REVOLVING CREDIT AND SECURITY AGREEMENT

Revolving Credit Agreement

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Title: REVOLVING CREDIT AND SECURITY AGREEMENT
Governing Law: Maryland Date: 11/14/2005

REVOLVING CREDIT AND SECURITY AGREEMENT, Parties: western express holdings , western express inc. , capitalsource finance llc

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EXHIBIT 10.1

REVOLVING CREDIT AND SECURITY AGREEMENT

TABLE OF CONTENTS

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Page

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I. DEFINITIONS........................................................ 1

1.1. General Terms........................................... 1

II. ADVANCES, PAYMENT AND INTEREST..................................... 1

2.1. The Revolving Facilities................................ 1

2.2. The Revolving A Note; The Revolving B Note; Maturity.... 2

2.3. Interest................................................ 2

2.4. Revolving Facility Disbursements; Requirement to Deliver

Borrowing Certificate................................... 3

2.5. Revolving Facility Collections; Repayment; Borrowing

Availability and Lockbox................................ 3

2.6. Promise to Pay; Manner of Payment....................... 4

2.7 Repayment of Excess Advances............................ 4

2.8. Payments to Lender...................................... 4

2.9. Grant of Security Interest; Collateral.................. 5

2.10. Collateral Administration............................... 6

2.11. Power of Attorney....................................... 7

III. FEES AND OTHER CHARGES............................................. 7

3.1. Commitment Fees......................................... 7

3.2. Unused Line Fees........................................ 7

3.3. Collateral Management Fee............................... 8

3.4. Computation of Fees; Lawful Limits...................... 8

3.5. Default Rate of Interest................................ 8

3.6. Acknowledgement of Joint and Several Liability.......... 8

IV. CONDITIONS PRECEDENT............................................... 9

4.1. Conditions to Initial Advance and Closing............... 9

4.2. Conditions to Each Advance.............................. 10

V. REPRESENTATIONS AND WARRANTIES..................................... 11

5.1. Organization and Authority.............................. 11

5.2. Loan Documents.......................................... 11

5.3. Subsidiaries, Capitalization and Ownership Interests.... 12

5.4. Properties.............................................. 12

5.5. Other Agreements........................................ 12

5.6. Litigation.............................................. 12

5.7. Hazardous Materials..................................... 13

5.8. Potential Tax Liability; Tax Returns; Governmental

Reports................................................. 13

5.9. Financial Statements and Reports........................ 13

5.10. Compliance with Law..................................... 13

5.11. Intellectual Property................................... 14

5.12. Licenses and Permits; Labor............................. 14

5.13. No Default.............................................. 14

5.14. Disclosure.............................................. 14

5.15. Existing Indebtedness; Investments, Guarantees and

Certain Contracts....................................... 14

5.16. Other Agreements........................................ 15

5.17. Insurance............................................... 15

5.18. Names; Location of Offices, Records and Collateral...... 15

5.19. Non-Subordination....................................... 15

5.20. Accounts................................................ 15

5.21. Survival................................................ 16

VI. AFFIRMATIVE COVENANTS.............................................. 16

6.1. Financial Statements, Borrowing Certificate, Financial

Reports and Other Information........................... 16

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6.2. Payment of Obligations.................................. 17

6.3. Conduct of Business and Maintenance of Existence and

Assets.................................................. 18

6.4. Compliance with Legal and Other Obligations............. 18

6.5. Insurance............................................... 18

6.6. True Books.............................................. 18

6.7. Inspection; Periodic Audits............................. 19

6.8. Further Assurances; Post Closing........................ 19

6.9. Payment of Indebtedness................................. 19

6.10. Lien Searches........................................... 19

6.11. Use of Proceeds......................................... 19

6.12. Collateral Documents; Security Interest in Collateral... 19

6.13. Taxes and Other Charges................................. 20

6.14. Payroll Taxes........................................... 20

VII. NEGATIVE COVENANTS................................................. 21

7.1. Financial Covenants..................................... 21

7.2. Permitted Indebtedness.................................. 21

7.3. Permitted Liens......................................... 21

7.4. Investments; New Facilities or Collateral;

Subsidiaries............................................ 22

7.5. Dividends; Redemptions.................................. 22

7.6. Transactions with Affiliates............................ 22

7.7. Charter Documents; Fiscal Year; Name; Jurisdiction of

Organization; Dissolution; Use of Proceeds.............. 23

7.8. Truth of Statements..................................... 23

7.10. Transfer of Assets...................................... 23

VIII. EVENTS OF DEFAULT.................................................. 24

IX. RIGHTS AND REMEDIES AFTER DEFAULT.................................. 26

9.1. Rights and Remedies..................................... 26

9.2. Application of Proceeds................................. 27

9.3. Rights and Remedies not Exclusive....................... 27

X. WAIVERS AND JUDICIAL PROCEEDINGS................................... 28

10.1. Waivers................................................. 28

10.2. Delay; No Waiver of Defaults............................ 28

10.3. Jury Waiver............................................. 28

XI. EFFECTIVE DATE AND TERMINATION..................................... 28

11.1. Termination and Effective Date Thereof.................. 28

11.2. Survival................................................ 29

XII. MISCELLANEOUS...................................................... 29

12.1. Governing Law; Jurisdiction; Service of Process; Venue.. 29

12.2. Successors and Assigns; Participations; New Lenders..... 30

12.3. Application of Payments................................. 30

12.4. Indemnity............................................... 30

12.5. Notice.................................................. 31

12.6. Severability; Captions; Counterparts; Facsimile

Signatures.............................................. 31

12.7. Expenses................................................ 31

12.8. Entire Agreement........................................ 32

12.9. Lender Approvals........................................ 32

12.10. Publicity............................................... 32

12.11. Agent................................................... 32

1) Minimum EBITDAR.........................................

2) Net Leverage Ratio (Total Debt to EBITDAR)..............

3) Fixed Charge Coverage Ratio (EBITDA/Fixed Charges)......

4) Tangible Net Worth......................................

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REVOLVING CREDIT AND SECURITY AGREEMENT

THIS REVOLVING CREDIT AND SECURITY AGREEMENT (the "AGREEMENT") dated as of

March 31, 2004, 2004 is entered into between WESTERN EXPRESS, INC., a Tennessee

corporation (the "BORROWER"), and CAPITALSOURCE FINANCE LLC, a Delaware limited

liability company (the "LENDER").

WHEREAS, Borrower has requested that Lender make available to Borrower

revolving credit facilities (collectively, the "REVOLVING FACILITY") in a

maximum principal amount at any time outstanding of up to Thirty Seven Million

Dollars ($37,000,000) (the "FACILITY CAP"), the proceeds of which shall be used

by Borrower for refinancing Borrower's existing obligations and indebtedness,

for the acquisition of Equipment and rolling stock and for its working capital

needs in connection with its trucking business; and

WHEREAS, Lender is willing to make the Revolving Facility available to

Borrower upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing and for other good and

valuable consideration, the receipt and adequacy of which hereby are

acknowledged, Borrower and Lender hereby agree as follows:

I. DEFINITIONS

1.1. GENERAL TERMS

For purposes of this Agreement, in addition to the definitions above and

elsewhere in this Agreement, the terms listed in Appendix A hereto shall have

the meanings given such terms in Appendix A, which is incorporated herein and

made a part hereof. All capitalized terms used which are not specifically

defined shall have meanings provided in Article 9 of the UCC in effect on the

date hereof to the extent the same are used or defined therein. Unless otherwise

specified herein or in Appendix A, any agreement or contract referred to herein

or in Appendix A shall mean such agreement as modified, amended or supplemented

from time to time. Unless otherwise specified, as used in the Loan Documents or

in any certificate, report, instrument or other document made or delivered

pursuant to any of the Loan Documents, all accounting terms not defined in

Appendix A or elsewhere in this Agreement shall have the meanings given to such

terms in and shall be interpreted in accordance with GAAP.

