Subordinated Debt;
(iv)
The Borrower shall have not less than $1,000,000 in working capital (as defined
in Section 10.9. (c) of the Loan Agreement); and
(v)
All outstanding interest, fees and expenses due Bank under the Loan Agreement,
as amended by this First Amendment, shall be paid to Bank by Borrower.
Bank reserves the right, in its sole discretion, to waive in writing compliance
with any of the foregoing conditions and covenants. A violation of any of the
foregoing conditions and covenants shall constitute an Event of Default.
J.
Representation. On and as of the date hereof, and
after giving effect to this First Amendment, the Borrower and each Guarantor
confirm, reaffirm and restate the representations and warranties set forth in
the Loan Agreement and the Collateral Documents; provided, that each reference
to the Loan Agreement herein shall be deemed to include the Loan Agreement as
amended by this First Amendment.
K.
Warrants. The Borrower hereby confirms the option in
favor of Bank to purchase 4,545 shares of stock issued by Borrower at a strike
price of $1.50 per share. The term of the option shall last until January 31,
2002; provided, however, any extension of the Termination Date (as defined in
the Loan Agreement) by Bank and Borrower shall also act as an extension of the
term of the said option.
L.
Payment of Expenses. The Borrower agrees to pay or
reimburse the Bank for all legal fees and expenses of counsel to the Bank in
connection with the transactions contemplated by this First Amendment.
M.
WAIVER OF DEFENSES; RELEASE OF LIABILITIES. IN
CONSIDERATION OF THE BANK'S EXECUTION OF THIS FIRST AMENDMENT, THE BORROWER AND
THE GUARANTORS DO HEREBY IRREVOCABLY WAIVE ANY AND ALL CLAIMS, CAUSES OF ACTION,
AND/OR DEFENSES TO PAYMENT ON ANY INDEBTEDNESS OWED BY ANY OF THEM TO THE BANK
THAT MAY EXIST AS OF THE DATE OF EXECUTION OF THIS FIRST AMENDMENT. FURTHER,
BORROWER AND THE GUARANTORS HEREBY AGREE THAT ALL DISPUTES AND CLAIMS WHATSOEVER
OF ANY KIND OR NATURE WHICH BORROWER AND/OR ANY OF THE GUARANTORS PRESENTLY HAS
OR MAY HAVE AGAINST BANK, WHETHER PRESENTLY KNOWN OR UNKNOWN, WHICH BORROWER
AND/OR ANY OF THE GUARANTORS COULD HAVE ASSERTED AGAINST BANK, ARE FULLY AND
FINALLY RELEASED, COMPROMISED AND SETTLED. BORROWER AND THE GUARANTORS,
INDIVIDUALLY AND FOR THEMSELVES, THEIR, SUCCESSORS IN INTEREST AND ASSIGNS, DO
HEREBY EXPRESSLY RELEASE AND FOREVER RELIEVE, DISCHARGE AND GRANT FULL
ACQUITTANCE TO BANK FOR AND FROM ANY AND ALL CAUSES OF ACTION, SUITS, CLAIMS,
DEBTS, OBLIGATIONS OR LIABILITIES OF ANY NATURE WHATSOEVER, KNOWN OR UNKNOWN,
ALLEGED OR NOT ALLEGED, WHICH BORROWER AND/OR ANY OF THE GUARANTORS HAS OR MAY
HAVE AGAINST BANK, ITS AGENTS, OFFICERS, EMPLOYEES, DIRECTORS AND SHAREHOLDERS
AS OF THE DATE HEREOF. ACCEPTANCE OF THE PROCEEDS OF EACH REVOLVING LOAN AFTER
THE DATE HEREOF SHALL CONSTITUTE A RATIFICATION, ADOPTION AND CONFIRMATION BY
BORROWER AND GUARANTORS OF THE FOREGOING GENERAL RELEASE OF RELEASED CLAIMS AND
LIABILITIES THAT ARE BASED IN WHOLE OR IN PART ON FACTS, WHETHER OR NOT KNOWN