Income was decreased by noncash expenses consisting of (i) amortization for
customer relationships and non-compete agreements, (ii) original issue discount
on the Senior Secured Notes, (iii) deferred financing costs, and (iv) reduction
in value of intangible assets, the amounts which were deducted in calculating
Net Income for such period for the items described in clauses (i) through
(iv) above shall be added back to Net Income as calculated in accordance with
GAAP.
(G)
THE FIRST SENTENCE OF SECTION 9.12 OF THE FINANCING AGREEMENT IS
HEREBY AMENDED AND RESTATED IN ITS ENTIRETY AS FOLLOWS:
FURNISH AGENT, NO LATER THAN MAY 31 OF EACH YEAR, A MONTH BY MONTH PROJECTED
OPERATING BUDGET AND CASH FLOW OF LOAN PARTIES ON A CONSOLIDATED BASIS FOR THE
FISCAL YEAR TO COMMENCE ON THE SUCCEEDING JULY 1 (INCLUDING AN INCOME STATEMENT
FOR EACH MONTH AND A BALANCE SHEET AS AT THE END OF THE LAST MONTH IN EACH
FISCAL QUARTER AND PROPOSED BUSINESS PLAN FOR SUCH FISCAL YEAR INCLUDING,
WITHOUT LIMITATION, LETTER OF CREDIT ANTICIPATED TO BE REQUIRED DURING EACH SUCH
PERIOD), SUCH PROJECTIONS TO BE ACCOMPANIED BY A CERTIFICATE SIGNED BY THE
PRESIDENT OR CHIEF FINANCIAL OFFICER OF EACH LOAN PARTY TO THE EFFECT THAT SUCH
PROJECTIONS HAVE BEEN PREPARED ON THE BASIS OF SOUND FINANCIAL PLANNING PRACTICE
CONSISTENT WITH PAST BUDGETS AND FINANCIAL STATEMENTS AND THAT SUCH OFFICER HAS
NO REASON TO QUESTION THE REASONABLENESS OF ANY MATERIAL ASSUMPTIONS ON WHICH
SUCH PROJECTIONS WERE PREPARED.
3
(H)
SECTION 16.9(B) OF THE FINANCING AGREEMENT IS HEREBY AMENDED BY
DELETING THE PHRASE "LIMITED TO TWO (2) SUCH FIELD EXAMINATIONS IN ANY CALENDAR
YEAR" AND BY INSERTING "LIMITED TO ONE (1) SUCH FIELD EXAMINATION IN ANY
CALENDAR YEAR" IN LIEU THEREOF.
3.
CONDITION OF EFFECTIVENESS.
THIS AMENDMENT SHALL BECOME
EFFECTIVE UPON SATISFACTION OF THE FOLLOWING CONDITIONS PRECEDENT:
(A)
AGENT SHALL HAVE RECEIVED FOUR (4) COPIES OF THIS AMENDMENT
EXECUTED BY BORROWER, VERRAZANO, AGENT AND LENDERS.
(B)
AGENT SHALL HAVE RECEIVED AN ADMINISTRATIVE FEE EQUAL TO $50,000
WHICH SHALL BE CHARGED BY AGENT TO BORROWER'S ACCOUNT AND SHALL BE SHARED PRO
RATA BY LENDERS BASED UPON THEIR RESPECTIVE COMMITMENT PERCENTAGES.
(C)
AGENT SHALL HAVE RECEIVED THE PROJECTIONS REQUIRED UNDER
SECTION 9.12 FOR THE FISCAL YEAR OF BORROWER ENDING JUNE 30, 2009 AND SUCH
PROJECTIONS SHALL BE DETERMINED BY AGENT TO BE SATISFACTORY IN ALL RESPECTS.
(D)
ALL REASONABLE OUT-OF-POCKET COSTS AND EXPENSES INCURRED BY AGENT
IN CONNECTION WITH THIS AMENDMENT OR WITH THE FINANCING AGREEMENT, INCLUDING
WITHOUT LIMITATION ATTORNEYS FEES AND DISBURSEMENTS, SHALL HAVE BEEN PAID BY
BORROWER.
4.
REPRESENTATIONS AND WARRANTIES.
BORROWER AND VERRAZANO EACH
HEREBY REPRESENTS AND WARRANTS AS FOLLOWS:
(A)
THIS AMENDMENT AND THE FINANCING AGREEMENT, AS AMENDED HEREBY,
CONSTITUTE ITS LEGAL, VALID AND BINDING OBLIGATIONS AND ARE ENFORCEABLE AGAINST
IT IN ACCORDANCE WITH THEIR RESPECTIVE TERMS.
(B)
UPON THE EFFECTIVENESS OF THIS AMENDMENT, IT HEREBY REAFFIRMS, IN
ALL MATERIAL RESPECTS, ALL REPRESENTATIONS, WARRANTIES AND COVENANTS MADE IN THE
FINANCING AGREEMENT ON AND AS OF THE DATE HEREOF EXCEPT:
(I) TO THE EXTENT SUCH