   | (e) | Subordinated Debt; |
|--------|-----|--------------------|

(f)        Debt listed inSchedule 7.1, attached hereto and made a part hereof, to the extent such Debt exists as of the Closing Date and is not otherwise permitted by thisSection 7.1, together with any Debt incurred in any refinancing or            renewal thereof in an amount not to exceed the principal amount thereof;

|   | (g) | Debt of any Subsidiary to Borrower or another Subsidiary; |
|--------|-----|-----------------------------------------------------------|

|   | (h) | Any Debt incurred under any Hedge Agreements with Lender (or with any of its Affiliates). |
|--------|-----|-------------------------------------------------------------------------------------------|

7.2       Liens. Shall not create or permit or suffer to exist any Liens on any of its property except the following (“Permitted Liens”):

|   | (a) | Liens securing the Obligations; |
|--------|-----|---------------------------------|

(b)        Liens for taxes, assessments, and charges or levies instituted or levied by any Governmental Entity (but not including any Lien imposed pursuant to ERISA or any Environmental Law) which are not yet due and payable or which are being Properly Contested;

(c)        The claims of Third Parties arising out of operation of law so long as the obligations secured thereby are not past due or are being Properly Contested;

(d)        Liens existing in respect of deposits or pledges made in the ordinary course of business in connection with workers’ compensation, unemployment insurance, social security, and similar laws;

(e)        Judgment and other similar non-tax Liens arising in connection with court proceedings, but only to the extent and for so long as (i) the execution or enforcement of such Liens is and continues to be effectively stayed and bonded on appeal; (ii) the validity or amount of the claims secured thereby are being Properly Contested; and            (iii) such Liens do not, in the aggregate, materially detract from the value of the assets of the Person whose assets are subject to such Lien or materially impair the use thereof in the operation of such Person’s business;

(f)        Liens securing purchase money Debt incurred solely to purchase Equipment, but only to the extent such Liens attach only to the Equipment purchased and secure no more than the purchase price therefor;

(g)        Liens list on inSchedule 7.2, attached hereto and made a part hereof, to the extent such Liens exist as of the Closing Date and are not otherwise permitted by thisSection 7.2.

7.3       Restricted Payments. Shall not make any Restricted Payment,exceptthat (a) any Subsidiary of a Borrower may pay dividends to such Borrower or another Subsidiary wholly-owned by such Borrower; and (b) any Borrower or any Subsidiary may            make payments on Subordinated Debt, but only to extent each such payment is expressly permitted under the terms of the subordination agreement related thereto.

7.4       Loans and Other Investments. With respect to any Person, shall not (a) make or permit to exist any advances or loans to such Person, (b) guarantee or become contingently liable, directly or indirectly, in connection with the obligations, leases, Equity Interests, or dividends or            distributions of such Person, (c) own,

 

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purchase, or make any commitment to purchase any Equity Interests, bonds, notes, debentures, or other securities of, or any interest in such Person, or (d) make any capital contributions to such Person (all of which are sometimes collectively referred to herein as “Investments”), except for (i) purchases of direct obligations of the            Federal Government; (ii) deposits in commercial banks; (iii) commercial paper of any U.S. corporation having the highest ratings then given by the Moody’s Investors Services, Inc. or Standard & Poor’s Corporation; (iv) existing investments in Subsidiaries; (v) endorsement of negotiable Instruments for collection in the ordinary course of business; (vi) advances to employees for business travel and other expenses incurred in the ordinary course of business which do            not at any time exceed in the aggregate Five Thousand Dollars ($5,000); and (vii) any Hedge Agreements with Lender (or with any of its Affiliates).

|   | 7.5 | Change in Business; Activities Covered by Insurance, Etc. |
|--------|-----|-----------------------------------------------------------|

(a)        Shall not enter into any business which is substantially different from the business in which it is engaged on the Closing Date.

(b)        Shall not (i) undertake any business or other activity which is not insured by such the policies of insurance required bySection 6.3 or (ii)permit or undergo any changes in its business and related activities which could result in the termination, revocation, ineffectiveness, or            unenforceability of any of such policies of insurance.

(c)        Shall not amend or modify, its articles or certificate of incorporation, organization, or formation, or its bylaws, operating agreement or partnership agreement, as applicable, in any way which could reasonably be expected to have a Material Adverse Effect.

(d)        Shall not amend or modify any of its Material Agreement, or permit the termination or cancellation thereof, in any way which could reasonably be expected to have a Material Adverse Effect.

7.6       Accounts. (a) Shall not sell, assign, or discount any of its Accounts, Chattel Paper, or Instruments other than the discount of promissory notes in the ordinary course of business for collection; (b) shall not create or accept any Account, Instrument, Chattel Paper or other obligation            of any kind due from or owed by a Sanctioned Person or own any Chattel Paper in the form of a lease where (i) the lessee thereunder is a Sanctioned Person and (ii) such Chattel Paper is Collateral; and (c) shall promptly notify Lender in writing of (i) any discount, set-off, or other deductions not shown on the face of an invoice relating to any Account involving an amount in excess of thelesserof (A) five percent (5%) of such            Account’s face value or (B) Twenty-Five Thousand Dollars ($25,000), (ii) any dispute over an Account involving an amount in excess of thelesserof (A) five percent (5%) of such Account’s face value or (B) Twenty-Five Thousand Dollars ($25,000); and (d) any information relating to an adverse change in any Account Debtor’s financial condition or ability to pay its obligations or an Account Debtor’s status as a            Sanctioned Person.

