Document:

exv10w29w6

 

EXHIBIT 10.29.6

 

ALLIANCE CONSULTING GROUP ASSOCIATES, INC.

AND

ALLIANCE HOLDINGS, INC.

AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

 

 

 

This AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is entered into as of February 28, 2007 by
and among COMERICA BANK (“Bank”) and ALLIANCE CONSULTING GROUP ASSOCIATES, INC. and ALLIANCE
HOLDINGS, INC. (individually, a “Borrower” and collectively, the “Borrowers”).

RECITALS

     A. Borrowers and Bank are parties to that certain Loan and Security Agreement dated as of
September 25, 2003, as amended, including, without limitation, by that certain First Amendment to
Loan and Security Agreement dated as of December 12, 2003, that certain Second Amendment to Loan
and Security Agreement dated as of May 27, 2004, that certain Third Amendment to Loan Documents
dated as of August 9, 2004, that certain Fourth Amendment to Loan Documents dated as of September
30, 2004, that certain Fifth Amendment to Loan Documents dated as of March 11, 2005, that certain
Sixth Amendment to Loan Documents dated as of June 30, 2005, that certain Seventh Amendment to Loan
Documents dated as of February 28, 2006, that certain Eighth Amendment and Consent to Loan
Documents dated as of April 27, 2006, that certain Consent to Loan Documents dated as of July 13,
2006 and that certain Ninth Amendment and Waiver to Loan Documents dated December 29, 2006
(collectively, the “Agreement”) and that certain LIBOR Addendum to Loan and Security Agreement
dated as of September 25, 2003 (the “LIBOR Addendum”)(the Agreement and the LIBOR Addendum,
collectively, the “Original Agreement”).

     B. Borrowers and Bank wish to amend and restate the terms of the Original Agreement and to
evidence the obligations of Borrowers to Bank in two separate agreements, one subject to a guaranty
and the other not. This Agreement sets forth the terms on which Bank will advance credit to
Borrowers in respect of the guarantied loans, and Borrower will repay the amounts owing to Bank.

AGREEMENT

     The parties agree as follows:

     1. DEFINITIONS AND CONSTRUCTION.

          1.1 Definitions. As used in this Agreement, the following terms shall have the
following definitions:

               “Accounts” means all presently existing and hereafter arising accounts, contract rights,
payment intangibles and all other forms of obligations owing to a Borrower arising out of the sale
or lease of goods (including, without limitation, the licensing of software and other technology)
or the rendering of services by a Borrower, whether or not earned by performance, and any and all
credit insurance, guaranties, and other security therefor, as well as all merchandise returned to
or reclaimed by Borrower and Borrower’s Books relating to any of the foregoing.

               “Advance” or “Advances” means a cash advance or cash advances under the Revolving Facility.

               “Affiliate” means, with respect to any Person, any Person that owns or controls directly or
indirectly such Person, any Person that controls or is controlled by or is under common control
with such Person, and each of such Person’s senior executive officers, directors, and partners.
“Affiliate” does not include any partner companies of Safeguard Scientifics, Inc. or either
Guarantor.

               “Bank Expenses” means all reasonable costs or expenses (including reasonable attorneys’ fees
and expenses) incurred in connection with the preparation, negotiation, administration, and
enforcement of the Loan Documents; reasonable Collateral audit fees; and Bank’s reasonable
attorneys’ fees and expenses incurred in amending, enforcing or defending the Loan Documents
(including fees and expenses of appeal), incurred before, during and after an Insolvency
Proceeding, whether or not suit is brought.

               “Borrower’s Books” means all of a Borrower’s books and records including: ledgers; records
concerning Borrower’s assets or liabilities, the Collateral, business operations or financial
condition; and all computer programs, or tape files, and the equipment, containing such
information.

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               “Business Day” means any day that is not a Saturday, Sunday, or other day on which banks in
the State of California or the Commonwealth of Pennsylvania are authorized or required to close.

               “Change in Control” means (a) a sale of all or substantially all of the assets of a Borrower,
or (b) a transaction in which any “person” or “group” (within the meaning of Section 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rule
13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of a sufficient number of
shares of all classes of stock then outstanding of a Borrower ordinarily entitled to vote in the
election of directors, empowering such “person” or “group” to elect a majority of the Board of
Directors of a Borrower, who did not have such power before such transaction; provided that a
transaction with any Affiliate of a Borrower shall not constitute a “Change of Control.”

               “Closing Date” means the date of this Agreement.

               “Code” means the California Uniform Commercial Code.

               “Collateral” means the property described on Exhibit A attached hereto.

               “Contingent Obligation” means, as applied to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to (i) any indebtedness, lease, dividend,
letter of credit or other obligation of another, including, without limitation, any such obligation
directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that
Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any
obligations with respect to undrawn letters of credit, corporate credit cards, or merchant services
issued or provided for the account of that Person; and (iii) all obligations arising under any
interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate
collar agreement, or other agreement or arrangement designed to protect a Person against
fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that
the term “Contingent Obligation” shall not include endorsements for collection or deposit in the
ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determined amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by such Person in good faith; provided, however, that
such amount shall not in any event exceed the maximum amount of the obligations under the guarantee
or other support arrangement.

               “Copyrights” means any and all copyright rights, copyright applications, copyright
registrations and like protections in each work or authorship and derivative work thereof, whether
published or unpublished and whether or not the same also constitutes a trade secret, now or
hereafter existing, created, acquired or held.

               “Credit Extension” means each Advance, or any other extension of credit by Bank for the
benefit of Borrower hereunder.

               “Current Assets” means, as of any applicable date, all amounts that should, in accordance with
GAAP, be included as current assets on the consolidated balance sheet of Borrower and its
Subsidiaries, as at such date.

               “Current Liabilities” means, as of any applicable date, all amounts that should, in accordance
with GAAP, be included as current liabilities on the consolidated balance sheet of Borrower and its
Subsidiaries, as at such date, plus, to the extent not already included therein, all outstanding
Credit Extensions made under this Agreement, including all Indebtedness that is payable upon demand
or within one year from the date of determination thereof unless such Indebtedness is renewable or
extendible at the option of Borrower or any Subsidiary to a date more than one year from the date
of determination.

               “Daily Balance” means the amount of the Obligations owed at the end of a given day.

               “Equipment” means all present and future machinery, equipment, tenant improvements, furniture,
fixtures, vehicles, tools, parts and attachments in which Borrower has any interest.

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

               “Event of Default” has the meaning assigned in Article 8.

               “Formula Loan Agreement” means the Loan and Security Agreement of even date between Borrowers
and Bank.

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

               “Guarantor” means Safeguard Delaware, Inc. and Safeguard Scientifics Delaware, Inc.

               “Indebtedness” means (a) all indebtedness for borrowed money or the deferred purchase price of
property or services, including without limitation reimbursement and other obligations with respect
to surety bonds and letters of credit, (b) all obligations evidenced by notes, bonds, debentures or
similar instruments, (c) all capital lease obligations and (d) all Contingent Obligations.

               “Insolvency Proceeding” means any proceeding commenced by or against any person or entity
under any provision of the United States Bankruptcy Code, as amended, or under any other bankruptcy
or insolvency law, including assignments for the benefit of creditors, formal or informal
moratoria, compositions, extension generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.

               “Intellectual Property Collateral” means all of a Borrower’s right, title, and interest in and
to the following:

               (a) Copyrights, Trademarks and Patents;

               (b) Any and all trade secrets, and any and all intellectual property rights in computer
software and computer software products now or hereafter existing, created, acquired or held;

               (c) Any and all design rights which may be available to a Borrower now or hereafter existing,
created, acquired or held;

               (d) Any and all claims for damages by way of past, present and future infringement of any of
the rights included above, with the right, but not the obligation, to sue for and collect such
damages for said use or infringement of the intellectual property rights identified above;

               (e) All licenses or other rights to use any of the Copyrights, Patents or Trademarks, and all
license fees and royalties arising from such use to the extent permitted by such license or rights;

               (f) All amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents;
and

               (g) All proceeds and products of the foregoing, including without limitation all payments
under insurance or any indemnity or warranty payable in respect of any of the foregoing;

     provided however, that any of the foregoing developed by a Borrower to be used exclusively by
a Borrower’s customer shall not constitute “Intellectual Property Collateral”.

               “Inventory” means all present and future inventory in which Borrower has any interest,
including merchandise, raw materials, parts, supplies, packing and shipping materials, work in
process and finished products intended for sale or lease or to be furnished under a contract of
service, of every kind and description now or at any time hereafter owned by or in the custody or
possession, actual or constructive, of Borrower, including such inventory as is temporarily out of
its custody or possession or in transit and including any returns upon any accounts or

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other proceeds, including insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above, and Borrower’s Books relating
to any of the foregoing.

               “Investment” means any beneficial ownership of (including stock, partnership interest or other
securities) any Person, or any loan, advance or capital contribution to any Person.

               “IRC” means the Internal Revenue Code of 1986, as amended, and the regulations thereunder.

               “Lien” means any mortgage, lien, deed of trust, charge, pledge, security interest or other
encumbrance.

               “Loan Documents” means, collectively, this Agreement, any note or notes executed by Borrower,
and any other agreement entered into in connection with this Agreement, all as amended or extended
from time to time.

               “Material Adverse Effect” means a material adverse effect on (i) the business operations
condition (financial or otherwise) or prospects of a Borrower and its Subsidiaries taken as a
whole, (ii) the ability of a Borrower to repay the Obligations or otherwise perform its obligations
under the Loan Documents, or (iii) the value or priority of Bank’s security interests in the
Collateral.

               “Negotiable Collateral” means all of Borrower’s present and future letters of credit of which
it is a beneficiary, notes, drafts, instruments, securities, documents of title, and chattel paper,
and Borrower’s Books relating to any of the foregoing.

