**Exhibit 10.13**

**AMENDED ANDRESTATED LOAN AND SECURITY AGREEMENTOPTIO SOFTWARE, INC.**

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**TABLE OF CONTENTS**

|        | ** **                     | ** **                                                        | **Page** |
|--------|--------------------------------|-------------------------------------------------------------------|----------|
| 1      | ACCOUNTING AND OTHER TERMS     |                                                              | 5        |
| 2      | LOAN AND TERMS OF PAYMENT      |                                                              | 5        |
|   | 2.1                            | Promise to Pay                                                    |     | 5 |
|   | 2.2                            | Overadvances                                                      |     | 6 |
|   | 2.3                            | Interest Rate, Payments                                           |     | 6 |
|   | 2.4                            | Fees                                                              |     | 6 |
| 3      | CONDITIONS OF LOANS            |                                                              | 7        |
|   | 3.1                            | Conditions Precedent to Initial Credit Extension                  |     | 7 |
|   | 3.2                            | Conditions Precedent to all Credit Extensions                     |     | 7 |
| 4      | CREATION OF SECURITY INTEREST  |                                                              | 7        |
|   | 4.1                            | Grant of Security Interest                                        |     | 7 |
| 5      | REPRESENTATIONS AND WARRANTIES |                                                              | 7        |
|   | 5.1                            | Due Organization and Authorization                                |     | 7 |
|   | 5.2                            | Collateral                                                        |     | 8 |
|   | 5.3                            | Litigation                                                        |     | 8 |
|   | 5.4                            | No Material Adverse Change in Financial Statements                |     | 8 |
|   | 5.5                            | Solvency                                                          |     | 8 |
|   | 5.6                            | Regulatory Compliance                                             |     | 8 |
|   | 5.7                            | Subsidiaries                                                      |     | 9 |
|   | 5.8                            | Deposit Accounts.                                                 |     | 9 |
|   | 5.9                            | Tax Returns and Payments; Pension Contributions.                  |     | 9 |
|   | 5.10                           | Use of Proceeds                                                   |     | 9 |
|   | 5.11                           | Full Disclosure                                                   |     | 9 |
| 6      | AFFIRMATIVE COVENANTS          |                                                              | 10       |
|   | 6.1                            | Government Compliance                                             |     | 10 |
|   | 6.2                            | Financial Statements, Reports, Certificates                       |     | 10 |
|   | 6.3                            | Inventory; Returns                                                |     | 10 |
|   | 6.4                            | Taxes                                                             |     | 10 |
|   | 6.5                            | Insurance                                                         |     | 11 |
|   | 6.6                            | Primary Accounts                                                  |     | 11 |
|   | 6.7                            | Financial Covenants                                               |     | 11 |
|   | 6.8                            | Litigation Cooperation                                            |     | 11 |
|   | 6.9                            | Further Assurances                                                |     | 12 |
| 7      | NEGATIVE COVENANTS             |                                                              | 12       |
|   | 7.1                            | Dispositions                                                      |     | 12 |
|   | 7.2                            | Changes in Business, Ownership, Management or  Business Locations |     | 12 |
|   | 7.3                            | Mergers or Acquisitions                                           |     | 12 |
|   | 7.4                            | Indebtedness                                                      |     | 12 |

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|        | 7.5                                         | Encumbrance                              |   | 12 |
|--------|---------------------------------------------|------------------------------------------|--------|----|
|   | 7.6                                         | Distributions; Investments               |   | 12 |
|   | 7.7                                         | Transactions with Affiliates             |   | 13 |
|   | 7.8                                         | Subordinated Debt                        |   | 13 |
|   | 7.9                                         | Compliance                               |   | 13 |
| 8      | EVENTS OF DEFAULT                           |                                     | 13     |
|   | 8.1                                         | Payment Default                          |   | 13 |
|   | 8.2                                         | Covenant Default                         |   | 13 |
|   | 8.3                                         | Material Adverse Change                  |   | 13 |
|   | 8.4                                         | Attachment                               |   | 13 |
|   | 8.5                                         | Insolvency                               |   | 14 |
|   | 8.6                                         | Other Agreements                         |   | 14 |
|   | 8.7                                         | Judgments                                |   | 14 |
|   | 8.8                                         | Misrepresentations                       |   | 14 |
|   | 8.9                                         | Guaranty                                 |   | 14 |
| 9      | BANK’S RIGHTS AND REMEDIES             |                                     | 14     |
|   | 9.1                                         | Rights and Remedies                      |   | 14 |
|   | 9.2                                         | Power of Attorney                        |   | 15 |
|   | 9.3                                         | Accounts Collection                      |   | 15 |
|   | 9.4                                         | Bank Expenses                            |   | 15 |
|   | 9.5                                         | Application of Payments and Proceeds     |   | 15 |
|   | 9.6                                         | Bank’s Liability for Collateral     |   | 16 |
|   | 9.7                                         | Remedies Cumulative                      |   | 16 |
|   | 9.8                                         | Demand Waiver                            |   | 16 |
| 10     | NOTICES                                     |                                     | 16     |
| 11     | CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER |                                     | 17     |
| 12     | GENERAL PROVISIONS                          |                                     | 17     |
|   | 12.1                                        | Successors and Assigns                   |   | 17 |
|   | 12.2                                        | Indemnification                          |   | 17 |
|   | 12.3                                        | Time of Essence                          |   | 17 |
|   | 12.4                                        | Severability of Provision                |   | 17 |
|   | 12.5                                        | Amendments in Writing, Integration       |   | 17 |
|   | 12.6                                        | Counterparts                             |   | 17 |
|   | 12.7                                        | Survival                                 |   | 18 |
|   | 12.8                                        | Confidentiality                          |   | 18 |
|   | 12.9                                        | Attorneys’ Fees, Costs and Expenses |   | 18 |
| 13     | DEFINITIONS                                 |                                     | 18     |
|   | 13.1                                        | Definitions                              |   | 18 |

 

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**This AMENDED AND RESTATEDLOAN AND SECURITY AGREEMENT** dated as of April 20,2007, between SILICON VALLEY BANK (“Bank”), a California corporation whoseaddress is 3353 Peachtree Rd., Suite M-10, Atlanta, GA  30326 and OPTIO SOFTWARE, INC. (“Borrower”),a Georgia corporation whose address is 3015 Windward Plaza, Fairways II,Alpharetta, GA  30005, provides the termson which Bank will lend to Borrower and Borrower will repay Bank. This LoanAgreement amends and restates that certain Loan and Security Agreement betweenthe parties, dated April 25, 2002 in its entirety. The parties agree asfollows:

**1****                                                        ACCOUNTINGAND OTHER TERMS**

Accounting terms notdefined in this Agreement will be construed following GAAP. Calculations anddeterminations must be made following GAAP. The term “financial statements”includes the notes and schedules. The terms “including” and “includes” alwaysmean “including (or includes) without limitation,” in this or any LoanDocument. Capitalized terms not otherwise defined in this Agreement shall havethe meanings set forth in Section 13. All other terms contained in thisAgreement, unless otherwise indicated, shall have the meaning provided by theCode to the extent such terms are defined therein.

**2****                                                        LOANAND TERMS OF PAYMENT**

**2.1**                                              Promiseto Pay.

Borrower herebyunconditionally promises to pay Bank the outstanding principal amount of allCredit Extensions and accrued and unpaid interest thereon as and when due inaccordance with this Agreement.

**2.1.1**                                    RevolvingAdvances.

(a)   Bank will make Advances not exceeding (i) the lesser of (A) theCommitted Revolving Line or (B) the Borrowing Base minus (ii) anyamounts used for Cash Management Services. Amounts borrowed under this Section maybe repaid and reborrowed during the term of this Agreement.

(b)   To obtain an Advance, Borrower must notify Bank by facsimile ortelephone by 3:00 p.m. Eastern time on the Business Day the Advance is tobe made. Borrower must promptly confirm the notification by delivering to Bankthe Payment/Advance Form attached as Exhibit B (the “Payment/AdvanceForm”). Bank will credit Advances to Borrower’s deposit account. Bank may makeAdvances under this Agreement based on instructions from a Responsible Officeror his or her designee or without instructions if the Advances are necessary tomeet Obligations which have become due. For purposes of this Section 2.1.1(b),Bank may rely on any telephone notice given by a person whom Bank reasonablybelieves is a Responsible Officer or designee. Borrower will indemnify Bank forany loss Bank suffers due to such reliance.

(c)   The Committed Revolving Line terminates on the Revolving MaturityDate, when all Advances are immediately payable.

(d)   Bank’s obligation to lend the undisbursed portion of theObligations will terminate if, in Bank’s sole but reasonable discretion, therehas been a material adverse change in the general affairs, management, resultsof operation, condition (financial or otherwise) or the prospect of repaymentof the Obligations, or there has been any material adverse deviation byBorrower from the most recent business plan of Borrower presented to andaccepted by Bank prior to the execution of this Agreement.

**2.1.2**                                    CashManagement Services Sublimit.

Borrower may use up toFifty Thousand Dollars ($50,000) of the Revolving Line for Bank’s cashmanagement services which may include merchant services, direct deposit ofpayroll, business credit card, and check cashing services identified in Bank’svarious cash management services agreements (collectively, the “Cash ManagementServices”). Any amounts used by Borrower for Cash Management Services will betreated as Advances under the Revolving Line, will accrue interest at theinterest rate applicable to Advances, and will reduce the amount otherwiseavailable for Credit Extensions thereunder.

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**2.2**                                              Overadvances.

