0001169232-09-001665.txt : 20090323 0001169232-09-001665.hdr.sgml : 20090323 20090323160610 ACCESSION NUMBER: 0001169232-09-001665 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20081231 FILED AS OF DATE: 20090323 DATE AS OF CHANGE: 20090323 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AUTOINFO INC CENTRAL INDEX KEY: 0000351017 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING & COURIER SERVICES (NO AIR) [4210] IRS NUMBER: 132867481 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11497 FILM NUMBER: 09698893 BUSINESS ADDRESS: STREET 1: PO BOX 4383 CITY: STAMFORD STATE: CT ZIP: 06907-0383 BUSINESS PHONE: 2019301800 MAIL ADDRESS: STREET 1: PO BOX 4383 CITY: STAMFORD STATE: CT ZIP: 06907-0383 10-K 1 d76521_10-k.htm ANNUAL REPORT

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15 (d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008

Commission file number: 001-11497


AUTOINFO, INC.

(Exact Name of Registrant as Specified in Its Charter)


	Delaware		13-2867481

	(State or Other Jurisdiction of		(I.R.S. Employer
	Incorporation or Organization)		Identification No.)

6413 Congress Ave – Suite 260
Boca Raton, Florida 33487
(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: 561 - 988 - 9456

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to section 12(g) of the Act:

Common Stock, $.001 par value
(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x Noo

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


	Large Accelerated filer o	Accelerated filer o
	Non-accelerated filer o	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The aggregate market value of the voting common stock held by non-affiliates of the registrant as June 30, 2008 was (based upon the closing price on the Nasdaq Over-the-Counter Bulletin Board of $0.62 per share) approximately $5,507,000.

The number of shares outstanding of the registrant’s common stock, $.001 par value, as of March 16, 2009 was 32,946,060 shares.

DOCUMENTS INCORPORATED BY REFERENCE

None.

AUTOINFO, INC.

Annual Report on Form 10-K

TABLE OF CONTENTS


		Page

PART I		2
Item 1.	Business	2
Item 1A.	Risk Factors	6
Item 1B.	Unresolved Staff Comments	10
Item 2.	Properties	10
Item 3.	Legal Proceedings	10
Item 4.	Submission of Matters to a Vote of Security Holders	10
PART II		10
Item 5.	Market for our Common Equity, Related Stockholder Matters and Purchases of Equity Securities	10
Item 6.	Selected Consolidated Financial Data	12
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 7A.	Quantitive and Qualitative Disclosures About market Risk	20
Item 8.	Financial Statements and Supplementary Data	20
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	20
Item 9A(T)Controls and Procedures		20
Item 9B.	Other Information	21
PART III		22
Item 10.	Directors, Executive Officers and Corporate Governance	22
Item 11.	Executive Compensation	24
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	30
Item 13.	Certain Relationships and Related Transactions, and Director Independence	31
Item 14.	Principal Accounting Fees and Services	32
PART IV		32
Item 15.	Exhibits and Financial Statement Schedules	32

FORWARD LOOKING STATEMENT INFORMATION

Certain statements made in this Annual Report on Form 10-K are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Our plans and objectives are based, in part, on assumptions involving judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that our assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein particularly in view of the current state of our operations, the inclusion of such information should not be regarded as a statement by us or any other person that our objectives and plans will be achieved. Factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, the factors set forth herein under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

PART I


Item 1.	BUSINESS

Overview

Through our wholly-owned subsidiaries, Sunteck Transport Co., Inc. (Sunteck) and Eleets Logistics, Inc., we are a non-asset based transportation services company, providing transportation capacity and related transportation services to shippers throughout the United States, and to a lesser extent, Canada. As a non-asset based provider of brokerage and contract carrier transportation services, we do not own any equipment and our services are provided through our strategic alliances with less than truckload, truckload, air, rail, ocean common carriers and independent owner-operators to service our customers’ needs. Our services include ground transportation coast to coast, local pick up and delivery, air freight and ocean freight. Our business services emphasize safety, information coordination and customer service and are delivered through a network of independent commissioned sales agents and third party capacity providers coordinated by us. The independent commissioned sales agents typically enter into exclusive contractual arrangements with us and are responsible for locating freight and coordinating the transportation of the freight with customers and capacity providers. The third party capacity providers consist of independent contractors who provide truck capacity to us, including owner-operators who operate under our contract carrier license, air cargo carriers and railroads. Through this network of agents and capacity providers, we operate a transportation services business with revenue, net revenue and net income of approximately $180.2 million, $31.7 million and $2.2 million, respectively, during our most recently completed fiscal year.

Our brokerage services are provided though a network of independent sales agents throughout the United States and Canada. Our services include arranging for the transport of customers’ freight from the shippers location to the designated destination. We do not own any trucking equipment and rely on independent carriers for the movement of customers’ freight. We seek to establish long-term relationships with our customers and provide a variety of logistics services and solutions to eliminate inefficiencies in our customers’ supply chain management.

Our contract carrier services are also provided through a network of independent sales agents and independent owner-operators throughout the United States. We do not own any trucking equipment; our independent owner-operators lease onto our operating authority and transport freight under the Sunteck name.

Strategy

Our strategy is to continue to expand through affiliations with independent sales agents and through internal expansion. We have been successful at expanding our brokerage sales agent network and now have representatives throughout the United States and Canada. We have also been successful in expanding our contract carrier services. In addition, we have experienced internal expansion as many of our existing agents have expanded their customer base and increased the number of transactions generated. We intend to seek, on a selective basis, acquisition of businesses that have services which complement and expand our existing services, and provide us with strategic distribution locations or attractive customer bases. Our ability to implement our growth strategy will be dependent on our ability to identify and affiliate with these agents on desirable economic terms.

Company background

AutoInfo, Inc. was organized under the laws of the State of New York in 1976 and reincorporated under the laws of Delaware in 1987. In December 2000, we acquired Sunteck in a merger transaction.

The industry

Prior to the mid 1980’s, the trucking industry was regulated by the Interstate Commerce Commission. Deregulation brought new breath and life to the industry. This also brought with it the problem of how to navigate the transportation highway. Shippers found it difficult to locate carriers and carriers found that it was expensive to find freight. Enter the third party transportation providers-intermediaries (freight brokers, freight forwarders and logistics providers). The third party intermediary connects the shipper and the carrier and helps manage the flow of goods.

The present market for freight moved by truck is in excess of $200 billion per year. This is a highly fragmented industry comprised of common carriers, contract carriers, freight forwarders and freight brokers.

The actual movement of goods is accomplished by trucking (consisting of local, over the road, truckload, and less than truckload shipments), air freight (time sensitive in nature), rail freight (non time sensitive in nature and usually less expensive than truck) and ocean freight (generally in containerized ships). Other services provided include warehousing and distribution.

There are several trends which are relevant to the continued dependency upon and growth of the trucking industry:


•	Just in time service	With new technology and a premium on cost savings, businesses are able to maintain smaller inventories, thereby reducing carrying costs and warehouse space requirements. The impact on the freight industry is more shipments of smaller quantities that are more time sensitive and, therefore, more costly.

•	Outsourcing	Companies have found it to be more cost effective and efficient to eliminate company owned truck fleets and rely upon others to handle their trucking and shipping needs.

•	Logistics	Small to medium size businesses, with less frequent shipping requirements, utilize logistics providers (freight brokers, etc.) to manage all aspects of the transportation, warehousing and delivery needs.

The market for third party logistics providers is highly fragmented. It is comprised primarily of full service logistics providers, freight brokers, independent sales agents and sales representatives. Sales agents often work out of home-based offices or small regional sales offices and affiliate themselves with full service brokers to provide back-office services including load dispatching, bonding and licensing, billing, collection and other administrative services. Sales representatives vary from experienced people with years of freight industry experience and established client relationships to telemarketing personnel cold calling shippers and dispatchers.

Third party logistics companies provide numerous services to clients on an outsourced basis, by contract and on demand. The continued growth of this industry has created secondary market opportunities to provide low-cost delivery to the endpoint, in addition to supply chain services of warehousing, inventory management and electronic interface with customers and suppliers. Third party logistics companies provide customized domestic and international freight transportation of customers’ goods and packages via truck, rail, airplane and ship, and provide warehousing and storage of those goods. Many companies utilize information

systems and expertise to reduce inventories, cut transportation costs, speed delivery and improve customer service. The third-party logistics services business has been bolstered in recent years by the competitiveness of the global economy, which causes shippers to focus on reducing handling costs, operating with lower inventories and shortening inventory transit times. Using a network of transportation, handling and storage providers in multiple transportation modes, third-party logistics services companies seek to improve their customers’ operating efficiency by reducing their inventory levels and related handling costs. Many third-party logistics service providers are non-asset-based, primarily utilizing physical assets owned by others in multiple transport modes.

The third-party logistics services business increasingly relies upon advanced information technology to link the shipper with its inventory and as an analytical tool to optimize transportation solutions. This trend favors the larger, more professionally managed companies that have the resources to support a sophisticated information technology infrastructure. By outsourcing all non-core business services to third party providers, companies can help to control costs, eliminate staff and focus on internal business.

Operations and systems

We processed approximately 130,000 freight orders in 2008, as compared with 85,000 in 2007.

In our brokerage services, our sales agents throughout the United States and Canada receive customers’ freight requirements daily. All agents make appropriate carrier arrangements for the pick-up and timely delivery of customers’ freight.

In our contract carrier services, our sales agents receive customers’ freight requirements daily and, utilizing their respective owner-operators, make appropriate carrier arrangements for the pick-up and timely delivery of customers’ freight. In addition, utilizing various sources, including numerous internet based freight posting boards, our agents locate additional freight to maximize utilization of available capacity and minimize deadhead miles, or miles driven generating little or no revenue. A typical owner-operator will generate $2,500 per week in revenues.

Our sales agents vary in level of experience from agents with years of freight industry experience and established client relationships to a more limited number of inexperienced telemarketing and operations personnel working under the direct supervision and training of experienced sales agents and dispatchers.

We rely exclusively on independent third parties for our hauling capacity. These third party capacity providers consist of our independent owner-operators, unrelated trucking companies, air cargo carriers and railroads. Our use of capacity provided by our independent owner-operators, and other third party capacity providers, allows us to maintain a lower level of capital investment, resulting in lower fixed costs.

We utilize a state-of-the-art proprietary internet based order entry system. All agents access our web-based platform and orders are entered into a customized traffic management system which enables us to monitor the status of all orders, generate customer billing and provide detailed transactional reports from our Florida corporate headquarters. We use these reports to monitor customer logistics and transportation usage, track customer and carrier historical data, generate detailed financial and accounting data and provide our customers with details of their supply chain activity. We maintain dual off-site storage and back-up facilities to insure data integrity and safety.

Suppliers

We use the services of various third party transportation companies. During 2008, no third party provider handled more than 10% of our shipping volume (measured by revenue).

Customers

We strive to establish long-term customer relationships and, by providing a full range of logistics and supply chain services, we seek to increase our level of business with each customer. We service customers ranging from Fortune 100 companies to small businesses in a variety of industries. During 2008, no customer accounted for more than 10% of our revenues. We typically receive credit applications from all customers, review credit references and perform credit checks to ensure credit worthiness.

Sunteck has achieved revenue growth through the addition of independent sales agents, the opening of new operations offices, an increase in the number of customers serviced, and the expansion of the logistics and supply chain services we provide.

Each operations office markets our full range of supply chain services to existing customers and pursues new customers within its local markets. We build new customer relationships by exploiting our range of logistics and supply chain services, the traffic lanes we commonly service, carrier relationships and capabilities, our industry specific expertise and our sales agents’ individual knowledge and experience.

Our growth model is focused on adding sales agents in strategic markets. As this agent network is further established and expanded, we believe that significant other opportunities will emerge. Larger sales agents offices often have their own equipment (truck space), which presents the opportunity to maximize available freight and load capacity thereby increasing gross margins above historical levels. In addition, sales representatives will be added to regional operating office sales agent locations to increase market penetration. Since representatives work on a commission basis, this expansion essentially comes with no additional overhead outlay.

Significant opportunities for expansion and growth also include strategic alliances with other service freight broker groups. This strategy will enable us to achieve strong regional penetration into new geographical markets and increase back office capabilities to service the agent network.

Competition

Government regulation

Our industry has long been subject to government legislation and regulation. Over the years, many changes in these laws and regulations have affected the industry and caused changes in the operating practices and the cost of providing transportation services. We cannot predict what effect, if any, legislative and regulatory changes may have on the industry in the future.

We are licensed by the United States Department of Transportation (DOT) as a broker arranging the movement of materials by motor carrier. In this capacity, we are required to meet certain qualifications to enable us to conduct business, which includes the compliance with certain surety bond requirements. We are also licensed by the DOT as a contract carrier arranging the movement of materials by motor carrier. In this capacity, we are required to meet certain qualifications to enable us to conduct business, which includes the maintenance of $1,000,000 of general liability insurance and $100,000 of cargo insurance.

If we fail to comply with, or lose, any required licenses, governmental regulators could assess penalties or issue a cease and desist order against our operations that are not in compliance.

Risk and liability

In our brokerage services, we do not assume liability for loss or damage to freight; we act as the shipper’s agent and arrange for a carrier to handle the freight. Therefore, we do not take possession of the shipper’s freight and, accordingly, we are not liable for the carrier’s negligence or failure to perform. We do assist our customers in the processing and collection of any claim. The Federal Highway Administration requires us to maintain a surety bond of $10,000, which is intended to show our financial responsibility and provide surety for the arrangements with shippers and carriers. In addition, we maintain $100,000 of contingent cargo liability insurance.

In our contract carrier services business, we are liable for loss or damage to our customers’ freight. We maintain cargo liability insurance coverage with a policy limit of $100,000 per occurrence. We have not incurred any material losses to date. Any such losses in excess of insurance limits would be accounted for as incurred for financial reporting purposes.

Employees

As of February 27, 2009 we had 52 full-time employees. None of our employees are represented by a labor union and we believe that our relationship with our employees is good.

Available Information

Our website address is www.suntecktransport.com. We are not including the information contained on our website as part of, or incorporating it by reference into, this annual report on Form 10-K. We make available free of charge through our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, Forms 3, 4 and 5, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (SEC).

The public may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers such as us that file electronically with the SEC. The website address is www.sec.gov.


Item 1A.	RISK FACTORS

In addition to the other information provided in this report, you should carefully consider the following factors in evaluating our business, operations and financial condition. Additional risks and uncertainties not presently known to us, that we currently deem immaterial or that are similar to those faced by other companies in our industry or business in general, such as competitive conditions, may also impair our business operations.

The occurrence of any of the following risks could have a material adverse effect on our business, financial condition and results of operations.

We are dependent upon independent commissioned sales agents who have direct relationships with our customers.

A substantial portion of our business is originated by our network of independent sales agents. Most of these sales agents work with us on an exclusive basis pursuant to contracts with terms ranging from one to five years. However, certain agent contracts are terminable upon thirty day notice by either party. These contracts typically contain non-compete and non-solicitation provisions. Notwithstanding these provisions, we may not be able to restrict the ability of a former agent from competing with Sunteck following termination. As a result, if sales representatives terminate their affiliation with us, our revenue and results of operations could be adversely affected.

We are dependent on third party capacity providers.

We do not own trucks or other transportation equipment and rely on third party capacity providers, including independent owner operators, unrelated trucking companies, railroads and air cargo carriers to transport freight for our customers. We compete with motor carriers and other third parties for the services of independent owner operators and other third party capacity providers. A significant decrease in available capacity provided by either our independent owner operators or other third party capacity providers could have a material adverse effect on our results of operations and revenue.

Decreased demand for transportation services could adversely affect our operating results.

The transportation industry historically has experienced cyclical financial results as a result of slowdowns in economic activity, the business cycles of customers, price increases by capacity providers, interest rate fluctuations, and other economic factors beyond our control. Certain of our third party capacity providers can be expected to charge higher prices to cover increased operating expenses, and our operating income may decline if we are unable to pass through to our customers the full amount of these higher transportation costs. If a slowdown in economic activity or a downturn in our customers’ business cycles causes a reduction in the volume of freight shipped by those customers, our operating results could be materially adversely affected.

We have limited marketing and sales capabilities and must make sales in fragmented markets.

Our future success depends, to a great extent, on our ability to successfully market our services through our network of independent agents. Our sales and marketing capabilities are more limited than many of our competitors who have captive internal sales forces and greater financial resources than us. We cannot assure you that any marketing and sales efforts undertaken on our behalf will be successful or will result in any significant sales.

Our industry is intensely competitive, which may adversely affect our operations and financial results.

All our markets are intensely competitive and numerous companies offer services that compete with our services. We anticipate that competition for our services will continue to increase. Many of our competitors have substantially greater capital resources, sales and marketing resources and experience. We cannot assure you that we will be able to effectively compete with our competitors in effecting our business expansion plans.

We depend on the continued services of our president, chief financial officer and chief operating officer.

Our future success depends, in part, on the continuing efforts of our president, Harry Wachtel, who conceived our strategic plan and is responsible for executing that plan, our chief financial officer, William Wunderlich, and our chief operating officer, Michael Williams. The loss of any of Messrs. Wachtel, Wunderlich or Williams would adversely affect our business. We do not have any term “key man” insurance

on any of them. If we lose any of their services, our business, operations, and financial condition would be materially adversely affected.

We must attract and retain qualified personnel.

As we implement our business growth strategy, significant demands will be placed on our managerial, financial and other resources. One of the keys to our future success will be our ability to attract and retain highly qualified marketing, sales and administrative personnel. Competition for qualified personnel in these areas is intense and we will be competing for their services with companies that have substantially greater resources than we do. We cannot assure you that we will be able to identify, attract and retain personnel with skills and experience necessary and relevant to the future operations of our business. Our inability to retain or attract qualified personnel in these areas could have a material adverse effect on our business and results of operations.

We may require additional financing in the future, which may not be available on acceptable terms.

Depending on our ability to generate revenues, we may require additional funds to expand our business operations and for working capital and general corporate purposes. Any additional equity financing may be dilutive to stockholders, and debt financings may involve restrictive covenants that limit our ability to make decisions that we believe will be in our best interests. In the event we cannot obtain additional financing on terms acceptable to us when required, our ability to expand operations may be materially adversely affected.

Our principal stockholders have substantial control over our affairs.

As of March 17, 2009, our president, Harry Wachtel, owned approximately 15.2% of the issued and outstanding shares of our common stock. Further, James T. Martin, Kinderhook Partners, LP and Morehead Opportunity Fund, LP, three significant stockholders, owned approximately 19.0%, 18.3% and 13.8%, respectively, of the issued and outstanding shares of our common stock. As a result, any one of Mr. Wachtel, Mr. Martin, Kinderhook Partners, LP or Morehead Opportunity Fund, LP could assert control over our affairs, including the election of directors and any proposals regarding a sale of the company or its assets or a merger. In addition, this concentration of ownership could have the effect of delaying, deferring or preventing a change in control or impeding a merger or consolidation, takeover or other business combination which you, as a stockholder, may otherwise view favorably.

Our stock price is volatile and could be further affected by events not within our control.

The market price of our common stock has historically experienced and may continue to experience significant volatility. For the 52-week period ended March 16, 2009, our closing stock price has ranged from $0.80 to $0.21. On March 16, 2009, our closing stock price was $0.25.

The trading price of our common stock has been volatile and will continue to be subject to:


	•	volatility in the trading markets generally;

	•	fluctuations in our quarterly operating results; and

	•	announcements regarding our business or the business of our competitors.

Statements or changes in opinions, ratings or earnings estimates made by brokerage firms or industry analysts relating to the markets in which we operate or expect to operate could also have an adverse effect on the market price of our common stock. In addition, the stock market as a whole is currently experiencing

extreme price and volume fluctuations which have particularly affected the market price for the securities of many small-cap companies and which often have been unrelated to the operating performance of these companies.

The price of our common stock may be adversely affected by the possible issuance of shares of our common stock as a result of the exercise of outstanding options.

We have granted options covering approximately 11.6 million shares of our common stock. As a result of the actual or potential sale of these shares into the market, our common stock price may decrease.

Future sales of our common stock may adversely affect our common stock price.

If our stockholders sell a large number of shares of common stock or if we issue a large number of shares in connection with future acquisitions or financings, the market price of our common stock could decline significantly. In addition, the perception in the public market that our stockholders might sell a large number of shares of common stock could cause a decline in the market price of our common stock.

Some provisions in our charter documents and bylaws may have anti-takeover effects.

Our certificate of incorporation and bylaws contain provisions that may make it more difficult for a third party to acquire us, with the result that it may deter potential suitors. For example, our board of directors is authorized, without action of the stockholders, to issue authorized but unissued common and preferred stock. The existence of authorized but unissued common and preferred stock enables us to discourage or to make it more difficult to obtain control of us by means of a merger, tender offer, proxy contest or otherwise.

We have agreed to limitations on the potential liability of our directors.

Our certificate of incorporation provides that, in general, directors will not be personally liable for monetary damages to the company or our stockholders for a breach of fiduciary duty. Although this limitation of liability does not affect the availability of equitable remedies such as injunctive relief or rescission, the presence of these provisions in the certificate of incorporation could prevent us from recovering monetary damages.

Liquidity on the Nasdaq OTC Bulletin Board is limited, and we may be unable to obtain listing of our common stock on a more liquid market.

Our common stock is quoted on the Nasdaq OTC Bulletin Board, which provides significantly less liquidity than a national securities exchange such as the New York Stock Exchange and the Nasdaq World or Capital Markets. We do not currently meet the minimum trading price requirement for listing on any of these exchanges and there is uncertainty that we will ever be accepted for a listing on any of these exchanges.

Our common stock has been thinly traded, and the public market may provide little or no liquidity for holders of our common stock.

Purchasers of shares of our common stock may find it difficult to resell their shares at prices quoted in the market or at all. There is currently a limited volume of trading in our common stock, and on many days there has been no trading activity at all. Due to the historically low trading price of our common stock, many brokerage firms may be unwilling to effect transactions in our common stock, particularly because low-priced securities are subject to an SEC rule that imposes additional sales practice requirements on broker-dealers who sell low-priced securities (generally those below $5.00 per share). We cannot predict when or whether investor

interest in our common stock might lead to an increase in its market price or the development of a more active trading market or how liquid that market might become.


Item 1B.	UNRESOLVED STAFF COMMENTS

None.


Item 2.	PROPERTIES

We lease approximately 5,300 square feet of space for our executive offices and the headquarters of Sunteck at 6413 Congress Avenue, Boca Raton, Florida. This lease runs through April 2010 and provides for aggregate rent payments of $68,000 for the twelve months ending April 2009 and $71,000 for the twelve months ending April 2010. We lease approximately 1,433 square feet of space for our sales and dispatch group at 6401 Congress Avenue, Boca Raton, Florida. This lease runs through November, 2011 and provides for annual aggregate rent payments of $18,000. We lease approximately 3,000 square feet of space for our legal and compliance group at 11437 Central Parkway, Jacksonville, Florida. This lease runs through November 2010 and provides for aggregate annual rent payments of $36,000.


Item 3.	LEGAL PROCEEDINGS

We are not a party to any material legal proceedings.


Item 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

PART II


Item 5.	MARKET FOR OUR COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND PURCHASES OF EQUITY SECURITIES

Our common stock is not listed on any stock exchange. Our common stock is traded on the Nasdaq Over-the-Counter Bulletin Board (“OTCBB”) under the symbol “Auto.” The following table sets forth the high and low bid information for our common stock for each quarter within the last two fiscal years, as reported by the OTCBB. The bid information reflects inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.


	Bid Prices

Year Ended December 31, 2008	High			Low


First quarter		$	0.80		$	0.70
Second quarter			0.80			0.60
Third quarter			0.70			0.40
Fourth quarter			0.50			0.21


Year Ended December 31, 2007	High			Low


First quarter		$	1.06		$	0.98
Second quarter			0.97			0.74
Third quarter			0.80			0.62
Fourth quarter			0.87			0.63

As of March 16, 2009, the closing bid price per share for our common stock, as reported on the OTCBB was $0.25. As of March 16, 2009 we had approximately 1,000 beneficial stockholders.

Dividend policy

We have never declared or paid a cash dividend on our common stock. It has been the policy of our board of directors to retain all available funds to finance the development and growth of our business. The payment of cash dividends in the future will be dependent upon our earnings and financial requirements and other factors deemed relevant by our board of directors.


Item 6.	SELECTED CONSOLIDATED FINANCIAL DATA

The following is a summary of our selected consolidated financial data for the years ended December 31, 2008, 2007, 2006, 2005 and 2004. The financial data has been derived from our audited consolidated financial statements and accompanying notes.

The selected financial data set forth below should be read together with, and are qualified by reference to, the “Management’s Discussion and Analysis of Financial condition and Results of Operations” section of this report and our audited consolidated financial statements and accompanying notes included elsewhere in this report.


000’s omitted, except for per share data	Year ended December 31,

	2008		2007		2006		2005		2004

Statement of Operations Data:


Gross revenues	$	180,211	$	110,332	$	84,111	$	68,040	$	46,492

Net revenues (1)		31,698		21,309		17,743		13,554		8,734

Net income	$	2,224	$	1,604	$	3,628	$	3,608	$	1,466

Net income per share (2)
Basic	$	.07	$	.05	$	.11	$	.11	$	.05
Diluted	$	.07	$	.05	$	.10	$	.11	$	.04



(1)	Net revenues are determined by deducting cost of transportation from gross revenues. See Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(2)	The common stock equivalents for the year ended December 31, 2008, 2007, 2006, 2005 and 2004 were 1,727,000, 3,113,000, 4,090,000, 2,400,000, and 2,523,000, respectively.


000’s omitted	As at December 31,

	2008			2007			2006			2005			2004

Balance Sheet Data:


Cash and cash equivalents	$	390		$	270		$	146		$	419		$	38
Accounts receivable, net		29,863			24,224			16,967			12,735			9,658
Total assets		42,776			33,190			23,822			16,646			11,795
Total liabilities		26,467			19,374			11,826			8,515			7,383
Deficit		(3,628	)		(5,852	)		(7,456	)		(11,084	)		(14,692	)
Stockholders’ equity		16,309			13,816			11,996			8,131			4,412


Item 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary statement identifying important factors that could cause our actual results to differ from those projected in forward looking statements.

Readers of this report are advised that this document contains both statements of historical facts and forward looking statements. Forward looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those indicated by the forward looking statements. Examples of forward looking statements include, but are not limited to (i) projections of revenues, income or loss, earnings per share, capital expenditures, dividends, capital structure and other financial items, (ii) statements of our plans and objectives with respect to business transactions and enhancement of stockholder value, (iii) statements of future economic performance, and (iv) statements of assumptions underlying other statements and statements about our business prospects.

This report also identifies important factors, which could cause actual results to differ materially from those indicated by the forward looking statements. These risks and uncertainties include the factors discussed under the heading “Risk Factors” beginning at page 6 of this report.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our financial statements and the notes thereto appearing elsewhere in this report.

Overview

Our contract carrier services are also provided through a network of independent sales agents and independent owner-operators throughout the United States. We do no own any trucking equipment; our independent owner-operators lease onto our operating authority and transport freight under the Sunteck name.

The most significant factors in our growth during the past two years have been internal growth experienced by our existing agents and the expansion of our brokerage services agent, contract carrier services agent and owner-operator networks. This growth is readily measured by the number of transactions we have processed, which increased from 85,000 in 2007 to130,000 in 2008, an increase of 53%. The average gross revenue dollar per load increased by 7% in 2008 as compared to 2007. This increase is the result of higher fuel prices passed through to customers as fuel service charges and revenue mix during the period.

During the next twelve months, we plan to continue to offer our brokerage and contract carrier transportation services and expand our agent network. We are presently profitable and have adequate available lines of credit to satisfy our working capital requirements during the next twelve months.

Results of operations

Comparison of 2008 vs 2007

During the year ended December 31, 2008, we continued to implement our strategic growth business plan consisting primarily of the expansion of client services and the addition of independent sales agents providing brokerage and contract carrier services. Our net revenues (gross revenues less cost of transportation) are the primary indicator of our ability to source, add value and resell services that are provided by third parties and are considered to be the primary measurement of growth. Therefore, the discussion of the results of operations below focuses on the changes in our net revenues. The increases in net revenues and all related cost and expense categories are the direct result of our business expansion.