               “Obligations” means all debt, principal, interest, Bank Expenses and other amounts owed to
Bank by Borrower pursuant to this Agreement or any other agreement, whether absolute or contingent,
due or to become due, now existing or hereafter arising, including any interest that accrues after
the commencement of an Insolvency Proceeding.

               “Patents” means all patents, patent applications and like protections including without
limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations
in part of the same.

               “Periodic Payments” means all installments or similar recurring payments that a Borrower may
now or hereafter become obligated to pay to Bank pursuant to the terms and provisions of any
instrument, or agreement now or hereafter in existence between a Borrower and Bank.

               “Permitted Indebtedness” means:

               (h) Indebtedness of a Borrower in favor of Bank arising under this Agreement, the Formula Loan
Agreement, or any other Loan Document;

               (i) Indebtedness existing on the Closing Date and disclosed in the Schedule;

               (j) Indebtedness secured by a lien described in clause (c) of the defined term “Permitted
Liens,” provided (i) such Indebtedness does not exceed the lesser of the cost or fair market value
of the equipment financed with such Indebtedness and (ii) such Indebtedness does not exceed
$250,000 in the aggregate at any given time; and

               (k) Subordinated Debt.

               “Permitted Investment” means:

               (a) Investments existing on the Closing Date disclosed in the Schedule; and

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               (b) (i) marketable direct obligations issued or unconditionally guaranteed by the United
States of America or any agency or any State thereof maturing within one (1) year from the date of
acquisition thereof, (ii) commercial paper maturing no more than one (1) year from the date of
creation thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s
Corporation or Moody’s Investors Service, (iii) certificates of deposit maturing no more than one
(1) year from the date of investment therein issued by Bank, and (iv) Bank’s money market accounts.

               “Permitted Liens” means the following:

               (a) Any Liens existing on the Closing Date and disclosed in the Schedule or arising under this
Agreement or the other Loan Documents;

               (b) Liens for taxes, fees, assessments or other governmental charges or levies, either not
delinquent or being contested in good faith by appropriate proceedings, provided the same have no
priority over any of Bank’s security interests;

               (c) Liens (i) upon or in any equipment which was not financed by Bank acquired or held by a
Borrower or any of its Subsidiaries to secure the purchase price of such equipment or indebtedness
incurred solely for the purpose of financing the acquisition of such equipment, or (ii) existing on
such equipment at the time of its acquisition, provided that the Lien is confined solely to the
property so acquired and improvements thereon, and the proceeds of such equipment; and

               (d) Liens incurred in connection with the extension, renewal or refinancing of the
indebtedness secured by Liens of the type described in clauses (a) through (c) above, provided that
any extension, renewal or replacement Lien shall be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced
does not increase.

               “Person” means any individual, sole proprietorship, partnership, limited liability company,
joint venture, trust, unincorporated organization, association, corporation, institution, public
benefit corporation, firm, joint stock company, estate, entity or governmental agency.

               “Prime Rate” means the variable rate of interest, per annum, most recently announced by Bank,
as its “prime rate,” whether or not such announced rate is the lowest rate available from Bank.

               “Responsible Officer” means each of the Chief Executive Officer, the Chief Operating Officer,
the Chief Financial Officer, Vice President of Finance and the Controller of Borrower.

               “Revolving Facility” means the facility under which Borrowers may request Bank to issue
Advances, as specified in Section 2.1(a) hereof.

               “Revolving Line” means a credit extension of up to Five Million Dollars ($5,000,000).

               “Revolving Maturity Date” means February 27, 2008.

               “Schedule” means the schedule of exceptions attached hereto and approved by Bank, if any.

               “Subordinated Debt” means any debt incurred by a Borrower that is subordinated to the debt
owing by Borrower to Bank on terms acceptable to Bank (and identified as being such by Borrower and
Bank).

               “Subsidiary” means any corporation, company or partnership in which (i) any general
partnership interest or (ii) more than 50% of the stock or other units of ownership which by the
terms thereof has the ordinary voting power to elect the Board of Directors, managers or trustees
of the entity, at the time as of which any determination is being made, is owned by a Borrower,
either directly or through an Affiliate.

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               “Trademarks” means any trademark and servicemark rights, whether registered or not,
applications to register and registrations of the same and like protections, and the entire
goodwill of the business of a Borrower connected with and symbolized by such trademarks.

          1.2 Accounting Terms. All accounting terms not specifically defined herein shall be
construed in accordance with GAAP and all calculations made hereunder shall be made in accordance
with GAAP. When used herein, the terms “financial statements” shall include the notes and
schedules thereto.

     2. LOAN AND TERMS OF PAYMENT.

          2.1 Credit Extensions.

               Borrowers promise to pay to the order of Bank, in lawful money of the United States of
America, the aggregate unpaid principal amount of all Credit Extensions made by Bank to each
Borrower and/or Borrowers hereunder. Borrowers shall also pay interest on the unpaid principal
amount of such Credit Extensions at rates in accordance with the terms hereof.

               (a) Revolving Advances.

                    (i) Advances. Subject to and upon the terms and conditions of this Agreement, Borrowers may
request Advances in an aggregate outstanding amount not to exceed the Revolving Line. Subject to
the terms and conditions of this Agreement, amounts borrowed pursuant to this Section 2.1(a) may be
repaid and reborrowed at any time prior to the Revolving Maturity Date, at which time all Advances
under this Section 2.1(a) shall be immediately due and payable. Borrowers may prepay any Advances
without penalty or premium.

                    (ii) Procedure. Whenever Borrowers desire an Advance, a Borrower will notify Bank by
facsimile transmission or telephone no later than 3:30 p.m. Eastern time, on the Business Day that
the Advance is to be made. Each such notification shall be promptly confirmed by a Payment/Advance
Form in substantially the form of Exhibit B hereto. Bank is authorized to make Advances
under this Agreement, based upon instructions received from a Responsible Officer or a designee of
a Responsible Officer, or without instructions if in Bank’s discretion such Advances are necessary
to meet Obligations which have become due and remain unpaid. Bank shall be entitled to rely on any
telephonic notice given by a person who Bank reasonably believes to be a Responsible Officer or a
designee thereof, and Borrower shall indemnify and hold Bank harmless for any damages or loss
suffered by Bank as a result of such reliance. Bank will credit the amount of Advances made under
this Section 2.1(a) to a Borrower’s deposit account.

          2.2 Reserved

          2.3 Interest Rates, Payments, and Calculations.

               (a) Interest Rates. Except as set forth in Section 2.3(b), the Advances shall bear
interest, on the outstanding daily balance thereof, at a variable rate equal to the Prime Rate
minus 0.5%.

               (b) Default Rate. If any payment is not made within ten (10) days after the date such
payment is due, Borrowers shall pay Bank a late fee equal to the lesser of (i) five percent (5%) of
the amount of such unpaid amount or (ii) the maximum amount permitted to be charged under
applicable law. All Obligations shall bear interest, from and after the occurrence and during the
continuance of an Event of Default, at a rate equal to five (5) percentage points above the interest
rate applicable immediately prior to the occurrence of the Event of Default.

               (c) Payments. Interest hereunder shall be due and payable on the first calendar day
of each month during the term hereof. Bank shall, at its option, charge such interest, all Bank
Expenses, and all Periodic Payments against any of a Borrower’s deposit accounts or against the
Revolving Line, in which case those amounts shall thereafter accrue interest at the rate then
applicable hereunder. Any interest not paid when due shall be compounded by becoming a part of the
Obligations, and such interest shall thereafter accrue interest at the rate then applicable
hereunder.

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All payments shall be free and clear of any taxes, withholdings, duties, impositions or
other charges, to the end that Bank will receive the entire amount of any Obligations payable
hereunder, regardless of source of payment.

               (d) Computation. In the event the Prime Rate is changed from time to time hereafter,
the applicable rate of interest hereunder shall be increased or decreased effective as of the day
the Prime Rate is changed, by an amount equal to such change in the Prime Rate. All interest
chargeable under the Loan Documents shall be computed on the basis of a three hundred sixty (360)
day year for the actual number of days elapsed.

          2.4 Crediting Payments. Prior to the occurrence of an Event of Default, Bank shall
credit a wire transfer of funds, check or other item of payment to such deposit account or
Obligation as Borrowers specify. After the acceleration of the Obligations and so long as the
Obligations remain unpaid, the receipt by Bank of any wire transfer of funds, check, or other item
of payment shall be immediately applied to conditionally reduce Obligations, but shall not be
considered a payment on account unless such payment is of immediately available federal funds or
unless and until such check or other item of payment is honored when presented for payment.
Notwithstanding anything to the contrary contained herein, any wire transfer or payment received by
Bank after 3:30 p.m. Eastern time shall be deemed to have been received by Bank as of the opening
of business on the immediately following Business Day. Whenever any payment to Bank under the Loan
Documents would otherwise be due (except by reason of acceleration) on a date that is not a
Business Day, such payment shall instead be due on the next Business Day, and additional fees or
interest, as the case may be, shall accrue and be payable for the period of such extension.

          2.5 Fees. Borrowers shall pay to Bank the following:

               (a) Facility Fee. None;

               (b) Commitment Fee. None; and

               (c) Bank Expenses. (i) On the Closing Date, all Bank Expenses incurred through the
Closing Date, including reasonable attorneys’ fees, and (ii) after the Closing Date, all Bank
Expenses, including reasonable attorneys’ fees and expenses, as and when they are billed by Bank to
the Borrowers, with appropriate supporting evidence and backup information to the extent available.

          2.6 Term. This Agreement shall become effective on the Closing Date and, subject to
Section 13.7, shall continue in full force and effect for so long as any Obligations remain
outstanding or Bank has any obligation to make Credit Extensions under this Agreement.
Notwithstanding the foregoing, Bank shall have the right to terminate its obligation to make Credit
Extensions under this Agreement immediately and without notice upon the occurrence and during the
continuance of an Event of Default. Notwithstanding termination, Bank’s Lien on the Collateral
shall remain in effect for so long as any Obligations are outstanding.