If Borrower’s Obligationsunder Section 2.1.1 and 2.1.2 exceed the lesser of either (i)  theCommitted Revolving Line or (ii) the Borrowing Base, Borrower shallimmediately, upondetermining that there is an overage, but no later than upon delivery of theBorrowing Base Certificate in accordance with Section 6.2(b), payBank the excess.

**2.3**                                              InterestRate, Payments.

(a)   Interest Rate. So long as Borrower’s Quick Ratio exceeds2.00:1.00, Advances shall accrue interest on the outstanding principal balanceat a floating per annum rate equal to the Prime Rate. From and after any monthwhere Borrower’s Quick Ratio is less than 2.00:1.00 and continuing until suchtime as Borrower’s Quick Ratio exceeds 2.00:1.00, Advances shall accrueinterest on the outstanding principal balance at a floating per annum rateequal of 0.75 percentage points above the Prime Rate. After an Event ofDefault, Obligations accrue interest at 5 percent above the rate effectiveimmediately before the Event of Default. The interest rate increases ordecreases when the Prime Rate changes. Interest is computed on a 360 day yearfor the actual number of days elapsed.

(b)   Payments. Interest due on the Committed Revolving Line is payableon the first Business Day of each month. Bank may debit any of Borrower’sdeposit accounts including Account Number 3300293105 for principal and interest payments owing or anyamounts Borrower owes Bank. Bank will promptly notify Borrower when it debitsBorrower’s accounts. These debits are not a set-off. Payments received after2:00 p.m. Eastern time are considered received at the opening of businesson the next Business Day. When a payment is due on a day that is not a BusinessDay, the payment is due the next Business Day and additional interest accrues.

(c)   Agreements Regarding Interest and Other Charges.  Borrower and the Bank agree that the onlycharges imposed or to be imposed by Bank upon Borrower for the use of money inconnection with the Obligations is and will be the interest required to be paidunder the provisions of this Agreement as well as the related provisions of theLoan Documents. The amount of interest due and payable under this Agreement orthe Loan Documents will not exceed the maximum rate of interest allowed byapplicable law and, if any payment is made by Borrower or received by Bank inexcess of such payment, such sum shall be credited as a payment of principal. Itis the express intent that Borrower not pay and the Bank not receive, directlyor indirectly or in any manner, interest in excess of that which may belawfully paid under applicable law. All interest and other charges, fees orother amounts deemed to be interest which are paid or agreed to be paid to Bankunder this Agreement or the Loan Documents shall, to the maximum extentpermitted by applicable law, be amortized, allocated and spread on a *pro-rata* basis throughout the entire actual term of theObligations. Any and all fees payable under this Agreement are not intended,and will not be deemed to be interest or a charge for use of money, but ratherwill constitute an “other charge” within the meaning of O.C.G.A. §7-4-2(a)(1).

**2.4**                                              Fees.

Borrowerwill pay:

(a)   Facility Fee. A fully earned, non-refundable facility fee of$15,000 for the Committed Revolving Line; and

(b)   Bank Expenses. All Bank Expenses (including reasonable attorneys’fees and reasonable expenses) incurred through and after the date of thisAgreement, are payable when due.

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**3****                                                        CONDITIONSOF LOANS**

**3.1**                                              ConditionsPrecedent to Initial Credit Extension.

Bank’s obligation to makethe initial Credit Extension is subject to the condition precedent that itreceive the agreements, documents and fees required hereunder, as well asverification of its first priority interest in the Collateral.

**3.2**                                              ConditionsPrecedent to all Credit Extensions.

Bank’sobligations to make each Credit Extension, including the initial CreditExtension, is subject to the following:

(a)   timely receipt of any Payment/Advance Form;

(b)   the representations and warranties in Section 5, to theknowledge of Borrower, must be materially true on the date of thePayment/Advance Form and on the effective date of each Credit Extensionand no Event of Default may have occurred and be continuing, or result from theCredit Extension. Each Credit Extension is Borrower’s representation andwarranty on that date that the representations and warranties of Section 5remain true; and

(c)   in Bank’s sole discretion, there has not been a Material AdverseChange.

**4****                                                        CREATIONOF SECURITY INTEREST**

**4.1**                                              Grantof Security Interest.

Borrower grants Bank acontinuing security interest in all presently existing and later acquiredCollateral to secure all Obligations and performance of each of Borrower’sduties under the Loan Documents. Except for Permitted Liens, any securityinterest will be a first priority security interest in the Collateral. Bank mayplace a “hold” on any deposit account pledged as Collateral; provided, however,that such “hold” shall be limited to the outstanding amount of Obligations, andany balances in such deposit accounts in excess of such Obligations shall notbe held by Bank and shall be available for Borrower’s use. If this Agreement isterminated, Bank’s lien and security interest in the Collateral will continueuntil Borrower fully satisfies its Obligations.

**5****                                                        REPRESENTATIONSAND WARRANTIES**

Borrowerrepresents and warrants as follows:

**5.1**                                              DueOrganization and Authorization.

Borrower and eachSubsidiary is duly existing and in good standing in its state of formation andqualified and licensed to do business in, and in good standing in, any state inwhich the conduct of its business or its ownership of property requires that itbe qualified, except where the failure to do so could not reasonably beexpected to cause a Material Adverse Change. In connection with this Agreement,Borrower has delivered to Bank a completed certificate signed by Borrower,entitled “Perfection Certificate”. Borrower represents and warrants to Bankthat (a) Borrower’s exact legal name is that indicated on the PerfectionCertificate and on the signature page hereof; (b) Borrower is anorganization of the type and is organized in the jurisdiction set forth in thePerfection Certificate; (c) the Perfection Certificate accurately setsforth Borrower’s organizational identification number or accurately states thatBorrower has none; (d) the Perfection Certificate accurately sets forthBorrower’s place of business, or, if more than one, its chief executive officeas well as Borrower’s mailing address (if different than its chief executiveoffice); (e) Borrower (and each of its predecessors) has not, in the pastfive (5) years, changed its jurisdiction of formation, organizationalstructure or type, or any organizational number assigned by its jurisdiction;and (f) all other information set forth on the Perfection Certificatepertaining to Borrower and each of its Subsidiaries is accurate and complete (it being understood and agreed that Borrowermay 

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from time to time update certain information in thePerfection Certificate after the Effective Date to the extent permitted by oneor more specific provisions in this Agreement).

The execution, deliveryand performance of the Loan Documents have been duly authorized, and do notconflict with Borrower’s formation documents, nor constitute an event ofdefault under any material agreement by which Borrower is bound, except wheresuch default could not reasonably be expected to cause a Material AdverseChange. Borrower is not in default under any agreement to which or by which itis bound in which the default could reasonably be expected to cause a MaterialAdverse Change.

**5.2**                                              Collateral.

Borrower has good title tothe Collateral, free of Liens except Permitted Liens. The Accounts are bonafide, existing obligations, and the service or property has been performed ordelivered to the account debtor or its agent for immediate shipment to andunconditional acceptance by the account debtor. To the knowledge of Borrower’sResponsible Officers, Borrower has no notice of any actual or imminentInsolvency Proceeding of any account debtor whose accounts are an EligibleAccount in any Borrowing Base Certificate. All material Inventory is in allmaterial respects of good and marketable quality, free from material defects.

The Collateral is not inthe possession of any third party bailee (such as a warehouse) except asotherwise provided in the Perfection Certificate. None of the components of theCollateral shall be maintained at locations other than as provided in thePerfection Certificate or as Borrower has given Bank notice pursuant to Section 7.2.In the event that Borrower, after the date hereof, intends to store orotherwise deliver any portion of the Collateral to a bailee, then Borrower willfirst receive the written consent of Bank and such bailee must execute anddeliver a bailee agreement in form and substance satisfactory to Bank in itssole discretion.

**5.3**                                              Litigation.

There are no actions orproceedings pending or, to the knowledge of Borrower’s Responsible Officers,threatened by or against Borrower or any Subsidiary in which a likely adversedecision could reasonably be expected to cause a Material Adverse Change.

**5.4**                                              NoMaterial Adverse Change in Financial Statements.

All consolidated financialstatements for Borrower, and any Subsidiary, delivered to Bank fairly presentin all material respects as of the dates of such financial statements, Borrower’sconsolidated financial condition and Borrower’s consolidated results ofoperations. There has not been any material deterioration in Borrower’sconsolidated financial condition since the date of the most recent financialstatements submitted to Bank.

**5.5**                                              Solvency.

The fair salable value ofBorrower’s assets (including goodwill minus disposition costs) exceeds the fairvalue of its liabilities; the Borrower is not left with unreasonably smallcapital after the transactions in this Agreement; and Borrower is able to payits debts (including trade debts) as they mature.

**5.6**                                              RegulatoryCompliance.

Borrower is not an “investmentcompany” or a company “controlled” by an “investment company” under theInvestment Company Act. Borrower is not engaged as one of its importantactivities in extending credit for margin stock (under Regulations T and Uof the Federal Reserve Board of Governors). Borrower has complied in allmaterial respects with the Federal Fair Labor Standards Act. Borrower has notviolated any laws, ordinances or rules, the violation of which could reasonablybe expected to cause a Material Adverse Change. None of Borrower’s or anySubsidiary’s properties or assets has been used by Borrower or any Subsidiaryor, to the best of Borrower’s knowledge, by previous Persons, in disposing, 

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producing,storing, treating, or transporting any hazardous substance other than legally. Borrowerand each Subsidiary has timely filed all required tax returns and paid, or madeadequate provision to pay, all material taxes, except those being contested ingood faith with adequate reserves under GAAP. Borrower and each Subsidiary hasobtained all consents, approvals and authorizations of, made all declarationsor filings with, and given all notices to, all government authorities that arenecessary to continue its business as currently conducted, except where thefailure to do so could not reasonably be expected to cause a Material AdverseChange.