The following table represents certain statement of operation data as a percentage of net revenues:


	Year Ended December 31,

	2008			2007


Net revenues		100.0	%		100.0	%


Commissions		64.3	%		63.3	%
Operating expenses		22.5	%		22.9	%
Interest expense		1.6	%		1.3	%
Income taxes		4.6	%		5.0	%


Net income		7.0	%		7.5	%

Revenues

Gross revenues, consisting of freight fees and other related services revenue, totaled $180,211,000 for the year ended December 31, 2008, as compared with $110,332,000 in the prior year, an increase of 63%. Net revenues were $31,698,000 for the year ended December 31, 2008, as compared with $21,309,000 in the prior year, an increase of 49%. This increase is the direct result of the continued expansion of our agent network and customer base which resulted in a 53% increase in the number of transactions processed. As a percentage of gross revenue, net revenue decreased from 19.3% to 17.6%, year over year. This decrease is primarily the result of revenue mix and increased direct freight costs relating to competition, fuel prices and the availability of equipment.

Costs and expenses

Commissions totaled $20,373,000 for the year ended December 31, 2008, as compared with $13,492,000 in the prior year, an increase of 51%. This increase is the direct result of the increase in revenues resulting from the continued expansion of our agent network and customer base. As a percentage of net revenues, commissions were 64.3% for the year ended December 31, 2008 as compared with 63.3% in the prior year. This increase is the direct result of the expansion of our agent network at higher commission rates, additional bonuses earned based upon the achievement of certain monthly benchmarks, stock based compensation expense, and cost associated with the addition of new agents.

Operating expenses totaled $7,129,000 for the year ended December 31, 2008, as compared with $4,870,000 in the prior year. This increase is the direct result of the increase in selling, general and administrative expenses in connection with our business expansion. As a percentage of net revenues, operating expenses were 22.5% for the year ended December 31, 2008 as compared with 22.9% in the prior year. We presently have adequate facilities and management to handle our present and anticipated transaction volume in 2009 without a significant increase in overhead.

Interest expense was $500,000 for the year ended December 31, 2008 as compared with $277,000 in the prior year. This increase is primarily the result of increased average borrowings to support increased expenses related to our business expansion.

Income tax

Income tax expense was $1,471,000 for the year ended December 31, 2008 as compared with $1,066,000 in the prior year. The 2008 income tax expense reflects an effective federal and state tax rate of 39.8% and is comprised of a deferred tax expense of $1,256,000 related to the utilization of our federal tax loss carryforward and a current state tax expense of $215,000. The 2007 income tax expense reflects an effective federal and state tax rate of 39.9% and is comprised of a deferred tax expense of $910,000 related to the utilization of our federal tax loss carryforward and a current state tax expense of $156,000.

Comparison of 2007 vs 2006

During the year ended December 31, 2007, we continued to implement our strategic growth business plan consisting primarily of the expansion of client services, the opening of regional operations centers in key geographical markets and the addition of independent sales agents providing brokerage and contract carrier services. Our net revenues (gross revenues less cost of transportation) are the primary indicator of our ability to source, add value and resell services that are provided by third parties and are considered to be the primary measurement of growth. Therefore, the discussion of the results of operations below focuses on the changes in our net revenues. The increases in net revenues and all related cost and expense categories are the direct result of our business expansion.

The following table represents certain statement of operation data as a percentage of net revenues:


	Year Ended December 31,
	2007			2006


Net revenues		100.0	%		100.0	%


Commissions		63.3	%		62.3	%
Operating expenses		22.9	%		21.6	%
Interest expense		1.3	%		.6	%
Income taxes (benefit)		5.0	%		(5.0	)%


Net income		7.5	%		20.5	%

Revenues

Gross revenues, consisting of freight fees and other related services revenue, totaled $110,332,000 for the year ended December 31, 2007, as compared with $84,111,000 in the prior year, an increase of 31%. Net revenues were $21,309,000 for the year ended December 31, 2007, as compared with $17,743,000 in the prior year, an increase of 20%. This increase is the direct result of the continued expansion of our agent network and customer base which resulted in a 42% increase in the number of transactions processed. The increase in net revenues of 20% as compared to the increase in gross revenues of 31% is the result of revenue mix and increased direct freight costs relating to competition and the availability of equipment.

Costs and expenses

Commissions totaled $13,492,000 for the year ended December 31, 2007, as compared with $11,044,000 in the prior year, an increase of 22%. This increase is the direct result of the increase in revenues resulting from the continued expansion of our agent network and customer base. As a percentage of net revenues, commissions were 63.3% for the year ended December 31, 2007 as compared with 62.3% in the prior year. This increase is the direct result of the expansion of our agent network at higher commission rates, additional bonuses earned based upon the achievement of certain monthly benchmarks, stock based compensation expense, and cost associated with the addition of new agents.

Operating expenses totaled $4,870,000 for the year ended December 31, 2007, as compared with $3,840,000 in the prior year. As a percentage of net revenues, operating expenses were 22.9% for the year ended December 31, 2007 as compared with 21.6% in the prior year. This increase is the direct result of the increase in selling, general and administrative expenses in connection with our business expansion. We presently have adequate facilities and management to handle our present and anticipated transaction volume in 2007 without a significant increase in overhead.

Interest expense was $277,000 for the year ended December 31, 2007 as compared with $113,000 in the prior year. This increase is primarily the result of increased average borrowings to support the working capital needs generated primarily by the increase in revenues.

Income tax

Income tax expense was $1,066,000 for the year ended December 31, 2007 as compared to a net income tax benefit of $882,000 in the prior year. The 2007 income tax expense reflects an effective federal and state tax rate of 39.9% and is comprised of a deferred tax expense of $910,000 related to the utilization of our federal tax loss carryforward and a current state tax expense of $156,000. In 2006, based upon available

objective evidence, including our post-merger history of profitability, we concluded that it was more likely than not that forecasted taxable income would be sufficient to utilize all of our net operating loss carryforwards before their expiration in 2014. Accordingly, in 2006 the remaining valuation allowance was reversed and a deferred tax benefit of $1,965,000 was recorded.

Trends and uncertainties

The transportation industry is highly competitive and highly fragmented. In our brokerage services, our primary competitors are other non-asset based as well as asset based third party logistics companies, freight brokers, carriers offering logistics services and freight forwarders. In our contract carrier services, our competitors are other contract carriers and common carriers. We also compete with customers’ and shippers’ internal traffic and transportation departments as well as carriers’ internal sales and marketing departments directly seeking shippers’ freight. We anticipate that competition for our services will continue to increase. Many of our competitors have substantially greater capital resources, sales and marketing resources and experience. We cannot assure you that we will be able to effectively compete with our competitors in effecting our business expansion plans. The most significant trend contributing to our growth during the past two years has been the expansion of our brokerage services agent network and contract carrier agent and owner operator network. Sales agents are independent contractors and, as such, there are no assurances that we can either maintain our existing agent network or continue to expand this network.

For the year ended December 31, 2008, we increased gross revenues from $110.3 million to $180.2 million. As of December 31, 2008, we had an accumulated deficit of $3.6 million compared to $5.9 million at December 31, 2007. Factors that could adversely affect our operating results include:


	•	the success of Sunteck in expanding its business operations; and

	•	changes in general economic conditions.

Depending on our ability to generate revenues, we may require additional funds to expand our business operations and for working capital and general corporate purposes. Any additional equity financing may be dilutive to stockholders, and debt financings may involve restrictive covenants that further limit our ability to make decisions that we believe will be in our best interests. In the event we cannot obtain additional financing on terms acceptable to us when required, our ability to expand our operations may be materially adversely affected.

Liquidity and capital resources

During the past two years, our sources for cash have been cash flow generated from operations and available borrowings under our line of credit.

At December 31, 2008, we had a balance outstanding of $14,164,000 under our $20.0 million line of credit with Wachovia Bank. The line of credit was subject to the maintenance of certain financial covenants, was secured by accounts receivable and other operating assets, and was due to mature in June 2010.

In February 2009, we entered into a $30.0 million line of credit with Regions Bank, secured by substantially all of our assets. The line of credit, which replaced the then existing $20.0 million line of credit with Wachovia Bank, is due to expire in March 2012, accrues interest at a rate of LIBOR plus 1 1/2% with a minimum of 3%, and is subject to the maintenance of certain financial covenants. We believe that we have sufficient working capital to meet our short-term operating needs and that we will be able to increase, extend, or replace the line of credit on terms acceptable to us.

At December 31, 2008, we had liquid assets of approximately $390,000.

The total amount of debt outstanding at December 31, 2008 and 2007 was $14,164,000 and $8,790,000, respectively. The following table presents our debt instruments and their weighted average interest rates at December 31, 2008 and 2007, respectively:


	Balance		Weighted Average Rate		Balance		Weighted Average Rate

	2008				2007


Line of Credit	$	14,164,000		1.69%	$	8,790,000		5.9%

Inflation and changing prices had no material impact on our revenues or the results of operations for the year ended December 31, 2008.

Critical Accounting Policies

Preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Note 1 of the Notes to Financial Statements includes a summary of the significant accounting policies and methods used in the preparation of our financial statements. The most significant areas involving our estimates and assumptions are described below. Actual results could differ materially from our estimates under different assumptions or conditions.

Revenue Recognition

As a third party transportation logistics provider, we act as the shippers’ agent and arrange for a carrier to handle the freight. Gross revenues consist of the total dollar value of services purchased by shippers. Revenue is recognized upon the delivery of freight, at which time the related transportation cost, including commission, is also recognized. At that time, our obligations are completed and collection of receivables is reasonably assured.

Emerging Issues Task Force No. 99-19, “Reporting Revenues Gross as a Principal Versus Net as an Agent” (EITF 99-19), establishes criteria for recognizing revenues on a gross or net basis. We are the primary obligor in our transactions, have all credit risk, maintain substantially all risk and rewards, have discretion in selecting the supplier, and latitude in pricing decisions. Accordingly, we record all transactions at the gross amount, consistent with the provisions of EITF 99-19.

Income Taxes

The deferred tax asset represents expected future tax savings resulting from our net operating loss carryforward. As of December 31, 2008, we had a net operating loss carryforward of approximately $5.2 million for federal income tax purposes which expire through 2014. Utilization of this benefit is primarily subject to the extent of our future earnings, and may be limited by, among other things, stockholder changes, including the possible issuance of additional shares in one or more financing or acquisition transactions. As of December 2006, we eliminated any valuation allowance for the future tax savings as management believes it is more likely than not that they will be realized by the end of the carryforward period.

Provision For Doubtful Accounts

We continuously monitor the creditworthiness of our customers and have established an allowance for amounts that may become uncollectible in the future based on current economic trends, our historical payment and bad debt write-off experience, and any specific customer related collection issues.

Recently Issued Accounting Standards

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157, “Fair Value Measurements” (SFAS 157), which provides guidance for using fair value to measure assets and liabilities. SFAS 157 defines fair value and establishes a framework for measuring fair value; however, SFAS 157 does not expand the use of fair value in any new circumstances. We adopted SFAS 157 on January 1, 2008 for our financial assets and liabilities. The adoption of SFAS 157 did not have a material impact on our financial statements.

In February 2008, the FASB issued Staff Position 157-2, which delayed the effective date of SFAS 157 for non-financial assets and liabilities. We will be required to apply the provisions of SFAS 157 to our non-financial assets and liabilities as of January 1, 2009. We do not expect the adoption of SFAS 157 in relation to our non-financial assets and liabilities to have a material impact on our financial statements.

In February 2007, FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (SFAS 159), which permits entities to choose to measure many financial assets and liabilities at fair value. The fair value option may be applied, subject to certain exceptions, on an instrument by instrument basis; is irrevocable; and is applied only to entire instruments and not to portions of instruments. We adopted SFAS 159 on January 1, 2008. The adoption of SFAS 159 did not have a material impact on our financial statements.

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (SFAS 141(R)), which establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree. SFAS 141(R) also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141(R) is effective for us as of January 1, 2009. The provisions of SFAS 141(R) will impact us only if we are party to a business combination after SFAS 141(R) has been adopted.

Off-balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Contractual Obligations

The following table summarizes our contractual obligations as of December 31, 2008:


	Payments due by period

Contractual Obligations	Total	Less than 1 year	1-3 years	3-5 years	More than 5 years

Operating Lease Obligations	$ 215,000	$ 124,000	$ 91,000	—	—
Line of Credit	14,164,000	—	$ 14,164,000	—	—

Total	$ 14,379,000	$ 124,000	$ 14,255,000	—	—
	3


Item 7A.	QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

A smaller reporting company is not required to provide the information required by this Item.


Item 8.	FINANCIAL STATEMENTS

The response to this item is submitted as a separate section of this report beginning on page F-1.


Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

None.


Item 9A(T).	CONTROLS AND PROCEDURES


(a)	Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our president and chief financial officer, carried out an evaluation of the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 (the “Exchange Act”) Rules 13a-15(e) and 15-d-15(e)) as of the end of the period covered by this report (the “Evaluation Date”). Based upon that evaluation, the president and chief financial officer concluded that as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our president and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.


(b)	Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the

transactions and dispositions of the assets of the company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management evaluated our internal control over financial reporting as of December 31, 2008. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework. As a result of this assessment and based on the criteria in this framework, management has concluded that, as of December 31, 2008, our internal control over financial reporting was effective.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.


(c)	Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


Item 9B.	OTHER INFORMATION

None.

PART III


Item 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table sets forth the names, ages and positions of our directors and executive officers:


Name	Age	Position


Peter C. Einselen	69	Director
Thomas C. Robertson	63	Director
Harry Wachtel	50	President, chief executive officer and director
Mark Weiss	48	National account executive and director
William Wunderlich	61	Chief financial officer
Michael P. Williams	42	Chief operating officer and general counsel

PETER C. EINSELEN has been a director since January 1999. Mr. Einselen has been an account executive since 1990 and served as senior vice president from 1990 to 2001 of Anderson & Strudwick, a brokerage firm. From 1983 to 1990, Mr. Einselen was employed by Scott and Stringfellow, Incorporated, a brokerage firm.

THOMAS C. ROBERTSON has been a director since January 1999. Mr. Robertson has been senior vice president since 2005 and was president and chief financial officer from 1988 to 2005 and a director from 1988 to 2007 of Anderson & Strudwick, a brokerage firm. Mr. Robertson has been president of Gardner & Robertson, a money management firm, since 1997.

HARRY WACHTEL joined us in conjunction with the acquisition of Sunteck and has been a director, and our president and chief executive officer since December 7, 2000. Since 1997, he has been president of Sunteck. From 1992 to 1997, he served as vice president of sales and marketing for Pioneer Services, Inc., a third party, non-asset based transportation logistics provider.

MARK WEISS joined us in conjunction with the acquisition of Sunteck and has been a director since December 7, 2000. Since 1997, he has been employed by Sunteck as a national account executive. From 1994 to 1997 he served as a national account executive for Pioneer Services, Inc., a third party, non-asset based transportation logistics provider. Mr. Weiss is the brother-in-law of Mr. Wunderlich, our executive vice president and chief financial officer.

WILLIAM WUNDERLICH joined us in October 1992 as our vice president - finance, became chief financial officer in January 1993, president in January 1999 and, in conjunction with the acquisition of Sunteck, became executive vice president in December 2000. From 1990 to 1992, he served as vice president of Goldstein Affiliates, Inc., a public adjusting company. From 1981 to 1990, he served as executive vice president, chief financial officer and a director of Novo Corporation, a manufacturer of consumer products. Mr. Wunderlich is a Certified Public Accountant with a B.A. degree in Accounting and Economics from the City University of New York at Queens College. Mr. Wunderlich is the brother-in-law of Mr. Weiss, one of our directors.

MICHAEL P. WILLIAMS joined us in January 2007 as our chief operating officer and general counsel. From 2002 to 2007, Mr. Williams served as general counsel and vice president of legal and business affairs for Vexure, Inc., a logistics company. Prior to that, from 1999 to 2002, Mr. Williams also served as general counsel and vice president of legal and business affairs for Stonier Transportation Group, Inc., a trucking and brokerage company. During his tenure with Stonier and Vexure, Mr. Williams gained experience handling customer and vendor contract negotiations, risk management strategies, human resources and assets

management, and transportation and employment litigation matters. Mr. Williams received his juris doctor cum laude from Thomas Cooley Law School, Lansing, Michigan and his masters degree (LL.M.) in taxation from the University of Florida, Gainesville. He has been a member of the Florida Bar since 1995.

Committees of the Board of Directors

Our board of directors has an audit committee and a compensation committee. The audit committee reviews the scope and results of the audit and other services provided by our independent accountants and our internal controls. The compensation committee is responsible for the approval of compensation arrangements for our officers and the review of our compensation plans and policies. Each committee is comprised of Messrs. Einselen and Robertson, our non-employee independent outside directors.

Audit Committee Matters

Under its charter, the audit committee must pre-approve all engagements of our independent auditor unless an exception to such pre-approval exists under the Exchange Act or the rules of the SEC. Each year, the independent auditor’s retention to audit our financial statements, including the associated fee, is approved by the committee before the filing of the preceding year’s annual report on Form 10-K. At the beginning of the fiscal year, the audit committee will evaluate other known potential engagements of the independent auditor, including the scope of the work proposed to be performed and the proposed fees, and approve or reject each service, taking into account whether the services are permissible under applicable law and the possible impact of each non-audit service on the independent auditor’s independence from management. At each subsequent committee meeting, the committee will receive updates on the services actually provided by the independent auditor, and management may present additional services for approval. Typically, these would be services such as due diligence for an acquisition that would not have been known at the beginning of the year.

Since the May 6, 2003 effective date of the SEC rules stating that an auditor is not independent of an audit client if the services it provides to the client are not appropriately approved, each new engagement of Dworken, Hillman, LaMorte & Sterczala, P.C. was approved in advance by the audit committee, and none of those engagements made use of the de minimus exception to pre-approval contained in the SEC’s rules.

Our board has determined that the chairman of the audit committee, Mr. Robertson, is an “audit committee financial expert,” as that term is defined in Item 407(d)(5) of Regulation S-K, and “independent” for purposes of current and recently-adopted Nasdaq listing standards and Section 10A(m)(3) of the Exchange Act.

Code of Ethics

We have adopted a code of ethics that applies to our principal executive officer, principal financial officer and other persons performing similar functions. This code of ethics is posted on our website at www.suntecktransport.com.

Section 16(a) beneficial ownership reporting compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our officers and directors, and persons who own more than ten percent of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC. Officers, directors and greater than ten-percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. Based solely on review of the copies of such forms furnished to us, or written representations that no Forms 5 were required, we believe that all Section 16(a) filing requirements applicable to our officers and directors were complied with.


Item 11.	EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

We provide what we believe is a competitive total compensation package to our executive management team through a combination of base salary, annual cash and equity incentives and the right to participate in our broad-based benefits program. We place significant emphasis on incentive compensation directly related to our financial performance.

This Compensation Discussion and Analysis explains our compensation philosophy, policies and practices with respect to our named executive officers which includes our chief executive officer, chief financial officer and chief operating officer.

The Objectives of our Executive Compensation Program

Our compensation committee is responsible for establishing and administering our policies governing the compensation for all of our executive officers. The compensation committee is composed entirely of non-employee independent directors. See “Committees of the Board of Directors” above.

The purpose of our executive compensation program is to attract, retain and motivate qualified executives to manage our business so as to maximize profits and stockholder value. Executive compensation in the aggregate is made up principally of the executive’s annual base salary, a bonus based upon operating earnings, a discretionary bonus which may be awarded by our compensation committee and awards of stock or stock options under our Stock Option Plans. Our compensation committee annually considers and makes recommendations to our board of directors as to executive compensation including changes in base salary, bonuses and awards of our stock or stock options.

Consistent with the above-noted purpose of the executive compensation program, in recommending the aggregate annual compensation of our executive officers, our compensation committee considers our overall performance and the individual contribution and performance of the executive with our overall performance being the more significant factor. While stockholders’ total return is important and is considered by the compensation committee, it is subject to the vagaries of the public market place. Our executive compensation program focuses on our strategic plans, corporate performance measures, and specific corporate goals which should lead to a favorable stock price. The corporate performance measures which our compensation committee considers include sales, earnings, return on equity and comparisons of sales and earnings with prior years and with budgets.

Our compensation committee does not rely on any fixed formulae or specific numerical criteria in determining an executive’s aggregate compensation. It considers corporate and personal performance criteria, competitive compensation levels, the economic environment and changes in the cost of living as well as the recommendations of management. Our compensation committee then exercises business judgment based on all of these criteria and the purposes of the executive compensation program.

The Elements of Our Executive Compensation Program

Overall, our executive compensation programs are designed to be consistent with the objectives and principles set forth above. The basic elements of our executive compensation programs are summarized in the table below, followed by a more detailed discussion of each element of compensation.


Element	Characteristics	Purpose

Base salary	Fixed annual cash compensation; all executives are eligible for periodic increases in base salary based on performance; targeted at the median market pay level.	Keep our annual compensation competitive with the market for skills and experience necessary to meet the requirements of the executive’s role with us.

Incentive bonus awards	Performance-based annual cash and equity incentive earned based on company and individual performance against target performance levels; targeted at the median market pay level.	Motivate and reward for the achievement and over-performance of our critical financial and strategic goals. Amounts earned for achievement of target performance levels based on our annual budget is designed to provide a market-competitive pay package at median performance; potential for lesser or greater amounts are intended to motivate participants to achieve or exceed our financial performance goals and to not reward if performance goals are not met.

Health & welfare benefits	Fixed component. The same/comparable health & welfare benefits (medical, dental, vision, disability insurance and life insurance) are available for all full-time employees.	Provides benefits to meet the health and welfare needs of employees and their families.

Annual Compensation

To attract and retain executives with the ability and the experience necessary to lead us and deliver strong performance to our stockholders, we provide a competitive total compensation package. Base salaries are established considering individual performance and experience, to ensure that each executive is appropriately compensated.

Base Salary

Our compensation committee reviews salary ranges and individual salaries for our executive officers and establishes the base salary for each executive officer based on the following:


	•	consideration of median pay levels in our peer group among individuals in comparable positions with transferable skills within the transportation industry and comparable companies in general industry;

	•	internal factors, such as, the individual’s performance and experience, and the pay of others on the executive team;

	•	our overall performance and the individual contribution and performance of the executive with our overall performance being the more significant factor; and


	•	with a focus on our strategic plans, corporate performance measures, and specific corporate goals which should lead to a favorable stock price including, our sales, earnings, return on equity and comparisons of sales and earnings with prior years and with budgets.

When establishing the base salary of any executive officer, we believe that a competitive base salary is necessary to attract and retain an executive management team with the appropriate abilities and experience required to lead us. The base salaries paid to our named executive officers are set forth below in the Summary Compensation Table. We believe that the base salary paid to our executive officers during 2008 achieves our executive compensation objectives, compares favorably to our peer group and is within our target of providing a base salary at the market median.

Incentive Bonus Awards

Cash Bonuses

Cash incentive bonus awards are solely based on established and pre-approved percentages of pre-tax profit levels, are paid quarterly and adjusted on an annual basis. Our compensation committee also exercises discretion adjusting awards based on its consideration of our overall performance during the year and each executive officer’s individual performance, other than the chief executive officer and the chief financial officer, based on a review of the executive’s performance as communicated to the compensation committee by the chief executive officer.

Health and Welfare Benefits

All full-time employees, including our named executive officers, may participate in our health and welfare benefit programs, including medical, dental and vision care coverage, disability insurance and life insurance.

Overview of 2008 Compensation

We believe that the total compensation paid to our named executive officers for the fiscal year ended December 31, 2008 achieves the overall objectives of our executive compensation program. In accordance with our overall objectives, executive compensation for 2008 was competitive with our peer group and was weighted more heavily to pay for performance.

Employment Agreements and Severance Benefits

We have employment agreements with our chief executive officer, Harry M. Wachtel, our chief financial officer, William I. Wunderlich and our chief operating officer, Michael Williams. We entered into these agreements, effective January 1, 2007, to ensure the performance of their roles for an extended period of time. In addition, we also considered the critical nature of the position and our need to retain them when we committed to these agreements.

The agreements for Messrs. Wachtel and Wunderlich provide for annual base salaries of $250,000 and $175,000, respectively, and for participation in all executive benefit plans. Each of their agreements provide that they will each be entitled to a bonus equal to 10% of our consolidated pre-tax profit (as defined in their respective employment agreements) up to $1,250,000 and 5% of our consolidated pre-tax profit in excess of $1,250,000. Annual salaries and bonuses shall not exceed $750,000 for Mr. Wachtel and $675,000 for Mr. Wunderlich. The employment contracts with both Messrs. Wachtel and Wunderlich are for terms expiring in December 2011. If either is terminated for cause or terminates without good reason (as defined in the agreements), we are obligated to pay only those wages and bonuses pursuant to the terms of our annual

incentive plan and other compensation then vested. If either Mr. Wachtel or Mr. Wunderlich is terminated without cause or if either terminates his employment agreement for good reason (as defined in the agreements), in addition to the payment of amounts then vested, in exchange for a general release of all claims, such executive is entitled to:


•	The immediate vesting of any unvested stock options and one-year from the date of such termination to exercise such options;

•	Salary for the remaining term of the agreement, if any; and

•	Bonus based on a pre-determined percentage of pre-tax profit for the remaining term of the agreement, if any.

The employment contract with Mr. William’s provides for participation in all executive benefit plans and for a base salary starting at $175,000 per year which will increase to $205,000 per year by the fourth year of the contract term. During the term of the agreement, he will also be entitled to cash bonuses annually which increases by $25,000 per year and ranges from $25,000, in year one, to $125,000, in year five. The bonuses are paid annually and contingent on AutoInfo meeting certain agreed upon annual earnings target each year. The term of the employment contract with Mr. Williams is five-years, expiring on December 31, 2011, which, beginning on December 1, 2011, will automatically be extended for an additional one year period on that date and on each anniversary of that date unless thirty days prior written notice of termination is provide by either party. The agreement also generally provides that if (i) we terminate his employment for cause, due to death or disability, we would be obligated to pay all compensation accrued to him prior to any such date of termination; and (ii) he terminates his employment for good reason on or prior to December 31, 2009, we would be obligated to pay all of his unpaid base compensation through and including December 31, 2009.

Tax Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code of 1996, as amended (the “Code”), generally disallows a tax deduction to public companies for compensation over $1 million paid to the chief executive officer and four other most highly compensated executive officers, unless the compensation is considered performance based. The compensation disclosed in this report does not exceed the $1 million limit, and executive compensation for 2008 is also expected to qualify for deductibility. We currently intend to structure the performance-based portion of our executive officers’ compensation to achieve maximum deductibility under Section 162(m) of the code with minimal sacrifices in flexibility and corporate objective.

Although deductibility of compensation is preferred, tax deductibility is not a primary objective of our compensation programs. We believe that achieving our compensation objectives set forth above is more important than the benefit of tax deductibility and we reserve the right to maintain flexibility in how we compensate our executive officers that may result in limiting the deductibility of amounts of compensation from time to time.

Summary Compensation Table

The following table sets forth certain information with respect to compensation for the years ended December 31, 2008 and 2007 earned by or paid to our chief executive officer and our two other most highly compensated executive officers in 2008 whose total compensation exceeded $100,000 (the “named executive officers”).

Summary Compensation Table


Name and Principal Position	Year	Salary ($)	Bonus ($)	Option Awards($) (1)	Other (2)	Total ($)

Harry M. Wachtel, President and chief executive officer	2008 2007	$250,000 $250,000	$287,000 $227,000	$42,000 —	$16,000	$595,000 $477,000

William I. Wunderlich, Executive vice president and chief financial officer	2008 2007	$175,000 $175,000	$287,000 $227,000	$25,000 —	$16,000	$505,000 $402,000

Michael P. Williams, Chief operating officer	2008 2007	$185,000 $175,000	$ — $ 25,000	$12,000 $12,000	$ 6,000	$203,000 $212,000


(1)	Reflects the value of the stock option that was charged to income as reported on our financial statements and calculated using the provisions of Statement of Financial Accounting Standards (SFAS) No. 123R, Share-based Payments.

(2)	Includes company matching contributions to a qualifying 401(K) plan.

Discussion of Summary Compensation

Our executive compensation policies and practices, pursuant to which the compensation set forth in the Summary Compensation Table was paid, are described above under “Compensation Discussion and Analysis.” A summary of certain material terms of our compensation plans and arrangements is set forth below.

Indemnification Arrangements

Our Certificate of Incorporation provides that we indemnify and hold harmless each of our directors and officers to the fullest extent authorized by the Delaware General Corporation Law, against all expense, liability and loss (including attorney’s fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith.

