Document:

Exhibit
10.14

 

ASSET PURCHASE AGREEMENT

 

by and among

 

ECHO/RT HOLDINGS, LLC,

 

RAYTRANS DISTRIBUTION SERVICES, INC.,

 

RAYTRANS HOLDINGS, INC.,

 

AND

 

JAMES A. RAY

 

 

Table
of Contents

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  I 

  	
  PURCHASE AND SALE OF ASSETS

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Purchase
  and Sale of Assets

  	
  1

  
	
  1.2

  	
  Retained
  Assets

  	
  3

  
	
  1.3

  	
  Assumed
  Liabilities

  	
  4

  
	
  1.4

  	
  Retained
  Liabilities

  	
  5

  
	
  1.5

  	
  Purchase
  Price

  	
  6

  
	
  1.6

  	
  Purchase
  Price Adjustment

  	
  6

  
	
  1.7

  	
  Earn-Out

  	
  9

  
	
  1.8

  	
  Allocation
  of Purchase Price

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II

  	
  CLOSING

  	
  14

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Time

  	
  14

  
	
  2.2

  	
  Closing
  Date for Financial Reporting Purposes

  	
  14

  
	
  2.3

  	
  Transactions
  at the Closing

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III 

  	
  REPRESENTATIONS AND WARRANTIES OF HOLDINGS AND THE
  SHAREHOLDER

  	
  16

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Authority

  	
  16

  
	
  3.2

  	
  Enforceability

  	
  16

  
	
  3.3

  	
  Transaction
  Not a Breach

  	
  17

  
	
  3.4

  	
  No
  Brokers

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV 

  	
  REPRESENTATIONS AND WARRANTIES OF SELLER, HOLDINGS
  AND SHAREHOLDER

  	
  17

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Organization

  	
  17

  
	
  4.2

  	
  No
  Subsidiaries

  	
  17

  
	
  4.3

  	
  Capitalization;
  Indebtedness

  	
  17

  
	
  4.4

  	
  Authority

  	
  18

  
	
  4.5

  	
  Transaction
  Not a Breach; Required Consents

  	
  18

  
	
  4.6

  	
  Financial
  Statements

  	
  18

  
	
  4.7

  	
  No
  Undisclosed Liabilities

  	
  19

  
	
  4.8

  	
  Litigation

  	
  19

  
	
  4.9

  	
  Insurance

  	
  19

  
	
  4.10

  	
  Intellectual
  Property

  	
  19

  
	
  4.11

  	
  Tax
  Matters

  	
  20

  
	
  4.12

  	
  Contracts;
  No Defaults

  	
  21

  
	
  4.13

  	
  Licenses
  and Permits

  	
  22

  
	
  4.14

  	
  Compliance
  with Laws

  	
  23

  
	
  4.15

  	
  Employees

  	
  23

  
	
  4.16

  	
  Employee
  Benefit Plans

  	
  24

  
	
  4.17

  	
  Obligations
  to Related Parties

  	
  26

  
	
  4.18

  	
  Title
  and Condition of Purchased Assets

  	
  26

  
	
  4.19

  	
  Real
  Property

  	
  26

  
	
  4.20

  	
  Environmental
  Matters

  	
  27

  
	
  4.21

  	
  Material
  Adverse Changes

  	
  28

  
	
  4.22

  	
  Customers

  	
  29

  

 

i

 

Table
of Contents

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  4.23

  	
  Vendors

  	
  30

  
	
  4.24

  	
  Accounts
  Receivable

  	
  30

  
	
  4.25

  	
  Accounts
  Payable

  	
  30

  
	
  4.26

  	
  Bank
  Accounts

  	
  30

  
	
  4.27

  	
  Certain
  Payments

  	
  30

  
	
  4.28

  	
  No
  Brokers

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V 

  	
  REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

  	
  31

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Organization

  	
  31

  
	
  5.2

  	
  Authority

  	
  31

  
	
  5.3

  	
  Transaction
  Not a Breach

  	
  31

  
	
  5.4

  	
  Litigation

  	
  31

  
	
  5.5

  	
  No
  Brokers

  	
  31

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI 

  	
  CERTAIN COVENANTS OF THE PARTIES

  	
  32

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Confidential
  Information; Non-Competition

  	
  32

  
	
  6.2

  	
  Publicity

  	
  33

  
	
  6.3

  	
  Access
  to Records

  	
  33

  
	
  6.4

  	
  Budget;
  Transition Plan; Accounts Receivable

  	
  33

  
	
  6.5

  	
  License
  Agreement

  	
  34

  
	
  6.6

  	
  Confidentiality
  and Non-Compete Agreements

  	
  34

  
	
  6.7

  	
  Transaction
  Processing Services

  	
  34

  
	
  6.8

  	
  Minimum
  EBITDA

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII 

  	
  SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
  COVENANTS

  	
  34

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Survival
  of Representations, Warranties and Covenants of Seller, Holdings and the
  Shareholder

  	
  34

  
	
  7.2

  	
  Survival
  of Representations, Warranties and Covenants of Purchaser

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII 

  	
  INDEMNIFICATION

  	
  36

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Indemnification
  by Holdings and the Shareholder

  	
  36

  
	
  8.2

  	
  Indemnification
  by Seller, Holdings and the Shareholder

  	
  36

  
	
  8.3

  	
  Indemnification
  by Purchaser

  	
  36

  
	
  8.4

  	
  Claims
  for Indemnification

  	
  37

  
	
  8.5

  	
  Right
  of Set-Off

  	
  37

  
	
  8.6

  	
  Defense
  by the Indemnifying Party

  	
  38

  
	
  8.7

  	
  Payment
  of Indemnification Obligation

  	
  39

  
	
  8.8

  	
  Indemnification
  Limitation — Basket

  	
  39

  
	
  8.9

  	
  Indemnification
  Limitation — Cap

  	
  39

  
	
  8.10

  	
  Computation
  of Losses

  	
  39

  
	
  8.11

  	
  Other
  Indemnification Limitations

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX 

  	
  OTHER AGREEMENTS AND COVENANTS

  	
  40

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Tax
  Matters

  	
  40

  
	
  9.2

  	
  Required
  Consents

  	
  40

  
	
  9.3

  	
  Accounts
  Receivable

  	
  41

  
	
  9.4

  	
  Post-Closing
  Access to Records/Cooperation

  	
  41

  

 

ii

 

Table
of Contents

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  9.5

  	
  Bulk
  Sale Waiver and Indemnity

  	
  42

  
	
  9.6

  	
  Use
  of the Seller’s Name

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  X 

  	
  EMPLOYEE MATTERS

  	
  42

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Offers
  of Employment

  	
  42

  
	
  10.2

  	
  Liabilities

  	
  43

  
	
  10.3

  	
  Severance

  	
  43

  
	
  10.4

  	
  Accrued
  Vacation Time

  	
  43

  
	
  10.5

  	
  Employee
  Benefit Plans

  	
  43

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XI 

  	
  MISCELLANEOUS

  	
  44

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  Notices

  	
  44

  
	
  11.2

  	
  Entire
  Agreement

  	
  45

  
	
  11.3

  	
  Governing
  Law and Venue

  	
  45

  
	
  11.4

  	
  Binding
  Effect; Assignment

  	
  45

  
	
  11.5

  	
  Counterparts

  	
  46

  
	
  11.6

  	
  Further
  Assurances

  	
  46

  
	
  11.7

  	
  Section Headings

  	
  46

  
	
  11.8

  	
  Gender;
  Tense, Etc.

  	
  46

  
	
  11.9

  	
  Severability

  	
  46

  
	
  11.10

  	
  No
  Third Party Rights

  	
  46

  
	
  11.11

  	
  Fees
  and Expenses

  	
  47

  
	
  11.12

  	
  Amendments;
  No Waivers

  	
  47

  
	
  11.13

  	
  “Knowledge”
  Defined

  	
  47

  
	
  11.14

  	
  Public
  Announcements

  	
  47

  
	
  11.15

  	
  No
  Strict Construction

  	
  48

  
	
  11.16

  	
  Guaranty
  of Performance

  	
  48

  

 

iii

 

ASSET PURCHASE AGREEMENT

 

This
ASSET PURCHASE AGREEMENT (this
“Agreement”) dated as of June 2, 2009, is made and entered into by and
among Echo/RT Holdings, LLC, a Delaware limited liability company (the “Purchaser”),  RayTrans
Distribution Services, Inc., an Illinois corporation (the “Seller”), RayTrans Holdings, Inc., an Illinois corporation (“Holdings”),  and James A. Ray (the “Shareholder”), and solely with respect to the provisions of Section 11.16 herein, Echo
Global Logistics, Inc., a Delaware corporation (“Echo”).

 

RECITALS

 

A.                                   WHEREAS, the Seller
provides brokerage services in the commercial trucking market (the “Business”);

 

B.                                     WHEREAS, Holdings owns,
and is the holder of, all of the issued and outstanding shares of capital stock
of the Seller, and the Shareholder owns, and is the holder of, a majority of
the issued and outstanding shares of capital stock of Holdings;

 

C.                                     WHEREAS, Purchaser is a
wholly-owned subsidiary of Echo; and

 

D.                                    WHEREAS, the Purchaser
wishes to purchase from Seller, and Seller wishes to sell to the Purchaser, the
Purchased Assets (as defined below), upon the terms and conditions set forth in
this Agreement.

 

NOW, THEREFORE, in
consideration of the mutual promises and covenants set forth herein, and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:

 

ARTICLE I

PURCHASE AND SALE OF ASSETS

 

1.1                                 Purchase and
Sale of Assets. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties set forth in this
Agreement, at the Closing (as defined herein), Seller shall sell, transfer,
convey, assign and deliver to the Purchaser, and the Purchaser shall purchase
and accept from Seller, all of the Purchased Assets (as defined herein), free
and clear of any and all Liens or Encumbrances (as defined herein). The “Purchased Assets” shall mean all of
Seller’s right, title and interest in, to and under the assets, properties and
business of Seller used or held for use in the conduct of or in connection with
the Business, whether tangible or intangible, real, personal or mixed, and
wherever located (but excluding the Retained Assets), including, without
limitation, the following:

 

(a)                                  Seller’s rights
to the Leased Real Property (as defined in Section 4.19 below) and all
other rights, if any, under the leases related thereto;

 

(b)                                 all tangible
assets (“Tangible Personal Property”), including machinery,
equipment, tools, appliances, furniture, office supplies, office equipment,
fixtures, computers

 

 

and
printers, telephone systems, telecopiers and photocopiers, and other tangible
personal property of every kind and description, which are used or useable in,
or relating to, the Business, including, without limitation, those items listed
on Schedule 1.1(b)(A) to this
Agreement, and all leases or subleases of any such Tangible Personal Property
as to which Seller is the lessee or sublessee, together with any options to
purchase the underlying property, including, without limitation, those leases
and subleases listed on Schedule 1.1(b)(B) to this
Agreement (the “Personal Property Leases”);

 

(c)                                  all inventories
of Seller, including all inventories of raw materials, work-in-process, parts,
supplies, samples and finished goods merchandise, wherever located;

 

(d)                                 all of Seller’s
right, title and interest in, to or under (i) the Contracts (as defined
below) listed on Schedule 4.12 and (ii) the Contracts
that relate to the Business and are not required to be listed on Schedule 4.12 in accordance
with the provisions of Section 4.12 below
(collectively, the “Assigned Contracts”); provided, however, that in no
event shall those contracts designated with an asterisk on Schedule 4.12 be deemed
Assigned Contracts;

 

(e)                                  all of Seller’s
right, title and interest in, to or under any and all Intellectual Property
Assets (as defined in Section 4.10 below) owned
by Seller and used in the Business and that are not Retained Assets;

 

(f)                                    all accounts
receivable, notes, contract or other rights to payment for goods sold or
services rendered as of the Closing Date (the “Accounts
Receivable”) that are
included as current assets in the Final Closing Balance Sheet and the final
determination of Actual Working Capital;

 

(g)                                 all Permits (as
defined in Section 4.13 below) of Seller used in
connection with, or otherwise related to, the Business to the extent
transferable or assignable to Purchaser;

 

(h)                                 all books of
account, ledgers, forms, records, documents, files, invoices, vendor or
supplier lists, reference materials, price guides, business records (excluding
Tax Returns, corporate minute books, stock ownership records and similar
records relating to the organization, maintenance and existence of Seller as a
corporation), plans and other data relating to the ownership, use, maintenance
or enjoyment of the Purchased Assets or the operation of the Business and that
are owned by Seller (collectively, the “Records”); provided, however, that the
Shareholder may retain copies of such Records as necessary to enable the
Seller, Holdings or Shareholder to fulfill their Tax filing, regulatory or
statutory obligations after the Closing Date;

 

(i)                                     all prepaid
expenses, deposits and advance payments of Seller relating to the Business and
all rights of Seller to receive discounts, refunds, reimbursements, rebates,
awards and the like, if and to the extent they are included as current assets
in the Final Closing Balance Sheet and the final determination of Actual
Working Capital;

 

(j)                                     Seller’s
goodwill related to the Business;

 

(k)                                  all of Seller’s
right, title and interest in any action, claim and cause of action or rights of
recovery or set-off of every kind and character related to the Purchased
Assets, including those arising under or pursuant to any warranty, guarantee or
indemnity;

 

2

 

(l)                                     all deposits
held by Seller with respect to services to be performed or products to be
delivered after the Closing Date, if and to the extent they are included as
current assets in the Final Closing Balance Sheet and the final determination
of Actual Working Capital;

 

(m)                               all of Seller’s
rights in and to that certain “lock box” account listed on Schedule 4.26, together with
all cash and cash equivalents and marketable securities of Seller in such account
as of the Closing Date;

 

(n)                                 all other
properties, assets and rights of every kind, character or description which are
owned or used by Seller in conducting its Business and that are not Retained
Assets; and

 

(o)                                 all causes of
action and rights of recovery with respect to any of the foregoing.

 

1.2                                 Retained Assets.
Notwithstanding anything in this Agreement to the contrary, Seller is retaining
ownership and possession of, and Seller is not selling, transferring,
conveying, assigning or delivering to Purchaser any right, title or interest of
Seller in, to or under any of the following assets (the “Retained Assets”) of Seller:

 

(a)                                  any assets identified on Schedule 1.2(a) to this
Agreement and any equity or other ownership interests in each of the entities
listed on Schedule 1.2(a) hereto;

 

(b)                                 all Employee
Benefit Plans;

 

(c)                                  Tax records
(including Tax Returns), minute books and other corporate books and records of
Seller relating to its corporate existence and maintenance;

 

(d)                                 any claim,
right or interest of Seller in any Tax refunds, assessments or credits due to
Seller for any period, other than Tax refunds, assessments or credits with
respect to any Assumed Taxes;

 

(e)                                  all of Seller’s
right, title and interest in, to or under any Contract or Permit to the extent
not assigned by Seller to Purchaser in accordance with the terms of this
Agreement;

 

(f)                                    all insurance
policies and all rights of Seller to insurance benefits and all proceeds under
insurance policies arising from or relating to any Losses with respect to the
Retained Assets or Retained Liabilities (excluding insurance benefits and all
proceeds under insurance policies that relate to Purchased Assets);

 

(g)                                 all claims,
rights or causes of action related to any Retained Asset or Retained Liability;

 

(h)           all of Seller’s
rights under any agreement by and between Seller and the Shareholder;

 

(i)                                     except as
provided in Section 1.1(m) above, all cash
and cash equivalents and marketable securities of Seller, together with
Seller’s rights in and to any and all bank accounts, as of the Closing Date;

 

3

 

(j)                                     all of Seller’s
rights in and to, and ownership of, the name under which it is doing business
and any names related or substantially similar thereto, including without
limitation, “RayTrans Distribution Services,” “RayTrans” or other substantially
similar words; and

 

(k)                                  all of Seller’s
rights under this Agreement, including payments to be made to Seller hereunder,
and any Transaction Document (as defined herein).

 

1.3                                 Assumed
Liabilities. As additional consideration for the purchase of
the Purchased Assets, Purchaser shall, on the Closing Date, by its execution
and delivery of the Assumption Agreement, assume and agree to pay, discharge,
satisfy and perform only the following Liabilities of Seller relating to the
Business (collectively, the “Assumed Liabilities”):

 

(a)                                  Seller’s
Liabilities under the Assigned Contracts that by their terms are to be paid,
discharged, satisfied or performed or completed at any time on and after the
Closing Date provided, however, Purchaser is not assuming
any Liabilities of Seller in respect of a breach of or default under any
Assigned Contract, including without limitation, the Lease, that occurs at any
time prior to the Closing Date, except to the extent Seller knows of such
default or breach as of the Closing Date and such default or breach is
disclosed on Schedule 4.12 to this Agreement);

 

(b)                                 Seller’s
Liabilities relating to the Business that are included as current liabilities
in the Final Closing Balance Sheet and the final determination of Actual
Working Capital (other than any liabilities which Seller is obligated to pay
pursuant to Section 11.11 below), but only to the extent of the
monetary amount of such Liabilities so reflected;

 

(c)                                  Seller’s
Liabilities relating to the Business that exist as of the Closing Date (other
than those Liabilities described in Section 1.3(b) above) and
that are clearly set forth on Schedule 1.3 to this Agreement, but only
to the extent of the monetary amount of such Liabilities so reflected;

 

(d)                                 any Assumed
Taxes;

 

(e)                                  all obligations
of Seller under the Leased Real Property arising and to be performed only on or
after the Closing Date;

 

(f)                                    all obligations
of Seller under the Personal Property Leases arising and to be performed only
on or after the Closing Date; and

 

(g)                                 all obligations
accruing, arising out of or relating to the conduct or operation of the
Business or the ownership of the Purchased Assets from and after the Closing
Date, including all such obligations arising out of any action, proceeding or
other litigation.

 

For
purposes of this Agreement, “Assumed Taxes”
shall mean (i) personal property Taxes related to the Purchased Assets for
periods (or portions thereof) ending at or before the Closing Date, to the
extent that such Taxes are not yet due and payable at or before the Closing
Date and have been reserved for as a separate current liability in the
determination of Actual Working Capital, and (ii) withholdings, payroll, employment,
social security, or similar Taxes related to any Hired Employee for periods (or
portions thereof) ending at or before the Closing

 

4

 

Date
to the extent such Taxes are not yet due and payable at or before the Closing
Date have been reserved for as a separate current liability in the
determination of Actual Working Capital.

 

1.4                                 Retained
Liabilities. All Liabilities other than the Assumed
Liabilities shall remain Liabilities of Seller, and Purchaser shall not assume
or pay any Liabilities (including any future legal actions) relating to or
arising out of the ownership, conduct or operation of the Business or the
Purchased Assets on or prior to the Closing Date or otherwise arising out of
events occurring or conditions existing on or prior to the Closing Date, other
than the Assumed Liabilities (the “Retained
Liabilities”). Seller shall
remain solely responsible for all Retained Liabilities. Except as otherwise
expressly provided in Section 1.3 above, the Purchaser
does not assume or agree to be liable for any Retained Liabilities, including
without limitation:

 

(a)                                  any Liability
(whether direct or as a result of successor liability, transferee liability,
joint and several liability or contractual liability) for Taxes related to the
Retained Assets, the Business or any Hired Employee (other than the Assumed
Taxes) for periods (or portions thereof) ending on or before the Closing Date;

 

(b)                                 any Liability
(whether direct or as a result of successor liability, transferee liability,
joint and several liability or contractual liability) for income Taxes or Taxes
that are unrelated to the Purchased Assets, the Business or any Hired Employee
(including without limitation, any sales Taxes payable with respect to accounts
receivable collected by Seller prior to the Closing Date and not being acquired
by Purchaser hereunder);

 

(c)                                  any Liability
under any Contract not assumed by the Purchaser under Section 1.3(a) above;

 

(d)                                 any Liability
under or with respect to any Employee Benefit Plan;

 

(e)                                  any Liability
arising out of any claim, cause of action, proceeding, investigation or other
litigation or suit (whether brought against Seller or Purchaser before or after
the Closing Date) arising, in whole or in part, from the conduct of the
business of Seller prior to or after the Closing Date;

 

(f)                                    any Liability
arising out of or resulting from Seller’s non-compliance with any federal,
state, local or other governmental law, statute or regulation;

 

(g)                                 any costs and
expenses incurred by Seller incident to the negotiation and preparation of this
Agreement and its performance and compliance with the agreements and conditions
contained herein;

 

(h)                                 any Liability
of Seller to pay fees or commissions to any broker, finder or agent with respect
to the transactions contemplated by this Agreement;

 

(i)                                     any Liability
of Seller to its current or former stockholders, (in their capacities as such)
or to any other affiliate of Seller;

 

(j)                                     any Liability
of Seller to the extent relating to any Retained Asset;

 

5

 

(k)                                  any
Indebtedness (as defined in Section 1.6(a)(iii) below);

 

(l)                                     any Liability
of Seller for accrued dividends, interest and shareholder and employee bonuses;
or

 

(m)                               Seller’s
obligations under this Agreement or any of the Transaction Documents.

 

1.5                                 Purchase Price. The total
purchase price being paid by Purchaser to Seller for the transfer and delivery
of the Purchased Assets and the rights and benefits conferred under this
Agreement shall be equal to an amount up to $12,550,000 (the “Purchase Price”). The Purchase
Price shall be paid to Seller in such amounts and at such times as follows:

 

(a)                                  an amount equal
to $6,050,000 (the “Closing Payment”), to be paid as follows:

 

(i)                                     the Payoff Amount
(as defined in Section 2.3(b)(vii)) shall be delivered at Closing
by wire transfer of immediately available funds in accordance with the wire
transfer instructions provided by each applicable lender; and

 

(ii)                                  the remainder
of the Closing Payment, as adjusted pursuant to Section 1.6(a)(i) below
and after deduction for the Payoff Amount, shall be paid at Closing by wire
transfer of immediately available funds to Seller; plus

 

(b)                                 an additional
amount up to $4,000,000, to be paid to Seller in accordance with Section 1.7(b) hereof;
plus

 

(c)                                  an additional
amount up to $2,500,000, to be paid to Seller in accordance with Section 1.7(c) hereof;
plus

 

(d)                                 the assumption
by Purchaser of the Assumed Liabilities pursuant to Section 1.3 above.

 

1.6                                 Purchase Price Adjustment.

 

(a)                                  Estimated
Working Capital.

 

(i)                                     Seller has
prepared and delivered to Purchaser a balance sheet of the Business based upon
the Purchased Assets and the Assumed Liabilities as of the Closing Date (the “Estimated Closing Balance Sheet”),
a copy of which is attached hereto as Exhibit A and which
contains Seller’s good faith best estimate of the Working Capital as of the
Closing Date (the “Estimated Working Capital”), determined on a basis consistent with the methodology to be employed in
the calculation of the Working Capital described below. To the extent that the
Estimated Working Capital is less than $1,000,000
(the “Minimum Closing Working Capital”), the Purchase Price (and the Closing Payment required to be made
pursuant to Section 1.5(a) at the Closing) will be decreased
dollar-for-dollar by the amount of such shortfall. To the extent that the
Estimated Working Capital is greater than the
Minimum Closing Working Capital, the Purchase Price (and the Closing Payment
required to be made pursuant to Section 1.5(a) at the Closing) will
be increased dollar-for-dollar by the amount of such excess.

 

6

 

(ii)                                  For purposes of this
Agreement, the term “Working Capital” means the
excess of all of the Seller’s current assets included in the Purchased Assets
over all of the Seller’s current liabilities included in the Assumed
Liabilities as of the close of business on the business day immediately prior
to the Closing Date; provided, however, that the parties agree
that for purposes of determining Working Capital, Seller’s current liabilities
shall not include (i) any Indebtedness, or (ii) any Liabilities which
Seller is obligated to pay pursuant to Section 11.11 of this
Agreement, except to the extent separately accrued for as current liabilities
on the Final Closing Balance Sheet. The Working Capital shall be determined in
accordance with United States generally accepted accounting principles (“GAAP”), consistently
applied.

 

(iii)                               For purposes of this
Agreement, the term “Indebtedness” means, without
duplication, (i) all indebtedness of Seller for borrowed money, whether
current or funded, secured or unsecured, direct or indirect, including under
lines of credit or other credit facilities of Seller or evidenced by notes,
bonds, debentures or other debt securities, (ii) any cash overdrafts or
similar obligations, (iii) the deferred purchase price of property or services
(other than accounts payable and accrued expenses incurred in the ordinary
course of business that are reflected on the Final Closing Balance Sheet) with
respect to which Seller is liable as obligor (including credit card balances), (iv) any
notes payable to any of Seller’s stockholders, vendors, customers or third
parties, (v) all interest owed with respect to the indebtedness described
in the preceding clauses (i) through (iv) and any
prepayment penalties or fees or similar breakage costs or other fees and costs
required to be paid in order for such indebtedness to be satisfied and
discharged in full as of the Closing Date, (v) any severance or change of
control payments, liabilities or obligations owed or due to be paid as a result
of the sale of the Purchased Assets, and (vi) indebtedness of the types
described in clauses (i) through (v) guaranteed, directly or
indirectly, in any manner by Seller through an agreement, contingent or
otherwise.

 

(b)                                 Actual Working
Capital.

 

(i)                                     As soon as practicable after
the date hereof, but not later than ninety (90) days following the date hereof,
Purchaser shall prepare and deliver to Seller the following:

 

(A)                              a balance sheet
of the Business based upon the Purchased Assets and Assumed Liabilities as of
the Closing Date prepared in accordance with GAAP consistently applied (the “Final Closing Balance Sheet”),
reflecting all adjustments made by Purchaser to the Estimated Closing
Balance Sheet;

 

(B)                                Purchaser’s
calculation of the Working Capital as of the Closing Date (the “Actual Working Capital”) which shall be
consistent with the methodology set forth in Section 1.6(a)(ii),
together with a statement setting forth the amount, if any, by which the Actual
Working Capital is less than the Estimated Working Capital (such deficiency,
the “Working Capital Deficit”) or the Actual Working Capital is greater than the Estimated Working
Capital (such excess, the “Working Capital Surplus”); and

 

(C)                                all workpapers
and copies of source documents that reasonably

 

7

 

support
and document the determination of the Actual Working Capital (collectively, the
“Supporting Documents”).

 

(ii)                                  Purchaser shall prepare or
coordinate the preparation of the Final Closing Balance Sheet, the cost of
which shall be borne by Purchaser. Seller, Purchaser, and their respective
accountants and other representatives shall fully cooperate with each other in
the preparation and review of the Final Closing Balance Sheet, including,
without limitation, by providing access to accountant’s work papers relevant to
the Final Closing Balance Sheet, as well as the books and records related
thereto.

 

(iii)                               Within thirty (30) days
after the delivery of the Final Closing Balance Sheet and Supporting Documents
to Seller, Seller may deliver written notice (the “Protest Notice”) to
Purchaser of any objections to Purchaser’s calculation of the Actual Working
Capital. The Protest Notice shall (A) describe the nature of Seller’s
objection in reasonable detail, (B) identify the specific items involved
and the dollar amount of each such objection, and (C) be accompanied with
reasonable supporting documentation for each of Seller’s objections. If Seller
fails to deliver a Protest Notice within such 30-day period, then Seller will
be deemed to have accepted the Final Closing Balance Sheet and Purchaser’s
calculation of the Actual Working Capital and may not introduce additional
disagreements with respect to any item in the Final Closing Balance Sheet.

 

(iv)                              If Seller timely delivers a
Protest Notice to Purchaser, then any dispute shall be resolved as follows:

 

(A)                              The parties
shall promptly endeavor to negotiate in good faith to reach agreement upon the
amount of the Actual Working Capital. In the event that a written agreement determining
the amount of the Actual Working Capital has not been reached within ten (10) business
days after the date of receipt by Purchaser of the Protest Notice, each of
Seller and Purchaser shall each select one (1) reputable
accounting firm and the two (2) accounting firms selected by Seller and
Purchaser shall jointly choose a third reputable accounting firm (with whom
neither Purchaser or its affiliates, nor Seller, the Shareholder or their
respective affiliates, have any relationship) to arbitrate the dispute over the
calculation of the Actual Working Capital, which accounting firm shall serve as
the arbiter for the dispute over the calculation of the Actual Working Capital
(the “Working Capital Arbiter”). Upon the selection of the Working
Capital Arbiter, each of Purchaser’s and the Seller’s determination of the
items in dispute shall be submitted to the Working Capital Arbiter.

