(II)
75% OF ALL CONSIDERATION RECEIVED AFTER
AUGUST 1, 2004 FROM PROCEEDS FROM THE ISSUANCE OF ANY EQUITY SECURITIES OF THE
BORROWER (OTHER THAN (I) THE ISSUANCE OF STOCK OPTIONS, RESTRICTED STOCK OR
OTHER STOCK-BASED AWARDS UNDER THE BORROWER'S DIRECTOR OR EMPLOYEE STOCK
INCENTIVE PLANS, OR (II) STOCK PURCHASES UNDER THE BORROWER'S EMPLOYEE STOCK
PURCHASE PLAN) AND/OR SUBORDINATED DEBT INCURRED BY THE BORROWER (NET OF
REFINANCED AMOUNTS OF EXISTING SUBORDINATED DEBT)."
4.
FEES.
BORROWER SHALL PAY TO BANK A
MODIFICATION FEE EQUAL TO TWENTY-FIVE THOUSAND DOLLARS ($25,000.00), WHICH FEE
SHALL BE DUE ON THE DATE HEREOF AND SHALL BE DEEMED FULLY EARNED AS OF THE DATE
HEREOF.
THE BORROWER SHALL ALSO REIMBURSE BANK FOR ALL LEGAL FEES AND EXPENSES
INCURRED IN CONNECTION WITH THIS AMENDMENT TO THE EXISTING LOAN DOCUMENTS.
5.
WAIVER.
BANK HEREBY WAIVES BORROWER'S
FAILURE TO COMPLY WITH THE MINIMUM TANGIBLE NET WORTH REQUIREMENT SET FORTH IN
SECTION 5(A) OF THE SCHEDULE TO THE LOAN AGREEMENT AS OF DECEMBER 31, 2004.
THE
BANK'S WAIVER OF BORROWER'S COMPLIANCE WITH SAID FOREGOING AFFIRMATIVE COVENANT
SHALL APPLY ONLY TO THE FOREGOING SPECIFIC PERIOD.
6.
RATIFICATION OF NEGATIVE PLEDGE.
BORROWER HEREBY RATIFIES, CONFIRMS AND REAFFIRMS, ALL AND SINGULAR, THE TERMS
AND CONDITIONS OF A CERTAIN NEGATIVE PLEDGE AGREEMENTS EACH DATED AS OF
JANUARY 30, 2003 BETWEEN BORROWER AND BANK, AND ACKNOWLEDGES, CONFIRMS AND
AGREES THAT SAID NEGATIVE PLEDGE AGREEMENT SHALL REMAIN IN FULL FORCE AND
EFFECT.
7.
RATIFICATION OF PERFECTION CERTIFICATE.
BORROWER HEREBY RATIFIES, CONFIRMS AND REAFFIRMS, ALL AND SINGULAR, THE TERMS
AND DISCLOSURES CONTAINED IN CERTAIN PERFECTION CERTIFICATES EACH DATED AS OF
JANUARY 30, 2003 AND ACKNOWLEDGES, CONFIRMS AND AGREES THE DISCLOSURES AND
INFORMATION THEREIN HAS NOT CHANGED AS OF THE DATE HEREOF, EXCEPT AS SET FORTH
ON SCHEDULE 1 ANNEXED HERETO.
8.
CONSISTENT CHANGES.
THE EXISTING LOAN
DOCUMENTS ARE HEREBY AMENDED WHEREVER NECESSARY TO REFLECT THE CHANGES DESCRIBED
ABOVE.
9.
RATIFICATION OF LOAN DOCUMENTS.
BORROWER HEREBY RATIFIES, CONFIRMS, AND REAFFIRMS ALL TERMS AND CONDITIONS OF
ALL SECURITY OR OTHER COLLATERAL GRANTED TO THE BANK, AND CONFIRMS THAT THE
INDEBTEDNESS SECURED THEREBY INCLUDES, WITHOUT LIMITATION, THE OBLIGATIONS.
10.
NO DEFENSES OF BORROWER.
BORROWER HEREBY
ACKNOWLEDGES AND AGREES THAT BORROWER HAS NO OFFSETS, DEFENSES, CLAIMS, OR
COUNTERCLAIMS AGAINST BANK WITH RESPECT TO THE OBLIGATIONS, OR OTHERWISE, AND
THAT IF BORROWER NOW HAS, OR EVER DID HAVE, ANY OFFSETS, DEFENSES, CLAIMS, OR
COUNTERCLAIMS AGAINST BANK, WHETHER KNOWN OR UNKNOWN, AT LAW OR IN EQUITY, ALL
OF THEM ARE HEREBY EXPRESSLY WAIVED AND BORROWER HEREBY RELEASES BANK FROM ANY
LIABILITY THEREUNDER.
11.
CONTINUING VALIDITY.
BORROWER UNDERSTANDS AND
AGREES THAT IN MODIFYING THE EXISTING OBLIGATIONS, BANK IS RELYING UPON
BORROWER'S REPRESENTATIONS, WARRANTIES, AND AGREEMENTS, AS SET FORTH IN THE
EXISTING LOAN DOCUMENTS.
EXCEPT AS EXPRESSLY MODIFIED PURSUANT TO THIS LOAN
MODIFICATION AGREEMENT, THE TERMS OF THE EXISTING LOAN DOCUMENTS REMAIN
UNCHANGED AND IN FULL FORCE AND EFFECT.
BANK'S AGREEMENT TO MODIFICATIONS TO
THE EXISTING OBLIGATIONS PURSUANT TO THIS LOAN MODIFICATION AGREEMENT IN NO WAY
SHALL OBLIGATE BANK TO MAKE ANY FUTURE MODIFICATIONS TO THE