TO BE PAID THE
PREMIUM(S) ON ANY OF THE REQUIRED INSURANCE, LENDER MAY DO SO FOR BORROWERS, BUT
BORROWERS SHALL CONTINUE TO BE LIABLE FOR THE SAME.
BORROWERS FURTHER COVENANT
THAT ALL INSURANCE PREMIUMS OWING UNDER ITS CURRENT CASUALTY POLICY HAVE BEEN
PAID.
BORROWERS ALSO AGREE TO NOTIFY LENDER, PROMPTLY, UPON ANY BORROWER'S
RECEIPT OF A NOTICE OF TERMINATION, CANCELLATION OR NON-RENEWAL FROM ITS
INSURANCE COMPANY OF ANY OF THE REQUIRED INSURANCE.
EACH BORROWER HEREBY
APPOINTS LENDER AS ITS ATTORNEY-IN-FACT, EXERCISABLE AT LENDER'S OPTION, TO
ENDORSE ANY CHECK WHICH MAY BE PAYABLE TO SUCH BORROWER IN ORDER TO COLLECT THE
PROCEEDS OF THE REQUIRED INSURANCE.
(B)
FINANCIAL RECORDS - BORROWERS SHALL KEEP
CURRENT AND ACCURATE BOOKS OF RECORDS AND ACCOUNTS IN WHICH FULL AND CORRECT
ENTRIES WILL BE MADE OF ALL OF ITS BUSINESS TRANSACTIONS, AND WILL REFLECT IN
ITS FINANCIAL STATEMENTS ADEQUATE ACCRUALS AND APPROPRIATIONS TO RESERVES, ALL
IN ACCORDANCE WITH GAAP.
NO BORROWER SHALL CHANGE ITS RESPECTIVE FISCAL YEAR
END DATE WITHOUT PRIOR WRITTEN NOTICE THEREOF TO LENDER.
(C)
EXISTENCE AND RIGHTS - EACH BORROWER SHALL
DO (OR CAUSE TO BE DONE) ALL THINGS NECESSARY TO PRESERVE AND KEEP IN FULL FORCE
AND EFFECT ITS LEGAL EXISTENCE, GOOD STANDING, RIGHTS AND FRANCHISES, EXCEPT
FOREIGN QUALIFICATIONS WHERE FAILURE TO BE SO QUALIFIED COULD NOT REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.
6.03
BUSINESS CONDUCTED.
EACH BORROWER SHALL CONTINUE
IN THE BUSINESS PRESENTLY OPERATED BY IT USING ITS BEST EFFORTS TO MAINTAIN ITS
CUSTOMERS.
NO BORROWER SHALL ENGAGE, DIRECTLY OR INDIRECTLY, IN ANY LINE OF
BUSINESS SUBSTANTIALLY DIFFERENT FROM THE BUSINESSES CONDUCTED BY IT IMMEDIATELY
PRIOR TO THE CLOSING DATE.
6.04
LITIGATION.
BORROWERS SHALL GIVE PROMPT NOTICE TO
LENDER OF ANY LITIGATION CLAIMING IN EXCESS OF $50,000.00 FROM BORROWERS, OR ANY
OF THEM, OR WHICH COULD REASONABLY BE EXPECTED TO CAUSE A MATERIAL ADVERSE
EFFECT.
6.05
TAXES.
BORROWERS SHALL PAY ALL TAXES WHEN DUE
(OTHER THAN TAXES BASED UPON OR MEASURED BY LENDER'S INCOME OR REVENUES), IF
ANY, IN CONNECTION WITH THE REVOLVING LOANS AND/OR THE RECORDING OF ANY
FINANCING STATEMENTS OR OTHER LOAN DOCUMENTS.
THE OBLIGATIONS OF BORROWERS
UNDER THIS SECTION SHALL SURVIVE THE PAYMENT OF BORROWERS' OBLIGATIONS UNDER
THIS AGREEMENT AND THE TERMINATION OF THIS AGREEMENT.
6.06
FINANCIAL COVENANTS.
BORROWERS SHALL PERFORM AND
COMPLY WITH EACH OF THE FOLLOWING FINANCIAL COVENANTS AS REFLECTED AND COMPUTED
FROM THEIR FINANCIAL STATEMENTS:
(A)
COMMENCING WITH THE CALENDAR MONTH ENDING
MAY 31, 2008 AND CONTINUING THROUGH AND INCLUDING THE CALENDAR MONTH ENDING
JANUARY 31, 2009, BORROWERS SHALL MAINTAIN A LOAN TURN DAYS OF NOT GREATER THAN
FIFTY (50) DAYS, IN EACH CASE MEASURED MONTHLY AT THE END OF EACH SUCH CALENDAR
MONTH.
(B)
BORROWERS SHALL MAINTAIN EBITDA, ON A
CUMULATIVE, YEAR TO DATE BASIS, OF AT LEAST (I) $2,000,000 FOR THE FISCAL
QUARTERS ENDING MARCH 31, 2008, JUNE 30, 2008 AND SEPTEMBER 30, 2008 COMBINED
AND (II) $2,900,000 FOR THE FISCAL QUARTERS ENDING MARCH 31, 2008, JUNE 30,
2008, SEPTEMBER 30, 2008 AND DECEMBER 31, 2008 COMBINED, IN EACH CASE