     3. CONDITIONS OF LOANS.

          3.1 Conditions Precedent to Initial Credit Extension. The obligation of Bank to make
the initial Credit Extension is subject to the condition precedent that Bank shall have received,
in form and substance satisfactory to Bank, the following:

               (a) this Agreement;

               (b) a certificate of the Secretary of each Borrower with respect to incumbency and resolutions
authorizing the execution and delivery of this Agreement;

               (c) financing statements (Form UCC-1);

               (d) a subordination agreement;

               (e) an Affirmation of Guaranty ;

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               (f) payment of the fees and Bank Expenses then due specified in Section 2.5 hereof;

               (g) current financial statements of Borrowers for the most recent fiscal quarter; and

               (h) such other documents, and completion of such other matters, as Bank may reasonably deem
necessary or appropriate.

          3.2 Conditions Precedent to all Credit Extensions. The obligation of Bank to make
each Credit Extension, including the initial Credit Extension, is further subject to the following
conditions:

               (a) timely receipt by Bank of the Payment/Advance Form as provided in Section 2.1; and

               (b) the representations and warranties contained in Section 5 shall be true and correct in all
material respects on and as of the date of such Payment/Advance Form and on the effective date of
each Credit Extension as though made at and as of each such date, and no Event of Default shall
have occurred and be continuing, or would exist after giving effect to such Credit Extension
(provided, however, that those representations and warranties expressly referring to another date
shall be true, correct and complete in all material respects as of such date). The making of each
Credit Extension shall be deemed to be a representation and warranty by Borrower on the date of
such Credit Extension as to the accuracy of the facts referred to in this Section 3.2.

     4. CREATION OF SECURITY INTEREST.

          4.1 Grant of Security Interest. Each Borrower hereby grants and pledges to Bank a
continuing security interest in all presently existing and hereafter acquired or arising Collateral
in order to secure prompt repayment of any and all Obligations and in order to secure prompt
performance by Borrower of each of its covenants and duties under the Loan Documents. Except as
set forth in the Schedule, such security interest constitutes a valid, first priority security
interest in the presently existing Collateral, and will constitute a valid, first priority security
interest in Collateral acquired after the date hereof.

          4.2 Delivery of Additional Documentation Required. Each Borrower shall from time to
time execute and deliver to Bank, at the request of Bank, all Negotiable Collateral, all financing
statements and other documents that Bank may reasonably request, in form satisfactory to Bank, to
perfect and continue the perfection of Bank’s security interests in the Collateral and in order to
fully consummate all of the transactions contemplated under the Loan Documents. Borrowers from
time to time may deposit with Bank specific time deposit accounts to secure specific Obligations.
Borrowers authorize Bank to hold such balances in pledge and to decline to honor any drafts thereon
or any request by a Borrower or any other Person to pay or otherwise transfer any part of such
balances for so long as the Obligations are outstanding.

          4.3 Right to Inspect. Bank (through any of its officers, employees, or agents) shall
have the right, upon reasonable prior notice, from time to time during Borrower’s usual business
hours, but no more than twice a year (unless an Event of Default has occurred and is continuing),
to inspect Borrower’s Books and to make copies thereof and to check, test, and appraise the
Collateral in order to verify a Borrower’s financial condition or the amount, condition of, or any
other matter relating to, the Collateral.

     5. REPRESENTATIONS AND WARRANTIES.

          Each Borrower represents and warrants as follows:

          5.1 Due Organization and Qualification. Each of Borrower and each Subsidiary is a
corporation duly existing under the laws of its state of incorporation and qualified and licensed
to do business in any state in which the conduct of its business or its ownership of property
requires that it be so qualified.

          5.2 Due Authorization; No Conflict. The execution, delivery, and performance of the
Loan Documents are within Borrower’s powers, have been duly authorized, and are not in conflict
with nor constitute a breach

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of any provision contained in Borrower’s Articles of Incorporation or
Bylaws, nor will they constitute an event of default under any material agreement to which Borrower
is a party or by which Borrower is bound. Except as disclosed in the Schedule, Borrower is not in
default under any material agreement to which it is a party or by which it is bound.

          5.3 No Prior Encumbrances. Borrower has good and marketable title to its property,
free and clear of Liens, except for Permitted Liens.

          5.4 Bona Fide Accounts. The Accounts are bona fide existing obligations. The
property and services giving rise to such Accounts has been delivered or rendered to the account
debtor or to the account debtor’s agent for immediate and unconditional acceptance by the account
debtor. .

          5.5 Merchantable Inventory. All Inventory is in all material respects of good and
marketable quality, free from all material defects, except for Inventory for which adequate
reserves have been made.

          5.6 Intellectual Property Collateral. Borrower is the sole owner of the Intellectual
Property Collateral, except for non-exclusive licenses granted by Borrower to its customers in the
ordinary course of business. Each of the Patents is valid and enforceable, and no part of the
Intellectual Property Collateral has been judged invalid or unenforceable, in whole or in part, and
no claim has been made that any part of the Intellectual Property Collateral violates the rights of
any third party. Except as set forth in the Schedule, Borrower’s rights as a licensee of
intellectual property do not give rise to more than five percent (5%) of its gross revenue in any
given month, including without limitation revenue derived from the sale, licensing, rendering or
disposition of any product or service. Except as set forth in the Schedule, Borrower is not a
party to, or bound by, any agreement that restricts the grant by Borrower of a security interest in
Borrower’s rights under such agreement.

          5.7 Name; Location of Chief Executive Office. Except as disclosed in the Schedule,
Borrower has not done business under any name other than that specified on the signature page
hereof. The chief executive office of Borrower is located at the address indicated in Section 10
hereof.

          5.8 Litigation. Except as set forth in the Schedule, there are no actions or
proceedings pending by or against Borrower or any Subsidiary before any court or administrative
agency in which an adverse decision could have a Material Adverse Effect or a material adverse
effect on Borrower’s interest or Bank’s security interest in the Collateral.

          5.9 No Material Adverse Change in Financial Statements. All consolidated and
consolidating financial statements related to Borrower and any Subsidiary that Bank has received
from Borrower fairly present in all material respects Borrower’s financial condition as of the date
thereof and Borrower’s consolidated and consolidating results of operations for the period then
ended. There has not been a material adverse change in the consolidated or the consolidating
financial condition of Borrower since the date of the most recent of such financial statements
submitted to Bank.

          5.10 Solvency, Payment of Debts. Except as disclosed in the Schedule, Borrower is
solvent and able to pay its debts (including trade debts) as they mature.

          5.11 Regulatory Compliance. Borrower and each Subsidiary has met the minimum funding
requirements of ERISA with respect to any employee benefit plans subject to ERISA, and no event has
occurred resulting
from Borrower’s failure to comply with ERISA that could result in Borrower’s incurring any
material liability. Borrower is not an “investment company” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940. Borrower is not
engaged principally, or as one of the important activities, in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of Regulations T and U of
the Board of Governors of the Federal Reserve System). Borrower has complied with all the
provisions of the Federal Fair Labor Standards Act. Borrower has not violated any statutes, laws,
ordinances or rules applicable to it, violation of which could have a Material Adverse Effect.

          5.12 Environmental Condition. Except as disclosed in the Schedule, none of Borrower’s
or any Subsidiary’s properties or assets has ever been used by Borrower or any Subsidiary or, to
the best of Borrower’s

9

 

knowledge, by previous owners or operators, in the disposal of, or to
produce, store, handle, treat, release, or transport, any hazardous waste or hazardous substance
other than in accordance with applicable law; to the best of Borrower’s knowledge, none of
Borrower’s properties or assets has ever been designated or identified in any manner pursuant to
any environmental protection statute as a hazardous waste or hazardous substance disposal site, or
a candidate for closure pursuant to any environmental protection statute; no lien arising under any
environmental protection statute has attached to any revenues or to any real or personal property
owned by Borrower or any Subsidiary; and neither Borrower nor any Subsidiary has received a
summons, citation, notice, or directive from the Environmental Protection Agency or any other
federal, state or other governmental agency concerning any action or omission by Borrower or any
Subsidiary resulting in the releasing, or otherwise disposing of hazardous waste or hazardous
substances into the environment.

          5.13 Taxes. Except as disclosed in the Schedule, Borrower and each Subsidiary has
filed or caused to be filed all tax returns required to be filed, and has paid, or has made
adequate provision for the payment of, all taxes reflected therein.

          5.14 Subsidiaries. Borrower does not own any stock, partnership interest or other
equity securities of any Person, except for Permitted Investments.

          5.15 Government Consents. Borrower and each Subsidiary has obtained all consents,
approvals and authorizations of, made all declarations or filings with, and given all notices to,
all governmental authorities that are necessary for the continued operation of Borrower’s business
as currently conducted, the failure to obtain which could have a Material Adverse Effect.

          5.16 Accounts. None of Borrower’s property is maintained or invested with a Person
other than Bank. None of any Subsidiary’s property within the United States is maintained or
invested with a Person other than Bank.

          5.17 Full Disclosure. No representation, warranty or other statement made by Borrower
in any certificate or written statement furnished to Bank contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the statements contained
in such certificates or statements not misleading.

     6. AFFIRMATIVE COVENANTS.

          Each Borrower covenants and agrees that, until payment in full of all outstanding Obligations,
and for so long as Bank may have any commitment to make a Credit Extension hereunder, each Borrower
shall do all of the following:

          6.1 Good Standing. Borrower shall maintain its and each of its Subsidiaries’
corporate existence and good standing in its jurisdiction of incorporation and maintain
qualification in each jurisdiction in which it is required under applicable law. Borrower shall
maintain, and shall cause each of its Subsidiaries to maintain, in force all licenses, approvals
and agreements, the loss of which could have a Material Adverse Effect.

