AMENDMENT TO REVOLVING CREDIT LOAN AGREEMENT
THIS AMENDMENT TO REVOLVING CREDIT LOAN AGREEMENT, is made this 31st day
of March, 2005, by and between 1mage Software, Inc. (the "Borrower"), a Colorado
corporation, and DEMALE, LLC ("Lender"), a Colorado limited liability company.
RECITALS
A. WHEREAS, pursuant to a Revolving Credit Loan Agreement dated April 1, 2003
(the "Agreement"), Borrower agreed to borrow sums from time to time up to an
aggregate amount of Three Hundred Thousand Dollars ($300,000) from Lender in the
form of a revolving line of credit; and
B. WHEREAS, the loans under the Agreement are evidenced by a Revolving
Credit Master Note dated April 1, 2003 (the "Note");
C. WHEREAS, the Lender has agreed to increase the amount of the revolving
line of credit to Five Hundred Thousand Dollars ($500,000) and to extend the
term of the Agreement and the Note until June 30, 2007; and
D. WHEREAS, the Lender has agreed to revise the conversion ratio for the
outstanding balance of the Note;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, the parties agree as follows:
1. Amendments to Section 1--Terms of Revolving Credit. Subject to the
terms and conditions of this Agreement, Lender and Borrower agree that Section 1
and Section 1.a. of the Agreement are amended to provide that the Revolving
Credit will be in the maximum amount of Five Hundred Thousand Dollars ($500,000)
and that the Repayment Date shall end on the earlier to occur of June 30, 2007
or another date which is mutually agreed upon by the Lender and the Borrower.
2. Amendment to Section 3--Promise to Pay and Conversion Rights.
Section 3 of the Agreement is amended to provide that the date of termination of
the Agreement and right to convert in such Section shall occur on June 30, 2007
or another date which is mutually agreed upon by the Lender and the Borrower,
and that the Lender may elect to convert all or any portion of the unpaid
principal and interest owed under the Agreement and the Note into shares of the
Company's common stock at a conversion price equal to the lesser of (a) $0.14
per share or (b) 80% of the Fair Market Value on the date that Lender's written
notice of such conversion is received by Borrower.
3. Revision to Section 8--Borrower's Covenants. Section 3.b.(1) of the
Agreement is revised to acknowledge that the Borrower's primary bank line of
credit, to which the Note is expressly subordinated, is currently with U.S.
Bancorp.
4. Miscellaneous
a. No Waiver. No failure or delay of any party hereto to exercise
any right given to it hereunder, or to insist on strict compliance with any
provision hereunder, shall constitute a waiver of such provision or of any other
provision hereof, or a waiver of any breach, and no waiver of any provision or
breach of any provision shall constitute a waiver of any other provision or
breach or of any subsequent breach of the same provision. No waiver shall be
effective unless in writing and signed by the party having the right to waive
such provision.
b. Survival. All covenants, agreements, representations and
warranties made herein and in any other instruments or documents delivered
pursuant hereto shall survive the execution and delivery of this Amendment to
Revolving Credit Loan Agreement ("Amendment") and shall continue in full force
and effect so long as any of the amounts due hereunder are outstanding and
unpaid.
c. Entire Agreement; Modification. This Amendment and the
Agreement constitute the entire agreement between the parties hereto with
respect to the subject matter hereof, superseding all prior negotiations,
correspondence, understandings and agreements, if any, between the parties; no
amendment or modification of this Amendment shall be binding on the parties
unless made in writing and duly executed by all parties. There are no oral or
implied agreements and no oral or implied warranties between the parties hereto
other than those expressed herein.
d. Binding Effect; Assignability. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
e. Headings. The section and other headings in this Amendment are
for reference only and shall not limit or otherwise affect any of the terms
hereof.
f. Further Assurances and Corrective Instruments. The parties
hereto agree to execute, acknowledge, seal and deliver, after the date hereof,
without additional consideration, such further assurances, instruments and
documents, and to take such further actions, as the parties hereto shall request
in order to fulfill the intent of this Amendment and the transactions
contemplated hereby.
g. Severability. Any provision in this Amendment which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.
h. Governing Law. This Amendment is made in and shall be governed
by and construed and interpreted in accordance with this laws of the State of
Colorado.
i. Effect. In the event of a conflict between the provisions of
this Amendment and those of the Agreement, the provisions of this Amendment
shall govern and control. Except as specifically provided in Sections 1, 2 and 3
hereof, all of the terms of the Agreement remain in full force and effect. As
amended by this Amendment, the Agreement shall remain in full force and effect
and is hereby ratified and affirmed by the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Amendment to Revolving Credit Loan Agreement under seal, with the intention
of making it a sealed instrument, as of the day and year first above written.
BORROWER:
1MAGE SOFTWARE, INC.
By: /s/ Xxxxx X. XxXxxxx
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Xxxxx X. XxXxxxx, President/CEO
LENDER:
DEMALE, LLC
By: /s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx, Manager
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