II. ADVANCES, PAYMENT AND INTEREST

2.1. THE REVOLVING FACILITIES

(a) THE REVOLVING A FACILITY. Subject to the provisions of this Agreement,

Lender shall make Advances to Borrower under the Revolving A Facility from time

to time during the Term, provided that, notwithstanding any other provision of

this Agreement, the aggregate amount of all Advances at any one time outstanding

under the Revolving A Facility shall not exceed either of (a) the Revolving A

Facility Cap, and (b) the Revolving A Availability. The Revolving A Facility is

a revolving credit facility, which may be drawn, repaid and redrawn, from time

to time as permitted under this Agreement. Any determination as to whether there

is Revolving A Availability for Advances shall he made by Lender in its

Permitted Discretion and is final and binding upon Borrower. Unless otherwise

permitted by Lender, each Advance under the Revolving A Facility shall be in an

amount of at least $1,000. Subject to the provisions of this Agreement, Borrower

may request Advances under the Revolving A Facility up to and including the

value, in U.S, Dollars, of the sum of (i) Eighty-Five percent (85%) of the

Billed Receivables Borrowing Base plus (ii) Seventy-Five percent (75%) of

Unbilled Receivables Borrowing Base minus, (iii) if applicable, Dilution Factors

minus (iv) if applicable, amounts reserved by Lender as may determined by Lender

from time to time in its Permitted Discretion (such calculated amount being

referred to herein as the "REVOLVING A AVAILABILITY"). Advances under the

Revolving A Facility automatically shall be made for the

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payment of interest on the Revolving A Note and other Obligations on the date

when due to the extent available and as provided for herein.

(b) THE REVOLVING B FACILITY. Subject to the provisions of this Agreement,

Lender shall make Advances to Borrower under the Revolving B Facility from time

to time during the Term, provided that, notwithstanding any other provision of

this Agreement, (i) the aggregate amount of all Advances at any one time

outstanding under the Revolving B Facility shall not exceed either the (x)

Revolving B Facility Cap or (y) Revolving B Availability, (ii) no Advances under

Revolving B Facility shall be made unless and until Revolving A Availability

less the outstanding balance on the Revolving A Facility shall equal $0 and

(iii) no Advances under the Revolving B Facility shall be made unless Borrower

has achieved Fixed Charge Coverage of not less than that specified in Annex I:

Financial Covenants as evidenced by Borrower's most recent monthly financial

statement delivered in accordance with Section 6.l(a)(ii) hereof. The Revolving

B Facility is a revolving credit facility, which may be drawn, repaid and

redrawn, from time to time as permitted under this Agreement. Unless otherwise

permitted by Lender, each Advance under the Revolving B Facility shall be in an

amount of at least $100,000. Subject to the provisions of this Agreement,

Borrower may request Advances under the Revolving B Facility up to the Revolving

B Facility Cap (such amount being referred to herein as the "REVOLVING B

AVAILABILITY"). Advances under the Revolving B Facility automatically shall be

made for the payment of interest on the Revolving B Note and other Obligations

on the date when due to the extent available and as provided for herein.

2.2. THE REVOLVING A NOTE; THE REVOLVING B NOTE; MATURITY

(a) All Advances under the Revolving A Facility shall be evidenced by the

Revolving A Note, payable to the order of Lender, duly executed and delivered by

Borrower and dated the Closing Date, evidencing the aggregate indebtedness of

Borrower to Lender resulting from Advances under the Revolving A Facility, from

time to time. Lender hereby is authorized, but is not obligated, to enter the

amount of each Revolving A Advance under the Revolving A Facility and the amount

of each payment or prepayment of principal or interest thereon in the

appropriate spaces on the reverse of or on an attachment to the Revolving A

Note. Lender will account to Borrower monthly with a statement of Revolving A

Advances under the Revolving A Revolving Facility and charges and payments made

pursuant to this Agreement, and in the absence of manifest error, such

accounting rendered by Lender shall be deemed final, binding and conclusive

unless Lender is notified by Borrower in writing to the contrary within twenty

(20) calendar days of Receipt of each accounting, which notice shall be deemed

an objection only to items specifically objected to therein.

(b) All Advances under the Revolving B Facility shall be evidenced by the

Revolving B Note, payable to the order of Lender, duly executed and delivered by

Borrower and dated the Closing Date, evidencing the aggregate indebtedness of

Borrower to Lender resulting from Advances under the Revolving B Facility, from

time to time. Lender hereby is authorized, but is not obligated, to enter the

amount of each Revolving B Advance under the Revolving B Facility and the amount

of each payment or prepayment of principal or interest thereon in the

appropriate spaces on the reverse of or on an attachment to the Revolving B

Note. Lender will account to Borrower monthly with a statement of Revolving B

Advances under the Revolving B Revolving Facility and charges and payments made

pursuant to this Agreement, and in the absence of manifest error, such

accounting rendered by Lender shall be deemed final, binding and conclusive

unless Lender is notified by Borrower in writing to the contrary within 15

calendar days of Receipt of each accounting, which notice shall be deemed an

objection only to items specifically objected to therein.

due and payable in full, if not earlier in accordance with this Agreement, on

the earlier of (i) the occurrence of an Event of Default if required pursuant

hereto or Lender's demand upon an Event of Default, and (ii) the last day of the

Term (such earlier date being the "MATURITY DATE").

2.3. INTEREST

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(a) Interest on Revolving A Advances. Interest on outstanding Revolving A

Advances under the Revolving A Note shall be payable monthly in arrears on the

first day of each calendar month at an annual rate equal to the Prime Rate plus

one and one quarter percent (1.25%), provided, however, that, notwithstanding

any provision of any Loan Document, for the purpose of calculating interest

hereunder, the Prime Rate shall be not less than Four Percent (4.00%) with

respect to any Revolving A Advance, in each case calculated on the basis of a

360-day year and for the actual number of calendar days elapsed in each interest

calculation period. Interest accrued on each Advance under the Note shall be due

and payable on the first day of each calendar month, in accordance with the

procedures provided for in Section 2.5, and Section 2.6, commencing April 1,

2004, and continuing until the later of the expiration of the Term and the full

performance and irrevocable payment in full in cash of the Obligations and

termination of this Agreement.

(b) Interest on Revolving B Advances. Interest on outstanding Revolving B

Advances under the Revolving B Note shall be payable monthly in arrears on the

first day of each calendar month at an annual rate equal to the Prime Rate plus

seven percent (7.00%), provided, however, that, notwithstanding any provision of

any Loan Document, for the purpose of calculating interest hereunder, the Prime

Rate shall be not less than Four Percent (4.00%) with respect to any Revolving B

Advance, in each case calculated on the basis of a 360-day year and for the

actual number of calendar days elapsed in each interest calculation period.

Interest accrued on each Advance under the Note shall be due and payable on the

first day of each calendar month, in accordance with the procedures provided for

in Section 2.5 and Section 2.6, commencing April 1, 2004, and continuing until

the later of the expiration of the Term and the full performance and irrevocable

payment in full in cash of the Obligations and termination of this Agreement.