**5.7**                                              Subsidiaries.

Borrower does not own anystock, partnership interest or other equity securities except for PermittedInvestments.

**5.8**                                              DepositAccounts.

Borrower will maintain allof its deposit accounts, operating accounts, and excess investment balances ator through Bank. Borrower shall have the right to maintain a deposit accountwith financial institutions other than Bank for the purpose of making smallincidental deposits with any such financial institutions, so long as suchfinancial institutions enter into Bank’s standard form of Deposit AccountControl Agreement, as required for Bank to perfect its security interest inthose accounts.

**5.9**                                              TaxReturns and Payments; Pension Contributions.

Borrower has timely filedall required tax returns and reports, and Borrower has timely paid all foreign,federal, state and local taxes, assessments, deposits and contributions owed byBorrower; other than certain delinquent states sales and income taxes for whichBorrower has maintained adequate reserves and which Borrower is in the processof remedying. Borrower may defer payment of any contested taxes, provided thatBorrower (a) in good faith contests its obligation to pay the taxes byappropriate proceedings promptly and diligently instituted and conducted, (b) notifiesBank in writing of the commencement of, and any material development in, theproceedings, (c) posts bonds or takes any other steps required to preventthe governmental authority levying such contested taxes from obtaining a Lienupon any of the Collateral that is other than a “Permitted Lien”. Borrower isunaware of any claims or adjustments proposed for any of Borrower’s prior taxyears which could result in additional taxes becoming due and payable by Borrower.Borrower has paid all amounts necessary to fund all present pension, profitsharing and deferred compensation plans in accordance with their terms, andBorrower has not withdrawn from participation in, and has not permitted partialor complete termination of, or permitted the occurrence of any other event withrespect to, any such plan which could reasonably be expected to result in anyliability of Borrower, including any liability to the Pension Benefit GuarantyCorporation or its successors or any other governmental agency.

**5.10**                                       Useof Proceeds.

Borrower shall use theproceeds of the Credit Extensions solely as working capital, and to fund itsgeneral business requirements and not for personal, family, household oragricultural purposes.

**5.11**                                       FullDisclosure.

No written representation, warranty or other statementof Borrower in any certificate or written statement given to Bank (takentogether with all such written certificates and written statements to Bank)contains any untrue statement of a material fact or omits to state a materialfact necessary to make the statements contained in the certificates orstatements not misleading. It being recognized by Bank that the projections and forecasts provided by Borrower in goodfaith and based upon reasonable assumptions are not viewed as facts and thatactual results during the period or periods covered by such projections andforecasts may differ from the projected and forecasted results.

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**6**                                                        AFFIRMATIVECOVENANTS

Borrowerwill do all of the following for so long as Bank has an obligation to lend, orthere are outstanding Obligations:

**6.1**                                              GovernmentCompliance.

Borrower will maintain itsand all Subsidiaries’ legal existence and good standing in its jurisdiction offormation and maintain qualification in each jurisdiction in which the failureto so qualify would reasonably be expected to cause a material adverse effecton Borrower’s business or operations. Borrower will comply, and have each Subsidiarycomply, with all laws, ordinances and regulations to which it is subject,noncompliance with which could reasonably be expected to have a materialadverse effect on Borrower’s business or operations or would reasonably beexpected to cause a Material Adverse Change.

**6.2**                                              FinancialStatements, Reports, Certificates.

(a)   Borrowerwill deliver to Bank:  (i) As soonas available, but no later than 30 days after the last day of each month, acompany prepared consolidated balance sheet and income statement coveringBorrower’s consolidated operations during the period certified by a ResponsibleOfficer and in a form reasonably acceptable to Bank and a ComplianceCertificate signed by a Responsible Officer in the form of **Exhibit D**; (ii) as soon asavailable, but no later than 45 days after the last day of each of Borrower’sfiscal quarters, Borrower’s 10-Q for that quarter and, (iii) as soonas available, but no later than 90 days after the last day of Borrower’s fiscalyear, audited consolidated financial statements prepared under GAAP,consistently applied, together with an unqualified opinion on the financialstatements from an independent certified public accounting firm reasonablyacceptable to Bank, including any nationally recognized accounting firm, whichfirms are hereby deemed reasonably acceptable to Bank, along with Borrower’s 10-Kfor that year; (iv) a prompt report of any legal actions pending orthreatened against Borrower or any Subsidiary that could reasonably be expectedto result in damages or costs to Borrower or any Subsidiary of $100,000 ormore; (v) budgets, sales projections, operating plans or other financialinformation Bank reasonably requests; and (vi) prompt notice of anymaterial change in the composition of the Intellectual Property or knowledge ofan event that materially adversely affects the value of the IntellectualProperty.

(b)   Within 30days after the last day of each month, Borrower will deliver to Bank aBorrowing Base Certificate signed by a Responsible Officer in the form of **Exhibit C**, with aged listings ofaccounts receivable.

(c)   All reportson Form 10-K and 10-Q and all financial statements deliveredto Bank pursuant to Section 6.2(a) above shall be accompanied by aCompliance Certificate.

(d)   Allow Bank, with 5 Business Days’ prior notice (unless an Event ofDefault has occurred and is continuing, in which case Bank shall not berequired to give any prior notice), to audit that portion of Borrower’sCollateral related to Accounts at Borrower’s expense. Such audits will beconducted no more often than once per year, unless an Event of Default hasoccurred and is continuing.

**6.3**                                              Inventory;Returns.

Borrower will keep allmaterial Inventory in good and marketable condition, free from material defects.Returns and allowances between Borrower and its account debtors will followBorrower’s customary practices as they exist at execution of this Agreement. Borrowermust promptly notify Bank of all returns, recoveries, disputes and claims,that  involve more than $50,000.

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**6.4**                                              Taxes.

Borrower will make, andcause each Subsidiary to make, timely payment of all material federal, state,and local taxes or assessments (other than taxes and assessments which Borroweris contesting in good faith, with adequate reserves maintained in accordancewith GAAP) and will deliver to Bank, on demand, appropriate certificatesattesting to the payment.

**6.5**                                              Insurance.

Borrower will keep itsbusiness and the Collateral insured for risks and in amounts standard forBorrower’s industry, and as Bank may reasonably request. Insurance policieswill be in a form, with companies, and in amounts that are satisfactory to Bankin Bank’s reasonable discretion. All property policies will have a lender’sloss payable endorsement showing Bank as an additional loss payee and, otherthan for Errors and Omissions policies, waive subrogation against Bank and allliability policies will show the Bank as an additional insured and provide thatthe insurer must give Bank at least 20 days notice before canceling ordeclining to renew its policy. At Bank’s request, Borrower will delivercertified copies of policies and evidence of all premium payments. Proceedspayable under any policy will, at Bank’s option, be payable to Bank on accountof the Obligations.

**6.6**                                              PrimaryAccounts.

Borrower will maintain itsprimary banking relationship with Bank, which relationship shall includeBorrower maintaining account balances in any accounts at or through Bankrepresenting 100% of all account balances of Borrower at any financialinstitution.

**6.7**                                              FinancialCovenants.

Borrower willmaintain as of the last day of each month:

(i)    **Quick Ratio**. A monthly ratio of Quick Assets to CurrentLiabilities minus Deferred Revenue of at least 2.00 to 1.00.

(ii)   **EBITDA**. EBITDA,as of the last day of each month, of no less than:

| **Asof the last day of:** | ** ** | ** ** | ** **  | **Minimum EBITDA:** | ** ** |
|-----------------------------------------------|------------|------------|-------------|--------------------------|------------|
| March -  April  2007                |       |       | ($2,000,000 | )                        |       |
| May 2007                                 |       |       | ($1,500,000 | )                        |       |
| June -  July 2007                   |       |       | ($1,000,000 | )                        |       |
| August 2007  - January 2008         |       |       | ($250,000   | )                        |       |
| February 2008 and  thereafter            |       |       | ($750,000   | )                        |       |

**6.8**                                              LitigationCooperation.

From the date hereof andcontinuing through the termination of this Agreement, make available to Bank,without expense to Bank, Borrower and its officers, employees and agents andBorrower’s books and records, to the extent that Bank may deem them reasonablynecessary to prosecute or defend any third-party suit or proceeding institutedby or against Bank with respect to any Collateral or relating to Borrower.

**6.9**                                              FurtherAssurances.

Borrower will execute anyfurther instruments and take further action as Bank reasonably requests toperfect or continue Bank’s security interest in the Collateral or to effect thepurposes of this Agreement.

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**7**                                                        NEGATIVECOVENANTS

Borrower will not do anyof the following without Bank’s prior written consent, which will not beunreasonably withheld, for so long as Bank has an obligation to lend or thereare any outstanding Obligations:

**7.1**                                              Dispositions.

Convey, sell, lease,transfer or otherwise dispose of (collectively “Transfer”), or permit any of itsSubsidiaries to Transfer, all or any part of its business or any material realor personal property, including all of Borrower’s Intellectual Property, *except**for* Transfers (i) ofInventory in the ordinary course of business; (ii) of non-exclusive licensesand similar arrangements for the use of the property of Borrower or itsSubsidiaries in the ordinary course of business; (iii) of worn-outor obsolete Equipment; or (iv) Transfers, which, in the aggregate, do notexceed $75,000 in any fiscal year.

