statements and which results, except as otherwise
agreed to in writing by Foothill, shall not show any such Liens;
(F)
SECTION 6.12(A) OF THE LOAN AGREEMENT IS HEREBY AMENDED AND
RESTATED IN ITS ENTIRETY AS FOLLOWS:
6
(a)
EBITDA.
(i) Borrower shall not have two consecutive fiscal
quarters of EBITDA losses (exclusive of the quarter ending September 30, 2006)
and (ii) Borrower shall maintain EBITDA, for each fiscal period set forth below,
of not less than the amount indicated below opposite such fiscal period:
for the immediately preceding twelve-month period ending 06/30/06
$3,500,000
for the immediately preceding twelve-month period ending 09/30/06
$1,500,000
for the immediately preceding twelve-month period ending 12/31/06
$2,000,000
for the immediately preceding twelve-month period ending 03/31/07
$2,500,000
for the immediately preceding twelve-month period ending 06/30/07
$2,500,000
for the immediately preceding twelve-month period ending 09/30/07
$3,000,000
for the immediately preceding twelve-month period ending 12/31/07 and for each
twelve-month period ending at each fiscal quarter end thereafter
$3,500,000
(G)
SCHEDULES 5.6(A), 5.6(B), 5.6(C), 5.7(A), 5.7(B), AND 5.7(C) OF
THE LOAN AGREEMENT ARE HEREBY DELETED IN THEIR ENTIRETY AND REPLACED WITH
SCHEDULES 5.6(A), 5.6(B), 5.6(C), 5.7(A), 5.7(B), AND 5.7(C) ATTACHED HERETO,
RESPECTIVELY.
3.
Waiver.
Lender hereby waives the Event of Default that has occurred as
a result of the failure by Borrower to comply with Section 6.12(a) of the Loan
Agreement with respect to the fiscal period ending June 30, 2006.
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)
LENDER SHALL HAVE RECEIVED THIS AMENDMENT, DULY EXECUTED BY THE
PARTIES HERETO, AND THE SAME SHALL BE IN FULL FORCE AND EFFECT.
7
(B)
LENDER SHALL HAVE RECEIVED A REAFFIRMATION AND CONSENT
SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS EXHIBIT A, DULY EXECUTED AND
DELIVERED BY EACH GUARANTOR.
(C)
LENDER SHALL HAVE RECEIVED AN AMENDMENT FEE IN THE AMOUNT OF
$20,000, WHICH AMOUNT BORROWER AUTHORIZES LENDER TO CHARGE TO THE LOAN ACCOUNT.
(D)
THE REPRESENTATIONS AND WARRANTIES HEREIN AND IN THE LOAN
AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRUE AND CORRECT IN ALL MATERIAL
RESPECTS ON AND AS OF THE DATE HEREOF, AS THOUGH MADE ON SUCH DATE (EXCEPT TO
THE EXTENT THAT SUCH REPRESENTATIONS AND WARRANTIES RELATE SOLELY TO AN EARLIER
DATE).
(E)
NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING ON THE DATE HEREOF, NOR SHALL RESULT FROM THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREIN.
(F)
NO INJUNCTION, WRIT, RESTRAINING ORDER, OR OTHER ORDER OF ANY
NATURE PROHIBITING, DIRECTLY OR INDIRECTLY, THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREIN SHALL HAVE BEEN ISSUED AND REMAIN IN FORCE BY ANY
GOVERNMENTAL AUTHORITY AGAINST BORROWER, ANY GUARANTOR, OR LENDER.
5.
Release.
Borrower hereby waives, releases, remises and forever
discharges Lender, each of its Affiliates, and each of its officers, directors,
employees, and agents (collectively, the "Releasees"), from any and all claims,
demands, obligations, liabilities, causes of action, damages, losses, costs and
expenses of