2.4. REVOLVING FACILITY DISBURSEMENTS; REQUIREMENT TO DELIVER BORROWING

CERTIFICATE

So long as no Default or Event of Default shall have occurred and be

continuing, Borrower may give Lender irrevocable written notice requesting an

Advance under the Revolving Facility by delivering to Lender not later than 1:00

p.m. (Eastern Standard Time) at least one but not more than four Business Days

before the proposed borrowing date of such requested Advance ( the "BORROWING

DATE"), a completed Borrowing Certificate and relevant supporting documentation

satisfactory to Lender, which shall (i) specify the proposed Borrowing Date of

such Advance which shall be a Business Day, (ii) specify the principal amount of

such requested Advance, (iii) specify whether such Advance is a Revolving A

Advance or a Revolving B Advance and (iv) certify the matters contained in

Section 4.2; provided, however, any request for an Advance when Revolving A

Availability minus the outstanding balance of Revolving A Advances equals $0

shall automatically be deemed a request for a Revolving B Advance (for example,

if the Revolving A Facility is fully drawn, any requested Advance will

automatically be deemed a request to draw down on the Revolving B Facility).

Each time a request for an Advance is made (and more frequently if Lender shall

so reasonably request) until the Obligations are indefeasibly paid in cash in

full and this Agreement is terminated, Borrower shall deliver to Lender a

Borrowing Certificate accompanied by a separate detailed aging and categorizing

of Borrower's accounts receivable and accounts payable and such other supporting

documentation with respect to the figures and information in the Borrowing

Certificate as Lender shall reasonably request from a credit or security

perspective or otherwise. On each Borrowing Date, Borrower irrevocably

authorizes Lender to disburse the proceeds of the requested Advance to the

appropriate Borrower's account(s) as set forth on Schedule 2.4, in all cases for

credit to the appropriate Borrower (or to such other account as to which the

appropriate Borrower shall instruct Lender) via Federal funds wire transfer no

later than 4:00 p.m. (Eastern Standard Time).

2.5. REVOLVING FACILITY COLLECTIONS; REPAYMENT; BORROWING AVAILABILITY AND

LOCKBOX

Borrower shall maintain one or more lockbox accounts (individually and

collectively, the "LOCKBOX ACCOUNT") with one or more banks acceptable to Lender

(each, a "LOCKBOX BANK"), and shall execute with each Lockbox Bank one or more

agreements acceptable to Lender (individually and collectively, the

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"LOCKBOX AGREEMENT"), and such other agreements related thereto as Lender may

require. Borrower shall ensure that all collections of their respective Accounts

and all other cash payments received by Borrower are paid and delivered directly

from Account Debtors and other Persons into the appropriate Lockbox Account. The

Lockbox Agreements shall provide that the Lockbox Banks immediately will

transfer all funds paid into the Lockbox Accounts into a depository account or

accounts maintained by Lender or an Affiliate of Lender at such bank as Lender

may communicate to Borrower from time to time (the "CONCENTRATION ACCOUNT"),

Notwithstanding and without limiting any other provision of any Loan Document,

Lender shall apply, on a daily basis, all funds transferred into the

Concentration Account pursuant to the Lockbox Agreement and this Section 2.5 in

such order and manner as determined by Lender in the following order, first to

all then unpaid fees and expenses then owing, second, to all accrued and unpaid

interest on the Advances, third, to the principal amount of the Revolving B

Advances and, fourth, to the principal amount of the Revolving A Advances. To

the extent that any Accounts are collected by Borrower or any other cash

payments received by Borrower are not sent directly to the appropriate Lockbox

Account but are received by Borrower or any of its Affiliates, such collections

and proceeds shall be held in trust for the benefit of Lender and immediately

remitted (and in any event within two (2) Business Days), in the form received,

to the appropriate Lockbox Account for immediate transfer to the Concentration

Account. All funds transferred to the Concentration Account for application to

the Obligations under the Revolving Facility shall be applied to reduce the

Obligations under the Revolving Facility, but, for purposes of calculating

interest hereunder, shall be subject to a four Business Day clearance period. If

as the result of collections of Accounts and/or any other cash payments received

by Borrower pursuant to this Section 2.5 a credit balance exists with respect to

the Concentration Account, such credit balance shall not accrue interest in

favor of a Borrower, but shall be available to Borrower upon Borrower's written

request. If applicable, at any time prior to the execution of all or any of the

Lockbox Agreements and operation of all or any of the Lockbox Accounts, Borrower

and its Affiliates shall direct all collections or proceeds it receives on

Accounts or from other Collateral to the accounts(s) and in the manner specified

by Lender in its sole discretion.

2.6. PROMISE TO PAY; MANNER OF PAYMENT

Borrower absolutely and unconditionally promises to pay principal,

interest and all other amounts payable hereunder, or under any other Loan

Document, without any right of rescission and without any deduction whatsoever,

including any deduction for any setoff, counterclaim or recoupment, and

notwithstanding any damage to, defects in or destruction of the Collateral or

any other event, including obsolescence of any property or improvements. All

payments made by Borrower (other than payments automatically paid through

Advances under the Revolving Facility as provided herein), shall be made only by

wire transfer on the date when due, without offset or counterclaim, in U.S.

Dollars, in immediately available funds to such account as may be indicated in

writing by Lender to Borrower from time to time. Any such payment received after

4:00 p.m. (Eastern Standard Time) on the date when due shall be deemed received

on the following Business Day. Whenever any payment hereunder shall be stated to

be due or shall become due and payable on a day other than a Business Day, the

due date thereof shall be extended to, and such payment shall be made on, the

next succeeding Business Day, and such extension of time in such case shall be

included in the computation of payment of any interest (at the interest rate

then in effect during such extension) and/or fees, as the case may be.

2.7. REPAYMENT OF EXCESS ADVANCES

Any balance of Advances under the Revolving Facility outstanding at

any time in excess of the lesser of the Facility Cap or the Availability shall

be immediately due and payable by Borrower without the necessity of any demand,

at the Payment Office, whether or not a Default or Event of Default has occurred

or is continuing and shall be paid in the manner specified in Section 2.6.

2.8. PAYMENTS BY LENDER

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Should any amount required to be paid under any Loan Document be unpaid,

such amount may be paid by Lender, which payment shall be deemed a request for

an Advance under the Revolving Facility as of the date such payment is due, and

Borrower irrevocably authorizes disbursement of any such funds to Lender by way

of direct payment of the relevant amount, interest or Obligations. No payment or

prepayment of any amount by Lender or any other Person shall entitle any Person

to be subrogated to the rights of Lender under any Loan Document unless and

until the Obligations have been fully performed and paid irrevocably in cash and

this Agreement has been terminated. Any sums expended by Lender as a result of

Borrower's or any Guarantor's failure to pay, perform or comply with any Loan

Document or any of the Obligations may be charged to Borrower's account as an

Advance under the Revolving Facility and added to the Obligations.