**7.2**                                              Changesin Business, Ownership, Management or Business Locations.

Engage in or permit any ofits Subsidiaries to engage in any business other than the businesses currentlyengaged in by Borrower or reasonably related thereto or have a material changein its (i) management or (ii) ownership of greater than 25% (otherthan by the sale of Borrower’s equity securities in a public or privateoffering so long as Borrower identifies any private investors prior to theclosing of the investment, or other than as set forth in Section 7.3,below). Borrower will not, without at least 30 days prior written notice,relocate its chief executive office.

**7.3**                                              Mergersor Acquisitions.

Merge or consolidate, orpermit any of its Subsidiaries to merge or consolidate, with any other Person,or acquire, or permit any of its Subsidiaries to acquire, all or substantiallyall of the capital stock or property of another Person, except where (i) noEvent of Default has occurred and is continuing or would result from suchaction during the term of this Agreement and (ii) such transaction wouldnot result in a decrease of more than 25% of Tangible Net Worth. A Subsidiarymay merge or consolidate into another Subsidiary or into Borrower.

**7.4**                                              Indebtedness.

Create, incur, assume, orbe liable for any Indebtedness, or permit any Subsidiary to do so, other thanPermitted Indebtedness.

**7.5**                                              Encumbrance.

Create, incur, or allowany Lien on any of its property, or assign or convey any right to receiveincome, including the sale of any Accounts, or permit any of its Subsidiariesto do so, except for Permitted Liens, or permit any Collateral not to besubject to the first priority security interest granted here, subject toPermitted Liens.

**7.6**                                              Distributions;Investments.

Except as permittedpursuant to Section 7.3, directly or indirectly acquire or own any Person,or make any Investment in any Person, other than Permitted Investments, orpermit any of its Subsidiaries to do so. Pay any cash dividends or make anydistribution or redeem, retire or purchase any of Borrower’s capital stock.

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**7.7**                                              Transactionswith Affiliates.

Directly or indirectlyenter into or permit to exist any material transaction with any Affiliate ofBorrower except for transactions that are in the ordinary course of Borrower’sbusiness, upon fair and reasonable terms that are no less favorable to Borrowerthan would be obtained in an arm’s length transaction with a non­affiliatedPerson.

**7.8**                                              SubordinatedDebt.

Make or permit any paymenton any Subordinated Debt, except under the terms of the Subordinated Debt, oramend any provision in any document relating to the Subordinated Debt withoutBank’s prior written consent.

**7.9**                                              Compliance.

Become an “investmentcompany” or a company controlled by an “investment company,” under theInvestment Company Act of 1940 or undertake as one of its important activitiesextending credit to purchase or carry margin stock, or use the proceeds of anyCredit Extension for that purpose; fail to meet the minimum fundingrequirements of ERISA, permit a Reportable Event or Prohibited Transaction, asdefined in ERISA, to occur; fail to comply with the Federal Fair LaborStandards Act or violate any other law or regulation, if the violation couldreasonably be expected to have a material adverse effect on Borrower’s businessor operations or would reasonably be expected to cause a Material AdverseChange, or permit any of its Subsidiaries to do so.

**8**                                                        EVENTSOF DEFAULT

Anyone of the following is an Event of Default:

**8.1**                                              PaymentDefault.

If Borrower fails to payany of the Obligations within 5 days after their due date. During theadditional period the failure to cure the default is not an Event of Default(but no Credit Extension will be made during the cure period);

**8.2**                                              CovenantDefault.

IfBorrower does not perform any obligation in Section 6 or violates anycovenant in Section 7, or if Borrower does not perform or observe anyother material term, condition or covenant in this Agreement, any LoanDocuments, or in any agreement between Borrower and Bank and as to any defaultunder a term, condition or covenant that can be cured, has not cured thedefault within 10 days after it occurs, or if the default cannot be curedwithin10 days or cannot be cured after Borrower’s attempts within 10 dayperiod, and the default may be cured within a reasonable time, then Borrowerhas an additional period (of not more than 30 days) to attempt to cure thedefault. During the additional time, the failure to cure the default is not anEvent of Default (but no Credit Extensions will be made during the cureperiod);

**8.3**                                              MaterialAdverse Change.

Ifthere (i) occurs a material adverse change in the business, operations, orcondition (financial or otherwise) of the Borrower, or (ii) is a materialimpairment of the prospect of repayment of any portion of the Obligations or (iii) isa material impairment of the value or priority of Bank’s security interests inthe Collateral.

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**8.4**                                              Attachment.

If any material portion ofBorrower’s assets is attached, seized, levied on, or comes into possession of atrustee or receiver and the attachment, seizure or levy is not removed in 10days, or if Borrower is enjoined, restrained, or prevented by court order fromconducting a material part of its business or if a judgment or other claimbecomes a Lien on a material portion of Borrower’s assets, or if a notice oflien, levy, or assessment is filed against any of Borrower’s assets by anygovernment agency and not paid within 10 days after Borrower receives notice. Theseare not Events of Default if stayed or if a bond is posted pending contest byBorrower (but no Credit Extensions will be made during the cure period);

**8.5**                                              Insolvency.

If Borrower becomesinsolvent or if Borrower begins an Insolvency Proceeding or an InsolvencyProceeding is begun against Borrower and not dismissed or stayed within 30 days(but no Credit Extensions will be made before any Insolvency Proceeding isdismissed);

**8.6**                                              OtherAgreements.

If there is a default inany agreement between Borrower and a third party that gives the third party theright to accelerate any Indebtedness exceeding $100,000 or that could cause aMaterial Adverse Change;

**8.7**                                              Judgments.

If a money judgment(s) inthe aggregate of at least $100,000 is rendered against Borrower and isunsatisfied and unstayed for 10 days (but no Credit Extensions will be madebefore the judgment is stayed or satisfied);

**8.8**                                              Misrepresentations.

If Borrower or any Personacting for Borrower makes any material misrepresentation or materialmisstatement now or later in any warranty or representation in this Agreementor in any writing delivered to Bank or to induce Bank to enter this Agreementor any Loan Document; or

**8.9**                                              Guaranty.

Any guaranty of anyObligations ceases for any reason to be in full force or any Guarantor does notperform any obligation under any guaranty of the Obligations, or any materialmisrepresentation or material misstatement exists now or later in any warrantyor representation in any guaranty of the Obligations or in any certificatedelivered to Bank in connection with the guaranty, or any circumstancedescribed in Sections 8.4, 8.5 or 8.7 occurs to any Guarantor.

**9**                                                        BANK’SRIGHTS AND REMEDIES

**9.1**                                              Rightsand Remedies.

When an Event ofDefault occurs and continues Bank may, without notice or demand, do any or allof the following during any such period:

(a)    Declareall Obligations immediately due and payable (but if an Event of Defaultdescribed in Section 8.5 occurs all Obligations are immediately due andpayable without any action by Bank);

(b)   Stopadvancing money or extending credit for Borrower’s benefit under this Agreementor under any other agreement between Borrower and Bank;

(c)    Settle oradjust disputes and claims directly with account debtors for amounts, on termsand in any order that Bank considers reasonably advisable;

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(d)   Make anypayments and do any acts it considers necessary or reasonable to protect itssecurity interest in the Collateral. Borrower will assemble the Collateral ifBank requires and make it available as Bank designates. Bank may enter premiseswhere the Collateral is located, take and maintain possession of any part ofthe Collateral, and pay, purchase, contest, or compromise any Lien whichappears to be prior or superior to its security interest and pay all expensesincurred. Borrower grants Bank a license to enter and occupy any of itspremises, without charge, to exercise any of Bank’s rights or remedies;

(e)    Apply tothe Obligations any (i) balances and deposits of Borrower it holds, or (ii) anyamount held by Bank owing to or for the credit or the account of Borrower;

(f)    Ship,reclaim, recover, store, finish, maintain, repair, prepare for sale, advertisefor sale, and sell the Collateral. Bank is granted a non-exclusive,royalty-free license or other right to use, without charge, Borrower’s labels,Patents, Copyrights, Mask Works, rights of use of any name, trade secrets,trade names, Trademarks, service marks, and advertising matter, or any similarproperty as it pertains to the Collateral, in completing production of,advertising for sale, and selling any Collateral and, in connection with Bank’sexercise of its rights under this Section, Borrower’s rights under all licensesand all franchise agreements (to the extent allowable under such licenses andagreements) inure to Bank’s benefit; and

(g)    Dispose of the Collateral according to the Code.

**9.2**                                              Powerof Attorney.

Effective only when anEvent of Default occurs and continues, Borrower irrevocably appoints Bank asits lawful attorney to:  (i) endorseBorrower’s name on any checks or other forms of payment or security; (ii) signBorrower’s name on any invoice or bill of lading for any Account or draftsagainst account debtors, (iii) make, settle, and adjust all claims underBorrower’s insurance policies; (iv) settle and adjust disputes and claimsabout the Accounts directly with account debtors, for amounts and on terms Bankdetermines reasonable; and (v) transfer the Collateral into the name ofBank or a third party as the Code permits. Bank may exercise the power ofattorney to sign Borrower’s name on any documents necessary to perfect orcontinue the perfection of any security interest regardless of whether an Eventof Default has occurred. Bank’s appointment as Borrower’s attorney in fact, andall of Bank’s rights and powers, coupled with an interest, are irrevocableuntil all Obligations have been fully repaid and performed and Bank’sobligation to provide Credit Extensions terminates.

**9.3**                                              AccountsCollection.

When an Event of Defaultoccurs and continues, Bank may notify any Person owing Borrower money of Bank’ssecurity interest in the funds and verify the amount of the Account. Borrowermust collect all payments in trust for Bank and, if requested by Bank,immediately deliver the payments to Bank in the form received from the accountdebtor, with proper endorsements for deposit.