 

(B)                                The Working
Capital Arbiter shall be directed to render a detailed written report that sets
forth the resolution of all items in dispute (the “Disputed Items”) and
that contains a final copy of the Final Closing Balance Sheet as promptly as
practicable, and to resolve only the Disputed Items. Each of Seller and
Purchaser shall furnish to the Working Capital Arbiter such work papers,
schedules and other documents and information relating to the Disputed Items as
the Working Capital Arbiter may reasonably request. The Working Capital Arbiter
shall establish the procedures it shall follow (including procedures

 

8

 

regarding
the presentation of materials supporting each party’s position) giving due
regard to the mutual intention of the Purchaser and Seller to resolve each of
the Disputed Items as accurately, quickly, efficiently and inexpensively as
possible, but in no event later than thirty (30) days after the Protest Notice
is sent by the Seller. The Working Capital Arbiter’s resolution of the Disputed
Items and the calculation of the Actual Working Capital shall be final and binding
upon each party hereto absent manifest error by the Working Capital Arbiter.
The fees and expenses of the Working Capital Arbiter shall be borne exclusively
by the party whose last proposal with respect to the Disputed Items and the
Actual Working Capital (prior to the submission thereof to the Working Capital
Arbiter) is furthest from the final determination of the Disputed Items and
Actual Working Capital by the Working Capital Arbiter.

 

(v)                                 If, after the final
determination of the Actual Working Capital, there is a Working Capital
Deficit, then the Purchase Price shall be reduced dollar-for-dollar by the
entire amount of such Working Capital Deficit. Purchaser shall be entitled to
the amount of such reduction, which amount shall be paid by Seller to Purchaser
within ten (10) days after the final determination of the Actual Working
Capital.

 

(vi)                              If, after the final
determination of the Actual Working Capital, there is a Working Capital
Surplus, then the Purchase Price shall be increased dollar-for-dollar by the
entire amount of such Working Capital Surplus. Seller shall be entitled to the
amount of such increase, which sum shall be paid by Purchaser to Seller within
ten (10) days after the final determination of the Actual Working Capital.

 

(vii)                           Upon written notice to
Seller specifying in reasonable detail the basis therefor, Purchaser may
set-off any amount to which it may be entitled under this Section 1.6 after a final
determination by the Working Capital Arbiter as provided for above, or as to
which Seller does not deliver a Protest Notice as provided for above, against
amounts otherwise payable under Section 1.7. The exercise
of such a right of set-off by Purchaser in good faith, whether or not
ultimately determined to be justified, will not constitute a breach of Section 1.7. Neither the
exercise of, nor the failure to exercise, such right of set-off will constitute
an election of remedies or limit Purchaser or Seller in any manner in the
enforcement of any other remedies that may be available to it.

 

1.7                                 Earn-Out.

 

(a)                                  For the
purposes of this Section 1.7, the following terms shall
have the meanings set forth below:

 

“Cumulative Earn-Out Period” shall mean the period beginning on June 1, 2009
and ending May 31, 2012.

 

“Cumulative Earn-Out Payment” shall mean any payment of the amounts as determined
in accordance with Section 1.7(c), which shall, if made,
constitute additional consideration for the Purchased Assets.

 

“Cumulative EBITDA” shall mean for any period,
the cumulative EBITDA

 

9

 

generated
from June 1, 2009 through and including the end of such period.

 

“Earn-Out Payment” shall mean any EBITDA Earn-Out Payment or any
Cumulative Earn-Out Payment.

 

“Earnings” shall mean, for any period,
the earnings of the Purchaser and its affiliates attributable to the Business
during such period, including without limitation, all earnings attributable to
Existing Accounts and New Accounts.

 

“EBITDA” shall mean the Earnings,
excluding interest, taxes, depreciation and amortization, determined in
accordance with GAAP, consistently applied. For purposes of this definition,
any corporate overhead expenses charges paid by or among Purchaser and its
subsidiaries or affiliates shall be excluded from the calculation of EBITDA and
shall not cause a reduction of EBITDA for any applicable period; provided, however, that Purchaser
may be charged for, and the calculation of EBITDA shall include, (i) the
reasonable direct cost of services (including, without limitation, finance,
accounting and customer support services) provided by Echo or the Purchaser to
the extent directly relating to the operation of the Business, (ii) any
salary, bonus, commissions or other compensation paid or payable by Purchaser
to Shareholder for such period (other than payments pursuant to this
Agreement), and (iii) its reasonable, allocable share of any out-of-pocket
costs for products or services purchased or procured by Echo or its
subsidiaries or affiliates from third parties for the direct benefit of the
Purchaser with respect to the operation of the Business (e.g.,
Echo may purchase insurance for all operating subsidiaries, including
Purchaser, and allocate a reasonable portion of the cost thereof to Purchaser),
provided that the costs for such products or services are commercially
reasonable and do not exceed the costs that would be paid by Purchaser
directly.

 

“EBITDA Earn-Out Payment” shall mean any payment of the amounts as determined
in accordance with Section 1.7(b), which shall, if made, constitute additional consideration for the
Purchased Assets.

 

“EBITDA Measurement Period” shall mean each
of the First EBITDA Measurement Period, the Second EBITDA Measurement Period,
and the Third EBITDA Measurement Period.

 

“Existing Accounts” shall mean all customer
accounts of Seller as of the Closing listed on Schedule
1.7(a) to this Agreement; provided, however, that no
customer account listed on Schedule
1.7(a) shall constitute an Existing
Account unless Seller has delivered an invoice to such customer account within
the twelve (12) month period prior to the Closing.

 

“First EBITDA Measurement Period” shall mean the
period beginning on June 1, 2009 and ending May 31, 2010.

 

“New Accounts” means all future customer
accounts obtained by any current or future employee or independent contractor
of the Purchaser and its affiliates in connection with the Business; provided, that no such future
customer account shall constitute a New Account for purposes of this Agreement
unless such customer account

 

10

 

was
obtained by such employee or independent contractor in compliance with the
standard policies and procedures used by Echo with respect to Echo’s or its
subsidiaries’ sales personnel (as such policies and procedures may be
supplement or amended by Echo from time to time), consistently applied with
respect to all such sales personnel, including employees and independent
contractors of the Purchaser. Such policies and procedures include policies for
resolving conflicts among Echo’s or its subsidiaries’ sales personnel regarding
allocation and ownership of customer accounts.

 

“Second EBITDA Measurement Period” shall mean the
period beginning on June 1, 2010 and ending May 31, 2011.

 

“Third EBITDA Measurement Period” shall mean the
period beginning on June 1, 2011 and ending May 31, 2012.

 

(b)                                 The applicable
EBITDA Earn-Out Payments shall be determined as follows and paid in accordance
with the procedures and on the date set forth in Section 1.7(f):

 

(i)                                     If the EBITDA for the First
EBITDA Measurement Period is equal to at least $2,500,000, then Purchaser shall
pay to Seller an EBITDA Earn-Out Payment in an amount equal to $1,333,333.

 

(ii)                                  If the EBITDA for the Second
EBITDA Measurement Period is equal to at least $2,500,000, then Purchaser shall
pay to Seller an EBITDA Earn-Out Payment in an amount equal to $1,333,333.

 

(iii)                               If the EBITDA for the Third
EBITDA Measurement Period is equal to at least $2,500,000, then Purchaser shall
pay to Seller an EBITDA Earn-Out Payment in an amount equal to $1,333,334.

 

(iv)                              If the EBITDA for any EBITDA
Measurement Period is less than $2,500,000 but equal to or greater than
$2,000,000, then Purchaser shall pay to Seller an EBITDA Earn-Out Payment in an
amount equal to $1,333,333 times a fraction, (A) the numerator of which is
the positive difference between (x) the EBITDA for such EBITDA Measurement
Period and (y) $2,000,000, and (B) the denominator of which is
$500,000. By way of example only,  if the EBITDA
for the applicable EBITDA Measurement Period is equal to $2,200,000, the EBITDA
Earn-Out Payment would be $533,333 (or $1,333,333 times
$200,000 [or $2,200,000 minus $2,000,000] divided
by $500,000).

 

(v)                                 Notwithstanding the
foregoing to the contrary, if the Cumulative EBITDA equals or exceeds
$7,500,000 during the Cumulative Earn-Out Period, then Purchaser shall pay to
Seller an EBITDA Earn-Out Payment in an amount equal to $4,000,000, less the
amount of any Earn-Out Payments previously paid by Purchaser with respect to
any EBITDA Measurement period pursuant to Sections 1.7(b)(i) – (iv) above;
provided, however, that Seller shall not be entitled to any
payment pursuant to this Section 1.7(b)(v) in the event that
the EBITDA for any EBITDA Measurement Period is less than $2,000,000. For the
avoidance of doubt, in no event shall the aggregate amount of EBITDA Earn-Out
Payments payable pursuant to this Section 1.7(b) exceed
$4,000,000.

 

11

 

(c)                                  In addition to
the applicable EBITDA Earn-Out Payments above, upon the Cumulative EBITDA
equaling or exceeding $10,000,000 on or prior to April 30, 2012, Purchaser
shall pay to Seller a Cumulative Earn-Out Payment equal to $2,500,000. The
Cumulative Earn-Out Payment shall be paid in accordance with the procedures and
on the date set forth in Section 1.7(f).

 

(d)                                 Within twenty
(20) days after the close of the books following the end of each month during
each EBITDA Measurement Period, Purchaser shall provide to Seller a statement
of the EBITDA for the month then ended and the Cumulative EBITDA for the
portion of the Cumulative Earn-Out Period then ended (the “EBITDA Statement”). Purchaser shall
provide to Seller and its representatives copies of such records and work
papers created in connection with preparation of the EBITDA Statement which are
reasonably required to support such EBITDA Statement. Seller and its
representatives shall have the right to inspect Purchaser’s books and records
during business hours, upon reasonable prior notice, and solely for purposes
reasonably related to the determination of EBITDA. Upon receipt of each EBITDA
Statement for any portion of an EBITDA Measurement Period, Seller shall be
entitled to object to the calculation of EBITDA for such period by delivery to
Purchaser of a written notice of objection, and the parties agree to discuss in
good faith any modifications to the calculation of such EBITDA. In the event
that the parties cannot agree on any such modifications, Seller shall be
entitled to make such further objections as it deems appropriate in a Notice of
Objection as described in the following sentence. Upon receipt of the final
EBITDA Statement for each fully completed EBITDA Measurement Period, Seller
shall be entitled to object to the calculation of EBITDA for such EBITDA
Measurement Period by delivery to Purchaser of a written notice of objection
thereto (a “Notice of Objection”),  describing in
reasonable detail the nature of the disagreement asserted. If Seller fails to
deliver a Notice of Objection to Purchaser within thirty (30) days following
receipt of an EBITDA Statement for a fully completed EBITDA Measurement Period,
the determination of EBITDA by Purchaser as set forth in such EBITDA Statement
shall be final and binding on the parties hereto.

 

(e)                                  If Seller
timely delivers a Notice of Objection to Purchaser, then any dispute shall be
resolved as follows:

 

(i)             Seller and Purchaser shall
promptly endeavor to negotiate in good faith to agree upon the amount of the
EBITDA. In the event that a written agreement determining the amount of the
EBITDA has not been reached within ten (10) business days after the date
of receipt by Purchaser of the Notice of Objection, each of Seller and
Purchaser shall each select one (1) reputable accounting firm and the two (2) accounting
firms selected by Seller and Purchaser shall jointly choose a third reputable
accounting firm (with whom neither Purchaser or its affiliates, nor Seller, the
Shareholder or their respective affiliates, have any relationship) to
adjudicate the determination of the EBITDA, which accounting firm shall serve
as the arbiter for the dispute over the calculation of EBITDA (the “EBITDA Arbiter”).  Upon the selection of the
EBITDA Arbiter, each of the Purchaser’s and the Seller’s determination of the
EBITDA shall be submitted to the EBITDA Arbiter.

 

12

 

(ii)          The EBITDA Arbiter shall be
directed to render a written report on the unresolved disputed issues with
respect to the EBITDA as promptly as practicable but in no event later than
sixty (60) days after the Notice of Objection is sent by Seller, and to resolve
only those issues of dispute set forth in the Notice of Objection. Each of
Seller and Purchaser shall furnish to the EBITDA Arbiter such work papers, schedules
and other documents and information relating to the unresolved disputed issues
as the EBITDA Arbiter may reasonably request. The EBITDA Arbiter shall
establish the procedures it shall follow (including procedures regarding the
presentation of materials supporting each party’s position) giving due regard
to the mutual intention of the parties to resolve each of the disputed items
and amounts as accurately, quickly, efficiently and inexpensively as possible.
The resolution of the dispute and the calculation of the EBITDA shall be final
and binding upon each party hereto absent manifest error. The fees and expenses
of the EBITDA Arbiter shall be borne exclusively by the party whose proposal
for the EBITDA is furthest from the final determination of the EBITDA by the
EBITDA Arbiter.

 

(f)                                    On the date
that a EBITDA Statement is delivered to Seller reflecting that an Earn-Out
Payment (as determined in accordance with Section 1.7(b) above)
is due or a Cumulative Earn-Out Payment (as determined in accordance with Section 1.7(c) above)
is due, Purchaser shall pay to Seller the applicable Earn-Out Payment (as
determined in accordance with Section 1.7(b) above), the
applicable Cumulative Earn-Out Payment (as determined in accordance with Section 1.7(c) above),
or the portion of any applicable Earn-Out Payment that is not then in dispute
under Sections 1.7(d) and 1.7(e) above. Notwithstanding
the foregoing, if an Earn-Out Payment becomes due and payable to Seller after
the resolution of a dispute pursuant to Section 1.7(e) above, then
Purchaser shall pay to Seller, within five (5) business days of the final
determination of the EBITDA for the applicable EBITDA Measurement Period
pursuant to Section 1.7(e) above, the additional amount with
respect to the applicable Earn-Out Payment. All payments to Seller pursuant to
this Section 1.7(f) shall be made by wire transfer in
accordance with wire transfer instructions provided to Purchaser by the Seller.

 

(g)                                 During the
Cumulative Earn-Out Period, Purchaser shall (i) continue to operate the
Business in a manner consistent with Seller’s past practices and the Budget,
subject to the Business continuing to perform in a manner consistent with its
past performance and the Budget and to the express limitations set forth in
this Agreement, and (ii) maintain separate books and records of the
Business, including, but not limited to, separate quarterly profit and loss
statements of the Business, so as to make calculation of EBITDA feasible and
verifiable.

 

(h)                                 Notwithstanding
anything in this Agreement to the contrary, except as expressly set forth in
this Section 1.7, or as required by the Purchaser’s implied
contractual covenant of good faith and fair dealing, this Agreement shall
impose no restrictions on the operation of the Business by Purchaser after the
Closing or on the operations, business or activities of Purchaser or Echo after
the Closing; provided, however, that during the Cumulative
Earn-Out Period, Purchaser shall not act in an arbitrary or commercially
unreasonable manner in the conduct or operation of the Business if such action
would be reasonably likely to materially interfere with the achievement of the
EBITDA targets set forth in this Section 1.7. Without limiting the

 

13

 

foregoing,
Seller acknowledges and agrees that after the Closing, (i) Purchaser may
operate the Business under the name “Echo” or “Echo Global,” (ii) all
financial statements, billing matters, payment of accounts payables,
collections of accounts receivables, bank accounts, credit facilities and other
financial operations or activities of the Business will be consolidated with
Purchaser, (iii) the Business will transition to using the Purchaser’s
operational and financial technology, and in connection with such transition,
Purchaser shall use its commercially reasonable efforts to insure that no
material deterioration in the timeliness and accuracy of order processing, job
tracking, billing, collections or the availability of budgeted operating
capital results from such transition, and (iv) Echo, as the sole member of
the Purchaser, may, in its sole discretion, dissolve or terminate Purchaser and
operate the Business as a division of Echo, provided that Echo
expressly assumes the obligations of the Purchaser under this Section 1.7,
including without limitation, all payment obligations and the obligation under Section 1.7(h) to
maintain separate books and records of the Business.

 

1.8                                 Allocation of
Purchase Price. The parties shall (a) allocate the Purchase
Price (and all relevant Assumed Liabilities and other relevant items) among the
Purchased Assets and the Restrictive Covenants set forth in Section 7.1
below (the “Purchase Price Allocation”) in accordance with the methodology
set forth on Schedule 1.8 hereto and the applicable provisions of the
Internal Revenue Code of 1986, as amended (the “Code”), (b) within
thirty (30) days of the final determination of the Actual Working Capital, make
appropriate adjustments to the Purchase Price Allocation to reflect changes in
the Purchase Price, and (c) make consistent use of the allocation, fair
market value and useful lives specified on Schedule 1.8 hereto, as
adjusted, for all Tax reporting purposes and report the transactions
contemplated by this Agreement in accordance with the Purchase Price
Allocation.

 

ARTICLE II

CLOSING

 

2.1                                 Time. The closing
of the transactions contemplated by this Agreement (the “Closing”) shall take place concurrently with the execution of this
Agreement. The date of the Closing shall be referred to herein as the “Closing Date.”

 

2.2                                 Closing Date
for Financial Reporting Purposes. For convenience, the
parties hereto agree that, solely for purposes of Purchaser’s financial
accounting and reporting (but not for any other purpose under this Agreement,
including without limitation, Section 1.6, Article III,
Article IV and Article V hereof), the Closing shall be
deemed completed as of 12:01 a.m. (CST) on the morning of June 1,
2009.

 

2.3                                 Transactions at
the Closing. At the Closing, the parties shall take the
following actions, which shall be deemed to occur simultaneously at the
Closing:

 

(a)                                  Purchaser shall
take the following actions:

 

(i)                                deliver to
Seller the Closing Payment by means of wire transfer of immediately available
funds into one or more bank accounts designated in writing by Seller to
Purchaser prior to the Closing Date; and

 

(ii)                             deliver to
Seller the following:

 

14

 

(A)                              an Assumption
Agreement, in substantially the form attached hereto as Exhibit B, duly executed
by Purchaser and reflecting the assumption of the Assumed Liabilities;

 

(B)                                a consulting
agreement between the Purchaser and James A. Ray, in substantially the form
attached hereto as Exhibit C (the “Consulting
Agreement”), duly executed by the Purchaser;

 

(C)                                the License
Agreement required to be delivered pursuant to Section 6.5, duly executed
by the Purchaser; and

 

(D)                               such other
documents or certificates as are deemed reasonably necessary by Seller and its
counsel.

 

(b)                                 Seller shall
deliver to Purchaser the following:

 

(i)                                a Bill of Sale
and Assignment Agreement, in substantially the form attached hereto as Exhibit D, duly executed
by Seller;

 

(ii)                             assignments of
Intellectual Property Assets, as Purchaser reasonably deems necessary or
appropriate, duly executed by Seller;

 

(iii)                          a certificate
of the Secretary of Seller certifying as to: (A) the articles of
incorporation of Seller, as certified by the Secretary of State of the State of
Illinois not earlier than ten (10) days prior to the Closing Date; (B) the
by-laws of Seller; (C) resolutions duly adopted by the board of directors
and shareholders of Seller authorizing the execution, delivery and performance
of this Agreement and any agreements, instruments, certificates or other documents
executed by Seller pursuant to this Agreement; and (D) the incumbency of
its officers authorized to execute this Agreement and such other agreements or
documents on behalf of Seller;

 

(iv)                         a certificate
from the Secretary of State of the State of Illinois as of a date not earlier
than ten (10) days prior to the Closing Date as to the existence and good
standing of Seller;

 

(v)                            each of the
consents required to be obtained from third parties as identified under Section 4.5 and Section 4.12 of this Agreement;

 

(vi)                         the Consulting
Agreement, duly executed by James A. Ray;

 

(vii)                      a pay-off
letter from each lender of the Company with respect to any Indebtedness
indicating (A) the aggregate amount owed to such lender as of the Closing
(collectively, the “Payoff
Amount”)
and (B) that, upon payment of such amount, all amounts due and
owing such lender by the Company shall be deemed satisfied and paid in full,
such lender or creditor shall release all of its Liens and Encumbrances
outstanding on or against the Purchased Assets or Seller, and shall authorize
the filing of UCC Termination Statements or such other documents or endorsements
necessary to release of

 

15

 

record
such Liens and Encumbrances outstanding on or against the Purchased Assets or
Seller, in form and substance satisfactory to Purchaser at the Closing;

 

(viii)                        the License
Agreement required to be delivered pursuant to Section 6.5, duly
executed by Seller;

 

(ix)                                copies of the
Confidentiality and Non-Compete Agreements required to be delivered pursuant to
Section 6.6;

 

(x)                                   an assignment
to Purchaser of Seller’s obligations under that certain lease agreement for
Seller’s premises located at Suite 102, 4747 Lincoln Mall Drive, Matteson,
Illinois 60443 (the “Lease”);

 

(xi)                                an assignment
to Purchaser of Seller’s rights under that certain promissory note payable to
Seller by Inline Enterprises, LLC in the original principal amount of
$99,878.13 (the “Inline Note”);

 

(xii)                             a certificate,
duly completed and executed by Seller pursuant to Section 1.1445-2(b)(2) of
the Treasury Regulations, certifying that Seller is not a “foreign person”
within the meaning of Section 1445 of the Code;

 

(xiii)                          such other
documents or certificates as are deemed reasonably necessary by the Purchaser
and its counsel.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF HOLDINGS AND THE

SHAREHOLDER

 

Each
of Holdings and the Shareholder hereby, severally and not jointly, represents
and warrants to the Purchaser as follows:

 

3.1                                 Authority. Each of
Holdings and the Shareholder has all requisite power, right and authority to
enter into and perform its or his obligations under this Agreement, the
Consulting Agreement, as applicable, and each of the other agreements,
instruments or documents entered into in connection with this Agreement
(collectively, the “Transaction Documents”) to which Holdings or the Shareholder is a party.

 

3.2                                 Enforceability. This
Agreement and each of the Transaction Documents to which Holdings and the
Shareholder is a party have been duly executed and delivered by Holdings and
the Shareholder and are the valid and binding obligation of Holdings and the
Shareholder and are enforceable against Holdings and the Shareholder in
accordance with their respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting enforcement of creditors’ rights generally and by
general principles of equity (including the possibility of unavailability of
specific performance or injunctive relief), regardless of whether applied in a
proceeding at law or in equity. No permits, approvals or consents of or
notifications to (i) any governmental entities or (ii) any other
persons are necessary in connection with the execution, delivery and
performance by Holdings or the Shareholder of this Agreement and the
Transaction Documents to which

 

16

 

Holdings
or the Shareholder is a party and the consummation by Holdings or the
Shareholder of the transactions contemplated hereby and thereby.

 

3.3                                 Transaction Not
a Breach. Neither the execution and delivery of this
Agreement and the Transaction Documents by Holdings or the Shareholder, nor the
performance by Holdings or the Shareholder of the transactions contemplated
hereby or thereby will, with or without the giving of notice or the passage of
time or both, (a) violate the provisions of any law, rule or
regulation applicable to Holdings or the Shareholder, (b) violate any
judgment, decree, order or award of any court, governmental body or arbitrator
applicable to Holdings or the Shareholder, or (c) conflict with or result
in the breach or termination of any term or provision of, or constitute a
default under, or cause any acceleration under, or cause the creation of any
lien, claim or encumbrance upon the properties or assets of Holdings or the
Shareholder pursuant to, any indenture, mortgage, deed of trust or other
agreement or instrument to which Holdings or the Shareholder is a party or by
which he is or may be bound.

 

3.4                                 No Brokers. Except as set
forth on Schedule 3.4, no broker, finder, agent or
similar intermediary has acted for or on behalf of Holdings or the Shareholder
in connection with this Agreement or the transactions contemplated hereby, and
no other broker, finder, agent or similar intermediary is entitled to any
broker’s, finder’s or similar fee or other commission in connection therewith
based on any agreement, arrangement or understanding with Holdings or the
Shareholder.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER, HOLDINGS AND

SHAREHOLDER

 

Each
of Seller, Holdings and the Shareholder hereby, jointly and severally,
represents and warrants to the Purchaser as follows:

 

4.1                                 Organization. Seller is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Illinois, and has all requisite power and authority to own
its properties, to carry on its business as now being conducted, to execute and
deliver this Agreement and the Transaction Documents, and to consummate the
transactions contemplated hereby and thereby. Seller is qualified to do
business and in good standing in all jurisdictions in which its ownership of
property or the character of its business requires such qualification,
except where the failure to be so qualified would not have a material adverse
effect on Seller or its business, properties, assets or condition. A list of
the jurisdictions where Seller is so qualified to do business is set forth on Schedule 4.1.

 

4.2                                 No Subsidiaries. Except as set
forth on Schedule 4.2, Seller does not own, directly
or indirectly, more than fifty percent (50%) of the equity interests or voting
control of any other corporation, partnership, limited liability company or
other entity (each, a “Subsidiary”),  nor does Seller
own, directly or indirectly, any stock or other equity interest in any other
corporation, partnership, limited liability company or other entity.

 

4.3                                 Capitalization;
Indebtedness. Holdings owns and holds of record all of the
issued and outstanding shares of capital stock of Seller, free and clear of any
liens, claims or other

 

17

 

encumbrances.
Shareholder owns and holds of record at least a majority of the issued and
outstanding shares of capital stock of Holdings, free and clear of any liens,
claims or other encumbrances. As of the Closing, Seller has no outstanding
Indebtedness and is not a guarantor or indemnitor of any Indebtedness of any
other person or entity.

 

4.4                                 Authority. Seller (a) has
all requisite corporate power to enter into, and perform its obligations under,
this Agreement and each of the Transaction Documents to which it is a party and
(b) has taken all requisite corporate action to authorize (i) the
execution, delivery and performance of this Agreement and each of the
Transaction Documents to which it is a party and (ii) the consummation of
the sale of the Purchased Assets and other transactions contemplated by this
Agreement and each of the Transaction Documents to which it is a party. This
Agreement has been duly executed and delivered by Seller and is binding upon,
and legally enforceable against, Seller in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting enforcement of creditors’ rights
generally and by general principles of equity (whether applied in a proceeding
at law or in equity).

 

4.5                                 Transaction Not
a Breach; Required Consents. Except as set forth on Schedule 4.5, neither the
execution and delivery of this Agreement or any of the Transaction Documents by
Seller, nor the consummation by Seller of the transactions contemplated hereby
and thereby, will, with or without the giving of notice or the passage of time
or both, (a) violate or conflict with or result in a breach of (i) any
of the terms, conditions or provisions of Seller’s articles of incorporation or
bylaws, (ii) any Contract, or (iii) any law, statute, ordinance,
rule, regulation, restriction, judgment, order, writ, injunction, decree,
determination or award to which Seller may be subject or bound, (b) result
in the creation of any Lien or Encumbrance upon any of the Purchased Assets, (c) terminate,
amend or modify, or give any party the right to terminate, amend, modify,
abandon, or refuse to perform, any Contract, or (d) accelerate or modify,
or give any party the right to accelerate or modify, the time within which, or
the terms under which, any duties or obligations are to be performed, or any
rights or benefits are to be received, under any Contract. Except as set forth
on Schedule 4.5, no filing, declaration or registration with,
or consent, approval, order or authorization of, any governmental authority or
other person is required to be made or obtained by Seller or Shareholder in
connection with the consummation by Seller of the transactions contemplated by
this Agreement or by any of the Transaction Documents.

 

4.6                                 Financial
Statements. Seller has delivered to Purchaser (a) the
unaudited financial statements of Seller as of December 31, 2008 and December 31,
2007, and the related statements of income for each of the fiscal years then
ended (collectively, the “Year
End Financial Statements”), (b) the unaudited balance sheet of
Seller as of April 30, 2008 (the “Current Balance Sheet”) and the related statement of income of
Seller for the four-month period then ended (collectively, the “Current Financial Statements”), and the
Estimated Closing Balance Sheet. The Year End Financial Statements, the Current
Financial Statements and the Estimated Closing Balance Sheet are collectively
referred to herein as the “Financial
Statements.” The Financial Statements have been prepared in
accordance with GAAP applied consistent with past practices, are complete and
correct in all material respects, and present fairly as of their respective
dates the financial condition and results of operations of the Business as of
and for the periods presented thereby, except, in the case of the Current
Financial

 

18

 

Statements
and the Estimated Closing Balance Sheet, for normal year-end adjustments (which
will not be material individually or in the aggregate) and the failure to
include footnotes and other similar presentation items required by GAAP.