2.9. GRANT OF SECURITY INTEREST; COLLATERAL

(a) To secure the payment and performance of the Obligations, Borrower

hereby grants to Lender a continuing security interest in and Lien upon, and

pledges to Lender, all of its right, title and interest in and to the following

(collectively and each individually, the " COLLATERAL"), which security interest

is intended to be a first priority security interest:

(i) all of Borrower's tangible personal property, including

without limitation all present and future Inventory and Designated Equipment,

items of equipment which are or become Fixtures, now owned or hereafter

acquired;

(ii) all of Borrower's intangible personal property, including

without limitation all present and future Accounts, contract rights, Permits,

General Intangibles, Chattel Paper, Documents, Instruments, Deposit Accounts,

Investment Property, Letter-of-Credit Rights and Supporting Obligations, rights

to the payment of money or other forms of consideration of any kind, tax

refunds, insurance proceeds, now owned or hereafter acquired, and all intangible

and tangible personal property relating to or arising out of any of the

foregoing; and

(iii) any and all additions and accessions to any of the

foregoing, and any and all replacements, products and proceeds (including

insurance proceeds) of any of the foregoing.

(b) Notwithstanding the foregoing provisions of this Section 2.9, such

grant of a security interest shall not extend to, and the term "Collateral"

shall not include, (i) any Equipment Lender Collateral, (ii) Real Property , and

(iii) any General Intangibles of Borrower to the extent that (1) such General

Intangibles are not assignable or capable of being encumbered as a matter of law

or under the terms of any license or other agreement applicable thereto (but

solely to the extent that any such restriction shall be enforceable under

applicable law) without the consent of the licensor thereof or other applicable

party thereto, and (2) such consent has not been obtained; provided, however,

that the foregoing grant of a security interest shall extend to, and the term

"Collateral" shall include, each of the following: (x) any General Intangible

which is in the nature of an Account or a right to the payment of money or a

proceed of, or otherwise related to the enforcement or collection of, any

Account or right to the payment of money, or goods which are the subject of any

Account or right to the payment of money, (y) any and all proceeds of any

General Intangible that is otherwise excluded to the extent that the assignment,

pledge or encumbrance of such proceeds is not so restricted, and (z) upon

obtaining the consent of any such licensor or other applicable party with

respect to any such otherwise excluded General Intangible, such General

Intangible as well as any and all proceeds thereof that might theretofore have

been excluded from such grant of a security interest and from the term

"Collateral."

performance of the Obligations, Lender shall have received a pledge of not less

than (i) 100% of the issued and outstanding shares of Borrower pursuant to the

Borrower Stock Pledge Agreement and (ii) 100% of the issued an outstanding

shares of each of Borrower's subsidiaries pursuant to the Subsidiary Stock

Pledge Agreement.

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(d) Upon (i) the execution and delivery of this Agreement, (ii) the

proper filing of the necessary financing statements recordation of the

Collateral Patent, Trademark and Copyright Assignment in the United States

Patent and Trademark Office and/or the United States Copyright Office, (iii) the

proper delivery of the necessary stock certificates, without any further action,

Lender will have a good, valid and perfected first priority Lien and security

interest in the Collateral, subject to no transfer or other restrictions or

Liens of any kind in favor of any other Person except for Permitted Liens. No

financing statement relating to any of the Collateral is on file in any public

office except those (i) on behalf of Lender, and/or (ii) in connection with

Permitted Liens.

2.10. COLLATERAL ADMINISTRATION

(a) All Collateral (except Deposit Accounts) will at all times be kept

by Borrower at the locations set forth on Schedule 5.18B hereto and shall not,

without thirty (30) calendar days prior written notice to Lender, be moved

therefrom, and in any case shall not be moved outside the continental United

States.

(b) Borrower shall keep accurate and complete records of its Accounts

and all payments and collections thereon and shall submit such records to Lender

on such periodic bases as Lender may request. In addition, if Accounts of

Borrower in an aggregate face amount in excess of $100,000 become ineligible

because they fall within one of the specified categories of ineligibility set

forth in the definition of Eligible Billed Receivables or Eligible Unbilled

Receivables, Borrower shall notify Lender of such occurrence on the first

Business Day following such occurrence and the Borrowing Base shall thereupon be

adjusted to reflect such occurrence. If requested by Lender, Borrower shall

execute and deliver to Lender formal written assignments of all of its Accounts

weekly as Lender may request, including all Accounts created since the date of

the last assignment, together with copies of claims, invoices and/or other

information related thereto. To the extent that collections from such assigned

accounts exceed the amount of the Obligations, such excess amount shall not

accrue interest in favor of Borrower, but shall be available to Borrower upon

Borrower's written request.

officers, employees, representatives or agents shall have the right, at any time

during normal business hours, in the name of Lender, any designee of Lender or

Borrower, to verify the validity, amount or any other matter relating to any

Accounts of Borrower. Borrower shall cooperate fully with Lender in an effort to

facilitate and promptly conclude such verification process.

(d) To expedite collection, Borrower shall endeavor in the first

instance to make collection of its Accounts for Lender. Lender shall have the

right at all times after the occurrence and during the continuance of an Event

of Default to notify Account Debtors owing Accounts to Borrower that their

Accounts have been assigned to Lender and to collect such Accounts directly in

its own name and to charge collection costs and expenses, including reasonable

attorney's fees, to Borrower.

(e) As and when determined by Lender in its Permitted Discretion,

Lender will perform the searches described in clauses (i) and (ii) below against

Borrower and Guarantors (the results of which are to be consistent with

Borrower's representations and warranties under this Agreement), all at

Borrower's expense, provided that unless an Event of Default has occurred and

during the continuance thereof, Borrower shall not pay for more than one such

search per calendar quarter: (i) UCC searches with the Secretary of State of the

jurisdiction of organization of Borrower and Guarantor and the Secretary of

State and local filing offices of each jurisdiction where Borrower and/or any

Guarantors maintain their respective executive offices, a place of business or

assets; (ii) lien searches with the United States Patent and Trademark Office

and the United States Copyright Office; and (iii) judgment, federal tax lien and

state tax lien searches, in each jurisdiction searched under clause (i) above.

(f) Borrower (1) shall provide prompt written notice to its current

bank to transfer all items, collections and remittances to the Concentration

Account, (ii) shall, upon the occurrence and during the continuance of an Event

of Default, provide prompt written notice to each Account Debtor that Lender has

been granted a lien

<PAGE>

and security interest in, upon and to all Accounts applicable to such Account

Debtor; (iii) shall direct each Account Debtor to make payments to the

appropriate Lockbox Account, and Borrower hereby authorizes Lender, upon any

failure to send such notices and directions within ten (10) calendar days after

the date of this Agreement (or ten (10) calendar days after the Person becomes

an Account Debtor), to send any and all similar notices and directions to such

Account Debtors, and (iv) shall do anything further that may be lawfully

required by Lender to create and perfect Lender's lien on any collateral and

effectuate the intentions of the Loan Documents. At Lender's request, Borrower

shall immediately deliver to Lender all items for which Lender must receive

possession to obtain a perfected security interest and all notes, certificates,

and documents of title, Chattel Paper, warehouse receipts, Instruments, and any

other similar instruments constituting Collateral.

