Document:

Exhibit 4.2 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
  SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. 

UNIVERSAL POWER GROUP, INC. 

WARRANT 

1.           Issuance; Certain Definitions.
In consideration of good and valuable consideration, the receipt of which is
hereby acknowledged by
UNIVERSAL POWER GROUP, INC., a Texas corporation
(the "Company"), LADENBURG THALMANN & CO. INC., or registered assigns (the "Holder"),
is hereby granted the right to purchase at any time after 9:00 a.m. New York
City time on __________, 2007 [180 days after the effective date of the Registration
Statement], until 5:00 p.m., New York City, time on __________, 2011 (“Termination
Date”),    (__________) fully paid and
nonassessable shares (the “Warrant Shares”) of the Company's Common
Stock, $ .01 par value per share (the "Common Stock"), at an initial exercise
price per share (the "Exercise Price") of $__________ per share, subject to
 further adjustment as set forth herein. Capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Underwriting Agreement,
dated , 2006, between Universal Power Group, Inc. and the representatives of
the several  underwriters listed on Schedule I thereof (the "Agreement"). 

2.           Exercise of Warrants.

	               	
(a)          	
      This Warrant is exercisable in whole or in part at any time
  and from time to time beginning on _______ __, 2007 [180 days after the effective
  date of the Registration Statement] and ending on the Termination Date. Such
   exercise shall be effectuated by submitting to the Company (either by delivery
  to the Company or by facsimile transmission as provided in Section 8 hereof)
  a completed and duly executed Notice of Exercise
  (substantially in the form attached to this Warrant)
  as provided in this paragraph. The date such Notice of Exercise is faxed to
  the Company shall be the "Exercise Date", provided that the Holder of this
  Warrant tenders this Warrant Certificate to the Company within five (5) business
  days thereafter. The Notice of Exercise shall be executed by the Holder of
  this Warrant and shall indicate the number of shares then being purchased pursuant
  to such exercise. Upon surrender of this Warrant Certificate, together with
  appropriate payment of the Exercise Price for the shares of Common Stock purchased,
  the Holder shall be entitled to receive a certificate or certificates for the
  shares of Common Stock so purchased.

	 
	 	
(b)	
      If the Notice of Exercise form
          elects a "cashless" exercise, the Holder shall thereby be entitled
          to receive a number of shares of Common Stock equal to the quotient
    obtained by dividing [(A-B) * (X)] by (A), where:

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	 	 	(A) = the average of the VWAP for the twenty (20)
    trading days immediately preceding the date of such election; 

	 	 	

	 	 	 (B) = the Exercise Price of this Warrant, as adjusted;
    and

	 	 	

	                         	               	 (X) = the number of Warrant Shares, as adjusted,
          issuable upon exercise of this Warrant in accordance with the terms of
    this Warrant by means of a cash exercise rather than a cashless exercise. 

	 	 
	 	The holder may not elect
          a "cashless" exercise until one year from the date hereof or at any
          time when there is a currently effective registration statement for
          the Warrant Shares. 

       Notwithstanding anything herein to
          the contrary, on the Termination Date, this Warrant shall be automatically
          exercised via cashless exercise pursuant to this Section 2(b), provided,
          however, that if the average of the VWAP for the twenty (20) trading
          days preceding the Termination Date is less than the Exercise Price
          at such time, this Warrant shall be deemed cancelled, unless the Holder
          elects to exercise this Warrant pursuant to Section 2(a) on or prior
          to the Termination Date. 

       “VWAP” means, for any date,
          the price determined by the first of the following clauses that applies:
          (a) if the Common Stock is then listed or quoted on a national securities
          exchange, the daily volume weighted average price of the Common Stock
          for such date (or the nearest preceding date) on the Trading Market
          on which the Common Stock is then listed or quoted as reported by Bloomberg
          Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time
          to 4:02 p.m. Eastern Time); (b) if the Common Stock is not then listed
          or quoted on a national securities exchange and if prices for the Common
          Stock are then quoted on the Nasdaq Global Market or Capital Market
          Systems (collectively, “Nasdaq”) or the OTC Bulletin Board,
          the volume weighted average price of the Common Stock for such date
          (or the nearest preceding date) on Nasdaq or the OTC Bulletin Board;
          (c) if the Common Stock is not then listed or quoted on Nasdaq or the
          OTC Bulletin Board and if prices for the Common Stock are then reported
          in the “Pink Sheets” published by the Pink Sheets, LLC (or
          a similar organization or agency succeeding to its functions of reporting
          prices), the most recent bid price per share of the Common Stock so
          reported; or (c) in all other cases, the fair market value of a share
          of Common Stock as determined by an independent appraiser selected
    in good faith by the Purchasers and reasonably acceptable to the Company. 