7.7       Transactions with Affiliates. Shall not, in the ordinary course of business or otherwise, (a) directly or indirectly purchase, acquire, or lease any property from any Affiliate, (b) sell, transfer, or lease any property to any Affiliate, (c) pay any management fees to any Affiliate, or            (d) otherwise deal with any Affiliate, other than (i) where such Affiliate is a Subsidiary and a Credit Party, (ii) transactions described onSchedule 7.7, attached hereto and made a part hereof, and (iii) transactions on arms’ length terms which are no less favorable to a Borrower or such Subsidiary than would exist if the parties thereto were not Affiliates and for which Lender has received prior written notice.

7.8       No Change in Name, Offices, or Jurisdiction of Organization; Removal of Collateral. Shall not (a) change its name or the jurisdiction in it is organized, (b) unless it shall have given sixty (60) days’ advance written notice thereof to Lender, change the location of its chief            executive office or other office where books or records are kept, or (c) permit any Inventory or other tangible Collateral (other than Inventory in-transit) to be located at any location other than a Permitted Location.

|   | 7.9 | No Sale, Leaseback. Shall not enter into any sale-and-leaseback or similar transaction. |
|--------|-----|-----------------------------------------------------------------------------------------|

 

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7.10      Margin Stock. Shall not use any proceeds of the Loan to purchase or carry any margin stock (within the meaning of Regulation U of the Board of Governors of Federal Reserve System) or extend credit to others for the purpose of purchasing or carrying any margin stock.

7.11      Tangible Collateral. Shall not, except to the extent otherwise permitted herein or as otherwise permitted by Lender in writing, (a) allow any Collateral to be commingled with, or become an Accession to or part of, any property of any other Person or (b) allow any Collateral to become a            Fixture.

7.12      Subsidiaries. Shall not (a) acquire or form any Subsidiary, (b) cause or permit any Subsidiary to dissolve, voluntarily or involuntarily, or (c) permit any Subsidiary to issue any Equity Interests except to a Borrower.

7.13      Liquidation, Mergers, Consolidations, and Dispositions of Assets; Name and Good Standing. Shall not (a) merge, reorganize, consolidate, or amalgamate with any Person; (b) liquidate, wind up its affairs or dissolve itself; (c) acquire by purchase, lease, or otherwise any of the assets of any            Person, except for the acquisition of Inventory and Equipment (to the extent not prohibited hereunder) in the ordinary course of business; (d) sell, transfer, lease, or otherwise dispose of any of its assets, except for (i) the sale of Inventory in the ordinary course of business, (ii) so long as no Event of Default then exists, the sale or other disposition of Equipment which is worn out, obsolete or no longer used or useful in a Borrower’s businessprovidedthat the aggregate fair market value of all such Equipment of all Borrowers does not exceed One Hundred Thousand Dollars ($100,000) in any one Fiscal Year of Borrowers, and (iii) the voluntary termination of Hedge Agreements to which a Borrower or such Subsidiary is a party; (e) sell or dispose of any Equity Interests in any Subsidiary, whether in a single transaction or in a series of related transactions; (f) change its legal            name or jurisdiction of organization or conduct business under any new trade, assumed, or fictitious name; (g) change its Federal Employer Identification Number; or (h) fail to remain in good standing and qualified to transact business as a foreign entity in any state or other jurisdiction in which it is required to be qualified to transact business as a foreign entity and in which the failure to do so could reasonably be expected to have a Material Adverse Effect.

7.14      Change of Fiscal Year or Accounting Methods. Shall not change its Fiscal Year or its accounting methods. As of the Closing Date, Borrower’s fiscal year ends on or about December 31 of each year.

7.15      Deposit Accounts; Exclusive Control. Shall not open or, after thirty (30) days following the Closing Date, maintain any Deposit Accounts except for (a) Deposit Accounts with Lender; (b) Deposit Accounts listed onSchedule 5.15; (c) Deposit            Accounts which are not with Lender but which are subject to Lender’s Control on terms satisfactory to Lender; and (d) such other Deposit Accounts as shall be necessary for payroll, petty cash, local trade payables, and other occasional needs of Borrower;providedthat the aggregate balance of any Deposit Accounts which are not subject to Lender’s Control on terms acceptable to Lender may not at any time exceed            Twenty-Five Thousand ($25,000) without Lender’s prior written consent. Borrower shall maintain its primary Deposit Account and cash management Deposit Accounts with Lender. All Deposit Accounts maintained with Lender shall be deemed to be under Lender’s Control.

|   | **8.** | **FINANCIAL COVENANTS****.** |
|--------|--------|------------------------------|

|   | 8.1 | Definitions. As used in this Agreement: |
|--------|-----|-----------------------------------------|

(a)        “EBITDA” means, for any period of determination and without duplication, the sum of (i) consolidated net income of Borrowers and their Subsidiaries for such period (computed without regard to any extraordinary items of gain or loss),plus(ii) to the extent included in the calculation of revenue in computing consolidated net income for such period, the sum of (A) interest expense, (B) income tax expense, and (C) depreciation and amortization,minus(iii) non-cash gains.