Our Certificate of Incorporation also provides that a director will not be personally liable to us or to our stockholders for monetary damages for breach of the fiduciary duty of care as a director. This provision does not eliminate or limit the liability of a director:


	•	for breach of his or her duty of loyalty to us or to our stockholders;

	•	for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

	•	under Section 174 of the Delaware General Corporation Law (relating to unlawful payments or dividends or unlawful stock repurchases or redemptions); or

	•	for any improper benefit.

Outstanding Equity Awards

The following table sets forth certain information with respect to outstanding equity awards at December 31, 2008 with respect to the named executive officers.

Outstanding Equity Awards at Fiscal Year-End


	Option Awards

Name	Number of Securities Underlying Unexercised Options Exercisable	Number of Securities Underlying Unexercised Options Unexercisable	Option Exercise Price			Option Expiration Date


Harry M. Wachtel	500,000	—		$	1.173	1/10/2010

William I. Wunderlich	300,000	—		$	1.173	1/10/2010

William I. Wunderlich	500,000	—		$	0.10	11/30/2009

Michael P. Williams	100,000	500,000		$	1.12	6/6/2012

Compensation of Directors

We do not pay any directors’ fees. Directors are reimbursed for the costs relating to attending board and committee meetings. During 2008, Peter C. Einselen and Thomas C. Robertson, our non-employee directors, each were granted options to purchase 100,000 shares of our common stock at $0.84 per share, 115% of the fair market value on the date of grant.

The following table provides compensation information for the year ended December 31, 2008 for each of the independent members of our board of directors.

Director Compensation


Name	Year	Option Awards (1) (2)		Total

Thomas C. Robertson	2008	$	8,900	$	8,900

Peter C. Einselen	2008	$	8,900	$	8,900



	(1) Reflects the value of the stock option that was charged to income as reported on our financial statements and are calculated using the provisions of Statement of Financial Accounting Standards (SFAS) No. 123R, Share-based Payments.

	(2) During 2008, each of Mr. Robertson and Mr. Einselen was granted one option award on January 8, 2008 exercisable for 100,000 shares of our common stock, respectively. The fair value (computed in accordance with SFAS 123R) on such date was $8,900, respectively.

Equity Compensation Plan Information
Year Ended December 31, 2008


Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

	(a)		(b)			(c)
Equity compensation plans approved by security holders (1992, 1997, 1999, 2003 and 2006)		6,117,000		$	0.76		4,006,000

Equity compensation plans not approved by security holders (1)		5,487,000		$	0.71		1,316,000


Total		11,604,000		$	0.73		5,322,000


(1)	Includes the following equity compensation plans:

•	In 2006, we established the 2006 Independent Sales Agent Stock Option Plan (the “Sales Agent Plan”) to align the interests of our independent sales agents and affiliates with those of our stockholders, to afford an incentive to such sales agents to continue as such, to increase their efforts on our behalf and to promote the success of our business. Generally, the Sales Agent Plan is administered by our board of directors and provides (i) for the granting of non-qualified stock options, (ii) that the maximum term for options granted under the plan is 10 years and (iii) that the exercise price for the options may not be less than 115% of the fair market value of our common stock on the date of grant.

•	In 2005, we established the 2005 Independent Sales Agent Stock Option Plan (the “2005 Sales Agent Plan”) to align the interests of our independent sales agents and affiliates with those of our stockholders, to afford an incentive to such sales agents to continue as such, to increase their efforts on our behalf and to promote the success of our business. Generally, the 2005 Sales Agent Plan is administered by our board of directors and provides (i) for the granting of non-qualified stock options, (ii) that the maximum term for options granted under the plan is 10 years and (iii) that the exercise price for the options may not be less than 100% of the fair market value of our common stock on the date of grant.


Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table, together with the accompanying footnotes, sets forth information, as of March 20, 2009, regarding stock ownership of all persons known by us to own beneficially 5% or more of our outstanding common stock, all directors, named executive officers and all directors and executive officers as a group.

We determined beneficial ownership in accordance with rules promulgated by the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Except as otherwise indicated, we believe that the persons or entities named in the following table have sole voting and investment power with respect to all shares of common stock as beneficially owned by them, subject to community property laws where applicable. All information with respect to beneficial ownership has been furnished to us by the respective stockholder.


Name of Beneficial Owner (1)	Shares of Common Stock Beneficially Owned			Percentage Of Ownership


(i) Directors and Executive Officers
Harry Wachtel		6,762,000	(2)	20.2	%
Thomas C. Robertson		655,000	(3)	2.0	%
Peter C. Einselen		785,000	(4)	2.3	%
Mark Weiss		1,072,000	(7)	3.2	%
William I. Wunderlich		1,622,000	(5)(8)	4.8	%
Michael P. Williams		100,000	(6)	*

All executive officers and directors as a group (6 persons)		9,737,000	(9)	27.4	%

(ii) 5% Stockholders
James T. Martin		6,270,000		19.0	%
Kinderhook Partners, LP		6,038,000		18.3	%
Morehead Opportunity Fund, LP		4,535,000		13.8	%



* Less than one percent.


(1)	Unless otherwise indicated below, each director, executive officer and each 5% stockholder has sole voting and investment power with respect to all shares beneficially owned. The address for Mr. Wachtel, Mr. Weiss and Mr. Wunderlich is c/o AutoInfo, Inc., 6413 Congress Avenue, Suite 260, Boca Raton, FL 33487. The address for Mr. Martin is c/o Bermuda Trust Company, Compass Point Road, 9 Bermudian Road, Hamilton HM11, Bermuda. The address for Kinderhook Partners, LP is One Executive Drive, Suite 160, Fort Lee, NJ 07024. The address for Morehead Opportunity Fund, LP is 5151 Glenwood Avenue, Suite 300, Raleigh, NC 27612.

(2)	Includes 1,259,000 shares with respect to which Mr. Wachtel has been granted voting rights pursuant to voting proxy agreements and 500,000 shares issuable upon the exercise of stock options.

(3)	Includes 450,000 shares issuable upon the exercise of stock options.

(4)	Includes 485,000 shares issuable upon the exercise of stock options

(5)	Includes 800,000 shares issuable upon the exercise of stock options.

(6)	Includes 100,000 shares issuable upon the exercise of stock options.

(7)	Includes 852,000 with respect to which Mr. Weiss has granted voting rights to Mr. Wachtel pursuant to a voting proxy agreement. Mr. Weiss retains full control over the disposition of these shares and 220,000 shares issuable upon the exercise of stock options.

(8)	Includes 407,000 with respect to which Mr. Wunderlich has granted voting rights to Mr. Wachtel pursuant to a voting proxy agreement. Mr. Wunderlich retains full control over the disposition of these shares.

(9)	Assumes that all currently exercisable options or warrants owned by members of this group have been exercised.


Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Certain relationships and related transactions

None.

Director Independence

The Board has determined that Thomas Robertson and Peter Einselen (the “Independent Directors”) are independent as that term is defined in the listing standards of the Nasdaq. As disclosed above, Messrs. Robertson and Einselen are the sole members of our audit committee and our compensation committee and are independent for such purposes.

In determining director independence, the Board considered the option awards to the Independent Directors for the year ended December 31, 2008, disclosed in “Item 11 – Executive Compensation – Director Compensation” above, and determined that such awards were compensation for services rendered to the Board and therefore did not impact their ability to continue to serve as Independent Directors.


Item 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES

The aggregate fees billed by our principal accounting firm, Dworken, Hillman, LaMorte & Sterczala, P.C., for the fiscal years ended December 31, 2008 and 2007 are as follows:


	2008		2007

Audit fees	$	80,000	$	66,000
Audit related fees		—		—
Tax fees		—		—
All other fees		—		—

Total fees	$	80,000	$	66,000

Audit Committee Pre-Approval Policies and Procedures

Our audit committee charter provides that the audit committee will pre-approve audit services and non-audit services to be provided by our independent auditor before the auditor is engaged to render these services. The audit committee may consult with management in the decision-making process, but may not delegate this authority to management. The audit committee may delegate its authority to pre-approve services to one or more committee members, provided that the designees present the pre-approvals to the full committee at the next committee meeting.

PART IV


Item 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this report:

(1) Financial Statements – See the Index to the consolidated financial statements on page F-1


(b) Exhibits: Exhibit No.		Description

No. 3A	Certificate of Incorporation of the Company, as amended. (6)

No. 3B	Amended and Restated By-Laws of the Company. (3)

No. 4A	Specimen Stock Certificate. (1)

No. 10A	** 1992 Stock Option Plan. (2)

No. 10B	** 1997 Stock Option Plan. (4)

No. 10C	** 1997 Non-Employee Stock Option Plan. (4)

No. 10D	** 1999 Stock Option Plan. (5)

No. 10E	** Employment Agreement between AutoInfo, Inc. and Harry M. Wachtel dated as of January 1, 2007. (10)

No. 10F	** Employment Agreement between AutoInfo, Inc. and William I. Wunderlich dated January 1, 2007. (10)


No. 10G		First Amendment to Revolving Credit and Security Agreement between Wachovia Bank and AutoInfo, Inc., et al. (7)

No. 10H		Second Amendment to Revolving Credit and Security Agreement between Wachovia Bank and AutoInfo, Inc., et al. (8)

No. 10I		Third Amendment to Revolving Credit and Security Agreement between Wachovia Bank and AutoInfo, Inc., et al. (10)

No. 10J		** 2003 Stock Option Plan. (9)

No. 10K		** 2005 Independent Sales Agent Stock Option Plan. (10)

No. 10L		** 2006 Stock Option Plan. (10)

No. 10M		** 2006 Independent Sales Agent Stock Option Plan. (10)

No. 10N		Fourth Amendment to Revolving Credit and Security Agreement between Wachovia Bank and AutoInfo, Inc., et al. (11)

No. 10O		Fifth Amendment to Revolving Credit and Security Agreement between Wachovia Bank and AutoInfo, Inc., et al. (11)

No. 10P		Sixth Amendment to Revolving Credit and Security Agreement between Wachovia Bank and AutoInfo, Inc., et al. (11)

No. 10Q		** Employment Agreement between AutoInfo, Inc. and Michael. P. Williams dated as of January 1, 2007. (11)

No. 10R		Loan and Security Agreement between Regions Bank and AutoInfo, Inc., et al.*

No. 14A		Code of Ethics. (7)

No. 21A		Subsidiaries of the Registrant. (7)

No. 23A		Consent of Dworken, Hillman, LaMorte & Sterczala, P.C., independent registered public accounting firm.*

No. 31A		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

No. 31B		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*


No. 32A		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

No. 32B		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*



* Filed as an exhibit hereto.

** Management contract or compensatory plan or arrangement.


(1)	This Exhibit was filed as Exhibit to our Registration Statement on Form S-1 (File No. 33-15465) and is incorporated herein by reference.

(2)	This Exhibit was filed as an Exhibit our definitive proxy statement dated October 2, 1992 and is incorporated herein by reference.

(3)	This Exhibit was filed as an Exhibit to our Current Report on Form 8-K dated March 30, 1995 and is incorporated herein by reference.

(4)	This Exhibit was filed as an Exhibit to our Annual Report on Form 10-K for the year ended December 31, 1997 and is incorporated herein by reference.

(5)	This Exhibit was filed as an Exhibit to our Annual Report on Form 10-K for the year ended December 31, 1999 and is incorporated herein by reference.

(9)	This Exhibit was filed as an Exhibit to our Annual Report on Form 10-KSB for the year ended December 31, 2000 and is incorporated herein by reference.

(10)	This Exhibit was filed as an Exhibit to our Annual Report on Form 10-KSB for the year ended December 31, 2004 and is incorporated herein by reference.

(11)	This Exhibit was filed as an Exhibit to our Annual Report on Form 10-K for the year ended December 31, 2005 and is incorporated herein by reference.

(12)	This Exhibit was filed with our Definitive Information Statement on Schedule 14C, filed on July 7, 2003 and is incorporated herein by reference.

(13)	This Exhibit was filed as an Exhibit to our Annual Report on Form 10-K for the year ended December 31, 2006 and is incorporated herein by reference.

(14)	This Exhibit was filed as an Exhibit to our Annual Report on Form 10-K for the year ended December 31, 2007 and is incorporated herein by reference.

(c) Information required by schedules called for under Regulation S-X is either not applicable or is included in the consolidated financial statements or notes thereto.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d), the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on March 20, 2009 on its behalf by the undersigned, thereunto duly authorized.


	AutoInfo, Inc.

	By:	/s/ Harry M. Wachtel

		Harry M. Wachtel, President and Chief
		Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities indicated.


/s/ Harry M. Wachtel

Harry M. Wachtel	President, Chief Executive Officer and Chairman of the Board (Principal Executive Officer)	March 20, 2009

/s/ William I. Wunderlich

William I. Wunderlich	Chief Financial Officer (Principal Accounting Officer)	March 20, 2009

/s/ Mark Weiss

Mark Weiss	Director	March 20, 2009

/s/ Peter C. Einselen

Peter C. Einselen	Director	March 20, 2009


/s/ Thomas C. Robertson

Thomas C. Robertson	Director	March 20, 2009

AUTOINFO, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Report of Independent Registered Public Accounting Firm	F-2

Consolidated Balance Sheets as of December 31, 2008 and 2007	F-3

Consolidated Statements of Income for the Years Ended December 31, 2008, 2007 and 2006	F-4

Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2008, 2007 and 2006	F-5

Consolidated Statements of Cash Flows for the Years Ended December 31, 2008, 2007 and 2006	F-6

Notes to Consolidated Financial Statements	F-7

Information required by schedules called for under Regulation S-X is either not applicable or is included in the Consolidated Financial Statements or Notes thereto.

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders
AutoInfo, Inc.
Boca Raton, Florida

We have audited the accompanying consolidated balance sheets of AutoInfo, Inc. and subsidiaries as of December 31, 2008 and 2007, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of AutoInfo, Inc. and subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.

March 17, 2009
Shelton, Connecticut


		/s/ Dworken, Hillman, LaMorte & Sterczala, P.C.

	Dworken, Hillman, LaMorte & Sterczala, P.C.

F-2

AUTOINFO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS


	December 31,

	2008			2007

ASSETS (Note 3)
Current assets:
Cash and cash equivalents	$	390,000		$	270,000
Accounts receivable, net of allowance for doubtful accounts of $370,000 and $326,000 as of December 31, 2008 and 2007, respectively		29,863,000			24,224,000
Deferred income taxes (Note 4)		1,100,000			1,000,000
Prepaid expenses		560,000			310,000
Current portion of advances and other assets (Note 2)		1,260,000			1,273,000


Total current assets		33,173,000			27,077,000

Fixed assets, net of depreciation		590,000			477,000

Deferred income taxes (Note 4)		680,000			2,037,000

Advances and other assets, net of current portion (Note 2)		8,333,000			3,599,000


	$	42,776,000		$	33,190,000


LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable and accrued liabilities	$	12,303,000		$	10,584,000


Loan payable (Note 3)		14,164,000			8,790,000


Commitments and contingencies (Note 5)

Stockholders’ equity: (Note 6)
Common stock - authorized 100,000,000 shares, $.001 par value; issued and outstanding 32,946,000 and 32,586,000 as of December 31, 2008 and 2007, respectively		33,000			33,000
Additional paid-in capital		19,904,000			19,635,000
Deficit		(3,628,000	)		(5,852,000	)


Total stockholders’ equity		16,309,000			13,816,000


	$	42,776,000		$	33,190,000

The accompanying notes are an integral part of these consolidated financial statements.

F-3

AUTOINFO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME


	For The Years Ended December 31,

	2008		2007		2006


Gross revenues	$	180,211,000	$	110,332,000	$	84,111,000
Cost of transportation		148,513,000		89,023,000		66,368,000


Net revenues		31,698,000		21,309,000		17,743,000


Commissions		20,373,000		13,492,000		11,044,000
Operating expenses		7,130,000		4,870,000		3,840,000

		27,503,000		18,362,000		14,884,000


Income from operations		4,195,000		2,947,000		2,859,000

Interest expense		500,000		277,000		113,000


Income before income taxes (benefit)		3,695,000		2,670,000		2,746,000
Income taxes (benefit) (Note 4)		1,471,000		1,066,000		(882,000	)


Net income	$	2,224,000	$	1,604,000	$	3,628,000


Net income per share:
Basic	$	.07	$	.05	$	.11
Diluted	$	.07	$	.05	$	.10

Weighted average number of common shares:
Basic		32,774,000		32,447,000		31,915,000
Diluted		34,501,000		35,560,000		36,005,000

The accompanying notes are an integral part of these consolidated financial statements.

F-4

AUTOINFO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


	Shares of Common Stock Outstanding		Common Stock		Additional Paid - In Capital		Deficit




Balance, January 1, 2006		31,624,000	$	32,000	$	19,183,000	$	(11,084,000	)

Exercise of stock options		478,000		—		103,000

Stock-based compensation expense						134,000

Net income								3,628,000


Balance, December 31, 2006		32,102,000	$	32,000	$	19,420,000	$	(7,456,000	)

Exercise of stock options		484,000		1,000		52,000

Stock-based compensation expense						163,000

Net income								1,604,000


Balance, December 31, 2007		32,586,000	$	33,000	$	19,635,000	$	(5,852,000	)

Exercise of stock options		360,000		—		54,000

Stock-based compensation expense						215,000

Net income								2,224,000


Balance, December 31, 2008		32,946,000	$	33,000	$	19,904,000	$	(3,628,000	)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

AUTOINFO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS


	For The Years Ended December 31,
	2008			2007			2006

Cash flows from operating activities:
Net income	$	2,224,000		$	1,604,000		$	3,628,000
Adjustments to reconcile net income to net cash used in operating activities:
Change in allowance for doubtful accounts		44,000			77,000			48,000
Depreciation and amortization expenses		201,000			142,000			104,000
Stock-based compensation expense		215,000			163,000			134,000
Deferred income taxes		1,256,000			910,000			(1,040,000	)

Changes in operating assets and liabilities:
Accounts receivable		(5,683,000	)		(7,335,000	)		(4,279,000	)
Prepaid expenses		(250,000	)		(116,000	)		(108,000	)
Accounts payable and accrued liabilities		1,719,000			2,209,000			1,140,000


Net cash used in operating activities		(274,000	)		(2,346,000	)		(373,000	)


Cash flows from investing activities:
Advances and other assets		(4,721,000	)		(2,628,000	)		(2,037,000	)
Capital expenditures		(313,000	)		(294,000	)		(137,000	)


Net cash used in investing activities		(5,034,000	)		(2,922,000	)		(2,174,000	)


Cash flows from financing activities:
Exercise of stock options		54,000			53,000			103,000
Increase in loan payable, net		5,374,000			5,339,000			2,171,000


Net cash provided by financing activities		5,428,000			5,392,000			2,274,000


Net change in cash and cash equivalents		120,000			124,000			(273,000	)
Cash and cash equivalents, beginning of year		270,000			146,000			419,000


Cash and cash equivalents, end of year	$	390,000		$	270,000		$	146,000

The accompanying notes are an integral part of these consolidated financial statements.

F-6

AUTOINFO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2008, 2007 and 2006

Note 1 - Business and Summary of Significant Accounting Policies

Business Overview

Through its wholly-owned subsidiaries, Sunteck Transport Co., Inc and Eleets Logistics, Inc., the Company is a non-asset based transportation services company, providing transportation capacity and related transportation services to shippers throughout the United States, and to a lesser extent, Canada. As a non-asset based provider of brokerage and contract carrier transportation services, the Company does not own any equipment and its services are provided through strategic alliances with less than truckload, truckload, air, rail, ocean common carriers and independent owner-operators to service customers’ needs. The Company’s non-asset based services include ground transportation coast to coast, local pick up and delivery. The Company’s business services emphasize safety, information coordination and customer service and are delivered through a network of independent commissioned sales agents and third party capacity providers coordinated by it. The independent commissioned sales agents typically enter into exclusive contractual arrangements with the Company and are responsible for locating freight and coordinating the transportation of the freight with customers and capacity providers. The third party capacity providers consist of independent contractors who provide truck capacity to the Company, including owner-operators who operate under the Company’s contract carrier license, air cargo carriers and railroads.

The Company’s brokerage services are provided though a network of independent sales agents throughout the United States and Canada. The Company’s services include arranging for the transport of customers’ freight from the shippers location to the designated destination. The Company does not own any trucking equipment and relies on independent carriers for the movement of customers’ freight. The Company seeks to establish long-term relationships with its customers and provides a variety of logistics services and solutions to eliminate inefficiencies in its customers’ supply chain management.

The Company’s contract carrier services are also provided through a network of independent sales agents and independent owner-operators throughout the United States. The Company does not own any trucking equipment; its independent owner-operators lease onto the Company’s operating authority and transport freight under its name.

Summary of Significant Accounting Policies

Basis of Presentation

The financial statements of the Company have been prepared using the accrual basis of accounting under accounting principles generally accepted in the United States of America (GAAP).

Principles of Consolidation

The consolidated financial statements include the accounts of the AutoInfo, Inc. (the Company), its wholly-owned subsidiary Sunteck Transport Co., Inc. and its wholly-owned subsidiaries Sunteck

F-7

Transport Carriers, Inc., and Eleets Logistics, Inc. (collectively, Sunteck). All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of these financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the periods presented. The Company believes that all such assumptions are reasonable and that all estimates are adequate, however, actual results could differ from those estimates.

Revenue Recognition

As a third party transportation logistics provider, the Company acts as the shippers’ agent and arranges for a carrier to handle the freight. Gross revenues consist of the total dollar value of services purchased by shippers. Revenue is recognized upon the delivery of freight, at which time the related transportation cost, including commission, is also recognized. At that time, the Company’s obligations are completed and collection of receivables is reasonably assured.

Emerging Issues Task Force No. 99-19, “Reporting Revenues Gross as a Principal Versus Net as an Agent” (EITF 99-19), establishes criteria for recognizing revenues on a gross or net basis. The Company is the primary obligor in its transactions, has all credit risk, maintains substantially all risk and rewards, has discretion in selecting the supplier, and has latitude in pricing decisions. Accordingly, the Company records all transactions at the gross amount, consistent with the provisions of EITF 99-19.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash in banks.

Provision For Doubtful Accounts

The Company continuously monitors the creditworthiness of its customers and has established an allowance for amounts that may become uncollectible in the future based on current economic trends, its historical payment and bad debt write-off experience, and any specific customer related collection issues.

Fixed Assets

Fixed assets as of December 31, 2008 and 2007, consisting predominantly of furniture, fixtures, equipment and proprietary software, were carried at cost net of accumulated depreciation. Depreciation of fixed assets was provided on the straight-line method over the estimated useful lives of the related assets which range from three to five years.

Employee Benefit Plan:

In 2008, the Company established a qualified 401 (K) plan covering all employees meeting certain minimum requirements. Employees may contribute up to 5% of eligible compensation, as defined, and may make additional contributions subject to Internal Revenue Code limitations. The plan provides for matching contributions by the Company equal to 100% of the employees’ first 3% of elective

F-8

deferrals and an additional 50% of the next 2% of elective deferrals, subject to a maximum contribution of 4% of an employees’ eligible compensation. 401 (K) expense charged to operations in 2008 was $91,000.

Income Per Share

Basic income per share is based on net income divided by the weighted average number of common shares outstanding. Common stock equivalents outstanding were 1,727,000, 3,113,000 and 4,090,000 for the years ended December 31, 2008, 2007 and 2006, respectively.

Income Taxes

The Company utilizes the asset and liability method for accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and future benefits to be recognized upon the utilization of certain operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Recently Issued Accounting Standards

F-9

SFAS 141(R) is effective for us as of January 1, 2009. The provisions of SFAS 141(R) will impact us only if we are party to a business combination after SFAS 141(R) has been adopted.

Segment Information

The Company provides transportation capacity and related logistics services through its integrated network of independent agents and third party capacity providers. For the purpose of applying Statement of Financial Accounting Standards No. 131, “Disclosures About Segments of an Enterprise and Related Information”, management has determined that it operates in a single business segment.

Note 2 – Advances and Other Assets

Advances and other assets consists of the following:


	December 31,
	2008		2007

Signing bonuses to independent sales agents, amortized on a straight-line basis over the life of the underlying contracts from three to five years	$	1,448,000	$	2,184,000
Non-interest bearing advances to independent sales agents repayable at the end of the underlying contracts at various dates through 2014		1,151,000		942,000
Loans to independent sales agents bearing interest at prime to prime plus 1% repayable through 2013		6,046,000		738,000
Due from independent sales agents and employees consisting primarily of short-term non-interest bearing loans and advanced commissions expected to be earned / repaid in the next twelve months.		948,000		1,008,000


		9,593,000		4,872,000
Less: current portion		1,260,000		1,273,000


		8,333,000		3,599,000

Advances and other assets are expected to be earned / repaid as follows:


2009	$	1,260,000
2010		451,000
2011		1,296,000
2012		1,144,000
2013		5,242,000
Thereafter		200,000

	$	9,593,000

F-10

Note 3 – Debt

Loan Payable

In February 2009, the Company entered into a $30.0 million line of credit with Regions Bank, secured by substantially all assets of the Company. The line of credit replaces the $20.0 million line of credit with Wachovia Bank, expires in March 2012, provides for interest at the LIBOR plus 1 1/2% with a minimum of 3%, and the maintenance of certain financial covenants.

Note 4- Income Taxes

For the years ended December 31, 2008, 2007 and 2006, the provision for income taxes consisted of the following:


	2008					2007					2006
	Current			Deferred		Current			Deferred		Current			Deferred


Income tax expense before application of operating loss carryforwards	$	1,471,000		$	—	$	1,066,000		$	—	$	1,083,000		$	—
Income tax expense (benefit) of operating loss carryforwards		(1,257,000	)		1,257,000		(910,000	)		910,000		(925,000	)		925,000
Change in valuation allowance					—					—					(1,965,000	)


Income tax expense (benefit)	$	214,000		$	1,257,000	$	156,000		$	910,000	$	158,000		$	(1,040,000	)

The following table reconciles the Company’s effective income tax rate on income before income taxes to the Federal Statutory Rate for the years ended December 31, 2008, 2007 and 2006:


	2008		2007		2006

Federal Statutory Rate	34.0	%	34.0	%	34.0	%

State income taxes, net of federal benefit	5.8		5.9		5.8

Effect of:
Utilization of operating loss carryforward					(34.0	)
Change in valuation allowance					(37.9	)

	39.8	%	39.9	%	(32.1	)%

F-11

Deferred taxes are comprised of the following at December 31, 2008 and 2007:


	December 31, 2008		December 31, 2007

Deferred tax asset:
Net operating loss carryforward	$	1,780,000	$	3,037,000

The deferred tax asset represents expected future tax savings resulting from the Company’s net operating loss carryforward. As of December 31, 2008, the Company has a net operating loss carryforward of approximately $5.2 million for federal income tax purposes which expire through 2014. Utilization of this benefit is primarily subject to the extent of future earning of the Company, and may be limited by, among other things, stockholder changes, including the possible issuance by the Company of additional shares in one or more financing or acquisition transactions.

Based upon available objective evidence, including the Company’s post-merger history of profitability, management believes it is more likely than not that forecasted taxable income will be sufficient to utilize all of the net operating loss carryforward before its expiration in 2014.

Note 5 - Commitments and Contingencies

Leases

The Company is obligated under non-cancelable operating leases for premises expiring at various dates through November 2011. Future minimum lease payments are $124,000, $75,000 and $16,000 for the years ending December 31, 2009, 2010 and 2011, respectively. Rent expense for the years ended December 31, 2008, 2007 and 2006 was $206,000, $124,000 and $105,000, respectively.

Other Agreements

The Company has employment agreements with Messrs. Wachtel and Wunderlich, its chief executive officer and chief financial officer, respectively, who are also stockholders and Mr. Williams, its chief operating officer. The agreements with Mssrs. Wachtel and Wunderlich expire on December 31, 2011 and provide for minimum annual compensation of $250,000 and $175,000, and bonuses equal to 10% of the Company’s consolidated pre-tax profit (as defined) up to $1,250,000 and 5% of consolidated pre-tax profit in excess of $1,250,000, respectively. Under the terms of the agreements, annual salaries and bonuses shall not exceed $750,000 and $675,000 for Messrs. Wachtel and Wunderlich, respectively. Bonus payments to each of Messrs. Wachtel and Wunderlich were $287,000 and $227,000 for the years ended December 31, 2008 and 2007 and $269,000 and $229,000 for the year ended December 31, 2006, respectively. The agreement with Mr. Williams expires on December 31, 2011 and provides for a base salary starting at $175,000 per year which will increase to $205,000 per year by the fourth year of the contract term. During the term of the agreement, he will also be entitled to cash bonuses annually which increase by $25,000 per year and range from $25,000, in year one, to $125,000, in year five. The bonuses are paid annually and are contingent on AutoInfo meeting certain agreed upon annual earnings target each year. A bonus of $25,000 was paid for the year ended December 31, 2007. No bonus was paid for the year ended December 31, 2008.

