C-2 SHALL BE IN THE FORM OF EXHIBIT C-2 ATTACHED HERETO.
2.
LIMITED WAIVER.
BANK HEREBY WAIVES BORROWER'S OBLIGATION TO
COMPLY WITH SECTION 6.8 OF THE AGREEMENT FOR THE FISCAL QUARTERS ENDING JUNE 30,
2005 AND SEPTEMBER 30, 2005.
SUCH WAIVER DOES NOT CONSTITUTE A WAIVER (I) OF
COMPLIANCE WITH THAT SECTION AS OF ANY OTHER DATES, (II) OF ANY OTHER FAILURE BY
BORROWER TO COMPLY WITH THE AGREEMENT OR ANY OTHER EVENTS OF DEFAULT, NOW
EXISTING OR HEREAFTER ARISING, OR (III) BANK'S RIGHT TO REQUIRE COMPLIANCE AT
ALL TIMES WITH THE TERMS AND CONDITIONS OF THE AGREEMENT.
BANK RESERVES ALL
RIGHTS UNDER THE AGREEMENT AND UNDER APPLICABLE LAW.
ALL OTHER TERMS AND
CONDITIONS OF THE AGREEMENT OF OR RELATING TO THE COMMITTED REVOLVING LINE
REMAIN IN FULL FORCE AND EFFECT.
3.
CONDITIONS PRECEDENT TO EFFECTIVENESS.
THIS AMENDMENT SHALL
BECOME EFFECTIVE ONLY UPON:
(A)
RECEIPT BY THE BANK OF THE FOLLOWING (EACH OF WHICH SHALL BE IN
FORM AND SUBSTANCE SATISFACTORY TO BANK):
(I)
COUNTERPARTS OF THIS AMENDMENT DULY EXECUTED ON BEHALF OF THE
BORROWER AND THE BANK;
(II)
COPIES OF RESOLUTIONS OF THE BOARD OF DIRECTORS OR OTHER
AUTHORIZING DOCUMENTS OF BORROWER, AUTHORIZING THE EXECUTION AND DELIVERY OF
THIS AMENDMENT;
(III)
A PROMISSORY NOTE EVIDENCING THE AMOUNTS OWING UNDER
SECTION 2.1.2 OF THE AGREEMENT;
(IV)
A CREDIT APPLICATION FROM CARL BERG;
(V)
AN AFFIRMATION OF GUARANTY AND INTERCREDITOR AGREEMENT BY CARL
BERG;
(B)
BANK SHALL HAVE RECEIVED A LOAN FACILITY FEE IN THE AMOUNT OF
TWELVE THOUSAND FIVE HUNDRED DOLLARS ($12,500), PLUS AN AMOUNT EQUAL TO ALL BANK
EXPENSES INCURRED IN CONNECTION WITH THIS AMENDMENT; AND
(C)
COMPLETION OF SUCH OTHER MATTERS AND DELIVERY OF SUCH OTHER
AGREEMENTS, DOCUMENTS AND CERTIFICATES AS BANK MAY REASONABLY REQUEST.
4.
REPRESENTATION AND WARRANTIES.
BORROWER REPRESENTS AND WARRANTS
THAT THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THE AGREEMENT ARE TRUE AND
CORRECT AS OF THE DATE OF THIS AMENDMENT, AND THAT NO EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING.
5.
MISCELLANEOUS.
(A)
SUCCESSORS AND ASSIGNS.
THIS AMENDMENT SHALL BE BINDING UPON AND
SHALL INURE TO THE BENEFIT OF BORROWER AND BANK AND THEIR RESPECTIVE SUCCESSORS
AND ASSIGNS; PROVIDED, HOWEVER, THAT THE FOREGOING SHALL NOT AUTHORIZE ANY
ASSIGNMENT BY BORROWER OF ITS RIGHTS OR DUTIES HEREUNDER.
(B)
ENTIRE AGREEMENT.
THIS AMENDMENT AND THE LOAN DOCUMENTS CONTAIN
THE ENTIRE AGREEMENT OF THE PARTIES HERETO AND SUPERSEDE ANY OTHER ORAL OR
WRITTEN AGREEMENTS OR UNDERSTANDINGS.
(C)
COURSE OF DEALING; WAIVERS.
NO COURSE OF DEALING ON THE PART OF
BANK OR ITS OFFICERS, NOR ANY FAILURE OR DELAY IN THE EXERCISE OF ANY RIGHT BY
BANK, SHALL OPERATE AS A WAIVER THEREOF, AND ANY SINGLE OR PARTIAL
EXERCISE OF ANY SUCH RIGHT SHALL NOT PRECLUDE ANY LATER EXERCISE OF ANY SUCH
RIGHT.
BANK'S FAILURE AT ANY TIME TO REQUIRE STRICT PERFORMANCE BY BORROWER OF
ANY PROVISION SHALL NOT AFFECT ANY RIGHT OF BANK THEREAFTER TO DEMAND STRICT
COMPLIANCE AND PERFORMANCE.
ANY SUSPENSION OR WAIVER OF A RIGHT MUST BE IN
WRITING SIGNED BY AN OFFICER OF