**9.4**                                              BankExpenses.

IfBorrower fails to pay any amount or furnish any required proof of payment tothird persons, Bank may make all or part of the payment or obtain insurancepolicies required in Section 6.5, and take any action under the policiesBank deems prudent. Any amounts paid by Bank are Bank Expenses and immediatelydue and payable, bearing interest at the then applicable rate and secured bythe Collateral. No payments by Bank are deemed an agreement to make similarpayments in the future or Bank’s waiver of any Event of Default.

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**9.5**                                              Applicationof Payments and Proceeds.

Borrower shall have noright to specify the order or the accounts to which Bank shall allocate orapply any payments required to be made by Borrower to Bank or otherwisereceived by Bank under this Agreement when any such allocation or applicationis not specified elsewhere in this Agreement. If an Event of Default hasoccurred and is continuing, Bank may apply any funds in its possession, whetherfrom Borrower account balances, payments, proceeds realized as the result ofany collection of Accounts or other disposition of the Collateral, orotherwise, to the Obligations in such order as Bank shall determine in its solediscretion. Any surplus shall be paid to Borrower or other Persons legallyentitled thereto; Borrower shall remain liable to Bank for any deficiency. IfBank, in its good faith business judgment, directly or indirectly enters into adeferred payment or other credit transaction with any purchaser at any sale ofCollateral, Bank shall have the option, exercisable at any time, of eitherreducing the Obligations by the principal amount of the purchase price ordeferring the reduction of the Obligations until the actual receipt by Bank ofcash therefor.

**9.6**                                              Bank’sLiability for Collateral.

If Bank complies withreasonable banking practices and the Code, it is not liable for: (a) thesafekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) anydiminution in the value of the Collateral; or (d) any act or default ofany carrier, warehouseman, bailee, or other person. Subject to the foregoing,Borrower bears all risk of loss, damage or destruction of the Collateral.

**9.7**                                              RemediesCumulative.

Bank’s rights and remediesunder this Agreement, the Loan Documents, and all other agreements arecumulative. Bank has all rights and remedies provided under the Code, by law,or in equity. Bank’s exercise of one right or remedy is not an election, andBank’s waiver of any Event of Default is not a continuing waiver. Bank’s delayis not a waiver, election, or acquiescence. No waiver is effective unlesssigned by Bank and then is only effective for the specific instance and purposefor which it was given.

**9.8**                                              DemandWaiver.

Borrower waives demand,notice of default or dishonor, notice of payment and nonpayment, notice of anydefault, nonpayment at maturity, release, compromise, settlement, extension, orrenewal of accounts, documents, instruments, chattel paper, and guarantees heldby Bank on which Borrower is liable.

**10**                                  NOTICES

Allnotices or demands by any party about this Agreement or any other relatedagreement must be in writing and be personally delivered or sent by anovernight delivery service, by certified mail, postage prepaid, return receiptrequested, or by telefacsimile to the addresses set forth below:

| If to Borrower: |   | Optio Software, Inc.  |
|-----------------|--------|----------------------------|
|            |   | 3015 Windward  Plaza       |
|            |   | Fairways II                |
|            |   | Alpharetta,  Georgia 30005 |
|            |   | Attention:                 | Caroline Bembry |
|            |   | Fax No.:                   | 770-576-3525 |

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| with Copy to: |   | Lord, Bissell & Brook                  |
|---------------|--------|-------------------------------------------------|
|          |   | The Proscenium,  Suite 1900                |
|          |   | 1170 Peachtree Street,  NE                      |
|          |   | Atlanta, Georgia  30309                    |
|          |   | Attention:   Neil Dicksont, Esq. |
|          |   | Fax No.:      404-870-4617  |
| If to Bank:   |   | Silicon Valley  Bank                            |
|          |   | 3353 Peachtree  Road, Suite M-10           |
|          |   | Atlanta,  Georgia  30326                   |
|          |   | Attention:   Nathan  Ottinger         |
|          |   | Fax No.:      404-467-4467  |

 

A party may change its notice address by giving the otherparty written notice.

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**11**                                                 CHOICEOF LAW , VENUE AND JURY TRIAL WAIVER

Georgia law governs the Loan Documents without regardto principles of conflicts of law. Borrower and Bank each submit to theexclusive jurisdiction of the State and Federal courts in Fulton County,Georgia.

**TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSEOF ACTION ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY CONTEMPLATEDTRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS.THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THISAGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.**

**12**                                                 GENERALPROVISIONS

**12.1**                                       Successorsand Assigns.

ThisAgreement binds and is for the benefit of the successors and permitted assignsof each party. Borrower may not assign this Agreement or any rights orobligations under it without Bank’s prior written consent which may be grantedor withheld in Bank’s discretion. Bank has the right, without the consent of ornotice to Borrower, to sell, transfer, negotiate, or grant participation in allor any part of, or any interest in, Bank’s obligations, rights and benefitsunder this Agreement and the other Loan Documents.

**12.2**                                       Indemnification.

Exceptfor losses caused by Bank’s gross negligence or willful misconduct, Borrowerwill indemnify, defend and hold harmless Bank and its officers, employees, andagents against:  (a) allobligations, demands, claims, and liabilities asserted by any other party inconnection with the transactions contemplated by the Loan Documents; and (b) alllosses or Bank Expenses incurred, or paid by Bank from, following, orconsequential to transactions between Bank and Borrower (including reasonableattorneys fees and expenses).

**12.3**                                       Timeof Essence.

Timeis of the essence for the performance of all obligations in this Agreement.

**12.4**                                       Severabilityof Provision.

Eachprovision of this Agreement is severable from every other provision indetermining the enforceability of any provision.

**12.5**                                       Amendmentsin Writing, Integration.

Allamendments to this Agreement must be in writing and signed by Borrower and Bank.This Agreement represents the entire agreement about this subject matter, andsupersedes prior negotiations or agreements. All prior agreements,understandings, representations, warranties, and negotiations between theparties about the subject matter of this Agreement merge into this Agreementand the Loan Documents.

**12.6**                                       Counterparts.

This Agreement may beexecuted in any number of counterparts and by different parties on separatecounterparts, each of which, when executed and delivered, are an original, andall taken together, constitute one Agreement.

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**12.7**                                       Survival.

Allcovenants, representations and warranties made in this Agreement continue infull force while  any Obligations remainoutstanding. The obligations of Borrower in Section 12.2 to indemnify Bankwill survive until all statutes of limitations for actions that may be broughtagainst Bank have run.

**12.8**                                       Confidentiality.

Inhandling any confidential information, Bank will exercise the same degree ofcare that it exercises for its own proprietary information, but disclosure ofinformation may be made (i) to Bank’s subsidiaries or affiliates inconnection with their business with Borrower, (ii) to prospectivetransferees or purchasers of any interest in the loans (provided, however, Bankshall use commercially reasonable efforts in obtaining such prospectivetransferee or purchasers agreement of the terms of this provision), (iii) asrequired by law, regulation, subpoena, or other order, (iv) as required inconnection with Bank’s examination or audit and (v) as Bank considersappropriate exercising remedies under this Agreement. Confidential informationdoes not include information that either: (a) is in the public domain orin Bank’s possession when disclosed to Bank, or becomes part of the publicdomain after disclosure to Bank; or (b) is disclosed to Bank by a thirdparty, if Bank does not know that the third party is prohibited from disclosingthe information.

**12.9**                                       Attorneys’Fees, Costs and Expenses.

In any action orproceeding between Borrower and Bank arising out of the Loan Documents, theprevailing party will be entitled to recover its reasonable attorneys’ fees andother reasonable costs and expenses incurred, in addition to any other reliefto which it may be entitled.

**13**                                                 DEFINITIONS

**13.1**                                       Definitions.

In this Agreement:

“**Accounts**” areall existing and later arising accounts, contract rights, and other obligationsowed Borrower in connection with its sale or lease of goods (includinglicensing software and other technology) or provision of services,**all credit insurance, guaranties, other security and  all merchandise returned or reclaimed byBorrower and Borrower’s Books relating to any of the foregoing.

“**Advance**” or “**Advances**” is a loan advance (or advances) under theCommitted Revolving Line.

“**Affiliate**” of aPerson is a Person that owns or controls directly or indirectly the Person, anyPerson that controls or is controlled by or is under common control with thePerson, and each of that Person’s senior executive officers, directors,partners and, for any Person that is a limited liability company, that Person’smanagers and members.

“**Bank Expenses**”are all audit fees and expenses and reasonable costs and expenses (includingreasonable attorneys’ fees and expenses) for preparing, negotiating,administering, defending and enforcing the Loan Documents (including appeals orInsolvency Proceedings).

“**Borrower’s Books**”are all Borrower’s books and records including ledgers, records regardingBorrower’s assets or liabilities, the Collateral, business operations orfinancial condition and all computer programs or discs or any equipmentcontaining the information.

“**Borrowing Base**”is 80% of Eligible Accounts as determined by Bank from Borrower’s most recentBorrowing Base Certificate; *provided*, *however*, that, in either instance, Bank may  lower the percentage of the Borrowing Baseafter performing an audit of Borrower’s Collateral that is not satisfactory tothe Bank.

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“**Business Day**”is any day that is not a Saturday, Sunday or a day on which the Bank is closed.

“**Cash Management Services**”is defined in Section 2.1.2.

“**Closing Date**”is the date of this Agreement.

“**Code**” is theGeorgia Uniform Commercial Code, as applicable.