 

4.7                                 No Undisclosed
Liabilities. Except as set forth on Schedule 4.7, the Business
has no debts, liabilities or obligations of any nature, whether known or
unknown, accrued or unaccrued, absolute or contingent, asserted or unasserted,
choate or inchoate, liquidated or unliquidated, secured or unsecured, or
otherwise (collectively, “Liabilities”), except (a) to
the extent such Liabilities are clearly and accurately reflected and accrued
for or fully reserved against in the Estimated Closing Balance Sheet, (b) Liabilities
incurred in the ordinary course of business since the date of the Estimated
Closing Balance Sheet, and (c) Liabilities under or pursuant to the
Assigned Contracts which are to be performed or incurred after the Closing and
are apparent from the reading of such Assigned Contract (but not Liabilities
that result from, arise out of, or are attributable to, any breach of such Contract
if such breach occurred prior to the Closing, Seller is aware of such breach,
and Seller has disclosed such breach on Schedule  4.12).

 

4.8                                 Litigation. Except as set
forth on Schedule 4.8, (a) there is no
action, suit, claim, proceeding or investigation pending (or, to the Seller’s
knowledge, currently threatened in writing) against Seller, Holdings or the
Shareholder relating in any way to Seller or the Business, (b) none of
Seller, Holdings nor the Shareholder is a party to or subject to the provisions
of any order, writ, injunction, judgment or decree of any court or governmental
agency, authority or body relating in any way to Seller or the Business, and (c) there
is no action, suit, claim, proceeding or investigation by Seller currently
pending or that Seller intends to initiate relating in any way to Seller or the
Business. Except as set forth on Schedule 4.8,  since December 31,
2007, Seller has not been a party or otherwise subject to any action, suit,
proceeding, order, claim or investigation relating in any way to Seller or the
Business involving a claim or request for an injunction or other equitable
relief or for damages in excess of $50,000.

 

4.9                                 Insurance. Schedule
4.9 sets forth a list of all insurance policies maintained by Seller, specifying
the type of coverage, the amount of coverage, the insurer and the expiration
date of each such policy (collectively, the “Insurance Policies”) and all claims under such Insurance
Policies since December 31, 2007 in excess of $10,000. Each Insurance Policy
is in good standing, valid and subsisting, and in full force and effect in
accordance with its terms and, collectively, such Insurance Policies are
reasonably adequate and customary for the conduct of the Business. All premiums
due on the Insurance Policies or renewals thereof have been paid and there is
no default under any of the Insurance Policies. Seller not has received any
notice or other communication from any issuer of the Insurance Policies since December 31,
2007 validly canceling or amending any of the Insurance Policies, increasing
any deductibles or retained amounts thereunder, and, to the Seller’s knowledge,
no such cancellation, amendment or increase of deductibles, retainages or
premiums is threatened.

 

4.10                           Intellectual
Property.

 

(a)                                  Schedule 4.10 sets forth an
accurate and complete list of all Intellectual Property Assets owned or
licensed by Seller. Except as otherwise disclosed in Schedule 4.10: (A) Seller
is the owner or licensee of all right, title and interest in and to each of the
Intellectual Property

 

19

 

Assets
used in the Business, free and clear of any and all liens, charges, covenants,
conditions, restrictions, encumbrances and adverse claims or rights whatsoever (“Liens or Encumbrances”); (B) Seller
has the right and authority to use each of the Intellectual Property Assets in
connection with the conduct of the Business in the manner presently conducted,
without payment to any third party; (C) Seller is not in violation of any
license, sublicense or agreement with respect to any of its Intellectual
Property Assets, and the consummation of the transactions contemplated by this
Agreement will not limit Seller’s ability to use such Intellectual Property
Assets; (D) to Seller’s knowledge, Seller is not infringing upon,
violating or misappropriating, the Intellectual Property Assets of any other
person or entity, and (E) no person or entity is infringing upon,
violating or misappropriating, any of Seller’s Intellectual Property Assets.
The Intellectual Property Assets included in the Purchased Assets comprise all
of the Intellectual Property Assets that are necessary to conduct the Business
in the manner presently conducted.

 

(b)                                 As used herein,
the term “Intellectual
Property Assets” means (A) registered and unregistered trade
names, trade marks, logos, service marks and trade mark and service mark
applications, together with all goodwill associated with any of the foregoing
and all registrations and applications therefore, (B) patents,
patent applications, patent disclosures and inventions and discoveries that may
be patentable, (C) registered and unregistered copyrights in both
published and unpublished works and applications for registration thereof, (D) trade
secrets or confidential or proprietary information (including, without
limitation, customer and supplier lists and information, software (other than
commercially available, “off-the-shelf” software), process technology,
technical information, drawings and plans, financial, marketing and business
data, pricing and cost information, and business and marketing plans) know-how
and copyrightable works, and (E) rights in internet web sites or protocol
addresses, internet domain names and registration rights, uniform resource
locators, and related security passwords or codes.

 

4.11                           Tax Matters. Seller has
complied in all material respects with all laws relating to Taxes and has
timely filed or caused to be timely filed all returns, statements, schedules,
reports, and other information required to be filed with any governmental
authority or third party (collectively, “Tax Returns”)  with
respect to any net income, capital gains, gross income, gross receipts, sales,
use, transfer, ad valorem, franchise, profits, license, capital, withholding,
payroll, estimated, employment, excise, goods and services, severance, stamp,
occupation, premium, property, social security, environmental (including Code Section 59A),
alternative or add-on, value added, registration, windfall profits or other tax
or customs duties or amount imposed by any governmental or taxing authority, or
any interest, penalties, additions to tax or other additional amounts incurred
or accrued under applicable tax law or properly assessed or charged by any
governmental or taxing authority (collectively, “Taxes”).
All such Tax Returns were true, correct and complete in all material respects.
All Taxes of Seller due and payable (whether or not shown as due on a Tax Return)
have been paid. There are no unpaid assessments for additional Taxes of Seller
for any period, and to the knowledge of Seller, there is no basis therefor.
There are no liens for Taxes on any assets of Seller, other than liens for
Taxes not yet due and payable. Seller has (i) withheld all required
amounts from its employees, agents, contractors, nonresidents, and other
persons and remitted such amounts to the proper agencies in accordance with all
applicable laws; (ii) paid all employer contributions and premiums; and (iii) filed
all federal, state, local and foreign returns and reports with respect to
employee income Tax withholding, social security Taxes and premiums, and
unemployment Taxes and premiums,

 

20

 

all
in compliance with the Code (and other applicable federal, state, local or
foreign laws) as in effect for the applicable year. No federal, state, local or
foreign Tax audits or other administrative proceedings, discussions or court
proceedings are presently in progress or pending, or to the knowledge of Seller,
threatened with regard to any Taxes or Tax Returns of Seller. Seller has
properly elected to be treated as an S corporation pursuant to Code Section 1362(a) and
the laws of each state in which Seller conducts business, effective as of its
date of incorporation. Each such election is currently effective and no event
has occurred (or fact has existed) that would cause Seller not to initially
qualify as an S corporation under Code Section 1361(a) (or any
comparable provision of applicable state law) or that would terminate Seller’s
S corporation status. No taxing authority has challenged the effectiveness of
any of these elections. There is no contract, agreement, plan or arrangement
covering any employee or former employee or independent contractor or former independent
contractor of Seller that, individually or collectively, could give rise to a
payment by Purchaser (or the provision by Seller of any other benefit such as
accelerated vesting) that would not be deductible by reason of Code Section 280G
or subject to an excise tax under Code Section 4999. Seller has no
indemnity obligation for any excise Taxes imposed under Code Section 4999
or for any Taxes of any employee, including the Taxes under Code Section 409A.

 

4.12                           Contracts; No
Defaults.

 

(a)                                  Schedule 4.12 contains an
accurate and complete list, and Seller has delivered to Purchaser accurate and
complete copies of, each of the following contracts, agreements, instruments,
leases, subleases, licenses, deeds, mortgages, purchase orders, commitments,
arrangements or undertakings, whether written or oral (“Contracts”), to which or by Seller is a
party or otherwise bound that relates to the Purchased Assets or operation of
the Business:

 

(i)                                     each Contract
relating to the acquisition or divestiture of capital stock or other equity
securities, assets or business of any person or entity;

 

(ii)                                  each Contract
for the employment of any officer, individual employee or other person on a
full-time or consulting basis (other than Contracts for “at will” employment
that are not in writing) and each Contract with any independent sales agents or
contractors;

 

(iii)                               each agreement
or indenture relating to the borrowing of money or to mortgaging, pledging or
otherwise placing a lien, claim or other encumbrance on any portion of the
Purchased Assets;

 

(iv)                              each guaranty
of any obligation for borrowed money;

 

(v)                                 each lease or
agreement under which Seller is lessee of, or holds or operates any personal
property owned by any other person or entity;

 

(vi)                              each lease or
agreement under which Seller is lessor of or permits any third party to hold or
operate any property, real or personal;

 

21

 

(vii)                           each Contract
or group of related Contracts with the same party for the purchase of products
or services, under which the undelivered balance of such products and services
has a selling price in excess of $25,000;

 

(viii)                        each Contract
or group of related Contracts with the same party for the sale of products or
services under which the undelivered balance of such products or services has a
sales price in excess of $25,000;

 

(ix)                                each Contract
which expressly prohibits Seller from freely engaging in business anywhere in
the world; and

 

(x)                                   each Contract
entered into outside the ordinary course of business.

 

(b)                                      Except as set
forth on Schedule 4.12:

 

(i)                                     each Assigned Contract is a
valid, binding and enforceable agreement against Seller and, to Seller’s
knowledge, the other parties thereto in accordance with its terms (except to
the extent that the enforceability of obligations and the availability of
certain remedies thereunder are subject to and may be limited by general
principles of equity or by bankruptcy, insolvency, reorganization, arrangement,
fraudulent transfer, moratorium and other laws relating to or affecting
creditors’ rights generally);

 

(ii)                                  no consent,
authorization or approval is required under any Assigned Contract in connection
with the consummation of the transactions contemplated by this Agreement

 

(iii)                               Seller is not
in breach of, or in default under, the terms of any Assigned Contract and has
not received any notice of any such breach or default;

 

(iv)                              no condition
exists or event has occurred that with or without notice or the passage of time
or both, would constitute such a breach of, or a default under, any Assigned
Contract by Seller;

 

(v)                                 no other party
to any Assigned Contract has breached any provision or is in default under any
Assigned Contract; and

 

(vi)                              Seller has not
given or received, at any time since December 31, 2007, any written notice
or other written communication regarding any actual, alleged, or potential
violation or breach of, or default under, any Assigned Contract.

 

(c)                                       Except as set
forth on Schedule 4.5 or Schedule 4.12, the
continuation, validity and effectiveness of each Assigned Contract will not be
affected by the consummation of the transactions contemplated hereunder. Except
as set forth on Schedule 4.12, there are no pending
renegotiations of any of the Assigned Contracts, and neither Seller nor
Shareholder has any knowledge that a party to any Assigned Contract intends to
terminate, cancel or materially change the terms of any such Assigned Contract.

 

4.13                                Licenses and
Permits. Schedule 4.13 sets forth a complete and
correct list of all

 

22

 

licenses,
franchises, permits, operating authorities, state operating licenses or
registrations and other interstate, intrastate, national or international
regulatory licenses and other governmental authorizations held by Seller as of
the date hereof relating to the Business (collectively, “Permits”).
Such Permits (or, if renewed after the date hereof, such renewals) are valid
and in effect and Seller has not received any written notice that any
governmental authority intends to cancel, terminate or not renew any of the
same. Seller holds and is in compliance in all material respects with all
Permits necessary for the ownership and use of its assets or properties and the
operation of the Business as presently conducted. No such Permit is subject to
termination or modification as a result of the transactions contemplated hereby
and except as set forth on Schedule 4.13, no filings,
consents or approvals are necessary to assign or transfer any of such Permits
to Purchaser and all of such Permits will be in full force and effect following
consummation of the transactions contemplated hereby.

 

4.14                                Compliance with
Laws. Each of Seller and the operation of the Business as conducted on the
date hereof is in compliance in all material respects with all applicable
federal, state, local and all other applicable laws, regulations, ordinances or
orders. Neither Seller nor Shareholder has received any notice or other
communication from any governmental authority, agency or body or any other
person regarding any actual or alleged violation of or failure to comply with
any term or requirement of applicable law.

 

4.15                                Employees.

 

(a)                                       Schedule 4.15 sets forth a
true and complete list of the names, start dates, rates of pay per applicable
period, applicable commission rates, and titles of all current officers,
directors, employees and independent sales agents or contractors of Seller.
Except as listed on Schedule 4.15, Seller has not entered into
any agreements or arrangements with any officers, directors, employees or
independent sales agents or contractors of Seller. To the knowledge of Seller,
each employee and independent sales agent or contractor of Seller is currently
deploying all of his or her business time to the conduct of the business of
Seller, and no employee or independent sales agent or contractor of Seller has
any intention to terminate his or her employment with Seller or to change his
or her work schedule in any material respect, either as a result of the
transactions contemplated by this Agreement or otherwise. To Seller’s
knowledge, no employee of Seller is obligated under any Contract or subject to
any order or judgment that would interfere with the use of such employee’s or
independent sales agent’s or contractor’s best efforts to promote the interests
of Seller or would conflict with the Business. Neither the execution and
delivery of this Agreement nor the carrying on of the Business by the employees
or independent sales agents or contractors of Seller, as presently conducted,
will, to Seller’s knowledge, violate, conflict with or result in the breach of
any term, condition or provision of, or constitute a default under, any
Contract to which such employee or independent sales agent or contractor is a
party or by which such employee or independent sales agent or contractor is
bound.

 

(b)                                      Seller is in
compliance in all material respects with all federal, state and municipal laws
with respect to employment and employment practices, terms and conditions of
employment, and wages and hours, and is not engaged in any unfair labor
practice, and there are no arrears in the payment of wages or social security
Taxes, except where the failure to so comply or where such practice or such
arrears would not have a material adverse effect on Seller

 

23

 

or
its business, properties, assets or condition. None of the employees of Seller
are represented by a union and there have been no union organizing efforts
conducted at Seller and none are now being conducted. Seller has not had at any
time, nor, to the Seller’s knowledge, is there now threatened, any strike or
other labor trouble.

 

4.16                                Employee
Benefit Plans.

 

(a)                                       Schedule 4.16 sets forth a
true and complete list as of the date hereof of each “employee pension benefit
plan” (as such term is defined in Section 3(2) of ERISA), “employee
welfare benefit plan” (as such term is defined in Section 3(1) of
ERISA), material personnel or payroll policy (including vacation time, holiday
pay, service awards, moving expense reimbursement programs and sick leave) or
material fringe benefit, severance agreement or plan or any medical, hospital,
dental, life or disability plan, excess benefit plan, bonus, stock option,
stock purchase, or other incentive plan (including any equity or equity-based
plan), top hat plan or deferred compensation plan, salary reduction agreement,
change-of-control agreement, employment agreement, consulting agreement,
collective bargaining agreement, indemnification agreement, or retainer
agreement, or any other benefit plan, policy, program, arrangement, agreement
or contract, whether or not written, with respect to any employee, former
employee, director, independent contractor, or any beneficiary or dependent
thereof (including, without limitation, any “employee benefit plan”, as defined
in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”)),
maintained, or contributed to, by Seller or to which Seller may have any
liability, including contingent liability by reason of being (or having been) a
part of a controlled group of companies under Code Section 414(b), (c), (m) or
(o) (each other company hereinafter referred to as an “ERISA Affiliate”) (the “Employee Benefit Plans”).

 

(b)                                 With respect to each Employee Benefit Plan, Seller has heretofore
delivered or made available to Purchaser a true, correct and complete copy of: (A) each
writing constituting a part of such Employee Benefit Plan, including without
limitation all plan documents, trust agreements, and insurance contracts and
other funding vehicles; (B) the most recent Annual Report (Form 5500
Series) and accompanying schedule, if any; (C) the current summary plan
description and any material modifications thereto, if any (in each case,
whether or not required to be furnished under ERISA); (D) the most recent
annual financial report, trustee report, audit report, or actuarial report, if
any; and (E) the most recent determination letter from the Internal
Revenue Service (“IRS”),  if any. Except
as specifically provided in the foregoing documents delivered to Purchaser,
there are no amendments to any Employee Benefit Plan that have been adopted or
approved nor has Seller undertaken to make any such amendments or to adopt or
approve any new Employee Benefit Plan.

 

(c)                                  Neither Seller
nor any ERISA Affiliate has at any time either (1) contributed to or been
obligated to contribute to a plan that is subject to Title IV of ERISA or the
funding provision of Section 412 of the Code, or (2) engaged in a
transaction described in ERISA Section 4069.

 

(d)                                 Neither Seller
nor any ERISA Affiliate has (i) at any time contributed to or been
obligated to contribute to any “multiemployer plan” (as such term is defined in
Section 3(37) of ERISA) or a “multiple employer plan” (as such term is
defined in Section 4063 of ERISA), or

 

24

 

(ii) incurred
any withdrawal liability to a multiemployer plan as a result of a complete or
partial withdrawal from such multiemployer plan that has not been satisfied in
full.

 

(e)                                  Each of the
Employee Benefit Plans intended to be “qualified” within the meaning of Section 401(a) of
the Code has received a favorable determination letter as to such qualification
from the IRS, and no event has occurred, either by reason of any action or
failure to act, which would cause the loss of any such qualification.

 

(f)                                    No Employee
Benefit Plan provides benefits, including, without limitation, death or medical
benefits (whether or not insured), with respect to current or former employees
of Seller beyond their retirement or other termination of service, other than (1) coverage
mandated by applicable law, (2) death benefits or retirement benefits
under any “employee pension plan” (as such term is defined in Section 3(2) of
ERISA), or (3) deferred compensation benefits accrued as liabilities on
the books of Seller.

 

(g)                                 Each Employee
Benefit Plan complies in all material respects with the applicable requirements
of ERISA, the Code and any other applicable law governing such Employee Benefit
Plan, and each Employee Benefit Plan has at all times been properly
administered in all material respects in accordance with all such requirements
of law, and in accordance with its terms and the terms of any
applicable collective bargaining agreement to the extent consistent with all
such requirements of law. All contributions or other amounts payable by Seller
as of the Closing with respect to each Employee Benefit Plan in respect of
current or prior plan years will have been paid or accrued by such time in
accordance with GAAP.

 

(h)                                 With respect to
each Employee Benefit Plan, there are no claims or other proceedings pending or
threatened with respect to the assets thereof (other than routine claims for
benefits), and which could reasonably give rise to any liability, claim or
other proceeding against any Employee Benefit Plan, any fiduciary or plan
administrator or other person dealing with any Employee Benefit Plan or the
assets of any such Employee Benefit Plan.

 

(i)                                     With respect to
each Employee Benefit Plan maintained by the Seller or any ERISA Affiliate,
such plan permits the plan sponsor to amend or terminate the plan at any time
and without any liability, subject to the applicable requirements of ERISA and
the Code for plan termination.

 

(j)                                     There are, and
have been, no audits by any governmental agency with respect to any Employee
Benefit Plan.

 

(k)                                  With respect to
each Employee Benefit Plan, there has not occurred, and no person or entity is
contractually bound to enter into, any “prohibited transaction” within the
meaning of Section 4975(c) of the Code or Section 406 of ERISA,
which transaction is not exempt under Section 4975(d) of the Code or Section 408
of ERISA.

 

(l)                                     Each Employee
Benefit Plan or arrangement that is subject to the provisions of Section 409A
of the Code has been operated and administered in good faith compliance with Section 409A
of the Code.

 

25

 

(m)                                    The
consummation of the transactions contemplated by this Agreement will not (i) entitle
any current or former employee of Seller to severance pay, unemployment
compensation or any other payment except as set forth on Schedule 4.16, (ii) accelerate
the time of payment or vesting or increase the amount of compensation due to
any such employee or former employee, except as expressly provided in this
Agreement, or (iii) result in any prohibited transaction described in Section 406
of ERISA or Section 4975 of the Code for which an exemption is not available.

 

4.17                                Obligations to
Related Parties. Except as set forth on Schedule 4.17, (i) Seller
is not indebted, directly or indirectly, to any person who is a shareholder,
member, manager, director, officer or employee of Seller or any affiliate of
any such person in any amount whatsoever other than for salaries and bonuses
set forth on Schedule 4.17 for services rendered or reimbursable
business expenses, all of which have been reflected on the Current Financial
Statements, and no such shareholder, member, manager, director, officer or
employee is indebted to any Company, except for advances made to employees of
Seller in the ordinary course of business to meet reimbursable business
expenses anticipated to be incurred by such obligor, (ii) none of the
shareholders, members, managers, directors, officers or employees of Seller, or
any members of their immediate families, are indebted to Seller or have any
direct or indirect ownership interest in any firm or corporation with which
Seller is affiliated or with which Seller has a business relationship, or any
firm or corporation which competes with Seller, except that managers, members,
officers, directors and/or stockholders of Seller may own stock in publicly
traded companies which may compete with Seller, and (iii) no shareholder,
member, manager, director, officer or employee of Seller, or any member of
their immediate families, is, directly or indirectly, interested in any
Assigned Contract with Seller (other than employment agreements).

 

4.18         Title and
Condition of Purchased Assets.

 

(a)                                       Except as set
forth on Schedule 4.18, Seller has valid title to, or a valid leasehold
interest in, all of the Purchased Assets, free and clear of all Liens or
Encumbrances, other than statutory liens. There are no agreements with,
options, commitments or rights in favor of, any person to directly or
indirectly acquire the Business or any interest therein or any tangible
properties or assets of Seller other than in the ordinary course of business
consistent with past practices. All of the rights, properties and assets
utilized or required in connection with owning and operating the Business
(other than the Retained Assets) are either owned by Seller and included in the
Purchased Assets or licensed or leased to Seller under one of the Assigned
Contracts. No assets, properties or rights used by Seller in connection with
the Business are held in the name or in the possession of any person or entity
other than Seller.

 

(b)                                           Each item of
tangible property included in the Purchased Assets is in operating condition.

 

4.19           Real Property.

 

(a)                                       Except as set
forth in Schedule 4.19, Seller does not own, operate, manage, or possess
any real property or any interest therein.

 

26

 

(b)                                      All real
property leases and subleases as to which Seller is a party and any amendments
or modifications thereof are listed in Schedule 4.19 (each a “Lease” and collectively, the “Leases”).
Schedule 4.19 indicates each real property (the “Leased Real Property”)  of
which Seller is the tenant or subtenant. The Leased Real Property constitutes
all of the facilities used or occupied by Seller in connection with the
Business. The Leases are valid, in full force and effect and enforceable
(except to the extent that the enforceability of obligations and the
availability of certain remedies thereunder are subject to and may be limited
by general principles of equity or by bankruptcy, insolvency, reorganization,
arrangement, fraudulent transfer, moratorium and other laws relating to or
affecting creditors’ rights generally).

 

(c)                                       With respect to
the Leased Real Property: (i) Seller has all rights necessary to conduct
the Business in a manner consistent with past practices; (ii) no portion
thereof is subject to any pending or, to the knowledge of Seller, threatened
condemnation proceeding or proceeding by any governmental authority; (iii) Seller
has not received notice, and Seller has no knowledge, of any leases, subleases,
licenses, concessions or other agreements, written or oral, granting to any
party or parties the right of use or occupancy of any portion of any parcel of
Leased Real Property; (iv) all material components of and improvements on
or included within the Leased Real Property do not require material repair or
replacement for their present use and operation, to the extent that Seller is
responsible for such repair or replacement; (v) Seller has not received
notice, and the Seller has no knowledge, of any outstanding options or rights
of first refusal to purchase any parcel of Leased Real Property, or any portion
or interest therein; (vi) Seller has not received notice, and the Seller
has no knowledge, of any parties (other than Seller) in possession of any
parcel of Leased Real Property, other than tenants under any leases of the
Leased Real Property who are in possession of space to which they are entitled
and Seller enjoy peaceful and undisturbed possession under all leases for
Leased Real Property; (vii) the Leased Real Property is supplied with
utilities and other services necessary for the operation of the Business in a
manner consistent with past practices; and (viii) each parcel of Leased
Real Property abuts on and has direct vehicular access to a public road or
access to a public road.

 

4.20                                Environmental
Matters.

 

(a)                                       To the Seller’s
knowledge (without independent investigation or inquiry), Seller has complied
and is in compliance with all applicable Environmental Laws, except for such
noncompliance as could not reasonably be expected to have a material adverse
effect on the business, properties, assets or condition of Seller, and Seller
has not received written notice, report, communication or information regarding
any Liabilities or any corrective, investigatory or remedial obligations,
arising under any applicable Environmental Laws in connection with Seller
activities.

 

(b)                                      Seller does not
now, and in the past Seller has never did, in violation of Environmental Laws,
maintain, store, use, generate, treat, release, dispose (or cause to be disposed)
of Hazardous Substances in, at, under, upon or from any real property at any
time owned, leased, operated or controlled by Seller, including, without
limitation, the real property subject to the Leases, except for such
noncompliance as could not individually or in the aggregate reasonably be
expected to have a material adverse effect on the business, properties, assets
or condition of Seller.

 

27

 

(c)                                       Seller is not
subject to, nor has it received any written notice of, any private,
administrative or judicial action, or an intended private, administrative or
judicial action relating to the presence or alleged presence of Hazardous
Substances in, at, under or upon the real property subject to the Leases in
connection with Seller activities, and there are no pending or, to the Seller’s
knowledge (without independent investigation or inquiry), threatened actions or
proceedings (or written notices or potential actions or proceedings) against
Seller from any Governmental Authority regarding any matter relating to any
Environmental Laws.

 

(d)                                      As used herein,
“Environmental Laws” means all applicable
federal, state and local laws, rules, regulations, ordinances, requirements and
common law relating to public health and safety, worker health and safety and
pollution and protection of the environment pertaining to (i) treatment,
storage, disposal, generation and transportation of toxic or hazardous
substances or solid or hazardous waste, (ii) air, water and noise pollution,
(iii) groundwater and soil contamination, (iv) the release or
threatened release into the environment of toxic or hazardous substances, or
solid or hazardous waste, including, without limitation, emissions, discharges,
injections, spills, escapes or dumping of pollutants, contaminants or
chemicals, (v) the protection of wild life, marine sanctuaries and
wetlands, including, without limitation, all endangered and threatened species,
(vi) storage tanks, vessels and containers, (vii) underground and other
storage tanks or vessels, abandoned, disposed or discarded barrels, containers
and other closed receptacles, (viii) health and safety of employees and
other persons, and (ix) manufacture, processing, use, distribution,
treatment, storage, disposal, transportation or handling of pollutants,
contaminants, chemicals or toxic or hazardous substances or oil or petroleum
products or solid or hazardous waste, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, U.S.C.
§9601 et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
§6901 et seq., the Emergency Planning and Community Right-to-Know Act, 42
U.S.C. §11001 et seq., the Clean Air Act, 42 U.S.C. §7401 et seq., the Federal
Water Pollution Control Act, 33 U.S.C. §1251 et seq., the Toxic Substance
Control Act, 15 U.S.C. §2601 et seq., the Safe Drinking Water Act, 42 U.S.C.
§300f et seq., and the Occupational Safety and Health Act, 42 U.S.C. §1891 et
seq., all as in effect as of the date hereof, and any regulations, rules,
ordinances adopted or publications promulgated pursuant thereto. “Hazardous
Substances” means (i) hazardous materials, hazardous
substances, extremely hazardous substances, toxic substances, hazardous wastes
or words of similar import as defined under any Environmental Laws other than
customary office equipment and cleaning supplies, (ii) petroleum,
including without limitation, crude oil or any fraction thereof, (iii) any
radioactive material, (iv) asbestos in any form or condition, and (v) polychlorinated
byphenyls (“PCBs”) or PCB-containing materials. “Governmental
Authority” means any governmental agency, department, bureau,
commission or similar body.

