BANK OR FINANCIAL INSTITUTION (OTHER THAN BANK) AT OR WITH WHICH ANY
SUCH COLLATERAL ACCOUNT IS MAINTAINED TO EXECUTE AND DELIVER A CONTROL AGREEMENT
OR OTHER APPROPRIATE INSTRUMENT WITH RESPECT TO SUCH COLLATERAL ACCOUNT TO
PERFECT BANK'S LIEN IN SUCH COLLATERAL ACCOUNT IN ACCORDANCE WITH THE TERMS
HEREUNDER. THE PROVISIONS OF THE PREVIOUS SENTENCE SHALL NOT APPLY TO DEPOSIT
ACCOUNTS EXCLUSIVELY USED FOR PAYROLL, PAYROLL TAXES AND OTHER EMPLOYEE WAGE AND
BENEFIT PAYMENTS TO OR FOR THE BENEFIT OF THE EMPLOYEES OF PARENT, BORROWERS OR
SUCH SUBSIDIARY AND IDENTIFIED TO BANK BY BORROWERS AS SUCH. NOTWITHSTANDING THE
FOREGOING, BORROWERS SHALL HAVE UNTIL THE EXPIRATION OF SIXTY (60) DAYS
FOLLOWING THE EFFECTIVE DATE TO PROVIDE SUCH CONTROL AGREEMENTS WITH RESPECT TO
COLLATERAL ACCOUNTS IN EXISTENCE ON THE EFFECTIVE DATE.
6.7
FINANCIAL COVENANTS.
Parent shall maintain at all times, to be tested as of the last day of each
month, unless otherwise noted, on a consolidated basis with respect to Parent
and its Subsidiaries:
(A)
QUICK RATIO. A RATIO OF QUICK ASSETS TO CURRENT LIABILITIES OF AT
LEAST 1.3 TO 1.0.
(B)
TANGIBLE NET WORTH. A TANGIBLE NET WORTH OF AT LEAST (I)
$90,000,000 DURING THE PERIOD BEGINNING WITH THE EFFECTIVE DATE THROUGH NOVEMBER
30, 2006, (II) $95,000,000 DURING THE PERIOD BEGINNING WITH DECEMBER 1, 2006
THROUGH MAY 31, 2007, (III) $105,000,000 DURING THE PERIOD BEGINNING WITH JUNE
1, 2007 THROUGH
11
AUGUST 31, 2007, (IV) $108,000,000 DURING THE PERIOD BEGINNING WITH SEPTEMBER 1,
2007 THROUGH NOVEMBER 30, 2007 AND (V) $115,000,000 BEGINNING WITH DECEMBER 1,
2007 AND CONTINUING THEREAFTER; IN EACH OF THE FOREGOING CASES (Y) THE MINIMUM
TANGIBLE NET WORTH REQUIREMENTS WILL BE INCREASED BY 50% OF NET INCOME AND 50%
OF ISSUANCES OF EQUITY (EXCEPT THAT, FOR SUCH PURPOSE, INCREASES IN EQUITY DUE
TO EQUITY ISSUED UPON EXERCISE OF OPTIONS GRANTED UNDER A STOCK OPTION PLAN OF
PARENT, A BORROWER OR ANY PREDECESSOR THEREOF SHALL NOT BE INCLUDED FOR PURPOSES
OF COMPUTING SUCH INCREASE UNLESS THE AMOUNT OF SUCH INCREASE IN EQUITY IN A
FISCAL QUARTER EXCEEDS $500,000, IN WHICH CASE THE ENTIRE AMOUNT OF SUCH
INCREASE (I.E., NOT JUST THE EXCESS OVER $500,000) IN THE FISCAL QUARTER SHALL
BE INCLUDED) AFTER THE EFFECTIVE DATE, IN ACCORDANCE WITH THIS SECTION 6.7(B),
AND (Z) IF AFTER THE EFFECTIVE DATE PARENT OR A SUBSIDIARY OF PARENT MAKES A
PAYMENT FOR A PURCHASE OR OTHER ACQUISITION OF AN ASSET OR COMPANY (PROVIDED
THAT SUCH PURCHASE OR ACQUISITION OCCURRED PRIOR TO THE EFFECTIVE DATE OR IS
ALLOWED UNDER THE TERMS OF THIS AGREEMENT) AND BECAUSE OF GOODWILL, INTANGIBLES
OR IN-PROCESS RESEARCH AND DEVELOPMENT THAT WERE ACQUIRED IN SUCH PURCHASE OR
ACQUISITION THE TANGIBLE NET WORTH DECREASES, THE MINIMUM TANGIBLE NET WORTH
REQUIREMENTS WILL BE DECREASED BY THE SAME AMOUNT. INCREASES IN THE MINIMUM
TANGIBLE NET WORTH REQUIREMENTS BASED ON CONSIDERATION RECEIVED FOR EQUITY
SECURITIES SHALL BE EFFECTIVE AS OF THE END OF THE MONTH IN WHICH SUCH
CONSIDERATION IS RECEIVED, AND SHALL CONTINUE IN EFFECT THEREAFTER; PROVIDED
THAT (AA) INCREASES DUE TO