(b)        “Fixed Charge Coverage Ratio,” for any period of three (3) Fiscal Months of Borrowers and their Subsidiaries shall be defined as (i) EBITDA for such period, less the sum of (A) all unfinanced Capital Expenditures made in such period, (B) any dividends and distributions            paid in such period and (C) cash taxes paid (if any) in such period (net of any income tax refunds directly received by Borrowers and their Subsidiaries from the appropriate

 

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taxing authorities in such period),dividedby (ii) the sum of (A) scheduled principal amortization on Funded Debt (if any) for the succeeding three (3) Fiscal Months,plus(B) interest expense paid in the preceding period of three (3) Fiscal Months.

(c)        “Funded Debt” means all Debt for borrowed funds (including the Obligations), capitalized leases, Debt for the deferred payment by one (1) year or more of any purchase money obligation and Subordinated Debt.

(d)        “Funded Debt to EBITDA Ratio” means, for any given Fiscal Month, (i) Funded Debt of Borrowers and their Subsidiaries, outstanding on the last day of such Fiscal Month to (ii) EBITDA of Borrowers and their Subsidiaries, for the twelve (12) Fiscal Months then            ended.

(e)        “Working Capital Ratio” means, for any given Fiscal Month, the ratio of: (i) the sum of (A) unrestricted cash on hand of Borrowers and their Subsidiaries,plus(B) total accounts receivable of Borrowers and            their Subsidiaries, as of the end of such Fiscal Month to (ii) the sum of (A) transportation charges of Borrowers and their Subsidiaries for such Fiscal Monthplus(B) any overdrafts occurring in such Fiscal Month of Borrowers and their Subsidiariesplus(C) the outstanding amount of all Working Capital Obligations as at the end of such Fiscal Month.

8.2       Financial Covenants. Borrowers covenant and agree that, from the date hereof and until the full and final payment and performance of all Obligations and the termination of this Agreement, Obligors shall comply with each of the following covenants:

(a)        Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio for each period of twelve (12) Fiscal Months, beginning with the Fiscal Month ending January 31, 2009, shall be not less than 1.30:1.

(b)        Funded Debt to EBITDA Ratio. The Funded Debt to EBITDA Ratio for each Fiscal Month, beginning with the Fiscal Month ending January 31, 2009, shall be not more than 5.00:1.

(c)        Working Capital Ratio. The Working Capital Ratio as of the end of any Fiscal Month, beginning with the Fiscal Month ending January 31, 2009, shall be at least 1.00:1.

|   | **9.** | **DEFAULT****.** |
|--------|--------|------------------|

|   | 9.1 | Events of Default. Each of the following shall constitute an Event of Default: |
|--------|-----|--------------------------------------------------------------------------------|

(a)        Any Borrower shall fail to pay when due any principal of or interest on any Note, any fee or other amounts due to Lender hereunder or any other Loan Document, or (except as provided in (b) and (c) below) any other Obligations; or

(b)        Any Borrower shall default on the performance of any agreement, covenant, or obligation contained inSection 6.1,6.4,6.5,6.6,6.9,6.12, orSection 7orSection 8; or

(c)        Any Borrower or any other Credit Party shall default on the performance of any other agreement, covenant, or obligation contained in this Agreement or such Loan Document not provided for elsewhere in thisSection 9and the breach of such agreement, covenant, or obligation shall            not have been cured to Lender’s satisfaction within fifteen (15) days after the sooner to occur of (i) any Senior Officer’s receipt of notice of such breach from Lender or (ii) the date on which such failure or neglect first became known to any Senior Officer;provided,however, that such notice and opportunity to cure shall not apply in the case of any default on an            agreement, covenant, or obligation which is not capable of being cured at all or within such fifteen (15) days’ period or which was a willful and knowing breach by such Borrower or such other party; or

(d)        Any representation or warranty made by any Borrower or any other Credit Party in this Agreement or any other Loan Document, or in any certificate or report furnished in connection with this Agreement or any other Loan Document, shall prove to have been untrue or incorrect in any material respect when made; or

 

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(e)        Any Borrower, any Subsidiary, or any Guarantor shall default in any obligation which (i) is owed to Lender or any of Lender’s Affiliates and (ii) arose under any agreement other than a Loan Document, but only if such default was not cured within any applicable cure period provided for in such agreement; or

(f)        Any Borrower, any Subsidiary, or any Guarantor shall fail to make any payment in respect of outstanding Debt (other than the Obligations) having an aggregate outstanding principal amount in excess of One Hundred Thousand Dollars ($100,000) or more when due after the expiration of any applicable grace period, or any event or            condition shall occur which results in the acceleration of the maturity of such Debt (including, without limitation, any required mandatory prepayment or “put” of such Debt to any such Person) or enables (or, with the giving of notice or passing of time or both, would enable) the holders of such Debt or a commitment related to such Debt (or any Person acting on such holders’ behalf) to accelerate the maturity thereof or terminate any such commitment before its            normal expiration (including, without limitation, any required mandatory prepayment or “put” of such Debt to such Person); or