	 	 

	
(c)          	
      If the Notice of Exercise form
          elects a "cash" exercise, the Exercise Price per share of Common Stock
          for the shares then being exercised shall be payable in cash or by
    certified or official bank check.

	 
	
(d)	
      The Holder shall be deemed to be the holder of the shares issuable to it in accordance with the provisions of this Section 2 on the Exercise Date

	 

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3.           Reservation of Shares. The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance upon exercise of this Warrant
such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant (the "Warrant Shares"). 

4.           Restrictions on Transferability.  This Warrant and the underlying shares may not be transferred or assigned for a period of 180 days after the effective date of the
Registration Statement, other than to any underwriter participating in this offering or an officer or partner thereof, and only if all securities so transferred remain subject to the 180-day lock-up restriction for the remainder of the lock-up
period. 

5.           Mutilation or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the
case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver a duplicate Warrant and any such lost,
stolen, destroyed or mutilated Warrant shall thereupon become void. 

6.           Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the
Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein. 

7.           Protection Against Dilution and Other Adjustments. 

                7.1           Adjustment Mechanism. If an adjustment of the Exercise Price is required pursuant to this Section 7, the Holder shall be entitled to purchase such number of
additional shares of Common Stock as will cause (i) the total number of shares of Common Stock Holder is entitled to purchase pursuant to this Warrant, multiplied by (ii) the adjusted Exercise Price per share, to equal (iii) the dollar amount of the
total number of shares of Common Stock Holder is entitled to purchase before adjustment multiplied by the total Exercise Price immediately before adjustment. 

                7.2.           Adjustment of Exercise Price. The Exercise Price and the number of shares of Common Stock purchasable upon the exercise of this Warrant shall be subject to
adjustment from time to time upon the occurrence of certain events described in this Section 7.2. 

	               	
(a)            	
      Subdivision or Combination of Stock. In case the Company shall at any time subdivide its outstanding shares of Common Stock into a greater number of shares, the Exercise Price, as in effect
  immediately prior to such subdivision, shall be proportionately reduced, and conversely, in case the outstanding shares of Common Stock shall be combined into a smaller number of shares, the Exercise Price, as in effect immediately prior to such
  combination shall be proportionately increased.

	 

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	               	 (b)            	Dividends in Stock, Property, Reclassification.
        If at any time or from time to time the holders of the Common Stock shall
        have received or become entitled to receive, without payment therefor,
    then

	 	 	 	 
	 	 	
(1)          	
      Common Stock, or any rights or options to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution,

	 
	 	 	
(2)	
      any cash paid or payable otherwise than as a cash dividend, or

	 
	 	 	
(3)	
      Common Stock or additional stock or other securities or property (including cash) by way of spinoff, split-up, reclassification, combination of shares or similar corporate rearrangement (other than shares of Common Stock issued as
  a stock split, adjustments in respect of which shall be covered by the terms of Section 7.2(a) above), then and in each such case, the Holder of this Warrant shall, upon the exercise of the Warrant, be entitled to receive, in addition to the number
  of shares of Common Stock receivable thereupon, and without payment of any additional consideration therefor, the amount of stock and other securities and property (including cash in the cases referred to in clauses (2) and (3)) which such Holder
  would hold on the date of such exercise had he been the holder of record of such Common Stock as of the date on which holders of Common Stock received or became entitled to receive such shares or all other additional stock and other securities and
  property.

	 
	 	
(c)	
      Notice of Adjustment. Upon any adjustment of the Exercise Price or any increase or decrease in the number of shares purchasable upon the exercise of this Warrant, the Company shall give written
  notice thereof, in accordance with Section 8, to the Holder of this Warrant. The notice shall be signed by the Company's chief financial officer and shall state the Exercise Price resulting from such adjustment and the increase or decrease, if any,
  in the number of shares of Common Stock purchasable at such price upon the exercise of this Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.