          6.2 Government Compliance. Borrower shall meet, and shall cause each Subsidiary to
meet, the minimum funding requirements of ERISA with respect to any employee benefit plans subject
to ERISA. Borrower shall
comply, and shall cause each Subsidiary to comply, with all statutes, laws, ordinances and
government rules and regulations to which it is subject, noncompliance with which could have a
Material Adverse Effect.

          6.3 Financial Statements, Reports, Certificates. Each Borrower shall deliver the
following to Bank: (a) as soon as available, but in any event within thirty (30) days after the
end of each calendar month, a company prepared consolidated balance sheet, income, and cash flow
statement covering Borrower’s consolidated operations during such period, prepared in accordance
with GAAP, consistently applied, in a form acceptable to Bank and certified by a Responsible
Officer; (b) as soon as available, but in any event within ninety (90) days after the end of
Borrower’s fiscal year, audited consolidated financial
statements of Borrower prepared in accordance with GAAP, consistently applied, together with an unqualified opinion on such financial
statements of an independent certified public accounting firm reasonably acceptable to Bank; (c) as
soon as available, but in any event within forty-five (45) days after the end of each fiscal
quarter and each fiscal year, consolidating financial statements of Alliance Holdings, Inc.
prepared in

10

 

accordance with GAAP, consistently applied, in a form acceptable to Bank; (d) copies of
all quarterly and annual statements, reports and material notices sent or made available generally
by Borrower to its security holders or to any holders of Subordinated Debt and, if applicable, all
reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission; (e) promptly upon
receipt of notice thereof, a report of any legal actions pending or threatened against Borrower or
any Subsidiary that could result in damages or costs to Borrower or any Subsidiary of $100,000 or
more; (f) such budgets, sales projections, operating plans or other financial information as Bank
may reasonably request from time to time; and (g) within thirty (30) days after the last day of
each fiscal quarter, a report signed by Borrower, in form reasonably acceptable to Bank, listing
any applications or registrations that Borrower has made or filed in respect of any Patents,
Copyrights or Trademarks and the status of any outstanding applications or registrations, as well
as any material change in Borrower’s intellectual property, including but not limited to any
subsequent ownership right of Borrower in or to any Trademark, Patent or Copyright not specified in
Exhibits A, B, and C of the Intellectual Property Security Agreement
delivered to Bank by Borrower in connection with this Agreement.

     Borrower shall deliver to Bank with the monthly financial statements a Compliance Certificate
signed by a Responsible Officer in substantially the form of Exhibit D hereto.

     Bank shall have a right from time to time hereafter to audit Borrower’s Accounts and appraise
Collateral at Borrower’s expense, provided that such audits will be conducted no more often than
every six (6) months unless an Event of Default has occurred and is continuing and the fees for
such audits shall be reasonable and customary for a transaction of this type.

          6.4 Inventory; Returns. Borrower shall keep all Inventory in good and marketable
condition, free from all material defects except for Inventory for which adequate reserves have
been made. Returns and allowances, if any, as between Borrower and its account debtors shall be on
the same basis and in accordance with the usual customary practices of Borrower, as they exist at
the time of the execution and delivery of this Agreement. Borrower shall promptly notify Bank of
all returns and recoveries and of all disputes and claims, where the return, recovery, dispute or
claim involves more than $100,000.

          6.5 Taxes. Except as disclosed in the Schedule, Borrower shall make, and shall cause
each Subsidiary to make, due and timely payment or deposit of all material federal, state, and
local taxes, assessments, or contributions required of it by law, and will execute and deliver to
Bank, on demand, appropriate certificates attesting to the payment or deposit thereof; and Borrower
will make, and will cause each Subsidiary to make, timely payment or deposit of all material tax
payments and withholding taxes required of it by applicable laws, including, but not limited to,
those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income
taxes, and will, upon request, furnish Bank with proof satisfactory to Bank indicating that
Borrower or a Subsidiary has made such payments or deposits; provided that Borrower or a Subsidiary
need not make any payment if the amount or validity of such payment is contested in good faith by
appropriate proceedings and is reserved against (to the extent required by GAAP) by Borrower.

          6.6 Insurance.

               (a) Borrower, at its expense, shall keep the Collateral insured against loss or damage by
fire, theft, explosion, sprinklers, and all other hazards and risks, and in such amounts, as
ordinarily insured against by
other owners in similar businesses conducted in the locations where Borrower’s business is
conducted on the date hereof. Borrower shall also maintain insurance relating to Borrower’s
business, ownership and use of the Collateral in amounts and of a type that are customary to
businesses similar to Borrower’s.

               (b) All such policies of insurance shall be in such form, with such companies, and in such
amounts as are reasonably satisfactory to Bank. All such policies of property insurance shall
contain a lender’s loss payable endorsement, in a form satisfactory to Bank, showing Bank as an
additional loss payee thereof, and all liability insurance policies shall show the Bank as an
additional insured and shall specify that the insurer must give at least twenty (20) days notice to
Bank before canceling its policy for any reason. Upon Bank’s request, Borrower shall deliver to
Bank certified copies of such policies of insurance and evidence of the payments of all premiums
therefor. All proceeds payable under any such policy shall, at the option of Bank, be payable to
Bank to be applied on account of the Obligations.

11

 

          6.7 Accounts. Borrower shall maintain and shall cause each of its Subsidiaries to
maintain its domestic depository, operating, and investment accounts with Bank and/or its
Affiliates.

          6.8 Profitability. Beginning February 28, 2007, as of the last day of each month,
Borrowers on a consolidated basis shall maintain pre-tax profit as indicated for the three months
immediately preceding each date of measurement:

	 	 	 	 	 	 
	Period measured	 	Pre-tax profit
	Closing Date through 06/30/2007
	 	 	($	700,000	)
	7/1/2007 through 8/31/2007
	 	 	$	1.00	 
	9/1/2007 through 12/30/2007
	 	 	$	500,000	 
	12/31/2007 and thereafter
	 	 	$	1,000,000	 

          6.9 Current Ratio. Borrowers shall maintain at all times, on a consolidated basis,
measured as of the last day of each calendar month, a ratio of Current Assets to Current
Liabilities plus, to the extent not already included therein, all Indebtedness (including
without limitation any Contingent Obligations) owing from Borrower to Bank, less deferred
revenue, of at least 0.90 to 1.00 through October 31, 2007, and 1.00 to 1.00 thereafter.

          6.10 Consultant Utilization. Borrowers’ Consultant Utilization (salaried and hourly)
shall be equal to or greater than 75% at all times. As used herein, “Consultant Utilization” means
(a) all hours billed by Borrower to a client for consulting work divided by (b) all hours paid by
Borrower to an hourly consultant or worked by Borrower’s salaried employees which perform
consulting services.

          6.11 Intellectual Property Rights.

               (a) Borrower shall register or cause to be registered (to the extent not already registered)
with the United States Patent and Trademark Office or the United States Copyright Office, as the
case may be, those registerable intellectual property rights now owned or hereafter developed or
acquired by Borrower, to the extent that Borrower, in its reasonable business judgment, deems it
appropriate to so protect such intellectual property rights.

               (b) Borrower shall promptly give Bank written notice of any applications or registrations of
intellectual property rights filed with the United States Patent and Trademark Office, including
the date of such filing and the registration or application numbers, if any. Borrower shall (i)
give Bank not less than 30 days prior written notice of the filing of any applications or
registrations with the United States Copyright Office, including the title of such intellectual
property rights to be registered, as such title will appear on such applications or registrations,
and the date such applications or registrations will be filed, and (ii) prior to the filing of any
such applications or registrations, shall execute such documents as Bank may reasonably request for
Bank to maintain its perfection in such intellectual property rights to be registered by Borrower,
and upon the request of Bank, shall file such documents simultaneously with
the filing of any such applications or registrations. Upon filing any such applications or
registrations with the United States Copyright Office, Borrower shall promptly provide Bank with
(i) a copy of such applications or registrations, without the exhibits, if any, thereto, (ii)
evidence of the filing of any documents requested by Bank to be filed for Bank to maintain the
perfection and priority of its security interest in such intellectual property rights, and (iii)
the date of such filing.

               (c) Borrower shall execute and deliver such additional instruments and documents from time to
time as Bank shall reasonably request to perfect and maintain the priority of Bank’s security
interest in the Intellectual Property Collateral. Borrower shall (i) protect, defend and maintain
the validity and enforceability of the trade secrets, Trademarks, Patents and Copyrights, (ii)
use commercially reasonable efforts to detect infringements of the Trademarks, Patents and
Copyrights and promptly advise Bank in writing of material infringements detected and (iii) not
allow any material Trademarks, Patents or Copyrights to be abandoned, forfeited or dedicated to
the public without the written consent of Bank, which shall not be unreasonably withheld.

12

 

               (d) Bank may audit Borrower’s Intellectual Property Collateral to confirm compliance with this
Section, provided such audit may not occur more often than twice per year, unless an Event of
Default has occurred and is continuing. Bank shall have the right, but not the obligation, to
take, at Borrower’s sole expense, any actions that Borrower is required under this Section to take
but which Borrower fails to take, after 15 days’ notice to Borrower. Borrower shall reimburse and
indemnify Bank for all reasonable costs and reasonable expenses incurred in the reasonable exercise
of its rights under this Section.

          6.12 Further Assurances. At any time and from time to time Borrower shall execute and
deliver such further instruments and take such further action as may reasonably be requested by
Bank to effect the purposes of this Agreement.