 

4.21                                Material
Adverse Changes.

 

(a)                                       Except as set
forth on Schedule 4.21, since the date of the
Current Balance Sheet, (i) Seller has conducted the Business only in the
ordinary course of business, (ii) Seller has incurred no Liabilities other
than in the ordinary course of business, (iii) there has not been any
material adverse change in the business, operations, assets, results of
operations or condition (financial or otherwise) of Seller or the Business, and
(iv) no event has occurred or circumstance exists that could reasonably
likely result in such a material adverse change.

 

28

 

(b)                                      Without limitation on the
foregoing, since the date of the Current Balance Sheet, except as set forth on Schedule 4.21, Seller has
not:

 

(i)                                          made any change
in Seller’s (A) accounting methods, principles or practices, or (B) its
depreciation or amortization policies or rates theretofore adopted, other than
as required by a change in any applicable law;

 

(ii)                                       except for
purchase orders entered into in the ordinary course of the Business, entered into
any new Contract that requires or is reasonably expected to require
expenditures by Seller in excess of $25,000 individually or outside of the
ordinary course of business;

 

(iii)                                    sold, leased,
licensed, encumbered, transferred or disposed of any assets (except in the
ordinary course of business consistent with past practice, including the sale
of inventory in the ordinary course), sold, leased, transferred, licensed,
pledged or otherwise disposed of tangible or intangible assets of Seller, or
created or suffered to exist any lien, claim or other encumbrance on any of its
assets or properties;

 

(iv)                                   (A) accelerated
the collection of any accounts receivable of Seller, or written-off any
accounts receivable or notes receivable of Seller, other than in the ordinary
course of business consistent with past practice or (B) delayed or
postponed the payment of accounts payable of Seller other than in the ordinary
course of business consistent with past practice;

 

(v)                                      except as may
be required pursuant to existing agreements between Seller and any director,
officer, employee or independent contractor, (1) paid any bonuses or
increased the salaries or other compensation to any of its directors, officers,
employees or independent contractors, (2) entered into any employment,
consulting, severance or similar Contract with any director, officer, employee
or independent contractor, (3) entered into any transaction or Contract
with any director or officer of Seller, (4) entered into any collective
bargaining agreement, (5) made any loan, advance or capital contribution
to or cash investment in any director, officer, employee or independent
contractor (other than under tax qualified plans or as advances to employees
for business expenses to be incurred in the ordinary course of business
consistent with past practice), or (6) materially adopted, increased,
accelerated, amended, modified or terminated the schedule of payments or
benefits under any Employee Benefit Plan, for or which any director, officer,
consultant, agent, employee or independent contractor is the beneficiary;

 

(vi)                                   settled any
litigation or other proceeding against Seller, other than the settlement of any
such litigation or other proceeding solely for cash payment and without
incurring any other obligation with respect thereto; or

 

(vii)                                agreed,
authorized, committed, whether orally or in writing, and whether or not
binding, to take any of the foregoing actions.

 

4.22                                Customers. The customer
list set forth on Schedule 4.22 represents a true, complete
and correct list of the twenty (20) customers of Seller that generated the most
revenues

 

29

 

for
Seller during the trailing 12-month period ended January 31, 2009,
together with the revenues generated during that period from such customer. To
the knowledge of Seller, except as set forth on Schedule 4.22, (a) there
are no material outstanding disputes with any customer included on the customer
list, and (b) no such customer has terminated or materially altered its
relationship with Seller or has given Seller or Shareholder notice (orally or
in writing) of its intention not to continue to do business with Seller or to
terminate or materially alter its relationship with Seller. For purposes of
this Section 4.22, “material outstanding
disputes” shall mean a dispute over payment by that customer of more than
$5,000.

 

4.23                                Vendors. The vendor
list set forth on Schedule 4.23 represents a true, complete
and correct list of the twenty (20) vendors to which Seller made the most payments
during the trailing 12-month period ended January 31, 2009. To the
knowledge of Seller, except as set forth on Schedule 4.23, (a) there
are no material outstanding disputes with any such vendor included on Schedule 4.23, and (b) no
such vendor has terminated or materially altered its relationship with Seller
or has given Seller or Shareholder written notice of its intention not to
continue to do business with Seller or to terminate or materially alter its
relationship with Seller. For purposes of this Section 4.23, “material
outstanding disputes” shall mean a dispute over payment by that customer of
more than $5,000.

 

4.24                                Accounts
Receivable. Attached as Schedule 4.24 is a true,
correct and complete list of all Accounts Receivable of Seller as of May 22,
2009.

 

4.25                                Accounts
Payable. Attached as Schedule 4.25 is a true, correct and
complete list of all accounts payable of Seller as of May 22, 2009. All
accounts payable of Seller arose in the ordinary course of business and none is
delinquent or past due. Seller has disclosed to Purchaser in writing any
objections, defenses or setoff rights to the accounts payable of Seller.

 

4.26                                Bank Accounts. Schedule
4.26 contains a complete and accurate list of each bank at which Seller has
an account or safe deposit box, the number of each such account or box, and the
names of all persons authorized to draw on such accounts or to have access to
such boxes.

 

4.27                                Certain
Payments. During the last three years, neither Seller,
nor any director, officer, member, manager, agent, or employee of Seller or any
other person associated with or acting for or on behalf of Seller, has directly
or indirectly, with respect to the Business (a) made any bribes, payoffs
or kickbacks, whether in money, property, or services (i) to obtain
favorable treatment in securing business, (ii) to pay for favorable
treatment for business secured, or (iii) to obtain special concessions or
for special concessions already obtained, or (b) established or maintained
any fund or asset that has not been recorded in the books and records of
Seller, provided that the foregoing shall not be applicable or relate to gifts,
entertainment, travel, lodging and similar benefits afforded to representatives
of customers, vendors and suppliers and others in accordance with industry
practices.

 

4.28                                No Brokers. Except as set
forth on Schedule 4.28, no broker, finder, agent or
similar intermediary has acted for or on behalf of Seller in connection with
this Agreement or the transactions contemplated hereby, and no other broker,
finder, agent or similar intermediary is entitled to any broker’s, finder’s or
similar fee or other commission in connection therewith based on any agreement,
arrangement or understanding with Seller.

 

30

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

The
Purchaser hereby represents and warrants to Seller, Holdings and the
Shareholder as follows:

 

5.1                                      Organization. Purchaser is a
limited liability company duly organized, validly existing and in good standing
under the limited liability company laws of the State of Delaware, and has all
requisite power and authority to own its properties, to carry on its business
as now being conducted, to execute and deliver this Agreement and the agreements
contemplated herein, and to consummate the transactions contemplated hereby and
thereby.

 

5.2                                      Authority. Purchaser (a) has
all requisite limited liability company power to enter into, and perform its
obligations under, this Agreement and each Transaction Document to which it is
a party and (b) has taken all requisite limited liability company action
to authorize (i) the execution, delivery and performance of this Agreement
and each of the Transaction Documents to which it is a party and (ii) the
consummation of the purchase of the Purchased Assets and other transactions
contemplated by this Agreement and each of the Transaction Documents to which
it is a party. This Agreement has been duly executed and delivered by Purchaser
and is binding upon, and legally enforceable against, Purchaser in accordance
with its terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
enforcement of creditors’ rights generally and by general principles of equity
(whether applied in a proceeding at law or in equity).

 

5.3                                      Transaction Not
a Breach. The execution, delivery and performance of
this Agreement and the Transaction Documents by Purchaser, and the consummation
by the Purchaser of the transactions contemplated hereby and thereby, will not,
with or without the giving of notice or the passage of time or both, (a) violate
or conflict with or result in a breach of (i) any of the terms, conditions
or provisions of Purchaser’s certificate of formation or limited liability
company agreement, (ii) any contract or agreement to which Purchaser is a
party or by which Purchaser is bound, or (iii) any law, statute,
ordinance, rule, regulation, restriction, judgment, order, writ, injunction,
decree, determination or award to which Purchaser may be subject or bound. No
filing, declaration or registration with, or consent, approval, order or
authorization of, any governmental authority or other person is required to be
made or obtained by Purchaser in connection with the consummation by Purchaser
of the transactions contemplated by this Agreement or by any of the Transaction
Documents.

 

5.4                                      Litigation. There are no
actions, suits, proceedings, orders, claims or investigations pending (or to
the knowledge of Purchaser, currently threatened) against Purchaser with
respect to this Agreement or the transactions contemplated hereby. Purchaser is
not a party or subject to the provisions of any order, writ, injunction,
judgment or decree of any court or government authority relating in any way to
Purchaser with respect to this Agreement or the transactions contemplated
hereby.

 

5.5                                      No Brokers. No broker,
finder, agent or similar intermediary has acted for or on behalf of Purchaser
in connection with this Agreement or the transactions contemplated hereby, and
no broker, finder, agent or similar intermediary is entitled to any broker’s,
finder’s or

 

31

 

similar
fee or other commission in connection therewith based on any agreement,
arrangement or understanding with Purchaser.

 

ARTICLE VI

CERTAIN COVENANTS OF THE PARTIES

 

6.1                                      Confidential
Information; Non-Competition.

 

(a)                                       From and after
the Closing, the Shareholder shall keep secret and retain in confidence, and
not use for the benefit of any person or entity other than Purchaser, all
confidential matters and trade secrets known to him relating to the Business; provided, however,
that Shareholder may disclose such confidential matters or trade
secrets if required by law or pursuant to an order from a court or governmental
authority.

 

(b)                                      For a period of
five (5) years following the Closing Date, each of Seller, Holdings, the
Shareholder, and each of their respective affiliates shall not, directly or
indirectly, in any manner (whether as an owner, stockholder, partner, member,
joint venturer, officer, director, manager, employee, consultant, agent,
independent contractor of any company or business or otherwise):

 

(i)                                          engage or
participate in any business activity that is directly or indirectly in
competition with any of the activities of the Business as presently conducted
by Seller on the Closing Date anywhere in the United States;

 

(ii)                                       solicit,
market, service, or induce, attempt to solicit, market, service or induce, or
service or otherwise do business with, any customer or account of the Business
that has been serviced by or otherwise done business with Seller within the
twelve (12) month period prior to the Closing; or

 

(iii)                                    recruit or
solicit for employment or other services, or employ or engage, as an employee,
independent contractor, consultant or otherwise, (A) any then current
supplier and/or vendor in connection with a business that is competitive with
the Business, or (B) any then
current employee, independent contractor or consultant of Purchaser or its affiliates
who is involved in the Business.

 

(c)                                       Notwithstanding
the foregoing, nothing in this Section 6.1 shall prevent
any Shareholder from owning less than 5% of the equity of any corporation
traded on any national, international, or regional stock exchange or in the
over-the-counter market.

 

(d)                                      Each of Seller,
Holdings and the Shareholder acknowledges and agrees that: (i) the business and
the industry in which Seller competes is highly competitive; (ii) Seller,
Holdings, the Shareholder and each of their respective affiliates have
participated in the solicitation and servicing of customers through which,
among other things, they have obtained and will continue to obtain knowledge of
the “know-how” and business practices of Seller, in which matters Purchaser
will have a substantial proprietary interest following the consummation of the
transactions contemplated by this Agreement; (iii) Seller, Holdings, the
Shareholder and each of their respective affiliates have had and have personal
relationships with the customers of Seller and a knowledge of those customers’
affairs and requirements; (iv) it is a legitimate

 

32

 

interest
of Purchaser, and reasonable and necessary for the protection of the
confidential information, goodwill and business of Purchaser, which is valuable
to Purchaser, that such Shareholder make the covenants contained in this Section 6.1;
and (v) Purchaser would not enter into this Agreement absent the covenants
set forth in this Section 6.1.

 

(e)                                  Each of Seller,
Holdings and the Shareholder acknowledge and agree that all of the conditions
and restrictions established in this Section 6.1 are reasonable,
taking into account the circumstances surrounding this Agreement. Each of
Seller, Holdings and the Shareholder further acknowledge and agree that
Purchaser would be irreparably damaged if Seller, Holdings or the Shareholder
breaches, or threatens to commit a breach of, any of the covenants set forth in
this Section 6.1 (the “Restrictive Covenants”)
and that any such breach or threatened breach could not be adequately
compensated in all cases by monetary damages alone. Accordingly, in addition to
any other right or remedy to which Purchaser may be entitled, at law or in
equity, it shall be entitled to seek to have the Restrictive Covenants
specifically enforced against Seller, Holdings or the Shareholder by any court
of competent jurisdiction, including immediate temporary, preliminary and
permanent injunctive relief and, to the extent permitted by law, without the
necessity of furnishing any bond or other undertaking.

 

(f)                                    If any court of
competent jurisdiction at any time deems the Restrictive Covenants, or any part
hereof, unenforceable because of the duration or geographical scope of such
provisions, the other provisions of this Section 6.1, will
nevertheless stand and to the full extent consistent with law continue in full
force and effect, and it is the intention and desire of the parties that the
court treat any provisions of this Agreement which are not fully enforceable as
having been modified to the extent deemed necessary by the court to render them
reasonable and enforceable, and that the court enforce them to such extent.

 

6.2                                 Publicity. No publicity
release or announcement concerning this Agreement or the transactions
contemplated herein shall be issued without advance written approval of the
form and substance thereof by the Purchaser and the Shareholder; provided,
however, that such restrictions shall not apply to any disclosure
required by regulatory authorities, applicable law or the rules of any
securities exchange which may be applicable.

 

6.3                                 Access to
Records. The Purchaser agrees to permit Seller and its attorneys, accountants,
agents and designees, such access to, and right to copy, such books and records
as the Seller may deem reasonably necessary or reasonably desirable in
connection with the defense of any actual or threatened litigation or the
preparation of any Tax Returns of Seller. Any such examination and copying
shall be at the expense of Seller, shall be performed at the place where the
books and records are regularly maintained by the Purchaser and shall not
unreasonably interfere with the normal business activities of Purchaser.

 

6.4                                 Budget;
Transition Plan; Accounts Receivable. Prior to the Closing,
Seller and Purchaser shall mutually agree in writing upon an operating budget
for the Business for the fiscal years ending December 31, 2009 and December 31,
2010 (the “Budget”). The parties anticipate that
the Business will operate under its current name immediately following the
Closing and will transition to the “Echo” name and to Purchaser’s operational
and financial technology at some point thereafter as determined by Purchaser in
its sole discretion. With respect to that certain “lock box” account listed on Schedule
4.26, the parties agree to use

 

33

 

reasonable
good faith efforts after the Closing to identify whether deposits into such account
are Accounts Receivable, or amounts to be paid to Seller because such deposits
are (a) amounts that do not constitute payment of Accounts Receivable
(which amounts shall be promptly paid to Seller or as Seller directs), or (b) amounts that represent payment
of Accounts Receivable assigned to Seller pursuant to Section 9.3.

 

6.5                                 License
Agreement. At the Closing, Purchaser
will provide the Shareholder and/or his affiliate with a license, in
substantially the form attached hereto as Exhibit E (the “License Agreement”), to use certain computer programs and other technology.

 

6.6                                 Confidentiality
and Non-Compete Agreements. At the Closing, Seller
shall cause the employees and sales representatives of Seller listed on Schedule
6.6 to enter into a Confidentiality Agreement with the Purchaser, in
substantially the form attached hereto as Exhibit F-1 and a Non-Compete/Non-Solicitation Agreement with
the Purchaser, in substantially the form attached hereto as Exhibit F-2 (collectively, the “Confidentiality and Non-Compete Agreements”).

 

6.7                                 Transaction
Processing Services. For a period of not less than ninety (90) days following
the Closing, unless earlier terminated by Purchaser, Holdings agrees to use its
employees to provide transaction processing services to Purchaser in a manner
consistent with the provision of such services by such employees to Seller in
the conduct of the Business prior to the Closing. In consideration for such
services, Purchaser hereby agrees to pay to Holdings a transaction fee in an
amount equal to six dollars ($6.00)] per transaction. Purchaser may terminate
the receipt of such services at any time by delivery of written notice to
Holdings, and at any time after ninety (90) days following the Closing,
Holdings may terminate the provision of such services by delivery of written
notice to Purchaser.

 

6.8                                 Minimum EBITDA. If the EBITDA
for the First EBITDA Measurement Period is less than
$2,000,000, then Seller, Holdings and the Shareholder, jointly and severally,
agree to pay to Purchaser an amount equal to $1,000,000. Upon written notice to
Seller, Purchaser may set-off any amount to which it may be entitled under this
Section 6.8 after a final determination of the EBITDA for the First
EBITDA Measurement Period against amounts otherwise payable under Section 1.7.
Neither the exercise of, nor the failure to exercise, such right of set-off
will constitute an election of remedies or limit any party in any manner in the
enforcement of any other remedies that may be available to it.

 

ARTICLE VII

SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS

 

7.1                                 Survival of
Representations, Warranties and Covenants of Seller, Holdings and the
Shareholder. All representations and warranties of each of
Seller, Holdings and the Shareholder contained herein shall survive the
execution and delivery of this Agreement and the Closing and shall continue in
full force and effect for twelve (12) months after the Closing Date, at which
time such representations and warranties shall terminate; provided, however,
that:

 

(a)                                       the
representations and warranties of Seller, Holdings and the Shareholder set
forth in Section 4.11  (Tax Matters), Section 4.16
(Employee
Benefit Plans)  and

 

34

 

Section 4.20  (Environmental Matters)  (collectively, the “Statute Representations”) shall survive until the earlier
of (i) the expiration of any applicable statute of limitations plus thirty
(30) days or (ii) seven (7) years, at which time such representations
and warranties shall terminate;

 

(b)                                           the
representations and warranties of Holdings and the Shareholder set forth in Section 3.1
(Authority), Section 3.2
(Enforceability),  and Section 3.4
(No
Brokers)  shall survive
indefinitely; and

 

(c)                                            the
representations and warranties of Seller, Holdings and the Shareholder set
forth in Section 4.1  (Organization),  Section 4.2 (Subsidiaries),  Section 4.3 (Capitalization; Indebtedness), Section 4.4 (Authority), Section 4.18(a) (Title to
Purchased Assets),  and Section 4.27
(No
Brokers)  shall survive
indefinitely.

 

The
Sections referenced in the foregoing clauses (b) and (c) are
referred to herein collectively as the “Unlimited
Representations.” All covenants and other obligations of Seller,
Holdings and the Shareholder contained herein shall survive the execution and
delivery of this Agreement and the Closing and shall continue in full force and
effect until such covenants or obligations expire, are fully performed and
satisfied or until expiration of the applicable statute of limitations, in
accordance with the respective terms of such covenants or obligations. The
right to indemnification based upon such representations, warranties, covenants
and obligations shall not be affected by any examination, inspection, audit or
other investigation conducted by the Purchaser with respect to, or any
knowledge acquired at any time with respect to, the accuracy or inaccuracy of
or compliance with any such representation, warranty, covenant or obligation.
Each of Seller, Holdings and the Shareholder acknowledge and agree that,
notwithstanding Purchaser’s participation in the preparation and drafting of
the Schedules to this Agreement, Purchaser shall have the right to rely fully
upon the representations, warranties, covenants and obligations of Seller,
Holdings and the Shareholder contained in this Agreement or any agreement or
instrument required to be delivered hereunder, and no presumption or burden of
proof shall arise in favor of Seller, Holdings or the Shareholder by virtue of
such participation by Purchaser.

 

7.2                                 Survival of
Representations, Warranties and Covenants of Purchaser. All representations
and warranties of Purchaser contained herein shall survive the execution and
delivery of this Agreement and the Closing and shall continue in full force and
effect for twelve (12) months after the Closing Date, at which time such
representations and warranties shall terminate; provided, however,
that the representations and warranties of Purchaser set forth in Section 5.2
(Authority),  and Section 5.5
(No
Brokers)  shall survive
indefinitely. All covenants and other obligations of the Purchaser contained
herein shall survive the execution and delivery of this Agreement and the
Closing and shall continue in full force and effect until such covenants or
obligations expire, are fully performed and satisfied or until expiration of
the applicable statute of limitations, in accordance with the respective terms
of such covenants or obligations.

 

35

 

ARTICLE VIII

INDEMNIFICATION

 

8.1                                 Indemnification
by Holdings and the Shareholder. Each of Holdings and the Shareholder,
jointly and severally, shall indemnify and hold harmless Purchaser, its
successors and assigns in interest, and each of their respective directors,
officers, shareholders, employees, agents, subsidiaries and affiliates
(collectively, the “Purchaser
Indemnitees”), from and against and will reimburse the Purchaser Indemnitees
for, any loss, liability, claim, damage or expense (including reasonable costs
of investigation and defense and reasonable attorneys’ fees and expenses)
(collectively, “Losses”) arising or resulting
from or in connection with any misrepresentation, inaccuracy or breach of any
representation or warranty of Holdings and the Shareholder in Article III hereof.

 

8.2                                 Indemnification
by Seller, Holdings and the Shareholder. Each of Seller, Holdings
and the Shareholder, jointly and severally, shall indemnify and hold harmless
the Purchaser Indemnitees from and against and will reimburse the Purchaser
Indemnitees for, any Losses arising or resulting from or in connection with any
of the following:

 

(a)                                  any
misrepresentation, inaccuracy or breach of any representation or warranty of Seller,
Holdings and the Shareholder in Article IV hereof;

 

(b)                                 any breach of
any covenant or obligation of Seller, Holdings or the Shareholder in this
Agreement (other than the Restrictive Covenants) or any of the Transaction
Documents;

 

(c)                                  any Retained
Liability;

 

(d)                                 any Retained
Asset;

 

(e)                                  any claim by
any person for payment of any fees or expenses incurred by Seller, Holdings or
the Shareholder in connection with the negotiation and execution of this
Agreement and the transactions contemplated hereby;

 

(f)                                    any Taxes
(other than Assumed Taxes) with respect to operations of the Business, ownership
of the Purchased Assets, or employment of the Hired Employees for periods (or
portions of periods) ending on or prior to the Closing Date, and interest and
penalties thereon whether accruing on prior to or following the Closing;

 

(g)                                 any and all actions,
suits, proceedings, claims, demands, assessments, judgments, costs and
expenses, including, without limitation, reasonable legal fees and expenses,
incurred in enforcing this indemnity; or

 

(h)                                 any unpaid
principal or interest under the Inline Note as of June 1, 2012.

 

8.3                                 Indemnification
by Purchaser. Purchaser shall indemnify and hold harmless Seller,
Holdings and the Shareholder, and their respective successors and assigns in
interest, and each of their respective directors, officers, shareholders,
employees, agents, subsidiaries and affiliates (the “Seller Indemnitees”) from and against and will reimburse
the Seller Indemnitees for, any Losses that may be incurred or suffered by the
Seller Indemnitees arising or resulting

 

36

 

from
or in connection with any of the following:

 

(a)                                       any
misrepresentation, inaccuracy or breach of any representation or warranty of
Purchaser in Article V hereof;

 

(b)                                      any breach of
any covenant or obligation of Purchaser in this Agreement;

 

(c)                                       any Assumed
Liability;

 

(d)                                      any Liability
(other than Retained Liabilities) arising out of the Purchased Assets or the
operations of the Business post-Closing which (A) do not relate to any
pre-Closing period and (B) are not Retained Liabilities; or

 

(e)                                       any and all
actions, suits, proceedings, claims, demands, assessments, judgments, costs and
expenses, including, without limitation, reasonable legal fees and expenses,
incurred in enforcing this indemnity.

 

8.4                                 Claims for
Indemnification. Whenever any claim shall arise for indemnification
under this Article VIII, a Purchaser Indemnitee or a Seller
Indemnitee, as the case may be (the party seeking such indemnification, the “Indemnified Party”), shall promptly notify the other party or parties hereto (the
party or parties from whom indemnification is sought, the “Indemnifying Party”), and such Indemnifying Party’s counsel pursuant to Section 11.1
herein, in writing (the “Indemnification
Notice”) of the
claim, which writing shall include the facts constituting the basis for such
claim, the specific section of this Agreement upon which the claim is based and
an estimate, if possible, of the amount of damages suffered by the Indemnified
Party. In the event of any such claim for indemnification hereunder resulting
from or in connection with any claim or legal proceedings by a third party (a “Third Party Claim”), the Indemnification Notice shall specify, if known, the amount
or an estimate of the amount of the liability arising therefrom and shall
attach all correspondence and demands from such third party. The failure to
give an Indemnification Notice to the Indemnifying Party shall not relieve the
Indemnifying Party of any liability hereunder unless the Indemnifying Party was
prejudiced thereby under this Article VIII, and then only to the
extent of such prejudice. In the event that any claim for indemnification
involves a matter other than a Third Party Claim, the Indemnifying Party shall
have thirty (30) days from receipt of the Indemnification Notice to object to
such claim by delivery of a written notice of such objection to the Indemnified
Party specifying in reasonable detail the basis for such objection. Failure to
timely object to such claims shall constitute a final and binding acceptance of
the claim for indemnification by the Indemnifying Party and the claim shall be
paid in accordance with Section 8.7 hereof.

 

8.5                                 Right of
Set-Off. Upon notice to Seller specifying in reasonable detail the basis therefore
(the “Set-Off Notice”), Purchaser may
set-off any amount to which it may be entitled under this Article VIII
against amounts otherwise payable by Purchaser under Section 1.7.
In the event that Seller objects to the reasons for any set-off by Purchaser
hereunder, Seller shall deliver to Purchaser written notice of such objection
(the “Set-Off Protest Notice”) within ten (10) days
of delivery of the Set-Off Notice which shall set forth in reasonable detail
the nature of the disagreement. If Seller delivers a Set-Off Protest Notice to
Purchaser, then the parties agree to use reasonable efforts to resolve in good
faith the disputes set forth therein. If the

 

37

 

parties
are unable to resolve any such disputes within thirty (30) days of delivery of
the Set-Off Protest Notice, then the set-off amount which is in dispute shall
be deposited by Purchaser into an interest-bearing escrow account established
pursuant to a customary escrow agreement mutually acceptable to Purchaser and
Seller, pursuant to which such escrow deposit or portion thereof, together
accrued interest thereon, shall be released to the appropriate party or parties
promptly following the resolution of such dispute. The fees and expenses of the
escrow agent under such escrow agreement shall be borne equally by the parties.
The exercise of a right of set-off by Purchaser in good faith, whether or not
ultimately determined to be justified, will not constitute a breach of Section 1.7 hereof.
Neither the exercise of, nor the failure to exercise, such right of set-off
will constitute an election of remedies or limit Purchaser in any manner in the
enforcement of any other remedies that may be available to it.

 

8.6                                 Defense by the
Indemnifying Party.

 

(a)                                  In connection
with any Third Party Claim, the Indemnifying Party may, upon written notice
given to the Indemnified Party, assume the defense of any such Third Party
Claim if the Indemnifying Party acknowledges to the Indemnified Party in
writing the obligation of the Indemnifying Party to indemnify the Indemnified
Party with respect to all elements of such Third Party Claim. If the
Indemnifying Party assumes the defense of any such Third Party Claim, the Indemnifying
Party shall select counsel to conduct the defense of such Third Party Claim,
and at the sole cost and expense of the Indemnifying Party, shall take all
steps it deems necessary or appropriate in the defense or settlement thereof.
The Indemnifying Party shall not consent to a settlement of, or the entry of
any judgment arising from, any such Third Party Claim without the prior written
consent of the Indemnified Party (which consent shall not be unreasonably
withheld or delayed), unless such settlement or judgment includes a full
release of the Indemnified Party from such Third Party Claim. No settlement or
compromise which seeks non-monetary damages which could have an adverse effect
on the business or assets of the Indemnified Party shall be entered into
without the consent of the Indemnified Party. The Indemnified Party shall be
entitled to participate in (but not control) the defense of any such Third
Party Claim, with its own counsel and at its own expense. If the Indemnifying
Party does not assume the defense of any such Third Party Claim within thirty
(30) days after the date it receives written notice of such Third Party Claim
from the Indemnified Party: (i) the Indemnified Party may defend against
such Third Party Claim in such manner as it may deem necessary or appropriate,
including, but not limited to, settling such Third Party Claim so long as such
settlement includes a full release of the Indemnifying Party from such Third
Party Claim, on such terms as the Indemnified Party may deem appropriate; and (ii) the
Indemnifying Party shall be entitled to participate in (but not control) the
defense of such action, with its counsel and at its own expense. If the
Indemnifying Party thereafter seeks to question the manner in which the
Indemnified Party defended such Third Party Claim or the amount or nature of
any such settlement, the Indemnifying Party shall have the burden to prove by a
preponderance of the evidence that the Indemnified Party did not defend or
settle such Third Party Claim in a reasonably prudent manner.