2.11. POWER OF ATTORNEY

Lender is hereby irrevocably made, constituted and appointed the true

and lawful attorney for Borrower (without requiring Lender to act as such) with

full power of substitution to do the following: (i) upon and during the

continuance of an Event of Default, endorse the name of any such Person upon any

and all checks, drafts, money orders, and other instruments for the payment of

money that are payable to such Person and constitute collections on its or their

Accounts; (ii) upon and during the continuance of an Event of Default, execute

in the name of such Person any financing statements, schedules, assignments,

instruments, documents, and statements that it is or they or are obligated to

give Lender under any of the Loan Documents; (iii) upon and during the

continuance of an Event of Default, record Lender's Lien upon any motor vehicle

title certificates with respect to the Designated Equipment and file appropriate

applications with Government Authorities to have Lender's Lien noted on such

certificates of title, and (iv) do such other and further acts and deeds in the

name of such Person that Lender may deem necessary or desirable to enforce any

Account or other Collateral or to perfect Lender's security interest or lien in

any Collateral. In addition, if any such Person breaches its obligation

hereunder to direct payments of Accounts or the proceeds of any other Collateral

to the appropriate Lockbox Account, Lender, as the irrevocably made, constituted

and appointed true and lawful attorney for such Person pursuant to this

paragraph, may, by the signature or other act of any of Lender's officers or

authorized signatories (without requiring any of them to do so), direct any

federal, state or private payor or fiscal intermediary to pay proceeds of

Accounts or any other Collateral to the appropriate Lockbox Account.

III. FEES AND OTHER CHARGES

3.1. COMMITMENT FEES

On or before the Closing Date, Borrower shall pay to Lender a

nonrefundable commitment fee equal to (i) $300,000 for Lender's provision of the

Revolving A Facility and (ii) $70,000 for Lender's provision of the Revolving B

Facility.

3.2. UNUSED LINE FEES

Borrower shall pay to Lender monthly an unused line fee (the "UNUSED

LINE FEE") in an amount calculated as follows:

(a) from the Closing Date through the first anniversary of the Closing

Date, an amount equal to one half of one percent (0.50%) per annum of the

difference derived by subtracting (i) the daily average amount of the balances

under the Revolving A Facility outstanding during the preceding month from (ii)

$25,000,000;

(b) (x) from the first anniversary of the Closing Date through the

last day of the Tern or (y) in the event the daily amount advances outstanding

during the preceding month exceeds $25,000,000 during the period from the

Closing Date through the first anniversary of the Closing Date, an amount equal

to one half of one

<PAGE>

percent (0.50%) per annum of the difference derived by subtracting (i) the daily

average amount of the balances under the Revolving A Facility outstanding during

the preceding month, from (ii) the Revolving A Facility Cap;

of one percent (0.75%) per annum of the difference derived by subtracting (i)

the daily average amount of the balances under the Revolving B Facility

outstanding during the preceding month, from (ii) the Revolving B Facility Cap;

and

(d) The Unused Line Fee shall be payable monthly in arrears on the

first clay of each successive calendar month (starting with the month in which

the Closing Date occurs).

3.3 COLLATERAL MANAGEMENT FEE

Borrower shall pay Lender as additional interest a monthly collateral

management fee (the "COLLATERAL MANAGEMENT FEE") equal to one quarter of one

percent per annum calculated on the basis of the daily average amount of the

balances under the Revolving A Facility and the Revolving B Facility outstanding

during the preceding month. The Collateral Management Fee shall be payable

monthly in arrears on the first day of each successive calendar month (starting

with the month in which the Closing Date occurs).

3.4. COMPUTATION OF FEES; LAWFUL LIMITS

All fees hereunder shall be computed on the basis of a year of 360

days and for the actual number of days elapsed in each calculation period, as

applicable. In no contingency or event whatsoever, whether by reason of

acceleration or otherwise, shall the interest and other charges paid or agreed

to be paid to Lender for the use, forbearance or detention of money hereunder

exceed the maximum rate permissible under applicable law which a court of

competent jurisdiction shall, in a final determination, deem applicable hereto.

If, due to any circumstance whatsoever, fulfillment of any provision hereof, at

the time performance of such provision shall be due, shall exceed any such

limit, then, the obligation to be so fulfilled shall be reduced to such lawful

limit, and, if Lender shall have received interest or any other charges of any

kind which might be deemed to be interest under applicable law in excess of the

maximum lawful rate, then such excess shall be applied first to any unpaid fees

and charges hereunder, then to unpaid principal balance owed by Borrower

hereunder, and if the then remaining excess interest is greater than the

previously unpaid principal balance, Lender shall promptly refund such excess

amount to Borrower and the provisions hereof shall be deemed amended to provide

for such permissible rate. The terms and provisions of this Section 3.4 shall

control to the extent any other provision of any Loan Document is inconsistent

herewith.

3.5. DEFAULT RATE OF INTEREST

Upon the occurrence and during the continuation of an Event of

Default, the Applicable Rate of interest in effect at such time with respect to

the Obligations shall be increased b y 4.0% per annum (the "DEFAULT RATE").

3.6. ACKNOWLEDGEMENT OF JOINT AND SEVERAL LIABILITY

To the extent applicable, each Borrower acknowledges that it is

jointly and severally liable for all of the Obligations under the Loan

Documents. To the extent applicable, each Borrower expressly understands, agrees

and acknowledges that (i) Borrowers are all Affiliated entities by common

ownership, (ii) each Borrower desires to have the availability of one common

credit facility instead of separate credit facilities, (iii) each Borrower has

requested that Lender extend such a common credit facility on the terns herein

provided, (iv) Lender will be lending against, and relying on a lien upon, all

of Borrowers' assets even though the proceeds of any particular loan made

hereunder may not be advanced directly to a particular Borrower, (v) each

Borrower will nonetheless benefit by the making of all such loans by Lender and

the availability of a single credit facility of a size greater than each

<PAGE>

could independently warrant, and (vi) all of the representations, warranties,

covenants, obligations, conditions, agreements and other terms contained in the

Loan Documents shall be applicable to and shall be binding upon each Borrower.

IV. CONDITIONS PRECEDENT

4.1. CONDITIONS TO INITIAL ADVANCE AND CLOSING

The obligations of Lender to consummate the transactions contemplated

herein and to make the initial Advance under the Revolving Facility (the

"INITIAL ADVANCE") are subject to the satisfaction, in the sole judgment of

Lender, of the following:

(a) (i) Borrower shall have delivered to Lender (A) the Loan Documents

to which it is a party, each duly executed by an authorized officer of Borrower

and the other parties thereto, (B) a Borrowing Certificate for the Initial

Advance a rider the R evolving Facility executed by an authorized officer of

Borrower, and (ii) each Guarantor shall have delivered to Lender the Loan

Documents to which such Guarantor is a party, each duly executed and delivered

by such Guarantor or an authorized officer of such Guarantor, as applicable, and

the other parties thereto;

(b) all in form and substance satisfactory to Lender in its sole

discretion, Lender shall have received (i) a report of Uniform Commercial Code

financing statement, tax and judgment lien searches performed with respect to

Borrower and Guarantor in each jurisdiction determined by Lender in its sole

discretion, and such report shall show no Liens on the Collateral (other than

Permitted Liens), (ii) each document (including, without limitation, any Uniform

Commercial Code financing statement) required by any Loan Document or under law

or requested by Lender to be filed, registered or recorded to create in favor of

Lender, a perfected first priority security interest upon the Collateral, and

(iii) evidence of each such filing, registration or recordation and of the

payment by Borrower of any necessary fee, tax or expense relating thereto;

Documents, all in form and substance acceptable to Lender, (ii) a certificate of

the corporate secretary or assistant secretary of Borrower and Guarantor dated

the Closing Date, as to the incumbency and signature of the Persons executing

the Loan Documents, in form and substance acceptable to Lender, and (iii) the

written legal opinion of counsel for Borrower and Guarantors, in form and

substance satisfactory to Lender and its counsel;