F-12

Litigation

The Company is involved in certain litigation arising in the ordinary course of its business. In the opinion of management, these matters will not have a material adverse effect on the Company’s financial position or liquidity.

Note 6 - Stockholders’ Equity

Stock Option Plans

The Company has seven stock option plans; its 1992, 1997, 1999, 2003, 2005 and two 2006 Plans (collectively, the Plans). Pursuant to the Plans, a total of 18,850,000 shares of common stock were made available for grant of stock options. Under the Plans, options have been granted to key personnel to purchase shares at not less than fair market value on the date of grant. Stock options generally vest ratably over a period of three to five years from the date of grant and must be exercised within ten years from the date of grant. The Company’s policy is to recognize compensation expense on a straight-line basis over the requisite service period for the entire award. Compensation expense is recognized only for those options expected to vest, with forfeitures estimated at the date of grant based on the Company’s historical experience and future expectations. No further grants will be made under the 1985, 1986, 1989, 1992 or 1997 Plans.

Options have been granted under the Plans to independent sales agents under the same general terms and conditions as options granted to employees. Such option grants are primarily based upon profits generated and act as long-term incentives to remain with the Company. Out of the total options outstanding of 11,604,000 as of December 31, 2008, 9,669,000 have been granted to independent sales agents.

Option activity for the years ended December 31, 2008, 2007 and 2006 was as follows:


	Shares Subject to Options		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value (in millions)


Outstanding, January 1, 2006	7,081,000		$	.37	5.1	$	1.5

Forfeited	(192,000	)		.56
Exercised	(478,000	)		.22
Granted	4,881,000			1.11


Outstanding, December 31, 2006	11,292,000		$	.70	4.6	$	3.7

Forfeited	(3,985,000	)		.96
Exercised	(485,000	)		.11
Granted	5,989,000			.87


Outstanding, December 31, 2007	12,811,000		$	.72	4.1	$	—

Forfeited	(3,847,000	)		.77
Exercised	(360,000	)		.16
Granted	3,000,000			.78


Outstanding December 31, 2008	11,604,000		$	.73	3.2	$	—

Exercisable, December 31, 2008	6,334,000		$	.64	2.1	$	—

F-13

As of December 31, 2008, there were 5,322,000 shares of common stock available for issuance pursuant to future stock option grants. Additional information regarding options outstanding as of December 31, 2008 is as follows:


		Options outstanding				Options exercisable

Range of exercise prices		Shares	Weighted average remaining contractual life (years)	Weighted average exercise price		Shares	Weighted average exercise price


$	.05 - .20	999,000	2.5	$	.13	999,000	$	.13
	.24 - .65	3,639,000	1.7		.49	2,911,000		.48
	.72 - .88	3,989,000	5.1		.78	515,000		.50
	1.00 – 1.48	2,977,000	2.7		1.17	1,909,000		1.18

$	.05 – 1.48	11,604,000	3.2	$	.73	6,334,000	$	.64

Weighted average grant-date fair value of options granted:


2008	$	.78
2007	$	.87
2006	$	1.11

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions by grant year.


	2008		2007		2006


Risk-free interest rate	2.25	%	5.0	%	4.52	%
Expected dividend yield	0	%	0	%	0	%
Expected volatility factor	10.82	%	13.61	%	18.16	%
Expected option term, in years	5.90		6.00		6.00

The Company recognized stock-based compensation expense related to stock options of $215,000, $163,000 and $134,000 for the years ended December 31, 2008, 2007 and 2006, respectively. As of December 31, 2008, the Company had $704,000 of unrecognized stock-based compensation expense related to nonvested stock option plans that will be recognized over a period of five years.

Note 7 - Fair Value of Financial Instruments

The following disclosures of fair value were determined by management using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize on disposition of the financial

F-14

instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities and loan payable are carried at amounts which reasonably approximate fair value.

Note 8 - Quarterly Results of Operations (Unaudited)


	Year Ended December 31, 2008 Quarter Ended

	Mar 31		June 30		Sep 30		Dec 31


Gross revenues	$	36,562,000	$	45,234,000	$	52,744,000	$	45,671,000



Net income	$	490,000	$	596,000	$	560,000	$	578,000


Basic net income per share	$	.01	$	.02	$	.02	$	.02

Diluted net income per share	$	.01	$	.02	$	.02	$	.02


	Year Ended December 31, 2007 Quarter Ended

	Mar 31		June 30		Sep 30		Dec 31


Gross revenues	$	22,054,000	$	26,224,000	$	29,079,000	$	32,975,000



Net income	$	326,000	$	383,000	$	503,000	$	392,000


Basic net income per share	$	.01	$	.01	$	.02	$	.01

Diluted net income per share	$	.01	$	.01	$	.01	$	.01

Note 9 - Supplemental Disclosure of Cash Flow Information and Non-Cash Financing Activities

Cash paid for interest in 2008, 2007 and 2006 was $500,000, $277,000 and $113,000, respectively.

The Company paid income taxes of $130,000, $102,000 and $118,000 for the years ended December 31, 2008, 2007 and 2006, respectively.

F-15

EX-10.R 2 d76521_ex10-r.htm LOAN AND SECURITY AGREEMENT

LOAN AND SECURITY AGREEMENT

by and between

AUTOINFO, INC.

SUNTECK TRANSPORT CO., INC.

ELEETS LOGISTICS, INC.

SUNTECK TRANSPORT CARRIERS, INC.,

SUNTECK GOVERNMENT LOGISTICS, INC.,

SUNTECK TRANSPORT GROUP, INC.

RAILPORT SERVICES, INC.,

and

AMERICAN SHIPPERS DISPATCH, INC.

as the “Borrowers”

and

REGIONS BANK

as the “Lender”

February 17, 2009

TABLE OF CONTENTS

			Page


1.	DEFINITIONS; RELATED TERMS		1
	1.1	Certain UCC Terms	1
	1.2	Defined Terms	1
	1.3	Financial Terms	10

2.	THE CREDIT FACILITY		10
	2.1	The Commitments	10
	2.2	The Notes	10
	2.3	Interest	10
	2.4	Requesting New Loans	11
	2.5	Requests for Borrowings	12
	2.6	Excess Outstandings	12
	2.7	Repayment of Loans	12
	2.8	Additional Payment Provisions	13
	2.9	Lockboxes; Collections Accounts	13
	2.10	Letters of Credit	14
	2.11	Fees	14
	2.12	Statement of Account	15
	2.13	Termination	15
	2.14	USA Patriot Act Notice	15

3.	SECURITYAGREEMENT		15
	3.1	Security Interest	15
	3.2	Financing Statements; Fixture Filings; Power of Attorney	16
	3.3	Entry	16
	3.4	Other Rights	16
	3.5	Accounts	16
	3.6	Waiver of Marshaling	17
	3.7	Control; Further Assurances	17
	3.8	Pledge of Equity Interests	17

4.	CONDITIONS PRECEDENT TO EXTENSIONS OF CREDIT		17
	4.1	Conditions Precedent to each Initial Loan	17
	4.2	Conditions Precedent to Each Loan	18

5.	REPRESENTATIONS AND WARRANTIES		19
	5.1	Valid Existence and Power	19
	5.2	Authority	19
	5.3	Financial Condition	19
	5.4	Litigation	19
	5.5	Agreements, Etc	20
	5.6	Authorizations	20
	5.7	Title	20
	5.8	Collateral	20
	5.9	Jurisdiction of Organization; Location	20
	5.10	Taxes	20
	5.11	Labor Law Matters	21
	5.12	Accounts	21
	5.13	Judgment Liens	21
	5.14	Structure	21
	5.15	Deposit Accounts	21
	5.16	Environmental	21

TABLE OF CONTENTS
(continued)

Page


	5.17	ERISA	22
	5.18	Investment Company Act	22
	5.19	Insider	22
	5.20	Sanctioned Persons; Sanctioned Countries	22
	5.21	Compliance with Covenants; No Default	22
	5.22	Full Disclosure	22
	5.23	Collateral Disclosure Certificates	22
	5.24	Operating and Capital Leases	22

6.	AFFIRMATIVE COVENANTS		22
	6.1	Use of Loan Proceeds	22
	6.2	Maintenance of Business and Properties	22
	6.3	Insurance	23
	6.4	Certain Notices	23
	6.5	Inspections of Books and Records and Field Examinations; Appraisals; Physical Inventories	23
	6.6	Financial Information	24
	6.7	Maintenance of Existence and Rights	25
	6.8	Payment of Taxes, Etc	25
	6.9	Subordination	25
	6.10	Compliance; Hazardous Materials	25
	6.11	Further Assurances	26
	6.12	Covenants Regarding Collateral	26

7.	NEGATIVE COVENANTS		26
	7.1	Debt	26
	7.2	Liens	27
	7.3	Restricted Payments	27
	7.4	Loans and Other Investments	27
	7.5	Change in Business; Activities Covered by Insurance, Etc	28
	7.6	Accounts	28
	7.7	Transactions with Affiliates	28
	7.8	No Change in Name, Offices, or Jurisdiction of Organization; Removal of Collateral	28
	7.9	No Sale, Leaseback	28
	7.10	Margin Stock	29
	7.11	Tangible Collateral	29
	7.12	Subsidiaries	29
	7.13	Liquidation, Mergers, Consolidations, and Dispositions of Assets; Name and Good Standing	29
	7.14	Change of Fiscal Year or Accounting Methods	29
	7.15	Deposit Accounts; Exclusive Control	29

8.	FINANCIAL COVENANTS		29
	8.1	Definitions	29
	8.2	Financial Covenants	30

9.	DEFAULT		30
	9.1	Events of Default	30
	9.2	Remedies	32
	9.3	Receiver	32
	9.4	Deposits; Insurance	32

TABLE OF CONTENTS
(continued)

Page


10.	MISCELLANEOUS		32
	10.1	No Waiver, Remedies Cumulative	32
	10.2	Survival of Representations	32
	10.3	Indemnity By Borrowers; Expenses	33
	10.4	Notices	33
	10.5	GOVERNING LAW	34
	10.6	Successors and Assigns	34
	10.7	Counterparts; Telecopied Signatures	34
	10.8	No Usury	34
	10.9	Powers	34
	10.10	Approvals; Amendments	34
	10.11	Participations and Assignments	34
	10.12	Dealings with Multiple Borrowers	34
	10.14	Additional Provisions	35
	10.15	Integration; Final Agreement	35
	10.16	LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES	35
	10.17	WAIVER OF JURY TRIAL	35
	10.18	Submission to Jurisdiction; Venue	36
	10.19	Credit Inquiries	36
	10.20	Information	36
	10.21	No Tax Advice	36

iii

EXHIBITS AND SCHEDULES

EXHIBITS:

Exhibit A

Form of Revolving Note

Exhibit B

Form of Notice of Borrowing

Exhibit C

Form of Collateral Disclosure Certificate

Exhibit T

Form of Telephone Instruction Letter

Exhibit 4.1

Form of Borrower’s Counsel’s Opinion

Exhibit 6.6(a)

Form of Borrowing Base Certificate

Exhibit 6.6(d)

Form of Compliance and No Default Certificate

SCHEDULES:

Schedule 5.3

Direct or Contingent Obligations and Liabilities

Schedule 5.4

Pending or Threatened Litigation

Schedule 5.8(b)

Insurance Policies

Schedule 5.9

Locations of Collateral

Schedule 5.14

Corporate Structure

Schedule 5.15

Deposit Accounts

Schedule 5.16

Environmental

Schedule 5.17

ERISA

Schedule 5.24

Operating and Capital Leases

Schedule 7.1

Scheduled Permitted Debt

Schedule 7.2

Scheduled Permitted Liens

Schedule 7.7

Transactions with Affiliates

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT (the “Agreement”), dated as of February 17, 2009, by and between AUTOINFO, INC., a Delaware corporation (“Parent Company”) and its direct and indirect Subsidiaries, namely, SUNTECK TRANSPORT CO., INC., (“Sunteck”), ELEETS LOGISTICS, INC. (“ELEETS”), SUNTECK TRANSPORT CARRIERS, INC. (“STC”), SUNTECK GOVERNMENT LOGISTICS, INC. (“SGL”), SUNTECK TRANSPORT GROUP, INC., a Florida corporation (“STG”), RAILPORT SERVICES, INC., a Florida corporation (“RSI”) and AMERICAN SHIPPERS DISPATCH, INC. (“ASD”), all of which are Florida corporations (Parent Company, together with Sunteck, ELEETS, STC, SGL, RSI and ASD, herein called, collectively, the “Borrowers” and, individually, a “Borrower”), and REGIONS BANK, an Alabama bank (together with its successors and assigns, “Lender”).

W I T N E S S E T H :

The Borrowers are engaged in a common business enterprise and, in connection therewith, have applied jointly to Lender for credit pursuant hereto. In consideration of the premises and of the mutual covenants herein contained and to induce Lender to extend credit to Borrowers, the parties agree as follows:

DEFINITIONS; RELATED TERMS.

1.1 Certain UCC Terms. Any term used in this Agreement or in any financing statement filed in connection herewith which is defined in the UCC and not otherwise defined in this Agreement or in any other Loan Document shall have the meaning given to the term in the UCC, including, without limitation, Accession, Account Debtor, Chattel Paper, Account, Commercial Tort Claim, Deposit Account, Document, Electronic Chattel Paper, Equipment, Fixture, Instrument, Inventory, Investment Property, Letter-of-Credit Right, Proceeds, Supporting Obligation, and Tangible Chattel Paper.

1.2 Defined Terms. Capitalized terms that are not otherwise defined herein shall have the meanings set forth in this Section 1.2. Certain terms relating to financial covenants are set forth in Section 8.

“Accounts Payable Report” has the meaning given such term in Section 6.6(a).

“Accounts Receivable Report” has the meaning given such term in Section 6.6(a).

“Affiliate” means, with respect to any Person, (a) any other Person directly or indirectly owning five percent (5%) or more of the Equity Interests of such Person or of which such Person owns five percent (5%) or more of such Equity Interests; (b) any other Person controlling, controlled by, or under common control with such Person; (c) any officer, director, or employee of such Person or any Affiliate of such Person; and (d) any family member or Affiliate of such Person. Without limitation of the foregoing, each Borrower is an Affiliate of each other Borrower.

“Applicable Margin” means, as to any Revolving Loan, one and 50/100ths of one percent (1.50%) per annum, so long as such Loan is a LIR Loan, and one and 50/100ths of one percent (1.50%) per annum if, pursuant to Section 2.3(f), such Loan is made as, or converted to, a Base Rate Loan.

“Base Rate” means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the greatest of (a) the Federal Funds Rate in effect on such day plus ½ of 1% or (b) the Prime Rate in effect on such day. If for any reason Lender shall have determined (which determination shall be conclusive absent manifest error) that it is unable, after due inquiry, to ascertain the Federal Funds Rate for any reason, including the inability or failure of Lender to obtain sufficient quotations in accordance with the terms hereof, the Base Rate shall be determined without regard to clause (a) of the first sentence of this definition until the circumstances giving rise to such inability no longer exist. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be effective on the effective date of such change in the Prime Rate or the Federal Funds Rate, respectively.

“Base Rate Loan” means a Loan, or portion thereof, during any period in which it bears interest at a rate based on the Base Rate pursuant to Section 2.3(f).

“Borrower” or “Borrowers” shall have the meanings given to such terms in the preamble to this Agreement.

“Borrower Agent” shall have the meaning set forth in Section 10.12.

“Borrowing Base” means, on any date of determination, an amount equal to:

(a) up to eighty-five percent (85%) (or such lesser percentage as Lender may determine from time to time in its Permitted Discretion) of the total amount of Eligible Billed Accounts, plus

(b) the lesser of (i) up to seventy-five percent (75%) (or such lesser percentage as Lender may determine from time to time in its Permitted Discretion) of the total amount of Eligible Unbilled Accounts or (ii) Twelve Million Dollars ($12,000,000), less

(c)

any Reserves.

“Borrowing Base Certificate” has the meaning set forth in Section 6.6(a).

“Business Day” means (a) any week day on which Lender is open for business in Birmingham, Alabama, and Atlanta, Georgia, and (b) with respect to all matters relating to the determination of the LIBOR Index Rate, any day that is also a day for trading by and between banks in U.S. dollar deposits in the London interbank market.

“Capital Expenditures” means, for any period, the aggregate cost of all capital assets acquired by a Borrower and its Subsidiaries during such period (including gross leases to be capitalized under GAAP and leasehold improvements), as determined in accordance with GAAP.

“Closing Date” means the earliest date on which all of the conditions precedent in Section 4 of this Agreement are satisfied and the initial extensions of credit are made under this Agreement.

“Collateral” means all property of each Borrower, wherever located and whether now owned by each Borrower or hereafter acquired, including but not limited to, for each Borrower, (a) all Inventory; (b) all General Intangibles; (c) all Accounts; (d) all Chattel Paper; (e) all Instruments and Documents and any other instrument or intangible representing payment for goods or services; (f) all Equipment; (g) all Investment Property; (h) all Commercial Tort Claims; (i) all Letter-of-Credit Rights; (j) all Deposit Accounts and funds on deposit therein, including but not limited to any Funding Account, Collections Account, and funds otherwise on deposit with or under the Control of Lender or its agents or correspondents; (k) all Fixtures and (l) all parts, replacements, substitutions, profits, products, Accessions, cash and non-cash Proceeds, and Supporting Obligations of any of the foregoing (including, but not limited to, insurance proceeds) in any form and wherever located. Collateral also includes, for each Borrower, (i) all written or electronically recorded books and records relating to any such Collateral and other rights relating thereto and (ii) any other real or personal property as to which Lender, at any time of determination, has a Lien to secure the Obligations. The term “Collateral” expressly includes all issued and outstanding Equity Interests of each Borrower which is a Subsidiary of Parent Company or another Borrower now or hereafter owned by the Parent Company or such Borrower, including all such Equity Interests so listed and described on Schedule 5.14.

“Collateral Disclosure Certificate” means each certificate, to be substantially in the form of Exhibit C attached hereto and made a part hereof, executed and delivered by a Credit Party to Lender on or before the Closing Date.

“Collections Account” means any Deposit Account maintained by a Borrower with Lender to which collections, deposits, and other payments on or with respect to Collateral may be made pursuant to the terms hereof and to which only Lender shall have access to withdraw or otherwise direct the disposition of funds on deposit therein.

“Commitment(s)” shall mean the Revolving Loan Commitment.

“Control” means, with respect to any asset, right, or property with respect to which a security interest therein is perfected by a secured party’s having “control” thereof (whether pursuant to the terms of an agreement or through the existence of certain facts and circumstances), that Lender has “control” of such asset, right, or property in accordance with the terms of Article 9 of the UCC.

“Credit Party” means each Borrower, each Guarantor (other than an individual Guarantor), and each other Person obligated to Lender under any Loan Document.

“Debt” means all liabilities of a Person as determined under GAAP and all obligations which such Person has guaranteed or endorsed or is otherwise secondarily or jointly liable for, and shall include, without limitation, (a) all obligations for borrowed money or purchased assets; (b) obligations secured by assets whether or not any personal liability exists; (c) the capitalized amount of any capital or finance lease obligations; (d) the unfunded portion of pension or benefit plans or other similar liabilities; (e) obligations as a general partner; (f) contingent obligations pursuant to guaranties, endorsements, letters of credit and other secondary liabilities; (g) obligations for deposits; and (h) obligations under Hedge Agreements.

“Default” means any event or circumstance which, upon satisfaction of any requirement for the giving of notice or the lapse of time, or the happening of any further condition, event, or act, would constitute an Event of Default.

“Default Rate” means, as of any date, a rate per annum that is equal to (a) in the case of each Loan outstanding on such date, two percent (2.00%) in excess of the rate otherwise applicable to such Loan on such date; (b) in the case of fees payable with respect to Letters of Credit, two percent (2.00%) in excess of the fees otherwise applicable to Letters of Credit; and (c) in the case of any other Obligations outstanding on such date, two percent (2.00%) in excess of the LIBOR Index Rate in effect on such date; provided, however, that Obligations arising under any Hedge Agreement shall bear interest at the rate and, if applicable, the default rate set forth in such Hedge Agreement.

“EBITDA” has the meaning given such term in Section 8.1.

“Eligible Accounts” means all of each Borrower’s Accounts (valued at the face amount of such invoice, minus the maximum discounts, credits, and allowances which may be taken by Account Debtors on such Accounts, and net of any sales tax, finance charges, or late payment charges included in the amount invoiced) created or acquired by such Borrower and arising from the rendering of services in such Borrower’s ordinary course of business, but excluding (without duplication), Accounts:

(a)

which are not denominated in U.S. dollars;

(b) over which Lender does not have a duly perfected, first-priority (and only) Lien or which, by contract, subrogation, mechanics’ lien laws, or otherwise, are subject to claims by a Borrower’s creditors or other third parties or which are owed by Account Debtors as to whom any creditor of Borrower (including any bonding company) has lien or retainage rights;

(c) as to which any representation, warranty, or covenant herein relating thereto shall be untrue, misleading, or in default in any material respect;

(d) outstanding for longer than (i) ninety (90) days from original invoice date or sixty (60) days from the original due date, whichever is the shorter time, in the case of Eligible Billed Accounts, and (ii) thirty (30) days from delivery date in the case of Eligible Unbilled Accounts;

(e) owed by any Account Debtor if more than twenty-five (25%) of the Accounts owed by such Account Debtor to a Borrower, or to Borrowers generally, are deemed ineligible pursuant to clause (d) above;

(f)

owed by any of such Borrower’s Affiliates;

(g) owed by any of such Borrower’s creditors, but only to the extent of Borrower’s Debt to such creditors;

(h) as to which the Account Debtor disputes liability or are otherwise in dispute or are subject to any counterclaim, contra-account, volume rebate, cooperative advertising accrual, deposit, or offset, but only to the extent thereof;

(i) owing by any Account Debtor (and such Account Debtor’s Affiliates) whose aggregate Accounts exceed ten percent (10%) of the total of Borrowers’ total Eligible Accounts, but only in each case to the extent of such excess;

(j) owing by any Account Debtor which is not Solvent or which is subject to any proceeding of the types described in Section 9.1(g) or Section 9.1(h);

(k) arising from a sale on a bill-and-hold, progress billing, guaranteed sale, sale-or-return, sale-on-approval, consignment, or similar basis;

(l) owed by an Account Debtor which (i) is a Sanctioned Person or (ii) is located outside of the United States of America or Canada (subject, in the case of Canada, to an aggregate dollar limit determined from time to time by Lender, in its Permitted Discretion) unless Lender, in its Permitted Discretion, agrees to allow such Account to be an Eligible Account on terms and conditions satisfactory to Lender in its Permitted Discretion;

(m) owed by the United States of America or any other governmental or quasi-governmental unit, agency, or subdivision unless such Borrower shall have complied with all applicable Federal and state assignment of claims laws as required by;

(n) (i) as to which the goods or services giving rise to such Account (A) have not been delivered or provided to, and accepted by, the Account Debtor, (B) are subject to repurchase, return, rejection, repossession, loss, or damage, or (C) have not been completely performed, as applicable, or (ii) which do not represent a final sale;

(o) evidenced by a note or other Instrument or Chattel Paper or which have been reduced to judgment;

(p) as to which such Borrower or Lender, in its Permitted Discretion, shall have determined the validity, collectibility, or amount thereof to be doubtful;

(q) owed by an Account Debtor which is located in a jurisdiction where such Borrower is required to qualify to transact business or to file reports, unless such Borrower has so qualified or filed; and

(r)

which Lender otherwise determines, in its Permitted Discretion, to be ineligible.

To the extent applicable, “Eligible Accounts” shall not include aged credit balances outstanding for longer than ninety (90) days.

“Eligible Billed Accounts” shall mean Eligible Accounts as to which the service corresponding thereto has been completed and a paper invoice or an electronic equivalent acceptable to Lender has been issued to the applicable Account Debtors.

“Eligible Unbilled Accounts” shall mean Eligible Accounts as to which the service corresponding thereto has been completed but no paper invoice or electronic equivalent acceptable to Lender has been issued to the applicable Account Debtors but which will be issued as soon as practicable in the ordinary course of a Borrower’s business.

“Environmental Laws” means, collectively, the Comprehensive Environmental Response, Compensation and Liability Act of 1980; the Superfund Amendments and Reauthorization Act of 1986; the Resource Conservation and Recovery Act; the Toxic Substances Act; the Clean Water Act; the Clean Air Act; the Oil Pollution and Hazardous Substances Control Act of 1978; and any other “Superfund” or “Superlien” law or any other Federal, state, or local statute, law, ordinance, code, rule, regulation, order, or decree relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic or dangerous waste, substance, or material, as now or at any time hereafter in effect, in each case, as the same may be amended from time to time.

“Equity Interest” means, with respect to any Person, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interest in (however designated) equity of such Person, including, without limitation, any common stock, preferred stock, limited or general partnership interests, and limited liability company membership interests, whether voting or non-voting.

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

“Event of Default” has the meaning given such term in Section 9.1.

“Excess Availability” means, at any time of determination, the amount by which (a) the lesser of (i) the Borrowing Base and (ii) the Revolving Loan Commitment, exceeds (b) the Working Capital Obligations.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal, for each day during such period, to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations at approximately 10:00 a.m. (Birmingham, Alabama, time) for such day on such transactions received by Lender from 3 Federal Funds brokers of recognized standing selected by it in its discretion.

“Fiscal Month,” “Fiscal Quarter,” and “Fiscal Year” means each of Borrower’s fiscal months, quarters, or years, as applicable.

“Fixed Charge Coverage Ratio” has the meaning given such term in Section 8.1.

“Flat Rate” shall mean a simple interest rate of three percent (3.0%) per annum.

“Funded Debt” has the meaning given such term in Section 8.1.

“Funding Account” means any Deposit Account maintained by a Borrower or Borrower Agent with Lender for the purpose of depositing the proceeds of Loans.

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

“General Intangibles” has the meaning set forth in the UCC, and includes, without limitation, general intangibles of each Borrower, whether now owned or hereafter created or acquired by each Borrower, including all choses in action, causes of action, company or other business records, inventions, blueprints, designs, patents, patent applications, trademarks, trademark applications, trade names, trade secrets, service marks, goodwill, brand names, copyrights, registrations, licenses, franchises, customer lists, permits, tax refund claims, computer programs, operational manuals, internet addresses and domain names, insurance refunds and premium rebates, all claims under guaranties, security interests or other security held by or granted to such Borrower to secure payment of any of any of such Borrower’s Accounts by an Account Debtor, all rights to indemnification and all other intangible property of such Borrower of every kind and nature (other than Accounts).

“Governmental Entity” means any (a) court (whether in law or at equity or trial or appellate), tribunal, or arbitrator or arbitration proceeding and (b) any local, city, state, Federal, municipal or quasi-municipal, foreign, or international government or any subdivision, agency, authority, commission, bureau, branch, regulatory body, or other body thereof.

“Guarantor” means any Person now or hereafter guaranteeing, endorsing, acting as surety of, or otherwise becoming liable for any Obligations.

“Guaranty” means any guaranty of all or any Obligations now or hereafter executed and delivered by any Guarantor to Lender, as the same may be amended, restated, supplemented, or otherwise modified from time to time.

“Hedge Agreement” has the meaning for swap agreement as defined in 11 U.S.C. § 101, as in effect from time to time, or any successor statute, and includes, without limitation, any rate swap agreement, forward rate agreement, commodity swap, commodity option, interest rate option, forward foreign exchange agreement, spot foreign exchange agreement, rate cap agreement, rate floor agreement, rate collar agreement, currency swap agreement, cross-currency rate swap agreement, currency option and any other similar agreement.

“Item” means any “item” as defined in Section 4-104 of the UCC, and shall also mean and include checks, drafts, money orders or other media of payment.

“Jurisdiction” means the State of Georgia.

