and (b) one (1) final payment of
the remaining principal balance, plus all accrued and unpaid interest thereon on
March 15, 2009.
Notwithstanding the foregoing, if the Capital Raise Date has
not occurred prior to the Cut-Off Date, Borrower will pay the entire outstanding
principal balance of Term Loan B, plus all accrued and unpaid interest thereon
on December 31, 2006."
4.
ADDITIONAL CONDITIONS.
SECTION 11 OF THE FIRST AMENDMENT IS
HEREBY DELETED AND REPLACED WITH THE FOLLOWING:
"11.
Additional Conditions.
If the Capital Raise Date does not occur
prior to the Cut-Off Date, on November 30, 2006, at Borrowers' sole option, (i)
Bank shall institute a reserve against Eligible Receivables or Eligible
Inventory in an amount equal to Five Hundred Thousand Dollars ($500,000.00) or
(ii) Borrower shall deposit in a non-interest bearing cash collateral account
maintained at Bank (the "Additional Cash Collateral Account") an amount equal to
Five Hundred Thousand Dollars ($500,000.00).
Bank will have sole dominion and control over all items and funds in the
Additional Cash Collateral Account and such items and funds may be withdrawn
only by Bank.
Bank will have the right to apply all or any part of such funds
towards payment of any of the Bank Indebtedness.
Items and funds in the
Additional Cash Collateral Account shall be referred to herein as the
"Additional Cash Collateral"."
5.
AMENDMENT/REFERENCES.
THE LOAN AGREEMENT AND THE LOAN DOCUMENTS
ARE HEREBY AMENDED TO BE CONSISTENT WITH THE TERMS OF THIS AMENDMENT. ALL
REFERENCES IN THE LOAN AGREEMENT AND THE LOAN DOCUMENTS TO (A) THE "LOAN
AGREEMENT" SHALL MEAN THE LOAN AGREEMENT AS AMENDED HEREBY; AND (B) THE "LOAN
DOCUMENTS" SHALL INCLUDE THIS AMENDMENT AND ALL OTHER INSTRUMENTS OR AGREEMENTS
EXECUTED PURSUANT TO OR IN CONNECTION WITH THE TERMS HEREOF.
6.
CROSS-COLLATERALIZATION; CONFIRMATION OF COLLATERAL.
BORROWERS
HEREBY CONFIRM, ACKNOWLEDGE AND AGREE THAT ALL BANK INDEBTEDNESS IS AND SHALL BE
CROSS-COLLATERALIZED AND, WITHOUT LIMITING THE FOREGOING, TERM LOAN B, THE OTHER
LOANS, AND ALL OTHER BANK INDEBTEDNESS ARE AND SHALL CONTINUE TO BE SECURED BY
ALL LIENS, SECURITY INTERESTS, ASSIGNMENTS, SURETYSHIP OBLIGATIONS, STOCK
PLEDGES, RIGHTS AND REMEDIES GRANTED TO BANK IN THE LOAN DOCUMENTS, WHICH LIENS,
MORTGAGES, SECURITY INTERESTS, RIGHTS AND REMEDIES ARE HEREBY REAFFIRMED AND
CONTINUED AS SECURITY FOR THE FOREGOING; AND ALL OF THE LOAN DOCUMENTS ARE
HEREBY AMENDED TO REFLECT THE SAME.
NONE OF THE
2
COLLATERAL SHALL BE IMPAIRED BY ANYTHING CONTAINED HEREIN AND ALL SUCH
COLLATERAL SHALL CONTINUE TO SECURE ALL PRESENT AND FUTURE BANK INDEBTEDNESS.
7.
RELEASE.
EACH BORROWER AND EACH GUARANTOR ACKNOWLEDGES AND
AGREES THAT IT HAS NO CLAIMS, SUITS OR CAUSES OF ACTION AGAINST BANK AND HEREBY
REMISES, RELEASES AND FOREVER DISCHARGES BANK, THEIR OFFICERS, DIRECTORS,
SHAREHOLDERS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS, AND ANY OF THEM, FROM
ANY CLAIMS, SUITS OR CAUSES OF ACTION WHATSOEVER, IN LAW OR AT EQUITY, WHICH ANY
BORROWER OR ANY GUARANTOR HAS OR MAY HAVE ARISING FROM ANY ACT, OMISSION OR
OTHERWISE, AT ANY TIME UP TO AND INCLUDING THE DATE OF THIS AMENDMENT.
8.