(d) Lender shall have received a certificate of the chief financial

officer (or, in the absence of a chief financial officer, the chief executive

officer) of Borrower and Guarantor, in form and substance satisfactory to Lender

(each, a "SOLVENCY CERTIFICATE"), certifying (i) the solvency of such Person

after giving effect to the transactions and the Indebtedness contemplated by the

Loan Documents, and (ii) as to such Person's financial resources and ability to

meet its obligations and liabilities as they become due, to the effect that as

of the Closing Date and the Borrowing Date for the Initial Advance and after

giving effect to such transactions and Indebtedness: (A) the assets of such

Person, at a Fair Valuation, exceed the total liabilities (including contingent,

subordinated, unmatured and unliquidated liabilities) of such Person, and (B) no

unreasonably small capital base with which to engage in its anticipated business

exists with respect to such Person;

(e) Lender shall have completed examinations, the results of which

shall be satisfactory in form and substance to Lender, of the Collateral, the

financial statements and the books, records, business, obligations, financial

condition and operational state of Borrower and Guarantor, and each such Person

shall have demonstrated to Lender's satisfaction that (i) its operations comply,

in all respects deemed material by Lender, in its sole judgment, with all

applicable federal, state, foreign and local laws, statutes and regulations,

(ii) its operations are not the subject of any governmental investigation,

evaluation or any remedial action which could result in any

<PAGE>

expenditure or liability deemed material by Lender, in its sole judgment, and

(iii) it has no liability (whether contingent or otherwise) that is deemed

material by Lender, in its sole judgment;

(f) Lender shall have received all fees, charges and expenses payable

to Lender on or prior to the Closing Date pursuant to the Loan Documents;

(g) all in form and substance satisfactory to Lender in its sole

discretion, Lender shall have received such consents, approvals and agreements,

including, without limitation, any applicable Landlord Waivers and Consents with

respect to any and all leases set forth on Schedule 5.4 (but only to the extent

any books and records relating to Collateral are stored at any such location),

from such third parties as Lender and its counsel shall determine are necessary

or desirable with respect to (i) the Loan Documents and/or the transactions

contemplated thereby, and/or (ii) claims against Borrower or Guarantor or the

Collateral;

(h) Borrower shall be in compliance with Section 6.5, and Lender shall

have received original certificates of all insurance policies of Borrower

confirming that they are in effect and that the premiums due and owing with

respect thereto have been paid in full and naming Lender as loss payee or

additional insured, as appropriate;

(i) all corporate and other proceedings, documents, instruments and

other legal matters in connection with the transactions contemplated by the Loan

Documents (including, but not limited to, those relating to corporate and

capital structures of Borrower) shall be satisfactory to Lender;

(j) Lender shall have received, in form and substance satisfactory to

Lender, (i) evidence of the repayment in full and termination of Citibank, N.A.

Indebtedness and all related documents, agreements and instruments and of all

Liens, security interests and Uniform Commercial Code financing statements

relating thereto, and (ii) release and termination of any and all Liens,

security interest and/or Uniform Commercial Code financing statements in, on,

against or with respect to any of the Collateral (other than Permitted Liens);

(k) Borrower shall have executed and filed IRS Form 8821 with the

appropriate office of the Internal Revenue Service;

(1) Lender shall have received such other documents, certificates,

information or legal opinions as Lender may reasonably request, all in form and

substance reasonably satisfactory to Lender.

4.2. CONDITIONS TO EACH ADVANCE

The obligations of Lender to make any Advance (including, without

limitation, the Initial Advance) are subject to the satisfaction, in the sole

judgment of Lender, of the following additional conditions precedent:

(a) Borrower shall have delivered to Lender a Borrowing Certificate

for the Advance executed by an authorized officer of Borrower, which shall

constitute a representation and warranty by Borrower as of the Borrowing Date of

such Advance that the conditions contained in this Section 4.2 have been

satisfied; provided, however, that any determination as to whether to fund

Advances or extensions of credit shall be made by Lender in its Permitted

Discretion;

(b) each of the representations and warranties made by Borrower in or

pursuant to this Agreement shall be accurate, before and after giving effect to

such Advance, and no Default or Event of Default shall have occurred or be

continuing or would exist after giving effect to the Advance under the Revolving

Facility on such date;

<PAGE>

aggregate outstanding principal amount of (i) Revolving A Advances under the

Revolving A Facility shall not exceed either the Revolving A Availability or the

Revolving A Facility Cap and (ii) Revolving B Advances under the Revolving B

Facility shall not exceed either the Revolving B Availability or the Revolving B

Facility Cap;

(d) except as disclosed in the historical financial statements, there

shall be no liabilities or obligations with respect to Borrower of any nature

whatsoever which, either individually or in the aggregate, would reasonably be

likely to have a Material Adverse Effect; and

(e) Lender shall have received all fees, charges and expenses payable

to Lender on or prior to such date pursuant to the Loan Documents.

V. REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants as of the date hereof, the Closing Date,

and each Borrowing Date as follows:

5.1. ORGANIZATION AND AUTHORITY

Borrower is a corporation duly organized, validly existing and in good

standing under the laws of its state of formation. Borrower (i) has all

requisite corporate or entity power and authority to own its properties and

assets and to carry on its business as now being conducted and as contemplated

in the Loan Documents, (ii) is duly qualified to do business in every

jurisdiction in which failure so to qualify would reasonably be likely to have a

Material Adverse Effect, and (iii) has all requisite power and authority (A) to

execute, deliver and perform the Loan Documents to which it is a party, (B) to

borrow hereunder, (C) to consummate the transactions contemplated under the Loan

Documents, and (D) to grant the Liens with regard to the Collateral pursuant to

the Security Documents to which it is a party, No Borrower is an "investment

company" registered or required to be registered under the Investment Company

Act of 1940, as amended, or is controlled by such an "investment company."

5.2. LOAN DOCUMENTS

The execution, delivery and performance by Borrower of the Loan

Documents to which it is a party, and the consummation of the transactions

contemplated thereby, (i) have been duly authorized by all requisite action of

each such Person and have been duly executed and delivered by or on behalf of

each such Person; (ii) do not violate any provisions of (A) applicable law,

statute, rule, regulation, ordinance or tariff, (B) any order of any

Governmental Authority binding on any such Person or any of their respective

properties, or (C) the certificate of incorporation or bylaws (or any other

equivalent governing agreement or document) of any such Person, or any agreement

between any such Person and its respective stockholders, members, partners or

equity owners or among any such stockholders, members, partners or equity

owners; (iii) are not in conflict with, and do not result in a breach or default

of or constitute an event of default, or an event, fact, condition or

circumstance which, with notice or passage of time, or both, would constitute or

result in a conflict, breach, default or event of default under, any indenture,

agreement or other instrument to which any such Person is a party, or by which

the properties or assets of such Person are bound; (iv) except as set forth

therein, will not result in the creation or imposition of any Lien of any nature

upon any of the properties or assets of any such Person, and (v) except as set

forth on Schedule 5.2, do not require the consent, approval or authorization of,

or filing, registration or qualification with, any Governmental Authority or any

other Person. When executed and delivered, each of the Loan Documents to which

Borrower is a party will constitute the legal, valid and binding obligation of

Borrower, enforceable against Borrower in accordance with its terns, subject to

the effect of any applicable bankruptcy, moratorium, insolvency, reorganization

or other similar law affecting the enforceability of creditors' rights generally

and to the effect of general principles of equity which may limit the

availability of equitable remedies (whether in a proceeding at law or in

equity).