“**Collateral**” isthe property described on **Exhibit A**.

“**Committed Revolving Line**”is an Advance, or Advances, of up to $4,000,000.

“**Contingent Obligation**”is, for any Person, any direct or indirect liability, contingent or not, ofthat Person for (i) any indebtedness, lease, dividend, letter of credit orother obligation of another such as an obligation directly or indirectlyguaranteed, endorsed, co-made, discounted or sold with recourse by thatPerson, or for which that Person is directly or indirectly liable; (ii) anyobligations for undrawn letters of credit for the account of that Person; and (iii) allobligations from any interest rate, currency or commodity swap agreement,interest rate cap or collar agreement, or other agreement or arrangementdesignated to protect a Person against fluctuation in interest rates, currencyexchange rates or commodity prices;  but “ContingentObligation” does not include endorsements in the ordinary course of business. Theamount of a Contingent Obligation is the stated or determined amount of theprimary obligation for which the Contingent Obligation is made or, if notdeterminable, the maximum reasonably anticipated liability for it determined bythe Person in good faith; but the amount may not exceed the maximum of theobligations under the guarantee or other support arrangement.

“**Copyrights**” areall copyright rights, applications or registrations and like protections ineach work or authorship or derivative work, whether published or not (whetheror not it is a trade secret) now or later existing, created, acquired or held.

“**Credit Extension**”is each Advance, or any other extension of credit by Bank for Borrower’sbenefit.

“**Current Assets**”are amounts that under GAAP should be included on that date as current assetson Borrower’s consolidated balance sheet.

“**Current Liabilities**”are the aggregate amount of Borrower’s Total Liabilities which mature withinone (1) year.

“**Deferred Revenue**”is all amounts received in advance of performance under contracts and not yetrecognized as revenue.

“**EBITDA**” isearnings before interest expense, taxes, depreciation and amortization expense,calculated in accordance with GAAP, for the previous three months, on a rollingbasis.

“**Eligible Accounts**” are Accounts in the ordinary course ofBorrower’s business that meet all Borrower’s representations and warranties in Section 5;*but* Bank may change eligibilitystandards by giving Borrower thirty (30) days prior written notice. Unless Bankagrees otherwise in writing, Eligible Accounts will not include:

(a)    Accountsthat the account debtor has not paid within 90 days of invoice date;

(b)   Accountsfor an account debtor, 50% or more of whose Accounts have not been paid within90 days of invoice date;

(c)    Creditbalances over 90 days from invoice date;

(d)   Accountsfor an account debtor, including Affiliates, whose total obligations toBorrower exceed 25% of all Accounts, for the amounts that exceed thatpercentage, unless the Bank approves in writing;

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(e)    Accountsfor which the account debtor does not have its principal place of business inthe United States (other than Eligible Foreign Accounts);

(f)    Accountsowing from an Account Debtor which is a federal, state or local governmententity or any department, agency, or instrumentality thereof; except forAccounts of the United States if Borrower has assigned its payment rights toBank and the assignment has been acknowledged under the Federal Assignment ofClaims Act of 1940, as amended;

(g)    Accountsfor which Borrower owes the account debtor, but only up to the amount owed(sometimes called “contra” accounts, accounts payable, customer deposits orcredit accounts);

(h)   Accountsfor demonstration or promotional equipment, or in which goods are consigned,sales guaranteed, sale or return, sale on approval, bill and hold, or otherterms if account debtor’s payment may be conditional;

(i)    Accountsfor which the account debtor is Borrower’s Affiliate, officer, employee, oragent;

(j)     Accountsin which the account debtor disputes liability or makes any claim and Bankbelieves there may be a basis for dispute (but only up to the disputed orclaimed amount), or if the Account Debtor is subject to an InsolvencyProceeding, or becomes insolvent, or goes out of business;

(k)   Accountsfor which Bank reasonably determines ** **collection****tobe doubtful.

“**Eligible ForeignAccounts**”  are Accounts forwhich the account debtor does not have its principal place of business in theUnited States but are: (i) covered by credit insurance  reasonably satisfactory to Bank, less anydeductible; or (ii) supported by letter(s) of credit reasonablyacceptable to Bank; or (iii) that Bank approves in writing.

“**ERISA**” is theEmployment Retirement Income Security Act of 1974, and its regulations.

“**GAAP**” isgenerally accepted accounting principles.

“**Guarantor**” isany present or future guarantor of the Obligations.

“**Indebtedness**”is (a) indebtedness for borrowed money or the deferred price of propertyor services, such as reimbursement and other obligations for surety bonds andletters of credit, (b) obligations evidenced by notes, bonds, debenturesor similar instruments, (c) capital lease obligations, which in theaggregate, exceed $1,000,000 and (d) Contingent Obligations.

“**Insolvency Proceeding**”are proceedings by or against any Person under the United States BankruptcyCode, or any other bankruptcy or insolvency law, including assignments for thebenefit of creditors, compositions, extensions generally with its creditors, orproceedings seeking reorganization, arrangement, or other relief.

“**Intangible Assets**”****are intangibleitems such as unamortized debt discount and expense, Intellectual Property andresearch and development expenses, not including prepaid expenses.

“**Intellectual Property**” is:

(a)    Copyrights,Trademarks, Patents, and Mask Works including amendments, renewals, extensions,and all licenses or other rights to use and all license fees and royalties fromthe use;

(b)   Any tradesecrets and any intellectual property rights in computer software and computersoftware products now or later existing, created, acquired or held;

(c)    All designrights which may be available to Borrower now or later created, acquired orheld;

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(d)   Any claimsfor damages (past, present or future) for infringement of any of the rightsabove, with the right, but not the obligation, to sue and collect damages foruse or infringement of the intellectual property rights above;

All proceeds and products of the foregoing, includingall insurance, indemnity or warranty payments.

“**Inventory**” ispresent and future inventory in which Borrower has any interest, includingmerchandise, raw materials, parts, supplies, packing and shipping materials,work in process and finished products intended for sale or lease or to befurnished under a contract of service, of every kind and description now orlater owned by or in the custody or possession, actual or constructive, ofBorrower, including inventory temporarily out of its custody or possession orin transit and including returns on any accounts or other proceeds (includinginsurance proceeds) from the sale or disposition of any of the foregoing andany documents of title.

“**Investment**” isany beneficial ownership of (including stock, partnership interest or othersecurities) any Person, or any loan, advance or capital contribution to anyPerson.

“**Lien**” is amortgage, lien, deed of trust, charge, pledge, security interest or otherencumbrance.

“**Loan Documents**”are, collectively, this Agreement, any note, or notes or guaranties executed byBorrower or Guarantor, and any other present or future agreement betweenBorrower and/or for the benefit of Bank in connection with this Agreement, allas amended, extended or restated.

“**Mask Works**” areall mask works or similar rights available for the protection of semiconductorchips, now owned or later acquired.

“**Material Adverse Change**”is described in Section 8.3.

“**Obligations**”are debts, principal, interest, Bank Expenses and other amounts Borrower owesBank now or later, including cash management services, letters of credit andforeign exchange contracts, if any and including interest accruing afterInsolvency Proceedings begin and debts, liabilities, or obligations of Borrowerassigned to Bank.

“**Patents**” arepatents, patent applications and like protections, including improvements,divisions, continuations, renewals, reissues, extensions and continuations-in-partof the same.

“**Perfection Certificate**”is defined in Section 5.1.

“**Permitted Indebtedness**” is:

(a)    Borrower’sindebtedness to Bank under this Agreement or any other Loan Document;

(b)   Indebtednessexisting on the Closing Date and shown on the Perfection Certificate;

(c)    SubordinatedDebt, except that Borrower shall not incur any additional indebtedness fromBankers/Softech/Mid-States after the Closing Date;

(d)   Indebtednessto trade creditors incurred in the ordinary course of business;

(e)    Indebtednesssecured by Permitted Liens;

(f)    Indebtednessincurred by Subsidiaries, not to exceed $150,000 in the aggregate at any time,and any guaranty of the same by Borrower; and

“**Permitted Investments**” are:

(a)    Investmentsshown on the Perfection Certificate and existing on the Closing Date; and

(b)   (i) marketable direct obligations issued or unconditionally guaranteed by theUnited States or its agency or any State maturing within 1 year from itsacquisition, (ii) commercial paper maturing 

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no more than 1 year afterits creation and having the highest rating from either Standard & Poor’sCorporation or Moody’s Investors Service, Inc., and (iii) Bank’s certificatesof deposit issued maturing no more than 1 year after issue.

“**Permitted Liens**” are:

(a)    Liensexisting on the Closing Date and shown on the Perfection Certificate or arisingunder this Agreement or other Loan Documents;

(b)   Liens fortaxes, fees, assessments or other government charges or levies, either notdelinquent or being contested in good faith and for which Borrower maintainsadequate reserves on its Books, *if* they have nopriority over any of Bank’s security interests;

(c)    Purchasemoney Liens (i) on Equipment acquired or held by Borrower or itsSubsidiaries incurred for financing the acquisition of the Equipment, or (ii) existingon equipment when acquired, *if* the Lien isconfined to the property and improvements and the proceeds of the equipment;

(d)   Licenses orsublicenses granted in the ordinary course of Borrower’s business and anyinterest or title of a licensor or under any license or sublicense, *if* the licenses and sublicenses permit granting Bank asecurity interest;

(e)    Leases orsubleases granted in the ordinary course of Borrower’s business, including inconnection with Borrower’s leased premises or leased property;

(f)    Liensincurred in the extension, renewal or refinancing of the indebtedness securedby Liens described in (a) through (c), *but* anyextension, renewal or replacement Lien must be limited to the propertyencumbered by the existing Lien and the principal amount of the indebtednessmay not increase.