(g)        Any Borrower or any Subsidiary or any Guarantor shall (i) voluntarily dissolve, liquidate, or terminate operations or apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, or liquidator of such Person or of all or of a substantial part of its assets, (ii) admit in writing its            inability, or be generally unable, to pay its debts as the debts become due, (iii) make a general assignment for the benefit of its creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code (as now or hereafter in effect), (v) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition, or adjustment of debts, (vi) fail to controvert in a timely and appropriate manner, or acquiesce in            writing to, any petition filed against it in an involuntary case under Bankruptcy Code, or (vii) take any action for the purpose of effecting any of the foregoing; or

(h)        An involuntary petition or complaint shall be filed against any Borrower or any Subsidiary or any Guarantor seeking bankruptcy relief or reorganization or the appointment of a receiver, custodian, trustee, intervenor, or liquidator of any Borrower or any Subsidiary or any Guarantor, of all or substantially all of its assets, and            such petition or complaint shall not have been dismissed within sixty (60) days of the filing thereof; or an order, order for relief, judgment, or decree shall be entered by any competent Governmental Entity approving or ordering any of the foregoing actions; or

(i)        A judgment of more than One Hundred Thousand Dollars ($100,000) in excess of insurance coverage therefor (as provided by an underwriter acceptable to Lender, where such underwriter has agreed in writing to pay such judgment, and for which the deductible does not exceed One Hundred Thousand Dollars ($100,000) shall be rendered            against any Borrower or any Subsidiary or any Guarantor and shall remain undischarged, undismissed, and unstayed for more than ten (10) days or there shall occur any levy upon, or attachment, garnishment, or other seizure of, any portion of the Collateral or other assets of Borrower, any Subsidiary, or any Guarantor in excess of One Hundred Thousand Dollars ($100,000) by reason of the issuance of any tax levy, judicial attachment, garnishment, or levy of execution; or

(j)        Any Guarantor shall repudiate, revoke, or attempt to revoke any Guaranty, in whole or in part; or

(k)        Any loss, theft, damage, or destruction of any material portion of the Collateral shall occur for which there is either no insurance coverage or for which, in Lender’s reasonable opinion, there is insufficient insurance coverage; or

(l)        There shall occur any change in the condition (financial or otherwise) of Borrower, any Subsidiary, or any Guarantor which, in Lender’s sole opinion, could reasonably be expected to have a Material Adverse Effect; or

(m)       A majority in interest of the Parent Company’s Equity Interests shall become owned and controlled, with sole power to vote, by a Person or a group of Persons acting in concert subsequent to the Closing Date, e.g., pursuant to a “going private” transaction or a transaction having the same effect; or the Parent Company            shall cease to own and control, with sole power to vote, either directly or indirectly through one or more Subsidiaries, one hundred percent (100%) of each class of each other Borrower’s Equity Interests subsequent to the Closing Date.

 

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(n)        The death (i) of the holder of the majority ownership interests of any Credit Party or (ii) of any individual Guarantor.

9.2       Remedies. During the existence of any Default, Lender may, without notice to Borrowers and at its option, refuse to make Loans, issue Letters of Credit, or make other extensions of credit to Borrowers. During the existence of any Event of Default, Lender may at its option take any or            all of the following actions:

(a)        Lender may terminate all Commitments and declare any or all Obligations (other than Obligations under any Hedge Agreements, between any Borrower and Lender or any Affiliate of Lender, which shall be due in accordance with and governed by the provisions of said Hedge Agreements) to be immediately due and payable (if not earlier            demanded) (provided,that, upon the occurrence of any Event of Default described inSection 9.1(g)orSection 9.1(h), all Obligations shall automatically become immediately due and payable), terminate its obligation to make Loans and other extensions of credit to Borrowers, bring            suit against Borrowers to collect the Obligations, exercise any remedy available to Lender hereunder or at law, and take any action or exercise any remedy provided herein or in any other Loan Document or under applicable law.

(b)        Without waiving any of its other rights hereunder or under any other Loan Document, Lender shall have all rights and remedies of a secured party under the UCC (and the Uniform Commercial Code of any other applicable jurisdiction) and such other rights and remedies as may be available hereunder, under other applicable law, or            pursuant to contract. If requested by Lender, Borrowers will promptly assemble the Collateral and make it available to Lender at a place designated by Lender. Borrowers agree that any notice by Lender of the sale or disposition of the Collateral or any other intended action hereunder, whether required by the UCC or otherwise, shall constitute reasonable notice to Borrower if the notice is mailed to Borrowers by regular or certified mail, postage prepaid, at least five days before            the action to be taken. The proceeds realized from the sale or other disposition of any Collateral shall be applied in the manner provided inSection 2.9. Each Credit Party shall be liable for any deficiencies in the event the proceeds of the disposition of the Collateral do not satisfy the Obligations in full.

(c)        Lender may demand, collect, and sue for all amounts owed pursuant to Accounts, General Intangibles, Chattel Paper, Instruments, or Documents or for proceeds of any Collateral (either in a Borrower’s name or Lender’s name at Lender’s option), with the right to enforce, compromise, settle, or discharge any such            amounts.

(d)        Each Borrower hereby grants Lender a worldwide, non-exclusive, and royalty-free license to use solely during the existence of an Event of Default such Borrower’s trademarks, service marks, and trade names for purposes of invoicing and collecting Accounts and otherwise disposing of or liquidating Collateral.

9.3       Receiver. In addition to any other remedy available to it, Lender shall have the absolute right, during the existence of an Event of Default, to seek and obtain the appointment of a receiver to take possession of and operate and/or dispose of the business and assets of            Borrowers.