	 
	 	
(d)	
Other Notices. If at any time:
	 
	 	 	
(1)	
      the Company shall declare any cash dividend upon its Common Stock;

	 
	 	 	
(2)	
      there shall be any capital reorganization or reclassification of the capital stock of the Company; or consolidation or merger of the Company with, or sale of all or substantially all of its assets to, another entity;

	 
	 	 	
(3)	
      there shall be a voluntary or involuntary dissolution, liquidation or winding- up of the Company;

	 

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	               	              	 (4)          	
      there shall be a public offering
          of the Company equity securities; or

	 
	 	 	 (5)	 thirty (30) days prior to the expiration of this
        Warrant;
	 

	               	 	
  then, in any one or more of said cases, the Company shall give, in accordance with Section 8, to the Holder of this Warrant, (a) at least thirty (30) days' prior written notice of the date on which the books of the Company shall
  close or a record shall be taken for such dividend, distribution or subscription rights or for determining rights to vote in respect of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up,
  and (b) in the case of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, winding-up or public offering, at least thirty (30) days' prior written notice of the date when the same shall take place;
  provided, however, that the Holder shall make a best efforts attempt to respond to such notice as early as possible after the receipt thereof.

	 
	 	
(e)          	
      Certain Events.
          If any change in the outstanding Common Stock of the Company or any
          other event occurs as to which the other provisions of this Section
          7.2 are not strictly applicable or if  strictly applicable would not
          fairly protect the purchase rights of the Holder of this Warrant in
          accordance with such provisions, then the Board of Directors of the
          Company shall make an adjustment in the number and class of shares
          of Common Stock  available under this Warrant, the Exercise Price or
          the application of such provisions, so as to protect such purchase
          rights as aforesaid. The adjustment shall be such as will give the
          Holder of this Warrant upon exercise for the same aggregate Exercise
          Price, the total number, class and kind of shares of Common Stock as
          it would have owned had this Warrant been exercised prior to the event
          and had it continued to hold such shares until after the event requiring
    adjustment.

8.           Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, sent by facsimile
transmission or sent by certified, registered or express mail, postage pre-paid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission, or, if mailed, four days after the date of
deposit in the United States mails, as follows: 

	               	
If to the Company: 
	
	 	 

	
	 	
Universal Power Group, Inc. 
	
	 	
1720 Hayden Road 
	
	 	
Carrollton, TX 75006 
	
	 	
Telephone No.: (469) 892-1122 
	
	 	
Telecopier No.: (469) 892-1123 
	
	 	 

	
	 	
with a copy to: 
	
	 	 

	

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	               	 Joel J. Goldschmidt,
        Esq.  
	 	 Morse, Zelnick, Rose & Lander
        LLP  
	 	 405 Park Avenue, Suite
        1401  
	 	
New York, NY 10022 
	
	 	
Telephone No.: (212) 838-8269   
	
	 	
Telecopier No.: (212) 838-9190  
	
	 	 

	
	 	
If to the Holder: 
	
	 	 

	
	 	
Robert J. Kropp 
	
	 	
Ladenburg Thalmann & Co. Inc. 
	
	 	
153 East 53rd Street, 49th Floor 
	
	 	
New York, NY 10022 
	
	 	
Telephone No.: (212) 409-2000  
	
	 	
Telecopier No.: (212) 409-2169  
	
	 	 

	
	 	
with a copy to: 
	
	 	 

	
	 	
Norman R. Miller, Esq. 
	
	 	
Patton Boggs LLP 
	
	 	
2001 Ross Avenue, Suite 3000 
	
	 	
Dallas, TX 75201 
	
	 	
Telephone No.: (214) 758-6630  
	
	 	
Telecopier No.: (214) 758-1550  
	

Any party may give notice in accordance with this Section to designate to another address or person for receipt of notices hereunder. 

9.           Supplements and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the Company and the Holder. This
Warrant contains the full understanding of the parties with respect to the subject matter hereof and thereof and there are no representations, warranties, agreements or understandings other than expressly contained herein and therein. 

10.         Governing
Law. This Warrant shall be deemed to be a contract
made under the laws of the State of New York. The Company and each Purchaser
hereby submit to the  jurisdiction of any New York State or federal court sitting
in the State of New York, County of New York and any appellate court from any
thereof in any action or proceeding arising out of or relating to this Agreement
and agree that all claims in  respect of the action or proceeding may be heard
and determined in any such court; agree not to bring any action or proceeding
arising out of or relating to this Agreement in any other court; waive any defense
of inconvenient forum to the  maintenance of any action or proceeding so brought
and waive any bond, surety, or other security that might be required of any other
party 

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with respect thereto; and agree that a final
    judgment in any action or proceeding so brought shall be conclusive and may
    be enforced by suit on the judgment or in any other manner provided by law
or in equity. 

 11.         Jury
      Trial Waiver. THE
      COMPANY AND THE HOLDER HEREBY WAIVE A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER IN RESPECT OF ANY MATTER ARISING OUT OR IN CONNECTION WITH THIS WARRANT. 

