LENDER'S
SOLE DISCRETION.
UPON SATISFACTION OF THE CONDITIONS SET FORTH IN THIS SECTION
2 AND OF ALL CONDITIONS TO THE EFFECTIVENESS OF THIS AMENDMENT, THE ADDITIONAL
DEBENTURES SHALL BE DEEMED TO CONSTITUTE PERMITTED SUBORDINATED INDEBTEDNESS
UNDER THE TERMS OF THE LOAN AGREEMENT.
3.
CONDITIONS.
THIS AMENDMENT SHALL BE EFFECTIVE ONCE EACH OF
THE FOLLOWING HAVE BEEN DELIVERED TO LENDER:
(I)
THIS AMENDMENT EXECUTED BY BORROWER AND LENDER;
(II)
OFFICER'S CERTIFICATE FROM BORROWER CERTIFYING AS
TO INCUMBENCY OF OFFICERS, SPECIMEN SIGNATURES, ITS CERTIFICATE OF INCORPORATION
AND BYLAWS, AND RESOLUTIONS ADOPTED BY THE BOARD OF DIRECTORS AUTHORIZING THIS
AMENDMENT;
(III)
A REPLACEMENT REVOLVING NOTE EXECUTED BY BORROWER
IN FAVOR OF LENDER;
(IV)
SUBORDINATION AGREEMENT AMONG, LENDER, X-L
INVESTMENTS, FIVE STAR INVESTMENTS, THOMAS PAUKEN, IDA PAUKEN, WILLIAM SOLEMENE
AND STANLEY F. BEDELL, IN FORM AND SUBSTANCE ACCEPTABLE TO LENDER;
(V)
PAYMENT BY BORROWER TO LENDER OF A $1,500 AMENDMENT
FEE, WHICH FEE SHALL BE FULL-EARNED AND NON-REFUNDABLE WHEN PAID; AND
(VI)
SUCH OTHER DOCUMENTS AS LENDER MAY REASONABLY
REQUEST.
4.
REPRESENTATIONS AND WARRANTIES.
BORROWER REPRESENTS AND
WARRANTS TO LENDER THAT (A) IT POSSESSES ALL REQUISITE POWER AND AUTHORITY TO
EXECUTE, DELIVER AND COMPLY WITH THE TERMS OF THIS AMENDMENT, (B) THIS AMENDMENT
HAS BEEN DULY AUTHORIZED AND APPROVED BY ALL REQUISITE CORPORATE ACTION ON THE
PART OF BORROWER, (C) NO OTHER CONSENT OF ANY PERSON, GOVERNMENTAL AUTHORITY, OR
ENTITY (OTHER THAN LENDER) IS REQUIRED FOR THIS AMENDMENT TO BE EFFECTIVE, (D)
THE EXECUTION AND DELIVERY OF THIS AMENDMENT DOES NOT VIOLATE ITS ORGANIZATIONAL
DOCUMENTS, (E) THE REPRESENTATIONS AND WARRANTIES IN EACH LOAN DOCUMENT TO WHICH
IT IS A PARTY ARE TRUE AND CORRECT IN ALL MATERIAL RESPECTS ON AND AS OF THE
DATE OF THIS AMENDMENT AS THOUGH MADE ON THE DATE OF THIS AMENDMENT (EXCEPT TO
THE EXTENT THAT SUCH REPRESENTATIONS AND WARRANTIES SPEAK TO A SPECIFIC DATE OR
AS MODIFIED BY THIS AMENDMENT), (F) IT IS IN FULL COMPLIANCE WITH ALL COVENANTS
AND AGREEMENTS CONTAINED IN EACH LOAN DOCUMENT TO WHICH IT IS A PARTY, AND (G)
NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING.
THE REPRESENTATIONS AND
WARRANTIES MADE IN THIS AMENDMENT SHALL SURVIVE THE EXECUTION AND DELIVERY OF
THIS AMENDMENT.
NO INVESTIGATION BY LENDER IS REQUIRED FOR LENDER TO RELY ON
THE REPRESENTATIONS AND WARRANTIES IN THIS AMENDMENT.
2
5.
SCOPE OF AMENDMENT; REAFFIRMATION; RELEASE.
ALL REFERENCES
TO THE LOAN AGREEMENT SHALL REFER TO THE LOAN AGREEMENT AS AMENDED BY THIS
AMENDMENT.
EXCEPT AS AFFECTED BY THIS AMENDMENT, THE LOAN DOCUMENTS ARE
UNCHANGED AND CONTINUE IN FULL FORCE AND EFFECT.
HOWEVER, IN THE EVENT OF ANY
INCONSISTENCY BETWEEN THE TERMS OF THE LOAN AGREEMENT (AS AMENDED BY THIS
AMENDMENT) AND ANY OTHER LOAN DOCUMENT, THE TERMS OF THE LOAN AGREEMENT SHALL
CONTROL AND SUCH OTHER DOCUMENT SHALL BE DEEMED TO BE AMENDED TO CONFORM TO THE
TERMS OF THE LOAN AGREEMENT.
BORROWER HEREBY REAFFIRMS ITS OBLIGATIONS UNDER
THE LOAN DOCUMENTS TO WHICH IT IS A PARTY AND AGREES THAT ALL LOAN DOCUMENTS TO
WHICH THEY ARE A