“LC Obligations” means, at any time of determination, the aggregate undrawn and unreimbursed amounts under all Letters of Credit.

“Letter of Credit” means a letter of credit issued by Lender for the account of a Borrower, or Borrowers jointly, as provided in Section 2.1(a) and Section 2.10.

“Lien” means any lien (statutory or otherwise), mortgage, deed of trust, deed to secure debt, pledge, hypothecation, security interest, trust arrangement, security deed, financing lease, collateral assignment, encumbrance, conditional sale or title retention agreement, or any other interest in property designed to secure the repayment or performance of any obligation, whether arising by agreement or under any statute or law or otherwise.

“LIBOR” means a per annum rate equal to the rate per annum offered by prime banks in the London interbank eurodollar market for deposits in United States dollars in an amount comparable to the Loan for which such rate is being determined and for a period equal to the interest period applicable thereto, all as determined by Lender with reference to the financial information reporting service used by Lender at the time of such determination. Each calculation by Lender of LIBOR shall be conclusive and binding for all purposes, absent manifest error.

“LIBOR Index Rate” means, for any LIR Loan and at any time of determination, a per annum rate equal to LIBOR determined with respect to an interest period of one (1) month. At Borrowers’ election (or, if Borrowers make no election or while any Event of Default exists, then, at Lender’s election): (i) the LIBOR Index Rate shall be determined daily on each Business Day and shall be increased or decreased, as applicable, automatically and without notice to any Person on the date of each such determination, or (ii) the LIBOR Index Rate shall be determined monthly on the first Business Day of each calendar month and shall be increased or decreased, as applicable, automatically and without notice to any Person on the date of each such determination. Upon Borrowers’ request from time to time, Lender will quote the then current LIBOR Index Rate to Borrowers.

“LIBOR Reserve Requirements” means the maximum reserves (whether basic, supplemental, marginal, emergency, or otherwise) prescribed from time to time by the Board of Governors of the Federal Reserve System (or any successor) with respect to liabilities or assets consisting of or including “Eurocurrency liabilities” (as defined in Regulation D of the Board of Governors of the Federal Reserve System).

“LIR Loan” means a Loan, or portion thereof, during any period in which it bears interest at a rate based on the LIBOR Index Rate.

“Loans” means the Revolving Loans .

“Loan Documents” means this Agreement and each other now existing or hereafter arising document, agreement, or instrument evidencing, describing, guaranteeing, or securing the Obligations or delivered in connection with this Agreement (but excluding any Hedge Agreement), including, without limitation, each Security Agreement, Note, Guaranty, Notice of Borrowing, Collateral Disclosure Certificate, Borrowing Base Certificate, and UCC financing statement, as the same may be amended, restated, supplemented, or otherwise modified from time to time.

“Loss” has the meaning given such term in Section 6.3.

“Material Adverse Effect” means any (a) material adverse effect upon the validity, performance, or enforceability of any of the Loan Documents or any of the transactions contemplated hereby or thereby; (b) material adverse effect upon the properties, business, prospects, or condition (financial or otherwise) of any Credit Party; (c)

material adverse effect upon the ability of any Credit Party to fulfill any obligation under any of the Loan Documents; or (d) material adverse effect on the Collateral.

“Material Agreement” means an agreement to which any Credit Party is a party (other than the Loan Documents) evidencing or pertaining to (A) any Funded Debt, (B) capitalized leases or (C) operating leases with aggregate annual rentals exceeding One Hundred Thousand Dollars ($100,000) or, if otherwise, for which breach, termination, cancellation, nonperformance, or failure to renew could reasonably be expected to have a Material Adverse Effect.

“Net Proceeds” means, with respect to the disposition of any property, (a) the proceeds (including cash receivable (when received) by way of deferred payment) received by a Borrower in cash from the sale, lease, transfer, or other disposition of such property, including insurance proceeds and awards of compensation received with respect to any Loss affecting all or part of such property, minus (b) (i) the reasonable and customary costs and expenses of such sale, lease, transfer, or other disposition (including legal fees and sales commissions) and (ii) amounts applied to repayment of Debt for borrowed money (other than the Obligations) secured by a Permitted Lien on such property which is senior to Lender’s Liens; and (iii) in connection with any sale of such property, a reasonable reserve (not to exceed five percent (5%) of the total purchase price) for post-closing adjustments to the purchase price (provided that upon the expiration of ninety (90) days after the sale, any remaining reserve balance shall constitute Net Proceeds).

“Notes” shall mean the Revolving Note and any other promissory note now or hereafter evidencing any Obligations, as the same may be amended, restated, supplemented, or otherwise modified from time to time.

“Notice of Borrowing” means each written request for a Revolving Loan substantially in the form of Exhibit B, attached hereto and made a part hereof.

“OFAC” means the United States Department of the Treasury’s Office of Foreign Assets Control or any successor thereto.

“Obligations” means all obligations and covenants now or hereafter owed to Lender or any Affiliate of Lender by each Borrower, or Borrowers jointly, whether related or unrelated to the Loans, this Agreement, or the Loan Documents, including, without limitation or duplication, (a) amounts owed or to be owed under the terms of this Agreement and the other Loan Documents, or arising out of the transactions described herein or therein, (b) the Loans, (c) amounts paid by Lender under, and other obligations of each Borrower or Borrowers jointly arising under, Letters of Credit, letters of credit, bankers acceptances, or drafts accepted or issued by Lender for the account of a Borrower or Borrowers jointly, the LC Obligations, and commissions and fees incurred by a Borrower in connection with Lender’s issuance, amendment, renewal or extension of Letters of Credit, letters of credit, bankers acceptances, or Items, (d) any Debt arising out of or relating to any Deposit Accounts of a Borrower, or Borrowers jointly, with Lender or any Affiliate of Lender or any cash management services or other products or services, including merchant card and ACH transfer services, (e) all existing and future obligations under any Hedge Agreements between Lender or any Affiliate of Lender and a Borrower, or Borrowers jointly, whenever executed (including obligations under Hedge Agreements entered into prior to any transfer or sale of Lender’s interests hereunder if Lender ceases to be a party hereto), and (f) all fees, all costs of collection, attorneys’ fees and expenses of, or advances by, Lender which Lender pays or incurs (i) in discharge of obligations of any Credit Party, (ii) to inspect, repossess, remove, transport, deliver, protect, preserve, complete, store, sell or otherwise dispose of any Collateral, or (iii) in connection with the appointment and administration of any receiver, together, in each of the foregoing cases in this definition, all interest accruing thereon, including any interest on pre-petition Debt accruing after bankruptcy (whether or not allowable in such bankruptcy), and whether any of the foregoing amounts are now due or hereafter become due, are direct or indirect, or are certain or contingent, and whether such amounts due are from time to time reduced or entirely extinguished and thereafter re-incurred.

“Parent Company” shall have the meaning given to such term in the preamble to this Agreement.

“Permitted Debt” has the meaning set forth in Section 7.1 hereof.

“Permitted Discretion” shall mean the discretion of Lender exercised by it solely but in good faith and from the standpoint of an asset-based lender.

“Permitted Liens” has the meaning set forth in Section 7.2 hereof.

“Permitted Location” means (a) any location of each Borrower within the continental United States of America described in the Collateral Disclosure Certificate and (b) any other location within the continental United States of America as to which each Borrower shall have provided written notice to Lender and Lender shall have consented in writing to such location’s being a “Permitted Location.”

“Permitted Purposes”, in reference to the use(s) of the proceeds of the Loans, (i) to pay existing Debt being refinanced pursuant hereto, (ii) for each Borrower’s working capital and (iii) for other purposes in the ordinary course of each Borrower’s business as conducted on the Closing Date to the extent not in contravention of any terms or conditions of this Agreement.

“Person” means any natural person, corporation, unincorporated organization, trust, joint-stock company, joint venture, association, company, limited or general partnership, limited liability company, any government or any agency or political subdivision of any government, or any other entity or organization.

“Prime Rate” means that rate announced by Lender from time to time as its prime rate and is one of several interest rate bases used by Lender. Lender lends at rates both above and below its prime rate, and Borrower acknowledge that Lender’s prime rate is not represented or intended to be the lowest or most favorable rate of interest offered by Lender.

“Projections” means, for any period and as to such period, each Borrower’s, or Borrowers’ jointly and its (or their) Subsidiaries’ forecasted consolidated and consolidating (a) balance sheets, (b) profit and loss statements, (c) cash flow statements, and (d) Borrowing Base availability calculations, all prepared on a quarterly basis and on a basis consistent with each Borrower’s, or Borrowers’ jointly, and its (or their) Subsidiaries’ historical financial statements, together with appropriate supporting details and a statement of underlying assumptions.

“Properly Contested” means, in the case of any Debt of any Credit Party (including any taxes) which is not paid when due or payable by reason of such Credit Party’s bona fide dispute over its liability therefor or the amount thereof, (a) such Debt is being properly contested in good faith by appropriate proceedings promptly instituted and diligently conducted; (b) such Credit Party has established appropriate reserves in accordance with GAAP; (c) the non-payment of such Debt will not have a Material Adverse Effect and will not result in a forfeiture or sale of any of such Credit Party’s assets; (d) no Lien is imposed upon any of such Credit Party’s assets with respect to such Debt unless such Lien is at all times subordinate in priority to the Liens in favor of Lender (except only with respect to property taxes that have priority as a matter of applicable law) and enforcement of such Lien is stayed pending the final resolution or disposition of such dispute; (e) if the Debt results from, or is determined by the entry, rendition, or issuance against such Credit Party or any of its assets of a judgment, writ, order, or decree, enforcement of such judgment, writ, order, or decree is stayed pending a timely appeal or other judicial review; and (f) if such contest is abandoned, settled, or determined adversely (in whole or in part) to such Credit Party, such Credit Party forthwith pays such Debt and all penalties, interest, and other amounts due in connection therewith. Only that portion of the Debt which is in dispute may be Properly Contested.

“Qualified Appraisal” means an appraisal conducted in a manner and with such scope and using such methods as are acceptable to Lender by an appraiser selected by, or acceptable to, Lender, the results of which are acceptable to Lender in all respects.

“Regulated Materials” means any hazardous, toxic, or dangerous waste, substance, or material, the generation, handling, storage, disposal, treatment, or emission of which is subject to any Environmental Law.

“Reserves” means the such amounts, including but not limited to reserves for obligations under Hedge Agreements, as may be required by Lender to be imposed against borrowing availability at any time and from time to time in Lender’s Permitted Discretion.

“Restricted Payment” means (a) any cash dividend or other cash distribution, direct or indirect, on account of any Equity Interests issued by a Borrower or any of its Subsidiaries, as the case may be, now or hereafter outstanding, (b) any redemption, retirement, sinking fund or similar cash payment, purchase or other acquisition for value, direct or indirect, of any Equity Interests issued by a Borrower or any of its Subsidiaries now or hereafter outstanding by a Borrower or any of its Subsidiaries, as the case may be, except for any redemption, retirement, sinking funds or similar payment payable solely in such other shares or units of the same class of Equity Interests or any class of Equity Interests which are junior to that class of Equity Interests, (c) any cash payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire any Equity Interests issued by a Borrower or any of its Subsidiaries now or hereafter outstanding, or (d) the payment by a Borrower or any of its Subsidiaries of any Subordinated Debt.

“Revolving Loan Commitment” means the commitment of Lender, subject to the terms and conditions herein, to make Revolving Loans and issue Letters of Credit in accordance with the provisions of Section 2 in an aggregate amount not to exceed Thirty Million Dollars ($30,000,000) at any one time.

“Revolving Loan” means a loan made by Lender pursuant to Section 2.1(a).

“Revolving Note” has the meaning set forth in Section 2.2(a).

“Sanctioned Country” means a country subject to the sanctions program identified on the list maintained by OFAC and available at the following website or as otherwise published from time to time: http://www.treas.gov/offices/enforcement/ofac/programs/.

“Sanctioned Person” means (a) any Person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices/eotffc/ofac/sdn/index.html or as otherwise published from time to time, (b) any agency, authority, or subdivision of the government of a Sanctioned Country, (c) any Person or organization controlled by a Sanctioned Country, or (d) any Person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC.

“Security Agreement” means this Agreement as it relates to a security interest in the Collateral, and any other mortgage instrument, deed of trust, pledge agreement, life insurance assignment, security agreement, or similar agreement or instrument now or hereafter executed by any Credit Party or other Person granting Lender a Lien in any property to secure the Obligations.

“Senior Officer” means, as to any Credit Party, the chairman of the board of directors, the chief executive officer, chief operating officer, chief financial officer, chief legal officer, manager (with respect to any manager-managed limited liability company), or president of such Credit Party.

“Solvent” means, as to any Person, that such Person has capital sufficient to carry on its business and transactions in which it is currently engaged and all business and transactions in which it is about to engage, is able to pay its Debts as they mature, and has assets having a value greater than its liabilities, at fair valuation.

“Subordinated Debt” means any Debt (other than trade Debt incurred in the ordinary course of business) payable by a Borrower or a Subsidiary which is subordinate in right of payment and Lien priority to the Obligations and Lender’s Lien on the Collateral pursuant to a subordination agreement in form and substance satisfactory to Lender.

“Subsidiary” means, as to any Person, any other Person of which more than fifty percent (50%) of the Equity Interests issued by such other Person are directly or indirectly owned or effectively controlled by such Person. Any unqualified reference herein or in any Loan Document to “Subsidiary” shall be deemed a reference to a Borrower’s or the Borrowers’ Subsidiaries (if any), unless the context requires otherwise.

“Telephone Instruction Letter” means a telephone instruction letter substantially in the form of Exhibit T, attached hereto and made a part hereof.

“Term” means the period from and including the Closing Date to but not including the Termination Date.

“Termination Date” means the earliest to occur of (a) the third (3^rd) anniversary of the Closing Date; (b) the date on which Borrowers terminate this Agreement and the Commitments pursuant to Section 2.13; and (c) the date on which Lender terminates the Commitments pursuant to Section 9.2(a) hereof.

“Third Party” means (a) any lessor, mortgagee, mechanic or repairman, warehouse operator, processor, packager, or other third party which may have possession of any Collateral or lienholders’ enforcement rights against any Collateral or (b) any licensor whose rights in or with respect to any intellectual property or Collateral limit or restrict or may, in Lender’s determination, limit or restrict a Borrower’s or Lender’s right to sell or otherwise dispose of such Collateral.

“Third Party Agreement” means an agreement in form and substance satisfactory to Lender pursuant to which a Third Party, as applicable and as required by Lender, waives or subordinates in favor of Lender such Third Party’s lienholders’ enforcement rights against any Collateral, grants Lender access to the Collateral for purposes of allowing Lender to exercise its rights hereunder and under the other Loan Documents, or authorizes Lender to dispose of Collateral bearing or consisting of, in whole or in part, such Third Party’s intellectual property.

“Type” means, with respect to a Loan, whether such Loan is a Base Rate Loan or a LIR Loan.

“UCC” means the Uniform Commercial Code (or any successor statute), as adopted and in force in the Jurisdiction or, when the laws of any other state govern the method or manner of the perfection or enforcement of any Lien in any of the Collateral, the Uniform Commercial Code (or any successor statute) of such other state.

“U.S.” means the United States of America.

“USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, as the same may be amended, restated, supplemented, or otherwise modified from time to time.

“Working Capital Obligations” means the sum of (a) the aggregate principal amount of all outstanding Revolving Loans plus (b) all outstanding LC Obligations.

1.3 Financial Terms. All financial terms used herein shall have the meanings assigned to them under GAAP unless another meaning shall be specified.

THE CREDIT FACILITY.

2.1 The Commitments. Subject to the terms and conditions of this Agreement, Lender agrees to make Revolving Loans to Borrowers and issue Letters of Credit for Borrowers’ account from time to time during the Term. Lender shall have no obligation to make any Revolving Loan or issue any Letter of Credit if doing so would, after giving effect thereto, cause the Working Capital Obligations to exceed the lesser of (i) the Revolving Loan Commitment or (ii) the Borrowing Base. Within the foregoing limit and subject to the terms and conditions of this Agreement, Borrowers may borrow, repay, and reborrow the principal amount of the Revolving Loans at any time during the Term. Borrowers shall use the proceeds of the Revolving Loans only for Permitted Purposes.

2.2 The Notes. On the Closing Date, Borrowers shall execute and deliver to Lender a promissory note in the form of Exhibit A, attached hereto and made a part hereof (the “Revolving Note”), which Revolving Note, together with Lender’s records, shall evidence the Revolving Loans and interest accruing thereon.

2.3

Interest.

(a)

Types of Loans. Subject to Section 2.3(f), all Loans shall be made as LIR Loans.

(b) Agreement to Pay Interest. Borrowers agree to pay interest on all unpaid principal amounts of the Loans from the respective date each such Loan is made until such Loan is paid (whether at stated maturity, upon acceleration, or otherwise) at the rates of interest and at the times set forth in this Agreement.

(c) Interest Rate. All LIR Loans shall bear interest at a rate per annum equal to the greater of (i) the LIBOR Index Rate plus the Applicable Margin or (ii) the Flat Rate. Any Base Rate Loans shall bear interest at a rate per annum equal to the greater of (i) the Base Rate plus the Applicable Margin or (ii) the Flat Rate. All interest on any Loan and on all other Obligations shall be calculated on the presumed basis of a year of 360 days, for the actual number of days elapsed.

(d) Adjustment of Interest Rate. The rate of interest on any LIR Loan shall be adjusted as provided in the definition of “LIBOR Index Rate,” subject to Section 2.3(f). The rate of interest on any Base Rate Loan made pursuant to Section 2.3(f) shall be adjusted automatically and without notice on and as of the date of any change in the Base Rate.

(e) Default Rate. At Lender’s option, during the existence of any Event of Default, the principal amount of all Obligations (other than Obligations arising under Hedge Agreements between a Borrower, or Borrowers jointly, and Lender or its Affiliates) shall bear interest at the Default Rate. In any event, the Default Rate shall automatically and without notice apply from the time Lender accelerates or is deemed to have accelerated the Obligations pursuant to Section 9.2 until such Obligations or any judgment thereon is paid in full.

(f) Conversion to Base Rate. Any provision of this Agreement to the contrary notwithstanding, if Lender should at any time, in good faith, determine that (i) it is not reasonably possible to determine the LIBOR Index Rate, (ii) the LIBOR Index Rate is no longer available, (iii) it is no longer lawful for Lender to make Loans at a rate based on the LIBOR Index Rate, or (iv) a Default or Event of Default exists and Lender shall so elect; then, in each case, all affected LIR Loans shall automatically and without notice be converted into Base Rate Loans and any Loans made thereafter shall be made as Base Rate Loans until such time as Lender shall have determined that such illegality has been reversed, such condition has ceased to exist, or such Event of Default shall have been waived, as applicable.

(g) Opening LIBOR Index Rate. The LIBOR Index Rate on the date hereof is _______ percent (____%) per annum and, therefore, the rate of interest in effect hereunder on the date hereof, expressed in simple interest terms (but on a 360-day basis), is _______ percent (____%) per annum with respect to any portion of the Revolving Loans bearing interest as a LIR Loan.

2.4

Requesting New Loans.

(a) Revolving Loans. Revolving Loans shall be deemed requested pursuant to the following clauses (i) and (ii) or requested pursuant to the following clause (iii).

(i) Subject to Section 2.4(b), the becoming due of any Obligation (whether as principal, accrued interest, fees, or other charges owed to Lender or any Affiliate of Lender) shall in all respects constitute Borrowers’ irrevocable request for a Revolving Loan in an amount equal to such Obligations, and Lender may make such Revolving Loan and apply the proceeds thereof to the payment of such Obligations.

(ii) Subject to Section 2.4(b), the presentment for payment of any instrument drawn on, or request for any wire or other transfer from, a Funding Account at a time when there are insufficient funds in such account to cover such instrument shall in all respects constitute Borrowers’ irrevocable request for a Revolving Loan in an amount equal to the amount payable on such instrument to be made by Lender, and Lender may make such Revolving Loan and apply the proceeds thereof to such Funding Account for payment of such instrument or transfer.

(iii) For all other Revolving Loans, Borrowers shall provide Lender a request in accordance with Section 2.5.

(b) Provisions Regarding Deemed Requests for Revolving Loans. Lender shall have no obligation to honor any deemed request for a Revolving Loan under Sections 2.4(a)(i) or (ii), if (i) such request is deemed made after the Termination Date, (ii) doing so would cause the Working Capital Obligations to exceed the lesser of (A) the Revolving Loan Commitment or (B) the Borrowing Base, or (iii) Lender determines that any condition precedent in Section 4.2 hereof or any other condition precedent to the making of such Loan is not then satisfied or will not be satisfied when such Loan is to be made; provided, Lender may make such Revolving Loan in its sole and absolute discretion and without regard to the existence of, and without being deemed to have waived, any Default or Event of Default which may then exist or arise from the making of such Revolving Loan. Lender may make Revolving Loans under Sections 2.4(a)(i) and (ii) without Borrowers’ having submitted a request (whether telephonic or in writing) therefor.

2.5

Requests for Borrowings.

(a) Making Requests for New Loans. Each request for the making of a new Revolving Loan, may be made telephonically; provided, however, that Lender, in its sole discretion, may from time to time require each such request to be in writing. If Lender requires Borrowers to make a request for a new Revolving Loan in writing, Borrowers shall submit a Notice of Borrowing therefor. Each request (whether telephonic or in writing) shall specify (i) the date for the making of the applicable Loan, which date must be a Business Day; (ii) the principal amount of the applicable Loan to be made; (iii) for any new Loan, instructions for the disbursement of the proceeds of such Loan for Permitted Purposes (provided that, if such instructions are not included, the proceeds will be deposited into a Funding Account); (iv) for any new Revolving Loan, if requested by Lender, a written calculation of the Borrowing Base and a reconciliation of such Borrowing Base to the previous Borrowing Base or request for a Revolving Loan; and (v) such other information Lender may require from time to time.

(b) Timing and Acceptance of Requests. Requests made under this Section 2.5 (whether telephonic or in writing) are irrevocable. Requests under this Section 2.5 which Lender receives after 11:00 a.m. (Birmingham, Alabama, time) shall be deemed received on the next Business Day. Lender’s acceptance of a request for the making of a new Loan under this Section 2.5 shall be indicated by its making the Loan requested.

2.6 Excess Outstandings. Any provision of this Agreement to the contrary notwithstanding, Lender may, in its sole and absolute discretion, make or permit to remain outstanding Revolving Loans which are causing or would cause the Working Capital Obligations to exceed the Revolving Loan Commitment or the Borrowing Base, and all such excess amounts shall (i) be part of the Obligations evidenced by the Revolving Note, (ii) bear interest as provided herein, (iii) be payable on demand, (iv) be secured by the Collateral, and (v) be entitled to all rights and security as provided under the Loan Documents.

2.7

Repayment of Loans.

(a) Repayment of Obligations Generally. Borrowers shall pay all outstanding principal amounts and accrued interest under Note in accordance with the terms of such Note and this Agreement.

(b)

Repayment of Revolving Loans.

(i) Borrowers shall immediately repay the principal amount of the Revolving Loans with the proceeds of any Collateral of the type included in the Borrowing Base; provided, however, that, to the extent Lender receives and applies such proceeds in the manner described in, and in accordance with, Section 2.9, Borrowers’ payment obligation under this Section 2.7(b)(i) shall be satisfied with respect to such proceeds. All payments made pursuant to this subsection shall be applied in the manner set forth in Section 2.9. All outstanding principal of the Revolving Loans shall be due and payable on the Termination Date.

(ii) Interest accrued on the Revolving Loans shall be due and payable, in arrears, on (A) the first day of each month (for the immediately preceding month), computed through the last calendar day of the preceding month; and (B) on the Termination Date.

2.8

Additional Payment Provisions.

(a) Payment of Other Obligations. Borrowers shall pay Lender the balance of the Obligations under the Loan Documents requiring the payment of money on the terms set forth in the Loan Documents, or, if no date of payment is otherwise specified in the Loan Documents, on demand.

(b) Authorization to Debit. In addition to Lender’s right to make a deemed Revolving Loan under Section 2.4(a), Lender may, without notice to, or the consent of, Borrowers, debit any Funding Account, Collections Account, other Deposit Account, or other account over which Lender has Control and apply such amounts to the payment of Obligations which are then due and payable.

(c) Time and Location of Payment. Except for payments made pursuant to Section 2.9 and Section 2.4(a)(i), Borrowers shall make each payment of principal of and interest and other Obligations which are due and payable not later than 12:00 noon (Birmingham, Alabama, time) on the date due, without set-off, counterclaim, or other deduction, in immediately available funds to Lender at its address referred to in Section 10.4. If any payment of any Obligations shall be due on a day which is not a Business Day, such payment shall be due and payable the next Business Day, and interest shall accrue during such time.

(d) Excess Over Borrowing Base. At any time the Working Capital Obligations exceed the Borrowing Base, Borrowers shall immediately pay the amount of such excess to Lender.

(e) Hedge Agreements Are Independent. Prepayment of any Loans shall not affect any Borrower’s obligation to continue making payments under any Hedge Agreement, which shall remain in full force and effect notwithstanding such prepayment, subject to the terms of such Hedge Agreement.

(f) Capital Requirements; Increased Costs. If (i) the introduction of, or any change in, or in the interpretation of, any applicable law or (ii) compliance with any guideline or request from any central bank or comparable agency or other governmental authority (whether or not having the force of law), has or would have the effect of reducing the rate of return on the capital of, or has affected or would affect the amount of capital required to be maintained by Lender or any Person controlling Lender as a consequence of, or with reference to, the Commitments and other commitments of this type, below the rate which Lender or such other Person could have achieved but for such introduction, change, or compliance, then within five (5) Business Days after Lender’s written demand therefor, Borrowers shall pay Lender from time to time as specified by Lender additional amounts sufficient to compensate Lender or such other Person for such reduction. Lender’s accounting of such amounts submitted in writing to Borrower shall be presumed conclusive absent manifest error. If there is any change in the LIBOR Reserve Requirements, then Borrowers shall, from time to time upon demand by Lender, pay to Lender such additional amounts as Lender may deem necessary to compensate Lender for any increased costs resulting from such change. Borrowers agree that Lender’s determination of such additional amounts and increased costs will be made in Lender’s sole discretion and shall be conclusive absent manifest error.

2.9

Lockboxes; Collections Accounts.

(a) Establishment of Lockboxes. Borrowers shall, on or before the Closing Date, (i) establish and thereafter maintain one or more lockboxes under Lender’s control and (ii) contemporaneously therewith, direct all of its Account Debtors to make payments to such lockboxes (or, if made by wire or other transfer, to a Collections Account).

(b) Collections Accounts. To the extent not delivered directly to a lockbox, all Items or funds received by each Borrower in respect of Accounts or the sale of Inventory or as Net Proceeds of other Collateral shall be held by such Borrower in trust for Lender, shall not be commingled with such Borrower’s funds, and shall be deposited promptly by such Borrower into a Collections Account or forwarded to Lender in the form received. All such Items and funds shall be the exclusive property of Lender upon the earlier of the receipt thereof by Lender or by Borrower. Subject to Section 2.9(c), Lender shall apply available balances from any Item or funds deposited into a Collections Account to the payment of Obligations in whatever order Lender shall determine.

(c) Chargebacks. No payment item received by Lender shall constitute payment to Lender until such item is actually collected by Lender and credited to the Collections Account; provided, however, that Lender shall have the right to charge back to the Collections Account (or any other account of Borrower maintained with Lender) an Item which is returned for inability to collect, plus accrued interest during the period of Lender’s provisional credit for such item prior to receiving notice of dishonor.

(d) Power of Attorney; Security Interest; Applicable Fees. Borrowers hereby irrevocably appoint Lender (and any Person designated by Lender) as each Borrower’s attorney-in-fact to indorse each Borrower’s name on any Items which come into Lender’s possession or control, this power being coupled with an interest is irrevocable so long as any of the Obligations remain outstanding. Such indorsement by Lender under such power of attorney shall, for all purposes, be deemed to have been made by the affected Borrower (prior to any subsequent indorsement by Lender) in negotiation of the Item. In addition to the security interest granted Lender in Section 3, each Borrower hereby grants Lender a security interest in and to all Items, funds, and balances held in any lockbox, any Funding Account, and any Collections Account, in each case as Collateral for the Obligations. Each Borrower shall pay all of Lender’s standard fees and charges in connection with any lockboxes, Funding Accounts, and Collections Accounts and the processing of Items and other transactions relating thereto, as such fees and charges may change from time to time.

