Agreement (determined on a consolidated basis with the Guarantor):
(1)
Tangible Net Worth of, at minimum: (a)
$3,700,000.00 as of July 31, 2004; (b) $6,000,000.00 as of July 31, 2005; and
(c) $11,000,000.00 as of July 31, 2006, and at all times thereafter.
(2)
A Fixed Charge Coverage of not less than
1.25 to 1.0 as of April 30, 2004, and at any time thereafter; such Fixed Charge
Coverage to be measured quarterly based on a rolling four-quarter basis.
(3)
A ratio of Liabilities to Tangible Net
Worth of not more than: (a) 4.8 to 1.0 as of July 31, 2004; (b) 2.7 to 1.0 as of
July 31, 2005; and (c) 1.5 to 1.0 as of July 31, 2006, and at all times
thereafter.
(4)
A Coverage Ratio of not greater than: (a)
3.0 to 1.0 as of July 31, 2004; (b) 2.35 to 1.0 as of July 31, 2005; and (c) 1.5
to 1.0 as of July 31, 2006, and at all times thereafter; said Coverage Ratio to
be measured quarterly based on a rolling four-quarter basis.
3.
BORROWER REPRESENTS AND WARRANTS TO THE
BANK THAT AS OF THE DATE HEREOF:
(A) ALL REPRESENTATIONS AND WARRANTIES GIVEN
BY THE BORROWER IN ARTICLE V OF THE LOAN AGREEMENT ARE TRUE AND CORRECT, EXCEPT
TO THE EXTENT AFFECTED BY THIS AMENDMENT; AND (B) THE BORROWER IS IN FULL
COMPLIANCE WITH ALL OF THE COVENANTS OF THE BORROWER CONTAINED IN ARTICLE VI OF
THE LOAN AGREEMENT, EXCEPT TO THE EXTENT AFFECTED BY THIS AMENDMENT.
THE
BORROWER FURTHER REPRESENTS THAT THE BORROWER HAS FULL POWER AND AUTHORITY TO
ENTER INTO THIS AMENDMENT AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED
HEREBY, AND THE BORROWER AGREES TO PAY DIRECTLY, OR REIMBURSE THE BANK FOR, ALL
REASONABLE EXPENSES, INCLUDING THE REASONABLE FEES AND EXPENSES OF LEGAL
COUNSEL, INCURRED IN CONNECTION WITH THE PREPARATION OF THE DOCUMENTATION TO
EVIDENCE THIS AMENDMENT AND ANY DOCUMENTS EXECUTED IN CONNECTION HEREWITH.
4.
EXCEPT AS EXPRESSLY MODIFIED BY THIS
AMENDMENT, THE PARTIES AGREE THAT:
(A)
IN ALL OTHER RESPECTS, ALL THE TERMS,
CONDITIONS, OBLIGATIONS AND PROVISIONS OF THE LOAN AGREEMENT SHALL BE UNCHANGED
AND REMAIN THE SAME AND IN FULL FORCE AND EFFECT, AND ALL TERMS OF THE LOAN
AGREEMENT, AS HEREIN MODIFIED, ARE EXPRESSLY RATIFIED AND CONFIRMED IN ALL
RESPECTS; AND
(B)
IN THE EVENT THAT THERE SHALL BE ANY
CONFLICT BETWEEN THE TERMS OF THIS AMENDMENT AND ANY OF THE TERMS OF ANY OF THE
OTHER LOAN DOCUMENTS NOT AMENDED CONCURRENTLY HEREWITH, THE TERMS AND PROVISIONS
OF THIS AMENDMENT SHALL GOVERN AND EACH OF SUCH OTHER LOAN DOCUMENTS ARE DEEMED
AUTOMATICALLY AMENDED AND MODIFIED WITHOUT ANY FURTHER ACTION UPON THE EXECUTION
AND DELIVERY OF THIS AMENDMENT.
(C)
IN THE EVENT THAT THERE SHALL BE ANY
CONFLICT BETWEEN THE AMENDMENT CONTAINED IN PARAGRAPH 2 OF THIS AMENDMENT WITH
ANY OF THE TERMS OF THE REVOLVING LOAN AGREEMENT, INCLUDING, WITHOUT LIMITATION,
SUBSECTION 6.1(F) THEREOF, THE TERMS AND PROVISIONS OF THE AMENDMENT CONTAINED
IN
2
PARAGRAPH 2 OF THIS AMENDMENT SHALL