12.         Counterparts.
This Warrant may be executed in any number of counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such  counterparts
shall together constitute but one and the same instrument. 

13.         Descriptive
Headings. Descriptive headings of the several Sections
of this Warrant are inserted for convenience only and shall not control or affect
the meaning or  construction of any of the provisions hereof. 

              IN
WITNESS WHEREOF, the Company has executed this Warrant as of the _____ day of
____________, 2006. 

 

	 	
UNIVERSAL POWER GROUP, INC. 
	
	 	 

	
	 	
By:______________________________ 
	
	 	
Name:____________________________ 
	
	 	
Title:_____________________________ 
	

7 

NOTICE OF EXERCISE 

TO: Universal Power Group, Inc. 

                      (1)           The undersigned hereby elects to purchase Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any. 

	                    	
(2)          	
Payment shall take the form of (check applicable box): 
	 	 	 
	 	 	[ ] in lawful money of the United States; or
	 
	 	 	
  [ ] the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(b), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant
  to the cashless exercise procedure set forth in subsection 2(b).

                      (3)          Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified below: 

                                   ____________________

The Warrant Shares shall be delivered to the following: 

                                   ____________________

                                   ____________________

                                   ____________________

Date: _______________   

	 	
LADENBURG THALMANN & CO., INC. 
	
	 	 
	 	 
	 	 
	 	
By: _______________________________Exhibit 10.5(c) 

SECOND RENEWAL AND MODIFICATION AGREEMENT 

           THIS SECOND RENEWAL AND MODIFICATION AGREEMENT (this “Modification”) is made by and between UNIVERSAL POWER GROUP, INC., a Texas corporation (“Borrower”), and COMPASS BANK (“Lender”), to be effective as of the
18th day of April, 2006.

RECITALS: 

           WHEREAS, Borrower executed and delivered to Lender that certain Revolving Credit and Security Agreement, dated December 14, 2004 (the “Security Agreement”),
covering among other items of collateral certain Accounts, Accounts Receivable, Inventory, and other Collateral (each as defined in such Security Agreement), both tangible and intangible, together with all other collateral and property described in
the Security Agreement (all of such property being hereinafter collectively referred to as the “Property”); and 

           WHEREAS, the Security Agreement secures in part the indebtedness evidenced by that certain Revolving Note, dated of even date with the Security Agreement, in the original stated principal amount of Twelve Million and No/100
Dollars ($12,000,000.00), executed by Borrower and payable to Lender (as may have been heretofore renewed, extended, and/or modified, the “Note”); and 

           WHEREAS, the Borrower has obligations (collectively, the “Obligations”) under the Note, Security Agreement, and other Loan Documents (as defined below), which
Obligations, Note, Security Agreement and other Loan Documents were modified, renewed and/or extended, as the case may be, pursuant to that certain Renewal and Modification Agreement, dated March 23, 2006 (the “First Modification”)  (the indebtedness evidenced by the Note is referred to herein as the “Loan”, and the Note, Security
Agreement, First Modification, and all documents evidencing the Loan are herein collectively, the “Loan Documents”); and 

           WHEREAS, the parties desire to increase the principal amount under the Loan from Twelve Million and No/100 Dollars ($12,000,000.00) to Sixteen Million and No/100 Dollars ($16,000,000.00), all in accordance with the terms
and conditions herein contained; and

           WHEREAS, the parties desire to further modify the terms of the Loan as the same relate to certain of Borrower’s covenants, agreements, duties and obligations under the Security Agreement and other terms and conditions of the
Loan. 

AGREEMENTS: 

           NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower and Lender
hereby agree as follows: 

          1.
          The parties desire to increase the original principal amount of the Note from Twelve
Million and No/100 Dollars ($12,000,000.00) to
Sixteen Million and No/100 Dollars ($16,000,000.00) (hereinafter, the “Principal
Amount”),
Borrower’s duties and obligations under the Note (as hereby modified, extended,
and renewed) to repay the Principal Amount (as herein defined) shall be included
within the definition of the Obligations as herein specified, all in accordance
with the terms and conditions herein contained.