2.10

Letters of Credit.

(a) Issuance of Letters of Credit. Subject to the terms and conditions of this Agreement, Lender shall from time to time issue, extend, or renew Letters of Credit for the account of Borrowers jointly, provided that (i) Borrowers shall have given Lender not less than five (5) Business Days’ written notice thereof; (ii) Lender shall have no obligation to issue any Letter of Credit, if (A) doing so would cause (1) the Working Capital Obligations to exceed the lesser of (a) the Borrowing Base or (b) the Revolving Loan Commitment or (2) the LC Obligations to exceed Three Million Dollars ($3,000,000) or (B) the expiration date of such requested Letter of Credit would occur after the date specified in clause (a) of the definition of Termination Date; and (iii) all other conditions precedent to the issuance of each such Letter or Credit set forth in this Agreement shall have been satisfied or waived in writing by Lender. All payments made by Lender under any Letter of Credit (whether or not a Borrower is the account party) and all fees, commissions, discounts, and other amounts owed or to be owed to Lender in connection therewith, shall be paid on demand, unless (x) Borrowers instruct Lender to make a Revolving Loan to pay such amount, (y) Lender agrees to do so, and (z) sufficient Excess Availability exists to make such Revolving Loan. All LC Obligations shall be secured by the Collateral. Borrowers shall complete and sign such applications and supplemental agreements and provide such other documentation as Lender may require in respect to the issuance and administration of the Letters of Credit. The form and substance of all Letters of Credit shall be subject to Lender’s approval. Lender may charge certain fees or commissions for the issuance, handling, renewal or extension of a Letter of Credit, in addition to the fees payable pursuant to Section 2.11. Borrowers unconditionally guarantee the payment and performance of all obligations of any Subsidiary with respect to Letters of Credit issued for the account of such Subsidiary. Upon Lender’s request during the existence of an Event of Default, Borrowers shall immediately deliver to Lender immediately available funds in an amount equal to one hundred five percent (105%) of the LC Obligations, which Lender shall hold as cash collateral for the payment of Obligations related to the Letters of Credit.

(b) Law Governing Letter of Credit. Each Letter of Credit issued hereunder shall be governed, as applicable, by (i) the Uniform Customs and Practice for Documentary Credits International Chamber of Commerce (“ICC”), Publication 500, or any subsequent revision or restatement thereof adopted by the ICC and in use by Lender or (ii) the International Standby Practices, ICC Publication No. 590, or any subsequent revision or restatement thereof adopted by the ICC and in use by Lender, except to the extent that the terms of such publication would limit or diminish rights granted to Lender hereunder or in any other Loan Document.

2.11

Fees.

(a)

Closing Fee. [NONE].

(b) Unused Line Fee. Borrowers shall pay Lender a fee for each day of the Term equal to (A) the Unused Line Fee Rate divided by (B) 360, times (C) the amount by which the Revolving Loan Commitment

exceeded the Working Capital Obligations on such day. Borrowers shall pay this fee on the first day of each calendar month, for each day in the preceding calendar month, and on the Termination Date. As used herein, “Unused Line Fee Rate” shall mean, (i) 25/100ths of one percent (.25%), if Working Capital Obligations (determined on a daily average basis for the calendar month, or portion thereof, for which such fee is being charged) are equal to or greater than Fifteen Million Dollars ($15,000,000), or (ii) 37.5/100^th of one percent (.375%), until May 31, 2009, and, thereafter, 50/100^th of one percent (.50%), if Working Capital Obligations, as so determined for the same such period, are less than Fifteen Million Dollars ($15,000,000).

(c) Letter of Credit Fees. Borrowers shall pay to Lender, at such times as Lender shall require, Lender’s standard fees in connection with Letters of Credit, as in effect from time to time, and with respect to standby and commercial Letters of Credit, at the time of issuance of each Letter of Credit, a fee equal to the Applicable Margin for LIR Loans on the face amount of the Letter of Credit for the period of time the Letter of Credit will be outstanding.

(d) Field Examinations. Borrowers shall pay for all field examinations to the extent required by Section 6.5.

(e) Appraisals. Borrowers shall pay all costs and expenses relating to any appraisals conducted in contemplation of this Agreement and for any other appraisals conducted from time to time to the extent required by this Agreement or the other Loan Documents.

(f) Method of Calculation. Unless otherwise expressly provided, all fees payable hereunder or with respect to any Obligations shall be calculated on the presumed basis of a year of 360 days, for the actual number of days elapsed.

2.12 Statement of Account. If Lender provides Borrowers with a statement of account on a periodic basis, each such statement will be binding on Borrowers unless, within forty-five (45) days of its receipt, Borrowers object in writing and with specificity to such statement.

2.13 Termination. Borrowers may terminate this Agreement and the Commitments before the Termination Date, in whole but not in part, by giving Lender thirty (30) days prior written notice; provided, however, no termination by Borrowers shall be effective until (a) Lender shall have received cash collateral or an irrevocable direct-pay letter of credit naming Lender as beneficiary, which letter of credit shall be in form and substance satisfactory to Lender, be issued by a bank other than Lender but satisfactory to Lender, and be in an original face amount equal to one hundred five percent (105%) of all Obligations which remain contingent (e.g., LC Obligations and pending indemnification payments) and (b) all other Obligations have been fully and finally paid and performed. Any notice of termination shall be irrevocable. Lender may terminate this Agreement and the Commitments at any time, without notice, during the existence of an Event of Default.

2.14 USA Patriot Act Notice. To help fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each Person who opens an account. For purposes of this section, account shall be understood to include loan accounts.

SECURITY AGREEMENT.

3.1

Security Interest.

(a) As security for the full and final payment and performance of the Obligations, each Borrower hereby grants to Lender (for itself and its Affiliates) a continuing security interest in and to all right, title, and interest of each Borrower in and to the Collateral of such Borrower, whether now owned or hereafter acquired by such Borrower.

(b) Except as expressly required by the Security Agreements or applicable law, Lender shall have no obligation to (i) exercise any degree of care in connection with any Collateral in its possession or (ii) take any steps necessary to preserve any rights in the Collateral or to preserve any rights in the Collateral against senior or prior

parties (which steps Borrowers agree to take). In any case, Lender shall be deemed to have exercised reasonable care of the Collateral if Lender takes such steps for the care and preservation of the Collateral or rights therein as Borrowers reasonably request Lender to take; provided that Lender’s omission to take any action not requested by Borrowers shall not be deemed a failure to exercise reasonable care. Lender’s segregation or specific allocation of specified items of Collateral against any of Borrowers’ liabilities shall not waive or affect any Lien against other items of Collateral or any of Lender’s options, powers, or rights under this Agreement or otherwise arising.

(c) Lender may at any time and from time to time, with or without notice to Borrowers, (i) transfer any of the Collateral into the name of Lender or the name of Lender’s nominee, (ii) notify any Account Debtor or other obligor with respect to any of the Collateral to make payment of any amounts due or to become due thereon directly to Lender, and (iii) receive and direct the disposition of any proceeds of any Collateral.

(d) Notwithstanding the foregoing, (i) no Account, Instrument, Chattel Paper, or other obligation or property of any kind due from, owed by, or belonging to, a Sanctioned Person or (ii) any lease under which the lessee is a Sanctioned Person shall be Collateral or shall be credited toward the payment of the Obligations.

3.2 Financing Statements; Fixture Filings; Power of Attorney. Each Borrower authorizes Lender to file any financing statements (and other similar filings or public records or notices relating to the perfection of Liens), fixture filings, and amendments thereto relating to the Collateral which Lender deems appropriate, in form and substance required by Lender, and to (a) describe the Collateral thereon (i) as “all personal property of the debtor,” “all assets,” or words of similar effect, if appropriate and permitted by applicable law, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC or any other applicable law, or (ii) by specific collateral category and (b) include therein all other information which is required by Article 9 of the UCC or other applicable law with respect to the preparation or filing of a financing statement (or other similar filings or public records or notices relating to the perfection of Liens), fixture filing, or amendment. Each Borrower appoints Lender as its attorney-in-fact to perform all acts which Lender deems appropriate to perfect and to continue perfection of the Lien granted to Lender under any Security Agreement, including, without limitation, (x) the filing of financing statements (and other similar filings or public records or notices relating to the perfection of Liens), fixture filings, and amendments, (y) the execution in such Borrower’s name of any agreements providing for Control over any applicable Collateral, and (z) the indorsement, presentation, and collection on behalf of such Borrower and in such Borrower’s name of any Items or other documents necessary or desirable to collect any amounts which such Borrower may be owed, such power of attorney being coupled with an interest and is therefore irrevocable. Borrower grants Lender a license or other right to use, without charge, such Borrower’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks and advertising matter, and any Property of a similar nature, as it pertains to the Collateral, in advertising for sale and selling any Collateral, and such Borrower’s rights under all licenses and all franchise agreements shall inure to Lender’s benefit. Each Borrower shall be liable for any and all expense incurred in connection with Lender’s exercising its rights under this Section 3.2.

3.3 Entry. Each Borrower (for itself and on behalf of its Subsidiaries) irrevocably consents to any act by Lender or its agents in entering upon any premises for the purposes of either (a) inspecting any Collateral or (b) taking possession of any Collateral. Borrower waives, as to Lender and its agents, any now existing or hereafter arising claim based upon trespass or any similar cause of action for entering upon any premises where Collateral may be located.

3.4 Other Rights. Without limiting any Credit Party’s obligations under the Loan Documents, each Borrower authorizes Lender from time to time (a) to (i) take from any party and hold additional Collateral or Guaranty for the payment of the Obligations or any part thereof, (ii) exchange, enforce, or release such Collateral or Guaranty or any part thereof, and (iii) release or substitute any indorser or Guarantor or any party who has granted Lender any security interest in any property as security for the payment of the Obligations or any part thereof or any party in any way obligated to pay the Obligations or any part thereof, and (b) during the existence of any Event of Default, to direct the manner of the disposition of the Collateral and the enforcement of any indorsements, guaranties, letters of credit, or other security or Supporting Obligations relating to the Obligations or any part thereof as Lender in its sole discretion may determine.

3.5 Accounts. Before or after any Event of Default, Lender may contact any Account Debtor (a) to ensure such Account Debtor is directing payments on Borrower’s Accounts to a lockbox or a Collections Account

(as applicable), (b) to direct such Account Debtor to make payment directly to Lender, a lockbox, or a Collections Account, and (c) to notify such Account Debtor of the existence of Lender’s Liens under the Security Agreements.

3.6 Waiver of Marshaling. Each Borrower hereby waives any right it may have to require marshaling of its assets.

3.7 Control; Further Assurances. Each Borrower will, at its expense, cooperate with Lender in (a) obtaining Control of, or Control agreements with respect to, Collateral for which Control or a Control agreement is required for perfection of Lender’s security interest under the UCC and (b) perfecting Lender’s Lien in the Collateral.

3.8 Pledge of Equity Interests. Each Borrower will cause all certificates representing its ownership of Equity Interests in each other Borrower constituting Collateral hereunder to be physically delivered to Lender, in pledge, on the Closing Date (or, as to any such certificates issued subsequent to the Closing Date, promptly upon their issuance) together with stock powers (assignments) executed “in blank” in respect thereof.

CONDITIONS PRECEDENT TO EXTENSIONS OF CREDIT.

4.1 Conditions Precedent to each Initial Loan. In addition to any other requirement set forth in this Agreement, Lender shall not be required to fund any Loan or make any other extensions of credit hereunder unless and until the following conditions shall have been satisfied, in the sole opinion of Lender and its counsel:

(a) Loan Documents. Each Borrower and each other Credit Party shall have executed and delivered this Agreement, each Note, and all other required Loan Documents, all in form and substance satisfactory to Lender.

(b) Supporting Documents and Other Conditions. Borrowers shall cause to be delivered to Lender the following documents (each of which must be in form and substance satisfactory to Lender) and shall satisfy the following conditions:

(i) A copy of the governing instruments of each Borrower and each Subsidiary, and good standing certificates of each Borrower and each Subsidiary, certified by the appropriate official of their respective states of incorporation and each state in which each Borrower or such Subsidiary is qualified to do business;

(ii) Incumbency certificate and certified resolutions of the board of directors (or other appropriate governing body) of each Borrower and each other Credit Party executing any Loan Documents (other than Lender), signed by the secretary or another authorized officer of each Borrower or such other Credit Party, authorizing the execution, delivery, and performance of the Loan Documents;

(iii) The legal opinion of each Credit Party’s legal counsel addressed to Lender regarding the matters set forth in Exhibit 4.1, attached hereto and made a part hereof, and such other matters as Lender and its counsel may request;

(iv) A Borrowing Base Certificate duly completed by Borrowers, together with all supporting statements, schedules, and reconciliations as required by Lender;

(v) UCC searches and other Lien searches showing no existing security interests in or Liens on the Collateral (other than Permitted Liens acceptable to Lender);

(vi)

A Collateral Disclosure Certificate duly completed by Borrowers;

(vii) Satisfactory evidence of insurance meeting the requirements of Sections 5.8(b) and 6.3;

(viii) UCC financing statements (and other similar filings or public records or notices relating to the perfection of Liens) and, if applicable, certificates of title covering the Collateral shall duly have been recorded or filed in the manner and places required by law to establish, preserve, protect, and perfect the interests

and rights created or intended to be created by the Security Agreements, and all taxes, fees, and other charges in connection with the execution, delivery, and filing of the Security Agreements and the financing statements (and any other similar filings or public records or notices relating to the perfection of Liens) shall have been paid;

(ix)

Subordination agreements as may be required by Section 6.9;

(x)

Third Party Agreements as required by Section 6.12;

(xi) A complete and final payoff letter from any lender whose outstanding Debt is to be paid in full with the proceeds of the initial Loans;

(xii) A fully executed deposit account control agreement respecting each Borrower’s Deposit Accounts, providing for Lender’s exclusive control thereof, in form and substance satisfactory to Lender;

(xiii)

All collateral and field exams required by Lender shall have been completed;

(xiv) All additional opinions, documents, certificates, and other assurances that Lender or its counsel may require;

(xv) Satisfactory evidence of payment of all fees due and reimbursement of all costs incurred by Lender, and evidence of payment to other parties of all fees or costs which Borrowers are required under the Loan Documents to pay by the date of the initial Loan;

(xvi) There shall be no litigation in which any Credit Party or Subsidiary is a party defendant, which Lender determines may have a Material Adverse Effect;

(xvii) Lender shall have received Borrowers’ and their Subsidiaries’ financial statements for their most recently concluded Fiscal Year and Fiscal Month and such other financial reports and information concerning such Persons as Lender shall request; and

(xviii) Lender shall have determined that after the making of the initial Loans to be made on the Closing Date, the issuance of any Letters of Credit to be issued on the Closing Date, and the payment of all fees and closing costs incurred on or prior to the Closing Date, Excess Availability shall not be less than an amount equal to (A) Three Million Five Hundred Thousand Dollars ($3,500,000) plus (B) the aggregate amount of all of Borrowers’ accounts payable which are more than thirty (30) days past due; and

(xix) Lender shall have received Projections for the current Fiscal Year prepared on a quarterly basis and Projections for the next two (2) Fiscal Years, prepared on an annual basis.

4.2 Conditions Precedent to Each Loan. In addition to any other requirements set forth in this Agreement, Lender shall not be required to fund any Loan or issue any Letter of Credit unless and until each of the following conditions shall have been satisfied, in Lender’s sole opinion, and each request for a Loan (whether or not a written Notice of Borrowing is required) or issuance of a Letter of Credit shall be deemed to be a representation that all such conditions have been satisfied:

(a) Notice of Borrowing. If required by this Agreement or by Lender, Borrowers shall have delivered to Lender a Notice of Borrowing and such other information as Lender may request;

(b) No Default. No Default shall have occurred and be continuing or would result from the making or issuance of the requested Loan or Letter of Credit;

(c) Correctness of Representations. All representations and warranties made to Lender by any Credit Party in any Loan Document or otherwise in writing shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of date of the requested Loan or Letter of Credit;

(d) No Material Adverse Effect. There shall have been no change which could have a Material Adverse Effect on any Credit Party or Subsidiary of any Borrower since the date of the most recent financial statements of such Person delivered to Lender from time to time;

(e) Limitations Not Exceeded. Any making or issuance of any requested Revolving Loan or Letter of Credit would not cause the Working Capital Obligations to exceed the lesser of (i) the Revolving Loan Commitment or (ii) the Borrowing Base; and

(f) Further Assurances. Each Credit Party shall have delivered such further documentation or assurances as Lender may require, in its Permitted Discretion.

REPRESENTATIONS AND WARRANTIES.

To induce Lender to enter into this Agreement and to make the Loans or extend credit as provided for herein, each Borrower makes the following representations and warranties, all of which shall survive the execution and delivery of the Loan Documents. Unless otherwise specified, such representations and warranties shall be deemed made as of the date hereof and as of the date of each request for a Loan or extension of credit hereunder:

5.1 Valid Existence and Power. Each Borrower and each Subsidiary is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization and is duly qualified or licensed to transact business in all places where the failure to be so qualified could reasonably be likely to have a Material Adverse Effect. Each of Borrower and each other Credit Party has the power to make and perform the Loan Documents executed by it and all Loan Documents will constitute the legal, valid, and binding obligations of such Person, enforceable in accordance with their respective terms, subject only to bankruptcy and similar laws affecting creditors’ rights generally. Each Borrower is organized under the laws of the State (or other jurisdiction) first inscribed hereinabove, and has not changed the jurisdiction of its organization within the five (5) years preceding the Closing Date.

5.2 Authority. The execution, delivery, and performance thereof by each Borrower and each other Credit Party executing any Loan Document have been duly authorized by all necessary actions of such Person, and do not and will not violate any provision of law or regulation, or any writ, order, or decree of any Governmental Entity or any provision of the governing instruments of such Person, and do not and will not, with the passage of time or the giving of notice, result in a breach of, or constitute a default or require any consent under, or result in the creation of any Lien upon any property or assets of such Person pursuant to, any law, regulation, instrument, or agreement to which any such Person is a party or by which any such Person or its respective properties may be subject, bound, or affected.

5.3 Financial Condition. Other than as disclosed in financial statements delivered to Lender on or before the Closing Date or as may be on Schedule 5.3, attached hereto and made a part hereof, none of any Borrower, any Subsidiary, or (to the knowledge of any Borrower) any Guarantor has any material direct or contingent obligations or liabilities or any material unrealized or anticipated losses from any commitments of such Person. As of the Closing Date, all operating and capital leases under which any Borrower, any Subsidiary, or (to the knowledge of Borrower) any Guarantor is lessee are disclosed in the financial statements delivered to Lender on or before the Closing Date or on Schedule 5.3. All financial statements from time to time delivered to Lender by Borrowers shall have been prepared in accordance with GAAP and fairly present the financial condition of such Person as of the date thereof. Borrowers are not aware of any material adverse fact (other than facts which are generally available to the public and not particular to any Borrower, such as general economic trends) concerning the condition (financial or otherwise) or future prospects of Borrower or any Subsidiary or any Guarantor which has not been fully disclosed to Lender, including any adverse change in the operations or financial condition of such Person since the date of the most recent financial statements delivered to Lender. Each Credit Party is Solvent and, after consummation of the transactions set forth in this Agreement and the other Loan Documents, will be Solvent.

5.4 Litigation. Except as may be disclosed on Schedule 5.4, attached hereto and made a part hereof, there are no suits or proceedings pending or, to any Borrower’s knowledge, threatened by or before any Governmental Entity against or affecting any Borrower, any Subsidiary or (to any Borrower’s knowledge) any

Guarantor, or their respective assets, which if adversely determined could reasonably be expected to have a Material Adverse Effect.

5.5 Agreements, Etc. Neither any Borrower nor any Subsidiary is a party to any agreement or instrument or subject to any order or decree of any Governmental Entity or any charter or other corporate restriction, adversely affecting its business, assets, operations, or condition (financial or otherwise), nor is any such Person in default in the performance, observance, or fulfillment of any of the obligations, covenants, or conditions contained in any agreement or instrument to which it is a party, or any law, regulation, decree, order, or the like to which it is subject.

5.6 Authorizations. All authorizations, consents, approvals, and licenses required under applicable law for the ownership or operation of the property owned or operated by each Borrower or any Subsidiary or for the conduct of any business in which it is engaged have been duly issued and are in full force and effect, and it is not in default, nor has any event occurred which with the passage of time or the giving of notice, or both, would constitute a default, under any of the terms or provisions of any part thereof, or under any order, decree, ruling, regulation, closing agreement or other decision or instrument of any governmental commission, bureau or other administrative agency or public regulatory body having jurisdiction over such Person, which default would have a Material Adverse Effect on such Person. Except as noted herein, no approval, consent or authorization of, or filing or registration with, any governmental commission, bureau or other regulatory authority or agency is required with respect to the execution, delivery or performance of any Loan Document.

5.7 Title. Each Borrower and each Subsidiary has good title to all of the assets shown in its financial statements free and clear of all Liens, except Permitted Liens. Each Borrower alone has full ownership rights in all Collateral owned by it.

5.8

Collateral.

(a) The security interests granted to Lender herein and pursuant to any other Security Agreement (a) constitute and, as to subsequently acquired property included in the Collateral covered by the Security Agreement, will constitute, security interests under the UCC entitled to all of the rights, benefits, and priorities provided by the UCC and (b) are and, as to such subsequently acquired Collateral, will be fully perfected, superior, and prior to the rights of all third persons, now existing or hereafter arising. All of the Collateral of each Borrower is intended for use solely in such Borrower’s business.

(b) Schedule 5.8(b) sets forth all of the Credit Parties’ insurance policies in effect as of the Closing Date and sets forth as to each such policy (as applicable) the type of insurance provided by such policy, the underwriter thereof, the maximum coverage provided thereunder, the deductible applicable thereto, and a brief description of any non-customary term as set forth therein. Each of such policies is currently in effect and all premiums thereon have been paid to date.

5.9 Jurisdiction of Organization; Location. The jurisdiction in which each Borrower and each Subsidiary is organized, the chief executive office of each Borrower and each Subsidiary, the office where each Borrower’s and each Subsidiary’s books and records are located, all of Borrower’s and each Subsidiary’s other places of business, and any other places where any Collateral (other than Inventory in-transit) is kept, are all correctly and completely indicated in Schedule 5.9. The Collateral (other than Inventory in-transit) is located and shall at all times be kept and maintained only at a Permitted Location. No Collateral is attached or affixed to any real property so as to be classified as a Fixture unless Lender has otherwise agreed in writing. No Borrower has changed it legal status or the jurisdiction in which it is organized or moved its chief executive office within the five (5) years preceding the Closing Date.

5.10 Taxes. Each Borrower and each Subsidiary have filed all Federal and state income and other tax returns which are required to be filed, and have paid all taxes as shown on said returns and all taxes, including withholding, FICA, and ad valorem taxes, shown on all assessments received by it to the extent that such taxes have become due. Neither any Borrower nor any Subsidiary is subject to any Federal, state, or local tax Liens nor has such Person received any notice of deficiency or other official notice to pay any taxes. Each Borrower and each Subsidiary have paid all sales and excise taxes payable by it.

5.11 Labor Law Matters. No goods or services have been or will be produced by any Borrower or any Subsidiary in violation of any applicable labor laws or regulations or any collective bargaining agreement or other labor agreements or in violation of any minimum wage, wage-and-hour or other similar laws or regulations.

5.12 Accounts. Each Account, Instrument, Chattel Paper, and other writing constituting any portion of the Collateral (a) is genuine and enforceable in accordance with its terms except for such limits thereon arising from bankruptcy and similar laws relating to creditors’ rights; (b) is not subject to any deduction or discount (other than as stated in the invoice and disclosed to Lender in writing), defense, set-off, claim, or counterclaim of a material nature against any Borrower except as to which any Borrower promptly notified Lender in writing; (c) is not subject to any other circumstances that would impair the validity, enforceability or amount of such Collateral except as to which such Borrower promptly notified Lender in writing; (d) arises from a bona fide sale of goods or delivery of services in the ordinary course and in accordance with the terms and conditions of any applicable purchase order, contract or agreement; (e) is free of all Liens; and (f) is for a liquidated amount maturing as stated in the invoice therefor. That portion of any Account included in any Notice of Borrowing, Borrowing Base Certificate, report, or other document as an Eligible Account meets all the requirements of an Eligible Account set forth herein.

5.13 Judgment Liens. Neither any Borrower nor any Subsidiary, nor any of their respective assets, are subject to any unpaid judgments (whether or not stayed) or any judgment Liens in any jurisdiction, in each case, (a) which were not disclosed to Lender in writing on or before the Closing Date or (b) of which Borrower has not given notice to Lender in accordance with Section 6.4.

5.14

Structure.

(a) As of the date hereof, Schedule 5.14, attached hereto and made a part hereof, sets forth (i) the correct name of each Borrower and each Subsidiary and its jurisdiction of organization; (ii) the name of each of Borrower’s Affiliates (including, without limitation, any joint ventures) and the nature of the affiliation; (iii) the number, type or class, and name of the holder of all issued and outstanding Equity Interests of each Borrower and each of its Subsidiaries, together with the number and percentage of Equity Interests held by each such holder; and (iv) the number of authorized and issued Equity Interests (and treasury shares) of each Borrower and each Subsidiary, by type or class.

(b) Each Borrower has good title to all of the Equity Interests it purports to own of each of its Subsidiaries, free and clear in each case of any Lien other than Permitted Liens. All such Equity Interests have been duly issued and are fully paid and non-assessable. Since the date of the last audited financial statements of Borrowers and their Subsidiaries delivered to Lender, Borrowers have not made, or obligated themselves to make, any Restricted Payment, except as otherwise permitted hereunder. Except as may be set forth on Schedule 5.14, there are no outstanding options to purchase, or any rights or warrants to subscribe for or acquire, or any commitments or agreements to issue or sell, or any Equity Interests or obligations convertible into, or any powers of attorney relating to, Equity Interests issued by any Borrower or any of its Subsidiaries. Except as may be set forth on Schedule 5.14, there are no outstanding agreements or instruments binding upon the holders of any of the Equity Interests issued by any Borrower or any Subsidiary relating to the ownership of such Equity Interests.

5.15 Deposit Accounts. Borrowers and their Subsidiaries have no Deposit Accounts other than (a) on the Closing Date, those listed on Schedule 5.15, and (b) after the Closing Date, those permitted by Section 7.15.

5.16 Environmental. Except as disclosed on Schedule 5.16, attached hereto and made a part hereof, and except for ordinary and customary amounts of solvents, cleaners and similar materials used in the ordinary course of a Borrower’s or a Subsidiary’s business and in strict compliance with all Environmental Laws, none of any Borrower, any Subsidiary, or, to any Borrower’s knowledge, any previous owner or operator of any real property currently owned or operated by any Borrower or a Subsidiary, has generated, stored, or disposed of any Regulated Material on any portion of such property, or transferred any Regulated Material from such property to any other location in violation of any applicable Environmental Laws. Except as may be disclosed on Schedule 5.16, no Person (other than any Borrower or a Subsidiary) has generated, stored or disposed of any Regulated Material on any portion of the real property currently owned or operated by any Borrower or any Subsidiary, and, except for ordinary and customary amounts of solvents, cleaners and similar materials used in the ordinary course of any Borrower’s or a Subsidiary’s business and in strict compliance with all Environmental Laws, no Regulated Material

is now located on such property. Except as may be disclosed on Schedule 5.16, each Borrower and its Subsidiaries is in full compliance with all applicable Environmental Laws and neither any Borrower nor any Subsidiary has been notified of any action, suit, proceeding, or investigation which calls into question compliance by each Borrower or any Subsidiary with any Environmental Laws or which seeks to suspend, revoke or terminate any license, permit, or approval necessary for the generation, handling, storage, treatment, or disposal of any Regulated Material.

5.17 ERISA. Except as may be set forth on Schedule 5.17, none of any Borrower or its Subsidiaries has any pension, profit-sharing, or other benefit plan subject to ERISA.

5.18 Investment Company Act. None of any Borrower or its Subsidiaries is an “investment company” as defined in the Investment Company Act of 1940, as amended.

5.19 Insider. Each Borrower is not, and no Person having “control” (as that term is defined in 12 U.S.C. § 375(b)(5) or in regulations promulgated pursuant thereto) of such Borrower is, an “executive officer,” “director,” or “principal shareholder” (as those terms are defined in 12 U.S.C. § 375(b) or in regulations promulgated pursuant thereto) of Lender, of a bank holding company of which Lender is a subsidiary, or of any subsidiary of a bank holding company of which Lender is a subsidiary.