 

(b)                                 The
Indemnifying Party and the Indemnified Party shall cooperate with each other in
all reasonable respects in connection with the defense of any Third Party
Claim, including making available records relating to such claim and furnishing
employees of the Indemnified

 

38

 

Party
as may be reasonably necessary for the preparation of the defense of any such
Third Party Claim or for testimony as witnesses in any proceeding relating to a
Third Party Claim.

 

8.7                                 Payment of
Indemnification Obligation. Upon a final determination
of an indemnification claim made by the Indemnified Party, whereby such final
determination is by reason of (i) a failure of the Indemnifying Party to
timely object to an Indemnification Notice or (ii) the mutual agreement of
the Indemnifying Party and the Indemnified Party, or (iii) a final,
non-appealable judgment of a court of competent jurisdiction, then the amount
of the Losses stated in such claim or otherwise agreed to or determined, as the
case may be, shall be paid in cash or by cashier’s check or by wire transfer of
immediately available funds to the Indemnified Party or set-off such amount in
accordance with, Section 8.5 above. Any indemnity payments made pursuant
to this Article VIII shall be treated for all Tax purposes by the
parties as an adjustment to the Purchase Price.

 

8.8                                 Indemnification
Limitation – Basket. Seller, Holdings and the Shareholder shall have no
obligation to indemnify the Purchaser Indemnitees under Section 8.2(a),
and no indemnification claims shall be brought against Seller, Holdings or the
Shareholder under Section 8.2(a), absent fraud, unless and until
the aggregate amount of all Losses incurred or sustained by the Purchaser
Indemnitees in respect thereof exceeds $125,000 (the “Basket”),
whereupon Seller, Holdings and the Shareholder shall be obligated in respect of
all Losses in excess of $125,000; provided, however, that the
Basket shall not apply to Losses arising under or related to Section 8.2(a) due
to a breach of the Statute Representations or the Unlimited Representations.

 

8.9                                 Indemnification
Limitation – Cap. Seller, Holdings and the Shareholder shall have no
obligation to indemnify the Purchaser Indemnitees under Section 8.2(a),
and no indemnification claims shall be brought against Seller, Holdings or the
Shareholder under Section 8.2(a), absent fraud, for any Losses in
excess of $2,500,000.

 

8.10                           Computation of
Losses. For purposes of determining whether a breach of a representation or
warranty under Article III or Article IV has occurred
and calculating any Losses suffered by an Indemnified Party pursuant to Sections
8.1 or 8.2 hereof or under any other specific indemnification
covenant contained in this Agreement, (a) the amount of the Losses
suffered by the Indemnified Party shall be the net amount of the Loss so
suffered after giving effect to the aggregate value of any money or other
assets with a readily determinable value (including, without limitation,
proceeds of insurance) realized by the Indemnified Party in connection
therewith, and (b) each representation or warranty that contains any
qualification as to “materiality” or “material adverse effect” shall be deemed
to have been given as though there were no such qualification, and any such
qualification shall be disregarded for purposes of this Article VIII.

 

8.11                           Other
Indemnification Limitations. Subject to the foregoing
and Section 8.3, an Indemnified Party shall be entitled to recover
the full amount of any Losses incurred due to the matter for which
indemnification is sought, including reasonable attorney’s fees incurred in
connection therewith. Except with respect to any Loss that is the result of
fraud on the part of the other party or any of its affiliates, each of the
parties hereto agrees that, from and after the Closing, his or its sole and
exclusive remedy with respect to any and all claims relating to

 

39

 

breaches
of covenants (other than the Restrictive Covenants), representations and
warranties of this Agreement shall be indemnification pursuant to this Article VIII;
provided, however, that nothing in this provision shall limit any
equitable remedy, including injunctions and specific performance, that a party
may have pursuant to this Agreement or the transactions contemplated hereby.

 

ARTICLE IX

OTHER AGREEMENTS AND COVENANTS

 

9.1                                      Tax Matters.

 

(a)                                       Any and all
transfer, sales, use, purchase, value added, excise, real property, personal
property, intangible, stamp, or similar Taxes (collectively, “Transfer Taxes”)  imposed on, or resulting
from, the transfer of any Purchased Assets (including those Transfer Taxes
imposed on Purchaser or the Purchased Assets) shall be paid by Seller.

 

(b)                                      For purposes of
allocating Taxes incurred for a period beginning before and ending after the
Closing Date to the portion of the period ending at the Closing Date, (i) Liability
for any Taxes determined by reference to income, capital gains, gross income,
gross receipts, sales, net profits, windfall profits or similar items or
resulting from a transfer of assets incurred during a period beginning before
and ending after the Closing Date shall be allocated to the portion of the
period ending on and including the Closing Date if such items accrued during
such period; and (ii) Liability for all other Taxes such as real property
Taxes and personal property Taxes shall be pro rated on a per diem basis based
on the number of days in the taxable period such that the portion allocated to
the portion of the period ending on and including the Closing Date equals the
amount of such Taxes for the entire period multiplied by a fraction, the
numerator of which is the number of days in the portion of the period ending on
and including the Closing Date and the denominator of which is the number of
days for the entire period.

 

9.2                                 Required
Consents. If Seller fails to obtain any of the consents or
approvals set forth in Schedule 4.5 and Schedule 4.12 (the “Required Consents”)  prior to Closing, then Seller
will, within sixty (60) days after the Closing Date or such longer period as
Purchaser may reasonably request (but, as to the related Assigned Contract, not
longer than the term thereof), use its commercially reasonable efforts to, at
its own expense, (i) obtain such consent or approval, (ii) provide to
Purchaser, at the request of Purchaser, the benefits and burdens of the related
Assigned Contract, (iii) cooperate in any reasonable and lawful
arrangement designed to provide such benefits and burdens to Purchaser without
incurring any obligation to any other person or entity other than to provide
such benefits to Purchaser, and (iv) enforce, at the request of Purchaser
and for the account of Purchaser, any rights of Seller acquired by Purchaser
hereunder arising from the related Assigned Contract. Purchaser shall
reasonably cooperate with Seller in connection with the foregoing. Nothing in
this Section 9.2 shall affect the liability of Seller, if any,
pursuant to this Agreement for having failed to disclose the need for such
Required Consent or to use commercially reasonable efforts to obtain such
Required Consent. If (and for so long as) Purchaser receives substantially all
of the benefits of the related Assigned Contract not transferred to Purchaser hereunder,
then Purchaser shall perform the obligations of Seller under or in connection
with such Assigned Contract for the benefit of the other parties thereto.
Without limiting the generality or effect of any provision of this Agreement,
to the

 

40

 

extent
that any Assigned Contract is not capable of being transferred without a
Required Consent, nothing in this Agreement shall constitute a transfer or
attempted transfer of such Assigned Contract

 

9.3                                      Accounts
Receivable.

 

(a)                                       If, as of the
close of business on the 180th day following the Closing Date, Purchaser shall
not have collected the full face amount of the Accounts Receivable set forth on
the Final Closing Balance Sheet, net of the allowance for bad debt as set forth
on the Final Closing Balance Sheet, then Seller and Holdings jointly and
severally agree that Purchaser may assign good and marketable title to any
unpaid Accounts Receivable to Seller, free and clear of any Liens or
Encumbrances, and receive payment in cash from Seller or Holdings an amount
equal to the uncollected amount of such Accounts Receivable. Purchaser shall
use reasonable efforts after the Closing to collect all Accounts Receivable,
but Purchaser shall not be required to commence any legal action in connection
with such collection efforts. Upon the assignment of any such unpaid Accounts
Receivable to Seller, (i) Seller may take such commercially reasonable
actions, at Seller’s sole cost and expense, as Seller deems advisable with respect
to the collection thereof, (ii) all proceeds from such collection actions
shall be the property of Seller, and (iii) any sums paid to Purchaser on
account of such assigned Accounts Receivable shall be promptly paid to Seller
or as Seller directs.

 

(b)                                      Upon written
notice to Seller specifying in reasonable detail the basis therefore, Purchaser
may set-off any amount to which it may be entitled under this Section 9.3,
on a dollar-for-dollar basis, against the Earn-Out Payment otherwise payable
under Section 1.7. The exercise of a right of set-off by Purchaser
in good faith, whether or not ultimately determined to be justified, will not
constitute a breach of Section 1.7. Neither the exercise of, nor
the failure to exercise, such right of set-off will constitute an election of
remedies or limit Purchaser in any manner in the enforcement of any other
remedies that may be available to it. In the event that any suit or action is
instituted by Seller in relation to the exercise of a right of set-off by
Purchaser hereunder, the prevailing party in such dispute shall be entitled to
recover from the losing party all reasonable fees, costs and expenses of such
prevailing party incurred in connection with such dispute.

 

9.4                                      Post-Closing
Access to Records/Cooperation.

 

(a)                                       Purchaser, on
the one hand, and Seller and the Shareholder, on the other hand, shall provide
each other with such assistance as may reasonably be requested by the other in
connection with the preparation of any return or report of Taxes, any audit or
other examination by any taxing authority, any judicial or administrative
proceedings relating to liabilities for Taxes, or any other matter for which
cooperation and assistance is reasonable requested. Such assistance shall
include making employees, information, records and other reasonably requested
materials available on a mutually convenient basis to provide additional
information or explanation of material provided hereunder and shall include
providing copies of relevant Tax Returns and supporting material. The party
requesting assistance hereunder shall reimburse the assisting party for
reasonable out-of-pocket expenses incurred in providing assistance. Purchaser,
on the one hand, and Seller and the Shareholder, on the other hand, will retain
for the full period of any statute of limitations and provide the others with
any records or information

 

41

 

which
may be relevant to such preparation, audit, examination, proceeding or
determination. Seller and the Shareholder on the one hand, and Purchaser, on
the other hand, shall (and shall cause their respective affiliates to): (i) provide
timely notices to the other parties hereto in writing of any pending or
threatened Tax audits or assessments relating to the Business or the Purchased
Assets for taxable periods for which any other party hereto may be responsible
under this Agreement or otherwise; and (ii) furnish the other parties
hereto with copies of all correspondence received from any taxing authority in
connection with any Tax audit or information request with respect to any
taxable period for which any other party be responsible under this Agreement or
otherwise.

 

(b)                                      Each of Seller,
Holdings, the Shareholder and Purchaser agree that in the event after the
Closing Date any further action is necessary or desirable to carry out the
purposes of this Agreement, each such party will take such further action
(including the execution and delivery of such further instruments
and documents) as any other party reasonably may request, at the sole cost and
expense of the requesting party (unless the requesting party is entitled to
indemnification therefor under Article VIII).

 

9.5                                      Bulk Sale
Waiver and Indemnity. The parties hereto acknowledge and agree
that no filings with respect to any bulk sales or similar laws have been made,
nor are they intended to be made, nor are such filings a condition precedent to
the Closing; and, in consideration of such waiver by Purchaser, Seller,
Holdings and the Shareholder shall indemnify, defend and hold Purchaser
Indemnified Parties harmless against any claims or damages resulting or arising
from such waiver and failure to comply with applicable bulk sales laws, except
such indemnity shall not apply with respect to claims and damages arising out
of Assumed Liabilities.

 

9.6                                      Use of the
Seller’s Name. Purchaser acknowledges and agrees that all
of Seller’s rights in and to, and ownership of, the name under which it is
doing business and any names related or substantially similar thereto shall be
retained by Seller. From and after the Closing, Seller and its affiliates
grants to Purchaser an irrevocable, royalty-free, worldwide, transferable,
non-exclusive license to use such name in a reasonable manner in connection
with the conduct of the Business during the period following the
Closing as reasonably necessary for Purchaser to effect the transition of the
Business to the “Echo” name.

 

ARTICLE X

EMPLOYEE MATTERS

 

10.1                                Offers of
Employment. Immediately after the Closing, Purchaser
agrees to make an offer of employment to substantially all employees of Seller
(the “Potential Employees”),  such offers to be effective
as of the Closing Date (the “Hire Date”).  Seller gives
its full authorization and consent for (i) Purchaser to make such offers
of employment to the Potential Employees, and (ii) the Potential Employees
to accept and commence employment with Purchaser on the Hire Date, at which
time Seller shall terminate the employment of such Potential Employees. Each of
Seller, Holdings and the Shareholder agrees to assist Purchaser as reasonably
requested by Purchaser in communicating any such offers of employment to the
Potential Employees and arranging for Purchaser to meet with such employees
regarding the offers. All Potential Employees who accept employment with
Purchaser will become employees of Purchaser effective as of the Hire Date
(each, a “Hired Employee”).  Potential

 

42

 

Employees
who do not accept employment with Purchaser will not become employees of the
Purchaser. Except with respect to any employment agreement that Purchaser may
enter into with any Hired Employee, each Hired Employee shall be an employee
“at will” subject to Purchaser’s employment policies. Purchaser acknowledges
that Seller is relying on this covenant for purposes of assessing its
obligations to give notice of the transactions contemplated hereby to its
employees or to take any other action under applicable laws.

 

10.2                                Liabilities. Seller shall
remain responsible at all times and Purchaser shall have no liability or
responsibility for any Liabilities or other claims related to any suit,
proceeding or claim brought by any of the Potential Employees relating to or
arising from their employment with Seller or the termination of their
employment with Seller. Seller shall be solely responsible for all Liabilities
for severance pay by any of the Potential Employees and any claims that the
consummation of the transaction contemplated by this Agreement constitutes a
termination or constructive termination of the employment of any of the
Potential Employees. Notwithstanding any other provision of this Agreement to
the contrary, including any other indemnification provisions and limitations
contained elsewhere in this Agreement, Seller, Holdings and the Shareholder,
jointly and severally, shall indemnify, reimburse, defend and hold harmless
Purchaser from and against any and all claims, actions or proceedings for
matters occurring on or prior to the Closing Date based upon, arising out of or
otherwise in respect of any employment action or practice of Seller in
connection with persons previously employed, employed or seeking to be employed
by Seller, including, without limitation, claims, actions or proceedings
relating to or arising under the Workers Adjustment and Retraining Notification
Act of 1988 or any similar or successor federal, state or local law resulting
from its actions under this Agreement or from its termination of employment of
any of its employees.

 

10.3                                Severance. Seller shall
be solely responsible for all Liabilities for severance pay to any of the
Potential Employees due as a result of their termination of employment by
Seller.

 

10.4                                Accrued
Vacation Time. Purchaser hereby agrees to satisfy when due all
obligations of Seller to provide accrued paid vacation (or pay in lieu thereof)
to each Hired Employee solely to the extent such accrued vacation as of the
Closing Date is reflected in the final determination of the Actual Working
Capital. Purchaser will give each Hired Employee credit under Purchaser’s
vacation policies, for purposes of eligibility and entitlement to benefits, for
such Hired Employee’s service with Seller prior to the Closing to the extent
such service was credited under Seller’s policies.

 

10.5                                Employee
Benefit Plans. Purchaser shall not adopt or assume any of
Seller’s Employee Benefit Plans listed on Schedule 4.16. Seller and
Purchaser agree to furnish each other with such information concerning the
Potential Employees and Hired Employees, and to take all such other reasonable
action, as is necessary and appropriate to effect the transactions contemplated
herein. Nothing in this paragraph shall restrict the right of Purchaser to
amend, terminate or modify such Employee Benefit Plans at any time. Purchaser
may adopt and provide for Hired Employees such employee benefit plans as it may
determine in its sole discretion.

 

43

 

ARTICLE XI

MISCELLANEOUS

 

11.1                           Notices. All notices,
waiver, requests and other communications hereunder shall be in writing and
shall be delivered by courier or other means of personal service (including by
means of a nationally recognized courier service or a professional messenger
service), or sent by facsimile or mailed first class, postage prepaid, by
certified mail, return receipt requested, in all cases, addressed as follows:

 

	
   

  	
  if
  to the Purchaser:

  	
  Echo/RT
  Holdings, LLC

  
	
   

  	
   

  	
  c/o
  Echo Global Logistics, Inc.

  
	
   

  	
   

  	
  600
  West Chicago Avenue

  
	
   

  	
   

  	
  Suite 725

  
	
   

  	
   

  	
  Chicago,
  Illinois 60654

  
	
   

  	
   

  	
  Attention:
  Douglas R. Waggoner

  
	
   

  	
   

  	
  Fax:
  (888) 796-4445

  
	
   

  	
   

  	
   

  
	
   

  	
  with
  a copy to:

  	
  DLA Piper LLP (US)

  
	
   

  	
   

  	
  203
  North LaSalle Street

  
	
   

  	
   

  	
  Suite 1900

  
	
   

  	
   

  	
  Chicago,
  Illinois 60601-1293

  
	
   

  	
   

  	
  Attention:
  Richard E. Ginsberg

  
	
   

  	
   

  	
  Fax:
  (312) 630-5388

  
	
   

  	
   

  	
   

  
	
   

  	
  if
  to the Seller or Holdings:

  	
  RayTrans
  Distribution Services, Inc.

  
	
   

  	
   

  	
  4747
  Lincoln Mall Drive

  
	
   

  	
   

  	
  Matteson,
  Illinois 60443

  
	
   

  	
   

  	
  Fax:
  (877) 469-6671

  
	
   

  	
   

  	
   

  
	
   

  	
  with
  a copy to:

  	
  Foley &
  Lardner LLP

  
	
   

  	
   

  	
  111
  Huntington Avenue

  
	
   

  	
   

  	
  Boston,
  Massachusetts 02199-7610

  
	
   

  	
   

  	
  Attention:
  Susan E. Pravda, Esq.

  
	
   

  	
   

  	
  Fax:
  (617) 342-4001

  
	
   

  	
   

  	
   

  
	
   

  	
  if
  to the Shareholder:

  	
  James
  A. Ray

  
	
   

  	
   

  	
   

  
	
   

  	
  with
  a copy to:

  	
  Foley &
  Lardner LLP

  
	
   

  	
   

  	
  111
  Huntington Avenue

  
	
   

  	
   

  	
  Boston,
  Massachusetts 02199-7610

  
	
   

  	
   

  	
  Attention:
  Susan E. Pravda, Esq.

  
	
   

  	
   

  	
  Fax:
  (617) 342-4001

  

 

44

 

All
notices, requests and other communications shall be deemed given on the date of
actual receipt or delivery as evidenced by written receipt, acknowledgment or
other evidence of actual receipt or delivery to the address. In case of service
by facsimile, a copy of such notice shall be personally delivered or sent by
registered or certified mail, in the manner set forth above, within three (3) business
days thereafter. Either party hereto may from time to time by notice in writing
served as set forth above designate a different address or a different or
additional person to which all such notices or communications thereafter are to
be given.

 

11.2                           Entire
Agreement. This Agreement (including without limitation
the schedules and exhibits hereto) and the agreements, documents and
instruments to be executed and delivered pursuant hereto or thereto embody the
final, complete and exclusive agreement among the parties with respect to the
sale of the Purchased Assets and the transactions contemplated by this
Agreement. This Agreement supersedes all prior discussions, negotiations,
letters of intent, agreements, understandings and representations (whether
written or oral) with respect to the transactions contemplated hereby and may
not be contradicted by evidence of any such prior or contemporaneous agreement,
understanding or representation, whether written or oral.

 

11.3                           Governing Law
and Venue. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD
TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF. Any suit brought hereon and any
and all legal proceedings to enforce this Agreement, whether in contract, tort,
equity or otherwise, shall be brought in the state or federal courts sitting in
the State of Illinois, the parties hereto hereby waiving any claim or defense
that such forum is not convenient or proper. Each party hereby agrees that any
such court shall have in personam jurisdiction
over it, consents to service of process in any manner prescribed in Section 11.1 or in any
other manner authorized by Illinois law, and agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner specified by law.

 

11.4                           Binding Effect;
Assignment. This Agreement and the rights, covenants,
conditions and obligations of the respective parties hereto and any instrument
or agreement executed pursuant hereto shall be binding upon the parties and
their respective successors, assigns and legal representatives. Neither this
Agreement, nor any rights or obligations of any party hereunder, may be
assigned by a party without the prior written consent of the other party, provided, however, that Purchaser
shall be entitled to assign its rights and benefits hereto, without the consent
of Seller, Holdings or the Shareholder (a) to an affiliate of Purchaser so
long as the affiliate assumes Purchaser’s obligations hereunder, (b) in
connection with the grant of a security interest in all of its rights and
interests hereunder to any of Purchaser’s lenders (Purchaser nevertheless
remaining responsible for the performance of its obligations hereunder), and (c) in
connection with the sale of all or substantially all of Purchaser’s assets so
long as the assignee assumes Purchaser’s obligations hereunder; provided, further, however, no
such assignment shall limit Purchaser’s obligations hereunder which shall
remain primary together with any such assignee. Without limitation of the
foregoing, Purchaser shall not sell all or substantially all of Purchaser’s
assets without requiring that the assignee assume Purchaser’s obligations
hereunder, including without limitation, Section 1.7. In the event
of any such assignment and delegation, the term “Purchaser” as used in this
Agreement shall be deemed to refer to and include each such affiliate or
successor of Purchaser where reference is made to

 

45

 

actions
to be taken with respect to the acquisition of the Business or Purchased
Assets, and shall be deemed to include both Purchaser and each such affiliate
or successor where appropriate.

 

11.5                           Counterparts. The parties
may execute this Agreement in multiple counterparts, each of which will be
deemed an original and all of which, when taken together, will constitute one
and the same instrument. The parties may deliver executed signature pages to
this Agreement by facsimile or e-mail transmission. No party shall raise as a
defense to the formation or enforceability of this Agreement as a contract, and
each party forever waives any such defense, either (i) the use of
facsimile or e-mail transmission to deliver a signature or (ii) the fact
that any signature was signed and subsequently transmitted via facsimile or
e-mail transmission.

 

11.6                           Further
Assurances. Each party hereto agrees to promptly execute
and deliver all further instruments and documents and take all further action
necessary or appropriate or that the other party may reasonably request in
order to effect the purposes of this Agreement and the other agreements
delivered in connection herewith.

 

11.7                           Section Headings. The section
headings of this Agreement are for convenience of reference only and shall not
be deemed to alter or affect any provision hereof.

 

11.8                           Gender; Tense.
Etc. Where the context or construction requires, all words applied in the
plural shall be deemed to have been used in the singular, and vice versa; the
masculine shall include the feminine and neuter, and vice versa; and the
present tense shall include the past and future tense, and vice versa.

 

11.9                           Severability. In the event
that any provision or any part of any provision of this Agreement shall be void
or unenforceable for any reason whatsoever, then such provision shall be
stricken and of no force and effect. However, unless such stricken provision
goes to the essence of the consideration bargained for by a party, the
remaining provisions of this Agreement shall continue in full force and effect,
and to the extent required, shall be modified to preserve their validity.

 

11.10                     No Third Party
Rights.

 

(a)                                  Except as
otherwise provided herein, nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any person or entity other than the parties to it and their
respective successors-in-interest and assigns, nor is anything in this
Agreement intended to relieve or discharge the obligation or liability of any
third persons to any party to this Agreement, nor shall any provision give any
third persons any right of subrogation or action over against any party to this
Agreement.

 

(b)                                 No provision in
this Agreement shall create any third party beneficiary or other rights in any
employee or former employee (including any beneficiary or dependent thereof) of
Seller in respect of continued employment (or resumed employment) with Seller
and no provision shall create any such rights in any such persons in respect of
any benefits that may be provided, directly or indirectly, under any Employee
Benefit Plan or any plan or arrangement that may be established by the
Purchaser or any of its affiliates. No provision of this Agreement

 

46

 

shall
constitute a limitation on rights to amend, modify or terminate after the
Closing Date any Employee Benefit Plan.

 

11.11                     Fees and
Expenses. Each party shall be responsible for and pay (i) any
and all legal, accounting or other costs or expenses incurred by such party in
connection with the negotiation and preparation of this Agreement and the
consummation and performance of the transactions contemplated hereby, and (ii) any
brokers’, finders’ or referral fees payable to any broker, finder, agent or similar
intermediary who has acted for or on behalf of such party in connection with
this Agreement or the transactions contemplated hereby. Subject to the
consummation of the Closing, the Seller shall pay for up to an aggregate of
$50,000 of the legal, accounting or other costs or expenses incurred by the
Purchaser in connection with the negotiation and preparation of this Agreement
and the consummation and performance of the transactions contemplated hereby.

 

11.12                     Amendments; No
Waivers.

 

(a)                                  Any provision
of this Agreement may be amended if, and only if, such amendment is in writing
and signed by the Purchaser, Seller, Holdings and the Shareholder. Any
provision of this Agreement may be waived if the waiver is in writing and
signed by the party to be bound.

 

(b)                                 No failure or
delay by either party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other of further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.

 

11.13                     “Knowledge”
Defined. Where any representation or warranty contained in this Agreement is
expressly qualified by reference to the “knowledge” of Seller, Holdings or the
Shareholder or “awareness” of Seller, Holdings or the Shareholder (or words to
such effect), such term shall mean the facts or other information that are
actually known by the Shareholder or Robert Logan and the facts or other
information that the Shareholder or Robert Logan should be reasonably expected
to know after due inquiry as of the date of this Agreement. For these purposes,
“due inquiry” means (i) review of the
relevant Sections of this Agreement and the corresponding Schedules hereto and (ii) inquiry
of Jacob Kosiara, Mary Kuempel and all other sales representatives or agents
with respect to the particular subject matter of such Sections and Schedules.

 

11.14                     Public
Announcements. No party to this Agreement shall issue any press
release or other public document or make any public statement relating to this
Agreement or the terms, conditions or other matters contained herein without
obtaining the prior approval of the other parties. The parties will consult
with each other and agree upon the timing of and the means by which Seller’s
employees, customers, suppliers and others having dealings with Seller will be
informed of the transactions contemplated by this Agreement. Nothing in this Section 11.14
shall require either party to obtain consent to make, or prevent either party
from making, any public announcements or disclosures in such form as may be
required by, or deemed advisable by such party’s legal counsel pursuant to, the
rules of any stock exchange or national securities association or any
applicable legal requirements.

 

47

 

11.15                     No Strict
Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties hereto to express their mutual intent,
and no rule of strict construction will be applied against any party
hereto.

 

11.16                     Guaranty of
Performance.

 

(a)                                       Echo hereby
irrevocably and unconditionally guaranties (the “Guaranty”)  to
Seller, Holdings and Shareholder the full and timely payment of any amounts
payable and the prompt performance of all obligations of Purchaser under this
Agreement (for purposes of this Section 11.16, the “Purchaser’s Obligations”)  when and as the same shall become due
hereunder. The Guaranty is a guarantee of payment and performance and not of
collection only. Each of the Seller, Holdings and Shareholder acknowledges and
agrees that Purchaser’s Obligations are subject to and shall be determined in
accordance with the express terms and conditions of this Agreement. The
liability of Echo under the Guaranty is absolute and unconditional and the
Guaranty shall be binding upon Echo and its successors and assigns, shall not
be subject to any counterclaim, setoff, deduction or defense based upon any
claim Echo may have against Seller, Holdings or the Shareholder hereunder or
otherwise, and shall remain in full force and effect without regard to, and
shall not be released, discharged or in any way affected by, any circumstance
or condition whatsoever which might otherwise constitute a legal or equitable
discharge or defense of a guarantor; provided, that any claim under the
Guaranty against Echo shall be subject to, and Echo shall have available to it
in defense of any such claim, any and all of Purchaser’s rights and defenses
(including rights of set-off or deduction), whether arising hereunder or
otherwise, in respect of any such claim. Echo agrees that the Guaranty may be
enforced by the Shareholder without the necessity at any time of resorting to
or exhausting any other remedy or without the necessity at any time of having
recourse to this Agreement. Echo waives any right now or hereafter existing
requiring the Shareholder, as a condition to proceeding against Echo, to proceed
against Purchaser or any other person. The Guaranty shall survive the Closing.