          2.           From
the date hereof, Borrower promises to pay to Lender the Principal Amount (as herein modified), together with interest thereon, and
to perform all of the Obligations under the Loan Documents (as hereby modified)
including, without limitation the payment of all outstanding principal together
with all  accrued but unpaid interest on the Maturity Date (as defined in both
the Note and Security Agreement). The Principal Amount shall accrue interest
and be due and payable in accordance with and as specified within the Promissory
Note; provided,  however, that, contemporaneously upon the execution of this
Modification, Borrower and Lender shall execute that certain First Amendment
to Master Revolving Promissory Note (the “First
 Amendment”), reflecting, among other revised
 terms, the increase of the Principal Amount as specified in Section 1 above,
 as well as the increase in the sub-limit upon letters of credit (defined as
 L/C’s under
the Security Agreement) from Seven Hundred Fifty Thousand and No/100 Dollars
 ($750,000.00) in the aggregate to Eight Hundred Seventy Five Thousand and
 No/100 Dollars ($875,000.00) . By this reference, the First Amendment is
hereby  incorporated into this Modification for all purposes. 

          3.           In addition to the foregoing, the parties hereby further agree that certain sections of the Security Agreement shall be modified and/or
amended, all in accordance with the following:

	          	
(a)          	
      Any and all references to (i) “Twelve Million and No/100 Dollars ($12,000,000.00)” or “$12,000,000.00” in the Security Agreement with respect to the amount of the Revolving Line shall be deleted and
  replaced in their entirety by “Sixteen Million and No/100 Dollars ($16,000,000.00)” or “$16,000,000.00,” respectively, as appropriate; and (ii) “Seven Hundred Fifty Thousand and No/100 Dollars ($750,000.00)”
  or “$750,000.00” in the Security Agreement with respect to the sub-limit on the aggregate amount of L/C’s (as defined in the Security Agreement in respect of letters of credit) shall be deleted and replaced in their entirety by
“Eight Hundred Seventy Five Thousand and No/100 Dollars ($875,000.00)” or “$875,000.00,” respectively,
as appropriate, all in accordance with the terms and conditions of the Security
Agreement (as modified hereby) and as further set forth in the First Amendment.

	 
	 	
(b)	
      The advance formula referenced
          in the Security Agreement, Section 1.1, and defined as the “Borrowing Base” therein shall be and hereby is modified as follows: “eighty-five percent (85.0%) of the outstanding value of
  Borrower’s Eligible Accounts Receivable (as defined in the Security Agreement and modified hereby), plus fifty percent (50.0%) of the value of Borrower’s Eligible Inventory (as hereinafter defined). Advances against Borrower’s
  Eligible Inventory shall not to exceed the lesser of (a) $8,500,000.00,
  or (b) an amount equal to the

	 

2

	          	 	
  product of (i) one and one-half (1.5),
      multiplied by (ii) eight-five percent (85%) of the outstanding value of
      Borrower’s Eligible Accounts Receivable at any one time outstanding; provided, however, that in no event shall the
  aggregate sum of all principal advances made by Bank to Borrower at any one time outstanding hereunder exceed the sum of $16,000,000.00.” From and after the date of this Modification, all references to the term “Borrowing Base” in
  the Security Agreement and other Loan Documents shall refer to the advance
  formula defined above.

	 
	 	
(c)          	
      Section 2.9 of the Security Agreement shall be and hereby is amended to read in its entirety as follows:

	 
	 	 	 “Section
          2.9 Location of Collateral. Except for
          Inventory sold in the ordinary course of business, all Inventory and
          other tangible Collateral have always been, are and shall continue
          to be kept at Borrower’s locations as reflected in Schedule 2.9
    of this Agreement.” 

	 	 	 
	 	
(d)	
      Section 6.1 (ii) of the Security
          Agreement shall be and hereby is amended to read in its entirety as
          follows: “(ii) Borrower’s audited fiscal year-end financial statements (in form, preparation and substance acceptable
  to Bank) within one hundred fifty (150) days after the close of each of its year-end, including a balance sheet as of the close of such period, an income statement, a reconciliation of stockholders’ equity,
  and a statement of cash flows, all certified by an independent certified public
  accountant acceptable to Bank and analyzed in accordance with generally accepted
  accounting principles;”

	 
	 	
(e)	
      Section 7.2 of the Security Agreement shall be and hereby is amended to read in its entirety as follows:

	 
	 	 	“7.2 Borrowings; Permitted
          Indebtedness. Except for borrowings under
          the Revolving Line, Borrower shall not borrow any money other than
          (i) Subordinated Debt (but only to the extent such borrowings and loans
          shall be fully subordinated hereto), without Bank’s prior written consent,
          or (ii) for trade credit and to finance the purchase of equipment in
          the ordinary course of business, not to exceed $50,000.00 in the
          aggregate at any given time, without Bank’s prior written consent.
          Except in favor of Bank, Borrower shall not guarantee, endorse or assume,
          either directly or indirectly, any indebtedness of any other corporation,
    person, or entity.” 

