7.20(A)(I) OF THE LOAN
AGREEMENT, BORROWER FAILED TO MAINTAIN EBIT OF AT LEAST <$16,418,000> FOR THE
TRAILING TWELVE MONTH PERIOD ENDING DECEMBER 31, 2001, (II) IN VIOLATION OF
SECTION 7.20(A)(II) OF THE LOAN AGREEMENT, BORROWER FAILED TO MAINTAIN ADJUSTED
TANGIBLE NET WORTH OF AT LEAST "ADJUSTED TANGIBLE NET WORTH AS OF DECEMBER 31,
2000 PLUS <$17,918,000>" AS OF DECEMBER 31, 2001; AND (III) IN POTENTIAL
VIOLATION OF SECTION 7.21 OF THE LOAN AGREEMENT, PFS MAY HAVE ENGAGED IN
BUSINESS ACTIVITY WHILE IT WAS AN INACTIVE SUBSIDIARY.
(B)
ANYTHING TO THE CONTRARY IN THE LOAN AGREEMENT NOTWITHSTANDING AND
SUBJECT TO THE CONDITIONS SET FORTH HEREIN, THE LENDER GROUP HEREBY WAIVES EACH
OF THE DESIGNATED EVENTS OF DEFAULT.
4.
Conditions Precedent to Amendment.
The satisfaction of each of
the following shall constitute conditions precedent to the effectiveness of this
Amendment and each and every provision hereof:
(A)
AGENT SHALL HAVE RECEIVED THIS AMENDMENT, DULY EXECUTED BY THE
PARTIES HERETO, AND THE SAME SHALL BE IN FULL FORCE AND EFFECT;
(B)
AGENT SHALL HAVE RECEIVED THE REAFFIRMATION AND CONSENT OF EACH OF
THE GUARANTORS ATTACHED HERETO AS EXHIBIT A, DULY EXECUTED AND DELIVERED BY EACH
GUARANTOR;
(C)
AGENT SHALL HAVE RECEIVED THAT CERTAIN SIDE LETTER, BY AND AMONG
AGENT, ON BEHALF OF THE LENDERS, BORROWER, AND THE GUARANTORS;
(D)
AGENT SHALL HAVE RECEIVED, FOR THE RATABLE BENEFIT OF THE LENDERS,
AN AMENDMENT AND WAIVER FEE OF $300,000 (THE "AMENDMENT AND WAIVER FEE").
THE
AMENDMENT AND WAIVER FEE IS DUE AND PAYABLE TO THE LENDERS ON THE SECOND
AMENDMENT EFFECTIVE DATE, EARNED IN FULL BY THE LENDERS AND NON-REFUNDABLE WHEN
PAID, AND MAY BE CHARGED TO THE LOAN ACCOUNT;
(E)
AGENT SHALL HAVE RECEIVED THAT CERTAIN AMENDMENT NUMBER ONE TO FEE
LETTER, DATED AS OF THE SECOND AMENDMENT EFFECTIVE DATE, DULY EXECUTED BY THE
PARTIES THERETO, AND THE SAME SHALL BE IN FULL FORCE AND EFFECT;
(F)
AGENT SHALL HAVE RECEIVED (I) A CERTIFICATE FROM THE SECRETARY OF
PFS ATTESTING TO THE RESOLUTIONS OF PFS'S BOARD OF DIRECTORS AUTHORIZING THE
NAME CHANGE OF DAMARK FINANCIAL SERVICES, INC. TO PROVELL FINANCIAL SERVICES,
INC., (II) COPIES OF PFS'S GOVERNING DOCUMENTS, AS AMENDED, MODIFIED, OR
SUPPLEMENTED TO THE SECOND AMENDMENT EFFECTIVE DATE, CERTIFIED BY THE SECRETARY
OF PFS, AND (III) A CERTIFICATE OF STATUS WITH RESPECT TO PFS, DATED WITHIN 10
DAYS OF THE SECOND AMENDMENT EFFECTIVE DATE, SUCH CERTIFICATE TO BE ISSUED BY
THE APPROPRIATE OFFICER OF THE JURISDICTION OF ORGANIZATION OF PFS, WHICH
CERTIFICATE SHALL INDICATE THAT PFS IS IN GOOD STANDING IN SUCH JURISDICTION;
3
(G)
AGENT SHALL HAVE RECEIVED (I) A FILED FINANCING STATEMENT IN FAVOR
OF AGENT, FOR THE BENEFIT OF THE LENDER GROUP, AGAINST PFS, IN PFS'S STATE OF
ORGANIZATION, (II) A FILED UCC-3 AMENDMENT TO FINANCING STATEMENT NUMBER
2306599, CHANGING THE NAME OF DAMARK FINANCIAL SERVICES, INC. TO PROVELL
FINANCIAL SERVICES, INC., AND (III) SEARCHES REFLECTING THE FILING OF SUCH
FINANCING STATEMENT AND UCC-3 AMENDMENT AND AGENT'S FIRST PRIORITY PERFECTED
SECURITY INTEREST IN THE COLLATERAL (AS DEFINED IN THE