9.4       Deposits; Insurance. Each Borrower (a) authorizes Lender to, during the existence of an Event of Default, collect and apply against the Obligations when due any refund of insurance premiums or any insurance proceeds payable on account of the loss or damage to any Collateral and (b)            irrevocably appoints Lender as its attorney-in-fact to endorse any check or draft or take other action necessary to obtain such funds.

|   | **10.** | **MISCELLANEOUS**. |
|--------|---------|--------------------|

10.1      No Waiver, Remedies Cumulative. No failure or delay on the part of Lender to exercise any right under this Agreement, any other Loan Document, or applicable law shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder preclude any other or further            exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and are in addition to any other remedies provided by applicable law, any Loan Document, or otherwise.

10.2      Survival of Representations. All representations and warranties made in this Agreement and the other Loan Documents shall survive the making of any extension of credit hereunder and the delivery of any Note

 

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and shall continue in full force and effect until the full and final payment and performance of the Obligations and the termination of this Agreement.

10.3      Indemnity By Borrowers; Expenses. In addition to all other Obligations, each Borrower agrees to defend, protect, indemnify, and hold harmless Lender and its Affiliates and all of their respective officers, directors, employees, attorneys, consultants, and agents from and against any and all            losses, damages, liabilities, obligations, penalties, fines, fees, costs, and expenses (including, without limitation, attorneys’ and paralegals’ fees, costs and expenses, and fees, costs and expenses for investigations and experts) incurred by such indemnitees, whether before or from and after the Closing Date, as a result of or arising from or relating to (a) the due diligence effort (including, without limitation, public records searches, recording fees, examinations,            and investigations of the properties of the Credit Parties or any Subsidiary and their respective operations), negotiation, preparation, execution, performance of any of the Loan Documents or of any document executed in connection with the transactions contemplated thereby, perfection of Lender’s Liens in the Collateral, maintenance of each Loan by Lender, and any and all amendments, modifications, and supplements of any of the Loan Documents or restructuring of the            Obligations; (b) any suit, investigation, action, or proceeding by any Person (other than a Borrower), whether threatened or initiated, asserting a claim for any legal or equitable remedy against any Person under any statute, regulation, or common law principle, arising from or in connection with Lender’s making extensions of credit or furnishing funds to any Borrower under this Agreement; (c) Lender’s preservation, administration, and enforcement of its rights under the            Loan Documents and applicable law, including the reasonable attorneys fees if collected, or sought to be collected, by or through an attorney at law, and disbursements of counsel for Lender in connection therewith, whether any suit is brought or not and whether incurred at trial or on appeal, and all costs of repossession, storage, disposition, protection, and collection of Collateral; (d) periodic field examinations, audits, and appraisals performed by Lender pursuant toSection 6.5hereof; (e) any civil penalty or fine assessed by OFAC against Lender or any Affiliate of Lender and all reasonable costs and expense (including counsel fees and disbursements) incurred in connection with defense thereof by Lender or such Affiliate, as a result of Lender’s making extensions of credit hereunder, the acceptance of payments due under the Loan Documents or any Hedge Agreement, or acceptance of Collateral; or            (f) any matter relating to the financing transactions contemplated by the Loan Documents or by any document executed in connection with the transactions contemplated thereby, other than for such loss, damage, liability, obligation, penalty, fee, cost or expense arising from such indemnitee’s gross negligence or willful misconduct. If any Borrower should fail to pay any tax or other amount required by this Agreement to be paid or which may be reasonably necessary to protect or            preserve any Collateral or a Borrower’s or Lender’s interests therein, Lender may make such payment in the manner provided inSection 2.4(a)orSection 2.8(b). In addition, Borrower agrees to pay and save Lender harmless against any liability for payment of any state documentary stamp taxes, intangible taxes, or similar taxes (including interest or penalties, if any)            which may now or hereafter be determined to be payable in respect to the execution, delivery, or recording of any Loan Document or the making of any Loan, whether originally thought to be due or not, and regardless of any mistake of fact or law on the part of Lender (or its counsel) or Borrower with respect to the applicability of such tax. Each Borrower’s obligation for indemnification for all of the foregoing losses, damages, liabilities, obligations, penalties, fees, costs,            and expenses of Lender shall be part of the Obligations, secured by the Collateral, chargeable against such Borrower’s loan account as provided herein, and shall survive termination of this Agreement.

10.4      Notices. Any notice or other communication hereunder or under the Note to any party hereto or thereto shall be by hand delivery, overnight delivery via nationally recognized overnight delivery service, facsimile with receipt confirmed, or registered or certified United States mail with            return receipt and unless otherwise provided herein shall be deemed to have been given or made when delivered, telegraphed, faxed or, if sent via United States mail, when receipt therefor is signed by the receiver, postage prepaid, addressed to the party at its address specified below (or at any other address that the party may hereafter specify to the other parties in writing):

|   | Lender: | Regions Bank |
|--------|---------|--------------|

191 Peachtree St. NE

Suite 3800

Atlanta, GA 30303

Attn: Loan Administration

Fax: 404-221-4361

 

|   | Borrowers: | c/o AutoInfo, Inc., as Borrower Agent |
|--------|------------|---------------------------------------|

 

