FIRST AMENDMENT AND WAIVER (the "Amendment"), dated as of August 31, 1995 of a certain
Amended and Restated Agreement dated as of May 1, 1994 between Inrad, Inc. (the "Company") and Chemical
Bank (the "Bank") (the "Letter Agreement").
WHEREAS, the Company and the Bank are parties to the Letter Agreement; and
WHEREAS, the Company has requested the Bank to modify the Letter Agreement and to waive certain
violations of the Letter Agreement, and the Bank is agreeable to such requests;
NOW THEREFORE, in consideration of the premises and mutual agreements herein contained, the parties
hereby agree as follows:
1. Definitions. Except as otherwise stated, capitalized terms defined in the Letter Agreement and used herein
without definition shall have the respective meanings assigned to them in the Letter Agreement.
2. Waivers. The Bank hereby waives the violations of the Letter Agreement described below (which have taken
place on or before the date hereof) and any Defaults or Events of Default resulting therefrom, solely to the extent
set forth below:
(a) Subsection 5(k) of the Letter Agreement requires the Company to not allow the ratio of the Company's
account payables to Banks Indebtedness due under the Note to be below 1.1::1 or above 1.5::1. The Company
was in default of this provision for the period April 30, 1995, May 31, 1995, June 30, 1995 and July 31, 1995.
(b) Subsection 5(l) of the Letter Agreement requires the Company to not allow the ratio of the Company's
principal Indebtedness under the Letter Agreement to accounts receivable as of December 31, 1994, January,
1995 and February, 1995 to be greater than 85%. During that period such ratio was 85.4%, 97% and 91% at
the respective month ends.
(c) Subsection 7(j) of the Letter Agreement requires the Company to have an operating profit of at least $50,000
for fiscal year ending 12/31/94. During fiscal year ending 12/31/94, the Company had a $554,000 operating loss.
3. Amendment of the Letter Agreement.