     7. NEGATIVE COVENANTS.

          Each Borrower covenants and agrees that, so long as any credit hereunder shall be available
and until payment in full of the outstanding Obligations or for so long as Bank may have any
commitment to make any Credit Extensions, no Borrower will do any of the following:

          7.1 Dispositions. Without Bank’s prior written consent, which shall not be
unreasonably withheld, except as disclosed in the Schedule, convey, sell, lease, transfer or
otherwise dispose of (collectively, a “Transfer”), or permit any of its Subsidiaries to Transfer,
all or any part of its business or property, other than: (i) Transfers of Inventory in the
ordinary course of business; (ii) Transfers of non-exclusive licenses and similar arrangements for
the use of the property of Borrower or its Subsidiaries in the ordinary course of business; or
(iii) Transfers of worn-out or obsolete Equipment.

          7.2 Change in Business; Change in Control or Executive Office. Without Bank’s prior
written consent, which shall not be unreasonably withheld, engage in any business, or permit any of
its Subsidiaries to engage in any business, other than the businesses currently engaged in by
Borrower and any business substantially similar or related thereto (or incidental thereto); or
cease to conduct business in the manner conducted by Borrower as of the Closing Date; or suffer or
permit a Change in Control; or without thirty (30) days prior written notification to Bank,
relocate its chief executive office or state of incorporation or change its legal name; or without
Bank’s prior written consent, change the date on which its fiscal year ends.

          7.3 Mergers or Acquisitions. Without Bank’s prior written consent, which shall not be
unreasonably withheld, merge or consolidate; or permit any of its Subsidiaries to merge or
consolidate, with or into any other business organization (other than any Affiliate of a Borrower;
or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital
stock or property of another Person (other than any Affiliate of a Borrower).

          7.4 Indebtedness. Create, incur, assume or be or remain liable with respect to any
Indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness.

          7.5 Encumbrances. Create, incur, assume or suffer to exist any Lien with respect to
any of its property, or assign or otherwise convey any right to receive income, including the sale
of any Accounts, or permit any of its Subsidiaries so to do, except for Permitted Liens. Agree
with any Person other than Bank not to grant a security interest in, or otherwise encumber, any of
its property, or permit any Subsidiary to do so.

          7.6 Distributions. Pay any dividends or make any other distribution or payment on
account of or in redemption, retirement or purchase of any capital stock, or permit any of its
Subsidiaries to do so, except that Borrower may repurchase the stock of former employees pursuant
to stock repurchase agreements as long as an Event of Default does not exist prior to such
repurchase or would not exist after giving effect to such repurchase.

          7.7 Investments. Directly or indirectly acquire or own, or make any Investment in or
to any Person, or permit any of its Subsidiaries so to do, other than Permitted Investments; or
maintain or invest any of its property with a Person other than Bank or permit any of its
Subsidiaries to do so unless such Person has entered into an account control agreement with Bank in
form and substance satisfactory to Bank; or suffer or permit any Subsidiary to be

13

 

a party to, or be
bound by, an agreement that restricts such Subsidiary from paying dividends or otherwise
distributing property to Borrower.

          7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to
exist any material transaction with any Affiliate of Borrower except for transactions that are in
the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less
favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated
Person.

          7.9 Subordinated Debt. Make any payment in respect of any Subordinated Debt, or
permit any of its Subsidiaries to make any such payment, except in compliance with the terms of
such Subordinated Debt, or amend any provision contained in any documentation relating to the
Subordinated Debt without Bank’s prior written consent.

          7.10 Inventory and Equipment. Store the Inventory or the Equipment with a bailee,
warehouseman, or other third party unless the third party has been notified of Bank’s security
interest and Bank (a) has received an acknowledgment from the third party that it is holding or
will hold the Inventory or Equipment for Bank’s benefit or (b) is in pledge possession of the
warehouse receipt, where negotiable, covering such Inventory or Equipment. Store or maintain any
Equipment or Inventory at a location other than the location set forth in Section 10 of this
Agreement.

          7.11 Compliance. Become an “investment company” or be controlled by an “investment
company,” within the meaning of the Investment Company Act of 1940, or become principally engaged
in, or undertake as one of its important activities, the business of extending credit for the
purpose of purchasing or carrying margin stock, or use the proceeds of any Credit Extension for
such purpose. Fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or
Prohibited Transaction, as defined in ERISA, to occur, fail to comply with the Federal Fair Labor
Standards Act or violate any law or regulation, which violation could have a Material Adverse
Effect or a material adverse effect on the Collateral or the priority of Bank’s Lien on the
Collateral, or permit any of its Subsidiaries to do any of the foregoing.

     8. EVENTS OF DEFAULT.

          Any one or more of the following events shall constitute an “Event of Default” by Borrowers
under this Agreement:

          8.1 Payment Default. If Borrowers fail to pay any of the Obligations within three (3)
days after the date when due;

          8.2 Covenant Default. If a Borrower fails to perform any obligation under Article 6
or violates any of the covenants contained in Article 7 of this Agreement, or fails or neglects to
perform, keep, or observe any other material term, provision, condition, covenant, or agreement
contained in this Agreement, in any of the Loan Documents, or in any other present or future
agreement between a Borrower and Bank and as to any default under such other term,
provision, condition, covenant or agreement; and a Borrower has failed to cure such default
within ten (10) days after a Borrower receives notice thereof or any officer of a Borrower becomes
aware thereof; provided, however, that if the default cannot by its nature be cured within the ten
(10) day period or cannot after diligent attempts by Borrowers be cured within such ten (10) day
period, and such default is likely to be cured within a reasonable time, then Borrowers shall have
an additional reasonable period (which shall not in any case exceed thirty (30) days) to attempt to
cure such default, and within such reasonable time period the failure to have cured such default
shall not be deemed an Event of Default but no Credit Extensions will be made;

          8.3 Material Adverse Effect. If there occurs any circumstance or circumstances that
could reasonably be expected to have a Material Adverse Effect;

          8.4 Attachment. If any portion of a Borrower’s assets is attached, seized, subjected
to a writ or distress warrant, or is levied upon, or comes into the possession of any trustee,
receiver or person acting in a similar capacity and such attachment, seizure, writ or distress
warrant or levy has not been removed, discharged or rescinded within ten (10) days, or if a
Borrower is enjoined, restrained, or in any way prevented by court order from continuing to

14

 

conduct all or any material part of its business affairs, or if a judgment or other claim becomes a lien or
encumbrance upon any material portion of a Borrower’s assets, or if a notice of lien, levy, or
assessment is filed of record with respect to any of a Borrower’s assets by the United States
Government, or any department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, and the same is not paid within ten (10) days after a Borrower
receives notice thereof, provided that none of the foregoing shall constitute an Event of Default
where such action or event is stayed or an adequate bond has been posted pending a good faith
contest by Borrowers (provided that no Credit Extensions will be required to be made during such
cure period);

          8.5 Insolvency. If a Borrower becomes insolvent, or if an Insolvency Proceeding is
commenced by a Borrower, or if an Insolvency Proceeding is commenced against a Borrower and is not
dismissed or stayed within thirty (30) days (provided that no Credit Extensions will be made prior
to the dismissal of such Insolvency Proceeding);

          8.6 Other Agreements. If there is a default or other failure to perform in any
agreement to which a Borrower is a party or by which it is bound resulting in a right by a third
party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an
amount in excess of $100,000); or which could have a Material Adverse Effect;

          8.7 Subordinated Debt. If a Borrower makes any payment on account of Subordinated
Debt, except to the extent such payment is allowed under any subordination agreement entered into
with Bank;

          8.8 Judgments. If a judgment or judgments for the payment of money in an amount,
individually or in the aggregate, of at least $100,000 shall be rendered against a Borrower and
shall remain unsatisfied and unstayed for a period of ten (10) days (provided that no Credit
Extensions will be made prior to the satisfaction or stay of such judgment);

          8.9 Misrepresentations. If any material misrepresentation or material misstatement
exists now or hereafter in any warranty or representation set forth herein or in any certificate
delivered to Bank by any Responsible Officer pursuant to this Agreement or to induce Bank to enter
into this Agreement or any other Loan Document; or

          8.10 Guaranty. If any guaranty of all or a portion of the Obligations (a “Guaranty”)
ceases for any reason to be in full force and effect, or any guarantor fails to perform any
obligation under any Guaranty or a security agreement securing any Guaranty (collectively, the
“Guaranty Documents”), or any event of default occurs under any Guaranty Document or any guarantor
revokes or purports to revoke a Guaranty, or any material misrepresentation or material
misstatement exists now or hereafter in any warranty or representation set forth in any Guaranty
Document or in any certificate delivered to Bank in connection with any Guaranty Document, or if
any of the circumstances described in Sections 8.3 through 8.9 occur with respect to any guarantor
or any guarantor dies or becomes subject to any criminal prosecution.

