OF A LOAN OR LOANS FROM ILANA FRYDMAN IN AN
AGGREGATE AMOUNT NOT TO EXCEED FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) (THE
"FRYDMAN SUBORDINATED DEBT").
(II)
CONTEMPORANEOUSLY WITH THE EXECUTION OF
THIS AMENDMENT, BORROWERS SHALL CAUSE ILANA FRYDMAN TO EXECUTE AND DELIVER TO
LENDER A SUBORDINATION AGREEMENT IN FORM AND CONTENT SATISFACTORY TO THE LENDER,
PURSUANT TO WHICH ILANA FRYDMAN SHALL ACKNOWLEDGE AND AGREE THAT THEY SHALL NOT
RECEIVE PAYMENT (OF ANY KIND OR CHARACTER) OF ALL OR ANY PART OF THE FRYDMAN
SUBORDINATED DEBT EXCEPT AS PROVIDED FOR IN SUCH SUBORDINATION AGREEMENT.
(D)
BORROWERS AND GUARANTOR HEREBY ACKNOWLEDGE
AND AGREE THAT, PURSUANT TO SECTION 6.25 OF THE LOAN AGREEMENT, NO BORROWER OR
GUARANTOR SHALL, NOR SHALL ANY OF THEM PERMIT THEIR SUBSIDIARIES TO, INCUR OR
CREATE ANY LIABILITY OR INDEBTEDNESS, INCLUDING CAPITALIZED LEASES, OTHER THAN
AS PROVIDED FOR IN SECTION 6.25 OF THE LOAN AGREEMENT.
ANY PREVIOUS WAIVERS
AND/OR CONSENTS BY LENDER IN CONNECTION WITH ANY INDEBTEDNESS INCURRED BY ANY
BORROWER OR GUARANTOR HAVE BEEN GIVEN SOLELY AS AN ACCOMMODATION TO BORROWERS
AND GUARANTOR, ON BORROWERS' AND GUARANTOR'S REQUEST, AND SHALL NOT BE DEEMED TO
BE AN AGREEMENT, OBLIGATION OR COMMITMENT BY LENDER TO WAIVER AND/OR CONSENT TO
ANY OTHER INDEBTEDNESS TO BE INCURRED BY ANY BORROWER OR GUARANTOR WHICH WOULD
BE PROHIBITED BY THE TERMS AND CONDITIONS OF THE LOAN AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS.
7
15.
ADDITIONAL REPORTING REQUIREMENTS.
IN
ADDITION TO ALL OTHER INFORMATION REQUIRED TO BE DELIVERED UNDER THE LOAN
AGREEMENT:
(A)
ON OR BEFORE OCTOBER 31, 2004, BORROWERS
SHALL DELIVER TO LENDER A SCHEDULE, WHICH SHALL BE IN FORM SATISFACTORY TO
LENDER, DETAILING THE (I) FIXED ASSETS OF BORROWERS SOLD OR MOVED TO A LOCATION
OUTSIDE OF THE UNITED STATES SINCE JULY 31, 2003, (II) FIXED ASSETS OF BORROWERS
SCHEDULED TO BE SOLD OR MOVED TO A LOCATION OUTSIDE OF THE UNITED STATES, (III)
ESTIMATED SALE PRICE OR APPRAISED VALUE OF SUCH FIXED ASSETS AND (IV) DATE OR
ESTIMATED TIMING OF SUCH SALE OR MOVE.
ANY SUCH SALE OR MOVEMENT OF FIXED
ASSETS SHALL BE FURTHER SUBJECT TO THE TERMS AND CONDITIONS OF SECTION 8 OF THE
FIFTH AMENDMENT.
(B)
ONE TIME EVERY FOURTEEN (14) DAYS, BORROWERS
SHALL DELIVER TO LENDER A REPORT INCLUDING (I) PROJECTIONS, INCLUDING WITHOUT
LIMITATION PROJECTED NET EXCESS AVAILABILITY, AND CASH FLOWS ON A WEEK-BY-WEEK
BASIS FOR THE NEXT SUCCEEDING THIRTEEN (13) WEEK PERIOD AND (II) A CASH FLOW
STATEMENT FOR THE IMMEDIATELY PRECEDING TWO (2) WEEK PERIOD, IN EACH CASE
PREPARED BY THE CHIEF FINANCIAL OFFICER OF BORROWERS.
SUCH REPORT SHALL INCLUDE
AN EXPLANATION OF ANY VARIANCES BETWEEN THE PROJECTIONS PREVIOUSLY DELIVERED TO
LENDER AND THE ACTUAL RESULTS OF OPERATIONS.
16.
AMENDMENT FEE.
(A)
BORROWERS SHALL PAY TO LENDER AN AMENDMENT
FEE IN THE AMOUNT OF $95,000.00 (THE "AMENDMENT FEE"), WHICH HAS BEEN FULLY
EARNED BY LENDER AS OF THE DATE HEREOF.
(B)
THE AMENDMENT FEE SHALL BE PAID AS FOLLOWS:
(I)
$5,000.00 ON THE DATE OF EXECUTION OF
THIS AMENDMENT; AND
(II)
$90,000.00 ON THE