5.20 Sanctioned Persons; Sanctioned Countries. None of any Borrower, its Subsidiaries, or its Affiliates or any Guarantor (a) is a Sanctioned Person or (b) does business in a Sanctioned Country or with a Sanctioned Person in violation of the economic sanctions of the United States administered by OFAC. No Borrower will use the proceeds of any extension of credit hereunder to fund any operation in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Country.

5.21 Compliance with Covenants; No Default. Each Borrower is, and upon the making of the initial extensions of credit on the Closing Date will be, in compliance with all of the covenants hereof. No Default is in existence, and the execution, delivery, and performance of the Loan Documents and the making of the initial extensions of credit on the Closing Date will not cause a Default.

5.22 Full Disclosure. Each Credit Party has disclosed to Lender each fact and circumstance which such Credit Party knows or should know and which, by itself or together with any other fact disclosed or undisclosed, could reasonably be expected to have Material Adverse Effect. No Loan Document or any other agreement, document, certificate, or statement delivered by a Credit Party or a Subsidiary to Lender contains any untrue statement of a material fact or omits to state any material fact which is known or which should be known by such Person necessary to keep the other statements from being misleading.

5.23 Collateral Disclosure Certificates. All information set forth in each Collateral Disclosure Certificate is true and correct as of the date thereof.

5.24 Operating and Capital Leases. Schedule 5.24, attached hereto and made a part hereof, sets forth (a) each operating and capital lease to which any Borrower or any Subsidiary is a party as a lessee and which, in the case operating leases, requires aggregate rentals of greater than One Hundred Thousand Dollars ($100,000) per annum; (b) the name of the lessor, (c) a summary of the rental terms thereof, and (d) a brief description of the property leased thereunder.

AFFIRMATIVE COVENANTS.

Borrowers covenant and agree that from the date hereof until the full and final payment and performance of the Obligations and the termination of this Agreement, each Borrower and each Subsidiary:

6.1 Use of Loan Proceeds. Shall use the proceeds of the Loans and any Letters of Credit only in accordance with Permitted Purposes and shall furnish Lender all evidence it may require with respect to such uses.

6.2 Maintenance of Business and Properties. Shall at all times (a) (i) maintain, preserve, and protect all Collateral and the remainder of its property used or useful in the conduct of its business, (ii) keep the same in

good repair, working order, and condition, and (iii) make, or cause to be made, all material needful and proper repairs, renewals, replacements, betterments, and improvements thereto so that the business carried on in connection therewith may be conducted properly and in accordance with standards generally accepted in businesses of a similar type and size and (b) maintain and keep in full force and effect all licenses and permits necessary to the proper conduct of its business.

6.3

Insurance.

(a) Shall (i) maintain (A) such liability insurance, workers’ compensation insurance, business interruption insurance, and casualty insurance in amounts equal to the greater of (1) such amounts that may be required by law and (2) such amounts that are customary and usual for prudent businesses in its industry and (B) any other insurance that may be required by Lender in its Permitted Discretion and (ii) insure and keep insured all Collateral and other properties with insurance companies acceptable to Lender. All hazard insurance covering Collateral shall be in amounts acceptable to Lender, shall name and directly insure Lender as secured party and loss payee under a long-form loss payee clause, or its equivalent, acceptable to Lender, and shall not be terminable except upon thirty (30) days’ written notice to Lender. On or before the Closing Date and thereafter on an annual basis (or at such other more frequent intervals as Lender may request from time to time), Borrowers shall furnish Lender copies of all such policies (or summaries thereof, if requested by Lender) and evidence of insurance in the form of an Acord Form 27 with respect to casualty and property insurance and an Acord Form 25 with respect to liability insurance.

(b) If any Borrower’s tangible property constituting Collateral suffers a casualty or is condemned by a Governmental Entity (each, a “Loss”), all Net Proceeds of such Loss shall be paid over to Lender for application to the Obligations, unless Lender otherwise agrees in writing. If Lender does otherwise agree in writing, Borrowers may apply the Net Proceeds of any such casualty or condemnation to the repair, restoration, or replacement of the assets suffering such Loss, so long as (i) such repair, restoration, or replacement is completed within one hundred eighty (180) days after the date of such Loss (or such longer period of time agreed to in writing by Lender), (ii) while such repair, restoration, or replacement is underway, all of such Net Proceeds are on deposit with Lender in a separate Deposit Account over which Lender has exclusive Control, and (iii) such Loss did not cause an Event of Default. If an Event of Default occurs pursuant to which Lender exercises its rights to accelerate the Obligations as provided in Section 9.2 or such repair, restoration, or replacement is not completed within one hundred eighty (180) days of the date of such Loss (or such longer period of time agreed to in writing by Lender), Lender may immediately and without notice to any Person apply all of such Net Proceeds to the Obligations, regardless of any other prior agreement regarding the disposition of such Net Proceeds.

6.4 Certain Notices. Shall provide Lender immediate notice of (a) the occurrence of a Default and what action (if any) Borrowers are taking to correct the same; (b) any litigation involving an amount at issue in excess of One Hundred Thousand Dollars ($100,000) or material changes in existing litigation or any judgment against it or its assets in excess of One Hundred Thousand Dollars ($100,000); (c) any damage or loss to property in excess of One Hundred Thousand Dollars ($100,000); (d) any notice from taxing authorities as to claimed deficiencies or any tax lien or any notice relating to alleged ERISA violations; (e) any Reportable Event, as defined in ERISA; (f) any rejection, return, offset, dispute, loss, or other circumstance in an amount equal to or greater than One Hundred Thousand Dollars ($100,000) or otherwise having a Material Adverse Effect on any Collateral; (g) the cancellation or termination of, or any default under, or any material change in, any Material Agreement; (h) any acceleration of the maturity of any Debt of any Credit Party or the occurrence or existence of any event or circumstances which gives the holder of such Debt the right to accelerate; and (i) any loss or threatened loss of material licenses or permits.

6.5 Inspections of Books and Records and Field Examinations; Appraisals; Physical Inventories. Shall permit Lender and its agents to conduct inspections, verifications (of accounts and otherwise), appraisals, and field examinations of the Collateral and such Person’s other property and books and records at such times and with such frequency as Lender may request from time to time, with (a) when no Default or Event of Default is in existence, reasonable notice thereof and (b) when any Default or Event of Default is in existence, no notice thereof. Borrower shall pay the cost of such inspections, verifications, appraisals, and field examinations; provided, the cost of field examinations shall not exceed Eight Hundred Fifty Dollars ($850) per examiner per day (or whatever higher sum then represents Lender’s standard charge in regard thereto), plus Lender’s actual out-of-pocket expenses.

Borrower shall, at its expense, conduct physical inventories of its and its Subsidiaries’ Inventory with such frequency as Lender shall request from time to time and, before conducting any such physical inventory, shall provide reasonable written notice thereof to Lender and allow Lender or its agents to witness such physical inventory.

6.6 Financial Information. Shall maintain books and records in accordance with GAAP and shall furnish to Lender the following periodic financial information:

(a) Periodic Borrowing Base Information. Within fifteen (15) days of the end of each month (or more frequently if requested by Lender in its Permitted Discretion), a completed Borrowing Base Certificate in the form of Exhibit 6.6(a), attached hereto and made a part hereof (each, a “Borrowing Base Certificate”). Borrowers shall attach the following to each Borrowing Base Certificate, which shall be certified by a Senior Officer of a Borrower to be accurate and complete and in compliance with the terms of the Loan Documents: (i) a report in form and substance satisfactory to Lender listing (A) all Accounts of Borrower as of the last Business Day of such month, (B) the amount and age of each Account on an original invoice date aging basis, (C) the name and mailing address of each Account Debtor, (D) all Accounts which do not constitute Eligible Accounts, and (E) such other information as Lender may require (each, an “Accounts Receivables Report”); (ii) a report listing (A) all of each Borrower’s accounts payable, (B) the number of days which have elapsed since the original date of invoice of such accounts payable, (C) the name and address of each Person to whom such accounts payable are owed, and (D) such other detail Lender may request (each, an “Accounts Payable Report”); and (iii) each other report as Lender may from time to time require in its Permitted Discretion, each prepared with respect to such periods and with respect to such information and reporting as Lender may request.

(b) Interim Statements. Within thirty (30) days after each Fiscal Month (except a Fiscal Month which is also a Fiscal Quarter end) and within forty-five (45) days after the end of each Fiscal Quarter, (i) a consolidated and consolidating balance sheet of Borrowers and their Subsidiaries at the end of that period and a consolidated and consolidating income statement and statement of cash flows for such period (and for the portion of the Fiscal Year ending with such period), together with all supporting schedules, setting forth in comparative form the figures for the same period of the preceding Fiscal Year and (ii) a report reconciling (A) Borrowers’ Accounts and Inventory as set forth in the Accounts Receivable Report and the Inventory Report attached to the Borrowing Base Certificate to (B) the Borrowers’ aggregate Accounts and Inventory set forth in the financial statements delivered to Lender pursuant hereto (which shall be based upon Borrowers’ general ledger). The foregoing statements and reports shall be certified by a Senior Officer of Parent Company as true and correct and fairly representing the financial condition of Borrower and its Subsidiaries and that such statements are prepared in accordance with GAAP, except without footnotes and subject to normal year-end audit adjustments.

(c) Annual Statements. Within ninety (90) days after the end of each Fiscal Year, a detailed audited financial report of Borrowers and their Subsidiaries containing a consolidated and consolidating balance sheet at the end of such period and a consolidated and consolidating income statement and statement of cash flows for such period, setting forth in comparative form the figures for the preceding Fiscal Year, together with all supporting schedules and footnotes, and containing an unqualified audit opinion of independent certified public accountants acceptable to Lender that the financial statements were prepared in accordance with GAAP.

(d) Compliance and No Default Certificate. Together with each report required by subsections (b) and (c), a compliance certificate in the form of Exhibit 6.6(d), attached hereto and made a part hereof, and a certificate of a Senior Officer of Parent Company certifying that no Default then exists or, if a Default exists, the nature and duration thereof and Borrowers’ intention with respect thereto. Each such compliance certificate will be accompanied by a spreadsheet showing Borrowers’ calculations of all financial covenants, which must be of such detail as requested by Lender from time to time. Borrowers shall also cause Borrowers’ independent auditor (if applicable) to submit to Lender, together with its audit report, a statement that, in the course of conducting such audit, it discovered no circumstances which it believes would result in a Default or, if it discovered any such circumstances, the nature and duration thereof.

(e) Auditor’s Management Letters. Promptly upon receipt thereof, copies of each report submitted to Borrowers by independent public accountants in connection with any annual, interim, or special audit made by them of the Borrowers’ books including, without limitation, each report submitted to Borrowers concerning its accounting

practices and systems and any final comment letter submitted by such accountants to management in connection with Borrowers’ annual audit.

(f) Statements of Guarantors. To the extent that now or hereafter there are any Guarantors, with respect to any Guarantor who is an individual, (i) such Guarantor’s detailed annual financial statement, including a balance sheet (including all contingent liabilities) as of the end of such annual period and a statement of income for such annual period, all in form and substance satisfactory to Lender and delivered to Lender within thirteen months after the date of the most recent financial statement delivered to Lender and (ii) a copy of such Guarantor’s personal Federal income tax returns, delivered to Lender within fifteen (15) days of the date on which such returns are filed. With respect to any Guarantor which is not an individual, a detailed audited financial report of Guarantor and its Subsidiaries containing a consolidated and consolidating balance sheet at the end of that period and a consolidated and consolidating income statement and statement of cash flows for that period, setting forth in comparative form the figures for the preceding fiscal year, together with all supporting schedules and footnotes, and containing an unqualified audit opinion of independent certified public accountants acceptable to Lender that the financial statements were prepared in accordance with GAAP, all delivered to Lender within ninety (90) days after each of such Guarantor’s fiscal years. Each such Guarantor (if any) shall obtain such written acknowledgments from Guarantor’s independent certified public accountants as Lender may request permitting Lender to rely on such annual financial statements.

(g) Other Information. Such other information requested by Lender, in its Permitted Discretion, from time to time concerning the business, properties, or financial condition of the Credit Parties and their respective Subsidiaries.

(h) Projections. At least thirty (30) days before the end of each Fiscal Year, Projections for the immediately following Fiscal Year, prepared on a quarterly basis.

(i) Customer List. Within thirty (30) days following the commencement of each Fiscal Year, or more frequently if requested by Lender, Borrowers shall provide Lender with a listing of all of the Credit Parties’ customers and their names and addresses as of the end of the immediately preceding Fiscal Year or as of such other date requested by Lender.

(j) Collateral Disclosure Certificate. Within thirty (30) days following the commencement of each Fiscal Year, Borrowers shall, and shall cause each other Person who has executed and delivered a Collateral Disclosure Certificate to, execute and deliver a Collateral Disclosure Certificate with then-current information. The proper disclosure of any information in any Collateral Disclosure Certificate shall not, in and of itself, constitute any waiver of any Default or Event of Default which may otherwise exist.

6.7 Maintenance of Existence and Rights. Shall preserve and maintain its legal existence, authorities to transact business, rights and franchises, trade names, patents, trademarks, and permits necessary to the conduct of its business.

6.8 Payment of Taxes, Etc. Shall pay before delinquent all of its Debts and taxes, except to the extent such taxes are being Properly Contested.

6.9 Subordination. Shall cause all (a) Debts and other obligations now or hereafter owed to any Guarantor or Affiliate (other than trade debt incurred in the ordinary course of business in compliance with Section 7.7) to be Subordinated Debt and (b) all trade debt payable to any Guarantor or Affiliate to be subordinated to the Obligations on terms satisfactory to Lender.

6.10 Compliance; Hazardous Materials. Shall comply with all laws, regulations, ordinances, and other legal requirements, including, without limitation, ERISA, all securities laws, and all laws relating to hazardous materials and the environment. Unless approved in writing by Lender, neither any Borrower nor any Subsidiary shall engage in the storage, manufacture, disposition, processing, handling, use, or transportation of Regulated Materials, whether or not in compliance with Environmental Laws, except for ordinary and customary amounts of solvents, cleaners and similar materials used in the ordinary course of such Borrower’s or a Subsidiary’s business

and in strict compliance with all Environmental Laws. Borrowers shall promptly report to Lender any notices of any violations of such laws or regulations received from any Governmental Entity, along with Borrower’s proposed corrective action as to such violation.

6.11 Further Assurances. Shall take such further action and provide to Lender such further assurances as may be reasonably requested by Lender, in its Permitted Discretion, to ensure compliance with the intent of this Agreement and the other Loan Documents.

6.12

Covenants Regarding Collateral.

(a) Shall use the Collateral only in the ordinary course of its business and will not permit the Collateral to be used in violation of any applicable law or policy of insurance;

(b) Shall defend the Collateral against all claims and demands of all Persons, except for Permitted Liens;

(c) Shall exercise its best efforts to obtain and deliver to Lender such Third Party Agreements as Lender may request from time to time (with it being understood that the failure for whatever reason to obtain any such Third Party Agreements shall not in any way limit Lender’s right to institute Reserves);

(d) Shall promptly deliver to Lender all Items, Instruments, Chattel Paper, Investment Property in the form of certificated securities, and, if requested by Lender, Documents which constitute Collateral, in each case appropriately indorsed to Lender’s order;

(e) Shall not create any Electronic Chattel Paper without first granting Lender Control thereof pursuant to such measures as Lender shall request;

(f) Shall promptly notify Lender of any patents, trademarks, or copyrights to which Borrower or a Subsidiary acquires title or rights after the Closing Date and any license agreements entered into after the Closing Date by Borrower or any Subsidiary authorizing Borrower or such Subsidiary to use any third party’s patents, trademarks, or copyrights;

(g) Shall give Lender at least thirty (30) days written notice before using any trade, assumed, or fictitious name not already disclosed in the Collateral Disclosure Certificate and shall use all trade, assumed, or fictitious names in accordance with all applicable laws;

(h) Shall promptly notify Lender of the existence of any Commercial Tort Claims which arise after the Closing Date and shall provide Lender with such information, and otherwise take such action with respect to such Commercial Tort Claims, as is reasonably necessary for Lender to perfect its security interest thereon;

(i) Within five (5) Business Days after Lender’s request, shall deliver to Lender the original certificates of title or similar title documents for all of such Person’s owned vehicles and Equipment which are subject to certificate of title or similar statutes (as contemplated in Section 9-311 of the UCC) and take such further actions from time to time as Lender requests for purposes of perfecting Lender’s security interest in and to such vehicles and Equipment.

NEGATIVE COVENANTS.

Borrowers covenant and agree that from the date hereof and until the full and final payment and performance of all Obligations and the termination of this Agreement, each Borrower and each Subsidiary:

7.1 Debt. Shall not create or permit to exist any Debt, including any guaranties or other contingent obligations, except the following (“Permitted Debt”):

(a)

The Obligations;

(b)

Endorsement of Items for collection in the ordinary course of business;

(c) Debts which are payable to suppliers and other trade creditors and were incurred in the ordinary course of business, on ordinary and customary trade terms, and which are not more than sixty (60) days past due (unless Properly Contested);

(d) Purchase money Debt incurred to purchase Equipment; provided that the amount of such Debt shall not at any time (i) exceed the purchase price of the Equipment purchased or (ii) exceed in aggregate principal amount at any time outstanding for Borrowers and their Subsidiaries, One Hundred Thousand Dollars ($100,000);

(e)

Subordinated Debt;

(f) Debt listed in Schedule 7.1, attached hereto and made a part hereof, to the extent such Debt exists as of the Closing Date and is not otherwise permitted by this Section 7.1, together with any Debt incurred in any refinancing or renewal thereof in an amount not to exceed the principal amount thereof;

(g)

Debt of any Subsidiary to Borrower or another Subsidiary;

(h)

Any Debt incurred under any Hedge Agreements with Lender (or with any of its Affiliates).

7.2 Liens. Shall not create or permit or suffer to exist any Liens on any of its property except the following (“Permitted Liens”):

(a)

Liens securing the Obligations;

(b) Liens for taxes, assessments, and charges or levies instituted or levied by any Governmental Entity (but not including any Lien imposed pursuant to ERISA or any Environmental Law) which are not yet due and payable or which are being Properly Contested;

(c) The claims of Third Parties arising out of operation of law so long as the obligations secured thereby are not past due or are being Properly Contested;

(d) Liens existing in respect of deposits or pledges made in the ordinary course of business in connection with workers’ compensation, unemployment insurance, social security, and similar laws;

(e) Judgment and other similar non-tax Liens arising in connection with court proceedings, but only to the extent and for so long as (i) the execution or enforcement of such Liens is and continues to be effectively stayed and bonded on appeal; (ii) the validity or amount of the claims secured thereby are being Properly Contested; and (iii) such Liens do not, in the aggregate, materially detract from the value of the assets of the Person whose assets are subject to such Lien or materially impair the use thereof in the operation of such Person’s business;

(f) Liens securing purchase money Debt incurred solely to purchase Equipment, but only to the extent such Liens attach only to the Equipment purchased and secure no more than the purchase price therefor;

(g) Liens list on in Schedule 7.2, attached hereto and made a part hereof, to the extent such Liens exist as of the Closing Date and are not otherwise permitted by this Section 7.2.

7.3 Restricted Payments. Shall not make any Restricted Payment, except that (a) any Subsidiary of a Borrower may pay dividends to such Borrower or another Subsidiary wholly-owned by such Borrower; and (b) any Borrower or any Subsidiary may make payments on Subordinated Debt, but only to extent each such payment is expressly permitted under the terms of the subordination agreement related thereto.

7.4 Loans and Other Investments. With respect to any Person, shall not (a) make or permit to exist any advances or loans to such Person, (b) guarantee or become contingently liable, directly or indirectly, in connection with the obligations, leases, Equity Interests, or dividends or distributions of such Person, (c) own,

purchase, or make any commitment to purchase any Equity Interests, bonds, notes, debentures, or other securities of, or any interest in such Person, or (d) make any capital contributions to such Person (all of which are sometimes collectively referred to herein as “Investments”), except for (i) purchases of direct obligations of the Federal Government; (ii) deposits in commercial banks; (iii) commercial paper of any U.S. corporation having the highest ratings then given by the Moody’s Investors Services, Inc. or Standard & Poor’s Corporation; (iv) existing investments in Subsidiaries; (v) endorsement of negotiable Instruments for collection in the ordinary course of business; (vi) advances to employees for business travel and other expenses incurred in the ordinary course of business which do not at any time exceed in the aggregate Five Thousand Dollars ($5,000); and (vii) any Hedge Agreements with Lender (or with any of its Affiliates).

7.5

Change in Business; Activities Covered by Insurance, Etc.

(a) Shall not enter into any business which is substantially different from the business in which it is engaged on the Closing Date.

(b) Shall not (i) undertake any business or other activity which is not insured by such the policies of insurance required by Section 6.3 or (ii) permit or undergo any changes in its business and related activities which could result in the termination, revocation, ineffectiveness, or unenforceability of any of such policies of insurance.

(c) Shall not amend or modify, its articles or certificate of incorporation, organization, or formation, or its bylaws, operating agreement or partnership agreement, as applicable, in any way which could reasonably be expected to have a Material Adverse Effect.

(d) Shall not amend or modify any of its Material Agreement, or permit the termination or cancellation thereof, in any way which could reasonably be expected to have a Material Adverse Effect.

7.6 Accounts. (a) Shall not sell, assign, or discount any of its Accounts, Chattel Paper, or Instruments other than the discount of promissory notes in the ordinary course of business for collection; (b) shall not create or accept any Account, Instrument, Chattel Paper or other obligation of any kind due from or owed by a Sanctioned Person or own any Chattel Paper in the form of a lease where (i) the lessee thereunder is a Sanctioned Person and (ii) such Chattel Paper is Collateral; and (c) shall promptly notify Lender in writing of (i) any discount, set-off, or other deductions not shown on the face of an invoice relating to any Account involving an amount in excess of the lesser of (A) five percent (5%) of such Account’s face value or (B) Twenty-Five Thousand Dollars ($25,000), (ii) any dispute over an Account involving an amount in excess of the lesser of (A) five percent (5%) of such Account’s face value or (B) Twenty-Five Thousand Dollars ($25,000); and (d) any information relating to an adverse change in any Account Debtor’s financial condition or ability to pay its obligations or an Account Debtor’s status as a Sanctioned Person.

7.7 Transactions with Affiliates. Shall not, in the ordinary course of business or otherwise, (a) directly or indirectly purchase, acquire, or lease any property from any Affiliate, (b) sell, transfer, or lease any property to any Affiliate, (c) pay any management fees to any Affiliate, or (d) otherwise deal with any Affiliate, other than (i) where such Affiliate is a Subsidiary and a Credit Party, (ii) transactions described on Schedule 7.7, attached hereto and made a part hereof, and (iii) transactions on arms’ length terms which are no less favorable to a Borrower or such Subsidiary than would exist if the parties thereto were not Affiliates and for which Lender has received prior written notice.

7.8 No Change in Name, Offices, or Jurisdiction of Organization; Removal of Collateral. Shall not (a) change its name or the jurisdiction in it is organized, (b) unless it shall have given sixty (60) days’ advance written notice thereof to Lender, change the location of its chief executive office or other office where books or records are kept, or (c) permit any Inventory or other tangible Collateral (other than Inventory in-transit) to be located at any location other than a Permitted Location.

7.9

No Sale, Leaseback. Shall not enter into any sale-and-leaseback or similar transaction.

7.10 Margin Stock. Shall not use any proceeds of the Loan to purchase or carry any margin stock (within the meaning of Regulation U of the Board of Governors of Federal Reserve System) or extend credit to others for the purpose of purchasing or carrying any margin stock.

7.11 Tangible Collateral. Shall not, except to the extent otherwise permitted herein or as otherwise permitted by Lender in writing, (a) allow any Collateral to be commingled with, or become an Accession to or part of, any property of any other Person or (b) allow any Collateral to become a Fixture.

7.12 Subsidiaries. Shall not (a) acquire or form any Subsidiary, (b) cause or permit any Subsidiary to dissolve, voluntarily or involuntarily, or (c) permit any Subsidiary to issue any Equity Interests except to a Borrower.

7.13 Liquidation, Mergers, Consolidations, and Dispositions of Assets; Name and Good Standing. Shall not (a) merge, reorganize, consolidate, or amalgamate with any Person; (b) liquidate, wind up its affairs or dissolve itself; (c) acquire by purchase, lease, or otherwise any of the assets of any Person, except for the acquisition of Inventory and Equipment (to the extent not prohibited hereunder) in the ordinary course of business; (d) sell, transfer, lease, or otherwise dispose of any of its assets, except for (i) the sale of Inventory in the ordinary course of business, (ii) so long as no Event of Default then exists, the sale or other disposition of Equipment which is worn out, obsolete or no longer used or useful in a Borrower’s business provided that the aggregate fair market value of all such Equipment of all Borrowers does not exceed One Hundred Thousand Dollars ($100,000) in any one Fiscal Year of Borrowers, and (iii) the voluntary termination of Hedge Agreements to which a Borrower or such Subsidiary is a party; (e) sell or dispose of any Equity Interests in any Subsidiary, whether in a single transaction or in a series of related transactions; (f) change its legal name or jurisdiction of organization or conduct business under any new trade, assumed, or fictitious name; (g) change its Federal Employer Identification Number; or (h) fail to remain in good standing and qualified to transact business as a foreign entity in any state or other jurisdiction in which it is required to be qualified to transact business as a foreign entity and in which the failure to do so could reasonably be expected to have a Material Adverse Effect.

7.14 Change of Fiscal Year or Accounting Methods. Shall not change its Fiscal Year or its accounting methods. As of the Closing Date, Borrower’s fiscal year ends on or about December 31 of each year.

7.15 Deposit Accounts; Exclusive Control. Shall not open or, after thirty (30) days following the Closing Date, maintain any Deposit Accounts except for (a) Deposit Accounts with Lender; (b) Deposit Accounts listed on Schedule 5.15; (c) Deposit Accounts which are not with Lender but which are subject to Lender’s Control on terms satisfactory to Lender; and (d) such other Deposit Accounts as shall be necessary for payroll, petty cash, local trade payables, and other occasional needs of Borrower; provided that the aggregate balance of any Deposit Accounts which are not subject to Lender’s Control on terms acceptable to Lender may not at any time exceed Twenty-Five Thousand ($25,000) without Lender’s prior written consent. Borrower shall maintain its primary Deposit Account and cash management Deposit Accounts with Lender. All Deposit Accounts maintained with Lender shall be deemed to be under Lender’s Control.

FINANCIAL COVENANTS.

8.1

Definitions. As used in this Agreement:

(a) “EBITDA” means, for any period of determination and without duplication, the sum of (i) consolidated net income of Borrowers and their Subsidiaries for such period (computed without regard to any extraordinary items of gain or loss), plus (ii) to the extent included in the calculation of revenue in computing consolidated net income for such period, the sum of (A) interest expense, (B) income tax expense, and (C) depreciation and amortization, minus (iii) non-cash gains.

(b) “Fixed Charge Coverage Ratio,” for any period of three (3) Fiscal Months of Borrowers and their Subsidiaries shall be defined as (i) EBITDA for such period, less the sum of (A) all unfinanced Capital Expenditures made in such period, (B) any dividends and distributions paid in such period and (C) cash taxes paid (if any) in such period (net of any income tax refunds directly received by Borrowers and their Subsidiaries from the appropriate

taxing authorities in such period), divided by (ii) the sum of (A) scheduled principal amortization on Funded Debt (if any) for the succeeding three (3) Fiscal Months, plus (B) interest expense paid in the preceding period of three (3) Fiscal Months.

(c) “Funded Debt” means all Debt for borrowed funds (including the Obligations), capitalized leases, Debt for the deferred payment by one (1) year or more of any purchase money obligation and Subordinated Debt.

(d) “Funded Debt to EBITDA Ratio” means, for any given Fiscal Month, (i) Funded Debt of Borrowers and their Subsidiaries, outstanding on the last day of such Fiscal Month to (ii) EBITDA of Borrowers and their Subsidiaries, for the twelve (12) Fiscal Months then ended.