     9. BANK’S RIGHTS AND REMEDIES.

          9.1 Rights and Remedies. Upon the occurrence and during the continuance of an Event
of Default, Bank may, at its election, without prior notice (but with notice promptly after the
election of the Bank to so act) of its election and without demand, do any one or more of the
following, all of which are authorized by each Borrower:

               (a) Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan
Documents, or otherwise, immediately due and payable (provided that upon the occurrence of an Event
of Default described in Section 8.5 all Obligations shall become immediately due and payable
without any action by Bank);

               (b) Demand that Borrower (i) deposit cash with Bank in an amount equal to the amount of any
Letters of Credit remaining undrawn, as collateral security for the repayment of any future
drawings under such Letters of Credit, and (ii) pay in advance all Letter of Credit fees scheduled
to be paid or payable over the remaining term of the Letters of Credit, and Borrower shall promptly
deposit and pay such amounts;

               (c) Cease advancing money or extending credit to or for the benefit of Borrower under this
Agreement or under any other agreement between Borrower and Bank;

15

 

               (d) Settle or adjust disputes and claims directly with account debtors for amounts, upon terms
and in whatever order that Bank reasonably considers advisable;

               (e) Make such payments and do such acts as Bank considers necessary or reasonable to protect
its security interest in the Collateral. Borrower agrees to assemble the Collateral if Bank so
requires, and to make the Collateral available to Bank as Bank may designate. Borrower authorizes
Bank to enter the premises where the Collateral is located, to take and maintain possession of the
Collateral, or any part of it, and to pay, purchase, contest, or compromise any encumbrance,
charge, or lien which in Bank’s determination appears to be prior or superior to its security
interest and to pay all expenses incurred in connection therewith. With respect to any of
Borrower’s owned premises, Borrower hereby grants Bank a license to enter into possession of such
premises and to occupy the same, without charge, in order to exercise any of Bank’s rights or
remedies provided herein, at law, in equity, or otherwise;

               (f) Set off and apply to the Obligations any and all (i) balances and deposits of Borrower
held by Bank, or (ii) indebtedness at any time owing to or for the credit or the account of
Borrower held by Bank;

               (g) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for
sale, and sell (in the manner provided for herein) the Collateral. Bank is hereby granted a
license or other right, solely pursuant to the provisions of this Section 9.1, to use, without
charge, Borrower’s labels, patents, copyrights, rights of use of any name, trade secrets, trade
names, trademarks, service marks, and advertising matter, or any property of a similar nature, as
it pertains to the Collateral, in completing production of, advertising for sale, and selling any
Collateral and, in connection with Bank’s exercise of its rights under this Section 9.1, Borrower’s
rights under all licenses and all franchise agreements shall inure to Bank’s benefit;

               (h) Dispose of the Collateral by way of one or more contracts or transactions, for cash or on
terms, in such manner and at such places (including Borrower’s premises) as Bank determines is
commercially reasonable, and apply any proceeds to the Obligations in whatever manner or order Bank
deems appropriate;

               (i) Bank may credit bid and purchase at any public sale; and

               (j) Any deficiency that exists after disposition of the Collateral as provided above will be
paid immediately by Borrowers.

          9.2 Power of Attorney. Effective only upon the occurrence and during the continuance
of an Event of Default, each Borrower hereby irrevocably appoints Bank (and any of Bank’s
designated officers, or employees) as such Borrower’s true and lawful attorney to: (a) send
requests for verification of Accounts or notify account debtors of
Bank’s security interest in the Accounts; (b) endorse Borrower’s name on any checks or other
forms of payment or security that may come into Bank’s possession; (c) sign Borrower’s name on any
invoice or bill of lading relating to any Account, drafts against account debtors, schedules and
assignments of Accounts, verifications of Accounts, and notices to account debtors; (d) dispose of
any Collateral; (e) make, settle, and adjust all claims under and decisions with respect to
Borrower’s policies of insurance; (f) settle and adjust disputes and claims respecting the accounts
directly with account debtors, for amounts and upon terms which Bank determines to be reasonable;
(g) to file, in its sole discretion, one or more financing or continuation statements and
amendments thereto, relative to any of the Collateral; and (h) to transfer the Intellectual
Property Collateral into the name of Bank or a third party to the extent permitted under the
California Uniform Commercial Code; provided Bank may exercise such power of attorney to sign the
name of Borrower on any of the documents described in Section 4.2 regardless of whether an Event of
Default has occurred, including without limitation to modify, in its sole discretion, any
intellectual property security agreement entered into between Borrower and Bank without first
obtaining Borrower’s approval of or signature to such modification by amending Exhibits A, B, and
C, thereof, as appropriate, to include reference to any right, title or interest in any Copyrights,
Patents or Trademarks acquired by Borrower after the execution hereof or to delete any reference to
any right, title or interest in any Copyrights, Patents or Trademarks in which Borrower no longer
has or claims to have any right, title or interest. The appointment of Bank as each Borrower’s
attorney in fact, and each and every one of Bank’s rights and powers, being coupled with an
interest, is irrevocable until all of the Obligations have been fully repaid and performed and
Bank’s obligation to provide Credit Extensions hereunder is terminated.

16

 

          9.3 Accounts Collection. At any time during the occurrence and continuation of an
Event of Default, Bank may notify any Person owing funds to a Borrower of Bank’s security interest
in such funds and verify the amount of such Account. Each Borrower shall collect all amounts owing
to such Borrower for Bank, receive in trust all payments as Bank’s trustee, and immediately deliver
such payments to Bank in their original form as received from the account debtor, with proper
endorsements for deposit.

          9.4 Bank Expenses. If a Borrower fails to pay any amounts or furnish any required
proof of payment due to third persons or entities, as required under the terms of this Agreement,
then Bank may do any or all of the following after reasonable notice to Borrowers: (a) make
payment of the same or any part thereof; (b) set up such reserves under a loan facility in Section
2.1 as Bank deems necessary to protect Bank from the exposure created by such failure; or (c)
obtain and maintain insurance policies of the type discussed in Section 6.6 of this Agreement, and
take any action with respect to such policies as Bank deems prudent. Any amounts so paid or
deposited by Bank shall constitute Bank Expenses, shall be immediately due and payable, and shall
bear interest at the then applicable rate hereinabove provided, and shall be secured by the
Collateral. Any payments made by Bank shall not constitute an agreement by Bank to make similar
payments in the future or a waiver by Bank of any Event of Default under this Agreement.

          9.5 Bank’s Liability for Collateral. So long as Bank complies with reasonable banking
practices and its actions do not constitute gross negligence or willful misconduct, Bank shall not
in any way or manner be liable or responsible for: (a) the safekeeping of the Collateral; (b) any
loss or damage thereto occurring or arising in any manner or fashion from any cause; (c) any
diminution in the value thereof; or (d) any act or default of any carrier, warehouseman, bailee,
forwarding agency, or other person whomsoever. Except as set forth in the previous sentence, all
risk of loss, damage or destruction of the Collateral shall be borne by Borrowers.

          9.6 Remedies Cumulative. Bank’s rights and remedies under this Agreement, the Loan
Documents, and all other agreements shall be cumulative. Bank shall have all other rights and
remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise
by Bank of one right or remedy shall be deemed an election, and no waiver by Bank of any Event of
Default on a Borrower’s part shall be deemed a continuing waiver. No delay by Bank shall
constitute a waiver, election, or acquiescence by it. No waiver by Bank shall be effective unless
made in a written document signed on behalf of Bank and then shall be effective only in the
specific instance and for the specific purpose for which it was given.

          9.7 Demand; Protest. Each Borrower waives demand, protest, notice of protest, notice
of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at
maturity, release, compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees at any time held by Bank on which a Borrower may in any
way be liable.

     10. NOTICES.

          Unless otherwise provided in this Agreement, all notices or demands by any party relating to
this Agreement or any other agreement entered into in connection herewith shall be in writing and
(except for financial statements and other informational documents which may be sent by first-class
mail, postage prepaid) shall be personally delivered or sent by a recognized overnight delivery
service, certified mail, postage prepaid, return receipt requested, or by telefacsimile to
Borrowers or to Bank, as the case may be, at its addresses set forth below:

	 	 	 	 	 
	 

	 	If to any Borrower:
	 	Alliance Consulting Group Associates, Inc. and
	 

	 	 	 	Alliance Holdings, Inc.
	 

	 	 	 	Six Tower Bridge
	 

	 	 	 	181 Washington Street
	 

	 	 	 	Suite 350
	 

	 	 	 	Conshohocken, PA 19428
	 

	 	 	 	Attn: Chief Financial Officer
	 

	 	 	 	FAX: 610-234-4331
	 
	 	 	 	 
	 

	 	If to Bank:
	 	Comerica Bank
	 

	 	 	 	75 E Trimble Road

17

 

	 	 	 	 	 
	 

	 	 	 	Mail Code 4770
	 

	 	 	 	San Jose, CA 95131
	 

	 	 	 	Attn: Manager
	 

	 	 	 	FAX: (408) 556-5091
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Comerica Bank
	 

	 	 	 	11921 Freedom Drive
	 

	 	 	 	Suite 920
	 

	 	 	 	Reston, VA 20190
	 

	 	 	 	Attn: Beth Kinsey
	 

	 	 	 	FAX: (703) 467-9308

     The parties hereto may change the address at which they are to receive notices hereunder, by
notice in writing in the foregoing manner given to the other.

     11. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

          This Agreement shall be governed by, and construed in accordance with, the internal laws of
the State of California, without regard to principles of conflicts of law. Each of Borrower and
Bank hereby submits to the exclusive jurisdiction of the state and Federal courts located in the
County of Santa Clara, State of California. BORROWERS AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND
AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.

     12. REFERENCE PROVISION.

          12.1 In the event the Jury Trial Waiver set forth above is not enforceable, the parties elect
to proceed under this Judicial Reference Provision.

          12.2 With the exception of the items specified in clause 12.3, below, any controversy, dispute
or claim (each, a “Claim”) between the parties arising out of or relating to this Agreement or any
other document, instrument or agreement between the undersigned parties (collectively in this
Section, the “Comerica Documents”), will be resolved by a reference proceeding in California in
accordance with the provisions of Sections 638 et seq. of the California Code of Civil Procedure
(“CCP”), or their successor sections, which shall constitute the exclusive remedy for the
resolution of any Claim, including whether the Claim is subject to the reference proceeding. Except
as otherwise provided in the Comerica Documents, venue for the reference proceeding will be in the
state or federal court in the county or district where the real property involved in the action, if
any, is located or in the state or federal court in the county or district where venue is otherwise
appropriate under applicable law (the “Court”).

          12.3 The matters that shall not be subject to a reference are the following: (i) nonjudicial
foreclosure of any security interests in real or personal property, (ii) exercise of self-help
remedies (including, without limitation, set-off), (iii) appointment of a receiver and (iv)
temporary, provisional or ancillary remedies (including, without limitation, writs of attachment,
writs of possession, temporary restraining orders or preliminary injunctions). This reference
provision does not limit the right of any party to exercise or oppose any of the rights and
remedies described in clauses (i) and (ii) or to seek or oppose from a court of competent
jurisdiction any of the items described in clauses (iii) and (iv). The exercise of, or opposition
to, any of those items does not waive the right of any party to a reference pursuant to this
reference provision as provided herein.