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6413 Congress Avenue, Suite 260

Boca Raton, FL 33487

Attn: President

Fax: 561-988-9456

 

10.5      GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE DEEMED CONTRACTS MADE UNDER THE LAWS OF THE JURISDICTION AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE JURISDICTION (EXCLUDING ITS CONFLICT OF LAWS PROVISIONS IF SUCH PROVISIONS WOULD REQUIRE            APPLICATION OF THE LAWS OF ANOTHER JURISDICTION) EXCEPT INSOFAR AS (A) THE LAWS OF ANOTHER JURISDICTION MAY, BY REASON OF MANDATORY PROVISIONS OF LAW, GOVERN THE PERFECTION, PRIORITY, OR ENFORCEMENT OF SECURITY INTERESTS IN THE COLLATERAL OR (B) THE TERMS OF SUCH LOAN DOCUMENT EXPRESSLY STATE THAT THE LAW OF A DIFFERENT JURISDICTION SHALL GOVERN.

10.6      Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of each Borrower and Lender and their respective successors and assigns;provided, that no Borrower may assign any of its rights hereunder without            the prior written consent of Lender, and any such assignment made without such consent will be void in all respects.

10.7      Counterparts; Telecopied Signatures. This Agreement and any amendments, waivers, or consents relating hereto may be executed in any number of counterparts and by different parties hereto or thereto in separate counterparts, each of which when so executed and delivered shall be deemed an            original and all of which when taken together shall constitute but one and the same instrument. Any signature delivered by a party hereto or to any amendment, waiver, or consent relating hereto by facsimile transmission or by electronic email in Adobe Corporation’s Portable Document Format (or PDF) shall be deemed to be an original signature hereto.

10.8      No Usury. Regardless of any other provision of this Agreement, each Note, or in any other Loan Document, if for any reason the effective rate of interest payable hereunder or thereunder should exceed the maximum lawful rate of interest, the effective rate of interest shall be deemed reduced            to, and shall be, such maximum lawful rate of interest. Any amount paid or collected by Lender as interest which would be in excess of the amount permitted by applicable law shall be deemed applied to the reduction of the principal balance of the Obligations and not to the payment of interest, but if such Obligations have been or are thereby paid in full, the excess shall be returned to the Person paying same, such application to the principal balance of the Obligations or the            refunding of excess to be a complete settlement and acquittance thereof.

|   | 10.9 | Powers. All powers of attorney granted to Lender are coupled with an interest and are irrevocable. |
|--------|------|----------------------------------------------------------------------------------------------------|

10.10    Approvals; Amendments. If this Agreement calls for Lender’s approval or consent, such approval or consent may be given or withheld in the discretion of Lender unless otherwise specified herein. This Agreement and the other Loan Documents may not be modified, altered, or amended, except by an            agreement in writing signed by the affected Borrowers and Lender and may not be modified in any manner adverse to a counterparty to any secured or guarantied Hedge Agreement without that provider’s prior written consent.

10.11    Participations and Assignments. Lender shall have the right to enter into one or more participations with other banks or financial institutions with respect to the Obligations and to assign to one or more assignees all or a portion of its interest, rights, and obligations under the Loan Documents. Upon            prior notice to Borrowers of any such participation or assignment, Borrowers shall thereafter furnish such participant or assignee with any information furnished by Borrowers to Lender pursuant to the terms of the Loan Documents. Nothing in this Agreement or any other Loan Document shall prohibit Lender from pledging or assigning this Agreement and Lender’s rights under any of the other Loan Documents, including Collateral therefor, to any Federal Reserve Bank in accordance            with applicable law.

10.12    Dealings with Multiple Borrowers. All Obligations, representations, warranties, covenants, and indemnities set forth in the Loan Documents to which each Borrower is a party shall be joint and several with each other Borrower, unless otherwise expressly provided. Lender shall have the right to deal with            any individual of any

 

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Borrower with regard to all matters concerning the rights and obligations of Lender hereunder and pursuant to applicable law with regard to the transactions contemplated under the Loan Documents. All actions or inactions of the officers, managers, members, or agents of any Borrower with regard to the transactions contemplated under the Loan Documents shall be deemed with full authority and binding            upon all Borrowers. Each Borrower hereby appoints Parent Company as its true and lawful agent, representative and attorney-in-fact, with full right and power, for purposes of exercising all rights of such Person hereunder and under applicable law with regard to the transactions contemplated under the Loan Documents, including the execution and delivery of Loan Documents and the giving (and receipt) of notices, including Notices of Borrowing, for and on behalf of all Borrowers, with            the ability to bind all Borrowers thereto (Parent Company, acting in such capacity, herein called “Borrower Agent”); and Borrower Agent may so act, for each Borrower or all Borrowers, whether expressly so designated to do so pursuant hereto or to any other Loan Document. The provisions of thisSection 10.12and Lender’s reliance thereon are material inducements to            the agreement of Lender to enter into this Agreement and to consummate the transactions contemplated hereby.