 

(b)                                      Echo hereby
waives and agrees that it shall not at any time insist upon, plead or in any
manner whatever claim or take the benefit or advantage of, any appraisal, valuation,
stay, extension, marshaling of assets or redemption laws, exemption, or any
defense based upon suretyship or impairment of collateral, whether now or at
any time hereafter in force, which may delay, prevent or otherwise affect the
payment and performance by Echo of the Purchaser’s Obligations under, or the
enforcement by the Shareholder of, the Guaranty. Echo hereby waives diligence,
presentment and demand (whether for non-payment or protest or of acceptance,
maturity, extension of time, change in nature or form of the Purchaser’s
Obligations, acceptance of further security, release of further security,
composition or agreement arrived at as to the amount of, or the terms of, the
Purchaser’s Obligations, notice of adverse change in the Purchaser’s financial
condition or any other fact which might increase the risk to Echo) with respect
to any of the Purchaser’s Obligations or all other demands whatsoever and
waives the benefit of all provisions of law which are or might be in conflict
with the terms of the Guaranty.

 

(c)                                       If an action or
proceeding is brought to interpret or enforce the Guaranty, then the prevailing
party shall be entitled to recover its reasonable attorney fees and costs of
suit incurred, in addition to other available relief, with respect to the
interpretation or enforcement of the Guaranty.

 

48

 

IN WITNESS  WHEREOF,
the parties hereto have duly executed this Agreement as of the day and
year first above written. Each of the parties hereto acknowledges that it has
read and understood this Agreement
and has either obtained its own independent counsel with respect to the
transactions contemplated hereby, or waived its right to have counsel review this Agreement.

 

	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  ECHO/RT HOLDINGS, LLC

  
	
   

  	
   

  
	
   

  	
  By: Echo Global Logistics, Inc., its sole Member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David B. Menzel

  
	
   

  	
  Name:

  	
  David B. Menzel

  
	
   

  	
  Its:

  	
  CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  RAYTRANS DISTRIBUTION SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James A. Ray

  
	
   

  	
  Name:

  	
  James A. Ray

  
	
   

  	
  Its:

  	
  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HOLDINGS:

  
	
   

  	
   

  
	
   

  	
  RAYTRANS HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James A. Ray

  
	
   

  	
  Name:

  	
  James A. Ray

  
	
   

  	
  Its:

  	
  Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SHAREHOLDER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ James A. Ray

  
	
   

  	
  James A. Ray

  
					

 

[SIGNATURE
PAGE TO ASSET PURCHASE AGREEMENT]

 

 

The undersigned is hereby executing and delivering
this Agreement solely for the purpose of agreeing to the provisions of and
accepting any obligations under Section 11.16 hereof.

 

ECHO:

 

ECHO GLOBAL LOGISTICS, INC.

 

 

	
  By:

  	
  /s/
  David B. Menzel

  	
   

  
	
  Name:

  	
  David
  B. Menzel

  	
   

  
	
  Its:

  	
  CEO

  	
   

  

 

[SIGNATURE
PAGE TO ASSET PURCHASE AGREEMENT]

 

List of Exhibits and Schedules

 

EXHIBITS

 

Exhibit A – Estimated Closing Balance Sheet

Exhibit B – Form of Assumption Agreement

Exhibit C – Form of Consulting Agreement

Exhibit D – Form of Bill of Sale and
Assignment Agreement 

Exhibit E – Form of License Agreement

Exhibit F-1 – Form of Confidentiality
Agreement

Exhibit F-2 – Form of
Non-Compete/Non-Solicitation Agreement

 

SCHEDULES

 

Schedule 1.1(b)(A) – Tangible Personal Property

Schedule 1.1(b)(B) – Personal Property Leases 

Schedule 1.2(a) – Retained Assets

Schedule 1.3 – Seller’s Liabilities

Schedule 1.7(a) – Existing Accounts

Schedule 1.8 – Purchase Price Allocation Methodology

Schedule 3.4 – Brokers

Schedule 4.1 – Foreign Qualifications 

Schedule 4.2 – Subsidiaries

Schedule 4.3 – Capitalization; Indebtedness 

Schedule 4.5 – Consents

Schedule 4.7 – Liabilities

Schedule 4.8 – Litigation

Schedule 4.9 – Insurance

Schedule 4.10 – Intellectual Property 

Schedule 4.12 – Contracts

Schedule 4.13 – Licenses and Permits 

Schedule 4.15 – Employees

Schedule 4.16 – Employee Benefit Plans 

Schedule 4.17 – Obligations to Related Parties 

Schedule 4.18 – Title to Assets

Schedule 4.19 – Real Property

Schedule 4.21 – Material Adverse Changes 

Schedule 4.22 – Customers

Schedule 4.23 – Vendors

Schedule 4.24 – Accounts Receivable 

Schedule 4.25 – Accounts Payable

Schedule 4.26 – Bank Accounts

Schedule 4.28 – Brokers

Schedule 6.6 – Confidentiality and Non-Compete
AgreementsExhibit
10.15

 

AMENDED AND RESTATED

 

LOAN AND SECURITY AGREEMENT

 

dated as of August 26, 2009

 

among

 

ECHO GLOBAL LOGISTICS, INC.,

a Delaware corporation,

Borrower,

 

and

 

EGL MEZZANINE LLC,

a Delaware limited liability company,

Lender

 

 

	
  Section

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  DEFINITIONS
  AND RULES OF CONSTRUCTION

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Definitions

  	
   

  	
  1

  
	
   

  	
  1.2

  	
  Rules of
  Construction

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  AMOUNT
  AND TERMS OF CREDIT

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Term
  Loan

  	
   

  	
  10

  
	
   

  	
  2.2

  	
  Prepayments

  	
   

  	
  11

  
	
   

  	
  2.3

  	
  Use
  of Proceeds

  	
   

  	
  11

  
	
   

  	
  2.4

  	
  Interest;
  Principal

  	
   

  	
  11

  
	
   

  	
  2.5

  	
  Fees

  	
   

  	
  12

  
	
   

  	
  2.6

  	
  Method
  of Payment

  	
   

  	
  12

  
	
   

  	
  2.7

  	
  Application
  and Allocation of Payments

  	
   

  	
  12

  
	
   

  	
  2.8

  	
  Loan
  Account and Accounting

  	
   

  	
  13

  
	
   

  	
  2.9

  	
  Indemnity

  	
   

  	
  13

  
	
   

  	
  2.10
  

  	
  Taxes

  	
   

  	
  13

  
	
   

  	
  2.11

  	
  Single
  Loan

  	
   

  	
  14

  
	
   

  	
  2.12
  

  	
  Termination
  of Chase Loan Documents

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  CREATION
  OF SECURITY INTEREST

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Grant
  of Security Interest

  	
   

  	
  14

  
	
   

  	
  3.2

  	
  Lender’s
  Rights

  	
   

  	
  15

  
	
   

  	
  3.3

  	
  Power
  of Attorney

  	
   

  	
  16

  
	
   

  	
  3.4

  	
  Financing
  Statements

  	
   

  	
  17

  
	
   

  	
  3.5

  	
  Reinstatement

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Corporate
  Existence; Compliance with Law

  	
   

  	
  18

  
	
   

  	
  4.2

  	
  Corporate
  Power, Authorization, Enforceable Obligations

  	
   

  	
  18

  
	
   

  	
  4.3

  	
  Ownership
  of Property; Liens

  	
   

  	
  18

  
	
   

  	
  4.4

  	
  Taxes

  	
   

  	
  19

  
	
   

  	
  4.5

  	
  No
  Litigation

  	
   

  	
  19

  
	
   

  	
  4.6

  	
  Intellectual
  Property

  	
   

  	
  19

  
	
   

  	
  4.7

  	
  Full
  Disclosure

  	
   

  	
  20

  
	
   

  	
  4.8

  	
  Solvency

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  FINANCIAL
  STATEMENTS AND INFORMATION

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Reports
  and Notices

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  AFFIRMATIVE
  COVENANTS

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Insurance

  	
   

  	
  20

  
	
   

  	
  6.2

  	
  Existence

  	
   

  	
  20

  
	
   

  	
  6.3

  	
  Financial
  Records

  	
   

  	
  20

  
	
   

  	
  6.4

  	
  Inspection

  	
   

  	
  20

  
	
   

  	
  6.5

  	
  Notices
  of Claims, Litigation, Defaults, etc.

  	
   

  	
  21

  
	
   

  	
  6.6

  	
  Other
  Agreements

  	
   

  	
  21

  

 

 

	
   

  	
  6.7

  	
  Title
  to Assets and Property

  	
   

  	
  21

  
	
   

  	
  6.8

  	
  Additional
  Assurances

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  TERM

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Termination

  	
   

  	
  21

  
	
   

  	
  7.2

  	
  Survival
  of Obligations Upon Termination of Financing Arrangements

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  EVENTS
  OF DEFAULT; RIGHTS AND REMEDIES

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Events
  of Default/Acceleration

  	
   

  	
  22

  
	
   

  	
  8.2

  	
  Remedies

  	
   

  	
  23

  
	
   

  	
  8.3

  	
  Waivers
  by Borrower

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  MISCELLANEOUS

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Continuation
  of Security Interest

  	
   

  	
  24

  
	
   

  	
  9.2

  	
  Severability

  	
   

  	
  24

  
	
   

  	
  9.3

  	
  Notice

  	
   

  	
  25

  
	
   

  	
  9.4

  	
  Entire
  Agreement; Modifications and Amendments

  	
   

  	
  25

  
	
   

  	
  9.5

  	
  Headings

  	
   

  	
  25

  
	
   

  	
  9.6

  	
  No
  Waiver

  	
   

  	
  25

  
	
   

  	
  9.7

  	
  Successors
  and Assigns

  	
   

  	
  26

  
	
   

  	
  9.8

  	
  GOVERNING
  LAW

  	
   

  	
  26

  
	
   

  	
  9.9

  	
  Consent
  To Jurisdiction And Venue

  	
   

  	
  26

  
	
   

  	
  9.10

  	
  Mutual
  Waiver Of Jury Trial; Judicial Reference

  	
   

  	
  26

  
	
   

  	
  9.11

  	
  Confidentiality

  	
   

  	
  27

  
	
   

  	
  9.12

  	
  Revival
  of Obligations

  	
   

  	
  27

  
	
   

  	
  9.13

  	
  Counterparts

  	
   

  	
  28

  
	
   

  	
  9.14

  	
  Remedies

  	
   

  	
  28

  
	
   

  	
  9.15

  	
  Conflict
  of Terms

  	
   

  	
  28

  
	
   

  	
  9.16

  	
  Advice
  of Counsel

  	
   

  	
  28

  
	
   

  	
  9.17

  	
  No
  Strict Construction

  	
   

  	
  28

  

 

ii

 

INDEX OF APPENDICES

 

	
  Schedule
  1

  	
   

  	
  –

  	
   

  	
  Indebtedness

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit 2.1

  	
   

  	
  –

  	
   

  	
  Form of
  Amended and Restated Term Note

  

 

iii

 

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

This
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”)
dated as of August 26, 2009, by and among ECHO GLOBAL LOGISTICS, INC., a
Delaware corporation (“Borrower”), and EGL MEZZANINE LLC, a Delaware
limited liability company (“Lender”).

 

RECITALS

 

A.            Borrower has
requested that Lender extend a term loan facility to Borrower of Seven Million
Five Hundred Thousand Dollars ($7,500,000) for the purpose of (a) funding the
Borrower’s working capital needs and (b) acquiring all or substantially all of
the assets of RayTrans Distribution Services, Inc., an Illinois
corporation; and for these purposes, Lender is willing to make a term loan to
Borrower of such amount upon the terms and conditions set forth herein.

 

B.            Borrower has
agreed to secure all of its obligations under the Loan Documents by granting to
Lender a security interest in and lien upon all of their existing and
after-acquired personal and real property.

 

C.            Capitalized
terms used in this Agreement shall have the meanings ascribed to them in Section
1 and, for purposes of this Agreement, the other Loan Documents, the
rules of construction set forth in Section 1 shall
govern. All Schedules, Exhibits and other
attachments hereto (collectively, “Appendices”) are incorporated herein
by reference, and taken together with this Agreement, shall constitute but a
single agreement. These Recitals shall be construed as part of this Agreement.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and for other good and valuable consideration, the
parties hereto agree as follows:

 

SECTION
1. DEFINITIONS AND RULES OF CONSTRUCTION

 

1.1           Definitions.  Unless otherwise defined herein, the
following capitalized terms shall have the following meanings:

 

“Account
Debtor” means any Person who may become obligated to Borrower under, with
respect to, or on account of, an account, chattel paper or general intangibles
(including a payment intangible).

 

“Affiliate”
means, with respect to any Person, (a) each Person that, directly or
indirectly, owns or controls, whether beneficially, or as a trustee, guardian
or other fiduciary, 5% or more of the Stock having ordinary voting power in the
election of directors of such Person, (b) each Person that controls, is
controlled by or is under common control with such Person, (c) each of such
Person’s officers, directors, joint venturers and partners and (d) in the case
of Borrower, the immediate family members, spouses and lineal descendants of
individuals who are

 

 

Affiliates
of Borrower. For the purposes of this definition, “control” of a Person shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of its management or policies, whether through the ownership of
voting securities, by contract or otherwise; provided, however, that the term
“Affiliate” shall specifically exclude Lender.

 

“Agreement”
means this Amended and Restated Loan and Security Agreement by and among
Borrower and Lender, as the same may be amended, supplemented, restated or
otherwise modified from time to time.

 

“Appendices”
has the meaning ascribed to it in the Recitals hereto.

 

“Bankruptcy
Code” means the provisions of Title 11 of the United States Code, U.S.C. §§
101 et seq.

 

“Borrower”
has the meaning ascribed thereto in the preamble hereof.

 

“Business
Day” means any day that is not a Saturday, a Sunday or a day on which banks
are required or permitted to be closed in the State of Illinois.

 

“Capital
Lease” means, with respect to any Person, any lease of any property
(whether real, personal or mixed) by such Person as lessee that, in accordance
with GAAP, would be required to be classified and accounted for as a capital
lease on a balance sheet of such Person.

 

“Capital
Lease Obligation” means, with respect to any Capital Lease of any Person,
the amount of the obligation of the lessee thereunder that, in accordance with
GAAP, would appear on a balance sheet of such lessee in respect of such Capital
Lease.

 

“Change
of Control” means the occurrence of any event or transaction, including the
sale or exchange of outstanding shares of Borrower’s capital Stock or the
capital Stock of any of Borrower’s Subsidiaries, or series of related events or
transactions, resulting in (a) the holders of such outstanding capital Stock
immediately before consummation of such event or transaction, or series of
related events or transactions, do not, immediately after consummation of such
event or transaction or series of related events or transactions, retain,
directly or indirectly, capital Stock representing at least fifty percent (50%)
of the voting power of Borrower, (b) Borrower ceases to own and control all of
the economic and voting rights associated with all of the of the outstanding
capital Stock of any of its Subsidiaries, or (c) Borrower ceases to own and
control all of the economic and voting rights associated with all of the
outstanding capital Stock of its Subsidiaries; provided, however, that the
merger or consolidation of any Subsidiary of Borrower with any other Subsidiary
of Borrower, or with Borrower so long as Borrower is the surviving entity of
any such merger or consolidation, does not constitute a “Change of Control”.

 

“Charges”
means all federal, state, county, city, municipal, local, foreign or other
governmental taxes, levies, assessments, charges, liens, claims or encumbrances
upon or arising on account of (a) the Collateral, (b) the Obligations, (c) the
employees, payroll, income or gross receipts of Borrower, (d) Borrower’s
ownership or use of any properties or other assets, or (e) any other aspect of
Borrower’s business.

 

2

 

“Chase
Loan” means that certain $20,000,000 line of credit from JPMorgan Chase
Bank, N.A. to Borrower, Echo/Bestway, Echo/TMG, Echo/RT and Echo/FMI, evidenced
by the Chase Loan Documents, dated as of August 26, 2009, as amended.

 

“Chase
Loan Documents” means that certain Amended and Restated Credit Agreement,
dated as of the date hereof, by and among Borrower, Echo/Bestway, Echo/TMG,
Echo/RT, Echo/FMI and JPMorgan Chase Bank, N.A., as amended, that certain
Replacement Line of Credit Note, dated as of the date hereof, from Borrower,
Echo/Bestway, Echo/TMG, Echo/RT and Echo/FMI in favor of JPMorgan Chase Bank,
N.A., that certain Amended and Restated Security Agreement, dated as of the
date hereof, from Borrower, Echo/Bestway, Echo/TMG, Echo/RT and Echo/FMI in
favor of JPMorgan Chase Bank, N.A., and all other agreements, instruments,
documents and certificates executed and delivered to, or in favor of, JPMorgan
Chase Bank, N.A. and including all other pledges, powers of attorney, consents,
assignments, contracts, notices, and all other written matter whether now or
hereafter executed by or on behalf of Borrower, Echo/Bestway, Echo/TMG, Echo/RT
or Echo/FMI, or any employee of Borrower, Echo/Bestway, Echo/TMG, Echo/RT or
Echo/FMI, and delivered to JPMorgan Chase Bank, N.A. in connection with the
Chase Loan or the transactions contemplated thereby. Any reference in the Chase
Loan Documents shall include all appendices, exhibits or schedules thereto, and
all amendments, restatements, supplements or other modifications thereto, and
shall refer to the Chase Loan Documents as the same may be in effect at any and
all times such reference becomes operative.

 

“Closing
Date” means August 26, 2009.

 

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

 

“Collateral”
means all of Borrower’s “accounts”; “chattel paper”; “deposit accounts” and
other payment obligations of financial institutions (including Lender);
“documents”; “equipment”, including any documents and certificates of title
issued with respect to any of the equipment; “general intangibles” and any
right to a refund of taxes paid at any time to any governmental entity;
“instruments”; “inventory”; including any documents and certificates of title
issued with respect to any of the inventory; “investment property”; “financial
assets”; “letter of credit rights”; all as defined in the UCC, whether now
owned or hereafter acquired, whether now existing or hereafter arising, and
wherever located. In addition, the term “Collateral” includes all “proceeds”,
“products” and “supporting obligations” (as such terms are defined in the UCC)
of the Collateral, including but not limited to all stock rights, subscription
rights, dividends, stock dividends, stock splits, or liquidating dividends, and
all cash, accounts, chattel paper, “instruments”, “investment property”,
“financial assets”, and “general intangibles” (as such terms are defined in the
UCC) arising from the sale, rent, lease, casualty loss or other disposition of
the Collateral, and any Collateral returned to, repossessed by or stopped in
transit by Borrower, and all insurance claims relating to any of the
Collateral. The tern “Collateral” further includes all of Borrower’s right,
title and interest in and to all books, records, and data relating to the
Collateral, regardless of the form of media containing such information or
data, and all software necessary or desirable to use any of the Collateral or
to access, retrieve, or process any of such information or data. Where the
Collateral is in possession of Lender or Lender’s agent, Borrower agrees to
deliver to Lender any property that represents an increase in

 

3

 

the
Collateral or profits or proceeds of the Collateral, subject to the terms of
the Chase Loan Documents.

 

“Commitment”
means the commitment of Lender to make the Term Loan, which commitment shall be
SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS ($7,500,000) on the Closing Date.
After advancing the Term Loan, each reference to the Commitment shall refer to
the outstanding amount of the Term Loan.

 

“Copyright
License” means any and all rights now owned or hereafter acquired by
Borrower under any written agreement granting any right to use any Copyright or
Copyright registration.

 

“Copyrights”
means all of the following now owned or hereafter adopted or acquired by
Borrower: (a) all copyrights and general intangibles of like nature (whether
registered or unregistered), all registrations and recordings thereof, and all
applications in connection therewith, including all registrations, recordings
and applications in the United States Copyright Office or in any similar office
or agency of the United States, any state or territory thereof, or any other
country or any political subdivision thereof, and (b) all reissues, extensions
or renewals thereof.

 

“Default”
means any event that, with the passage of time or notice or both, would, unless
cured or waived, become an Event of Default.

 

“Default
Rate” has the meaning ascribed to it in Section
2.4(d).

 

“Dollars”
or “$” means lawful currency of the United States of America.

 

“Echo/Bestway”
means Echo/Bestway Holdings, LLC, a Delaware limited liability company.

 

“Echo/TMG”
means Echo/TMG Holdings, LLC, a Delaware limited liability company.

 

“Echo/RT”
means Echo/RT Holdings, LLC, a Delaware limited liability company.

 

“Echo/FMI”
means Echo/FMI Holdings, LLC, a Delaware limited liability company.

 

“Event
of Default” has the meaning ascribed to it in Section 8.1.

 

“Fees”
means any and all fees payable to Lender pursuant to this Agreement or any of
the other Loan Documents.

 

“Financial
Statements” means the consolidated and consolidating income statement,
statement of cash flows and balance sheet of Borrower.

 

“Fiscal
Month” means any of the monthly accounting periods of Borrower.

 

4

 

“Fiscal
Quarter” means any of the quarterly accounting periods of Borrower, ending
on March 31, June 30, September 30 and December 31 of each year.

 

“Fiscal
Year” means any of the annual accounting periods of Borrower ending on
December 31 of each year.

 

“GAAP”
means generally accepted accounting principles in the United States of America,
consistently applied.

 

“Governmental
Authority” means any nation or government, any state or other political
subdivision thereof, and any agency, department or other entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.

 

“Indebtedness”
means, with respect to any Person, without duplication (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of property
payment for which is deferred six months or more, but excluding obligations to
trade creditors incurred in the ordinary course of business that are unsecured
and not overdue by more than six (6) months unless being contested in good
faith, (b) all reimbursement and other obligations with respect to letters of
credit, bankers’ acceptances and surety bonds, whether or not matured, (c) all
obligations evidenced by notes, bonds, debentures or similar instruments, (d) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (e)
all Capital Lease Obligations and the present value (discounted at the rate
publicly quoted by The Wall Street Journal as the “prime rate” as in effect on
Closing Date) of future rental payments under all synthetic leases, (f) all
obligations of such Person under commodity purchase or option agreements or
other commodity price hedging arrangements, in each case whether contingent or
matured, (g) all obligations of such Person under any foreign exchange
contract, currency swap agreement, interest rate swap, cap or collar agreement
or other similar agreement or arrangement designed to alter the risks of that
Person arising from fluctuations in currency values or interest rates, in each
case whether contingent or matured, (h) all Indebtedness referred to above
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in property or
other assets (including accounts and contract rights) owned by such Person,
even though such Person has not assumed or become liable for the payment of
such Indebtedness, and (i) the Obligations.

 

“Indemnified
Liabilities” has the meaning ascribed to it in Section 2.9.

 

“Indemnified
Person” has the meaning ascribed to it in Section 2.9.

 

“Intellectual
Property” means any and all Licenses, Patents, Copyrights, Trademarks, and
the goodwill associated with such Trademarks.

 

“Interest
Rate” means a fixed per annum rate of interest equal to thirteen percent (13%).

 

“IRS”
means the Internal Revenue Service.

 

5

 

“Legal
Requirements” means any law, ordinance, decree, requirement, order,
judgment, rule, regulation (or interpretation of any of the foregoing) of any
foreign governmental authority, the United States of America, any state
thereof, any political subdivision of any of the foregoing or any agency,
department, commission, board, bureau, court or other tribunal having
jurisdiction over Lender or Borrower or any of its subsidiaries or their
respective Properties or any agreement by which any of them is bound.

 

“Lender”
has the meaning ascribed thereto in the preamble hereof.

 

“License”
means any Copyright License, Patent License, Trademark License or other license
of rights or interests now held or hereafter acquired by Borrower.

 

“Lien”
means any mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, lien, charge, claim, security interest, easement or encumbrance,
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever (including any lease or title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of, or agreement to give, any financing
statement perfecting a security interest under the UCC or comparable law of any
jurisdiction).

 

“Litigation”
has the meaning ascribed to it in Section 4.5.

 

“Loan
Account” has the meaning ascribed to it in Section 2.8.

 

“Loan
Documents” means this Agreement, the Term Note, and all other agreements,
instruments, documents and certificates executed and delivered to, or in favor
of, Lender and including all other pledges, powers of attorney, consents,
assignments, contracts, notices, and all other written matter whether now or
hereafter executed by or on behalf of Borrower, or any employee of Borrower,
and delivered to Lender in connection with this Agreement or the transactions
contemplated thereby. Any reference in this Agreement or any other Loan
Document to a Loan Document shall include all appendices, exhibits or schedules
thereto, and all amendments, restatements, supplements or other modifications
thereto, and shall refer to this Agreement or such Loan Document as the same
may be in effect at any and all times such reference becomes operative.

 

“Material
Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, prospects or financial or other condition of Borrower, (b) Borrower’s
ability to pay the Term Loan or any of the other Obligations in accordance with
the terms of this Agreement, (c) the Collateral or Lender’s Liens on the
Collateral or the priority of such Liens, or (d) Lender’s rights and remedies
under this Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, any event or occurrence adverse to Borrower which
results or could reasonably be expected to result in losses, costs, damages,
liabilities or expenditures in excess of $500,000 shall constitute a Material
Adverse Effect.

 

“Maturity
Date” means the earlier of (a) June 2, 2012, and (b) the date of termination
of Lender’s obligation to permit the Term Loan to remain outstanding pursuant
to Section 8.2(b).

 

6

 

“Obligations”
means all loans, advances, debts, liabilities and obligations for the
performance of covenants, tasks or duties or for payment of monetary amounts
(whether or not such performance is then required or contingent, or such
amounts are liquidated or determinable) owing by Borrower to Lender, and all
covenants and duties regarding such amounts, of any kind or nature, present or
future, whether or not evidenced by any note, agreement or other instrument,
arising under this Agreement or any of the other Loan Documents. This term
includes all principal, interest (including all interest that accrues after the
commencement of any case or proceeding by or against Borrower in bankruptcy,
whether or not allowed in such case or proceeding), Fees, expenses, reasonable
attorneys’ fees and any other sum chargeable to Borrower under this Agreement
or any of the other Loan Documents.

 

“Patent
License” means rights under any written agreement now owned or hereafter
acquired by Borrower granting any right with respect to any invention on which
a Patent is in existence.

 

“Patents”
means all of the following in which Borrower now holds or hereafter acquires
any interest: (a) all letters patent of the United States or any other country,
all registrations and recordings thereof, and all applications for letters
patent of the United States or of any other country, including registrations,
recordings and applications in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any State or any other
country, and (b) all reissues, continuations, continuations in part or
extensions thereof.

 

“Permitted
Liens” means the following encumbrances: (a) Liens for taxes or assessments
or other governmental Charges not yet due and payable or which are being
contested; (b) pledges or deposits of money securing statutory obligations
under workmen’s compensation, unemployment insurance, social security or public
liability laws or similar legislation; (c) pledges or deposits of money
securing bids, tenders, contracts (other than contracts for the payment of
money), leases to which Borrower is a party as lessee made in the ordinary
course of business, or surety, appeal or similar bonds arising in the ordinary
course of business; (d) inchoate and unperfected workers’, mechanics’ or
similar Liens arising in the ordinary course of business, so long as such Liens
attach only to equipment, fixtures or real estate; (e) carriers’, warehousemen’s,
suppliers’ or other similar possessory Liens arising in the ordinary course of
business and securing liabilities in an outstanding aggregate amount not in
excess of $25,000 at any time, so long as such Liens attach only to inventory; (f)
deposits securing, or in lieu of, surety, appeal or customs bonds in proceedings
to which Borrower is a party; (g) any attachment or judgment Lien not
constituting an Event of Default; (h) zoning restrictions, easements, licenses,
or other restrictions on the use of any Real Estate or other minor
irregularities in title (including leasehold title) thereto, so long as the
same do not materially impair the use, value, or marketability of such Real
Estate; (i) presently existing or hereafter created Liens in favor of Lender; (j)
Liens in existence on the date hereof securing Indebtedness described in Schedule 1 and permitted refinancings, extensions and renewals
thereof, including extensions or renewals of any such Liens, provided that the
principal amount so secured is not increased and the Lien does not attach to
any other property; (k) Liens created after the date hereof by conditional sale
or other title retention agreements (including Capital Leases) or in connection
with purchase money Indebtedness with respect to equipment and fixtures
acquired by Borrower in the ordinary course of business, involving the
incurrence of an aggregate amount of purchase money Indebtedness and Capital
Lease Obligations of not more than $100,000

 

7

 

outstanding
at any one time for all such Liens (provided that such Liens attach only to the
assets subject to such purchase money debt and such Indebtedness is incurred
within 20 days following such purchase and does not exceed 100% of the purchase
price of the subject assets); and (1) Liens created under the Chase Loan
Documents.