18

 

          12.4 The referee shall be a retired judge or justice selected by mutual written agreement of
the parties. If the parties do not agree within ten (10) days of a written request to do so by any
party, then, upon request of any party, the referee shall be selected by the Presiding Judge of the
Court (or his or her representative). A request for appointment of a referee may be heard on an ex
parte or expedited basis, and the parties agree that irreparable harm would result if ex parte
relief is not granted. Pursuant to CCP § 170.6, each party shall have one peremptory challenge to
the referee selected by the Presiding Judge of the Court (or his or her representative).

          12.5 The parties agree that time is of the essence in conducting the reference proceedings.
Accordingly, the referee shall be requested, subject to change in the time periods specified herein
for good cause shown, to (i) set the matter for a status and trial-setting conference within
fifteen (15) days after the date of selection of the referee, (ii) if practicable, try all issues
of law or fact within one hundred twenty (120) days after the date of the conference and (iii)
report a statement of decision within twenty (20) days after the matter has been submitted for
decision.

          12.6 The referee will have power to expand or limit the amount and duration of discovery. The
referee may set or extend discovery deadlines or cutoffs for good cause, including a party’s
failure to provide requested discovery for any reason whatsoever. Unless otherwise ordered based
upon good cause shown, no party shall be entitled to “priority” in conducting discovery,
depositions may be taken by either party upon seven (7) days written notice, and all other
discovery shall be responded to within fifteen (15) days after service. All disputes relating to
discovery which cannot be resolved by the parties shall be submitted to the referee whose decision
shall be final and binding.

          12.7 Except as expressly set forth herein, the referee shall determine the manner in which the
reference proceeding is conducted including the time and place of hearings, the order of
presentation of evidence, and all other questions that arise with respect to the course of the
reference proceeding. All proceedings and hearings conducted before the referee, except for trial,
shall be conducted without a court reporter, except that when any party so requests, a court
reporter will be used at any hearing conducted before the referee, and the referee will be provided
a courtesy copy of the transcript. The party making such a request shall have the obligation to
arrange for and pay the court reporter. Subject to the referee’s power to award costs to the
prevailing party, the parties will equally share the cost of the referee and the court reporter at
trial.

          12.8 The referee shall be required to determine all issues in accordance with existing case
law and the statutory laws of the State of California. The rules of evidence applicable to
proceedings at law in the State of California will be applicable to the reference proceeding. The
referee shall be empowered to enter equitable as well as legal relief, enter equitable orders that
will be binding on the parties and rule on any motion which would be authorized in a court
proceeding, including without limitation motions for summary judgment or summary adjudication. The
referee shall issue a decision at the close of the reference proceeding which disposes of all
claims of the parties that are the subject
of the reference. Pursuant to CCP § 644, such decision shall be entered by the Court as a
judgment or an order in the same manner as if the action had been tried by the Court and any such
decision will be final, binding and conclusive. The parties reserve the right to appeal from the
final judgment or order or from any appealable decision or order entered by the referee. The
parties reserve the right to findings of fact, conclusions of laws, a written statement of
decision, and the right to move for a new trial or a different judgment, which new trial, if
granted, is also to be a reference proceeding under this provision.

          12.9 If the enabling legislation which provides for appointment of a referee is repealed (and
no successor statute is enacted), any dispute between the parties that would otherwise be
determined by reference procedure will be resolved and determined by arbitration. The arbitration
will be conducted by a retired judge or justice, in accordance with the California Arbitration Act
§1280 through §1294.2 of the CCP as amended from time to time. The limitations with respect to
discovery set forth above shall apply to any such arbitration proceeding.

          12.10 THE PARTIES RECOGNIZE AND AGREE THAT ALL CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED
UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER OWN CHOICE, EACH PARTY
KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, AGREES THAT THIS REFERENCE
PROVISION WILL

19

 

APPLY TO ANY CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR AMONG THEM ARISING OUT OF OR
IN ANY WAY RELATED TO, THIS AGREEMENT OR THE OTHER COMERICA DOCUMENTS.

     13. GENERAL PROVISIONS.

          13.1 Successors and Assigns. This Agreement shall bind and inure to the benefit of
the respective successors and permitted assigns of each of the parties; provided,
however, that neither this Agreement nor any rights hereunder may be assigned by Borrower
without Bank’s prior written consent, which consent may be granted or withheld in Bank’s sole
discretion. Bank shall have the right without the consent of or notice to Borrowers to sell,
transfer, negotiate, or grant participation in all or any part of, or any interest in, Bank’s
obligations, rights and benefits hereunder.

          13.2 Indemnification. Each Borrower shall defend, indemnify and hold harmless Bank
and its officers, employees, and agents against: (a) all obligations, demands, claims, and
liabilities claimed or asserted by any other party in connection with the transactions contemplated
by this Agreement; and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by
Bank as a result of or in any way arising out of, following, or consequential to transactions
between Bank and a Borrower whether under this Agreement, or otherwise (including without
limitation reasonable attorneys fees and expenses), except for losses caused by Bank’s gross
negligence or willful misconduct.

          13.3 Time of Essence. Time is of the essence for the performance of all obligations
set forth in this Agreement.

          13.4 Severability of Provisions. Each provision of this Agreement shall be severable
from every other provision of this Agreement for the purpose of determining the legal
enforceability of any specific provision.

          13.5 Amendments in Writing, Integration. Neither this Agreement nor the Loan
Documents can be amended or terminated orally. All prior agreements, understandings,
representations, warranties, and negotiations between the parties hereto with respect to the
subject matter of this Agreement and the Loan Documents, if any, are merged into this Agreement and
the Loan Documents.

          13.6 Counterparts. This Agreement may be executed in any number of counterparts and
by different parties on separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, when taken together, shall constitute but one and the
same Agreement.

          13.7 Survival. All covenants, representations and warranties made in this Agreement
shall continue in full force and effect so long as any Obligations remain outstanding or Bank has
any obligation to make Credit Extensions to Borrowers. The obligations of each Borrower to
indemnify Bank with respect to the expenses, damages,
losses, costs and liabilities described in Section 12.2 shall survive until all applicable
statute of limitations periods with respect to actions that may be brought against Bank have run.

          13.8 Effect of Amendment and Restatement. This Agreement is intended to and does
completely amend and restate, without novation, the Original Agreement. All security interests
granted under the Original Agreement are hereby confirmed and ratified and shall continue to secure
all Obligations under this Agreement.

     14. CO-BORROWER PROVISIONS.

          14.1 Primary Obligation. This Agreement is a primary and original obligation of each
Borrower and shall remain in effect notwithstanding future changes in conditions, including any
change of law or any invalidity or irregularity in the creation or acquisition of any Obligations
or in the execution or delivery of any agreement between Bank and any Borrower. Each Borrower
shall be liable for existing and future Obligations as fully as if all of all Credit Extensions
were advanced to such Borrower. Bank may rely on any certificate or representation made by any
Borrower as made on behalf of, and binding on, all Borrowers, including without limitation Advance
Request Forms, and Compliance Certificates.

20

 

          14.2 Enforcement of Rights. Borrowers are jointly and severally liable for the
Obligations and Bank may proceed against one or more of the Borrowers to enforce the Obligations
without waiving its right to proceed against any of the other Borrowers.

          14.3 Borrowers as Agents. Each Borrower appoints the other Borrower as its agent with
all necessary power and authority to give and receive notices, certificates or demands for and on
behalf of both Borrowers, to act as disbursing agent for receipt of any Advances on behalf of each
Borrower and to apply to Bank on behalf of each Borrower for Advances, any waivers and any
consents. This authorization cannot be revoked, and Bank need not inquire as to each Borrower’s
authority to act for or on behalf of Borrower.

          14.4 Subrogation and Similar Rights. Notwithstanding any other provision of this
Agreement or any other Loan Document, each Borrower irrevocably waives all rights that it may have
at law or in equity (including, without limitation, any law subrogating the Borrower to the rights
of Bank under the Loan Documents) to seek contribution, indemnification, or any other form of
reimbursement from any other Borrower, or any other Person now or hereafter primarily or
secondarily liable for any of the Obligations, for any payment made by the Borrower with respect to
the Obligations in connection with the Loan Documents or otherwise and all rights that it might
have to benefit from, or to participate in, any security for the Obligations as a result of any
payment made by the Borrower with respect to the Obligations in connection with the Loan Documents
or otherwise. Any agreement providing for indemnification, reimbursement or any other arrangement
prohibited under this Section 13.4 shall be null and void. If any payment is made to a Borrower in
contravention of this Section 13.4, such Borrower shall hold such payment in trust for Bank and
such payment shall be promptly delivered to Bank for application to the Obligations, whether
matured or unmatured.

          14.5 Waivers of Notice. Except as otherwise provided in this Agreement, each Borrower
waives notice of acceptance hereof; notice of the existence, creation or acquisition of any of the
Obligations; notice of an Event of Default; notice of the amount of the Obligations outstanding at
any time; notice of intent to accelerate; notice of acceleration; notice of any adverse change in
the financial condition of any other Borrower or of any other fact that might increase the
Borrower’s risk; presentment for payment; demand; protest and notice thereof as to any instrument;
default; and all other notices and demands to which the Borrower would otherwise be entitled. Each
Borrower waives any defense arising from any defense of any other Borrower, or by reason of the
cessation from any cause whatsoever of the liability of any other Borrower. Bank’s failure at any
time to require strict performance by any Borrower of any provision of the Loan Documents shall not
waive, alter or diminish any right of Bank thereafter to demand strict compliance and performance
therewith. Nothing contained herein shall prevent Bank from foreclosing on the Lien of any deed of
trust, mortgage or other security instrument, or exercising any rights available thereunder, and
the exercise of any such rights shall not constitute a legal or equitable discharge of any
Borrower. Each Borrower also waives any defense arising from any act or omission of Bank that
changes the scope of the Borrower’s risks hereunder.