“**Person**” is anyindividual, sole proprietorship, partnership, limited liability company, jointventure, company association, trust, unincorporated organization, association,corporation, institution, public benefit corporation, firm, joint stockcompany, estate, entity or government agency.

“**Prime Rate**” isBank’s most recently announced “prime rate,” even if it is not Bank’s lowestrate.

“**Quick Assets**”is, on any date, the Borrower’s consolidated, unrestricted cash, cashequivalents, net billed accounts receivable and investments with maturities offewer than 12 months determined according to GAAP.

“**Responsible****Officer**” is each of the Chief Executive Officer, thePresident, the Chief Financial Officer and the Controller of Borrower.

“**Revolving Maturity Date**”is April 19, 2008.

“**Subordinated Debt**”is debt incurred by Borrower subordinated to Borrower’s indebtedness owed toBank and which is reflected in a written agreement in a manner and formacceptable to Bank and approved by Bank in writing.

“**Subsidiary**” isfor any Person, or any other business entity of which more than 50% of thevoting stock or other equity interests is owned or controlled, directly orindirectly, by the Person or one or more Affiliates of the Person.

“**Total****Liabilities**” is on any day, obligations that should, underGAAP, be classified as liabilities on Borrower’s consolidated balance sheet,including all Indebtedness, and current portion Subordinated Debt allowed to bepaid, but excluding all other Subordinated Debt.

22

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“**Trademarks**” aretrademark and servicemark rights, registered or not, applications to registerand registrations and like protections, and the entire goodwill of the businessof Assignor connected with the trademarks.
| BORROWER:            |                 |   |   |
|----------------------|----------------------|--------|--------|
| OPTIO SOFTWARE, INC. |                 |   |   |
| By:                  | /s/ Caroline Bembry  |   |   |   |
| Title:               | CFO                  |   |   |   |
| BANK:                |                 |   |   |
| SILICON VALLEY BANK  |                 |   |   |
| By:                  | /s/ Thomas Armstrong |   |   |   |
| Title:               | Vice President       |   |   |   |
|                      |                      |        |        |  |  |

 

23

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**EXHIBIT A**

The Collateral consists of all of Borrower’s right,title and interest in and to the following:

All goods and equipment now owned or hereafteracquired, including, without limitation, all machinery, fixtures, vehicles(including motor vehicles and trailers), and any interest in any of theforegoing, and all attachments, accessories, accessions, replacements,substitutions, additions, and improvements to any of the foregoing, whereverlocated;

All inventory, now owned or hereafter acquired,including, without limitation, all merchandise, raw materials, parts, supplies,packing and shipping materials, work in process and finished products includingsuch inventory as is temporarily out of Borrower’s custody or possession or intransit and including any returns upon any accounts or other proceeds,including insurance proceeds, resulting from the sale or disposition of any ofthe foregoing and any documents of title representing any of the above;

All contract rights and general intangibles now ownedor hereafter acquired, including, without limitation, goodwill, trademarks,servicemarks, trade styles, trade names, patents, patent applications, leases,license agreements, franchise agreements, blueprints, drawings, purchaseorders, customer lists, route lists, infringements, claims, computer programs,computer discs, computer tapes, literature, reports, catalogs, design rights,income tax refunds, payments of insurance and rights to payment of any kind;

All now existing and hereafter arising accounts, contractrights, royalties, license rights and all other forms of obligations owing toBorrower arising out of the sale or lease of goods, the licensing of technologyor the rendering of services by Borrower, whether or not earned by performance,and any and all credit insurance, guaranties, and other security therefor, aswell as all merchandise returned to or reclaimed by Borrower;

All documents, cash, deposit accounts, securities,securities entitlements, securities accounts, investment property, financial assets,letters of credit, certificates of deposit, instruments and chattel paper nowowned or hereafter acquired and Borrower’s Books relating to the foregoing;

All Borrower’s Books relating to the foregoing and anyand all claims, rights and interests in any of the above and all substitutionsfor, additions and accessions to and proceeds thereof.

Notwithstanding the foregoing, the Collateral shallnot be deemed to include any copyrights, copyright applications, copyrightregistration and like protection in each work of authorship and derivative workthereof, whether published or unpublished, now owned or hereafter acquired; anypatents, patent applications and like protections including without limitationimprovements, divisions, continuations, renewals, reissues, extensions andcontinuations-in-part of the same, trademarks, servicemarks and applicationstherefor, whether registered or not, and the goodwill of the business ofBorrower connected with and symbolized by such trademarks, any trade secretrights, including any rights to unpatented inventions, know-how, operatingmanuals, license rights and agreements and confidential information, now ownedor hereafter acquired; or any claims for damage by way of any past, present andfuture infringement of any of the foregoing (collectively, the “IntellectualProperty”) except that the Collateral shall include the proceeds of all theIntellectual Property that are accounts, (i.e. accounts receivable) ofBorrower, or general intangibles consisting of rights to payment, if a judicialauthority (including a U.S. Bankruptcy Court) holds that a security interest inthe underlying Intellectual Property is necessary to have a security interestin such accounts and general intangibles of Borrower that are proceeds of the IntellectualProperty, then the Collateral shall automatically, and effective as of theClosing Date, include the Intellectual Property to the extent necessary topermit perfection of Bank’s security interest in such accounts and generalintangibles of Borrower that are proceeds of the Intellectual Property.

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**EXHIBIT B**

**LOAN PAYMENT/ADVANCE REQUESTFORM**

DEADLINEFOR SAME DAY PROCESSING IS 3:00 E.S.T.
| **Fax To:** | ** ** | **Date:** | ** ** | ** ** | ** ** |
|-------------|------------|-----------|------------|------------|------------|

 
| **o**  | ** ** | **Loan Payment:**                                                                                                                                                                                                                                                                                                                                                                                            | ** **           | ** **        | ** **    | ** **   | ** **       | ** ** | ** ** | ** ** | ** ** |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------|-------------------|---------------|--------------|------------------|------------|------------|------------|------------|
|   |       | Optio  Software, Inc. (Borrower)                                                                                                                                                                                                                                                                                                                                                                        |
|   |       | From Account #                                                                                                                                                                                                                                                                                                                                                                                               |                 |              |          | To Account # |             |       |
|   |       |                                                                                                                                                                                                                                                                                                                                                                                                         | (Deposit Account  #) |              |          |         | (Loan Account #) |       |       |
|   |       | Principal $                                                                                                                                                                                                                                                                                                                                                                                                  |                 | and/or Interest $ |          |         |
|   |       | All Borrower’s  representation and warranties in the Loan and Security Agreement, to the  knowledge of Borrower, are true, correct and complete in all material  respects to on the date of the telephone transfer request for and advance,  but those representations and warranties expressly referring to another date  shall be true, correct and complete in all material respects as of the date: |
|   | ** ** | **Authorized Signature:**                                                                                                                                                                                                                                                                                                                                                                                    |                 |              | Phone Number: |         |
|   | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                   |                 |              |          |         |
|        |            |                                                                                                                                                                                                                                                                                                                                                                                                              |                      |                   |               |              |                  |            |            |            |            |  |  |  |  |  |  |  |

 
| **o**  | ** ** | **LOAN ADVANCE:**                                                                                                                                                                                                                                                                                                                                                                                            | ** **       | ** ** | ** **    | ** **   | ** **          | ** ** | ** ** | ** ** | ** ** |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------|------------|---------------|--------------|---------------------|------------|------------|------------|------------|
|   |       | **Complete *Outgoing  Wire Request* section below if all or a portion of the funds from  this loan advance are for an outgoing wire.**                                                                                                                                                                                                                                                                       |
|   |       | From Account #                                                                                                                                                                                                                                                                                                                                                                                               |             |       |          | To Account # |                |       |
|   |       |                                                                                                                                                                                                                                                                                                                                                                                                         | (Loan Account #) |       |          |         | (Deposit Account #) |       |       |
|   |       | Amount of Advance $                                                                                                                                                                                                                                                                                                                                                                                          |             |       |          |         |                |       |       |
|   |       | All Borrower’s  representation and warranties in the Loan and Security Agreement, to the  knowledge of Borrower,are true,  correct and complete in all material respects to on the date of the telephone  transfer request for and advance, but those representations and warranties  expressly referring to another date shall be true, correct and complete in  all material respects as of the date: |
|   | ** ** | **Authorized Signature:**                                                                                                                                                                                                                                                                                                                                                                                    |             |       | Phone Number: |         |
|   | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                   |             |       |          |         |
|        |            |                                                                                                                                                                                                                                                                                                                                                                                                              |                  |            |               |              |                     |            |            |            |            |  |  |  |  |