(e) “Working Capital Ratio” means, for any given Fiscal Month, the ratio of: (i) the sum of (A) unrestricted cash on hand of Borrowers and their Subsidiaries, plus (B) total accounts receivable of Borrowers and their Subsidiaries, as of the end of such Fiscal Month to (ii) the sum of (A) transportation charges of Borrowers and their Subsidiaries for such Fiscal Month plus (B) any overdrafts occurring in such Fiscal Month of Borrowers and their Subsidiaries plus (C) the outstanding amount of all Working Capital Obligations as at the end of such Fiscal Month.

8.2 Financial Covenants. Borrowers covenant and agree that, from the date hereof and until the full and final payment and performance of all Obligations and the termination of this Agreement, Obligors shall comply with each of the following covenants:

(a) Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio for each period of twelve (12) Fiscal Months, beginning with the Fiscal Month ending January 31, 2009, shall be not less than 1.30:1.

(b) Funded Debt to EBITDA Ratio. The Funded Debt to EBITDA Ratio for each Fiscal Month, beginning with the Fiscal Month ending January 31, 2009, shall be not more than 5.00:1.

(c) Working Capital Ratio. The Working Capital Ratio as of the end of any Fiscal Month, beginning with the Fiscal Month ending January 31, 2009, shall be at least 1.00:1.

DEFAULT.

9.1

Events of Default. Each of the following shall constitute an Event of Default:

(a) Any Borrower shall fail to pay when due any principal of or interest on any Note, any fee or other amounts due to Lender hereunder or any other Loan Document, or (except as provided in (b) and (c) below) any other Obligations; or

(b) Any Borrower shall default on the performance of any agreement, covenant, or obligation contained in Section 6.1, 6.4, 6.5, 6.6, 6.9, 6.12, or Section 7 or Section 8; or

(c) Any Borrower or any other Credit Party shall default on the performance of any other agreement, covenant, or obligation contained in this Agreement or such Loan Document not provided for elsewhere in this Section 9 and the breach of such agreement, covenant, or obligation shall not have been cured to Lender’s satisfaction within fifteen (15) days after the sooner to occur of (i) any Senior Officer’s receipt of notice of such breach from Lender or (ii) the date on which such failure or neglect first became known to any Senior Officer; provided, however, that such notice and opportunity to cure shall not apply in the case of any default on an agreement, covenant, or obligation which is not capable of being cured at all or within such fifteen (15) days’ period or which was a willful and knowing breach by such Borrower or such other party; or

(d) Any representation or warranty made by any Borrower or any other Credit Party in this Agreement or any other Loan Document, or in any certificate or report furnished in connection with this Agreement or any other Loan Document, shall prove to have been untrue or incorrect in any material respect when made; or

(e) Any Borrower, any Subsidiary, or any Guarantor shall default in any obligation which (i) is owed to Lender or any of Lender’s Affiliates and (ii) arose under any agreement other than a Loan Document, but only if such default was not cured within any applicable cure period provided for in such agreement; or

(f) Any Borrower, any Subsidiary, or any Guarantor shall fail to make any payment in respect of outstanding Debt (other than the Obligations) having an aggregate outstanding principal amount in excess of One Hundred Thousand Dollars ($100,000) or more when due after the expiration of any applicable grace period, or any event or condition shall occur which results in the acceleration of the maturity of such Debt (including, without limitation, any required mandatory prepayment or “put” of such Debt to any such Person) or enables (or, with the giving of notice or passing of time or both, would enable) the holders of such Debt or a commitment related to such Debt (or any Person acting on such holders’ behalf) to accelerate the maturity thereof or terminate any such commitment before its normal expiration (including, without limitation, any required mandatory prepayment or “put” of such Debt to such Person); or

(g) Any Borrower or any Subsidiary or any Guarantor shall (i) voluntarily dissolve, liquidate, or terminate operations or apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, or liquidator of such Person or of all or of a substantial part of its assets, (ii) admit in writing its inability, or be generally unable, to pay its debts as the debts become due, (iii) make a general assignment for the benefit of its creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code (as now or hereafter in effect), (v) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition, or adjustment of debts, (vi) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under Bankruptcy Code, or (vii) take any action for the purpose of effecting any of the foregoing; or

(h) An involuntary petition or complaint shall be filed against any Borrower or any Subsidiary or any Guarantor seeking bankruptcy relief or reorganization or the appointment of a receiver, custodian, trustee, intervenor, or liquidator of any Borrower or any Subsidiary or any Guarantor, of all or substantially all of its assets, and such petition or complaint shall not have been dismissed within sixty (60) days of the filing thereof; or an order, order for relief, judgment, or decree shall be entered by any competent Governmental Entity approving or ordering any of the foregoing actions; or

(i) A judgment of more than One Hundred Thousand Dollars ($100,000) in excess of insurance coverage therefor (as provided by an underwriter acceptable to Lender, where such underwriter has agreed in writing to pay such judgment, and for which the deductible does not exceed One Hundred Thousand Dollars ($100,000) shall be rendered against any Borrower or any Subsidiary or any Guarantor and shall remain undischarged, undismissed, and unstayed for more than ten (10) days or there shall occur any levy upon, or attachment, garnishment, or other seizure of, any portion of the Collateral or other assets of Borrower, any Subsidiary, or any Guarantor in excess of One Hundred Thousand Dollars ($100,000) by reason of the issuance of any tax levy, judicial attachment, garnishment, or levy of execution; or

(j) Any Guarantor shall repudiate, revoke, or attempt to revoke any Guaranty, in whole or in part; or

(k) Any loss, theft, damage, or destruction of any material portion of the Collateral shall occur for which there is either no insurance coverage or for which, in Lender’s reasonable opinion, there is insufficient insurance coverage; or

(l) There shall occur any change in the condition (financial or otherwise) of Borrower, any Subsidiary, or any Guarantor which, in Lender’s sole opinion, could reasonably be expected to have a Material Adverse Effect; or

(m) A majority in interest of the Parent Company’s Equity Interests shall become owned and controlled, with sole power to vote, by a Person or a group of Persons acting in concert subsequent to the Closing Date, e.g., pursuant to a “going private” transaction or a transaction having the same effect; or the Parent Company shall cease to own and control, with sole power to vote, either directly or indirectly through one or more Subsidiaries, one hundred percent (100%) of each class of each other Borrower’s Equity Interests subsequent to the Closing Date.

(n) The death (i) of the holder of the majority ownership interests of any Credit Party or (ii) of any individual Guarantor.

9.2 Remedies. During the existence of any Default, Lender may, without notice to Borrowers and at its option, refuse to make Loans, issue Letters of Credit, or make other extensions of credit to Borrowers. During the existence of any Event of Default, Lender may at its option take any or all of the following actions:

(a) Lender may terminate all Commitments and declare any or all Obligations (other than Obligations under any Hedge Agreements, between any Borrower and Lender or any Affiliate of Lender, which shall be due in accordance with and governed by the provisions of said Hedge Agreements) to be immediately due and payable (if not earlier demanded) (provided, that, upon the occurrence of any Event of Default described in Section 9.1(g) or Section 9.1(h), all Obligations shall automatically become immediately due and payable), terminate its obligation to make Loans and other extensions of credit to Borrowers, bring suit against Borrowers to collect the Obligations, exercise any remedy available to Lender hereunder or at law, and take any action or exercise any remedy provided herein or in any other Loan Document or under applicable law.

(b) Without waiving any of its other rights hereunder or under any other Loan Document, Lender shall have all rights and remedies of a secured party under the UCC (and the Uniform Commercial Code of any other applicable jurisdiction) and such other rights and remedies as may be available hereunder, under other applicable law, or pursuant to contract. If requested by Lender, Borrowers will promptly assemble the Collateral and make it available to Lender at a place designated by Lender. Borrowers agree that any notice by Lender of the sale or disposition of the Collateral or any other intended action hereunder, whether required by the UCC or otherwise, shall constitute reasonable notice to Borrower if the notice is mailed to Borrowers by regular or certified mail, postage prepaid, at least five days before the action to be taken. The proceeds realized from the sale or other disposition of any Collateral shall be applied in the manner provided in Section 2.9. Each Credit Party shall be liable for any deficiencies in the event the proceeds of the disposition of the Collateral do not satisfy the Obligations in full.

(c) Lender may demand, collect, and sue for all amounts owed pursuant to Accounts, General Intangibles, Chattel Paper, Instruments, or Documents or for proceeds of any Collateral (either in a Borrower’s name or Lender’s name at Lender’s option), with the right to enforce, compromise, settle, or discharge any such amounts.

(d) Each Borrower hereby grants Lender a worldwide, non-exclusive, and royalty-free license to use solely during the existence of an Event of Default such Borrower’s trademarks, service marks, and trade names for purposes of invoicing and collecting Accounts and otherwise disposing of or liquidating Collateral.

9.3 Receiver. In addition to any other remedy available to it, Lender shall have the absolute right, during the existence of an Event of Default, to seek and obtain the appointment of a receiver to take possession of and operate and/or dispose of the business and assets of Borrowers.

9.4 Deposits; Insurance. Each Borrower (a) authorizes Lender to, during the existence of an Event of Default, collect and apply against the Obligations when due any refund of insurance premiums or any insurance proceeds payable on account of the loss or damage to any Collateral and (b) irrevocably appoints Lender as its attorney-in-fact to endorse any check or draft or take other action necessary to obtain such funds.

10.

MISCELLANEOUS.

10.1 No Waiver, Remedies Cumulative. No failure or delay on the part of Lender to exercise any right under this Agreement, any other Loan Document, or applicable law shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and are in addition to any other remedies provided by applicable law, any Loan Document, or otherwise.

10.2 Survival of Representations. All representations and warranties made in this Agreement and the other Loan Documents shall survive the making of any extension of credit hereunder and the delivery of any Note

and shall continue in full force and effect until the full and final payment and performance of the Obligations and the termination of this Agreement.

10.3 Indemnity By Borrowers; Expenses. In addition to all other Obligations, each Borrower agrees to defend, protect, indemnify, and hold harmless Lender and its Affiliates and all of their respective officers, directors, employees, attorneys, consultants, and agents from and against any and all losses, damages, liabilities, obligations, penalties, fines, fees, costs, and expenses (including, without limitation, attorneys’ and paralegals’ fees, costs and expenses, and fees, costs and expenses for investigations and experts) incurred by such indemnitees, whether before or from and after the Closing Date, as a result of or arising from or relating to (a) the due diligence effort (including, without limitation, public records searches, recording fees, examinations, and investigations of the properties of the Credit Parties or any Subsidiary and their respective operations), negotiation, preparation, execution, performance of any of the Loan Documents or of any document executed in connection with the transactions contemplated thereby, perfection of Lender’s Liens in the Collateral, maintenance of each Loan by Lender, and any and all amendments, modifications, and supplements of any of the Loan Documents or restructuring of the Obligations; (b) any suit, investigation, action, or proceeding by any Person (other than a Borrower), whether threatened or initiated, asserting a claim for any legal or equitable remedy against any Person under any statute, regulation, or common law principle, arising from or in connection with Lender’s making extensions of credit or furnishing funds to any Borrower under this Agreement; (c) Lender’s preservation, administration, and enforcement of its rights under the Loan Documents and applicable law, including the reasonable attorneys fees if collected, or sought to be collected, by or through an attorney at law, and disbursements of counsel for Lender in connection therewith, whether any suit is brought or not and whether incurred at trial or on appeal, and all costs of repossession, storage, disposition, protection, and collection of Collateral; (d) periodic field examinations, audits, and appraisals performed by Lender pursuant to Section 6.5 hereof; (e) any civil penalty or fine assessed by OFAC against Lender or any Affiliate of Lender and all reasonable costs and expense (including counsel fees and disbursements) incurred in connection with defense thereof by Lender or such Affiliate, as a result of Lender’s making extensions of credit hereunder, the acceptance of payments due under the Loan Documents or any Hedge Agreement, or acceptance of Collateral; or (f) any matter relating to the financing transactions contemplated by the Loan Documents or by any document executed in connection with the transactions contemplated thereby, other than for such loss, damage, liability, obligation, penalty, fee, cost or expense arising from such indemnitee’s gross negligence or willful misconduct. If any Borrower should fail to pay any tax or other amount required by this Agreement to be paid or which may be reasonably necessary to protect or preserve any Collateral or a Borrower’s or Lender’s interests therein, Lender may make such payment in the manner provided in Section 2.4(a) or Section 2.8(b). In addition, Borrower agrees to pay and save Lender harmless against any liability for payment of any state documentary stamp taxes, intangible taxes, or similar taxes (including interest or penalties, if any) which may now or hereafter be determined to be payable in respect to the execution, delivery, or recording of any Loan Document or the making of any Loan, whether originally thought to be due or not, and regardless of any mistake of fact or law on the part of Lender (or its counsel) or Borrower with respect to the applicability of such tax. Each Borrower’s obligation for indemnification for all of the foregoing losses, damages, liabilities, obligations, penalties, fees, costs, and expenses of Lender shall be part of the Obligations, secured by the Collateral, chargeable against such Borrower’s loan account as provided herein, and shall survive termination of this Agreement.

10.4 Notices. Any notice or other communication hereunder or under the Note to any party hereto or thereto shall be by hand delivery, overnight delivery via nationally recognized overnight delivery service, facsimile with receipt confirmed, or registered or certified United States mail with return receipt and unless otherwise provided herein shall be deemed to have been given or made when delivered, telegraphed, faxed or, if sent via United States mail, when receipt therefor is signed by the receiver, postage prepaid, addressed to the party at its address specified below (or at any other address that the party may hereafter specify to the other parties in writing):

Lender:

Regions Bank

191 Peachtree St. NE

Suite 3800

Atlanta, GA 30303

Attn: Loan Administration

Fax: 404-221-4361

Borrowers:

c/o AutoInfo, Inc., as Borrower Agent

6413 Congress Avenue, Suite 260

Boca Raton, FL 33487

Attn: President

Fax: 561-988-9456

10.5 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE DEEMED CONTRACTS MADE UNDER THE LAWS OF THE JURISDICTION AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE JURISDICTION (EXCLUDING ITS CONFLICT OF LAWS PROVISIONS IF SUCH PROVISIONS WOULD REQUIRE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION) EXCEPT INSOFAR AS (A) THE LAWS OF ANOTHER JURISDICTION MAY, BY REASON OF MANDATORY PROVISIONS OF LAW, GOVERN THE PERFECTION, PRIORITY, OR ENFORCEMENT OF SECURITY INTERESTS IN THE COLLATERAL OR (B) THE TERMS OF SUCH LOAN DOCUMENT EXPRESSLY STATE THAT THE LAW OF A DIFFERENT JURISDICTION SHALL GOVERN.

10.6 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of each Borrower and Lender and their respective successors and assigns; provided, that no Borrower may assign any of its rights hereunder without the prior written consent of Lender, and any such assignment made without such consent will be void in all respects.

10.7 Counterparts; Telecopied Signatures. This Agreement and any amendments, waivers, or consents relating hereto may be executed in any number of counterparts and by different parties hereto or thereto in separate counterparts, each of which when so executed and delivered shall be deemed an original and all of which when taken together shall constitute but one and the same instrument. Any signature delivered by a party hereto or to any amendment, waiver, or consent relating hereto by facsimile transmission or by electronic email in Adobe Corporation’s Portable Document Format (or PDF) shall be deemed to be an original signature hereto.

10.8 No Usury. Regardless of any other provision of this Agreement, each Note, or in any other Loan Document, if for any reason the effective rate of interest payable hereunder or thereunder should exceed the maximum lawful rate of interest, the effective rate of interest shall be deemed reduced to, and shall be, such maximum lawful rate of interest. Any amount paid or collected by Lender as interest which would be in excess of the amount permitted by applicable law shall be deemed applied to the reduction of the principal balance of the Obligations and not to the payment of interest, but if such Obligations have been or are thereby paid in full, the excess shall be returned to the Person paying same, such application to the principal balance of the Obligations or the refunding of excess to be a complete settlement and acquittance thereof.

10.9

Powers. All powers of attorney granted to Lender are coupled with an interest and are irrevocable.

10.10 Approvals; Amendments. If this Agreement calls for Lender’s approval or consent, such approval or consent may be given or withheld in the discretion of Lender unless otherwise specified herein. This Agreement and the other Loan Documents may not be modified, altered, or amended, except by an agreement in writing signed by the affected Borrowers and Lender and may not be modified in any manner adverse to a counterparty to any secured or guarantied Hedge Agreement without that provider’s prior written consent.

10.11 Participations and Assignments. Lender shall have the right to enter into one or more participations with other banks or financial institutions with respect to the Obligations and to assign to one or more assignees all or a portion of its interest, rights, and obligations under the Loan Documents. Upon prior notice to Borrowers of any such participation or assignment, Borrowers shall thereafter furnish such participant or assignee with any information furnished by Borrowers to Lender pursuant to the terms of the Loan Documents. Nothing in this Agreement or any other Loan Document shall prohibit Lender from pledging or assigning this Agreement and Lender’s rights under any of the other Loan Documents, including Collateral therefor, to any Federal Reserve Bank in accordance with applicable law.

10.12 Dealings with Multiple Borrowers. All Obligations, representations, warranties, covenants, and indemnities set forth in the Loan Documents to which each Borrower is a party shall be joint and several with each other Borrower, unless otherwise expressly provided. Lender shall have the right to deal with any individual of any

Borrower with regard to all matters concerning the rights and obligations of Lender hereunder and pursuant to applicable law with regard to the transactions contemplated under the Loan Documents. All actions or inactions of the officers, managers, members, or agents of any Borrower with regard to the transactions contemplated under the Loan Documents shall be deemed with full authority and binding upon all Borrowers. Each Borrower hereby appoints Parent Company as its true and lawful agent, representative and attorney-in-fact, with full right and power, for purposes of exercising all rights of such Person hereunder and under applicable law with regard to the transactions contemplated under the Loan Documents, including the execution and delivery of Loan Documents and the giving (and receipt) of notices, including Notices of Borrowing, for and on behalf of all Borrowers, with the ability to bind all Borrowers thereto (Parent Company, acting in such capacity, herein called “Borrower Agent”); and Borrower Agent may so act, for each Borrower or all Borrowers, whether expressly so designated to do so pursuant hereto or to any other Loan Document. The provisions of this Section 10.12 and Lender’s reliance thereon are material inducements to the agreement of Lender to enter into this Agreement and to consummate the transactions contemplated hereby.

10.13 Waiver of Certain Defenses. To the fullest extent permitted by applicable law, upon the occurrence of any Event of Default, neither any Borrower nor anyone claiming by or under Borrower will claim or seek to take advantage of any law requiring Lender to attempt to realize upon any Collateral or collateral of any Guarantor, or any appraisement, evaluation, stay, extension, homestead, redemption, or exemption laws now or hereafter in force to prevent or hinder the enforcement of this Agreement. Each Borrower, for itself and all who may at any time claim through or under any Borrower, hereby expressly waives to the fullest extent permitted by applicable law the benefit of all such laws. All rights of Lender and all obligations of Borrower hereunder shall be absolute and unconditional irrespective of (a) any change in the time, manner, or place of payment of, or any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from any provision of the Loan Documents, (b) any exchange, release, or non-perfection of any other collateral given as security for the Obligations, or any release or amendment or waiver of or consent to departure from any guaranty for all or any of the Obligations, or (c) any other circumstance which might otherwise constitute a defense available to, or a discharge of, Borrower or any third party, other than payment and performance in full of the Obligations.

10.14 Additional Provisions. Time is of the essence of this Agreement and the other Loan Documents. No provision of this Agreement or any of the other Loan Documents shall be construed against or interpreted to the disadvantage of any party hereto by any Governmental Entity by reason of such party having or being deemed to have structured, drafted or dictated such provision.

10.15 Integration; Final Agreement. This Agreement and the other Loan Documents, together with all other instruments, agreements, and certificates executed by the parties in connection therewith or with reference thereto, embody the entire understanding and agreement between the parties hereto and thereto with respect to the subject matter hereof and thereof and supersede all prior agreements, understandings and inducements, whether express or implied, oral or written. There are no unwritten oral agreements between the parties.

10.16 LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES. EACH OF THE PARTIES HERETO, INCLUDING LENDER BY ACCEPTANCE HEREOF, AGREES THAT IN ANY JUDICIAL, MEDIATION, OR ARBITRATION PROCEEDING OR ANY CLAIM OR CONTROVERSY BETWEEN OR AMONG THEM (A “DISPUTE”) THAT MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS, OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN OR AMONG THEM OR THE OBLIGATIONS EVIDENCED HEREBY OR RELATED HERETO, IN NO EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE LIABLE TO THE OTHER FOR, (a) INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES OR (b) PUNITIVE OR EXEMPLARY DAMAGES. EACH OF THE PARTIES HEREBY EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH ANY DISPUTE, REGARDLESS OF WHETHER THE DISPUTE IS RESOLVED BY ARBITRATION, MEDIATION, JUDICIALLY, OR OTHERWISE.

10.17 WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF BORROWER BY EXECUTION HEREOF AND LENDER BY ACCEPTANCE HEREOF, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT EACH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION

WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO ENTER INTO AND ACCEPT THIS AGREEMENT. EACH OF THE PARTIES AGREES THAT THE TERMS HEREOF SHALL SUPERSEDE AND REPLACE ANY PRIOR AGREEMENT RELATED TO ARBITRATION OF DISPUTES BETWEEN THE PARTIES CONTAINED IN ANY LOAN DOCUMENT OR ANY OTHER DOCUMENT OR AGREEMENT HERETOFORE EXECUTED IN CONNECTION WITH, RELATED TO OR BEING REPLACED, SUPPLEMENTED, EXTENDED OR MODIFIED BY, THIS AGREEMENT.

10.18

Submission to Jurisdiction; Venue.

(a) Any legal action or proceeding with respect to this Agreement or any other Loan Document shall be brought in the courts of the State of Georgia in Cobb County or the State of Alabama in Jefferson County or of the United States for the Northern District of Georgia or the Northern District of Alabama, and, by execution and delivery of this Agreement, each Borrower irrevocably accepts for itself and in respect of its property, generally and unconditionally, the nonexclusive jurisdiction of such courts, and agrees to be bound by the other provisions set forth in this Section 10.18. Each Borrower further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to it at the address set out for notices pursuant to Section 10.4, such service to become effective three days after such mailing. Nothing herein shall affect the right of Lender to serve process in any other manner permitted by law or to commence legal proceedings or to otherwise proceed against each Borrower or any other Credit Party in any other jurisdiction.

(b) Each Borrower hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Agreement or any other Loan Document brought in the courts referred to in subsection (a) above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

10.19 Credit Inquiries. Each Borrower hereby authorizes and permits Lender, at its discretion and without any obligation to do so, to respond to credit inquiries from third parties concerning any Borrower or any of its Subsidiaries.

10.20 Information. Nothing in this Agreement shall prevent Lender from disclosing confidential information provided by any Credit Party from time to time (a) to any of Lender’s Affiliates, or any of Lender’s or any of its Affiliates’ officers, directors, employees, agents, or advisors, (b) to any other Person if reasonably incidental to the administration of the agreements made herein, (c) as required by any law, rule, or regulation, (d) upon the order, request or demand of any Governmental Entity; provided, however, that, to the extent permitted by law, Lender shall provide prior written notice to the affected Credit Party of any such request or demand, (e) that is or becomes available to the public or that is or becomes available to Lender other than as a result of a disclosure by Lender prohibited by this Agreement, (f) in connection with any litigation to which Lender or any of its Affiliates may be a party, whether to defend itself, reduce its liability, protect or exercise any of its claims, rights, remedies or interests under or in connection with the Loan Documents or any Hedge Agreements, or otherwise, (g) to the extent necessary in connection with the exercise of any remedy under this Agreement or any other Loan Document, and (h) to any actual or proposed participant or assignee; such information to consist of deal terms and other information customarily found in such publications. Each Credit Party and each Guarantor hereby authorizes Lender to use the name, logos and other insignia and the amount of the credit facility provided hereunder in any “tombstone” or comparable advertising, on its website or in other of Lender’s marketing materials.

10.21 No Tax Advice. Each Credit Party hereby acknowledges and agrees that, with respect to all tax and accounting matters relating to this Agreement, the other Loan Documents, or the transactions contemplated herein and therein, it has not relied on any representations made, consultation provided by, or advice given or rendered by Lender or Lender’s representatives, agents, or employees, and, instead, such Credit Party has sought, and relied upon, the advice of its own tax and accounting professionals with respect to all such matters.

[Signatures on following pages]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed under seal as of the day and year first above written.

	“BORROWERS”

	AUTOINFO, INC.


	By: /s/ William I.Wunderlich


	Name: William I. Wunderlich


	Title: Chief Financial Officer


	SUNTECK TRANSPORT CO., INC.


	By: /s/ William I. Wunderlich


	Name: William I. Wunderlich


	Title: Chief Financial Officer


	ELEETS LOGISTICS, INC.


	By: /s/ William I. Wunderlich


	Name: William I. Wunderlich


	Title: Chief Financial Officer


	SUNTECK TRANSPORT CARRIERS, INC.


	By: /s/ William I. Wunderlich

	Name: William I. Wunderlich

	Title: Chief Financial Officer



	SUNTECK GOVERMENT LOGISTICS, INC.


	By: /s/ William I. Wunderlich


	Name: William I. Wunderlich


	Title: Chief Financial Officer



	SUNTECK TRANSPORT [SEAL] GROUP, INC.


	By: /s/ William I. Wunderlich

	Name: William I. Wunderlich

	Title: Chief Financial Officer


	RAILPORT SERVICES, INC. [SEAL]


	By: /s/ William I. Wunderlich

	Name: William I. Wunderlich

	Title: Chief Financial Officer


	AMERICAN SHIPPERS DISPATCH, INC.


	By: /s/ William I. Wunderlich

	Name: William I. Wunderlich

	Title: Chief Financial Officer


	Accepted in Atlanta, Georgia

	“LENDER”

	REGIONS BANK


	By: /s/ David L. Coody

	Name: David L.Coody

	Title: Senior Vice President

EX-23.A 3 d76521_ex23-a.htm CONSENTS OF EXPERTS AND COUNSEL

EXHIBIT 23A

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements (Form S-8 No. 33-34442 and 333-156289) pertaining to stock option plans of AutoInfo, Inc. of our report dated March 17, 2009, with respect to the consolidated financial statements of AutoInfo, Inc., included in the Annual Report (Form 10-K) for the year ended December 31, 2008.


	/s/ Dworken, Hillman, LaMorte & Sterczala, P.C.



Shelton, Connecticut	Dworken, Hillman, LaMorte & Sterczala, P.C.
March 20, 2009

EX-31.A 4 d76521_ex31-a.htm RULE 13A-14(A)/15D-14(A) CERTIFICATIONS

EXHIBIT 31A

CERTIFICATION


I, Harry M. Wachtel, certify that:

1.	I have reviewed this annual report on Form 10-K of AutoInfo, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

		a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;

		b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

		c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

		d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

		a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

		b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: March 20, 2009
	/s/ Harry M. Wachtel

	Harry M. Wachtel
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.B 5 d76521_ex31-b.htm RULE 13A-14(A)/15D-14(A) CERTIFICATIONS

EXHIBIT 31B

CERTIFICATION


I, William I. Wunderlich, certify that:

1.	I have reviewed this annual report on Form 10-K of AutoInfo, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

		a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;

		b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

		c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

		d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):



		a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

		b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: March 20, 2009	/s/ William I. Wunderlich

	William I. Wunderlich
	Chief Financial Officer
	(Principal Financial Officer)

EX-32.A 6 d76521_ex32-a.htm SECTION 1350 CERTIFICATIONS

EXHIBIT 32A

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of AutoInfo, Inc. (the “Company”) on Form 10-K for the fiscal year ended December 31, 2008 as filed with the Securities and Exchange Commission (“SEC”) on the date hereof (the “Report”), I, Harry M. Wachtel, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


	A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.


Dated: March 20, 2009

/s/ Harry M. Wachtel

Harry M. Wachtel
President and Chief Executive Officer
(Principal Executive Officer)

EX-32.B 7 d76521_ex32-b.htm SECTION 1350 CERTIFICATIONS

EXHIBIT 32B

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of AutoInfo, Inc. (the “Company”) on Form 10-K for the fiscal year ended December 31, 2008 as filed with the Securities and Exchange Commission (“SEC”) on the date hereof (the “Report”), I, William I. Wunderlich, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


	A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.


Dated: March 20, 2009

/s/ William I. Wunderlich

William I. Wunderlich
Chief Financial Officer
(Principal Financial Officer)