          14.6 Subrogation Defenses. Each Borrower hereby waives any defense based on
impairment or destruction of its subrogation or other rights against any other Borrower and waives
all benefits which might otherwise be available to it under California Civil Code Sections 2809,
2810, 2819, 2839, 2845, 2848, 2849, 2850, 2899, and 3433 and California Code of Civil Procedure
Sections 580a, 580b, 580d and 726, as those statutory provisions are now in effect and hereafter
amended, and under any other similar statutes now and hereafter in effect.

          14.7 Right to Settle, Release.

               (a) The liability of Borrowers hereunder shall not be diminished by (i) any agreement,
understanding or representation that any of the Obligations is or was to be guaranteed by another
Person or secured by other property, or (ii) any release or unenforceability, whether partial or
total, of rights, if any, which Bank may now or hereafter have against any other Person, including
another Borrower, or property with respect to any of the Obligations.

               (b) Without affecting the liability of any Borrower hereunder, Bank may (i) compromise,
settle, renew, extend the time for payment, change the manner or terms of payment, discharge the
performance of, decline to enforce, or release all or any of the Obligations with respect to a
Borrower, (ii) grant other indulgences to a Borrower in respect of the Obligations, (iii) modify in
any manner any documents relating to the Obligations with respect to a Borrower, (iv) release,
surrender or exchange any deposits or other property securing the Obligations, whether pledged by a
Borrower or any other Person, or (v) compromise, settle, renew, or extend the time for

21

 

payment,
discharge the performance of, decline to enforce, or release all or any obligations of any
guarantor, endorser or other Person who is now or may hereafter be liable with respect to any of
the Obligations.

          14.8 Subordination. All indebtedness of a Borrower now or hereafter arising held by
another Borrower is subordinated to the Obligations and the Borrower holding the indebtedness shall
take all actions reasonably requested by Lender to effect, to enforce and to give notice of such
subordination.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
date first above written.

	 	 	 	 	 	 	 
	 	 	ALLIANCE CONSULTING GROUP ASSOCIATES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jeffrey B. McGroarty	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	ALLIANCE HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Steven Grenfell	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	COMERICA BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Beth Kinsey	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Title: Senior Vice President	 	 

22

 

	 	 	 
	DEBTOR:

	 	ALLIANCE CONSULTING GROUP ASSOCIATES, INC.
	 

	 	ALLIANCE HOLDINGS, INC.
	 
	 	 
	SECURED PARTY:

	 	COMERICA BANK

EXHIBIT A

COLLATERAL DESCRIPTION ATTACHMENT

TO LOAN AND SECURITY AGREEMENT

     All personal property of Borrower (herein referred to as “Borrower” or “Debtor”) whether
presently existing or hereafter created or acquired, and wherever located, including, but not
limited to:

          (a) all accounts (including health-care-insurance receivables), chattel paper (including
tangible and electronic chattel paper), deposit accounts, documents (including negotiable
documents), equipment (including all accessions and additions thereto), general intangibles
(including payment intangibles and software), goods (including fixtures), instruments (including
promissory notes), inventory (including all goods held for sale or lease or to be furnished under a
contract of service, and including returns and repossessions), investment property (including
securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books
and records with respect to any of the foregoing, and the computers and equipment containing said
books and records;

          (b) all common law and statutory copyrights and copyright registrations, applications for
registration, now existing or hereafter arising, in the United States of America or in any foreign
jurisdiction, obtained or to be obtained on or in connection with any of the forgoing, or any parts
thereof or any underlying or component elements of any of the forgoing, together with the right to
copyright and all rights to renew or extend such copyrights and the right (but not the obligation)
of Secured Party to sue in its own name and/or in the name of the Debtor for past, present and
future infringements of copyright;

          (c) all trademarks, service marks, trade names and service names and the goodwill associated
therewith, together with the right to trademark and all rights to renew or extend such trademarks
and the right (but not the obligation) of Secured Party to sue in its own name and/or in the name
of the Debtor for past, present and future infringements of trademark;

          (d) all (i) patents and patent applications filed in the United States Patent and Trademark
Office or any similar office of any foreign jurisdiction, and interests under patent license
agreements, including, without limitation, the inventions and improvements described and claimed
therein, (ii) licenses pertaining to any patent whether Debtor is licensor or licensee, (iii)
income, royalties, damages, payments, accounts and accounts receivable now or hereafter due and/or
payable under and with respect thereto, including, without limitation, damages and payments for
past, present or future infringements thereof, (iv) right (but not the obligation) to sue in the
name of Debtor and/or in the name of Secured Party for past, present and future infringements
thereof, (v) rights corresponding thereto throughout the world in all jurisdictions in which such
patents have been issued or applied for, and (vi) reissues, divisions, continuations, renewals,
extensions and continuations-in-part with respect to any of the foregoing; and

          (e) any and all cash proceeds and/or noncash proceeds of any of the foregoing, including,
without limitation, insurance proceeds, and all supporting obligations and the security therefor or
for any right to payment. All terms above have the meanings given to them in the California
Uniform Commercial Code, as amended or supplemented from time to time, including revised Division 9
of the Uniform Commercial Code-Secured Transactions, added by Stats. 1999, c.991 (S.B. 45), Section
35, operative July 1, 2001.exv10w29w7

 

EXHIBIT 10.29.7

AFFIRMATION
OF GUARANTY

(Safeguard Delaware / Safeguard Scientifics (Delaware))

     This AFFIRMATION OF GUARANTY is made as of February 28, 2007, by the undersigned (each a
“Guarantor”; collectively, the “Guarantors”) and COMERICA BANK (“Bank”).

RECITALS

     Borrowers and Bank are parties to that certain Loan and Security Agreement dated as of
September 25, 2003, as amended, including, without limitation, by that certain First Amendment to
Loan and Security Agreement dated as of December 12, 2003, that certain Second Amendment to Loan
and Security Agreement dated as of May 27, 2004, that certain Third Amendment to Loan Documents
dated as of August 9, 2004, that certain Fourth Amendment to Loan Documents dated as of September
30, 2004, that certain Fifth Amendment to Loan Documents dated as of March 11, 2005, that certain
Sixth Amendment to Loan Documents dated as of June 30, 2005, that certain Seventh Amendment to Loan
Documents dated as of February 28, 2006, that certain Eighth Amendment and Consent to Loan
Documents dated as of April 27, 2006, that certain Consent to Loan Documents dated as of July 13,
2006 and that certain Ninth Amendment and Waiver to Loan Documents dated December 29, 2006
(collectively, the “Agreement”) and that certain LIBOR Addendum to Loan and Security Agreement
dated as of September 25, 2003 (the “LIBOR Addendum”)(the Agreement and the LIBOR Addendum,
collectively, the “Original Agreement”).

     Guarantors executed for the benefit of Bank an Unconditional Guaranty dated as of September
30, 2004 (the “Guaranty”), guarantying certain amounts owing by Borrowers to Bank under the
Original Agreement. Borrowers and Bank wish to amend and restate the terms of the Original
Agreement and to evidence the obligations of Borrowers to Bank in two separate agreements, one
subject to a guaranty and the other not. The Amended and Restated Loan and Security Agreement
dated as of the date hereof sets forth the terms on which Bank will advance credit to Borrowers in
respect of the guarantied loans in the maximum principal amount of $5,000,000 (the “Guarantied Loan
Agreement”). Bank has agreed to enter into the Guarantied Loan Agreement provided, among other
things, that Guarantors consent to the entry by Borrowers into the Guarantied Loan Agreement and
related documents and agrees that the Guaranty will remain effective.

AGREEMENT

     NOW, THEREFORE, Guarantors agree as follows:

     1. Each Guarantor consents to the execution, delivery and performance by Borrower of the
Guarantied Loan Agreement and the documents and instruments executed in connection therewith, as
well as all other amendments and modifications to the Loan Documents.

     2. The Guaranty is and shall remain in full force and effect with respect to all of
Borrowers’ Obligations as defined in the Guarantied Loan Agreement. Each Guarantor confirms that,
as of the date hereof, it has no defenses against its obligations under the Guaranty.

     3. Each Guarantor represents and warrants that the Representations and Warranties contained
in the Guaranty are true and correct as of the date of this Affirmation except (i) to the extent
such representations and warranties expressly relate to an earlier date, which representations and
warranties are true and correct as of such date; and (ii) for those changes to the representations
and warranties resulting from events, occurrences or circumstances permitted under the applicable
Loan Documents. Unless otherwise defined, all capitalized terms in this Affirmation shall be as
defined in the Guaranty.

     4. The Guaranty, as amended hereby, shall be and remain in full force and effect in
accordance with its respective terms and hereby is ratified and confirmed in all respects. Except
as expressly set forth herein, the

 

 

execution, delivery, and performance of this Affirmation and
shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under
the Guaranty, as in effect prior to the date hereof. Each Guarantor ratifies and reaffirms the
continuing effectiveness of all instruments, documents and agreements entered into in connection
with the Guaranty.

     IN WITNESS WHEREOF, the undersigned Guarantors have executed this Affirmation of Guaranty as
of the first date above written.

	 	 	 	 	 	 	 
	 	 	SAFEGUARD DELAWARE, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By: /s/ Steven J. Feder	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	SAFEGUARD SCIENTIFICS (DELAWARE), INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By: /s/ Steven J. Feder	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	COMERICA BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By: /s/ Beth Kinsey	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Title: Senior Vice President

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