<PAGE>

5.3 SUBSIDIARIES, CAPITALIZATION AND OWNERSHIP INTERESTS

Except as listed on Schedule 5.3, Borrower has no Subsidiaries.

Schedule 5.3 states the authorized and issued capitalization of Borrower, the

number and class of equity securities and/or ownership, voting or partnership

interests issued and outstanding of Borrower and the record and beneficial

owners thereof (including options, warrants and other rights to acquire any of

the foregoing). The ownership or partnership interests of Borrower that is a

limited partnership or a limited liability company are not certificated, the

documents relating to such interests do not expressly state that the interests

are governed by Article 8 of the Uniform Commercial Code, and the interests are

not held in a securities account. The outstanding equity securities and/or

ownership, voting or partnership interests of Borrower have been duly authorized

and validly issued and are fully paid and nonassessable, and each Person listed

on Schedule 5.3 owns beneficially and of record all the equity securities and/or

ownership, voting or partnership interests it is listed as owning free and clear

of any Liens other than Liens created by the Security Documents. Schedule 5.3

also lists the directors, members, managers and/or partners of Borrower. Except

as listed on Schedule 5.3, Borrower does not own an interest in, participate in

or engage in any joint venture, partnership or similar arrangements with any

Person.

5.4. PROPERTIES

Borrower (i) is the sole owner and has good, valid and marketable

title to, or a valid leasehold interest in, all of its properties and assets,

including the Collateral, whether personal or real, subject to no transfer

restrictions or Liens of any kind except for Permitted Liens, and (ii) is in

compliance in all material respects with each lease to which it is a party or

otherwise bound. Schedule 5.4 lists all real properties (and their locations)

owned or leased by or to, and all other assets or property that are leased or

licensed by, Borrower and all leases (including leases of leased real property)

covering or with respect to such properties and assets. Borrower enjoys peaceful

and undisturbed possession under all such leases and such leases are all the

leases necessary for the operation of such properties and assets, are valid and

subsisting and arc in full force and effect.

5.5 OTHER AGREEMENTS

Except as otherwise set forth in Schedule 5.5, Borrower is not (i) a

party to any judgment, order or decree or any agreement, document or instrument,

or subject to any restriction, which would affect its ability to execute and

deliver, or perform under, any Loan Document or to pay the Obligations, (ii) in

default in the performance, observance or fulfillment of any obligation,

covenant or condition contained in any agreement, document or instrument to

which it is a party or to which any of its properties or assets are subject,

which default, if not remedied within any applicable grace or cure period would

reasonably be likely to have a Material Adverse Effect, nor is there any event,

fact, condition or circumstance which, with notice or passage of time or both,

would constitute or result in a conflict, breach, default or event of default

under, any of the foregoing which, if not remedied within any applicable grace

or cure period would reasonably be likely to have a Material Adverse Effect; or

(iii) a party or subject to any agreement, document or instrument with respect

to, or obligation to pay any, management or service fee with respect to, the

ownership, operation, leasing or performance of its business.

5.6. LITIGATION

Except as otherwise set forth on Schedule 5.6, there is no action,

suit, proceeding or investigation pending or, to their knowledge, threatened

against Borrower that (i) questions or could prevent the validity of any of the

Loan Documents or the right of Borrower to enter into any Loan Document or to

consummate the transactions contemplated thereby, (ii) would reasonably be

likely to be or have, either individually or in the aggregate, any Material

Adverse Change or Material Adverse Effect, or (iii) would reasonably be likely

to result in any Change of Control or other change in the current ownership,

control or management of Borrower. Borrower is not aware that there is any basis

for the foregoing. Borrower is not a party or subject to any order, writ,

injunction, judgment or decree of any Governmental Authority. There is no

action, suit, proceeding or investigation initiated by Borrower

<PAGE>

currently pending which when taken together with all such other pending actions,

suits, proceedings or investigations could reasonably be expected to have a

Material Adverse Effect, Borrower has no existing accrued and/or unpaid

Indebtedness to any Governmental Authority or any other governmental payor.

5.7. HAZARDOUS MATERIALS

Borrower is in compliance in all material respects with all applicable

Environmental Laws. Borrower has not been notified of any action, suit,

proceeding or investigation (i) relating in any way to compliance by or

liability of Borrower under any Environmental Laws, (ii) which otherwise deals

with any Hazardous Substance or any Environmental Law, or (iii) which seeks to

suspend, revoke or terminate any license, permit or approval necessary for the

generation, handling, storage, treatment or disposal of any Hazardous Substance.

5.8. POTENTIAL TAX LIABILITY; TAX RETURNS; GOVERNMENTAL REPORTS

(a) Except as disclosed in Schedule 5.8, Borrower (i) has not received

any oral or written communication from the Internal Revenue Service with respect

to any investigation or assessment relating to the Borrower directly, or

relating to any consolidated tax return which was filed on behalf of Borrower,

(ii) is not aware of any year which remains open pending tax examination or

audit by the IRS, and (iii) is not aware of any information that could give rise

to an IRS tax liability or assessment.

(b) Borrower (i) has filed all federal, state, foreign (if applicable)

and local tax returns and other reports which are required by law to be filed by

Borrower, and (ii) has paid all taxes, assessments, fees and other governmental

charges, including, without limitation, payroll and other employment related

taxes, in each case that are due and payable, except only for items that

Borrower is currently contesting in good faith with adequate reserves under

GAAP, which contested items are described on Schedule 5.8.

5.9 FINANCIAL STATEMENTS AND REPORTS

All financial statements and financial information relating to

Borrower that have been or may hereafter be delivered to Lender by Borrower are

accurate and complete and have been prepared in accordance with GAAP

consistently applied with prior periods. Borrower has no material obligations or

liabilities of any kind not disclosed in such financial information or

statements, and since the date of the most recent financial statements submitted

to Lender, there has not occurred any Material Adverse Change, Material Adverse

Effect to Borrower's knowledge, any other event or condition that would

reasonably be likely to have a Material Adverse Effect,

5.10. COMPLIANCE WITH LAW

Borrower (i) is in compliance with all laws, statutes, rules,

regulations, ordinances and tariffs of any Governmental Authority applicable to

Borrower and/or Borrower's business, assets or operations, including, without

limitation, ERISA, and (ii) is not in violation of any order of any Governmental

Authority or other board or tribunal, except where noncompliance or violation

could not reasonably be expected to have a Material Adverse Effect. There is no

event, fact, condition or circumstance which, with notice or passage of time, or

both, would constitute or result in any noncompliance with, or any violation of,

any of the foregoing, in each case except where noncompliance or violation could

not reasonably be expected to have a Material Adverse Effect. Borrower has not

received any notice that Borrower is not in compliance in any respect with any

of the requirements of any of the foregoing. Borrower has (a) not engaged in any

Prohibited Transactions as defined in Section 406 of ERISA and Section 4975 of

the Internal Revenue Code of 1986, as amended, and the rules and regulations

promulgated thereunder, (b) not failed to meet any applicable minimum funding

requirements under Section 302 of ERISA in respect of its plans and no funding

requirements have been postponed or delayed, (c) no knowledge of any amounts due

but unpaid to the Pension Benefit Guaranty Corporation, or of any event or

occurrence which would cause the Pension Benefit Guaranty Corporation to

institute proceedings under Title IV of ERISA to terminate any of the

<PAGE>

employee benefit plans, (d) no fiduciary responsibility under ERISA for

investments with respect to any plan existing for the benefit of Persons other

than its employees or former employees, or (e) not withdrawn, completely or

partially, from any multi-employer pension plans so as to incur liability under

the MultiEmployer Pension Plan Amendments of 1980. With respect to Borrower,

there exists no event described in Section 4043 of ERISA, excluding Subsections

4043(b)(2) and 4043(b)(3) thereof, for which the thirty (30) day notice period

contained in 12 C.F.R. Section 2615.3 has not been waived.

