AND EVIDENCE OF ALL PREMIUM PAYMENTS. PROCEEDS PAYABLE UNDER ANY POLICY SHALL,
AT BANK'S OPTION, BE PAYABLE TO BANK ON ACCOUNT OF THE OBLIGATIONS.
NOTWITHSTANDING THE FOREGOING, SO LONG AS NO EVENT OF DEFAULT HAS OCCURRED AND
IS CONTINUING, BORROWER SHALL HAVE THE OPTION OF APPLYING THE PROCEEDS OF ANY
CASUALTY POLICY
UP TO $300,000.00, IN THE AGGREGATE, TOWARD THE REPLACEMENT OR
REPAIR OF DESTROYED OR DAMAGED PROPERTY; PROVIDED THAT (I) ANY SUCH REPLACED OR
REPAIRED PROPERTY (A) SHALL BE OF EQUAL OR LIKE VALUE AS THE REPLACED OR
REPAIRED COLLATERAL AND (B) SHALL BE DEEMED COLLATERAL IN WHICH BANK HAS BEEN
GRANTED A FIRST PRIORITY SECURITY INTEREST AND (II) AFTER THE OCCURRENCE AND
DURING THE CONTINUATION OF AN EVENT OF DEFAULT ALL PROCEEDS PAYABLE UNDER SUCH
CASUALTY POLICY SHALL, AT THE OPTION OF THE BANK, BE PAYABLE TO BANK ON ACCOUNT
OF THE OBLIGATIONS.
IF BORROWER FAILS TO OBTAIN INSURANCE AS REQUIRED UNDER
SECTION 6.5 OR TO PAY ANY AMOUNT OR FURNISH ANY REQUIRED PROOF OF PAYMENT TO
THIRD PERSONS AND THE BANK, BANK MAY MAKE ALL OR PART OF SUCH PAYMENT OR OBTAIN
SUCH INSURANCE POLICIES REQUIRED IN SECTION 6.5, AND TAKE ANY ACTION UNDER THE
POLICIES BANK DEEMS PRUDENT.
6.6
­PRIMARY ACCOUNTS.
IN ORDER TO PERMIT THE BANK TO MONITOR THE
BORROWER'S FINANCIAL PERFORMANCE AND CONDITION, BORROWER SHALL MAINTAIN ITS
PRIMARY DOMESTIC DEPOSITORY AND OPERATING ACCOUNTS WITH BANK.
BORROWER SHALL
MAINTAIN AT LEAST $18,000,000 IN UNRESTRICTED CASH (SUBJECT TO THE PROVISO
BELOW) WITH BANK AT ALL TIMES DURING THE TERM OF THIS AGREEMENT, PROVIDED,
HOWEVER, BORROWER MAY USE UP TO $3,000,000 OF SUCH AMOUNT TO SECURE LETTERS OF
CREDIT.
BORROWER SHALL IDENTIFY TO BANK, IN WRITING, OF ANY BANK OR SECURITIES
ACCOUNT OPENED BY BORROWER WITH ANY INSTITUTION OTHER THAN BANK.
IN ADDITION,
FOR EACH SUCH ACCOUNT THAT THE BORROWER AT ANY TIME OPENS OR MAINTAINS, BORROWER
SHALL, AT THE BANK'S REQUEST AND OPTION, PURSUANT TO AN AGREEMENT IN FORM AND
SUBSTANCE ACCEPTABLE TO THE BANK, CAUSE THE DEPOSITARY BANK OR SECURITIES
INTERMEDIARY TO AGREE THAT SUCH ACCOUNT IS THE COLLATERAL OF THE BANK PURSUANT
TO THE TERMS HEREUNDER.
THE PROVISIONS OF THIS PARAGRAPH 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 BORROWER'S EMPLOYEES.
6.7
­FINANCIAL COVENANTS.
(a)
Liquidity Coverage.
Borrower shall have at all times, to be
tested
as of the last day of each month, unrestricted and unencumbered cash
equal to or greater than the product of (A) all Obligations (including the
stated amount of any issued but undrawn Letters of Credit) hereunder multiplied
by (B) two (2.0).
(b)
Profitability.
Borrower shall have quarterly net losses of not
more than (i) $40,000,000.00 for the quarter ending December 31, 2001 (excluding
all non-cash write off of deferred tax assets); (ii) $7,000,000.00 for the
quarter ending March 31, 2002; (iii) $6,000,000.00 for the quarter ending June
30, 2002; (iv) $3,000,000.00 for the quarter ending September 30, 2002; and (v)