 
| **o**  | ** ** | **OUTGOING WIRE REQUEST**                                                                                                                                                                                                                                                                                                  | ** ** | ** ** | ** **                                        | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|---------------------------------------------------|------------|------------|------------|------------|------------|------------|
|   |       | **Complete only if all or a  portion of funds from the *loan advance*  above are to be wired.**                                                                                                                                                                                                                            |
|   |       | Deadline for same day processing  is 3:00pm, E.S.T.                                                                                                                                                                                                                                                                        |
|   |       | Beneficiary Name:                                                                                                                                                                                                                                                                                                          |       |       | Amount of Wire: $                                 |       |       |
|   |       | Beneficiary Bank:                                                                                                                                                                                                                                                                                                          |       |       | Account Number:                                   |       |       |
|   |       | City and Sate:                                                                                                                                                                                                                                                                                                             |       |       |                                              |       |       |       |       |
|   |       | Beneficiary Bank Transit  (ABA) #:                                                                                                                                                                                                                                                                                         |       |       | Beneficiary Bank Code  (Swift, Sort, Chip, etc.): |       |
|   |       | (For International  Wire Only)                                                                                                                                                                                                                                                                                             |
|   |       | Intermediary Bank:                                                                                                                                                                                                                                                                                                         |       |       | Transit (ABA) #:                                  |       |       |
|   |       | For Further Credit to:                                                                                                                                                                                                                                                                                                     |       |       |
|   |       | Special Instruction:                                                                                                                                                                                                                                                                                                       |       |       |
|   |       | *By signing below, I (we)  acknowledge and agree that my (our) funds transfer request shall be processed  in accordance with and subject to the terms and conditions set forth in the  agreements(s) covering funds transfer service(s), which  agreements(s) were previously received and executed by me (us).* |
|   | ** ** | **Authorized Signature:**                                                                                                                                                                                                                                                                                                  |       |       | 2nd Signature (If  Required):                |       |
|   | ** ** | Print Name/Title:                                                                                                                                                                                                                                                                                                          |       |       | Print Name/Title:                                 |       |
|   | ** ** | Telephone #                                                                                                                                                                                                                                                                                                                |       |       | Telephone #                                       |       |
|   | ** ** | ** **                                                                                                                                                                                                                                                                                                                 |       |       |                                              |       |
|        |            |                                                                                                                                                                                                                                                                                                                            |            |            |                                                   |            |            |            |            |            |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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**EXHIBIT CBORROWING BASE CERTIFICATE**
| Borrower:                                 |   | Optio  Software, Inc. |   |   |   | Bank:  |   | Silicon Valley Bank |
|-------------------------------------------|--------|----------------------------|--------|--------|--------|--------|--------|---------------------|
| Commitment Amount:   $4,000,000 |   |                       |   |   |   |   |
|                                      |   |                       |   |   |   |   |

 

| ACCOUNTS  RECEIVABLE                                 |   |                                                                                                                                                            |   |
|------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| 1.                                                   |   | Accounts  Receivable Book Value as of                       |   | $ |   |   |
| 2.                                                   |   | Additions (please  explain on reverse)                                                                                                                          |   | $ |   |   |
| 3.                                                   |   | TOTAL ACCOUNTS  RECEIVABLE                                                                                                                                      |   | $ |   |   |
| ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication) |   |                                                                                                                                                            |   |
| 4.                                                   |   | Amounts over 90  days due                                                                                                                                       |   | $ |   |   |
| 5.                                                   |   | Balance of 50%  over 90 day accounts                                                                                                                            |   | $ |   |   |
| 6.                                                   |   | Credit balances  over 90 days                                                                                                                                   |   | $ |   |   |
| 7.                                                   |   | Concentration  Limits*                                                                                                                                          |   | $ |   |   |
| 8.                                                   |   | Foreign Accounts                                                                                                                                                |   | $ |   |   |
| 9.                                                   |   | Governmental  Accounts                                                                                                                                          |   | $ |   |   |
| 10.                                                  |   | Contra Accounts                                                                                                                                                 |   | $ |   |   |
| 11.                                                  |   | Promotion or Demo  Accounts                                                                                                                                     |   | $ |   |   |
| 12.                                                  |   | Intercompany/Employee  Accounts                                                                                                                                 |   | $ |   |   |
| 13.                                                  |   | Other (please  explain on reverse)                                                                                                                              |   | $ |   |   |
| 14.                                                  |   | TOTAL ACCOUNTS  RECEIVABLE DEDUCTIONS                                                                                                                           |   | $ |   |   |
| 15.                                                  |   | Eligible Accounts  (#3 minus #14)                                                                                                                               |   | $ |   |   |
| 16.                                                  |   | LOAN VALUE OF  ACCOUNTS (80% of #15)                                                                                                                            |   | $ |   |   |
| BALANCES                                             |   |                                                                                                                                                            |   |   |   |
| 17.                                                  |   | Maximum Loan  Amount                                                                                                                                            |   | $ | 4,000,000 |   |
| 18.                                                  |   | Total Funds Available  [Lesser of #17 or #16]                                                                                                                   |   | $ |   |   |
| 19.                                                  |   | Present balance  owing on Line of Credit                                                                                                                        |   | $ |   |   |
| 20.                                                  |   | Amounts owing for  Cash Management Services                                                                                                                     |   |   |   |
| 21.                                                  |   | RESERVE POSITION (#18  minus #19 minus #20)                                                                                                                     |   | $ |   |   |

 

*The undersigned represents and warrants that thisis true, complete and correct in all material respects, and that theinformation in this Borrowing Base Certificate complies with therepresentations and warranties in the Loan and Security Agreement between theundersigned and Silicon Valley Bank.*
| COMMENTS:                 |   |              |
|---------------------------|--------|-------------------|
|                      |   | BANK USE ONLY     |
| Optio Software, Inc. |   |              |   |   |   |
|                      |   |              | Rec’d By: |   |   |   |
|                      |   |              |   |   | Auth. Signer |   |
| By:                       |   |              |   |   | Date: |   |   |
|                      |   | Authorized Signer |   |   |   |   |   |   |
|                      |   |              |   |   | Verified: |   |   |   |
|                      |   |              |   |   |   |   | Auth. Signer |   |
|                      |   |              |   |   | Date: |   |   |
|                      |   |              |   |   |   |   |
|                      |   |              |   |   |   |   |   |   |
|                           |        |                   |  |  |  |  |  |  |  |

 

2

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**EXHIBITDCOMPLIANCE CERTIFICATE**
| TO:   |   | SILICON VALLEY BANK  |
|-------|--------|----------------------|
| FROM: |   | OPTIO SOFTWARE, INC. |

 

The undersigned authorized officer of Optio Software, Inc.(“Borrower”) certifies that under the terms and conditions of the Loan andSecurity Agreement between Borrower and Bank (the “Agreement”), (i) Borroweris in complete compliance for the period ending                    with all required covenants except as noted below and (ii) allrepresentations and warranties in the Agreement, to the knowledge of Borrower,are true and correct in all material respects on this date. Attached are therequired documents supporting the certification. The Officer certifies thatthese are prepared in accordance with Generally Accepted Accounting Principles(GAAP) consistently applied from one period to the next except as explained inan accompanying letter or footnotes. The Officer acknowledges that noborrowings may be requested at any time or date of determination that Borroweris not in compliance with any of the terms of the Agreement, and thatcompliance is determined not just at the date this certificate is delivered.

**Please indicatecompliance status by circling Yes/No under “Complies” column.**
| Reporting Covenant                    | ** ** | ** **              | ** ** | **Required** | ** ** | ** ** | ** ** | **Complies** |
|---------------------------------------|------------|-------------------------|------------|--------------|------------|------------|------------|--------------|
| Monthly Fins + Compliance Certificate |       | Monthly within 30  days |       | Yes          |       | No         |
| 10-Q + CC                             |       | FQE within 45 days      |       | Yes          |       | No         |
| Annual (Audited)  + 10-K + CC         |       | FYE within 90 days      |       | Yes          |       | No         |
| A/R Agings                            |       | Monthly within 30 days  |       | Yes          |       | No         |
| A/R Audit                             |       | Annual                  |       | Yes          |       | No         |
| Borrowing Base  Certificate           |       | Monthly within 30 days  |       | Yes          |       | No         |

 
| Financial Covenant                   | ** ** | ** **   | ** ** | **Required**                                                                                                              | ** ** | ** ** | ** ** | **Actual** | ** ** | ** ** | ** ** | **Complies** |
|--------------------------------------|------------|--------------|------------|---------------------------------------------------------------------------------------------------------------------------|------------|------------|------------|------------|------------|------------|------------|--------------|
| Maintain:                            |       |         |       |                                                                                                                      |       |       |       |       |
| Monthly Minimum Quick Ratio          |       | 2.00:1.00    |       |           :1.00                                                         |       | Yes        |       | No         |
| Minimum EBITDA                       |       |         |       |                                                                                                                      |       |       |       |       |
| March - April  2007        |       | ($2,000,000) |       | $                     |       | Yes        |       | No         |
| May 2007                        |       | ($1,500,000) |       | $                     |       | Yes        |       | No         |
| June - July 2007           |       | ($1,000,000) |       | $                     |       | Yes        |       | No         |
| August 2007 - January 2008 |       | ($250,000)   |       | $                     |       | Yes        |       | No         |
| February 2008  and thereafter   |       | ($750,000)   |       | $                     |       | Yes        |       | No         |

 

Have there been updates to Borrower’s intellectualproperty, if appropriate?          Yes /No
| **Comments Regarding Exceptions:**  See Attached**.** | ** ** | **BANK  USE ONLY** |               |
|-----------------------------------------------------------------|------------|--------------------|--------------------|
| Sincerely,                                                      |       | Received by:       |               |   |
|                                                            |       |               | AUTHORIZED SIGNER  |   |
| Optio Software, Inc.                                       |       |               |               |   |   |
|                                                            |       | Date:              |               |   |
|                                                            |       |               | Verified:          |   |   |
| SIGNATURE                                                       |       |               |               | AUTHORIZED SIGNER |   |
|                                                            |       |               |               |   |   |   |
| TITLE                                                           |       |               | Date:              |   |   |
|                                                            |       |               | Compliance Status: |   | Yes   No |   |
| DATE                                                            |       |               |               |   |   |   |
|                                                                 |            |                    |                    |  |  |  |  |  |  |  |

 

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