	 	 	 
	 	
(f)	
Section 7.3 of the Security Agreement shall be and hereby is amended to read in its entirety as follows:
	 
	 	 	“Section 7.3 Dividends. Borrower
        shall not pay, make or declare any dividends, distributions, or other
        similar payments, or make any other advances of any nature whatoseover,
        to Borrower’s
        directors, managers, officers, employees, owners, parent, members, affiliates,
    subsidiaries or other related persons or

3

	          	 	
  entities, without Bank’s prior written consent. Notwithstanding anything herein to the contrary, Bank agrees that Borrower may pay a monthly management fee to Zunicom of up to $40,000.00 per month and quarterly dividends
  equal to 50% of Borrower’s net income for any fiscal quarter for cash, taxes, or other Zunicom expenses, provided that (a) no Default of Event of Default exists as of the date any such payment is to be made or such payment would cause or result
  in a Default or Event of Default, (b) there is at least $500,000.00 of borrowing availability under the Revolving Line after the making of any such payment, (c) no more than one dividend is paid per fiscal quarter of Borrower, and (d) any such
  dividend is paid no sooner than thirty (30) days from Bank’s receipt of the financial statements delivered by Borrower for the end of the month that coincides with the end of such fiscal quarter of Borrower. Borrower shall not redeem, purchase
  or in any manner acquire any of its outstanding shares without Bank’s
  prior written consent.”

	 
	 	
(g)          	
      Section 7 (g) in Addendum A attached
          to the Security Agreement shall be and hereby is amended to read in
          its entirety as follows: “(g) it is located at one of Borrower’s
          places of business in (i) Carrollton, Texas, (ii) Oklahoma City, Oklahoma,
    (iii) Overland Park, Kansas, or (iv) Las Vegas, Nevada;”

	 
	 	
(h)	
      Schedule 2.9 of the Security Agreement is hereby deleted in its entirety and replaced by the attached Schedule 2.9 (attached hereto as Exhibit A) which shall be incorporated into the Security Agreement (as hereby modified) for all
  purposes.

	 
	 	
(i)	
      Except as specifically set forth
          in the Security Agreement (as hereby modified), the parties acknowledge
          and agree that all financial covenants of Borrower and/or any guarantor
          set forth in the Security Agreement (including, without limitation,
          Sections 6.5, 6.6, 7.9. and 7.11 of the Security Agreement) shall be
          measured based upon information contained in Borrower’s internally-prepared
          financial statements, including, without limitation, such statements
          as are required to be delivered to Lender pursuant to clauses (i),
          (iii), (iv), and (viii) of Section 6.1 of the Security Agreement or
    as otherwise may be reasonably requested from Lender from time to time.

          4.           Borrower hereby conveys and/or re-conveys, grants and/or re-grants, and makes and/or re-makes, each as applicable, to Lender the security interests and liens upon the Property remaining subject to
the Loan Documents and securing the Obligations.  Further, Borrower hereby covenants and agrees that Borrower shall not sell, transfer, convey or otherwise dispose of any of the Property without Lender’s prior written consent (except as
otherwise permitted under the Security Agreement), and, in the event such consent by Lender is given, Borrower shall provide Lender with such additional security with respect to the Obligations as Lender shall require in its sole and absolute
discretion. 

          5.           Borrower hereby renews, but does not extinguish, the Note, Loan, and the liens and security interests created and evidenced by the Security Agreement and all other liens and 

4

security interests
securing the Note (including, without limitation, any vendor’s lien), and
Borrower promises to pay to the order of Lender, the principal sum of the Loan
evidenced by the Note, or so much thereof as may be  advanced and outstanding,
together with interest at the rate and in the manner specified in the Note, as
modified herein, and to observe, comply with and perform each and every of the
terms and provisions of the Loan Documents as herein modified.

