IN THE APPROPRIATE ALPHABETICAL ORDER IN
SECTION 13.1 THEREOF, ENTITLED "DEFINITIONS":
1
"
"FOURTH LOAN MODIFICATION AGREEMENT" MEANS THAT CERTAIN WAIVER
AND FOURTH LOAN MODIFICATION AGREEMENT, DATED AS OF THE FOURTH LOAN MODIFICATION
EFFECTIVE DATE, BY AND BETWEEN BORROWER AND BANK."
"Fourth Loan Modification Effective Date" is the date noted on the signature
page to the Fourth Loan Modification Agreement."
B.
ACKNOWLEDGEMENT OF DEFAULT; WAIVER.
1
BORROWER HAS INFORMED BANK THAT IT
ANTICIPATES THAT IT WILL FAIL TO COMPLY WITH THE TANGIBLE NET WORTH FINANCIAL
COVENANT SET FORTH IN SECTION 6.9(B) OF THE LOAN AGREEMENT FOR THE QUARTERLY
COMPLIANCE PERIOD ENDED DECEMBER 31, 2010 (THE "ANTICIPATED DEFAULT).
2
BANK HEREBY WAIVES BORROWER'S
ANTICIPATED DEFAULT UNDER THE LOAN AGREEMENT.
BANK'S WAIVER SHALL ONLY APPLY TO
THE ANTICIPATED DEFAULT DESCRIBED ABOVE, AND ONLY FOR THE SPECIFIC COMPLIANCE
PERIOD DESCRIBED ABOVE.
BORROWER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS
SPECIFICALLY PROVIDED HEREIN, NOTHING IN THIS SECTION OR ANYWHERE IN THIS LOAN
MODIFICATION AGREEMENT SHALL BE DEEMED OR OTHERWISE CONSTRUED AS A WAIVER BY THE
BANK OF ANY OF ITS RIGHTS AND REMEDIES PURSUANT TO THE EXISTING LOAN DOCUMENTS,
APPLICABLE LAW OR OTHERWISE.
4.
FEES.
BORROWER SHALL PAY TO BANK A MODIFICATION FEE IN THE
AMOUNT OF TWO THOUSAND FIVE HUNDRED DOLLARS ($2,500.00), WHICH FEE SHALL BE DUE
AND PAYABLE AND FULLY EARNED AS OF THE DATE HEREOF.
BORROWER SHALL ALSO
REIMBURSE BANK FOR ALL LEGAL FEES AND EXPENSES INCURRED BY BANK IN CONNECTION
WITH THE EXISTING LOAN DOCUMENTS AND THIS AMENDMENT THERETO.
5.
RATIFICATION OF INTELLECTUAL PROPERTY SECURITY AGREEMENT.
BORROWER HEREBY RATIFIES, CONFIRMS, AND REAFFIRMS, ALL AND SINGULAR, THE TERMS
AND CONDITIONS OF THE IP AGREEMENT AND ACKNOWLEDGES, CONFIRMS AND AGREES THAT
THE IP AGREEMENT CONTAINS AN ACCURATE AND COMPLETE LISTING OF ALL INTELLECTUAL
PROPERTY.
6.
RATIFICATION OF PERFECTION CERTIFICATE.
BORROWER HEREBY
RATIFIES, CONFIRMS AND REAFFIRMS, ALL AND SINGULAR, THE TERMS AND DISCLOSURES
CONTAINED IN A CERTAIN PERFECTION CERTIFICATE DATED AS OF FEBRUARY 20, 2008
BETWEEN BORROWER AND BANK, AND ACKNOWLEDGES, CONFIRMS AND AGREES THE DISCLOSURES
BORROWER PROVIDED TO BANK IN THE PERFECTION CERTIFICATE, AS AMENDED, HAS NOT
CHANGED.
7.
AUTHORIZATION TO FILE.
BORROWER HEREBY AUTHORIZES BANK TO FILE
UCC FINANCING STATEMENTS WITHOUT NOTICE TO BORROWER, WITH ALL APPROPRIATE
JURISDICTIONS, AS BANK DEEMS APPROPRIATE, IN ORDER TO FURTHER PERFECT OR PROTECT
BANK'S INTEREST IN THE COLLATERAL, INCLUDING A NOTICE THAT ANY DISPOSITION OF
THE COLLATERAL, BY EITHER THE BORROWER OR ANY OTHER PERSON, SHALL BE DEEMED TO
VIOLATE THE RIGHTS OF THE BANK UNDER THE CODE.
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, AS OF THE DATE OF THIS LOAN MODIFICATION AGREEMENT, BORROWER HAS NO
OFFSETS, DEFENSES, CLAIMS, OR COUNTERCLAIMS AGAINST BANK WITH