10.13    Waiver of Certain Defenses. To the fullest extent permitted by applicable law, upon the occurrence of any Event of Default, neither any Borrower nor anyone claiming by or under Borrower will claim or seek to take advantage of any law requiring Lender to attempt to realize upon any Collateral or            collateral of any Guarantor, or any appraisement, evaluation, stay, extension, homestead, redemption, or exemption laws now or hereafter in force to prevent or hinder the enforcement of this Agreement. Each Borrower, for itself and all who may at any time claim through or under any Borrower, hereby expressly waives to the fullest extent permitted by applicable law the benefit of all such laws. All rights of Lender and all obligations of Borrower hereunder shall be absolute and            unconditional irrespective of (a) any change in the time, manner, or place of payment of, or any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from any provision of the Loan Documents, (b) any exchange, release, or non-perfection of any other collateral given as security for the Obligations, or any release or amendment or waiver of or consent to departure from any guaranty for all or any of the Obligations, or (c)            any other circumstance which might otherwise constitute a defense available to, or a discharge of, Borrower or any third party, other than payment and performance in full of the Obligations.

10.14    Additional Provisions. Time is of the essence of this Agreement and the other Loan Documents. No provision of this Agreement or any of the other Loan Documents shall be construed against or interpreted to the disadvantage of any party hereto by any Governmental Entity by reason of such party having or            being deemed to have structured, drafted or dictated such provision.

10.15    Integration; Final Agreement. This Agreement and the other Loan Documents, together with all other instruments, agreements, and certificates executed by the parties in connection therewith or with reference thereto, embody the entire understanding and agreement between the parties hereto and thereto            with respect to the subject matter hereof and thereof and supersede all prior agreements, understandings and inducements, whether express or implied, oral or written. There are no unwritten oral agreements between the parties.

10.16    LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES. EACH OF THE PARTIES HERETO, INCLUDING LENDER BY ACCEPTANCE HEREOF, AGREES THAT IN ANY JUDICIAL, MEDIATION, OR ARBITRATION PROCEEDING OR ANY CLAIM OR CONTROVERSY BETWEEN OR AMONG THEM (A            “DISPUTE”) THAT MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS, OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN OR AMONG THEM OR THE OBLIGATIONS EVIDENCED HEREBY OR RELATED HERETO, IN NO EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE LIABLE TO THE OTHER FOR, (a) INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES OR (b) PUNITIVE OR EXEMPLARY DAMAGES. EACH OF THE PARTIES HEREBY EXPRESSLY WAIVES ANY            RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH ANY DISPUTE, REGARDLESS OF WHETHER THE DISPUTE IS RESOLVED BY ARBITRATION, MEDIATION, JUDICIALLY, OR OTHERWISE.

10.17    WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF BORROWER BY EXECUTION HEREOF AND LENDER BY ACCEPTANCE HEREOF, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT EACH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN            CONNECTION

 

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WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO ENTER INTO AND ACCEPT THIS AGREEMENT. EACH OF THE PARTIES AGREES THAT THE TERMS HEREOF SHALL SUPERSEDE            AND REPLACE ANY PRIOR AGREEMENT RELATED TO ARBITRATION OF DISPUTES BETWEEN THE PARTIES CONTAINED IN ANY LOAN DOCUMENT OR ANY OTHER DOCUMENT OR AGREEMENT HERETOFORE EXECUTED IN CONNECTION WITH, RELATED TO OR BEING REPLACED, SUPPLEMENTED, EXTENDED OR MODIFIED BY, THIS AGREEMENT.

|   | 10.18 | Submission to Jurisdiction; Venue. |
|--------|-------|------------------------------------|

(a)        Any legal action or proceeding with respect to this Agreement or any other Loan Document shall be brought in the courts of the State of Georgia in Cobb County or the State of Alabama in Jefferson County or of the United States for the Northern District of Georgia or the Northern District of Alabama, and, by execution and delivery            of this Agreement, each Borrower irrevocably accepts for itself and in respect of its property, generally and unconditionally, the nonexclusive jurisdiction of such courts, and agrees to be bound by the other provisions set forth in thisSection 10.18. Each Borrower further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by            registered or certified mail, postage prepaid, to it at the address set out for notices pursuant toSection 10.4, such service to become effective three days after such mailing. Nothing herein shall affect the right of Lender to serve process in any other manner permitted by law or to commence legal proceedings or to otherwise proceed against each Borrower or any other Credit Party in any other jurisdiction.

(b)        Each Borrower hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Agreement or any other Loan Document brought in the courts referred to in subsection (a) above and hereby further irrevocably            waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

10.19    Credit Inquiries. Each Borrower hereby authorizes and permits Lender, at its discretion and without any obligation to do so, to respond to credit inquiries from third parties concerning any Borrower or any of its Subsidiaries.

10.20    Information. Nothing in this Agreement shall prevent Lender from disclosing confidential information provided by any Credit Party from time to time (a) to any of Lender’s Affiliates, or any of Lender’s or any of its Affiliates’ officers, directors, employees, agents, or advisors, (b)            to any other Person if reasonably incidental to the administration of the agreements made herein, (c) as required by any law, rule, or regulation, (d) upon the order, request or demand of any Governmental Entity;provided,however, that, to the extent permitted by law, Lender shall provide prior written notice to the affected Credit Party of any such request or demand, (e) that is            or becomes available to the public or that is or becomes available to Lender other than as a result of a disclosure by Lender prohibited by this Agreement, (f) in connection with any litigation to which Lender or any of its Affiliates may be a party, whether to defend itself, reduce its liability, protect or exercise any of its claims, rights, remedies or interests under or in connection with the Loan Documents or any Hedge Agreements, or otherwise, (g) to the extent necessary in            connection with the exercise of any remedy under this Agreement or any other Loan Document, and (h) to any actual or proposed participant or assignee; such information to consist of deal terms and other information customarily found in such publications. Each Credit Party and each Guarantor hereby authorizes Lender to use the name, logos and other insignia and the amount of the credit facility provided hereunder in any “tombstone” or comparable advertising, on its            website or in other of Lender’s marketing materials.