          6.           Borrower hereby reaffirms the liens on the Property and any other liens securing the Note and/or Loan until the indebtedness and the Note and Loan as modified and renewed hereby has been fully
paid, and agrees that the modification set forth herein shall in no manner affect or impair the Note, Loan, or the liens securing the same, and that said liens shall not in any manner be waived, the purpose of this instrument being simply to modify
the Security Agreement (and other Loan Documents, as appropriate) and to carry forward all liens securing the same, which are acknowledged by Borrower to be valid and subsisting. Borrower further agrees that all terms and provisions of the Note and
of the instrument or instruments creating or fixing the liens securing the same shall be and remain in full force and effect as therein written, except as otherwise expressly provided herein.  All liens are hereby carried forward from the original
inception thereof, and Borrower hereby ratifies, reaffirms and confirms all of said liens from the original inception thereof.  Except as otherwise specified herein, the terms and provisions hereof shall in no manner impair, limit, restrict, or
otherwise affect the obligations of Borrower or any guarantor under the Loan Documents. As a material inducement to Lender to execute and deliver this Modification, Borrower hereby acknowledges and agrees that Borrower is well and truly indebted to
Lender in the amount set forth hereinabove, and that the liens, security interests and assignments created by the Security Agreement and any other Loan Documents are, respectively, valid and subsisting liens, security interests, and assignments,
and, to the best of Borrower’s knowledge, are of the validity and priority recited in the Security Agreement and the other Loan Documents.  As a further material inducement to Lender to execute and deliver this Modification, Borrower hereby
acknowledges that there are no claims or offsets against, or defenses or counterclaims to, the terms or provisions or other obligations created or evidenced by the Loan Documents, and represent that, after modification of the Security Agreement and
other Loan Documents hereunder, no event has occurred, and no condition exists which would constitute a default, either with or without notice or lapse of time, or both, under the Loan Documents. 

          7.           Borrower reaffirms and remakes, as of the date hereof, all representations and warranties contained in the Note, Security Agreement, and other Loan Documents.  Borrower further represents and
warrants that, except as disclosed in writing to Lender, it has done nothing, nor has allowed anything, to adversely affect title to or encumber the Property or any other property of Borrower in which Lender has a security interest. Borrower further
represents and warrants to Lender that it is aware of no condition or fact, which has not been disclosed in writing to Lender, which would materially adversely affect the repayment to Lender of all sums due under the Note, Security Agreement, and
other Loan Documents. 

          8.           Borrower, for it and its successors, assigns, and representatives does hereby waive, release, and discharge Lender and its agents, employees, officers, directors, and
attorneys (collectively, the “Released Parties”) from any and all of Lender’s duties, obligations, and liabilities arising under, based upon or associated with, directly or 

5

indirectly, the Loan, the Note, Security Agreement, First
Modification, and any Loan Documents, existing as of the date of this Modification,
and further does hereby waive any and all claims and causes of action of any
kind or  character, arising under, based upon, or associated with, directly or
indirectly, the Loan Documents or the acts, actions, or omissions of the Released
Parties in connection therewith, existing as of the date hereof, whether known
or unknown,  asserted or unasserted, equitable or at law, arising under or pursuant
to common or statutory law, rules, or regulations. 

          9.           Borrower hereby ratifies, reaffirms and confirms any and all covenants, agreements, or promises heretofore made by Borrower to Lender in connection with the Loan, Note, Security Agreement, or other
Loan Documents, and all renewals thereof, including as hereby modified. 

          10.         Borrower
agrees, simultaneously with and as a condition precedent to the execution hereof,
to pay to Lender a non-refundable credit facility fee in the amount of $5,000.00
(representing 0.125%  of the $4,000,000.00 amount of the increased availability
under the Revolving Line [as defined in the Security Agreement]), as well as
all costs and expenses of Lender incurred in connection with the preparation
and administration of this  Modification, including, the cost of any recording
fees and charges associated with the Security Agreement and/or other Loan Documents,
and Lender’s attorneys’ fees and expenses.

          11.         It
is hereby agreed and acknowledged that other parties, if any, who are liable
in any part for the Obligations, including, without limitation, Zunicom, Inc.,
a Texas corporation, in its capacity  as guarantor of the Loan and Obligations,
are in no way released or discharged from such Obligations, nor are Lender’s
rights against such persons or entities waived or negatively impacted by the
execution of this Modification.

          12.         The
parties agree that all clauses contained in the Loan Documents which relate to
the payment, application, and spreading of interest received by Lender which
may be greater than the maximum  amount allowed by applicable law, shall remain
in full force and effect and by this reference be fully incorporated herein. 

          13.         If
any provision of this Modification or application to any party or circumstance
shall be determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the  remainder of this Modification or the application
of such provision to such person or circumstances, other than those as to which
it is so determined invalid or unenforceable, shall not be affected thereby,
and each provision hereof shall be valid  and shall be enforced to the fullest
extent permitted by law. 

          14.         Except
as amended hereby, the Note, Security Agreement, First Modification, and other
Loan Documents remain unmodified and in full force and effect. 