 

“Person”
means any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, limited liability
company, institution, public benefit corporation, other entity or government
(whether federal, state, county, city, municipal, local, foreign, or otherwise,
including any instrumentality, division, agency, body or department thereof).

 

“Property”
means any interest in any kind of property or asset, whether real, personal or
mixed, tangible or intangible.

 

“Qualified
IPO” means the closing of a firmly underwritten initial public offering
pursuant to an effective registration statement under the Securities Act of
1933, as amended, covering the offer and sale of shares of capital stock for
the account of Borrower in which the gross proceeds to Borrower (before
underwriting discounts, commissions and fees) are at ]east $25,000,000.

 

“Real
Estate” means all of the real property owned, leased, subleased or used by
Borrower.

 

“Solvent”
means, with respect to any Person on a particular date, that on such date (a) the
fair value of the property of such Person is greater than the total amount of
liabilities, including contingent liabilities, of such Person; (b) the present
fair salable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its debts
as they become absolute and matured; (c) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such Person’s
ability to pay as such debts and liabilities mature; and (d) such Person is not
engaged in a business or transaction, and is not about to engage in a business
or transaction, for which such Person’s property would constitute an
unreasonably small capital. The amount of contingent liabilities (such as
litigation, guaranties and pension plan liabilities) at any time shall be
computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can be reasonably be expected
to become an actual or matured liability.

 

“Stock”
means all shares, options, warrants, general or limited partnership interests,
membership interests or other equivalents (regardless of how designated) of or
in a corporation, partnership, limited liability company or equivalent entity
whether voting or nonvoting, including common stock, preferred stock or any
other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules
and Regulations promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended).

 

“Subordination
Agreement” means that certain Amended and Restated Subordination and
Intercreditor Agreement, dated as of the date hereof, by and among JPMorgan
Chase Bank, N.A., Lender, Borrower, Echo/Bestway, Echo/TMG, Echo/RT and
Echo/FMI.

 

8

 

“Subsidiary”
means, with respect to any Person, (a) any corporation of which an aggregate of
more than 50% of the outstanding Stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of
whether, at the time, Stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, owned legally or
beneficially by such Person or one or more Subsidiaries of such Person, or with
respect to which any such Person has the right to vote or designate the vote of
50% or more of such Stock whether by proxy, agreement, operation of law or
otherwise, and (b) any partnership or limited liability company in which such
Person or one or more Subsidiaries of such Person shall have an interest
(whether in the form of voting or participation in profits or capital
contribution) of more than 50% or of which any such Person is a general partner
or may exercise the powers of a general partner. Unless the context otherwise
requires, each reference to a Subsidiary shall be a reference to a Subsidiary
of a Borrower.

 

“Taxes”
means taxes, levies, imposts, deductions, Charges or withholdings, and all
liabilities with respect thereto, excluding taxes imposed on or measured by the
net income of Lender by the jurisdictions under the laws of which Lender is
organized or conducts business or any political subdivision thereof.

 

“Term
Loan” has the meaning assigned to it in Section
2.1(a).

 

“Term
Note” has the meaning assigned to it in Section
2.1(a).

 

“Termination
Date” means the date on which (a) the Term Loan has been indefeasibly
repaid in full, and (b) all other Obligations under this Agreement and the
other Loan Documents (other than inchoate indemnity and other obligations that
expressly survive the repayment in full
of the Term Loan) have been completely discharged.

 

“Trademark
License” means rights under any written agreement now owned or hereafter
acquired by Borrower granting any right to use any Trademark.

 

“Trademarks”
means all of the following now owned or hereafter adopted or acquired by
Borrower: (a) all trademarks, trade names, corporate names, business names,
trade styles, service marks, logos, other source or business identifiers,
prints and labels on which any of the foregoing have appeared or appear,
designs and general intangibles of like nature (whether registered or
unregistered), all registrations and recordings thereof, and all applications
in connection therewith, including registrations, recordings and applications
in the United States Patent and Trademark Office or in any similar office or
agency of the United States, any state or territory thereof, or any other
country or any political subdivision thereof; (b) all reissues, extensions or
renewals thereof; and (c) all goodwill associated with or symbolized by any of
the foregoing.

 

“UCC”
means the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of Illinois; provided, that to the
extent that the UCC is used to define any term herein or in any Loan Document
and such term is defined differently in different Articles or Divisions of the
UCC, the definition of such term contained in Article or Division 9 shall
govern; and further provided, that in the event
that, by reason of mandatory

 

9

 

provisions
of law, any or all of the attachment, perfection or priority of, or remedies
with respect to, Lender’s Lien on any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the State
of Illinois, the term “UCC” shall mean the Uniform Commercial Code as enacted
and in effect in such other jurisdiction solely for purposes of the provisions
thereof relating to such attachment, perfection, priority or remedies and for
purposes of definitions related to such provisions.

 

1.2           Rules of Construction. Rules of
construction with respect to accounting terms used in this Agreement or the
other Loan Documents shall be as set forth in the definition of GAAP in Section 1.1. All other undefined terms
contained in any of the Loan Documents shall, unless the context indicates
otherwise, have the meanings provided for by the UCC to the extent the same are
used or defined therein; in the event that any term is defined differently in
different Articles or Divisions of the UCC, the definition contained in Article
or Division 9 shall control. Unless otherwise specified, references in this
Agreement or any of the Appendices to a Schedule, Exhibit, Section, subsection
or clause refer to such Schedule, Exhibit, Section, subsection or clause as
contained in this Agreement. The words “herein,” “hereof’ and “hereunder” and
other words of similar import refer to this Agreement as a whole, including all
Schedules and Exhibits, as the same may from time to time be amended, restated,
modified or supplemented, and not to any particular section, subsection or
clause contained in this Agreement or any such Schedule or Exhibit. Wherever
from the context it appears appropriate, each term stated in either the singular
or plural shall include the singular and the plural, and pronouns stated in the
masculine, feminine or neuter gender shall include the masculine, feminine and
neuter genders. The words “including,” “includes” and “include” shall be deemed
to be followed by the words “without limitation”; the word “or” is not
exclusive; references to Persons include their respective successors and
assigns (to the extent and only to the extent permitted by the Loan Documents)
or, in the case of governmental Persons, Persons succeeding to the relevant
functions of such Persons; and all references to statutes and related
regulations shall include any amendments of the same and any successor statutes
and regulations. Whenever any provision in any Loan Document refers to the knowledge
(or an analogous phrase) of Borrower, such words are intended to signify that
Borrower has actual knowledge or awareness of a particular fact or circumstance
or that Borrower, if it had exercised reasonable diligence, would have known or
been aware of such fact or circumstance.

 

SECTION 2. AMOUNT AND TERMS OF CREDIT

 

2.1           Term Loan.

 

(a)           Subject to the terms and
conditions hereof, Lender agrees to make a term loan (the “Term Loan”)
on the Closing Date to Borrower in the original principal amount of its
Commitment. The Term Loan shall be evidenced by a promissory note substantially
in the form of Exhibit 2.1
(the “Term Note”) and, except as provided in Section 2.8, Borrower shall execute and deliver the Term Note
to Lender. The Term Note shall represent the obligation of Borrower to pay the
amount of the Commitment, together with interest thereon as prescribed in Section 2.4.

 

10

 

(b)           The aggregate outstanding
principal balance of the Term Loan shall be due and payable in full in
immediately available funds on the Maturity Date, if not sooner paid in full.
No payment with respect to the Term Loan may be reborrowed.

 

2.2           Prepayments.

 

(a)           Voluntary Prepayments. Borrower may,
at any time upon at least five (5) days’ prior written notice by Borrower to
Lender, voluntarily prepay all or part of the Term Loan; provided, that
any such prepayment shall be accompanied by payment of the fee described in Section 2.5(b).

 

(b)           Mandatory Prepayment. Upon a
Qualified IPO, Borrower shall prepay the Term Loan in accordance with Section 2.2(c).

 

(c)           Application of Mandatory
Prepayment. Any prepayment made by Borrower pursuant to Section 2.2(b) shall be applied as follows:
first, to fees and reimbursable expenses of Lender then due and payable
pursuant to any of the Loan Documents; second, to interest then due and
payable on the Term Loan; and third, to prepay the principal of the Term
Loan until the Term Loan shall have been repaid in full.

 

(d)           No Implied Consent. Nothing in this
Section 2.2 shall be construed to
constitute Lender’s consent to any transaction that is not permitted by other
provisions of this Agreement or the other Loan Documents.

 

2.3           Use of Proceeds. The proceeds
of the Term Loan shall be utilized for the financing of Borrower’s ordinary
working capital and general corporate needs and acquisition of all or
substantially all of the assets of RayTrans Distribution Services, Inc., an
Illinois corporation.

 

2.4           Interest; Principal.

 

(a)           Interest shall accrue on the
outstanding principal amount of the Term Loan at the Interest Rate and shall be
payable by Borrower, together with principal, (i) on July 7, 2009 in the amount
of $260,830 and (ii) in equal monthly installments of $252,750 each, commencing
on August 7, 2009 and continuing on the seventh day of each month thereafter.
On the Maturity Date, all unpaid principal and interest shall be due and payable. Interest that
continues to accrue after the Maturity Date shall be payable on the Termination
Date.

 

(b)           If any payment on the Term
Loan becomes due and payable on a day other than a Business Day, the payment
shall be clue on the immediately preceding Business Day.

 

(c)           All computations of Fees and
interest calculated on a per annum basis shall be made by Lender on the basis
of a 360-day year, in each case for the actual number of days occurring in the
period for which such interest and Fees are payable. Each determination by
Lender of interest rates and Fees hereunder shall be presumptive evidence of
the correctness of such rates and Fees.

 

11

 

(d)           So long as an Event of
Default has occurred and is continuing, at the election of Lender confirmed by
written notice from Lender to Borrower, the interest rates applicable to the
Term Loan shall be increased to 16% (the “Default Rate”), and all
outstanding Obligations shall bear interest at the Default Rate applicable to
such Obligations. Interest at the Default Rate shall accrue from the initial
date of such Event of Default until that Event of Default is cured or waived
and shall be payable upon demand.

 

(e)           Notwithstanding anything to
the contrary set forth in this Section 2.4, if
a court of competent jurisdiction determines in a final order that the rate of
interest payable hereunder exceeds the highest rate of interest permissible
under law (the “Maximum Lawful Rate”), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; provided, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrower shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Lender is equal
to the total interest that would have been received had the interest rate
payable hereunder been (but for the operation of this paragraph) the interest
rate payable since the Closing Date as otherwise provided in this Agreement. In
no event shall the total interest received by Lender pursuant to the terms
hereof exceed the amount that Lender could lawfully have received had the
interest due hereunder been calculated for the full term hereof at the Maximum
Lawful Rate.

 

2.5           Fees. Borrower
shall pay to Lender the following fees and expenses:

 

(a)           A origination fee in the
amount of $37,500 shall be paid to Lender on the Closing Date, which fee shall
be fully earned on the Closing Date and shall be non-refundable when paid.

 

(b)           An exit fee in the amount of
$262,500 shall be deemed fully earned by Lender on the Closing Date and shall
be paid to Lender on the earliest of (i) the Maturity Date, (ii) the date of
payment in full by Borrower of the Term Loan, and (iii) the date of early
termination or acceleration of the Term Loan.

 

2.6           Method of Payment. Payments are
due in immediately available funds to Lender at JPMorgan Chase Bank, N.A., ABA
#021000021, Account Name — EGL Mezzanine LLC — 600 West Chicago Ave., Chicago,
IL 60654, Account #816899793, no later than 1:00 p.m. Central time.

 

2.7           Application and Allocation
of Payments. So long as no Event of Default has occurred and is
continuing, (i) payments matching specific scheduled payments then due shall be
applied to those scheduled payments; and (ii) voluntary prepayments shall be
applied in accordance with the provisions of Section 2.2(a). As to any other
payment, and as to all payments made when an Event of Default has occurred and
is continuing or following the Maturity Date, Borrower hereby irrevocably
waives the right to direct the application of any and all payments received
from or on behalf of Borrower, and Borrower hereby irrevocably agrees that
Lender shall have the continuing exclusive right to apply any and all such
payments against the Obligations as Lender may deem advisable notwithstanding
any previous entry by Lender in the Loan Account or any other books and
records. In all circumstances, after acceleration or

 

12

 

maturity
of the Obligations, all payments and proceeds of Collateral shall be applied to
amounts then due and payable in the following order: (1) to Fees and Lender’s
expenses reimbursable hereunder; (2) to interest on the Term Loan; (3) to
principal payments on the Term Loan; and (4) to all other Obligations including
expenses of Lender to the extent reimbursable.

 

2.8           Loan Account and Accounting. Lender shall
maintain a loan account (the “Loan Account”) on its books to record the
Term Loan, all payments made by Borrower, and all other debits and credits as
provided in this Agreement with respect to the Term Loan or any other
Obligations. All entries in the Loan Account shall be made in accordance with
Lender’s customary accounting practices as in effect from time to time, The
balance in the Loan Account, as recorded on Lender’s most recent printout or
other written statement, shall, absent manifest error, be presumptive evidence
of the amounts due and owing to Lender by Borrower.

 

2.9           Indemnity. Borrower
shall indemnify and hold harmless each of Lender and its Affiliates, and each
such Person’s respective officers, directors, employees, attorneys, agents and
representatives (each, an “Indemnified Person”), from and against any
and all suits, actions, proceedings, claims, damages, losses, liabilities and
expenses (including reasonable attorneys’ fees and disbursements and other
costs of investigation or defense, including those incurred upon any appeal)
that may be instituted or asserted against or incurred by any such Indemnified
Person as the result of credit having been extended, suspended or terminated
under this Agreement and the other Loan Documents and the administration of
such credit, and in connection with or arising out of the transactions
contemplated hereunder and thereunder and any actions or failures to act in
connection therewith, including any and all legal costs and expenses arising
out of or incurred in connection with disputes between or among any parties to
any of the Loan Documents (collectively, “Indemnified Liabilities”); provided,
that Borrower shall not be liable for any indemnification to an Indemnified
Person to the extent that any such suit, action, proceeding, claim, damage,
loss, liability or expense results from that Indemnified Person’s gross
negligence or willful misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR
LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR
THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS
DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN
EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY
OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.

 

2.10         Taxes.

 

(a)           Any and all payments by
Borrower hereunder or under the Term Note shall be made, in accordance with
this Section 2.10, free and clear
of and without deduction for any and all present or future Taxes. If Borrower
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder or under the Term Note, (i) the sum payable shall be
increased as much as shall be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.10) Lender receives an amount equal to
the sum it would have received had no such deductions been made, (ii) Borrower
shall make such deductions, and (iii) Borrower shall pay the full amount
deducted to the relevant taxing or other authority in accordance with
applicable law. Within 30 days after

 

13

 

the
date of any payment of Taxes, Borrower shall furnish to Lender the original or
a certified copy of a receipt evidencing payment thereof.

 

(b)           Borrower shall indemnify
and, within ten days of demand therefor, pay Lender for the full amount of
Taxes (including any Taxes imposed by any jurisdiction on amounts payable under
this Section 2.10) paid by Lender, and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes were correctly or legally
asserted.

 

2.11         Single Loan. The Term Loan
of Borrower and all of the other Obligations of Borrower arising under this
Agreement and the other Loan Documents shall constitute one general obligation
of Borrower secured, until the Termination Date, by all of the Collateral.

 

2.12         Termination of Chase Loan
Documents. Borrower hereby agrees to elect to irrevocably
terminate the Chase Loan Documents and take all such other actions as may be
necessary to cause the Chase Loan to be “Finally Paid” within the meaning of
the Subordination Agreement, upon the earliest to occur of the
following: (a) the outstanding Liabilities (as defined in the Chase Loan
Documents) have been paid in full or otherwise have been fully satisfied and no
amounts are then due and owing under the Chase Loan Documents; and (b) the sale
or issuance of equity securities of Borrower after the date of this Agreement
in one transaction or a series of related transactions pursuant to which
Borrower receives aggregate gross proceeds (excluding proceeds from the
conversion of any indebtedness) of at least $15,000,000, all of which may be
used to pay outstanding indebtedness of Borrower, including without limitation,
amounts outstanding under the Chase Loan, or for working capital and other
general corporate purposes.

 

SECTION 3. CREATION OF
SECURITY INTEREST

 

3.1           Grant of Security Interest.

 

(a)           Borrower grants to Lender a
Lien upon all of its right, title and interest in the Collateral to secure the
prompt and complete payment and performance of the Obligations, which Lien
shall be subordinate to the Lien granted under the Chase Loan pursuant to the
terms set forth in the Subordination Agreement.

 

(b)           Borrower shall defend the
right, title and interest of Lender in and to the Collateral against the claims
and demands of all Persons whomsoever, and shall take such actions, including (i)
after payment in full of the Chase Loan, all actions necessary to grant Lender “control”
of any investment property, deposit accounts, letter of credit rights or
electronic chattel paper owned by Borrower, with any agreements establishing
control to be in form and substance satisfactory to Lender, (ii) after payment
in full of the Chase Loan, the delivery to Lender of all original instruments,
chattel paper, negotiable documents and certificated Stock owned by Borrower
(in each case, accompanied by stock powers, allonges or other instruments of
transfer executed in blank) promptly after Borrower receives same, (iii) after
payment in full of the Chase Loan, notification of Lender’s interest in
Collateral at Lender’s request, (iv) after payment in full of the Chase Loan,
preparation and delivery of all applications and other relevant actions to note
the Lien of Lender on any certificate of title, and (v) the institution of
litigation

 

14

 

against
third parties as shall be prudent in order to protect and preserve Borrower’s
and Lender’s respective and several interests in the Collateral. Borrower shall
mark its books and records pertaining to the Collateral to evidence the Loan
Documents and the Liens granted under the Loan Documents, subject to the Chase
Loan Documents. After payment in full of the Chase Loan, if Borrower retains
possession of any chattel paper or instruments with Lender’s consent, then such
chattel paper and instruments shall be marked with the following legend: “THIS
WRITING AND THE OBLIGATIONS EVIDENCED OR SECURED HEREBY ARE SUBJECT TO THE LIEN
OF EGL MEZZANINE LLC.” Borrower shall promptly, and in any event within two
Business Days after the same is acquired by it, notify Lender of any commercial
tort claim acquired by it and unless otherwise consented to by Lender, Borrower
shall enter into a supplement to this Agreement (and the Loan Documents)
granting to Lender a Lien in such commercial tort claim, provided Borrower has
also granted to JPMorgan Chase Bank, N.A. a first priority Lien in such
commercial tort claim.

 

3.2           Lender’s Rights.

 

(a)           After payment in full of the
Chase Loan, Lender may, at any time in Lender’s own name or in the name of
Borrower and without prior notice to Borrower, (i) communicate with Account
Debtors, parties to contracts, and obligors in respect of payment intangibles,
instruments, chattel paper or other Collateral to verify to Lender’s
satisfaction the existence, amount and terms of any such accounts, contracts,
payment intangibles, instruments, chattel paper or other Collateral, and (ii) at
any time after the occurrence and continuance of an Event of Default (or if any
rights of set-off (other than set-offs against an account arising under the
contract giving rise to the same Account) or contra accounts may be asserted
with respect to the following), and without prior notice to Borrower, notify
Account Debtors and other Persons obligated on the Collateral that Lender has a
security interest therein, and that payments shall be made directly to Lender.
Upon the request of Lender, Borrower shall, only after payment in full of the
Chase Loan, so notify such Account Debtors and other Persons obligated on the
Collateral. Once any such notice has been given to any Account Debtor or other
Person obligated on the Collateral, Borrower shall not give any contrary
instructions to such Account Debtor or other Person without Lender’s prior
written consent.

 

(b)           It is expressly agreed by
Borrower that Borrower shall remain liable under each contract and License to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder, and Lender shall not have any obligation or
liability whatsoever to any Person under any contract or License (between
Borrower and any Person other than Lender) by reason of or arising out of the
execution, delivery or performance of this Agreement, and Lender shall not be
required or obligated in any manner (i) to perform or fulfill any of the
obligations of Borrower thereunder, (ii) to make any payment or inquiry, or (iii)
to take any action of any kind to collect or enforce any performance or the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times under or pursuant to any contract or License.

 

(c)           Borrower shall, with respect
to each owned, leased, or controlled property or facility, during normal
business hours and upon reasonable advance notice (unless a Default or an Event
of Default has occurred and is continuing, in which event no notice shall be
required and Lender shall have access at any and all times): (i) provide access
to such facility or property

 

15

 

to
Lender and any of its officers, employees and agents, as frequently as Lender
determines to be appropriate; (ii) permit Lender and any of its officers,
employees and agents to inspect, audit and make extracts from all of Borrower’s
books and records; and (iii) permit Lender to inspect, review, evaluate and
make physical verifications and appraisals of the inventory and other Collateral
in any manner and through any medium that Lender considers advisable, and
Borrower shall provide to Lender, at Borrower’s cost and expense, such clerical
and other assistance as may be reasonably requested with regard thereto.
Representatives of Lender may accompany Lender’s representatives on inspections
and audits at no cost to Borrower. Borrower shall make available to Lender and
its counsel, as quickly as practicable under the circumstances, originals or
copies of all of Borrower’s books and records and any other instruments and
documents that Lender may request. Borrower shall deliver any document or
instrument reasonably necessary for Lender, as it may from time to time
request, to obtain records from any service bureau or other Person that maintains
records for Borrower.

 

(d)           Upon the occurrence and
during the continuance of a Default or an Event of Default, Borrower, at its
own expense, shall cause their independent certified public accountants or
consultants who are reasonably acceptable to Lender, to prepare and deliver to
Lender at any time and from time to time, promptly upon Lender’s request: (i) a
reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial
balances; and (iv) test verifications of such Accounts as Lender may request.
Borrower, at its own expense, shall cause their independent certified public
accountants to deliver to Lender the results of (i) any physical verifications
of all or any portion of the inventory made or observed by such accountants and
(ii) any verifications of Borrower’s Accounts, in each case when and if any
such verifications are conducted. Lender shall be permitted to observe and
consult with Borrower and Borrower’s certified public accountants in the
performance of these tasks.

 

3.3           Power of Attorney. Borrower
hereby irrevocably makes, constitutes, and appoints Lender (and any of Lender’s
officers, employees or agents designated by Lender) as Borrower’s true and
lawful attorney-in-fact, with power to: (a) sign the name of Borrower on any
document to be executed, recorded or filed in order to perfect or continue
perfected Lender’s Lien upon the Collateral if Borrower fails to do so promptly
after request therefor by Lender, including filing any financing statement or
amendments thereto or continuation statement without the signature of Borrower;
(b) after payment in full of the Chase Loan, 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; (c) after payment in full of the Chase Loan, send
requests for verification of Accounts; (d) after payment in full of the Chase
Loan, endorse Borrower’s name on any checks, notices, acceptances, money
orders, drafts, or other forms of payment or security that may come into Lender’s
possession; and (e) after payment in full of the Chase Loan, at any time that
an Event of Default has occurred and is continuing or Lender deems itself
insecure, (i) notify the post office authorities to change the address for
delivery of Borrower’s mail to an address designated by Lender, to receive and
open all mail addressed to Borrower, and to retain all mail relating to the
Collateral and forward all other mail to Borrower, (ii) make, settle, and
adjust all claims under Borrower’s policies of insurance and make all
determinations and decisions with respect to such policies of insurance, and (iii)
settle and adjust disputes and claims respecting the Accounts directly with
Account Debtors, for amounts and upon terms which Lender determines to be
reasonable, and Lender may cause to be executed and delivered any documents and
releases which Lender determines to

 

16

 

be
necessary. The appointment of Lender as Borrower’s attorney-in-fact, and each
and every one of Lender’s rights and powers, being coupled with an interest, is
irrevocable until the Termination Date. NEITHER LENDER NOR ANY OF ITS OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL BE RESPONSIBLE TO
BORROWER FOR ANY ACT OR FAILURE TO ACT PURSUANT TO THE POWERS GRANTED UNDER THE
POWER OF ATTORNEY HEREIN OR OTHERWISE, EXCEPT FOR ITS OR THEIR OWN GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT, NOR FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR
CONSEQUENTIAL DAMAGES. Borrower also hereby (a) authorizes Lender to file any
financing statements, continuation statements or amendments thereto that (i) indicate
the Collateral (A) as all assets of Borrower or words of similar effect,
regardless of whether any particular asset comprised in the Collateral falls
within the scope of Article 9 of the UCC of such jurisdiction, or (B) as being
of an equal or lesser scope or with greater detail, and (ii) contain any other
information required by Part 5 of Article 9 of the UCC for the sufficiency or
filing office acceptance of any financing statement, continuation statement or
amendment, including (A) whether Borrower is an organization, the type of
organization and any organization identification number issued to Borrower, and
(B) in the case of a financing statement filed as a fixture filing or
indicating Collateral as as-extracted collateral or timber to be cut, a
sufficient description of real property to which the Collateral relates, (b) agrees
to furnish any such information to Lender promptly upon request, and (c) ratifies
its authorization for Lender to have filed any initial financial statements, or
amendments thereto if filed prior to the Closing Date. Borrower acknowledges
that it is not authorized to file any financing statement or amendment or
termination statement with respect to any financing statement without the prior
written consent of Lender and agrees that it will not do so without the prior
written consent of Lender, subject to Borrower’s rights under Section 9509(d)(2)
of the UCC.

 

3.4           Financing Statements. Borrower
shall from time to time execute, deliver and file, alone or with Lender any
financing statements, security agreements, assignments, notices, control
agreements, or other documents to perfect or give priority to Lender’s Lien on
the Collateral. Borrower shall from time to time procure any instruments or
documents as may be requested by Lender, and take all further action that may
be necessary or desirable, or that Lender may request, to carry out more
effectively the provisions and purposes of this Agreement or any other Loan
Document or to confirm, perfect, preserve and protect the Liens granted hereby
and thereby. In addition, and for such purposes only, Borrower hereby authorizes
Lender to execute and deliver on behalf of Borrower and to file such financing
statements, assignments, notices, control agreements, security agreements and
other documents without the signature of Borrower in Lender’s name as agent and
attorney-in-fact for Borrower. The parties agree that a carbon, facsimile,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement and may be filed in any appropriate office in lieu thereof.

 

3.5           Reinstatement. The
provisions of this Section 3 shall
remain in full force and effect and continue to be effective even if: (a) any
petition is filed by or against Borrower for liquidation or reorganization; (b)
Borrower becomes insolvent or makes an assignment for the benefit of creditors;
(c) a receiver or trustee is appointed for all or any significant part of
Borrower’s assets; or (d) at any time payment and performance of the
Obligations, or any part thereof, is, pursuant to applicable law, rescinded or
reduced in amount, or must otherwise be restored or returned by any obligee of
the Obligations, whether as a “voidable preference,”

 

17

 

“fraudulent
transfer” or otherwise, all as though such payment or performance had not been
made. In the event that any payment, or any part thereof, is rescinded,
reduced, restored or returned, the Obligations and Lender’s Liens on the
Collateral shall be reinstated and deemed reduced only by any amount paid and
not so rescinded, reduced, restored or returned.

 

SECTION
4. REPRESENTATIONS AND WARRANTIES

 

To
induce Lender to make the Term Loan, the Borrower makes the following
representations and warranties to Lender with respect to Borrower, each and all
of which shall survive the execution and delivery of this Agreement.

 

4.1           Corporate Existence;
Compliance with Law. Borrower (a) is a corporation, duly organized,
validly existing and in good standing under the laws of Delaware; (b) is duly
qualified to conduct business and is in good standing in each other
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to be so
qualified would not result in exposure to losses or liabilities which could
reasonably be expected to have a Material Adverse Effect; (c) has the requisite
power and authority and the legal right to own, pledge, mortgage or otherwise
encumber and operate its properties, to lease the property it operates under
lease and to conduct its business as now conducted or proposed to be conducted;
(d) has all licenses, permits, consents or approvals from or by, and has made
all material filings with, and has given all notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership, operation
and conduct; (e) is in compliance with its charter and bylaws; and (f) subject
to specific representations set forth herein regarding tax and other laws, is
in compliance with all applicable provisions of law, except where the failure
to comply, individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect.