5.11. INTELLECTUAL PROPERTY

Except as set forth on Schedule 5.11, Borrower does not own, license

or utilize, and is not a party to, any patents, patent applications, trademarks,

trademark applications, service marks, registered copyrights, copyright

applications, copyrights, trade names, trade secrets, software or licenses

(collectively, the "INTELLECTUAL PROPERTY").

5.12. LICENSES AND PERMITS; LABOR

Borrower is in compliance with and has all Permits and Intellectual

Property necessary or required by applicable law or Governmental Authority for

the operation of its businesses. All of the foregoing are in full force and

effect and not in known conflict with the rights of others. Borrower is not (i)

in breach of or default under the provisions of any of the foregoing, nor is

there any event, fact, condition or circumstance which, with notice or passage

of time or both, would constitute or result in a conflict, breach, default or

event of default under, any of the foregoing which, if not remedied within any

applicable grace or cure period would reasonably be likely to have a Material

Adverse Effect, (ii) a party to or subject to any agreement, instrument or

restriction that is so unusual or burdensome that it might have a Material

Adverse Effect, and/or (iii) and has not been, involved in any labor dispute,

strike, walkout or union organization which would reasonably be likely to have a

Material Adverse Effect.

5.13. NO DEFAULT

There does not exist any Default or Event of Default or any event,

fact, condition or circumstance which, with the giving of notice or passage of

time or both, would constitute or result in a Default or Event of Default.

5.14. DISCLOSURE

No Loan Document nor any other agreement, document, certificate, or

statement furnished to Lender by or on behalf of Borrower in connection with the

transactions contemplated by the Loan Documents, nor any representation or

warranty made by Borrower in any Loan Document, contains any untrue statement of

material fact or omits to state any fact necessary to make the statements

therein not materially misleading. There is no fact known to Borrower which has

not been disclosed to Lender in writing which would reasonably be likely to have

a Material Adverse Effect.

5.15. EXISTING INDEBTEDNESS; INVESTMENTS, GUARANTEES AND CERTAIN CONTRACTS

Except as contemplated by the Loan Documents or as otherwise set forth

on Schedule 5.15A, Borrower (i) has no outstanding indebtedness, (ii) is not

subject or party to any mortgage, note, indenture, indemnity or guarantee of,

with respect to or evidencing any Indebtedness of any other Person, or (iii)

does not own or hold any equity or long-term debt investments in, and does not

have any outstanding advances to or any outstanding guarantees for the

obligations of, or any outstanding borrowings from, any Person. Borrower has

performed all material obligations required to be performed by Borrower pursuant

to or in connection with any items listed on Schedule 5.15A and there has

occurred no breach, default or event of default under any document

<PAGE>

evidencing any such items or any fact, circumstance, condition or event which,

with the giving of notice or passage of time or both, would constitute or result

in a breach, default or event of default thereunder. Schedule 5.15B sets forth

all Indebtedness with a maturity date during the Term of the Loan, and

identifies such maturity date.

5.16. OTHER AGREEMENTS

Except as set forth on Schedule 5.16, (i) there are no existing or

proposed agreements, arrangements, understandings or transactions between

Borrower and any of Borrower's officers, members, managers, directors,

stockholders, partners, other interest holders, employees or Affiliates or any

members of their respective immediate families, and (ii) none of the foregoing

Persons are directly or indirectly, indebted to or have any direct or indirect

ownership, partnership or voting interest in, to Borrower's knowledge, any

Affiliate of Borrower or any Person that competes with Borrower (except that any

such Persons may own stock in (but not exceeding two (2%) percent of the

outstanding capital stock of) any publicly traded company that may compete with

Borrower.

5.17. INSURANCE

Borrower has in full force and effect such insurance policies as are

customary in its industry and as may be required pursuant to Section 6.5 hereof.

All such insurance policies are listed and described on Schedule 5.17.

5.18. NAMES; LOCATION OF OFFICES, RECORDS AND COLLATERAL

During the preceding five years, Borrower has not conducted business

under or used any name (whether corporate, partnership or assumed) other than as

shown on Schedule 5.18A. Borrower is the sole owner of all of its names listed

on Schedule 5.18A, and any and all business done and invoices issued in such

names are Borrower's sales, business and invoices. Each trade name of Borrower

represents a division or trading style of Borrower. Borrower maintains its

places of business and chief executive offices only at the locations set forth

on Schedule 5.18B, and all Accounts of Borrower arise, originate and are

located, and all of the Collateral and all books and records in connection

therewith or in any way relating thereto or evidencing the Collateral are

located and shall only be located, in and at such locations. All of the

Collateral is located only in the continental United States.

5.19. NON-SUBORDINATION

The Obligations are not subordinated in any way to any other

obligations of Borrower or to the rights of any other Person.

5.20. ACCOUNTS

In determining which Accounts are Eligible Receivables, Lender may

rely on all statements and representations made by Borrower with respect to any

Account. Unless otherwise indicated in writing to Lender, (i) each Account of

Borrower is genuine and in all respects what it purports to be and is not

evidenced by a judgment, (ii) each Account of Borrower arises out of a

completed, bona fide sale and delivery of goods or rendering of services by

Borrower in the ordinary course of business and in accordance with the terms and

conditions of all purchase orders, contracts, certifications, participations and

other documents relating thereto or forming a part of the contract between

Borrower and the Account Debtor, (iii) each Account of Borrower is for a

liquidated amount maturing as stated in a claim or invoice covering such sale of

goods or rendering of services, a copy of which has been furnished or is

available to Lender, (iv) each Account of Borrower together with Lender's

security interest therein, is not and will not be in the future (by voluntary

act or omission by Borrower), subject to any offset, lien, deduction, defense,

dispute, counterclaim or other adverse condition, is absolutely owing to

Borrower and is not

<PAGE>

contingent in any respect or for any reason (other than offsets, deductions,

defenses, disputes or counterclaims arising in the ordinary course of business),

(v) there are no facts, events or occurrences which in any way impair the

validity or enforceability of any Account of Borrower or tend to reduce the

amount payable thereunder from the face amount of the claim or invoice and

statements delivered to Lender with respect thereto, (vi) (A) the Account Debtor

under each Account of Borrower had the capacity to contract at the time any

contract or other document giving rise thereto was executed and (B) each such

Account Debtor is solvent, (vii) there are no proceedings or actions which are

threatened or pending against any Account Debtor under any Account of Borrower

which might result in any Material Adverse Change in such Account Debtor's

financial condition or the collectability thereof, (viii) each Account of

Borrower has been billed and forwarded to the Account Debtor for payment in

accordance with applicable laws and is in compliance and conformance with any

requisite procedures, requirements and regulations governing payment by such

Account Debtor with respect to such Account, and, (ix) Borrower has obtained and

currently has all Permits necessary in the generation of each Account of

Borrower.

5.21. SURVIVAL

Borrower makes the representations and warranties contained herein

with the knowledge and intention that Lender is relying and will rely thereon.

All such representations and warranties will survive the execution and delivery

of this Agre

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