          15.         THE
LOAN, NOTE, SECURITY AGREEMENT, FIRST MODIFICAITON, AND OTHER WRITTEN LOAN DOCUMENTS,
AS MODIFIED BY THIS MODIFICATION, REPRESENT THE FINAL AGREEMENT BETWEEN  BORROWER
AND LENDER, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, 

6

CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF
THE PARTIES. 

           THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN BORROWER AND LENDER. 

[remainder of page intentionally left blank]

 

7

          EXECUTED to be effective as of the date first above written. 

	 	 	
BORROWER: 
	
	 	 	 

		 
	 	 	
UNIVERSAL POWER GROUP, INC., 
	
	 	 	
a Texas corporation 
	
	 	 	 

		 
	 	 	 

		 
	 	 	
By: 
		/s/
    IAN EDMONDS

	/s/ JULIE SANSOM-REESE 
	 	
Name:   
		Ian
    Edmonds

	Julie Sansom-Reese	 	
Title: 
		Chief Operating
    Officer 

	Chief Financial Officer 	 	 

		 
	 	 	
LENDER: 
	
	 	 	 

		 
	 	 	
COMPASS BANK 
	
	 	 	 

		 
	 	 	 

		 
	 	 	
By: 
		 

	 	 	
Name: 
		 

	 	 	
Title: 
		 

[remainder of page intentionally left blank]

 

8

ACCEPTED, AGREED, AND ACKNOWLEDGED: 

ZUNICOM, INC., a Texas corporation (“Guarantor”),
as guarantor of the Obligations herein specified pursuant to its execution of
that certain Guaranty Agreement  dated of even date with the Security Agreement
(the “Guaranty”),
is executing below to evidence (a) its consent to this Modification and (b) its
agreement that (i) this  Modification does not void, invalidate, create a defense
to the enforcement of, or otherwise negatively impact the Guaranty and (ii) the
Guaranty shall continue in full force and effect and cover all of the Obligations
(as herein modified);  provided, however, that, upon Lender’s request, Guarantor
shall execute a new Guaranty Agreement, to be dated of even date herewith to
further evidence its duties and obligations as a principal obligor with respect
to the Obligations (as herein  modified).

 GUARANTOR: 

ZUNICOM, INC.,

    a Texas corporation 

    

    

	 By:  	/s/
          IAN EDMONDS 
	 
	 Name:    	Ian
          Edmonds
	 
	 Title:  	Executive Vice
        President 
	 

[acknowledgments on following page]

 

9

	
STATE OF TEXAS 
		
§ 
	
	 

		
§ 
	
	
COUNTY OF DALLAS 
		
§ 
	

           The
foregoing instrument was acknowledged before me this      18      day
of April, 2006, by   Julie Sansom-Reese  , as      CFO                          of
Universal Power Group, Inc., a Texas corporation, on behalf of such entity. 

	 	
    /s/ TRACIE HUNTER 

  
	               
	 	
      Notary Public in and for the State of Texas 
      
	 
	 	 	 
	 	 	 

	 STATE OF TEXAS  	 §  
	  	 §  
	 COUNTY OF DALLAS  	 §  

           This
instrument was acknowledged before me on the      18      day
of April, 2006, by      Ian Edmonds      ,
as   Executive President    of Zunicom, Inc., a Texas
corporation, on behalf of said corporation in its capacity as guarantor. 

	 	
        /s/ TRACIE HUNTER 

    
	               
	 	
      Notary Public in and for the State
          of Texas  
	 
	 	 	 
	 	 	 

	 STATE OF TEXAS  	 §  
	  	 §  
	 COUNTY OF DALLAS  	 §  

           This
instrument was acknowledged before me on the _____ day of April, 2006, by ______________________,
______________________ of COMPASS BANK. 

	 	
        

    
	               
	 	
      Notary Public in and for the State
          of Texas  
	 
	 	 	 
	 	 	 

 

10

EXHIBIT A 

Schedule 2.9 

Places of Business 

Business Locations 

Universal Power Group 

	 	 	 
	                         	
1)  	
Main Warehouse and Corporate Offices 

1720 Hayden Road 

Carrollton, Texas 75006
	 
	 	
2)	
Oklahoma City Retail Store and Wholesale Warehouse 

11605 N. Santa Fe 

Oklahoma City, Oklahoma 73114
	 
	 	
3)	
Kansas City Customer Service Center 

10580 Barkley, Ste. #410 

Overland Park, Kansas 66212
	 
	 	
4)	
South Tech-Diablo Business Center, LLC 

5770 South Valley View Boulevard 

Las Vegas, Nevada 89118
	 

11

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