PAYABLE UNDER ANY POLICY SHALL, AT BANK'S OPTION, BE PAYABLE
TO BANK ON ACCOUNT OF THE OBLIGATIONS.
NOTWITHSTANDING THE FOREGOING, (A) 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 $50,000, IN THE
AGGREGATE, TOWARD THE REPLACEMENT OR REPAIR OF DESTROYED OR DAMAGED PROPERTY;
PROVIDED THAT ANY SUCH REPLACED OR REPAIRED PROPERTY (I) SHALL BE OF EQUAL OR
LIKE VALUE AS THE REPLACED OR REPAIRED COLLATERAL AND (II) SHALL BE DEEMED
COLLATERAL IN WHICH BANK HAS BEEN GRANTED A FIRST PRIORITY SECURITY INTEREST,
AND (B) AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT,
ALL PROCEEDS PAYABLE UNDER SUCH CASUALTY POLICY SHALL, AT THE OPTION OF BANK, BE
PAYABLE TO BANK ON ACCOUNT OF THE OBLIGATIONS.
IF BORROWER FAILS TO OBTAIN
INSURANCE AS REQUIRED UNDER THIS SECTION 6.7 OR TO PAY ANY AMOUNT OR FURNISH ANY
REQUIRED PROOF OF PAYMENT TO THIRD PERSONS AND BANK, BANK MAY MAKE ALL OR PART
OF SUCH PAYMENT OR OBTAIN SUCH INSURANCE POLICIES REQUIRED IN THIS SECTION 6.7,
AND TAKE ANY ACTION UNDER THE POLICIES BANK DEEMS PRUDENT.
10
6.8
OPERATING ACCOUNTS.
(A)
MAINTAIN ITS AND ITS SUBSIDIARIES' PRIMARY DEPOSITORY AND
OPERATING ACCOUNTS AND SECURITIES ACCOUNTS MAINTAINED IN THE UNITED STATES WITH
BANK AND BANK'S AFFILIATES WHICH ACCOUNTS SHALL REPRESENT AT LEAST 85% OF THE
DOLLAR VALUE OF BORROWER'S AND SUCH SUBSIDIARIES ACCOUNTS AT ALL FINANCIAL
INSTITUTIONS.
(B)
DISCLOSE IN WRITING TO BANK ALL COLLATERAL ACCOUNTS MAINTAINED
WITH ANY BANK OR FINANCIAL INSTITUTION OTHER THAN BANK OR ITS AFFILIATES.
IN
ADDITION, FOR EACH COLLATERAL ACCOUNT THAT BORROWER MAINTAINS WITH ANY BANK OR
FINANCIAL INSTITUTION OTHER THAN BANK OR ITS AFFILIATES, BORROWER SHALL CAUSE
THE DEPOSITS AND/OR SECURITIES MAINTAINED THEREIN TO BE TRANSFERRED TO BANK OR
ITS AFFILIATES WITHIN 90 DAYS OF THE EFFECTIVE DATE AND FOR ANY DEPOSITS AND/OR
SECURITIES NOT SO TRANSFERRED TO BANK AND ITS AFFILIATES WITHIN SUCH TIME
PERIOD, BORROWER SHALL CAUSE SUCH APPLICABLE BANK OR FINANCIAL INSTITUTION
(OTHER THAN BANK) AT OR WITH WHICH ANY 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 BORROWER'S EMPLOYEES AND IDENTIFIED TO BANK BY BORROWER AS SUCH.
6.9
FINANCIAL COVENANTS.
Borrower shall maintain at all times, to be tested as of the last day of each
month, unless otherwise noted, on a consolidated basis:
(a)
Tangible Net Worth.
A Tangible Net Worth of at least $4,000,000
("Minimum Tangible Net Worth") plus (i) 25% of all consideration received after
the date hereof for equity securities and subordinated debt of the Borrower,
plus (ii) 25% of the Borrower's net income in each fiscal quarter ending after