10.21    No Tax Advice. Each Credit Party hereby acknowledges and agrees that, with respect to all tax and accounting matters relating to this Agreement, the other Loan Documents, or the transactions contemplated herein and therein, it has not relied on any representations made, consultation provided by, or            advice given or rendered by Lender or Lender’s representatives, agents, or employees, and, instead, such Credit Party has sought, and relied upon, the advice of its own tax and accounting professionals with respect to all such matters.

 

|   | 36 |
|--------|----|

 

 

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[Signatures on following pages]

 

|   | 37 |
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**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be duly executed under seal as of the day and year first above written.

 
|   | “BORROWERS”                                                                                                                                                                                                                                                             |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                |
|   | **AUTOINFO, INC.**                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                |
|   | By: /s/ William I.Wunderlich                                                          |
|        |                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                |
|   | Name:  William I. Wunderlich                                                     |
|        |                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                |
|   | Title:   Chief Financial Officer                                       |
|   |                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                |
|   | **SUNTECK TRANSPORT CO., INC.**                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                |
|        |                                                                                                                                                                                                                                                                                     |
|   | By: /s/ William I. Wunderlich                                                                        |
|   |                                                                                                                                                                                                                                                                                |
|        |                                                                                                                                                                                                                                                                                     |
|   | Name:    William I. Wunderlich                                                             |
|   |                                                                                                                                                                                                                                                                                |
|        |                                                                                                                                                                                                                                                                                     |
|   | Title:     Chief Financial Officer                                                         |
|   |                                                                                                                                                                                                                                                                                |
|        |                                                                                                                                                                                                                                                                                     |
|   | **ELEETS LOGISTICS, INC.**                                                                                                                                                                                                                                                          |
|        |                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                |
|   | By: /s/ William I. Wunderlich                                                                                  |
|   |                                                                                                                                                                                                                                                                                |
|        |                                                                                                                                                                                                                                                                                     |
|   | Name:    William I. Wunderlich                                                                  |
|   |                                                                                                                                                                                                                                                                                |
|        |                                                                                                                                                                                                                                                                                     |
|   | Title:     Chief Financial Officer                                                              |
|        |                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                |
|   | **SUNTECK TRANSPORT CARRIERS, INC.**                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                |
|   | By: /s/ William I. Wunderlich                                                                             |
|   |                                                                                                                                                                                                                                                                                |
|   | Name:    William I. Wunderlich                                                                  |
|   |                                                                                                                                                                                                                                                                                |
|   | Title:     Chief Financial Officer                                                              |
|        |                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                |
|   | **SUNTECK GOVERMENT LOGISTICS, INC.**                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                |
|   | By: /s/ William I. Wunderlich                                                                                       |
|   |                                                                                                                                                                                                                                                                                |
|        |                                                                                                                                                                                                                                                                                     |
|   | Name:    William I. Wunderlich                                                                            |
|        |                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                |
|   | Title:     Chief Financial Officer                                                                        |

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|        |                                                                                                                                                                                                                                                                                                        |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                                                                                                                                                                                        |
|   | **SUNTECK TRANSPORT**               [SEAL]**GROUP, INC.**                                                                                                                                                                   |
|        |                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                   |
|   | By: /s/ William I. Wunderlich                                                                                                |
|   |                                                                                                                                                                                                                                                                                                   |
|   | Name:    William I. Wunderlich                                                                                     |
|   |                                                                                                                                                                                                                                                                                                   |
|   | Title:     Chief Financial Officer                                                                            |
|   |                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                   |
|   | **RAILPORT SERVICES, INC.**              [SEAL]                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                   |
|   | By: /s/ William I. Wunderlich                                                                                                |
|   |                                                                                                                                                                                                                                                                                                   |
|   | Name:    William I. Wunderlich                                                                                     |
|   |                                                                                                                                                                                                                                                                                                   |
|   | Title:     Chief Financial Officer                                                                                 |
|   |                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                   |
|   | **AMERICAN SHIPPERS DISPATCH,**         **INC.**                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                   |
|   | By: /s/ William I. Wunderlich                                                                                                |
|   |                                                                                                                                                                                                                                                                                                   |
|   | Name:    William I. Wunderlich                                                                                     |
|   |                                                                                                                                                                                                                                                                                                   |
|   | Title:     Chief Financial Officer                                                                            |
|   |                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                   |
|   | Accepted in Atlanta, Georgia                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                   |
|   | “LENDER”                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                   |
|   | **REGIONS BANK**                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                   |
|   | By:  /s/ David L. Coody                                                    |
|   |                                                                                                                                                                                                                                                                                                   |
|   | Name:   David L.Coody                                            |
|   |                                                                                                                                                                                                                                                                                                   |
|   | Title:      Senior Vice President                                                                             |
|   |                                                                                                                                                                                                                                                                                                   |

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