in lieu thereof the following:
"
6.9
FINANCIAL COVENANTS.
Borrower shall maintain at all times, to be certified by the Borrower as of the
last day of each month, unless otherwise noted, on a consolidated basis with
respect to Borrower and its Subsidiaries:
(a)
Liquidity. Borrower's (A) unrestricted cash on deposit at Bank
plus (B) unusedavailability pursuant to the Revolving Line under this Agreement,
as determined by Bank with reference to the Availability Amount set forth
herein, of at least $4,000,000.
(b)
Tangible Net Worth. A Tangible Net Worth, tested as of the last
day of each fiscal quarter, of at least (i) from the Second Loan Modification
Effective Date through March 31, 2009, $12,000,000, and (ii) from June 30, 2009,
and as of the end of each fiscal quarter of Borrower thereafter, $12,500,000.
The Tangible Net Worth requirements set forth herein shall increase by 50% of
quarterly Net Income and 50% of issuances of equity after the Second Loan
Modification Effective Date."
2
THE LOAN AGREEMENT SHALL BE AMENDED BY INSERTING THE FOLLOWING
DEFINITIONS IN THE APPROPRIATE ALPHABETICAL ORDER IN SECTION 13.1 THEREOF,
ENTITLED "DEFINITIONS":
"
"SECOND LOAN MODIFICATION AGREEMENT" MEANS THAT CERTAIN SECOND
LOAN MODIFICATION AGREEMENT, DATED AS OF THE SECOND LOAN MODIFICATION EFFECTIVE
DATE, BY AND BETWEEN BORROWER AND BANK."
"Second Loan Modification Effective Date" is the date noted on the signature
page to the Second Loan Modification Agreement."
3
THE COMPLIANCE CERTIFICATE APPEARING AS EXHIBIT D TO THE LOAN
AGREEMENT IS HEREBY REPLACED WITH THE COMPLIANCE CERTIFICATE ATTACHED AS
EXHIBIT D HERETO.
4.
FEES. BORROWER SHALL PAY TO BANK A MODIFICATION FEE IN THE AMOUNT
OF FIFTEEN THOUSAND DOLLARS ($15,000.00), WHICH FEE SHALL BE DUE AND PAYABLE AND
FULLY EARNED AS OF THE DATE HEREOF. BORROWER SHALL ALSO REIMBURSE BANK FOR ALL
LEGAL FEES AND EXPENSES INCURRED BY BANK IN CONNECTION WITH THE EXISTING LOAN
DOCUMENTS AND THIS AMENDMENT THERETO.
5.
RATIFICATION OF INTELLECTUAL PROPERTY SECURITY AGREEMENT.
BORROWER HEREBY RATIFIES, CONFIRMS, AND REAFFIRMS, ALL AND SINGULAR, THE TERMS
AND CONDITIONS OF THE IP AGREEMENT AND ACKNOWLEDGES, CONFIRMS AND AGREES THAT
THE IP AGREEMENT CONTAINS AN ACCURATE AND COMPLETE LISTING OF ALL INTELLECTUAL
PROPERTY.
2
6.
RATIFICATION OF PERFECTION CERTIFICATE. BORROWER HEREBY RATIFIES,
CONFIRMS AND REAFFIRMS, ALL AND SINGULAR, THE TERMS AND DISCLOSURES CONTAINED IN
A CERTAIN PERFECTION CERTIFICATE DATED AS OF FEBRUARY 20, 2008 BETWEEN BORROWER
AND BANK, AND ACKNOWLEDGES, CONFIRMS AND AGREES THE DISCLOSURES BORROWER
PROVIDED TO BANK IN THE PERFECTION CERTIFICATE, AS AMENDED, HAS NOT CHANGED.
7.
AUTHORIZATION TO FILE. BORROWER HEREBY AUTHORIZES BANK TO FILE
UCC FINANCING STATEMENTS WITHOUT NOTICE TO BORROWER, WITH ALL APPROPRIATE
JURISDICTIONS, AS BANK DEEMS APPROPRIATE, IN ORDER TO FURTHER PERFECT OR PROTECT
BANK'S INTEREST IN THE COLLATERAL, INCLUDING A NOTICE THAT ANY DISPOSITION OF
THE COLLATERAL, BY EITHER THE BORROWER OR ANY OTHER PERSON, SHALL BE DEEMED TO
VIOLATE THE RIGHTS OF THE BANK UNDER THE CODE.
8.
CONSISTENT CHANGES. THE EXISTING LOAN DOCUMENTS ARE HEREBY
AMENDED WHEREVER NECESSARY TO REFLECT THE CHANGES DESCRIBED ABOVE.
9.
RATIFICATION