 

4.2             Corporate
Power, Authorization, Enforceable Obligations. The execution, delivery
and performance by Borrower of the Loan Documents to which it is a party and
the creation of all Liens provided for therein: (a) are within Borrower’s
power; (b) have been duly authorized by all necessary corporate action; (c) do
not contravene any provision of Borrower’s charter and bylaws; (d) do not
violate any law or regulation, or any order or decree of any court or
Governmental Authority; (e) do not conflict with or result in the breach or
termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which Borrower is a party or by
which Borrower or any of its property is bound; (f) do not result in the
creation or imposition of any Lien upon any of the property of Borrower other
than those in favor of Lender pursuant to the Loan Documents; and (g) do not
require the consent or approval of any Governmental Authority or any other
Person, all of which will have been duly obtained, made or complied with prior
to the Closing Date. Each of the Loan Documents shall be duly executed and
delivered by Borrower and each such Loan Document shall constitute a legal,
valid and binding obligation of Borrower enforceable against it in accordance
with its terms.

 

4.3           Ownership of Property; Liens. Borrower owns
good and marketable fee simple title to all of its owned Real Estate, and valid
and marketable leasehold interests in all of its leased Real Estate. Borrower
also has good and marketable title to, or valid leasehold interests in, all of
its personal property and assets. None of the properties and assets of Borrower
are

 

18

 

subject
to any Liens other than Permitted Liens, and there are no facts, circumstances
or conditions that could reasonably be expected to result in any Liens other
than Permitted Liens. Borrower has received all deeds, assignments, waivers,
consents, nondisturbance and attornment or similar agreements, bills of sale
and other documents, and has duly effected all recordings, filings and other
actions necessary to establish, protect and perfect Borrower’s right, title and
interest in and to all such Real Estate and other properties and assets. No
portion of Borrower’s Real Estate has suffered any material damage by fire or
other casualty loss that has not heretofore been repaired and restored in all
material respects to its original condition or otherwise remedied. All material
permits required to have been issued or appropriate to enable the Real Estate
to be lawfully occupied and used for all of the purposes for which it is
currently occupied and used have been lawfully issued and are in full force and
effect.

 

4.4           Taxes.  All Federal and other material tax returns,
reports and statements, including information returns, required by any Governmental
Authority to be filed by Borrower have been filed with the appropriate
Governmental Authority, and all Charges have been paid prior to the date on
which any fine, penalty, interest or late charge may be added thereto for
nonpayment thereof, excluding Charges or other amounts being contested and
unless the failure to so file or pay would not reasonably be expected to result
in fines, penalties or interest in excess of $100,000 in the aggregate. Proper
and accurate amounts have been withheld by Borrower from its employees for all
periods in full and complete compliance with all applicable federal, state,
local and foreign laws and such withholdings have been timely paid to the
respective Governmental Authorities. Borrower has not executed or filed with
the IRS or any other Governmental Authority any agreement or other document
extending, or having the effect of extending, the period for assessment or
collection of any Charges. Borrower and its predecessors are not liable for any
Charges: (a) under any agreement (including any tax sharing agreements) or (b) to
Borrower’s knowledge, as a transferee. Borrower has not agreed or been
requested to make any adjustment under Code Section 481(a), by reason of a
change in accounting method or otherwise, which would reasonably be expected to
have a Material Adverse Effect.

 

4.5           No Litigation. No action,
claim, lawsuit, demand, investigation or proceeding is now pending or, to the
knowledge of Borrower, threatened against Borrower (collectively, “Litigation”), (a) that
challenges Borrower’s right or power to enter into or perform any of its
obligations under the Loan Documents to which it is a party, or the validity or
enforceability of any Loan Document or any action taken thereunder, or (b) that
has a reasonable risk of being determined adversely to Borrower and that, if so
determined, could reasonably be expected to have a Material Adverse Effect.
There is no Litigation pending or threatened that seeks damages in excess of
$100,000 or injunctive relief against, or alleges criminal misconduct of,
Borrower.

 

4.6           Intellectual Property. Borrower owns
or has rights to use all Intellectual Property necessary to continue to conduct
its business as now conducted by it or presently proposed to be conducted by
it. Borrower conducts its business and affairs without infringement of or
interference with any Intellectual Property of any other Person in any material
respect. Borrower is not aware of any material infringement claim by any other
Person with respect to any Intellectual Property.

 

19

 

4.7           Full Disclosure. No
information contained in this Agreement, any of the other Loan Documents,
Financial Statements or other written reports from time to time prepared by
Borrower and delivered hereunder or any written statement prepared by Borrower
and furnished by or on behalf of Borrower to Lender pursuant to the terms of
this Agreement contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the circumstances under
which they were made. The Liens granted to Lender pursuant to this Agreement
will at all times be fully perfected Liens in and to the Collateral described
therein.

 

4.8           Solvency. Both before
and after giving effect to the Term Loan made on the Closing Date Borrower is
and will be Solvent.

 

SECTION
5. FINANCIAL STATEMENTS AND INFORMATION

 

5.1           Reports and Notices.

 

(a)           Borrower hereby agrees that
from and after the Closing Date and until the Termination Date, it shall
deliver to Lender the Financial Statements, notices, and other information at
the times, to the Persons and in the manner requested by Lender.

 

SECTION
6. AFFIRMATIVE COVENANTS

 

Borrower
agrees to do, and cause each of its Subsidiaries to do, each of the following:

 

6.1           Insurance. Maintain
insurance with financially sound and reputable insurers, with such insurance
and insurers to be satisfactory to Lender, covering its Property and business
against those casualties and contingencies and in the types and amounts as are
in accordance with sound business and industry practices, and furnish to
Lender, upon request of Lender, reports on each existing insurance policy
showing such information as Lender may reasonably request.

 

6.2           Existence. Maintain its
existence and business operations as presently in effect in accordance with all
applicable Legal Requirements, pay its debts and obligations when due under
normal terms, and pay on or before their due date, all taxes, assessments, fees
and other governmental monetary obligations, except as they may be contested in
good faith if they have been properly reflected on its books and, at Lender’s
request, adequate funds or security has been pledged or reserved to insure
payment.

 

6.3           Financial Records. Maintain
proper books and records of account, in accordance with GAAP, and consistent
with financial statements previously submitted to Lender.

 

6.4           Inspection.  Permit Lender, its agents and designees to: (a)
inspect and photograph its Property, to examine and copy files, books and
records, and to discuss its business, operations, prospects, assets, affairs
and financial condition with Borrower’s or its Subsidiaries’ officers and
accountants, at times and intervals as Lender reasonably determines; (b) perform
audits or other inspections of the Collateral, including the records and
documents related to the Collateral; and (c) confirm with any Person any
obligations and liabilities of the Person to Borrower or its Subsidiaries.
Borrower will, and will cause its Subsidiaries to

 

20

 

cooperate
with any inspection or audit. Borrower will pay Lender the reasonable costs and
expenses of any audit or inspection of the Collateral (including fees and
expenses charged internally by Lender for asset reviews) promptly after
receiving the invoice.

 

6.5           Notices of Claims,
Litigation, Defaults, etc. Promptly inform Lender in writing of: (i) all
existing and all threatened litigation, claims, investigations, administrative
proceedings and similar actions or changes in Legal Requirements affecting it
which could materially affect its business, assets, affairs, prospects or
financial condition; (ii) the occurrence of any event which gives rise to
Lender’s option to terminate the Loan; (iii) the institution of steps by it to
withdraw from, or the institution of any steps to terminate, any employee
benefit plan as to which it may have liability; (iv) any reportable event or
any prohibited transaction in connection with any employee benefit plan; (v) any
additions to or changes in the locations of its businesses; and (vi) any
alleged breach by Lender of any provision of this agreement or of any other
Loan Document.

 

6.6           Other Agreements. Comply with
all terms and conditions of all other agreements, whether now or hereafter
existing, between it and any other Person.

 

6.7           Title to Assets and Property. Maintain good
and marketable title to all of its Properties, and defend them against all
claims and demands of all Persons at any time claiming any interest in them.

 

6.8           Additional Assurances. Promptly
make, execute and deliver any and all agreements, documents, instruments and
other records that Lender may request to evidence the Loan, cure any defect in
the execution and delivery of any of the Loan Documents, perfect any Lien,
comply with any Legal Requirement applicable to Lender or the Loan or describe
more fully particular aspects of the agreements set forth or intended to be set
forth in any of the Loan Documents.

 

SECTION
7. TERM

 

7.1           Termination. The financing
arrangements contemplated hereby shall be in effect until the Maturity Date,
and the Term Loan and all other Obligations shall be automatically due and
payable in full on such date.

 

7.2           Survival of Obligations Upon
Termination of Financing Arrangements. Except as otherwise
expressly provided for in the Loan Documents, no termination or cancellation
(regardless of cause or procedure) of any financing arrangement under this
Agreement shall in any way affect or impair the obligations, duties and
liabilities of Borrower or the rights of Lender relating to any unpaid portion
of the Term Loan or any other Obligations, due or not due, liquidated,
contingent or unliquidated or any transaction or event occurring prior to such
termination, or any transaction or event, the performance of which is required
after the Maturity Date. Except as otherwise expressly provided herein or in
any other Loan Document, all undertakings, agreements, covenants, warranties
and representations of or binding upon Borrower, and all rights of Lender, all
as contained in the Loan Documents, shall not terminate or expire, but rather
shall survive any such termination or cancellation and shall continue in full
force and effect until the Termination Date; provided, that the
provisions of Section 9, the

 

21

 

payment
obligations under Sections 2.10
and 2.11, and the indemnities contained in
the Loan Documents shall survive the Termination Date.

 

SECTION
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES

 

8.1           Events of
Default/Acceleration. The occurrence of any one or more of the following
events (regardless of the reason therefor) shall constitute an “Event of
Default” hereunder:

 

(a)           Borrower fails
to pay when due any of the Obligations or any other debt to any Person, or any
amount payable with respect to any of the Obligations, or under the Term Note,
any other Loan Document, or any agreement or instrument evidencing other debt
to any Person.

 

(b)           Borrower: (i) fails
to observe or perform or otherwise violates any term, covenant, condition or
agreement of any of the Loan Documents; (ii) makes any materially incorrect or
misleading representation, warranty, or certificate to Lender; (iii) makes any
materially incorrect or misleading representation in any financial statement or
other information delivered to Lender; or (iv) defaults under the terms of any
agreement or instrument relating to any debt for borrowed money (other than the
debt evidenced by the Loan Documents) and the effect of such default will allow
the creditor to declare the debt due before its states maturity.

 

(c)           In the event (i)
there is a default under the terms of any Loan Document, (ii) Borrower
terminates or revokes or purports to terminate or revoke its guaranty or
Borrower’s guaranty becomes unenforceable in whole or in part, (iii) Borrower
fails to perform under its guaranty, or (iv) Borrower fails to comply with, or
perform under any agreement, now or hereafter in effect, between Borrower and
Lender, or any Affiliate of Lender or their respective successors and assigns.

 

(d)           There is any
loss, theft, damage, or destruction of any Collateral not covered by insurance.

 

(e)           Any event
occurs that would permit the Pension Benefit Guaranty Corporation to terminate any
employee benefit plan of Borrower or any of its Subsidiaries.

 

(f)            Borrower or any
of its Subsidiaries: (i) becomes insolvent or unable to pay its debts as they
become due; (ii) makes an assignment for the benefit of creditors; (iii) consents
to the appointment of a custodian, receiver, or trustee for itself or for a
substantial part of its Property; (iv) commences any proceeding under any
bankruptcy, reorganization, liquidation, insolvency or similar laws; (v) conceals
or removes any of its Property, with the intent to hinder, delay or defraud any
of its creditors; (vi) makes or permits a transfer of any of its Property,
which may be fraudulent under any bankruptcy, fraudulent conveyance or similar
law; or (vii) makes a transfer of any of its Property to or for the benefit of
a creditor at a time when other creditors similarly situated have not been
paid.

 

(g)           A custodian,
receiver, or trustee is appointed for Borrower or any of its Subsidiaries or
for a substantial part of their respective Property.

 

22

 

(h)           Borrower or any
of its Subsidiaries, without Lender’s written consent: (i) liquidates or is
dissolved; (ii) merges or consolidates with any other Person; (iii) leases,
sells or otherwise conveys a material part of its assets or business outside
the ordinary course of its business; (iv) leases, purchases, or otherwise
acquires a material part of the assets of any other Person, except in the
ordinary course of its business; or (v) agrees to do any of the foregoing;
provided, however, that any Subsidiary of Borrower may merge or consolidate
with any other Subsidiary of Borrower, or with Borrower, so long as Borrower is
the survivor.

 

(i)            Proceedings are
commenced under any bankruptcy, reorganization, liquidation, or similar laws
against Borrower or any of its Subsidiaries and remain undismissed for thirty
(30) days after commencement; or Borrower or any of its Subsidiaries consents
to the commencement of those proceedings.

 

(j)            Any judgment is
entered against Borrower or any of its Subsidiaries, or any attachment,
seizure, sequestration, levy, or garnishment is issued against any Property of
Borrower or any of its Subsidiaries or any Collateral.

 

(k)           Any material
adverse change occurs in: (i) the reputation, Property, financial condition,
business, assets, affairs, prospects, liabilities, or operations of Borrower or
any of its Subsidiaries; (ii) Borrower’s ability to perform its obligations
under the Loan Documents; or (iii) the Collateral.

 

8.2           Remedies.

 

(a)           Upon the
occurrence and during the continuance of any Event of Default, Lender may,
without notice except as otherwise expressly provided herein, increase the rate
of interest applicable to the Term Loan to the Default Rate.

 

(b)           Upon the
occurrence and during the continuance of any Event of Default, Lender may,
without notice: (i) declare all or any portion of the Obligations, including
all or any portion of any Term Loan to be forthwith due and payable without
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by Borrower; or (ii) exercise any rights and remedies provided
to Lender under the Loan Documents or at law or equity, including all remedies
provided under the UCC; provided, that upon the occurrence of an Event
of Default specified in Sections 8.1(i)
or (j), the Commitments shall be
immediately terminated and all of the Obligations shall become immediately due
and payable without declaration, notice or demand by any Person.

 

(c)           Upon the
occurrence and during the continuance of any Event of Default, Lender may, at
any time or from time to time, apply, collect, liquidate, sell in one or more
sales, lease or otherwise dispose of, any or all of the Collateral, in its then
condition or following any commercially reasonable preparation or processing,
in such order as Lender may elect. Any such sale may be made either at public
or private sale at its place of business or elsewhere. Borrower agrees that any
such public or private sale may occur upon five (5) calendar days’ prior
written notice to Borrower. Lender may require Borrower to assemble the
Collateral and make it available to Lender at a place designated by Lender that
is reasonably convenient to Lender and

 

23

 

Borrower.
The proceeds of any sale, disposition or other realization upon all or any part
of the Collateral shall be applied by Lender in the following order of
priorities:

 

(i)              First, to Lender in
an amount sufficient to pay in full Lender’s costs and professionals’ and
advisors’ fees and expenses;

 

(ii)             Second, to Lender in
an amount equal to the then unpaid amount of the Obligations (including
principal, interest, and the Default Rate interest), in such order and priority
as Lender may choose in its sole discretion; and

 

(iii)            Finally, after the
full, final, and indefeasible payment in cash of all of the Obligations, to any
creditor holding a junior Lien on the Collateral, or to Borrower or its
representatives or as a court of competent jurisdiction may direct.

 

Lender
shall be deemed to have acted reasonably in the custody, preservation and
disposition of any of the Collateral if it complies with the obligations of a
secured party under the UCC.

 

8.3           Waivers by Borrower. Except as
otherwise provided for in this Agreement or by applicable law, Borrower waives:
(a) presentment, demand and protest and notice of presentment, dishonor, notice
of intent to accelerate, notice of acceleration, protest, default, nonpayment,
maturity, release, compromise, settlement, extension or renewal of any or all
commercial paper, accounts, contract rights, documents, instruments, chattel
paper and guaranties at any time held by Lender on which Borrower may in any
way be liable, and hereby ratifies and confirms whatever Lender may do in this
regard, (b) all rights to notice and a hearing prior to Lender’s taking
possession or control of, or to Lender’s replevy, attachment or levy upon, the
Collateral or any bond or security that might be required by any court prior to
allowing Lender to exercise any of its remedies, and (c) the benefit of all
valuation, appraisal, marshaling and exemption laws.

 

SECTION
9. MISCELLANEOUS

 

9.1           Continuation of Security
Interest. This is a continuing agreement and the grant of a
Lien hereunder shall remain in full force and effect and all of the rights,
powers and remedies of Lender hereunder, shall continue to exist until the
Termination Date. Lender shall execute a termination statement within a
reasonable time after the Termination Date, reassigning to Borrower, without
recourse, the Collateral and all rights conveyed hereby and returning
possession of the Collateral to Borrower. The rights, powers and remedies of
Lender shall be in addition to all rights, powers and remedies given by statute
or rule of law and are cumulative. The exercise of any one or more of the
rights, powers and remedies provided herein shall not be construed as a waiver
of or election of remedies with respect to any other rights, powers and
remedies of Lender.

 

9.2           Severability. Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under such law, such provision
shall be ineffective only to the extent and duration of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

 

24

 

9.3           Notice. Except as otherwise
provided herein, all notices and service of process required, contemplated, or
permitted under the Loan Documents or with respect to the subject matter hereof
shall be in writing, and shall be deemed to have been validly served, given,
delivered, and received upon the earlier of: (i) the first Business Day after
transmission by facsimile or hand delivery or deposit with an overnight express
service or overnight mail delivery service; or (ii) the third calendar day
after deposit in the United States mails, with proper first class postage
prepaid, and shall be addressed to the party to be notified as follows:

 

(a)               If to Lender:

 

EGL
Mezzanine LLC

600
West Chicago Avenue, Suite 725

Chicago,
Illinois 60654

Attn:
Eric P. Lefkofsky

Facsimile: 
       .       .       

 

with a copy to:

 

DLA
Piper LLP (US)

203
North LaSalle Street, Suite 1900

Chicago,
Illinois 60601

Attn:
Richard E. Ginsberg

Fax:
312.630.5388

 

(b)              If to Borrower:

 

Echo
Global Logistics, Inc.

600
West Chicago Avenue, Suite 725

Chicago,
Illinois 60654

Attn:
Douglas R. Waggoner

Fax:
888.796.4445

 

9.4           Entire Agreement;
Modifications and Amendments. This Agreement and the
other Loan Documents constitute the complete agreement between the parties with
respect to the subject matter hereof and thereof, supersede all prior
agreements, commitments, understandings or inducements (oral or written,
expressed or implied), and may not be modified, altered or amended except by a
written agreement signed by Lender, Borrower and each other Person executing
this Agreement or any other Loan Document, as applicable.

 

9.5           Headings. The various
headings in this Agreement are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or any provisions
hereof.

 

9.6           No Waiver. No action
taken by Lender or Borrower will be deemed to constitute a waiver of compliance
with any representation, warranty or covenant in this Agreement, Term Note or
other Loan Documents. The waiver by Lender of a breach of any provision of this

 

25

 

Agreement,
Term Note or other Loan Documents will not operate or be construed as a waiver
of any subsequent breach.

 

9.7           Successors and Assigns. The
provisions of this Agreement and the other Loan Documents shall inure to the
benefit of and be binding on Borrower and its permitted assigns (if any).
Borrower shall not assign its obligations under this Agreement, the Term Note
or any of the other Loan Documents without Lender’s express prior written
consent, and any such attempted assignment shall be void and of no effect.
Lender reserves the right at any time to create and sell a participation in any
portion of the Term Loan and the Loan Documents and to sell, transfer or assign
any or all of its rights in the Term Loan and under the Loan Documents and
Borrower consents to Lender’s sale of participations in, at any time or times,
the Term Loan and the Loan Documents, or of any portion thereof or interest
therein, to any Person including Lender’s rights, title, interests, remedies,
powers, or duties thereunder, whether evidenced by a writing or not.

 

9.8
          GOVERNING LAW. THIS
AGREEMENT, THE TERM NOTE AND THE OTHER LOAN DOCUMENTS HAVE BEEN NEGOTIATED AND
DELIVERED TO LENDER IN THE STATE OF ILLINOIS, AND SHALL HAVE BEEN ACCEPTED BY
LENDER IN THE STATE OF ILLINOIS. PAYMENT TO LENDER BY BORROWER OF THE
OBLIGATIONS IS DUE IN THE STATE OF ILLINOIS. THIS AGREEMENT, THE TERM NOTE AND
THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS, EXCLUDING CONFLICT OF LAWS
PRINCIPLES THAT WOULD CAUSE THE APPLICATION OF LAWS OF ANY OTHER JURISDICTION.

 

9.9           Consent To Jurisdiction And
Venue. All judicial proceedings arising in or under or related to this
Agreement, the Term Note, or any of the other Loan Documents may be brought in
any state or federal court of competent jurisdiction located in the State of
Illinois. By execution and delivery of this Agreement, each party hereto
generally and unconditionally: (a) consents to personal jurisdiction in Cook
County, State of Illinois; (b) waives any objection as to jurisdiction or venue
in Cook County, State of Illinois; (c) agrees not to assert any defense based
on lack of jurisdiction or venue in the aforesaid courts; and (d) irrevocably
agrees to be bound by any judgment rendered thereby in connection with this
Agreement, the Term Note, or the other Loan Documents. Service of process on
any party hereto in any action arising out of or relating to this Agreement
shall be effective if given in accordance with the requirements for notice set
forth in Section 9.3, and shall be deemed
effective and received as set forth in Section 9.3.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of either party to bring proceedings
in the courts of any other jurisdiction.

 

9.10         Mutual Waiver Of Jury Trial;
Judicial Reference. Because disputes arising in connection with
complex financial transactions are most quickly and economically resolved by an
experienced and expert person and the parties wish applicable state and federal
laws to apply (rather than arbitration rules), the parties desire that their
disputes be resolved by a judge applying such applicable laws. EACH OF BORROWER
AND LENDER SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY
CAUSE OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY
OTHER

 

26

 

CLAIM
(COLLECTIVELY, “CLAIMS”) ASSERTED BY BORROWER AGAINST LENDER OR ITS
ASSIGNEE OR BY LENDER OR ITS ASSIGNEE AGAINST BORROWER. IN THE EVENT THE JURY
WAIVER IN THIS AGREEMENT IS UNENFORCEABLE FOR ANY REASON, THE PARTIES WILL
RESOLVE ALL DISPUTES ARISING OUT OF THIS AGREEMENT OR ANY RELATIONSHIP BETWEEN
LENDER OR BORROWER BY JUDICIAL REFERENCE PURSUANT TO CODE OF CIVIL PROCEDURE
SECTIONS 638 ET SEQ, SUCH REFERENCE PROCEEDING TO BE CONDUCTED WITHOUT A JURY
BEFORE A MUTUALLY ACCEPTABLE REFEREE OR, IF THERE IS NO AGREEMENT ON THE
REFEREE, A REFEREE APPOINTED BY THE PRESIDING JUDGE OF THE ILLINOIS CIRCUIT
COURT FOR COOK COUNTY. THIS SECTION SHALL NOT PROHIBIT ANY PARTY FROM SEEKING
ANY JUDICIAL PREJUDGMENT REMEDY OR EXERCISING ANY NONJUDICIAL REMEDY IN
ACCORDANCE WITH THE UNIFORM COMMERCIAL CODE OR OTHER APPLICABLE LAW. This
waiver extends to all such Claims, including Claims that involve Persons other
than Borrower and Lender; Claims that arise out of or are in any way connected
to the relationship between Borrower and Lender; and any Claims for damages,
breach of contract, specific performance, or any equitable or legal relief of
any kind, arising out of this Agreement or any other Loan Document.

 

9.11         Confidentiality. Lender
acknowledges that certain items of Collateral, including, but not limited to trade
secrets, source codes, customer lists and certain other items of Intellectual
Property, and any Financial Statements provided pursuant to hereto, if and to
the extent such information is marked as confidential by Borrower at the time
of disclosure, shall constitute proprietary and confidential information of
Borrower (the “Confidential Information”).  Accordingly, Lender
agrees that any Confidential Information it may obtain in the course of
acquiring, administering, perfecting or foreclosing Lender’s security interest
in the Collateral shall be received in the strictest confidence and shall not
be disclosed to any other person or entity in any manner whatsoever, in whole
or in part, without the prior written consent of Borrower, except that Lender
may disclose any such information: (a) to its own directors, officers,
employees, accountants, counsel and other professional advisors and to its
affiliates if Lender in their sole discretion determines that any such party
should have access to such information; (b) if such information is generally
available to the public; (c) if required or appropriate in any report,
statement or testimony submitted to any governmental authority having or
claiming to have jurisdiction over Lender; (d) if required or appropriate in
response to any summons or subpoena or in connection with any litigation, to
the extent permitted or deemed advisable by Lender’s counsel; (e) to comply
with any legal requirement or law applicable to Lender; (f) to the extent
reasonably necessary in connection with the exercise of any right or remedy
under any Loan Document, including Lender’s sale, lease, or other disposition
of Collateral after default, which Collateral constitutes or is reasonably
related to Confidential Information; (g) to any participant or assignee of
Lender or any prospective participant or assignee, provided that such
participant or assignee or prospective participant or assignee agrees in
writing to be bound by this Section prior to disclosure; or (h) otherwise with
the prior consent of Borrower; provided, that any disclosure made in
violation of this Agreement shall not affect the obligations of Borrower or any
of its affiliates or any guarantor under this Agreement or the other Loan
Documents.

 

9.12
        Revival of
Obligations. This Agreement and the Loan Documents shall remain
in full force and effect and continue to be effective if any petition is filed
by or against Borrower

 

27

 

for
liquidation or reorganization, if Borrower becomes insolvent or makes an
assignment for the benefit of creditors, if a receiver or trustee is appointed
for all or any significant part of Borrower’s assets, or if any payment or
transfer of Collateral is recovered from Lender. The Loan Documents and the Obligations
and Collateral security shall continue to be effective, or shall be revived or
reinstated, as the case may be, if at any time payment and performance of the
Obligations or any transfer of Collateral to Lender, or any part thereof is
rescinded, avoided or avoidable, reduced in amount, or must otherwise be
restored or returned by, or is recovered from, Lender or by any obligee of the
Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or
otherwise, all as though such payment, performance, or transfer of Collateral
had not been made, In the event that any payment, or any part thereof, is
rescinded, reduced, avoided, avoidable, restored, returned, or recovered, the
Loan Documents and the Obligations shall be deemed, without any further action
or documentation, to have been revived and reinstated except to the extent of
the full, final, and indefeasible payment to Lender in cash.

 

9.13         Counterparts. This
Agreement and any amendments, waivers, consents or supplements hereto may be executed
in any number of counterparts, and by different parties hereto in separate
counterparts, each of which when so delivered shall be deemed an original, but
all of which counterparts shall constitute but one and the same instrument.

 

9.14         Remedies. Lender’s
rights and remedies under this Agreement shall be cumulative and nonexclusive
of any other rights and remedies that Lender may have under any other
agreement, including the other Loan Documents, by operation of taw or
otherwise. Recourse to the Collateral shall not be required.

 

9.15         Conflict of Terms. Except as
otherwise provided in this Agreement or any of the other Loan Documents by
specific reference to the applicable provisions of this Agreement, if any
provision contained in this Agreement conflicts with any provision in any of
the other Loan Documents, the provision contained in this Agreement shall
govern and control.

 

9.16         Advice of Counsel. Each of the
parties represents to each other party hereto that it has discussed this
Agreement and, specifically, the provisions of Sections
9.8, 9.9  and 9.10, with its
counsel.

 

9.17         No Strict Construction. The parties
hereto have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.

 

[Signature Page Follows]

 

28

 

IN
WITNESS WHEREOF, this Loan and Security Agreement has been duly executed as of
the date first written above.

 

“Borrower”

 

ECHO
GLOBAL LOGISTICS, INC,

 

 

	
  By:

  	
  /s/
  David B. Menzel

  	
   

  
	
  Name:

  	
  David
  B. Menzel

  	
   

  
	
  Title:

  	
  CFO

  	
   

  

 

 

“Lender”

 

EGL
MEZZANINE LLC

 

 

	
  By:

  	
  /s/
  Eric P. Lefkofsky

  	
   

  
	
  Name:

  	
  Eric
  P. Lefkofsky

  	
   

  
	
  Title:

  	
  Manager

  	
   

  

 

[Signature Page to Amended and Restated Loan and Security Agreement]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}]]